EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) is a clinical-stage biopharmaceutical 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 bioerodible DURASERT E™ technology for sustained intraocular drug delivery, including its lead product candidate, EYP-1901, an investigational treatment delivering vorolanib currently in Phase 2 clinical trials for wet age-related macular degeneration (wet AMD) and non-proliferative diabetic retinopathy (NPDR).
Business Overview
EyePoint Pharmaceuticals was founded in 1987 and is headquartered in Watertown, Massachusetts. The company is focused on developing and commercializing innovative therapeutics to address unmet needs in ophthalmology. Its lead product candidate, EYP-1901, is an investigational, sustained-release product that consists of vorolanib, a selective and patent-protected tyrosine kinase inhibitor (TKI), formulated in the company's proprietary Durasert E bioerodible drug delivery technology.EYP-1901 is being evaluated in three separate Phase 2 clinical trials for the treatment of wet AMD, NPDR, and diabetic macular edema (DME). The company recently reported positive top-line data from the Phase 2 DAVIO 2 trial in wet AMD, achieving all primary and secondary endpoints. EyePoint plans to initiate the first pivotal Phase 3 wet AMD trial, the LUGANO trial, in the second half of 2024, with the second pivotal trial, Lucia, to follow shortly after.
In addition to EYP-1901, the company is advancing EYP-2301 into preclinical development. EYP-2301 delivers razuprotafib, an inhibitor of vascular endothelial protein tyrosine phosphatase (VE-PTP), utilizing the Durasert E technology for the potential treatment of diabetic eye diseases.
Financials
For the full year ended December 31, 2023, EyePoint Pharmaceuticals reported total net revenue of $46.0 million, compared to $41.4 million in the prior year. This increase was primarily driven by $31.8 million in revenue from royalties and collaborations, up from $1.5 million in the prior year. Net product revenue for the full year 2023 was $14.2 million, down from $39.9 million in 2022, due to the company's strategic exit from the commercial business in the first half of 2023.The company's net loss for the full year 2023 was $70.8 million, or $1.82 per share, compared to a net loss of $102.3 million, or $2.74 per share, in the prior year. The decrease in net loss was primarily attributable to lower operating expenses, which totaled $121.1 million in 2023 compared to $141.0 million in 2022.
EyePoint's annual operating cash flow for 2023 was $1.9 million, while its annual free cash flow was -$1.6 million. The company ended the year with $331.1 million in cash and investments, providing runway to advance its pipeline programs.
Quarterly Performance
For the fourth quarter of 2023, EyePoint reported total net revenue of $14.0 million, compared to $10.5 million in the prior-year period. Net product revenue for the quarter was $0.7 million, down from $9.9 million in the fourth quarter of 2022, reflecting the company's strategic exit from the commercial business. Net revenue from royalties and collaborations totaled $13.3 million, up from $0.6 million in the prior-year quarter, primarily due to the recognition of deferred revenue from the license of the YUTIQ franchise.Operating expenses for the fourth quarter of 2023 were $30.4 million, down from $54.3 million in the same period of 2022, driven by the strategic exit from the commercial business and the absence of a one-time intangible asset impairment charge recorded in the prior-year quarter. The company reported a net loss of $14.1 million, or $0.33 per share, in the fourth quarter of 2023, compared to a net loss of $43.5 million, or $1.16 per share, in the prior-year period.
Liquidity
As of December 31, 2023, EyePoint Pharmaceuticals had $331.1 million in cash and investments, providing the company with a strong financial position to advance its pipeline programs. This robust cash position was driven by the $82.5 million upfront payment received from the out-licensing of the YUTIQ franchise to Alimera Sciences, the retirement of outstanding bank debt, and a $230 million oversubscribed follow-on equity offering completed in December 2023.The company believes its current cash and investments will fund its operations through the top-line data readouts for the planned Phase 3 clinical trials of EYP-1901 in wet AMD, expected in 2026, as well as the completion of the ongoing Phase 2 trials in wet AMD, NPDR, and DME.
Pipeline and Clinical Development
EYP-1901, EyePoint's lead product candidate, is a potentially paradigm-altering treatment for patients suffering from VEGF-mediated retinal diseases. In the Phase 2 DAVIO 2 trial in wet AMD, EYP-1901 achieved all primary and secondary endpoints, demonstrating non-inferiority in change in best corrected visual acuity (BCVA) compared to the Aflibercept control group, with a favorable safety profile and an over 80% reduction in treatment burden.Based on the positive DAVIO 2 results, EyePoint plans to initiate the first pivotal Phase 3 wet AMD trial, the LUGANO trial, in the second half of 2024, with the second pivotal trial, Lucia, to follow shortly after. The company expects the Phase 3 trials to feature redosing of EYP-1901 every six months, with the primary efficacy endpoint being non-inferior change in BCVA at approximately one year.
In the Phase 2 PAVIA trial evaluating EYP-1901 as a potential nine-month treatment for moderately severe to severe NPDR, EyePoint is on track to report top-line data in the second quarter of 2024. The primary endpoint of this trial is a structural measure, assessing the degree of retinopathy on the diabetic retinopathy severity scale (DRSS). The company is also advancing the Phase 2 VERONA trial of EYP-1901 in DME, with top-line data expected in the first quarter of 2025.
In addition to the EYP-1901 program, EyePoint is developing EYP-2301, which delivers razuprotafib, an inhibitor of vascular endothelial protein tyrosine phosphatase (VE-PTP), utilizing the Durasert E technology. The company believes EYP-2301 has the potential to offer new sight-saving treatments for patients with severe retinal disease, either alone or in combination with anti-VEGFs.
Risks and Challenges
While EyePoint Pharmaceuticals has made significant progress in advancing its pipeline, the company faces several risks and challenges that investors should be aware of. These include the inherent risks associated with the development and regulatory approval of novel ophthalmic therapies, potential competition from emerging gene therapies and other sustained-release treatments, and the ability to successfully commercialize its products, if approved.Additionally, the company's reliance on the success of its lead candidate, EYP-1901, exposes it to the risk of clinical trial failures or delays, which could have a material adverse impact on the company's financial position and future prospects. The ongoing DOJ investigation into the company's sales and marketing practices for DEXYCU also represents a potential legal and regulatory risk.