Good morning. My name is Josh and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharmaceuticals First Quarter 2022 Financial Results and Recent Corporate Development's Conference Call. There will be a question-and-answer session 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 George Elston, Chief Financial Officer of EyePoint Pharmaceuticals.

Thank you, Josh and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals' first quarter 2022 financial results and recent corporate development. With me today is Nancy Lurker, President and Chief Executive Officer; Dr. Jay Duker, Chief Operating Officer; and Scott Jones, Chief Commercial Officer. Nancy will begin with a review of recent corporate updates. Dr. Duker will then discuss pipeline developments for EYP-1901, and Scott will comment on our Q1 2022 commercial activities. I will close the momentary on the first quarter financial results and then we'll open up the call for your questions. Earlier this morning, we issued a press release detailing our financial results as well as commercial and operational development. A copy of the release can be found on 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 timelines; the potential success of our products and product candidates; financial projections; and 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 Pharmaceuticals.

Thank you, George and apologies for my hoarse voice, I'm still getting over a cold. So, good morning and I do want to thank you for joining us to discuss a very solid progress EyePoint made in the first quarter of 2022. Our team has maintained a positive momentum we had 2021 and now into 2022 and the company continues to be well-positioned to create long-term value for our shareholders, particularly should subsequent clinical trials for EYP-1901 report out positively. We are keenly focused to execute on our goal of becoming the leader in ocular drug delivery. In the first quarter, EyePoint presented additional validating clinical results of our ongoing Phase 1 trial for our lead pipeline program, EYP-1901, while simultaneously advancing two strategic corporate initiatives; refinancing our debt, and our just announced, enhanced agreement with Betta Pharmaceuticals. We also made important leadership hires that position the company for long-term successful growth that encompasses our overarching mission of improving the lives of patients with serious eye disorders and bringing our innovative products to patients in the United States and around the world. Prior to turning the call over to my colleagues, I'd like to highlight a few of our achievements in 2022 so far. I'm incredibly pleased with the team's consistent execution of our Phase 1 DAVIO clinical trial for our lead pipeline asset, EYP-1901 in wet AMD. As many of you know wet AMD is a serious and potentially devastating eye disorder, accounting for approximately 90% of all AMD-related blindness. But despite the safe and effective FDA approved medications on the market, treatment adherence remains an ongoing challenge for patients and physicians. Currently, most patients with wet AMD are treated every month or every other month with eye injection. EYP-1901, which is a combination of a small molecule TKI…

Thank you, Nancy and good morning, everyone. Before I begin, I want to reiterate what an exciting time this is as our team is poised to execute on multiple clinical catalysts this year as we advance our pipeline. As Nancy stated earlier, we are quite pleased with the results of our Phase 1 DAVIO clinical trial for our lead pipeline program EYP-1901, an investigational sustained-release delivery treatment for wet age-related macular degeneration, being studied as a maintenance therapy following induction therapy with an anti-VEGF, a therapeutic approach, which we refer to as treat-to-maintain. The largest unmet need in the wet AMD landscape is longevity of action of anti-VEGFs. Our goal is to sustain the majority of wet AMD patients' treatment interval up to six months or longer after a single injection of EYP-1901, allowing patients and practitioners the flexibility to safely reduce the number of visits to their retina specialist through controlled and sustained intravitreal delivery of an anti-VEGF drug. The recent positive eight months safety data and efficacy results give us increased confidence that EYP-1901 may have a differentiated profile for safety, efficacy, and tolerability in wet AMD. Before we review the data, I'd like to touch on EYP-1901's use of the Durasert delivery technology and its differentiation from alternatives in the retinal drug delivery landscape. BioErodible Durasert allows for true sustained-release of drug with zero-order kinetics after an initial beneficial burst of medication. In its non-erodible formulation, Durasert has best-in-class track record of proven safety, tolerability, and consistent medication delivery. Durasert has been safely administered to thousands of patients across four U.S. FDA approved products and the safety and efficacy results we have seen so far with the BioErodible formulation used in the DAVIO trial, bolster our confidence in this differentiated drug delivery system. EYP-1901 combines a BioErodible…

Thank you, Jay. We're excited to record a strong quarter for our commercial business with $9 million of net product revenue, an increase of 32% from the first quarter of last year. Our Q1 net product revenue for YUTIQ and DEXYCU was $4.6 million and $4.4 million respectively. Customer demand was approximately 14,800 units of DEXYCU and 650 units of YUTIQ compared to approximately 13,000 units and 650 units, respectively in Q4 2021. Customer demand for DEXYCU saw approximately 7% growth from Q4 2021. Customer demand for DEXYCU came from our strong commercial presence and our collaboration with our commercial alliance partner, ImprimisRx, whose assumed full responsibility for U.S. sales and marketing activity for DEXYCU as of January 1st, 2022. EyePoint retains the DEXYCU NDA, revenue recognition, manufacturing, and distribution responsibilities for all markets. ImprimisRx has been a strong partner and we look forward to continued growth for that franchise. Customer demand for YUTIQ remains strong due to ongoing expansion of YUTIQ sales efforts into the retina [ph] community for the treatment of posterior segment uveitis and from an approved siliconized needle that provides preferred procedural experience for physicians and patients. Although demand for YUTIQ was consistent with Q4 2021, it's important to note that historically, first quarter demand numbers usually turned down due to insurance deductible resets for these patients. We are incredibly pleased by the progress we've made of our commercial businesses and with the performance of our commercial teams. Our mission is to continue to provide a unique, sustained delivery system across all platforms that provide -- that requires fewer visits to the doctor's office, a key attribute for each product's value proposition for both patients and doctors. We look forward to updating you on revenues and demand in the quarters to come. I'd now like to turn the call over to George to review the financials, George?

Thank you, Scott. As the financial results for the three months ended March 31st, 2022 were included in the press release issued this morning, my comments today will focus on a high level review for the quarter. To begin, in the first quarter, we continued our balance sheet focus and entered into a new loan agreement with Silicon Valley Bank to replace our existing CRG credit facility with improved economic terms. The new loan agreement with Silicon Valley Bank provides for senior secured credit facilities and the aggregate amount of $45 million and reduces the loan interest rate from 12.5% to a blended rate of approximately 5%, resulting in an estimated $2.8 million in annualized interest savings. For the first quarter ended March 31st, 2022, total net revenue was $9.3 million, compared to $7.3 million in the quarter ended March 31st, 2021. This includes net product revenue for the first quarter of $9 million compared to net product revenue for the first quarter ended March 31st, 2021 of $6.8 million, an increase of 32%. Net revenue from royalties and collaborations for the first quarter ended March 31st, 2022 totaled $0.3 million compared $0.5 million in the corresponding period in 2021. Operating expenses for the first quarter ended March 31st, 2022 totaled $27.6 million versus $18.3 million in the prior year period, primarily driven by an increase in R&D spending, including clinical trial costs for EYP-1901 and investment in personnel across the organization, including non-cash stock-based comp. Non-operating expense totaled $2.7 million and net loss was $21 million or $0.56 per share compared to a net loss of $12.3 million or $0.50 per share for the prior year period. Cash and investments at March 31st, 2022 totaled $190.8 million compared to $211.6 million at December 31st, 2021. We expect the cash and investments on hand at March 31st, 2022 and expected net cash inflows from our product sales will enable us to fund our current and planned operations into the second half of 2024. In conclusion, we are pleased with EyePoint's progress in the first quarter of 2022 and are well-capitalized to advance our product pipeline to key value inflection points. Thank you all very much for listening this morning and I will now turn the call over to the operator for questions.

Thank you. [Operator Instructions] Our first question comes from Georgi Yordanov with Cowen. You may proceed with your question.

Hi, team, thank you so much for taking our questions and congratulations on all the progress. So, maybe just a few on our end, now that you have the full DAVIO data, appreciating the fact that is to allude to number of patients but has this data helped you better refine to commercial opportunity for 1901? Who do you think would be the most optimal patient for a maintenance product like that and what percentage of the patient population that these patients represent? And then secondly, given the efficacy we've seen from 1901 in DAVIO, what do you see as the main risks to a successful registrational trial? And I guess related to that, what would be the most optimal trial design that could maximize your chances of success, while still ensuring you get durability you've demonstrated so far on the label?

Wow, that's quite a quite a list.

Good morning Georgi.

Good morning.

Let me see if I can answer an overview, and then I'm going to triage it out to the team here. So, and your -- if we missed some of your questions, just reiterate them. I would say definitely as the data continues to come in, of course, it refines our approach, because it informs exact better how long this is working. And we remain really pleased with what we're seeing. I mean, we're out nine months on, which we've reported on rescue eight months on overall safety and efficacy. And we continue just to see really good sustainability of treatments. Now, we're going to continue to keep this designed as a six-month treatment, just because we want to be able to capture a majority of patients. And we still believe, obviously dependent on Phase 2 results, that a majority of patients can be treated with EYP-1901. I want to just elaborate a bit on this treat-to-maintain approach that we're taking, it's important to understand that we're not here to replace current anti-VEGF, they are very effective and safe. The problem as we all know, is they're not as durable and long-acting as patients really need particularly given the fact patients have to keep coming in all the time to doctors' offices, to get their eyes injected, which is a real burden. So, the goal is to be able to first go ahead and induce your patients with an anti-VEGF, get the eye as cleared up as possible, and then you can put in EYP-1901, maintain that patient. So, treat-to-maintain for we hope, a majority patients up to six months. And then for some patients, so who may be particularly resistant to anti-VEGF therapy, or they just can't get rid of all the fluids, you can supplement as needed with existing therapies. So, that is -- and again, because we have two different mechanisms of action on board, there is often a benefit could be I want to put caveats, we don't know everything yet to having two different mechanisms of action at work on the AI. So, we think there's a lot of benefits for patients. We continue to have a group headed up by Scott, I'm going to let him comment just a bit. We just launched a new group for early commercial development. And Scott and his team's task is to begin to more fully understand the commercial opportunity and what we need to do to more appropriately develop that commercial opportunity because it is a new treatment paradigm. So, you need to change some of the current mindset. I'm now -- actually, and then we'll get back to the regulatory trials in just a moment. I'm going to ask Dr. jay Duker to comment, and then Scott on the commercial opportunity.

Yes, thanks, Nancy. And I think you've covered things well. I probably just add a few more thoughts based on the DAVIO results. Georgi you asked what percentage of wet AMD patients would benefit from this treatment? And the way I would answer that is based strictly on the 17 patients from DAVIO, one would extrapolate that the market would be at least 85% of wet AMD. Now though -- what I mean by that is there was a clear cut benefit to about 85% of the patients who enrolled in the trial, either they didn't require any supplemental anti-VEGF, or if they did require supplemental anti-VEGF, it was at a very reduced rate compared to prior to enrollment. Now, I think we can speculate in more of a broad spectrum of what AMD patients, not the spectrum we enrolled in DAVIO that the benefit might be greater than that. But again, that's speculation. That's why we're doing a Phase 2 trial to see in a in a broader population of wet AMD patients than what we enrolled in DAVIO, how -- what percentage is going to benefit and we're optimistic that that benefit will be a majority of patients. The major risks -- major risks of any trial or safety efficacy at a very high level, the good news is in with N equals 17, we really had no safety issues. Of course, that's a small number. We're confident though, that safety will probably not bubble up to be a problem. And the confidence stems from the experience with Durasert in tens of thousands of patients, number one. And the safety of vorolanib, both preclinical and so far in patients. I have to say that in our preclinical studies, we haven't been able to find a maximally tolerated dose…

Scott, go ahead.

Sure. Thank you for the question. And as Jay said, I think there we're still examining the exact percent of patients, but certainly a large percent of the currently treated patients we believe will be correct for our potential therapy. But just to take a step back to think about why there is such a need for this in the marketplace. As you know, that it's currently AMD, [indiscernible], it's a very large market. But if you think about what's going to occur in the next several years, we have an aging population. We have an expansion of the number of patients with diabetes. We currently have a very undertreated diabetic retinopathy market. And the number of retina specialists isn't expanding appreciably to be able to meet those needs. So, the demand for more durable therapy, we think it's -- we're just meeting a need that is growing every day. So, we certainly think there is just an enormous opportunity for us to build a bring a durable therapy to the marketplace. But again, as Jay said, we're currently evaluating which patients we believe will be the most appropriate as we move for them. I'm certain that we'll have more information to come in in the coming years.

Hopefully, we captured all your questions Georgi?

Incredibly comprehensive. Thank you so much, really appreciate it and congratulations again on the results.

Thank you.

Thank you. Our next question comes from Yatin Suneja with Guggenheim. You may proceed with your question.

Hey guys, congrats on the result. Just a couple for me. First is on the 1901 Phase 2 study. Just I think one of the confusion out there is that I think we and investor community is used to thinking about EYLEA or other injection as a comparison. So, just help us understand what is the right come to us it seems like poor delivery study that was run by -- run with the center's might be the right to think about how you are conducting the Phase 2 study. Can you maybe comment on that, is that the right way to look at it? And then in obviously, the study is going to start in Q3, can you talk about how long it might take for you to report the interim data? Any ballpark you could give on the enrollment and data readout timeframe that'd be helpful? Thanks.

Sure. No problem. Jay, why don't you take those questions?

Sure. So, Yatin thanks for the questions and as usual, very insightful. The first is a comparison of our trial, and I would say at a high level, the primary endpoint of non-inferior visual acuity is what has been used in all the recent wet AMD trials. Once you have a standard of care -- setting the standard of care was LUCENTIS initially, that was what the comparison needed to be. And that's how the trials were designed, non-inferiority margins were determined by the prior studies by the size of your study in the statistics involved. So at a very high level, one could look at any of the recent studies that were non-inferior visual acuity. However, as you point out, we're looking at a different patient population. The only previous trial that looked at a non-naive patient population for maintenance therapy was the poor delivery system. So in some ways, the poor delivery system trials would be in some ways comparable to the patient population that we're enrolling. However, their control group was monthly was LUCENTIS. And our control group is monthly EYLEA times three, and then EYLEA every other month after that. So we have a bit of a different control group as well, with a different treatment interval. And I'd also like to point out that given that EYLEA will be dosed after the first three months, as every other month, there's the potential for anti-VEGF supplemental in our control group, which I believe is a bit unique for any of these studies. So while there are comparisons to many of the previous wet AMD trials, I'd say, given the patient population, the longevity of action of our drug, the rescue criteria, they're also going to be some differentiation. So but at a very high level, what we're trying to do is inherently different than what some of our previous anti-VEGF of molecules have been trying to do, which is again, as Nancy pointed out at the beginning, we're not necessarily replacing EYLEA or Faricimab, we are working to maintain the gains that those drugs give patients initially over the long-term, because we're sustained release, which helps to account for patients who can't make it back for visits or extended intervals that have been extended beyond perhaps what might be safe. Because we know in the real world, patients with these branded drugs, still over the year or two into the -- into their disease, lose much of the visual gain that they had. So there's a definite unmet need out there for continuous treatment. And that's what we aim to provide.

Yes. Let me just also add on to your last question, Yatin, which was, we expect that we will report out the Phase 2 wet AMD results in the second half of 2023. So we're on track with this, of course, timing of all the patients to being enrolled is still a variable, but we're pulling out all the stops to enroll as quickly as possible. And as we stated earlier, we're on track for third quarter of this year to enroll our first patient.

Got it. Just one more question, if I may, with regard to the update on the YUTIQ 50 that you're pausing the study like what exactly -- can you just provide a little bit more detail on what exactly FDA asked us to do that may be driving the cost of this program?

Yes, good question. As again, some people may know, but others may not. The FDA, recently an issued new guidance related to drug-device combinations. This new guidance was as a result of a lawsuit that was filed by another company against the FDA on their particular product. And it's called the genius decision that was handed down by an apple at court. As a result, the FDA issued new guidance. And as a result of that, for some products, they want more studies to be done. And that's the case with YUTIQ 50. So instead of one study, they're requiring now two studies. We don't see any impact right now on EYP-1901, because we already are anticipating that we will be doing multiple Phase 3 pivotal studies. So we don't see any impact on YUTIQ -- excuse me, EYP-1901, unfortunately, we had planned for one study on YUTIQ 50, and the guidance is now that we have to do two studies. So as you can imagine, YUTIQ is a nice, steady consistent product, growing very nicely in revenues, but it's never going to be a huge drug as I've often said. It is going to deliver some nice profits to the bottom line over an extended period of time, because we don't have to put a lot of money into it. However, these are not large drugs. And so as a result, the cost of doing another Phase 3 study for YUTIQ 50 may become problematic for us to see the ROI on YUTIQ 50

Got it. So basically more of an ROI or NPV decision. It seems like two studies, but given that for 1901, you will be required to do multiple study till it get approved should not have retrieve, right?

Yes, exactly.

Okay.

And again, let me just reiterate, this was strictly a financial decision on YUTIQ 50. It has nothing to do with YUTIQ, nothing to do with what we believe the benefit of a six-month steroid delivery is for uveitis. However, again, that's uveitis is not a large category. So, it's an orphan disease. And as we've always said, it probably YUTIQ 180, will probably get maximum revenues of 80 to 100 million over time. YUTIQ 50 is a subcategory of that. So when you do the ROI, it's just very hard to do that with two pivotal Phase 3 studies. But again, we see no impact on 1901.

Very nice. Thank you so much.

Thank you. Our next question comes from Jennifer Kim with Cantor Fitzgerald. Please go ahead.

Hey, everyone, congrats on all the good work this quarter. And Nancy, I wish you a fast recovery from your cold.

Thank you. Thank you.

Yes, I have a few questions here. Maybe to start off, I think you mentioned that you're going to present 12 months data at ASRS.

Yes.

Given that six months is the sweet spot, like you said, what kind of additional takeaways are you hoping to see in that 12-month data?

Yes, that's a great question. Jay, why don't you take that?

Yes. So I'll start by saying, first of all, again, the Phase 1 trial is primarily safety. So we want to make sure that there's no longer-term safety issues, not that we expect any. Certainly, if you have a problem that's injection related, you'd expect it early in the study. If you have a problem that's dose related, once again, because of the burst of vorolanib we get in the first few weeks, we would have expected that early in the study. We didn't see either of those. So while we wouldn't anticipate any new safety issues in the last three months of the study, we want to make sure that none exists. That's number one. Number two is we didn't reinject 1901 during this study. And so based on the preclinical and animal and in vitro data, we would expect the implants to release in humans for approximately nine months. So we would expect in some patients to get that longevity of action that we saw with 41%, supplemental anti-VEGF free up to nine months. But as the implants run out, we would expect a reactivation of the disease in need for supplementation, although not necessarily immediately. Remember, when you give an EYLEA or a LUCENTIS shot, that drug might be out of the eye and weeks, but some patients can go two or even three months between injections. And so we would expect to see somewhat of the same as the drugs run out. So while from a safety perspective, we would very happy to see a minimal if any safety issues, really in the first few months, we want to confirm that through the year. And with respect to efficacy, again, as we've said, and as I think you know, we were really anticipating going for a label of every six months in the pivotal trials. So one could argue that the efficacy data beyond six months may not be useful, except that will again remind you that retina specialists are happy to allow patients to go longer than the label if they deem it safe. So while we may have a label of six months, in some patients was 41%, and DAVIO, we were able to go eight, and up to nine months without supplement. And so that data is important to clinicians. So even though they might be able to reinjected six months in certain patients, they may choose to extend that a little bit longer.

Okay, great. And maybe another question on your license agreement with Betta. Is there any color you can give on the exact terms of that deal? And on a related note with your amended agreement with Equinox, I guess, is the biggest takeaway there that you're now able to plan that Phase 2 trial DME? And are you still planning to look into the RVO opportunity or has DME sort of taking the priority over that?

Yes. Let me answer that. So, as for beta, we're very pleased to have the extension of our partnership with them. As you may recall, we struck that agreement in 2020, where we, we in license role and what was always anticipated, and that was part of the original agreement is that they would have the ability to negotiate for rights to China, that was all anticipated as well as part of the payments and milestones that we owe them. In exchange, of course, that was some reduced payments in exchange for them gaming rights in 1901. So we will, we won't go into the details of that. But suffice it to say, it gives them now the formal rights to 1901 in China. And of course, there's your typical royalties and milestones, that they will pay us for that as well. In addition, back to DME, yes, it now gives us rights to all of Ophthalmology indications delivered locally with rolling out, around the world outside of China. And we are now going to prioritize the state may have mentioned I believe in his comments, that DME will now be done first before -- excuse me, before retinal vein occlusion. So we'll do what AMD and then nonplussed proliferative diabetic retinopathy. And the thinking now is we'll do DME as a third study that will initiate we certainly would still think about RVO. We have to be careful, obviously, of our Capital Management. The timing of RVO is yet to be determined. But we do expect that we should be able to initiate a DME trial sometime early next year. Hopefully, that's answers your question.

Yes, that's perfect. One last quick question just on YUTIQ 50. Is there anything I know it was just sort of a small single trial? But is there anything that we should think about in terms of modeling costs now that the trial has been put on hold?

George, why don’t you answer that.

Yes, I think the certainly the near term benefit is we're probably going to reduce that spend over the next 12 months to 18 months, we'll probably pick up 4 million to 5 million in anticipated spending that we won't spend. So that does certainly help our cash runway in the near term Even though our cash guidance is unchanged from last quarter, which is into the second half of 2024. That also assumes that we're starting the Phase 2 in DME in the first quarter of next year. So it's a cash pickup near term, which is good news in this environment.

Okay.

And Nancy if I can may add one more thing about it, which is there's some, what I might de-minor indirect benefits, which is the clinical team. Although, these two studies weren't large studies, they were still studies we needed to track and therefore they can focus more on the EYP-1901 studies, and as well as the manufacturing group.

Yes, yes. Very good point.

Great. Very helpful. Thanks, guys.

Thank you. Our next question comes from Yale Jen with Laidlaw & Company. You may proceed with your question.

Good morning. Thanks for taking questions and add my congrats for your progress. Maybe this is a system of a follow-up of the previous one. Just in terms of the reason that you guys placed the DME ahead of the retinal vein occlusion was data economical or market assessment or other reasoning? Just curious and I have a follow-up.

Yes. DME is a much, much larger market with a higher unmet need. Not that RVO still has an unmet need. But DME is just a substantially larger market than RVO. So when you look at where to put your capital, obviously, you have to look at where you can have the most impact for patients, the broadest number of patients as well as on a return basis. So it was a pretty easy decision to make that week to prioritize DME overall review.

Okay, great. That's very helpful. And two quick ones, the first one is that in terms of you guys going to start at those Phase 2 study later this year and next year? Was the manufacturer aspects of that already been done or is still in progress to prepare for the stock get into the trial?

Nope. Our products all ready to go for the trial.

Okay. Great. And maybe the last question here is a housekeeping one that you're in for this quarter, you have extinguishment of debt is that a one-time event or that will be continued for the remaining of the year?

George, you take that.

I'll take that. So, you know what that is? It's a non-cash. It's an unamortized discount that was associated with the CRG loan. And with the refinancing with just a non-cash accounting entry, so it was a one-time and it won't repeat.

Okay. Great. Well, thanks a lot. I really appreciate it and congrats for the progress.

Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Yi Chen with H.C. Wainwright. You may proceed with your question.

Thank you for taking my questions. The first question just to clarify, with respect to the new FDA regulations for companies and drug device, it implied does it apply to it applies to the non-erodible Durasert technology as well as the relativo there were some technology

Yes. Let me just reiterate a couple of things. Yes. And by the way, let me just reiterate, it applies to a number of ophthalmology and even non-ophthalmology products. This is not specific to just ophthalmology or even our product, it's a drug device combination so regulation. So anytime that you have a drug combined with a device, and the definition of a device is quite broad, I might add, the FDA is now has to require more data. So -- but I want to again, reiterate the way that the regulations based on the ruling came out is that it doesn't add anything more to 1901 because 1901 is delivered in a injector. And obviously, it's also in an implant. It qualifies under these regulations. But we always anticipated doing all the work that is being promulgated. The difference was in this particular case, YUTIQ 50, they need more than just one study, because the YUTIQ 50 was had not previously been on the market. And we did not have a clinical study around it. So they need to clinical studies, which as I said, we always anticipated with the multiple indications on 1901, regardless.

Thank you. And just to confirm there's no upfront pavement for the better pharmaceutical licensing agreement, right?

That is correct.

Okay. Last question, for the upcoming NPDR Phase 2 trial in the second half of the year, what will be the drug used in the control group?

Yes, Jay, why don't you answer that.

At this point, the control group will consist of a sham EYP-1901 injection, so there will be no active control.

Okay. Do you think it will be necessary as of -- a certain point in the future to evaluate the drug against an active control?

We really can't speculate on that. At the current time, we believe from a regulatory perspective. As of now, that's not necessary. But that could change in the future. But our current belief in discussing this with regulatory advisors is that sham non-active control is still permissible. And that's because while there are two FDA approved products in this space for DR the usage of them is so minimal.

Okay. Got it. Thank you.

Thank you. And I'm showing no further questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude your programs and you may now disconnect. Everyone have a great day.

Thank you, everyone.