Good day, ladies and gentlemen, and welcome to the Third Quarter Fiscal 2018 EyePoint Pharmaceuticals Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference Barbara Ryan with ‎Barbara Ryan Advisors. Ms. Ryan, you may begin. ‎Barbara Ryan: Thank you, operator, and good afternoon everyone joining us on the call today to review EyePoint Pharmaceuticals fiscal 2018 third quarter results for the period ending March 31, 2018, as well as to review recent corporate developments. Making prepared remarks on today's call are Nancy Lurker, EyePoint Pharmaceuticals' President and Chief Executive Officer; and Len Ross, the company's Vice President of Finance and Principal Accounting Officer. Before we begin, I'd like to remind you that all statements, other than statements of historical fact, are considered forward-looking statements and we cannot guarantee the results or other expectations expressed, anticipated or implied will be realized. Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements. For a more detailed discussion of risk factors that can impact our future results and financial conditions, we refer you to EyePoint Pharmaceuticals' filings with the SEC, including its annual report on Form 10-K. The company undertakes no obligation to update any forward-looking statement in order to reflect events or circumstances that may arise after this conference call. It is now my pleasure to turn the call over to EyePoint Pharmaceuticals' President and Chief Executive Officer, Nancy Lurker.

Thank you, Barbara, and good afternoon, everyone. Thank you for joining us for a review of our 2018 fiscal third quarter financial results, recent operating highlights, and anticipated milestones. In addition to Len, joining me this afternoon are Gregg Beloff, Chief Financial Advisor; and Dario Paggiarino, Chief Medical Officer. When I joined the company over 18 months ago, I knew we had the basic elements to build a successful company and drive significant shareholder value. Today, my level of excitement and enthusiasm has never been greater as we have executed on a number of transformative milestones during the quarter that will accelerate our growth prospects as we transition to a commercial-stage specialty pharmaceuticals company, focused on ophthalmology. For those new to the EyePoint story, let me review at a high level these transformational developments. First, on March 28, we acquired privately-held Icon Bioscience. Icon's lead product, DEXYCU, was approved by the FDA for the treatment of inflammation following ocular surgery on February 9. DEXYCU is administered as a single intraocular injection at the end cataract surgery and it's the first long-acting intraocular steroid approved by the FDA for the treatment of post-operative inflammation. We believe the commercial opportunity for DEXYCU is quite large, as there are approximately 4 million cataract surgeries each year in the United States and growing. Let me go into more detail to fully explain why we are excited about DEXYCU. There is a high unmet medical need among patients and physicians, patients who undergo cataract surgery and the physicians who perform them. The current standard of care to treat the inflammation post-surgery is extremely challenging, requiring an arduous schedule of up to 70 drops over a period of 30 days. Many of these patients are elderly and may have health conditions that make administering a lengthy…

Thank you, Nancy, and good afternoon to everyone. I will briefly review our fiscal third quarter results that we reported following today's close. Revenue for the third fiscal quarter ended March 31, 2018 was $928,000 compared to $590,000 for the prior year quarter. Our third quarter operating expenses decreased slightly to $5.6 million from $5.8 million a year earlier, due primarily to lower clinical trial costs and stock-based compensation expense, partially offset by higher regulatory and clinical consulting services in support of YUTIQ and increased personnel and related expenses. Net loss for the quarter ended March 31, 2018 was $7 million, or $0.15 per share, compared to a net loss of $5.1 million, or $0.15 per share, for the prior year quarter. Included in net loss for the current period was $2.3 million in non-cash charge to non-operating expense representing a change in fair value of derivative liability related to the second tranche of the EW Healthcare investment. I will speak further to this non-cash charge in a few moments. Revenue for the nine months ended March 31, 2018 were $2.2 million compared to $6.8 million for the nine months ended March 31, 2017. As noted previously, the prior year period included the recognition of deferred collaborative research and development revenue totaling $5.6 million resulting from the termination of our Pfizer collaboration agreement. Excluding Pfizer, revenues for the nine months ended March 31, 2018 were $2.2 million compared to $1.2 million for the prior year period. Operating expenses for the first nine months of fiscal year 2018 were $18.7 million compared to $19.3 million a year earlier. Net loss for the nine months ended March 31, 2018 was $18.7 million or $0.43 per share compared to a net loss of $12.4 million or $0.36 per share for the corresponding period…

Thank you, Len. Before we take questions, let me review our significant near-term milestones. These include, gain approval of the second tranche investment by EW Healthcare at the June 22, 2018 shareholder meeting; implement the companies four-pillar commercialization plan; secure pass-through reimbursement for DEXYCU; work collaboratively with the FDA to gain regulatory approval for YUTIQ by its November 5 PDUFA action date; present scientific data at leading medical conferences including YUTIQ at the American Society of Retina Specialists annual meeting in Vancouver July 20 through the 25; launch DEXYCU and YUTIQ, subject to favorable regulatory approval in the first half of calendar year 2019. In summary, we continue to make excellent progress, executing on our business plan, including preparations for commercialization of DEXYCU and YUTIQ in the U.S. in the first half of 2019. Importantly, we are now well capitalized, assuming a favorable shareholder vote on June 22, with the resources necessary to successfully launch DEXYCU and YUTIQ. This is a very exciting time for EyePoint Pharmaceuticals and we look forward to keeping you informed of our progress. Operator, we're now ready to take questions.

Thank you. [Operator Instructions] And our first question comes from François Brisebois with Laidlaw. Your line is now open. François Brisebois: Hi, thanks for taking the questions. Just a couple here, so can you help us in terms of the timing of the build-out of the sales organization? And then, can you just repeat, talk a little bit about the experienced hires that you made recently?

Yeah, so, Frank, we are soon to sign an agreement with a CSO, contract sales organization. Now, again, that will - we will move slowly with that, but there is a lot of back-office work that needs to be done and groundwork that needs to be laid, so that when we decide to launch we are ready to go. So we've already initiated that. We're close to extending an offer as well for a national sales director. As I've mentioned, we've hired a VP of marketing. We expect very soon a head of market access to join the company. That person has already been identified and ready to start. We have a head of medical affairs, which is responsible for the MSLs and several MSLs, again, ready to start. So by our next earnings call, I fully expect that we will have a more built-out commercial infrastructure except for district managers and sales reps, which again, we won't - we'll begin to have those people identified. We will not pull the trigger on those cost or those people, until we are ready to launch, either with DEXYCU or YUTIQ depending on timing for commercial launch supplies in DEXYCU's case, and obviously, getting hopefully a positive FDA approval for YUTIQ, November 2018. François Brisebois: Okay, excellent. And then, could you compare and contrast YUTIQ and DEXYCU in terms of the competitive landscape, just remind us, and the process or challenges in terms of educating the physicians for both products.

Yeah, okay, let me first talk about DEXYCU. DEXYCU right now, the only real viable or competitors on the market today are the steroid drops, both branded and non-branded. And as I - they are the vast majority of what's being used today. There is a very, very small amount that's being used by compounded pharmacies. But again, there are multiple problems with that, they are not FDA approved. There unfortunately been some incidences in parts of the country where those compounded drugs have caused serious eye problems, because they've been contaminated. And in some cases, they've led to blindness, so you can imagine the lawsuits, so most doctors don't want to go down that road. It's highly problematic. So the vast majority are these - right now today, it's really branded and unbranded steroid drops. There is one competitor in review. As you may know Ocular Therapeutix has a punctal plug that is currently waiting to be re-filed with the FDA. I don't want to speak for them. But you can certainly look them up in terms of their status. That's primarily what's only - what's available for DEXYCU. As to YUTIQ, for uveitis, and let me clarify, posterior segment uveitis, which is the back of the eye for uveitis, again, a very, very serious disease that's progressive. And as I've mentioned in the past, it's the third leading cause of blindness so that's extremely serious. And right now available today are generic corticosteroids. And by the way, let me reiterate, the only thing that works treating uveitis, again, eyesight threatening disease, are corticosteroids with the one exception being HUMIRA, which is systemic. And HUMIRA as you know, they'll cost approximately $40,000 to $50,000 a year and has numerous systemic side effects. That typically is used in only a…

That's for our short-acting. So in the pipeline for uveitis, is our short-acting YUTIQ. And the current plan is that we would file that as an sNDA once we get approval for these three years. So that we have a six month effective dose of YUTIQ, because doctor's, as in all drug categories want multiple dosing options. And we want to be able to provide that for them. François Brisebois: Okay, great. Thank you very much. That's it for me.

Thank you.

Thank you. Our next question comes from Andrew D'Silva with B. Riley FBR. Your line is now open.

Hi, Andrew.

Hey, good afternoon. How are you?

Very good.

All right. Well, thanks for taking my questions. I just have a few quick ones here. And my apologies in advance, I was hopping between call, so I'm very sorry, if you already touched based on this. But, can you just please refresh my memory and let me know, what the next steps are for you to actually obtain pass-through status for DEXYCU? And if you could also please touch on what the hurdles are related to that, if there are any related opinion?

Yeah, I am happy to do so. So the main issue is you simply file an application. And as I mentioned the applications are submitted on a rolling quarterly basis and then the pass-through code, the C Codes are issued on a rolling quarterly basis, so actually there is set quarterly timeframe. So the next step for us would be when we are confident that we have enough commercial supply produced, we will then apply for the C code and we would expect, I'll give an example. For instance, if you want to be able to launch in January, you need to submit your C code application in September, and those codes will then be issued in December, affective January, just to give you an example. So that is the plan, that we will then submit that. To qualify, there is a couple of test that you the pass. And we're very, very confident we have those tests. Number one, you have to have an approved NDA, by the - obviously by the FDA. Number two, you have to be not insignificant in your pricing, and that's why - and there's a somewhat complicated formula that you have to then go through to ensure that you're not insignificant in your pricing. And that's why I said, we already know that to pass that cost test or price test. We would have to price our product at a minimum of $485 per dose. Those are the big buckets that you have to pass in order to get the C code, and approved NDA in this case a drug, not a device, although, there's a separate applications for devices. You have to be not insignificant in your cost or the price that you said. And there are a few other minor things, the point begin is we're quite confident, we will pass this test, and achieve and receive to C code.

Great. That was a great color there. And then, just moving over to the financing front, obviously the market has awarded you for the progress you've made in uveitis and through the acquisition of Icon. Now, the part of the acquisition as you mentioned [tied to conscious of] [ph] funding with EW Healthcare. The first tranche received particular [ph] prior to the acquisition I believe. And the second tranche, as you mentioned requires shareholder vote. But the equity raise portion on the second tranche, I believe it's bracketed, and with the common stock, I believe it is set with a max price of around $1.27, and the warrant somewhere around $1.40 to $1.45. So essentially, with a share price far eclipsing that feeling right now, does it make sense to go down that path? Can you rate capital through more traditional means? And are you able to actually go down that path or are there restrictive covenants now you took the first tranche?

So this is Gregg Beloff. I'll take that question. Thank you. It's a very good question. But I do think that the way we think of it is this, we set out to transform this company from an R&D to a commercial organization. One of the things we needed was a financial sponsor. And as you imagine and if you recall, we recently mentioned how our stock has appreciated value at the time, that we endeavor to start this process, the stock was not at this price. And we found two financial sponsors EW, Essex Woodlands and SWK. And at the time, they stepped up with a significant amount of capital that relative to the value was not dilutive as - or certainly as dilutive is it could have been, and they made a commitment to us to allow us to on track and release the - what we believe to be the fair value of the stock. So we don't really have any issue with the deal that we struck previously with them and following to on our commitment to that, as they have committed to us. And if you think about what's the alternative is, and if in fact, we don't get the shareholder vote. We have to go out into a broad regular way equity capital market raise, subject to variability's and vagaries of the open market and that's not something we're willing to do.

Okay. Fair enough. I was just curious, obviously, the market rewarded you guys for establishing the deal and getting the tranche is all set up. So I was just want…

Andrew, let me just interject. So I want to add another point, which I think it's important for investors to understand, which is that also in addition to the excellent points Gregg made, Essex is also there for the long-term with us. And as I've mentioned we intend to remain highly opportunistic about other opportunities and they are committed to backing those potential additional transactions.

Okay, well, that actually gives a perfect segue into my last question. So in a blue sky scenario, you'll have two approved and commercial products in the market in the beginning of next year. And two sales teams effectively targeting, from what I understand two separate physician bases. Now, does it make sense for you to look to in-license or acquiring additional offerings to increase sales force utilization or do you have enough wood to chop at this point, where that doesn't necessarily make sense at least from a near-term standpoint?

Well, let me just say this. We have plenty of wood to chop with DEXYCU and YUTIQ. However, we believe that the ophthalmology marketplace in particular is highly fragmented and that as you continue to - and there are opportunities to drive further shareholder value and looking at additional opportunities in this fragmented marketplace. So we will continue to look at additional opportunities. Obviously, we're not going to do them if they don't make sense. But we are going to remain open to additional opportunities.

Got it. Okay, perfect. And thank you for the color and congratulations on all the progress you've made and then best of luck going forward.

Thank you.

Thank you. [Operator Instructions] And our next question comes from Yi Chen with H.C. Wainwright. Your line is now open.

Hi, Yi.

Hi, there. This is - hi, this Julian on for Yi.

Oh, hi.

Hi, there. Are you able to talk about any dialog you've had with the FDA, since the NDA for YUTIQ was submitted?

No, not at this time. It wouldn't be appropriate. As you can imagine, we're in the middle of discussion. We're in the middle of our NDA review. And it's just not appropriate for us to discuss it. Thank you for asking though.

Okay. Sure…

And then, let me reassure you, at the appropriate time we absolutely will.

Okay. And for my second question, I was just curious if there have been any recent updates with our short-acting Durasert for posterior segment uveitis.

Let me just comment. It continues to do nicely in our bioequivalency study. So we are on track to execute our plan with that.

And what would be your general timeline for next steps associated with that program?

Yeah, as I mentioned earlier, we would expect to file an sNDA once we get approval - assuming we get approval with YUTIQ in November. But once the NDA is approved, we would expect to file the sNDA for short-acting, sometime in the first half of 2019. That again it's assuming we get approval in November.

Okay, great. Thank you for taking my questions.

You're welcome.

Thank you. At this time, I'm showing no further questions. I would now like to turn the conference back to Nancy Lurker, President and CEO for any further remarks.

I want to thank all of our investors for your support and for taking the time to listen to our exciting conference call. And I look forward to keeping you apprised, as we make significant progress in the months ahead on executing against our very exciting plan and opportunities for EyePoint Pharmaceuticals. Thank you very much.

Ladies and gentlemen, this concludes today's program. You may all disconnect. Everyone, have a great day.