Alimera Sciences Inc. (ALIM)

Q2 2012 Earnings Call

August 9, 2012 4:30 PM ET


Rick Eiswirth – COO and CFO

Dan Myers – President and CEO


Adam Darity – Citi

Michael Faerm – Credit Suisse

Chris Holterhoff – Oppenheimer



Good day, ladies and gentlemen, and welcome to the Alimera Sciences Second Quarter 2012 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. (Operator Instructions) And as a reminder, this conference is being recorded.

I would now like to introduce your host for today, Mr. Rick Eiswirth, Chief Operating Officer and Chief Financial Officer. Sir, please go ahead.

Rick Eiswirth

Thank you. Good morning, everyone, and welcome to the Alimera Sciences’ conference call to discuss our second quarter 2012 financial results. A press release regarding these results was issued earlier this afternoon and is available on our website. On the call with me today is Dan Myers, our President, and Chief Executive Officer.

Before we begin our prepared remarks, I would like to remind you that various statements that we make during this call about the company’s future results of operations and financial position, business strategy and plans and objectives for Alimera’s future operations are considered forward-looking statements within the meaning of the federal securities laws.

Words such as anticipate, believe, estimate, expect, intend, may, plan, contemplate, predict, project, target, likely, potential, continue, will, would, should, could or the negative of those terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Our forward-looking statements are based upon current expectations that involve risks, changes and circumstances, assumptions and uncertainties. These risks are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and the Results of Operations” sections of Alimera’s quarterly report on Form 10-Q for the quarter ended March 31, 2012, and Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which are on file with the SEC and available on the SEC’s and Alimera’s websites.

Additional risks, which may also be described in those sections of Alimera’s quarterly report on Form 10-Q for the quarter ended June 30, 2012, which we expect to file no later than next week. We encourage all investors to read these reports and our other SEC filings.

All of the information we provide on this conference call is provided only as of today and we undertake no obligation to update any forward-looking statements we may make on this call or on account of new information, future events or otherwise. Please be advised that today’s call is being recorded and webcast.

And with that, I would like to turn the call over to Dan Myers, our President, and Chief Executive Officer. Dan?

Dan Myers

Thanks, Rick. We’ve made great progress in recent months as we prepared to launch ILUVIEN on our own in 2013 in selected countries. We now received marketing authorization for ILUVIEN in five of the seven EU countries that we initially targeted Austria, the UK, Portugal, France and Germany and on target to begin generating revenue during the first quarter of 2013.

With our recently announced $40 million convertible preferred stock financing that we expect to close in the third quarter, combined with our existing cash on hand, we believe that we’ll be fully funded to commercially launch and sell ILUVIEN on our own in Germany, the UK, and France.

Rick will provide a little more color on this shortly. We’ve begun the recruiting process for our key management positions and are engaging with a contract commercial organization to build on our field personnel. Our initial focus is to place medical science liaisons and market access specialists in the field to cultivate the market for our formal launch early next year. In July, we received a letter from Germany’s Federal Joint Committee indicating that the automatic obligation to submit a dossier on ILUVIEN per the AMNOG Law would not be necessary, and that a benefit assessment would not be required.

This is due to the fact that fluocinolone acetonide, the active ingredient in ILUVIEN, was available on the German market prior to January 2011. This allows us to launch ILUVIEN without price restriction in Q1 of 2013. Following Germany, we expect to launch in the United Kingdom and France later in 2013.

Regarding the UK, there has been misleading and incomplete information recently around the issuance of the Appraisal Consultation Document or ACD (ph) that we received from the National Institute for Health and Clinical Excellence or NICE. NICE publishes ACD as part of the Single Technology Appraisal process. Following the first appraisal committee meeting, the committee acknowledged that ILUVIEN showed greater efficacy than a sham injection in people with chronic diabetic macular edema. However, their preliminary recommendation is that ILUVIEN is not recommended for the treatment of chronic diabetic macular edema given the current cost of ₤5,500 and other variables included in our submission.

As some of you may or may not know, the process with NICE requires the submission of a cost affecting this model. As you can imagine, this model is extremely complex with multiple variables, only one of which is obviously price. We have reached agreement on the majority of the variables in the model. However, there do remain some assumptions that are still open for discussion. This document is not NICE’s final guidance on the technology and the recommendation may change after consultation. We, along with NICE’s consultant and the public, have the opportunity to provide further comments by the end of August in preparation for the second appraisal meeting in September. This interim guidance provides us additional information on key issues and important variable in NICE’s evaluation of the cost effectiveness of ILUVIEN.

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