Oyster Therapeutics Stock: State Of Business Is Confounding (NASDAQ:OYST)

Oyster Level Pharma, Inc. (NASDAQ:OYST) has an accredited solution, Tyrvaya (OC-01, varenicline answer) Nasal Spray for treating dry eye disorder, and it is also in the pipeline for Neurotrophic Keratopathy Phase 1. NK is a exceptional disease characterized by decreased corneal sensitivity and weak corneal therapeutic. For the pipeline system, the enterprise states in its earnings get in touch with:

We continue on to enroll sufferers in our OLYMPIA Period 2 analyze of OC-01 nasal spray aimed at managing Phase 1 NK. We remain on monitor to count on success of this demo in the 2nd half of this calendar year.

Now, coming to the acceptance, Tyrvaya was accredited in October 2021 and began in the marketplace by early November. So this was correctly the initially entire quarter of noted earnings for Tyrvaya.

Dry eye disorder happens in around 38 million People in america. Present cure possibilities are Allergan’s Restasis and Shire’s Xiidra both of those are specified as eye drops. Restasis is a mild immunosuppressant even though Xiidra is an anti-inflammatory drug. Nevertheless, supplied the formulation that calls for offering the remedies straight to the eye – often a cumbersome and painful course of action – compliance is reduced. What’s more, these therapies choose months to function from the onset of therapy. The enterprise suggests there are 7 million clients that have tried out and abandoned the regular therapies.

Tyrvaya uses a wholly new supply method, as properly as a special mechanism of action. It is used as a nasal drop, and it functions by triggering the trigeminal nerve which in its change triggers tear generation. In 3 clinical trials in about 1000 individuals in gentle, reasonable and significant dry eye illness – ONSET-1, ONSET-2 and MYSTIC – the drug has shown protection and efficacy. People showed statistically significant advancements in tear film generation as assessed employing the Schirmer’s score at Week 4, with far more than 50% sufferers showing exceptional tear output when compared to about fifty percent that amount in the placebo group:

TYRVAYA-dealt with patients showed statistically important advancements in tear movie output as assessed employing the anesthetized Schirmer’s score (-35 mm) at Week 4. Of the individuals handled with TYRVAYA, 52% reached ≥10 mm enhance in Schirmer’s rating from baseline in the ONSET-1 examine, and 47% accomplished ≥10 mm improve in Schirmer’s score from baseline in the ONSET-2 examine, when compared to 14% and 28% of automobile-treated sufferers in the ONSET-1 analyze and the ONSET-2 review, respectively at 7 days 4 (p<0.01 in both studies). Of the patients treated with TYRVAYA, the mean change in Schirmer's score was 11.7 mm and 11.3 mm as compared to 3.2 mm and 6.3 mm in the vehicle treated patients in the ONSET-1 study and ONSET-2 study, respectively at Week 4.

So the first full quarter revenue is $2.7mn. Around 19,000 prescriptions were filled, and these were written by 4500 unique prescribers. 65% of all patients went for refills. A number of patients have continued using the medicine for 6 months starting from November.

The company has also taken great strides on the mediclaim front. In February, TYRVAYA was placed on Express Scripts National Preferred basic and high performance formularies, which collectively make up around 26 million lives. The company has gone on to add more payers, and now it has commercial coverage for up to approximately 95 million lives, which represents 52% of all U.S. commercial lives.

Financials

OYST has a market cap of $134mn and a cash balance of $144mn. This is a terrible state of affairs. There’s a short interest of 22%, which says that the market still thinks the company is overvalued. For a commercial stage company with a clinically successful drug to be in this sorry state is unnerving for investors.

Sales and marketing expenses for the three months ended March 31, 2022, were $27.0 million, General and administrative expenses were $12.9 million, and Research and development expenses were $4.7 million. Net product revenues for the three months ended March 31, 2022, were $2.7 million. At this rate, and ignoring any major improvement in sales, the company hardly has cash for 2 more quarters.

In order to curtail some of these high expenses – high for a small company, that is – the company has gone through a restructuring process. This, it says, will lead to $6M-$8M in savings this year but also include laying off up to 50 workers. The company expects savings of $40-$48mn in 2023. These measures will allow it to commercialize Tyrvaya better, and also put focus on the NK pipeline program. This plan will also include retiring John Snisarenko, Chief Commercial Officer, effective July 1.

The company signed a deal with a Chinese firm last year to commercialize Tyrvaya in China against $17.5mn in upfront payment and a stake in that Chinese company.

Bottom Line

I really have nothing to say. Restasis is a billion dollar drug, while Xiidra is a half-a-billion dollar drug. Tyrvaya has an admittedly better mechanism of action and mode of delivery. Yet it is floundering in the market, and I cannot find any reason for that except perhaps lack of execution, which is also difficult to allege given what the company has been doing. All in all, this is a perplexing situation, and when I am perplexed, I tend to avoid buying.

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