Good afternoon. Welcome to the Jefferies Healthcare Conference. My name is Dennis Tang, biotech and spec pharma analyst here at Jefferies. I have the great pleasure of having SpyGlass Pharma here with us. We have the CEO, Patrick Mooney, CFO, Jean-Frederic Viret, and then the COO, James Dennewill. Welcome. Thank you. Glad to be here. 2026 has been an incredible year for you guys. For many people who may not be aware of this story, because you guys did go public, you raised a bunch of money, so congratulations on that. Thanks. Give people a background as to what SpyGlass is, what you're trying to achieve, and I guess the opportunity here? Thanks, Dennis, pleasure to be here today. SpyGlass has been in operation since 2019 for private raises all up rounds. Earlier this year, we took the company public. Very proud of that. The mission all along was to address two of the world's leading causes of preventable blindness, cataracts, and glaucoma. Essentially, the elegance of our procedure is combining vision correction at the time of cataract surgery with an intraocular lens, paired with multiple years of drug elution to address intraocular pressure lowering. This is combined into one procedure, one procedure code, and one surgery for the surgeons. Essentially, patients can come to the operating room for a needed cataract surgery and also address other conditions. That's our aim, and really happy to be on this journey, and the IPO honestly funds the company to obviously deliver on our ambition. Right. To be perfectly clear, these are glaucoma patients in need of cataract surgery. That's right. These patients are going in to get their lenses replaced or their cataracts removed. They're placing a lens in there. Your product also has drug pads on there that delivers a glaucoma agent. It's kind of like a two for one. Yeah Solving two problems with one product. That's right. On average, there's roughly 5 million annual cataract procedures performed in the U.S. every year. About 20% of those 5 million procedures, these patients also have glaucoma. 1 million incident procedures, glaucoma patients undergoing cataract extraction, and while those patients are receiving an intraocular lens, they now with the BIM-IOL system, we are in our phase III registration trials and aim to launch that product in 2029 to be able to treat both conditions at the time of routine cataract surgery. Maybe remind us what drug you are incorporating in the BIM-IOL system, and why did you make that decision to choose that product relative to the others? Good question. bimatoprost is the drug that we're using to elute from our drug pad system attached to the intraocular lens. It's a prostaglandin analog, prostaglandin analogs have been used commercially since 1996 with the original launch of XALATAN or latanoprost. There's three primary prostaglandin analogs, latanoprost, travoprost, bimatoprost. bimatoprost works very well in our system. The other two APIs are oil-based compounds. bimatoprost is a powder-based API, it works very well in our elution system. Fundamentally, bimatoprost works well in our system, I'd say there's a perception that bimatoprost is the most potent agent of the three, physicians expect it to work, that plays in our favor because they expect our system to work as well. Yeah. Standard of care for these patients, they are eye drops. Right? Yeah, standard of care, if you're initially diagnosed in the U.S., it's traditionally eye drops. The name in the game in glaucoma management is to preserve the visual field that you have, and we do that through lowering the pressure inside of the eye, and you can do that through multiple mechanisms of action. Some of these eye drops lower production of aqueous humor, some increase outflow, via different mechanisms, you can reduce the pressure inside the eye and increase perfusion pressure on the optic nerve and maintain the preservation of field. Yeah. I'm sure we'll get to it, but the problem with eye drops is around compliance and efficacy. Yeah. Sadly, we've known for decades that patients just don't take their drops as prescribed. The medicines that we use today to treat intraocular pressure lowering work very well. Sadly, they don't work when patients don't take them. For the most part, glaucoma is an asymptomatic disease. Patients aren't necessarily feeling pain, if you will, there's not that primary driver to remember to take something. Most patients are diagnosed in their 60s or later, you have dexterity issues, memory issues, financial or fixed income to pay for these medications. We've known from the literature, roughly 50% of patients discontinue therapy after six months, regardless of class of medication. The name of the game is to reduce the patient burden of adherence. How do we put the very medicine that we know is effective inside of the eye and take the patient compliance piece out of it and better manage their disease? Right. Conceptually, coming from biotech, it does sound sort of like schizophrenia, where you do have a lot of compliance issues with these oral medications, and that's where long-acting injectables, again, you're solving for compliance. In your case, it is certainly a long-acting. Maybe comment on how much drug is in the IOL and how long can you deliver that drug? Sure. We've got different trials out there. Our phase II and our phase III, which ultimately is our intended commercial dose. That will be a 3-year elution profile with bimatoprost. Very early on in our early work, first in human study, our drug payload system has the capacity for seven years of drug. In our initial feasibility trial, we do have seven years of payload in that system, which is relevant because as you'll see later this year, we'll show a four-year data readout. Why that's important is it continues to show that we have the ability to deliver longer durations of payload. Three years was a really good spot in terms of what the market wanted, and as a small private biotech, the daunting task of running an initial 10-year trial was too high. When we asked doctors what their minimally viable product was, they told us six to 12 months. We thought that wasn't good enough. Two years was even more exciting. Three years, everyone agreed that's great, but is that possible? It was really an easy decision for us to say, let's get to market with something three times the minimally viable product that surgeons were asking for, which is that three-year payload, and our aim is to continue to push that duration durability. You'll see us attempt that as we go into our first-in-human trial with our secondary system this year, which will have a seven-year component in that study. Right. Certainly when you guys have a successful phase III and you get approved in 2029, by that time, you should most likely have seven-year data, at least in the first-in-human, maybe even the phase I, phase II trial, so that when you guys get approved, you do have that wealth of data to at least market. That's right. That- We'll have multiple data sets at three years or more proving proof of concept. We can deliver consistently and confidently for at least three years, and I think that's meaningful. Yeah. Maybe remind us a little bit, on IOP reduction from your phase I, II and the FIH studies, and how does that compare to drops? Sure. Yeah. Going back with our FIH, even at three years, we're seeing 37% mean IOP reduction, which is really exciting because from a topical drop, you're typically expecting or we've seen 20 and 30% IOP reduction. We benefit from cataract surgery itself, which as you go in and do the procedure, take the lens out, you can see some IOP reduction, but it's not consistent across patients. Patients really benefit both from the cataract procedure and the prostaglandin that Patrick had mentioned. Okay. We follow that up with our phase II study, we're seeing similar results now across 22 different sites, now 104 different patients. I believe we're at 34% at 12 months in IOP reduction. What's really meaningful to patients is the% of patients that haven't needed any additional therapy, right? Three years in FIH, we've only had one patient need any additional therapy, so 95% of patients haven't needed anything. In our phase II, we're now at 12 months, with that 78 microgram dose, which is our phase III product, 98% of patients haven't needed initial therapy. For the patients, this is really what matters. As Patrick mentioned earlier, all the struggles with drops. Elevated intraocular pressure, the patient doesn't feel it, right? The treatment, the patient notices, right? When you're taking the drops, you feel the stinging. You could see the red eyes in the patients, in about a third of them, you could actually notice that they're taking the drops. You don't get that with our product and so really exciting for those patients. Okay. Phase III is ongoing. The data is going to be late 2027 in terms of the initial 12-week data. Is that enough to file with the FDA or is there additional data that the FDA needs to see? Yeah. We've been in close contact with the FDA over the life of the company, and we've aligned with them that the three-month data is the same that Durysta has done before us, iDose has done before us. That's what we'll file the NDA with. We'll follow that up at the 120-day safety update with safety on a subset of those patients and also best corrected distance visual acuity. Because we have that IOL component to it, one of the key changes that you'll notice between our phase II and our phase III was the addition of best corrected distance visual acuity as a co-primary endpoint, and that's to satisfy CDRH. One of the things that we negotiated with them was, "We'll give you that data at the 120-day safety update." We could submit with three months, and then we'll have a subset of patients at 12 months at 120 days into that NDA. You can submit as early as first half of 2028, and you do not need to wait for the 12-month data, the BCDVA data to submit. Yes. Right. Because if that were the case, you would probably submit second half 2028. Right? Okay. All right, sounds good. Commercially, right, there have been other efforts in the space and that have been good for patients, but still relatively mixed in terms of expectations. Comment on some of the learnings that you've had around iDose and its launch, and why do you think the BIM-IOL would be different? Yeah. I think our system, just off the bat, it's going to be available to all cataract surgeons. If you just look at the available surgeon pool that is able and willing to put in both of the products, both great advances for patient care, but the reality is two-thirds of cataract surgeons are not routinely implanting these minimally invasive glaucoma surgical products. iDose requires MIGS-like skill. While every surgeon technically can put in something like iDose, the reality is most of them don't and probably will not. This is where I think SpyGlass really picks up momentum because two-thirds of surgeons just are addressing the cataract. They all know how to put in a foldable lens at the time of cataract surgery, this is where SpyGlass' efficiency and just elegance of our procedure, I think, comes into play. Same market, these 1 million incident procedures that are addressable with three times the available surgeon pool willing to put that in. Combine that with, I think, our team's proven track record of launching buy-and-bill products in ophthalmology. It's a very specific prep. Launching a drug in buy-and-bill is very different than launching a device, and so the work that the team has to put into place ahead of time to make sure that you're building reimbursement confidence just in terms of the systems of care around that launch are important, and that work is underway now, years ahead of launch. I'm very confident in our team because we've done this multiple times in buy-and-bill and ophthalmology. I'm excited for our launch with three times the surgeons, a very knowable market, and a very capable team. Sure, I think that's a really important point, meaning the procedure itself, right? Like iDose, it requires specialized training, additional training, but the BIM-IOL, it's very similar to cataract surgery, maybe a couple of extra steps there, right? Maybe you can comment a little bit on what those extra steps are and some of the feedback from KOLs on the complexity of using a BIM-IOL. Yeah. I think that's part of the secret sauce of SpyGlass. Once surgeons see and are trained, Dennis, I think we could train you in about five minutes and you'd be really good at it. The primary core procedure is cataract surgery, and since second year of residency, cataract surgeons, ophthalmologists that do cataract surgery, part of their routine bread-and-butter procedure is putting in a foldable intraocular lens in the capsular bag. That's every cataract surgery, regardless of whether you're a cornea person or a glaucoma person or a generalist. We essentially meet the masses right where they are inside of a surgical workflow. Changing clinical practice, changing surgical techniques is a really high bar for any industry. Our aim is to not do that, and that was part of the premise of this elegant solution, to say let's just have surgeons do what they do. You don't need new skill. You don't need new tools or specialized tools in the operating room. Just do what you do. There is a bit more work in our surgery, but not new skill. As it comes to our procedure, the drug pads do have to be assembled, and so those drug pads are assembled in the operating room. The surgeon is doing that work today in our phase III trials. That takes at least a minute. We've seen that many, many times. There's other steps in terms of loading, implantation, positioning, and viscoelastic removal. You're in a very fixed compartment, and we now have more bulk in that compartment. The skill that they use to remove viscoelastics, for example, takes a bit more work and time, and we're measuring all of this against standard of care in our phase III trials. Someday we're going to be able to go back to Medicare and the MACs and say, "Here's your standard of care case. This is what you're paying for with your ProFee." As you know, we just got approval last month, and we're issued a Category III add-on CPT code, which will come with additional professional fee. The AMA looked at our system and said, "Yes, there's additional work here. That deserves its own code to be priced at the time of launch." More importantly, we'll have the objective data to go to the Medicare systems and the Medicare Administrative Contractors and say, "Here is the objective data," and that data has value, and that's how we'll negotiate. Yeah Professional fee will be. Okay. That's sort of a perfect segue into reimbursement and economics and things like that, right? That is fairly complicated. Maybe you can just decode that for us in terms of what you guys expect to do once you launch in terms of economics to the doctor. Yeah. It's actually not complicated. It can sound like it, but part of our premise when we said we want to be simple for surgeons, we also wanted to be simple for payers. Our surgery is cataract surgery. Our phase III registration trials are studying it at the time of cataract surgery. Our ultimate label, if approved, will say to be used at the time of cataract surgery. We'll have an on-label product indication to use our drug pads, and more importantly, it's still one surgery. It's one procedure code that already exists. We have well-established Category I CPT codes for cataract surgery. Surgeons will use those codes. This is not procedural stacking. It's a fundamental difference of our path at SpyGlass to be efficient for surgeons and efficient for payers. Using our existing cataract codes, we are still cataract surgery. We will add on the J-code once we have established a permanent J-code and this add-on CPT code, which comes with a little bit of professional fee, which will be negotiated at launch. Okay, when you compare the economics of a regular cataract surgery and BIM-IOL, for a similar amount of time in the operating room, a physician would get reimbursed materially higher with the BIM-IOL system. Right? Economically, there is an incentive there. Yeah, I think that was a question for years. Will cataract surgeons using BIM-IOL, will there be additional professional fee? Surgeons told us early on in our research, "If you get it, that's great. Obviously, if there's more work, we should be paid for it. If you don't get it, that's okay, too, because I see a tremendous value in three years of drug combined with cataract surgery. I'm already there. The patient's there. My patient's going to give me a hug." That was their response to us. Now, currently, we have been issued an additional Category III add-on code. It's been definitively answered. Will there be additional professional fee for SpyGlass? The answer is yes. What that price actually ends up being, that's to be determined, we'll use our objective data. We can say yes, there will be more professional fee for the surgeon, outside of their standard case, that with this add-on CPT code, they will get paid a higher rate. Mm-hmm. Then the ASP plus 6% as well. Yes. That ASP plus 6% is really the J code revenue that's reimbursed for the facility because usually this is an OR-based procedure. That's our intent as well. The OR, the ambulatory surgery center or hospital system is purchasing the drug, and that's reimbursed at average selling price plus 6%. There's additional margin there on the drug on top of the traditional facility fee for the cataract procedure. Yeah. Right now, how are you guys thinking about pricing for this type of product? Yeah, great question. No definitive answers yet, but you've got two products in market today. Durysta is technically a 4-month product, and that's reimbursed at $2,000. iDose, if I'm just rounding here, is a $14,000 product. Somewhere between, for three years of drug, if you just look at both products, you're somewhere between $14,000-$18,000 if you're comparing annual cost of care on both therapies. I think the floor price is there at $14,000. Of course, we'll do the work with the payers. This needs to be of value to them as well. I think the field is wide open from a SpyGlass point of view on what the right price point is, and we'll do that work and come to market where it makes sense for everybody. One of the most common questions that we get, I'm sure that you get as well, is just when you look at the iDose TR launch, the initial ramp, there were some challenges, right? It was relatively slow, despite what consensus at the time had assumed, in terms of revenue. What were some of your observations and learnings from that launch and how do you incorporate those learnings into your owns? Yeah, of course, we want that product to be successful. I think, new technology for patients, especially in this area, it's great. We want to see them do well. This is a very, very big market, and so I see both products continuing to do well in a world where both are in market today. The reality is launching a drug in Medicare Part B reimbursed type of scenario, it's a skill set. We have that, and that's about buy-and-bill know-how. Much of that model was built in medical retina inside of ophthalmology, which our team has a lot of experience propping up J codes, building the system of care with the benefit portal to be able to verify patient benefits. We're doing all of that work now. We're not doing that work post-launch. It's a really important nuance because the team that's at SpyGlass Pharma has done this multiple times in buy-and-bill, in retina with big drugs, and that know-how is essentially being implemented today, years ahead of launch. The short answer is, with three times the available surgeons and a team that's launched multiple buy-and-bill products, we're going to launch and ramp faster. Right. If we can take a step back, the issue with the iDose launch perhaps was just lack of consistency, lack of confidence that when a physician does use iDose, that they would get properly reimbursed for it consistently. What you guys were trying to do was try to be thoughtful, try to get all your ducks in a row ahead of the launch so that doctors can use it with confidence. Is that kind of the point in your strategy? Doctors and facilities, right? Everyone wants to know, are we going to get paid? Are we going to get reimbursed? Especially in the world of buy-and-bill. Establishing that reimbursement confidence is a critical pillar of success for us, and so we're carefully thinking through that now. What that looks like in terms of how do you operationalize that, you have to build, obviously, the benefit verification system. There's no guessing. When a patient comes in for cataract surgery evaluation, you run the benefits on what will their coverage pay for. Same thing needs to be true at this juncture, weeks ahead of surgery, so that you know exactly what does the patient pay, how much does the payer going to reimburse, and those decisions are all ironed out well before surgery. Once the patient's in the operating room, you know you're going to get paid because, A, you've run their benefits, and more importantly, you've verified them. That system is something we're carefully building ahead of time. Okay. Recently, there was, I believe, five out of the seven MACs issued an LCD for iDose, right, requiring SLT prior. Maybe talk a little bit about that dynamic and what does that necessarily mean for you guys, once you guys launch? Yeah. I'd say first thing, I think this is a proposal and I believe that when this rule gets finalized, it'll look differently. Putting that aside, SpyGlass is very different. We are not in the business of adding new procedure codes with new facility payments, and we're not trying to stack anything. This is do your cataract surgery, use the Category I codes you have. That's the simplicity of our system. I think in a world where both iDose and SpyGlass are in market, there is a more economical payer model and thought process just looking at SpyGlass because we're not asking for an additional facility fee, and I think that's important. As it relates to the stepwise therapy, do I think patients should first be diagnosed then go right to surgery? No, I don't. I think there should be some options for those patients. Medical therapy is still step one in this country. SLT is also considered a potential first-line therapy. I know some surgeons like to use it as initial, some use it secondary. Glaucoma patients are typically diagnosed in their 60s. They spend likely a decade on medical therapy and SLT, and they're trying lots of options to preserve their visual field. By the time they make it to cataract surgery, they have been through this entire gamut. Honestly, we're not worried about any of the LCD discussions right now. I think all of this will get ironed out. This was a fundamental choice of ours years ago to say we don't want to be anywhere near these LCD discussions because we are purely cataract surgery. Yeah. Let's stay there, let's not stack codes, and we'll make it a very efficient process for both the surgeon and the payers. Okay. Now maybe we can move on to your second-generation product, the Bimatoprost-Drug Ring System. Sure. Right. With BIM-IOL, yes, you could get three years, five years, seven years of efficacy. Once the drug pads run out of drug, then patients go back to eye drops. Right? For the BIM-DRS system, how would that solve that potential issue? Yeah. One small tweak to your statement, right. Patients will go back on additional therapies at any point that their IOP rises to a level. Okay Need therapy. I'll say, because we're learning about this with you, right? We'll see what our duration of efficacy is. Expectation is it's at least the duration of efficacy of the drug delivery because that's what we've seen with the latanoprost for 25 years now. Right? That's our expectation as well. Let's say a patient has BIM-IOL, and years down the road, they need additional therapy. One of the great things about this product is we don't take any options off the table, so they can still have laser drops, MIGS, kind of anything out there because we're not in the angle. We want to have an answer for those patients, too, and that's where this Bimatoprost-Drug Ring System comes in. Theoretically, they can go and similar to the premise of BIM-IOL, 100% of cataract surgeons have the skills to implant the Bimatoprost-Drug Ring System. You could think about it a lot like an add-on IOL. If a decade post-cataract surgery, you need additional correction, they could put an IOL just on top of your existing one, and the haptics actually rest in the ciliary sulcus. The BIM-DRS will be very similar. We're going into our FIH this year, and in that first-in-human study, we're taking both the three-year drug load and the seven-year drug load that Patrick mentioned earlier. We will have both in this first-in-human study. Beyond just re-treating our patients, this expands our potential market to all pseudophakic patients, so anyone that's had cataract surgery before, and could even potentially be used at the time of cataract surgery. We're including patients in our FIH that are getting DRS at the time of cataract surgery. Some of the flexibility that allows is now you can use this drug technology with a specialty IOL, like an RxSight Light Adjustable Lens, Light Adjustable Lens, something like that. Just really expands the accessibility to this technology to patients. Longer term, how does it work when the drug runs out? Yeah. This could go in, and it is removable and replaceable. Of course, we'll have to do a study to show exactly how that works. The expectation is, very similar to like a STAAR ICL, surgeon could go in with a simple hook, pull the device out, and then put another one in the same area. What's interesting is, if you look at our FIH data, we're at 95% of patients at three years that haven't needed any additional therapy. Not to get morbid, but the average lifespan post-cataract surgery is somewhere around eight years. We're going to be looking at what percentage of our patients don't need any therapy again for the rest of their lives. Sure. Right? Sure. Okay, perfect. Maybe in the last few minutes, because we did talk about BIM-IOL, BIM-DRS, the secret sauce with SpyGlass Pharma is really the platform, right? We're talking about these two because they're furthest along in the clinic, but how should we think about the platform? How could you leverage that into other markets, either in the front of the eye or the back of the eye? When would we hear some of those updates? Yeah, that's a great question, right? Today, I would say we have two platforms, right? We have the drug pad IOL platform, and then we have the Bimatoprost-Drug Ring System platform. One of the things that we end up doing in our lab is we take a number of other small molecules that are commonly used in ophthalmology, and we load them into our platforms and then study them and see that we could deliver them at levels and over durations that are likely efficacious for a variety of indications, right? Some include postoperative surgical drops, so your steroids and your NSAIDs, chronic conditions like uveitis, and then we even look at some of the back-of-the-eye indications as well. Today, what we do is we prove that we could deliver them at those likely efficacious levels. Then we kind of box them up and put them on the shelf so that we really stay focused on these lead programs. We know we have something special with BIM-IOL, and we're going to earn the right to develop the rest of our pipeline over time. Could those earlier products be partnered out if there's strategic interest? Potentially, yes. Okay. Maybe in the last minute, just remind us how much cash you guys have, the runway, et cetera. At the end of Q1, we had over $250 million on the balance sheet. That amount of cash will take us through 2028, so it will cover the full enrollment of the phase III trials, readout of the phase III trials, potentially the launch, but certainly also all the pre-commercial operations. Of course, it will also cover the phase first-in-human trial for BIM-DRS. Perfect. Well, I think that's all the time that we have, and thank you guys so much for hanging out with us.