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Ocular Therapeutix Inc (OCUL -1.48%)
Q4Â 2018 Earnings Conference Call
March 07, 2019, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
See all our earnings call transcripts.
Prepared Remarks:
Operator
Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Ocular Therapeutix Fourth Quarter and Year-end 2018 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.
It is now my pleasure to turn the call over to Donald Notman, Chief Financial Officer of Ocular Therapeutix. Please go ahead, sir.
Donald Notman -- Chief Financial Officer
Thank you, Daniel. Good afternoon, everyone, and thank you for joining us on our fourth quarter and year-end 2018 financial results and business update conference call. This afternoon we issued a press release providing an update on the company's product development programs and details of the company's financial results for the quarter ended December 31, 2018. The press release can be accessed on the Investors portion of our website at investors.ocutx.com.
Leading the call today will be Antony Mattessich, our President and Chief Executive Officer who will provide an update on DEXTENZA and a summary of our corporate developments and upcoming clinical milestones. Also speaking on the call today will be Scott Corning, our Senior Vice President, Commercial, who will provide an update on DEXTENZA commercial plans; and Dr. Michael Goldstein, our Chief Medical Officer who will then provide an update on our clinical development and pipeline. Following Michael's remarks, I will provide an overview of the financial highlights for the fourth quarter and year ended 2018, before turning the call back over to Antony for a summary and questions.
For Q&A, we will also be joined by Dr. Dan Bollag, our Senior Vice President, Regulatory Affairs and Quality. As a reminder during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, which was filed with the SEC today March 7, 2019. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so except as we are required to do so by law, even if our views change.
I will now turn the call over to Antony.
Antony Mattessich -- President and Chief Executive Officer
Thanks, Donald. 2018 was a transformational year for Ocular and we are thrilled with early momentum we're seeing as we entered 2019 having recently submitted our sNDA to expand the label for DEXTENZA, commence dosing in our OTX-TKI trial and close to $37.5 million convertible debt financing, which strengthens our cash position and extends our runway into early 2020.
2018 was obviously highlight by the FDA's approval of DEXTENZA, our dexamethasone intracanalicular insert for the treatment of post-surgical ocular pain. This accomplishment brings us one step closer to realizing the significant potential of our hydrogel drug-delivery platform. We are at a critical moment in the company's history as we are on the cusp becoming a fully integrated commercial stage biopharmaceutical company. We remain on track to have DEXTENZA available for sampling in May with a formal commercial launch set to begin upon confirmation of our passthrough payment status expected in July of this year.
DEXTENZA is not only Ocular's first drug approval, but is also the first product approved in an entirely novel dosage form. Drug alluding intracanalicular inserts are minimally invasive, easily deployable route of administration that can deliver drugs to the service of the eye without the challenges associated with eye drops.
While we intend to introduce multiple products treating many different diseases using this novel dosage form, we believe DEXTENZA can be transformative for both patients and physicians. For patients, DEXTENZA will offer the convenience of a full course of steroid treatment in a single preservative-free intracanalicular insert. This novel means a delivery can replace the complex eye drop regimen that under a current standard of care can require up to 70 ocular steroid drops delivered over a full month and require weekly change in pathology. For physicians, DEXTENZA which control back in their hands by ensuring patient compliance.
We believe DEXTENZA is simply a better way of delivering a steroid to the eye and fully expect that it could eventually compete for all of the 9 million prescriptions for ocular steroids each year in US. For the long-term plan where DEXTENZA is broad, our initial commercial efforts will be laser-focused on the 2 million cataract procedures performed annually under Medicare Part B where we expect to have full reimbursement at full price from the moment we receive passthrough payment status, anticipated to be effective in July timeframe.
Given the concentration of dynamics of this initial target market, we believe commercializing DEXTENZA in the US by ourselves with a specialized field force provides the best opportunity to maximize shareholder value. In preparation for a successful commercial launch, we are hard at work to building the appropriate infrastructure, ensuring commercial supply and most importantly, securing immediate and long-term reimbursement. We are pleased that as of today, all three of these areas are progressing as expected and we remain on track to have commercial product available for sampling in May with a formal national launch plan for July.
Since approval, we have been fully engaged in the buildout of our commercial organization, which Scott will go into shortly. It is important to note though that Ocular has been preparing to be a commercial entity from the moment I became CEO. Well, I had responsibility throughout my career for all facets of the biopharma business, my direct background is in the commercial space with over a 29-year career with a multiple -- a multitude of product launches across many therapeutic areas and in nearly every major pharmaceutical market in the world. Well DEXTENZA will be Ocular's first drug product launch, it will benefit from a team that has deep commercial experience including selling, buying, build products in the ophthalmology space. Rest assured, we have a sound commercial strategy and are in the process of executing against it.
Regarding reimbursement, we fully appreciate a successful commercial launch of DEXTENZA will be dependent upon having reimbursement firmly in place. As we have said, our goal is to achieve permanent separate payment status for the drug with well understood procedure coding attached to its deployment. As of today, we are pleased to report that we have pending applications of the Center for Medicare and Medicaid Services, that are being reviewed for both C and permanent J codes. Beyond DEXTENZA, we have a highly productive year plan with our pipeline, which continues to advance as well as additions to that pipeline. Dr. Michael Goldstein will talk more about this later.
To fund these plans, we are pleased to have announced a number of transactions, including a recently completed $37.5 million convertible note offering that strengthens our financial position and extends our cash runway. Proceeds from this offering along with existing cash resources will fund the initial US commercial launch of DEXTENZA and advance all of the pipeline programs we will discuss today into early 2020. It is important to remember that aside from our collaboration with Regeneron, we hope worldwide exclusive commercial rights to DEXTENZA and our entire pipeline on unburden by significant royalty obligations and position to potentially achieve high gross margins.
With that, I'd like to turn the call over to Scott Corning, Senior Vice President of Commercial, who will speak to the commercialization of DEXTENZA.
Scott Corning -- Senior Vice President, Commercial
Thanks, Antony. We are incredibly excited about the upcoming launch of DEXTENZA and I would like to update everyone on the status of our commercialization efforts. As Antony said, we remain on track to have DEXTENZA available for sampling in May with plans for our commercial launch in July upon receipt of passthrough payment status, when we expect CMS to issue our new C-Code.
Starting with market opportunity. There are approximately 9 million topical ophthalmic steroid prescriptions in the United States, about 4 million of which are associated with cataract surgery, of those, approximately 2 million are cataract surgeries performed on patients covered under Medicare Part B. These cataract procedures will be our initial target market as they will be reimbursable with a C-Code in hand. We are launching DEXTENZA ourselves in the United States market and will do so with the direct sales force. This is an important aspect of our commercialization strategy based on our strong belief that this specialized sales essentially, the surgical sale of the pharmaceutical product is best performed by a key account team with experience in ophthalmology and selling, buy and build products that can navigate the complexities of account base selling.
For us, it is important to have a dedicated team that not only shares in DEXTENZA success as a product, but also in Ocular success as a company. We've realized there are number of new and existing products being used presently or that will be used post cataract or post ocular surgery and we believe we are well positioned to compete effectively given DEXTENZA's unique value proposition as the only drug alluding intracanalicular insert.
DEXTENZA releases up to 30 days of preservative-free dexamethasone to the Ocular surface on the tapering basis, replacing the most arduous postoperative drop regimen with a single insert, thereby eliminating the need for a steroid drop post surgery. We are well under way in hiring of our commercial team. We are pleased to have a Head of Sales in place, who was already hired as Regional Directors and we are now in the midst of hiring our initial territory sales and field reimbursement personnel. We plan to launch within the initial footprint of approximately 20 key Account Managers, plus field reimbursement team and plan to add to that number as we gain sales and reimbursement traction with the goal of being at approximately 40 key account managers, by the end of the year.
Our commercial strategies and efforts benefit from having a running start given the pre-commercial work we conducted in 2017. Additionally, our distribution network is in place, we are working on our reimbursement services hub and we'll begin meeting with payers in the very near term. Surgeons are excited along with our insights into the marketplace and with a product like DEXTENZA, we believe a company with targeted resources, such as Ocular can successfully launch DEXTENZA.
I would now like to turn the call over to Michael Goldstein, our Chief Medical Officer, to discuss progress on our pipeline.
Michael Goldstein -- Chief Medical Officer
Thanks, Scott. Before getting to our pipeline, it is important to highlight our continued efforts to expand the potential of DEXTENZA. DEXTENZA truly represents a franchise opportunity for the company with multiple lifecycle expansion opportunities and other indications where a product profile like DEXTENZA has a potential to change the standard of care. In January of this year, we submitted our supplemental new drug application to expand DEXTENZA's label to include the treatment of ocular information following ophthalmic surgery. We expect the FDA to complete its review in the second half of 2019.
In addition, as we expand the DEXTENZA franchise, in 2019, we planned to initiate clinical trials that will evaluate DEXTENZA in pediatric cataract surgery and in allergic conjunctivitis. We have received proposals for and plan to support several investigator initiated trials evaluating DEXTENZA in different clinical situations.
Beyond DEXTENZA, our development efforts now shift to our pipeline products, that target multiple other ocular diseases of both the front and back of the eye. Each of the products within our pipeline targets are well defined market that we believe is underserved by the current standard of care. And like DEXTENZA each of the products in the pipeline is a customized formulation that uses our proprietary hydrogel technology platform that we believe can produce treatments that offer significant benefits over those offered by existing drugs on the market today.
Two programs within the pipeline that we are very excited about target patients with glaucoma or elevated intraocular pressure. As many of you know, glaucoma is a large market and a disease that impacts an estimated 2.7 million people of the United States. It is recognized as a leading cause of blindness in people over 60 years of age. It is also an area where we believe one of the greatest unmet clinical needs is improving patient compliance.
As current standard of care relies on patients placing eye drops every day. The ability of patients to use and place eye drops is challenging. The prostaglandins are the most commonly used cost of medications to treat patients with glaucoma. The products that we're developing are designed to address the issue of compliance by delivering a prostaglandin analog using our programs release hydrogel platform to potentially lower intraocular pressure for many months with a single insert. Our most clinically advanced asset in the pipeline is OTX-TP, which is fully enrolled in first Phase III pivotal trial. OTX-TP is being developed as a potential treatment for patients with primary open-angle glaucoma or ocular hypertension. The product is a long-acting preservative-free formulation of the drug travoprost deliver as an intracanalicular insert designed to release drug over approximately three months.
In the Phase III clinical trial, we completed enrollment of 550 subjects with the primary efficacy endpoint being a statistically superior mean reduction of intraocular pressure or IOP from baseline for OTX-TP treated subjects compared to placebo insert treated subjects at three diurnal type points of two, six and 12-weeks following insertion.
In addition, while not a primary endpoint, the IOP reduction will need to be clinically meaningful for regulatory approval. We remain on track to announce the top line data from this clinical trial in the first half of this year. If this trial is successful, we will need to conduct an additional Phase III efficacy trial for regulatory approval. In addition to the ongoing Phase III trial, we're conducting an open label one-year safety extension trial with OTX-TP, they'll be included as part of the current pivotal program. This study will provide additional long-term safety data with repeat administration of OTX-TP.
OTX-TIC is our second glaucoma program in development. The product is a bioresorbable of travoprost-containing hydrogel implant, delivered via an intracameral injection designed to deliver a higher level of IOP reduction. We continue to enroll patients at a Phase I perspective of multicenter open-label dose escalation clinical trial to evaluate the safety, efficacy, durability and tolerability of OTX-TIC. As this is an open-label trial, we will be able to assess early biological activity and safety and now treat our first subject for 9 months with a single insert. We expect to present initial results at the ARVO meeting in April of this year.
Moving to the back of the eye, we have initiated a multi-center open-label Phase I clinical trial for OTX-TKI. OTX-TKI is a bioresorbable hydrogel fiber implant with anti-angiogenic properties delivered by intravitreal injection being developed to treat patients with wet Age-Related Macular Degeneration and other retinal diseases. As a reminder, TKIs or tyrosine kinase inhibitors act upstream of VEGF, and therefore, may have broad anti-angiogenic properties. Preclinical data have demonstrated the ability to deliver a efficacious dose of TKI to the posterior segment of the eye for the treatment of VEGF induced retinal leakage for an extended duration of up to 12 months.
The Phase I trial will test the safety, durability and tolerability of OTX-TKI and evaluate biological activity by following visual acuity over time and measuring retinal thickness using standard, optical coherence tomography. Last month, we announced that we dosed our first patient in this Phase I clinical trial. We are now pleased to announce that we have also successfully dosed our second subject in this trial. Finally, OTX-IVT is a sustained release formulation of the VEGF trap aflibercept, or EYLEA for the treatment of serious retinal diseases such as wet Age-Related Macular Degeneration as being developed in partnership with Regeneron. As we've said on prior calls, contractually, we are unable to comment on any details of the program.
I would now like to turn the call back over to Donald, who will review our fourth quarter and year ended 2018 financial results.
Donald Notman -- Chief Financial Officer
Thanks, Michael. Let me begin by summarizing our capitalization. As of the quarter-ended December 31, 2018, we have $54.1 million in cash and cash equivalents versus $56.9 million at the end of the third quarter. The cash balance benefited during the fourth quarter from $5 million in net proceeds generated from the sale of common stock under the company's 2016 sales agreement, or ATM and $12 million of net proceeds from an expansion and extension of our existing five-year term loan facility. Offsetting the ATM inflows during the quarter, the net losses of $17.4 million and principal debt and interest repayments of $1.5 million.
As disclosed in this afternoon's 10-K filing, we have continued to opportunistically sell common stock under the ATM into 2019, raising an additional $5 million net of expenses. At this point, we have exhausted the current ATM facility.
In addition as announced two weeks ago, we raised $37.5 million in a convertible note offering to further support the launch of DEXTENZA and the ongoing development of our pipeline. This seven-year note bears annual interest at a rate of 6% and is convertible into common stock at $6.50 per share, representing an 80% premium to the closing stock price on the day of announcement. We are pleased to put this additional funding in place that's ought to minimize solution to existing shareholders.
Based on our current plans and forecasted expenses, we believe that existing cash and cash equivalents will fund operating expenses, debt service obligations and capital expenditures into early 2020. This is of course subject to a number of assumptions about the pace of not only our research and clinical development programs, but also the costs related to the commercialization of DEXTENZA as well as the other aspects of our business.
Research and development expenses for the fourth quarter were $10.3 million versus $7.9 million for the fourth quarter of 2017 and reflect increased unallocated other costs primarily in personnel costs, consulting services outside testing expenses and costs associated with additional hiring. Overall R&D expenses for the full year ended December 31, 2018, increased $6 million to $36.9 million from $30.9 million in 2017, reflecting increased unallocated personnel costs, consulting services and facility expenses associated with additional lab space at our corporate headquarters.
Selling and marketing expenses for the fourth quarter were $2.3 million as compared to $0.9 million for the same quarter in 2017. This increase related to initial scale-up in pre-commercial activities as a result of the early approval of DEXTENZA on November 30, 2018. For the full year ended December 31, 2018, selling and marketing expenses decreased $12.1 million from $17 million to $4.9 million, driven primarily by decreased expenses associated with the previously delayed launch of DEXTENZA.
Finally, general and administrative expenses were $5.1 million for the fourth quarter versus $4.3 million in the comparable quarter of 2017. For the year ended December 31, 2018, G&A expenses increased $3.3 million to $18.8 million from $15.5 million in 2017. The increase in expenses for both the fourth quarter and year ended 2018 stemmed primarily from increases in legal costs related to the defense of the company in ongoing legal proceedings.
Revenues for the fourth quarter and year ended 2018 were driven exclusively by ReSure Sealant and totaled approximately $0.5 million and $2 million, respectively. As noted in the past, we are not currently providing promotional support to ReSure and we do not expect product revenues to be material in 2019.
With respect to financial results for the fourth quarter ended December 31, 2018, we reported a net loss of $17.4 million or a loss of $0.42 per share. This compares to a net loss of $13.1 million or a loss of $0.44 per share for the same period in 2017. The net loss for the fourth quarter of 2018 included $2.5 million in non-cash charges for stock-based compensation and depreciation, compared to $2.6 million for the same quarter in 2017. The company had approximately 42.8 million shares issued in outstanding as of March 1, 2019.
For the full year ended December 31, 2018, we reported a net loss of $60 million or a loss of $1.57 per share. This compares to a net loss of $63.4 million or a loss of $2.20 per share for the full year 2017.
This concludes my comments on our fourth quarter and year ended 2018 financial results. And I would like to turn the call back to Antony for some summary comments.
Antony Mattessich -- President and Chief Executive Officer
Thanks, Donald. Before opening the call up for questions, I'd like to recap the company's upcoming milestones for 2019. We remain on track to launch DEXTENZA mid-year upon ceded of the C-code. We anticipate the FDA to complete its review of our sNDA to expand DEXTENZA label and include information in the second half of 2019.
We expect to report results from our first pivotal Phase III study for OTX-TP in the first half of 2019. We have made progress on both of our Phase I programs. For OTX-TIC, we have completed dosing our first cohort and have begun dosing our second cohort. We expect to present initial results at the ARVO meeting in April of this year. For OTX-TKI, we are pleased to announce we have commenced dosing and plan to continue to recruit this Phase I trial over the course of the year. In both of these programs, we will collect safety data and also have an indication of biological activity by the end of 2019.
Finally, we remain active in business development discussions seeking to leverage our hydrogel platform, our pipeline programs and the uncovered territories for DEXTENZA. Our expectation is that the approval of DEXTENZA will enhance our ability to negotiate deals that will bring fair value back to the company.
In summary, we are encouraged with our progress in all aspects of our business and look forward to evolving into a commercial biopharmaceutical company. Before turning the call over to questions, I like to quickly mention that we have a plan to host later this month an R&D Day in New York City to highlight our pipeline and the opportunities we have with our hydrogel platform. We'll be sending along and save the date note shortly and I certainly hope to see you all there.
And with that, I want to thank you for your time and we can now open the line up for questions.
Questions and Answers:
Operator
Thank you. (Operator Instructions) Our first question comes from Adnan Butt with Guggenheim Securities. Your line is now open.
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Hey, thanks for the question. First on the glaucoma program, Antony, what do you think you need to see from the OTX-TP Phase III study to start the second Phase III? And then for OTX-TIC, what is that compound need to show in terms of IOP lowering to stay competitive in the space?
Antony Mattessich -- President and Chief Executive Officer
Thanks for the question, Adnan, I'll form that out to Mike Goldstein, who's answered at a number of different times and essentially the same way. So I'll give you Mike.
Michael Goldstein -- Chief Medical Officer
Yes. Thanks, Adnan. This is Mike. So I think as we've said before, we'd like to see the data come in from the OTX-TP Phase IIIa study before we commence the IIIb study. The primary endpoint is to show statistically significant difference between the active treated group and the placebo group at the nine diurnal time points. So that's a two-week, six weeks and 12 weeks, so it's looking at 8:00 AM, 10:00 AM and 4:00 PM. And the additional parts -- so that's what the primary endpoint to the study are. To get approve, the additional part is that the change from baseline that we see with the active group needs to be clinically meaningful. I think it's that point that there -- it's really a risk benefit discussion with the FDA to determine how you come up with clinically meaningful given that we have a single insert that will provide therapy for a period of up to three months. So I think it's really analyzing that data having the discussion with the FDA and then cracking the appropriate IIIb study. As far as OTX-TIC, so that's our intracameral program. So by putting the travoprost into the eye, we expect to have greater IOP lowering effects, and we fully expect us to see that with the TIC program relative to the TP program and we've seen that in the small number of patients that we've dosed thus far.
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Mike, a follow-up here. In terms of OTX-TP when the company says in discussions that the benefit has to be clinically meaningful. Is that not yet defined by the FDA or is that something that's negotiated and you don't want to commit to that?
Michael Goldstein -- Chief Medical Officer
So I think the so-called -- so the FDA has not defined that and it's up to the sponsor to justify what's clinically meaningful based on the unique product characteristics that we have. I think the definition for that would be very different for a product that's got the value proposition that this has, which again, is a single insert, no drops for a period of three months, that's a very different value proposition to -- you have to administer drops either once or twice to three times a day, every single day. So ultimately it's the risk benefit. What's the benefit that we see and then what's the risk and how does compliance play a role in that. It's up to the sponsor to make the justification to the FDA as to what's clinically meaningful in that setting.
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Now there is another long-acting insert that's past Phase III studies. Do you think the FDA view of risk benefit will be impacted by that particular compound and then that's why I post to OTX-TIC question as well. What's your thing as the hurdle for that when in terms of being viable?
Michael Goldstein -- Chief Medical Officer
Yes, I mean -- so OTX-TIC again is the intracameral injection of travoprost, so that's a more -- so minimally invasive procedure, but certainly more invasive than putting something in the canaliculus. As you note there is a program that is completed two Phase III programs, and they've shown nice efficacy on par maybe even slightly greater than that what you'd see with a very compliant topical drop patient. So I think that's a reasonable efficacy barrier or reasonable efficacy marked ahead. But I think the products will have very different other profiles. So the OTX-TIC platform uses the same hydrogel platform that we've used in other programs, and it's been programmed to completely go away in approximately six months. And so I think that could be a really interesting competitive differentiation. And then we need to look at other safety metrics, including the health with the cornea in the long run with each of these products. So again, ultimately it's going to be a risk benefit looking at the various -- the profiles of the different products, but I think both will really solve a key unmet need and probably the most important unmet need in glaucoma, which is patient compliant. So while coming up with new mechanisms is certainly important being able to come up -- being able to solve the compliance issue in glaucoma. I think when you talk to most glaucoma experts, I think that would be probably the biggest unmet need in glaucoma.
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Last one before I get back in line, you mentioned TIC data at ARVO. Antony, does the company plan to top-line that press release that? Or do we have to wait for the medical meeting to see it?
Antony Mattessich -- President and Chief Executive Officer
So you have to wait for the medical meeting. That will not be full dataset, will not be from all the subjects. It will be a snapshot of where we are at that particular point in time. So we believe -- so it won't be one, or two, or three patients, it will be more than that, but we will not have been able to follow all 10 patients out to the full. Originally, we have design the trial for six months, we've actually seen in the first couple of patients longer efficacy. So we've extended the trial for a little bit longer period of time, but we will not be able to see the full efficacy for all the patients at that meeting, but it will give you a snapshot of where we are at that point.
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Thanks.
Operator
Thank you. And our next question comes from Dane Leone with Raymond James. Your line is now open.
Dane Leone -- Raymond James -- Analyst
Hi, thank you for taking the questions. Congratulations on the progress. I want to ask and just double check here that there is no potential delay in the review for the C-Code given the disruption in the government operations as you guys are submitting that?
Antony Mattessich -- President and Chief Executive Officer
We certainly don't expect there to be a delay. We were -- as you might have remember, we actually submitted as part of the previous cycle, but did not have it fully complete. We didn't yet have a published price. We were told by CMS that they would put us sort of on the top of the pile for the next round, which we understand is progressing at -- when it's supposed to. So we have every expectation and we'll be able to get the C-Code in the July timeframe.
Dane Leone -- Raymond James -- Analyst
Okay, great. In terms of just alleviating some of the capital position that you have, obviously, you have a pretty deep pipeline that you're looking to accelerate. Can you just kind of touch on what you want to do is that capital constraints are alleviated that you guys have been working on and what we could expect from a timeline or maybe bringing new programs out that haven't been unveiled yet over the course of this year? And just kind of general thoughts of balancing the commercial effort that you're rolling into the DEXTENZA versus still some of the developmental efforts?
Antony Mattessich -- President and Chief Executive Officer
Right, I mean clearly the commercial efforts around DEXTENZA will be sacrosanct. We are going to optimally resource that launch and we are sort of ring-fencing any kind of investment that we would do around that DEXTENZA launch to make sure that we get the traction that we need with that product. As Donald mentioned with the existing cash and cash equivalents that we have in place, we would be able to fund the entire pipeline that Mike went through, through the first -- through early 2020. We also gave a teaser about our pipeline -- potential additions to the pipeline that we will be talking about in the March Investor Conference. Accelerating some of those into an earlier clinical path, clearly something we do if we had additional resources, but certainly the early stage development formulation and pre-IND work, we can do relatively inexpensively and relatively quickly. So we really don't need any additional financial resources to get those to the clinic. Clearly once we're in the clinic than having multiple programs in later stage clinical trials, we would need additional resources for that and we would either get that by ourselves or we work through partners who would be able to help fund those and potentially fund other programs that we have in development as well.
Dane Leone -- Raymond James -- Analyst
Excellent. And could you just kind of clarify that the wording on the final formulation for OTX-IVT is that new wording? Or is that just kind of the same thing that's been evaluated over the last 12 months?
Antony Mattessich -- President and Chief Executive Officer
It's exactly the same thing, I mean, I'm -- I think we are as frustrated as everyone else, but we're not able to announce that there have been changes, one way or the other in that program. And we're clearly working very hard as our Regeneron to try and to understand what -- how we go forward with this. But there has been no change and very purposely no change because there is nothing material that we can talk about.
Dane Leone -- Raymond James -- Analyst
Just I think this is disclosed when the partnership was signed, but they do owe you some milestone payment if it goes into Phase I, right?
Antony Mattessich -- President and Chief Executive Officer
If we keep with the existing agreement and they option the product, then yes, the $10 million payment is associated with that. That's assuming that we keep the existing agreement and action the existing agreement.
Dane Leone -- Raymond James -- Analyst
Okay. Then one last one for me to get Mike in here. The contacts, the nine months target for OTX-TIC, maybe you can provide some color in terms of -- we saw some of this formulation, some novel compound formulations extended duration formulations presented at the Angiogenesis Conference a few weeks back. Just kind of where is your thinking in terms of competitive positioning if you really can't get this OTX-TIC -- sorry, OTX-TKI to work up to nine months as a sustainable delivery mechanism and what IND?
Michael Goldstein -- Chief Medical Officer
Yes, thanks for the question. Yes, so OTX-TIC is the glaucoma program and so there we are targeting six months, but it seem longer OTX-TKI.
Dane Leone -- Raymond James -- Analyst
Yes. Sorry, about TKI.
Michael Goldstein -- Chief Medical Officer
The TKI program, which -- we've been TIC at Angiogenesis, I got it. So I think there are two novel opportunities there, so one is duration and as you know, standard of care or microgeneration and diabetic macular edema is treatment every one to two months. There are some near term programs that probably extend that to every three months. And so from a durability perspective, we think anything greater than three months is going to be pretty novel without having to refill a (inaudible) in the eye. So getting a single insert getting beyond three months, we think could be pretty novel. With the animal data, we've had it and we've actually seen that fact out to about 12 months with a single insert, but when you sort of take into account different size of the eye and different viscosity of the vitreous, we think that correlates in a human to about every nine months. But we think could be clinically viable, even if we don't hit every nine-month, if we're able to show three or four months in that range, we still think that will be clinically viable. So I think that's sort of one-line of thinking. The other is new mechanisms in the R&D space. So clearly anti-VEGF drugs have revolution at the space and they clearly work, but they don't work for everyone. And there are certainly opportunities to come up with new novel mechanisms. So with the TKI program, I think, we hit on both of those, we've got a novel mechanism and we think we can increase the durability of the effect.
Dane Leone -- Raymond James -- Analyst
Okay, great. Thank you very much.
Operator
Thank you. And our next question comes from Bill Maughan with Cowen & Company. Your line is now open.
William Maughan -- Cowen & Company -- Analyst
Hi, thanks for taking the question. I was hoping, can we get any metrics on the size of the plan sampling program for DEXTENZA that will be starting later this spring? And secondly, how can -- how should we view the launch of DEXTENZA in terms of the competitive environment with another product launching into the same space, the same time? Thanks.
Antony Mattessich -- President and Chief Executive Officer
Okay, great. I'll handle the first question about the sampling. We've yet to determine what the sampling level will be. We won't be restricted though by the amount of volume that we expect to be able to produce. We have -- we are lucky enough to have control our own means of production and we're able to produce really as much as we think we could possibly need. The main issue around that it's going to be that we are going to remain in compliance and ensure that we don't run a foul of any kind of compliance arrangement with potential over sampling. But we'll give as much as we can. I'll let Scott, our Head of Commercial sort of handle the competitive situation.
Scott Corning -- Senior Vice President, Commercial
Yes, we -- thank you. We look forward to launching into a really competitive and vibrant market, there is two topical launches, our new products that will be taking place as well as one injection and then on top of that, of course, DEXTENZA. We believe we know the markets been clamoring for sustained release products for years. And so we think we'll compete very effectively versus any topical drop prednisolone acetate a course of generic is the lion's share of the market. So that's really the main competitor. But as far as the other competitive entrants, we look forward to being in that space and to use the spoken cliche, a rising tide lifts all boats. And so we will be entering into offices and two ASCs after someone else has already talked about the steroid marketplace and vice versa. So I think we'll all benefit from as I said a vibrant marketplace.
William Maughan -- Cowen & Company -- Analyst
Thanks. And then as a follow-up, is there any thought to maybe an ex-US launch or partnership anytime in the foreseeable future? Thanks.
Scott Corning -- Senior Vice President, Commercial
Absolutely. I mean this is something we're very actively involved in looking at potential ex-US partners. At this moment, we don't have a desire to go direct ex-US. We've not given any guidance on when we would intend to file ex-US and particularly in Europe and some of the other large markets. Once we get those the clear understanding of what it takes to file in those areas and then are able to commit to a timeline will come forward with one but absolutely these are -- this is a better way of giving a steroid drop and steroid drops are given all over the world. So the intention is very much to leverage that the -- our global rights to this product.
William Maughan -- Cowen & Company -- Analyst
Thank you.
Operator
Thank you. (Operator Instructions) Our next question comes from Yi Chen with H.C. Wainwright. Your line is now open.
Rob -- H.C. Wainwright & Co -- Analyst
Hi. This is Rob on for Yi. Just two questions if I may. The first one being, so how is the CMS indicated that the procedure of inserting DEXTENZA could be separately reimbursed? And then the second one would be, what are your expectations for sales in financing before the issuance of the J-Code? Thank you.
Antony Mattessich -- President and Chief Executive Officer
I'm sorry, I didn't the second question.
Rob -- H.C. Wainwright & Co -- Analyst
The second one is, what are your expectations with sales of DEXTENZA in 2019 before the issuance of a J-Code?
Antony Mattessich -- President and Chief Executive Officer
Okay. The first one, the CMS has not indicated that the product -- you're talking about the product or the insertion?
Rob -- H.C. Wainwright & Co -- Analyst
The procedure for inserting DEXTENZA, could it be separately reimbursed?
Antony Mattessich -- President and Chief Executive Officer
Yes, it could be separately reimbursed. But that's one of the -- that's one of our key goals will be determining under what circumstances and how that gets reimbursed. Clearly that becomes a key driver in the uptake of the product. But having gone through this movie before, what you have to do is, you have to test the code, you have to submit it and then you have to do a bit of hand to hand combat to ensure that it gets reimbursed in a reliable fashion. We'll launch as a category three code, which is an experimental code and there are some payers that are more willing to pay against that code than others. Over time, the goal is very much turn that into a category one code, where it will be universally separately reimbursed. But we have some work to do before we get there. In terms of the expectation, I'll turn it over to Scott for the second part of the question.
Scott Corning -- Senior Vice President, Commercial
Yes. As far as we stated, our expectations to launch with a laser focus on Medicare Part B reimbursement suggests that we're not waiting for the J-Code, of course, that opens things up widely for us and we look forward to the day when we have the J. But as stated, we're launching with a limited side sales force that's targeted on the surgical opportunity very purposefully and once we get the sales and reimbursement engine up and running that's when we plan to expand rapidly, as I said to about 40 key account managers by year-end. But as far as a specific number, that's something that we're not giving at this point. Our goal is to get patients treated and we want to do that by getting out into the marketplace, speaking to surgeons in their offices and of course, working with them in their ASCs and getting DEXTENZA into the hands of the physicians who can get it into the patients. So our goal will be overall patients treated as opposed to units sold in the first few months of deploying into the fields.
Operator
Thank you. And I'm not showing any further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone have a wonderful day.
Duration: 44 minutes
Call participants:
Donald Notman -- Chief Financial Officer
Antony Mattessich -- President and Chief Executive Officer
Scott Corning -- Senior Vice President, Commercial
Michael Goldstein -- Chief Medical Officer
Adnan Shaukat Butt -- Guggenheim Securities -- Analyst
Dane Leone -- Raymond James -- Analyst
William Maughan -- Cowen & Company -- Analyst
Rob -- H.C. Wainwright & Co -- Analyst
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