Eyenovia, Inc.

Greetings and welcome to the Inovia third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Eric Ribner from Investor Relations. Thank you. You may begin.

Good afternoon and welcome to Inovia's third quarter 2024 earnings conference call and audio webcast. With me today are Inovia's Chief Executive Officer, Michael Rowe, Chief Operating Officer, Bren Kern, and newly appointed Chief Financial Officer, Andy Jones. Welcome, everybody. This afternoon, we issued a press release announcing financial results for the three months ended September 30th, 2024. We encourage everyone to read today's press release, as well as Inovia's quarterly report on Form 10-Q for the second quarter, ended September 30th, 2024, which was just filed with the SEC. The company's press release and annual report are also available on our website at www.inovia.com. In addition, this conference call is being webcast on the company's website and will be archived and available for replay 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 provisions of the Private Securities Litigation Reform Act. We caution listeners that during the call, Inovia's management will be making 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 in our annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 12, 2024. INOVIA 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 may be required by applicable securities law. With that said, I'd like to turn the call over to Michael Rowe, INOVIA's Chief Executive Officer. Michael, the floor is yours.

Thank you, Eric, and welcome, everyone, to our third quarter 2024 financial results conference call. During the third quarter, we made significant progress towards transforming inovia into a leader in improving outcomes from topical ophthalmic medications built around our OptiJet technology. First and most near term, we are rapidly approaching a potential phase three efficacy data readout for Micropi, our pediatric progressive myopia product, which if approved, provides entry to a multi-billion dollar addressable market opportunity. Second, we are making advances with our next-generation OptiJet technology and are excited about the progress and what this will mean for our profitability profile. Third, we have been commercializing our Midriasis product, MidCombi, the first FDA-approved product based on OptiJet technology, and we also launched our second FDA-approved product, Clobetazole, an advanced ophthalmic steroid with a highly desirable profile. Fourth, we are advancing our OptiJet development pipeline in dry eye, with clobetazole serving as the cornerstone for three compounds in late-stage development and partially funded through our strategic partners. Now let's take a deeper dive into Microbiome, our OptiJet-based low-dose atropine product candidate for pediatric progressive myopia. Pediatric progressive myopia is increasingly recognized as an epidemic in both the United States and globally. In the U.S. alone, of the nearly 20 million children with myopia, approximately 5 million are considered at risk of losing functional vision due to this disease. While glasses and contact lenses are the current standard of care for children diagnosed with progressive myopia, they are not always appropriate for the youngest children who are also at the most risk of myopic progression. Many younger children do not tolerate contact lenses well, have difficulty putting something on their eye, or may cause themselves injury or illness due to poor lens insertion techniques. Atropine has been shown in prior studies, such as LAMP and ADAM, to slow myopia progression, and we believe our proprietary atropine formulation, administered with the OptiJet, may offer benefits beyond what could be obtained with a traditional eye drop. With the OptiJet technology, children in our Phase III chaperone study, as young as six years old, are dosing themselves nightly with minimal parental supervision. They can self-administer the dose because the OptiJet doesn't require any head tilting or manipulation of an eyedropper bottle, making aiming with a built-in mirror and medication administration achievable. The dosing itself feels like a gentle mist, and children have become familiar and comfortable with the dosing process quickly. This has the potential to reduce dosing anxiety and minimizes the myriad of struggles parents face when dosing children with conventional eye drops. The side effects of atropine dosed with the OptiJet have been notably infrequent and mild in the chaperone study. These results are consistent with what we have come to expect with our advanced drug device dosing system. Throughout the trial, our engineers have been keeping track of the performance of the OptiJet with embedded firmware that also helps study doctors to better understand how and when the device has been used. Each time the dosing button is pressed to administer medication, the device records the event and stores the information. This information can be accessed and reviewed by clinic staff during the patient's visit. For the commercial product, we anticipate Micropine will be equipped with our OptiCare system, which can notify patients and their parents and their caregivers when to administer their spray dose, as well as communicate important compliance and adherence information to the treating doctor. Our engineers are working today on plans to validate the system as part of our anticipated future NDA submission. We are continuing to advance the phase three chaperone study and are looking forward to the outcome of an analysis of the three-year efficacy and safety data very soon. If this analysis conducted by an independent data review committee indicates that we have likely achieved our efficacy endpoint, we would perform a complete analysis and discuss with the FDA an accelerated pathway towards an NDA submission as soon as early 2026. We look forward to providing additional updates on this program during our upcoming KOL virtual event on December 11th. Now let's talk about the advances our team has made with our Gen 2 Opti-Jet. We recently completed the first phase of manufacturing registration batches and are now preparing those cartridges for sterilization and subsequent drug stability testing. This is a key step in the FDA review process for this technology. We are leading with Midcombi as this is our most expeditious path to registration. and we believe would provide a foundation for all subsequent products that are developed for use with the OptiJet. As a reminder, the Gen 2 device has many advancements over its first-generation predecessor, including one-button use and compatibility with our digital compliance monitoring program, OptiCare. It was also developed with fewer parts and is more efficient to manufacture. This greater efficiency translates to lower costs, helping us to achieve margins of up to 90% on our planned product line. We view the introduction of the Gen 2 OptiJet as a significant upcoming inflection point for the company. Now let's look more deeply into MidCombi. MidCombi is also very important to Inovia as it has de-risked our OptiJet technology from a regulatory point of view. Prior to the approval of MidCombi, there were no other products in ophthalmology that combined the approval of a drug with a device containing electronics. We worked very closely with the FDA to identify the various activities, studies, and validation processes necessary to get our device approved, allowing the combi to serve as the precedent for any other optogen-based product. Obtaining FDA approval by itself was a terrific milestone for our company, and we are now recognized as a leader of this technology within eye care. We also understand that introducing this technology into the market requires us the paradigm of using eye drops. With this in mind, we placed MidCombi in about 200 offices and worked closely with those doctors and their technicians to learn more about their perceptions of the OptiJet platform. We found that after using MidCombi 50 times, which translates to about a week, both doctors and technicians felt truly comfortable with the change from eye drops. We also found that four out of five eye care professionals felt that MidCombi was a substantial improvement over eye drops, especially when dilating older people, children, and those who needed to return to work more quickly, as their experience with McCombie was that pupil dilation did not last as long as it did with eye drops, which was highly desirable. As a result of these positive findings, our sales force is now focused on three things. Formulary acceptance of key institutions, retention of the existing offices, and converting another 200 offices over the next few months, which they are working on right now. Before turning the call over to Bren, I'd like to cover a recent change to our board of directors. In September, our founder and board member, Sean Ianculev, stepped down from the chairman role for personal reasons. He will remain on the board and also continue to serve as our executive medical consultant. Charles Mather, who has served on our board since 2018, has been appointed our new chairman. Charlie has significant experience and expertise in capital markets, and his guidance has served us well as we work to keep the company sufficiently funded to advance our development initiatives. We are pleased that we will continue to have both Charlie and Sean as vital resources on our board at this important time for Inovia. At this point, I'll turn the call over to our Chief Operating Officer, Bren Kern. Bren?

Thanks, Michael. At the end of September, we announced the launch and commercial availability of Clebetazole, developed by our partner, Formosa Pharmaceuticals. Clebetazole is FDA approved for the treatment of pain and inflammation following ocular surgery and the first new ophthalmic steroid to come to market in over 15 years. With its favorable efficacy and safety profile, convenient twice-a-day dosing regimen, and streamlined distribution designed to eliminate complications from insurance, we're seeing strong interest amongst doctors and have already placed clobetazole into local pharmacies supporting over 100 offices. Clobetazole perfectly complements MidCombi, our FDA-approved and commercially available mydriasis agent, offering additional value to ophthalmic offices while maximizing the utilization of our 10-person sales force. Offices commonly show interest in both clovetazole and medcombe. The launch of clovetazole signifies a substantial step towards the execution of our commercial strategy. We also announced the results of commissioned market research indicating strong level of interest from ophthalmic surgeons after their review of prescribing information. 100 ophthalmic surgeons were involved in this research and ranked efficiency and safety as the most important characteristics of post-operative steroids. In clinical studies of clobetazole, approximately 80% of patients had complete relief from pain as soon as four days post-surgery versus approximately 50% for patients who had vehicle. Clobetazole safety information was also of importance, with the same study results showing that no single adverse event affected more than 2% of patients. These top two characteristics piqued the surgeon's interest. The research also showed that managed care coverage challenges were a significant concern for most of the doctors. Inovia is addressing these concerns by offering clobetazole II patients at a low fixed price regardless of their insurance status. This is seen by surgeons as a great way to eliminate insurance complications that often burden their office staff. In summary, the majority of surgeons surveyed, based solely on the actual prescribing information and pricing, indicate a high-level interest in prescribing clobetazole. Turning now to our manufacturing facilities, recently, we successfully completed two audits of our Renovata facility, one by the Nevada Board of Pharmacy and the second by the FDA. Receipt of these licenses enables Inovia to manufacture, store, transport, and distribute our products, another significant step in transitioning Inovia to a commercial company. I'd now like to switch gears with an update on our partnerships, beginning with Dry Eye. Recall in our last quarterly update, we discussed three development collaboration agreements, each with with each drug being a primary candidate to leverage our OptiJet dispenser. Nearly 16 million Americans suffered from dry eye, with treatment expenditures totaling over $3 billion in the U.S. and $5 billion globally. Symptoms of dry eye can significantly interfere with daily life, and many patients remain unsatisfied with available therapies. According to a recent survey by the American Academy of Ophthalmology, 48% of patients reported carefully following their treatment plans, but only 13% experienced lasting relief. We're excited about our collaboration agreements in the field of dry eye. In brief recap for Formosa, we signed an agreement to develop a formulation of Colbetazole in the OptiJet as a potential treatment for acute dry eye and another indication. This development program, which will require two 15-day clinical trials, will be free of any upfront fees from Inovia or development milestones to Formosa in less than until it receives FDA approval. For Senju Pharmaceuticals, we also signed a collaboration agreement to develop a new adjunctive treatment for chronic dry eye disease. We will work closely to develop Senju's SJP0035, initially intended to facilitate epithelial wound healing as a candidate for use with the OptiJet to treat chronic dry eye. This potential drug-device combination is unique as it's being designed for use alongside other dry eye medications. In other words, we believe it would complement existing products rather than competing with them. We are working towards requesting a meeting with the FDA later this year, followed by anticipated completion of a Phase IIb study in 2025. If successful, the companies may expand this collaboration and initiate two phase three studies by 2026. To date, SJP0035 has been tested in prior phase one and phase two studies as a standard eye drop across 250 subjects at multiple doses. With these studies, SJP0035 was well-polarated, providing promise to support chronic dry eye indications. And finally, SDN. We entered into a collaboration agreement with SDN Nanopharma to leverage its proprietary micellar nanoparticle platform known as the MNP platform. This platform allows for the distribution of active pharmaceutical ingredients in three or more phases, thereby improving its bioavailability, biodistribution, and pharmacokinetics. We have been conducting feasibility and manufacturing testing with SGN's Phase III-ready ophthalmic cyclosporine formulation, SGN-101, in combination with our OptiDep device as a potential treatment for chronic dry eye. This faster working cyclosporine combined with the OptiJet dispenser could be a powerful new treatment option for this large underserved market. With the SCN collaboration, we are hopeful that we may have a phase three ready asset next year in chronic dry eye. With these three agreements, we have the potential to make strong inroads into the entire dry market a $3 billion annual addressable U.S. market serving a multimillion patient population with unmet needs. I'll now provide an update on an existing licensing program with Arctic Vision, which covers all three of our products, Micropine, Aperture, and the Combi, in China and South Korea. This licensing program provides for sales royalties in addition to development milestones. As Michael said earlier, MicroPine in particular is a significant opportunity in China for pediatric myopia and part of the $5 billion global market. If approved, MicroPine could be a potentially meaningful source of long-term non-diluted funding for the company. To date, our licensing agreement with Arctic Vision has generated approximately $6 million in licensing fees, and we have the potential to earn an additional $37 million in net license and development milestones over the next three to six years. If our products are approved upon commercialization, we'd also be eligible to earn significant sales royalties. We are excited about the improvements the OptiJet may provide for patients required to deliver topical ophthalmic medications and believe this platform has widespread utility. To that end, we continue to assess our potential pipeline expansion opportunities. Similar to Formosa, Senju, and STN, we are seeking opportunities which can leverage the OptiJet technology in additional large ophthalmic indications such as glaucoma. I'd now like to turn the call over to our new Chief Financial Officer, Andy Jones.

Andy? Thanks, Brent. I'm very excited to be here with everyone today as part of the I Know Dia team. For the third quarter of 2024, we reported a net loss of approximately $7.9 million or 11 cents per share on approximately 69.5 million weighted average shares outstanding. This compares to a net loss of 7.3 million or 18 cents per share and approximately 40.1 million weighted average shares outstanding for the third quarter of 2023. Growth loss for the third quarter was $131,000, which compares to $12,000 for the prior year quarter. The losses are primarily the result of adjustments to write-down inventory to net realizable value during the respective periods related to mid-combi in our Gen 1 device. We will likely continue to incur such losses on sales of our Gen 1 device. However, we anticipate that positive margins on clobetasol cells will offset those losses as that channel grows. Research and development expenses total approximately $3.5 million for the third quarter of 2024, and this compares to $3.6 million for the third quarter of 2023, a slight decrease which reflects the reallocation of internal resources to commercial production. For the third quarter of 2024, general and administrative expenses were approximately $3.7 million as compared to $2.9 million for the third quarter of 2023, and that's an increase of 27.3%. That increase consisted primarily of $647,000 in salaries and benefits, primarily related to the start of the company's commercialization efforts. Total operating expenses for the third quarter of 2024 were approximately $7.2 million as compared to $6.5 million for the same period in 2023. This represents an increase of approximately 10.6%. Our third quarter 2024 operating expense figure also included approximately $1.2 million of non-cash expenses. At September 30th, 2024, we reported unrestricted cash of approximately $7.2 million. This includes net proceeds of approximately $10.7 million raised during the quarter through securities offerings. We continue to evaluate capital raising structures to fund our ongoing strategy and to make near-term payments on our Avenue loan. Also, as always, we continue to look at ways to improve our operating efficiencies and control expenses. We are excited about our commercial portfolio, our development pipeline, and our current and future partnerships that leverage the OptiJet platform. We believe that we have established a foundation for growth as a leading ophthalmic company with a novel and highly differentiated technology and applications across several very large market ophthalmic indications. In conclusion, we are very pleased with our progress in the third quarter of 2024 and expectations for subsequent periods. To summarize our key highlights today, first, we are preparing for an analysis of the three-year efficacy data from our ongoing Phase III chaperone trial of micropine in pediatric progressive myopia this quarter. If positive, this data may allow us to significantly advance our remaining development timeline. Also, we commenced the manufacture of registration batches of Midcombi and our state-of-the-art Gen 2 OptiJet device. We also announced the U.S. launch and commercial availability of Clobetasol, which is the first new ocular steroid approved in more than 15 years. Customer feedback has been very positive, and we are very excited about the opportunity here. With over 6 million surgeries performed each year in the U.S. for which patients could potentially benefit from Clobetasol, we believe that even a low single-digit market share would be very meaningful for us. We entered into development collaborations with Formosa, Senju, and SGN to develop novel therapeutic formulations for the OptiJet that would potentially address unmet needs in acute and chronic dry eye disease. Also, our commercial launch of MidCombi continues to track well with the product now in use at over 200 ophthalmology offices around the country. 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. This concludes our prepared remarks. We would now like to open the call to questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question is from Matthew Caulfield from HCA Wainwright. Please go ahead.

Hi, thank you. Hi, Michael and team, and thanks for the update. So, as we look to the chaperone trial, what are the most important distinctions for setting expectations to define success? Obviously, we're looking at the myopia progression of less than 0.5 diopters, but are there other top points that are most clinically meaningful or relevant as we get closer to that readout?

Thank you, Matt, and it's a very good question. So, you know, the way this is going to work is that the independent review committee which is truly independent of us and is made up of expert medical doctors and optometrists in the field, they're going to, after they meet, tell us whether or not at least one of the doses in the chaperone study appears to have reached statistical significance over placebo. Once that happens, then our company, Inovia, will make a decision to open the database and dive into the data, which will take a few days more to see exactly what's going on. Things that we will be looking for, obviously, is the efficacy endpoint that you talked about, which is the number or portion of patients that do not progress more than half a diopter after three years of therapy. But in addition to that, the things I would like to look at are the things that make the optogen very special. And those would be things like the side effect profile, where we anticipate because we're in ophthalmic spray that we should be more comfortable than would be expected from an eyedrop. or things later on about compliance where we would want to see that the children in the study were able to comply with therapy more than what you have seen in historical studies that are similar. Another one we'd be looking at is there has to be a PK or blood level evaluation as well. And we'd like to see that there's very little exposure systemically to atropine during the study too, which could be another advantage. So those are the types of things that differentiate the OptiJet delivered product versus perhaps an eye drop that we'd want to look at.

Very helpful. And then do you mind if I ask just one quick follow-up on chaperone as well? Sure. So with that trial, those seen as young as six years old, which you mentioned, is there a sense of what age range progressive myopia is most commonly identified in practice? Like presumably children are identified a little bit earlier than that. Is that accurate or?

Right. So there's actually a number of publications in the area. And one of the things that we've been told is that the way that these children are identified is you have a child coming in, usually when they're in kindergarten, when they first get their eyes examined. So they're five years old, six years old. They come in. They're myopic. The doctor looks around. Both parents are myopic. That's usually a very good signal that there's probably a genetic component and they're at the most risk. And you want to capture them when they're 5, 6, 7, 8 years old because the progression of myopia is tied to the development of the eye. So the faster and more the eye is developing when the children are younger is when you have greatest progression. By the time you get to somebody who's maybe 14 or 15, you've already kind of lost a lot of that opportunity. So the goal is to find them and find them early. Awesome. That's very helpful, guys.

I appreciate it. Thank you. Thank you, Matthew. Take care.

The next question is from Matt Kaplan from Ladenburg-Thalman. Please go ahead.

Hey, guys. Thanks for taking the questions. Just to follow up on the chaperone interim analysis, what's the potential powering that you'll have with this interim analysis as you go into it?

Thanks, Matt. And always good to hear from you as well. I wish I had the statistician here. I believe the power calculation was something around 85% with what we have, and that's at a p-value of less than 021. If I'm off by a little bit, please don't hold me to that because I'm trying to remember what was in the statistical plan. But it's adequately powered at this point, and that's why we're having the Independent Review Committee take a look at the data.

And in terms of data, How that works in terms of the independent review committee gives you an answer, and then you do the full analysis? Is that the way it works? Right, exactly. Okay.

You're right. So what happens is the first step is they get to look at the data. Nobody at Inovia sees the data, so it's not open to us. So they see it, and then they say, yes or no, there's something here. If there is something here, then Inovium makes the decision to go ahead and open the database at that point, and then we would do the full analysis, and that will take several days to see exactly what's in there. Okay.

Great. And if this is positive and you do the analysis, what would be the timeline to a potential NDA filing in this indication, and what would be the rate limiting step?

Right, so if the analysis is positive, and after talking with the FDA, they confirm that we have the way to move forward with the study, we could be looking at an NDA filing in the first half of 2026, which is about two years earlier than we had planned. So this is a great way to accelerate the entire program. In terms of what could be in the way, I'm not really sure that there would be anything, because if we have a positive study, what the FDA would be looking for is efficacy and how does that compare to safety. And in the mask data, which we've been looking at, we have a great safety profile. There's been no significant adverse events that are treatment-related, and the AEs we do see are the ones that you would expect from this kind of therapy, and they've all been mild and very short-lived.

And are you able to leverage the existing data atropine safety data to facilitate the NDA filing?

Well, the FDA is allowing us to use the LAMP study and the ADAMS study in place of one phase three study. So yes, for that. For us, I'm sure that a lot of reference that, but I think we'd love to have our safety data in that label because I believe, and I haven't seen the data yet, that our safety profile may be superior to what you would get with an eye drop just simply because we have the lower dose volume. Of course. Okay.

Great. Thank you for that detail.

Thank you, Matt.

The next question is from Lachlan Hanbury-Brown from William Blair. Please go ahead.

Hey, guys. Thanks for the question. I guess first, can you just help us understand the revenue number in the quarter? I mean, it looks like it was down over Q2, but you did. report an increase in the number of centers or practices using Mid Combi. So can you just explain the dynamics there?

Yeah, so we're super excited about Mid Combi. We have it in over 200 offices with a good response from those folks. Our next goal is to continue to push that out to additional offices with the goal of having 200 more. So, you know, the revenue number in Q3 is about $2,000. We think we could go up from there. As you know, we have a loss on those sales, but that was to be expected. And one of the benefits of getting this out there, in addition obviously to the cash flow that we get from it, is just having the product out there being used, providing feedback on it, as we progress to Gen 2. But I think that revenue number also reflects that we were preparing for the launch of Clobetasol, and we feel like having both of those products out there with our sales team will benefit both channels in the current and future quarters.

Right. Let me add to that also, and thank you, Andy, that MidCombi, like any pharmaceutical product, when you go and you launch it, the first thing you're going to do is you're going to bring samples into the marketplace because people are going to want to try your new product. In this case, we're bringing a brand new technology that people need to be exposed to, they need some training, and they need to use it actually on patients. So what you're seeing here is that while we're in over 200 offices now, it's because we've pre-qualified these offices as potential MidCombi offices, place product in there as samples and they've been using them and now they're reordering. So you're going to see the reorders come in the fourth quarter. We had, for example, the University of California just had ordered 15 more cartridges in the past couple of days. So now that they've actually used it and they see its benefit, they're ordering more of it. And that's why the sales force is now going to be let loose to sample another 200 offices and do the same sort of thing. And then lastly, what Andy had said about helping to leverage clobetazole, it does do that because we can bring both of the products in. They solve two different issues for the same thing. Presurgical, you have mid-combine, and then post-surgical, you have clobetazole. So it's a nice way to round out that sales call.

Great, thanks. And on clobetazole, it sounds like you're seeing good interest. Can you maybe just talk a bit more about what you're seeing sort of in the field? I think you said You are in 100 pharmacies for offices. Is there anything you can provide on how many doctors have used it or anything along those lines at this point?

I don't have those figures, but what I can tell you is what we're finding is that the doctors are very attracted to the profile and very interestingly, more attracted to how we're distributing because they do have so many problems with prior authorizations and other issues with managed care. for this class of drugs. And we find that what's working very well for us is we are selling clobetazole into the mom and pop pharmacies that are usually located in the medical arts buildings and the other places near where the surgeons are. And they just very simply write the product. The patient goes downstairs, picks it up. The price is always the same regardless of their insurance status. You know, no mess, no fuss. And that's working for them. And we're getting reorders now from those pharmacies. So that is something that's working great. And we look forward to finding more of those opportunities.

Thanks. Thank you.

The next question is from Kemp Dolliver from Brookline Capital Markets. Please go ahead.

Right. A couple of questions. First, on mid-combi, when you mentioned 200 additional offices, did you mention a timeframe for that?

Kev, I didn't, but I'll share it with you now.

They're going to hit those 200 offices this quarter. Okay. Fabulous. And...

When we, you know, the office statistic is one way, you know, it's kind of like a biomarker because offices vary in their size and at traffic levels. So how should we think about the, say, the number of whether, you know, technicians or physicians, how, you know, how many units are out there roughly?

Right. We don't go into a, we pre-qualify an office to have at least five lanes in So you would usually have five techs with their doctors working simultaneously. So that would be the minimum size office that we would be going into.

Great. That's very helpful. And my last question is to go back to the relationship between revenue and cost of sales this quarter, because in prior quarters, you know, we've seen some costs that were related to buying back the micropine inventory from Bausch & Lomb and completely unrelated to mid-combi. So this quarter, is this an apples-to-apples relationship, or are there other expenses in there?

So the cost to reacquire the product on our former relationship, those would be outside of cost of goods sold, so those wouldn't be included in that number. The numbers you're seeing coming through CODS are, you know, adjustments primarily for, you know, either short-dated inventory or for, you know, overhead that's applied to finished goods that we have to reduce to net realizable value. So those numbers can fluctuate depending on what we have in terms of inventory and when that might expire or in terms of how much overhead that we're applying to the product. We anticipate as those volumes increase, that number would change. I think when you're comparing, for example, the second quarter with the third quarter this year, I'd say that those were different adjustments. In the second quarter, it was more related to short gating on some of our finished goods that we had produced early on in the commercialization and the development of that inventory. Another thing to point out about these losses is that much of those costs, as I mentioned, they might be overhead or they might be inventory. Those costs are all sunk costs, so they're not a drain on our cash. You know, because those have already been committed in terms of overhead or in terms of inventory purchases. But we'll continue to look at those every quarter. But I don't, you know, I don't personally see anything alarming here. And I think that the adjustments have been a little bit different each quarter, but we'll continue to look at them and, you know, we'll probably continue to see some of that. But as I mentioned, as we grow other channels and this channel, we expect the magnitude of those to wane.

Great. Thank you. Thanks, Kev.

The next question is from Len Yaffe from Stock Talk Partners. Please go ahead.

Thank you very much. I had two questions for you, Michael. The first is you touched on this, but Given with micropine you're looking at a pediatric population, which are very sensitive to drug delivery, could you talk about the advantages that the OptiJet will likely have versus traditional dispensing to make sure you're getting the right dose in the patient in order to be able to have the appropriate effect? And then the second question, and you may have mentioned this, I could have missed it, was I'm trying to understand the where I know that they're scheduled to be possibly the interim look soon, but when will the public moral announcement be made in terms of what those top-line results are? Because I'm trying to understand the timeframe, given your current cash position, to when shareholders, potential investors, would understand what the top-line data are. Thank you.

Thank you, Len. Let me answer the second question first. The Independent Data Review Committee, which is truly independent from us, they are meeting very, very shortly. Now, getting them to meet when they're all very busy, well-recognized experts in the field, I'm sure has not been an easy feat for the chairman of that committee. But that should be happening any day now. And once that does happen and we get an answer from them, our commitment is to share that answer within a day. of when we have it, so all of those things.

But is it just the data, or is it just the yes, a go, no go?

The answer is just the go, no go. It's going to take us about, I would say, several weeks after that to actually dig into the data to say exactly what's in there. But the go, no go is going to tell you, you know, if it's go, there was at least one arm that was statistically superior to placebo. So that's, you know, pretty significant information just from that. For what I believe our product offers that's superior to eye drops in pediatrics, there's a number of things. If anybody who's been a parent has ever tried to administer eye drops to their child, they know that that's difficult to begin with just to do that, never mind the child doing it by themselves. I think the exposure is another issue. You have less systemic exposure with the OptiJet than you would with an eye drop, just purely because you have less volume. And we actually have published data on phenylephrine, for example, that shows that that difference is about 33%. And when you're talking about a 40 or 50 or 70-pound child, that could be meaningful, that systemic exposure over three years. Topical tolerability, you know, the stinging that's associated with low pH eye drops that you don't seem to get the same kind of reaction with the oxygen because it's the lower volume and it's gently sprayed onto the eye. And then, of course, all the compliance assistance that you get with the OptiJet so you can actually see what the child's doing. Because if the child's not taking the medication, it's not going to do them any good over the long term. So those are four things I can think of off the top of my head. I'm sure there's probably others as well, and we see those as meaningful differences.

Great. And then just so I understand again, the independent committee will evaluate the data, let you know, and then you'll take a couple weeks to go through the data. When would be the earliest that the public will be aware of what the top-line results are? Is it soon after that, or is it not for another quarter or two?

No, it won't be another quarter or two. I would say within a quarter, within the same quarter.

Excellent. Thank you so very much.

Thank you.

The next question is from Kemp Dolliver from Brookline Capital Markets. Please go ahead.

Kemp, you're back. Yeah, I never left. I just want to clarify the timetable based on a couple of your comments, because earlier on you made reference to your review taking several days, and then you said just now that It'll take several weeks. I don't know if those refer to the same steps in the process, but I just want to be clear that I understand the timetable you laid out.

I'm sorry. So I'm not sure exactly when we're going to get the information from the Data Review Committee. When we do have that, we will share that very quickly, and then we will take the time, and I don't know if the time's going to be or it's going to be four weeks to go through that data, but as soon as that analysis is done, that's when we will share it. But prior to that even happening, when that DRC recommendation is communicated to us, we will share that, and that in itself is a pretty meaningful event.

Okay, great. So it's essentially going to be potentially two disclosures.

Yes, I would say that is correct.

Okay, thanks. That's very helpful to know.

Thank you, Kevin.

This concludes the question and answer session. I would like to turn the floor back over to Michael Rowe for closing comments.

Thank you, Operator, and thanks to everyone on the call today for taking the time to join us. You know, this is an exciting time to be with Inovia as we prepare for several transformative events all occurring in the next few months. Many of those events will be discussed at an upcoming R&D webinar scheduled for Wednesday, December 11th at 1 p.m. Eastern Time. The webinar will feature three leading and well-published doctors who will cover the unmet medical and other opportunities that are and can be addressed by our products, Midgambi, Clobetazole, and Micropine. More information about this event will be coming out just before Thanksgiving, both through a press release and on our website, inovia.com. We invite all of you to register for what we anticipate will be a very informative session. Thank you again. This concludes our call, and we look forward to talking with you again very soon.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.