Ocular Therapeutix, Inc Q4 FY2021 Earnings Call

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Ocular Therapeutix 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 Notman, Chief Financial Officer of Ocular Therapeutics. Please go ahead, sir.

Thank you, 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 Antony Mattessich, 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, 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 of 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 Antony.

Thank you, Don, and welcome, everyone, to the Ocular Therapeutix fourth quarter and year-end 2021 earnings call. Ocular had another strong quarter and a productive year. The commercialization of DEXTENZA 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 attributable to the COVID pandemic. DEXTENZA represents a tremendous growth driver 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 DEXTENZA currently maintaining faster 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 I code which became effective January 1, 2022, ensuring reliable payments 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, in ophthalmology and optometric office environments. Allergic conjunctivitis is treated in the office environment as opposed to the ASC and HOPD where DEXTENZA has 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-licensed 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 Therapeutix with a unique set of challenges and opportunities. We discovered in the launch of DEXTENZA that the primary barriers to entry were logistics associated with ASC and HOPD administration, and selling into ophthalmology and optometric sub-offices will be analogous to the 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 exclusively 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 the longer-term commercialization of any product candidates in our pipeline that may be approved, including potentially OTX-TKI and wet AMD, OTX-TIC in glaucoma, and our dry eye products, all of which are designed to be predominantly used in the office setting. Shifting to our pipeline, we've also made great progress advancing our key programs. We recently provided updates on OTX-TKI for the treatment of wet AMD as the angiogenesis exudation and generation mean, 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.

Thanks, Antony. Let me begin with an update on our back-of-the-eye program, OTX-TKI. We are pleased to have recently completed enrollment in the U.S.-based multicenter prospective randomized controlled trial that is evaluating a single 600-microgram OTX-TKI implant containing axitinib compared to aflibercept administered every eight weeks in subjects previously treated with anti-VEGF therapy. This U.S.-based Phase I clinical trial, OTX-TKI, is being conducted under an exploratory IND application at five sites targeting a total of 20 randomized subjects with a 3:1 randomization weighted toward OTX-TKI treated subjects. We plan to report interim six-month data in the second half of the year. This trial is designed to assess the safety, durability, and tolerability of OTX-TKI, as well as to assess preliminary biological activity in subjects by measuring anatomical and functional changes of the retina. It is critical to remember that the population being studied here is different from the population being studied in our ongoing Phase I clinical trial of OTX-TKI in Australia. In this trial, we are including only subjects who have been previously treated with anti-VEGF therapy and asking the question, how long can we maintain subjects without the need for retreatment? Whereas in the Australian trial, we study subjects with pre-existing intraretinal and/or subretinal fluid and ask the question, could we get rid of fluid with the TKI? We recently presented the interim data on OTX-TKI from the Australia-based Phase I trial at the Angiogenesis, Oxidation and Degeneration 2022 Meeting held on February 11 and 12. This latest analysis of interim data in subjects with subretinal and/or intraretinal fluid due to wet AMD continues to support the product safety profile and preliminary evidence of biological activity. In this trial, we found a clinically meaningful decrease in the intraretinal and/or subretinal fluid in many subjects. Extended duration of activity of six months or more was observed in over 60% of subjects across all cohorts and over 80% of subjects in Cohort 3A and 600-microgram cohort, which could represent a compelling drug product profile. Moving to our glaucoma program, OTX-TIC, we recently presented data from a completed U.S.-based Phase I clinical trial evaluating safety, biological activity, durability, and tolerability of OTX-TIC in subjects with prior open-angle glaucoma or ocular hypertension at the Glaucoma 360 Meeting on February 11. The Phase I data presented highlights OTX-TIC's ability to provide a clinically meaningful decrease in intraocular pressure comparable to travoprost as early as two days following administration and for as long as six months or more with a single implant preserving corneal health, representing its potential for a unique and differentiated drug-product profile. With this data in hand, we've initiated a U.S.-based Phase II clinical trial and are actively screening subjects. This trial is a prospective multicenter randomized controlled trial evaluating the safety, tolerability, and efficacy of OTX-TIC for the treatment of patients with primary open-angle glaucoma or ocular hypertension. The trial overall involves approximately 105 subjects in three different arms, 35 subjects per arm randomized 1:1:1, in which the subjects will receive a single OTX-TIC implant containing a 5-microgram or 26-microgram dose of travoprost compared with an injection of DURYSTA. The trial will assess changes in diurnal intraocular pressure, changes from baseline at 8:00 a.m., 10:00 a.m., 4:00 p.m. at 2, 6, and 12 weeks, and follow the duration of intraocular response over time. Regarding our ocular surface disease programs, we remain committed to the development of our two dry eye programs, OTX-DED, a low-dose intracanalicular insert of preservative-free dexamethasone for the short-term treatment of the signs and symptoms of dry eye disease, and OTX-CSI for the chronic treatment of patients with dry eye disease. In December 2021, we announced positive top-line results from our Phase II clinical trial of OTX-DED. The Phase II clinical trial was a U.S.-based, randomized, double-masked, vehicle-controlled multicenter trial evaluating two different formulations of OTX-DED of the 0.2 milligram group and a 0.3 million group with 166 subjects of dry eye disease. While not powered for statistical significance, the clinical trial achieved its prespecified primary endpoint demonstrating a statistically significant change of bulbar conjunctival hyperemia from baseline to day 15 compared to the vehicle hydrogel using a central reading photographic assessment in the modified ITT population at both doses, p-value of 0.004 in the 2-milligram group and a p-value of 0.028 in the 0.3 milligram group. OTX-DED was observed to be generally well tolerated with a favorable safety profile. Overall, we are pleased with the OTX-DED results and we continue to see a large treatment effect from the punctal occlusion used in the controller. We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include some additional formulation work for the OTX-DED insert and the development of an appropriate comparator. In late October of 2021, we reported top-line data from the U.S.-based Phase II randomized double-masked multicenter clinical trial to evaluate the safety, efficacy, durability, and tolerability of two different formulations of OTX-CSI versus hydrogel vehicle insert. The Phase II study showed that OTX-CSI treated subjects had a clinically meaningful improvement from baseline for both signs and symptoms of dry eye disease for both formulations. This trial, however, did not show separation between the OTX-CSI treated subjects for both formulations and the vehicle-treated subjects for both formulations on symptoms for the primary endpoint of increased tear production at 12 weeks, as measured by the Schirmer's Test. We are currently reviewing an appropriate clinical regulatory development and manufacturing plan. This plan will include additional formulation work for the OTX-CSI insert to allow improved retention and the development of an appropriate vehicle comparator. I would now like to turn the call back over to Donald to review our fourth quarter and year-end financial results.

Thanks, Mike. Gross product revenues net of discounts, rebates, and returns, which the company refers to as total net product revenue was $12.3 million for the fourth quarter and represented a 66% increase over the same period in 2020. Net product revenue of DEXTENZA in the fourth quarter was $12.2 million versus $6.9 million in the comparable quarter of 2020, reflecting a 77% increase. Total net product revenue for the fourth quarter of 2021 also includes net product revenue of $58,000 from ReSure Sealant. Overall, net product revenue for the year was $43.5 million versus $17.4 million for 2020, reflecting a strong uptick in extended sales. Research and development expenses for the fourth quarter were $12.6 million versus $7.6 million for the comparable period in 2020, driven primarily by an increase in unallocated expenses, predominantly personnel costs and increased clinical trial costs associated with the initiation of the U.S.-based Phase I clinical trial of OTX-TKI and the initiation of the U.S.-based Phase II clinical trial for OTX-TIC; the Phase II clinical trials for OTX-CSI and OTX-DED, the ongoing Phase I clinical trial of OTX-TKI in Australia, and the ongoing post-approval clinical trial for DEXTENZA for post-surgical inflammation and pain in pediatric subjects. Overall, R&D expenses for the full year increased $21.4 million to $50.1 million from $28.7 million in 2020, reflecting the trends identified above. Selling and marketing expenses in the quarter were $9.1 million compared to $6.8 million for the same quarter in 2020, primarily reflecting increased personnel costs associated with an expansion of the field force. Overall, selling and marketing expenses for the full year increased to $35.2 million from $26.6 million in 2020, driven primarily by increased personnel costs and increased spending on consulting, trade shows, and conferences. Finally, general and administrative expenses were $7.5 million for the fourth quarter versus $6.6 million in the comparable quarter of 2020. The increase in expenses stemmed primarily from increased personnel expenses and professional fees. Overall, G&A expenses for the full year increased $9 million to $31.9 million from $22.9 million in 2020, again reflecting primarily increased personnel and professional fees. With respect to the financial results for the fourth quarter, the company reported a net loss of $3.9 million or a loss of $0.05 per share on a basic basis and a loss of $0.23 per share on a diluted basis for the three months ended December 31, 2021. This compares to a net loss of $85.6 million or a loss of $1.21 per share on a basic and diluted basis for the same period in 2020. Net income in the fourth quarter of 2021 included a $15.9 million noncash gain in the fair value of the derivative liability associated with our convertible notes driven by a decrease in the price of our common stock during the quarter. Non-cash charges for stock-based compensation and depreciation and amortization were $4.4 million in the fourth quarter versus $2.8 million for the same quarter in 2020. Overall, the company reported a net loss of $6.6 million or a loss of $0.09 per share on a basic and a loss of $0.98 per share on a diluted basis for the full year ended December 31, 2021, versus a net loss of $155.6 million or a loss of $2.56 per share on both a basic and diluted basis in 2020. As of February 24, 2022, the company had 76.8 million shares outstanding. As of December 31, 2021, the company had $164.2 million in cash and cash equivalents versus $179.3 million at September 30, 2021. Based on our current plans and related estimates of anticipated cash inflows from DEXTENZA and anticipated cash outflows from operating expenses, the company believes that existing cash and cash equivalents as of December 31, 2021, will enable the company to fund planned operating expenses, debt service obligations, and capital expenditure requirements through 2023. This cash guidance is subject to a number of assumptions, including those related to the severity and duration of the COVID-19 pandemic, the revenues, expenses, and reimbursement associated with DEXTENZA and the pace of research and clinical development programs, among other aspects of the business. This concludes my comments on our fourth quarter 2021 and year-end financial results. And I would like to turn the call back over to Anthony for some final thoughts.

Thanks, Don. Before opening the call up for questions, let me give a quick summary. The company demonstrated solid performance growing total net revenue 66% over the comparable quarter of 2020 and approximately 150% in 2021 on a full-year basis. With the FDA's approval of our sNDA to include ocular itching associated with allergic conjunctivitis in the DEXTENZA label, we are establishing a separate commercial business unit consisting of key account managers and field reimbursement managers to focus exclusively on the office setting, while the main sales team continues to focus on maximizing the opportunity for DEXTENZA in surgical settings. With the recent OPPS final rules, CMS has laid out a path for the continued separate payment for DEXTENZA in the ASC environment after the path through expiration. This could allow us to maintain and strengthen our surgical business as we build a new source of growth in the office environment. The U.S.-based trial of OTX-TKI evaluating a single 600-microgram implant versus anti-VEGF injection versus standard of care every eight week Eylea is now fully enrolled, and we expect to announce interim data in the second half of 2022. We recently initiated our Phase II clinical trial of OTX-TIC for the treatment of glaucoma and are actively screening subjects. In dry eye disease, we remain dedicated to developing this key market and we're conducting work to find the best formulations in vehicle control to use as we look to advance both OTX-CSI and OTX-DED. And finally, the company ended the quarter with $164.2 million in cash on the balance sheet as of December 31 and an expected cash runway through 2023. We look forward to a strong 2022. And with that, I'll turn the call over for questions.

Our first question comes from Joe Catanzaro with Piper Sandler. Your line is open.

Hey guys, thanks so much for taking my questions here. Congrats on the progress. Maybe the first one for me, I had on DEXTENZA and expectations for 2022 and whether you would expect to provide billable unit data on a monthly basis in the absence of any firm revenue guidance. And what we should think about as we think about modeling DEXTENZA, if you could walk through some of the maybe tailwinds and headwinds that we should keep in mind for the year. And I have a follow-up.

Yes, we have regularly provided the monthly in-market insert numbers, which are also included in the earnings report. Until we can provide guidance moving forward, we will continue to share those figures. Essentially, the main challenge is the concerns regarding the ability of ASCs to adequately staff to address the backlog of cataract surgeries that we know are prevalent and will re-enter the market eventually. We’ve previously noted that October and November were very strong months for sales, but there was a slowdown in December due to fewer-than-expected cataract surgeries caused by the Omicron surge. This trend continued into January, but we have started to see a recovery in February. If this trend continues, we not only anticipate a normal flow of cataract volume but also expect that some of the postponed surgeries will return to the market. We are looking forward to a very strong year in 2022. Once we have better clarity on what the market will look like, we will consider the possibility of providing guidance.

Okay, got it. Thanks. That's helpful. And then maybe if I could ask one to Mike. And I know there was a recent Phase III extended VEGF wet AMD study that recently read out. I'm wondering if you see any learnings there, whether it be on trial design, enrollment criteria, or even how Eylea performs. Any thoughts you have there would be great.

Thank you, Joe. I believe you are referring to the recent Kodiak trial. The key takeaway is that achieving longer-duration therapy with an anti-VEGF monoclonal antibody is difficult and remains so. If anyone can make that work, it represents a significant opportunity. One of the main insights is that, as we have always thought, it is extremely challenging to extend the duration of a monoclonal antibody beyond two or three months. We are committed to this and believe that having a powerful small molecule TKI is a compelling approach. The data from the Australian trial shows our ability to enroll more complex patients and successfully eliminate fluid with monotherapy, maintaining that for six months or more is very encouraging for us. Additionally, we have the U.S. trial underway that is enrolling a population similar to other U.S. trials, where patients are either receiving three initial injections as seen in the Kodiak trial or, in our case, are pretreated. We are now looking at whether we can maintain those results, which we believe is a more reasonable expectation than what we demonstrated in the Australian trial.

Okay, got it. Thanks. That's helpful. And thanks for taking my questions, again.

Thanks, Joe.

Thank you. Our next question comes from Jon Wolleben with JMP Securities. Your line is open.

Hey guys, thanks for taking the questions and congrats on the progress. Just wondering for a little more color on the allergic conjunctivitis business unit. First, I just wanted to confirm whether or not there are any sales in AC in this $12.2 million DEXTENZA number for the fourth quarter. And then hoping you could give us a little more color on the size of this business unit and what your expectations might be for the contribution to the top line in AC this year?

No, we don't expect there to have been many or any allergic conjunctivitis sales in the $12.3 million figure we reported last quarter. This quarter, we are starting a fully dedicated team focused on the office environment. This team will initially be quite small, consisting of about five account managers, probably one dedicated field reimbursement manager, and a team leader. Our goal in this environment is to understand the key factors at play and how we need to adjust our programs to ensure they are appropriate. As we gain insights into this opportunity, we will invest accordingly. Instead of stating a target number and then resourcing to meet that target—as we did with the launch of DEXTENZA—we aim to enter the market, understand what drives it, and then invest once we have a solid plan. We intend to apply the same approach in the office environment. Therefore, we are not pursuing a specific number at this time; instead, we are focused on deciphering the system. Once we have a clear understanding, we will promote accordingly.

Got it, that's helpful. And just one on OTX-TKI. I know you're enrolling a Cohort 4 in Australia. That could be a nice sneak peek of what to expect in the second half of this year from the U.S. study. Given that's open label, will you be releasing any of that data ahead of the U.S. data?

That's a good question. So we are enrolling a Cohort 4, which has a single implant of 600-microgram. As you know, at the Angiogenesis Meeting, we revealed the results from Cohort 3, which is the 600 microgram but it was the 300, 200-microgram implants to get there. We actually don't think it's going to be meaningfully different; it could be, but we don't think it will be. And I think if we've got something meaningful to say in terms of Cohort 4 in Australia, then there is an opportunity to give an update on the open-label trial. As you mentioned, the U.S. trial, because it's a mass trial, we really need to wait for time. Now we do have the opportunity for the protocol to do an interim analysis, which, as I mentioned, we anticipate to do after all or most of the subjects have hit six months or longer; we think would be a meaningful time to take a look at that.

Got it. Thanks for taking the questions.

Thanks, Jon.

Thank you. Our next question comes from Dane Leone with Raymond James. Your line is open.

Hi, thank you for taking the questions, and congratulations on the updates and outlook for 2022. Two questions for me, please. Firstly, as you get closer to having that six-month data from the 600-microgram single insert in the U.S. study, what's been the feedback from Angiogenesis in terms of where you think the hurdle is clinically for that six-month duration of needed retreatment of standard of care? Is it a percentage of the patients? Is it defined by the type of patient and the prior treatment history because that's been one of the major points of debate? So any thoughts there would be appreciated. And then secondly, it does seem like you're trying to rework the dry eye program a bit, both with the cyclosporine and low-dose DEX. Is there a timeline where you think you might be able to reengage some Phase II studies with that program?

Thanks, Dane. Those are good questions as always. Regarding OTX-TKI, I believe the number really depends on the safety signal observed, and we have been pleased with the strong safety signal we have seen with OTX-TKI. We consider around 50% of subjects over six months or longer to be a reasonable clinical target. In our 600-microgram data from Cohort 3, we actually reached around 80% of subjects. If we can replicate that in the U.S. trial, we would be very satisfied. It’s important to note that the Australian trial began with patients who had significant fluid, and we aimed to reduce that fluid with the TKI, which is something that we believe has not been demonstrated by anyone else. We have managed to show some subjects where the fluid has completely resolved, and we've maintained that performance for six months or more. The U.S. trial, which is more aligned with what others are doing, begins with patients who are treated or have received floating doses to see if we can keep people in that dry state for an extended period. Therefore, we would be disappointed if we don’t achieve 60% or better with the 600-microgram single implant in the U.S. trial, but we will find out soon. If we reach that target, it would be a significant success given the strong safety profile, especially if there are many cases of inflammation or vasculitis, as that changes the equation. Assuming we maintain a strong safety profile, we believe achieving over 50% is a compelling potential outcome. Additionally, it is important to highlight that the implants dissolve completely without needing removal, addressing a common concern about long-duration therapies potentially remaining in the body for extended periods. We have shown this consistently across all our programs. Regarding the dry eye questions, the DED and CSI programs present some interesting insights from the Phase II trials. While both share similarities, some reworking is necessary: minor formulation adjustments for DED and more significant changes for CSI. The primary work lies in refining the comparator, as we know a sham cannot be used; alternatives in hydrogels need exploration to optimize the comparative analysis, which is crucial from a regulatory standpoint. We are committed to detailing our plans for these trials by the second quarter, but we do not expect to initiate a Phase II trial for either program in the immediate future.

Let me explain that. We understand that trials for dry eye are particularly high-risk. We want to thoroughly analyze the data we have from our Phase II and understand how we can scale up both the vehicle and the active drug while preserving our cash runway. There are ways to accelerate this process, which would increase the risk of the trials. However, we prefer to proceed in the right manner, ensuring we have the appropriate vehicle and active components for both CSI and BEV, and begin trials that we are confident will lead to products that can be registered. We have two options: we could quickly enter the clinic or take a longer, lower-risk approach with reduced cash burn. We are definitely leaning towards the lower risk and lower cash burn option.

Thank you.

Thank you. And our next question comes from Yi Chen with H.C. Wainwright. Your line is open.

Thank you for taking my questions. First question is regarding the new sales unit for the office setting use of DEXTENZA. Are those people new hires? Or are they your existing reps and they are just being allocated to the new team?

There will likely be a mix. We don't have the team in place yet, but we've opened up the vacancies that the surgical team can apply for. In the end, I believe it will be a combination of new hires and existing members of the surgical team.

Okay. So do you expect the company to start recognizing revenue from DEXTENZA for AC in the current quarter or the second quarter?

I think it will ramp slowly in the second quarter. And once we crack the code about the proper way to sell DEXTENZA in the office environment, we will layer on resources as needed. I would expect in the latter part of the year and certainly the beginning of 2023 to really start to see the ramp-up in that office environment. I mean assuming those are there, once again, we're starting with a small team that's trying to look at the pressure points in that environment. We believe that there's a tremendous reservoir of unsatisfied patients and there's a great need in the office environment for a buy-and-bill product for the front of the eye that has a procedure code attached. So the ingredients are right; we just need to figure out what the right alchemy is.

Okay. And for the wet AMD indication, for those patients who do not respond well to anti-VEGF therapy, do you think there's a chance they can possibly respond to OTX-TKI?

Yes, I think there is. I mean as you know, TKIs have a broader spectrum of activity compared with currently available VEGF drugs. It is certainly possible that those patients who don't respond well to anti-VEGF drugs will respond well to TKIs. That said, the U.S. trial is enrolling patients who are responding well to anti-VEGF drugs. So we're not selecting for those patients who don't respond. The Australian trial is a bit of a mix. We've got some patients who are naive, some who responded well to anti-VEGF, and some who didn't have a great response to the anti-VEGF.

Got it. And for the glaucoma trial, do you still expect the trial to complete enrollment in the second half of this year?

We haven't provided guidance on when we expect enrollment to be complete. I believe we will need about 105 patients. Finishing this year would be a challenging target. We will monitor how enrollment progresses and share updates with appropriate guidance as we move forward. However, it seems unrealistic to anticipate that enrollment will be fully completed this year.

Okay. Thank you.

Thanks, Yi.

Thank you. Our next question comes from Anita Dushyanth with Berenberg Capital. Your line is open.

Hi, good afternoon and thanks for taking my question, and congrats on the progress. Just two for me here. I know you spoke about the next steps in the DED and CSI candidate. Could you talk about maybe the timelines associated with the development, especially now that you are working internally to develop the comparator?

Yes. As I mentioned, we will share the appropriate clinical regulatory and manufacturing plans in the second quarter of this year. That will be the time to provide an update on guidance. However, we do not expect to start a Phase II trial in either program in the near future for the reasons Anthony discussed earlier.

Okay. And then what are some of the metrics that you probably look at in terms of the backlog that will be addressed with the surgical procedures that use DEXTENZA?

Well, the metrics are essentially that there's usually in a normal year around four million cataract surgeries that are done in the United States. We believe that in 2021, that number was closer to $3 million. Because cataracts don't spontaneously resolve and you, at some point, are going to need to get the cataract done, the assumption is that those million-or-so cataracts that weren't done in 2021 will spring themselves in the latter half of 2022 and early 2023. So just giving rough numbers, you would expect $4.5 million this year and probably another $4.5 million or more next year which would give us a really nice bump off the basis of what we saw in 2021.

That was helpful. The last question is whether there are any updates from the collaboration with Mosaic Biosciences.

Good question. So that collaboration is to develop a longer-duration drug in the dry AMD space, and it's going extremely well and it's on target, and we hope to develop a new candidate at some point in the near future.

Okay. Okay, thank you for that.

Thanks for the questions.

Thank you. And that's all the questions we have. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.