Earnings Call Transcript - EYPT Q1 2021

George Elston, CFO

Thank you, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals' First Quarter 2021 financial results and recent corporate developments. With me today is Nancy Lurker, President and Chief Executive Officer, Dr. Jay Duker, Chief Strategic Scientific Officer and Scott Jones, Chief Commercial Officer. Nancy will begin with a review of recent corporate updates, Dr. Duker will then discuss pipeline developments for EYP-1901, and Scott will comment on our commercial business performance. I will close with commentary on the first quarter 2021 financial results, and we will then open the call up for your questions. Earlier this morning, we issued a press release detailing our financial results, as well as commercial and operational developments. A copy of the release can be found in the Investor Relations tab on the corporate website www.eyepointpharma.com.

Nancy Lurker, CEO

Thank you, George. Good morning, everyone and thank you for joining us. We are incredibly pleased with our progress this quarter, with both our paradigm-changing pipeline and our commercial products that are delivering innovation to patients with serious ophthalmic diseases. Before turning the call over to my colleagues, I will briefly review our recent achievements as we continue to make terrific progress on our clinical and commercial plans. On the clinical front, in January, we initiated our Phase 1 DAVIO trial for our lead pipeline asset EYP-1901, a potential twice-yearly treatment for Wet age-related macular degeneration or Wet AMD, and we remain on track with this trial. As a reminder, EYP-1901 leverages a bioerodible formulation of our proprietary Durasert sustained release technology with vorolanib, an anti-VEGF tyrosine kinase inhibitor. We are very much looking forward to providing further updates with preliminary data from the DAVIO study expected in the fourth quarter of this year. In February, we continued to strengthen our balance sheet after the successful completion of an oversubscribed $115.1 million follow-on offering. This financing provides us with significant capital to continue to grow our organization efficiently and purposefully, including plans to expand our pipeline by initiating studies in additional indications for EYP-1901 in diabetic retinopathy and retinal vein occlusion, as well as advancing YUTIQ50 for posterior segment uveitis. Right now, we hope to begin these studies sometime in late 2021 or early 2022.

Jay Duker, Chief Strategic Scientific Officer

Thank you, Nancy, and good morning. As you know, we are very pleased with the progress so far on our EYP-1901 program for the potential treatment of patients with Wet AMD. Despite the challenges of the COVID-19 pandemic, enrollment is on target for our Phase 1 clinical study, the DAVIO trial, and we are pleased to report that our study remains on track to read out initial data in the fourth quarter of 2021. We are grateful for the effort by our team and our external partners for their extraordinary work as we progress the trial forward. The Phase 1 trial was an open-label dose-escalation study of three ascending doses with a total of 13 patients.

Scott Jones, Chief Commercial Officer

Thank you, Jay. Before I begin, as you know, EyePoint's revenue was negatively impacted by the COVID-19 pandemic in 2020. However, throughout this quarter, we continued to see strong growth in DEXYCU customer demand and as expected, slightly lower first quarter demand for YUTIQ as first quarter calendars are historically softer in this category. We're pleased as well that the customer transition to the new YUTIQ needle is going well. Despite the first quarter being historically weaker for commercial product revenues, our Q1 net product revenue of $6.8 million represents a 45% increase from the first quarter of 2020, where our net product revenues totaled $4.7 million. Net product revenue for the first quarter was $3.8 million for YUTIQ and $3.0 million for DEXYCU, respectively. Customer demand was approximately 7,000 units of DEXYCU and 400 for YUTIQ, compared to approximately 6,200 and 500 units respectively for Q4 2020 customer demand. Demand for DEXYCU in the first quarter of the year increased as a result of a growing positive impact from our commercial alliance partner ImprimisRx and the growing impact of our recently signed contracts. ImprimisRx's experienced cataract surgery field force is bringing significant momentum to demand. We're also beginning to see patients feel more comfortable coming to the doctor's office as the vaccine continues to roll out across the country. We're also continuing to execute on several strategies to expand or create permanent pass-through for DEXYCU, which is currently set to expire at the end of March 2022. We're currently working on both regulatory and legislative strategy to extend the payment for DEXYCU moving forward. Turning to YUTIQ, demand levels remained strong as a result of the expansion of our sales and marketing efforts in the retinal market, as well as the increased patient access, particularly in large hospital environments. This quarter, we rolled out a new siliconized needle for YUTIQ and we're extremely excited about the opportunity to provide a better patient experience over the coming months, as we continue to improve options for patients and ophthalmologists treating posterior uveitis. Given the pandemic, we are pleased with our current commercial trajectory and we're looking forward to growth throughout the rest of the year. As we look at the commercial year ahead, while it is difficult to project customer demand, we are optimistic that we will continue to see increased growth as sales and marketing for YUTIQ and DEXYCU increases. Based on current commercial numbers, our goal is to reach profitability or breakeven for DEXYCU and YUTIQ by the end of this year.

George Elston, CFO

Thank you, Scott. As the financial results for the three months ended March 31, 2021 were included in the press release issued this morning, my comments will be focused on a high-level review for the quarter. As Nancy mentioned, we've begun 2021 with a strong balance sheet, driven by the $115.1 million follow-on offering that follows important fourth quarter transactions where we reduced our obligation to CRG by $15 million and closed the $15.7 million equity investment by our Asia partner Ocumension. This improved position, combined with the continued return of our commercial business, has allowed us to reduce the 2021 revenue covenant with CRG services to $25 million at no additional cost. For the three months ended March 31, 2021, total net revenue was $7.3 million compared to $7.5 million for the three months ended March 31, 2020. This includes net product revenue for the first quarter of $6.8 million compared to net product revenues for the first quarter ended March 31, 2020 of $4.7 million. Net revenue from royalties and collaborations for the first quarter ended March 31, 2021 totaled $0.5 million compared to $2.8 million in the corresponding period in 2020. This decrease was driven by the monetization of our ILUVIEN Royalty in December 2020 and a one-time $2 million license payment received in Q1 of 2020. Operating expenses for the first quarter ended March 31, 2021 totaled $18.3 million versus $18.9 million in the prior year period. This decrease was primarily due to a $2.4 million decrease in sales and marketing expense, offset by a $0.8 million increase in G&A, a $0.6 million increase in R&D expense, and a $0.4 million increase in cost of sales. Non-operating expense net totaled $1.3 million and net loss was $12.3 million or $0.50 per share compared to a net loss of $13.2 million or $1.14 per share for the prior year period. Cash and cash equivalents at March 31, 2021 totaled $138.6 million compared to $44.9 million at December 31, 2020. We expect cash on hand at March 31, 2021 and expected net cash inflows from our product sales will enable us to fund our current and planned operations through the end of 2022. In conclusion, we are thrilled with EyePoint's progress in the first quarter of 2021, and are very well-capitalized to advance our product pipeline to key value inflection points.

Georgi Yordanov, Analyst

Maybe to start with a broader question for Dr. Duker, how do you see the Wet AMD space evolve over the next 5 to 10 years, given that in that time we'll be seeing the launch of generic entries, and there will be other programs on the market? And given the issues that we have seen recently from some of the gene therapy companies with serious adverse events, do you consider those less of a threat to a product like EYP-1901?

Nancy Lurker, CEO

Hi, Georgi, this is Nancy. I'll answer that question. Unfortunately, Dr. Duker couldn't join the Q&A today. Over the next five years, the Wet AMD market is expected to grow due to the aging baby boomer population globally, leading to increased demand. It's important to note that this is a substantial market, and given the prevalence of these diseases, there will be a continuous need for various treatment options. We do not anticipate a significant impact from generics, which typically affect the demand for new products. However, if new products provide considerable value by improving outcomes and treatment options, there will always be space for innovative drugs, which we believe applies to EYP-1901. Regarding the recent developments with some gene therapy companies, it's always tough and unfortunate to see adverse data, as patients require alternative medications. This situation emphasizes our point that delivering drugs into the ocular space, particularly in the back of the eye, is challenging. We are optimistic about EYP-1901 since our Durasert technology is well established. We have received four FDA approvals for our products, which are currently available on the market, and have an excellent safety record. The implant remains intact after injection and typically settles at the bottom of the vitreous, demonstrating good sustained zero-order kinetics. Overall, we believe this technology could significantly enhance patient outcomes and that there will be a substantial market for the drugs in development. We are confident about our chances of success with our Durasert technology. Does that address your question?

Georgi Yordanov, Analyst

Yeah, this is very helpful. And maybe as a follow-up, you have indicated your plans to go into other retinal indications. So maybe could you remind us of the opportunities there? And do you think that having a broader mechanism of action, such as a TKI, might provide added benefit compared to the current standards of care, especially for refractory patients? And do you have any guidance as to the percentage of patient population that those refractory patients might represent in these other retinal indications?

Nancy Lurker, CEO

Okay. So let's see, you asked three questions there. As to our other indications, yes, we are currently evaluating, doing some small studies in diabetic retinopathy and retinal vein occlusion, and we're hopeful that we can start those studies potentially early next year. So we are in the planning mode for those two additional studies. If you look at all those areas, those remain again large areas. Diabetic retinopathy, as you know, is a very large area with a large number of patients who suffer from that; it tends to be a precursor to Wet AMD and most DME patients have had or have diabetic retinopathy. It's a way to potentially catch those earlier and treat them. As for refractory patients, I believe your question was how effective we think we might be, and I believe that was your question. It’s hard to say at this point. Obviously, early data suggests that not just with vorolanib, which is the tyrosine kinase inhibitor we're using, but also if you look at the other tyrosine kinase inhibitors in development, they tend to show that these are effective drugs. We're going to have to see the data, but we do believe that the potential exists because these tyrosine kinase inhibitors, as you mentioned, hit a broader array of receptors. They operate at the receptor level, not at the ligand level, which is what the large antibodies do. As a result, the potential is there that they could potentially be more effective, but we have to see the data.

Georgi Yordanov, Analyst

This is great, and then just a housekeeping question. Just in terms of the will you be willing to provide any spending guidance for this year? And just thinking about Q1 in terms of spending, is that a good run rate for the rest of the year, or should we expect spending to pick up for the remainder of the year?

Nancy Lurker, CEO

Yes, George will take that question.

George Elston, CFO

Yes, I think from a run rate perspective, Q1 is probably a good place to start. I think as we get later in the year, as you know, we're in the middle of the Phase 1 study with 1901, and we did update our cash guidance on the call this morning, indicating that we have cash through the end of next year.

Jennifer Kim, Analyst

Congrats on the productive quarter. I have a few questions. The first one is just, is it fair to say that we should expect an enrollment update sometime this week or next month just to keep you on track for the six-month or around six months prelim data in the fourth quarter? And then also, since I saw you talked about the update with CRG, have you been in any discussions with them regarding the 2022 financial covenants? What was the thinking behind that update for 2021 and the extent of the update for the year? And then my last question is, regarding spending guidance for the year, did anything impact gross margins, and how should we think about gross margins for the year and going forward?

Nancy Lurker, CEO

Okay. Jennifer, I'll take the enrollment update, and then George will take the financial-related questions. Yes, you can expect that we would give an update on the enrollment certainly by this month or next month. So that is something we fully expect to do. George?

George Elston, CFO

Yes, thanks, Jennifer. On the debt covenant perspective, we've had a great relationship with CRG; they have been incredibly strong partners for us as we went through a difficult 2020, as we all know. The background of the change in revenue covenant this year is to put it into a reachable range, primarily because we've improved our balance sheet and because Q1 was strong versus last year. We wanted to put it in a range that was attainable as we climbed out of COVID, and they continue to be a good partner. If you look at the history on the covenants, we've tended to address them a year at a time, and I think as we look out at 2022, we anticipate that not being an issue when that time comes, either through the debt itself or through the covenant. We're very comfortable with where we sit with CRG today. Obviously, we were able to pay down $15 million of our obligation to them last year, so the revenue covenant really became less of an overhang for them, and we wanted to ensure it was easily reachable this year. On gross margin, I think a lot of it is driven by product mix. DEXYCU was a bigger piece of revenues in Q1, which does carry a lower margin than YUTIQ, and that was a big driver for that as well. Did I get all of your questions?

Dana Flanders, Analyst

Hi, this is Devin on for Dana. Congrats on the commercial and clinical progress. I have a couple of questions. We saw the 10-Q update today regarding the SEC accounting investigation, with no enforcement against the company. Could you elaborate on the specific findings and clarify whether you expect any further action from the SEC, or does this conclude the investigation?

Nancy Lurker, CEO

George?

George Elston, CFO

Yes, thanks for that question. Yes, this goes back to Q2 of 2020; we disclosed in our 10-Q that we had received an SEC subpoena, which we have been fully compliant with, and it has taken up to this point in time. The short version is we were very cooperative with the SEC during the review, and we are very pleased to get the memo from them yesterday. Essentially, it stated that they have concluded their investigation and they have no intent to recommend an enforcement action. If you look at our disclosures, we've always maintained that we were confident in our accounting, and we're glad that this is now resolved and behind us. We don't expect anything additional, so it was a nice letter to receive yesterday. We updated that in our Q this morning.

Devin Geiman, Analyst

On the commercial side of things, could you give a bit more color on what you're seeing in terms of retinal specialists trends and ASCs? Are they generally back to normal patient flow? Are you still seeing depressed levels persisting with uneven geographic recovery in the U.S.?

Nancy Lurker, CEO

Yes, I'll have Scott answer that question. Go ahead, Scott.

Scott Jones, Chief Commercial Officer

Sure. Good morning and thanks for the question. In terms of the ASC market, especially for cataracts, most seem to be getting back to normal. There are still areas of the country where I would say they are less than 100%, but in general, we're seeing a good return in the cataract space. On the YUTIQ side, I think the private practice retinal physicians seem to be back to a normal schedule for the most part. We do still see a little bit of unevenness in the academic center, teaching center environment where there are still some restrictions on patient flow. Certainly, our ability to access physicians, especially in that environment, is much less available than in the general private practice. But we are pleased to see things starting to return to a much more normal pace of patient flow.

Devin Geiman, Analyst

And then my last one, just on the developmental side. I know you mentioned previously, depending on the EYP-1901 Phase 1 data, you could potentially progress into a Phase 2 or even a pivotal trial. Is this dependent on the strength of the data or are there clear delineating factors needed to move straight into a regulatory trial versus a Phase 2?

Nancy Lurker, CEO

Yes, we're not going to get into that level of detail on this, but you are correct. It is going to be dependent on the strength of the data. We want to first and foremost make sure that the drug is safe, which we do expect, so that's going to be important. And then obviously showing good efficacy is required to move into a pivotal trial. Obviously that carries higher risk than moving into a normal Phase 2 trial, but we'll assess all of that as data starts to come in. Suffice it to say, we're planning for all outcomes.

Yi Chen, Analyst

First question is, regarding the sales of YUTIQ in the first quarter, was it subject to a severe impact from the COVID-19 pandemic which peaked in January?

Nancy Lurker, CEO

Yi, I'll take that question. Yes. We didn't see as much with DEXYCU, but we definitely did see a drop-off in YUTIQ. The other issue with YUTIQ is that there's a disproportionate number of university offices that treat uveitis patients as compared to community-based offices. They have opened up more slowly than community-based offices. Now we are starting to see them open back up, but certainly, we had two factors going on in the first quarter. One is your traditional normal slowdown, as Scott mentioned, that you always see in pharmaceutical products, especially specialty drugs like YUTIQ. But then the second thing is that the universities, which are a large part of our utilization, have typically been slower opening than community-based offices. But again, we're starting to see them start to open up more and more.

Yi Chen, Analyst

Got it. For YUTIQ in China, has Ocumension indicated when a NDA could potentially approve the drug?

Nancy Lurker, CEO

Yes, very good question. It wouldn't be right for me to comment on behalf of Ocumension. But as you probably know, they have already filed, and they did that in record time. They were able to file it under a new system and they're the first drug, to my understanding, to be able to file under this, where they can use some real-world data, plus our NDA. As a result, we're quite impressed with the progress that they've made. Hopefully, we'll see an approval coming through potentially sometime this year, but that's up to them to comment on specifics.

Yi Chen, Analyst

Can you remind us the potential milestones and royalties EyePoint can receive from Ocumension?

Nancy Lurker, CEO

Yes. George, do you want to comment on that?

George Elston, CFO

Sure. So, as a reminder, Yi, we actually as part of our expansion into Southeast Asia for YUTIQ last year with Ocumension, we received a milestone payment for that, but they also prepaid the remaining milestone payments. What we have forward with them is a royalty stream, which we haven't disclosed specifically, but it's in the high single low double-digit range.

Andrew D'Silva, Analyst

Just to start, I have a couple of quick bookkeeping questions. As it relates to YUTIQ, was the end-user demand fairly aligned with the distributor ordering patterns? And then, was your PPP loan forgiven yet? I just wasn't sure where we were on that.

Nancy Lurker, CEO

George will take that question.

George Elston, CFO

Sure. There is always a disconnect. I think we've certainly talked about in the past how demand and revenues are different. I think they're starting to track closer, but there is still a bit of a difference in demand and stocking by distributors, which is where we recognize our revenue. In the quarter, we also had some exchanges as well for the YUTIQ needle. Nothing of real consequence but it affected it a little bit on the distributor side. It’s getting closer, but there's still a disconnect and we don't really want to guide on those specifics, because it's a lot of reconciliation that doesn't really help. On the PPP front, we have submitted our forgiveness application; we are very comfortable in our forgiveness application, but we are still waiting for the SBA to act on that. We've provided all the necessary documentation. I think as you know, our loan was above the $2 million threshold, making it subject to additional review by the SBA, and we're just waiting for that process to work itself through, but we do continue to expect complete forgiveness on that loan.

Andrew D'Silva, Analyst

I was looking for an update on DEXYCU. I remember that last year during one of the earnings calls, you mentioned you were considering extending pass-through through an inclusion in an Omnibus spending bill. Was that initially expected to be part of the Consolidated Appropriations Act of 2021, which was recently signed, or were you exploring other bills or paths for extension? Any clarification would be helpful.

Nancy Lurker, CEO

Yes, I'll answer that, and then I'll actually ask Scott to comment if you want to add anything further, because he and I have been pretty involved with this. So, yes, I can tell you that we obviously were hoping that we would be part of the Omnibus bill, but unfortunately they really didn't put any drug-related legislation in the Omnibus spending bill. But we have additional avenues that we are pursuing, continuing on the legislative front, and we continue to have support in Congress by some members for this. The second thing is that we are also pursuing this at the CMS level, on the regulatory front. We're not going to go into a lot of detail on this, but we certainly are somewhat optimistic that we should, at a minimum, get an extension of pass-through tied to the public health emergency because CMS has already extended that to medical devices and a few other categories. It makes sense as these drugs, when you calculate what the new bundled price is, you take a look back over the last couple of years, in terms of the utilization, and obviously, the utilization across all these drugs used in the surgical suite has been severely depressed due to COVID. It's very hard for them to determine a fair bundled price given that dynamic. So we do expect, or we're hopeful, I should say, that CMS will at least provide an extension on pass-through tied to the length of time of the public health emergency, which, by the way, has still not been lifted, it's still ongoing. Scott, do you want to add anything to that?

Scott Jones, Chief Commercial Officer

Nancy, I think that was well said. I was just going to add that when we say the strategy for extension, it's not one strategy; it's multiple tactics that we're employing in dealing with the PHE shutdown and extending the tolling period on our pass-through for that, as well as looking at long-term options to continue paying that for pass-through type products, especially policy package products. So again, we have both regulatory and legislative strategies that we're currently implementing, and we do feel confident that we'll see something in the coming weeks or months relative to those strategies that we're employing today.

Andrew D'Silva, Analyst

Okay. Could you just refresh my memory with OMIDRIA, when it got its extension? Was that through legislative or congressional support versus going down perhaps the regulatory CMS staff?

Nancy Lurker, CEO

Yes, Andy, it was both. They initially received an extension through a regulation included in an Omnibus spending bill, which had a time limit. They managed to extend that, but then they lost reimbursement when it expired. Fortunately, they were able to secure permanent reimbursement from CMS after conducting a small study that demonstrated a reduction in opioid use linked to OMIDRIA. It's important to note that the opioid crisis persists, and the pandemic has exacerbated the situation. CMS is strongly motivated to provide opioid alternatives to patients, which is challenging when your drug is included in a broader cataract bundle, and they recognize this issue. We are definitely considering that route as well.

Andrew D'Silva, Analyst

Is there any data available for ophthalmic conditions showing that dexamethasone helps reduce the need for painkillers or opioids?

Nancy Lurker, CEO

Yes, dexamethasone is not DEXYCU. Dexamethasone is a generic injectable. To my knowledge, no one has conducted a study specifically on dexamethasone. DEXYCU is dexamethasone combined with our Verisome Technology for extended delivery. I'll stop there as I prefer not to elaborate further, but as Scott mentioned, we are exploring several opportunities.

Andrew D'Silva, Analyst

Okay. That’s actually very interesting; I did not realize that. And then as it relates to the DAVIO's trial, outside of sustained release that lasts for six months, which should help with patient adherence and compliance, are you expecting any efficacy benefits or improved efficacy of EYP-1901 relative to anti-VEGF monoclonal antibodies that are already in the market, like Eylea, Lucentis, Beovu? Or have there been any small molecule anti-VEGFs that have been able to mimic or show improved efficacy compared to approved biologics, at least from an anecdotal standpoint? There's limited head-to-head studies out there; I'm just curious about any anecdotal or your thoughts.

Nancy Lurker, CEO

Yes, first of all, let me just say that simply showing equal efficacy to the current large molecules that are on the market, but with extended delivery is a huge win. And again, and I'll answer your question about efficacy in just a moment. But again, I can’t stress this enough. These patients with the current therapies have to come in every month or every other month, and in the case of Beovu, potentially every three months, but they have to get their eyes injected for the rest of their lives. That's an incredible burden to put on patients and offices, I might add. What happens is there’s a preponderance of real-world data, both from Europe as well as the U.S., showing that, over time, patients' eyesight continues to deteriorate despite current therapies. The reason for this, as correlation rather than causation, is likely that these patients just don’t comply. They may have shown they just don’t come in and get their eyes injected as often as they should because it's hard; frankly, who wants to get their eyes injected every month or every other month for the rest of their lives? This presents a real difficulty, which is why you see a number of drugs in development to extend the injection timetable further out. If you don’t have to come in as frequently, but you get the same efficacy, you won’t skip your doses as much. So theoretically, you should end up with better overall outcomes, meaning your vision doesn’t deteriorate as much. Now again, that’s going to take long-term studies to prove that, but you can infer it. You can infer it from these large databases looking at the current drugs and the real-world data that shows that patients' eyesight continues to deteriorate. Let me stress again, we absolutely believe that being able to extend out potentially six to nine months before you have to get your eye injected again is a game changer.

Yi Chen, Analyst

My first question is about DEXYCU. For this quarter versus the fourth quarter of last year, the revenue has jumped quite significantly. To my understanding, the unit may not be that much different. I mean there is a difference but not to the level of the revenues. So, is there a price increase for DEXYCU, or how should we reconcile the differences here?

Nancy Lurker, CEO

Yes, actually, George, why don't you take that, and then Scott can comment as well regarding the revenue versus demand.

George Elston, CFO

Sure. As I pointed out earlier, remember that there will continue to be a disconnect between underlying customer demand, which is customers buying from distributors, and our sales, which is our purchases from us by the distributors. There will always be some disconnect there. What we've tried to do in our disclosures is recognize revenue under GAAP, which is what is reported, and that is the sales to distributors. Underlying customer demand is disclosed separately, which gives a track on what the customers are buying from the distributors. Unfortunately, there's always going to be a disconnect, and at least for now, we're not in a position to provide that reconciliation because I just think it complicates it. We have not put a price increase on DEXYCU. On your other questions, Scott, is there anything you want to add to that?

Scott Jones, Chief Commercial Officer

No, I think George covered it. I was just going to add that there has not been a price increase, but we've seen a nice pickup in customer demand from Q4 to Q1 as we continue to pull out of the pandemic. Again, I mentioned earlier that we're seeing strength from our corporate alliance with ImprimisRx, and also some of the contracts that we've recently signed. So adding in the layer of the rebound from COVID, we're seeing a nice demand pickup.

I-Eh Jen, Analyst

To extrapolate maybe a little bit in terms of the increase in revenue, does the sales imply that ImprimisRx has more optimism regarding future growth or demand? Is that why they have made a bigger purchase versus before?

Nancy Lurker, CEO

Could you clarify your question? Are you asking if we expect to see an increase in demand because of the co-promotion with Imprimis?

I-Eh Jen, Analyst

In terms of that quite a large increase in the purchase by the distributors, would that suggest that they are more optimistic about future growth or demand, and that’s why they have made a bigger purchase?

Nancy Lurker, CEO

Yes, let me answer it this way. As you know, we don't give forward guidance, and I want to emphasize that it's always challenging to forecast future events. The pandemic is not completely over; we've made significant strides, but it still continues. I will say, though, as Scott mentioned, assuming the pandemic doesn't worsen, that offices continue to reopen, and patients maintain their current momentum for visits, we are seeing and expect to sustain growth with DEXYCU. It's an excellent product. Transitioning from drops to new technology like DEXYCU, which is administered at the end of surgery with a single injection, always takes time. As physicians become more accustomed to using DEXYCU, and as Scott pointed out, ImprimisRx is really starting to gain traction. Typically, it takes about six months for a representative to become fully effective in the field, and that's precisely what we're observing with ImprimisRx. We signed our agreement in August, and now we are beginning to see positive momentum from their team, which we appreciate. Our co-promotion agreement with them is going exceptionally well.

I-Eh Jen, Analyst

Just two quick ones. The first one is that in your prepared remarks, you mentioned potentially in-licensing additional products. I'm just curious, what would you consider as an ideal product for that pursuit?

Nancy Lurker, CEO

Yes, good question. Business development is part of George's area. So, George, why don't you take that question?

George Elston, CFO

Sure. Following our recent financing, we are now focused on execution and are proud to have advanced 1901 into the clinic. Since the financing in February, we have begun to strategically evaluate the next programs in Wet AMD, particularly how Durasert can be applied to eye diseases. We are currently undergoing a strategic process for this and plan to provide updates on our approach, possibly later this year, as we identify additional molecules for development. We are being very thoughtful in our approach, but we believe that delivering treatments for the eye is complex and gives us a competitive advantage with Durasert. We have several areas where we believe we can make a significant impact with both existing molecules and Durasert, and we hope to share more information on our progress later this year.

I-Eh Jen, Analyst

And maybe the last one here is that, this is a very forward-looking kind of situation. EYP-1901 will be delivered, I guess, twice a year, but you do have the technology to deliver drugs for almost three years. So the question is that, going forward, is there a consideration that you might deliver a drug for Wet AMD or others for an even less frequent dosing compared with 1901?

George Elston, CFO

Nancy, do you want to take that?

Nancy Lurker, CEO

I apologize; I was on mute to minimize background noise. Yes, there's no doubt that we are looking at other ways to extend the duration of treatment and injection, mostly for other indications like diabetic retinopathy, which are probably better suited for longer treatment because they are less severe diseases. As for Wet AMD, that's not something we're going to evaluate right now. It’s certainly something down the road if we're successful and we look like we're well into a Phase 3 potentially approved. We’ll evaluate if the market would want that. Right now, I can tell you that what we've consistently seen in market research data over the years is that the sweet spot for some of these serious diseases like Wet AMD, and I can say other diseases like certainly uveitis, diabetic macular edema as examples, doctors consistently state that they do like to have treatment options and six months is a nice sweet spot. Uveitis typically can go out to three years because it's an unpredictable disease; you don't know when they're going to flare. But they still want that treatment option, which is why we're developing YUTIQ50. We don’t have plans to do another dose duration for Wet AMD right now, but all of these things will be evaluated should we be successful with the Phase 1 and going into a Phase 2 study. Thank you everyone for your time. Thank you also for the great questions. We look forward to updating you next quarter, and we're very excited about our current progress. Thank you very much.

Operator, Operator

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