10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

COMMISSION FILE NUMBER 000-51122

 

EyePoint Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

26-2774444

(I.R.S. Employer

Identification No.)

 

 

 

480 Pleasant Street

Watertown, MA

(Address of principal executive offices)

 

02472

(Zip Code)

(617) 926-5000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001

EYPT

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

There were 35,309,432 shares of the registrant’s common stock, $0.001 par value, outstanding as of October 27, 2023.

 

 

 


 

 

 

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Unaudited Financial Statements

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2023 and December 31, 2022

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss – Three and Nine months ended September 30, 2023 and 2022

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity – Three and Nine months ended September 30, 2023 and 2022

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2023 and 2022

 

6

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

32

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

32

 

 

 

 

 

PART II: OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

33

 

 

 

 

 

Item 1A.

 

Risk Factors

 

33

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

34

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

34

 

 

 

 

 

Item 5.

 

Other Information

 

34

 

 

 

 

 

Item 6.

 

Exhibits

 

35

 

 

 

 

 

Signatures

 

37

 

 

 

 

 

Certifications

 

 

 

2


 

 

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands except share data)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

133,035

 

 

$

95,633

 

Marketable securities

 

 

2,977

 

 

 

48,928

 

Accounts and other receivables, net

 

 

483

 

 

 

15,503

 

Prepaid expenses and other current assets

 

 

9,091

 

 

 

9,858

 

Inventory

 

 

4,577

 

 

 

2,886

 

Total current assets

 

 

150,163

 

 

 

172,808

 

Property and equipment, net

 

 

4,480

 

 

 

1,360

 

Operating lease right-of-use assets

 

 

5,250

 

 

 

6,038

 

Restricted cash

 

 

150

 

 

 

150

 

Total assets

 

$

160,043

 

 

$

180,356

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,580

 

 

$

5,919

 

Accrued expenses

 

 

13,417

 

 

 

16,359

 

Deferred revenue

 

 

39,841

 

 

 

1,205

 

Short-term borrowings

 

 

 

 

 

10,475

 

Other current liabilities

 

 

1,058

 

 

 

579

 

Total current liabilities

 

 

63,896

 

 

 

34,537

 

Long-term debt

 

 

 

 

 

29,310

 

Deferred revenue – noncurrent

 

 

32,341

 

 

 

13,557

 

Operating lease liabilities – noncurrent

 

 

5,185

 

 

 

5,984

 

Other long-term liabilities

 

 

 

 

 

600

 

Total liabilities

 

 

101,422

 

 

 

83,988

 

Contingencies (Note 14)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares
   issued and outstanding

 

 

 

 

 

 

Common stock, $.001 par value, 300,000,000 shares authorized at September 30, 2023
   and December 31, 2022;
35,309,432 and 34,082,934 shares issued and outstanding at
   September 30, 2023 and December 31, 2022, respectively

 

 

35

 

 

 

34

 

Additional paid-in capital

 

 

785,792

 

 

 

766,899

 

Accumulated deficit

 

 

(728,047

)

 

 

(671,351

)

Accumulated other comprehensive income

 

 

841

 

 

 

786

 

Total stockholders' equity

 

 

58,621

 

 

 

96,368

 

Total liabilities and stockholders' equity

 

$

160,043

 

 

$

180,356

 

 

See notes to condensed consolidated financial statements.

3


 

 

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

816

 

 

$

9,720

 

 

$

13,483

 

 

$

30,048

 

License and collaboration agreements

 

 

14,137

 

 

 

52

 

 

 

17,768

 

 

 

160

 

Royalty income

 

 

249

 

 

 

240

 

 

 

739

 

 

 

663

 

Total revenues

 

 

15,202

 

 

 

10,012

 

 

 

31,990

 

 

 

30,871

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales, excluding amortization of acquired
   intangible assets

 

 

1,202

 

 

 

1,405

 

 

 

3,634

 

 

 

4,916

 

Research and development

 

 

17,363

 

 

 

11,162

 

 

 

46,711

 

 

 

34,099

 

Sales and marketing

 

 

479

 

 

 

6,016

 

 

 

11,504

 

 

 

19,592

 

General and administrative

 

 

10,556

 

 

 

9,212

 

 

 

28,854

 

 

 

26,321

 

Amortization of acquired intangible assets

 

 

 

 

 

615

 

 

 

 

 

 

1,845

 

Total operating expenses

 

 

29,600

 

 

 

28,410

 

 

 

90,703

 

 

 

86,773

 

Loss from operations

 

 

(14,398

)

 

 

(18,398

)

 

 

(58,713

)

 

 

(55,902

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

1,786

 

 

 

640

 

 

 

4,611

 

 

 

1,067

 

Interest expense

 

 

 

 

 

(662

)

 

 

(1,247

)

 

 

(2,408

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(1,347

)

 

 

(1,559

)

Total other income (expense), net

 

 

1,786

 

 

 

(22

)

 

 

2,017

 

 

 

(2,900

)

Net loss

 

$

(12,612

)

 

$

(18,420

)

 

$

(56,696

)

 

$

(58,802

)

Net loss per share – basic and diluted

 

$

(0.33

)

 

$

(0.49

)

 

$

(1.50

)

 

$

(1.58

)

Weighted average shares outstanding – basic and diluted

 

 

38,341

 

 

 

37,338

 

 

 

37,804

 

 

 

37,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(12,612

)

 

$

(18,420

)

 

$

(56,696

)

 

$

(58,802

)

Other comprehensive (loss) gain:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale
   securities, net of tax of $
0 for periods presented

 

 

(1

)

 

 

51

 

 

 

55

 

 

 

(188

)

Comprehensive loss

 

$

(12,613

)

 

$

(18,369

)

 

$

(56,641

)

 

$

(58,990

)

 

See notes to condensed consolidated financial statements.

4


 

 

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(In thousands except share data)

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Accumulated
Other

 

 

Total

 

 

Number of
Shares

 

 

Par Value
Amount

 

 

Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Comprehensive
Income

 

 

Stockholders’
Equity

 

Balance at July 1, 2022

 

34,052,616

 

 

$

34

 

 

$

760,209

 

 

$

(609,479

)

 

$

602

 

 

$

151,366

 

Net loss

 

 

 

 

 

 

 

 

 

 

(18,420

)

 

 

 

 

 

(18,420

)

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

 

 

51

 

 

 

51

 

Employee stock purchase plan

 

19,283

 

 

 

 

 

 

153

 

 

 

 

 

 

 

 

 

153

 

Exercise of stock options

 

256

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Stock-based compensation

 

 

 

 

 

 

 

3,199

 

 

 

 

 

 

 

 

 

3,199

 

Balance at September 30, 2022

 

34,072,155

 

 

$

34

 

 

$

763,562

 

 

$

(627,899

)

 

$

653

 

 

$

136,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at July 1, 2023

 

34,306,118

 

 

$

34

 

 

$

771,821

 

 

$

(715,435

)

 

$

842

 

 

$

57,262

 

Net loss

 

 

 

 

 

 

 

 

 

 

(12,612

)

 

 

 

 

 

(12,612

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Issuance of stock, net of issue costs

 

902,769

 

 

 

1

 

 

 

9,539

 

 

 

 

 

 

 

 

 

9,540

 

Employee stock purchase plan

 

43,335

 

 

 

 

 

 

174

 

 

 

 

 

 

 

 

 

174

 

Exercise of stock options

 

55,210

 

 

 

 

 

 

629

 

 

 

 

 

 

 

 

 

629

 

Vesting of stock units

 

2,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

3,629

 

 

 

 

 

 

 

 

 

3,629

 

Balance at September 30, 2023

 

35,309,432

 

 

$

35

 

 

$

785,792

 

 

$

(728,047

)

 

$

841

 

 

$

58,621

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Accumulated
Other

 

 

Total

 

 

Number of
Shares

 

 

Par Value
Amount

 

 

Paid-In
Capital

 

 

Accumulated
Deficit

 

 

Comprehensive
Income

 

 

Stockholders’
Equity

 

Balance at January 1, 2022

 

33,905,826

 

 

$

34

 

 

$

752,602

 

 

$

(569,097

)

 

$

841

 

 

$

184,380

 

Net loss

 

 

 

 

 

 

 

 

 

 

(58,802

)

 

 

 

 

 

(58,802

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(188

)

 

 

(188

)

Issuance of stock, net of issue costs

 

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

 

20

 

Employee stock purchase plan

 

47,787

 

 

 

 

 

 

354

 

 

 

 

 

 

 

 

 

354

 

Exercise of stock options

 

4,479

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

Vesting of stock units

 

114,063

 

 

 

 

 

 

(271

)

 

 

 

 

 

 

 

 

(271

)

Stock-based compensation

 

 

 

 

 

 

 

10,816

 

 

 

 

 

 

 

 

 

10,816

 

Balance at September 30, 2022

 

34,072,155

 

 

$

34

 

 

$

763,562

 

 

$

(627,899

)

 

$

653

 

 

$

136,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2023

 

34,082,934

 

 

$

34

 

 

$

766,899

 

 

$

(671,351

)

 

$

786

 

 

$

96,368

 

Net loss

 

 

 

 

 

 

 

 

 

 

(56,696

)

 

 

 

 

 

(56,696

)

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

 

 

55

 

 

 

55

 

Issuance of stock, net of issue costs

 

902,769

 

 

 

1

 

 

 

9,539

 

 

 

 

 

 

 

 

 

9,540

 

Employee stock purchase plan

 

107,056

 

 

 

 

 

 

422

 

 

 

 

 

 

 

 

 

422

 

Exercise of stock options

 

56,090

 

 

 

 

 

 

634

 

 

 

 

 

 

 

 

 

634

 

Vesting of stock units

 

160,583

 

 

 

 

 

 

(169

)

 

 

 

 

 

 

 

 

(169

)

Stock-based compensation

 

 

 

 

 

 

 

8,467

 

 

 

 

 

 

 

 

 

8,467

 

Balance at September 30, 2023

 

35,309,432

 

 

$

35

 

 

$

785,792

 

 

$

(728,047

)

 

$

841

 

 

$

58,621

 

 

See notes to condensed consolidated financial statements.

5


 

 

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(56,696

)

 

$

(58,802

)

Adjustments to reconcile net loss to cash flows used in
   operating activities:

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

1,845

 

Depreciation of property and equipment

 

 

352

 

 

 

266

 

Amortization of debt discount and premium and discount on
   available-for-sale marketable securities

 

 

(334

)

 

 

(218

)

Provision for excess and obsolete inventory

 

 

693

 

 

 

 

Loss on extinguishment of debt

 

 

1,347

 

 

 

1,559

 

Stock-based compensation

 

 

8,467

 

 

 

10,816

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable and other current assets

 

 

14,701

 

 

 

(8,942

)

Inventory

 

 

(2,224

)

 

 

85

 

Accounts payable and accrued expenses

 

 

791

 

 

 

1,681

 

Right-of-use assets and operating lease liabilities

 

 

467

 

 

 

(44

)

Deferred revenue

 

 

57,420

 

 

 

(663

)

Net cash provided by (used in) operating activities

 

 

24,984

 

 

 

(52,417