Ocular Therapeutix, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutics fourth quarter and year-end 2021 earnings conference call. At 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 Donovan, Chief Financial Officer of Ocular Therapeutics. Please go ahead, sir.

Thank you, Catherine. Hello. Good afternoon, everyone, and thank you for joining us on our fourth quarter and year-end 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 and fiscal year ended December 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 Dextenva. Also speaking on the call today will be Dr. Michael Goldstein, our President, 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 quarter. and the fiscal year 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 Chief Business Officer. 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 1995. In particular, any statements regarding our regulatory and product development plans, as well as our research activities are 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 annual report on Form 10-K filed this afternoon with the SEC. I will now turn the call over to Anthony.

Thank you, Donald, and welcome, everyone, to the Ocular Therapeutics Fourth Quarter and Year-End 2021 Earnings Report. Ocular's had another strong quarter and a productive year. The commercial division of Xtensa continues to ramp. We achieved $12.3 million in total net product revenues in the fourth quarter and $43.5 million for 2021. This represents a 66% growth over the comparable quarter in 2020 and 150% growth in 2021 on a full year basis. I'm pleased with our commercial efforts and our team's ability to grow product revenues in each quarter of 2021 despite lower than expected cataract surgery volumes attributed to the COVID pandemic. Xtensa represents a tremendous growth forever for Ocular as we continue to put ourselves in the best possible position to grow the product. We've made significant progress on reimbursement as we enter 2022 with Xtensa currently maintaining pass-through payment status through 2022, and then very importantly, being eligible for separate payment beginning in 2023 and potentially beyond as a non-opioid pain management supply provision in ASCs. In addition, physician reimbursement for the insertion of Dextenza is now broadly available under our Category 1 code, which became effective January 1, 2022, ensuring reliable payment to physicians for Dextenza placement across all payer types and in all settings of care. In October, we received FDA approval of our SNDA expanding the use of Dextenza for the treatment of ocular itching associated with allergic conjunctivitis. This approval represents an important strategic milestone, not just because it expands the market opportunity for Dextenza, but because we believe it opens up growth potential in a new site of care, the ophthalmology and optometric office environments. Allergic ineptivitis is treated in the office environment, as opposed to the ASC and HOPD, where Dextenza gets the vast majority of its current use in the treatment of post-surgical inflammation and pain. Ocular's strategic goal is to expand its presence into ophthalmology and optometric offices by providing customers with numerous innovative buy and build products, including those developed internally and potentially those in license from other companies in the future. The approval of this NDA gives us the opportunity to take the first step in doing that. While the strategic potential of the office environment is exciting, it represents an almost entirely new space for ocular therapeutics with a unique set of challenges and opportunities. We discovered in the launch of Xtensa that the primary barriers of entry were the logistics associated with ASC and HOPD administration. Setting up accounts in ophthalmology and optometric offices will be analogous, but with different drivers that require bespoke solutions. As a result, in 2022, we are establishing a separate business unit consisting of key account managers and field reimbursement managers who will be tasked exclusively with selling into the office setting. This effort will expand our commercial footprint and provide the opportunity to further enhance the growth of Dextenza and may also facilitate longer-term the commercialization of any of the product candidates in our pipeline that may be approved, including potentially OTX TKI and wet AMD, OTX TIC and glaucoma, and our dry eye products, all of which are designed to be used predominantly in the office setting. Shifting to our pipeline, we have also made great progress advancing our key programs, We recently provided updates on OTX TKI for the treatment of wet AMD at the angiogenesis exudation and degeneration meeting and on OTX TIC for the treatment of glaucoma at the glaucoma 360 meeting. Both updates continue to demonstrate drug product profiles that we believe are compelling and could dramatically improve upon the standard of care in these billion dollar markets. We anticipate significant milestones in both programs over the course of 2022. Clearly, We believe our pipeline remains a source of tremendous potential value. We continue to advance the portfolio of product candidates that are highly differentiated clinically, that lend themselves to efficient commercialization, and have the potential for long periods of exclusivity. With that, I would now like to hand the call over to our President of Ophthalmology and Chief Medical Officer, Dr. Michael Goldstein, who will provide an in-depth look at our pipeline.