OYST - Earnings & 50M Funding Closure Catalyst (November 4th)

This is a continuation of the previous thread about their FDA approval. That play didn’t go quite as expected, however, there is another emerging opportunity to lose money on this stock.

You can read through the previous thread HERE

OYST is a company that received recent FDA approval for their drug TYRVAYA, which is a nasal spray that treats dry eye. After the approval, the stock promptly fell from it’s height of $15 and tapped a recent all-time-low of $9. The reasoning, as we’ve come to find out, was likely because the approval did not include a specific item on the label that was required for them to get their second “tranche” of funding… 50M dollars to actually manufacture the product. So essentially, despite approval, it was looking as though they may not be able to actually produce any of the medication to sell.

Thankfully, they were able to reach an agreement and filed the amendment to their financing agreement that granted them a waiver for the label stipulation on October 19th:

Item 1.01 Entry into a Material Definitive Agreement. On October 19, 2021, Oyster Point Pharma, Inc. (the “Company”) entered into a waiver and amendment (the “Amendment”) to the Company’s $125 million term loan credit facility (the “Credit Agreement”) with OrbiMed Royalty & Credit Opportunities III, LP, as administrative agent and initial lender (“OrbiMed”), to waive certain labeling requirements required for, and to permit the availability of, the second $50 million tranche of funding under the Credit Agreement (among other customary funding provisions) and make certain other amendments thereto, subject to the terms and conditions contained therein. Because the label approving TYRVAYA™ (varenicline solution) Nasal Spray (formerly referred to as OC-01 (varenicline) Nasal Spray) for the signs and symptoms of dry eye disease did not include eye dryness score data from clinical trials, the Amendment was required in order for the Company to draw the second tranche and to be eligible to draw the third tranche under the Credit Agreement. The Amendment also increases the amount of principal that is required to be repaid if the Company does not meet certain minimum recurring revenue thresholds from the sale and/or licensing of TYRVAYA on a quarterly basis for the most recently ended four fiscal quarter period, from $5 million to $10 million, in the event an improper promotional event occurs. The Company delivered a notice to OrbiMed on October 19, 2021 that it intends to borrow the second tranche on November 4, 2021. The Company would also be barred from drawing the second tranche if an improper promotional event occurs prior to the funding of the second tranche.

The portion that is pertinent is that they’re intending to borrow the second tranche on November 4th. Today, they announced that they also intend to present earnings that same day:

Oyster Point Pharma to Report Third Quarter 2021 Financial Results on November 4, 2021

PDF Version

Conference Call and Webcast Scheduled for November 4, 2021, 4:30 p.m. Eastern Time

PRINCETON, N.J., Oct. 28, 2021 (GLOBE NEWSWIRE) – Oyster Point Pharma, Inc. (Nasdaq: OYST), a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of first-in-class pharmaceutical therapies to treat ocular surface diseases, today announced that it will report third quarter 2021 financial results on Thursday, November 4, 2021, after the market close. The announcement will be followed by a live audio webcast and conference call at 4:30 p.m. Eastern Time.

Conference Call Details
To access the live call by phone, please dial (855) 548-1220 (US/Canada) or (602) 563-8619 (International). The conference ID number is 4538958. A telephone replay will be available for approximately 7 days following the live conference call. To access the telephone replay, please dial (855) 859-2056 (US/Canada) or (404) 537-3406 (International). The conference ID number is 4538958.

So this is where it gets potentially exciting. During this earnings presentation, they’re going to simultaneously announce that they’ve closed on $50M worth of funding to produce and sell their medication while also touting the projections they have for potential customers and revenue. When you factor in that this stock is currently sitting a little shy of all-time-lows with a revolutionary product in their industry… it gets a bit interesting.

NOTE: We have already lost money on this stock once. Make sure you use responsible position sizing if you choose to get in on this play. We have a proven track record of not being really great at Pharma plays and there really isn’t a reason to suspect that this wouldn’t be more of the same.

[event start=“2021-11-04 20:00” status=“public” name=“OYST Earnings Catalyst” url=“https://investors.oysterpointrx.com/news-releases/news-release-details/oyster-point-pharma-report-third-quarter-2021-financial-results” end=“2021-11-04 21:00” allowedGroups=“trust_level_0” reminders=“1.days”]


I was part of the initial play (and lost money). I am a MD and do genuinely believe the medication they’re pushing is novel in mechanism and has a great shot at market penetration.

What I’m wondering about is why this wouldn’t be priced in already. From what I understand, it’s public knowledge that they’ve closed on the funding and there are already fairly impressive figures out there regarding the target patient population and potential revenue.

Do we think it’s more just having everything in a nice packaged event on the news will stimulate retail purchasing? I feel like the big boys already have all the information.

I’m not being cynical just to be a twat. I actually believe in this stock long-term. I’m just wary of re-entering because I was somewhat shocked at the strange dip that occurred immediately after FDA approval.


This is a real fear. As Kolachie always likes to reference, the markets are presumed to be efficient in the sense that everything that can be priced in, is.

Sometimes though, things seemingly slip through the cracks. This is inline with the hypothesis in the sense that it’s possible there is information that we don’t get possess that the market seems to be important. It’s also possible that the hypothesis is incorrect and the market can be taken by surprise just as we often are.

In the case of OYST, I’m betting that being near the lowest the stock has ever been is likely because the market is waiting for confirmation that this is a product they can make. The FDA label issue is resolved, but they don’t have cash in hand as of now. That happens on the 4th. Alternatively we have to believe that this stock was overvalued its entire existence right up until FDA approval. I would hope that’s unlikely.


Excuse my ignorance here but from what I’ve found - Oyst IPOd at circa $16 a share in 2019 then ran up to high 30s then has been on a slow decline ever since. It recently received FDA Approval for its dry eye treatment which according to quite a few different people looks quite a promising medication. So looking at it logically (I know the stock market rarely follows logic) how can this company be worth less than in 2019 when it originally IPOd and didn’t have this supposedly good medication to market? To me there definitely seems to be potential in this play.


Do you have any shares/calls on this and if so any you’d recommend?


I took a long position and I’m holding November 19th calls 12.5/17.5 strikes and January calls 25 strike.


Gotts take some. Nov 19 positions on Monday.


Thanks for this DD. I picked up a small number of Nov 19 $15 calls Friday and am already up 55%. :slight_smile:


How often do companies give FDA approvals during earnings? My concern is even if they have FDA approval, they may not announce it during earnings which will cause a large drop in the price and may create a better opportunity for a position if you still believe they will get FDA approval.

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They already received FDA approval.

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I was able to get in on and net ~30% realized gains on my options. I’ll buy in a few low strike calls today.

only bought 1 contract at 15c nov 19. lets hope pharma doesnt burn us all again

Cut half my position today. Covered cost basis and secured 40% profits. Letting the other half ride for lotto. Entry points are key and off that $10 bounce was huge.


OYST is currently tracking down pretty abruptly after a 127K sell order was executed.

Extremely low volume so this could just be algos trading a detected trend reversal, but may want to watch for a break downward. Not sure if I’ll cut any of the position.


As an update to this, OYST has tracked back up to near $13 again and is looking to form an inverse head and shoulders on the 5m chart. Still bullish for the potential earnings play so I’m keeping my position at this point.


CFO of OYST exercised options to acquire 8.5k shares of stock yesterday.


Nice find, excited, I’m 0/4 on earnings plays so far fingers crossed.


Is there another potential entry? I pulled out when I saw sufficient green.

Probably nothing super great from here until earnings unless the buy volume stops.

I totally forgot that I charted OYST in WeBull, last month.
That Double Bottom on the $10.00 was a great signal.