EYENOVIA, INC. The following discussion and analysis of the results of operations and financial
condition of
Forward Looking Statements
This report contains "forward-looking statements." Specifically, all statements
other than statements of historical facts included in this report, including
regarding our financial position, business strategy and plans and objectives of
management for future operations, are forward-looking statements. These
forward-looking statements are based on the beliefs of management at the time
these statements were made, as well as assumptions made by and information
currently available to management. When used in this report, the words
"anticipate," "believe," "estimate," "expect," "may," "might," "will,"
"continue" "intend," and "plan" and words or phrases of similar import are
intended to identify forward-looking statements. These statements reflect our
current view with respect to future events and are subject to risks,
uncertainties and assumptions related to various factors that could cause actual
results and the timing of events to differ materially from future results
expressed or implied by such forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed in the section titled "Risk Factors" included in our most recent
Annual Report on Form 10-K filed with the
Overview
We are a clinical stage ophthalmic company developing an advanced drug delivery
technology to improve the lives of patients with ophthalmic diseases and
conditions. We aim to achieve precision in ophthalmic drug delivery of novel and
existing ophthalmic pharmaceutical agents. The precise delivery of a low-volume
columnar spray by the Optejet® device also minimizes contamination with a
non-protruding nozzle and self-closing shutter. This technology may replace eye
droppers by advancing drug delivery beyond the limitations of patient
coordination, drug overexposure, gravity, contamination potential, and
discomfort towards a more precise, comfortable, and successful drug
administration for improved patient care. The ergonomic and functional design of
the Optejet® delivers microdroplets horizontally faster than the blink reflex to
minimize instillation discomfort and overflow spillage, providing a more
comfortable experience. In the clinic, the Optejet® has demonstrated that its
targeted delivery achieves a significantly high rate of successful
administration of 98% upon first attempt compared to the established rate
reported with traditional eye drops of ~ 50%. The diagnostics and therapeutics
in the Company's pipeline have been tested in Randomized Controlled Trials and
demonstrated significant results in improving the benefit to risk profile for
drug delivery. For example, the Company's deliberately designed technology
provides a 75% reduction in ocular drug and preservative exposure to
significantly improve the therapeutic index in drugs used for presbyopia,
mydriasis and intraocular pressure ("IOP") lowering through eight clinical
trials. Eyedrops expose the ocular surface to approximately 300% more medication
and preservatives that can lead to unintended effects and induce collateral
tissue damage. Drug delivery via the Optejet device reduces ocular exposure to
preservatives comparable to that of non-preserved formulations demonstrating
potentially less surface damage from ocular stress. To address unmet medical
needs, the Company is developing the next generation of smart ophthalmic
therapeutics to target new indications or new combinations where there are
currently no or few drug therapies approved by the
Our pipeline is currently focused on the late-stage development of novel,
potential first-in-class therapeutic indications for an estimated 25 million
potential pediatric patients with progressive myopia in
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MicroPine is our first-in-class topical therapy for the treatment of progressive
myopia, a back-of-the-eye ocular disease associated with pathologic axial
elongation and sclero-retinal stretching. In
On
MicroLine is our investigational pharmacologic treatment for presbyopia. Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye's ability to focus on near objects and impairs near visual acuity. Allergan recently received FDA approval for and launched VuityTM, which is a pilocarpine solution for the treatment of presbyopia. We are currently enrolling our second Phase III study, VISION-2, using the same molecule, but with the advantages of our Optejet delivery system. We anticipate top-line results from VISION-2 in the third quarter of 2022.
Mydcombi™ (or MicroStat) is our fixed combination formulation of
tropicamide-phenylephrine for mydriasis, designed to be a novel approach for the
estimated over 100 million office-based comprehensive and diabetic eye exams
performed every year in
On
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Historically, we have financed our operations principally through equity
offerings. We have also generated cash through licensing arrangements and our
credit facility with
Our net losses were
Financial Overview
Revenue and Cost of Revenue
In August and
Research and Development Expenses
Research and development expenses are incurred in connection with the research and development of our microdose-therapeutics and consist primarily of contract service expenses. Given where we are in our life cycle, we do not separately track research and development expenses by project. Our research and development expenses consist of:
direct clinical and non-clinical expenses, which include expenses incurred
? under agreements with contract research organizations, contract manufacturing
organizations, and costs associated with preclinical activities, development
activities and regulatory activities;
personnel-related expenses, which include expenses related to consulting
? agreements with individuals that have since entered into employment agreements
with us as well as salaries and other compensation of employees that is
attributable to research and development activities; and
facilities and other expenses, which include direct and allocated expenses for
? rent and maintenance of facilities, marketing, insurance and other supplies
used in research and development activities.
We expense research and development costs as incurred. We record costs for some development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, clinical site activations or other information our vendors provide to us.
In addition, our license agreements with Arctic Vision and Bausch + Lomb require them to assume or reimburse us for specified research and development costs.
We expect that our research and development expenses will increase with the continuation of the aforementioned initiatives.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll and related expenses, legal and other professional services, as well as non-cash stock-based compensation expense. We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and the potential commercialization of our product candidates.
No payments related to the Arctic Vision License Agreement or Senju license
agreement were earned or recognized during the six months ended
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Results of Operations
Three Months Ended
Revenue and Cost of Revenue
In
Research and Development Expenses
Research and development expenses for the three months ended
For the Three Months Ended
June 30,
2022 2021
Personnel-related expenses $ 1,524,119 $ 1,344,263 Direct clinical and non-clinical expenses 1,088,950 1,325,582 Non-cash stock-based compensation expenses
516,669 319,497
Facilities expenses 294,726 324,789
Other expenses 141,546 92,959
Supplies and materials 20,856 277,557
Total research and development expenses
The increase in personnel-related expenses was primarily due to salary increases and new staff additions made in late 2021 and early 2022, primarily related to the anticipated Mydcombi launch. The increase in non-cash stock-based compensation expenses resulted from stock option grants related to the new hires. The decrease in direct clinical and non-clinical expenses was primarily due to Mydcombi product testing expense that was primarily done in 2021.
General and Administrative Expenses
For the Three Months Ended June 30,
2022 2021
Professional fees $ 1,061,299 $ 436,923
Salaries and benefits 905,017 637,227
Stock-based compensation 520,257 317,858
Insurance expense 268,571 239,191
Sales and marketing 318,198 299,148
Other 250,325 225,346
Facilities expense 115,923 64,799
Director fees and expense 95,000 77,000
$ 3,534,590 $ 2,297,492 General and administrative expenses for the three months ended
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Six Months Ended
Revenue and Cost of Revenue
In
Research and Development Expenses
Research and development expenses for the six months ended
For the Six Months Ended June 30,
2022 2021
Personnel-related expenses $ 2,972,710 $ 2,587,577
Direct clinical and non-clinical expenses 1,874,685 3,598,783
Non-cash stock-based compensation expenses 1,017,850 649,210
Supplies and materials 691,902 439,829
Facilities expenses 508,333 574,153
Other expenses 233,970 157,744
Total research and development expenses
The increase in personnel-related expenses was primarily due to salary increases and costs related to staff additions made in late 2021 and early 2022 mainly related to the ramp up for the Mydcombi launch. Stock option grants for these new hires resulted in the increase in non-cash stock-based compensation expenses. The decrease in direct clinical and non-clinical expenses was mainly due to Mydcombi product testing expense that was primarily done in 2021. The increase in costs related to supplies and materials was primarily due to the anticipated commercialization of Mydcombi.
General and Administrative Expenses
For the Six Months Ended June 30,
2022 2021
Professional fees $ 2,268,148 $ 933,649
Salaries and benefits 1,933,800 1,306,586
Stock-based compensation 928,063 645,058
Insurance expense 519,789 429,336
Sales and marketing 497,506 607,351
Other 459,462 362,540
Facilities expense 221,954 111,712
Director fees and expense 180,833 145,250
$ 7,009,555 $ 4,541,482 General and administrative expenses for the six months ended
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Liquidity and Capital Resources and Going Concern
We measure our liquidity in a number of ways, including the following:
June 30, December 31,
2022 2021
Cash and cash equivalents $ 21,506,582 $ 19,461,850
Restricted cash 7,875,000 7,875,000
Total $ 29,381,582 $ 27,336,850
Working capital $ 13,630,953 $ 10,829,363
Notes payable (gross) $ 7,726,333 $ 7,500,000 Since inception, we have experienced negative cash flows from operations. As of
As of
These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to raise additional capital through the sale of equity or debt securities to support our future operations. Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities including clinical studies, working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce general and administrative and sales and marketing costs in order to conserve our cash.
During the six months ended
Net cash used in operating activities for the six months ended
Cash used in investing activities for the six months ended
Net cash provided by financing activities for the six months ended
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Contractual Obligations and Commitments
During the next twelve months we have commitments to pay: (a)
After twelve months we have commitments to pay an additional
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in
There have been no material changes to our critical accounting policies and
estimates from those disclosed in our financial statements and the related notes
and other financial information included in our Annual Report on Form 10-K for
the year ended
Recently Adopted Accounting Standards
For a description of recently adopted accounting standards, including adoption dates and estimated effects, if any, on our condensed financial statements, see Note 2 - Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
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