EyePoint Pharmaceuticals, Inc. (EYPT) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary presents mixed signals. While there is optimism about DuraVu's market potential and strong trial enrollment, revenue expectations remain minimal, indicating weak financial performance. The Q&A section reveals positive sentiment towards trial progress and commercialization strategy but lacks clarity on safety updates and incremental data. These factors, combined with no significant new announcements or changes in guidance, suggest a neutral stock price movement in the short term.

Key Financial Performance

Total Net Revenue $5.3 million for the quarter ended June 30, 2025, compared to $9.5 million for the quarter ended June 30, 2024, representing a decrease. The decline was primarily driven by lower recognition of deferred revenue related to the agreement to license YUTIQ product rights, completing the company's exit from Specialty Pharma.

Net Revenue from License and Royalties $5.3 million for the quarter ended June 30, 2025, compared to $8.4 million in the corresponding period in 2024, showing a decrease. This was primarily due to lower recognition of deferred revenue related to the agreement to license YUTIQ product rights.

Operating Expenses $67.6 million for the quarter ended June 30, 2025, compared to $44 million in the prior year period, reflecting an increase. The rise was primarily driven by the increase in clinical trial costs related to the ongoing Phase III LUGANO and LUCIA clinical trials of DURAVYU for wet-AMD.

Net Nonoperating Income $2.9 million for the quarter ended June 30, 2025. No year-over-year comparison or reasons for change were provided.

Net Loss $59.4 million, or $0.85 per share, for the quarter ended June 30, 2025, compared to a net loss of $30.8 million, or $0.58 per share, for the prior year period. The increase in net loss was primarily due to higher operating expenses driven by clinical trial costs.

Cash and Cash Equivalents and Investments $256 million as of June 30, 2025, compared to $371 million as of December 31, 2024, showing a decrease. The reduction was attributed to the accelerated use of cash due to rapid enrollment in the LUGANO and LUCIA trials.

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Operating Highlights

DURAVYU development: Phase III pivotal trials for DURAVYU in wet-AMD are fully enrolled with over 800 patients. Top-line data for LUGANO is expected in mid-2026, followed by LUCIA. DURAVYU is a sustained-release tyrosine kinase inhibitor with a novel mechanism of action, offering at least 6 months of durable efficacy and a favorable safety profile. It is designed to reduce treatment burden by over 80% compared to current therapies.

DME program: Phase II VERONA trial in diabetic macular edema (DME) showed highly positive results. Plans for a pivotal program are underway, with further details to be shared in the coming months.

Wet-AMD market: The wet-AMD market in the U.S. is valued at $10 billion and growing. DURAVYU aims to address unmet needs in this market by offering a more durable treatment option compared to current anti-VEGF therapies.

Global expansion: The LUCIA trial includes sites in South America, Europe, Israel, Australia, and India, marking EyePoint's global expansion efforts.

Manufacturing facility: A 41,000 square foot cGMP manufacturing facility in Northbridge, Massachusetts, has been established to support commercial production of DURAVYU. Registration batches are underway for an anticipated NDA filing.

Financial position: The company ended Q2 2025 with $256 million in cash and investments, with a cash runway extending into 2027. Operating expenses increased due to clinical trial costs, but cash burn is expected to decline in the second half of 2025.

Strategic pivot: EyePoint has transitioned to a clinical-stage biopharmaceutical company, focusing on DURAVYU for wet-AMD and DME while exiting the specialty pharma business.

Regulatory alignment: The Phase III trials for DURAVYU have been designed in close alignment with FDA and EMA guidelines, ensuring a clear approval pathway and a potentially broader label.

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Risk or Challenges

Regulatory Approval Risks: The success of DURAVYU is contingent on obtaining regulatory approvals from the FDA and EMA. Any delays or issues in meeting regulatory requirements could impact the company's timeline and market entry.

Clinical Trial Risks: The ongoing Phase III trials for DURAVYU in wet-AMD and DME are critical. Any adverse events, failure to meet endpoints, or delays in data readouts could jeopardize the product's approval and market potential.

Market Competition: The wet-AMD market is dominated by anti-VEGF biologics. DURAVYU must demonstrate clear advantages to compete effectively, especially as other sustained-release therapies are also in development.

Financial Risks: The company reported a significant net loss of $59.4 million for the quarter, with increased operating expenses due to clinical trials. While cash runway extends to 2027, financial sustainability depends on successful product commercialization.

Manufacturing and Supply Chain Risks: The company is relying on its new cGMP manufacturing facility for DURAVYU production. Any issues with scaling up production or meeting quality standards could delay commercialization.

Strategic Execution Risks: The company is expanding globally and entering new markets. Missteps in execution, such as regulatory non-compliance or ineffective market entry strategies, could hinder growth.

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Guidance & Outlook

Phase III Clinical Trials for DURAVYU in Wet-AMD: Top-line data for the LUGANO trial is expected in mid-2026, with the LUCIA trial data to follow shortly thereafter. The company anticipates being first to file and potentially first to market among current investigational sustained-release therapies for wet-AMD.

DURAVYU's Market Positioning: DURAVYU is positioned as a differentiated product with a novel mechanism of action, offering a 6-month dosing interval, which is expected to improve compliance and provide a competitive edge in the wet-AMD treatment landscape.

Commercial Readiness for DURAVYU: A state-of-the-art 41,000 square foot cGMP manufacturing facility has been established in Northbridge, Massachusetts, with registration batches underway to support an anticipated NDA filing and eventual pre-approval inspection.

DME Program: Following positive Phase II VERONA trial results, the company is aligning on a pivotal program for DME, with further details expected in the coming months. The DME market is projected to reach $3 billion in the U.S. by 2030.

Financial Guidance: The company has extended its cash runway into 2027, well beyond the pivotal wet-AMD data readouts in 2026. Cash burn is expected to decline in the second half of 2025 following the completion of Phase III trial enrollments.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Can you discuss the overall trial conduct of the two pivotal studies in wet-AMD and what you are focusing on to mitigate risks?

A:The company has completed enrollment for both studies ahead of time and is now focusing on study conduct. They are collaborating closely with clinical sites and investigators to ensure no protocol deviations, tracking patient safety, and working with their CRO for smooth execution. The dropout rate is less than 2%, and the noninferiority trial design is simple for sites and patients to understand.

Q:Are there concerns about introducing operational bias by disclosing masked data in the Phase III trials?

A:The company avoids disclosing certain masked data to prevent operational bias. They may disclose demographics like age and sex in the future but avoid introducing risks that could alter investigator or patient behavior. An independent data monitoring committee ensures patient safety.

Q:Should we expect regular safety updates on a quarterly or periodic basis?

A:Periodic updates are likely, but the company has not decided on a specific cadence for safety updates. They will provide updates as they receive data from the Data Safety Monitoring Committee.

Q:Can you elaborate on the rescue criteria for the trials and how it aligns with real-world practices?

A:The rescue criteria are strict and based on Phase II data. Patients are rescued if they lose more than 5 letters with 75 microns of new fluid or have new site-threatening hemorrhage due to wet-AMD. Physician discretion has been removed in Phase III to ensure consistency.

Q:What is the baseline division between naive and previously treated patients in the trials?

A:The target was a 75% naive to 25% previously treated ratio, which was achieved. Naive patients are expected to have fewer supplements and better visual acuity results.

Q:What is the early commercialization strategy for DURAVYU?

A:The company has been preparing the market since the Phase II trial, raising awareness about TKI and sustained release delivery systems. They are engaging with payers and retinal practices and plan to build their commercial team later this year in anticipation of a 2027 launch.

Q:Are there special considerations for rescue rates between naive and previously treated patients?

A:The rescue rate for naive patients is expected to be lower than in the Phase II trial, as previously treated patients often required frequent injections. Naive patients are anticipated to respond better to DURAVYU.

Q:What are the advantages of a blended endpoint in the trials?

A:The blended endpoint reduces variability and the risk of missing the primary endpoint. It ensures no missing data at the end of the trial and has been used in recent studies. The FDA strongly suggested this approach.

Q:What are the regulatory plans and safety package requirements for the NDA submission?

A:The company plans to file the NDA after the first trial readout in mid-2026 and the second shortly after. The safety package will include data from Phase I, Phase II, and Phase III studies, meeting the FDA's requirement of over 300 evaluable patients at the desired dose and interval.

Q:What is the advantage of filing the traditional way versus the 505(b)(2) pathway?

A:The 505(b)(2) pathway may save two months if the drug is already approved, but both pathways require the same clinical studies and CMC package. The company is confident in being first to file and launch.

Q:Will there be updates on pivotal trial progress beyond safety?

A:The company plans to provide updates on basic demographics and periodic safety updates but will avoid disclosing too much to prevent bias.

Q:How does the FDA view the rescue criteria, and how will they evaluate Phase III data for rescued patients?

A:The FDA allows companies to set their own rescue criteria. Supplements are not viewed as treatment failures, and sensitivity analysis will be applied to supplemented patients.

Q:What are the plans for the DME pivotal program?

A:The company plans to start the pivotal program in 2026, with preparations already underway. They are waiting for written minutes from the FDA to finalize plans.

Q:What feedback has been received from the physician community at ASRS?

A:The feedback has been overwhelmingly positive, with excitement about the potential of a new MOA and a 6-month extension option. Physicians appreciate the company's execution and trial design.

Q:What incremental data will be presented at the upcoming VERONA study presentation?

A:The presentation will build on previous data, focusing on BCVA, CST, and treatment burden.

Q:What is the U.S. versus ex-U.S. patient distribution in the LUCIA trial?

A:Approximately 80% of patients are from the U.S. and 20% from ex-U.S. sites. Interest in a sustained release option is high internationally.

Q:Will there be another Data Safety Monitoring Committee meeting before the first data readout in mid-2026?

A:Yes, there will be at least two more DMC meetings before the first data readout.

Q:What is the expected level of top-line revenue in the coming quarters?

A:The company expects minimal revenue as they have transitioned to a clinical-stage company, with some revenue from supplying commercial products to a partner in China.

Q:What is the competitive advantage of being first to market with DURAVYU?

A:First-mover advantage is significant, along with a likely 6-month dosing label and a strong safety profile. The company expects to lead in the sustained release retina market for years.

Q:Review of Unclear Management Responses

A:Management avoided providing a direct answer to whether there will be a regular cadence for safety updates, stating that periodic updates are likely but not committing to a specific schedule. Additionally, they did not provide detailed incremental data expected at the VERONA study presentation, citing the importance of the event.

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Earnings Word Cloud

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