SEC filing summary
Filing and period: pSivida Corp. and subsidiaries’ unaudited Form 10-Q covers the three months ended September 30, 2017, the company’s fiscal first quarter of fiscal 2018. The supplied company metadata says Eyepoint, Inc.; the filing itself identifies the registrant as pSivida Corp.
Business context
pSivida develops sustained-release drug-delivery products, primarily for chronic eye diseases. Its lead candidate, Durasert three-year uveitis, was in Phase 3 development; the company planned a U.S. NDA filing in late December 2017 or early January 2018. ILUVIEN for diabetic macular edema was licensed to Alimera, and Retisert royalties came from Bausch & Lomb.
Financial performance and liquidity
| Metric | Three months ended Sept. 30, 2017 | Prior-year period |
|---|---|---|
| Revenue | $385,000 | $277,000 |
| Operating expenses | $6.391 million | $7.463 million |
| Operating loss | $6.006 million | $7.186 million |
| Net loss | $5.983 million; $0.15 per share | $7.162 million; $0.21 per share |
| Cash used in operations | $5.968 million | $6.486 million |
At September 30, 2017, cash and cash equivalents were $11.833 million, current assets $12.547 million, current liabilities $4.279 million, total liabilities $4.326 million, and stockholders’ equity $9.001 million. The company reported no borrowings or credit facilities. The current ratio was approximately 2.9. No gross margin was reported; revenue was small relative to operating expenses.
Cash declined $5.065 million during the quarter. Financing provided $963,000 net from ATM share sales; investing used $64,000. The company had 40.2 million shares outstanding at quarter-end. It subsequently sold additional shares under the ATM, receiving approximately $6.2 million gross from October 1 through November 7, 2017, and received $750,000 in October under a new feasibility-study agreement.
Changes, outlook, and key risks
- Revenue rose 39%, primarily from higher collaborative research and development revenue; Retisert royalty income was nearly flat. Operating expenses fell 14%, and net loss improved 16% year over year. Lower R&D and G&A costs included timing effects and prior-year U.K. restructuring and CEO-transition costs.
- The July 2017 amended Alimera agreement licensed Durasert uveitis rights in EMEA and replaced the prior net-profit-share arrangement with sales-based royalties, initially 2%, with specified increases beginning in 2019. Management expected more predictable Alimera revenue, generally recognized one quarter in arrears.
- Management forecast fiscal 2018 R&D expense to increase approximately 10%–15% versus fiscal 2017, reflecting planned manufacturing, quality, medical-affairs, and NDA-preparation costs.
- Management said available funds—including September-quarter cash, subsequent ATM proceeds, the feasibility-study payment, and expected collaboration receipts—were expected to support current and planned operations through approximately the second quarter of calendar 2018. The filing states that recurring cash use and no probable source of additional capital raised substantial doubt about the company’s ability to continue as a going concern for one year from issuance.
- Extending the runway depended on additional financing, collaboration receipts, or expense reductions. Additional equity could dilute shareholders; financing might not be available on acceptable terms. The ATM share-issuance capacity was constrained by ASX rules pending stockholder action.
- Both Phase 3 trials met the primary six-month efficacy endpoint with statistical significance; 12-month results for the second trial were expected in the first half of 2018. Regulatory review, safety, commercialization, manufacturing, and Alimera’s financial and commercial performance remained material uncertainties. Retisert royalties could decline.
Important facts for investors to verify
- Whether Durasert’s second Phase 3 12-month results and planned NDA filing occurred on schedule, and the subsequent FDA review outcome.
- Actual cash burn and runway relative to management’s second-quarter 2018 estimate, including financing needs and any going-concern updates.
- Stockholder approval and the resulting capacity for additional equity issuance under the ATM and applicable listing rules.
- Alimera’s ILUVIEN sales, royalty payments, and ability to pursue the EMEA uveitis regulatory pathway.
- Whether forecast R&D spending and clinical, regulatory, and pre-commercialization costs matched subsequent results.