Good morning. My name is Lynch, and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharma Second Quarter 2019 Financial Results Conference Call. There will be a question-and-answer to follow at the completion of the prepared remarks.

Please be advised that this call is being recorded at the company's request.I would now like to turn the call over to Ms. Kimberly Minarovich, from Argot Partners. Ma'am, you may begin..

Thank you, Lynch, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals second quarter 2019 financial results and corporate developments. With me today is Nancy Lurker, EyePoint's President and Chief Executive Officer; and Scott Jones, Chief Commercial Officer.

Nancy and Scott will provide an overview of the recent progress made in our commercial launches, as well as highlight upcoming milestones and the second quarter 2019 financial results.

We'll then open up the call for your questions.Earlier this morning, we issued a press release detailing these 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.Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our product candidates, financial projections and our plans and prospects.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC, and other filings that we may make with the SEC in the future.Any forward-looking statements represent our views as of today only.

While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.

Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.I'll now turn the call over to Nancy Lurker, President and Chief Executive Officer of EyePoint..

Thank you, Kimberly. Good morning, everyone, and thank you for joining us. We're very excited to be able to announce our results for second quarter.The second quarter marked our first full quarter of our two product launches YUTIQ and DEXYCU.

As a reminder, our previous revenue performance shared on our first quarter earnings call in May only accounted for the initial few weeks following our February YUTIQ launch and March DEXYCU launch, are well trained and eager 43% sales force a Key Account Managers or KAMs came for YUTIQ and 33 for DEXYCU continue to call upon specialists across the U.S.

for high volume surgery centers and cataract surgeons for DEXYCU and uveitis and retinal specialist for YUTIQ.We are very happy with the second quarter strong momentum of our ongoing U.S.

product launches for YUTIQ and DEXYCU and we are focused on expanding the commercial reach of these truly innovative treatments that have such tremendous value to patients and physicians.Let me first start with YUTIQ or fluocinolone acetonide intravitreal implant 0.18 milligrams for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye.

As a reminder, YUTIQ is a remarkably tiny intravitreal micro insert that is designed to consistently release a steady micro dose of fluocinolone, a well-known and frequently used steroids for up to 36 months.

YUTIQ has a highly differentiated product profile compared to existing therapies because of its one time administration that delivers a consistent and steady amount of drug consistently for up to three years. And this is important, it avoids the drug level peaks and valleys often seen was short acting corticosteroids.

Please note, posterior segment uveitis is unlike other back of the eye diseases such as diabetic macular edema, retinal vein occlusion or wet AMD. These diseases are primarily characterized by blood capillaries leaking fluid, and the first line Anti-VEGF therapies such as Eylea and Lucentis.

For uveitis however, Anti-VEGF therapy is not indicated as you uveitis is caused by inflammation in the back of the eye, also known as the posterior segment of the eye.

First line therapy for posterior segment uveitis is steroids, which are highly effective in eye inflammatory.The critical need in treating uveitis is to prevent inflammation, which comes in unpredictable flares.

That's a critically important goal of treatment is to provide a therapy that can provide a consistent micro dose of steroid over a long time period to reduce the number of devastating, unpredictable and potentially blinding uveitis flares. Because of this, we were very excited to introduce YUTIQ to the uveitis market earlier this year.

And we are even more excited about the initial launch trajectory of YUTIQ, which is exceeding our internal expectations.As of July 31, approximately 95% of our top target uveitis specialists have now been visited by our key account management team.

Feedback from physicians has been highly positive from both patients, as well as physicians and YUTIQ have been widely acclaimed among those doctors who have used it.

Physicians continue to sight the compelling long term clinical data of YUTIQ that showed a reduction in the recurrences of these potentially blinding uveitis flares out to 36 months as a key driver to include YUTIQ to treat patients in their own practices.Our camps have had great success giving initial meetings with doctors given the high interest in YUTIQ.

We expect that physician interest in YUTIQ will remain strong. July sales quota is also showing positive upward trajectory for YUTIQ and the number of ordering physicians increasing month over month.

To maximize YUTIQ potential during this period of rapid growth and high market demand, we plan to dedicate more resources to our campaign by hiring two more representatives through our contract sales organization to further support our efforts.

As our ramps continues, we may hire additional representatives.On the reimbursement front, we have received an early assignment of a permanent specific YUTIQ J code J7413, which will take effect October 1, 2019.

This key milestone is one quarter earlier than under the prior CMS policy allowing for a more streamlined, best-in-class approval and reimbursement process to be in effect earlier than we had previously anticipated.

We continue to receive positive peer support with reimbursement for YUTIQ being approved for its labeled indication and we've seen minimal prior authorization requirements. We've seen very few rejections on the reimbursement front. More than 20 academic formula have approved YUTIQ for use with eight pending today and under review.

EyePoint assist a program to ensure access to YUTIQ is available for eligible patients in need a financial assistance.In July, we presented supportive YUTIQ data at the 37th Annual Scientific Meeting of the American Society Retinal Specialist in Chicago as part of our medical affairs and education initiative.

We were proud to have three oral presentations at the conference highlighting positive data from the 36 month follow-up of the Phase III clinical trials YUTIQ. Data included a recurrence rate in YUTIQ randomized eyes that was significantly lower than in Sham treated eyes 56.3% versus 92.9% respectively, with a p value of less than 0.001.

And promising safety data that showed improvements in best corrected visual acuity and a lower need for adjunct of assistance compared to Sham. Now recall in this study, Sham often means standard of care. Since you cannot deny patients rescue medication the vast majority of these patients had received rescue medication on Sham.

Feedback and bugs in the meeting was exceptionally positive with members of the medical community applauding the long term activity YUTIQ for up to three years. And again a real advance for treating this devastating and potentially blinding eye disease.

Physicians aside YUTIQ'S remarkable results is finding the sweet spot when treating this disease by balancing durable advocacy and solid safety.

Based on the continued positive data that YUTIQ the lack of comparable favorable treatment options for an extremely serious disease, we remained very bullish about YUTIQ revenue and market share prospects going forward.Let me now turn to DEXYCU. Dexamethasone intraocular suspension % for post-operative inflammation.

DEXYCU as a single injection of dexamethasone a commonly used steroids administered at the end of cataract surgery that provides a tapered release of drug for up to 22 days. This avoids the burdensome and complicated four week eye drop schedule associated with steroids eyedrops.

Like YUTIQ, we expect it over time and in particular given executed very positive initial reception from physicians that DEXYCU can become the standard of care for treating post eye surgery inflammation, such as cataract surgery, based on its effective and highly convenient product profile, ease of use and supportive clinical results.In the cataract surgery suite, it’s vital that any procedure or drug administered, not only be effective and safe, but also can be easily administered with minimal time required to complete the administration.Physicians often perform cataract surgery in 8 to 10 minutes, and they do not want any new procedure to slow them down.

Remember, there were over 4.8 million cataract surgeries performed in 2018, a huge market. And we expect that volume of procedures to continue to grow. These surgeons are extremely busy. Just as reference, I personally have attended five surgery days and I can tell you these surgeons want to move very quickly from patient to patient to patient.

They want efficacy, safety, convenience, speed, no reimbursement hassles and control of the medication to ensure that they can get 100% compliance because they administer it not the patient. DEXYCU meets these needs.

It takes only approximately 30 to 60 seconds on average to administer DEXYCU with the end of cataract surgery.That ease of use with one simple injection of DEXYCU, coupled with its excellent efficacy data and safety data is why we are now continuing to see high interest after surgeons are trained on DEXYCU.

Our camps dedicated DEXYCU have been focused on a phased launch program to ensure that cataract surgeons and their Ambulatory Surgery Center or the ASC support teams are fully trained and certified on the preparation, application and administration of DEXYCU through product sampling prior to being cleared to purchase.As I noted earlier, we continue to receive extremely positive and supportive feedback from cataract surgeons, who have expressed their intent to use DEXYCU, due to its non-disruptive administration process at the end of cataract surgery and quick injection time allowing the surgeon to remain on schedule with the day’s surgeries.I mentioned our phase launch strategy which consisted of initial position product training first, with our top key opinion leaders before being rolled out to a broader group of physicians to allow for certification and sampling.

Of the highest quality ASCs, where we have the greatest ability to make inroads, over 275 and over 400 surgeons over to – excuse me – over 400 surgeons have completed the training and certification program and are now certified to purchase DEXYCU since its launch.Over 3000 medical professionals and office staffs have been called on to discuss DEXYCU.

And since launch, over 4,200 patients have been injected with DEXYCU, predominantly with samples and again, that’s part of our certification program. These patients have exhibited the remarkable efficacy seen in our clinical studies, where they return on day eight, with a significant majority of them having zero inflammation.

Surgeons have told us how impressed they are by the fast acting activity so soon after surgery.Safety and adverse events reports have been consistent with our label, including very low to no IOP elevation, below the actual clinical label numbers of 5% to 15%, which is one of the key common side effects physicians pay attention to and a very low incidence of corneal edema about 1% in our real world setting which is less than the clinical label numbers of 2% to 3%.Since DEXYCU dissolves within 24 to 36 hours, these side effects so far have been transient.

DEXYCU clearly is a step ahead compared to alternative options like eye drops and other post-surgical steroids devices or compound drugs, because it is fast to administer, a reimbursement J-Code in place now, patient inflammation relief reaches statistical significance on day eight and potentially much easier treatment regimen for the physician and patient versus steroids eye drops.Physician and patient feedback has been very positive.

And I urge you to look at our firsthand video testimonials that can be viewed on our corporate website at www.eyepointpharma.com and on our Twitter feed.The reimbursement code that a product is given can make an enormous difference and how quickly it is reimbursed or if it is rejected for payment.

Reimbursement project the queue has been secured to the issues by CMS have a specific and permanent J-Code.A J-Code is very important because it’s universally recognized by virtually all payer systems, including Medicare fee-for-service, which is administered by CMS.

Medicare Advantage plans which are administered by private payers and commercial plans, again administered by private payers.

Because DEXYCU has a J-Code, reimbursement by Medicare Advantage and other commercial plans as well as Medicare fee-for-service has become straightforward.Commercial payers are accepting the product for reimbursement under prior authorization to label.

Other ocular surgery drugs have not been consistently reimbursed because they have a C-Code, which is not often recognized by the private payers, causing some ASCs to experience lost revenue, which has made some in the past and might add which has made some of them skeptical about reimbursement for new products.As we’ve educated ASCs on the streamline J-Code process and presented them results showing benefit investigations being approved for over 90% of Medicare Advantage and commercial plan patients and 100% on Medicare fee-for-service.

Their concerns have been largely alleviated and we are seeing DEXYCU volume pickup with the proceeds reimbursement risk now gone.As a reminder, DEXYCU was sold under a title model with Cardinal Health.

Revenues recognized upon sale to the third party logistics providers under the title model, which maintains certain inventory requirements per our agreement. Given these complexities, Sales Reporting may not always be aligned with product demand.

Scott will provide additional color on physician demand and physician feedback to help clarify sales trajectories under this model for DEXYCU.Due to the adequate inventory stocking by distributor Cardinal Health at the time of our launch in mid-March, late in the first quarter, DEXYCU did not generate product revenue under the title model during the second quarter of 2019.

As we were training surgical physicians and staff waiting for DEXYCU claims to be paid at each ambulatory surgery center and then working down the inventory.Our sampling and surgical training efforts have shown strong demand following the completion of certification, and ASCs are increasingly seeing the DEXYCU claims being reimbursed with July data, showing a significant increase in orders for DEXYCU early in the third quarter.

We remain very bullish about DEXYCU’s revenue and market share prospects, especially after our 4,200 patients have now been injected and we are seeing and physicians are seeing the clinical results.Let me now turn the call over to our new Chief Commercial Officer, Scott Jones, to discuss our commercial initiatives further.

We’re excited to have Scott join our team in June, as he brings a wealth of ophthalmology experience, many pair and KOL relationships and a proven track record of success in leading commercial organizations.

Scott?.

Well, thank you, Nancy. And it’s a pleasure to be here today. And I must say I’m delighted to be part of this dedicated Eyepoint team.

I joined Eyepoint from Notal Vision, where I served as a Chief Commercial Officer and Vice President of Business Development where I was really focused on developing and executing the commercial and growth strategy for the company.

I previously served as President in Notal Vision, were helped create the business model in the United States that would allow for a total monitoring platform to be covered by Medicare.

And before Notal Vision, I held Senior Commercial and Strategy roles at QLT and Novartis.What drew me to Eyepoint was really the cutting edge product portfolio for the ocular disease state. And really targeting a very attractive patient markets with significant commercial value.

I believe YUTIQ and DEXYCU both provides several key advantages to the standard of care and each indication, including convenient and fast administration, long acting activity, strong clinical data that’s really backed by the product portfolio, and profile. And the initial product launches I am going to say been really strong so far.

But my goal is to elevate the initiative and expand the reach across the country.On DEXYCU, each ASCs been trained, certified before an account is set up and the orders can be placed. The initial ASC orders are relatively small and that will allow for the reimbursement process to take place.

The claims are being submitted, the accounts are waiting to be paid before the bulk orders are placed and really to ensure that the firm is comfortable with the process and the payment plan.The J-Code streamline is processed and as Nancy discussed, it alleviates the concerns previously faced by ASCs from other ocular surgery drugs, which cause many headaches, there’s a lack of consistent reimbursement.

We have identified areas to help optimize the cell cycle and expedite the training and increase adoption to promote orders. And we’re seeing now that the initial targeted group of ASCs have completed their training.

They’re beginning to make orders and we’re now moving to accelerate to the next year of customers by making the process as efficient as possible.Our data are showing that ASCs are increasing their orders following that first initial purchase. And this is really a sign of early adoption and it’s setting the stage for our future growth.

My team is working to optimize this trend and increase ASC orders across the country. And we’re also actively educating the ASCs on J-Code to help eliminate concerns around reimbursement and to reinforce the streamlined process.

We’re highly enthusiastic about the opportunity for DEXYCU.The feedback that we’ve gotten from the early adopters really highlights DEXYCU advantages, specifically around the efficacy and the rapid injection time, which is less than one minute.

And that doesn’t materially alter the patient schedule for the position and provides an improved treatment regimen for patients given the potential elimination of the steroid eye drops.On the YUTIQ side, we believe that we’re really in the early phase of the growth trajectory, and we’re just beginning to address this high unmet need.

But I want to applaud the clinical team who continued to showcase YUTIQ’s long term efficacy and safety through the well-managed cadence of data publications and presentations at some of the high profile scientific conferences.These efforts provide additional continued support for YUTIQ’s value and treating the chronic disease.

And both DEXYCU and YUTIQ are very exciting new treatment paradigms and ophthalmology and we’re extremely excited about their forward prospects.Now, let me turn it back over to Nancy..

Thanks, Scott. We look forward to providing further commercial updates on our next quarterly call. I’m very proud of our commercial team, our launch results to date and the very positive reception we’ve received so far from patients, physicians and a greater medical community.

We will continue to work to make these products the new standard of care for both indications.Now, from a corporate standpoint, we continue to build our clinical team and we welcome Dr.

Said Saim, in the new role of Chief Technology Officer, where he will oversee drug formulation, preclinical research up to clinical development, pharmaceutical sciences, manufacturing and operations.

Said has 25 years of product development experience with recent senior science roles at Collegium Pharmaceutical and Boehringer Ingelheim Pharmaceuticals.We also announced the appointment of healthcare finance and corporate development veteran Wendy DiCicco to our Board of Directors, where she will serve as chair of the audit committee, replacing Mike Rogers who stepped down from our board and chair of the audit committee after many years of service in June 2019.

We thank Mike for as many years of service to Eyepoint.Wendy most recently led the finance and corporate development functions at Centinel Spine, as a Chief Operating and Financial Officer and she has held similar roles at many other healthcare companies.

We welcome her aboard and look forward to her guidance as we continue to grow.Moving now to an update on our pipeline.

Our sustained release bio-erodible device containing a tyrosine kinase inhibitor, or TKI, been studied in preclinical efficacy and safety studies in animal models for wet AMD is ongoing and additional preclinical studies are planned for this year.

We continue to seek out opportunities to business development activities to augment our product pipeline for new ophthalmology treatments for areas of high unmet medical needs, and to evaluate partnerships to run in our Durasert and Tethadur technologies.To close, I will review top line financial results for the second quarter.

For the three months ended June 30, 2019, total revenue was $7.2 million compared to $715,000 for the three months ending June 30, 2018.

Net product revenue was $6.7 million led by YUTIQ and as previously mentioned, no DEXYCU revenue was recorded in the period due to its late in the first quarter launched in March and sufficient inventory in place under our title model with Cardinal Health.

Neither of these products had net revenue in the corresponding quarter in 2018.Net revenue from royalties and collaboration for the three months ended June 30, 2019, totaled $505,000, compared to $715,000 in the corresponding quarter in 2018.Operating expenses for the three months ended June 30, 2019, increased to $17.4 million from $10.5 million in the prior year period, due primarily to investments in sales and marketing infrastructure and program costs, professional services, stock based compensation and cost of sales related to product revenue.Non-operating expense net for the three months ended June 30, 2019, total $1.3 million of net interest expense.

Net loss of three months ended June 30, 2019 was $11.5 million or $0.11 per share, compared to a net loss of $34.4 million or $0.62 per share for the prior year quarter.As of June 30, 2019, cash and cash equivalents totaled $44.2 million compared to $45.3 million as of December 31, 2018.

There were approximately 106 million common shares outstanding at June 30, 2019.

We expect that existing cash and cash equivalents at June 30, 2019 and cash inflows from anticipated YUTIQ and DEXYCU product sales will be sufficient to fund our operating plans into 2020.Given our two commercial product launches, we’ve not yet established a consistent sales trajectory and therefore guidance regarding the timing of positive cash flow is not being provided at this time.I’ll now turn the call back over to the operator for your questions.

Operator?.

[Operator Instructions] Our first question comes from the line of Andrew D’Silva from B. Riley FBR. Your line is open..

Hey, good morning, thanks for taking my question..

Hi, Andy?.

Hey, how are you?.

Very good..

Awesome. Good. And thanks for taking my questions. I’ll start with a couple on YUTIQ.

Do you have any sense of how end user demand is aligning right now with the initial stocking orders that you obtained during the quarter?.

Yeah, so I actually like to use the phrase position demand. We are able to see that, again, because this is a Medicare Part B product and we’re shipping to Cardinal and then it flows out from there. But through our hub, where a fair number of benefit investigations occur. We’ve got a good sense for things.

I don’t want to in this quarter, give out those metrics, because again, they’re fluctuating. But suffice it to say, and I alluded to this in the call that we’re seeing very strong physician demand, certainly increased, honestly, week-over-week, month-over-month..

That’s really great to hear.

Do you think though that the current inventory would be at least works through during Q3, so that there might be another reorder? I just know that the buy and bill model and just initial stocking orders kind of create a little bit of volatility in the early, early period I don’t want to be in a situation where having too bold of estimates for YUTIQ right out of the gate?.

Yeah, actually, we are taking a conservative approach because again, with drug launches, again, you have various vagaries. However, as I said, current reception is very positive. We’re seeing positive upward trajectories. I think that’s reflected in our revenues for YUTIQ this quarter.

We’re not giving forward-looking projections right now, because of the very reasons you say, however, I want to stress, we remain very bullish on this product prospect. So the best way to look at this, we will do our best to shine as much info as we can each quarter.

But it is important that people take a long term view of this because again, as you saying the initial launch trajectories plus with the title model, you can get some swings going on. I’m not giving any forward looking things. We’re very bullish about this, but we’re not going to give any kind of next quarter look into inventories..

Okay, great. And then as far as DEXYCU goes, could you refresh my memory, I know you referenced this a little bit. There have been other products not necessarily competing with products in the space that have used a pass through status before they had some issues. I don’t believe they necessarily had J-Codes.

Could you just highlight the significance of getting in J-Code and how that resolve some of those potential issues?.

Yes, and I can’t stress enough how critical this has been and will be for DEXYCU having a J-Code. Now I know for our listeners that can be a confusing because these reimbursement codes are confused. They just are.

But when you get pass through status, which is a special category that CMS designate for devices, drugs, materials that are using the surgical suite. They will give you a pass through code you have to meet certain criteria between that. And when you get that pass through code in the past, they always just gave people a C-Code.

That’s a special code for pass through status.The problem is, is that the C-code is usually not recognized by the private payer systems. Because again, it's not used that often there aren't that many drugs used in the surgical suite, devices tend to vary, the devices use a very inexpensive, they don't really go through a reimbursement process.

So what happens is, the systems just don't recognize the C-code, because it's not used that frequently. And so those claims just get rejected. And when they get rejected, they just stood on a desk, and you going to let me paint the picture for you here. Usually, you know, a high school graduate, because these are claims processor.

And they may just sit on it for a while. So it's not a priority to process those claims.

And so as a result, what happens is some of these ASCs that we're now calling on, they lost thousands upon thousands, in some cases were told $50,000 to $100,000 in revenues because of claims that did not get paid on their AC-Code.As a result, what they told our team is that they want to see that execute gets reimbursed first for a few claims before Scott mentioned, they put the bulk orders in.

And we have AJ-Code, CMS is now starting to reward I-Codes, we were the first, I'll take some credit, we led the effort on that to get J-Codes for drugs and as being used in the surgical suite. And as a result, the J-Codes are generally uniformly recognized by all payer systems.

So it makes it much easier to automatically adjudicate the claim.So usually, you'll see the claims paid within four weeks, as opposed to the C-Code, it could be some cases up to four to six months to get those claims paid.

So again, it's a critically vital part that we now have a J-Code, however, because these ASCs got burned, they want to wait and it's sort of it's a show me and prove to me that this claim is being paid and then I'll start the order. The good news is, we're absolutely seen almost all of our DEXYCU claims been paid within a short time period..

Thanks to the color. That's actually great to hear. And last question for me again on DEXYCU. As far as you know, the initial use of the product, I'm sure a majority has been samples today.

How has the transition with early adopters from a sample standpoint gone as you are going into Q3, had they started to move over to actually start ordering the product from a sales standpoint?.

And this is Scott Jones. And thanks for the question. And what we're really excited about is we're seeing a high percentage of those customers who have sample the product, making that first against small initial investment to understand the reimbursement environment.

But beyond that, those who have completed that initial reimbursement, we're seeing consistent ordering over time now. So we think it's a really good predictor of how the product is going to move into the future..

Okay, great. Thank you very much. And good luck closing out the year..

Thank you..

Your next question comes from the line of Yi Chen from H.C. Wainwright. Your line is open..

Good morning. Thank you for taking my question.

The first question is can you confirm that the both YUTIQ and DEXYCU revenues are recognized based on shipment to distributors, but not the physician demand?.

Yeah, that is absolutely correct. It's actually recognizes it in from Cardinal which [indiscernible] as they take that into the title model, and we've got two other distributors that take it into a title model. And that's when revenue is recognized, not when it is shipped out to the physicians..

Okay, okay. So does that mean what happened to DEXYCU in the second quarter, meaning that the unit has been depleted from cutting the stock could happen to YUTIQ in the third quarter? Because, you know, possibly they made a large stocking order in the second quarter.

So in the third quarter, the revenue from YUTIQ could be lower?.

Well, I want to put some caution around this. We're not going to project what could happen. But we absolutely could show revenues. And right now it looks like we're on that track, because of us bringing down so much inventory on YUTIQ.

But again, I just want to caution, that's why we will start to use more physician demand metrics, because again, this title model you're seeing is more think of it more like bulk orders that go in, we recognize the revenue, then you got to work the inventory down.

So I don't want to give any forward projections on YUTIQ, other than to say that the position demand and the current reception has been highly, highly bullish. So again, we don't want to get into quarter-by-quarter projections at this point in time..

Okay.

And would you be able to provide any information regarding Cardinal Health remaining stock for DEXYCU?.

No. We can't do that. We're not going to provide that, Yi..

Okay, got it. So last question.

How should we look at the SG&A cost for the remainder of 2019?.

Basically, it's going to be flat to just potentially very, very slight decline. But we're managing our costs. I want to assure investors we are managing our costs very tightly. However, we also do not want to prematurely not invest at the appropriate level to take advantage of the tremendous upside these products have.

So what we're seeing is remember to our YUTIQ studies are winding down, so you should start to see R&D costs come down slightly, consider SG&A to remain relatively flat..

Got it? Thank you..

I'm showing no further questions at this time, I would like to turn the conference back to Nancy Lurker for closing remarks..

I thank everybody for participating on today's call and for your time. We look very forward to keeping you updated on a commercial launch progress, as well as other business matters in the coming quarters. And we're very excited about our two product launches for YUTIQ and DEXYCU. Thank you and enjoy your day..

Ladies and gentlemen, this concludes today's conference call. You may now disconnect..