Jonathan Knowles/DigitalVision by way of Getty Photos
Oyster Stage Pharma, Inc. (NASDAQ:OYST) has an approved solution, Tyrvaya (OC-01, varenicline solution) Nasal Spray for managing dry eye condition, and it is also in the pipeline for Neurotrophic Keratopathy Phase 1. NK is a exceptional disorder characterised by decreased corneal sensitivity and lousy corneal healing. For the pipeline software, the enterprise says in its earnings simply call:
We proceed to enroll people in our OLYMPIA Period 2 study of OC-01 nasal spray aimed at dealing with Stage 1 NK. We continue to be on track to hope benefits of this demo in the 2nd fifty percent of this year.
Now, coming to the acceptance, Tyrvaya was permitted in October 2021 and started out in the market place by early November. So this was proficiently the first total quarter of described earnings for Tyrvaya.
Dry eye illness happens in over 38 million People. Existing remedy alternatives are Allergan’s Restasis and Shire’s Xiidra both equally are supplied as eye drops. Restasis is a mild immunosuppressant while Xiidra is an anti-inflammatory drug. Having said that, supplied the formulation that demands providing the medications right to the eye – always a cumbersome and painful procedure – compliance is lower. Additionally, these therapies acquire months to operate from the onset of treatment method. The company says there are 7 million individuals that have tried out and deserted the normal therapies.
Tyrvaya makes use of a totally new shipping and delivery system, as nicely as a exclusive system of motion. It is used as a nasal drop, and it will work by triggering the trigeminal nerve which in its change triggers tear manufacturing. In 3 scientific trials in above 1000 sufferers in delicate, average and severe dry eye sickness – ONSET-1, ONSET-2 and MYSTIC – the drug has demonstrated safety and efficacy. Clients confirmed statistically substantial improvements in tear film generation as assessed utilizing the Schirmer’s score at Week 4, with additional than 50% sufferers showing exceptional tear creation when compared to about 50 % that quantity in the placebo group:
TYRVAYA-dealt with individuals showed statistically sizeable improvements in tear movie manufacturing as assessed utilizing the anesthetized Schirmer’s rating (-35 mm) at 7 days 4. Of the patients treated with TYRVAYA, 52% realized ≥10 mm enhance in Schirmer’s score from baseline in the ONSET-1 research, and 47% accomplished ≥10 mm increase in Schirmer’s score from baseline in the ONSET-2 research, in comparison to 14% and 28% of car-taken care of individuals in the ONSET-1 research and the ONSET-2 research, respectively at 7 days 4 (p<0.01 in both studies). Of the patients treated with TYRVAYA, the mean change in Schirmer's score was 11.7 mm and 11.3 mm as compared to 3.2 mm and 6.3 mm in the vehicle treated patients in the ONSET-1 study and ONSET-2 study, respectively at Week 4.
So the first full quarter revenue is $2.7mn. Around 19,000 prescriptions were filled, and these were written by 4500 unique prescribers. 65% of all patients went for refills. A number of patients have continued using the medicine for 6 months starting from November.
The company has also taken great strides on the mediclaim front. In February, TYRVAYA was placed on Express Scripts National Preferred basic and high performance formularies, which collectively make up around 26 million lives. The company has gone on to add more payers, and now it has commercial coverage for up to approximately 95 million lives, which represents 52% of all U.S. commercial lives.
Financials
OYST has a market cap of $134mn and a cash balance of $144mn. This is a terrible state of affairs. There’s a short interest of 22%, which says that the market still thinks the company is overvalued. For a commercial stage company with a clinically successful drug to be in this sorry state is unnerving for investors.
Sales and marketing expenses for the three months ended March 31, 2022, were $27.0 million, General and administrative expenses were $12.9 million, and Research and development expenses were $4.7 million. Net product revenues for the three months ended March 31, 2022, were $2.7 million. At this rate, and ignoring any major improvement in sales, the company hardly has cash for 2 more quarters.
In order to curtail some of these high expenses – high for a small company, that is – the company has gone through a restructuring process. This, it says, will lead to $6M-$8M in savings this year but also include laying off up to 50 workers. The company expects savings of $40-$48mn in 2023. These measures will allow it to commercialize Tyrvaya better, and also put focus on the NK pipeline program. This plan will also include retiring John Snisarenko, Chief Commercial Officer, effective July 1.
The company signed a deal with a Chinese firm last year to commercialize Tyrvaya in China against $17.5mn in upfront payment and a stake in that Chinese company.
Bottom Line
I really have nothing to say. Restasis is a billion dollar drug, while Xiidra is a half-a-billion dollar drug. Tyrvaya has an admittedly better mechanism of action and mode of delivery. Yet it is floundering in the market, and I cannot find any reason for that except perhaps lack of execution, which is also difficult to allege given what the company has been doing. All in all, this is a perplexing situation, and when I am perplexed, I tend to avoid buying.
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