Eyenovia, Inc. (NASDAQ:EYEN) Q1 2024 Earnings Call Transcript

Eyenovia, Inc. (NASDAQ:EYEN) Q1 2024 Earnings Call Transcript May 15, 2024

Eyenovia, Inc. reports earnings inline with expectations. Reported EPS is $-0.18 EPS, expectations were $-0.18.

Operator: Good afternoon, ladies and gentlemen, and welcome to the Eyenovia First Quarter 2024 Earnings Conference Call. [Operator instructions]. This call is being recorded. I would now like to turn the conference over to Mr. Eric Ribner of Investor Relations. Please go ahead.

Eric Ribner: Good afternoon, and welcome to Eyenovia’s First Quarter 2024 Earnings Conference Call and Audio Webcast. With me today are Eyenovia’s Chief Executive Officer, Michael Rowe, Chief Financial Officer, John Gandolfo; and Chief Operating Officer, Brent Kern. This afternoon, we issued a press release announcing financial results for the 3 months ended March 31, 2024. We encourage everyone to read today’s press release as well as Eyenovia’s quarterly report on Form 10-Q for the quarter March 31, 2024, which will be filed with the SEC tomorrow. The company’s press release is available on our website at eyenovia.com. In addition, this conference call is being webcast to the company’s website and will be archived there for future reference.

Please note that on today’s call, we will be discussing products, product concepts and candidates, some of which have yet to receive FDA approval. Please also note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during the call, Eyenovia’s management will make forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company’s business. These forward-looking statements are subject to a number of risks, which are described in more detail on our annual report on Form 10-K. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 15, 2024.

Eyenovia undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as maybe required by the applicable securities laws. With that said, I’d like to turn the call over to Michael Rowe, Eyenovia’s Chief Executive Officer. Michael?

Michael Rowe: Thank you, Eric, and welcome, everyone, to our first quarter 2024 financial results conference call. During the first quarter, we took several meaningful steps to strengthen the inherent value of our company, which currently includes Eyenovia Optejet dispensing technology, 2 FDA-approved products, MidCap and clobetasol and a third MicroPine in late Phase III development. Together, these products address the U.S. market worth more than $3.3 billion annually. By being able to address a broad range of patient needs with a portfolio of novel technologies and products, we believe we are building a solid foundation upon which to drive accelerating sales growth in 2025 and beyond. Our main focus is on the successful commercialization of MydCombi and clobetasol and the expedited development of MicroPine.

Q&A Session

We are in the process of establishing a solid foundation for our portfolio with a second FDA-approved product to be launched by our sales force in the next few months and a potential blockbuster MicroPine in the next couple of years. At the same time, our finance and business development teams are diligently executing on an overall strategy to ensure that Eyenovia is well positioned for success beyond the immediate near term and through these challenging times in the capital markets for small cap life sciences companies. Now, let’s take some time to provide an update on our MicroPine program, which is our Phase III candidate for progressive myopia. Pediatric progressive myopia has been called an epidemic in the United States and China, where we have licensed the rights to MicroPine to our partner, Arctic Vision.

In the U.S. alone, approximately 5 million children are at higher risk of losing functional vision due to this disease in which the eye elongates and can result in separation of the retinal tissues from the back of the eye. Third-party sources have estimated the value of this market, which currently has no FDA-approved drug treatment options at $1.8 billion annually with a similar opportunity in China. The present standard of care involves glasses and contact lenses, which can reduce progression but does not stop it, and these are often not appropriate or well tolerated by the youngest children who are most at risk. And this is where MicroPine can make a significant difference addressing this unmet medical need. As a reminder, MicroPine is our investigational 8 microliter ophthalmic spray of atropine delivered by the Optejet currently being evaluated as a potential treatment for pediatric progressive myopia in the CHAPERONE study.

If the results of this study are positive, the FDA has agreed that the single 40-year evaluation could be sufficient for an NDA filing and approval. This is based upon several prior atropine studies in children in Asia, which demonstrated efficacy in slowing myopia progression by as much as 60%. MicroPine may also offer benefits far beyond what would be obtained with an eye drop. With the Optejet technology, children in our clinical study as young as 6 years old, are dosing themselves every evening without parental involvement. They can do this because the Optejet doesn’t require any head tilting or manipulation of eyedropper bottles and makes aiming easier with a built-in mirror so that children can see exactly where they are spraying. The side effects of atropine, which have overwhelmingly been mild and transient in our study have been consistent with what we have come to expect with our advanced device.

In its commercial form, we plan to have MicroPine equipped with our Opticare system which can notify patients and their parents when to administer their spray dose as well as communicate important compliance and adherence information for the treating physician. We are continuing to advance the Phase III CHAPERONE study and our clinical team is exploring a potential protocol amendment that could greatly expedite the study time lines and registration of MicroPine. This protocol amendment would include a planned limited review of the CHAPERONE data by an independent data safety monitoring committee later in the fourth quarter of this year when approximately 2/3 of CHAPERONE patients will have reached the study efficacy endpoint. If recommended by the committee, we could potentially be looking at a substantially derisked program, enabling a potential NDA submission as soon as late 2025 or early 2026.

As you can imagine, we believe this program would then be a very attractive opportunity for commercialization by us or a larger partner. We are eager to reach that milestone as MicroPine, if approved, would anchor our commercial portfolio and perfectly complement both Mydcombi and clobetasol, providing significant value to eye doctors, patients and payers by addressing a broad spectrum of unmet needs. Now, let’s talk about clobetasol propionate ophthalmic suspension 0.05%, the U.S. rights to which we acquired from Taiwan based Formosa Pharmaceuticals last August. Clobetasol was approved by the FDA on March 4 and in rapid succession, the New Drug Application, or NDA, was transferred to us from Formosa. There have been no new ophthalmic steroids approved in the U.S. in over 15 years.

The last one was Durezol by Alcon, which for many years, was selling well over $100 million annually. Clobetasol addresses many of the unmet needs for an ophthalmic steroid with a highly differentiated clinical and pharmacologic profile, including twice-a-day dosing and from a safety standpoint, fewer than 1% of patients experiencing seven eye pressure increases that may be more common with other steroids. Intraocular inflammation and eye pressure spikes are the 2 main safety issues that eye surgeons want to avoid and are paying particular attention to as they can lead to significant clinical consequences, complications and non-reimbursable costs to the providers. We believe that clobetasol has the potential to become the leading option in the postsurgical space.

Unlike conventional steroid drugs, clobetasol was developed using a breakthrough innovation in ophthalmic formulation and active ingredient development. This unique postocular surgery steroid is the first product developed using Formosa’s proprietary APNT nanoparticle formulation platform which reduces an active pharmaceutical ingredients critical size with high uniformity and impurity, thereby allowing penetration to relevant compartments in the eye and ultimately enhancing bioavailability. The nanotechnology is so effective that it essentially makes the suspension act like a solution. In fact, patients don’t even have to shake the product prior to use, and this is just one of the unique elements of our approved label. And while this might not seem like a big deal, it does point to the difference between clobetasol and other ophthalmic steroids.

Clobetasol’s efficacy and previously discussed safety profile is another point of differentiation. In clinical studies, nearly 9 out of 10 patients achieved complete absence of postsurgical pain and 6 out of that achieved complete absence of inflammation within 15 days post ocular surgery. And the incidence of all side effects was below 2%. Moreover, twice a day dosing without titration is a benefit all patients can understand, especially versus other treatments, which require dosing up to 4 times a day. This is particularly important thus eye surgery patients were often on multiple drugs during recovery. So, any advancement which simplifies the treatment regimen would be welcomed by eye doctors and patients alike. It is estimated that there are more than 7 million ocular surgeries in the U.S. each year with topical ocular steroids and steroid combinations currently totaling $1.3 billion in sales.

So, this is a very significant market opportunity for us and one that we think we can capture a mid-single-digit market share over the next 3 to 4 years. We continue to prepare for a robust commercial launch of clobetasol later in the summer. And longer term, we see a potential opportunity to develop a formulation of clobetasol for our Optejet dispenser as a treatment for acute dry eye. To that end, we plan to engage with the FDA in the coming months to discuss the path forward in that indication. Lastly, some of you have asked me about the brand name for clobetasol. That trade name is currently being reviewed by the FDA, and we expect the decision from the agency later in June for our launch. Staying on the topic of dry eye for a moment, in late February, we entered into a collaboration agreement with SGN Nanopharma, an innovation-led clinical-stage nanopharmaceutical company, focusing on creating impactful best-in-class nanotherapeutics, targeting large unmet medical needs.

As we aim for proprietary micellar nanoparticle platform, the MNP platform allows for the distribution of an active pharmaceutical ingredient into 3 or more phases, thereby improving its bioavailability, biodistribution and pharmacokinetics. For the terms of the agreement, Eyenovia will conduct feasibility and process manufacturing testing with SGN’s Phase III-ready ophthalmic cyclosporin formulation, SGN-101, in combination with the Gen 2 Optejet device as a potential treatment for chronic dry eye. Dry eye is a very significant market opportunity with some external sources valuing it at $3.6 billion annually in the U.S., a combination of a faster working cyclosporin and the Optejet could be a powerful addition into this large and underserved market.

For the SGN collaboration, we may have a Phase III-ready asset next year in chronic dry eye. As part of our collaboration, SGN will seek independent funding towards advancing the development of this candidate. I’ll now provide an update on Mydcombi, first and only FDA-approved fixed combination of 2 popular pupil dilation drugs, tropicamide and phenylephrine and the first approved ophthalmic spray using the Optejet platform. We are midway through the hiring and training of our 12-person sales force, and we have satisfied state licensing requirements in states covering over 2/3 of the U.S. population for the distribution strategy to reach offices in those states where we do not yet have a license. The sales force has been out for 5 weeks now since their training and are making inroads into this market.

The sales process requires demonstrating and training the office staff on the use of Mydcombi, which is not difficult, but it’s important to make sure that these offices have a great initial experience and realize all of the benefits of the technology. To date, they have trained and converted about 50 offices, many of whom you’ll see in our social media stream as they talk about their experience with the product. We have also partnered with these offices in a waiting room promotional campaign showing how they use Mydcombi because they care about their patients. And we plan on collecting market research information from these same offices so that they can bolster their own practice satisfaction scores. There are a number of reasons why offices and institutions like the University of California and Premier buying groups like Vision Source have turned to Mydcombi.

With Mydcombi, the dilation process is needed since the spray amount is a fraction of what’s in an eye drop. It’s comfortable with virtually no stinging reported in clinical studies. It’s hygienic with no protruding tips that could accidentally touch one patient and then another when using the same bottle and it works reliably and quickly. To further demonstrate the potential benefits of Mydcombi, we recently completed a Phase IV study to characterize the lowest effective dose to achieve mydriasis. For certain eye care patients, the current standard of care mydriasis eyedrops could present safety and tolerability risks, including potential systemic cardiovascular side effects in older patients, particularly those with high blood pressure. In this Phase IV study, 29 subjects were treated with a half dose of Mydcombi or 8 microliters per eye.

We won’t recap all of the positive results again, but 2/3 of subjects at treated clinically relevant pupil dilation within 30 minutes post-dose, and 83% achieved relevant pupil dilation at 60 minutes post dose. Importantly, the lower dose of Mydcombi was safer well tolerated with only 3 subjects reporting mild installation site pain and one with mild dry eye upon installation. And interestingly enough, most patients return to a functional pupil size as soon as 3.5 hours after the drug was used. The duration of pupil dilation is sometimes an issue for patients, especially those that may need to get back to work. So, this finding should help eye doctors determine what might be best for an individual patient. Turning now to our overall sales and marketing initiatives to complement the efforts of our sales team.

We entered into a co-promotion agreement with NovaBay Pharmaceuticals to cross promote clobetasol to hundreds of eye care professionals through its telephone-based sales force. At the same time, our field sales force will promote their prescription, Avenova Antimicrobial Lid & Lash Solution to our doctors who can include this product in their suite of pre and postsurgical offerings. In addition to the benefit of the promotion and potential sales for both sides, each party will also get a percentage of the sales that they generate. This is an extremely cost-effective way to boost our commercial sales reach, and we believe this agreement will be very beneficial to both parties. This agreement with NovaBay complements our recent announcement with Vision Source, that Vision Source has added Mydcombi as an approved product for its membership of more than 3,000 locally owned optometry offices.

So, while our own sales force is targeted, this agreement allows us to significantly expand our commercial reach, particularly in more rural areas where we may not be providing direct sales coverage currently. We are already seeing sales have been coming to Vision Source member offices. Before turning the call over to Bren to provide a manufacturing update, I will conclude with a recap of recent national ophthalmology medical meetings that we participated in. The first was the American Society of Cataract & Refractive Surgery Annual Meeting, or ASCRS in Boston. During ASCRS, we featured our entire suite of commercial products, Mydcombi, clobetasol and Avenova. Both our sales and medical affairs teams were present to demonstrate the products review data, answer questions and provide attendees for the opportunity to purchase these products on site.

We also attended Vision Source Exchange in Orlando. Vision Source Exchange is the country’s largest gathering of private practice optometrists with more than 1,000 of the most successful ODs in the nation. The event featured continuing education keynote speakers exchange-only pricing for more than 100 vendors and opportunities to network with colleagues who were on hand to demonstrate and sell Mydcombi there as well. And just recently, we delivered the presentation at the Association for Research in Vision and Ophthalmology 2024 Annual Meeting or RVO. The presentation detailed results from a study demonstrating that Formosa’s APN technology on which the development of clobetasolid base, improves the solubility and bioavailability of topical ophthalmic medications.

APMT much like our Optejet Dispenser, represents an exciting new attain technology, and we are thrilled to feature both in our product portfolio. Our presence at national medical and commercial meetings like these are key to raising awareness of the breadth of our product portfolio and are a critical component of our commercialization strategy. We plan to attend more such meetings later this year. At this point, I’d like to turn the call over to our Chief Operating Officer, Bren Kern, for our manufacturing update. Bren?

Bren Kern: Thank you, Michael. As previously mentioned by Michael, with our sales staff completing their training, we are experiencing an uptick in economy sales orders. Our operations team is working closely with our commercial team to ensure that our growing customer base is being provided with best-in-class customer service, enabled by the procurement of state licensing covering 2/3 of the U.S. population, our limit city facility serves as our primary distribution center for Mydcombi. Redwood City is supported by manufacturing, engineering, supply chain, quality and regulatory professionals, all of whom are laser-focused on order fulfillment, recognized our integral role and colors customer satisfaction and are fueled by the excitement of providing clinical practices across the country with our groundbreaking technology.

Manufacturing operations have been performing to expectations and supply of Mydcombi remains sufficient to fulfill current sales demand. In addition to distributing Mydcombi, Redwood City will also be leveraged as the initial distribution hub for clobetasol. Our operations team is actively optimizing distribution processes in preparation of product receipts. Formosa Pharmaceuticals has initiated the manufacture of clobetasol and is on schedule for delivery and our subsequent shipment later this summer. These preparatory activities are currently progressing as planned. Our facility in Reno was in part selected to support the future distribution of Eyenovia products as it contains warehousing infrastructure, conducive to the proper storage and handling of drug products.

The Reno operations team also comprised of manufacturing, engineering, supply chain and quality, are actively installing and validating systems similar to those in Redwood City, but a larger scale. When complete, this increased storage capacity will be complementary to Redwood City and provides us with the flexibility to handle future fulfillment needs. To this end, we are also establishing internal logistics capabilities along the transportation of materials between the 2 locations, unbridled by large commercial shipping companies. Eyenovia is also progressing with plans to introduce Gen 2 into the commercial market. Our Redwood City facility, which houses data arts clean rooms and aseptic fill and finish operations is currently preparing for the production of registration batches required for future S&D and submission.

These preparations include marked improvements aimed at increasing performance and efficiencies. Our engineering team is also hard at work planning, testing, refining and generating documentation to support the Gen 2 platform. These activities bear significant similarities to our Gen 1 platform and our FDA inspection successes with Gen 1 combined with an ever-increasing technological knowledge base, suggests the successes that Gen 1 will be replicated for Gen 2. Further to the expansion of our capacity, the Reno facility has optimized our new injector manufacturing process, culminating and executing process validation builds. The product generated during this build is being prepared for performance testing and feasibility of test results suggest that product should perform as expected.

I classify these achievements as impressive. Mydcombi has entered into the commercial market and is being well received. Demonstrating the Optejet platform is capable and both the technology and our processes are able to fulfill the rigorous standards established by regulatory bodies and scale. I would now like to turn the call over to our Chief Financial Officer, John Gandolfo, to provide an financial update. John?

John Gandolfo: Thanks, Bren. For the first quarter of 2024, we reported net loss of approximately $10.9 million or $0.23 per share on approximately 46.6 million weighted leverage shares outstanding. This includes a $0.05 loss related to the $2.5 million of costs for bringing MicroPine back to Eyenovia. First quarter 2024 net loss compares to a net loss of $5.7 million or $0.15 per share and approximately 37.4 million weighted leverage shares outstanding for the first quarter of 2023. Research and development expenses totaled approximately $4.4 million for the first quarter of 2024, and this compares to $2.5 million for the first quarter of 2023, an increase of 75.7%. For the first quarter of 2024, G&A expenses were approximately $3.8 million as compared to $2.9 million for the first quarter of 2023, an increase of 30.6%.

Total operating expenses for the first quarter of 2024 were approximately $10.3 million, including the previously mentioned $2.5 million in repatriation costs for bringing MicroPine back to Eyenovia. This compares to $5.5 million for the same period in 2023 and represents an increase of approximately 88%. Our first quarter 2024 operating expense figure also included approximately $1.5 million of noncash expenses. At March 31, 2024, we reported unrestricted cash of approximately $8 million, and this does not include the $2.2 million of additional capital the company raised in April of 2024. We have reduced our planned spending by approximately $800,000 per quarter compared to the first quarter of 2024 cash-based operating expense levels, and we’re focusing our resources on validating our Gen 2 device with the FDA, commercializing Mydcombi and clobetasol and the completion of the MicroPine CHAPERONE study.

We are also exploring several options and structures to ensure we have sufficient capital to support these programs and continue to execute on our growth strategy. I’ll now provide an update on our existing licensing programs with the Arctic Vision, which covers all 3 of our products in China and South Korea, MicroPine, MicroLine, Rhopressa and Mydcombi and provides us sales royalties in addition to development milestones. MicroPine in particular, is a significant opportunity in China for pediatric myopia. If approved, MicroPine could be a potentially meaningful source of nondilutive funding for our company over the long term. To date, our license agreements have generated approximately $16 million in license fees, and we have the potential to earn an additional $25 million in non-dilutive net license and development milestones from more Arctic Vision over the next 3 to 4 years.

If our products are approved upon commercialization, we also are eligible to earn significant sales royalties as well. We are also continuing to assess potential pipeline expansion opportunities similar to our promotion agreements, and we will continue to leverage the Optejet technology to address unmet needs and additional large ophthalmic indications beginning with dry eye. As Michael indicated earlier, we believe the steps that we have taken to date to create a solid foundation upon which we will drive meaningful sales growth in 2025 and beyond. In conclusion, we are very pleased with our performance in the first quarter of 2024. And, to summarize our key highlights today, we announced FDA approval of clobetasol for the treatment of pain and inflammation following ocular surgery.

We reacquired the development and commercial rights to MicroPine for the U.S. and Canada. We entered into a co-promotion agreement with NovaBay Pharmaceuticals, whereby NovaBay will market clobetasol through its U.S. physician dispense channel. The agreement also gives us access to their prescription Avenova Antimicrobial Lid & Lash Solution. We announced that our second manufacturing facility in Redwood City, California has been approved by the FDA as a commercial manufacturing facility. We’ve participated in 3 important national ophthalmology medical meetings. ASCRS, Vision Source Exchange and ARVO, which provides excellent platforms for us to demonstrate our commercial products and educate doctors on their use. And finally, our licensing agreement with Arctic Vision is progressing well and remains a promising avenue for significant development and regulatory milestones as well as the potential for sales royalties in the future.

That concludes our prepared remarks. We would like to now open the call to questions. Operator?

Operator: [Operator instructions] We have a question from Matt Kaplan from Ladenburg.

Matthew Kaplan: Congrats on the progress during the quarter. Can you talk a little bit more about the transition that you’re planning to the Gen 2 device and for your portfolio of products and what you think it will take to get the thumbs-up from FDA for that device?

Michael Rowe: Yes. Hi, Matthew, and thank you for calling in. There’s basically 2 things we need to do. The first is, we have to demonstrate that the Gen 2 acts like the Gen 1 in terms of performance, how much drug it delivers, how it delivers the drug and so on. And Bren’s team is deep in doing that. The second thing that we believe the FDA is going to ask for is a very small bridging study that we can essentially do in 3 days, just to give them the additional knowledge that when people actually use us in real life, they get the same result. And like I said, that’s literally a 3-day study that could be done while we’re manufacturing Gen 2 supply. So, at this point, our plan is, we’ve already submitted for the FDA meeting, we will likely have that meeting in mid-July.

Assuming that goes as we believe it will, we will make the Gen 2 supply shortly thereafter. While that supply is up for stability, which is 12 months, we will complete a small bridging study. And then basically, we take all that information and file an sNDA, which I believe has a 6-month turnaround to it so that by the end of next year, we may be ready to go into the market with the Gen 2. But the good news is that I believe we’ve got all the boxes checked. And I’m feeling very confident that we’re going to be able to do this, and it’s not going to be anything that’s going to be difficult for us. Bren, did I miss anything?

Bren Kern: No, Michael, You did not miss anything, thank you.

Matthew Kaplan: And then just a second question on MicroPine. You plan to meet with the FDA soon. When do you think you’ll have that squared away in terms of the protocol and be able to do that analysis in the fourth quarter?

Michael Rowe: Right. Well, my clinical and regulatory team tells me that we can do the protocol amendment without meeting with the FDA because we’re putting into place a data monitoring committee. So we, at Eyenovia, do not actually see the results. And so, the DMC would then look at the data probably in mid-October. And basically, they come out of that meeting with a thumbs up that everything looks great. Or for example, in the very rare case that nothing’s happening, there’ll be a thumbs down to tell us that. But basically, they give us the indication of whether or not there’s something there. Now, from looking at the mass data, my team certainly thinks there’s a very, very good signal, and that’s why we’re optimistic about this.

And the DMC would then confirm that. And then once they do confirm that, that’s when we meet with the FDA. And we say, look, this is what we have. This is what the DMC said. We have the statistical power at this point. This is why we would like to stop the study and go right into the analysis. So, that would probably happen if the DMC meets in October, it would be 1 or 2 months after that.

Operator: Our next question comes from the line of Matthew Caufield from H.C. Wainwright.

Matthew Caufield: So, for Optejet development in presbyopia with Apersure, I believe it’s Orasis Pharma that’s planning their pilocarpine launch for first half ’24. And I was curious what you’d want to see just in the near term, kind of what you’d like to see from that from the overall presbyopia market to have Apersure be more of a top strategic priority. And then I just had one follow-up on the Gen2 device.

Michael Rowe: Great. Matthew, thank you. It’s a great question. So, right now, I believe [Indiscernible], which is the only product approved in the market is selling somewhere between 15 and $18 million a year, which obviously was underperforming what everybody had hoped for. So, if Orasis or anybody can go out there and we start seeing a market that starts to grow and gets to $50 million or $100 million, that would obviously be very attractive to us. There’s 2 things going on here. One is that your people are looking at the efficacy and side effect of these products. But the other thing is also people like the Optejet. So, the eye drops that are going to be out there will likely all compete on who lasts the longest and who has the fewest side effects.

We are completely different by having the Optejet, which in market research, the vast majority of potential users, they just like the device for all sorts of reasons, it’s need, it doesn’t mess up makeup, it’s discrete, it’s socially acceptable. Lots of reasons to use that. But to go into this market right now and to spend $20 million or $30 million, doesn’t make sense to me, not in the market of this size. So, we are very comfortable with letting other people go in there, spend the resources, build this up to a point where we can say, “Okay, great. We’ve done a great job with the eye drops. We can come in with something completely different, completely differentiated that we know people like, and you’ve done the heavy lifting for us. So, that’s what we’ll be looking for.

Matthew Caufield: So, then just one question on the Gen 2 device. So, for the Gen 2 Optejet, can you remind us if that focuses squarely on the pediatric myopia program? Or is there any chance that the Gen 2 device could be relevant for the current MydCombi mydriasis approval?

Michael Rowe: So, Gen 2 ultimately will be our only platform. The reason that when we had first in Mydcombi because that’s our only approved product. So, we have to measure it and validate it against an approved product, which is Mydcombi. But what it does, Matt, is by doing it against Mydcombi, all of the stuff we have to do with performance testing and validation, it’s basically identical for all the other programs. So, we basically have the recipe that the FDA has accepted so that when we get to the other products, the other one be MicroPine, we just follow the same recipe.

Operator: Our next question comes from the line of Kemp Dolliver from Brookline Capital Markets.

Brian Kemp Dolliver: First is, how should we think about the runway situation given the reductions in spending and other adaptations to your plan?

John Gandolfo: Sure. So, the way we’re looking at it is that we feel our current cash plus reimbursement from our partners for Gen 2 product development expenses as well as the launch of clobetasol and a 60% gross margin gives us cash resources that are sufficient. So, we get that data readout on MicroPine, which Michael mentioned, is towards the latter part of the fourth quarter of 2024. In addition, as I mentioned in our prepared remarks, we’re exploring various options and structures to ensure that we have enough capital and support past that point. So, I think that’s probably the best way to look at it. In terms of the reduced cash spending that we put in place, I think that was just down business principle that we felt like we should reduce wherever we could.

One final comment with respect to our cash-based expenses is that, a large amount of our expenses are project-based. So, if needed, we could defer some of that spending on some of those longer-term projects. Now, we don’t believe that, that’s necessary and we haven’t planned for it. But it is important to note that we do have flexibility with our spending going forward, too.

Bren Kern: I would also add to that in my comments about SGN, for example, that we are getting partners now that when they come in, they basically also come in with the funding to do the development rather than us having to come up with that. So, that opportunity with that advanced quick-acting cyclosporine for dry eye, SGN is doing a great job in raising that money so that we can do our work, which is the sweat work to get it done, but they’re going to be able to bring much of that cash in.

Brian Kemp Dolliver: And with regard to Gen 2, are we still dependent upon Gen 2 to get a cost of goods structure that will help you achieve profitability?

John Gandolfo: Yes, exactly. So, to give you an idea, one of the main reasons why we look for FDA approval of Mydcombi with Gen 1 is, we wanted to go through the regulatory process and get approval with the product as had never been done before. And our focus was always going to be to the developer commercial product, which is Gen 2 as you stated, at a much more efficient cost of goods sold. So, to give you an example, the cost of goods sold on the Gen 2 delivery system is probably about 20% of the cost of goods sold of the Gen 1 system. So, it makes all of our programs generate gross margins at the low end, probably 60% to 70% and at the high end with MicroPine more than of 90%. So, that is going to be the key driver that gets the company to profitability.

Brian Kemp Dolliver: And how is — we are mostly doing with getting the export approval worked out?

Bren Kern: It’s funny to ask that. So the Taiwanese FDA was in there doing their inspections. They are now waiting for their final report. I’ve been told by my partners in Taiwan that you can’t push them too hard. So, we don’t do that. But in the meantime, we have labeling ready. We have all the other preparations ready and we’re doing everything we can. So, the minute they get that permit, they can drop the pallets off at the airport and send them over to us. Right now, we’re counting on that happening somewhere in early to mid-July, so that our plan is we want to be on the street by August 1.

Operator: There are no further questions at this time. I would now like to hand the call over to Mr. Michael Rowe, please go ahead.

Michael Rowe: Thank you, operator, and thanks to everybody on the call today and through the development of Eyenovia. Our company now has 2 FDA-approved products, both very differentiated and well positioned in the eye care space. Our platform technology, the Optejet, is going to be presented to the FDA this summer and its most technologically advanced form, and we look forward to rolling it out next year. And MicroPine, a potential blockbuster in the very underserved pediatric progressive myopia market is well positioned to be substantially derisked later this year. I encourage everyone to keep up to date with our progress on eyenovia.com, or through our social media links. This concludes our call, and we look forward to talking with you again in August. Thank you.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.