Aerie Pharmaceuticals Reports First Quarter 2019 Financial Results and Provides Business Update

Conference Call and Webcast Today, May 7^th,
at 5:00 p.m. ET

DURHAM, N.C.–(BUSINESS WIRE)–Aerie Pharmaceuticals, Inc. (NASDAQ:AERI), an ophthalmic pharmaceutical
company focused on the discovery, development and commercialization of
first-in-class therapies for the treatment of patients with open-angle
glaucoma, retinal diseases and other diseases of the eye, today reported
financial results for the first quarter ended March 31, 2019, along with
a general business update.

Aerie Highlights

• The Rocklatan^® (netarsudil and latanoprost ophthalmic
  solution) 0.02%/0.005% U.S. commercial launch is underway with the
  sales force actively calling on 14,000 eye care professionals. Upon
  launch, Rocklatan^® had 60% of commercial lives covered in
  non-preferred brand Tier 3.
• Rhopressa^® (netarsudil ophthalmic solution) 0.02% generated
  first quarter net revenues on a U.S. GAAP (generally accepted
  accounting principles) basis of $10.9 million, equivalent to an
  average of $100 per bottle, lower than prior quarters as the result of
  a higher share of Medicare Part D business. First-quarter 2019 net
  revenues reflect a higher proportion of Medicare Part D rebates which
  are steeper than commercial rebates, along with the increased level of
  government-mandated donut hole funding in 2019 for Medicare Part D
  programs.
• Rhopressa^® now has preferred brand Tier 2 market access for
  approximately 75% of lives covered under Medicare Part D plans.
  Rhopressa^® also has approximately 90% of lives covered
  under commercial plans, including 55% in preferred brand Tier 2 and
  35% in Tier 3.
• Rhopressa^® shipments to wholesalers, and from wholesalers
  to pharmacies, have been achieving record levels in April and into May
  2019. Rhopressa^® sales out to pharmacies totaled over
  10,500 bottles for the week ended May 3^rd, compared to less
  than 9,600 bottles for the week ended March 29^th.
• International expansion activities are progressing. The Rhopressa^®
  Phase 2 clinical trial in Japan commenced in March 2019 in preparation
  for subsequent Phase 3 registration trials in Japan. The Rocklatan^®
  Mercury 3 Phase 3 clinical trial continues to progress in Europe.
• Aerie’s retina program continues to advance with the IND
  (Investigational New Drug application) for AR-13503 (Rho kinase and
  Protein kinase C inhibitor implant) accepted by the FDA (the U.S. Food
  and Drug Administration) in April 2019. Clinical trials for this
  product candidate are expected to commence in the second quarter of
  2019 for wet age-related macular degeneration and DME (diabetic
  macular edema). The AR-1105 (dexamethasone steroid implant) Phase 2
  clinical trial commenced in March 2019 for macular edema due to RVO
  (retinal vein occlusion). Safety and efficacy data for AR-1105 will be
  evaluated at six months after dosing.
• Net cash burn for the three months ended March 31, 2019 was
  approximately $54 million, and cash and cash equivalents were $148.9
  million as of March 31, 2019. In addition, with the $200 million in
  undrawn credit facility capacity available, total liquidity was
  approximately $350 million at March 31, 2019. Shares outstanding at
  March 31, 2019 totaled 45.9 million.
• Aerie reiterated that it expects full-year 2019 net revenues in the
  range of $110 million to $120 million on a U.S. GAAP basis for the
  combined net revenues for Rhopressa^® and Rocklatan^®.
• Aerie also reiterated its net cash burn guidance for full-year 2019 in
  the range of $130 million to $140 million. This range includes the
  gross cash burn guidance of $210 million to $220 million, partially
  offset by estimated full-year 2019 revenue-related net cash inflows of
  $80 million, which includes accounts receivable collections and rebate
  payments.

“We are now uniquely positioned with two very exciting glaucoma products
in the market. With the recent significant gains in Rhopressa^®
market access for the Medicare Part D population, we are proud to report
that within only one year of launch we were able to achieve extensive
coverage both for Medicare Part D and commercially insured lives, which
we believe will further stimulate future volume gains. Though just
launched, we are seeing strong physician interest in Rocklatan^®,
and we believe, based on its demonstrated superiority to market-leading
latanoprost in clinical trials, that Rocklatan^® will generate
a significant presence in the U.S. market for years to come. Rocklatan^®
is the first and only fixed-dose combination product in the United
States for the reduction of intraocular pressure that includes a
prostaglandin, and the only fixed-dose combination product available in
the United States that is dosed once daily. Further, we continue to make
excellent progress with our expansion efforts in Europe and Japan and
are delighted that by the middle of 2019, we will have our two retinal
implant product candidates in the clinic,” said Vicente Anido, Jr.,
Ph.D., Chairman and Chief Executive Officer.

Dr. Anido continued, “We currently have the highest level of financial
liquidity in Aerie history, at approximately $350 million. Based on our
current estimates, this is more than we will need to get to break-even
and provides us the flexibility to continue to support the growth of our
pipeline.”

First Quarter 2019 Financial Results

As of March 31, 2019, Aerie had cash and cash equivalents of $148.9
million. For the first quarter ended March 31, 2019, Aerie reported net
product revenues of $10.9 million related to sales of Rhopressa^®,
which was launched in the United States on April 30, 2018. Aerie
reported a U.S. GAAP net loss of $48.0 million, or $1.06 loss per share,
for the first quarter of 2019, compared to a net loss of $40.7 million
and $1.05 loss per share for the first quarter of 2018. The weighted
average number of shares outstanding utilized in the calculation of net
loss per share was 45,270,660 and 38,598,827 for the first quarters of
2019 and 2018, respectively. Total shares outstanding as of March 31,
2019 were 45,921,976.

The $48.0 million net loss for the first quarter of 2019 is primarily
comprised of $10.5 million of gross profit and $58.6 million in total
operating expenses, including $36.3 million in selling, general and
administrative expenses, $4.5 million in pre-approval commercial
manufacturing expenses and $17.9 million in research and development
expenses. Excluding $12.6 million of stock-based compensation expense,
adjusted total operating expenses for the first quarter of 2019 were
$46.0 million, with adjusted selling, general and administrative
expenses of $27.2 million, adjusted pre-approval commercial
manufacturing expenses of $3.6 million and adjusted research and
development expenses of $15.2 million. Total adjusted net loss for the
first quarter of 2019 was $35.3 million, and adjusted net loss per share
was $0.78.

The $40.7 million net loss for the first quarter of 2018 is primarily
comprised of $40.8 million in total operating expenses, including $22.9
million in selling, general and administrative expenses, $4.9 million in
pre-approval commercial manufacturing expenses and $13.0 million in
research and development expenses. Excluding $8.7 million of stock-based
compensation expense, adjusted total operating expenses for the first
quarter of 2018 were $32.1 million, with adjusted selling, general and
administrative expenses of $16.7 million, adjusted pre-commercial
manufacturing expenses of $4.4 million and adjusted research and
development expenses of $10.9 million. Total adjusted net loss for the
first quarter of 2018 was $32.1 million, and adjusted net loss per share
was $0.83.

Conference Call / Webcast Information

Aerie management will host a live conference call and webcast at 5:00
p.m. Eastern Time today to discuss Aerie’s financial results and provide
a general business update.

The live webcast and a replay may be accessed by visiting the Company’s
website at http://investors.aeriepharma.com.
Please connect to the Company’s website at least 15 minutes prior to the
live webcast to ensure adequate time for any software download that may
be needed to access the webcast. Alternatively, please call (888)
734-0328 (U.S.) or (678) 894-3054 (international) to listen to the live
conference call. The conference ID number for the live call is 6786103.
Please dial in approximately 10 minutes prior to the call. Telephone
replay will be available approximately two hours after the call. To
access the replay, please call (855) 859-2056 (U.S.) or (404) 537-3406
(international). The conference ID number for the replay is 6786103. The
telephone replay will be available until May 15, 2019.

About Aerie Pharmaceuticals, Inc.

Aerie is an ophthalmic pharmaceutical company focused on the discovery,
development and commercialization of first-in-class therapies for the
treatment of patients with open-angle glaucoma, retinal diseases and
other diseases of the eye. Aerie’s first product, Rhopressa^® (netarsudil
ophthalmic solution) 0.02%, a once-daily eye drop approved by the U.S.
Food and Drug Administration (FDA) for the reduction of elevated
intraocular pressure (IOP) in patients with open-angle glaucoma or
ocular hypertension, was launched in the United States in April 2018. In
clinical trials of Rhopressa^®, the most common adverse
reactions were conjunctival hyperemia, corneal verticillata,
instillation site pain, and conjunctival hemorrhage. More information
about Rhopressa^®, including the product label, is available
at www.rhopressa.com.
Aerie’s second product for the reduction of elevated IOP in patients
with open-angle glaucoma or ocular hypertension, Rocklatan^® (netarsudil
and latanoprost ophthalmic solution) 0.02%/0.005%, the first and only
fixed-dose combination of Rhopressa^® and the
widely-prescribed PGA (prostaglandin analog) latanoprost, has been
approved by the FDA and was launched in the United States in the second
quarter of 2019. In clinical trials of Rocklatan^®, the most
common adverse reactions were conjunctival hyperemia, corneal
verticillata, instillation site pain, and conjunctival hemorrhage. More
information about Rocklatan^®, including the product label, is
available at www.rocklatan.com.
Aerie continues to focus on global expansion and the development of
additional product candidates and technologies in ophthalmology,
including for wet age-related macular degeneration and diabetic macular
edema. More information is available at www.aeriepharma.com.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. We may, in some cases, use terms such as “predicts,”
“believes,” “potential,” “proposed,” “continue,” “estimates,”
“anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,”
“will,” “should,” “exploring,” “pursuing” or other words that convey
uncertainty of future events or outcomes to identify these
forward-looking statements. Forward-looking statements include
statements regarding our intentions, beliefs, projections, outlook,
analyses or current expectations concerning, among other things: our
expectations regarding the commercialization and manufacturing of
Rhopressa^® and Rocklatan^® or any future product
candidates, including the timing, cost or other aspects of the
commercial launch of Rhopressa^® and Rocklatan^® or
any future product candidates; our commercialization, marketing,
manufacturing and supply management capabilities and strategies; the
success, timing and cost of our ongoing and anticipated preclinical
studies and clinical trials for Rhopressa^® and Rocklatan^®,
with respect to regulatory approval outside of the United States or
additional indications, and any future product candidates, including
statements regarding the timing of initiation and completion of the
studies and trials, such as statements in this press release regarding
any expected clinical trials for AR-1105 or AR-13503 and the results of
such clinical trials; our guidance for full-year 2019; our estimates
regarding expected net revenues, expected cash burn, anticipated capital
requirements and our needs for additional financing; our expectations
regarding the effectiveness of Rhopressa^®, Rocklatan^®
or any future product candidates; the timing of and our ability to
request, obtain and maintain FDA or other regulatory authority approval
of, or other action with respect to, as applicable, Rhopressa^®,
Rocklatan^® or any future product candidates, including the
expected timing of, and timing of regulatory and/or other review of,
filings for, as applicable, Rhopressa^®, Rocklatan^®
or any future product candidates; the potential advantages of Rhopressa^®
and Rocklatan^® or any future product candidates; our plans to
pursue development of additional product candidates and technologies
within and beyond ophthalmology; our plans to explore possible uses of
our existing proprietary compounds beyond glaucoma, including
development of our retina program; our ability to protect our
proprietary technology and enforce our intellectual property rights; and
our expectations regarding strategic operations, including our ability
to in-license or acquire additional ophthalmic products, product
candidates or technologies. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events,
competitive dynamics, industry change and other factors beyond our
control, and depend on regulatory approvals and economic and other
environmental circumstances that may or may not occur in the future or
may occur on longer or shorter timelines than anticipated. We discuss
many of these risks in greater detail under the heading “Risk Factors”
in the quarterly and annual reports that we file with the Securities and
Exchange Commission (SEC). In particular, FDA approval of Rhopressa^®
and Rocklatan^® do not constitute FDA approval of AR-1105,
AR-13503 or any future product candidates, and there can be no assurance
that we will receive FDA approval for AR-1105, AR-13503 or any future
product candidates. FDA approval of Rhopressa^® and Rocklatan^®
also do not constitute regulatory approval of Rhopressa^® and
Rocklatan^® in jurisdictions outside the United States and
there can be no assurance that we will receive regulatory approval for
Rhopressa^® and Rocklatan^® in jurisdictions outside
the United States. In addition, the acceptance of the INDs by the FDA
for AR-1105 and AR-13503 does not constitute FDA approval of AR-1105 or
AR-13503 and the outcome of later clinical trials for AR-1105 or
AR-13503 may not be sufficient to submit an NDA with the FDA or to
receive FDA approval. Forward-looking statements are not guarantees of
future performance and our actual results of operations, financial
condition and liquidity, and the development of the industry in which we
operate may differ materially from the forward-looking statements
contained in this press release. Any forward-looking statements that we
make in this press release speak only as of the date of this press
release. We assume no obligation to update our forward-looking
statements whether as a result of new information, future events or
otherwise, after the date of this press release.

Non-GAAP Financial Measures

To supplement our financial statements, which are prepared and presented
in accordance with GAAP, we use the following non-GAAP financial
measures, some of which are discussed above: adjusted net loss, adjusted
total operating expenses, adjusted research and development expenses,
adjusted selling, general and administrative expenses, and adjusted net
loss per share. For reconciliations of non-GAAP measures to the most
directly comparable GAAP measures, please see the “Reconciliation of
GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP Net
Loss Per Share to Adjusted Net Loss Per Share” tables in this press
release.

We believe these non-GAAP financial measures provide investors with
useful supplemental information about the financial performance of our
business, enable comparison of financial results between periods where
certain items may vary independent of business performance, and allow
for greater transparency with respect to key metrics used by management
in operating our business.

The presentation of these financial measures is not intended to be
considered in isolation from, or as a substitute for, financial
information prepared and presented in accordance with GAAP. Investors
are cautioned that there are material limitations associated with the
use of non-GAAP financial measures as an analytical tool. In particular,
the adjustments to our GAAP financial measures reflect the exclusion of
stock-based compensation expense, which is recurring and will be
reflected in our financial results for the foreseeable future. In
addition, these measures may be different from non-GAAP financial
measures used by other companies, limiting their usefulness for
comparison purposes. We compensate for these limitations by providing
specific information regarding the GAAP amounts excluded from these
non-GAAP financial measures.

Contacts

Aerie Pharmaceuticals

Media: Tad Heitmann 949-526-8747; [email protected]
Investors:
Ami Bavishi 908-947-3949; [email protected]