Operations

6 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1.	Operations

EyePoint Pharmaceuticals, Inc. (together with its subsidiaries, the “Company”), incorporated in Delaware, is a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products for the treatment of eye diseases. The Company has two products, YUTIQ™ and DEXYCU™, which were approved by the United States (“U.S.”) Food and Drug Administration (“FDA”) in 2018.

YUTIQ, a three-year non-erodible fluocinolone acetonide insert for the treatment of non-infectious posterior uveitis (“NIPU”), was approved by the FDA in October 2018 and launched directly in the U.S. in February 2019. Injected into the eye in an office visit, YUTIQ is a micro-insert that delivers a micro-dose of a corticosteroid to the back of the eye on a sustained constant (zero order release) basis for approximately three years. YUTIQ is based on the Company’s proprietary Durasert™ sustained-release drug delivery technology platform, which can deliver drugs for predetermined periods of time ranging from months to years. NIPU is the third leading cause of blindness in the U.S. and affects between 55,000 to 120,000 people.

DEXYCU™ (dexamethasone intraocular suspension) 9%, approved by the FDA in February 2018 for the treatment of post-operative ocular inflammation, is administered as a single dose at the end of ocular surgery and is the first long-acting intraocular product approved by the FDA for

this indication.

DEXYCU utilizes the Company’s proprietary Verisome

drug-delivery platform, which allows for a single intraocular injection that releases dexamethasone, a corticosteroid, over time. There are approximately

4.8

million cataract surgeries performed annually in the U.S. and the Company launched DEXYCU directly in the U.S. in March 2019 with a primary focus on its use following cataract surgery. The Company acquired DEXYCU in connection with its acquisition of Icon Bioscience, Inc. (“Icon”) in March 2018.

ILUVIEN

for diabetic macular edema (“DME”), the Company’s lead licensed product, is sold directly in the U.S. and several European Union (“EU”) countries by Alimera Sciences, Inc. (“Alimera”). Retisert

, one of the Company’s earlier generation products, was approved in 2005 by the FDA for the treatment of NIPU and is sold in the U.S. by Bausch & Lomb Incorporated (“Bausch & Lomb”).

The Company’s development programs are focused primarily on developing sustained release products that utilize its Durasert and Verisome technology platforms to deliver approved drugs to treat chronic diseases. The Company’s strategy includes developing products independently while continuing to leverage its technology platforms through collaborations and license agreements.

The Company has financed its operations primarily from sales of equity securities, long-term debt and the receipt of license fees, milestone payments, research and development funding and royalty income from its collaboration partners.

The Company has a history of operating losses and, to date, has not had significant recurring cash inflows from revenue. The Company had cash and cash equivalents of $45.3 million at December 31, 2018.

In February 2019, the Company refinanced its existing $20.0 million term loan (see Note 10) and made an initial draw of $

35.0

million from a new term loan agreement (the “CRG Loan Agreement”) with CRG Servicing LLC (“CRG”) (see Note 18), resulting in incremental net proceeds of approximately $11.4 million.

Subsequent to the refinancing, the Company had cash and cash equivalents of $48.5 million at February 28, 2019.

Pursuant to the CRG Loan Agreement, the Company has an option to draw up to an additional $15.0 million on or before June 30, 2019.

An additional $

10.0

million is available subject to the achievement of $

25.0

million of 3-month trailing product net sales on or before March 31, 2020.

During the first quarter of calendar 2019, the Company began selling its two products, YUTIQ and DEXYCU. The cash flows related to these two commercialized products are dependent on the amount and timing of cash receipts from the sales of YUTIQ and DEXYCU. The Company has limited history of direct commercialization of its products and there is inherent uncertainty associated with the cash flows related to these two newly commercialized products.

A combination of the Company’s limited currently available cash, cash equivalents and available borrowings, together with its history of losses, absence of recurring inflows of cash from operations and the uncertainty in timing of cash receipts from its newly launched products raises substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these financial statements.

In addition to the cash flows related to the launch of the Company’s products, management’s plans to extend the Company’s ability to fund its operations include obtaining additional financing from the sale of equity securities through an underwritten public offering and/or the sale of shares of the Company’s common stock (the “Common Stock”) through its existing at-the-market (“ATM”) program or from other sources or, as applicable, reducing or deferring operating expenses.