The COVID-19 pandemic has caused several ophthalmic businesses to announce major changes to operations and guidance. Here is a review of some of the recent updates announced from publicly traded companies in the ophthalmology industry as a result of the pandemic.
Alcon announced a series of updates stemming from the impact of COVID-19. Alcon has initiated business continuity plans designed to keep its associates and customers safe while continuing to deliver critical eye care needs for the global healthcare community. These plans include directing all Alcon office-based associates to work from home and not travel. In manufacturing facilities, the company is limiting the number of people in one area at a time, modifying workstation arrangements and minimizing the cross flow of people between shifts to reduce potential exposure, along with enhanced cleaning and sanitization.
Alcon announced it is withdrawing its full year 2020 guidance previously disclosed on February 25, 2020.
Most countries and local municipalities have mandated or advised unprecedented measures to help contain the spread of COVID-19. These measures, which have necessitated a temporary deferral of eye care procedures and exams in many markets, are anticipated to have an impact on Alcon’s financial results. The extent of this impact will depend on the duration of the pandemic, timing of global recovery and normalization of customers’ practices. Due to the challenges in forecasting the duration of the pandemic, Alcon is unable to estimate the overall ongoing impact on its financial results. The company plans to provide additional details in its first quarter earnings call scheduled for May 13, 2020.
Annual General Meeting and Withdrawal of Dividend Proposal
Alcon’s Board of Directors announced the company will hold its first Annual General Meeting on Wednesday, May 6, 2020, without the attendance of shareholders and published its invitation for shareholders in the Swiss Gazette of Commerce.
Due to restrictions banning all public and private events in Switzerland as a result of the coronavirus outbreak, the Board of Directors is directing shareholders to send their voting instructions to the independent representative, Hartmann Dreyer Attorneys-at-Law. Shareholders will not be granted access to the meeting room on the day of the meeting.
Alcon’s Board of Directors has also revised the proposals for the meeting. In February, the Board proposed a dividend of CHF 0.19 per share for 2019. In light of the current market conditions and economic uncertainties linked to COVID-19, and as part of the company’s overall efforts to maintain financial flexibility and implement cash preservation measures, the Board of Directors considers that it is in the best interest of Alcon’s stakeholders to delay the initiation of a dividend proposal until 2021. As a result, the dividend proposal has been withdrawn and the remaining amount of available earnings, after allocation to the general reserve, shall be carried forward.
The invitation, including agenda, proposals of the Board of Directors and other meeting materials covering the COVID-19 situation and the withdrawal of the dividend proposal, will soon be mailed directly to shareholders entered in the company’s share register with the right to vote as of the record date of April 27, 2020. The meeting materials will soon be available electronically for information purposes on https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2020/2020-Annual-General-Meeting/default.aspx.
Alcon regrets the unusual circumstances of the 2020 Annual General Meeting and hopes to return to a standard agenda next year.
COVID-19 Support Efforts
Alcon is responding by supporting charitable partners that are serving the most vulnerable populations affected by the outbreak. The Alcon Foundation has reallocated funds and made monetary donations to local, national and global organizations to support meal programs for children and seniors, provide essential supplies to shelters and aid public health emergency relief efforts.
As the public health emergency has grown in scale, Alcon has ramped up its efforts to donate personal protective equipment (PPE), while also producing additional PPE and hand sanitizers for relief efforts. Alcon will continue to explore additional measures to support organizations fighting to stem this pandemic.
Glaukos provided an update on the impact of the COVID-19 pandemic on the company and announced a preliminary net sales range for its first quarter of 2020.
Preliminary and Unaudited First Quarter 2020 Net Sales and COVID-19 Response
Preliminary and unaudited net sales for the first quarter of 2020 are expected to be in the range of $55 million to $55.3 million. Company sales were materially impacted as healthcare systems shifted resources to the treatment of COVID-19 and government restrictions on elective procedures and therapies were implemented throughout the world. By late March, these restrictions led to the increasing deferral of cataract and keratoconus procedures and global sales trends that were significantly lower versus levels achieved prior to the COVID-19 outbreak. The company believes most of these deferred procedures will ultimately occur in the future as the COVID-19 pandemic subsides, but it cannot predict the timing and impact on its future financial and operating results given the continued uncertainties associated with the situation.
During this challenging time, Glaukos remains focused on its employees and their families, its customers and their patients, its suppliers and the communities it serves. As the current situation emerged, Glaukos reviewed and implemented significant cost saving initiatives in order to preserve jobs globally, protect core research and development programs, and maintain its strong financial and operating position following the COVID-19 pandemic. These initiatives included substantial reductions in discretionary spending and capital expenditures, as well as a temporary salary reduction for all senior executives throughout the company. The company does not carry any outstanding debt obligations and continues to have a strong cash position that it believes is sufficient to fund ongoing operations beyond the next 12 months should elective procedure restrictions remain in place.
The company plans to provide its full financial and operating results, along with additional information related to the impact of COVID-19, in its upcoming earnings release and earnings call for the first quarter of 2020, which is expected to be in early May.
Update on 2020 Guidance
As previously announced in a press release issued on March 24, 2020, due to the rapidly evolving environment and continued uncertainties from the impact of COVID-19, Glaukos has withdrawn its previously announced first quarter and annual guidance for 2020, which was originally issued on February 27, 2020. At this date, although Glaukos cannot predict the specific extent, or duration, of the impact of the COVID-19 outbreak on its future financial and operating results, the company expects the impact of COVID-19 will be significant in the near-term. Glaukos plans to provide additional information, to the extent practicable, during its first quarter earnings call in early May.
Allergan has announced several program enhancements designed to assist eye care professionals and patients during the COVID-19 pandemic. These include:
- Lowering copay savings card offerings for Restasis, Restasis Multidose, Lumigan, Combigan, and Alphagan P
- Beginning April 1, 2020 through May 31, 2020, eligible commercially insured patients* will pay as little as $0 using the My Tears, My Rewards, or At Your Service programs – patients can enroll at restasis.com or savewithays.com
- *Note: This limited-time offer is not valid for patients enrolled in Medicare, Medicaid, a Medicare drug benefit plan, TRICARE, or other federal or state health programs such as medical assistance programs; other limitations may apply
- Increasing the coupon value on all Refresh products from $4 to $10. Patients can visit RefreshRewards.com for their coupon
- Extending additional payment terms for products purchased directly from Allergan, specifically Ozurdex and Xen, on or before March 23
Ocular Therapeutix announced its response to the COVID-19 pandemic and related impact on Ocular Therapeutix’s business operations.
“In the midst of the global COVID-19 pandemic, our first priority is for the safety and well-being of our employees, patients, clinical collaborators and customers,” Antony Mattessich, President and Chief Executive Officer, said in a company news release. “While we are doing everything in our power to respond appropriately to the current crisis, we are also preparing Ocular Therapeutix and our community of stakeholders to thrive in the future. The company is well positioned despite the challenging economic conditions.
- Our clinical programs remain on track:
- The first two subjects in the higher-dose cohort of our OTX-TKI (axitinib intravitreal implant) phase 1 clinical trial have reached the four-and-a-half-month time point and are continuing to show clinically meaningful reductions in intraretinal and/or subretinal fluid with a single implant. If the durability of OTX-TKI is confirmed in larger trials out to this time point or beyond, we believe that it would have the potential to become a new standard of treatment for wet AMD;
- Our Phase 3 trial of Dextenza for the treatment of ocular itching associated with allergic conjunctivitis (AC) is expected to read out this quarter and, if successful, we plan to file an sNDA application for this indication;
- The first three cohorts of our phase 1 program for OTX-TIC (travoprost intracameral implant) are fully enrolled and we look forward to providing updates on the results of those patients in the near future; and
- OTX-CSI (cyclosporine intracanalicular insert) is set to enter the clinic in the middle of 2020, continuing our development of a treatment for dry eye disease.
- On the revenue side, despite a marked slow-down in cataract and other ophthalmic surgical procedures beginning in the second week of March due to COVID-19, we were able to record Dextenza net product revenue in Q1 of an estimated $2.1 million, representing growth of 31% over Q4 2019; and
- Moving forward, while we anticipate substantial continued weakness in cataract volumes throughout Q2, we expect that, with variable expense reductions and a rebound in cataract volumes in Q3, our cash runway should extend into Q1 2021, consistent with our prior guidance.”
Clinical and Pipeline Update
OTX-TKI (axitinib intravitreal implant): OTX-TKI is a bioresorbable, hydrogel implant incorporating axitinib, a small molecule tyrosine kinase inhibitor with anti-angiogenic properties delivered by intravitreal injection to the posterior segment of the eye for the potential treatment of wet age-related macular degeneration (wet AMD) and other retinal diseases. Two cohorts of six subjects each, a lower dose cohort of 200 µg and a higher dose cohort of 400 µg have been enrolled in a Phase 1 clinical trial.
- As of early April 2020, the first two patients in the second or higher-dose cohort have now shown a clinically meaningful reduction in intraretinal and/or subretinal fluid out to four-and-a-half months with a single implant. Other patients in the second cohort are still being followed and have not reached these timepoints yet. As is typical of such early stage trials, visual acuity has not shown consistent improvement across the cohort.
- Data from both cohorts continue to demonstrate that OTX-TKI has been generally well tolerated and is observed to have a favorable safety profile, with no ocular serious adverse events to date.
- Interim data will be presented by Robert Avery, MD a member of the Phase 1 Data Safety Monitoring Committee, at the 8th Annual Vit-Buckle Society meeting on April 20, 2020.
OTX-TIC (travoprost intracameral implant): OTX-TIC is a long-acting travoprost intracameral implant in development for the treatment of patients with primary open angle glaucoma or ocular hypertension. The company presented interim phase 1 data on OTX-TIC at the Glaucoma 360 Conference held in San Francisco, CA in February 2020 from the first two cohorts enrolled.
- Data from the first two fully enrolled cohorts (cohort 1 = 5 patients, cohort 2 = 4 patients) continue to indicate a clinically meaningful reduction in mean IOP values in patients receiving OTX-TIC.
- The data also continue to show that the mean intraocular pressure (IOP) values remained lowered from baseline through and beyond the six-month study period in many patients and, in one patient, over 18 months.
- Enrollment in the third patient cohort has been completed. Enrollment in the fourth cohort continues, while long-term evaluation remains ongoing in the first two cohorts.
OTX-CSI (cyclosporine intracanalicular insert): The company recently filed an IND and intends to begin a phase 1 clinical trial for the treatment of dry eye disease in the middle of 2020.
Staar Surgical Company provided a business update relating to the evolving COVID-19 global health care concern.
“We have made the decision to get out in front of our traditional earnings call communications to let you know how Staar is faring during the COVID-19 pandemic. It is clear that the health and safety of everyone around the globe is paramount and we are practicing, by country served, the required directives from national and local governments and public health officials,” Caren Mason, President and CEO, said in a company news release. “The following are facts as they exist today regarding Staar’s business continuity:
- We have a highly specialized work force and will support them effectively throughout the pandemic requirements in their respective geographies. We continue to pay all of our employees’ salaries, commissions, wages and benefits during this time while many of our employees effectively work remotely. We suspended most of our production on March 17 with the exception of continuation of critical late-staged processes. We anticipate resuming production this month and achieving full production during Q2.
- We have shipped to our global packaging and distribution center in Nidau, Switzerland inventory to support all of our expected global requirements with the exception of the U.S. which is serviced out of Monrovia, California. We have shipped to China requested quantities of billable units and several pallets of consignment inventory to support Q2 busy season requirements. We did this out of an abundance of caution to be sure China would be able to meet the demand they are forecasting. We also shipped billable and consignment inventory to Korea which experienced a significant increase in implants over prior year in March. Our business in Japan remains strong and we have stocked our Staar owned distribution center there to meet demand.
- Through the third week in March, our Q1 sales posted solid double-digit growth over prior year period. From March 20 through April 3, we experienced a substantial slowdown in global geographies characterized as “hot spots” for the COVID-19 virus during that timeframe. We expect this slowdown to continue and, in some markets, expect sales to pause as elective surgeries are discouraged to support COVID-19 related needs. While the global markets in “hot spots” recede or cease ordering, our teams report recovery or continuation of recent strong trends in much of Asia which currently represents over 60% of our business. Our teams in “hot spot” areas are following our successful playbook for engaging in extensive remote customer outreach programs that includes digital training courses during the business slowdown in their markets.
- Our CRO (Contract Research Organization) has worked individually with each of our implanting sites in the U.S. for the EVO clinical trial. The sites, with the CRO, determined effective plans to continue caring for patients in the trial and determined if or when to suspend implanting EVO lenses in new patients. We will not address impact on the timing of the study at this time. Each of our sites has patients in the queue and we expect to ramp-up as soon as it is acceptable to resume the study with each site determining with the CRO what that timing may be.
- Our balance sheet is strong with $120 million of cash at January 3, 2020 that we anticipate can support operations if required for the foreseeable future. We continue to receive payments from our largest customers while we expect our AR to grow over these next few months with smaller clinics the most financially impacted by the pandemic.”
Preliminary First Quarter Net Sales. Staar expects total net sales for the first quarter ended April 3, 2020 to be approximately $34.9 million, up approximately 7% as compared to the prior year period. The company estimates COVID-19 negatively impacted first quarter sales by approximately $4 million, less than previously estimated. Despite the pandemic’s impact on business, first quarter ICL unit growth is expected to be up approximately 9% with strong performance in Japan, Korea, Canada, Germany and the rest of Asia Pacific countries not including China. China’s growth was up 7% due to a strong January and ordering resuming in the final two weeks of the quarter. Implant rates in China were up significantly in the past two weeks.
Fiscal 2020 Outlook. While the company remains confident about its prospects, due to the shifting nature of COVID-19, the company is withdrawing its outlook for fiscal 2020. Any future updates to the company’s outlook will be based on the timing and duration to a resolution of the COVID-19 global health care concern.
Staar expects to report complete first quarter financial results on or about May 6 and provided today’s information to timely address inquiries relating to the evolving COVID-19 pandemic. The financial information in this release is unaudited and subject to adjustment in the final audited financial statements to be filed with the company’s Quarterly Report on Form 10-Q.
Aerie Pharmaceuticals provided a business update associated with the impact of the COVID-19 pandemic on company operations.
While Aerie volumes increased in the first-quarter of 2020 compared to the fourth-quarter of 2019 for both Rhopressa (netarsudil ophthalmic solution) 0.02% and Rocklatan (netarsudil and latanoprost ophthalmic solution) 0.02%/0.005%, the pace of volumes, as seen with the entire pharmaceutical market according to IQVIA data, has declined as the COVID-19 impact became elevated in late March and into April 2020 to date. There has been a positive partial offset from increasing 90-days’ supply activity, but with many eye care professionals’ offices closed or in the process of closing, new prescription growth has slowed. The company is using various virtual tools to remain in contact with eye care professionals, and Aerie’s territory managers are experiencing successful engagement largely working from their homes.
Considering the rapidly evolving status of the COVID-19 situation and the uncertainty around its ultimate impact, Aerie is withdrawing its 2020 guidance for net revenues and net cash used in operations, which includes the net revenue guidance as a component. As would be expected, the company is currently experiencing travel and meeting expenses below original internal expectations. Guidance will be updated when there is clarity going forward.
Aerie has observed no disruptions to date in its supply chain for production of Rhopressa and Rocklatan. The company believes it has approximately 3 years of starting materials and active pharmaceutical ingredient in inventory, and adequate supply of finished product on hand to support its commercial efforts for at least the next 6 months, and production continues.
Regarding Aerie’s globalization strategy, the regulatory review in Europe of Roclanda (Rocklatan in the United States) remains on track, while the results for the Mercury 3 trial for Roclanda, which is designed to gauge commercialization prospects in Europe, are now expected in late 2020 or early 2021. Aerie expects to hold a meeting with the regulatory authorities in Japan during the second quarter of 2020 to discuss phase 3 trial designs for Rhopressa while continuing to prepare for the trials and exploring partnership opportunities. From a pipeline perspective, Aerie’s early stage retina implant trials remain on track, and Aerie hopes to commence its phase 2b clinical study for dry eye candidate AR-15512 (formerly AVX-012) by the end of 2020.
“The health and safety of our employees, patients, prescribers and community are of utmost importance during this time,” Vicente Anido, Jr., PhD, Chairman and Chief Executive Officer, said in a company news release. “We are complying with all requirements and mandates from various agencies and governments, and we are operating quite effectively with most of our employees working diligently from home. While we believe we had been on track to execute our plan for 2020, including the growth we experienced in first-quarter 2020 volumes, given the uncertainties around COVID-19 and the unprecedented nature of this pandemic, we feel it is necessary to withdraw our current 2020 guidance. Despite these short-term disruptions, we remain confident in the long-term growth of our glaucoma franchise and Aerie’s future.”