EyePoint Pharmaceuticals (NASDAQ: EYPT), is a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products.
On May 8th, the company announced financial results for its fiscal 2018 third quarter and nine months ended March 31, 2018 and provided a company update. As per management, the acquisition of Icon Bioscience, Inc. and its FDA approved product, DEXYCU™, has significantly increased EyePoint Pharmaceuticals’ revenue potential and accelerates its planned transformation to a sustainable growth company.
The combination of experienced executives leading company’ commercial team and the additional capital from EW Healthcare and SWK positions EyePoint to successfully execute on the launch of two new products in the first half of 2019, pending favorable regulatory review of YUTIQ™. Additionally, the company anticipates the annual revenue potential for DEXYCU to be $150 – $200 million by the end of the third year on the market.
So far liquidity and financial flexibility is concerned, the Company had cash and cash equivalents totaling $16.3 million at March 31, 2018, and, subject to stockholder approval at a special meeting of shareholders scheduled for June 22, 2018, has capital commitments of an additional $30.5 million from EW Healthcare, a third-party investor, and SWK.
Therefore, the Company is currently projecting a cash balance of approximately $38.0 million at June 30, 2018, the end of its current fiscal year. The Company expects these proceeds will provide the financial resources to commence the launch of DEXYCU and YUTIQ.
Near-Term Goals and Upcoming Milestones:
- Gain approval of the second tranche investment by EW Healthcare at the June 22, 2018, special meeting of stockholders.
- Implement the Company’s four-pillar commercialization plan:
- Complete the build out of the sales organization;
- Implement the marketing plan;
- Continue to progress market access programs; and
- Initiate medical education initiatives.
- Secure pass-through reimbursement for DEXYCU.
- Receive FDA approval for YUTIQ based on the PDUFA action date of November 5, 2018. Present data at leading medical congresses, including for YUTIQ at the American Society of Retina Specialists (ASRS) annual meeting being held in Vancouver from July 20-25.
- Launch DEXYCU and YUTIQ (subject to FDA approval) in the first half of calendar 2019.
Analyst tracking the stock believes that the launch of DEXYCU plus the potential approval of YUTIQ will position EYPT to launch two products in the first half of 2019 and significantly leverage the commercial organization it is building. Moreover, the company continues to present positive date on YUTIQ, as recently two weeks ago at the Association for Research in Vision and Ophthalmology or ARVO’s annual meeting.
To summarise, this is a very exciting time for EyePoint Pharmaceuticals as the company continues to make excellent progress, executing on its business plan, including preparations for commercialization of DEXYCU and YUTIQ in the U.S. in the first half of 2019. Most Importantly, the company is well capitalized, assuming a favorable shareholder vote on June 22, with the resources necessary to successfully launch DEXYCU and YUTIQ. Several brokerage firms have initiated coverage on the company, and the stock currently has an average rating of “Buy”.
About the Company: EYPT, headquartered in Watertown, MA, is a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products in indications with a high unmet medical need to help improve the lives of patients with serious eye disorders.
Product Pipeline: EyePoint has developed three FDA-approved products utilizing its proprietary DurasertTM Technology. The company is utilizing its Durasert bioerodible technology platform in collaboration with other pharmaceutical companies to develop new sustained-release products to treat retinal diseases and other ocular conditions.
Key Recent Accomplishments:
- Acquired privately-held Icon Bioscience, Inc. and its FDA approved product, DEXYCU™.
- DEXYCU was approved by the FDA on February 9, 2018, for the treatment of postoperative inflammation and is administered as a single intraocular injection at the end of surgery.
- EyePoint has expanded the DEXYCU global IP portfolio with Notices of Allowance for two additional patents, including potential claims relating to a method of treating inflammation of an eye following cataract surgery by delivering extremely small (4-6µL) amounts of dexamethasone in acetyl triethyl citrate. These two additional patents, once allowed, will extend to 2032 and 2034.
- A New Drug Application (NDA) for YUTIQ™ (fluocinolone acetonide intravitreal implant) 0.18 mg three-year treatment for noninfectious posterior segment uveitis was submitted to the Food and Drug Administration (FDA) in January and was accepted for filing in March with a November 5, 2018 PDUFA date.
- EyePoint has enhanced the healthcare and capital markets expertise of the Board of Directors with the appointment of Ron Eastman, a Managing Director at EW Healthcare Partners with over 40 years of experience in building healthcare companies.
- EyePoint has hired experienced executives to lead the Company’s commercial team and to ensure successful execution of the launches of DEXYCU and YUTIQ
EyePoint presented data on YUTIQ at the Association for Research in Vision and Ophthalmology (ARVO) 2018 Annual Meeting.
- EyePoint delisted from the Australian Securities Exchange effective as of May 7, 2018
Fiscal Third Quarter Results
Revenue: Revenue for the third fiscal quarter ended March 31, 2018, totaled $928,000 compared to $590,000 for the prior-year quarter. Revenues in both periods were derived from feasibility study agreements and royalty income.
Expenses: Operating expenses for the three months ended March 31, 2018, decreased slightly to $5.6 million from $5.8 million a year earlier, due primarily to lower clinical trial costs and stock-based compensation expense, partially offset by higher regulatory and clinical consulting services in support of YUTIQ and higher personnel and related expenses.
Profitability: Net loss for the quarter ended March 31, 2018, was $7.0 million, or $0.15per share, compared to a net loss of $5.1 million, or $0.15 per share, for the prior-year quarter.
Liquidity and financial flexibility: At March 31, 2018, cash and cash equivalents totaled $16.3 million, a total number of common shares outstanding at March 31, was $53.9 million. During the third quarter, net cash used from operations totaled approximately $4.8 million compared to $5 million in the second fiscal quarter.
The company currently anticipate net cash used from operations to range between $6.5 million to $7.5 million in its fiscal fourth quarter as it advances towards the commercial readiness for the launch of DEXYCU and if approved by the FDA YUTIQ.
Key risk factors:
- Successful completion of the upcoming milestones would lead future direction for the company. Any adversities related to these forthcoming milestones might adversely impact the overall investor sentiments.
- EYPT is still an early stage entity and has not yet generated revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it. The company’ prospects are significantly dependent on DEXYCU and YUTIQ, which might have limited sales potential initially.
- EYPT has a history of operating losses. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
- On Friday, June 22th, 2018, EYPT closed at $2.00, on an average volume of 182K shares exchanging hands. Market capitalization is $108 million. Current RSI is 44.83
- In the past 52 weeks, shares of EYPT have traded as low as $0.93 and as high as $2.88.
- At $2.00, shares of EYPT are trading below its 50-day moving average (MA) at $2.10 and above its 200 days moving average at $1.41