Welcome to the EyePoint First Quarter 2021 Financial Results Conference Call. . I would now like to hand the conference over to your speaker today, George Elston, Chief Financial Officer. Please go ahead..

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..

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 parent -- 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 and 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..

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..

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 and $3.8 million for YUTIQ and 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 was 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 grow 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. Both products will continue to provide a unique value proposition of sustained delivery and fewer doctor visits, which remains attractive to doctors and patients both during the pandemic, and beyond..

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 $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, by $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, 2020 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. Thank you all very much for listening this morning, and I now turn the call over to the operator for questions..

. Our first question comes from the line of Georgi Yordanov from Cowen..

Maybe to start with a broader question for Dr.

Duker, how do you exceed 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 centers 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 AEs, do you consider those less of a threat to a product like EYP-1901..

Hi, Georgi, this is Nancy. I'll take that question. Dr. Duker unfortunately couldn't make the Q&A today. So, let me answer the Wet AMD space over the next five years is going to continue to grow, just because of the aging baby boomers and that's in across the world. So the demand is going to continue to increase.

And let me also state that this is such a large market and these diseases are unfortunately quite prevalent that there's going to be the need for continuing lots of different treatment options. We don't see a big impact due to generics, clearly that always has an impact on demand of new products.

But if your new products add significant value in improving outcomes and in treatment options, there's always a place for new innovative drugs. And that's what we believe is the case for EYP-1901, certainly.

When you look at what's been going on with some of the gene therapy companies -- let me just first state that, it's always difficult and sad when you see some of these data reads out, because patients need these alternative medications. However, it just further emphasizes the point that we've been making, is, this is not easy to do.

It's not easy to deliver drugs into the ocular space, particularly in the back of the posterior segment of the eye. So we like our odds with EYP-1901, because as we've said many times the Durasert technology is very well proven. As you know we've got -- we've had four FDA approvals on the line, excuse me, approved by the FDA, they're on the market.

We've had a remarkable safety track record. The implant does not break apart, it stays where it's injected once it drifts usually to the bottom of the vitreous. And overall it -- and it shows very good sustained zero-order kinetics. So when you put all that together, we believe it could offer substantial improvement to patients.

We think there's going to be a very large market for these drugs that are in development, and we think that we stand a good chance of being successful because of our Durasert technology.

Does that answer your question?.

Yeah, this is very helpful. And maybe as a follow-up, you have indicated the plan -- 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 MRA 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?.

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 -- a planning mode for those two additional studies.

Those -- if you look at all those areas, those remain again large areas. Diabetic retinopathy as you know is a very, very large area of large number of patients who suffer from that, that tends to be a precursor to Wet AMD, excuse me, DME. And so most DME patients have had or have diabetic retinopathy.

But it's a way to potentially catch those earlier and treat them. And as for refractory patients, I believe your question was what -- how effective we think we might be, I believe that was your question.

Hard to say at this point, obviously, the data suggests -- early data and not just with a vorolanib, which is a tyrosine kinase inhibitor we're using, but also if you look at the other tyrosine kinase inhibitors in development, it tends to show that these are effective drugs. We're going to have to see the data come through more though.

And we do believe that the potential exists because these tyrosine kinase inhibitors, as you mentioned, hit a broader array of receptors, so they operate at the receptor level not at the ligand.

And as a result -- which is what the large antibodies do, and as a result, the potential is there that they could potentially be more effective, but we have to see the data..

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 it's not -- 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 in as do you need to pick up for the remainder of the year?.

Yes, George will take that question..

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, we're -- 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..

Our next question comes from line of Jennifer Kim from Cantor Fitzgerald..

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 we -- this month 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 -- and you talked about the update with CRG.

Have you been in any discussions with them regarding the 2022 financial covenants? And what was the thinking of that update for 2021 and the extent of the update for the year? And then my last question is, you already talked about spending guidance for the year.

I was just wondering, did anything impact gross margins, and how should we think about gross margins for the year and going forward?.

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 a update on the enrollment certainly by this month or next month. So that is something we fully expect to do.

George?.

Yes, thanks, Jennifer. On the debt covenant perspective, so we have a -- we've had a great relationship with CRG, they've been incredibly strong partners for us as we went through a difficult 2020, as we all know.

And really, the background of the change in revenue covenant this year is just to put it into a reachable range, I think, because we've improved our balance sheet because it -- Q1 was strong, certainly versus last year. And so we wanted to put it in a range that was attainable as we climb out of COVID, and so, 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 you -- as we look out at 2022, we anticipate that not being an issue when that time comes and what -- either through the debt itself or through the covenant. We're very comfortable where we sit with CRG today.

Obviously, the other piece of that is 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 to them, and we wanted to make sure it was something and -- 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..

Yeah, I think you got of all of that, thanks..

Our next question comes from the line of Dana Flanders from Guggenheim Partners..

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.

Just could you elaborate on the specific findings and maybe clarify whether you expect any further action from the SEC, or does this conclude the investigation?.

George?.

Yes, thanks for that question. Yes.

The -- this goes back to -- actually 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 -- and it's taken up to this point in time, and the short version is, we were very cooperative cooperative with the SEC and the review, we are very pleased to get the memo from them yesterday.

Essentially stated that they've concluded their investigation and they have no intent -- they do not intend to recommend an enforcement action. I think if you look at our disclosures, we've always maintain 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 get yesterday. We updated that in our Q this morning..

And then on the commercial side of things, could you maybe give a little 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 recoveries in the U.S.?.

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

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 is 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 -- I think more of the academic center, teaching center environment where there's still some -- in places 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..

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.

So is this dependent on the strength of the data or is there any clear delineating factors like a clear to dose response or dose selection that are needed to move straight into a regulatory trial versus a Phase 2?.

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. So, clearly 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 to move into a pivotal trial.

Obviously that is -- carries higher risk than moving into a normal 2b trial. But we'll assess all of that as we -- as the data starts to come in. Suffice it to say, we're planning for all outcomes..

Our next question comes from the line of Yi Chen from H.C. Wainwright..

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

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. And the other issue with YUTIQ is, there's a disproportionate number of university offices that treat uveitis patients as compared to community-based offices. And 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 in pharmaceutical products, especially specialty drugs like YUTIQ.

But then the second thing is, the universities which are a large part of our utilization typically been slower opening than community-based offices. But again, we're starting to see them start to open up more and more..

Got it.

For YUTIQ in China -- so has Ocumension indicated that when an NPA could possibly potentially approve the drug?.

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 also to file it under a new system and they're the first drug -- my understanding, to be able to file under this, where they can use some real-world data, plus our NDA. And as a result we're quite impressed with the progress that they've made.

So hopefully we'll see an approval coming through potentially sometime this year, but that's up to them to comment on specifics..

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

Yes.

George, do you want to comment on that?.

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 mile -- a payment for that, but they also prepaid the mile -- the remaining milestone payments.

And so, 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..

Our next question comes from the line of Andrew D'Silva from B. Riley Securities..

Just to start, I have a couple of quick bookkeeping ones. 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..

George will take that question..

Sure. So the -- there's always a disconnect -- I think what we've certainly talked about in the past, Andy, 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. Not of real consequence but it affected it a little bit on the distributor side. And -- it's fairly -- 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 -- as we've disclosed in our Q 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 SBA, and we're just waiting for that process to work itself through, but we do continue to expect complete forgiveness on that loan..

Okay. Just was looking for an update there. And then as it relates to DEXYCU, I recall -- I believe it was last year on one of earnings calls you mentioned you were potentially looking for pass-through to be extended through an inclusion in an Omnibus spending bill.

Was that originally expected to be part of the Consolidated Appropriations Act of 2021, which was recently signed in lieu or were you looking at other bills or another path to extension? Just any color there would be useful..

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 actually have been pretty involved with this.

So, yes, I can tell you that we obviously were hoping that we'd 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, continue 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 a extension of pass-through tied to the public health emergency, because they've already -- CMS has already extended that to medical devices and a few other categories.

And it makes sense, because 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 had been severely depressed due to COVID.

So it's very hard for them to do, what I would consider to be 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?.

Nancy, I think that was well said. I was just going to add, and I think you covered it slightly, but it's not -- when we say the strategy for extension, it's not one strategy.

It's multiple tactics that were employed both for 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..

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? I think it was an Omnibus but I don't remember for sure how they....

Yes, Andy, it was both. They first got an extension through a piece of regulation that was put into an Omnibus spending bill, but that had again a time period tied to it.

And so then they actually lost reimbursement when that expired, and then they were able to get CMS to give them permanent reimbursement due to the fact that they've done a small study showing a reduction in opioid use associated with OMIDRIA.

And I would just say that obviously, unfortunately the opioid crisis continues particularly now as the pandemic has accelerated.

And so there is a large impetus at CMS to ensure that opioid alternatives are being made available to patients, and that's hard to do when you're drug has been bundled in with an overall cataract bundle, and they're aware of that. So certainly, that is -- and I've said before and I'll say this here that we certainly are looking at that path as well..

So dexamethasone has -- is there any just generally data out there for not only half the ophthalmic conditions but that dexamethasone has been shown to reduce the need for painkillers or opioids, anything like that....

Yes, Well, dexamethasone is not DEXYCU. Dexamethasone is just a generic injectable. So that -- to my knowledge, no. Nobody has done a study on dexamethasone per se. DEXYCU is dexamethasone in our Verisome Technology with extended delivery.

We'll just leave it at that because I don't want to comment any further, but we are -- as Scott said, we are looking at a number of shots on goal..

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 or should we be thinking about at least any efficacy benefits or you EYP-1901 relative to anti-VEGF MAbs that are already in the market, Eylea, Lucentis, Beovu.

Or have there been any small molecule anti-VEGFs that have been able to mimic or show improved efficacy relative to approved biologics, at least from an anecdotal standpoint? I just -- there's limited head-to-head studies out there, I'm just curious on any anecdotal or your thoughts on better efficacy..

Yes, so first of all, let me just say that, simply showing equal efficacy to the current large molecules that are on the market, but the extended delivery is a huge win. And again -- and I'll answer your question about efficacy in just a moment. But again, I just -- 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 -- and get their eyes injected for the rest of their lives. That's an incredible burden to put on patients and offices, I might add.

And so what happens is, there's a preponderance of real-world data, both from Europe as well as the U.S., that shows over time -- and these are large, large databases, with published studies, that have shown over time with current therapies, patient's eye sights continue to deteriorate.

And the reason is more than likely -- again this is correlation not positive, is that these patients just don't comply. Actually I'll take that back. They have shown but they just don't come in and get their eyes injected, because you can see that from the claims data, at the rate that they should.

Because it's hard, and frankly who wants to get their injected every month or every other month or every third month for the rest of their lives? So it's a real difficult problem, and that's why you see a number of drugs in development to get even further out in the injection timetable.

And then by comparison, of course, if you don't have to come in as frequently, but you get the same efficacy, you're not going to 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 -- and I want to be clear here, you can infer it from these large databases looking at the current drugs and the real-world data, that shows that their eyesight continues to deteriorate.

So, let me just 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..

Our next question comes from the line of Yale Jen from Laidlaw and Company..

My first question is about DEXYCU. For this quarter versus the fourth quarter of last year, the revenue has jumped quite significantly. But to my understanding, the unit may not be that much different. I mean there is difference, but then not to the level of the revenues.

So is there a price increase for DEXYCU or how should we reconcile the differences here?.

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

Sure. Yes, as I pointed out earlier, remember, 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. And so there is always going to be some disconnect there.

And so, what we've tried to do in our disclosures is, we recognize revenue under GAAP and that's what's reported and that's the sales to distributors. And then the underlying customer demand, we disclosed separately, which gives a track on what the customers are buying from the distributors.

And unfortunately, there's always going to be a disconnect and we're, at least for now not going -- not in a position to provide that reconciliation because I just think it complicates it. And we have not put a price increase in DEXYCU, on your other questions.

Scott, there anything to want to add to that?.

No, I think George covered it. I was just going to add that there has not been a price increase, but we've seen nice pickup in customer demand from Q4 to Q1 as we continue to pull out of the pandemic.

And again, I mentioned earlier that we're seeing strength from our corporate alliance with ImprimisRx, and then also from some of the contracts that we've recently signed. So including -- adding in the layer of the rebound from COVID, we're seeing a nice demand pick up..

To extrapolate may be a little bit in terms of the increase of revenue, the sales probably implies that the ImprimisRx has more optimistic in terms of purchase more products, prepare for the -- inventory, prepare for the future or that's not necessarily the case?.

So could you just go -- I'm not quite following the question.

Are you saying that, should we continue to see an uptick in demand due to the co-promotion with Imprimis?.

In terms of that quite a large increase of the purchase by the distributors, would that suggest that they are more optimistic on the future growth or demand, and that that's why they have make a bigger purchase versus before?.

Yes, so let me answer it this way. As you know, we don't give forward guidance. I want to put large caveats around this, it's always hard to predict what's going to happen in the future. The pandemic's not 100% over, though we've made enormous progress but it's not over yet.

I will state though, however, as Scott said, we -- assuming that the pandemic doesn't get worse, the offices continue to open up, patients continue to show the momentum to come in as they are right now. That -- and we are continuing to see and we expect to see continued growth with DEXYCU. It's a great product.

It always takes time to get a transition going, leaning from drops to new technology, which is DEXYCU, which is delivered at the very end of surgery with one injection. And as we've seen this physicians more and more and the ambulatory surgery centers are getting comfortable using DEXYCU.

In addition, as Scott said, ImprimisRx is really starting to kick into gear. Now, it always takes time. Typically, six months on average for a rep to get fully productive out in the field. And that's exactly what we're seeing with ImprimisRx.

We signed our agreement in August, and now we're starting to see some very nice momentum from their team, and we're very appreciate it. Our co-promotion agreement with them is just going terrific..

Just two quick ones. The first one is that in your prepared remarks, I think you mentioned potentially in licensing additional products.

I'm just curious, what would you consider as a ideal product in that for that pursuit?.

Yes, good question. Business development is part of Georgia's area.

So, George, why don't you take that question?.

Sure. So yes, I think on the other side of this financing and now we've really -- as you know we were focused on execution. We are very proud of the fact that we got 1901 into the clinic and moving forward. And Nancy highlighted a couple of additional indications for that program.

And since -- really since our financing in February, we have now started to strategically look at, okay, what are the next programs in Wet AM -- I'm sorry that where Durasert in particular can have an application in diseases of the eye. And so, we're in the middle of a strategic process for that now.

And I would say stay tuned, we'll look to update areas of approach, perhaps as early as later this year as we identify additional molecules that we would like to move into development. We're being very deliberate, but because of -- and I think the other key item here as we've seen, it's not simple to deliver in the eye.

We think we've got a real competitive advantage with Durasert, and we have a number of areas of focus in on that need where we think we can have a real make a real difference with existing molecules and Durasert. And we'll come back and update hopefully later this year on where we're going with that..

And maybe the last one here is that, this is a very forward-looking kind of situations, which is that, 1901, which will be delivered I guess twice every years, but you do have the technology, you can deliver drugs almost for three years.

So the question is that, going forward -- way forward, would there be -- was there a consideration that you might deliver a drug for in the Wet AMD or others for even in -- further infrequent dosing compared with 1901?.

Nancy, do you want to take that? You might be muted..

I apologize, I was on mute because they want to minimize background noise and others are speaking.

So, yes, there's no doubt that we are looking at other ways to extend the duration of treatment and injection, mostly for other indications, which -- like diabetic retinopathy, which are probably better suited to a longer treatment because they are less severe diseases. As for Wet AMDs, that's not something we're going to evaluate right now.

It certainly is 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 that we've done over the years, is the sweet spot for some of these serious diseases like Wet AMD, 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, and you don't know when they're going to flare. But they still want that treatment option, which is why we're developing YUTIQ50.

So right now we don't have plans to do another dose duration for Wet AMD, but that's certainly -- all these things are going to be evaluated should we be successful with the Phase 1 and going into a Phase 2 study..

Again, congrats on the quarter..

Thank you..

At this time, I'm showing no further questions. I would like to turn the call back over to Nancy Lurker, CEO for closing remarks..

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..

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