Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutix Second Quarter 2018 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of Ocular Therapeutix. Please go ahead, sir.

Thank you, Ashley. Good afternoon, everyone, and thank you for joining us on our second quarter 2018 financial results and business update conference call. This afternoon, we issued a press release providing an update on the company’s product development programs and details of the company’s financial results for the quarter ended June 30, 2018. The press release can be accessed on the Investors portion of our website at investors.ocutx.com. Leading the call today will be Antony Mattessich, our President and Chief Executive Officer, who will provide a summary of our corporate developments and upcoming clinical milestones. Scott Corning, our Senior Vice President, Commercial, will then provide an update on the commercial plans for DEXTENZA. Following Scott’s remarks, I will provide an overview of the financial highlights for the second quarter of 2018 before turning the call back over to Antony for a summary and questions. For Q&A, we will also be joined by Dr. Michael Goldstein, our Chief Medical Officer; Dr. Dan Bollag, our Senior Vice President of Regulatory and Quality; and Kevin Hanley, our Senior Vice President of Technical Operations. As a reminder, during today’s call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company’s future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. 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 quarterly report on Form 10-Q, which was filed with the SEC today, August 7, 2018. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. 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. I will now turn the call over to Antony.

Thanks, Donald. I’m pleased to report that Ocular has made significant progress in the second quarter. The transformation process, which began 12 months ago, is well underway and we are seeing the tangible results. By far the most important of which is the resubmission of our NDA for DEXTENZA followed by the formal acceptance of the filing by the FDA, which we announced on July 19. Most importantly the agency is also given a PDUFA date of December 28, 2018. As a reminder the issues outlined in the previous complete response letter for DEXTENZA sent exclusively on CMC with no requests for additional clinical data on safety or efficacy. Consequently, we believe the most critical remaining requirement for approval should be a successful pre-approval inspection. As mentioned in prior quarterly earnings calls, our strategy for ensuring a successful inspection has been to fully and adequately addressed all of the 43 observations from previous inspections and also to upgrade the overall production and quality oversight systems through a continuous improvement plan. We believe that we have fully accomplished the objective and our quality and production systems already demonstrated our ability to supply the market upon approval. As we await FDA inspection, we’re moving from planning to execution of the U.S. launch of DEXTENZA. Thankfully, we have the benefit of a running start on the work that was done in the first half of 2017. However, we’re taking the opportunity to question previous assumptions and integrate learnings from the market particularly from recent reimbursement experience in the ophthalmology space. With our insights into the marketplace and a product that is competitively well positioned, we believe a small company with a target of resources such as Ocular can be successful in maximizing revenue potential, while building a near-term path to product profitability. As we move from planning to execution, we are working to ensure Ocular has adequate resources to continue moving its pipeline forward, while securing an optimally resource launch for DEXTENZA. Like most biopharmaceutical companies at this stage, we are always evaluating the most appropriate options to finance the company for its next phase of growth and we’ll likely use a mix of options to fund the company going forward. Along with additional equity offerings, we’re looking at business development, partnerships and royalty financing as sources of future capital. It is important to remember that aside from our collaboration with Regeneron, we hold worldwide exclusive commercial rights to our entire pipeline, we’re unburdened by significant royalty obligations and we are positioned to achieve high gross margins. We believe that an approval of DEXTENZA before year end creates a near-term revenue story that significantly expand the financing options available to the company moving forward, both dilutive and non-dilutive. I’d now like to turn the call over to Scott Corning, Senior Vice President, Commercial to discuss the steps we’re taking to prepare for commercial launch of DEXTENZA.

Thanks, Antony. As many of you know, DEXTENZA is an intracanalicular insert of the approved drug dexamethasone that is being developed to treat patients with post surgical ocular pain for up to 30 days with a single administration. We believe that DEXTENZA is a potentially transformational asset for both patients and physicians. For patients, DEXTENZA would offer the convenience of a full course of post-surgical steroid treatment in a single insert. This novel means a delivery could replace a complex eye drop regimen that under the current standard of care would require up to 70 topical ocular steroid drops. For physicians this represents an important first step toward that realization of droplet surgery, which surgeons have wanted for several years. In our Phase 3 studies nearly 1,000 patients DEXTENZA met its primary efficacy endpoints in the treatment of post-operative pain with a safety profile comparable to placebo. While the canaliculus is a novel area to employ as a site for improved drug delivery, we know physicians generally understand how to place these inserts given their familiarity with and use of punctum plug. Notably from a treatment perspective, clinicians have been looking for ways to address the issue non-compliance with drops due to patient’s inability to administer drops properly, if at all. We understand the market and remain confident in the potential for DEXTENZA. With well over 9 million topical ocular steroid prescriptions a year in the U.S. alone the majority of which are written for ocular surgeries, chiefly cataract surgery the initial market opportunity is substantial. And as we approach the potential approval of DEXTENZA and subsequent commercialization, we understand the importance of a solid reimbursement strategy to ensure a successful launch and adoption of DEXTENZA. We anticipate the need to train surgeons in practices with DEXTENZA both from a clinical and reimbursement sampling. We are also engaging key payers in medical societies and we continue to look at ways to optimize reimbursement dynamics leading up to and after launch. As a final note on our commercialization efforts, we do intend to commercialize DEXTENZA on our own in the U.S. and planning and execution for the required build out is well underway. Importantly, we feel confident that we understand the appropriate steps needed for a successful commercial launch and look forward to talking more about our plans in future calls. I will now turn the call back over to Antony for an update on the clinical progress we have made on the pipeline.

Thanks, Scott. Along with the progress on DEXTENZA, we continue to advance our pipeline of products that targets multiple ocular diseases of both the front and back of the eye. Each of these products is a customized formulation using our proprietary hydrogel technology platform that we believe can produce treatments that offer significant benefits over those offered by existing drugs on the market today. Behind DEXTENZA, OTX-TP is our most clinically advanced asset in the pipeline. The product candidate is currently in Phase 3 clinical trials and is being developed as a potential treatment for patients with primary angle glaucoma or ocular hypertension. OTX-TP is a long acting preservative free formulation of the drug trial cost delivered as an intracanalicular insert designed to release drug over three months. The first Phase 3 trial is currently enrolling approximately 550 patients with the primary efficacy endpoint being a statistically superior reduction of intraocular pressure or IOP from baseline with OTX-TP compared to placebo inserts at three diurnal time points at each of three measurement days of two, six and 12 weeks following insertion. We continue to anticipate top line data in the first half of 2019. In addition to the ongoing Phase 3 trial, we are pleased to announce we have dosed our first patient in an open-label one year safety extension study it will be included as part of the current pivotal program. This study will provide additional long-term safety data with repeat administration of OTX-TP. OTX-TIC is our second glaucoma program in development. The product is a bioresorbable, travoprost-containing hydrogel implant delivered via an intracameral injection designed to deliver a higher level of IOP reduction. We announce the dosing of our first patient in a Phase 1 trial of OTX-TIC last quarter. This U.S.-based Phase 1 multicenter open-label perspective dose…

Thanks, Antony. Let me begin by summarizing our capitalization. As of the quarter ended June 30, 2018, we had $56.8 million in cash and cash equivalents versus $62.9 million at the end of the first quarter. The cash balance benefited from $8.4 million in net proceeds generated from the sale of common stock under the company’s 2016 sales agreement or ATM during the second quarter offsetting the ATM inflows during the quarter with net losses of $13.8 million, principal debt payments of $1.6 million and capital expenditures of $0.6 million. As of the end of Q2, $24.1 million remained available to be sold under the ATM and we will continue to monitor the opportunity to sell additional equity as appropriate under this facility. Based on our current plans and forecast of expenses, we believe that existing cash and cash equivalents will fund operating expenses, debt service obligations and capital expenditures into the second quarter of 2019 exclusive of the potential $10 million option payment from our Regeneron partnership. This is of course subject to a number of assumptions about our clinical development programs and other aspects of our business. Research and development expenses for the second quarter were $8.7 million versus $8.1 million for the second quarter of 2017 and reflect an increase in compensation costs associated with additional hiring primarily in the technical operations and quality departments, as well as an increase in facilities expenses associated with additional lab space at our corporate headquarters. Selling and marketing expenses for the second quarter were $0.9 million as compared to $6.8 million for the same quarter in 2017. This decrease relates to a significant reduction in pre-commercial activities as a result of the delay the plan 2017 launch of DEXTENZA. Finally, general and administrative expenses were $4.4 million for the second…

Thanks, Donald. Before opening the call up for questions I’d like to recap the company highlights for the second quarter. We have resubmitted the NDA for DEXTENZA, received our PDUFA date of December 28, 2018 and are awaiting a pre-approval inspections. We are moving from planning to execution on the U.S. commercial launch of DEXTENZA and continue to exploit sources of dilutive and non-dilutive funding that will allow us to optimize DEXTENZA launch, while continuing to develop and augment the pipeline. We are completing enrollment on our first pivotal Phase 3 trial for OTX-TP and expect the results in the first half of 2019. Additionally, we have also dosed the first patient in our open-label safety extension study for OTX-TP. Finally, we’ve made progress on both of our Phase 1 programs with the dosing of our first patient for OTX-TIC and the initiation in our first in-human trial for OTX-TKI. We are encouraged with our progress for the first half of 2018. The on time resubmission and establishment of a PDUFA date for DEXTENZA were critical achievements and we are pleased to have accomplished them. Clearly, we need to demonstrate to our stakeholders that the transformation we have experienced internally will continue to produce externally validated results. While the team understands the approval of DEXTENZA as our top priority, we will continue to drive forward a pipeline of significant opportunity that should be increasingly appreciated as we demonstrate our ability to execute. We can now open up the line for questions.

Thank you. [Operator Instructions] Our first question comes from Donald Ellis of JMP. Your line is open,

Thank you. Thank you, good afternoon guys. I have two questions of one at a time. First question is regarding the U.S. cataract market, can you tell us what percent of the markets commercial pay versus CMS?

I think the more appropriate number to look at is really what is the Medicare Part D, which is really what we’re going to head after first and that’s 50% of the total cataract markets, so there’s about 4 million cataract surgeries a year, about 2 million of them are Medicare Part D. And that’s the area that we think we would get the reimbursement in first, so that we would go after that as an initial area. But yes, so it’s about 50% of the total cataract is Medicare Part D.

Okay. And so that’s a target for 2019. And then what about the process of applying for an granting a pass through status is that something that would kick in by January 2020? How would that expand your market opportunity?

What I’ll do is, have Scott Corning actually answer the questions on the mechanics of that. But as we’ve discovered from the changes recently they are a bit in motion about how pass through works. But he’ll give you the state of play at the moment. But the short answer is yes, we do expect it before – the end of 2019. Scott, go ahead.

Yes. With FDA approval possible by the end of the year this would allow us to apply for transitional pass through payment status at the first available opportunity, which would be March 2019. And that would be for a hopeful July 1 approval. So with the PDUFA date at the end of the year and C code application to follow thereafter, it is possible we could see a C code approval midyear of 2019 and then we’d have a half year of commercial launch potentials.

We won’t get into the details on this but pass through was not a fait accompli. There’s number of options that could be opened first, given the way DEXTENZA is administrated and what DEXTENZA is. But we – it shouldn’t be considered that we will definitely do pass through there. There are other options that may be available to us that might have a larger area under the curve.

Okay. So just to make sure, I understand and I’ll go back in the queue. So for 2019, you’ll have access to roughly 50% of the cataract market as far as reimbursement goes?

Yes. I think that’s true to say.

Thank you very much.

Thank you.

Our next question comes from Adnan Butt of Guggenheim Securities. Your line is open.

Thanks. Antony, on the reimbursement front sense for an extended period the strategy seem to have been pass through. On the call today you mentioned some learnings about reimbursement and now you are saying that pass through is an option, but may not be the only option. Can you give us some details or when would you be able to give us details about the reimbursement strategy?

Thanks for adding that last little bit. I don’t want to be sort of drawn into too deep of conversation about what we think the optimal pathway is. But we certainly will be able to give a lot of color on that before the end of the year. So before we expect to get approval we hope to give you some pretty concrete updates about what we think the optimal pathway is for us from reimbursement standpoint.

How about on the J code side? Is that still a target, even if pass through is not necessarily the initial target?

I mean, J is the Holy Grail right. That’s what we are gearing toward, we believe that given that our product is associated with a procedure that is essentially office-based in most cases, our own cases where it’s used today. We think that we should have a clear shot at the J code but we really have to kind of do some things with our – along the reimbursement pathway to secure that J code. But that is absolutely the goal and the expectation.

One question on the application itself. Good to see it get to filed and then accepted for review on time. Is it too soon to have expected an inspection to be scheduled? And once the inspection is done does the FDA communicate the CMC review portion separately or as part of the final review.

Yes. With that I’ll hand it over to Dan Bollag, to sort of talk about the process of the PI, but the short answer for the first one is, we haven’t expected it today, it would have been very early as already had the inspection. But it is – as each day it passes the likelihood of it can grows. But Dan you want to…

Yes. Sure I concur with the way that Antony has summarized it. I think it would be reasonably unusual to have an inspection in the first couple of months within the review cycle time. But that certainly is possible, we’re certainly now into our second month. So we would be ready when the FDA shows up. What would occur subsequent to that is, we’ll undergo the inspection, we’ll have a close out meeting at which the FDA will let us know about the findings. None of that really is public at that stage and in fact just those findings don’t provide any clear path about the actual approval itself. So I think we’ll be in a difficult position to kind of make too many extrapolations at stage. But we’ll have to see how the rest of the review proceeds after that and obviously if there’s something critical to be communicating that’s material, we’ll certainly be doing that.

And just one on the pipeline. For the TKI program, I think in the past or today you’ve mentioned that its long-term durability potentially out to 12 months. So how long before we should expect some type of an update from the Phase 1, is it a 12 month update or could there be something sooner than that.

As I mentioned, it’s a trial that’s being done in patients in open-label trial that will using OCP [ph] that it will chart the efficacy of the drug, the biological activity of the drug. We don’t know exactly when we’ll be in a position to be able to describe the case studies that we see in the Phase 1. But we won’t have to wait till the end of the treatment period to do that. We’ll be able to see that the reaction, the drying up the vasculature if it is effective should happen relatively soon. How soon, we’ll have those patients to be able to describe. We don’t know at the moment. But yes, you don’t need to wait for the full duration of the result before you know that.

Okay. Thank you.

[Operator Instructions] Our next question comes from Yi Chen of H.C. Wainwright. Your line is open.

Thank you for taking my questions. My first question is just for a clarification. As of today is the manufacturing facility ready for FDA inspection or you need to do a little bit more work before they show up?

We wouldn’t have filed if we didn’t believe it was ready for inspection. So yes, it is ready.

Okay, great. Second questions, as you plan for a commercialization, what are the likely sales and marketing expenses in the – we can expect to see in the second half of this year and 2019.

I think it’s a little premature to sort of announce what we think those numbers are going to be. But I think it’s sort of fair to say, this is a highly concentrated market where we know the centers that we would go to first and then we would be able to cover quite a percentage of those Medicare Part D patients with fairly like footprint. So it will be likely the numbers that you’ll see will won’t be like one big bang of expense where we hire a huge team. It will be rolled into the success that we see in the centers that we target. So the numbers will ramp up as the year goes along, but not in any significant way that would create a step change in the kind of expenses that you’re seeing now.

Okay. Thank you.

Thank you.

And with no further questions in queue, ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And you may all disconnect. Everyone have a great day.