The following discussion and analysis should be read in conjunction with our
unaudited interim condensed consolidated financial statements and the related
notes (Interim Financial Statements) that appear elsewhere in this quarterly
report on Form 10-Q. This discussion contains forward-looking statements
reflecting our current expectations that involve risks and uncertainties. Actual
results may differ materially from those discussed in these forward-looking
statements due to a number of factors. For further information regarding
forward-looking statements, please refer to the “Special Note Regarding
Forward-Looking Statements and Projections” immediately after the index to this
report above.
Overview
pharmaceutical company that specializes in the commercialization and development
of prescription ophthalmic pharmaceuticals. We focus on diseases affecting the
back of the eye, or retina, because we believe these diseases are not well
treated with current therapies and affect millions of people globally. Our only
product is ILUVIEN®, which has received marketing authorization and
reimbursement in numerous countries for the treatment of DME. In the
certain other countries outside
of DME in patients who have been previously treated with a course of
corticosteroids and did not have a clinically significant rise in intraocular
pressure. In 17 countries in
vision impairment associated with chronic DME considered insufficiently
responsive to available therapies. ILUVIEN is also now indicated in 17 countries
in
affecting the posterior segment of the eye (NIU-PS).
We market ILUVIEN directly in the
and have made ILUVIEN available in the
and
entered into various agreements under which distributors are providing or will
provide regulatory, reimbursement and sales and marketing support for ILUVIEN in
Netherlands
East
Therapeutics for the development and commercialization of our 0.19mg
fluocinolone acetonide intravitreal implant in
Pacific.
Where We Market ILUVIEN to Treat Diabetic Macular Edema (DME)
ILUVIEN has received marketing authorization for the use of ILUVIEN to treat DME
for the indications and in the countries shown in the following table:
Countries
Where ILUVIEN
Countries Has Countries Where
Where ILUVIEN Has Received ILUVIEN is
Received Marketing Reimbursement Currently
Indication for the Authorization Approval to Available
Treatment of DME to Treat DME Treat DME to Treat DME
Treatment of DME in U.S., Australia, U.S., Kuwait, U.S., Kuwait,
patients who have been Canada, Kuwait, Lebanon and the Lebanon and the
previously treated Lebanon and the United Arab United Arab
with a course of United Arab Emirates Emirates
corticosteroids and Emirates
did not have a
clinically significant
rise in intraocular
pressure
Treatment of vision The United The U.K., The U.K.,
impairment associated Kingdom (U.K.), Belgium, Belgium,
with chronic DME Germany, France, Germany, France, Germany, France,
considered Italy, Spain, Italy, Spain, Italy, Spain,
insufficiently Portugal, Portugal, Portugal,
responsive to Ireland, Ireland, Ireland,
available therapies Austria, Luxembourg and Austria,
Belgium, the Netherlands Luxembourg,
Denmark, Norway, Denmark, Norway,
Finland, Sweden, Finland, Sweden
Poland, Czech and the
Republic, the Netherlands
Netherlands and
Luxembourg
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Where We Market ILUVIEN to Treat Recurrent Non-Infectious Uveitis Affecting the
Posterior Segment of the Eye (NIU-PS)
ILUVIEN has received marketing authorization for the use of ILUVIEN to treat
NIU-PS for the indications and in the countries shown in the following table:
Countries Countries
Where ILUVIEN Has Where ILUVIEN Has Countries Where
Received Received ILUVIEN is
Marketing Reimbursement Currently
Indication for the Authorization Approval to Treat Marketed
Treatment of NIU-PS to Treat NIU-PS NIU-PS to Treat NIU-PS
The prevention of The U.K., The U.K., The U.K. Austria,
relapse in recurrent Germany, France, Germany, Ireland Belgium, Germany,
NIU-PS Spain, Portugal, (private sector), Ireland,
Ireland, Austria, Spain, Luxembourg Luxembourg,
Belgium, Denmark, and the Denmark, Norway,
Norway, Finland, Netherlands Sweden, Finland
Sweden, Poland, and the
Czech Republic, Netherlands
the Netherlands
and Luxembourg
We launched ILUVIEN for the NIU-PS indication in
third quarter of 2019,
Luxembourg in the first quarter of 2021. In addition, we secured reimbursement
of ILUVIEN for NIU-PS with the major private insurers in
quarter of 2021.
ILUVIEN became commercially available in
quarter of 2021, in
is currently commercialized across the
team and our contracted wholesaler partner.
We signed an agreement on
accessible to doctors wishing to use it on a named-patient basis in territories
where ILUVIEN is not licensed or commercialized while ensuring compliance with
regulations.
The COVID-19 Pandemic and Our Steps to Address its Effects on Our Business
The unprecedented events of the COVID-19 pandemic, and its unpredictable
duration, in the regions where we have customers, employees and distributors
have had an adverse effect on our sales of ILUVIEN and thus on our net revenues,
liquidity and financial condition. These adverse effects of the pandemic on us
have resulted from the following, among other factors:
•Limitations imposed by governments and private parties on in-person access to physicians have adversely affected us in certain countries where ILUVIEN is currently marketed and may again do so if reimposed where they have been lifted. •Patients' concerns about their personal health during the COVID-19 pandemic have also negatively affected our business. Many DME patients have been hesitant or even unwilling to visit their physicians in person (even if otherwise permitted) for fear of contracting the COVID-19 coronavirus. •Limitations on travel curtailed our in-person marketing activities, and may again do so if reimposed. •As physicians gain increased access to patients as a result of the lifting of limitations in theU.K. and inEurope , they may give a higher priority to patients with acute illnesses before treating patients with chronic illnesses such as DME, thereby reducing or delaying the number of ILUVIEN treatments that might otherwise have been performed. •SARS-CoV-2 variants such as Delta and Omicron have emerged and may again emerge, with unpredictable effects on our business.
These factors may continue to adversely impact our revenue in affected markets
and our capital resources, although the extent and duration of that impact is
currently uncertain. (Please refer to “Special Note Regarding Forward-Looking
Statements and Projections” above.)
In response to these developments, we have implemented measures to mitigate the
impact of the pandemic on our financial position and operations. We are
continuing to monitor the effects of the SARS-CoV-2 variants and to increase our
engagement with our customers to mitigate any anticipated loss of revenue in
those markets that may be affected.
For more information about the effect of the COVID-19 pandemic on our business
and the related risks we face, please see Part I, Item 1A, “Risk Factors – Risks
Related to the Public Health Pandemic,” in the 2021 Form 10-K.
Transactions with Ocumension Therapeutics
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On
incorporated in the
of its affiliates. In the Ocumension transaction, we received a total of
•a Share Purchase Agreement with Ocumension, pursuant to which we offered and
sold to Ocumension 1,144,945 shares of our common stock at a purchase price of
•an Exclusive License Agreement (the Ocumension License Agreement) with a wholly
owned subsidiary of Ocumension, pursuant to which we granted an exclusive
license for the development and commercialization of our 190 microgram
fluocinolone acetonide intravitreal implant in applicator under Ocumension’s own
branded label in
nonrefundable upfront payment of
milestone payments of up to
subsidiary of specified amounts of net sales of the licensed product in in the
future. We recognized
transaction (including the value of a warrant subscription agreement, which we
received as consideration, to purchase 1,000,000 shares of Ocumension
Therapeutics during a period of four years), in accordance with Accounting
Standards Codification (ASC) 606, Revenue from Contracts with Customers, with
the remaining approximate
deferred revenue that will be recognized over the remaining term of the license
agreement once Ocumension begins to sell products. Revenue from the Ocumension
License Agreement is included within net revenue in the accompanying condensed
consolidated statements of operations.
For more information about the Ocumension transaction, see Notes 9 and 16 in the
Interim Financial Statements and our Current Report on Form 8-K filed with the
Sources of Revenues
Our revenues for the three months ended
from product sales primarily in the
large pharmaceutical distributors accounted for 61% and 54% of our consolidated
product revenues for the three months ended
respectively, and 60% and 52% of our consolidated product revenues for the six
months ended
purchase ILUVIEN from us, maintain inventories of ILUVIEN and sell downstream to
physician offices, pharmacies and hospitals. Internationally, in countries where
we sell direct, our customers are hospitals, clinics and pharmacies. We
sometimes refer to physician offices, pharmacies, hospitals and clinics as end
users. In international countries where we sell to distributors, these
distributors maintain inventory levels of ILUVIEN for sale to their customers.
License Agreement with
Under the
US, Inc.
treatment of (a) human eye diseases, including uveitis, in
East
During each of the three and six months ended
royalty expense payable to EyePoint was 5.2%. We will pay an additional 2%
royalty on future global net revenues and other related consideration in excess
of
EyePoint, including how we calculate the royalty percentages we are required to
pay, see Note 9 in the Interim Financial Statements.)
?
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