Outlook Therapeutics, Inc. Stock

Hello, everyone, and welcome to the Outlook Therapeutics third quarter fiscal year 2026 corporate update conference call and webcast. [Operator Instructions] Note that this webcast is being recorded and a replay will be made available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations, plans, or future projections. These are forward-looking statements and involve risk and uncertainties.

As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results differ materially from those contemplated by such forward-looking statements and discussed in the periodic reports, Outlook Therapeutics files, and Securities and Exchange Commissions. These documents are available in the investor sections of the company's website and on the Security Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in the website relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the adequacy, fairness, and accuracy of the completeness of or that they any independent source has verified any information obtained from the third-party sources. Joining us on today's call from the Outlook Therapeutics Leadership Team are [ Bob Jarr ], President and Chief Executive Officer, and Lawrence Kenyon, Executive Vice President and Chief Financial Officer.

I would now like to turn the call over to [ Bob Jarr ], President and Chief Executive Officer.

Thank you, Operator, and good morning, everyone. We are entering a defining new chapter for Outlook Therapeutics. Only three weeks ago, the FDA approved LYTENAVA as the only FDA-approved ophthalmic formulation of bevacizumab for the treatment of wet AMD in the United States. Securing FDA approval is a transformational achievement for Outlook Therapeutics and an important development for the U.S. retina community. It significantly expands the commercial opportunity before us and positions the company to bring LYTENAVA to the world's largest retina market. For over 20 years, bevacizumab has played a central role in the treatment of retinal disease. Retina specialists know the molecule, have extensive experience using it, and continue to rely on the repackaged off-label bevacizumab across millions of injections annually.

Until now, however, physicians in the United States do not have access to an ophthalmic formulation of bevacizumab that adheres with the updated standards from manufacturing to the practice and developed specifically for administration in the eye. We are now changing that with the approval of LYTENAVA. We are not introducing an unfamiliar molecule or asking physicians to rethink the important role that bevacizumab plays in retina care. We are providing an improved version of a treatment they relied upon for years. Reaching this point required tremendous persistence and an extraordinary amount of work across our organization. The path to approval was not a straight line. We faced many challenges along the way.

Each time our team responded, completed the necessary work, and remained focused on our goal. This achievement belongs to everyone who helped make it possible. I want to begin by thanking our employees. Many have dedicated years to this program and continue moving it forward through periods of uncertainty. Their expertise, resilience, and commitment to the retina community are the reasons we are here today. I also want to thank the clinical investigators, retina physicians, study coordinators, and clinical sites that participated in our development programs. Their expertise and partnership were essential throughout this journey.

And a thank you to the retina community for their support and guidance as we navigated the regulatory process. Most importantly, I want to thank the patients who participated in our clinical trials, along with their families and caregivers. Clinical research cannot advance without people willing to participate, and their contributions made the approval of LYTENAVA possible. We should take a moment to recognize what has been accomplished. Securing FDA approval for a new biologic is an exceptional achievement, and everyone associated with Outlook Therapeutics should be proud of the role they played. At the same time, we should recognize that this is only the beginning of realizing our U.S. commercial opportunity. Our responsibility now is to convert this achievement into a successful and sustainable commercial launch.

That will require the same determination and discipline execution that brought us to this point. We have an FDA-approved product, a clearly defined market opportunity, and a molecule that is already deeply established in retina practice. Our focus is now on building the commercial foundation required to bring LYTENAVA to physicians and patients across the U.S. The commercial opportunity for LYTENAVA begins with the size and established nature of the U.S. retina market. The total U.S. anti-VEGF retina market is estimated at approximately $8.5 billion annually. Within that market, it is estimated that there are approximately 3.6 million injections of off-label repackaged bevacizumab across retinal indications in 2025. That includes approximately 2.2 million injections associated with wet AMD.

These figures demonstrate two important points. First, bevacizumab already occupies a meaningful position within everyday operations at retina practices. Second, the market has established a clear need for affordable bevacizumab treatment options. We believe this reinforces both the size and vitality of the retina market, and we believe that physicians will consider new therapies when those products offer a clear clinical, practical, or economic role within their practices. LYTENAVA enters this market with a clear differentiated proposition. Biosimilars are designed to compete with their respective branded preference products. LYTENAVA addresses a different and already established area of retina care, the widespread use of repackaged off-label bevacizumab.

This distinction matters. LYTENAVA is not simply another entrant within the existing branded category. It is the only FDA-approved ophthalmic formulation of bevacizumab, a molecule that retina specialists and patients already know and use extensively. Our opportunity is to provide physicians with a new treatment option that combines the familiarity of bevacizumab with the standards, oversight, and product consistency associated with an FDA-approved medicine. We also recognize that treatment decisions in retina are not driven by a single factor. Decisions consider efficacy, safety, durability, patient characteristics, reimbursement, acquisition economics, and their own clinical expertise. We are therefore not building our strategy around the assumption that one product will replace every other option. The anti-VEGF market is large enough to support multiple therapies serving different patient and practice needs.

Branded innovation will remain important, while biosimilars will provide additional choices. Our goal is to establish LYTENAVA as an important FDA-approved option within that evolving treatment landscape. Based on our market research and customer segmentation and analysis of current bevacizumab utilization, we believe LYTENAVA has the potential to generate more than $500 million in peak annual sales by 2030. That is our base case objective, not an assumption of immediate or universal adoption, and importantly assumes that repackaged bevacizumab will remain in the market. Achieving this target will require strong execution, expanding partnerships with payers, appropriate access and reimbursement, reliable commercial supply, and sustained engagement with retina practices. It will also require us to listen carefully to the market and adapt as conditions evolve. We believe the opportunity is substantial and we are approaching it with both confidence and discipline.

Our immediate priority is building infrastructure required for a successful U.S. launch. The retina market is highly concentrated, which allows us to pursue a focused commercial model. A relatively defined group of retina specialists and high volume practices account for a meaningful share of injections. That concentration creates an efficient opportunity, but it also means our execution must be precise. We have completed extensive customer segmentation and market analysis to identify practices currently dissatisfied with current compounded repackaged bevacizumab and practices with significant current bevacizumab utilization to understand the characteristics of potential early adopters and prioritize our field engagement. Following approval, we have been refreshing that work using the latest market information, including the evolving biosimilar environment. Our commercial strategy is built around the realities of the retina practice.

These are physician-administered products operating within a buy-and-bill model. Successful adoption depends on more than physician awareness. Practices need clarity around reimbursement, product acquisition, coding, inventory, and patient access. That is why market access and reimbursement capabilities are central to our launch strategy. We are advancing payer engagement and preparing the infrastructure necessary to support coverage decisions. We are also planning for the submission of an application for a permanent HCPCS code by the end of the third quarter and anticipating a permanent J-code in April of next year. Commercial supply is another critical priority.

We already have sufficient supply to support the launch later this year and are scaling the process required to provide a reliable commercial supply of LYTENAVA and coordinate product availability with our planned launch sequence. Reliability and constancy matter enormously to retina practices, where treatment scheduling, inventory management, and reimbursement are closely interconnected. We will continue to refine the timing and pace of our launch based on payer engagement, supply readiness, customer feedback, and the completion of key commercial capabilities. Our approach is designed to support a measured, high-quality entry into the market and create a foundation that can scale as adoption grows. As we build that commercial foundation, we are equally focused on the strength of the clinical story we will bring to retina specialists. We are very pleased with the strong label approved for LYTENAVA. Importantly, the label is grounded in NORSE TWO, our adequate and well-controlled registration trial, and clearly reflects the statistically significant and clinically meaningful improvement in visual acuity demonstrated in the study.

In NORSE TWO, 41.7% of patients treated with LYTENAVA gained at least 15 letters at month 11, compared with 23.1% of patients treated with ranibizumab. These data will serve as the foundation of our marketing efforts and our engagement with retina specialists. We believe the strength of the NORSE TWO results, together with LYTENAVA's position as the only FDA-approved ophthalmic formulation of bevacizumab for wet AMD, provides a clear and compelling clinical story. As we prepare to bring LYTENAVA to the U.S. market, we have taken a thoughtful and research-driven approach to pricing. Our objective is to support broad access while balancing the needs of patients, retina practices, and payers. Patient affordability has been at the forefront of this work. We have carefully considered potential out-of-pocket costs and the financial barriers that can affect whether patients are able to begin and remain on treatment.

We have also considered the operational realities of retina practices. Because LYTENAVA will be administered within a physician-directed, buy-and-bill environment, practices need a clear and workable path for product access and reimbursement. Importantly, our strategy has been informed by extensive research across the full range of stakeholders, including payers, providers, and patients. This has helped us better understand access expectations, potential barriers, and the factors likely to influence adoption. The anti-VEGF market is changing, including the growing availability of biosimilars and an increasing focus on value. We have taken that evolving environment into account. Without losing sight of LYTENAVA's differentiated position as the only FDA-approved ophthalmic formulation of bevacizumab for wet AMD.

Ultimately, our goal is to establish a pricing reimbursement approach that supports patient affordability, broad payer access, and practical adoption within retina practices. We believe this thoughtful approach will be important as we prepare for launch and work to make LYTENAVA available to the physicians and patients who may benefit from it. To that end, we expect the WAC price for LYTENAVA to fall below $500 per vial. Our target is to be competitive with biosimilars and other anti-VEGF therapies while appropriately reflecting LYTENAVA's differentiated profile. A central part of that preparation is building a commercial organization designed specifically for the retina market. We currently plan to hire approximately 30 customer-facing commercial personnel who will be focused on engaging retina specialists in practices across the U.S. individuals will be responsible for building awareness of LYTENAVA, educating customers on its approved profile, and supporting practices as they evaluate where the product may fit within their treatment approach. We also plan to hire approximately 20 field reimbursement personnel.

This team will help practices understand access and reimbursement processes, navigate cover requirements, provide clear insight into the impact of patient affordability, and address operational questions associated with adopting a newly approved physician-administered product. We are intentionally placing support alongside customer engagement because we understand that clinical interest alone does not produce commercial adoption. Practices must be able to access, purchase, and receive appropriate reimbursement for the product. In parallel, we are expanding our medical affairs organization. Medical Affairs will lead scientific exchange, respond to medical information requests, and support appropriate use in advanced evidence generation initiatives. Over time, we expect real-world evidence to become an increasingly important part of the LYTENAVA story. We want to understand how the product is being used, which patients and physicians are selecting, and how it's performing in routine clinical practice.

Across each of these functions, we are recruiting people with relevant expertise in retina, specialty launch commercialization, reimbursement, and buy-and-bill markets. We are also being disciplined in how we build. Our objective is not to create the largest organization. It is to create the right organization for the opportunity in front of us. We plan to align investment with our launch sequence, prioritize accounts where we believe adoption is most likely, and expand our capabilities as the market develops. The remainder of 2026 will be a period of commercial preparation, market engagement, and organizational build-out. We will be listening closely to retina physicians, practice administrators, payers, and other stakeholders.

Their feedback will help inform our positioning, our resource allocation, and the pace of our commercial expansion. As we move into 2027, we expect to be in a stronger position to begin translating that foundation into broader adoption and commercial growth upon receipt of a permanent J-code expected in April. In the United Kingdom, where we remain focused on execution, supporting physician adoption, and expanding our commercial presence. In the Netherlands, we are moving forward with our national reimbursement submission and expect to launch LYTENAVA in early 2027. The Netherlands will serve as an important regional hub for distribution and we continue expanding our European footprint. In Switzerland in 2027. Together these activities reflect the continued expansion of LYTENAVA's presence across Europe and our disciplined approach to building the product's long-term commercial opportunity. A key learning from Europe that we are applying to our U.S. launch is the importance of evidence generation, preparing positions and segmenting the market for those for early adoption. On a side note, our launch in the U.S. is not affected by [ MSN, the Mulsibur Nation ], or reference pricing.

I will now turn the call over to our Chief Financial Officer, Lawrence Kenyon, to provide financial updates.

For the third quarter of fiscal 2026, we reported adjusted net loss attributable to common stockholders of $10.9 million, or 9 cents, per basic and diluted share, compared with $15.8 million, or 44 cents, per basic and diluted share in the third quarter of fiscal 2025. The adjusted results exclude certain non-cash and non-recurring items, primarily changes in the fair value of our warrant liability and promissory notes, as well as a loss on the extinguishment of debt in the current year period. A complete reconciliation is included in today's earnings release. We would note that European revenue is improving, and last quarter saw a 46% increase in unit sales as compared to the second quarter of fiscal 2026. Fourth quarter unit sales are on track to match current unit sales, despite the expected summer slowdown in Europe. As of June 30th, we had cash and cash equivalents of $11.2 million. Subsequent to quarter end, we just announced a $55 million public offering of common stock and accompanying warrants, representing approximately $51.1 million in expected net proceeds, underwriting discounts, and offering expenses, is expected to close today.

We intend to use those proceeds to support our U.S. commercial launch of LYTENAVA and for other working capital and other general corporate purposes. Before concluding, I'd like to provide some guidance on our expected revenue ramp and operating expenses with the upcoming planned launch of LYTENAVA in the U.S. We expect total net revenue during the first 12 months following the U.S. launch of LYTENAVA to be between $50 million and $75 million, with Europe contributing approximately 10% to 15% of that total. We anticipate a progressive launch ramp with approximately 10% of first-year net revenues generated during the first three months, moving up to approximately 50% generated during the fourth quarter following launch. We believe the acceleration in the second half of calendar year 2027 corresponds with the permanent J-code we anticipate receiving in April of next year. To support commercialization, we expect quarterly SG&A expenses to approximately double from current levels by the end of calendar 2026, followed by an additional increase of approximately 10% during calendar year 2027. We expect R&D expenses to remain relatively steady over the next 12 months as we continue advancing our pre-filled syringe. With that, I will hand it back over to the operator for Q&A.

[Operator Instructions] The first question comes from Julian Harrison with BTIG. Please proceed.

I have a few and I think I'll ask them all at once. First, thinking about your $500 million in U.S. sales by 2030 guidance, I understand that does assume repackaged bevacizumab is still available. I'm wondering how much upside relative to your current guide you would expect if there's maybe FDA intervention on large scale compound pharmacy operations in the future, set a realistic outcome to consider at some point. And then intervention aside, can you maybe talk more about the salient features versus repackaged bevacizumab from the prescriber and payer standpoint? And finally, you mentioned early adopters identified in your prepared remarks. I'm wondering how many of those you've identified and what fraction of current repackaged bevacizumab use you would expect those potential early adopters to represent.

Great. Good morning, Julian. Thank you for the questions. And I will try to remember them and tackle them. So first, upside. So we do have upside in that forecast of the $500 million by 2030. Roughly, if there's any disruption in the compounded repackaged bevacizumab or any significant change in its availability, roughly just under a $300 million upside into that in terms of what can potentially happen. The way we've looked at it is if there is disruption, it doesn't necessarily guarantee it all comes over to LYTENAVA, but it could be split between other biosimilars. But that's sort of our conservative estimate is there's an upside of just under $300 million if there's disruption in the compounded market. In terms of the early adopters, our current segmentation, which we're live time refining, indicates that there is about a third of the retina physicians, so just under 800, that represent just below 50% of that $500 million that tend to only use compounded or repackaged bevacizumab due to the step edit that's required with some of the payers where they have to try and demonstrate non-effectiveness before moving to one of the newer branded agents, longer acting agents. comfortable in terms of saying as soon as there's an FDA one approved and we have the reimbursement, we will move to you.

So that's roughly the size of the market. So it's around a third of the targets and a little under half of the potential $500 million by 2030. And in terms of, I think the third question, if I have this correctly, so there's 2.2 million injections of anti-repackaged bevacizumab in the market for wet AMD alone. So that's just the wet AMD. Our forecasting that we've done on that $500 million indicates just over between 30% and 35% is the share of that that we hope to achieve by 2030. In terms of the payer piece of it, there's a little under half the market that is commercial and fee-for-service Medicare with supplemental or Medigap. And then the big primary part that we are talking about also is the Medicare Advantage.

Roughly, that's a little over 30%, almost 40% of the market. Most of those plans do require a step through compounded repackaged bevacizumab. Some of them will require a step through a less expensive, whether it be repackaged bevacizumab or biosimilar prior to going to a newer branded agent. So that's sort of how that market access piece breaks out in terms of where compounded. So compounded that is widely available across all of the payer landscape and probably in over two thirds of it, it's required to at least try it is sort of how we're thinking about it. If I answer the question correctly.

Very helpful. Thank you.

The next question comes from Kemp Dolliver with Brookline Capital Markets. Please proceed.

You referenced changes in the competitive dynamics because of biosimilars. And so how did that impact your forecast? Because when I look at Consensus expectations, I think your expectations are still higher than what's published.

Yes, so thank you for the question and good morning. We did some extensive work. As you know, we were working with the FDA through the first part of this year, so we really wanted to go back into our forecast model and say, look, the market has shifted. So everything that I'm giving to you assumes the following, that compounded stays in the market. All biosimilars, ranibizumab and aflibercept biosimilars, enter on time, and that there's ongoing decreased pricing pressures for all the biosimilars. We also assume that TKIs would be approved on time, IL-6s, gene therapy, and we also assumed that there'd be no disruption in terms of availability for repackage. So I believe our forecast is quite conservative in terms of, you know, to your point, in terms of the evolving market dynamics.

We also assume that the Good Days Foundation, which had a significant impact on retina practices and patients in the second half of 2025 and ongoing in 2026, we assume that that would still be some pressure in the market in terms of [ on-campus ] options in the selection of choice and patient out of pocket. So at least in terms of what the forecasts were giving right now today is we assume significant pressure and we still are quite conservative in our estimate and we do have potential upsides in there, such as when, you know, hopefully we get a [ pre-trial out ] in a couple of years. There's upside there. Obviously I already mentioned from Julian if there is any sort of disruption in the compounded market and if there's other ones in terms of payer availability that broaden it. And then certainly obviously there's acceleration after the J-code. But I do think our estimates are quite conservative because we did really put in there a rather difficult and competitive market for us to compete in.

Okay, thanks. So it sounds like you're assuming that patients who are in traditional Medicare will use compounded product because it's dirt cheap. And so any upside related to that is going to be in that population.

So, there's still utilization for compounded repackage outside of wet AMD, number one, but also there are some practices that are quite the permanent J-code and how payers and Medicare Advantage plans shake that out. So I do think the short answer to your question is yes, there will be some remaining practices that over time will continue to use repackage. I think our goal is to get into the market, demonstrate what the quality and the reimbursement and the experiences with us and then grow from there and then obviously expand that as we get the permanent J-code.

Super, thanks. I'll get back in the queue. Thank you.

Thank you. The next question comes from Douglas Tsao with H.C. Wainwright. Please proceed.

I guess, Bob, maybe if you could just help me understand how you're thinking about the impact from the Good Days Foundation sort of not having availability for funding, just because obviously, when we think about the price that you mentioned, for a lot of patients, or for patients on Medicare, you're going to be looking at $100 out of pocket versus if they're doing compounded, it might be as low as $10 to $15. And obviously without the Good Days Foundation, they're going to be sort of footing the bill themselves. And so if you could just help us walk through that and what you might have heard about how the lack of funding has impacted practices' use of repackage.

Sure, good morning, Doug. Thank you for the question. Yes, so obviously, we've been very aware about the Good Days Foundation and its impact on practices and patients for well over a year, and we've been monitoring very closely. So one thing, so there is some support and funding going into Good Days now, but not at the level it was before. A lot of the foundation support does lean to go toward the more expensive, longer acting competitors, the innovative competitors in the marketplace. That's where a lot of the funding does go for that. And remember, the foundation does not just cover wet AMD, but all retina and ophthalmology communities. And once it's in the foundation, can't be directed.

So with that said, to get to your point, is clearly it does put some questions on out-of-pocket costs for, you know, whether it be for biosimilars or for compounded in terms of patient dynamics. We believe we've been really working with this. So on the back of the napkin, clearly if we're talking about just Medicare with no supplemental, no Medicare Advantage, the math on 20% out of pocket, you're correct. That's what the math would be. However, as we look at our target market and we look and consider the fee-for-service plus supplemental Medigap, we look at commercial, and we look at Medicare Advantage, that out of pocket is not universal across all patients in all segments. So I think that's an important part of it. It's because each of those in the practices have gotten very sophisticated at assessing what is the patient out-of-pocket piece of it.

And, of course, we will do whatever we can do to support patient and practices and patient affordability. There are some limitations that we have in Medicare that we're well aware of. But part of the work in terms of anything on price that I quoted and saying, you know, what we'd be below of, all of that is taking all those things into consideration. So I feel the number one thing, too, is the practices, you know, in terms of compounding, they've never looked at a J-code reimbursement in addition to the administration of the procedure piece. So we do change the dynamics of that to a certain degree at the practice level, which we're very encouraged by the practice that we've been speaking to that. How are they going to navigate that in terms of particularly for those that have indicated they want to move quickly. And I feel pretty comfortable that we are going to get somewhere that is not going to put an additional burden on patients outside of what they have today.

I guess maybe if you could just help us understand the out-of-pocket relative to the biosimilar set.

Well, the biosimilars are evolving market. If you look at [ Pavlou ] pricing and that out-of-pocket price, particularly, again, if you're just specifically looking at the Medicare 20% out-of-pocket, you know, that price is quite expensive, right? Higher than anything here. And if you look at ranibizumab biosimilars, they can be down as low as Lucentis, which is the innovator, which is currently around 230, 250. That out of pocket would be around 50. So we're definitely, as new biosimilars and other biosimilars for ranibizumab have come in quite a bit high. So there's a broad range there. But again, in working with the practices and also having worked over 15 years in the buy-and-bill space in oncology, that back of the napkin 20% does not represent every patient and there are other ways to make sure that when the total value of care and what you're as well as from the total product, as well as the other services you can prevent to minimize patient out-of-pocket.

And then, if there is a patient out-of-pocket concern, leveraging all the mechanisms, whether it be through foundation, all the mechanisms we can to relieve any patient or practice of that out-of-pocket burden. So right now, you can see if you look at the majority of all the products that are used out there, a lot of it, there is quite a bit of out-of-pocket if you look at the pricing, particularly for the branded ones from Roche and Regeneron, and they're still able to find affordability and tools. We will use the exact same resources and thinking to help support the practices and patients for ours.

Okay, thank you. Thank you, Doug. The next question comes from Edward Woo, Ascendiant Capital Markets. Please proceed.

My question is, now that you got U.S. approval, will you be accelerating your European rollout? And is there any opportunities for Asia entering that market?

Yes, thank you. That's a great question. So the first one, yes, we are doing an assessment now that we have the FDA approval for the package of that in the compendia. What other regions? So we're looking at LATAM. We are looking at elements of Asia for that. We will have to look at what additional bridging studies are required. So now that we have an EMA package and an FDA package. You're absolutely correct. That also includes MENA that we will be looking.

And we have inbound calls from potential partners that want to help explore those regions. Some of them are a little bit straighter. Other ones might require additional data. We are considering that, absolutely. In terms of broader Europe, the answer is yes. We are looking at a broader Europe, but we are going much more strategic and really wanting to make sure, consume quite a bit of time and resources. And we've seen it also with the biosimilars this year. So our approach into Europe will be strategic.

We want to look at each market by opportunity, identify should we be going at it alone or finding a better partner that understands and is closer to the market, particularly with ophthalmology experience. And I think the other part we will discuss in future calls is our timing of our pre-filled syringe. I think a broader European play and expansion really makes a lot more sense with the pre-filled syringe because we're not that far from behind it and it takes some substantial amount of time to secure the reimbursement. Even though we have the EMA file, you still have to go country by country to get licensed and registered and then in some cases region-wide in the country to get reimbursed. So we will, in summary, by right now with the FDA approval, as we begin to commercialize in the U.S., we'll look at broader regional expansion and partners, including Asia, LATAM, and Europe, and MENA. Number two, the broader, now we are focused on execution where we currently are, and we are excited about the opportunity in the Netherlands, Austria, and Switzerland, and we will continue to look for the right partners and timing when we want to expand that. But currently, right now, we want to execute better and improve our execution where we are in Germany, in the U.K., et cetera.

So thank you.

Great, thanks for answering my questions and I wish you guys good luck. Thank you.

We have a follow-up question from Kemp Dolliver. Please proceed.

Bob, could you talk a little bit more about, you know, Europe, I think you already touched on it a bit with regard to the pricing spiral, but the results this quarter continue to show real progress, you know, a lack of progress there to put it bluntly. You know, what do you see happening that is implied in your guidance that'll drive improvement.

Yes, so I think, so we're, please, I'm pleased with the recent reset that we've done in Europe in terms of we've really dropped down the cost in terms of where we were spending, what the cost structure was, versus the relative revenue. We're pleased with that and we're starting to see more demand unit growth. It took a while because there was a channel fill last summer and there was also some dynamics in Germany where we had to in Germany, they compound even our own vial. So there is a stability testing that was required and because of privacy was very challenging to understand what the true underlying demand is and what segments was there in Europe. What I think we're very pleased with is first we have right-sized the team relative to the opportunity, which we are going to continue to expand and grow strategically, because Europe, the one thing that we do know in their current cost constraint structure is boots on the ground don't necessarily translate to revenue or to increase sales. So that's one thing. The second piece is we are looking at really unlocking some of the big barriers. There are some elements in the German market that are a pretty significant barrier tied to the fact that compounding and repackage there is sort of the standard of care by law in terms of the retina practices. So it's not so much physician choice.

It's really more of a regulatory requirement there. And that has provided some headwinds. Now in the hospital markets, we are seeing very good adoption and very good reorders. So, and that is another reason, as I mentioned, you know, I'm not concerned of reference. I think it's more of the fact what we want to do is, you know, make the right decision is where do we want to scale but not erode our pricing unnecessarily. In the U.K., the U.K. was never a large compounding market or repackage with less than 9% ever at their share and the U.K. has capacity, which really drives the physicians to look at long acting. And the long acting agents there between Roche and Regeneron or Bayer, they have quite a bit of market share in the U.K. So Europe is, again, when I came in, I wanted to take a much more strategic approach to make sure we understand each market.

The other one last year, there was a lot of activity with the aflibercept biosimilars entering the market that drove some, I would say, slowdown in terms of adoptions because people were waiting to see what happened on the tenders. And even in that case, we saw some biosimilar companies decide not to commercialize because the margins and the pricing downward pressure were so intense. And I think you've seen what's going on in the media. So my point there is to be let's execute better where we are. Let's be strategic on which markets we go into. Number one, let's make sure that we understand the market, understand those markets and the adoption curve and what is driving that adoption. If it's just a pure lower cost, you know, meet the repackaged bevacizumab where they fit.

That might not be the best strategic approach for us. And so I think it's just being more thoughtful in how we do it, but making sure that the cost structure, you know, revenue should lead expenses and we need to get the cost and the investment in Europe in line with our projected revenue and then also continue to look for the right partnerships or decide if we want to go it alone. So more to come on that, but I think, you know, it's not the shortest answer, but I wanted to be clear that we're not quitting on Europe. We want to execute better where we are, and we're very happy with where we're expanding to, but we do need to continue to work on that to be thoughtful and more strategic considering the pressures in reimbursement and pricing that are going not just for retina but across the entire industry in Europe right now.

I appreciate the detail. And just one final question. If the U.S. can be $500 million by 2030, how should we think about the opportunity in Europe in that timeframe?

I would say it's probably a quarter of that. If we peak it, probably less than a quarter of that right now, primarily just in that timeframe. I think the acceleration in Europe, by the end of 2028, early 2029, our pre-filled syringe program will be out, so that will accelerate broader in Europe, but there will be always downward pressure on pricing. So I believe the, yes, so I believe, you know, Europe and, you know, the way I'm looking at Europe moving forward is we just don't look at Europe, but we look at the rest of the world, because we do have quite a bit of interest in other regions. But I think it will be, you know, Europe, the U.S. will always be 90% or more of the total commercial opportunity in terms of net revenue.

Yep, okay, great, thank you.

Thank you. At this time, I would like to turn the call back over to [ Bob Jarr ] for closing comments.

Thank you. So in closing, Outlook Therapeutics is now a commercial stage company with an FDA-approved product. We have achieved something that required years of persistence, clinical work, regulatory engagement, and organizational commitment. We should take pride in that achievement, and we do. At the same time, we understand that shareholders will ultimately measure this approval by what we accomplished commercially. Our focus is now on that execution. We have a differentiated FDA-approved product, a large and established market, millions of injections already associated with bevacizumab molecule, and a targeted strategy for reaching the retina practices most likely to adopt LYTENAVA. We are building a commercial reimbursement, medical affairs, supply capabilities, and required support for this opportunity.

There is significant work ahead, but for the first time, that work is focused on bringing an improved LYTENAVA to physicians and patients in the United States. That is a position this company has worked very hard to reach, and we believe it creates the foundation of an important new chapter for Outlook Therapeutics. Thank you.

Thank you. This concludes today's teleconference. We may disconnect your lines at this time. Thank you for your participation and have a great day.