EYEG: Refreshed and moving forward

By Beth Senko, CFA

NASDAQ:EYEG

READ THE FULL EYEG RESEARCH REPORT

The past year has been one of much change at EyeGate Pharmaceuticals (NASDAQ:EYEG). The pipeline has expanded from one to three candidates (with multiple possible indications). The Company has raised over $20 million in funding and added key clinical and management hires. We expect a series of clinical milestones over the next 12-18 months to help refocus attention on an underappreciated company.

In early September, EYEG completed enrollment of 21 patients for its Phase 2 clinical trial to treat dry eye disease with its first-in-class dihydroorotate dehydrogenase (“DHODH”) inhibitor, PP-001. This study follows a Phase 1 safety and dose escalation study in 24 healthy volunteers. The Phase 2 study is expected to report top-line data in Q421.

The FDA changed the designation for EYEG’s Ocular Bandage Gel (OBG) candidate from a medical device to a drug. OBG is in development for ophthalmic wounds either post-surgery, or from injury. OBG may also be of value in treating dry eye. The upside to the regulatory reclassification is that OBG will be eligible for reimbursement under Medicare Part D plans; however, EYEG needs to redesign its clinical trials to meet the new approval criteria. EYEG plans to start a proof-of-concept study in Q421.

Finally, in July, EyeGate signed a letter of intent to acquire Bayon Therapeutics, a private, clinical-stage ophthalmic pharmaceutical company working with light-sensitive molecules as potential treatment for patients with degenerative retinal diseases. In 2Q22, EYEG will have a pre-IND meeting for Bayon’s lead candidate, B-203, and plans to initiate a Phase 1b proof-of-concept study in retinitis pigmentosa.

In August, EyeGate raised $9.7 million net proceeds in a direct offering of 4.7 million shares at $2.30 per share. Separately, the Company issued 2.3 million warrants with an exercise price of $2.24 per share. At June 30, 2021, cash and cash equivalents were $3.7 million compared to $1.2 million at the end of December. The increase in cash and cash equivalents was mainly due to net proceeds of $7.989 million received from the completion of a private placement in January of 2021, partially offset by cash outflows to fund the Company’s operations.

In the second quarter, research and development expenses were $1.4 million, compared to $0.6 million in the year-earlier period. The increase was primarily due to the December 2020, Panoptes acquisition, including development costs for PP-001 and personnel related costs, partially offset by a decrease in costs related to OBG.

General and administrative expenses were $1.3 million for the second quarter, compared to $1.1 million in 2Q20. The increase was primarily due to increases in professional fees and personnel related costs.

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