Filing Summary
Filing identity: The request identifies HYPERION DEFI, INC., but the supplied Form 10-Q is for Eyenovia, Inc. (Nasdaq: EYEN). This summary reflects the supplied filing, for the quarter ended September 30, 2021; the interim financial statements are unaudited.
Business context and reporting period
Eyenovia is a clinical-stage ophthalmic biopharmaceutical company developing microdose therapies delivered using its Optejet device. It had no product sales or recurring revenue and had not received U.S. marketing approval for a product candidate by the reporting date.
Financial results and liquidity
| Metric | Three months ended September 30 | Nine months ended September 30 |
|---|---|---|
| Revenue | $0 in 2021 and 2020 | $4.0 million in 2021; $0 in 2020 |
| Gross profit | $0 in 2021 and 2020 | $2.4 million in 2021; $0 in 2020 |
| Research and development expense | $3.47 million in 2021; $3.36 million in 2020 | $11.33 million in 2021; $9.91 million in 2020 |
| General and administrative expense | $2.44 million in 2021; $1.73 million in 2020 | $7.08 million in 2021; $5.67 million in 2020 |
| Net loss | $5.57 million in 2021; $5.10 million in 2020 | $15.76 million in 2021; $15.56 million in 2020 |
| Basic and diluted loss per share | $0.21 in 2021; $0.23 in 2020 | $0.61 in 2021; $0.79 in 2020 |
- The $4.0 million of nine-month revenue was license revenue recognized after trial data for MicroPine and MicroLine was submitted to Arctic Vision. The related $1.6 million license cost produced $2.4 million gross profit; this was not product-sales revenue.
- Operating expenses rose year over year, including higher staffing and commercialization-related spending. Management cited increased hiring, sales and marketing, and other costs; research and development expense also reflected cost reimbursements from license partners.
- Cash used in operating activities was $15.0 million for the first nine months of 2021, versus $11.9 million in 2020. Investing activities used $1.2 million, primarily for property and equipment. Financing activities provided $9.2 million, principally from the SVB loan and warrant and option exercises. Cash and cash equivalents declined by $7.0 million on the cash flow statement, which includes restricted cash.
- At September 30, cash and cash equivalents on the balance sheet were $13.5 million, with a further $7.875 million classified as restricted cash. The cash flow statement reports $21.4 million of cash and restricted cash combined. Working capital was $2.7 million, total liabilities were $20.7 million, debt was $7.3 million, and stockholders’ equity was $4.2 million. Accumulated deficit was $93.2 million.
- The filing reports no recurring revenue and substantial doubt about the company’s ability to continue as a going concern for at least one year from issuance of the financial statements. It expects ongoing operating cash outflows and says continued operations depend on revenue growth or additional capital.
Material changes, outlook and risks
- FDA development: In October 2021, after quarter-end, the FDA issued a Complete Response Letter and classified MydCombi as a drug-device combination product. Eyenovia said the change followed a shift in the agency’s legal interpretation and that it was preparing an expedited NDA resubmission; management anticipated resubmission in early 2022. The reclassification also affects the SVB loan terms.
- SVB loan and restricted funds: Eyenovia borrowed an initial $7.5 million under a facility of up to $25 million. Under a September amendment, it had to maintain $7.875 million in a collateralized account. The filing says the funds could become callable by SVB on November 30, 2021, at the bank’s election, because FDA approval of MydCombi and a minimum equity raise required for release were not achieved. The loan was therefore classified as current. The facility is secured by tangible assets; further advances are subject to milestones.
- Subsequent financing: Eyenovia began selling shares under its at-the-market program on October 6, 2021. By the filing date, it had sold 2,435,604 shares for approximately $12.8 million gross and $12.4 million net proceeds. This financing occurred after quarter-end.
- Pipeline: MicroLine’s Phase III VISION-1 study met its primary endpoint, according to management. The company targeted initiation of VISION-2 by year-end 2021 and anticipated topline results in mid-2022. It also reported that Bausch Health had assumed costs and was in the process of assuming oversight of the ongoing MicroPine CHAPERONE study.
- License arrangements: The Arctic Vision agreement offers up to $43.75 million in additional development, regulatory and cost-related payments; Bausch Health may pay up to approximately $35 million in milestone payments. These are contingent amounts, not guaranteed revenue. The filing reports no royalties earned through September 30, 2021.
- Management expected research and development and general and administrative costs to increase, including spending related to clinical development and potential commercialization. If unable to raise capital or generate recurring revenue, the company said it may need to reduce costs or curtail research and development.
- The filing reported no legal proceedings and no material changes to internal control over financial reporting during the quarter. As a smaller reporting company, it did not provide the specified market-risk disclosures or a separate Item 1A risk-factor update.
Important facts for investors to verify
- Confirm the issuer: the supplied filing is Eyenovia, Inc., not HYPERION DEFI, INC.
- Check the subsequent ATM proceeds and share issuance against the filing date and later filings; these proceeds were not on hand at September 30.
- Verify the status of the MydCombi resubmission and the FDA’s product classification, and whether regulatory timing or requirements changed.
- Review whether SVB exercised its rights over the restricted $7.875 million and the current status and repayment terms of the loan.
- Assess cash runway, working capital and further financing needs in light of operating cash use, the going-concern statement and the company’s dependence on external capital.
- Distinguish recognized license revenue from contingent milestones and future royalties when evaluating revenue prospects.