Brad Smith - Chief Financial Officer Amar Sawhney - Chairman, President and CEO Scott Corning - VP, Sales and Marketing Eric Ankerud - EVP, Clinical, Regulatory and Quality.

Ken Cacciatore - Cowen and Company Adnan Butt - RBC Capital Markets Hartaj Singh - from BTIG.

Good afternoon, ladies and gentlemen. Thank you for standing by. And welcome to Ocular Therapeutix's Second Quarter 2015 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 Brad Smith, Chief Financial Officer at Ocular Therapeutix. Please go ahead, sir..

Thank you and good afternoon, everyone. Welcome to Ocular Therapeutix's second quarter 2015 earnings and business update conference call. Earlier this afternoon we issued a press release providing details of the Company's financial results for the second quarter ended June 30, 2015 and recent company developments and near-term milestones.

This press release is available on the Investor portion of our Web site at investors.ocu.com. Leading the call today will be Dr. Amar Sawhney, our President, Chairman and Chief Executive Officer, who will provide an update on the status of each of our clinical and pre-clinical development programs as well as anticipated milestones.

Following Amar's remarks, I will provide an overview of the financial highlights for the second quarter of 2015 and our recently completed follow on financing before opening the call for questions.

We are joined on the call today by Eric Ankerud, our Executive Vice President of Clinical, Regulatory, and Quality as well as Scott Corning, our Vice President of Sales and Marketing. As a reminder, during today's call we will be making certain forward-looking statements.

Various remarks that we make during this call about the Company's future expectations, plans and prospects, constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

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 quarterly report on Form 10-Q which was filed with the SEC, was filed earlier today.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. 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.

These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. I will now turn the call over to our Chairman, President and CEO, Amar Sawhney..

Thank you Brad, good afternoon everyone and thank you joining us today on our second quarter 2015 earnings call. Before I provide an update on recent company developments and expected milestones I want to take a moment to reinforce our vision at Ocular Therapeutix.

I strongly believe that we have the ability to transform the way in which patients receive care for their ocular diseases by providing a one-time treatment for acute conditions and a less frequently administered therapy in the case of chronic diseases.

Patients in front of the eye conditions are faced with difficult task of administering eye drops daily and compliance on safety concern are some of the major issues that could potentially be overcome with our product candidates.

Patients with back of the eye conditions such as those suffering from wet age related macular degeneration or AMD, require intraviteral injections typically every one to two months. We hold out the prospects of sustain delivery of drugs for up to six months, potentially reducing the number of injections to twice a year.

These could be major paradigm shift in the treatment regimen of patient's impacted by ophthalmic diseases. I will now provide an update on recent developments and expected milestones. During the second quarter we have made progress on our clinical programs and on the corporate development front.

We finalized enrollment in pre clinical trials, including Phase 3 trials for DEXTENZA and allergic conjunctivitis, a Phase 2 be trial for OTX-TP our sustainably lease product candidate of glaucoma and exploratory Phase 2 trial for inflammatory dry eye also with DEXTENZA.

In addition, this quarter was highlighted by our closing of a follow-on public offering which resulted in approximately $66 million in net proceeds to Ocular. I will let Brad provide more details on the financing later on in the call.

But I do want to say, that this was an important step for us as a public company and puts us in a strong position to continue with the development of our programs and to more broadly execute on our vision. Thus far 2015 have been a busy and exciting time for Ocular Therapeutics.

As we continue to advance our clinical development stage programs for our lead product candidates which include DEXTENZA, which is a sustained-release dexamethasone product for the treatment of post-surgical ocular inflammation and pain.

DEXTENZA also for the treatment of allergic conjunctivitis and inflammatory dry eye disease and OTX-TP the sustain-release travoprost product for the treatment of glaucoma and ocular hypertension. We recently completed patient enrollment in our Phase 3 clinical trials for DEXTENZA for the treatment of allergic conjunctivitis.

We began enrollment in June 2015 for this prospective U.S. based multicenter 1:1 randomized, parallel-arm, double-masked, vehicle controlled study with subjects to exhibited chronic signs and symptoms of allergic conjunctivitis.

A total of 73 patients who enrolled in this trial to evaluate DEXTENZA with placebo vehicle punctum plug using a proprietary Modified Conjunctival Allergen Challenge model which accommodates for the longer therapeutic effect of a onetime administered sustain-release drug product.

This study is designed to assess the effect of DEXTENZA compared with placebo on allergic reactions using three series of successive allergen challenges over 30 day duration.

DEXTENZA or placebo will be administered 48 to 72 hours after the final confirmatory exposure to the allergen and the primary endpoints to be evaluated in our ocular itching and conjunctival redness at day seven following incursion.

The secondary efficacy measures for both itching and redness are measured at day 14 following incursions and on day 25 post incursion.

We expect to report top line efficacy data for this trial in the fourth quarter of this year, whereas size about the potential for DEXTENZA to serve as an attractive alternative over topical steroids as a treatment option for allergic conjunctivitis due to its constant yet low does elution of therapy over an extended period.

As part of our strategy to expand potential indication for DEXTENZA and as a means to gain experience from this complex area of dry eye disease in general, we're also evaluating this product candidate for the treatment of inflammatory dry eye disease.

In January, we began enrollment in a Phase 2 prospective multi center randomized, parallel-arm, double-masked, vehicle controlled study to evaluate the safety and efficacy of DEXTENZA for the treatment of inflammatory dry eye disease. During the second quarter, we completed enrollment for 43 patients at two U.S. sites.

The study was design as a serial phase study whereby patients were initially administered a placebo vehicle punctum plug for 30 days to establish a baseline for investigate of drug treatment. Patients are responded to the placebo plug only in treatment of their dry eye disease but excluded from the study.

Patients who continue to exhibit symptoms of dry eye during the initial 30 days were qualified for enrollment in the treatment phase of the study, qualified patients then randomized to receive either DEXTENZA or a placebo vehicle punctum plug but exploring the following signs and symptom in this trial to inform us on the design of potential future studies.

Corneal and conjunctival staining, -- [Shrimus] test, earphone breakup time, MMP-9 level and certain additional assessments under the allocation. We will also be assessing the presence of the depot our placebo plug ease of product use and visualization and reception following the therapy.

We expect to have top line efficacy data in the fourth quarter of this year. As a reminder the study has not been powered to demonstrate statistical significance of the efficacy measures but rather as a way for us to begin to assess the liability of our product candidate for this potential indication.

We also recently closed patient enrollments for our Phase 2b, clinical trial for OTX-TP, our preservative pre sustained-release travoprost product candidate for the treatment of glaucoma and ocular hypertension. We began enrollment last November and enrolled 73 patients at 10 clinical sites in the United States.

This is a prospective multicenter randomized, double-masked, parallel-arm, active controlled study to evaluate patients for the safety and efficacy of OTX-TP as compared to Timolol.

Study the efficacy in measures include the differences in the mean inter ocular pressure change between the treatment groups from baseline at multiple time points throughout the study. Our objective for this the study are as follows.

We wish to demonstrate that OTX-TP appears to be comparable to Timolol in its ability to lower inter ocular pressure from baseline, as at the duration of effect at 60 and 90 days. To determine if patients are able to self assess the presence of the drug product and receiver replacement if needed, and to assess the safety profile.

OTX-TP is administered by a physician as a depot through the punctum a natural opening in the eyelid near the tear ducts designed to deliver travoprost to the ocular surface for up to 90 days. We expect to have top line efficacy data on this trial in the fourth quarter of 2015.

Previous pilot and Phase 2A clinical trials evaluating OTX-TP showed reductions in inter ocular pressure for upto 75 days similar to the one found with twice a day Timolol dosing. No serious adverse events occurred and patients were comfortable with the use of the drug product overall.

We did not observe any hyperemia or red-eye in the OTX-TP group which can be a common side effect of glaucoma drugs. We're excited about the potential opportunity for OTX-TP.

Glaucoma and ocular hypertension are chronic life threatening diseases caused by elevated inter ocular pressure which affects approximately 2.7 million in the United States alone. This resulted in 33 million prescriptions and the sale of $2.4 billion in 2014 according to IMF.

The current standard of care eye drop therapy has significant limitations that we believe our technology could effectively address and better serve these patients.

We have outlined the challenges of current standard of care which include difficulty with administration, peaks and varies of dosage, poor compliance, higher rates of hyperemia and the need for higher concentration of drug due to the interference of natural tears which wash out about 95% of the active drug and prevent penetration into the intraocular tissues.

We also continue to advance a pre-clinical program of our sustained delivery hydrogel depot for the delivery of anti-VEGF drugs for the treatment of wet age-related macular degeneration or Wet AMD.

The market for anti-VEGF drugs for the treatment of wet AMD and other back of the eye diseases is large, which with about $3.5 billion in sales of Eylea and Lucentis in the U.S. in 2014.

We are collaborating on this program with several different pharmaceutical companies using protein based anti-VEGF agents and are also conducting our own internal pre-clinical development using the anti-VEGF agent Bevacizumab.

We are exploring the delivery of small molecule drugs such as Tyrosine Kinase Inhibitors or TKIs in our hydrogel depot and have been researching the optimal candidates for this program. We believe that this class of drugs is well suited for our platform given its high potency, multitarget capability and low water solubility.

In the absence of a sophisticated drug delivery system these drugs have been difficult to deliver to the eye at therapeutic levels without causing local and systemic toxicity. We feel our drug delivery technology gives us unique advantages in this regard.

We may seek to move forward on delivery of a small molecule on our own in parallel with a protein based anti-VEGF delivery program which will require the involvement of a collaboration partner.

We plan to continue working with our pharmaceutical company partners on development efforts and also continue exploring potential business development deal structures as well as advancing our internal development efforts on our sustained release hydrogel depot for the treatment of back of the eye diseases.

Our research efforts to date have focused on three key milestones. Firstly demonstrating that our sustained release hydrogel depots can release anti-VEGF drugs in clinically meaningful concentration over an extended duration.

We have demonstrated release of anti-VEGF drugs over a six month period in vitro and up to four months in vivo, and we have shown clinically meaningful concentration of drugs present in ocular tissues. Secondly, confirming that anti-VEGF drugs can be incorporated into our hydrogel depots without denaturing the drug.

We have demonstrated that protein based drugs can be incorporated within our hydrogel depot without denaturation. Thirdly demonstrating that our hydrogel depot incorporating anti-VEGF drug has an acceptable level of tolerability with respect to foreign body response.

We have seen a favorable ocular compatibility profile of our hydrogel depot as we have advanced the design of our product. We've had a very busy second quarter and we look forward to a number of data readouts for our three ongoing clinical trials.

Additionally we are on track to submit an NDA for the treatment of post surgical ocular pain later this year. In order to expand the terms of indications for use in treatment of post surgical ocular inflammation, we remain on track to initiate a third Phase 3 clinical trial for DEXTENZA later this year enrolling approximately 440 patients.

Some modifications to the design of this third Phase 3 clinical trial compared to our two completed Phase 3 clinical trials of DEXTENZA are planned as follows.

One to one randomization of treatment and placebo routes instead of a 2 to 1 randomization, exclusion of patients who are being treated with high dosage levels of oral and phase and improvement of protocol training and adherence for the onsite clinical investigators including the appropriate use of resque medications.

Assuming favorable results of our third Phase 3 clinical trial of DEXTENZA for ocular inflammation and pain subject to receiving approval for the pain indication pursuant to the initial NDA, we plan to submit an NDA supplement for DEXTENZA for the treatment of ocular inflammation following ophthalmic surgery in the second half of 2016.

I'm pleased with the progress we have been making and feel confident about our path forward for all our programs. I will now turn the call back over to Brad who will review the second quarter 2015 financials as well as provide more granularity around our recent follow on public offering..

Thanks Amar, with regard to our cash and investment position, as of June 30, 2015, we had $123.7 million in cash, cash equivalents and marketable securities. As Amar alluded to, we close the follow-on financing earlier June through an offering of 4.6 million shares including the underwriters' options.

The company sold 3.2 million primary shares at a price $22 per share and received net proceeds of 66 million and two selling shareholders for venture capital investors who invested at an early stage of the company's development sold a portion of their holdings 1.4 million shares.

We are pleased to have had Morgan Stanley, Cowen and our RBC Capital involved in our financing once again we added Nomura and BTIG as co-managers for the offering. Our balance sheet was considerably strengthened with our cash position nearly doubling with this recent offering.

We believe that we have sufficient cash and cash equivalents to fund the company through the third quarter of 2017 and through several important clinical and commercial milestones with our product development programs.

These expected milestones include submitting the NDA for DEXTENZA for the treatment of post-surgical ocular pain initiating and completing patient enrollment in a third Phase 3 clinical trial for DEXTENZA for post-surgical ocular inflammation and pain, advancing our DEXTENZA program for the treatment of allergic conjunctivitis, completing a Phase 2 exploratory clinical trial of DEXTENZA for the treatment of inflammatory dry eye disease reporting top line efficacy data and assessing the longer term strategy for this program.

Completing a Phase 2B clinical trial of OTX-TP for the treatment of glaucoma and ocular hypertension and reporting top line efficacy data and then initiating Phase 3 clinical trials and advancing our sustained release hydrogel depot preclinical program for the intravitreal delivery of anti-VEGF drugs for the treatment of Wet AMD and other back of eye diseases, to include additional preclinical milestones updates on an development and partner opportunities that build out aseptic manufacturing capability which we've started in support of this program and potentially following through and initiating a Phase 1 clinical trial.

Our cash used in operating activities was 15.4 million year-to-date through June 30, we expect cash used in operations to be 35 million to 37 million for 2015 first and expect capital expenditures to be 3.5 million to 4 million for this year.

For the second quarter ended June 30, 2015, we reported a net loss 10 million, or a loss of $0.45 per share, this compares to a net loss of 6.4 million, or a loss of $2.10 per share, for the second quarter of 2014.

The net loss for the second quarter of 2015 included 1.2 million in non-cash charges for stock-based compensation compared to $600,000 in non-cash charges for stock based compensation for the comparable quarter in 2014.

Revenues for the second quarter of 2015 totaled 500,000 including 334,000 in revenue from sales of ReSure Sealant and 125,000 in collaboration revenue from our feasibility agreements with pharmaceutical company partners. As previously stated, we don't expect product revenues from sales of ReSure to be material in 2015.

Total operating expenses during the second quarter of 2015 were 10.1 million which compares to 6 million in the second quarter of 2014. Research and development expenses totaled 6.7 million in the second quarter of this year compared to 4.3 million in the same quarter of last year.

The increases in R&D expenses related to a greater level of clinical development activities including the Phase 3 clinical trials of DEXTENZA for the treatment of allergic conjunctivitis and post-surgical ocular inflammation and pain, as well as the Phase 2B clinical trial OTX-TP for the treatment of glaucoma, internal development efforts on the anti-VEGF program as well as other programs we are pursuing for DEXTENZA product for multiple inflammatory conditions.

As of the end of June, 2015, we had approximately 24.7 million shares outstanding and we had 15 million in outstanding debt with principal payments currently expected to start in October of this year. That concludes my comments on the second quarter 2015 financial results. We will now turn it back over to the operator for Q&A..

Thank you. [Operator Instructions] And our first question comes from the line of Ken Cacciatore from Cowen and Company. Your line is now open..

One of the key differences in the Phase 2B glaucoma study from Phase 2A is the patients now trying to be able to observe whether they still have plug or not, so I was just wondering I know you've mastered the study, is there any anecdotal kind of view you can on what's being observed in terms of ability for patients to at least know if the devices I don't not necessarily clearly the retention rate I know you can't give us, but maybe any feedback on the ease or difficulty in observing that? And then also maybe talk about some of the complexities with your back of the eye programs I would assume that some folks may want take a license but of course maybe you want to retain the program would be more attractive to any large suitor or if you're able to not like it out, so just kind of balance the ability to or the desire to move forward the partnership versus wanting to maybe retain your own rights of the program?.

Sure, thanks Ken.

So let me begin by answering your first question on the patients' ability to visualize and assess the presence of the drug product, while the study is massed and we don't know whether which of these groups things may fall-in everybody does get a plug and everybody does get a fluorescent plug which can be visualized using the little blue light that we provide to the patients.

So, while we cannot comment upon how it's performing in one group or the other, what we do see is that some patients have been able to visualize that they have lost a plug and have asked for a replacement and in almost all cases, what patients findings are confirmed by the physicians finding.

Now this has by far being the minority number of patients, however, what we do see is a good correlation between the physicians findings and the patients finding. So, it appears to be working and that when patients feel that they are missing a plug that is confirmed by the physician also.

With regards to the second question, regarding the back-of-the-eye program, as you know we're pursuing a two pronged strategy, one is on the protein side and the second is on the TKI.

We are able to in our discussions with the various potential partners, segments this out in that the small molecule work we intent to and they have actually expressed a willingness for us to be able to pursue that on our own, while we're pursuing protein based programs with the potential partners.

Now the type of deal structures without going into too much of details, there are obviously a balance to be walked between on one hand gaining, non diluted type of financing and that having an interesting contribution to us, in terms of funding and other efforts.

On the other hand we wanted to be able to retain enough commercial upside, so that as we grow to become not only just technology licensor but real company that is pursuing commercial development of products that we retain sufficient commercial upside.

So, I think what you will see is us trying to strive that balance and to be able to do licensing deals on the protein front via keeping the small molecule efforts for our own development..

Thank you. And our next question comes from the line of Adnan Butt from RBC Capital Markets. Your line is now open. .

First one on OTX-TP, so Amar just the Phase 2B, will it get the company sufficient data to be able to determine if OTX-TP should be take into Phase 3 or not? And if so, what exactly is the company looking for? And then please tell me if using the new plug that has a high retention rate, does that require any kind of bridging study or is the company free to use that in that Phase 3 glaucoma study?.

So, with regards to what do we expect to learn from this Phase 2B trial, as we talked a little bit about in the earnings script is there are three things that we're mainly looking for or maybe for.

The first is do we have an adequate level of effect, while this study is not statistically powered to be able to show the 1.5 millimeter non-inferiority relative to Timolol if we see an effect of IOP lowering that general range, I think we will feel that now we can statistically use that information and power the appropriate Phase 3 study.

So that's one thing we're looking for. The second thing we looking for is, we've seen in the past work that we've done, IOP lowering at one month, two month and up to 75 days.

We wanted to be able to see can we take it out to 90 days, so 90 days has been natural period in which people come back to see their ophthalmologist if they have glaucoma, which is not to say that is two months product is not viable product, a three month will be little bit more preferable, because it naturally fits in with the visit timings.

And then ultimately, we've talked about this point already about the ability of the patient to visualize and replace because if you're developing a chronic therapy you want to be able to make sure that the patients are able to get a chronic therapy and the way we look at this is, we look at not only making the best and retain plug but also making a plug that patients can visualize themselves and ask for a replacement if they find it to be missing.

So as they're assure to continue therapy.

Finally safety is always something that we keep an eye on and we're pretty encouraged in that regard because till now with this type of drug product, we've not seen any hyperemia for example, which usually as you know in many whether it is prostaglandins drugs or ROCK inhibitors can be seen 35% to 40% of the time in patient -- and it is one of the factor that leads to non-compliance by the patients.

So, by being able to eliminate that which is principally a peak dose related effect, we're able to create a product that could potentially have not only compliance enhancement but patient preference as a result of that so. We're excited about these different aspects on the glaucoma therapy..

Amar in the prior call, the company talked about a plug with a high retention, if that were to be use for the Phase 3, would you need a bridging study or can that be taken direct…..

No, you would not need a bridging study because those studies, we are already doing non-significant risk studies with kind of blank plus they have micro particles in them but they don't have an active drug agent in them, and we are studying those in separate clinical trials and the information from those trials will be provided to the FDA along with the Phase 2B trials to be able to file and proceed for our Phase 3 trials.

So those are basically the hydrogel delivery system and we continue to kind of improve the prospects of how those are designed and developed for the maximum retention, ability to replace, visualize and incursion..

Okay and if I can get a question on the anti-VEGF depot program, would you expect any differences in timelines with development for a biologic versus a small molecule?.

Good question, I think so let’s look at for the biologic, on one hand there is a lot of history of usage, and lot of clinical data and awareness that the partners might bring to the table.

On the other hand formulating those is more technically challenging, requires kind of aseptic processing et cetera and customized manufacturing, something that we are starting to invest in and that's what you see in the capital investment this year.

So faster in some regards, slower in other regards, small molecules if we pick molecules that have already had some level of history of usage in oncology drug for example, some of these are renal cell carcinoma drugs. That helps.

But what really helps is that the manufacturing for these depots is simpler because these would be terminally sterilized, the small molecule drugs for example are stable to radiation and sterilization, so the manufacturing becomes a lot more facile and we can react and move much faster with that.

So I think net-net our feeling is that we should be able to move with the TKI agents once we have selected the appropriate agent and we are selecting the agents based on potency, different target kind of effects, solubility, the IP situation, all of these things kind of go into the selection of a particular TKI agent and we've narrowed it down to a few candidates and we should be in a position to kind of pick one and move with it very soon..

Thank you. Our next question comes from the line of Hartaj Singh, from BTIG. Your line is now open..

Just one question on the filing for DEXTENZA in pain. Amar just with the Phase 3 that you've run the two, there were co-primary endpoints. I'm just trying to visualize that when you file this and I'm trying to see it in my head, how will the actual filing be done.

Will you be able to separate out the co-primary endpoints and just be able to submit pain? Which I assume that was the pre-NDA discussion and then when assuming you have a positive readout for information then how will that fit in as sNDA into the previous NDA? And then lastly, because they were co-primary is there any potential that the FDA might want to go to an add-comm with this simply because you know it's a little bit different from normally what they're used with NDAs or just any thoughts on that..

We did have a pre-NDA meeting with FDA in regard to our planned filing for the ocular pain indication and so the NDA right now is being structured for pain only labeling. It includes the data from both of our Phase 3 trials in support of that indication.

With the expectation as we stated for a third Phase 3 study with the same endpoints of information and pain to support an NDA supplement to gain the inflammatory labeling pending the approval of the initial NDA for ocular pain..

So you'd actually -- I assume is, if the timing works out right than you'd actually go ahead, you'd probably get a 10 month review at which point you'll have the readout for information and that'll be able to kind of get submitted while you're getting the approval for pain..

The 10 month review is what are anticipating for the NDA for ocular pain. The third Phase 3 study will be in progress and the timing of completion for that study is line with a supplement following that initial NDA approval for ocular pain..

And then just one last, just a housekeeping question, you know with the increase, a slight increase in burn into go into this year, would you expect and not looking for any guidance going to 2016 or '17 but just kind of in a broad perspective would you see that with the increased clinical activities that you're having in pre-clinical activities that there'll be some con- concomitant kind of growth in just expenditures going into 2016..

We do yes. So you know, certainly gave the guidance of this year of 35 million to 37 million in operating cash burn plus CapEx, but yes, with just with four major clinical stage development programs next year we’re anticipating a Phase 3 glaucoma programs which will be expensive.

We do anticipate an increase and when we give guidance, we believe we're funded through the third quarter 2017 it takes into consideration Hartaj..

[Operator Instructions] Our next question comes from the line of Ian Somaiya from Nomura. Your line is now open..

It's Mathew on for Ian.

Just a couple of questions if I may, first, I want to come back to something Amar you mentioned, you've said they're continuing to work to improve and maximize the retention of the plugs for the glaucoma study and I was just wondering if you might be able to expand on that if there is anything different or changed in your sort of expectations hurdle rates versus sort of the last time you've touched on this? And then secondly as you gear up for the fourth quarter NDA filing, can you maybe talk little bit about any sort of pre-commercialization activities there as you're undertaking now or there you've got time for the early part of 2016 and if you have any discussions with payers what the time of those has been? And finally I was hoping you might be able maybe give some sort of directional guidance on when we will get any additional visibility into the TKI program?.

Sure, so let's first talk about sort of the retention rates. As we had mentioned that with some of our later product candidates, which have been going through the placebo vehicle plug that have been going through the non-significant risk studies we have seen retention rates over three month duration quite high as 92%.

So what we've changed in those to be able to achieve those types of rates are looking at the stiffness of the plugs, the swelling of the plugs, the size of the plugs those types of things are changed. So we have some key learning that have come from that.

Now what we're trying to optimize is to be able to make sure that the plugs are not only well retained but in a chronic therapy would need to have them be removed at the end of three months and then new plugs reinserted.

While the plug are designed, these systems are designed to be absorbable what we want to make sure that they are delivery drug for the duration and the absorption is a longer duration than that so they would need to be removed and then other ones inserted, so we're looking at different compositions of hydrogel.

This is all well within our learning and our capability. This is standard stuff that we do but that progress is made along with and in parallel with the drug delivery work that has been done in the Phase 2B trial.

So when those two pieces of information come together, we're allowed, we pick a candidate that has the best patient experience is the best way to describe it that would be entering the Phase 3 and also have the drug delivery capabilities, so that's the progress that we have made today over there.

On the pre-commercial activity, I am going to turn it over to Scott in a second so he can talk about that but maybe I can talk a little bit about the TKI. So what is the progress that we have made since the last time, the last call we've mentioned that we're going to be entering into the TKI program and evaluating molecules.

So we screened about 120 different molecules and based on their solubility based on their potencies towards VEGFR-2 and PDGF, based on not having off-target effects in other type of factor that can cause complications or toxicity from what we have known and based on sort of the IC-50 or sort of how tightly these bind and what their KDs are.

We are picking the right type of candidates and also looking at the IPX3 of these in the 20/20 kind of timeframe so that by the time these products enter into the market the intellectual property has expired by that point in time which covered the base molecule.

Based on that we have kind of narrowed it down to 4 or 5 different TKI agents, we have placed some of these in preclinical studies within our hydrogel depots and have seen in a good compatibly and ability to kind of place, we're looking at sort of the amount of drug that is released and in various ocular tissues, so once we have a good sense for all of that and we have cemented the IP position, we will give guidance as to timelines and formal entry into the development program.

So now, I'll turn it over to Scott to speak a little bit about some of the pre-commercial activities and any payer conversations..

This is Scott Corning.

Right now regarding pre-commercial activities we’re busy namely in the planning stages of course we got the name for the products several months ago, so we're now working on branding activities and campaign ideas as well as working on our marketing and sales staffing plans, putting people in place to prepare for commercialization of the products as early as third quarter of next year.

And then also looking at MSL deployment which we could do prior to launch, if we so chose to do, and also working constantly on our publication plan our KOL engagement and also ensuring a strong congress presence. So there is a lot of activity going on right now and that will only increases as time moves on.

Regarding reimbursement, we are looking at the scenarios that could come to fruition with the products so we're working closely with reimbursement consultants to gain a better understanding about this specific situation as it relates the product, of course our goal is to get the product reimbursed and we're working towards doing that in part of our strategy in terms of having an extended level multiple indications for DEXTENZA would only increase chance of doing so, lot of activity on that front as well..

And I'm showing no further question. I'll now turn the call over to Amar Sawhney for closing remarks. .

Well, I want to thank everyone for taking the time to join us on the call today.

We continue to deliver and advance our multiple programs including DEXTENZA, sustained-release dexamethasone, the post operative ocular inflammation and pain allergic conjunctivitis and inflammatory dry eye disease, OTX-TP, sustained-release travoprost of glaucoma and ocular hypertension and our pre clinical anti-VEGF agents of back-of-the-eye diseases.

We look forward to several important value creating milestones during the second half of 2015, we also look forward to seeing many of you at the Morgan Stanley Healthcare Conference and at the Citi Biotech Conference this September.

As always I want to thank our employees, advisors and Board Members who have been devoting their time, energy and passion to advance the Ocular Therapeutix's pipeline and vision. On behalf of the entire Ocular team, thank you for all your support. You may now disconnect..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day..