Business context and reporting period
The filing is a Form 10-K for pSivida Corp. for the fiscal year ended June 30, 2014—not a filing identified in its text as EyePoint, Inc. or for calendar 2013 Q4. pSivida develops sustained-release drug-delivery technologies, principally for eye diseases. Its lead independent candidate, Medidur, was in a pivotal Phase III trial; its licensed product ILUVIEN was marketed in parts of Europe and under FDA review in the U.S.
Financial performance and position
Amounts below are U.S. dollars; figures are in millions except per-share data.
| Metric | FY2014 | FY2013 | Change |
|---|---|---|---|
| Revenue | $3.47 | $2.14 | Up 62% |
| Operating expenses | $16.96 | $14.17 | Up 20% |
| Operating loss | $(13.49) | $(12.03) | Loss widened 12% |
| Net loss | $(13.36) | $(11.90) | Loss widened 12% |
| Net loss per share | $(0.49) | $(0.52) | Improved |
| Cash used in operations | $(10.67) | $(8.75) | Use increased |
- Revenue growth primarily reflected $1.5 million recognized after a feasibility-study contingency was resolved. Royalty income, predominantly from Retisert, declined 3% to $1.32 million.
- Research and development expense rose 37% to $9.57 million, mainly due to Medidur Phase III trial costs. General and administrative expense was $7.47 million, up 4%.
- Gross margin is not presented as a meaningful measure in the filing. Revenue remained far below operating expenses.
- At June 30, 2014, cash and cash equivalents were $15.33 million and marketable securities were $2.94 million, totaling $18.28 million. Current assets were $19.34 million versus current liabilities of $2.13 million.
- Total liabilities were $7.75 million, including $5.72 million of deferred revenue. No borrowings are shown on the balance sheet. Total stockholders’ equity was $14.92 million.
- FY2014 financing cash inflow was $19.04 million, mainly from stock offerings and an at-the-market program; shares outstanding increased to 29.30 million from 23.30 million.
Material changes, outlook, and risks
- Management estimated available capital plus expected collaboration cash inflows would fund planned operations through the third quarter of calendar 2015, excluding any Alimera milestone or net-profit receipts. Management said an FDA approval milestone could extend funding, but receipt and timing were uncertain.
- Alimera’s ILUVIEN NDA resubmission had an FDA goal date of September 26, 2014. A U.S. approval would trigger a one-time $25 million payment to pSivida; Alimera’s ability to pay was not assured. The filing reports three prior FDA Complete Response Letters and manufacturing deficiencies cited by FDA.
- Medidur enrollment was expected to finish in the first calendar quarter of 2015. pSivida planned to seek approval based on the ongoing Phase III trial plus inserter-use data, subject to FDA confirmation. A second Phase III trial could be required, increasing cost and delaying development; the CRO agreements contemplated two trials with about $16.2 million of remaining costs.
- Key risks include continued operating losses and the need for additional capital; dependence on Alimera and other partners; uncertain product approvals, commercialization, reimbursement and market acceptance; clinical and safety risks, including corticosteroid-related eye effects; and potential dilution from future equity financing.
- No formal revenue or earnings guidance is provided. The filing states that Retisert royalties may decline and that operating results can vary significantly between periods. The company reported no material legal proceedings and no material off-balance-sheet arrangements.
Investor verification priorities
- Confirm the issuer and reporting period: the supplied filing identifies pSivida Corp. and FY2014, despite the request metadata naming EyePoint and 2013 Q4.
- Check the subsequent FDA decision on ILUVIEN, whether the $25 million milestone was paid, and Alimera’s financing and commercial performance.
- Review updated cash burn, runway, financing activity and share dilution against the FY2014 estimate of funding through Q3 2015.
- Verify Medidur enrollment, trial outcomes, FDA-agreed approval pathway and whether a second pivotal trial was needed.
- Assess ILUVIEN reimbursement, sales and partner net-profit calculations, as well as the trajectory of Retisert royalties.