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

Oyster Level Pharma, Inc. (NASDAQ:OYST) has an authorized products, Tyrvaya (OC-01, varenicline option) Nasal Spray for treating dry eye ailment, and it is also in the pipeline for Neurotrophic Keratopathy Phase 1. NK is a unusual condition characterized by decreased corneal sensitivity and poor corneal therapeutic. For the pipeline system, the corporation suggests in its earnings connect with:

We keep on to enroll sufferers in our OLYMPIA Section 2 analyze of OC-01 nasal spray aimed at dealing with Phase 1 NK. We stay on observe to be expecting final results of this demo in the 2nd 50 % of this calendar year.

Now, coming to the acceptance, Tyrvaya was authorized in October 2021 and began in the industry by early November. So this was effectively the initial full quarter of noted earnings for Tyrvaya.

Dry eye condition occurs in more than 38 million Individuals. Current therapy options are Allergan’s Restasis and Shire’s Xiidra equally are provided as eye drops. Restasis is a gentle immunosuppressant although Xiidra is an anti-inflammatory drug. Nonetheless, offered the formulation that necessitates providing the prescription drugs instantly to the eye – generally a cumbersome and distressing method – compliance is small. In addition, these therapies acquire months to function from the onset of treatment. The organization says there are 7 million people that have tried using and abandoned the conventional therapies.

Tyrvaya works by using a completely new shipping approach, as properly as a unique system of motion. It is employed as a nasal fall, and it operates by triggering the trigeminal nerve which in its change triggers tear manufacturing. In 3 medical trials in over 1000 clients in mild, average and critical dry eye sickness – ONSET-1, ONSET-2 and MYSTIC – the drug has demonstrated security and efficacy. Individuals showed statistically sizeable advancements in tear film output as assessed utilizing the Schirmer’s score at 7 days 4, with extra than 50% people showing optimal tear generation as opposed to about 50 % that selection in the placebo group:

TYRVAYA-dealt with sufferers showed statistically sizeable enhancements in tear film generation as assessed making use of the anesthetized Schirmer’s score (-35 mm) at Week 4. Of the people addressed with TYRVAYA, 52% accomplished ≥10 mm boost in Schirmer’s rating from baseline in the ONSET-1 examine, and 47% achieved ≥10 mm maximize in Schirmer’s rating from baseline in the ONSET-2 review, when compared to 14% and 28% of vehicle-dealt with sufferers in the ONSET-1 examine 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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