Good morning. My name is Lynch, and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharma Second Quarter 2019 Financial Results Conference Call. There will be a question-and-answer to follow at the completion of the prepared remarks. Please be advised that this call is being recorded at the company's request.I would now like to turn the call over to Ms. Kimberly Minarovich, from Argot Partners. Ma'am, you may begin.

Thank you, Lynch, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals second quarter 2019 financial results and corporate developments. With me today is Nancy Lurker, EyePoint's President and Chief Executive Officer; and Scott Jones, Chief Commercial Officer. Nancy and Scott will provide an overview of the recent progress made in our commercial launches, as well as highlight upcoming milestones and the second quarter 2019 financial results. We'll then open up the call for your questions.Earlier this morning, we issued a press release detailing these financial results as well as commercial and operational developments. A copy of the release can be found in the Investor Relations tab on the corporate 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 these 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-K, which is on file with the SEC, and 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, President and Chief Executive Officer of EyePoint.

Thank you, Kimberly. Good morning, everyone, and thank you for joining us. We're very excited to be able to announce our results for second quarter.The second quarter marked our first full quarter of our two product launches YUTIQ and DEXYCU. As a reminder, our previous revenue performance shared on our first quarter earnings call in May only accounted for the initial few weeks following our February YUTIQ launch and March DEXYCU launch, are well trained and eager 43% sales force a Key Account Managers or KAMs came for YUTIQ and 33 for DEXYCU continue to call upon specialists across the U.S. for high volume surgery centers and cataract surgeons for DEXYCU and uveitis and retinal specialist for YUTIQ.We are very happy with the second quarter strong momentum of our ongoing U.S. product launches for YUTIQ and DEXYCU and we are focused on expanding the commercial reach of these truly innovative treatments that have such tremendous value to patients and physicians.Let me first start with YUTIQ or fluocinolone acetonide intravitreal implant 0.18 milligrams for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. As a reminder, YUTIQ is a remarkably tiny intravitreal micro insert that is designed to consistently release a steady micro dose of fluocinolone, a well-known and frequently used steroids for up to 36 months. YUTIQ has a highly differentiated product profile compared to existing therapies because of its one time administration that delivers a consistent and steady amount of drug consistently for up to three years. And this is important, it avoids the drug level peaks and valleys often seen was short acting corticosteroids. Please note, posterior segment uveitis is unlike other back of the eye diseases such as diabetic macular edema, retinal vein occlusion or wet AMD. These diseases are primarily characterized by…

Well, thank you, Nancy. And it’s a pleasure to be here today. And I must say I’m delighted to be part of this dedicated Eyepoint team. I joined Eyepoint from Notal Vision, where I served as a Chief Commercial Officer and Vice President of Business Development where I was really focused on developing and executing the commercial and growth strategy for the company. I previously served as President in Notal Vision, were helped create the business model in the United States that would allow for a total monitoring platform to be covered by Medicare. And before Notal Vision, I held Senior Commercial and Strategy roles at QLT and Novartis.What drew me to Eyepoint was really the cutting edge product portfolio for the ocular disease state. And really targeting a very attractive patient markets with significant commercial value. I believe YUTIQ and DEXYCU both provides several key advantages to the standard of care and each indication, including convenient and fast administration, long acting activity, strong clinical data that’s really backed by the product portfolio, and profile. And the initial product launches I am going to say been really strong so far. But my goal is to elevate the initiative and expand the reach across the country.On DEXYCU, each ASCs been trained, certified before an account is set up and the orders can be placed. The initial ASC orders are relatively small and that will allow for the reimbursement process to take place. The claims are being submitted, the accounts are waiting to be paid before the bulk orders are placed and really to ensure that the firm is comfortable with the process and the payment plan.The J-Code streamline is processed and as Nancy discussed, it alleviates the concerns previously faced by ASCs from other ocular surgery drugs, which cause many headaches,…

Thanks, Scott. We look forward to providing further commercial updates on our next quarterly call. I’m very proud of our commercial team, our launch results to date and the very positive reception we’ve received so far from patients, physicians and a greater medical community. We will continue to work to make these products the new standard of care for both indications.Now, from a corporate standpoint, we continue to build our clinical team and we welcome Dr. Said Saim, in the new role of Chief Technology Officer, where he will oversee drug formulation, preclinical research up to clinical development, pharmaceutical sciences, manufacturing and operations. Said has 25 years of product development experience with recent senior science roles at Collegium Pharmaceutical and Boehringer Ingelheim Pharmaceuticals.We also announced the appointment of healthcare finance and corporate development veteran Wendy DiCicco to our Board of Directors, where she will serve as chair of the audit committee, replacing Mike Rogers who stepped down from our board and chair of the audit committee after many years of service in June 2019. We thank Mike for as many years of service to Eyepoint.Wendy most recently led the finance and corporate development functions at Centinel Spine, as a Chief Operating and Financial Officer and she has held similar roles at many other healthcare companies. We welcome her aboard and look forward to her guidance as we continue to grow.Moving now to an update on our pipeline. Our sustained release bio-erodible device containing a tyrosine kinase inhibitor, or TKI, been studied in preclinical efficacy and safety studies in animal models for wet AMD is ongoing and additional preclinical studies are planned for this year. We continue to seek out opportunities to business development activities to augment our product pipeline for new ophthalmology treatments for areas of high unmet medical needs,…

[Operator Instructions] Our first question comes from the line of Andrew D’Silva from B. Riley FBR. Your line is open. Andrew D’Silva: Hey, good morning, thanks for taking my question.

Hi, Andy? Andrew D’Silva: Hey, how are you?

Very good. Andrew D’Silva: Awesome. Good. And thanks for taking my questions. I’ll start with a couple on YUTIQ. Do you have any sense of how end user demand is aligning right now with the initial stocking orders that you obtained during the quarter?

Yeah, so I actually like to use the phrase position demand. We are able to see that, again, because this is a Medicare Part B product and we’re shipping to Cardinal and then it flows out from there. But through our hub, where a fair number of benefit investigations occur. We’ve got a good sense for things. I don’t want to in this quarter, give out those metrics, because again, they’re fluctuating. But suffice it to say, and I alluded to this in the call that we’re seeing very strong physician demand, certainly increased, honestly, week-over-week, month-over-month. Andrew D’Silva: That’s really great to hear. Do you think though that the current inventory would be at least works through during Q3, so that there might be another reorder? I just know that the buy and bill model and just initial stocking orders kind of create a little bit of volatility in the early, early period I don’t want to be in a situation where having too bold of estimates for YUTIQ right out of the gate?

Yeah, actually, we are taking a conservative approach because again, with drug launches, again, you have various vagaries. However, as I said, current reception is very positive. We’re seeing positive upward trajectories. I think that’s reflected in our revenues for YUTIQ this quarter. We’re not giving forward-looking projections right now, because of the very reasons you say, however, I want to stress, we remain very bullish on this product prospect. So the best way to look at this, we will do our best to shine as much info as we can each quarter. But it is important that people take a long term view of this because again, as you saying the initial launch trajectories plus with the title model, you can get some swings going on. I’m not giving any forward looking things. We’re very bullish about this, but we’re not going to give any kind of next quarter look into inventories. Andrew D’Silva: Okay, great. And then as far as DEXYCU goes, could you refresh my memory, I know you referenced this a little bit. There have been other products not necessarily competing with products in the space that have used a pass through status before they had some issues. I don’t believe they necessarily had J-Codes. Could you just highlight the significance of getting in J-Code and how that resolve some of those potential issues?

Yes, and I can’t stress enough how critical this has been and will be for DEXYCU having a J-Code. Now I know for our listeners that can be a confusing because these reimbursement codes are confused. They just are. But when you get pass through status, which is a special category that CMS designate for devices, drugs, materials that are using the surgical suite. They will give you a pass through code you have to meet certain criteria between that. And when you get that pass through code in the past, they always just gave people a C-Code. That’s a special code for pass through status.The problem is, is that the C-code is usually not recognized by the private payer systems. Because again, it's not used that often there aren't that many drugs used in the surgical suite, devices tend to vary, the devices use a very inexpensive, they don't really go through a reimbursement process. So what happens is, the systems just don't recognize the C-code, because it's not used that frequently. And so those claims just get rejected. And when they get rejected, they just stood on a desk, and you going to let me paint the picture for you here. Usually, you know, a high school graduate, because these are claims processor. And they may just sit on it for a while. So it's not a priority to process those claims. And so as a result, what happens is some of these ASCs that we're now calling on, they lost thousands upon thousands, in some cases were told $50,000 to $100,000 in revenues because of claims that did not get paid on their AC-Code.As a result, what they told our team is that they want to see that execute gets reimbursed first for a few claims before…

And this is Scott Jones. And thanks for the question. And what we're really excited about is we're seeing a high percentage of those customers who have sample the product, making that first against small initial investment to understand the reimbursement environment. But beyond that, those who have completed that initial reimbursement, we're seeing consistent ordering over time now. So we think it's a really good predictor of how the product is going to move into the future. Andrew D’Silva: Okay, great. Thank you very much. And good luck closing out the year.

Thank you.

Your next question comes from the line of Yi Chen from H.C. Wainwright. Your line is open.

Good morning. Thank you for taking my question. The first question is can you confirm that the both YUTIQ and DEXYCU revenues are recognized based on shipment to distributors, but not the physician demand?

Yeah, that is absolutely correct. It's actually recognizes it in from Cardinal which [indiscernible] as they take that into the title model, and we've got two other distributors that take it into a title model. And that's when revenue is recognized, not when it is shipped out to the physicians.

Okay, okay. So does that mean what happened to DEXYCU in the second quarter, meaning that the unit has been depleted from cutting the stock could happen to YUTIQ in the third quarter? Because, you know, possibly they made a large stocking order in the second quarter. So in the third quarter, the revenue from YUTIQ could be lower?

Well, I want to put some caution around this. We're not going to project what could happen. But we absolutely could show revenues. And right now it looks like we're on that track, because of us bringing down so much inventory on YUTIQ. But again, I just want to caution, that's why we will start to use more physician demand metrics, because again, this title model you're seeing is more think of it more like bulk orders that go in, we recognize the revenue, then you got to work the inventory down. So I don't want to give any forward projections on YUTIQ, other than to say that the position demand and the current reception has been highly, highly bullish. So again, we don't want to get into quarter-by-quarter projections at this point in time.

Okay. And would you be able to provide any information regarding Cardinal Health remaining stock for DEXYCU?

No. We can't do that. We're not going to provide that, Yi.

Okay, got it. So last question. How should we look at the SG&A cost for the remainder of 2019?

Basically, it's going to be flat to just potentially very, very slight decline. But we're managing our costs. I want to assure investors we are managing our costs very tightly. However, we also do not want to prematurely not invest at the appropriate level to take advantage of the tremendous upside these products have. So what we're seeing is remember to our YUTIQ studies are winding down, so you should start to see R&D costs come down slightly, consider SG&A to remain relatively flat.

Got it? Thank you.

I'm showing no further questions at this time, I would like to turn the conference back to Nancy Lurker for closing remarks.

I thank everybody for participating on today's call and for your time. We look very forward to keeping you updated on a commercial launch progress, as well as other business matters in the coming quarters. And we're very excited about our two product launches for YUTIQ and DEXYCU. Thank you and enjoy your day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.