2021 Q2 Form 10-Q Financial Statement

#000156459021042129 Filed on August 06, 2021

View on sec.gov

Income Statement

Concept 2021 Q2 2020 Q2 2020 Q1
Revenue $9.013M $4.122M $7.490M
YoY Change 118.66% -42.83% 272.27%
Cost Of Revenue $1.929M $500.0K $980.0K
YoY Change 285.8% -29.18% 196.97%
Gross Profit $7.084M $3.620M $6.510M
YoY Change 95.69% -44.34% 287.04%
Gross Profit Margin 78.6% 87.82% 86.92%
Selling, General & Admin $11.84M $10.88M $12.49M
YoY Change 8.84% -10.07% 4.73%
% of Gross Profit 167.18% 300.58% 191.78%
Research & Development $5.605M $3.276M $4.853M
YoY Change 71.09% -17.17% 27.81%
% of Gross Profit 79.12% 90.5% 74.55%
Depreciation & Amortization $682.0K $670.0K $33.00K
YoY Change 1.79% 3.08% -25.0%
% of Gross Profit 9.63% 18.51% 0.51%
Operating Expenses $19.99M $15.27M $18.93M
YoY Change 30.89% -12.09% 13.62%
Operating Profit -$10.98M -$11.15M -$11.44M
YoY Change -1.55% 9.71% -21.89%
Interest Expense $1.376M $1.806M $1.784M
YoY Change -23.81% 12.95% 74.9%
% of Operating Profit
Other Income/Expense, Net $969.0K -$1.798M -$1.730M
YoY Change -153.89% 34.88% -62.28%
Pretax Income -$10.01M -$12.95M -$13.17M
YoY Change -22.7% 12.61% -31.55%
Income Tax
% Of Pretax Income
Net Earnings -$10.01M -$12.95M -$13.17M
YoY Change -22.7% 12.63% -31.52%
Net Earnings / Revenue -111.06% -314.17% -175.89%
Basic Earnings Per Share -$0.35
Diluted Earnings Per Share -$0.35 -$1.038M -$1.140M
COMMON SHARES
Basic Shares Outstanding 28.74M
Diluted Shares Outstanding 28.74M

Balance Sheet

Concept 2021 Q2 2020 Q2 2020 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $127.6M $22.80M $26.30M
YoY Change 459.78% -48.42% -39.4%
Cash & Equivalents $127.6M $22.80M $26.45M
Short-Term Investments
Other Short-Term Assets $3.704M $5.900M $5.600M
YoY Change -37.22% 90.32% 211.11%
Inventory $5.381M $3.773M $3.400M
Prepaid Expenses
Receivables $15.11M $7.400M $14.40M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $151.8M $39.80M $49.70M
YoY Change 281.47% -32.05% 2.75%
LONG-TERM ASSETS
Property, Plant & Equipment $2.868M $3.300M $3.400M
YoY Change -13.09% 691.37% 700.0%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $150.0K $200.0K $200.0K
YoY Change -25.0% 0.0% 0.0%
Total Long-Term Assets $27.00M $29.90M $30.60M
YoY Change -9.71% -8.72% -8.61%
TOTAL ASSETS
Total Short-Term Assets $151.8M $39.80M $49.70M
Total Long-Term Assets $27.00M $29.90M $30.60M
Total Assets $178.8M $69.70M $80.30M
YoY Change 156.56% -23.68% -1.9%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $5.421M $3.900M $5.200M
YoY Change 39.0% -35.71% -17.7%
Accrued Expenses $9.114M $5.131M $5.100M
YoY Change 77.63% 21.76% 74.42%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $95.00K $100.0K $0.00
YoY Change -5.0%
Total Short-Term Liabilities $16.25M $9.586M $10.30M
YoY Change 69.52% -10.59% -58.23%
LONG-TERM LIABILITIES
Long-Term Debt $36.27M $50.26M $47.80M
YoY Change -27.83% 8.67% 49.6%
Other Long-Term Liabilities $19.44M $3.026M $5.800M
YoY Change 542.37% 0.87% 176.19%
Total Long-Term Liabilities $55.71M $53.29M $53.60M
YoY Change 4.55% 8.19% 57.41%
TOTAL LIABILITIES
Total Short-Term Liabilities $16.25M $9.586M $10.30M
Total Long-Term Liabilities $55.71M $53.29M $53.60M
Total Liabilities $71.96M $65.50M $63.80M
YoY Change 9.86% 3.77% 2.94%
SHAREHOLDERS EQUITY
Retained Earnings -$491.4M
YoY Change 11.88%
Common Stock $494.8M
YoY Change 6.03%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $106.9M $4.194M $16.47M
YoY Change
Total Liabilities & Shareholders Equity $178.8M $69.69M $80.30M
YoY Change 156.62% -23.7% -1.9%

Cashflow Statement

Concept 2021 Q2 2020 Q2 2020 Q1
OPERATING ACTIVITIES
Net Income -$10.01M -$12.95M -$13.17M
YoY Change -22.7% 12.63% -31.52%
Depreciation, Depletion And Amortization $682.0K $670.0K $33.00K
YoY Change 1.79% 3.08% -25.0%
Cash From Operating Activities -$10.54M -$5.120M -$16.35M
YoY Change 105.9% -70.08% 22.58%
INVESTING ACTIVITIES
Capital Expenditures -$25.00K -$20.00K $16.00K
YoY Change 25.0% -33.33% -91.21%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities -$25.00K -$20.00K -$16.00K
YoY Change 25.0% -33.33% -91.21%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $20.29M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -382.0K 1.660M 20.45M
YoY Change -123.01% -90.74% 75.74%
NET CHANGE
Cash From Operating Activities -10.54M -5.120M -16.35M
Cash From Investing Activities -25.00K -20.00K -16.00K
Cash From Financing Activities -382.0K 1.660M 20.45M
Net Change In Cash -10.95M -3.480M 4.085M
YoY Change 214.63% -546.15% -317.06%
FREE CASH FLOW
Cash From Operating Activities -$10.54M -$5.120M -$16.35M
Capital Expenditures -$25.00K -$20.00K $16.00K
Free Cash Flow -$10.52M -$5.100M -$16.36M
YoY Change 106.22% -70.14% 21.05%

Facts In Submission

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<p style="margin-bottom:0pt;margin-top:10pt;text-indent:0%;font-weight:bold;font-size:10pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;">1.<span style="font-weight:normal;margin-left:36pt;"/>Operations</p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:0%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">         <span style="Background-color:#FFFFFF;color:#000000;">The accompanying condensed consolidated financial statements of EyePoint Pharmaceuticals, Inc., a Delaware corporation </span>(together with its subsidiaries, the “Company”), <span style="Background-color:#FFFFFF;color:#000000;">as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 are unaudited. Certain information in the footnote disclosures of these financial statements has been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, these statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2020, and include all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair presentation of the Company’s financial position, results of operations, comprehensive loss and cash flows for the periods indicated. The preparation of financial statements in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make assumptions and estimates that affect, among other things, (i) reported amounts of assets and liabilities; (ii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements; and (iii) reported amounts of revenues and expenses during the reporting period. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year or any future period.<br/></span><br/>         The Company is a pharmaceutical company committed to developing and commercializing innovative therapeutics to help improve the lives of patients with serious eye disorders. The Company’s pipeline leverages its proprietary Durasert<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> technology for extended intraocular drug delivery including EYP-1901, a potential twice-yearly sustained delivery intravitreal anti-VEGF treatment initially targeting wet age-related macular degeneration (“wet AMD”), the leading cause of vision loss among people 50 years of age and older in the United States. The Company’s product candidate pipeline also includes YUTIQ<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> 50, a potential twice-yearly treatment for non-infectious uveitis affecting the posterior segment of the eye, one of the leading causes of blindness. The Company also has two commercial products: YUTIQ<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup>, a once every three-year treatment for chronic non-infectious uveitis affecting the posterior segment of the eye, and DEXYCU<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup>, a single dose treatment for postoperative inflammation following ocular surgery<span style="Background-color:#FFFFFF;">. </span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Local drug delivery for treating ocular diseases is a significant challenge due to the effectiveness of the blood-eye barrier. This barrier makes it difficult for systemically-administered drugs to reach the eye in sufficient quantities to have a beneficial effect without causing unacceptable adverse side effects to other organs. The Company’s validated Durasert technology, which has already been included in four products approved for marketing by the U.S. Food and Drug Administration (“FDA”), is designed to provide consistent, sustained delivery of small molecule drugs over a period of months to years through a single intravitreal injection. </p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">The Company’s lead product candidate, EYP-1901, combines a bioerodible formulation of its proprietary Durasert sustained-release technology with vorolanib, a tyrosine kinase inhibitor (“TKI”). The Company is currently evaluating EYP-1901 in a Phase 1 clinical trial as a potential twice-yearly sustained delivery intravitreal treatment for wet AMD. Current approved treatments for wet AMD require monthly or bi-monthly eye injections in a physician’s office, which can cause inconvenience and discomfort and often lead to reduced compliance and poor outcomes. On May 25, 2021, the Company announced the completion of the enrollment of the Phase 1 DAVIO clinical trial of EYP-1901 and expects initial data from trial in the fourth quarter of 2021. </span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">The Company is also developing YUTIQ 50 as a potential twice-yearly intravitreal treatment for chronic non-infectious uveitis affecting the posterior segment of the eye. The Company has consulted with the FDA and identified a clinical pathway for a supplemental new drug application (“sNDA”) filing that the Company expects will involve a clinical trial of a small population. The Company expects to initiate the Phase 3 clinical trial for YUTIQ 50 by the end of this year.</span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">The Company also has two commercial products, YUTIQ<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> and DEXYCU<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup>, that are being sold directly in the U.S.  </span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">YUTIQ<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> (fluocinolone acetonide intravitreal implant) 0.18 mg for intravitreal injection, is a non-erodible intravitreal implant containing fluocinolone acetonide (“FA”) lasting for up to 36 months and is indicated for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. This disease affects between 60,000 to 100,000 people each year in the U.S. causes approximately 30,000 new cases of blindness every year and </span></p> <p style="margin-top:10pt;margin-bottom:0pt;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">is </span><span style="Background-color:#FFFFFF;">the third leading cause of blindness.</span><span style="Background-color:#FFFFFF;"> YUTIQ utilizes </span><span style="Background-color:#FFFFFF;">the Company’s proprietary Durasert</span><span style="Background-color:#FFFFFF;"><sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup></span><span style="Background-color:#FFFFFF;"> sustained-release drug delivery technology platform.</span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:5.24%;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="Background-color:#FFFFFF;">DEXYCU<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> (dexamethasone intraocular suspension) 9%, for intraocular administration, is indicated for the treatment of post-operative ocular inflammation, with the Company’s primary focus on its use immediately following cataract surgery as a single dose treatment. DEXYCU utilizes the Company’s proprietary Verisome<sup style="font-size:85%;line-height:120%;vertical-align:top">®</sup> drug-delivery technology.</span></p> <p style="Background-color:#FFFFFF;margin-bottom:0pt;margin-top:10pt;text-indent:4.81%;font-size:10pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The Company is also seeking to enhance its long-term growth potential by expanding EYP-1901 beyond wet AMD into diabetic retinopathy (“DR”) and retinal vein occlusion (“RVO”), both large and growing ocular disease areas. The Company also expects to potentially identify and advance additional product pipeline candidates through clinical and regulatory development. This may be accomplished through internal discovery efforts, potential research collaborations and/or in-licensing arrangements with partner molecules and potential acquisitions of additional ophthalmic products, product candidates or technologies that complement the Company’s current product portfolio.</p> <p style="Background-color:#FFFFFF;margin-bottom:0pt;margin-top:10pt;text-indent:0%;font-weight:bold;color:#000000;font-size:10pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;">Effects of the COVID-19 Coronavirus Pandemic<span style="Background-color:#FFFFFF;"> </span></p> <p style="margin-bottom:0pt;margin-top:10pt;text-indent:4.76%;color:#000000;font-size:10pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The ongoing COVID-19 coronavirus pandemic<span style="Background-color:#FFFFFF;"> (the “Pandemic”)</span> has had a material and adverse impact on the Company’s business, including as a result of measures that the Company, other businesses, and governments have taken and will possibly continue to take. This includes a significant impact on cash flows from expected revenues due to the closure of ambulatory surgery centers for DEXYCU and a significant reduction in physician office visits impacting YUTIQ in 2020. The ongoing Pandemic continued to have an adverse impact on the Company’s revenues, financial condition and cash flows in the first quarter and second quarter of 2021. Further, the future progression of the Pandemic and its effects on the Company’s business and operations are uncertain at this time. Depending on the future developments that are uncertain and difficult to predict, including new information that may emerge concerning the Pandemic, the Company’s revenues, financial condition and cash flows may be adversely affected in the future as well. The Company is continuously monitoring the Pandemic and its potential effect on the Company’s financial position, results of operations and cash flows. This uncertainty could have an impact in future periods on certain estimates used in the preparation of the Company’s periodic financial results, including reserves for variable consideration related to product sales, realizability of certain receivables, assessment for excess or obsolete inventory, and impairment of long-lived assets. <span style="Background-color:#FFFFFF;">Uncertainty around the extent and duration of the Pandemic, and any future related financial impact cannot be reasonably estimated at this time.</span></p> <p style="margin-bottom:0pt;margin-top:10pt;text-indent:0%;font-weight:bold;font-size:10pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;">Liquidity</p> <p style="margin-bottom:0pt;margin-top:10pt;text-indent:4.81%;color:#000000;font-size:10pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">The Company had cash and cash equivalents of $127.6<span style="font-size:12pt;color:#000000;"> </span>million at June 30, 2021.<span style="Background-color:#FFFFFF;"> T</span>he Company has a history of operating losses and has not had significant recurring cash inflows from revenue. The Company’s operations have been financed primarily from sales of its equity securities, issuance of debt and a combination of license fees, milestone payments, royalty income and other fees received from its collaboration partners<span style="Background-color:#FFFFFF;">.</span> In the first quarter of 2019, the Company commenced the U.S. launch of its first two commercial products, YUTIQ and DEXYCU. However, the Company has not received sufficient revenues from its product sales to fund operations and the Company does not expect revenues from its product sales to generate sufficient funding to sustain its operations in the near-term. The Company expects to continue fulfilling its funding needs through cash inflows from revenue of YUTIQ and DEXYCU product sales, licensing and research collaboration transactions, additional equity capital raises and other arrangements. The Company believes that its cash and cash equivalents of $127.6 million at June 30, 2021, coupled with expected cash inflows from its product sales will enable the Company to fund its current and planned operations for <span style="Background-color:#FFFFFF;">at least the next twelve months from the date these consolidated financial statements were issued. A</span>ctual cash requirements could differ from management’s projections due to many factors, including the continued effect of the Pandemic on the Company’s business and the medical community, <span style="Background-color:#FFFFFF;">the timing and results of the Company’s clinical trials for EYP-1901, </span>additional <span style="Background-color:#FFFFFF;">investments</span> in research and development programs, the success of <span style="Background-color:#FFFFFF;">commercialization</span> for YUTIQ and DEXYCU, the actual costs of these commercialization efforts, competing technological and market developments and the costs of any strategic acquisitions and/or development of complementary business opportunities.</p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:0%;font-weight:bold;color:#000000;font-family:Times New Roman;font-size:10pt;font-style:normal;text-transform:none;font-variant: normal;">Recently Adopted and Recently Issued Accounting Pronouncements</p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:4.81%;color:#000000;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">New accounting pronouncements are issued periodically by the Financial Accounting Standards Board (“FASB”) and are adopted by the Company as of the specified effective dates. Unless otherwise disclosed below, the </p> <p style="margin-top:10pt;margin-bottom:0pt;color:#000000;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><span style="color:#000000;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">Company believes that recently issued and adopted pronouncements will not have a material impact on the Company’s financial position, results of operations and cash flows or do not apply to the Company’s operations.   </span></p> <p style="margin-top:10pt;margin-bottom:0pt;text-indent:4.81%;color:#000000;font-family:Times New Roman;font-size:10pt;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">In May 2021, the FASB issued ASU No. 2021-04, <span style="font-style:italic;color:#000000;">Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40)</span> (“ASU 2021-04”)<span style="font-style:italic;">: Issuer’s  Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. </span>The amendments<span style="Background-color:#FFFFFF;color:#444444;font-size:17pt;font-family:Arial;"> </span>are designed to clarify an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options that remain equity-classified after modification or exchange. The ASU provides guidance on how an issuer would measure and recognize the effects of these transactions. The standard provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. ASU 2021-04 will be effective for the Company in the first quarter of its fiscal year ending December 31, 2022. The Company is currently evaluating the impact the adoption of this update will have on its consolidated financial statements.</p>
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