Alimera Sciences (NASDAQ:ALIM) has reported a substantial increase in its first-quarter 2024 financial results, with consolidated global net revenue climbing 70% to $23 million from Q1 2023. This notable growth is largely attributed to the successful acquisition of YUTIQ and a surge in global end-user demand. The company also reversed its fortunes from a loss in the previous year to achieving a positive adjusted EBITDA of $1.8 million. Alimera's US segment saw a 92% increase in net revenue, reaching $14.6 million, thanks to the YUTIQ acquisition and a 96% increase in US end-user demand. Internationally, the company experienced a 42% revenue growth, with end-user demand up by 53%. Alimera is optimistic about the future, aiming for over $105 million in revenue and an adjusted EBITDA margin of at least 20% for the full year.
Key Takeaways
- Alimera Sciences' Q1 2024 revenue soared to $23 million, a 70% increase year-over-year.
- The company reported a positive adjusted EBITDA of $1.8 million, a significant improvement from the $2.4 million loss in Q1 2023.
- Growth was primarily fueled by the acquisition of YUTIQ and heightened global end-user demand.
- In the US, revenue jumped 92% to $14.6 million, while international revenue grew 42% to $8.5 million.
- Alimera anticipates reaching $105 million in revenue and at least a 20% adjusted EBITDA margin for 2024.
Company Outlook
- Alimera projects over $105 million in revenue for 2024.
- The company is targeting an adjusted EBITDA margin greater than 20% for the year.
- Focus on growing ILUVIEN and YUTIQ utilization, with confidence in international market success indicating potential in the US.
Bearish Highlights
- The company reported a net loss of approximately $6.3 million in Q1 2024.
- Operating expenses were around $22 million, largely due to sales, marketing, and amortization expenses from the YUTIQ acquisition.
Bullish Highlights
- Alimera's clinical trials are progressing, with the Phase 4 synchronicity study enrollment target met and positive outcomes from the YUTIQ CALM registry study.
- The UK's NICE recommendation could potentially double the market for ILUVIEN in the UK for chronic DME patients with a natural lens.
Misses
- Despite revenue growth, Alimera Sciences still faced a net loss in Q1 2024.
- The impact of the UK NICE recommendation on revenue remains uncertain.
Q&A Highlights
- Alimera discussed the untapped market for treating radiation retinopathy, noting the absence of an approved treatment for this small patient population.
- The company has completed operational integration, including benefit investigation hotlines, and expects stable costs aiming for a 20% EBITDA margin.
- Sales of ILUVIEN and YUTIQ will no longer be reported separately; focus will be on the fluocinolone acetonide franchise as a whole.
- Alimera has 35 territories in the US and has received positive feedback on their new messaging strategy.
- Rick Eiswirth expressed gratitude and announced that second-quarter results would be reported in August.
InvestingPro Insights
Alimera Sciences (ALIM) has demonstrated a robust financial performance in Q1 2024, with significant revenue growth and a positive turn in adjusted EBITDA. To provide further context to these results, let's delve into some real-time data and insights from InvestingPro that could be of interest to investors.
InvestingPro Data highlights include a remarkable 49.19% revenue growth in the last twelve months as of Q1 2023, demonstrating the company's strong upward trajectory. This is further bolstered by a gross profit margin of 86.58%, showcasing Alimera's efficiency in managing its production costs and maximizing profitability from its sales. Despite not paying dividends, the company's share price has seen a substantial 114.81% return over the last year, reflecting investor confidence and market performance.
Two key InvestingPro Tips for Alimera Sciences include an expectation of net income growth this year, which aligns with the company's positive outlook for 2024. Additionally, analysts predict that Alimera will be profitable this year, which is a significant turnaround from the net loss reported in Q1 2024. These tips indicate a potential for continued financial improvement and could be a signal for investors considering Alimera Sciences' stock.
For investors interested in a deeper analysis, InvestingPro offers additional tips that can provide a more comprehensive understanding of Alimera's financial health and future prospects. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for exclusive access to these insights. There are 7 more InvestingPro Tips available for Alimera Sciences, which can be found at https://www.investing.com/pro/ALIM.
Full transcript - Alimera Sciences (ALIM) Q1 2024:
Operator: Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Alimera Sciences First Quarter and 2024 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants on this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through August 14, 2024. I would now like to turn the call over to Scott Gordon of CORE IR, the company's Investor Relations firm. Please go ahead sir.
Scott Gordon: Thank you, operator. Good morning and thank you for participating in today's conference call. Joining me from Alimera's leadership team are Rick Eiswirth, President and Chief Executive Officer; and Elliot Maltz, Chief Financial Officer; Todd Wood, President U.S. Operations; and Philip Ashman, President of International Operations. During this call management will be making forward-looking statements, including statements that address Alimera's expectations for future performance or operational results, future financial position, outlook and guidance and timeline for achieving positive cash flow. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Alimera's most recently filed periodic reports on Form 10-Q, or Form 8-K filed with the SEC today, and Form 10-K filed with the SEC from year ended December 31, 2023, as well as Alimera's press release that accompanies this call, particularly the cautionary statements there in. Today’s conference call will include references to adjusted EBITDA, which is a non-GAAP financial measure. Please see the explanatory language and reconciliation table located in Alimera's earnings press release that accompanies this call. The content of this call contains time-sensitive information that is accurate only as of today May 14, 2024. Except as required by law, Alimera disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Rick Eiswirth. Rick, please go ahead.
Rick Eiswirth: Thank you, Scott, and good morning to everyone on the call. We experienced a very good first quarter aligning with our internal expectations. As we continue to see the benefits of integrating YUTIQ in our U.S. portfolio, we're also seeing excellent growth in both our international distributor markets, as well as some of our key direct markets in Europe. In Q1, our consolidated global net revenue increased 70% over Q1 2023 to $23 million, driven primarily by the acquisition of YUTIQ and growth in global end-user demand, 23% on a pro forma basis. You may note that this revenue is below that for Q4 2023, but this seasonal decline is anticipated each year as patient deductibles are reset and physicians resubmit their benefit verifications lowering the utilization of higher priced products like YUTIQ and ILUVIEN. As we communicated last quarter, we are now generating positive adjusted EBITDA on a quarterly basis, achieving $1.8 million in Q1 2024 versus an EBITDA loss of $2.4 million in Q1 ‘23. We reiterate our confidence in achieving $105 million in revenue and at least 20% adjusted EBITDA margins this year. As I mentioned before, we do expect our revenue to fluctuate quarter-to-quarter due to the seasonality of our business. Adjusted EBITDA will also fluctuate quarter-to-quarter due to this seasonality as spending is more consistent on a quarter-to-quarter basis. In our U.S. segment, net revenue in Q1 2024 increased 92% to $14.6 million versus $7.6 million in Q1 2023, primarily again due to the acquisition of YUTIQ. U.S. end user demand for our products was up 96% in Q1 versus the prior year when including the addition of YUTIQ and 2% on a pro forma basis. We believe that the growth of a ILUVIEN and YUTIQ in Q1 softened from integrating a combined two product sales call. We restructured the call plan to prioritize targets across current users and that's all targets and enhance the level of effort against each product. We are seeing improvement as we've seen sequential growth in monthly end user demand for our products on an aggregate basis every month since December of last year. Further, our U.S. sales team has been selling both YUTIQ and ILUVIEN for three quarters now and we're starting to see the value of cross selling the two products to accounts in this quarter, as the percentage of accounts using both products have slightly increased from 26% to 28%. In order to accelerate the growth of our products, we're tightening our messaging decisions for both ILUVIEN and YUTIQ. For ILUVIEN and DME, we are refining the value proposition, linking the severity of disease to retinal thickness variability as this concept is catching on with retina specialists and being utilized by higher competition. If the swelling in the retina is allowed to recur as acute treatments were off, it can lead to permanent retinal damage and vision loss over time. The sooner the retina can return to a healthy level and the more consistently can stay there, the better opportunity to improve and save vision. For YUTIQ, our sales team now have the three year data from the YUTIQ PIVOTAL 001 study that illustrates the benefit of long-term control for chronic non-infectious uveitis affecting the posterior segment of the eye. It shows that the median time to the first recurrence of uveitis is over 1,000 days for the YUTIQ patient, while it's less than 100 days for the same patient, a substantial benefit. Turning to our international business. We are pleased with our continued momentum to begin the year. In Q1 2024, international net revenue grew 42% to $8.5 million, driven by a 53% increase in end user demand. We continue to see growing utilization in the U.K., Portugal, Ireland, Spain and France. In March, the U.K. National Institute for Health and Care Excellence, or NICE, issued final guidance stating that the fluocinolone intravitreal implant is recommended for treating visual impairment caused by chronic diabetic macular edema irrespective of lens sight. What this means for us is that now faking patients or those that have a natural lens now have access to ILUVIEN. NICE reimbursement to-date has been limited to only pseudophakic patients or those that had undergone cataract surgery. This is a significant expansion of our potential user base among the chronic diabetic macular edema or DME patient population. According to the U.K. Macular Society, safety patients represent up to 75% of the broader DME population in the United Kingdom. We expect the availability of this wider reimbursement to positively impact utilization in the U.K. in the second-half of 2024. NICE guidance can also impact reimbursement in other countries such as Spain and Italy. We believe that this NICE decision if adopted in other markets will broaden our potential patient base in these countries as well. I would now like to highlight the continued progress and key milestones we achieved this quarter in our clinical trials. We reached the enrollment target for the Phase 4 open-label synchronicity study in January that we inherited from EyePoint just a few months after our acquisition of YUTIQ. This study, which will read out in the second-half of next year, will provide retina specialists with a broader sense of the utility of our fluocinolone acetonide implant across a variety of patients with chronic non-infectious uveitis affecting the posterior segment of the eye, also known as NIUPS. This potentially -- this will potentially benefit both YUTIQ in the United States and ILUVIEN in Europe and the Middle East. Additionally, we have three abstracts highlighting our YUTIQ CALM registry study presented last week at two meetings. The Association for Research and Vision and Ophthalmology, also known as ARVO, and the retinal World Congress, all demonstrating that real-world safety and efficacy outcomes are consistent with the pivotal clinical trial outcomes. Separately, we were pleased to announce that the first patient has been randomized in the DRCR retina networks protocol AL. The study is titled, the randomized clinical trial, evaluating intravitreal forisumab injections for fluocinolone acetonide intravitreal implants versus observation for the prevention of visual acuity loss due to radiation retinopathy. This study will assess the development of macular edema and associated long-term visual acute effects of consistent and continuous release corticosteroids or repeated injections of anti-VEGF initiated near the time of radiation therapy, compared to observation, developing patients at risk for radiation retinopathy. The study plans to include 600 patients with primary choroidal melanoma seeing in treatment with plaque brachytherapy. Over 40% of radiation retinopathy patients have been shown to experience the devastating vision loss associated with radiation retinol within three years of treatment. And currently, there are no FDA approved pharmacotherapies for radiation retinopathy. And with that update, I'll now turn the call over to Elliot to review our first quarter financial results in greater detail.
Elliot Maltz: Thanks, Rick, and hello, everyone. We completed quarter one as we anticipated, delivering results expected from the Street. Consolidated net revenue in Q1 2024 was up 70% to approximately $23 million, compared to $13.5 million in Q1 2023. Consistent with the seasonal business pattern we see in the first quarter of the calendar year, revenue was down versus the fourth quarter of 2023 as patients' insurance plans change and practices resubmit benefits verifications. Looking at our operational segments. U.S. net revenue increased 92% to approximately $14.6 million in Q1 2024, compared to $7.6 million in Q1 2023, driven primarily by the acquisition of YUTIQ. End-user demand in the U.S. for our fluocinolone implant was 1,968 units in Q1 2024, a 2% increase, compared to Q1 2023 on a pro forma basis. International net revenue increased 42% to approximately $8.5 million in Q1 2024, compared to approximately $6 million in Q1 ‘23. The increase was driven primarily by end user demand growth of 23% in our direct markets and a 72% increase in stocking shipments to our international distributors. Total end-user demand in our International segment was up 53% to 2,050 units, compared to Q1 2023, due to strong growth in our direct markets and solid performance from our distributors in France and Spain. Now looking at the rest of our P&L. Total operating expenses in the first quarter of 2024 were approximately $22 million, compared to approximately $14.8 million in Q1 of ‘23. The increase was primarily attributable to $3.3 million of additional sales and marketing expenses, driven by the expansion of our commercial infrastructure to support selling two products in the U.S., as well as $2.4 million in additional amortization expense attributable to the YUTIQ acquisition in May of 2023, as well as a $1.3 million increase in general and administrative expenses relating to $700,000 of personnel costs and $0.5 million of stock-based compensation expense. Net loss was approximately $6.3 million in Q1 2024, compared to approximately $5 million in Q1 2023. We generated positive adjusted EBITDA again this quarter as planned. Q1 2024, we generated approximately $1.8 million of adjusted EBITDA, compared to an adjusted EBITDA loss of approximately $2.4 million in Q1 of ‘23. On our last call, we noted that our target adjusted EBITDA margin is 20% for the full-year. We remain confident in this guidance, but we anticipate adjusted EBITDA margins will fluctuate quarter-to-quarter since expenses remain relatively consistent, but revenues fluctuate due to seasonality. As of March 31, 2024, we had cash and cash equivalents of approximately $14.3 million, compared to $12.1 million at the end of 2023. This quarter, we increased our term loan agreement with our lender SLR Capital Partners by $5 million. This provides us with more operating flexibility and be phrased the impact of some upcoming contractual obligations, such as the $7.5 million of consideration owing to EyePoint in 2024, resulting from the acquisition of YUTIQ last year, of which $1.9 million was paid in March. Additionally, during Q1 2024, we triggered $1.1 million of revenue-based milestone fees under our term loan and exit fee agreements with SLR, and we expect to trigger the remaining $1.3 million over the rest of 2024. Now I'll turn it back over to Rick to give his closing comments.
Rick Eiswirth: Thank you, Elliot. As we said, we are pleased with our start to 2024, which was consistent with our internal expectations and previous guidance. However, there remains a significant opportunity to grow the utilization of ILUVIEN and YUTIQ in 2024 and beyond. We believe that our success in growing utilization of ILUVIEN in both DME and uveitis in our international markets is a leading indicator for what we can accomplish with our fluocinolone acetonide franchise in the United States. We believe our restructured call plans in U.S., which prioritize current users and high-decile targets will enhance the level of effort against each product and promote the cross-selling opportunity. As I commented earlier, we believe we are seeing early signs of success with sequential monthly demand growth since December and an uptick in the percentage of accounts utilizing both products. We believe that the numerous studies we have conducted around the world with ILUVIEN are a good indicator that the NEW DAY study will report a successful outcome and support the use of ILUVIEN earlier in the treatment paradigm for DME. And we believe the synchronicity study will highlight increased utility of YUTIQ in the general retina specialist population. We remain confident in our ability to deliver more than $105 million in revenue this year and greater than 20% EBITDA margins. Thank you very much. That concludes our prepared remarks, and I'll now turn the call over to the operator for questions.
Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Chase Knickerbocker with Craig-Hallum. Please go ahead.
Chase Knickerbocker: Good morning, guys. Thanks for taking the questions. Maybe just first for me, more of a qualitative one. Just as you're engaged -- as your sales force -- combined sales force are going out looking to harvest the synergies of both indications. Are you finding that a lot of physicians still that might have -- might be using your product in DME, for example, we're not aware of the indication for uveitis or maybe just kind of getting a sense of how warm the water is as far as those synergies still go and how much kind of more upside there is to drive awareness?
Rick Eiswirth: Yes, sure. I think it's a combination of a lot of things, Chase and I'll ask Todd to comment on this a little bit more, but I think it is an awareness issue, making sure doctors know that we have both assets now to some extent where they're using one product. It is a challenge that the team has been trying to figure out how to streamline the conversation about DME and uveitis to be able to talk about both in the same short window they get in the clinic, because there are quite a few products that are competing for clinic time with our team on the road now. And so you're getting less time in the clinic and talking to the doctor and is trying to squeeze both of those in the same conversation. But Todd, do you want to talk a little bit more about how you've been trying to refine that messaging.
Todd Wood: Yes. Yes, certainly. Thanks Chase. Thanks for the question. And to add on to what Rick mentioned, sometimes for classic uveitis and DME. There are different providers in different patients because sometimes it just gets referred on to a uveitis specialists. And what we are currently engaging on is an education campaign because there's many disease states that are of chronic inflammation that are uveitic. And so we're educating providers on the fact that they are probably seeing a lot of uveitis even though it's not classic uveitis, it's tied to another disease. So that's currently what we're implementing right now to create that crossover.
Chase Knickerbocker: Got it. And then kind of staying on the same line of taking a different tack. Taking a look at the ASP data, it looks like there's never been any rebating done here on either product line. Have you given any thought to potentially initiating any sort of rebating strategy to kind of help drive those initial conversations forward and maybe drive some extra demand early in the combination of these indications in the U.S.
Rick Eiswirth: Yes, Chase, it's a timely question. We actually have been looking at that. We call it -- we refer to it as a non-clinical value program, but we have implemented as of April 1, a non-clinical value program in the U.S., where we are providing value back to the physician practices that are using ILUVIEN or YUTIQ more consistently. And frankly, there's a separate program for ILUVIEN and YUTIQ. And then there's a little bit more value provided back for those practices that are using both products more consistently. So we implemented that on April 1. It's slowly been rolled out, but we do expect that we'll have some small impact in Q2 and have an impact -- greater impact as we move throughout the year.
Chase Knickerbocker: Are you seeing any sort of impact on initial conversations from that non-clinical value that you're willing to add to your potential new customers as well? And then just lastly on the model side. Sales and marketing spend, would you expect that to kind of be flat from here? Or was there any sort of non-recurring or non-cash items in the quarter? Sorry, if I missed it.
Rick Eiswirth: Yes. Well, I'll ask Todd to comment on some of the early feedback we've gotten from the -- it's what we're referring to as the Amplify program on the non-clinical value, and then maybe Elliot can address the comment on the financials.
Todd Wood: Yes. The initial feedback has been very well. It's greatly accepted. Obviously, the marketplace has been anticipating something like this for some time. And as we've launched it, they've -- we've just got a tremendous amount of positive feedback. Now it's just a matter to see what type of impact that is as we look at their purchasing patterns throughout the end of this quarter.
Elliot Maltz: Yes. And with regard to just total expense in the sales and marketing line, I think this quarter was maybe a bit higher than what we anticipate on a go-forward basis. We did have some one-time costs that were incurred during the first quarter of ‘24, which should normalize as we move through the rest of the year, not a very material number, but maybe in the 5% to 10% range that we're talking about in terms of one-time cost in our P&L this quarter in sales and marketing.
Chase Knickerbocker: Got it. Thanks for the questions, guys.
Operator: The next question comes from Yi Chen with H.C. Wainwright & Company. Please go ahead.
Yi Chen: Hi, thank you for taking my question. With respect to the protocol AL trial, does Alimera need to financially support your study?
Rick Eiswirth: I am sorry, I didn't quite understand that. Yi, can you repeat the question?
Yi Chen: The protocol AL, the DRCR retinal network study with ILUVIEN or faricimab injections. Does Alimera need to financially fund this study?
Rick Eiswirth: Yes. Well, we are making contributions of about $1.25 million over the period of four or five years and it's pretty straight lined over the course of the year. So it's about $0.25 million a year.
Yi Chen: Okay, okay. And could you give us some color on how many radiation retinopathy patients out there could that potentially benefit for [Technical Difficulty]
Rick Eiswirth: It's a pretty small population. I mean, it would be considered an orphan disease indication, probably less than 10,000 patients a year. But at the same time, there's nothing out there approved to treat it at this time.
Yi Chen: Okay. Okay. And regarding the U.K. NICE recommendation for chronic DME patients with natural lens having access to ILUVIEN. How much more -- I mean, how large is the impact on the top line revenue from the U.K. do you expect to see?
Rick Eiswirth: It's hard to give specific guidance around that. The phakic population is probably about 25% of the DME population. However, it's probably a little bit greater in the more chronic patients that it will be utilized -- where it would be utilized specifically in the U.K. But certainly, overtime, we think this can more than double the market for available patients in the U.K. How quickly it will be adopted in these patients, it's a little bit unclear. We'll probably be able to tell you a little bit more after we get a quarter or two of experience with it. But we do know that in some of the hospitals, patients are already being identified where they've got -- still have a phakic lens and they're being on identified for utilization of ILUVIEN. So it's starting to pick up, but probably won't be able to give much guidance until we get another quarter or two out.
Yi Chen: Got it. Got it. And the 4,028 units for the quarter, that is the user demand, including U.S. and ex U.S. territories. Is that correct?
Rick Eiswirth: Yes, that is correct. That's correct.
Yi Chen: Okay, got it, got it. Thank you.
Operator: The next question comes from Naz Rahman with Maxim (NASDAQ:MXIM) Group. Please go ahead.
Naz Rahman: Hi, everyone. Thanks for taking our questions and congrats on the progress. Just a couple. I want to expand on the U.K. management reimbursement question a little bit. Could you comment on how the reimbursement is in the U.K. or how it differs from other international territories? And what the implication that also needs for your margins? Like, how could we better reimbursement in the U.K. to translate the potential margin improvement, if any, later down the line?
Rick Eiswirth: So the reimbursement change doesn't -- Naz, the reimbursement change doesn't really have an impact on the margin because it's still going to be reimbursed at the same price. But Philip, maybe you could give us a little bit of commentary on where we have phakic restrictions and don't across Europe.
Philip Ashman: Yes. So the U.K. is one of the countries that adopted this pseudophakic limitation. The other countries include Italy, and Spain as well. And unfortunately, in Europe, the way things work, all of these reimbursement authorities speak to one another. So even in countries that don't have the limitation, there's a dampening impact which -- it will be interesting to see how it translates across Europe. But clearly, the U.K. guidance is now in place and implemented. We launched it in on -- at the end of April. So we're watching carefully to see how it progresses there, and we're working with our partners in Spain and Italy already to look at plans for how we can help them challenge the limitation in those countries, too. But hopefully, that helps. And just to echo what Rick said, because it's an important point, there has been no change in price at all with this. So in the sense of the United Kingdom, what we expect is more volume with the requisite impact of that volume coming through in the overall revenue.
Naz Rahman: Got it. That was helpful. Our next question is on the pipeline or indication expansion. You mentioned on the call, could you expand a little more about what you're thinking? And also, have you seen any potential off-label use of either YUTIQ or ILUVIEN for RVO or potentially other indications?
Rick Eiswirth: Yes. So I think from a pipeline perspective, we've been holding some advisory boards and looking at potential opportunities to expand the indications for ILUVIEN as we've discussed. I think that probably the leading candidate beyond potentially something in radiation retinopathy could arise out of the DRCR study, would be vein occlusion. We hear from physicians a lot that there's a need for a chronic long-term low-dose steroid in RVO. We do know that there are physicians that have utilized it on a compassionate use basis or have found patients that have signs of uveitis and DME with their RVO and treated those patients as well and have come back to us with cases where it works, but we are trying to work with the advisory board to try to refine what exactly that available patient population would look like and what a trial structure would look like and that's something that we hope to flush out between now and the end of the year where we could potentially redirect some of the spending from Synchronicity and NEW DAY as that sort of bleeds down.
Naz Rahman: Got it. And then my last question is on the comp study for YUTIQ. Could you provide some color on when we might see some data from that study or what conversion data might be presented at?
Rick Eiswirth: Yes. So that's -- it was a registry study, and it's sort of slowly producing publications by the participants in that study. As we mentioned, there were two -- there were three presentations both at ARVO and at the World -- Retinal World Congress over the past couple of weeks. And as those papers are published, we'll be able to share this publicly, but those papers haven't been shared yet. They were just presentations of the meetings. But in general, what you're seeing there is that the registry studies are showing that the safety and efficacy is very, very consistent with what you saw -- what we saw in the pivotal studies for uveitis. And I'd just like to remind you that the reason you see that, you see it across DME as well is because ILUVIEN and YUTIQ are, for the most part, they're self-compliant. Once they're injected in the eye, they deliver a very consistent low-dose of fluocinolone acetonide every day for three years and you're not reliant on capacity at a doctor's office, patient getting back to the office for consistent therapy. And it's why you don't see the same results in a real-world setting with the anti-VEGFs and the other acute therapies because they're not injected at the same frequency they are in the clinical studies.
Naz Rahman: Got it. Thank you for taking our questions.
Rick Eiswirth: Absolutely. Thank you, Naz.
Operator: The next question comes from James Molloy with Alliance Global Partners (NYSE:GLP). Please go ahead.
James Molloy: Hey, good morning guys. Thank you for taking my questions. I had a question on margins in the quarter. How do you -- would you guys be able to decouple sort of the sales and marketing from sales? I see that -- thinking of the $23 million in the first quarter here. I know it's seasonality from the fourth quarter, but it looks similar to the '23, you guys posted in the third quarter last year with better gross margins and better EBITDA margins. Is there a way to sort of get the margins going in the first quarter? Or do you expect to see that going to improve through the year? Or what happens in the first quarter that kind of crushes the margins well besides the seasonability?
Elliot Maltz: Yes. So I mean there were some fixed costs that keep our business fairly consistent. That's the majority of our P&L structure, but there are some one-off items, some relating to integration of new hub services and transitioning from having 2 hubs supporting each product of having a single hub in the U.S. There were some nonrecurring expenses in the first quarter that are tied to internal meetings to align the sales force on the cross-sell opportunity into train reps on selling both products. We have some that came from EyePoint last year that needed more training and attention, focusing on DME and vice versa for the legacy Alimera employees as they've taken on the uveitis indication and their selling opportunity. We believe that the majority of those costs are now done. And on a go-forward basis, our P&L should reflect really the fixed cost structure we have with fewer of those one-off items that can weigh down the P&L for an individual quarter. So as we move through the rest of the year, we expect our costs to remain fairly stable. And on a full-year basis, get us to that 20% EBITDA margin that we indicated in our guidance.
Rick Eiswirth: One point, Jim -- the last -- Jim, the last piece of operational integration was completed as of April 1, where we and EyePoint provided benefit investigation hotlines where we run benefits for the physicians' offices to make sure the insurance coverage was there and they understood co-pays, et cetera. We were running two systems in parallel until April 1, which means we were incurring more costs and that integration was complete as of April 1. So that's another issue you see.
James Molloy: And that goes into sales and marketing expense in the quarter?
Rick Eiswirth: Yes.
James Molloy: Thank you. Then what's the -- can you guys break out the U.S. ILUVIEN versus YUTIQ in the quarter?
Rick Eiswirth: We're not doing that going -- we talked about that a couple of quarters ago. We're going to talk about the fluocinolone acetonide franchise going forward because it's on a consolidated basis, just like it is in Europe going forward.
James Molloy: Okay. Great. Understood. Then maybe last question. How many reps you guys have currently in the field, and can you talk a little bit about any anecdotal stories in the field on the new messaging and how that's been received.
Rick Eiswirth: Sure. Right now, we've got 35 territories in the U.S., but I'll ask Todd to comment on feedback on the messaging. Todd, if you want to do that?
Todd Wood: Yes, sure. The messaging has been received quite well. And where this has been derived from is you look at some of the growth that we're experiencing internationally. Philip and his team have been out in front with this messaging a little bit before the U.S. And so we've really bolstered our efforts around it with the new call plan that Rick mentioned a little bit earlier. . And when you look at the advocacy use, our key proponents of the product, they're aware of fluctuating retina thickness. They take that into account with their treatment paradigm and they recognize that fluctuating thickness can lead to impaired vision. And then also on top of that, early intervention is better to prevent impaired vision. So that's how the advocates of ILUVIEN are using the product today. So we're trying to expand that to a broader base and get more people on board with that since there is initial momentum from the advocacy groups.
James Molloy: Great. Thank you for taking the questions.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Rick Eiswirth for any closing remarks.
Rick Eiswirth: Great. Thank you, and I'd like to thank everyone for participating on today's call and your continued interest in Alimera. We do look forward to sharing our ongoing progress when we report our second quarter results in August. Thank you all, and have a good day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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