KALA BIO, Inc. (KALA) Earnings Call Transcript & Summary

Good morning, and welcome to Kala Pharmaceuticals Conference Call to discuss the STRIDE 3 clinical trial results. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Niranjan Kameswaran, Senior Vice President of Strategy for Kala Pharmaceuticals. Please proceed.

Thank you, operator, and thank you all for participating in today's call. Please note that the press release we issued earlier today and the presentation that we're using for this conference call are both available on the Investors and Media section of the Kala website, www.kalarx.com. Additionally, today's call is being webcast live. Joining me from the company today are Mark Iwicki, Chairman, President and Chief Executive Officer; Kim Brazzell, Chief Medical Officer; Todd Bazemore, Chief Operating Officer; Mary Reumuth, Chief Financial Officer; and Hongming Chen, Chief Scientific Officer. Turning to Slide 2 of the presentation. Before we begin, I'd like to remind everyone that as part of today's call, we will make certain comments about Kala's future expectations, plans and prospects that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements will include the timing of resubmission of the EYSUVIS NDA to the FDA, expectations regarding timing of the NDA review and potential launch timing, and the potential market opportunity for EYSUVIS. These statements are based on the beliefs and expectations of management as of today, March 9, 2020. Our actual results may differ materially from our expectations. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. Investors should carefully read the risks and uncertainties described in today's press release as well as risk factors, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statement, included in the company's most recently filed annual report on Form 10-K and other filings with the SEC. I will now turn the call over to Kala's CEO, Mark Iwicki. Mark?

Thanks, Niranjan. Good morning, everyone, and thank you for joining us this morning to review the results from STRIDE 3, our Phase III clinical trial evaluating EYSUVIS for the short term treatment of dry eye disease. Today is an exciting day for Kala. We're really pleased to announce that STRIDE 3 successfully met both of the primary endpoints as well as the key secondary endpoints with a high degree of statistical significance. If you take a look at Slide 3, you can see that these data are consistent with our prior clinical experience and looking across the Phase II STRIDE 1, STRIDE 2 and STRIDE 3 trials, EYSUVIS has now achieved statistical significance on endpoints measuring the signs and symptoms of dry eye disease in multiple trials with a consistent safety and tolerability profile. We believe the results from STRIDE 3 address the complete response letter we received last year. We look forward to turning our attention to the Class 2 resubmission of our NDA, targeted for the second quarter of 2020 and to a potential approval before year-end. We are encouraged by these data because of what they mean for the millions of patients who suffer from dry eye disease and for the physicians who treat them. We'd like to express our sincere appreciation to the investigators and nearly 3,000 patients who participated in our trials, which together comprise the largest clinical development program for dry eye disease treatment to date. Patients and physicians have expressed tremendous interest in the dry eye therapy that targets inflammation, the underlying driver of dry eye flares and that delivers rapid relief. Based on the data announced today, we believe that EYSUVIS offers exactly this product profile, and we are hopeful that it will transform the treatment landscape for dry eye disease patients. Before turning the call over to Kim to review the clinical data in greater detail, I would like to reinforce our belief in the tremendous commercial potential for EYSUVIS. Based on our interactions with both ophthalmologists and optometrists, we believe EYSUVIS has the potential to become the preferred prescription therapy for the short-term treatment of dry eye. There is a substantial population of patients that could benefit from an improved medicine for their dry eye and associated flares. Given our experience with INVELTYS, we are well positioned to capitalize on this tremendous opportunity. We are aiming to resubmit the NDA during the second quarter of 2020 and expect a 6-month FDA review time line. Our team has been preparing to commercialize EYSUVIS for many months, and we look forward to leveraging our existing infrastructure to support a launch immediately following approval. I'll now turn it over to Kim.

Thank you, Mark, and good morning, everyone. Slide -- the STRIDE 3 trial design is shown on Slide 5. This was a multicenter, randomized, double-masked, vehicle-controlled, parallel-arm study comparing EYSUVIS to vehicle each dose 4 times a day for 2 weeks in a total of 901 patients with confirmed dry eye disease. Patients who met initial screening and inclusion and exclusion criteria, entered a 2-week run-in period with vehicle. Patients who continued to meet these inclusion and exclusion criteria after the run-in were then randomized to receive either EYSUVIS or vehicle for 2 weeks. Ocular discomfort severity was graded daily by the patient over the entire course of the trial using a visual analog grading scale from 0 to 100 recorded in a patient diary. The primary endpoints for the trial were first change of baseline of ocular discomfort severity compared to vehicle at day 15 in the overall intent-to-treat, or ITT population; and change from baseline of ocular discomfort severity compared to vehicle at day 15 in a predefined subgroup of patients in the ITT population that had more significant baseline ocular discomfort. Conjunctival hyperemia, the primary sign endpoint in the STRIDE 2 and STRIDE 1 and Phase II trial was assessed as one of the key secondary endpoints. The results for the primary endpoints are shown on the next slide, Slide 6. STRIDE 3 successfully met both of the prespecified primary endpoints in the trial with a statistically significant improvement in ocular discomfort severity at day 15 in the overall ITT population, achieving a p-value of 0.0002, and the statistically significant improvement in ocular discomfort severity at day 15 in the predefined subgroup of patients with more severe ocular discomfort at baseline, here with a p-value of 0.0007. We feel these data replicate the results of STRIDE 1 where statistical significance was achieved for both of these symptom endpoints as predefined primary endpoints. The next slide, Slide 7, shows the results for conjunctival hyperemia, which was assessed as the first key secondary endpoint. Statistical significance was achieved for hyperemia with a p-value of less than 0.0001. Again this replicates the results of STRIDE 1 and STRIDE 2 where statistical significance was also demonstrated for hyperemia as a prespecified primary endpoint in both of those trials. As we show on Slide 8, EYSUVIS was well tolerated in the study with adverse events and intraocular pressure increases comparable to that seamless vehicle. Instillation site pain was the only adverse event reported by greater than 1% of patients and occurred in less than 3% of patients participating in the trial. Of particular note, there were no patients in either group that had an IOP elevation of greater than 5 millimeters of mercury that led to an IOP of greater than 21, and no patients in either group had an absolute increase in IOP of greater than 10 millimeters of mercury. Now as a reminder, we had previously filed an NDA that included the results from STRIDE 1, STRIDE 2 and the Phase II trial. In the CRL that we received last year, the FDA recommended positive results from an additional clinical trial to support the efficacy of EYSUVIS. With the results from STRIDE 3, we believe we've satisfied that recommendation. We have now achieved statistical significance for the sign endpoint of conjunctival hyperemia in STRIDE 1, STRIDE 2 and STRIDE 3 as well as in the Phase II trial. We have achieved statistical significance for the symptom endpoint of ocular discomfort in the overall ITT population in the STRIDE 1 and STRIDE 3 trials, and we have achieved statistical significance for the symptom endpoint of ocular discomfort in the more severe subgroup in the STRIDE 1 and STRIDE 3 trials. With this, we have hit the sign endpoint in 3 Phase III trials and both symptom endpoints in 2 Phase III trials. Over the next few slides, we will briefly present key efficacy and safety across the various clinical trials, which we believe represent a compelling body of evidence supporting the safety and efficacy of EYSUVIS. Slide 9 shows the statistically significant results for ocular discomfort in the overall ITT population in STRIDE 1 and STRIDE 3, demonstrating replication of the key -- of this key primary endpoint across the 2 Phase III trials. As you recall, we also had a positive result in our Phase II trial for ocular discomfort, with a p-value of 0.0489. Slide 10 shows the daily data over the course of treatment for ocular discomfort in the ITT population in both the STRIDE 1 and STRIDE 3 trials. As you can see, there's a rapid onset of symptom relief in both STRIDE 1 and STRIDE 3 that continues to improve over the 2-week course of dosing. In addition to the day 15 ocular discomfort findings, we also achieved statistical significance for ocular discomfort at day 8 in STRIDE 3 as a secondary endpoint, with a p-value of 0.0282. As you may recall, we have demonstrated significant effects at day 8 in both our previous Phase III trials. If we go to Slide 11, this shows the statistically significant results in STRIDE 1 and STRIDE 3 for ocular discomfort in patients in the ITT population with more severe baseline discomfort. These data demonstrate replication of this key primary endpoint across the 2 Phase III trials. With these results and those of the overall ITT population, we have replicated statistically significant improvements in 2 separate prespecified independent primary symptom endpoints. Going to Slide 12. This slide demonstrates the statistically significant results for conjunctival hyperemia across all 3 trials, STRIDE 1, STRIDE 2 and STRIDE 3, again, demonstrating replication of the primary sign endpoint across the 3 Phase III trials. A significant improvement was also observed for corneal staining at day 15, with a p-value of 0.0042. This is consistent with the corneal staining result in STRIDE 2 where we achieved a p-value of 0.0314. Slide 13 shows combined safety and tolerability results across the 3 trials. As you can see, there was only 1 adverse event that was observed at a frequency of 1% or greater across the 3 trials, instillation site pain, which was reported in less than 5% of patients participating in the trials. In addition, the occurrence of increases in IOP of greater than 5 millimeters of mercury leading to an IOP of greater than or equal to 21 millimeters was 0.5% or less across the 3 trials and was similar between the EYSUVIS and the vehicle groups. Slide 14 summarizes the highlights of our STRIDE 3 results as well as the compelling body of evidence across all our clinical trials supporting the efficacy and safety of EYSUVIS for the temporary relief of the signs and symptoms of dry eye disease. As we mentioned previously, we believe that STRIDE 3 results address the recommendation of the complete response letter for an additional positive efficacy trial to support the EYSUVIS NDA submission. We have now achieved statistical significance for the prespecified sign endpoint of conjunctival hyperemia in all 3 trials and statistical significance for both prespecified primary symptom endpoints in the STRIDE 1 and STRIDE 3 trial. The team will now turn its attention towards finalizing the NDA submission, which we are targeting for the second quarter. This will be Class 2 resubmission, which qualifies for a 6-month review time line. Therefore, we target a potential approval in the second half of 2020. I will turn the call over to Todd now, who will describe the market opportunity for EYSUVIS in the U.S. Todd?

Thank you, Kim, and good morning, everyone. Turning to Slide 15. As Mark mentioned, following the STRIDE 3 results announced this morning, we are turning our full attention to securing U.S. regulatory approval for EYSUVIS and preparing for launch. We are well positioned to execute on the EYSUVIS market opportunity. As we prepared to commercialize INVELTYS a couple of years ago, we intentionally designed our commercial infrastructure to be readily scalable in order to accommodate a future potential launch in dry eye disease. Given the significant overlap between Kala targets for INVELTYS and EYSUVIS, we will be ready to launch EYSUVIS immediately upon approval. Our 57 existing sales professionals will initially target the top dry eye prescribers who collectively represent approximately 70% of all dry eye prescriptions. As we look to early 2021, we plan to expand our sales force to approximately 100 to 125 representatives. We expect a sales force of this size will allow us to effectively cover the eye care professionals who are responsible for approximately 85% of all dry eye prescriptions. Additionally, we will leverage our existing payer account team with the goal of quickly driving payer formulary reviews of EYSUVIS. Turning to Slide 16. As you've heard us describe before, we are very excited about the commercial potential of EYSUVIS. We estimate that there are approximately 33 million people suffering from dry eye disease in the U.S., of which over 17 million have been diagnosed and are managed by an eye care professional. Quantitative market research study suggests that approximately 80% to 90% of these patients experience episodic dry eye flares rather than continual symptoms. As a reminder, these flares are inflammatory-driven responses to a variety of triggers. And feedback from doctors and patients strongly suggest that they are -- that they typically have a significant -- not adequately managed by current therapies. Recent research conducted by Kala and external third parties indicate that approximately 78% of patients on artificial tears suffer from flares and approximately 82% of patients on reading prescription therapies still experience breakthrough flares. From this research, it seems clear that there is a substantial need for a new therapy that can provide temporary relief of the signs and symptoms of dry eye, particularly for those patients experiencing dry eye flares. And we believe that if approved, EYSUVIS can fill this gap and become the preferred prescription therapy for patients requiring a rapid-acting short-term treatment with broad anti-inflammatory activity. Slide 17. Slide 17 highlights prescription persistency trends for the leading dry eye therapies. As this chart shows, the vast majority of patients initiating treatment with these medications discontinue a therapy within the first 90 days. In quantitative market research, the top reasons patient cite for discontinuing the current prescription dry eye medication are insufficient efficacy and unwanted side effects. Turning to Slide 18. Importantly, our market research, shown on Slide 18, also suggest that EYSUVIS may be suitable for patients at all stages of disease. This includes mild-to-moderate patients who currently only use palliative approaches, such as artificial tears, which do not directly impact ocular inflammation as well as more severe patients as an adjunctive therapy to their chronic dry eye prescription medication as either induction therapy or to treat breakthrough symptoms. As such, we intend to position EYSUVIS as a first-line therapy to treat all dry eye patients in need of a rapid-acting short-term treatment of the signs and symptoms of their dry eye disease. And what we also believe is particularly encouraging is that there are already more than 17 million diagnosed dry eye patients that visit their eye care professional an average of 2 to 3 times a year. 42% of those visits are because the patient is experiencing a dry eye flare. That means we do not need to drive patients into the doctor's office. These patients are already there oftentimes because they are suffering a flare and today there is no FDA-approved prescription medication for the short-term treatment of the signs and symptoms of dry eye disease. Turning to Slide 19. We believe EYSUVIS is well-poised to become the preferred first-line prescription therapy for the short-term treatment of the signs and symptoms of dry eye disease, which includes flares. EYSUVIS provides broad anti-inflammatory activity to address the inflammation that is a key driver of dry eye disease. In our clinical trials, EYSUVIS provided rapid onset of relief of signs and symptoms of dry eye disease with adverse event an IOP elevation that was comparable to placebo. If approved, EYSUVIS would be the first ocular steroid to have an indication for dry eye disease, which we know from market research, eye care professionals are very enthusiastic about for the following reasons. First, the efficacy and safety profile of steroids vary. They are not all the same, and the EYSUVIS product profile was viewed very favorably by eye care professionals. Second, the inherent risk associated with prescribing off-label steroids. Third, patient comfort in having a dry eye indication in the labeling of their medication. And fourth, safety and efficacy that has been vetted by the FDA. In fact, 95% of the eye care professional surveyed stated that they are interested in the availability of a steroid with an FDA-approved dry eye disease indication. Slide 20. Today, there is limited use of off-label steroids to treat dry eye disease. As shown on Slide 20, prescription data suggests that approximately 2.9% of diagnosed dry eye disease patients, under an eye care professional's care are prescribed a steroid. Symphony data indicates that approximately 10% of total ocular steroid prescriptions are for dry eye disease. Assuming 2 prescriptions per patient per year, that means that only approximately 500,000 of the 17.2 million diagnosed dry eye patients are currently treated with an off-label steroid. Our research indication with the use of steroids for the treatment of dry eye disease will increase significantly if EYSUVIS is approved, with EYSUVIS capturing the majority of that use. Slide 21. Based on the surveys of both patients and physicians shown on Slide 21, we believe EYSUVIS is well positioned to capitalize on a massive market opportunity and change the treatment landscape in dry eye disease. Eye care professionals we have surveyed report that they intend to prescribe EYSUVIS for more than half of all their dry eye patients, which include patients primarily managed on over-the-counter artificial tears, patients currently on prescription medications that experience breakthrough flares and patients in need of an induction therapy when they are starting a maintenance medication. Patients we have surveyed have echoed this sentiment, expressing a strong interest in the EYSUVIS product profile, specifically, a product that can deliver rapid relief of the signs and symptoms of dry eye disease. On Slide 22, as you can see, when examining patient types based on their current dry eye therapy, there is a very large patient population that eye care professionals intend to prescribe EYSUVIS. When applying the stated patient shares in the market research across patient types, there is a significant market opportunity of more than 9 million dry eye patients that have the potential to be prescribed EYSUVIS. And as I stated earlier, these patients have already been diagnosed and see their eye care professional an average of 2 to 3 times per year for their dry eye disease. Putting this all together on Slide 23. We believe there is a substantial market opportunity for EYSUVIS. We estimate that there are over 330 million dry eye flare days per year in the U.S. alone, representing a total addressable market potential in excess of $8 billion annually. And if approved, as the only short-term treatment for the signs and symptoms of dry eye disease, we will be well positioned to capitalize on this opportunity. I'd like to hand it back to Mark at this time.

Thanks, Todd. As we finalize our NDA resubmission and prepare for a potential launch, our team will continue to progress our launch planning preparations. We are incredibly excited by the data reported today and confident in EYSUVIS' potential to become the preferred prescription therapy for the short-term treatment of dry eye disease. With that, I'll turn the call back over to the operator for questions.

[Operator Instructions] Your first question comes from the line of Chris Schott with JPMorgan.

Congrats on the data. Very good to see. Just had 2 questions here. I guess, first, as we think about the initial patient and kind of the docs you are going to be targeting with EYSUVIS, do you envision that this is going to be a focus on those 500,000 patients who are already using off-label steroids? And then once you get those patients on board, you start rolling out to some of those OTC patients? Or do you think you can immediately start converting that OTC opportunity once the drug's approved? May I also ask my second one together or -- yes, we'll start with that one and then go from there.

Sure. Chris, it's Todd. Thanks for your question. We believe that we're going to be able to go after the entire market straight away. Certainly, you would expect very rapid early adoption from patients that are already using or have used corticosteroids in the past for their dry eye disease. But we believe from our interactions with both patients and physicians and market research that we will very quickly be able to penetrate into the OTC market as well because remember the vast majority of those patients are already and in visiting an eye care professional, right? They see their eye care professional on average 2 to 3 times per year, and almost half of the office visits that they show up for is because they are experiencing a dry eye flare. And currently, there is no FDA-approved short-term treatment for those patients. So we believe from our interactions and market research that we'll see very rapid adoption also with those patients who are currently only managed on over-the-counter artificial tears. And I think you had a second question.

Yes. That's very helpful. And then the second one, which is as I'm thinking about reimbursement time lines and how we think about kind of gross to net shaking out over time. It's quite early, but just a higher level, just maybe compare and contrast the experience we had with INVELTYS versus -- in terms of, I guess, Medicare versus commercial patients, et cetera, versus what you expect with this dry eye opportunity?

Sure. Why don't we start talking about what the actual payer split is for current dry eye prescriptions. The market is about 48% commercial reimbursed, about 42% Medicare Part D. We really expect the market dynamics to be very different in dry eye than they are in surgery. Remember, surgery is a protocol-driven market in which you have to get entered into a surgeon's postsurgical treatment protocol. And as a result, that required us to have these copay cards for Medicare patients when we did not have Medicare coverage at launch, where we have -- essentially treat them as a cash-pay patient and buy them down to a very low copay, and that certainly put pressure on our gross to nets for INVELTYS in year 1. Very different in dry eye. It's not a protocol-driven situation. These are patients that are being seen on an individual basis and physicians are making individual prescribing decisions for those patients based on the way they present and what their needs are. We believe from our interactions with the payers that we've had in market research that they're going to be very receptive to the profile of EYSUVIS. They have expressed strong interest in a short-term treatment that provides rapid relief of signs and symptoms of dry eye disease as opposed to the only treatment option out there today, which are the more chronic maintenance medications.

Your next question comes from the line of Liana Moussatos from Wedbush.

Congratulations. Can you just give us your thoughts on potential commercial partnerships, maybe even inside the U.S. for primary care or/and outside the U.S.?

Yes, it's a great question. Let me start in the U.S. We have our commercial infrastructure already built, and it's a terrific team of really experienced ophthalmology sales professionals, leadership, management, marketing, all across the board. So I think we're really well poised to launch EYSUVIS ourselves. And with a modest-sized sales force to go after the ophthalmologists and optometrists, we feel that this is something that the Kala team can really do. Of course, we're always open to evaluating opportunities, but right now, our plans are to do this ourself here and inside the U.S. In Europe, we've had several conversations with regulators, and those have been positive conversations. We've been waiting for this trial to come in, and we're going to continue to advance those discussions as well. And I think on the backs of having a clear line of sight as to the opportunities in Europe, we will also be really interested in seeking out any potential partnerships for the European market.

Okay. And time line for submitting an MAA?

Yes. We don't have a definitive time line yet. We will need some time and -- to get back to the regulators. The early feedback we got was that our program that we've run mostly here in the U.S. would be sufficient, but we need to get back to those regulators and review all the data with them, and then we'll be able to report back to all of you what the time line looks like.

Your next question comes from the line of Biren Amin from Jefferies.

Congrats on the data. Mark, given -- you've started to see a treatment benefit at day 8 in STRIDE 3. How does your day 8 data compare to Xiidra and Restasis? Did they see a similar type of benefit at that early stage?

Yes, it's a great question. We actually see benefit even earlier than that, you can tell from the charts. But as you point out, good statistical significance at day 8, and we've seen that in all 3 of our Phase III trials. So it's a very consistent effect. I don't believe there's daily data in the Xiidra program. So I do believe they had some mixed results in their Phase II and Phase III programs, where they had some data where they showed some effect starting after a couple of weeks. With Restasis, it's typically thought that the product really doesn't start working for a few months. So that's why we always say with the existing therapies on the market, it's a number of weeks to months to really see a meaningful effect from those products. Here, we're starting to see effects really after the first couple of days and then really meaningful statistical effect at day 8 and, again, replicated in 3 trials right now. I think the other thing to just highlight and think about is, it's always great to get symptoms, a patient-reported outcome and that's really meaningful for the patients. But when you look at our hyperemia data, now supported by the corneal staining data, to get statistical significance at 2 weeks on corneal staining is a real accomplishment. I believe if you look at some of the other products, they're really not getting a corneal staining benefit until 3 months. So we're getting symptoms at a week, really onset even earlier than that potentially and getting really meaningful inflammation effects with hyperemia and corneal staining at 2 weeks, which is really just a terrific result and shows the power of the medicine. And then if you take it and think about these patients and having flares are just being really symptomatic. One of the big things is that they can tolerate the medicine and that it's reasonably comfortable job to put in their eyes day after day when they're having these symptoms, and we just couldn't be more pleased with the tolerability data.

Okay. And then when you refile later this year with FDA, do you expect the FDA to provide approval for the overall population or do you expect them to restrict it to the severe dry eye population, given in STRIDE 3, I think, 2/3 of the patients were severe and then STRIDE 1 and 2 about half of the patients were severe?

Yes. We expect a broad label. We hit the full ITT population and the more severe subgroup. So again, really robust data. That replicates the STRIDE 1 results. And if you look at our baseline data, it's really not very far off from where the Xiidra baseline, let's call it, discomfort scores were, albeit a slightly different endpoint that they used. We really expect that it would be a broad label and see no reason why it wouldn't be.

Your next question comes from the line of Tazeen Ahmad with Bank of America.

Congratulations on the positive study results. A couple from me. If you could maybe help us frame, let's say, the number of scripts that you expect per patient as it relates directionally to patients who were taking, let's say, Xiidra or Restasis in a year?

Yes, really good question, Tazeen. This is Todd. We think that it's probably going to be somewhere around 2 to 3 prescriptions per patient per year, right? This is going to be a short-term treatment that provides rapid relief of their signs and symptoms and is going to be used to treat flares. On average, as you know from the research we've reported, previously, patients say they have about 6 flares a year. And we're not modeling that every single flare will obviously get treated with EYSUVIS, but we think it's reasonable to assume, on average, that we may be around 3 prescriptions per year. The range in our market research, when we've talked to physicians about their comfort with how many scripts they would write a year, is anywhere from 2 to 8 prescriptions based on that patient's need.

And do you know what the current run rate is for a script per year for Restasis or Xiidra?

You know what, what we know -- I actually haven't calculated, it's a great question. I haven't calculated the average script. We can certainly look into that. But if you look at Slide 17 that we just presented, what we know is that within the first 90 days of either Restasis or Xiidra having been prescribed, that the vast majority of patients have already discontinued those therapies. And certainly, by the time you get out to 6 months, only about 10% of patients are still on either of those therapies.

Okay. Great. And then maybe on your plans for commercialization a little bit deeper on -- to how are you thinking about expenses. So for some of the more mainstream drugs, I forget who it was, but I do remember, for example, seeing Jennifer Aniston talking about her dry eye and her friends' group telling her about dry eye. How are you thinking about the need for any kind of DTC?

Yes. It's a really good question. We don't envision the need for a broad-based, direct-to-consumer campaign. And the reason for that is these patients, as I stated earlier, are already in seeing their eye care professional on average 2 to 3 times a year. And there's 17.5 million of them that are diagnosed, actively followed and treated by an eye care professional, and they visit that eye care professional 2 to 3 times a year. And really encouragingly, 42% of the dry eye patients' visits to an eye care professional is because they're having an active dry eye flare. So we think this is incredible market potential in front of us as really what would be the first FDA-approved solution for those patients. Now we will certainly have some very directed online efforts that certainly are much more cost-effective so that when patients are online, seeking specific information about dry eye flares, that we will have a presence. But at this point, we do not view the need for large, what I would call, TV-based, direct-to-consumer advertising.

Okay. And then the last question is in Europe. What kind of price discount versus the U.S. do you think you'd ultimately get, whether it's through a partner or if you market it there yourself?

I'd say, it's to be determined, right? We're still doing some of that work. There's certainly certain markets like Germany where you've got better pricing potential when the products are first approved and launched. But we're still working through that on a country-by-country basis to determine pricing potential, which then would obviously drive potential interest from outside parties.

[Operator Instructions] Your next question comes from the line of Esther Rajavelu with Oppenheimer.

I'd like to add my congrats as well. A couple of quick ones from me. You had talked about sort of a lean sales force and a lot of leverage ability with your existing sales folks. Can you help us understand what percent of ophthalmic surgeons actually treat dry eye patients? And then I have a quick follow-up.

Sure. It's 100%. So 100% of our INVELTYS targets today are also dry eye targets in the future. The need to grow the sales force from the current 57 sales professionals we have to -- we've said that we're estimating between 100 and 125, so that we can add the optometrists to our call panel. We call in a few optometrists today that comanage surgical patients with an ophthalmologist, but for the most part we're not calling on the large portion of optometrists out there who really often are the primary care dry eye physician for these patients. So when we add the optometrists to the call panel, that drives the need to increase the size of the sales organization.

Got you. And then -- and what are your views on positioning the product that's potentially an induction therapy ahead of some of the chronic medications for dry eye?

Yes. From our market research, physicians have been very clear with us that they see the product being used in 3 very specific areas. One is what you just described, which is induction therapy. That, today, when we look at the off-label use of steroids, which is in about 2.9% of patients, that is predominantly all for induction therapy. That's how it's mostly used today when it is used off-label. It's, I would call it, low-hanging fruit, but a small opportunity. The big opportunities for us are the patients that are on a chronic medication that would have EYSUVIS added to treat their breakthrough symptoms. And we know from market research that patients report -- 82% of patients that are on a chronic maintenance medication report that they still experience breakthrough dry eye flares. And then, of course, the big market opportunity is approximately 16 million diagnosed dry eye patients that today are only treated with over-the-counter artificial tears. They are experiencing flares, they are in visiting their physician oftentimes because of that flare, seeking relief, and we believe that we will be well positioned to be the first-line therapy for those patients.

With that, I will now turn the call back over to Mr. Iwicki for closing remarks.

Well, thank you very much, operator, and thank you, everyone, for your time this morning. As we've already said, we're just really thrilled with the results that we've gotten from STRIDE 3, the ability it gives us to get our filing back down to the FDA and hopefully have an action by the end of the year and lead right into a commercial launch of EYSUVIS. We really appreciate everyone's support, and we'll be updating you soon. Thank you very much.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may disconnect.