EYEPOINT PHARMACEUTICALS INC (EYPT) Q2 2019 Earnings Conference Call Transcript

EYPT earnings call for the period ending December 31, 2018.

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EYEPOINT PHARMACEUTICALS INC  (NASDAQ:EYPT)
Q2 2019 Earnings Conference Call
March 14, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

See all our earnings call transcripts.

Prepared Remarks:

Operator

Good morning. My name is Amanda, and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharma's Fiscal Period Ended December 31st, 2018 Financial Results Conference Call. There will be a question-and-answer session to follow at the completion of the prepared remarks. Please be advised that this call is being recorded at the Company's request.

I would now like to turn the call over to Mr. David Price, EyePoint's Chief Financial Officer.

David Price -- Chief Financial Officer

Thank you, Amanda, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals fiscal period ended December 31, 2018 financial results and recent corporate developments.

With me today is Nancy Lurker, EyePoint's President and Chief Executive Officer. Nancy will provide an overview of the recent progress made on our commercial and pipeline programs as well as highlight upcoming milestones. I will then provide an overview of the three and six months financial results for the fiscal period ended December 31, 2018. We'll then open the call up for your questions.

Earlier this morning, we issued a press release detailing these financial results as well as commercial and operational developments. A copy of the release can be found in the Investor Relations tab on the corporate website www.eyepointpharma.com.

Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines, the potential success of our product candidates, financial projections and our plans and prospects.

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 is on file with the SEC, and in other filings that we may make with the SEC in the future.

Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

I'll now turn the call over to Nancy Lurker, President and Chief Executive Officer of EyePoint.

Nancy Lurker -- President and Chief Executive Officer

Thank you, David. Good morning, everyone, and thank you for joining us. 2018 was a transformative year for EyePoint Pharmaceuticals as we transitioned from a technology driven R&D company into an integrated commercial-stage specialty biopharmaceutical company with two products now launched in first quarter 2019 for the treatment of ocular diseases.

These accomplishments are significant milestones for our Company as they represent the first product that we've commercialized ourselves since our formation. Our achievements are a direct reflection of our talented and dedicated team who worked tirelessly to ensure we are in a position for successful launches of both YUTIQ and DEXYCU in their respective markets.

In February this year, we launched YUTIQ, fluocinolone acetonide intravitreal implant 0.18 milligrams in the United States for the treatment of chronic non-infectious posterior segment uveitis. YUTIQ is our internally developed intravitreal micro-insert that is designed to consistently release fluocinolone for up to 36 months.

Recall that YUTIQ is derived from our proprietary Durasert sustained-release technology platform that has led to such marketed products as ILUVIEN, licensed to Alimera Sciences as well as Retisert and Vitrasert licensed to Bausch & Lomb. Non-infectious posterior segment uveitis represents a third leading cause of blindness in the US. One of the main issues with corticosteroid, the current standard of care, is the lack of long-term compliance which often results in the recurrence of inflammatory uveitis eye flares that can ultimately lead to blindness.

In clinical studies, YUTIQ significantly reduced the number of inflammatory uveitis eye flares due to its ability to deliver drug for up to 36 months. Current treatments today lasts anywhere from one month with generic steroids and many systemic drugs to two to three months from our commonly used intravitreal treatment and up to 24 months with Retisert, which requires insertion in a surgical suite.

The longer duration of YUTIQ coupled with its physician office administration should significantly improve patient compliance in this very serious disease. In addition, YUTIQ also delivers drug consistently, every day and avoids the ocular drug level peaks and valleys that often occur with current treatments today.

Consequently, YUTIQ's clinical data and product profile had been very well received by retinal and uveitis specialists, who've been highly supportive of this new treatment and expect YUTIQ to be a significant new addition to the treatment protocol for non-infectious posterior segment uveitis.

On the commercial front, YUTIQ is currently available today for ordering and delivery to physicians. And I'm pleased to report that initial field report suggests we're off to a strong start. Reimbursement is obtained today from an existing J-Code, and we've also filed for a new permanent and specific YUTIQ J-Code which, if granted, will take effect January 1st, 2020.

Currently, payers are approving reimbursement for YUTIQ with minimal prior authorization requirements. This is primarily due to the fact that YUTIQ treats an extremely serious disease that can lead to blindness and it's modestly priced. Based upon the existing J-Code, the wholesale acquisition cost for YUTIQ is approximately $8,340.

In conjunction with YUTIQ's product launch, we also introduced EyePoint Assist, a program to ensure access to YUTIQ for eligible patients in need of financial assistance. I will go into more specifics of our launch effort shortly as many of our YUTIQ activities are complementary to our DEXYCU initiatives.

DEXYCU, dexamethasone intraocular suspension is our second ophthalmology product launched just this week for post-operative ocular inflammation. We are very excited to have launched DEXYCU and to now have two innovative ophthalmology drugs on the US markets. Our primary market focus for DEXYCU is for treatment immediately following cataract surgery.

Recall that DEXYCU is acquired as a result of our acquisition of Icon Biosciences in March 2018 and it utilizes the proprietary Verisome sustained-release technology. We believe DEXYCU has the potential to alter the treatment paradigm for postoperative ocular inflammation through a single injection at the end of cataract surgery that provides a tapered release of dexamethasone over 22 days, very similar to how steroid drops are administered.

DEXYCU can potentially avoid the inherent patient compliance risk with the current complicated steroid drop regimen that typically is administered over four weeks and can require up to four drops a day with the taper down to one drop a day over four weeks.

In the US alone, for 2018, there were approximately 4.8 million cataract surgeries. This is an 11% growth over 2017 and demonstrates how rapidly this market is growing as a result of the aging baby boomer population as well as propensity for cataract surgery to be conducted earlier in the disease due to the great technological advances in the surgery process itself.

There is a high unmet medical need among patients who undergo cataract surgery and physicians, as this current standard of care to treat inflammation post eye surgery is extremely challenging and requires a burdensome eye drop schedule. Cataract surgeons have expressed a strong interest and intend to use DEXYCU due to its ease of use and non-disruptive process.

Physician product training is currently under way with an initial focus on our top key opinion leaders in the US rolling out to a broader group of physicians over the next number of weeks. This staged launch for DEXYCU is strategically designed to ensure appropriate initial training for the physician and other members of the ambulatory surgical suite and follows best practices when administering drugs or new medical devices in the surgical suite.

As previously reported, reimbursement for DEXYCU was secured in November 2018 through the issuance by CMS of a specific and permanent J-Code J1095 through the healthcare common procedure coding system that became effective on January 1st, 2019. As we previously mentioned, DEXYCU has been granted three-year transitional pass-through status for the purposes of Medicare Part B reimbursement.

As a result of the issuance of this specific J-Code, reimbursement by Medicare Advantage and other commercial plan has become more straightforward and our market access team is working with all payers to secure reimbursement. The wholesale acquisition costs for DEXYCU is $595.

Our internal sales and marketing organization is led by Tom Hadley, our Vice President of Marketing and Sales and Eric Toppy, who heads up our Market Access team. Both Tom and Eric joined EyePoint earlier last year and bring extensive experience in executing on highly successful commercial pharmaceutical launches. They have assembled a very experienced and deeply talented commercial team, which includes impressive sales leadership. And a total of 44 key account managers, in addition, field reimbursement managers, national account directors, and field leadership.

The Key Account Managers or KAMs has been hired through a contract sales organization. All 44 KAMs, 10 for YUTIQ and 34 DEXYCU are dedicated specifically to their respective products. Recruitment and training of all KAMs has been completed and they're all active in the field as we speak. The 10 YUTIQ KAMs are dedicated to calling on uveitis and retina specialists. The 34 DEXYCU KAMs are focused on high volume ambulatory surgery centers for DEXYCU and high volume cataract surgeons.

We are pleased to report that patients have already been treated with both products. We are excited about our product launches thus far and the interest from physicians and patients alike has generated a significant buzz and level of interest across the ophthalmology community.

Our medical education plan supports these sales and marketing efforts with our fully staffed Medical Science Liaison team and Medical Affairs Group that continues to expand our presence at key Congresses as well as proactively plan publications for continued dataflow to the greater medical community. We look forward to updating you on our commercial progress on our next quarterly call.

In addition to executing on two product launches, we continue to work on the development of our pipeline of early and late stage ophthalmic products. This year we anticipate filing our line extension application for our short-acting six-month YUTIQ, which would provide dosing options to physicians when treating noninfectious posterior segment uveitis.

Our preclinical pipeline includes a sustained-release bio-erodible device containing the tyrosine kinase inhibitor or TKI, which is currently being studied in preclinical efficacy and safety studies in animal models for wet AMD. Should these results be positive, we plan to continue additional preclinical studies throughout 2019.

While we are focused on advancing our commercial products and clinical pipeline, we also continue to seek out opportunities through business development activities to augment our product pipeline and bring in new ophthalmology treatments for areas of high unmet medical needs in the ocular disease space.

From a corporate standpoint, we recently announced the appointment of Dr. David Guyer, the current Executive Chairman and Co-founder of Ophthotech Corporation, a biopharmaceutical company specializing in gene therapy treatments for ocular diseases to our Board of Directors. Dr. Guyer is a well-regarded ophthalmology entrepreneur having led several public and private biotechnology companies focused on ocular diseases, including Eyetech Pharmaceuticals until it was acquired by OSI Pharmaceuticals. We welcome him to our team and look forward to benefiting from his extensive experience in the ophthalmology drug development space.

Separately, we also announced the appointment of Ron Honig in the newly created role of Senior Vice President and General Counsel and Company Secretary. Ron brings more than 25 years of legal experience in the medical device, biotechnology, contract manufacturing and legal services industries. In this new role, Ron will oversee the Company's legal activities, including the legal aspects of licensing, compliance, strategic transactions and business development.

With that, I will turn the call over to David to review our financial results. David?

David Price -- Chief Financial Officer

Thank you, Nancy. As a reminder, our Board of Directors approved a resolution to change the Company's fiscal year-end from June 30 to December 31. EyePoint believes this change of its fiscal year will align its financial reporting periods to that of our peer group in the industry and better facilitate the assessment of our financial performance.

Within the next few days, we will file audited financial statements on Form 10-K for the six-month transition period ended December 31, 2018. The financial results that I will now review are included in our press release that was issued this morning.

As of December 31, 2018, cash and cash equivalents totaled $45.3 million compared to $38.8 million as of June 30th, 2018. Net cash used from operations for the six months ended December 31, 2018 totaled $22.6 million compared to $11 million in the prior year six month period. There are approximately 95.4 million common shares outstanding at December 31, 2018.

Now, turning to the income statement, for the three months ended December 31, 2018, revenues totaled $2.4 million compared to $933,000 for the three months ended December 31, 2017. The revenue increase was primarily attributable to the recognition of $1.7 million from the upfront license fee received from Ocumension Therapeutics related to the November 2018 out license of Durasert three-year uveitis for the greater China region.

Operating expenses for the three months ended December 31, 2018 increased to $13.4 million from $6.7 million in the prior year period due primarily to ongoing build of our sales and marketing infrastructure as well as program costs, professional services, stock-based compensation and the amortization of the DEXYCU intangible asset.

Non-operating expense net for the three months ended December 31, 2018 totaled $589,000 and consisted of interest expense on the SWK term loan net of interest income from cash equivalent investments. Net loss for the three months ended December 31, 2018 was $11.6 million or $0.12 per share compared to a net loss of $5.8 million or $0.13 per share for the prior year quarter.

For the six month transition period ended December 31, 2018, revenues totaled $2.9 million compared to $1.3 million for the prior year six-month period. The revenue increase was primarily attributable to the aforementioned Ocumension upfront license fee and higher royalty income under existing collaboration agreements. This was partially offset by the absence in 2018 of revenues from feasibility study agreements.

Operating expenses for the six month transition period ended December 31, 2018, increased to $27.5 million from $13.1 million a year earlier, due primarily to the expansion of the Company's leadership team, building our sales and marketing infrastructure, as well as program costs, professional services, stock-based compensation and the amortization of the DEXYCU intangible assets.

Non-operating expense net in the six months ended December 31, 2018 totaled $20.2 million and consisted primarily of an $18.9 million non-cash change in fair value derivative liability as well as interest expense on the SWK term loan. Net loss for the six months ended December 31, 2018 was $44.7 million or $0.53 per share compared to a net loss of $11.8 million or $0.28 per share for the prior year six month period.

Last month we announced that we entered into a $60 million debt facility with CRG, which enabled us to retire existing debt and to provide additional working capital to support our ongoing product launches as well as our general operations. The initial borrowing under this new facility was $35 million, of which approximately $23 million was used to repay principal prepayment and exit fees and other costs associated with the secured term loan obtained from SWK Funding LLC in March of 2018.

EyePoint has the option at its sole discretion to borrow up to an additional $15 million under the CRG facility prior to June 30th, 2019 and a further $10 million should the company achieve certain sales milestones from our two commercial products on or before March 31st, 2020.

We believe that current cash and cash equivalents position is sufficient to fund operations and debt service obligations through the end of this year. In our future calls, we will be providing more information with regards to the metrics we will disclose to measure the progress of our two product launches.

I'll now turn the call back over to the operator for your questions. Amanda?


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Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from the line of Francois Brisebois of Laidlaw. Your line is open.

Francois Brisebois -- Laidlaw -- Analyst

Hi. Thanks for taking the questions. Congrats on the progress. Two launches recently as well. So I was just wondering, the first question here was the launch of DEXYCU and particularly it was so late in the quarter, can you just talk a little bit about expectations for topline in the first quarter '19, and you mentioned the process of educating physicians and the sales just so we can have an idea here.

Nancy Lurker -- President and Chief Executive Officer

Hi Francois, thank you for that. Yes, we'll have David answer that question. So go ahead, David.

David Price -- Chief Financial Officer

Great, thanks. Thanks, Francois. Yes, as you say, we've launched DEXYCU this week, only a couple of weeks left in this quarter. And as we've been saying, we want to make sure that all of our physicians who we work with are capable and trained associate -- appropriately with regards to DEXYCU and insertion of DEXYCU as well as helping the officers ensure that they can prepare appropriately. So we're doing what we call in-service visits and as a result of that that training anticipated that over the next few weeks, our overall revenues will be minimal associated with DEXYCU and really it will be a second quarter revenue kick.

Francois Brisebois -- Laidlaw -- Analyst

Okay, great. That's very helpful. And then in terms of OpEx, you had a nice little pull back in R&D. Obviously, your guys are transitioning from more of an R&D to commercial company, but how should we think about this going forward along the operating expenses?

Nancy Lurker -- President and Chief Executive Officer

Yes, that's a good question. What we're expecting is that, if you recall, we are continuing on the three-years that is now winding down for YUTIQ. So as a result, you should start to see those costs come down in 2019 substantially from 2018 on the R&D front. We do expect that we will be moving faster and with a little more expense on the TKI program. However, that will probably still stay in the preclinical stage, which as you know is not as expensive. So overall 2019 we would see a lower R&D cost, but then if we continue forward with the TKI program, which we anticipate we would, you'd see that pick back up again in 2020.

Francois Brisebois -- Laidlaw -- Analyst

Okay, great. And then just lastly, you guys talked about a strong start already to YUTIQ. I was just wondering what metrics we could be looking at in order to attract this launch.

Nancy Lurker -- President and Chief Executive Officer

Yes, I will give you one metric that we watch very closely. And again, I'm not going to give you numbers today, but this will be one, certainly, we would give you going forward which is the amount of physician demand that's coming in. We call those benefit investigation, so we have a hub on YUTIQ and virtually every physician and their offices are submitting reimbursement clearance, so to speak, through our hub. And our hub is the one that will make sure that the patient qualifies for reimbursement. And then of course if they don't, we have our EyePoint Assist program to help them.

So that is a very good metric for looking at the amount of physician demand or patients that are being teed up to get the drug. And as I mentioned, and let me reiterate this, we know there's pent-up demand for YUTIQ. Again, this is a very serious disease and there just are not a lot of good treatment options. So we do expect, as I've said repeatedly, that you're going to see a fairly large bolus of patients come-in, certainly in the first quarter of launch, probably going into the second quarter some, and then I would expect that it will -- the growth rate will taper off to a more normal growth rate.

So what we are seeing in the first several weeks of YUTIQ launch is exactly what we expected, which is a nice bolus of incoming physician request for having their patients cleared for reimbursement. So, again, I'm not going to give you numbers, but we certainly are doing absolutely what we would expect with this product which is, we're off to a good strong start.

Francois Brisebois -- Laidlaw -- Analyst

Okay, great. And then -- sorry I said last, but just wondering in terms of seasonality, obviously sometime especially in the third or this is the first quarter for the reimbursement issues and I'm looking more third quarter with this summer months, is this something that we should expect to affect the top line just that docs be in -- off on vacation?

Nancy Lurker -- President and Chief Executive Officer

Yes, you're going to see this. It is ubiquitous in the pharmaceutical industry, particularly for office administered drugs. And we would expect you'll see the same thing for DEXYCU and YUTIQ. There will be some slight seasonality.

Francois Brisebois -- Laidlaw -- Analyst

Great. All right, thank you, and congrats on the quarter.

David Price -- Chief Financial Officer

Thanks, Francois.

Operator

Thank you. And our next question comes from the line of Andrew D'Silva of B. Riley FBR. Your line is open.

Andrew D'Silva -- B Riley, FBR -- Analyst

Hey, good morning. Thanks for taking my questions and congrats on both the product launches. Just -- first out of the gate, just a couple of quick bookkeeping questions. Can you maybe just let me know what stock-based comp depreciation and amortization, cash flow from operations and CapEx was for the three or six months ending December? And then I take it, since you announced that DEXYCU launch this week, you triggered the $15 million sales milestone payment Icon. How should we model that in this quarter?

Nancy Lurker -- President and Chief Executive Officer

So, David or Len will take those questions.

David Price -- Chief Financial Officer

Yes, absolutely. Thanks, Andy. So given the transition period, it's easier for me to give you the six month period for those numbers, because you have the quarter to the end of September as well. So the stock-based comp for the six months is $2.5 million; the D&A number, the depreciation and amortization $1.6 million.

Recall also that within those six months, there's a change in fair value of the derivative liability of $18.9 million, that's a non-cash item as well. The cash used from operations $22.6 million; I mentioned that in the prepared remarks for the six months period. We have very, very minimal CapEx, about a $100,000 of CapEx in the six-month period. You're correct, the $15 million milestone is triggered for the former owners of Icon and we've 30 days from loans in order to pay for that. And so that's will fall in the second -- our cash flow in the second quarter.

Andrew D'Silva -- B Riley, FBR -- Analyst

Got it. Perfect. Sorry, one more quick financial question, as it relates to the $60 million debt facility. Are you expecting to tap all three tranches or do you expect just to utilize the first tranche $35 million or the first two at $50 million? Just give me a little sense what the plan is, so I can think about how to model that from a balance sheet and free cash flow standpoint?

David Price -- Chief Financial Officer

Yes. So in 2019, I mentioned in my remarks that we believe we have sufficient room for cash and facility runway to take us through the end of this year. The anticipation is that we would draw that other -- the $15 million that is at our behest that we would draw that. That's included in that assumption for getting us to cash through to the end of this year. The further $10 million obviously is subject to sales milestones and that is not factored into any of my calculations at this point.

Andrew D'Silva -- B Riley, FBR -- Analyst

Okay. But that $25 million sales milestone for the three month period prior to essentially the end of March 2020; is that something, when we think about that framework of how the companies being built in sales and marketing? Is that something that's viable in the next year or so to be able to hit that kind of run rate?

David Price -- Chief Financial Officer

Clearly at this juncture we've refrained from providing any revenue guidance. We will give an update on trading and the metrics associated with that as we come through the full second quarter. But I think suffice to say that having that as a milestone to trigger further cash availability is something that we had negotiated into that and had been put into those numbers.

Andrew D'Silva -- B Riley, FBR -- Analyst

Okay, that's really good. That's great to hear. And then, moving over to YUTIQ, can you just touch based on maybe how you're going to recognize revenue. I know it's a buy and build model, but are you essentially going to recognize when you launch into distributors. And then is there any sort of confusion at this point related to the product as it has lot of similarities to ILUVIEN or is that -- is it fairly understood that ILUVIEN for DME and YUTIQ is for uveitis?

Nancy Lurker -- President and Chief Executive Officer

So I will take the second question. Yes, go ahead, David.

David Price -- Chief Financial Officer

That's all right. So let me -- in terms of the revenue recognition, initially we are working under what's called a title model with Cardinal where they act as both the owner and also distributor for us. And therefore that's the revenue recognition point is on shipment into Cardinal. Obviously, we would then have appropriate gross to net reserves, returns reserves et cetera associated with that. But that's from a revenue recognition point of view, that's where we're initially. Ultimately, when we have all of our own licenses by state we will be moving on to a more normal distributor model.

Nancy Lurker -- President and Chief Executive Officer

So to your second question about ILUVIEN and any confusion, they really hasn't been, and part of that has to do with the fact that in this space physicians know very clearly that when they submit their claims, they have to be very clear about the disease codes that are being used. And as a result they know that ILUVIEN is very clearly indicated for diabetic macular edema and as they get more edged to YUTIQ, it's used for uveitis. So, so far we had no confusion around that at all and really we don't anticipate it.

Andrew D'Silva -- B Riley, FBR -- Analyst

Okay. That's really good to hear. Just a couple more quick questions from me, I'm aware that Allergan has been having some supply constraints with OZURDEX had meaningfully impacted their fourth quarter at least for that product line. Have you seen any benefit domestically for YUTIQ? And then with Bausch's Retisert technology, I mean essentially very similar platform, I believe it's actually both based on Durasert. Is it safe to assume going forward that those sales are just essentially be transitioned over to YUTIQ? I mean, it's just a more invasive surgery process, you would assume that physicians would use (inaudible)?

Nancy Lurker -- President and Chief Executive Officer

Yes. So let me answer your last question first and then I'll tackle your first question. For Retisert, let me just explain to our audience about Retisert. Retisert was our internally developed technology off the Durasert platform that got out licensed to Bausch Health a fair number of years ago. That is a much larger insert. It requires being inserted in the surgical suite. It actually has to get tethered into the eye.

My understanding right now is, there is not a lot of physicians who know how to do that anymore. A lot of doctors have sort of moved away from using Retisert because of how invasive it is. The other issue is it lasts for up to two years and it does tend to have higher elevated intraocular pressure as a side effect, because it releases at a higher rate of corticosteroid. So given all of that and the fact that YUTIQ has, just to reiterate, is administered in the physician's office, doesn't require surgical procedure, therefore it's a lot of cost associated with that.

And also the cost of Retisert, my understanding, it runs anywhere from $14,000 to $18,000 now. So that's a lot of money to put out and we're priced at, as I mentioned, whacked at $8,300 for three-years. Let me remind listeners that over -- that's a three-year of lasting insert. So we're substantially less expensive. We're much easier administered in the physician's office and we don't have as much elevated IOP. So when you add all that together, we do expect that there will be a fair amount of transition away from Retisert over to YUTIQ. And...

Andrew D'Silva -- B Riley, FBR -- Analyst

And -- I'm sorry.

Nancy Lurker -- President and Chief Executive Officer

Go ahead. Yes, and as for OZURDEX, yes we are seeing some of that out in the field. As per how long that lasts, we've no insights at all nor do I really want to comment on it as to when or if they will have complete coverage again. But we're seeing some of that out in the field that there is some outages of OZURDEX.

Andrew D'Silva -- B Riley, FBR -- Analyst

Thank you. Sorry for all the questions. My last one is just a very important quarter for you and with DEXYCU, I know it's just recent but are you following a sell-through model where you're going to recognize revenue going straight into the physicians or is it going to be similar from a stocking standpoint? And then, just any color on how you expect to ramp that product up, because I remember there were just some inventory issues and I wanted to make sure that all that was resolved, so I don't get ahead of my skis.

David Price -- Chief Financial Officer

No, absolutely. Yes, with regards to that I think we will be recording revenues the same way as we are with YUTIQ but the current state we have the title model as I mentioned with third-party logistics provider and we continue to operate it that way and we have inventory that is available for commercial sale.

Andrew D'Silva -- B Riley, FBR -- Analyst

Great, thank you so much. Congratulations on the progress and looking forward to watching you launch these products this year.

David Price -- Chief Financial Officer

Thanks, Andy.

Nancy Lurker -- President and Chief Executive Officer

Thank you very much.

Operator

Thank you. The next question comes from the line of Yi Chen of H.C. Wainwright. Your line is open.

Yi Chen -- H.C. Wainwright -- Analyst

Thank you for taking my question. Could you comment on the pricing of DEXYCU? And also the distribution of the sales force between YUTIQ and DEXYCU, is it in anyway indicative of the unit of products that could be sold in the coming quarters?

Nancy Lurker -- President and Chief Executive Officer

So, the price of DEXYCU is $595. And the distribution of the field force, as I mentioned in my comments was 10 reps are dedicated to YUTIQ and we have -- actually right now on the field we have 34, but we will be at 35, we have one vacancy we're still filling for DEXYCU. And let me comment as to the unit volume, yes, but now, is it an exact proportion between reps and expected unit volume? No, not at all. But you do size your field force based on potential.

I want to remind people that we have gone out conservatively with our field force. We do not want to get ahead of ourselves on the field force. If demand come through as we expect, we very well could size up the field force modestly to begin to capture more of the potential of these products, particularly DEXYCU.

If DEXYCU takes off in a very optimistic way and again we're doing everything we can to set the table for that, then I would expect that we would grow our field force. I'm not going to give you numbers. It's not going to be double by any means, but certainly grow the field force to capture more of that revenue demand. But right now, we're going to be conservative until we start to see run rates on these products.

Yi Chen -- H.C. Wainwright -- Analyst

Got it. Thank you.

Operator

Thank you. At this time, there are no further questions. I'd like to turn the conference back over to Ms. Nancy Lurker for any closing remarks.

Nancy Lurker -- President and Chief Executive Officer

I want to thank everyone for your time this morning and very much look forward to future calls with you. We remain very excited about the launch of these two products. Their innovativeness out in the marketplace is already been very well received and we expect good things as we look forward. So thank you again for your time, and we'll talk to you at our next earnings call.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.

Duration: 37 minutes

Call participants:

David Price -- Chief Financial Officer

Nancy Lurker -- President and Chief Executive Officer

Francois Brisebois -- Laidlaw -- Analyst

Andrew D'Silva -- B Riley, FBR -- Analyst

Yi Chen -- H.C. Wainwright -- Analyst

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