Brad Smith - CFO Amar Sawhney - President, CEO and Chairman Eric Ankerud - EVP of Regulatory Andy Hurley - Chief Commercial Officer Scott Corning - VP, Marketing and Sales.

Adnan Butt - RBC Capital Markets Donald Ellis - JMP Securities Ling Wang - BTIG.

Good morning, ladies and gentlemen. Thank you for standing by. And welcome to the Ocular Therapeutix 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 of Ocular Therapeutix. Please go ahead, sir..

Thanks Ilea. Good morning everyone, and thank you for joining us on our third quarter 2016 earnings and corporate update conference call. Earlier this morning, we issued a press release providing an update on the Company's product development programs and details of the Company's financial results for the third quarter ended September 30, 2016.

These can be accessed on the Investor portion of our website at investors.ocutx.com. Leading the call today will be Dr.

Amar Sawhney, our President, CEO and Chairman, who will provide a summary of our recent clinical and corporate developments, including the status of our new drug application, or NDA, for DEXTENZA for the treatment of post surgical ocular pain, our Phase 3 clinical development program for OTX-TP, our product candidate for the treatment of glaucoma and ocular hypertension, and our hydrogel depot program for the sustained release of drugs via intravitreal injection for the treatment of retinal disease.

Dr. Sawhney will also provide an overview of the various key milestones expected throughout the remainder of 2016 and into 2017. Following Amar's remarks, I will provide an overview of the financial highlights for the third quarter of 2016 before opening the call for questions.

Amar and I are joined on the call today by Eric Ankerud, our head of Regulatory, Compliance and Quality; Scott Corning, our Vice President of Sales and Marketing; and Andy Hurley, our newly appointed Chief Commercial Officer. 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 act.

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 Factor section of our most recent quarterly report on Form 10-Q on file with the SEC, which we filed earlier this morning.

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.

I will now turn the call over to Dr. Amar Sawhney..

Thank you, Brad. Good morning everyone and thank you for joining us on our call today. Over the past several months our focus has been on execution. We made significant progress on a number of important fronts.

Clearly a major focus for us right now is our new drug application, or NDA, for DEXTENZA for the treatment of ocular pain occurring after ophthalmic surgery. I am pleased to report that we have had productive discussions with the FDA over the past several months.

We believe we have taken the appropriate steps to address the manufacturing related items raised by the FDA, although the FDA will make its determination after we resubmit our NDA.

As a reminder, in July we received a CRL, or complete response letter, relating to certain manufacturing processes on control deficiencies, and subsequently received a letter from the New England district office providing additional details as to the outstanding deficiencies related to their pre-NDA approval inspection of the Ocular Therapeutix manufacturing facility.

Among these was an observation related to the proposed process for identifying identity testing of an incoming inert gas component used in the DEXTENZA manufacturing process. The district office letter also requested that we submit a formal report providing evidence that migration to automatic integration of analytical testing has been completed.

Importantly, the CRL did not identify any deficiencies related to efficacy or safety concerns for the clinical data provided in the NDA for ocular pain indications nor any need for additional clinical data for the approval of the NDA.

We have had ongoing and productive communications with the FDA, including the district office, the Office of Process and Facilities within the Center for Drug Evaluation and Research or CDER, and an in person meeting with the FDA’s officers to discuss our plans for the resubmission of the NDA.

We have submitted our responses to the outstanding manufacturing observations to the district office, and expect to resubmit our NDA before the end of the year. Adequate resolution of the outstanding Form 483 manufacturing deficiencies is a prerequisite to the approval of the NDA for DEXTENZA.

Although the final decision as to the adequacy of our manufacturing process is made by CDER as part of the NDA review process.

An indication of the scope and timing of FDA’s review of our NDA resubmission, including whether a reinspection of our manufacturing facilities will be required is expected within approximately 30 days after the resubmission to the NDA.

If we receive a Class I determination, we expect that the review would take up to two months, and if we receive a Class II determination, which would result if a reinspection is required, we expect that review would take up to six months.

We remain confident in DEXTENZA’s ability to provide a full postoperative course of therapy with a one-time administration as compared to the current standard of care, which requires a month-long complex and tapering regimen on a daily basis of eye drops.

If approved by the FDA, we believe that DEXTENZA the first and only steroid not containing preservatives available to ophthalmologists for the treatment of ocular pain occurring after ophthalmic surgery, and the first and only FDA approved drug to provide the complete course of therapy for this indication with drug elusion up to 30 days with a single placement.

We along with many physicians see this as a real value proposition of DEXTENZA. In a recent observation study published in the Journal of Cataract and Refractive Surgery approximately 93% of post-cataract surgery patient showed improper technique when using the current standard of care steroid eye drops.

These include common mistakes such as missing an eye, instilling an incorrect amount and contaminating the bottle tip. All of these improper techniques can lead to suboptimal patient outcomes and can also result in many of these patients having to revisit their doctor, which can be a burden for both office staff, as well as ophthalmologists.

Our goal with DEXTENZA is to improve patient outcomes and enable the transfer of control back to the physician for the entire course of postoperative therapy. If approved, we continue to believe that commercial uptake for DEXTENZA has the potential to be strong.

According to US census data by year 2020 it is estimated that number of Americans diagnosed with cataracts is expected to rise approximately 30 million, representing a 31.9% increase over current prevalence estimates.

Given these numbers, it is not surprising that cataract removal is the most commonly performed surgical procedure in the United States.

Medicare eligible population – of the patients of the Medicare eligible population, approximately 3.8 million cataract cases were performed in the United States in 2015, in parallel with steadily rising surgical volume with the requirement for safe and effective outcomes, driven not only by operative technique, but also by the appropriate pre-and postoperative care.

Therefore DEXTENZA’s ability to provide a full postoperative course of therapy with a one-time administration to address the issue of noncompliance is attractive to physicians.

In fact, approximately 80% of ophthalmologists stated in a recent market survey conducted by a third-party and commissioned by us that DEXTENZA would become the new standard of care for post surgical use. It is not just ophthalmologists, but also patients who are seeking an alternative to currently approved topical therapies.

At the OSN annual meeting last week we reported positive results from patient reported outcomes study of patients who were administered DEXTENZA in a first Phase 3 trial for the treatment of post surgical ocular inflammation and pain. This cross-section qualitative evaluation involved individual interviews lasting approximately 45 minutes.

There were no predesignated endpoints as for the qualitative survey seeking a deeper understanding of the patient experience with DEXTENZA. We are pleased to report that 96% of participants reported the highest level of satisfaction grade with regard to overall product satisfaction. 100% of patients described DEXTENZA insert as comfortable.

88% of participants stated that if they were to undergo cataract surgery again, they would request the insert, and 84% of participants would be willing to pay more for the insert than for eye drop therapy. It is encouraging to hear this from the patients themselves.

Clearly DEXTENZA was well received by these patients and largely preferred over topical therapy alternatives following surgery. This study is being submitted for publication, and we expect to be available in manuscript form sometime early next year.

It is clear that both patients and physicians seek a better alternative to current standard of care steroid eye drop therapy to address the issue of noncompliance and if approved, they believe DEXTENZA may serve as this alternative.

We are committed to bringing DEXTENZA to market and continue to build our commercial organization and infrastructure in preparation for the earliest possible launch of DEXTENZA. To that end we recently appointed Andy Hurley as our new Chief Commercial Officer, where he will oversee the potential launch of DEXTENZA.

Andy has over two decades of experience in sales, marketing, market access, and commercial operations across the pharmaceutical industry, and we are excited to have him join our team.

As we have previously stated, should the FDA grant marketing approval for DEXTENZA for the treatment of ocular pain occurring after ophthalmic surgery, we expect to apply for transitional pass-through payment status to be used in the hospital and ambulatory surgery center setting.

Pass-through payment status provides transitional reimbursement for innovative new products for a period of three years. We intend to launch DEXTENZA in the US through direct sales leadership and through a contract sales organization or CSO, with sales representatives 100% dedicated to DEXTENZA.

Our objective is to maximize product uptake and revenue from the outset. We are also pursuing additional indications for DEXTENZA in addition to ocular pain occurring after ophthalmic surgery aiming to broaden its label.

We expect top line results from our third Phase 3 clinical trial with DEXTENZA for post surgical ocular inflammation and pain to be available in the fourth quarter of this year.

As a reminder, we designated this trial to include key modifications compared to our first two Phase 3 clinical trials for DEXTENZA for post surgical ocular inflammation and pain. These modifications include a one-to-one patient randomization of treatment and placebo groups instead of a two-to-one randomization.

The inclusion of patients who are being treated with high levels of oral NSAIDS, or nonsteroidal anti-inflammatory drugs was excluded, an improvement of training and guidance on the on-site clinical investigators regarding adherence to study protocols, including appropriate use of risky medications.

We believe these modifications improve the likelihood of success for the trial. If we obtain favorable results from the trial and subject to potential approval of our NDA for ocular pain occurring after ophthalmic surgery we plan to submit an NDA supplement for DEXTENZA to include a post surgical ocular inflammation indication.

Just to be clear, we do not expect the results of this trial to affect our NDA resubmission. The agency has indicated they do not require efficacy data from this trial for its review of our NDA for ocular pain occurring after ophthalmic surgery.

The purpose of conducting this third Phase 3 trial is to be part of our label expansion strategy with DEXTENZA. I would now like to turn to OTX-TP, our sustained release travoprost drug product candidate for the treatment of glaucoma and ocular hypertension.

We recently commenced patient enrollment in the first of two planned Phase 3 clinical trials with OTX-TP. This is exciting as this is the first Phase 3 trial to be conducted within a noninvasive sustained-release drug candidate for the treatment of glaucoma, and presents an important advancement in the field of ophthalmology.

According to IMS health data, there were 34 million prescriptions and sales of approximately $2.7 billion of drugs administered by eye drops for treatment of glaucoma in the United States in 2015. So this is a very significant market opportunity.

Compliance is seen as the biggest issue with existing therapies for glaucoma, and more than 50% of patients on topical prostaglandin analogs are not compliant with their therapy within the first six months of treatment.

OTX-TP aims to address this issue directly by allowing patients who are either unable to acquire or do not remember to or who incorrectly administer eye drop regimens to have convenient way to manage their disease.

This US-based prospective, multicenter, randomized, parallel-arm, placebo-controlled study is expected to enroll approximately 550 patients with open angle glaucoma or ocular hypertension across 50 clinical sites.

The primary endpoint is statistically superior reduction of intraocular pressure from baseline with OTX-TP compared to placebo at three diurnal time points at 2, 6 and 12 weeks following insertion.

Importantly, the Phase 3 study design does not include a timolol comparator or validation arm, and does not have active or placebo eye drops administered in either arm. The comparator arm utilizes a non-drug eluting hydrogel-based intracanalicular insert.

We expect top line results from the first Phase 3 clinical trial to be available in the first half of 2018, and plan to commence the second Phase 3 clinical trial in the first half of 2017.

I'm also pleased to report that we have seen significant improvements in the retention rates of the inserts at day 90 from our ongoing nonsignificant risk investigational device exemption human clinical studies using the non-drug eluting version of the OTX-TP insert compared with our Phase 2B trial with OTX-TP.

Based on preliminary data, we are seeing retention rates approaching 90% at day 90. As many of, OTX-TP is designed to deliver travoprost to the ocular surface for up to 90 days. This concludes my comments on our front of the eye programs.

As many of you are aware, we are also continuing to move forward with the development of sustained-release delivery depots for intravitreal injection to address many serious back of the eye conditions as well.

Our dual back of the eye strategy is exploring the fact that these depots can be formulated with both small and large molecule pharmaceuticals, such as anti-VEGF and tyrosine-kinase inhibitors or TKIs. We have made considerable recent progress in this area.

Last month, we entered into a strategic collaboration, option and license agreement with Regeneron Pharmaceuticals for the development of a sustained release formulation of the VEGF trap aflibercept, as well as other protein-based biologics targeting VEGF for the treatment of serious retinal diseases such as wet age-related macular degeneration or wet AMD.

For those of you who don't know, Regeneron’s aflibercept is currently approved by the FDA for certain indications, including wet AMD, under the brand name EYLEA, and is the market-leading drug in this space.

We are very pleased to see an industry leader such as Regeneron recognize the potential of our sustained-release protein drug delivery platform and look forward to working with them.

We believe that the structure of our agreement leverages what is currently the largest market opportunity in ophthalmology, and positions Ocular Therapeutix with a meaningful level of participation in the economics post market launch if this program successfully culminates in the commercialization of our product under the collaboration.

Brad will recap the economic terms of the collaboration during his financial update. The US market for anti-VEGF drugs in 2015 was approximately $4.2 billion a year and we believe our platform could extend the lifecycle of aflibercept.

A four of six month sustained release formulation has the potential to advance the current standard of care in wet AMD and other retinal diseases by significantly reducing current injection frequency.

We have demonstrated up to six months of sustained-release of a few different anti-VEGF drugs using our hydrogel-based drug delivery technology with a good safety profile in preclinical studies completed to date.

Importantly, we retain all rights to develop our platform with other non-VEGF targeting compounds as well as with small molecule pharmaceuticals including TKIs for all retinal diseases. We have demonstrated minimal inflammatory response in vivo through 26 weeks with both our anti-VEGF protein and TKI depots currently in development.

Our small molecule program focuses on TKIs has also produced promising data on pharmacokinetics, pharmacodynamics and tolerability, and our plan is to continue internal development of a sustained release TKI depot, which we feel could possibly be in human clinical trials within the next year.

As you can see, we have a lot going on at Ocular over the past few months. I will now turn the call back over to Brad, who will review our third quarter 2016 financial results..

Thanks Amar. I will first review some additional details of the collaboration we signed with Regeneron for the development of our sustained-release formulation of their VEGF trap aflibercept currently marketed under the brand name EYLEA.

We are eligible to receive up to $305 million in milestone payments from Regeneron for development and commercialization. If we are successful in achieving positive results in a predefined clinical milestone, Regeneron has an option on the commercial license, which if exercised would trigger a payment of $10 million from Regeneron.

Ocular would be responsible for funding development through the initial human clinical trial. Regeneron would then be responsible for all subsequent development, regulatory and commercialization.

Importantly, Ocular is eligible to receive up to $305 million of milestone payments as I mentioned, including up to $155 million in development and regulatory milestone payments, which includes the $10 million option payment, $100 million for first commercial sale and up to $50 million in commercial milestone payments.

In addition, we will be eligible to receive tiered high single digit to low to mid-digit royalties on potential future net sales. We made the decision to trade off a possibility of what would have been a modest upfront payment for more substantial milestone payments, and higher royalties on net sales.

In addition to using best commercial efforts on the program, Regeneron also has some specific timelines by which certain clinical milestones must be met. We believe that the structure of this collaboration positions us with a meaningful level of preservation in the economics post market launch if we successfully bring product to market.

Turning to our cash and investment position, as of September 30, 2016, we had $75.7 million in cash, cash equivalents and marketable securities. Cash used in operating activities was $7.3 million in the third quarter of 2016 compared to $9.7 million in the third quarter of 2015.

We expect cash used in operations to be $41 to $43 million for calendar year 2016 and expect capital expenditures to be between $3 to $3.5 million for the year. This is of course subject to a number of assumptions about our clinical development programs, the commercialization of DEXTENZA and other aspects of our business.

This spending will be driven by our clinical development programs and by our capital investment in a new facility.

We plan to operate our existing manufacturing facility in parallel with the new facility for a period of time and plan to use this existing facility for the supply of DEXTENZA for our initial commercial launch subject of course to FDA approval of our NDA.

Based on our current plan and forecasted expenses, we expect existing cash, cash equivalents and marketable securities to fund the company’s operating activities, capital expenditures and debt service into the fourth quarter of 2017.

We had 15.6 million in outstanding debt as of September 30 and principal payments are due starting January 2017 over a 36 month period. For the quarter ended September 30, 2016, we reported a net loss of 9.6 million or $0.39 per share. This compares to a net loss of 11.5 million or a loss of $0.47 per share for the third quarter of 2015.

The net loss for the third quarter of 2016 included $1.4 million in non-cash charges for stock-based compensation compared to $1.2 million in similar charges for the comparable quarter in 2015. Revenues for the third quarter of 2016 totaled just under $500,000 from the sales of ReSure Sealant.

As previously stated, we don't expect product revenues from the sales of ReSure Sealant to be meaningful in 2016, as we are deferring the deployment of a sales force until we launch our initial sustained release drug delivery product.

Total costs and operating expenses during the third quarter 2016 were 9.7 million, which compares to 11.6 million for the third quarter of 2015. Research and development expenses totaled 5.7 million in the third quarter of 2016 compared to 8.3 million in the third quarter of 2015.

The decline in expenses is due to the fact that we incurred significantly lower clinical trial costs in the third quarter of 2016.

We incurred $2.7 million in expenses related to the Phase 3 allergic conjunctivitis clinical trials in the third quarter of 2015, compared to only $14,000 in such costs in the third quarter of 2016 as those trials wound down.

In the second quarter of 2016, we had completed patient enrollment in the third Phase 3 trial of DEXTENZA for the treatment of ocular inflammation and pain, and therefore expenses related to this trial were only approximately $430,000 in the third quarter.

In addition, in the third quarter of 2016 we are in the very early stages of initiating our Phase 3 trial of OTX-TP for the treatment of glaucoma and ocular hypertension, and incurred approximately $800,000 in expenses.

We expect the expenses related to our Phase 3 glaucoma trials to increase significantly in future quarters as we expect to enroll up to 550 patients in each of the two Phase 3 trials. We had approximately 24.9 million shares of common stock outstanding as of September 30.

This concludes my comments on the third quarter financial results and we like to now turn it back over to the operator for Q&A..

Thank you. [Operator Instructions] Our first question comes from Adnan Butt with RBC Capital Markets. Your line is now open..

Hi, folks. Thanks for the question.

On the third DEXTENZA study, could I ask what stage the company is at, are you at the point of analysis, has data-base lock occurred, or those things are still pending?.

We are pretty close, meaning I think yes, we have locked the database. So, we have guided that before the end of the year probably closer rather than later, we would be in a position to announce the results..

Thanks Amar, and then on the OTX-TP Phase 3 program, two things there, first you mentioned that there is a study that shows improved retention, could you say a bit more about that and then secondly for the Phase 3, is it designed so that you'd be able to give topline efficacy at three months or will we have to wait until the study completes?.

So, let me answer your first question and then I'd like maybe if you clarify the second one.

So, the with regards to retention rate, as you know what we have been doing is refining the hydrogel insert in terms of its physical size insertion characteristics to make the process as seamless as possible for both insertion and removal and along with that process retention.

So, the NFR study that we have conducted have indicated to us that the retention rates are in the 90% kind of range at three months. I remember that these were in the 50% range in the Phase 2b trial and we have been working diligently to improve that and we think we've made considerable progress in that regard.

And so, we feel pretty good about where we are on that.

The second question if you could just remind me?.

Sure. Just a follow-up there on our venue.

Look at these studies, you also look information any physiologic response and everything is fine and clean with these inserts at three months?.

Yes. It is completely acceptable in terms of. So, what we see is there may be a few cases where there may be some level of irritation or transient information. But that is easily resolved. So, it's nothing that is lasting. Or and that’s probably less than 10% of cases.

So, if you look at eye drops for example, you may see hyperemia and ice installations like pain effects of preservatives, so, when you kind of each product has its own kind of safety profile and we think that the safety profile when you look at the overall comparison, would be quite favorable relative to eye drops..

Okay.

And the question on the pivotal study or is that -- the primary endpoint just clarifying it's it at three months? Then if so, would you be able to even though the study maybe last longer, would you be able to give topline data once the efficacy endpoint has been reached?.

So, couple of things. One, it's not only a three months, it's at the end point is basically taking three different time points, two, six and 12 weeks and three diurnal time points at those 8AM, 10AM, and 4PM and then looking to demonstrate kind of superiority statistical superiority compared to the placebo insert at each of those time parts.

So, that is the primary endpoint. So, it's not only at day nighty. Okay.

So, the second part is that the once that efficacy has been demonstrated, I think the forgetting what you'd ask something else, I'm sorry?.

Yes. Just can you would you be able to maybe I --..

Analysis or not?.

Right. Can you say that, okay, this is the -- talking about primary endpoint something like that..

There are, it is possible, we'll have to look into that to make sure that there is sort of not any penalty. But we typically like to make sure that the safety evaluation duration of at least three months is finished. So, that in for the efficacy part would have been finished.

So, we would be able to give three months of safety and efficacy at that point in time in the topline results, yes..

Okay, thank you. I'll get in line..

Our next question comes from Donald Ellis with JMP Securities. Your line is now open..

Thank you and good morning. First question is can you describe the kind of infrastructure roll out for 2017 for DEXTENZA, assuming approvals with respect to numbers of patients, numbers of territories, etcetera. And then any 2017 data points we should be looking for for your hydrogel program in or outside of the VEGF program.

And then remind us again about the pass-through.

What are the parameters of the pass-through and how is the price that for DEXTENZA and pass-through?.

So, this is Andy Hurley. So, obviously I've been here just under a month's time and I've been able to evaluate really our launch planning efforts over that period of time. What I can say is we're right on track. The launch planning is ongoing right on track. We have sub teams that are focused in all the critical areas for commercialization.

And what we're looking to do is build the commercial model that focuses on educating physicians not only in the clinical value but also providing triage support for the reimbursement issues that may come up across the managed care channels. We realized the market opportunity is large for DEXTENZA.

What we're going to be needing to do over that the next couple of months is really to find what we're going to need for critical mass that will be right size to realize the fullest opportunity for DEXTENZA. That's not just under the sales room, that’s going to also be on the reimbursement side of the reimbursement special.

So, that number is still not completely determined but what I can say is that we're completely aware of the market opportunity and we're going go and right size it to realize the best opportunity for DEXTENZA..

And now with regards to pass-through, maybe I'll let Scott comment on pass-through..

Yes. Transitional pass-through payment status requires that you set a price that's not insignificant to the cost of the procedure itself.

So, if you take the hospital reimbursement for cataract surgery at $1600 plus, you need to be somewhere in the 20% plus range in terms of your pricing in order to qualify for transitional pass-through payment status. And so, although we haven’t determined our final pricing, we feel we need to be in that range in order to be granted that status.

You also need to be an innovative product which we obviously will be, should we be approved and so FDA approval is the base requirement for transitional pass-through payment status.

And I think it's also important to mention that regardless of when approval happens, CMS just made a final determination that pass-through payment status although it remains on a quarterly approval cycle, now doesn't start at the first of the year.

So, regardless of the quarter in which we gain pass-through status, we expect to have a full three years under that construct..

Okay.

And then that 20% you mentioned, what's the reference point, has to be 20% of what?.

The VAT pricing. So, you once you set your pricing, you just want to make sure that you're in the realm of around that percent. There is specific formulas put forth by CMS, but ensured it comes down to approximately that percentage or a little higher than that..

Of the procedural?.

Yes. Of the procedural reimbursement. So, as I said, in the hospital setting, cataract surgery is in the 1600+ range. So, if 20+% of that is in the 400+ range..

Yes, okay. Understood, okay.

And then 2017 potential data points for hydrogel?.

I'm sorry, could you repeat that?.

What's the question?.

Sure.

In the data points that we should be looking for regarding your hydrogel drug delivery program in 2017?.

You mean, for the back of the eye?.

Yes..

Yes. So, what -- as I mentioned that the TKI program which is under our control, we have a little bit better ability to predict that because we control the timeline.

So, we think we could be in the clinic sometime next year, probably towards the latter part of next year, whether we will have results on that next year or not is not clear right now but I think we hope to be able to enter the clinic in a kind of a early proof of principle Phase 1b type of a study..

Thank you, very much..

Thank you. [Operator Instructions] Our next question comes from Ling Wang with BTIG. Your line is now open..

Thank you. So, I just want to get a clarity on the timing for the regulatory event. So, after you resubmit it in a postsurgical pain indication for DEXTENZA. You mention Class I and Class 2 classification.

Which class do you expect of the resubmission to be classified?.

So, when we make the submission in our discussion that we had with the agency, we asked them that same question. And their response was that this determination is made after you do the resubmission and we will we are open to both possibilities but we need to look at the resubmission to make that determination.

If they feel that an inspection is required, it could be a Class 2, if they don’t, then the rest of the topics tend to fit under the Class I kind of category. But whether or not re-inspection is required, is a determination that Cedar will make. And they just said that we'll get back to you in 30 days after your resubmission to inform you.

That's so -- we really can't get more guidance or can't give more guidance on that. I think it's important to realize that this is a matter of when not if type of a thing, we've adequately we think addressed the issues that they've raised. And communicated our plans to them and they seem in broad agreement with the plans that we have communicated.

But until they kind of review the resubmission, they will not be in a position of giving any further guidance. So, when we do that, let's say that that were by the end of the year December we submit. In January they would let us know whether it's one more month left or five more months left..

Got it. And also I would assume, I mean, the NDA supplements once you get the Phase 3 data in the inflammation study. So, you will submit that after the approval in the pain indicational..

That's right..

Right.

And then what is the timeline for, I mean, the review time for the NDA supplement?.

Certifically an NDA supplement which includes new clinical data has a 10 month timeline on it..

10 months, okay..

So, that is what we would expect and this is the reason we choose not to sort of submit that right now as part of the resubmission because it would potentially prolong that timeline. So, we and it is not required as part and parcel of this initial NDA resubmission.

So, our hope is that we will do that as soon as we gain our NDA approval for pain, we will be in a position to be ready with our data to do the supplement..

Got it. I'm just curious, if DEXTENZA get the pain indication, the market, before I mean without the inflammation indication in the time being.

So, how I mean so to get your insight, how would it be used, I would assume like the patients will need to be given both DEXTENZA and some kind of a anti-inflammation drug at the same time?.

Well, I recall that patients currently are given steroid and said eye drops, both. Okay. So, there is two anti-inflammatory, two analgesic drugs being given at the same time, anyway.

The steroid is sort of what primarily people rely on, the [M-Fade] is an additional thing often times given for probably other purposes of cystoid macular edema prophylaxis which is actually not its indication but anyway not dwelling on that point.

The take home message is that the M-Fade drop will still be given, DEXTENZA would be replacing the steroid eye drop regimen. And patients are seen and they want time point and at 8:30 time point. So, as part of the normal course of their surgery. So, at day one, our data from our clinical trials is pretty strong on pain.

And if the patients are doing well, they don’t need to have anything else prescribed that will be the normal course of action. DEXTENZA, the M-Fade drop prescribed and that's kind of how we expect it to go..

I see, that's really helpful. And then just one or two.

Clarify, let's see once you get the inflammation label, would that impact the pricing at or the pass-through status, I mean how should we be thinking about that?.

No, it doesn't impact any of those issues. It is principally done by us more as sort of an implicit responsibility that want to be able to have a similar label to what current steroid eye drops do, so that our reps are not in a position where they have to either defer that question or not be able to directly speak to it or promote to it.

So, I think it's more from that standpoint, our data from market research has reflected that clearly there isn’t much of a difference in market uptake, whether or not you have that label, as long as there is published evidence that the product does have efficacy in that regard and its activity mechanisms are based on that.

However, we don’t want to be in a position where we are kind of treading a fine line in terms of how we promote the product. So, for that reason we are pursuing the information indication..

Got it.

And lastly, for the pass-through reimbursement status, I was wondering whether the CMS I bind to give you the decision on a quarterly basis or is there an timeline, next timeline or?.

Yes. Leave it in within three months they give you a response, within three months of your filing is a response can be gotten.

The good news is that this November which was supposed to be a draft document has now just been finalized where earlier it used to be there had to be the beginning of the calendar year when that started to be able to get the full three year. Now, it's been made such that whatever quarter you start in.

so, effectively if one were to start say in July, then you would have three years until that July. Otherwise, in the prior situation you would only have 2 ½ years. So, that's a good development..

Oh, yes, that's great. Thank you very much and congratulations on the progress..

Thank you..

There are no further questions, I will now turn the call over to Amar Sawhney for any closing remarks..

I want to thank everyone for taking the time to join us on the call today. We look forward to providing you with updates on our NDA for DEXTENZA for the ocular pain indication as well as on our third Phase 3 clinical trial with DEXTENZA for post-surgical ocular inflammation and pain.

And also, on our Phase 3 program of OTX-TP for the treatment of glaucoma. We will also be at the Stiefel and Piper Jaffray Healthcare Conference later this month and hope to see many of you there. On behalf of the entire Ocular team, thank you all for your support. You may now disconnect..