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Aerie Pharmaceuticals’ (AERI) CEO Raj Kannan on Q1 2022 Results – Earnings Call Transcript

Aerie Pharmaceuticals’ (AERI) CEO Raj Kannan on Q1 2022 Results – Earnings Call Transcript

Aerie Pharmaceuticals, Inc. (NASDAQ:AERI) Q1 2022 Earnings Conference Call May 5, 2022 5:00 PM ET

Company Participants

Hans Vitzthum – LifeSci Partners

Raj Kannan – Chief Executive Officer

Gary Sternberg – Chief Medical Officer

Peter Lang – Chief Financial Officer

Conference Call Participants

Louise Chen – Cantor

Serge Belanger – Needham & Company

Annabel Samimy – Stifel

Stacy Ku – Cowen and Company

François Brisebois – Oppenheimer

Carly Kenselaar – Citigroup

Oren Livnat – H.C. Wainwright

Operator

Good afternoon. Thank you for standing by, and welcome to the Aerie Pharmaceuticals’ First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. Today’s conference will be recorded.

It is now my pleasure to turn the floor over to Hans Vitzthum of LifeSci Partners, Aerie’s Investor Relations firm. Please go ahead.

Hans Vitzthum

Thank you, operator. Good afternoon and thank you for joining us. With us today are Raj Kannan, Chief Executive Officer; Peter Lang, Chief Financial Officer; and Gary Sternberg, Chief Medical Officer. Today’s call is also being webcast live on our website, investors.aeriepharma.com, and it will be available for replay, as indicated in our press release.

Now forward-looking statements and non-GAAP financial measures. On this call, we will make certain forward-looking statements, including statements, forecasts, and observations regarding our future financial and operating performance, including our observations regarding ongoing operating expenses.

These statements will include observations associated with our commercialization of Rhopressa and Rocklatan in the United States and our collaborations in Japan, Europe and other regions of the world. They will also include plans and expectations regarding the success, timing and cost of our clinical trials.

Additionally, we will discuss progress regarding maintaining, requesting or obtaining approvals from regulatory agencies of our products and product candidates, along with the associated business strategies regarding these products and product candidates. Finally, we will address our financial liquidity and other statements related to future events, including our financial outlook for 2022.

These statements are based on the beliefs and expectations of management as of today. Our actual results may differ materially from our expectations. Investors should carefully read the risks and uncertainties described in today’s press release as well as the risk factors included in our filings with the SEC. We assume no obligation to revise or update forward-looking statements, whether as the result of new information, future events or otherwise. Please note that we will file our Form 10-Q tomorrow.

In addition, during this call, we will be discussing certain adjusted or non-GAAP financial measures. For additional disclosures relating to these non-GAAP financial measures, including a reconciliation to the comparable GAAP measures, please see today’s press release, which is posted on the Investor Relations section of our website.

With that, I will now turn the call over to Raj Kannan, the CEO of Aerie.

Raj Kannan

Thank you, Hans, and good afternoon, everyone. I am pleased to speak with you on the excellent progress we’ve made in advancing Aerie Version 2.0 and why we remain confident about our growth in 2022 and beyond. During today’s call, I will provide you with a high-level update on our first quarter commercial performance, our outlook for 2022, and an overview of our progress to date against the three strategic pillars I outlined previously.

Then I’ll ask Gary to provide you with an update on our late-stage clinical portfolio, and in particular, our exciting prospects with AR-15512. And finally, Peter will review the first quarter 2022 financials with you before I close with a few remarks. We made significant progress across several fronts in the first quarter for Aerie.

We continued to execute well on our three strategic pillars in building Aerie Version 2.0. We delivered strong year-over-year revenue growth in line with our expectations for our first in class glaucoma franchise, comprised of the novel products, Rocklatan and Rhopressa.

We achieved alignment with the FDA on the Phase 3 program for our lead product candidate AR-15512 for dry eye disease. We initiated a Phase 4 program supporting Rocklatan. We continued to drive operational efficiencies to reduce net cash burn, and we strengthened our senior leadership team with the addition of Dr. Gary Sternberg, Chief Medical Officer; and Peter Lang, Chief Financial Officer, who are with us on this call.

We believe these achievements taken together, have set Aerie up for success in 2022 and beyond. During our February call, I introduced the three strategic pillars for our long-term success. First, driving sustainable growth of the commercial business; two, making smart choices with our capital in advancing our pipeline; and three, reducing our net cash burn rate to maintain a solid financial position.

These pillars are built on a foundation of attracting and retaining the right talent and leadership to support sustainable growth, which has been strengthened by the appointments of Gary and Peter.

Now taking them one at a time. Sustainable growth of the commercial franchise. We reiterate our full year guidance for Rocklatan and Rhopressa sales of $130 million to $140 million, which represents a 16% to 25% net revenue growth over 2021. I’ll elaborate more on the commercial performance in a few minutes.

Making smart choices with our capital in advancing the pipeline. We prioritized three programs based on our assessment of likelihood of approval, the potential value inflection in the near to mid-term and the speed to market AR-15512 for dry eye, AR-1105 for diabetic macular edema or DME, and AR-14034 for wet age-related macular degeneration, or wet AMD.

AR-15512 is scheduled to commence Phase 3 trials in the second quarter of 2022. We believe AR-15512 could have a very competitive profile in the dry eye market. AR-1105 could potentially replace the currently available steroid treatment for DME with a once every six-month dosing interval. And AR-14034 is on track for an IND submission later this year with the potential of a 12-month dosing interval with a best in class tyrosine kinase inhibitor, axitinib.

And third, reducing our annual burn rate, one of my ongoing priorities is to continue driving greater efficiencies in our ongoing operations to preserve cash and optimize capital allocation decisions. We’ve made meaningful progress in expense rationalization and ended the quarter with cash, cash equivalent and total investments of approximately $199 million. We continue to drive additional future efficiencies in our operations and are reiterating our guidance of an expected reduction in total net cash used of approximately 15% in 2022 versus 2021.

Now, as I mentioned before, let me provide you with an overview of our glaucoma commercial franchise performance and why we to remain confident in sustainable growth in 2022 and beyond. I am pleased to report that in the first quarter of 2022, Rocklatan and Rhopressa revenues grew by 30% over the first quarter of 2021, mainly driven by strong growth in total prescriptions. These results are in line with our expectations and continue to bode well for the franchise growth.

The continued strong growth in this future is mainly driven by two key factors. Number one, you’ll recall that we introduced a refreshed brand strategy for our commercial glaucoma franchise in February of 2022, with a focus on the lower is better theme. This has generated encouraging early feedback from the customer facing team calling on targeted prescribers, who say the clarity on where to use Rocklatan aligns well with the medical needs and the product profile.

Our goal is to drive powerful efficacy right from the start as a primary reason for brain choice. We are doing that by calling attention to the fact that Rocklatan is highly effective in lowering IOP, potentially getting patients to the lowest risk of vision loss right from the start. So why not start with the most powerful efficacy from the start or start with Rocklatan is our key message to prescribers.

Rhopressa, on the other hand, continues to be well positioned on its novel mechanism of action and why that matters. Given the encouraging feedback from our customer facing team on what they hear from their customers, we believe that the differentiated efficacy and good safety profiles provide physicians with a clear reason to prescribe these products. And we believe that this refreshed brand strategy could be the cornerstone to our commercial growth going forward.

And number two, on the increased pull-through opportunities available to us today. Our broad formulary coverage, especially in the Medicare book of business paves the way for increased pull-through opportunities to drive greater adoption for our brand.

In summary, we’re pleased with our first quarter commercial glaucoma franchise growth, and we believe that the updated brand strategy with greater clarity in positioning and refreshed messaging and increased pull-through opportunities on our broad formulary coverage could position Aerie to achieve our revenue growth targets in 2022 and beyond, and importantly, fund our journey to a bright future.

Before I move on, I want to take a moment to thank the entire Aerie team for their performance, dedication and commitment to the company’s goals throughout the first quarter of 2022.

Let me now turn the call over to Gary, our Chief Medical Officer, to continue building on the reasons for our excitement about the future for Arie. Gary?

Gary Sternberg

Thanks, Raj. It is great to have joined and be part of the Arie team. I am going to review the clinical pipeline and then briefly provide updates on ongoing global studies, our medical affairs program, and close with an update on some of our recent medical meeting presentations

AR-15512 or 512 is entering Phase 3 development as a differentiated, novel, first-in-class product candidate for the treatment of the signs and symptoms of dry eye. While there are a number of prescription and OTC products on the market for dry eye, we believe there is a significant unmet need for new therapies that can provide rapid onset of efficacy, convenient dosing, and importantly, consistent improvements across a range of sign, symptom, and quality of life endpoints.

As you know, 512 is TRPM8 agonist, which acts as a cold thermoreceptor modulator to stimulate the cold sensing receptors found on the nerve endings that innervate the cornea and eyelid. By stimulating these receptors, 512 leads to natural tear production and a cooling sensation across the surface of the eye that may result in a reduction in dry eye symptoms. As background, I want to make two points about the results of our Phase 2b trial named COMET-1 that we reported in September 2021.

First, while our chosen primary endpoints were not achieved, we showed statistically significant dose-dependent improvements on multiple validated sign, symptom, and quality of life endpoints across multiple time points. Importantly, we generally saw the difference between the 212 and the vehicle responses increase over time pointing to a potential sustained meaningful treatment effect in dry eye signs and symptoms.

Second, we also reported a good tolerability profile with no systemic or serious adverse events attributed to 512. In February, during our conference call regarding the fourth quarter financial results, we reported that we had gained alignment with the FDA on our Phase 3 endpoints and overall program, which will consist of two identical Phase 3 registrational efficacy studies and a 12-month long-term safety study.

To mitigate the risk of variability from Phase 2 to Phase 3 results, many aspects of the clinical trial design from the Phase 2b COMET-1 study were kept consistent in the upcoming Phase 3 COMET-2 and COMET-3 studies. The first of the Phase 3 efficacy studies, COMET-2, will be a multicenter, vehicle-controlled, double-masked, randomized study that will evaluate a single concentration of AR-15512 at 0.003% compared to the 512 vehicle administered twice daily for 90 days.

COMET-2 is expected to enroll about 460 participants at approximately 20 sites in the United States. The primary measure of the COMET-2 study will be assessed by the unanesthetized Schirmer test at day 14, which as you will recall was statistically significant in the Phase 2b study.

The key secondary outcomes measure will be the SANDE symptom questionnaire score at day 28, which was also statistically significant in the Phase 2b study. In addition, numerous other sign, symptom and quality of life assessments will be performed throughout the 90-day study period. We expect to enroll the first subject in the second quarter of 2022, and we expect the trial to yield top line results in the second half of 2023.

Now I would like to mention two other exciting pipeline programs, AR-1105 for diabetic macular edema or DME; an AR-14034 for wet age-related macular degeneration or wet AMD.

Let’s start with AR-1105. This was the first product candidate to use Aerie’s PRINT delivery platform and the only bioerodible dexamethasone retinal implant to demonstrate six months of efficacy in treating macular edema. These differentiated product features could enable reduced injection frequency and potential to position AR-1105 as a best-in-class molecule. We continue to evaluate options for Phase 3 development of AR-1105 and have partnering discussions underway.

Second AR-14034 is a pan-VEGF receptor inhibitor intended to block all VEGF receptor isoforms for the treatment of wet AMD. AR14034 also uses Aerie’s PRINT platform and is targeted to achieve an injection dosing frequency of up to once every 12 months. We expect to file an IND for AR-14034 by the end of 2022.

Moving to our glaucoma franchise, I would like to spend a few minutes on our global studies and medical affairs initiatives. These studies are intended to continue strengthening the product profile and support the generation of meaningful clinical data to improve patient outcomes.

Starting with our global studies, in February 2022, we reported that our partner Santen have initiated a second confirmatory Phase 3 study with Rhopressa required for approval in Japan. As you know, Santen is taking the lead on next steps in preparation for registration. Based on Santen’s disclosures, we expect Santen to complete Phase 3 studies in 2023.

Moving to medical affairs. I am pleased to note that Aerie continues to have a strong scientific presence at major congresses. We had recent strong showing that the American Glaucoma Society or AGS, American Society of Cataract and Refractive Surgery or ASCRS, and most recently at the Association for Research and Vision and Ophthalmology or ARVO.

All of the abstracts from these meetings are posted to our website once they’re published. At ASCRS two weeks ago, Aerie presented two abstracts related to a clinical study evaluating the use of Rhopressa in Fuchs Corneal Dystrophy and detaining the clinical data from the Phase 2b AR-15512 study in dry eye.

In addition, in May, 10 abstracts related to the glaucoma franchise were presented at ARVO. These abstracts helped to elaborate on the clinical utility of Rhopressa in glaucoma management and the potential of Rhopressa in other ocular indication. Additionally at ARVO Aerie presented abstracts related to AR-15512 dry eye program, as well as the preclinical abstract related to our novel ROCK’Sters ocular anti-inflammatory program. We are gratified with the ophthalmology community’s active interest in our pipeline.

Lastly, I am pleased to inform you that we have initiated a Phase 4 study with Rocklatan in the U.S. for the multicenter, open-label Rocklatan evaluation or MORE study. The study was designed to further demonstrate the powerful efficacy of Rocklatan as a single therapy relative to the use of latanoprast alone, while latanoprast plus additionally one or two individual agents. The first subject in this plan, 180 subject, 12-week dosing study was enrolled in March, and we expect top line data to be available in the first half of 2023.

I would now like to turn the call over to Peter.

Peter Lang

Thanks, Gary. As you expressed before, I’m also excited to be part of the Aerie family. I’ll focus my comments on our financial results for the first quarter of 2022. All numbers that I will review in this discussion will be approximate for easy sharing during the call. For additional information regarding our first quarter results and prior period comparisons, please refer to today’s earnings release and our Form 10-Q, which we will file tomorrow.

Combined Rhopressa and Rocklatan net revenues in the first quarter of 2022 totaled $29.8 million, a 30% increase over the first quarter of 2021. Total costs and expenses include cost of goods sold of $6.8 million, $31.5 million of selling, general and administrative expenses and $25.2 million of research and development expenses.

Our cost of goods sold was essentially flat compared to the first quarter of 2021. Our gross margins improved to 77.3% from 70.8% in the prior year period, mainly driven by increased utilization during the quarter. SG&A expenses reflect an investment in sales and marketing for our glaucoma franchise.

Overall, we expect SG&A to decrease for the remainder of 2022. R&D expenses include continued investment in our clinical programs, plus an $8 million milestone payment made in the first quarter of 2022 related to 512. As discussed earlier, we expect to start a Phase 3 clinical trials for 512 in the second quarter, with additional trials commencing in the second half of 2022. Therefore, we expect an increase in R&D cost through the end of the year.

Our first quarter of 2022 net loss was $35.9 million or $0.76 per diluted share. Total stock-based compensation expense was $4.6 million, of which $0.2 million was included in cost of goods sold, $3.1 million in SG&A, and $1.3 million in R&D. When excluding stock-based compensation expense, our total adjusted net loss was $31.3 million or $0.66 per diluted share.

Over the quarter, the weighted average shares outstanding was $47.5 million. As of March 31, 2022, shares outstanding were approximately $48.6 million. For the first quarter of 2022, our net cash provided by operating activities was $61.9 million, which includes $90 million received from Santen relating to the December, 2021 Santen licensing agreement.

As of March 31, 2022, we had $199.2 million in cash, cash equivalents and total investments. As Raj mentioned, we are reiterating our previously provided 2022 financial guidance. 2022 net product revenues for the glaucoma franchise are expected to be between $130 million and $140 million. Net cash used is expected to be about 15% below 2021. We believe we are well positioned financially to fund our current business plan.

Now I would like to turn the call back to Raj for a few closing remarks before Q&A.

Raj Kannan

Thank you, Peter. To conclude, I believe we are off to an excellent start in 2022 for Aerie. In 2022, we expect to deliver continued revenue growth in our glaucoma franchise. We expect to advance AR-15512 to the Phase 3 registrational studies, as was outlined by Gary. And we continue to make headway in expense reductions to strengthen our balance sheet. We’re excited about building Aerie Version 2.0, and I believe we have the right products, the right plan and the right talent to be successful in growing Aerie sustainably for the future.

Thank you all for taking the time to join us today. I look forward to the year ahead with confidence and on updating you on our progress along the way. Joining us for our Q&A will be Casey Kopczynski, our Chief Innovation Officer and Head of Research and External Innovation; and Jeff Calabrese, our Principal Accounting Officer.

Operator, over to you for Q&A.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Your first question comes to line of Louise Chen from Cantor. Your line now open.

Louise Chen

Hi, thank you for taking my questions here. So first question I had for you is, do you expect any of these macro headwinds like inflation, supply chain issues to impact your business for the remainder of 2022? And then the follow-up question I have is, what is your cash runway, and what are the pushes and pulls on your cash balance. Thank you.

Raj Kannan

Hi, Louise. Thanks for your question. This is Raj. In terms of the macro, right now in terms of inflation, from a production standpoint, we are seeing some increases on our energy cost, for example. But at this time, we haven’t seen any material impact, but we continue to monitor that. And in the supply chain, again, at this time, we are monitoring all of those, including our backups to make sure that we don’t run into a supply chain problem, but it’s kind of hard to predict what it’s going to be as the year progresses.

But at this time, I can tell you that nothing has impacted anything materially from a business perspective. In terms of the cash runway, we didn’t give guidance before, but I can tell you that based on the cash balance that we had, we basically had provided guidance in terms of our net cash burn, which is around 15% less than 2021 around $85 million to $86 million this year.

Given the revenue increase that we’re going to see, given the increasing focus that we have in reducing our net cash burn and the potential modernization that we could have in ex-U.S. markets with our assets. I have said this before that we have no plans to raise cash from a capital markets perspective. So we are very comfortable supporting our current operations. And that’s the best I can answer that question, Louise, instead of providing you an actual cash guidance.

Louise Chen

Thank you.

Operator

Your next question comes from the line of Serge Belanger with Needham & Company. Your line is now open.

Serge Belanger

Hi, good afternoon. I guess, my first question regarding Rhopressa and Rocklatan. You reiterated your sales guide into $130 million to $140 million. Is that based on just script growth or do you expect any improvement in net prices for the products? And then secondly, if you also reiterated one of your pillars was reducing the cash burden rate. Just curious what is on – currently on the table to address that especially on the SG&A side. Thank you.

Raj Kannan

Hi, Serge. This is Raj. Thanks for your questions. We continue to reaffirm that guidance on $130 million $140 million. And if you recall that represented about a 16% to 25% increase over 2021. And if you look at the first quarter 2022, we had a growth of about 30% over a similar period in 2021. So we continue to be confident and it is predominantly driven by prescription growth. In fact, the 1Q 2022 growth was predominantly from prescription growth. In terms of – I think I didn’t get the other question, Serge.

Serge Belanger

Yes. The third pillar of reducing your burn rate for 2022 and what options are on the table to achieve that goal.

Raj Kannan

Yes. So if you look at our first quarter cash – net cash burn, obviously, the first quarter tends to be much higher in terms of the cadence of spend. So when you look at the one-time milestone payment that we had to make for Avizorex going into Phase 3. You’ve got bonus and some severance payments in there. We’re quite comfortable with the guidance that we are provided in terms of reducing our net cash burn from 2021, which is – the guidance was around the $85 million to $87 million in net cash burn for this year. So we remain confident on that guidance, Serge.

Operator

Your next question comes from the line of Annabel Samimy from Stifel. Your line is now open.

Annabel Samimy

Hi, thanks for taking my question. Congratulations on an easy start to the year, I guess, relative to everybody else who sees a lot more seasonality. But maybe you can talk about the marketing message a little bit. So you did describe – touch on how the lower is better is resonating with people. But how much of it is the marketing message is working versus just increased experience with a drug? And are you starting to see additional prescribers. Or is it more that you’re going deeper into the practices? So maybe you can actually talk about the prescriber growth that you have. There used to be metrics shared about you have 10,000 targets, there’s this many weekly prescribers, these are the doctors, et cetera, et cetera. So do you have any metrics like that to help us understand whether the message is bringing on new prescribers?

Raj Kannan

Yes. Hi, Annabel. Thank you for that message. And thank you for the comment on our 1Q performance. In terms of the marketing message, I believe it’s a little too early to indicate better. That is what has driven prescription growth in 1Q, especially for the results that we provided. Recall that we rolled out that marketing message in early March. The reps got trained end of February. But I can’t say, it’s combination of many things, right? The initial – the experience that physicians are continuing to have the positive feedback that patients who remain on Rocklatan and Rhopressa, I think those are all factors in why we see continued strong growth in our franchise. When you look at other indicators, right, we have incrementally more number of prescribers in the first quarter of 2022 versus the fourth quarter in 2021.

And we continue to expand both on the breadth of prescribers, both monthly and weekly. So we look at the overall target of ophthalmologists that we call on, which is about the top 50% to 60% of the highest potential ophthalmologists. We continue to see an increasing breadth of prescription use and increasing depth. So again, from – it’s a little too early, but our message, like I said in the press release and in my prepared remarks, the initial feedback from prescribers from our field force has been quite encouraging, which is a very distinct positioning for Rocklatan, asking for first line or first switch business and positioning Rhopressa from an MOA perspective and potentially as an adjunct, but really asking for the business to Rocklatan. And that’s what we see in terms of at least the initial growth in first quarter of 2021 – 2022. Sorry.

Annabel Samimy

Okay. And if I can ask one more. How should we think about the sales progress? I know that it’s more of a stage rollout and now that you have the Phase 3, I guess, agreement on design for 1105, can we see any partnership progress in the near future? Was the Phase 3 design gating factor?

Raj Kannan

Yes. So we are having conversations. We’re not at a point where I could actually update the market in meaningful way. But we are getting an interest and there are parties in the data room. But at some point, I hope to update the market, because we remain excited about 1105. It is a proof of principle in terms of our PRINT platform, getting a product with an extended dosing delivery versus the current standard care with the steroid in DME. And more importantly, I think this has potential to potentially replace that, right? So we remain excited about that product and we continue to have robust conversations with interested parties who could develop it and take it to market.

Annabel Samimy

And in terms of the EU rollout for the glaucoma franchise.

Raj Kannan

So right now, I think we had said publicly, Annabel, that we are committed to supplying Santen. So we – I think, at this point in time expect to have the launch in early 2023. So I think we’ll update you if it happens earlier, but all our efforts are to make sure that they have commercial supply for the launch to start strongly in early 2023.

Annabel Samimy

Okay. Thank you.

Raj Kannan

Thank you.

Operator

Your next question comes from the line of Stacy Ku from Cowen and Company. Your line is now open.

Stacy Ku

Hi, good afternoon. Thanks for taking our questions and congrats on the progress. So our first question is with this improved managed care experience, is part of that sales force new strategy, increasing clinician awareness that there is seamless access. Is there still any friction left over there? So what has been kind of that experience so far, as well as any commentary about that first line use of Rhopressa and Rocklatan that you spoke about in your prepared remarks. So that’s the first question. The second is, if you could discuss the broader glaucoma market dynamics. With the introduction of generic combigan, would there be any implications to manage care as we’re seeing these really strong net pricing? Thank you.

Raj Kannan

Thank you Stacy for your comments and for your question. I think when you look at our Medicare coverage, we have very strong formulary coverage for Rhopressa and especially Rocklatan in the mid-70s. And I think – and for Rhopressa it’s in the mid-90s. So I think we have very good coverage in which to position ourselves for pull-through opportunities, especially, in the Medicare population, which as you know represents about 60%, right?

So in that, we are very focused right now with our field force to pull-through on that particular business. And I think the first line, our label is quite broad. So from a payer perspective, we did not see any pushback in terms of that positioning. And physicians do like to hear that message in terms of a crystal clear positioning for Rocklatan, especially given that we’re trying to talk about why not use the most efficacious product right from the start.

So we’re continuing to see an improved positive perception of Rocklatan in first line. And if that first line doesn’t happen, remember the biggest bulk of the business lies in patients who are in latanoprost and we’re then asking for the first switch, right? So hopefully, our bet is that our messaging is right. Our strategy is right, and that should continue to grow the Rocklatan prescription and grow the franchise overall.

In terms of the genericization of combigan, what we’ve seen to date is that it has basically taken share from the branded molecule. It hasn’t really impacted from a crossover perspective on any other brand. So the data so far only tells us that combigan has gone generic, but it hasn’t really impacted any other brand, including our franchise. And from a payer perspective, I don’t think this would necessarily cause any reengagement on rebates. I think we are on the high side in terms of where our pulmonary coverage is. And hopefully, that should be the right level that we plan to maintain for the rest of the year. Hope, that answers your question, Stacy.

Stacy Ku

It does. Thanks a lot.

Operator

Your next question comes to line of François Brisebois from Oppenheimer. Your line is now open.

François Brisebois

Hi, thanks for taking the questions. Just a couple here. So on the wet AMD side, it’s pretty competitive field more and more in terms of clinical trials. So I was just wondering, can you just help us understand maybe the delivery platform and how it’s validated and maybe the differentiation here with your product.

Peter Lang

François, I assume you’re talking about 1105, right, from the PRINT technology platform, which is the product that we have that’s Phase 2 or Phase 3 ready.

François Brisebois

Yes. I’m also wondering on the wet AMD side, maybe what’s differentiating and maybe duration wise, what you’re trying to attain.

Raj Kannan

Great. So on the wet AMD side, we certainly have animal studies that point to the confidence that we have in why we are aiming for the target product profile of up to 12 months. I’ll let Casey speak more to the PRINT technology and what has been done to date and why we remain confident about that particular product in wet AMD. Casey?

Casey Kopczynski

Thank you, Raj. Yes, the PRINT platform has really allowed us to create formulations that are distinct from the other competitors in this space that is those who are trying to deliver small molecule products to the back of the eye. We have proprietary polymers that we can use along with other polymers that have previously been used in the back of the eye to get optimal drug elution rate profiles.

And that’s what we’ve managed to accomplish with AR-14034 small molecule anti-VEGF implant is a profile that looks to be able to maintain drug elution through about 12 months in our preclinical studies. And I can say that our preclinical work for the AR-1105 steroid implant allowed us to accurately predict the duration of that implant in our follow-up human clinical trials. So we feel pretty confident that it is potentially achievable to get a once-per-year injection from the axitinib or AR-14034 implant.

François Brisebois

Okay. That’s extremely helpful. And then also in terms of the brand strategy, obviously, Rocklatan first, but I was just wondering, any pushback or any feedback maybe from docs maybe not being aware that reimbursement has come a long way on the Rocklatan front.

Raj Kannan

Yes. François, this is Raj. Good question. That is one of the focus in terms of messages for physicians that may have had a perception initially where they’ve run into formulary issues. That is why we’re very, very focused in making sure that we target those physicians where we feel their predominant plans that cover their patients is where we focus on build up opportunity. So that is part of the messaging to make sure that they understand that Rocklatan is covered, the label is broad, and there is really nothing that they could not – that they cannot use that…

François Brisebois

Okay. And if I could just sneak a quick one here, lastly. I was just wondering, in terms – I know you guys aren’t sharing the net price per bottle anymore. But if we just track scripts and volume and bottles that we see from our side, is it fair to say that from the fourth quarter to the first quarter, there might have been a little drop in the net price or anything there that might be – that might happen again in the future?

Raj Kannan

I think we have always said that we would maintain our net price per bottle. The only reason we did not give any guidance on that, as you know, is that it tends to vary and it can be quite uncertain. But that being said, I think from a TRx perspective, the slight dip that we saw, which is roundabout that 1% from a TRx perspective – potentially reflected in our opinion the annual [indiscernible] deductibles rate that [indiscernible] refills. So we continue to remain confident at the growth rate that we saw. And even from a revenue perspective, given that our guidance was 16% to 25% and our 1Q was at 30%, we remain confident about the guidance that we gave earlier for 2022.

François Brisebois

That makes a lot of sense. And as Annabel mentioned, the lack of seasonality here is pretty nice compared to other companies. So that’s it for me. Thank you.

Raj Kannan

Thank you.

Operator

Your next question comes from the line of Yigal Nochomovitz from Citigroup. Your line is now open.

Carly Kenselaar

Hi. This is Carly on for Yigal. Thank you so much for taking our question. First, we just wanted to ask if you’re comfortable with the current size of the sales force you have now or if that’s something you think can be optimized as well as you roll out this – the refreshed marketing strategy?

Raj Kannan

Hi, Carly. Great question. We continue to monitor two things, right? One is the breadth of the target calls from each rep and how many calls can they make in a day, how do you increase the sales effectiveness. And then we also monitor how are we competitive in target prescriber base that we choose to drive the adoption in the physician. And from both those regards this time, we’re quite comfortable in the share of voice that we have invested in terms of driving the growth for internal Rhopressa.

Carly Kenselaar

Okay, perfect. That’s helpful. And then we just had one quick clarification question on the dry eye registrational program. Will you wait for COMET-2 to read out in the second half of next year before you start the second Phase 3 that would be required for approval? Or do you expect to start a second Phase 3 this year as well?

Raj Kannan

So we plan to start all three studies COMET-2, COMET-3, and COMET-4, which is the safety study – required safety study from the FDA perspective, all three studies this year. They’re slightly staggered. And what we’ve publicly said that we are definitely on track in getting COMET-2 off the ground with first patient enrollment this quarter.

Carly Kenselaar

Okay, perfect. Thanks so much for taking the questions.

Raj Kannan

Thanks, Carly.

Operator

Your next question comes from the line of Jason Gerberry from Bank of America. Your line is now open.

Unidentified Analyst

Hi, this is Terry [ph] on the line for Jason. Thanks for taking our question. To the first, I was curious to get your thoughts on Bausch’s recent Phase 3 data for NOV03 in dry eye and your thoughts of that program as a potential competitor. And then second, I’m curious about the extent of COVID still impacting the marketing efforts for Rocklatan and Rhopressa. Thanks.

Raj Kannan

Okay. Hi, Barry. I didn’t get the first question totally. I got the second question in terms of the COVID impact on our franchise. I can answer the second question and maybe if you could repeat the first question, I can address that as well, but let me answer the second one that I heard clearly. On the COVID impact, we see actually an improving trend from the first quarter towards the end of the quarter, we actually saw improving trends in terms of access.

That’s probably occurring industry wide in terms of the access to physicians face to face in-person details, which we believe – continue to believe are critical along with the other channels that we have in engaging with our customers. But more importantly, I think in 2021, we – I think we did a pretty nice job in continuing to grow our franchise in spite of the access difficulties that we had in seeing our physicians. So it hasn’t impacted us as much as what I tend to see how much it has impacted other products. And we tend to remain confident that hopefully as the markets return back to normal, but we will continue to see an increased growth in adoption and utilization for our franchise. Could you please repeat that first question on Phase 3 on dry eye that you asked?

Unidentified Analyst

Okay, sure. And thanks for that. Yes, sorry if I’m breaking up a little bit. So it was related to Bausch’s recent Phase 3 data for NOV03 in dry eye. Just curious on your thoughts on that and that program is a potential competitor.

Raj Kannan

Yes. I think, Gary, are you on the line and, Casey, are you on the line? So could you address NOV03 Phase 3 program data that we saw?

Gary Sternberg

Yes. This is Gary. I’ll address that. So without speaking directly to a competitor, obviously, the data is the data. We are very comfortable with the target product profile of 15512 program. And I’ll just point out a few points of differentiation of our dry eye program compared to others.

First, we have a very unique mechanism of action. TRPM8, which is a cold sensing receptor. The mechanism of action itself leads to increased tearing and a cooling sensation on the eye. So it’s on target for mechanism of action of dry eye to relieve dry eye. As well, we ran a large Phase 2b study of 369 patients. And although, we didn’t hit our primary endpoint, when we look at all the signs and symptoms that were hit with significance, and we are very comfortable to be able to hit signs and symptoms, multiple signs and symptoms, including the unanesthetized Schirmer’s test, which was highly statistically significant in the Phase 2b study, as well as staining and redness that hit significance at day 84, as well as three symptoms of SANDE score, the dryness score and the discomfort score that hits significance the SANDE score from day 14 and the dryness and discomfort score at day 84 as well.

So we’re very comfortable that our drug, not only based on a mechanistic action, but based on the large Phase 2b data that we have can hit on multiple signs and symptoms. As well, we also ran quality of life metrics, seven measures, including reading, driving, wellbeing and others. These hit significance at day 14 and increased for the remainder of the study. And this was a common finding in the study on both sign, symptoms and quality of life that the Delta between our drug and the vehicle increased over time, giving us confidence that this is something that can be maintained over the long period of time of chronic dry eye.

Finally, our inclusion criteria for Phase 3 will be very, very similar virtually identical to the Phase 2b data – the Phase 2b study. All of these gives us confidence that we’ll be well differentiated in the dry eye market from other competitors, whether it be the Bausch & Lomb product or others.

Unidentified Analyst

Got it. Thank you.

Operator

Your next question comes to line of Oren Livnat from H.C. Wainwright. Your line is now open.

Oren Livnat

Thanks. I have a couple. To get back to the notion of where Rocklatan is fitting in lines of therapy and your efforts to get first line if possible, but switch patients from the obvious latanoprost bucket, if that failed. Can you just talk about, I guess, the volume of patients that are on polypharmacy or combination therapy already. I remember before this product launched, one of the sort of obvious pitches was that you’ve got patients on two, sometimes three, sometimes even four sets of eye drops, paying co-pays on all of them.

And that even with a Tier 3 co-pay perhaps for Rocklatan, you’d come out ahead paying one co-pay and get same or better efficacy, maybe with even better tolerability. And I don’t think we’ve heard that talked about in a long time. So I’m wondering if you could speak to that and then have a follow-up on COMET-2. Thanks.

Raj Kannan

Hi Oren, thank you for that question. You’re correct. I think the way the market is split up and it’s quite dynamic at any given point in time, roughly about 45% to 50% are on therapy on latanoprost. And then it’s about a half of these patients are multiple therapies some two, some three, and some even four agents. And yes, the initial message was always about the convenience and the one co-pay which was – which resonated quite well. But we believe that the message that resonates with physicians is on efficacy. And the reason why we switched our messaging from the convenience, one co-pay, which is still a relevant message, but it’s a secondary message now. The primary is really driven towards efficacy, which is the primary driver of brand choice.

So what we’re saying is, if you are choosing even latanoprost is chosen, not just because it’s generic, but it also in the physician’s mind, it’s a very efficacious product. And so we are saying, there is really nothing that surpasses Rocklatan’s efficacy, and why not start with the most efficacious agent that you have that could potentially reduce the progression towards vision loss, which aligns very nicely with the medical reason why they prescribe pharmacological agents for patients with primary angle glaucoma.

Oren Livnat

Okay. And then on COMET-2, did I hear correctly that you’re saying the primary endpoint is going to be just the unanesthetized Schirmer and that the SANDE symptom endpoint is going to be a key secondary? If so, is that sufficient to get a sign and symptom label and would COMET-2 be the same ordering or flip flopping endpoints? What’s the approach here and what kind of label are you trying to get? Thanks.

Raj Kannan

Yes. So let me just maybe comment on the label and then Gary maybe you could jump in on the COMET-2 endpoint. So the label is for both signs and symptoms, right, for patients who have dry eye disease. So that is the label that we aim to target with our current clinical design. And then COMET-2 in particular and also COMET-3, we decided to go with one endpoint, because that’s all that was needed for an approval perspective, but we remain confident, as Gary said in his previous comments that we should be able to get both signs and the strong results on symptoms and be a very differentiated product. Gary, do you want to add anything that I may have missed?

Gary Sternberg

Yes. I’ll just reiterate that our primary endpoint is unanesthetized Schirmer testing at day 14. That’s our only primary. And our first secondary endpoint is the SANDE symptom score at day 28. So if – once we – if we hit our primary, that’s enough for approval, as Raj has indicated. And then we would move to our secondary endpoint on symptoms and the target is to get signs and symptoms, not only in the label, but in the clinical trial section. So it can be promoted based on improvement of symptoms.

Oren Livnat

Okay. And is that something that actually one gets in the indication statement signs or signs and symptoms? Pardon me, if that’s a dumb question?

Gary Sternberg

No, that’s correct. You get signs and symptoms in the label.

Operator

Okay. Thank you. Thank you for your participation this afternoon. This concludes today’s call.