KALA BIO, Inc.

Good morning and welcome to Kala Pharmaceuticals' first quarter 2021 financial results conference call. At this time, all participants are in listen-only mode. Following management prepared remarks, a Q&A session will be held as a reminder. This call is being recorded. I would now like to turn the call over to Nairanjan Kamraswanan, Senior Vice President of Strategy for Kala Pharmaceuticals. Please proceed.

Thank you, Operator, and thank you all for participating in today's call. Mark Iwiki, Chairman, President, and Chief Executive Officer, Todd Bazemore, Chief Operating Officer, Mary Remeth, Chief Financial Officer, and Kim Brazel, our Chief Medical Officer. Today's call is being webcast live. The webcast link can be found in the Investors and Media section of our website at www.calarx.com. During this call, we will be referring to non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles. Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release issued today, which can also be found on our website. On this call, we will make certain comments about CALA's future expectations, plans, and prospects that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements will include statements regarding the potential market and commercial launch plans for ISUVIS, observations associated with our commercialization of ISUVIS and INVELTIS, and the sufficiency of our cash resources. These and other forward-looking statements are based on the beliefs and expectations of management as of this conference call. Our actual results may differ materially from our expectations. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after this conference call, except as required by law. Investors should carefully read the risks and uncertainties described in today's press release, as well as the risk factors, which identify specific factors that may cause actual results or events to differ materially from those described in our forward-looking statements included in the company's quarterly report on Form 10-Q and other filings we make with the SEC. The Form 10-Q will be filed with the SEC later today and will be available on our website. I will now turn the call over to Kala CEO, Mark Iricchi.

Thanks, Niranjan, and good morning, everyone. Thank you for joining us today to review Kala's first quarter 2021 financial results and recent business highlights. It's an exciting time at Kala. We now have two commercial products available for eye care professionals and patients, Deep Relationships Across Health. the ophthalmology and optometry markets, and are advancing a suite of innovative NCE pipeline programs. Taken together, we are working to extend our reach to address a broad range of front and back-of-the-eye diseases and help millions more patients. We believe this provides us with a tremendous foundation for future growth. As we look to the remainder of 2021, we are working hard to ensure the commercial success of ISUVIS and in VELTUS. We are pleased with the early ISUVIS launch feedback from doctors and patients as well as the significant commercial coverage that we've been able to secure in the few months since launch. In addition, we are encouraged by recent trends suggesting that elective ocular surgeries are growing toward pre-COVID levels as vaccines are becoming more readily available. We believe this positions in VELTUS for future growth in the market. We also continue to advance our next wave of therapeutic candidates, which includes programs for the treatment of both front and back of the eye diseases. As we have described before, we believe these programs, which include a selective glucocorticoid receptor modulator, or SEGRM, and a tyrosine kinase inhibitor, or TKI, have the potential to fuel future growth for Kala by leveraging our existing capabilities and extensive scientific know-how to deliver new solutions for retinal disorders that affect millions of people worldwide. We look forward to providing additional detail around these programs later this year as they move toward clinical development. We believe we're in a strong position to advance our portfolio of innovative products and development programs. This morning, we announced we entered into a new credit facility and increased the funds available to us subject to certain conditions to up to $125 million and also pushed out the beginning of our debt repayment obligations by a minimum of two years. This is an important milestone that ultimately contributes to enhancing our cash runway. We now anticipate that our cash resources as of March 31st, 2021, together with anticipated revenue from ISUVIS and INVELTIS, will enable us to fund our operations for at least two years as we continue to invest in our company. Mary will provide some additional comments about this update later in the call. I will now turn the call over to Todd to review our commercial progress with ISUVIS and INVELTIS.

Thank you, Mark. I'll begin this morning with a launch update for iSUVIS. We are pleased to report that as of the week ending April 23rd, data from Symphony Health and our patient hub indicate that more than 11,600 prescriptions for iSUVIS have been filled, written by more than 2,000 unique prescribers since the product launched in early January. In a short period of time, iSUVIS is quickly establishing itself in the market, is an ideal first-line treatment option for dry eye flares. Symphony patient source data indicate that approximately half of all ISUVIS prescriptions are for treatment-naive patients who previously had not been on a prescription therapy for their dry eye disease, supporting our belief that ISUVIS has the potential to become the preferred first-line prescription therapy for dry eye flares. turning out execution against two of our strategic priorities for the ISUVIS launch, ensuring optimal access and broad payer coverage, and establishing ISUVIS as the preferred prescription therapy for the short-term treatment of dry eye disease. Our market access team has done a great job expanding our payer coverage for ISUVIS. Just four months into launch, we have secured coverage for approximately 43% of commercial lives, totaling approximately 69 million lives. Gaining market access coverage with commercial payers is a core part of our launch strategy in 2021. Commercial payers make up the largest proportion of dry eye prescriptions, and patients with mild to moderate dry eye disease are typically younger and are more likely to have commercial health insurance. Earlier in the first quarter, we announced that iSUVIS was added to Express Script's national preferred basic and high performance formularies. We also announced that Cigna would add iSUVIS to their formulary as a preferred brand effective May 15th, 2021. In addition to these two formulary wins, we have secured coverage from other commercial health plans as well, including Emblem Health and Primera. We are incredibly pleased with this level of coverage so early in launch and believe it indicates payer anticipation of significant demand for iSUVIS. We look forward to further growing our market access coverage throughout the year which will be a key driver of our prescription growth in the months ahead. With substantial progress underway in building payer coverage, we are also making significant headway into establishing iSUVIS as a first-line prescription therapy for the short-term treatment of dry eye disease, which includes dry eye flares. We are routinely surveying eye care professionals in market research and see iSUVIS awareness growing. Our most recent survey indicated that nearly 80% of respondents report that they are familiar to extremely familiar with ISUVIS. In the same survey, nearly 70% of respondents stated that they have already prescribed ISUVIS. Additionally, survey responses indicate that eye care professionals view ISUVIS as suitable for a wide range of dry eye patients. We believe these quantitative results are closely linked to the positive anecdotal feedback we have been receiving from eye care professionals since we launched iSUVIS in January. Physicians consistently comment that iSUVIS is a very comfortable eye job to administer and that patients are benefiting from its rapid onset of action. Eye care professionals report that patients are achieving rapid symptom relief and that they are highly satisfied with how well the product works. In order to support the progress we are making against both securing market access and building demand price service, we plan to initiate our next Salesforce expansion in the second quarter, increasing from 91 to approximately 105 sales representatives by the start of the third quarter. Then pending continued growth in payer coverage and the status of the COVID-19 pandemic, we plan to further expand our Salesforce to approximately 125 sales representatives by the end of 2021. We are very pleased with our ISUVIS launch performance to date. The team is executing against our strategic launch priorities, and our ongoing efforts to educate the ophthalmology and optometry communities on ISUVIS is generating significant demand. We look forward to updating you on our launch progress on future calls. Turning now to Indeltus. As we have shared over the past year, the pandemic has impacted the ocular surgery market. In the first quarter of 2021, there were approximately 37,000 prescriptions of Enveltis reported by Symphony Health, compared to 41,000 prescriptions reported in the fourth quarter of 2020. Despite the challenges the pandemic continues to present, we believe that Enveltis prescriptions and revenues will grow over time. However, we remain unable to project the specific timing or quantify the potential impact on future revenues given the continued uncertainty around the impact and duration of the COVID-19 pandemic on elective ocular procedures. Now I'd like to turn the call over to Mary to go over our financial results.

Thanks, Todd. During this discussion of our financial results, I will reference certain non-GAAP financial measures. These non-GAAP financial measures exclude stock-based compensation, depreciation, and non-cash interest expense. For a full reconciliation of our gap to non-gap financial measures, please refer to today's press release, which is available on our website. This morning, we announced that we have further strengthened our cash position by entering into a new five-year $125 million credit facility with Oxford Finance, replacing our existing $75 million facility. The terms of the new facility provide for an initial tranche of $80 million with the ability to borrow two additional tranches totaling $45 million based on meeting certain revenue targets. The terms also eliminate the minimum cash balance required under our previous facility, resulting in additional cash on our balance sheet of $10 million. Principal payments will begin in December 2024 at the earliest, a full two years beyond our previous facilities. Additional information regarding the new credit facility is available in the 8K we filed this morning. As Mark mentioned, we believe this will allow us to invest in our company as we continue to establish our marketed products and advance our preclinical pipeline. Based on our current operational plans, we anticipate that our cash resources as of March 31, 2021, along with anticipated revenue from Isuvus and Inveltus, will enable us to fund operations for at least the next two years. Now, turning to a recap of the first quarter of 2021, our cash position as of March 31, 2021, was $156 million, compared to $153.5 million as of December 31, 2021. This increase primarily reflects net proceeds of $34.7 million received from sales of common stock under our at-the-market, or ATM, offering program. in a three-month ended March 31st, 2021, partially offset by cash used in operations. For the period ending March 31st, 2021, we reported net product revenues of $3.3 million. This is comprised of $1.63 million from net revenues from Invelta sales and $1.64 million of net revenues from Isuda sales. Net product revenues from Invelta sales increased approximately $500,000 compared to the first quarter of 2020, in which we reported $1.1 billion from sales of Inveltis. As a reminder, we recognize revenue when product is shipped to wholesalers. Cost of product revenues for the first quarter of 2021 was $800,000 compared to $400,000 for the same period in 2020. The increase is primarily due to the launch of iSuvis during the quarter, as well as an increase in total Inveltis units sold during the three months ended March 31st, 2021 compared to the three months ended March 31st, 2020. Non-GAAP cost of product revenues was $700,000 for the first quarter of 2021 compared to $300,000 for the same period in 2020. SG&A expenses for the first quarter of 2021 were $27.7 million compared to $15.4 million for the same period in 2021. The increase was primarily due to an increase in costs as a result of the launch of ISUVIS, including the expansion of the sales force and increased stock-based compensation costs. Non-GAAP SG&A expenses were $23.8 million for the first quarter of 2021 compared to $13.5 million for the same period in 2020. R&D expenses for the first quarter of 2021 were $3.1 million compared to $5.4 million for the same period in 2020. This decrease was primarily due to a decrease in external spend on stride three, our phase three clinical trial of ISUVIS, for which we announced positive data in the first quarter of 2020. Non-GAAP R&D expenses were $2.1 million for the first quarter of 2021 compared to $4.6 million for the same period in 2020. Loss from operations for the first quarter of 2021 was $28.3 million compared to $20.1 million for the same period in 2020. Non-GAAP operating loss was $23.4 million for the first quarter of 2021, compared to $17.4 million for the same period in 2020. Net loss for the first quarter of 2021 was $30.4 million, or 49 cents per share, compared to a net loss of $22 million, or 54 cents per share, for the same period in 2020. Non-GAAP net loss was $25.2 million for the first quarter of 2021 compared to 19 million for the same period in 2020. Please refer to the state's press release for the weighted average number of shares used in the calculation of our net loss per share for each of the quarterly periods discussed. That concludes our prepared marks for today. I will now pass the call over to the operator for questions.

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And our first question comes from Andreas Argyrides with Letbush. Your line is now open.

Good morning. This is Andreas Argyrides for Leona Misatos. Congrats, guys, on the quarter. Just a quick question on Invelta's. What trends are you seeing in the amount of cataract surgeries that give you confidence sales are going to pick up later in the year? Thanks.

Andreas, this is Todd Bazel. I'm happy to answer that question for you. So we're currently seeing surgical volume roughly at around 80% of its pre-COVID levels. I think what gives us encouragement is obviously the vaccine rollout continuing to go very well, combined with the fact that MarketScope is routinely conducting market research with surgeons to ask them what the impacts of COVID are and what they think future surgical volume will be as the vaccines continue to roll out. And the ophthalmologists are reporting that they expect by the end of the year to be able to return nearly to full pre-COVID surgical volume levels.

Okay, thanks. I'm going to hop back in the queue and let others ask questions. Thanks, guys.

Thank you. Our next question comes from Christopher Nayer with JPMorgan. Your line is now open.

Chris, not sure if you're on mute. We can't hear you.

Sorry about that. Thanks for the questions. Yeah, so first question is on service-payer contracting. Acknowledging it's still ongoing negotiations, can you speak to your confidence in, adding additional contracts here near term? And secondly, how are you doing the pace and progress for securing payer coverage relative to what you saw for the Invelta's launch? And second, on the ICVS patient hub, what's been your success rate and feedback from both physicians and patients on, for patients who don't have commercial and Medicare coverage as of yet? Any color there would be helpful. Thanks.

Sure, Chris. This is Todd. I'll try to kick through each of those if I miss something. Please don't hesitate to jump back in. We're really pleased with the way the ISU commercial market access is shaping up here in launch year. We do expect additional wins to come. I expect additional wins to come within the second quarter. And as we've always said, we expect that commercial coverage to continue to expand throughout the year and really be the key driver of continued prescription growth. as we head into the remaining three quarters of 2021. So feeling really good. I think the team's doing a great job executing on that. And we do expect to have additional wins to be able to announce and share with you throughout the year. I think on the hub side, I think, you know, like most patient hubs, we're having some success there, getting some scripts filled. You know, that hub is set up to help us with the prior offs that are required to for patients whose insurance does not yet have ISUVIS on formulary. So that's certainly a short-term solution to help in those situations, but ideally what we want to be able to do is move away from the hub by securing broad market access, having most patients have access to ISUVIS through their health insurance plan and not require a prior authorization to get the prescription approved and covered. That's going to allow patients, when they get the prescription from ISUVIS, to go straight to their local pharmacy, get the script filled, have a benefit, fill their eye service prescription at a reasonable copay, and have the ability to start treating their dry eye flare immediately.

That's super helpful.

Go ahead.

Yeah, that's super helpful. How do we think about the mix between script volumes currently that are on, that are currently covered versus uncovered?

So I think if you're asking about the actual market access coverage, it's about 43% of commercial lives that we now have coverage for with iService. Is that the question you're asking?

Or more so, so what percentage of the script volumes that you're seeing currently have commercial access coverage or going through the hub?

Yeah, look, like most newly launched products, most patients' insurance do not yet cover it, and that means that most of the prescriptions that were written, certainly in the first quarter, did not have insurance coverage and required a prior authorization approval. And so, you know, it's another thing that gives us great confidence as our market access continues to expand and patients are not requiring prior authorizations. It will have a significant impact on prescription volume growth for the remainder of the year.

That's helpful. Thanks for the questions.

Thank you. Our next question comes from Francois Brisebois with Oppenheimer. Your line is now open.

Hey, thanks for taking the questions. Just wondering, can you help us understand the breakdown a little bit that you're seeing between ophthalmologists and optometrists for prescriptions?

Frank, this is Todd. Good question. Right now, the majority of our prescriptions are being generated by optometrists, about 55% of prescriptions from optometrists, about 45% from ophthalmologists. That's not surprising to us. We know that optometrists tend to treat a little bit younger patient population when it comes to dry eye who more likely has commercial insurance. They are also oftentimes sort of the first line dry eye eye care professional. And so they may be seeing more of the mild to moderate patients who are suffering from, you know, three, four or five acute dry eye flares a year. and are patients that are ideal as first-line, you know, prescription therapy patients for ISUDAS.

Okay. Okay, great. And on that line of the first-line treatment, you know, can you talk a little bit more about the importance that about 50% of your patients are treatment-naive? And when you say first-line, just to be very clear here, is it mostly first-line for patients experiencing flares or first-line for patients with dry eye, just simply dry eye?

Yeah, so to your first question, we're really encouraged by the fact that so early in launch, already half of the Isuris prescriptions are for treatment-naive patients, and those are patients that have not been on a prescription GI therapy previously. You know, as you're probably aware, oftentimes when a new product is launched, you may get used in the more severe patient population that may be on other therapies, and you may be used as a junk of an add-on. But the fact that so early in launch, Eye care professionals are already going to eye service as a first-line prescription therapy for many of their patients is really encouraging. And when we talk about first-line, I think, you know, certainly for a patient that's experiencing dry eye flares, you know, we think that's a lot of where the prescriptions are going. But remember, that's the majority of all dry eye patients, right? Across multiple quantitative research studies, it indicates that anywhere from 80% to 90% of diagnosed dry eye patients suffer from these acute flares. We also know that only about 10% of those diagnosed patients are currently on one of the FDA-approved chronic dry eye medications. So we think that means that the majority of diagnosed dry eye patients are great candidates for first-line prescription therapy of lisubis.

Okay. No, that's very helpful. And then lastly, if you can just help us, you know, where are we exactly in terms of reimbursement? You just mentioned, again, the wins, their dates of effectiveness. And, you know, what you would expect once something is effective, is it kind of a bolus, kind of a pent-up demand, or is it slow? And then just lastly, if you can touch on the percentage of patients here that are commercial versus Medicare.

Sure. I'll start with the latter. About 50% of all GI prescriptions are reimbursed by commercial payers. It's around 40% that are Medicare, and the remaining 10% is some mix of cash and Medicaid. And, look, the Cigna contract goes live here in just a couple of weeks. ESI has been live since the beginning of February, and I think the team is doing a great job getting out there and communicating and educating eye care professionals about where there's access, which patients' insurance cover that, cover ISUVS, and where they're able to write those prescriptions and get the prescriptions filled without having to call back from the pharmacist. So the team is doing a great job. We'll continue to communicate that. You know, we're just a couple of weeks now from Cigna rolling out with that coverage, and, you know, I'm really confident in the team's ability to drive prescriptions as that coverage comes online.

All right, that's it for me. Thank you very much.

Thank you. Our next question comes from Tazina Med with Bank of America. Your line is now open.

Hi, good morning. Thank you for taking my questions. Can you tell us if Do you have any sense yet about, you know, number of bottles per year that are going to be utilized by each patient? I know you're still early in the launch trajectory, but are you noticing any trends on that? And then I have a couple of follow-ups.

Sure. Good morning. It's Todd. To your point, still too early to know number of refills, right, just four months into launch. What we do have some transparency to is for the scripts that have come into the hub, what percentage of those scripts have been written with refills. And right currently, it's about two-thirds of all of our prescriptions that we've seen at the hub were written with refills attached to them. So, you know, that gives us really good confidence that most of the scripts are being written with refills. And so as patients use their first bottle of Isuvus and then experience additional flares and need a refill, they'll be able to go and get it without having to go back to their doctor's office for another prescription.

And how many refills are they allowing?

You know, it varies. The majority of the refills are being written for more than two refills. But, you know, we're seeing great variance on that. You know, we've seen some cuisine as low as one refill to some that have had as many as 10 refills. Okay.

Okay. Now, in the first four months of launch, are you able to quantify what the impact of COVID has been? And as the country reopens, you know, what kind of easing, you know, as a result of easing of restraints, do you think how would that impact the tenor of the launch?

Yeah, it's a really good question. We are definitely seeing impacts. I think the biggest impact is just on our sales reps' ability to get in and see their customers face-to-face and have really meaningful sales interactions. It's currently probably about 65% to 70% of our eye care professionals that we're actually able to get in and see face-to-face. In fact, as you can imagine, the sales force has really focused its efforts in the first quarter on our high-decile customers that they can actually get in and see. And so as time goes on and, you know, more of those practices get comfortable allowing sales reps back in, we think that will certainly have a positive impact as it will give us a chance to, you know, get in and detail more eye care professionals, make sure they have samples and copay cards, which is going to be really important for expanding our reach.

Okay. We might have discussed this before, but I was curious if you have updated thoughts on the number of visits a sales rep might need to make to a physician's practice to result in scripts being written. Has that evolved during the course of the pandemic?

Yeah, you know, I would say also still a little too early to say. You know, we are seeing that it typically takes multiple sales calls to get in. You know, those sales calls involve talking about dry eye flares, identifying who those patients are in the practice, appropriately positioning iZubis as first-line prescription therapy for those patients. So, you know, too early to say on the exact number of calls, but, you know, we are certainly seeing that it takes a few sales calls before an eye care professional adopts and begins prescribing Isuvus.

Okay. And have you adopted virtual doctor visits, like Zoom calls or anything like that?

Yeah, we certainly have virtual tactics in place. They involve both rep to eye care professional interactions as well as we have done some virtual peer programs where some of our speaker programs can be done virtually as well.

Okay, great. And maybe just moving on, one last question. Beyond your two marketed products, you talked about a pipeline of pre-critical assets, both for the front and back of the eye, and wondering when we could get some more color about those and when they might enter the clinic. Thank you.

Yeah, I'll hand it over to Kenny.

Thank you. Yes, what we've said publicly is on our Sagram program, our target is to identify a lead compound by the end of this year, 2022, and then to begin the IND enabling work that would let us get into the clinic, hopefully within 12 to 18 months from that time.

So you would identify... by the end of this year, 2021?

Yes.

Okay. Great. Thank you.

Thank you. Our next question comes from Yuchen with HC. Your line is now open.

Hi. Thank you for taking my questions. How many eye care professionals have been reached by the sales team from January to April, and what are the reasons for those that have not prescribed eye service?

Yeah, this is Todd. I'm happy to answer that question. As I was saying earlier, it's probably about in the range of 65% to 70% of our eye care professionals that we're able to see face-to-face. We have certainly gotten to those eye care professionals. We have others that we're getting to through virtual promotion. The sales force has spent most of its time, as you can imagine, during the first quarter focused on the higher decile targets that we're able to get in and see face-to-face. And, you know, we believe from the market research and the feedback that we've got that, you know, eye care professionals are very enthusiastic about ISUVIS. As we said in the most recent round of quantitative research, 70% had said they had already written a prescription for ISUVIS. And we think, you know, the biggest thing that we can do to help them at this point is continue to improve market access, generate broad payer coverage so that a larger percentage of the prescriptions that are being written end up in a filled prescription that's covered by the patient's insurance.

Okay, could you give us an update on the usage of the patient access program?

Sure. Are you referring to the hub? Are you referring to our copay card? No, the copay card.

The copay card.

Yeah, it's a little less than half of the prescriptions that are coming in that are getting filled with the copay card.

Okay, got it. Thank you. Sure.

Thank you. Our next question comes from Tim Ching with Northland Securities. Your line is now open.

Hi, thanks. You know, I know you guys mentioned that you have about 43% of covered lives secured with market access for ISU. You know, what is the target? Where do you think that figure will be by year end?

Tim, we have not set a specific target or have not externally communicated a specific target for market access by year-end. We've just said that, you know, our goal is to obtain broad market access coverage within commercial payers by the end of 2021 with really a focus for Medicare coverage to start coming online in 2022. Okay.

And maybe just a follow-up. You know, as... We get to the reopen. What sort of major medical conferences are you guys going to be attending near term and throughout this year that sort of increase the awareness for your products? Obviously, I think a lot of ophthalmologists and optometrists, they are much more interested in new products. I was just sort of wondering what sort of conferences you guys are going to be attending.

Yeah, we will be at all of them, and we're really pleased that these conferences are starting to come back online for in-person meetings. So this past week was the big optometry conference down in Atlanta. That was in-person. We had great representation there from a number of programs ongoing. The whole IAI conference will be going on next week. That is largely attended by ophthalmologists. Again, that meeting will be in-person. So, you know, as these conferences start to occur in person, we will have a significant presence, both with our medical affairs department and our commercial teams at each of the conferences.

Okay, great. And maybe just one last question. Just sort of, I don't think you'll be able to answer it, but, you know, obviously, how do you sort of look at your prices for both ISUVIS and Invelta's throughout the course of this year and next. You know, obviously you signed some contracts here. You've got a WAC price for ISU that's around $460. Anything you can highlight just in terms of where the gross to net discounts are at this point? Are they pretty much in line with what other new products are at in terms of that discount?

Yeah, I certainly appreciate the question, Tim. As you know, we're not providing direct guidance on net revenues or gross to net, but I think it's a fair statement to say that similar to other new product launches, we expect there to be deeper discounts in the first few quarters of launch when you start to account for things like initial trade distribution and patient assistance programs and expect those gross to nets to improve over time as we secure broader market access coverage and, you know, at that point are just paying rebates to the payers as opposed to a lot of the other patient access programs that you have to initially put in place at launch.

Okay, great. Thanks. Sure.

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. Our next question comes from Kelly Shee with Jefferies. Your line is now open.

Good morning. This is from Jeff Reyes. My first question is a follow-up on the COVID impact. Have you seen gradual recovery in Q2 on the new patient that starts? And so this, given the vaccination has accelerated in the United States. And when do you expect to see full recovery of regular doctor office visit? And I also have a second question. I wonder if you have market research data inform what percentage of dry patients treated with steroids as the frontline treatment for acute flares? And do you see a difference on prescribing steroids between optometrists and ophthalmologists? Thank you.

Sure. You know, Kelly, I'll try to kick through each of those. Please don't hesitate to jump in if there's something that I missed. I think in terms of COVID impacts, as I said earlier, we're encouraged with the vaccine rollout. I think at this point it's estimated that roughly around 56, 57% of the U.S. population has received at least one shot. You know, obviously hard for us to predict what future quarters are going to look like and, you know, how the rest of the rollout of vaccinations are going to go. But we're optimistic. We are certainly seeing you know, more practices that we're able to get into and see the eye care professionals face-to-face. Certainly at this point compared to back in the winter when we were dealing with a second wave of spikes in cases being reported. So that appears to be improving. Certainly we have seen really good prescription volume growth for both in VELTUS and ISUVUS in the second quarter, looking at the weekly data compared to first quarter. So a lot of really positive signs there. As far as your next question about split and use of the product, we are seeing at this point about 55% of prescriptions being generated by optometrists, about 45% by ophthalmologists. So the optometrists do appear to be early adopters of ISUVIS. And we certainly anticipated that based on a lot of the market research we did to prepare for launch and understanding that a lot of those patients with more mild to moderate dry eye disease who do not have chronic persistent symptoms on a daily basis and are really not candidates for a chronic maintenance dry eye medication. They're patients who are better suited to be treated with a short-term treatment a few times a year. Like Isuvus, you know, those patients are largely treated by the optometrist, and so we are not surprised by the fact that they are early adopters. And then you asked about, you know, general use of steroids to treat dry eye flares. It's been quite limited. Only about 3% of the 17.5 million diagnosed dry eye patients previously would get a prescription for a steroid, an off-label steroid. There are certainly certain subsets of physicians like corneal specialists that were more comfortable with steroid use and were using more steroids. But when you look broadly across sort of all optometrists and ophthalmologists, it's only previously about 3% of diagnosed dry eye patients that would get an off-label steroid. And, of course, we expect that to grow significantly now with ISUVIS's approval and having an unlabeled steroid to treat these acute dry eye flares.

Thank you. It's super helpful. Thank you.

Sure.

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Mark Iwicki for closing remarks.

Thank you, everyone, for joining us this morning. We're really pleased with progress on the business and especially the early indicators of launch success with ISUVIS. We look forward to updating everyone soon and hope everyone stays safe. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.