EyePoint Pharmaceuticals, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with FY2022. This filing does not provide a separate Q4 income statement. EyePoint is a clinical-stage biopharmaceutical company developing sustained-delivery treatments for retinal diseases using its Durasert technology.
Financial performance and position
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Total revenue | $46.0 million | $41.4 million | Up 11% |
| Product sales, net | $14.2 million | $39.9 million | Down 64% |
| License and collaboration revenue | $30.8 million | $0.4 million | Up $30.4 million |
| Royalty income | $1.0 million | $1.1 million | Down 13% |
| Research and development expense | $64.7 million | $49.6 million | Up 30% |
| Loss from operations | $75.1 million | $99.6 million | Loss narrowed 25% |
| Net loss | $70.8 million | $102.3 million | Loss narrowed 31% |
| Net loss per share, basic and diluted | $1.82 | $2.74 | Loss per share narrowed |
Revenue mix shifted substantially following the May 2023 YUTIQ transaction with Alimera. License and collaboration revenue included $29.5 million recognized under the Alimera product-rights agreement and about $1.0 million for transition services. Product sales fell following the transfer of YUTIQ commercial rights and the loss of separate Medicare pass-through reimbursement for DEXYCU. The Company reported no DEXYCU product sales in FY2023.
Operating cash flow was positive $1.9 million, compared with $65.0 million used in FY2022. The 2023 result was materially supported by a $44.5 million increase in deferred revenue, principally related to the Alimera agreement, and other working-capital changes; it should not be read as evidence of profitable operations. Investing cash outflow was $3.3 million and financing cash inflow was $187.1 million.
At year-end, cash and cash equivalents were $281.3 million and marketable securities were $49.8 million, totaling $331.0 million. Total current assets were $344.8 million and current liabilities were $63.3 million. The Company had no debt outstanding after repaying its SVB loan in May 2023; operating lease liabilities totaled $5.5 million. Accumulated deficit was $742.1 million. The filing provides no separately stated operating-margin metric.
Material changes and transactions
- EyePoint licensed YUTIQ rights to Alimera for $82.5 million: $75.0 million paid upfront and $7.5 million payable in four quarterly installments during 2024. It may also receive low-to-mid double-digit royalties on qualifying U.S. net sales from 2025 through 2028, subject to sales thresholds.
- In December 2023, the Company sold 13.5 million shares in an underwritten offering at $17.00 per share, generating approximately $230.0 million gross proceeds. FY2023 also included approximately $10.0 million gross proceeds from ATM share sales. Shares issued and outstanding increased to 49.0 million from 34.1 million at year-end 2022.
- The $30.0 million SVB term loan was repaid in full in May 2023. Repayment and related fees contributed to a $1.3 million loss on extinguishment of debt.
- R&D spending rose with EYP-1901 Phase 2 trials and increased personnel costs. Sales and marketing expense fell 54% following the YUTIQ rights transfer and cessation of DEXYCU promotion.
- FY2022 included a $20.7 million impairment of the DEXYCU intangible asset and $2.1 million of related amortization; neither was recorded in FY2023.
Outlook, commentary and risks
- Management expects to begin pivotal Phase 3 trials of EYP-1901 for wet AMD in the second half of 2024. It expects topline Phase 2 results for NPDR in Q2 2024 and DME in Q1 2025. EYP-2301 remains in preclinical development.
- Management says year-end cash and investments are expected to fund planned operations through topline data from the wet AMD Phase 3 trials into 2026. The filing also says the Company expects continuing losses and may need additional capital; actual cash needs depend on trial timing, results, costs and other factors.
- In December 2023, the Company reported positive topline Phase 2 DAVIO 2 results: both EYP-1901 doses met the primary and secondary endpoints, with statistical non-inferiority to aflibercept on the specified visual-acuity measure. The Company reported no EYP-1901-related serious adverse events in the trial and reduced treatment burden. These are topline Phase 2 findings, not Phase 3 evidence or regulatory approval; follow-up was ongoing.
- The Company is cooperating with a U.S. Attorney’s Office subpoena received in August 2022 seeking documents about sales, marketing and promotional practices, including DEXYCU. EyePoint says it cannot predict the inquiry’s duration, scope or outcome, or whether it will have a material financial effect.
- Key risks include clinical-trial failure or delay, reliance on EYP-1901 and third-party vorolanib supply, manufacturing scale-up and the Northbridge facility schedule, future financing and dilution, reimbursement and competition, and the unresolved DOJ matter. Alimera royalties are dependent on future qualifying sales.
- The Northbridge manufacturing facility was expected to become operational in the second half of 2024. The Company reported effective disclosure controls and effective internal control over financial reporting; the auditor issued an unqualified opinion on the financial statements but was not engaged to audit internal control.
Investor verification points
- Review final and subsequent DAVIO 2 follow-up data, and the timing, design and results of the planned Phase 3 wet AMD trials and NPDR and DME readouts.
- Reconcile the $331.0 million liquidity figure with cash burn, the deferred-revenue contribution to 2023 operating cash flow, and management’s stated runway assumptions.
- Check receipt of the remaining $7.5 million Alimera payments in 2024 and assess the agreement’s supply obligations and conditions for future royalties.
- Monitor DOJ subpoena developments, potential costs or contingencies, and any disclosures that clarify exposure.
- Track vorolanib supply qualification, manufacturing readiness and Northbridge construction progress, alongside future share issuance and dilution.