Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutics Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Donald Nottmann, Chief Financial Officer of Ocular Therapeutics.
Please go ahead, sir.
Thank you, operator. Good afternoon, everyone, and thank you for joining us on our Q2 2021 financial results and business update conference call. This afternoon after the close, we issued a press release providing an update on the company's product development programs and details of the company's financial results for quarter ended June 30, 2021. The press release can be accessed on the Investors portion of our website at investors. Ocutx.com.
Leading the call today will be Antti Matosich, our President and Chief Executive Officer, who will provide a summary of our corporate developments and an update on the commercial progress of DEXTENZA. Also speaking on the call today will be Doctor. Michael Goldstein, our President, Ophthalmology and Chief Medical Officer, who will give an update on our clinical developments and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the Q2 before turning the call back over to Anthony for a summary and questions. For Q and A, we'll be joined by Scott Corning, our Senior Vice President, Commercial and Chris White, our Senior Vice President, Business and Corporate Development.
As a reminder, on today's call, certain statements we will be making may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. In particular, any statements regarding our regulatory and product development plans as well as our research activities are forward looking statements. These statements are subject to a variety of risks and uncertainties that may cause actual results to differ from those forecasted, including those risks described in our most recent quarterly report on Form 10 Q filed this afternoon with the SEC. I will now turn the call over to Antti.
Thank you, Donald. Welcome, everyone, to Ocular Therapeutics' 2nd quarter 2021 earnings report. It's been a good first half of
the year, and I'm proud of
the team's efforts as we continue our efforts to build a leading ophthalmology company with therapeutics that have the potential to transform the way common eye diseases are treated. At ocular, we begin with the end in mind. We first think about the size and dynamism of the disease state in ophthalmology and then consider the key unmet need in that space. It is only then that we apply our technology to the opportunity and determine whether we may be able to build the therapeutic that can meet that key unmet need and become the standard of care. We believe that all of our development programs satisfy these requirements.
From the largest opportunity in wet AMD, where we believe our OTX TKI could become the most durable product on the market, to glaucoma, where OTX TIC could solve the problem of patient compliance, to dry eye disease or OTX CSI and OTX TED could improve the patient experience relative to current therapies. And finally, to DEXTENZA that we believe fulfills the patient and physician desires to have a more convenient drop free solution for the treatment of both surgical inflammation and pain. Not only do the product candidates we develop target key unmet clinical needs in their respective spaces, but we have designed them with product characteristics that we believe will lend themselves to more efficient commercialization. All of the therapeutics at Ocular are designed to be medical benefit, buy and bill products with associated procedure codes. Products with these characteristics are optimized through an account selling approach.
Account selling structures can be more targeted than reach and frequency models employed by companies that sell traditional prescription benefit medications. DEXTENZA has been proof of principle, whereby we've been able to cover the entire U. S. With a targeted commercial team of less than 50 FEs and have been able to achieve a positive product contribution within a very short period of time. Finally, as highly innovative and novel dosage forms, the product candidates we are developing have substantial intellectual property protection that are expected to maintain exclusivity well into the future.
Xtensa is patent protected at least until 2, 030, and all of our development product candidates have patent applications that are expected to provide protection until 2, 040 and beyond. It all adds up to a portfolio of product candidates that we believe are highly differentiated clinically that blend themselves to efficient commercialization and that have long periods of exclusivity. In keeping with the way we add programs to our portfolio, we see dry age related macular degeneration as the next great area of opportunity in ophthalmology. Like wet AMD, we also believe that durability will be the key unmet need of the future. In June, we announced an exciting collaboration with Mosaic Biosciences that marks an important step forward for our company in how we approach the discovery and development of therapeutics.
Working with Mosaic, we hope to incorporate the discovery of new chemical entities with established mechanisms of action to identify novel therapeutics with superior durability. All innovations developed through our collaboration with Mosaic will be wholly owned by Ocular. As we enter a new collaboration with Mosaic, we are also saying goodbye to our long standing collaboration with Regeneron. While this collaboration was never a central driver of growth for ocular, we learned a great deal about how to formulate our proprietary Hyogel with monoclonal antibodies and also about formulating medicines for administration to the suprachoroidal space. Both of these are valuable learnings that will further benefit the key drivers of value in our business, our wholly owned pipeline.
With the termination of this collaboration, we are no longer restricted from independently developing anti VEGF agents for treatment of various retinal diseases. This is a multibillion dollar market opportunity, which we now have the opportunity to pursue on our own or through partnership with others. We believe collaborations will be a central pillar of our strategy to become a leading ophthalmology company. Moving to DEXTENZA. In the quarter, we achieved $11, 100, 000 in net sales to our distributors for the quarter, representing nearly a 700% increase over the same quarter last year and an approximately 65% sequential increase over the Q1 of 2021.
For the Q2, in market sales set a record of nearly 25, 000 billable inserts, an approximately 50% sequential increase over the Q1 of 2021. We believe this growth reflects a strong increase in end user demand for Xtensa against the backdrop of return to more normal cataract procedure volumes. In the outpatient prospective payment system, or OPPS, proposed rule issued by CMS in July, It was proposed that DEXTENZA receive an extension of its pass through payment status, resulting in separate drug payment through the end of 2022. If this decision becomes final, it allows us to build on our ongoing dialogue with CMS on DEXTENZA's post pass through payment status into the next rulemaking cycle a year from now. We continue to believe there are a number of viable pathways that CMS can employ whereby we can ensure patient access to DEXTENZA in the ASCs and HOPDs beyond the pass through period, and we will keep investors updated on any developments in this area.
The proposed Medicare physician fee schedule rule was also issued in July. The draft rule proposed that our CPT procedural code 0356T for the insertion of a drug eluting insert into the nasal vacuole canaliculus will convert to a Category 1 code in January of 2022 with a proposed payment of $31.91 in the facility and 37 $0.61 in the physician's office for unilateral insertion. We are very pleased that the Category 1 code conversion for the procedure appears on track since the Category 1 CPT codes typically benefit from broader coverage and payment among all types of payers. However, the work ahead for ocular and other interested party is to use the comment period to make the case of a reimbursement level that is more in line with similar procedures. With regard to allergic conjunctivitis, we currently await October 18 PDUFA target action date for potential approval and expansion of the DEXTENZA label.
It is estimated that up to 10, 000, 000 people in the U. S. Annually seek medical attention for the inflammatory response associated with allergic conjunctivitis caused by both seasonal and perennial allergens, representing a discrete and significant potential market for DEXTENZA. Most importantly, if approved, the AC indication may signal the opportunity to transition DEXTENZA administration to the office setting, providing additional opportunities for expansion of the product. Moving to our pipeline.
We have 4 clinical programs, each of which is geared to produce a highly differentiated ophthalmology specialty product candidate that addresses the key unmet needs in its respective disease state. We believe our pipeline remains a source of tremendous value for ocular and we anticipate a number of key events over the course of the year. Just recently, we announced the dosing of the first subject in our U. S.-based trial of OTX TKI for the treatment of wet AMD. OTX TKI has the potential to be a new sustained release administration of axitinib with 6 months or longer durability and a potential new mechanism of action for the treatment of patients with wet AMD and other retinal diseases.
A few weeks ago, we announced 8 company presentations and data from 5 investigator initiated trials at the ASCRS Annual Meeting held in Las Vegas. The scope of our presence highlights the interest in our clinical programs and the progress we continue to make advancing our pipeline. The company sponsored presentations and posters are available under the Investors section of our website. Before turning the call over to Mike, I want to highlight 2 compelling programs in dry eye disease. Dry eye represents a large market that we believe continues to be underserved with products that have high rates of patient drop off due to slow onsets of action and tolerability issues like burning and stinging upon administration.
OTX CSI is our cyclosporin containing intracanalicular insert to increase tear production in patients suffering from dry eye disease, and OTX DED is our dexamethasone containing intracanalicular insert for the short term treatment of signs and symptoms of dry eye disease. Both programs are being developed to address the specific limitations of current treatment options. To date, we are encouraged by our progress, and both programs have advanced faster than planned. So it has been a very productive start to the year, and we anticipate a number of important catalysts that will take place over the next 2 quarters. With that, I would like to hand the call over to our President of Ophthalmology and Chief Medical Officer, Doctor.
Michael Goldstein, who will provide an in-depth look at our pipeline.
Thanks, Anthony. Let me begin with an update on our back of the eye program, OTX TKI. As Anthony noted, we are pleased to have recently dosed our first subject in the U. S.-based multicenter prospective randomized control trial that is evaluating a single OTX TKI implant containing axitinib compared to aflibercept administered every 8 weeks in subjects previously treated with anti VEGF therapy. The U.
S.-based Phase I clinical trial of OTX TKI is being conducted under an exploratory IND application at 5 sites with a total of 20 randomized subjects, 15 subjects being treated with a single OTX TKI implant containing 600 microgram dose of axitinib with an anti VEGF induction and injection and 5 subjects being treated at 8 week intervals with aflibercept. The trial is designed to assess the safety, durability and tolerability of OTX TKI as well as to assess preliminary biological activity in subjects by measuring anatomical and functional changes. Based on the early data that we have shared to date from the ongoing Phase I trial of OTX TKI in Australia, we continue to see signals of biological activity, including decreases in retinal fluid in some subjects as early as 2 months following implant administration. Additionally, we are seeing encouraging durability of 6 months or longer across cohorts and durability beyond 1 year in some subjects. OTX TKI has thus far been well tolerated and has been observed to have a favorable safety profile.
No serious, author adverse events have been observed or reported to date. While the drug product profile is still emerging, we are pleased with the interim data and OTX TKI's potential to reduce intraretinal and or subretinal fluid. Moving to our glaucoma program, OTX TIC. We have completed a U. S.-based Phase I clinical trial evaluating the safety, biological activity, durability and tolerability of OTX TIC in subjects with primary open angle glaucoma or ocular hypertension.
We presented interim data in May at ARVO and in July at ASCRS that showed a mean reduction in intractable pressure from baseline of approximately 7 millimeters to 11 millimeters that is comparable to current standard of care topical travoprost. We observed onset of action as early as 2 days after implant administration and the durability of response with decreases in eye pressure for 6 to 9 months in many subjects in cohorts 12 and 4 to 6 months for subjects in cohorts 34. OTX TIC has been generally well tolerated with a favorable safety profile to date. We are targeting initiation of the Phase II clinical trial in the Q4 of this year. We are also making significant progress with our ocular surface disease programs, which include product candidates for dry eye disease and allergic conjunctivitis.
In dry eye, we have 2 programs: OTX CSI for the chronic treatment of patients with dry eye disease and OTX DED for the short term treatment of the signs and symptoms of dry eye disease. OTX CSI is an intracanalicular insert, which offers local programmed release of cyclosporum for approximately 3 to 4 months to the ocular surface along with punctal occlusion. By releasing low doses of preservative free cyclosporin over an extended duration of time, OTX CSI has the potential to minimize some of the biggest patient complaints about commercially available products for the chronic treatment of dry eye disease, namely ocular surface irritation, stinging and burning. We are very excited about the potential for this physician administered, hands free and preservative free option in helping dry eye patients receive the benefits of cyclosporin but with potentially greater tolerability and more rapid onset of action compared with therapies currently available on the market. We have completed enrollment of our U.
S.-based randomized masked Phase II multicenter clinical trial evaluating 2 different formulations of OTX CSI compared with 2 different hydrogel vehicle inserts in approximately 140 subjects will be followed for a period of 16 weeks. Endpoints in this study include increased tear production as measured by the Schirmer's test, other signs of dry eye disease as measured by corneal fluorescein staining and symptoms of dry eye disease as measured by the Visual Analog Scale or VAAS, eye dryness severity score and dry eye frequency score. Consistent with our update last quarter, we expect top line data in the Q4 of 2021. Our second product candidate in dry eye OTX DED is a low dose intracanalicular insert of preservative free dexamethasone. While it incorporates the same active drug as DEXTENZA, this is a new product candidate with a lower dose of dexamethasone and smaller insert size.
Many dry eye patients experience episodic flares of their signs and symptoms, which we believe are likely related to inflammation. Topical steroids have long been used off label for dry eye flares. All commercially available topical steroid eye drops in the United States have preservatives, which can result in ocular surface toxicity. Chronic misuse of steroids may also lead to adverse events, such as elevated eye pressure or cataracts. OTX TED potentially offers these patients the opportunity to be treated with a physician administered, preservative free and hands free steroid option that can't be overused by patients.
We are currently enrolling patients in a U. S.-based randomized double masked vehicle controlled Phase II multicenter clinical trial evaluating 2 different doses of OTX DED compared with a hydrogel vehicle insert in approximately 150 subjects with dry eye disease. This trial is designed to assess the safety and efficacy of OTX TED for the short term treatment of signs and symptoms of dry eye disease by evaluating bulbar conjunctival hyperemia, the vast eye dryness frequency and severity scores and total corneal fluorescein staining, among other endpoints. Enrollment has been faster than initially anticipated, and we are tightening our guidance as we now expect top line data in the Q1 of 2022 versus our prior guidance of the first half of 20 22. Lastly, for DEXTENZA, for the treatment of ocular itching associated with allergic conjunctivitis, we submitted an sNDA the end of 2020 and have received the PDUFA target action date of October 18, 2021.
Overall, we believe the data package highlights compelling product profile targeting an unmet need that could potentially change the current standard of care with a physician administered preservative free, hands free therapy for these patients, which can't be abused by patients. As Anthony mentioned, if approved, this sNDA would represent our 1st in office indication for DEXTENZA. I would now like to turn the call back over to Donald to review our Q2 financial results.
Thanks, Mike. Gross product revenue net of discounts, rebates and returns, which the company refers to as total net product revenue, was $11, 700, 000 and represented a 631% increase over the same period in 2020. Net product revenue of DEXTENZA in the 2nd quarter was $11, 100, 000 versus $1, 400, 000 in the comparable quarter of 2020, reflecting a nearly 7 times increase. Total net product revenue for the Q2 in 2021 also included net product revenue of $600, 000 from ReSure sealant. Research and development expenses for the Q2 were $13, 900, 000 versus $8, 000, 000 for the comparable period in 2020, driven primarily by increased headcount as well as increased clinical trial costs associated with the initiation of the U.
S.-based Phase 1 trial of OTX TKI as well as the ongoing Phase 2 clinical trials for OTX CSI and OTX DED, the ongoing Phase I clinical trial of OTX TKI in Australia and the DEXTENZA post approval pediatric trial. Selling and marketing expenses in the quarter were $8, 400, 000 as compared to $6, 200, 000 for the same quarter in 2020, reflecting increased personnel costs associated with expansion of our field force. Finally, general and administrative expenses were $8, 600, 000 for the 2nd quarter versus $5, 100, 000 in the comparable quarter 2020. The increase in expenses stem primarily from increased personnel expenses and professional fees. With respect to the financial results for the Q2, the company reported a net loss of $8, 500, 000 or a loss of $0.11 per share on a basic and a loss of $0.25 per share on a diluted basis.
This compares to a net loss of $36, 600, 000 or a loss of $0.64 per share on a basic and diluted basis for the same period in 2020. The decreased loss was due primarily to a $30, 400, 000 net change in the fair value of the derivative liability associated with our convertible note, driven by a decrease in the price of our common stock during the quarter. Non cash charges for stock based compensation and depreciation and amortization was $4, 900, 000 in the 2nd quarter versus $2, 500, 000 for the same quarter in 2020. As of August 6, 2021, the company had 76, 700, 000 shares outstanding. As of June 30, 2021, the company had $191, 900, 000 in cash and cash equivalents versus $209, 400, 000 at March 31, 2021.
Based on our current plans and related estimates of anticipated cash inflows from DEXTENZA and ReSure product sales and cash outflows from operating expenses, the company believes that existing cash and cash equivalents as of June 30, 2021, will enable the company to fund planned operating expenses, debt service obligations and capital expenditure requirements through 2023. This CASK guidance is subject to a number of assumptions, including those related to the severity and duration of the COVID-nineteen pandemic, the revenues, expenses and reimbursement associated with DEXTENDA and the pace of research and clinical development programs, among other aspects of the business. This concludes my comments on our Q2 financial results, and I would like to turn the call back to Anthony for some final thoughts.
Thanks, Donald. So before opening the call up for questions, let me do a quick summary. Fantastic performance in the quarter with $11, 100, 000 in net sales, growing nearly 65% over the previous quarter. We are pleased with continued progress in our pipeline and our growing presence at key medical meetings like ASCRS that allow us to share our progress. In wet AMD, we dosed the 1st patient with OTX TKI in our U.
S.-based clinical trial using a single 600 microgram insert. In glaucoma, data from our Phase I trial of OTX TIC continues to support a durable, rapid onset product profile that could potentially set the standard of care for patient compliance. We remain in a position to advance that program into a Phase II clinical trial in the Q4 of 2021. In dry eye disease, we are conducting 2 Phase II clinical trials, 1 for OTX CSI and 1 for OTX DED. We plan to announce clinical data from OTX CSI in the Q4 of this year and in the Q1 of 2022 for OTX DED.
Beyond dry eye disease, we submitted our sNDA for DEXTENZA in allergic conjunctivitis in December 2020 and have a PDUFA target action date of October 18, 2021. Finally, we announced an exciting collaboration with Mosaic Biosciences. This marks an important step forward for our company in how we approach the discovery and development of ophthalmic products and serves to enhance our current strategy, which includes a pipeline that we believe to be 1 of the most comprehensive ophthalmology pipelines in the industry today. We look forward to a busy and productive 2021. And with that, I will turn the call over for questions.
Thank you. Our first question comes from the line of John Willivan with JMP Securities. Your line is open. Please go ahead.
Hey, good afternoon and congrats on the progress. I appreciate you taking the questions. Just 1 on DEXTENZA to start, can you discuss the gross to net in 2Q and then how that dynamic is shifting? And then what do you think the potential outcomes are for the proposed pricing and when we might get an update on what that final pricing looks like?
Yes. I'll just hand it over to Donald in a second. But as I mentioned last quarter, where we had a growth that was somewhat slower than the end market growth, and I said I wouldn't take too much credit for the somewhat over market in market growth for this quarter. There is definitely an element of stocking that helped us have a higher growth rate for the quarter than we had in an in market. So we were growing in market 50%.
We grew to market 65%, but there were some adjustments within the gross to net that I'll let Donald speak to you about.
Hey, John. Thanks for the question. Yes, so the gross to net did improve for us over the course of the quarter. There are 2 primary drivers of that. 1 is, in the Q1 for the first time actually, we took an accrual for the anticipated rebate that is in the pipeline.
So that was kind of a bit of a onetime hit and it's begun to normalize. So that was a smaller number.
And the
other aspect of the rebate that are now the rebate of the gross to net that improved was on product returns. We have been now think with Extensa in the market for over a year and now have the data to have a better understanding of what the returns will look like and they're coming in much lower than originally anticipated. So we've begun to reduce that deduction in the gross to net. Where this will sort out over the next several quarters, we probably finished basically in the mid-twenty percent kind of discount range. And I would space it, we'd be more or less in that range moving forward, but that will depend in terms of rebate levels, etcetera, as we go forward.
John, you had a second question? Yes. I was hoping you could walk
us through the process of the proposed reimbursement pricing and what those different outcomes might look like for DEXTENZA and the long term growth?
That's a very complicated series. You're talking about the continued separate payment in the ASCs and hospitals?
Correct.
I mean, there's a number of different avenues through which that can happen. There's changes in the status indicator that would allow for permanent separate payment. Clearly, there is a at least for the proposed rule, there's the potential of continuing the opioid exclusion sorry, the non opioid exclusion where you are a product used in surgery, you have an indication in pain, it's important to obviously have an indication in pain, and you are used and you're a non opioid product that, that has an exception in the system that allows for continued separate payment. We're happy to see in the proposed rule that, that was extended, not only from the ASC but also in the HOPD setting. So there'd be the complete set of surgical settings that would be would give us access under that non opioid exclusion.
There are also potentials for the price of the drug to be paid out of facility payments depending on what APC class we eventually wind up in the post pass through period. So there's a number of different avenues that could be taken that would allow for continued separate payment.
Okay. And if I could squeeze in a couple on OTX CSI, I'm looking forward to that data in the Q4. Can you remind us the difference in the 2 formulations you're looking at? And I know you're still blinded the data, but I was wondering if you could comment on the dropout rate you're seeing so far in the study. Thanks.
Yes. Thanks, John. This is Mike. So there are 2 different formulations of OTX CSI being looked at and 2 vehicle formulations. So the 2 CSI formulations have the same amount of drug, but have slightly different hydrogel compositions, which lead to slightly different release and dissolution rates.
And the 2 different vehicle formulations, 1 matches very similar to the 2 CSI formulations and 1 is a rapidly degrading hydrogel. So anyway, so we'll see what the results of those. And the second part of your question was? Dropout. Dropout.
Dropout. Dropout. Yes, exceedingly low. So we don't have the whole exact number, but it's exceedingly low at this point.
Thank you, John.
Thank you. And our next question comes from the line of Joe Catanzaro with Piper Sandler. Your line is open. Please go ahead.
Hey, guys. Thanks for taking my questions here. Congrats on all the progress. Maybe actually a similar line of questioning here. Wondering if you maybe you could speak to DEXTEN's selling trends that you saw in July and whether it reverted back to the sawtooth pattern that you've historically seen in the 1st month of the quarter?
And just maybe more generally, if you could provide just a little bit of guidance around expectations for the rest of the year?
Yes. July did the quarter acted exactly as most of the quarters did before since we've had the rebate program where you had a bit of a sort of flat 1st 2 months of the quarter and then a very strong final month of the quarter. We would expect that to continue going forward. As we mentioned before, we are considering the possibility of giving guidance DEXTENZA sales going forward, but we have not done that yet or made the decision to do that yet.
Okay, got it. That's helpful. And then with regards to the Medicare proposed fee schedule for 3, 560, are there any established fee schedules for perhaps similar procedures that you could reference during the comment period? And I guess I'm thinking about the insertion of just a basic silicone plug and where that falls.
Right. I mean, there are 2. There's dilation and then there's insertion of a non drug plug. And dilation is around the $65 just for dilation itself, which is part of the procedure for 3560. And then insertion of a nondrug plug is closer to $150 So yes, those as comparative procedures certainly would suggest that there's upward movement, although the process doesn't really relate to similar procedures.
You really have to do it within the logic of the way the RUC actually calculated the payments. I think Mike can add a little more color on how that works.
No, I was going to say, it's not as simple as you might think in that it's the most as Andy said, the most analogous procedure. But there are other procedure codes where you can, for example, probe and then irrigate the nasal acrimal system, and there's a whole series of codes that apply there. So as he mentioned, there's just an opportunity to compare this to a number of different procedures at a number of different levels.
Okay, got it. If I could just squeeze maybe 1 last 1 in around the termination of the Regeneron collaboration. Could you maybe speak to your view around how the preclinical work was progressing on the program just to maybe help us get a sense of what contributed to Regeneron's decision? Thanks.
Yes. We're very satisfied with the pace of the work. As we mentioned before, we actually have been very fortunate to have been in this collaboration. Regeneron was the scientists at Regeneron were fantastic to work with. The eplibercept is a great molecule where we learned a lot about how to formulate that with our hydrogel.
We also learned how to get into the suprachoroidal space, certainly in a preclinical model. And that could be a very important space for us going forward. So we're very excited to have been in the collaboration. But I truly believe that there's more opportunity now outside of the collaboration than there was inside of the collaboration. And obviously, we'll sort of have to ask you to stay tuned on exactly what we do going forward with it as we look at a number of different possibilities given the opportunities that we see in the marketplace that are occurring all over.
Okay, great. That's it for me. Thanks for taking my questions here.
Thank you, Joe.
Thank you. And our next question comes from the line of Dane Leone with Raymond James. Your line is open. Please go ahead.
Hey, guys. This is Dylan on for Dane. Thanks for taking our question. On the proposed Medicare physician fee schedule for DEXTENZA, if reimbursement rates are not revised higher, how could this potentially impact utilization?
So you're talking about the CPT procedure code? Right. Yes. We right now, within the system that within the T code that we have, we're getting reimbursement rates across the MACs that are ranging between $30 in the lowest MAC and $2.50 in the highest, averaging out about 100. We have not noticed a difference in penetration of total cataract volume among the MACs.
So there's really no basis to suggest that, that payment rate would need to be higher in order to get better penetration, although it certainly stands to reason that the higher they are, the more attractive the use of an intracanalicular drug delivery device would be to the doctor. So we think that from a fairness standpoint that, that should be reimbursed at a higher level. And that's really what drives what we're doing, less about penetration that we would expect our drugs to get.
Thank you. And our next question comes from the line of George Georginoff with Cowen and Company. Your line is open. Please go ahead.
Hey, thank you so much for taking our questions. So I guess the TKI program, congratulations on the initiation of the U. S.-based trial. Could you maybe discuss and I guess remind us of the decision to include a control group in this study? And how should we be interpreting the results from the trial?
And then related to that, do you plan to announce interim data? And when should we expect initial efficacy data from this trial?
Yes, thanks for those questions.
So the trial design is
different than the Australian trial and that we have we're both looking at a slightly different population. So in the Australian trial, as you know, we're taking patients who have active fluid and we're asking the question, can you get rid of that fluid, whether it's intraretinal fluid or subretinal fluid. And so there, what we're seeing is the fluid is there and then it's gone or not. And in the U. S.
Trial, we're actually looking at a different population. For them. So we're looking at those patients who have wet age related macular degeneration, who have been previously treated with an anti VEGF drug. So they're starting without fluid, and then we're giving them the TKI and we're following them out. And the question that you would ask without a control group is, well, if you didn't give them anything, what would they do?
So we want to have a control group just to demonstrate, to have a comparison in the trial. And the way it's designed is that it's a 3 to 1 randomization where for every 3 patients who get the TI, we'll have 1 patient who were maintained on the oplibercept. We're targeting 20 patients. As noted, enrollment has already started. There is not an interim analysis date currently planned, although we do have the option to take an interim look at some point later probably early next year if we chose to do that.
Got it. And then on the glaucoma program, just if you could remind us, once the trial is initiated in Q4, when should we be expecting potential results from this trial? And what would be the plan for registrational studies? Would you need to run 2 separate pivotal studies? Or is this Phase II trial powered sufficiently to service 1 of 2 pivotal?
Yes. So the glaucoma program called OTX TIC, as you know, is initiating in Q4. We're targeting 3 different dose groups with 135 subjects. We haven't yet given guidance on how long that trial will take, but obviously it takes longer to enroll that trial than it will, for example, the dry eye disease trials. It is not powered for statistical significance.
So presumably, we would then need to do 2 Phase III trials after the Phase II trial completes.
Got it. Thank you so much.
Thank you. And our next question comes from the line of Yi Chen with H. C. Wainwright. Your line is open.
Please go ahead.
Thank you. Thank you for taking my questions. First, can you comment on the potential revenue contribution from DEXTENZA from the allergic conjunctivitis indication once approved?
We've given no forward guidance on what we expect that indication to be. I mean, clearly, it is a very strategic indication for us as we move into the office environment, but we haven't made public a number. Clearly, we have some internal forecasts that are we believe to be reasonably ambitious, and we're very excited about the opportunity that AC gives us, but we haven't put out a
number. Got it. And regarding the 2 hydrogel formulations used in the OTX CSI, is that the 2 same 2 different formulations used for OTX TIC?
No. So in short, no. So we have a number of different PEG formulations that we look at. There are different combinations. And every indication, every program, the formulations are different depending on the indication.
So yes, there's no overlap, really between any of the programs.
So the formulation is also different from the formulation used in DEXTENZA?
That's correct. I mean, they're all based on similar tags, but the actual compositions are different.
Okay. So with these different formulations, do you expect a different an impact in efficacy or CT or both?
Really about durability. So in terms of safety, I think we probably put every combination of pig, both on the surface as well as in the eye. So we don't expect any safety differences. Efficacy is really about rate of delivery of the drug over a certain period of time for a particular indication. So we target the we create each drug independently so that we can match the desired durability with the indication we're looking at.
Got it. Thank
Our next question comes from the line of Anita Dushyantan with Berenberg. Your line is open. Please go ahead.
Hi, good afternoon. Thanks for taking my question. I just wanted to get some clarity on the sNDA for the allergic conjunctivitis. So I mean considering that the reimbursement will sort of kick in from January, can you sort of give an idea of like what percentage of patients that are in the cataract surgery are also candidates for the elective conjunctivitis?
Yes. It's not so much the cataract patients that are candidates for AC. It's more the doctors that treat cataract and how in their office environment, how often they see patients
who have moved through
the step edits or the earlier treatments of antihistamines and the like in order to get into the office and need something additional for allergic conjunctivitis. That overlap is extremely high. So something like 90% of the doctors who we see in the cataract world actually are high potentials also in the allergic conjunctivitis world. The allergic conjunctivitis opportunity is much broader, so it doesn't encompass all of that opportunity. It actually is quite a small percentage of it.
But there are 10, 000, 000 patients a year who present to physicians with a desire for something better than what they're getting over the counter for allergic conjunctivitis. So that's a large number. Even you get a slice of a slice, the opportunity can be fairly significant.
Thank you. And this does conclude today's question and answer session as well as today's conference call. Ladies and gentlemen, thank you for participating and you may now disconnect. Everyone have a great day.