Eyenovia Inc

NASDAQ:EYEN

Greetings, and welcome to the Eyenovia Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Eric Ribner from Investor Relations. Thank you. You may begin.

Good afternoon, and welcome to Eyenovia's Third Quarter 2024 Earnings Conference Call and Audio Webcast. With me today are Eyenovia's Chief Executive Officer, Michael Rowe; Chief Operating Officer, Bren Kern; and newly appointed Chief Financial Officer, Andy Jones. Welcome, everybody.

This afternoon, we issued a press release announcing financial results for the 3 months ended September 30, 2024. We encourage everyone to read today's press release as well as Eyenovia's quarterly report on Form 10-Q for the second quarter ended September 30, 2024, which was just filed with the SEC. The company's press release and annual report are also available on our website at www.eyenovia.com. In addition, this conference call is being webcast on the company's website and will be archived and available for replay for future reference.

Please note that on today's call, we will be discussing products, product concepts and candidates, some of which have yet to receive FDA approval. Please also note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during the call, Eyenovia's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.

These forward-looking statements are subject to a number of risks, which are described in more detail on our annual report on Form 10-K and subsequently -- subsequent quarterly reports on Form 10-Q. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 12, 2024. Eyenovia undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by the applicable securities law.

With that said, I'd like to turn the call over to Michael Rowe, Eyenovia's Chief Executive Officer. Michael, the floor is yours.

Thank you, Eric, and welcome, everyone, to our third quarter 2024 financial results conference call. During the third quarter, we made significant progress towards transforming Eyenovia into a leader in improving outcomes from topical ophthalmic medications built around our Optejet technology. First and most near-term, we are rapidly approaching a potential Phase III efficacy data readout for MicroPine, our pediatric progressive myopia product, which, if approved, provides entry to a multibillion-dollar addressable market opportunity.

Second, we are making advances with our next-generation Optejet technology and are excited about the progress and what this will mean for our profitability profile. Third, we have been commercializing our mydriasis product, MydCombi, the first FDA-approved product based on Optejet technology, and we also launched our second FDA-approved product, clobetasol, an advanced ophthalmic steroid with a highly desirable profile. Fourth, we are advancing our Optejet development pipeline in dry eye with clobetasol serving as the cornerstone for 3 compounds in late-stage development and partially funded through our strategic partners.

Now let's take a deeper dive into MicroPine, our Optejet-based low-dose atropine product candidate for pediatric progressive myopia. Pediatric progressive myopia is increasingly recognized as an epidemic in both the United States and globally. In the U.S. alone, of the nearly 20 million children with myopia, approximately 5 million are considered at risk of losing functional vision due to this disease. While glasses and contact lenses are the current standard of care for children diagnosed with progressive myopia, they are not always appropriate for the youngest children, who are also at the most risk of [ myopia ] progression.

Many younger children do not tolerate contact lenses well, have difficulty putting something on their eye or may cause themselves injury or illness due to poor lens insertion techniques. Atropine has been shown in prior studies such as LAMP and ATOM to slow myopia progression, and we believe our proprietary atropine formulation administered with the Optejet may offer benefits beyond what could be obtained with a traditional eye drop. With the Optejet technology, children in our Phase III CHAPERONE study as young as 6 years old are dosing themselves nightly with minimal parental supervision. They can self-administer the dose because the Optejet doesn't require any head tilting or manipulation of an eye drop or bottle, making aiming with a built-in mirror and medication administration achievable.

The dosing itself feels like a gentle mist and children have become familiar and comfortable with the dosing process quickly. This has the potential to reduce dosing anxiety and minimizes the myriad of struggles parents face when dosing children with conventional eye drops. The side effects of atropine dosed with the Optejet have been notably infrequent and mild in the CHAPERONE study. These results are consistent with what we have come to expect with our advanced drug device dosing system. Throughout the trial, our engineers have been keeping track of the performance of the Optejet with embedded firmware that also helps study doctors to better understand how and when the device has been used.

Each time the dosing button is pressed to administer medication, the device records the event and stores the information. This information can be accessed and reviewed by clinic staff during the patient visit. For the commercial product, we anticipate MicroPine will be equipped with our OptiCare system, which can notify patients and their parents and their caregivers when to administer their spray dose as well as communicate important compliance and adherence information for the treating doctor. Our engineers are working today on plans to validate the system as part of our anticipated future NDA submission.

We are continuing to advance the Phase III CHAPERONE study and are looking forward to the outcome of an analysis of the 3 year efficacy and safety data very soon. If this analysis conducted by an independent data review committee indicates that we have likely achieved our efficacy endpoint, we would perform a complete analysis and discuss with the FDA an accelerated pathway towards an NDA submission as soon as early 2026. We look forward to providing additional updates on this program during our upcoming KOL virtual event on December 11.

Now let's talk about the advances our team has made with our Gen 2 Optejet. We recently completed the first phase of manufacturing registration batches and are now preparing those cartridges for sterilization and subsequent drug stability testing. This is a key step in the FDA review process for this technology. We are leading with MydCombi as this is our most expeditious path to registration, and we believe would provide a foundation for all subsequent products that are developed for use with the Optejet.

As a reminder, the Gen 2 device has many advancements over its first-generation predecessor, including one button use and compatibility with our digital compliance monitoring program, OptiCare. It was also developed with fewer parts and is more efficient to manufacture. This greater efficiency translates to lower costs, helping us to achieve margins of up to 90% on our planned product line. We view the introduction of the Gen 2 Optejet as a significant upcoming inflection point for the company.

Now let's look more deeply into MydCombi. MydCombi is also very important to Eyenovia as it has derisked our Optejet technology from a regulatory point of view. Prior to the approval of MydCombi, there were no other products in ophthalmology that combine the approval of a drug with a device containing electronics. We worked very closely with the FDA to identify the various activities, studies and validation processes necessary to get our device approved, allowing MydCombi to serve as the precedent for any other Optejet-based product. Obtaining FDA approval by itself was a terrific milestone for our company, and we are now recognized as a leader of this technology within eye care.

We also understand that introducing this technology into the market requires us the paradigm of using eye drops. With this in mind, we placed MydCombi in about 200 offices and work closely with those doctors and their technicians to learn more about their perceptions of the Optejet platform. We found that after using MydCombi 50 times, which translates to about a week, both doctors and technicians felt truly comfortable with the change from eye drops. We also found that 4 out of 5 eye care professionals felt that MydCombi was a substantial improvement over eye drops, especially when dilating older people, children and those who needed to return to work more quickly as their experience with MydCombi was that pupil dilation did not last as long as it did with eye drops, which was highly desirable. As a result of these positive findings, our sales force is now focused on 3 things: formulary acceptance of key institutions, retention of the existing offices and converting another 200 offices over the next few months, which they are working on right now.

Before turning the call over to Bren, I'd like to cover a recent change to our Board of Directors. In September, our Founder and Board member, Sean Ianchulev, stepped down from the Chairman role for personal reasons. He will remain on the Board and also continue to serve as our Executive Medical Consultant. Charles Mather, who has served on our Board since 2018, has been appointed our new Chairman. Charlie has significant experience and expertise in capital markets, and his guidance has served us well as we work to keep the company sufficiently funded to advance our development initiatives. We are pleased that we will continue to have both Charlie and Sean as vital resources on our Board at this important time for Eyenovia.

At this point, I'll turn the call over to our Chief Operating Officer, Bren Kern. Bren?

Thanks, Michael. At the end of September, we announced the launch and commercial availability of clobetasol developed by our partner, Formosa Pharmaceuticals. Clobetasol is FDA approved for the treatment of pain and inflammation following ocular surgery and the first new ophthalmic steroid to come to market in over 15 years. With its favorable efficacy and safety profile, convenient twice-a-day dosing regimen, and streamlined distribution designed to eliminate complications from insurance, we're seeing strong interest amongst doctors and have already placed clobetasol into local pharmacies supporting over 100 offices.

Clobetasol perfectly complements MydCombi, our FDA-approved and commercially available mydriasis agents, offering additional value to ophthalmic offices while maximizing the utilization of our 10 person sales force. Offices commonly show interest in both clobetasol and MydCombi. The launch of clobetasol signifies a substantial step towards the execution of our commercial strategy. We also announced the results of commission market research indicating strong level of interest from ophthalmic surgeons after their review of prescribing information. 100 ophthalmic surgeons were involved in this research and ranked efficiency and safety as the most important characteristics of post-operative steroids.

In clinical studies of clobetasol, approximately 80% of patients had complete relief from pain as soon as 4 days post surgery versus approximately 50% for patients who had vehicle. Clobetasol safety information was also of importance with the same study results showing that no single adverse event affected more than 2% of patients. These top 2 characteristics piqued the surgeons interest. The research also showed that managed care coverage challenges were a significant concern for most of the doctors. Eyenovia is addressing these concerns by offering clobetasol to patients at a low fixed price regardless of their insurance status. This is seen by surgeons as a great way to eliminate insurance complications that often burden their office staff. In summary, the majority of surgeons surveyed based solely on the actual prescribing information and pricing indicate a high level of interest in prescribing clobetasol.

Turning now to our manufacturing facilities. Recently, we successfully completed 2 audits of Reno, Nevada facility, one by the Nevada Board of Pharmacy and the second by the FDA. Receipt of these licenses enabled Eyenovia to manufacture, store, transport and distribute our products, another significant step in transitioning Eyenovia to a commercial company.

I'd now like to switch gears with an update on our partnerships, beginning with dry eye. Recall in our last quarterly update, we discussed 3 development collaboration agreements each -- with each drug being a primary candidate to leverage our Optejet dispenser. Nearly 16 million Americans suffered from dry eye with treatment expenditures totaling over $3 billion in the U.S. and $5 billion globally. Symptoms of dry eye can significantly interfere with daily life and many patients remain unsatisfied with available therapies. According to our recent survey by the American Academy of Ophthalmology, 48% of patients reported carefully following their treatment plans, but only 13% experienced lasting relief.

We're excited about our collaboration agreements in the field of dry eye. In brief recap for Formosa, we signed an agreement to develop a formulation of clobetasol in the Optejet as a potential treatment for acute dry eye and in other indications. This development program, which will require 2 15 day clinical trials, will be free of any upfront fees from Eyenovia or development milestones to Formosa in less and until it receives FDA approval. For Senju Pharmaceuticals, we also signed a collaboration agreement to develop a new adjunctive treatment for chronic dry eye disease. We will work closely to develop Senju's SJP-0035, initially intended to facilitate epithelial wound healing as a candidate for use with the Optejet to treat chronic dry eye. This potential drug device combination is unique as it is being designed for use alongside other dry eye medications. In other words, we believe it would be -- it would complement existing products rather than competing with them.

We are working towards requesting a meeting with the FDA later this year, followed by anticipated completion of a Phase IIb study in 2025. If successful, the companies may expand this collaboration and initiate 2 Phase III studies by 2026. To date, SJP-0035 has been tested in prior Phase I and Phase II studies as a standard eye drop across 250 subjects at multiple doses. With these studies, SJP-0035 was well tolerated, providing promise to support chronic dry eye indication.

And finally, SGN. We entered into a collaboration agreement with SGN Nanopharma to leverage its proprietary myocellular nanoparticle platform known as the MNP platform. This platform allows for the distribution of active pharmaceutical ingredient in 3 or more phases, thereby improving its bioavailability, biodistribution and pharmacokinetics. We have been conducting feasibility and manufacturing testing with SGN's Phase III-ready ophthalmic cyclosporine formulation, SGN-101, in combination with our Optejet device as a potential treatment for chronic dry eye. This faster working cyclosporine, combined with the Optejet dispenser to be a powerful new treatment option for this large underserved market. With the SGN collaboration, we are hopeful that we may have a Phase III-ready asset next year in chronic dry eye. With these 3 agreements, we have the potential to make strong inroads into the entire dry eye market, a $3 billion annual addressable U.S. market serving a multimillion patient population with unmet needs.

I'll now provide an update on our existing licensing program with Arctic Vision, which covers all 3 of our products, MicroPine, Apersure and MydCombi in China and South Korea. This licensing program provides for sales royalties in addition to development milestones. As Michael said earlier, MicroPine, in particular, is a significant opportunity in China for pediatric myopia and part of the $5 billion global market. If approved, MicroPine could be a potentially meaningful source of long-term nondilutive funding for the company.

To date, our licensing agreement with Arctic Vision has generated approximately $6 million in licensing fees, and we have the potential to earn an additional $37 million in net license and development milestones over the next 3 to 6 years. If our products are approved upon commercialization, we'd also be eligible to earn significant sales royalties. We are excited about the improvements the Optejet may provide for patients required to deliver topical ophthalmic medications and believe this platform has widespread utility.

To that end, we continue to assess our potential pipeline expansion opportunities. Similar to Formosa, Senju and SGN, we are seeking opportunities which can leverage the Optejet technology in additional large ophthalmic indications such as glaucoma.

I'd now like to turn the call over to our new Chief Financial Officer, Andy Jones. Andy?

Thanks, Bren. I'm very excited to be here with everyone today as part of the Eyenovia team. For the third quarter of 2024, we reported a net loss of approximately $7.9 million or $0.11 per share on approximately 69.5 million weighted average shares outstanding. This compares to a net loss of $7.3 million or $0.18 per share and approximately 40.1 million weighted average shares outstanding for the third quarter of 2023.

Gross loss for the third quarter was $131,000, which compares to $12,000 for the prior year quarter. The losses are primarily the result of adjustments to write down inventory to net realizable value during the respective periods related to MydCombi and our Gen 1 device. We will likely continue to incur such losses on sales of our Gen 1 device. However, we anticipate that positive margins on clobetasol sales will offset those losses as that channel grows.

Research and development expenses totaled approximately $3.5 million for the third quarter of 2024, and this compares to $3.6 million for the third quarter of 2023, a slight decrease, which reflects the reallocation of internal resources to commercial production. For the third quarter of 2024, general and administrative expenses were approximately $3.7 million as compared to $2.9 million for the third quarter of 2023, and that's an increase of 27.3%. That increase consisted primarily of $647,000 in salaries and benefits, primarily related to the start of the company's commercialization efforts.

Total operating expenses for the third quarter of 2024 were approximately $7.2 million as compared to $6.5 million for the same period in 2023. This represents an increase of approximately 10.6%. Our third quarter 2024 operating expense figure also included approximately $1.2 million of non-cash expenses.

At September 30, 2024, we reported unrestricted cash of approximately $7.2 million, this includes net proceeds of approximately $10.7 million raised during the quarter through securities offerings. We continue to evaluate capital raising structures to fund our ongoing strategy and to make near-term payments on our Avenue loan. Also, as always, we continue to look at ways to improve our operating efficiencies and control expenses. We are excited about our commercial portfolio, our development pipeline and our current and future partnerships that leverage the Optejet platform. We believe that we have established a foundation for growth as a leading ophthalmic company with a novel and highly differentiated technology and applications across several very large market ophthalmic indications.

In conclusion, we are very pleased with our progress in the third quarter of 2024 and expectations for subsequent periods. To summarize our key highlights today, first, we are preparing for an analysis of the 3 year efficacy data from our ongoing Phase III CHAPERONE trial of MicroPine in pediatric progressive myopia this quarter. If positive, this data may allow us to significantly advance our remaining development time line. Also, we commenced the manufacture of registration batches of MydCombi and our state-of-the-art Gen 2 Optejet device. We also announced the U.S. launch and commercial availability of clobetasol, which is the first new ocular steroid approved in more than 15 years.

Customer feedback has been very positive, and we are very excited about the opportunity here. With over 6 million surgeries performed each year in the U.S. for which patients could potentially benefit from clobetasol, we believe that even a low single-digit market share would be very meaningful for us. We entered into development collaborations with Formosa, Senju and SGN to develop novel therapeutic formulations for the Optejet that would potentially address unmet needs in acute and chronic dry eye disease.

Also, our commercial launch of MydCombi continues to track well with the product now in use at over 200 ophthalmology offices around the country. And finally, our licensing agreement with Arctic Vision is progressing well and remains a promising avenue for significant development and regulatory milestones as well as the potential for sales royalties.

This concludes our prepared remarks. We would now like to open the call to questions. Operator?

[Operator Instructions] The first question is from Matthew Caufield from H.C. Wainwright.

So as we look to the CHAPERONE trial, what are the most important distinctions for setting expectations to define success? Obviously, we're looking at the myopia progression of less than 0.5 diopters. But are there other top points that are most clinically meaningful or relevant as we get closer to that readout?

Thank you, Matt, and it's a very good question. So the way this is going to work is that the independent review committee, which is truly independent of us and is made up of expert medical doctors and optometrists in the field, they're going to, after they meet, tell us whether or not at least one of the doses in the CHAPERONE study appears to have reached statistical significance over placebo. Once that happens, then our company, Eyenovia will make a decision to open the database and dive into the data, which will take a few days more to see exactly what's going on.

Things that we will be looking for, obviously, is the efficacy endpoint that you talked about, which is the number of -- or a portion of patients that do not progress more than 0.5 diopter after 3 years of therapy. But in addition to that, the things I would like to look at are the things that make the Optejet very special. And those would be things like the side effect profile, where we anticipate because we're in ophthalmic spray that we should be more comfortable than would be expected from an eye drop or things later on about compliance, where we would want to see that the children in the study were able to comply with therapy more than what you have seen in historical studies that are similar.

Another one we'd be looking at is there has to be a PK or blood level evaluation as well. And we'd like to see that there's very little exposure systemically to atropine during the study, too, which could be another advantage. So those are the types of things that differentiate the Optejet delivered product versus perhaps an eye drop that we want to look at.

Very helpful. And then do you mind if I ask just one quick follow-up on CHAPERONE as well?

Sure.

So with that trial dosing as young as 6 years old, which you mentioned, is there a sense of what age range progressive myopia is most commonly identified in practice? Like presumably, children are identified a little bit earlier than that. Is that accurate or...

Right. So there's actually a number of publications in the area. And one of the things that we've been told is that the way that these children are identified is you have a child coming in usually when they're in kindergarten when they first get their eyes examined. So they're 5 years old, 6 years old, they come in, they're myopic, the doctor looks around, both parents are myopic. That's usually a very good signal that there's probably a genetic component and they're at the most risk. And you want to capture them when they're 5, 6, 7, 8 years old because the progression of myopia is tied to the development of the eye. So the faster and more the eye is developing when the children are younger is when you have greatest progression. By the time you get to somebody who's maybe 14 or 15, you've already kind of lost a lot of that opportunity. So the goal is to find them and find them early.

The next question is from Matt Kaplan from Ladenburg Thalmann.

Just a follow-up on the CHAPERONE interim analysis. What's the potential powering that you'll have with this interim analysis as you go into it?

Thanks, Matt, and always good to hear from you as well. I wish I had the statistician here. I believe the power calculation was something around 85% with what we have, and that's at a p-value of less than 021. If I'm off by a little bit, please don't hold me to that because I'm trying to remember what was in the statistical plan. But it's adequately powered at this point, and that's why we're having the independent review committee take a look at the data.

And in terms of how that works in terms of the independent review committee gives you an answer and then you do the full analysis. Is that the way it works? And [ when we would ] get the full analysis, okay.

You're right. So what happens is the first step is they get to look at the data. Nobody at Eyenovia sees the data. So it's not open to us. So they see it, and then they say, yes or no, there's something here. If there is something here, then Eyenovia makes the decision to go ahead and open, excuse me, open the database at that point, and then we would do the full analysis, and that will take several days to see exactly what's in there.

Okay. Great. And if this is positive and you do the analysis, what would be the time line to a potential NDA filing in this indication? And what would be the rate-limiting steps?

Right. So if the analysis is positive and after talking with the FDA, they confirm that we have the way to move forward with the study, we could be looking at an NDA filing in the first half of 2026, which is about 2 years earlier than we had planning. So this is planned. So this is a great way to accelerate the entire program. In terms of what could be in the way, I'm not really sure that there would be anything because if we have a positive study, what the FDA would be looking for is efficacy and how does that compare to safety. And in the mask data, which we've been looking at, we have a great safety profile. There's been no significant adverse events that are treatment related than the AEs we do see are the ones that you would expect from this kind of therapy, and they've all been mild and very short-lived.

And are you able to leverage the existing atropine safety data to facilitate the NDA filing?

Well, the FDA is allowing us to use the LAMP study and the ATOM study in place of one Phase III study. So yes, for that. For us, I'm sure that we'll want to reference that, but I think we'd love to have our safety data in that label because I believe, and I haven't seen the data yet that our safety profile may be superior to what you would get with an eye drop just simply because we have the lower dose volume.

The next question is from Lachlan Hanbury-Brown from William Blair.

I guess, first, can you just help us understand the revenue number in the quarter? I mean it looks like it was down over Q2, but you did report an increase in the number of centers or practices using MydCombi. So can you just explain the dynamics there?

Yes. So we're super excited about MydCombi. We have it in over 200 offices with a good response from those folks. Our next goal is to continue to push that out to additional offices with the goal of having 200 more. So the revenue number in Q3 is about $2,000. We think we could go up from there. As you know, we have a loss on those sales, but that was to be expected. And one of the benefits of getting this out there, in addition, obviously, to the cash flow that we get from it is just having the product out there being used, providing feedback on it as we progress to Gen 2. But I think that revenue number also reflects that we were preparing for the launch of clobetasol, and we feel like having both of those products out there with our sales team will benefit both channels in the current and future quarters.

Right. Let me add to that also, and thank you, Andy, that MydCombi, like any pharmaceutical product, when you go and you launch it, the first thing you're going to do is you're going to bring samples into the marketplace because people are going to want to try your new product. In this case, we're bringing a brand-new technology that people need to be exposed to, they need some training and they need to use it actually on patients. So what you're seeing here is that while we're in over 200 offices now, it's because we've pre-qualified these offices as potential MydCombi offices, placed product in there as samples and they've been using them, and now they're reordering.

So you're going to see the reorders come in the fourth quarter. We had, for example, the University of California just had ordered 15 more cartridges in the past couple of days. So now that they've actually used it and they see its benefit, they're ordering more of it. And that's why the sales force is now going to be let loose to sample another 200 offices and do the same sort of thing. And then lastly, what Andy had said about helping to leverage clobetasol, it does do that because we can bring both of the products in, they solve 2 different issues for the same thing. Pre-surgical, you have MydCombi, and then post-surgical, you have clobetasol. So it's a nice way to round out that sales call.

Great. And on clobetasol, it sounds like you're seeing good interest. Can you maybe just talk a bit more about what you're seeing sort of in the field? I think you said you were in 100 pharmacies for offices. Is there anything you can provide on sort of how many doctors have used it or anything along those lines at this point?

I don't have those figures, but what I can tell you is what we're finding is that the doctors are very attractive to the profile and very interestingly, more attractive to how we're distributing because they do have so many problems with prior authorizations and other issues with managed care for this class of drugs. And we find that what's working very well for us is we are selling clobetasol into the mom-and-pop pharmacies that are usually located in the medical arts buildings and the other places near where the surgeons are. And they just very simply write the product, the patient goes downstairs, picks it up. The price is always the same regardless of their insurance status, no mess, no fuss, and that's working for them. And we're getting reorders now from those pharmacies. So that is something that's working great, and we look forward to finding more of those opportunities.

The next question is from Kemp Dolliver from Brookline Capital Markets.

Great. A couple of questions. First on MydCombi, when you mentioned 200 additional offices, did you mention a time frame for that?

Kemp, I didn't, but I'll share it with you now. They're going to hit those 200 offices this quarter.

Okay. Fabulous. And -- when we -- the office statistic is one way -- it's kind of like a biomarker because offices vary in their size and traffic levels. So how should we think about, say, the number of whether your technicians or physicians, how many units are out there roughly?

Right. We don't go into a -- we pre-qualify an office to have at least 5 lanes. So you would usually have 5 techs with their doctors working simultaneously. So that would be the minimum size office that we would be going into.

Great. That's very helpful. And my last question is to go back to the relationship between revenue and cost of sales this quarter because in prior quarters, we've seen some costs that were related to buying back the MicroPine inventory from Bausch & Lomb and completely unrelated to MydCombi. So this quarter, is this an apples-to-apples relationship? Or are there other expenses in there?

No, the cost to reacquire the product on our former relationship, those would be outside of cost of goods sold. So those wouldn't be included in that number. The numbers you're seeing coming through COGS are adjustments primarily for either short-dated inventory or for overhead that's applied to finished goods that we have to reduce the net realizable value. So those numbers can fluctuate depending on what we have in terms of inventory and when that might expire or in terms of how much overhead that we're [ applying product. ]

We anticipate as those volumes increase, that number would change. I think when you're comparing, for example, the second quarter with the third quarter this year, I'd say that those were different adjustments. I think in the second quarter, it was more related to short dating on some of our finished goods that we had produced early on in the commercialization and the development of that inventory. Another thing to point out about these losses is that, much of those costs, as I mentioned, they might be overhead or they might be inventory. Those costs are all sunk costs. So they're not a huge -- they're not a drain on our cash because those have already been committed in terms of overhead or in terms of inventory purchases.

But we'll continue to look at those every quarter. But I don't personally see anything alarming here. And I think the adjustments have been a little bit different each quarter, but we'll continue to look at them, and we'll probably continue to see some of that. But as I mentioned, as we grow other channels in this channel, we expect those -- the magnitude of those to wane.

The next question is from Len Yaffe from Stoc Doc Partners.

I had 2 questions for you, Michael. The first is you touched on this, but given with MicroPine, you're looking at a pediatric population, which are very sensitive to drug delivery. Could you talk about the advantages that the Optejet will likely have versus traditional dispensing to make sure you're getting the right dose in the patient in order to be able to have the appropriate effect?

And then the second question, and you may have mentioned this, I could have missed it, was I'm trying to understand -- well, I know that there may be -- that there's scheduled to be possibly the interim look soon. But when will the public, when will an announcement be made in terms of what those top line results are? Because I'm trying to understand the time frame given your current cash position to when shareholders, potential investors would understand what the top line data are.

Thank you, Len. Let me answer the second question first. The independent data review committee, which is truly independent from us, they are meeting very, very shortly. Now getting them to meet when they're all very busy, well-recognized experts in the field, I'm sure has not been an easy feat for the Chairman of that committee, but that should be happening any day now. And once that does happen and we get an answer from them, our commitment is to share that answer within a day of when we have it. So all of those...

But is it [ the data ] or is it just a yes, a go/no-go?

The answer is just the go/no-go. It's going to take us about, I would say, several weeks after that to actually dig into the data to say exactly what's in there. But the go/no-go is going to tell you if it's go, there was at least one arm that was statistically superior to placebo. So that's pretty significant information just from that. For what I believe our product offers that's superior to eye drops in pediatrics, there's a number of things. If anybody who's been a parent has ever tried to administer eye drops to their child, they know that, that's difficult to begin with just to do that, never mind the child doing it by themselves. I think the exposure is another issue. You have less systemic exposure with the Optejet than you would with an eye drop just purely because you have less volume.

And we actually have published data on phenylephrine, for example, that shows that, that difference is about 33%. And when you're talking about a 40 or 50 or 70 pound child, that could be meaningful, that systemic exposure over 3 years. Topical tolerability, the stinging that's associated with low pH eye drops that you don't seem to get the same kind of reaction with the Optejet because it's the lower volume and it's gently sprayed on to the eye. And then, of course, all the compliance assistance that you get with the Optejet. So you can actually see what the child is doing because if child is not taking the medication, it's not going to do the many good over the long-term. So there's just -- those are 4 things I can think of off the top of my head. I'm sure there's probably others as well, and we see those as meaningful differences.

Great. And then just so I understand again, the independent committee will evaluate the data, let you know and then you'll take a couple of weeks to go through the data. When would be the earliest that the public will be aware of what the top line results are? Is it soon after that? Or is it not for another quarter or 2?

No, it will be -- it won't be another quarter or 2. It will be, I would say, within a quarter, within the same quarter.

The next question is from Kemp Dolliver from Brookline Capital Markets.

I never left. I just want to clarify the timetable based on your -- a couple of your comments because earlier on, you made reference to your review taking several days. And then you said just now that it will take several weeks. I don't know if we're -- if those refer to the same steps in the process. But I just want to be clear that I understand the timetable you laid out.

I'm sorry. So I'm not sure exactly when we're going to get the information from the data review committee. When we do have that, we will share that very quickly. And then we will take the time, and I don't know if the time is going to be a week or it's going to be 4 weeks to go through that data. But as soon as that analysis is done, that's when we will share it. But prior to that even happening, when that DRC recommendation is communicated to us, we will share that, and that in itself is a pretty meaningful event.

Okay. Great. So it's essentially going to be potentially 2 disclosures?

Yes. I would say that's correct.

This concludes the question-and-answer session. I would like to turn the floor back over to Michael Rowe for closing comments.

Thank you, operator, and thanks to everyone on the call today for taking the time to join us. This is an exciting time to be with Eyenovia as we prepare for several transformative events all occurring in the next few months. Many of those events will be discussed at an upcoming R&D webinar scheduled for Wednesday, December 11, at 1:00 p.m. Eastern Time. The webinar will feature 3 leading and well-published doctors who will cover the unmet medical and other opportunities that are and can be addressed by our products, MydCombi, clobetasol and MicroPine. More information about this event will be coming out just before Thanksgiving, both through a press release and on our website, eyenovia.com. We invite all of you to register for what we anticipate will be a very informative session. Thank you again. This concludes our call, and we look forward to talking with you again very soon.

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