Good morning. My name is Sarah, and I'll be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharmaceuticals 4th Quarter and Full Year 2019 Financial Results Conference Call. There will be a question and answer session to follow at the conclusion of the prepared remarks. Please be advised that this call is being recorded at the company's request.
I would like to turn the call over to George Austin, Chief Financial Officer and Head of Corporate Development of EyePoint Pharmaceuticals. Sir, you may begin.
Thank you, Sarah, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals' 4th quarter and full year 2019 financial results and recent corporate developments. With me today is Nancy Lurker, EyePoint's President and Chief Executive Officer and Scott Jones, our Chief Commercial Officer. Nancy will provide a corporate overview as well as highlight recent pipeline developments and Scott will comment on recent progress made on our commercial launches. I will provide commentary on the Q4 and full year financial results after those updates and we will then open the call for your questions where we will be joined by Doctor. Dario Padurino, Senior Vice President and Chief Medical Officer.
Earlier this morning, we issued a press release detailing our financial results as well as commercial and operational developments. A copy of the release can be found in the Investor Relations tab on the company website, www.eyepointpharma.com. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our product candidates, financial projections and our plans and prospects. Actual results may differ materially from those indicated by those forward looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent Annual Report on Form 10 ks, which is on file with the SEC and in other filings that we may make with the SEC in the future.
Any forward looking statements represent our views as of today only. While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward looking statements as representing our views as of any date subsequent to today. I'll now turn the call over to Nancy Lurker, our President and Chief Executive Officer.
Thank you, George. Good morning, everyone, and thank you for joining us. 2019 was a year of significant progress and achievement for EyePoint, marked by our transition into a commercial stage pharmaceutical company focused on delivering innovative ophthalmic products to patients in need. We began 2019 with quarter 1 U. S.
Commercial launches of DEXYCU for the treatment of postoperative inflammation following ocular surgery and YUTIQ for the treatment of chronic non infectious uveitis affecting the posterior segment of the eye. Our 45 person sales team of key account managers or CAMs led by our Chief Commercial Officer, Scott Jones, introduced and educated ambulatory surgical centers or ASCs and surgeons on DEXYCU and uveitis specialists on YUTIQ. Through our cohesive efforts, we ended the year with $20,000,000 in total revenues, including $16,800,000 in product revenue, dollars 4,800,000 for DEXYCU and $12,000,000 for YUTIQ. We expect there will continue to be some disparity between reported 2020 quarterly revenues and underlying customer demand as new distributors adjust their inventory levels. However, we do expect these metrics to track more closely as 2020 progresses.
Our underlying customer demand remains strong and we were very pleased to see continued demand growth for both DEXYCU and YUTIQ, with increases of 111 percent for DEXYCU and 59% for YUTIQ as compared to the Q3 of 2019. Now in parallel with our commercial initiatives, we've advanced our very exciting ophthalmology pipeline and prioritized EYP1901, an anti VEGF Tyrosine Kinase inhibitor, otherwise known as TKI, 6 months sustained relief potential therapy using our bioerodible Duracered technology. EYP1901 is being developed for wet age related macular degeneration or wet AMD, diabetic retinopathy or Doctor and retinal vein occlusion or RVO. We have also clarified the clinical and regulatory pathway for YUTIQ 5.0, our short acting 6 month treatment for chronic non infectious uveitis affecting the posterior segment of the eye. I'll provide more color and upcoming development plans for these programs a little later during this call.
I'm now going to turn the call over to Scott Jones, our Chief Commercial Officer, to review in more detail our commercial performance.
Thank you, Nancy. Let me first begin with an update on the DEXYCU launch. During the Q4, our focus remained on both training physicians and educating their ASCs on DEXYCU to promote both initial orders and reordering. Physicians continue to respond positively to the quick and easy administration of DEXYCU and its ability to control inflammation for up to 30 days post surgery. The rapid injection of DEXYCU at the end of the cataract surgery helps keep physicians on track with their busy surgery schedule and sends patients home with an important anti inflammatory treatment in place, which reduces the complexity of the postsurgical steroid eye drop regimens.
Since the launch, our team of 33 CAMs for DEXYCU have called on over 6 40 physicians, which has yielded approximately 440 ASCs that have completed training and certification for DEXYCU use. We've seen very strong reception and orders from our targeted core high volume physician owned ASCs in the markets that have the largest population of Medicare beneficiaries and with the highest concentration of cataract surgeries. We're also continuing to work to educate private equity owned ASCs on the advantages of DEXYCU and the streamlined reimbursement with the processing of our assigned J code. Based on our internal data, we estimate that ASCs that have been in service and trained today as part of our launch initiatives represent $170,000,000 market opportunity and physicians that have continued to reorder represent $105,000,000 market potential. To put that in context, the overall cataract surgery market potential is estimated at $2,000,000,000 which highlights the great potential of DEXYCU and the attractive market opportunity for this product.
It's important to note though that changing a treatment technology like we're trying to do with DEXYCU moving from post surgical eye drops, which are patient administered and distributed through retail pharmacy chains to an end of the surgery administration and a buy and bill distribution through the ASC. It takes time to complete, but we remain very confident in DEXYCU's potential given its excellent efficacy and safety profile, which is now being demonstrated in the real world and its administration by physicians, allowing them to take control of a critical element of post ocular surgery, treating the post surgical ocular inflammation. One of our key priorities has been to expedite the training process in order to increase ASC adoption in orders. And we're seeing that the timing between the first and second orders continues to decrease quarter over quarter. Importantly, we're still seeing that for most accounts, the number of units ordered have nearly doubled in the 2nd order placed as compared to the initial order.
As Nancy noted earlier, customer demand represented by the units purchased by ASCs from our distributors was up 111% over Q3 with repeat customers representing 98% of the Q4 order volume. And December alone represented our strongest month for orders during our launch today. Since launch, over 14,000 patients have been injected with DEXYCU. Reimbursement of DEXYCU has been consistently positive based on our OAC price of $5.95 Medicare fee for service claims continue to be paid consistently and Medicare Advantage and commercial paid claims have increased quarter over quarter. ASCs are gaining more confidence each day to this reimbursement process, which eventually translates to increased orders once this barrier has been lifted.
Another key priority area in our launch has been to secure additional access and purchase agreements with both the integrated health networks and also other vendors. And ASCs continue to show adoption based on this. Our recent agreement with the Vision Center Network of America and iSouth Partners, which collectively perform approximately 115,000 cataract surgeries per year exemplifies this progress. We hope to continue this trend in 2020 and we're actively negotiating agreements with additional group purchasing organizations and networks. The strong DEXYCU product profile continues to receive positive reception and recognition from the KOL community.
Positive retrospective case study data of DEXYCU were presented at the 2020 Caribbean Eye Meeting this January. These interim results presented are from 154 patients administered with DEXYCU and show the proportion of patients with complete anterior chamber cell clearing, which is a key measure of inflammation, was 84.1 and they're real world results as opposed to controlled clinical trial data and they provide additional support for our belief in the therapeutic potential of DEXYCU and its ability to improve patient compliance for treating post ocular surgical or surgery inflammation. Now turning to YUTIQ, we continue to receive very strong adoption with uveitis specialists that share our excitement for YUTIQ as a highly differentiated treatment option compared to existing therapies due to its ability to deliver a consistent sustained 24 hour microdose of steroid every day for up to 3 years. This is remarkable when you think about it, especially for the posterior segment uveitis, which often flares unpredictably and these flares can lead to blindness. In addition, YUTIQA is delivered as a convenient single administration in the physician's office.
And physicians regularly provide feedback on need for long acting treatments for non infectious uveitis affecting the posterior segment of the eye to control these uveitis flares. And as a result, YUTIQ fills a very critical unmet medical need. YUTIQ's durable 36 month efficacy clinical data and positive safety profile have been well received within the ophthalmology community has already built a very strong buzz among physicians and patients. As we shared earlier this week, our 36 month top line results from the 2nd Phase 3 study of UT showed the same durable response as the first study with a recurrence rate of 46.5% compared to 75% of sham eyes with a p value equal to 0.001. This is an approximately 40% reduction in patients who suffer from even one flare over 3 years.
The visual acuity gains or losses of 3 lines or more were both similar between patient groups even though sham patients had to be rescued with interim periocular therapies at a much higher rate of 51.9% versus only 8.9% for YUTIQ. The safety data showed no unanticipated side effects at each follow-up time point at 12, 24, 36 months. These results provide additional validation of YUTIQ's ability to reduce flares and control inflammation in patients who suffer from this devastating disease. During the Q4, customer demand represented again by units purchased by physicians from our distributors increased by 59% as compared to the Q3. 87% of customers that ordered during the quarter were repeat customers and their orders accounted for 98% of the total order volume.
Cumulative orders since launch have increased month over month and we hope to continue this growth trajectory in 2020. As a result of this very positive demand for the product, we expect to add to the existing 12 CAMS covering YUTIQ during 2020 to better grow our coverage in the U. S. On the reimbursement front, Medicare fee for service claims have been paid consistently and a growing number of Medicare Advantage and commercial payers are covering the product. The permanent specific J code for YUTIQ was effective as of October 1, 2019 and it expedites the reimbursement claims paid to just a few weeks compared to up to 3 months.
Recall that we did see customer demand slow toward the end of the 3rd quarter subscribers waited for the J code to go into effect to avoid the cumbersome reimbursement process that occurred when using the prior miscellaneous J code. We hope to extend the growing momentum seen in the Q4 throughout 2020, but we recognize that we have plenty of work left to do for both products. We believe in 2019, we laid the foundation for both products and we're now focused on accelerating the revenue growth. For DEXYCU, we're truly introducing a technology shift for these patients and for physicians and the ASCs and where they practice. Our expansion activities will continue to focus on securing additional volume based agreements with ASCs and integrated health networks to expand access for patients.
For both products, we remain focused on continued target account penetration and increased educational activities with key opinion leaders at the major ophthalmology medical meetings. As Nancy mentioned in our opening comments, in the Q4, we moved from a single distributor title model to a traditional network of specialty distributors, which is much more common in our industry. And we hope that this model will better align our reported product revenues and customer demand. They will likely trap separately for some period during 2020. It is also important to note that during the 1st calendar quarter, fewer treatments are typically performed both in surgical and drug related therapeutics.
And I think that's especially true of ophthalmology. This is especially noticed where you have larger co insurances and co pays are required due to insurance plans resetting
Let me now move to our pipeline programs, including our lead development product candidate EYP1901, an anti VEGF Tyrosine Kinase inhibitor, 6 months sustained release potential therapy using our bioerodible Durasert technology for wet AMD, RVO and Doctor. We're very excited about this program as it has the potential to provide a disruptive 6 month sustained delivery product to the wet AMD market and potentially other indications using our proven DuraSert technology coupled with virolinib, an anti VEGF small molecule. Virolinib at the TKI has already established efficacy signals from 2 prior human studies in wet AMD as an orally delivered therapy. In February, we announced an exclusive licensing agreement with Equinox Science for virolinib for an upfront payment of 1,000,000 dollars future developmental and regulatory milestones and single digit post commercialization royalties. Although the agreement was recently announced, we have been actively working with virolinim for over a year and completed the license after establishing initial activity in a classic animal model of wet AMD and evaluating ocular safety and PK for EYP1901, the combination of which is bioerodible Durasert and anti VEGF vorolanib.
Very importantly is that the Durasert delivery technology has been used in multiple FDA approved products and has demonstrated its safety in thousands of patients. This includes Retisert, ILUVIEN and YUTIQ. The Durasert bioerodible intravitreal insert used in EYP-nineteen oh one has no new excipients and therefore we expect to see the same safety profile as our non erodible Durasert. Over the years, many promising ocular drug delivery technologies have failed due to safety issues that materialize in the clinic with the delivery technologies. We believe the Durasert regulatory history and clinical history is a critically important differentiator for EYP-nineteen oh one and that it could substantially reduce the risk of this development program.
2nd, vorolanib, the anti VEGF active compound in EYP-nineteen oh one has been evaluated already in separate Phase 1 and Phase 2 human trials as an oral therapy for wet AMD. And it reported positive efficacy signals, including improved best corrected visual acuity, a decrease in rescue anti VEGF injections and a reduction in central retinal thickness. Consequently, EYP-nineteen oh one is advancing towards the clinic with both a proven drug delivery technology in Durasert and an active drug, virolinib, that brings an efficacy signal in wet AMD as an oral therapy. We believe that delivering virolinib locally in the eye as EYP1901 as a 6 month sustained delivery potential intravitreal treatment will equal or even improve results observed for the oral delivery of virolinib without the toxicities associated with the oral anti VEGF treatments. In our initial animal studies of EYP1901, promising activity was demonstrated in an established CNV laser animal model of human wet AMD and preliminary ocular and systemic safety was observed in initial PK and non GLP toxicology 2 month studies.
In these non clinical studies, EYP1901 and virolinib was measured in the retina at concentrations well above the IC50 levels, which is the half maximal inhibitory concentration and is a measure of drug potency. We've been very busy. We also recently completed a positive Type B pre investigational new drug meeting with the FDA in January and have a clear pathway to begin Phase 1 clinical development of EYP1901. GLP toxicology studies are expected to begin this month. And if positive, we plan to file an IND in the Q4 of this year, allowing the initiation of a Phase 1 study that can potentially provide data readouts as early as the second half of twenty twenty one.
Finally and equally important, EYP-nineteen oh one is potentially disruptive and beneficial product option for patients and physicians in established attractive multibillion dollar retinal disease markets. Wet AMD, diabetic retinopathy and retinal vein occlusion are most commonly treated with intravitreal injections of biologics that block VEGF, which is a growth factor that plays a central role in the abnormal retinal blood vessel growth and leakage leading to disease recurrence. FDA approved biologic treatments for these diseases are injected into the eye as frequently as monthly. But in real world outcomes, patients typically receive fewer injections, leading to progressive visual acuity loss. It's tough to get your eye injected monthly or bimonthly for the rest of your life.
Thus, it's become increasingly urgent to get to these patients effective anti VEGF treatments that do not require these often scary and unpleasant monthly or bimonthly eye injections. Finally, and not to be minimized, is the consistent 20 fourseven microdosing of drug that EYP1901 we expect will deliver for up to 6 months. In addition to the potential risk directly associated with frequent intravitreal injection procedures, such as ocular infections, It's not healthy for the eye to receive a monthly or bimonthly bolus eye injection, which causes a seesaw drug concentration and theoretically can result in the VEGF receptors to down regulate over time and slowly stop responding. We anticipate that there is real potential for an improved treatment effect by having consistent drug delivery over 6 months using EYP1901. We expect these markets to continue to grow with the aging U.
S. Population and the pressing need for treatment to replace the current available biologics with fewer injections and sustained delivery of anti VEGF therapy. EYP-nineteen oh one represents a promising and potentially game changing potential 6 month sustained microdosing release and an exciting treatment option for these patients. EYP-nineteen oh one is a complementary fit to our ophthalmology pipeline and aligns with our greater strategy of targeting areas of highly significant unmet medical need in the ocular disease space. We look forward to providing updates on this potentially transformative program throughout the year.
Late in 2019, we also received clarification from the U. S. Food and Drug Administration or FDA on the regulatory pathway to approval for YUTIQ 5 0. The FDA is requiring an approximately 60 patient 6 month trial for inclusion in a supplemental new drug application for the product. We are actively planning the trial and prioritizing resources and investment requirements and look to provide updates on timing later this year.
On the corporate front, we recently expanded our partnership with Ocumension Therapeutics with the signing of a second licensing agreement for the development and commercialization of DEXYCU in Mainland China, Hong Kong, Macau and Taiwan. We maintain worldwide development and commercialization rights outside of the territories licensed to Oktumention. Under the terms of the agreement, we received an upfront payment of $2,000,000 and are eligible to receive up to an additional $12,000,000 if certain future pre specified development, regulatory and commercial sales milestones are achieved by Ocumension as well as royalties on their product sales. We are delighted to grow this partnership and bring DEXYCU to additional patients in need in China. In November, we also appointed George Elston as our Chief Financial Officer and Head of Corporate Development.
George brings a wealth of experience as a senior executive of such biopharmaceutical companies like Enzanite Therapeutics, 2X Oncology, Juniper Pharmaceuticals and KBI Biopharma. I'm now going to turn the call over to George to review the financials.
Thank you, Nancy. I joined EyePoint in November because I truly believe in our mission to change the treatment paradigm for patients suffering with ocular diseases, and I believe we have the right team and the right pipeline to achieve this goal. I'll now turn over to the financial results included in the press release that was issued this morning. For the 3 months ended December 31, 2019, total revenue was $8,600,000 compared to $2,400,000 in the corresponding quarter in 2018. Net product revenue was $7,900,000 with $4,800,000 for YUTIQ and $3,100,000 for DEXYCU.
Neither of these products had net product revenue in the corresponding quarter in 20 18. Net revenue from licenses, royalties and collaborations for the 3 months ended December 31, 2019 totaled $750,000 compared to $2,400,000 in the corresponding quarter in 2018. The prior year quarter had the recognition of $1,700,000 from an upfront licensing fee to Ocumension or YUTIQ. Operating expenses for the 3 months ended December 31, 2019 increased to $17,600,000 from $13,400,000 in the prior year period due primarily to investments in sales and marketing infrastructure and program costs and the cost of sales related to product revenue. Non operating expense net for the 3 months ended December 19 was $10,400,000 or $0.10 per share compared to a net loss of $11,600,000 or $0.12 per share for the prior year quarter.
For the full year ended December 31, 2019, total revenue was $20,400,000 compared to $4,600,000 in the corresponding period in 2018. Net product revenue was $16,800,000 with $12,000,000 for YUTIQ and $4,800,000 for DEXYCU. Neither of these products had net product revenue in the corresponding year 2018. Net revenue from licenses, royalties and collaborations for the full year ended December 31, 2019, totaled $3,500,000 compared to $4,600,000 in the corresponding period in 2018. Operating expenses for the full year ended December 31, 20 19 increased to $68,200,000 from $43,600,000 in the prior year period due primarily to investments in our sales and marketing infrastructure and program costs, increase in personnel expenses related to senior management additions
additions and the full year impact of
prior additions and cost of sales related to product revenue, partially offset by a decrease in research and development expense. Non operating expense net for the full year ended December 31, 2019 totaled 8 $900,000 and consisted of $5,100,000 of net interest expense and $3,800,000 from the loss on extinguishment of debt related to the payoff of the SWK term loan. Net loss for the full year ended December 31, 2019 was $56,800,000 or 0.54 dollars per share compared to a net loss of $86,100,000 or $1.27 per share for the prior year period. Cash and cash equivalents at December 31, 2019, totaled $22,200,000 compared to $31,800,000 at September 30, 2019. In February 2020, we completed an underwritten public offering of 15,000,000 shares of common stock at a public offering price of $1.45 per share.
The gross proceeds of this offering were $21,800,000 before deducting the underwriting discounts and commissions and other transaction expenses. In addition, underwriters were granted a 30 day option to purchase up to an additional 2,300,000 shares of common stock at the public offering price, less underwriting discounts and commissions. We expect that our cash and cash equivalents combined with the February 20 20 underwritten public offering proceeds and projected cash inflows from anticipated YUTIQ and DEXYCU product sales should fund the company's operating plan into 2021. We will now turn the call over to the operator for questions.
Your first question comes from the line of Dana Flanders from Guggenheim. You may ask the question.
Hi. Thank you very much for the questions. My first one here, can you just elaborate a little bit more on your TKI? I know there are some data out there in the public domain, but just a little bit more on the efficacy that you have seen in prior studies and why that has you excited to move forward with this into Phase 1? And then my second one on the TKI, just any early thoughts on how big the Phase 1 will be that you plan to run later this
year? So I'm going to address at a high level and then I'll have Doctor. Dario Paggiarino go into a bit more detail for you on that, Dana. So first of all, vorulinib went through a Phase 2 human study. So Phase 1, which is published, and Phase 2, and in both cases showed efficacy in wet AMD.
Dario can go into the specifics. It did stop prematurely in Phase 2 due to well known Tyrosine Kinase inhibitor orally delivered systemic side effects, which again are usually typical that you see with TKIs when delivered orally, which have to do with liver enzyme elevation and some GI issues. Again, we expect that we're able to deliver this in the eye locally that you should not see the systemic liver enzyme or other
systemic side
effects that you see with much higher point to your point about Phase 1 and then Daria will come back and address a little bit more detail some of the efficacy signals that we're seeing is that the FDA in our pre IND meeting required a very, very small Phase 1. We're not going to go into specifics right now because we're still finalizing the design. However, we expect this to be a very modestly sized study. I can tell you it's probably going to be less than 25 patients, maybe even smaller than that. But again, very small study.
And because of the fact, the good news is when we had our pre IND meeting, the FDA is already familiar with virolinib because it's already gone through Phase 2 and it's already very familiar with Duracere. So because of those two factors, they were very comfortable with us moving quickly into a small Phase 1 and then into a larger Phase 2. I'll now turn it over to Dario to talk just a bit more on the efficacy signals seen with oral vorolanab.
Yes. Thank you. So the oral voronib formulation was actually tested in 2 studies, Phase I and Phase II, as pointed out. The first study was an open label dose escalation study in about 35 patients. These were patients for the most part who have been pretreated with anti VEGF treatment.
So the idea was, 1st of all, the objective was, 1st of all, to determine safety and second, also to possibly see evidence of efficacy. And indeed, we actually see some improvements in visual theory. And quite a number of patients, about 60% of them actually did not require a rescue with injections. We observed not only increasing visual acuity, but also a reduction in the retina thickness. And so and very importantly for that study also no adverse event associated with any ocular findings.
So that study justified moving to a Phase II study. The Phase II study was a larger study. It was about 150 patients, randomized. And again, in 3 doses, oral doses. And again, these patients were also patients that were had responded well to anti VHF therapy.
And the study was terminated early only because there were systemic side effects associated with the oral product. And but in patients and about half of the patients actually completed the study through 1 year, again, we observed stabilization of visual acuity and essentially a 50% reduction in the need for rescue injections. Also very importantly, in this study, again, no significant ocular events. So essentially, those two studies confirm the fact that the voronib orally is actually active and is also having a susceptible ocular safety.
Okay, great. And then just another follow-up. On your comments earlier around kind of demand seasonality, should I take that as we should expect revenue to be down, I guess, quarter over quarter into 1Q? And just how much of that is related to pharma seasonality versus some of the dynamics going on with your distributors? And then another follow-up on DEXYCU.
I think you mentioned you had trained ASCs representing about $170,000,000 market. How should I think about the pace of that increasing throughout 2020 and just kind of what are the big gating factors to seeing that ramp? Thank you.
Yes. Thanks, Dana. This is George. We're not going to guide specifically on quarter or the year, except to say that we do expect to see continued underlying growth in demand. As you know, as we stated, we went from a single distributor to a multi distributor structure in the Q4.
We expect that will sort through on as they sort out their inventory over time. And as 2020 progresses, we will we expect revenue and demand to get more closely aligned. It will we expect will continue to grow. Q1 will be a little more will continue to grow. Q1 will be a little more modest simply because of the seasonality as Scott had pointed out.
In fact, we learned I think there is a conference almost every weekend in January February for the cataract surgeons. So clearly, it's a time that they pause because their demand is down. But that said, we still expect to see underlying customer demand to continue to grow.
And then Scott Jones will answer your second question, Dana, around the contracts and ASCs.
Thank you. Thanks for the question, Dana. So as I mentioned earlier in the presentation, we're continuing to bring on additional customers through contracts both in the private equity market as well as in some of the integrated health networks. And we expect to see the addition of those contracts play out through the year in terms of underlying demand. We're ramping up actively in those areas to be able to and really what it does, it provides additional access for our representatives in accounts that are covered in by those contracts.
And we're already starting to see a return in the Q1 and we expect that to expand throughout the year.
Okay. Thank you.
Your next question comes from the line of Andrew D'Silva from B. Riley FBR. You may ask the question.
Hi, good morning. Thanks for taking my questions. Just a few quick ones for me. I'll start off with YUTIQ. I was just curious, was there any sort of benefit during the quarter from the OZURDEX supply constraints that were announced in early October?
And then if you remember, we did several channel checks and there was a contingent of like retinal physicians that, say, entered the space before 2,005 that were generally unfavorable to implants in the market, specifically due to issues with the registered. And I was curious if you were noticing any pushback from that in the market or if that just really hasn't been an issue at this point?
All right. So let me answer your question. As for OZURDEX, no. In all candor, we really did not see any impact from OZURDEX. And remember too, what we're seeing with the use of YUTIQ versus OZURDEX and in fact, there was a very recent article published on this, where physicians seem to be using OZURDEX and injectable generics is to bring down the initial inflammation and then they look to YUTIQ for maintenance.
So and we've always said, YUTIQ is not ever meant to be used when that initial patient presents where their eyes are almost always seriously inflamed. They've got all kinds of problems with it and you want to hit it hard with a more of a bolus injection and OZURDEX does give you this burst effect, but then it quickly drops off. So then that's where YUTIQ comes in. Once the patient is controlled, then they use YUTIQ. So to your answer, we don't see an impact from OZURDEX having been out of stock.
What you're seeing is true underlying demand for YUTIQ. And your second question around a contingent of patients back in 2,005, I think you said.
It was physicians. It was a lot more physicians in the space, yes.
Yes. Look, in all candor, look, most doctors, though there still is some Retisert use, most doctors plan to move away from it. And why is that? Retisert is a surgical procedure. You've got to go into the ambulatory surgery suite and have surgery.
YUTIQ can be delivered in the physician's office. It's $18,000 for one implant. Ours is $8,900 Retisert lasts for 2 years, Durasert lasts for up to 3 years. And the other nice thing about YUTIQ is you get less IOP than is seen in the clinical trials with Retisert. So we're just we're not seeing hesitancy to put an implant in.
The other thing I will tell you that's helping us is that ILUVIEN has been on the market for 3 years for excuse me, for 5 years for DME. And because these are basically identical products, they just aren't seeing any problems with ILUVIEN inserting it. And so as a result, they're much more comfortable using YUTIQ.
Okay. No, that's good to hear. I just wanted to make sure. And then just moving over DEXYCU, can you just maybe discuss the broader market in a little bit more detail? So I know the C code issue with other offerings created some headwinds out of the gate here, but how much have just changes in the broader ASC market from like a private equity roll up standpoint played a factor here versus just the J code, C code confusion?
So for example, looking at OMIDRIA, the sales when it was on a C code and going through pass through for the initial diverse three years with a similar ASP, we're trending significantly ahead of DEXYCU. But with that being said, obviously, there's been a change in the ASC market in some capacity. So I'm curious, when you look at it as a whole, how much of the change from where you initially thought you'd be to where you were now with DEXYCU specifically was maybe a broader market shift versus a coating issue?
Okay. So I'm going to let Scott answer that question, but let me just give one quick highlight, which is there's no doubt that shifting the control of what's used in the ASC from a physician owned ASC where the doctors really call the shots to more of an integrated delivery networks who own these now, a lot of them, a majority of them and private equity owned has taken a lot of control away from doctors. Now it's still important doctors still have to say yes, they want to use it, but they can't dictate anymore what gets used. So as a result, we now have to go that extra step and get these contracts signed with private equity firms to integrate delivery networks. I'm going to let Scott further elaborate.
Sure. Thank you, Nancy. So I'll answer the first part of the question relative to OMIDRIA. I think it is it's difficult to look at OMIDRIA versus DEXYCU is 1 to 1 because OMIDRIA obviously has a much different and broader indication utilization is outside of just the post surgical inflammation. However, one of the things that you said, which is relating to the reimbursement challenges of a pass through product is right on the money.
The process for ASCs getting comfortable with pass through has certainly changed and over time. And I think part of that is comfort level with both a permanent J code now which is different than the C code that OMIDRIA launched with and that we certainly launched with. So I think that is one big change in the market place. But relative to your broader question about the market, as Nancy said, the market has changed considerably over the last several years. It used to be dominated by physician owned ASCs.
Now the physician owned and community hospital owned segment is the small segment of the ASC market. Private equity is taking up a larger share, but still the largest share is are those ASCs controlled by the chains HCA etcetera. And so the primary issue relating to implementing a product in the surgical space is related to access into those markets. And clearly that's what our strategy and the discussion today implies is that we're actively trying to create additional access in all of those target market opportunities.
Okay. Thank you for the color on that. Two more just quick ones here. And pardon my memory is not perfect here, but is EYP-nineteen oh one effectively the same delivery platform that you had with that Teva Dor product you were developing a few years ago with Avastin? Or is it different since that's you was utilizing a mAb versus a small molecule?
And mostly just curious, is there a reason to go with the 6 month versus 3 year or is the plan to develop a 6 month and move out to 3 year eventually?
Okay. I'll answer some of that. I'll let Dario opine as well. So first of all, TAVADOR is dead, buried and long gone. It was a silicon it's a that was a silicon based delivery mechanism.
It did not work. We killed that program a long time ago. This is using Durasert and that's the one thing we also like about and why we think this program is relatively derisked or I should say I want to be careful here potentially relatively derisked versus other programs out using sustained delivery for anti veg hemp. Why is that? Because we're using Durasert.
DuraCert is used in YUTIQ, ILUVIEN and Retisert and by the way, long ago, Vitrisert. It's the same excipients. The only difference is that we're using now bioerodible Durasert, whereas YUTIQ and Iluvien and Retasert are non erodible. The main difference is that we are not using a polyamide tube and I'm not going to go into other details because it's proprietary. But for the bioerodible, there's no polyamide tube, whereas there is 1 in the non erodible.
Important to note, there is no new excipients in the bio erodible versus the non erodible Durasert. So there's other things we've done to it, but there's no new added ingredients. So as a result, because Durasert has proven so safe in patients over the years and thousands of patients have been injected with the non erodible form of Durasert, we do believe that we've got a well proven drug delivery technology that we're using with EYP1901. As to 6 months versus 3 years, Let me again state this, in uveitis where we have 3 years, it's a totally different disease. That disease again is because you get these unpredictable flares.
These patients are young. They're usually in their 40s. You have no idea when you're going to flare. So you need a longer delivery mechanism. And as a result, doctors like the 3 years with YUTIQ for uveitis.
It's different when you get into these chronic diseases that are they progress slower than uveitis like wet AMD. And as a result, what we found out in the marketplace, most doctors want a delivery device that delivers an anti VEGF 6 to 12 months. They really don't want something that goes longer. There's a couple of reasons for that. Number 1, they really want to make sure that they keep control of the patient and they want to make sure that they are on top of this disease and that when you get out longer than that, it's just the cost goes up, number 1, for the patient, the cost goes up for the doctor.
And remember, unlike uveitis, which is an orphan disease and you might see a handful of patients, these wet AMD, DME and RVO markets, you go into these doctors' offices, again, they're like factories. The patients are getting lining up to get their injections every month to every other month. Right now, that's what they're being treated with and with BOVU once potentially once every 3 months. So it's running a lot of patients through as a result, they want to be able to maintain contact with these patients and get out to 6 months to 12 months without going all the way out to 3 years. The second thing is, and I think it needs to be stated is, doctors do derive some income off frequent injections and you get out too far, they have to bear the cost of a more expensive product and they don't get to inject as frequently.
That's just the reality of this marketplace. So they do like these shorter acting, but long enough
No, I think, Nancy, I really don't have any additional comments. I think you covered all the points I would have covered.
Okay.
Yes. Thank you.
And just a follow-up, a couple of bookkeeping questions. Just what was cash flow from operations and CapEx for the year? And then last year, you noted from a cash flow standpoint that you would expect to be cash flow positive this year? Obviously, George wasn't there at the time. I'm just curious if that's still a benchmark we should be targeting.
No. We thanks for the question, Andy. As we look to invest in 1901, we are as we think about cash and as I mentioned in my prepared comments is that we expect cash on hand from both at the end of the year, the financing and generated from continued success with the commercial programs will fund us into next year. With the way to think about the commercial programs is over time we expect that with continued commercial success that those commercial programs should largely fund our operating costs and then we would look to fund R and D in the future separately.
Okay. And did you happen to have your CapEx and cash flow from operations for 2019?
We'll file that in the 10 ks likely next week, but it's not too inconsistent from the run rate through Q3.
Okay, great. Thank you very much. Best of luck going forward.
Thanks, Andy.
Your next question comes from the line of Yale Jen from Laidlaw and Company. You may ask your question.
Good morning and thanks for taking the questions. I'm just going to start with the pipeline product, NIKE-one, which is that a little bit longer term question, which is that you have 3 indications you can explore. Is there a priority in terms of which one and how would you prioritize that?
Yes. Wet AMD first, then RVO, then diabetic retinopathy in that order. So we'll probably go after wet AMD first. So again, we're still in the early stages of sorting through all
that. Yes. And I think, Yale, the way to think about that is the Phase 1 study should support all. There are other folks out there with similar programs targeting these and we'll certainly learn from that. But we right now, we're focused on having the Phase 1 be able to support multiple indications.
Yes. And let me also state to the listeners, to just remind people that wet AMD is a very developed market. It's a multi, multi, multibillion dollar market. And as a result, it is the one that has some of the highest unmet need in it in terms of needing this sustained delivery, but it also is the larger of the 3 markets. And again, if you look at the main products on the market, it's EYLEA excuse me, Lucentis, which is delivered monthly injected in the eye every month, usually for the rest of patients' lives.
And then EYLEA, which is injected usually every other month. And then the second and if you recall, when EYLEA was launched, they quickly overtook Lucentis, mostly because of the fact that you were able to diminish that frequent eye injections. And then now Novartis has launched Boavu, which is up to 3 months injections into the eye. And again, the goal is every time they're trying to extend out the number, the length of these eye injections. And so that kind of is the Holy Grail right now, get these patients out as long as possible up to 1 year, no longer than that generally, with less frequent eye injections.
That's why we're so excited about EYP1901.
Okay, great. That's very, very helpful. And also maybe just to tag on this a little bit. In terms of your cash and you say you're going to file IND toward the end of the toward the Q4 of this year, I guess. So was the cash at this point, you anticipate at least complete or start a Phase I study, given that it's a smaller study?
Or you will totally depends on other sort of resources going forward just for the Phase 1?
Yes. So I think important to note is that the Phase 1 is not a big investment. We're looking at likely single digit millions of investment. So it's certainly something that we can accommodate in our operating plan.
Okay. And is that you already considered that into your budget at this point in terms of when you guided the cash runway?
Yes. That's baked in, absolutely. We do have cash to get out next year on our current cash, as I stated earlier, cash and operating continued success with the operating plan.
Okay, great. One more question on the penetration to the private equity on the ASC. I know this is still in early stage, relatively early stage. Can you quantify that a little bit in terms of how far you have been in terms of if you can, you percentage otherwise use other metrics. And what sort of goal you hope to achieve toward end of this year in terms of that particular set of ASC?
ASC? I mean, Yale, let me make sure I understand. Are you saying what percent of ASCs we penetrate market share wise? Is that your question? I want to make sure we got your question right.
No, the ASC, particularly in the private equity owned one, because that's a major upcoming growing one that's probably the biggest target you guys want to sort of achieve.
Okay. I'm going to turn that question over to Scott.
Sure. Thank you. So we're I mean, this part of the market is evolving and there are a number of private equity players in the marketplace. However, there is, I would say, the smaller portion of that are those private equity firms that have gobbled up enough ASCs to have put in place management companies. Those are the principal ASC private equity owned ASC that we're targeting.
We as we've talked about during the call, we recently completed contracts with 2 of those. We're negotiating several more, but that will continue to be throughout the year. As that part of the market evolves, we'll continue to focus and expand in that market opportunity.
Your next question comes from the line of Yi Chen from H. C. Wainwright. You may ask your question.
Thank you for taking my question. My first question is, is it possible for you to provide some color regarding the breakdown of the Q4 product revenue between DEXYCU and YUTIQ?
Did you say Q1 or Q4, Ian?
Sorry, Q4, Q4, the last quarter?
Yes. So
it's in the release, but I'll give you the numbers now. So let me just pull it up. Give me one second.
It was $12,000,000 for the year, I want to be clear for the year, it was $12,000,000 YUTIQ and $4,800,000 DEXYCU. And George will get you the yes, okay. Dollars 4,800,000 for YUTIQ in Q4 $3,100,000 for DEXYCU for total product revenue of $7,900,000
For the quarter.
Okay. Thank you.
Okay. Thank you. And regarding that number, 14,000 patients treated with DEXYCU since launch, Does that number also include patients treated in the 1st and second the January February of 2020? And if so, can you provide us with the number of patients treated in 2019?
First of all, you got to remember the 14,000 also includes some sample usage. So it's a total number of patients that were injected. And of course, when you go out and launch, you're going to have some sample usage. The main point there is we wanted to make sure that we had good safety and efficacy in all these patients and that's basically what we have seen. So but we're not going to give color on exactly how many patients were given in 2019 versus now you said 2020, I think.
So basically the 14,000 is what was all injected in 2019. We haven't given any guidance or numbers for 2020 yet.
And again, keep in mind that as these ASCs are trained and brought up to speed, there is sample usage as they get up to speed on how DEXYCU is delivered. So we don't give granularity. We're not really ready to give granularity beyond that yet.
I am showing no further question at this time. I would like to turn the conference back to CEO, Nancy Lurker.
I want to thank everyone for your time today and we look forward to keeping you updated on our commercial launch progress as well as our exciting pipeline initiatives in the coming quarters. Thank you very much for your continued support.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.