Ocular Therapeutix, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the ocular therapeutics first quarter 2021 earnings conference call. And this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of ocular therapeutics. Please go ahead, sir.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us on our first quarter 2021 financial results and business update conference call. This afternoon after the close, we issued a press release providing an update on the company's product development programs and details of the company's financial results for the quarter ended March 31, 2021. The press release can be accessed on the investors portion of our website at investors.ocutx.com. Leading the call today will be Anthony Monacich, our President and Chief Executive Officer, who will provide a summary of our corporate developments and an update on the commercial progress of Dextenza. Also speaking on the call today will be Dr. Michael Goldstein, our President of Ophthalmology and Chief Medical Officer, who will give an update on our clinical developments and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the first quarter before turning the call back over to Anthony for a summary and questions. For Q&A, we will be joined by Scott Corning, our Senior Vice President Commercial, and Chris White, our Senior Vice President Business and Corporate Development. As a reminder, on today's call, certain statements we will be making may be considered forward-looking for the purposes of the Private Securities Litigation Reform Act of 1995. In particular, any statements regarding our regulatory and product development plans, as well as our research activities, our forward-looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted, including those risks described in our most recent quarterly report on Form 10-Q filed this afternoon with the SEC. I will now turn the call over to Anthony.

Thank you, Donald, and welcome, everyone, to Ocular Therapeutics' first quarter 2021 earnings report. It has been a good start to the year, and we are pleased with our progress in the first quarter, both on the commercial front as well as with advances in our pipeline of product candidates being developed to target several of the largest market opportunities in ophthalmology. Overall, total net product revenue for the quarter was $7.3 million. Beginning with Xtensa, we achieved $6.7 million in net sales to our distributors for the first quarter. While the net sales growth over the previous quarter is essentially flat, The picture in-market billable sales unit shows more clearly the development of the extensive sales primarily because it isn't obscured by variations in distributor inventory levels. For the first quarter of this year, we achieved a record quarter for in-market sales in billable units of 16,634, representing nearly 15% sequential quarterly growth. While billable units were just over 4,500 and 4,900 in January and February respectively, March billable units grew strongly to over 7,000 units, our highest monthly total to date. We believe March sales reflect both reopenings and higher capacity utilization of ASCs and HOPDs. I'm also pleased to report that the March momentum has continued into April. Sales of billable units to end customers in April are expected to exceed 8,000 units and comfortably set a new monthly record. This is especially gratifying in that April is the first month of a new quarter when in-market sales are typically slow to build up. We believe that this recent acceleration of in-market demand reflects a continued growth in our share of total cataract volume and also a return to more normal levels of cataract surgeries being performed across the U.S. We expect these drivers to continue to propel growth throughout the year. It is important to note that in our last quarterly earnings call, we indicated that we would no longer report on monthly in-market sales of billable units after the first quarter of this year. and that we would restrict our disclosures to quarterly net sales to our specialty distributors. However, with the changing market conditions that we experienced in the first quarter due to COVID-19, the continuing adjustments of inventory management by our distributors, and the maturing of our gross to net calculations, we believe that it makes sense to continue to provide monthly in-market sales in billable units at least through the second quarter of 2021. Moving to our pipeline, we have four clinical programs. each of which is geared to produce a highly differentiated ophthalmology specialty product that addresses the key unmet need in its respective disease state. In the aggregate, the target disease states are estimated at over $20 billion in annual global sales. We believe our pipeline remains a source of tremendous value for Ocular, and we are adequately capitalized to fund each of our four clinical programs through key Phase II clinical trials, which we believe could mark an inflection point for us. This week, we have six company presentations and one presentation from an IIT at the 2021 Association for Research in Vision and Ophthalmology, or ARBO, virtual meeting. To highlight a few of the key presentations, we presented updates to interim analyses of phase one data for both OTX TKI, or intravitreal bioresorbable hydrogel-based implant for the treatment of wet age-related macular degeneration and other retinal diseases, and OTX TIC, our intracameral traviprost hydrogel-based implant for the reduction of intraocular pressure in patients with primary open-angle glaucoma or ocular hypertension. Both presentations provide updated data that are consistent with the development of potential products that could become the standard of care in these large markets. We are also presenting preclinical data for our products targeting ocular surface disease. We have posters presenting preclinical PK data of OTX-CSI, are cyclosporine-containing intercanalicular insert to increase tear production in patients suffering from dry eye disease, and if OTX-DED are dexamethasone-containing intercanalicular insert for the short-term treatment of signs and symptoms of dry eye disease. Additionally, later this week at ARVO, we will be presenting data on dextenza for the treatment of allergic conjunctivitis. As many of you may know, we have submitted a supplemental new drug application to the FDA for the use of dextenza and allergic conjunctivitis and have received a PDUFA target action date of October 18th of this year. And this presentation evaluates the safety of the product candidate in a pooled post-hoc analysis of the four clinical trials included in our regulatory filing. I encourage you to take a look at these presentations, which can be accessed either at the ARVA website or on our corporate investor page. Overall, I am pleased with the year on all fronts and I'm confident for another productive year. With that, I would now like to hand over the call to our President of Ophthalmology and Chief Medical Officer, Dr. Michael Goldstein, who will provide an in-depth look at our pipeline.