Q3 2019 Earnings Call
Good day, ladies and gentlemen, and welcome to their Rockwell Medical 2019, Q2 results conference call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow what that time, if anyone should require assistance during the conference.
Please press Star then hero on their Touchtone telephone as a reminder, this conference call is being recorded.
I would love to turn the conference over to your host Ms. Julie Bickel 90. Please go ahead, let him.
Thank you Katrina.
Welcome to Rockwell Medicals third quarter 2019 earnings results call.
As Judy Clemente of insight Communications Investor Relations representative for Rockwell medical.
Before we begin I want it to note that certain matters, we will discuss may constitute forward looking statements within the meaning of the federal securities laws.
Words, such as me, Mike will should believe expect anticipate estimate continue could potential predict forecast project plan intend or similar expressions are statements regarding intents belief or current expectations are forward looking statements well.
Rockwell believes these forward looking statements are reasonable undue reliance should not be placed on any such forward looking statements, which are based on information available to us on the date of this release, which are subject to inherent uncertainty.
These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in rockwell's FCC filings, many of which are beyond our control and subject to change.
Actual results could be materially different.
Risks and uncertainties include statements about the unique J code for the Triferic powder packet timing and the success of our and be a submission for I'd triferic the potential market opportunity for IC, Triferic and other waffle products pricing and reimbursement status for Ivy Triferic Dialysate Triferic and other Rob.
Paul products, including CMS has recently announced final rule regarding eligibility for to data.
Acquitted, even capital resources expected duration of rockwell's existing liquidity in working capital success of our recently announced commercialization plans for Dialysate Triferic.
The success of our efforts to maintain grow and improve the profitability of our business.
Rockwell expressly disclaims any obligation to update or alter any statements whether as a result of new information future events or otherwise except as required by law.
This conference call can be accessed on Rockwell Medicals Investor Relations Web page. This call is being supported on November 11, 2019 for audio rebroadcast and can also be accessed on the same web page.
Present on today's call, our Stewart, Paul President and Chief Executive Officer of Rockwell Medical Angus Smith, Chief Financial Officer of Rockwell Medical and John Mclachlan, Chairman of Rockwell Medicals Board of directors.
Stuart and Angus will be available for a question and answer session immediately following the call at this time I would like to turn the conference calls to Rockwell CEO Stuart Paul Stuart.
Thank you Judy and good afternoon, everyone and thank you for joining our call today.
I want to start today by reminding everyone of Rockwell Medicals mission.
We believe we have the potential to transform anemia management in a wide variety of disease states across the globe.
The first disease state that we're focused on its end stage renal disease or PSR D. Specifically patients on hemo dialysis.
There are over 2 million patients across the globe on hemo dialysis and nearly half familiar in the United States alone and we believe we have potential to significantly improve the lives of these patients.
Now before we get started.
I'd like to introduced the new chairman of our board of Directors John Mclaughlin.
For a few remarks, John joined our board in early September It was recently appointed chairman.
John has over 30 years of senior executive experience in the pharmaceutical industry, serving as CEO of PDL Biopharma for 10 years, and executive Vice President of Genentech.
His previous sleek co founded and sold as well served on the board's up a number of biotechnology and medical technology companies.
So we are incredibly fortunate to have an executive of John's caliber on the board and his experience and advice is already spent providing benefits to the company.
With that I'll hand, the call over to John .
Thank you for the kind words Stewart.
Hi, Jordan This board because rockwell's products and.
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I asked a lot of questions during the due diligence process and I couldn't be more excited about the answers I got.
Our joint because triferic medically important therapeutic.
Dialysis patients have difficult lives.
Medical innovation in this field has been modest yes.
The goal of all the product used to improve the lives of those patients. If we do that and we're working hard to develop data to further proved that safety and efficacy of the therapeutic.
Medical importance will make it commercially important.
Which in turn will create value for shareholders.
[noise] diagnosis is a very cost sensitive environment.
Also working to develop data showing that the use of triferic can reduce the need for other in some cases expensive medicines administered to these patients.
Combined with the data we are collecting on reducing patient publications.
We could potentially demonstrate cost savings like health care system as a whole.
We also don't want rockwell's concentrate business to get lost in this discussion.
It generates significant revenues aneurysm, they read valuable asset increases the companys financial options.
In my previous position, we invested over a billion dollars in pharmaceutical and medical device companies.
A key investment criterion is the key.
A good product, but a week team is a poor investment that's true no matter how good the policies.
Well you applied that seem criteria before investing my tried in one well.
This is a smart dedicated team they are working incredibly hard to complete as quickly as possible. Many projects. It should've been finished years ago through no fault of Justine.
The matter Eaton somewhere done and we'll need to be completed.
I know that it must be frustrating for our shareholders, who have invested for years well need to see steep declines in all share price.
Here that we need to do more work to make these therapeutically.
Therapeutic medically in commercially important.
We should your frustration in disappointment, but we are committed to making these treatments medically important for dialysis patients.
Commercially important for shareholders.
Unfortunately, the recent efforts of the board and management are not being reflected in this year parts.
We're working to improve our communication, so shareholders have better visibility to our progress.
To conclude your money the shareholders money, we would be prudent students are your capital.
Stewards of your capital excuse me and with that let me hand, the call back over to Stuart Stuart.
Thanks, just fine.
Before getting to the details on the third quarter I want to comment on our business as a whole and expand upon summer John's comment.
We believe we have several valuable assets at walk well that will form the basis for the creation of shareholder value first we have a unique and differentiated therapeutic platform and triferic that we believe provides us with significant growth potential over the next three to five years as we seek to disrupt the current standard of care.
Sure.
We believe there's also significant value inherent in our global rights to the Triferic portfolio, which has and will enable us to enter into value, creating partnerships across the globe.
And second we have a base hemo dialysis concentrate business with 60 million dollar revenue run rate.
We have long term contracts with our two largest customers who represent more than 85% of our product revenues in this business.
These contracts give us relatively strong visibility into our sales for the foreseeable future.
In addition, this business as a strategic asset for us that gives us relationships with many of the key players in the dialysis industry and provides us with a variety of financial alternatives as we move forward.
And with these two core assets, we have a stable and well developed base to grow from over the next several years.
As most of you know.
Triferic is a completely novel therapy with a unique mechanism of action and unlike the current standard of care traditional I'd be irons any assays triferic delivers the iron and maintains the hemoglobin that he would dialysis patients need without increasing ferritin levels and with that.
The risks of chronic inflammation and adverse events.
And we believe this represents one of the most innovative medical advancements in patient iron management than the last two decades.
Our goal is to transform the way anemia is managed in the SRT.
Once this transformation is complete and its several points along the way, we expect to deliver significant value for the patients the medical community our employees and the shareholders that we serve.
We've now built a number of very important relationships with key opinion leaders, who understand and ours excited as we are about the transformational potential triferic.
In fact, just last week at the American Society of Nephrology kidney week conference in Washington, DC, We sponsored a triferic exhibitor spotlight presentation by Dr., Jay be wish Chief Medical officer for dialysis at Indiana University Health.
Entitled advances in hemo dialysis associated anemia management.
Benefits of physiologic iron replacement therapy.
The presentation was very well attended and there was a great deal of of enthusiasm around how triferic in its various formulations is an important advancement that can benefit the large and growing population of people receiving hemo dialysis treatments and more broadly we had a strong presence at Essent kids.
The weak and had productive dialogue with dialysis chains clinicians key opinion leaders all about triferic.
We believe the Buzz we created a day a sense along with the investments we continue to make and building a leading medical platform and in our commercial organization will translate to tangible progress in the near and intermediate term.
Turning to this third quarter.
We're making positive progress in advancing our triferic product portfolio I.
I hope that many of you were able to join US for our first quarterly business update call that we held on October 25th.
Through a regular cadence of business updates, we intend to best share the progress, we're making with our triferic portfolio as we work to penetrate the anemia management market for dialysis patients.
For those who may not have had the opportunity to listen to our business update let me briefly share with you a couple of headlines that illustrate the positive progress. We have seen now that we have completed our for our first full quarter of dialysate Triferic sales in the United States.
As of September 30, 2019, we had contracts with clinics representing over 1000 patients on therapy with 13 clinic account signed on as purchasing customers. We also had over 1300 patients at more than 15 clinics involved in various stages of revaluation program.
As a reminder, our evaluation program enables clinics to sample triferic for a period Thats generally up to three months at which point, we began contracting discussions.
Our evaluation program is turning into a critical element to the sales cycle for Triferic and we are thrilled about the conversion rate. We have seen from this program to date of over 75%.
To further support the development and commercialization of Triferic across the Globe. We're also strengthening our medical organization.
The key elements of this plan include contracting with centers of excellence to adopt triferic collecting and analyzing real world data.
Enhancing our medical affairs capabilities, and interacting with care wells and providing medical education to the dialysis community.
As of the until the third quarter, we had signed our first center of excellence, a leading academic institution to purchase Triferic.
Contracted with seven clinics to collect real world data and establish formal advisory relationships with 10 key opinion leaders.
And excellent start to our long term medical strategy.
As part of this overarching initiative, we plan to announce important additions to our medical organization and our medical Advisory Board in the coming weeks, including several new world renowned experts and anemia, and srd, who will be joining our advisory board.
We look forward to their perspectives and guidance as we continue to innovate our portfolio and drive adoption of Triferic.
We will share more details with you as appropriate.
Well, we're making very good progress. We're also realistic about the challenge involved in orchestrating a whole sale change in the way anemia is managed in hemodialysis patients a transformation at this scale will take time to fully execute but our ultimate goal remains to establish triferic as the standard of care.
Over the next three to five years, and we have a solid start and we expect to ramp our growth of new accounts patients on treatment and revenues at meaningful growth rates as we move forward.
On October 31st CMS issued the srd prospective payment system final rule for 2024 the final rule.
In the final rule CMS reiterated their position from the proposed rule released in July that only certain new drug application types will be eligible for separate reimbursement work to dapper starting next year.
The final rule, specifically states that type three in days, that's classified by the FDA will not be eligible for today.
Accordingly, our interpretation is that under the final rule Ivy Triferic will not be eligible for today.
Despite the fact that it is an incredibly innovative therapeutic.
To be clear, we believe to dampen would have provided a significant benefit to Ivy triferic uptake.
Without to Dabaa, we believe the launch curve for Ivy Triferic in the time to peak sales will be slower.
However, this does not dampened our enthusiasm for the Triferic portfolio and we still have an incredible opportunity in front of us.
We will continue to invest in generating data.
Straight the clinical Pharmacoeconomic and health economic outcomes associated with Triferic and we believe this data will support our goal of disrupting the standard of care for anemia management over the next three to five years.
And importantly, we believe the cost structure for Triferic enables us to make an attractive gross margin in the bundle.
While making this transformational therapy broadly accessible to the patients in need at most.
Before I hand, the call over to Angus Smith I.
I wanted to emphasize that we as management are unhappy about the current share price.
But we remain steadfast in our commitment to leverage our valuable assets to create value for all shareholders.
So in conclusion, let me reiterate that we're aligning all of our resources building, a leading medical platform as well as strong as highly skilled commercial capabilities to achieve our goal across the triferic portfolio, both in the west and globally.
Revenue in these early days.
Not necessarily a key indicator rather will continue to focus on making progress on the adoption metrics data initiatives and the engagement of care wells and if we do that we believe the revenues will follow.
I'll now turn the call over to our CFO Angus Smith to review, our third quarter financials Angus.
Thank you Stewart.
Before I discuss financial results for the third quarter of 2019, I would like to comment on a few key themes.
First we have valuable businesses here that we believe give us a solid foundation for growth and financial flexibility as we move forward.
Second over the last several quarters, we have made critical investments in our sales marketing medical and R&D efforts with the goal of ensuring that successful development and commercialization of our triferic portfolio in dialysis.
We believe these investments are required to enable us to built the foundation for sustainable growth platform in the coming year as we execute on our business plans.
Finally, we are at the very early stages of an organizational and financial transformation that we believe will create value for our stakeholders.
Turning to our third quarter results net sales for the third quarter of 2019 were $15.4 million compared to sales of $16.7 million. During the three months ended September Thirtyth 2018.
Net sales of hemo dialysis concentrates to dialysis providers and distributors in the U.S. and abroad were 15.2 million for the three months ended September Thirtyth 2019, compared to $16.6 million for the three months ended September Thirtyth 2018.
The decrease of $1.4 million was primarily due to lower sales to international customers offset by an increase in sales pursuant to the company's contract with Davita.
International concentrate sales declined compared to the prior year due to the loss of volume by one of our distributors in certain Latin American countries, which in some cases, we believe was temporary in nature.
We have worked with our distributor to regain access and some of these countries and we are also engaging with them to expand access to our concentrates products and other Latin American countries.
Net sales of Triferic were $166000 for the three months ended September Thirtyth 2019, compared to $68000 for the three months ended September Thirtyth 2018.
For each of the three months ending September 32019 at September Thirtyth 2018, Triferic net sales included approximately $68000 of deferred revenue recognized under the company's license and the people for public of China with Wanbang biopharmaceutical.
Triferic net sales to three months ended September Thirtyth 2019 also included approximately $98000 of Triferic product sales to us customers.
Cost of sales during the third quarter of 2019 was $15.4 million compared to the cost of sales at $14.7 million during the third quarter of 2018.
Gross profit decreased by $2 million in the third quarter of 2019 compare to the third quarter 2018.
Due primarily to an increase in inventory reserve expense of $1.1 million and a reduction in gross profit for the company's concentrate business, partially offset by an increase in gross profit from Triferic product sales.
Operating loss for the third quarter, 2019 was $7.9 billion compared to $5 million in the third quarter of 2018. The increase in operating loss was due to the decrease in gross profit that I. Just described an increase in selling marketing and R&D expenditures due to the investments we are making in our triferic portfolio, partially offset.
By a decline in our DNA expenditure.
Selling and marketing expenditures were $1.8 million during the third quarter 2019, compared with $100000 during the third quarter of 2018.
The increase in sales and marketing expense reflects the investments we are making in developing.
A commercial platform to support the commercial launch of Triferic.
General and administrative expenses were $4.6 million during that three months ended September thirtyth 2019, compared with $6 million. During the three months ended September Thirtyth 2018.
The decrease of $1.4 million is primarily due to a decrease in legal and other costs associated with various matters, including litigation activity stemming from the departure of certain executives and directors during 2018, partially offset by increases insurance premiums and certain other costs.
Research and product development expenses were 1.5 million dollar for the third quarter 2019, compared with $800000. During the third quarter of 2018. The increase was due to the company's commitment to investing in and building our medical capabilities that we mentioned earlier, including generating data from studies and real world the use of Triferic.
To support medical education, and development efforts as well as the expansion of the company's internal medical Affairs staff.
We expect our research and product development expenses will increase in the future due to additional clinical development of dialysate, an Ivy triferic, including the commencement of the pediatric trial for Triferic and various medical initiatives that we have mentioned on this call.
Net loss for the third quarter of 2019 was $7.9 billion or 12 cents per basic and diluted share compared to net loss of $5 million or 10 cents per basic and diluted share in a third quarter of 2018.
As of September Thirtyth 2019, the company had total liquidity of $29 billion, including $14.4 million of cash and cash equivalents at $14.6 million of investments available for sale.
The total decrease in cash and investments for the quarter was approximately $6.2 million net cash used in operating activities for the third quarter of 2019 was approximately $6.9 million.
As Stuart mentioned, we believe we have to valuable assets and Triferic and in our concentrates business that provide us with financial flexibility as we move forward, including potential non dilutive financing alternatives.
I will now turn the call back to Stewart.
Thank you Angus.
In closing, let me reiterate our excitement about the prospects for our business Triferic is a transformational therapeutic that we believe holds great promise not only in the us our d., but also in a wide variety of other disease States. We've made significant strides this year and bringing triferic to market.
And advancing the IB formulation toward FDA approval and look to continue that progress as we execute on our strategic goals.
Now, we'll open the call the questions operator.
Ladies and gentlemen.
Have a question at this time. Please press Star then the number one on your Touchtone telephone given a question of unanswered or you wish to remove yourself from the Q. Please press the pound.
Your first question is from Brandon Folkes from Cantor Fitzgerald.
Hi, Thanks for taking my questions and congratulations on the progress in the quarter.
First the any additional color you can provide around how we should think about to launch strategy for Triferic No you won't have today pricing.
Should we still think of this this is Tom Hanks logic clinics, and then I've got one follow up after that.
Well I think one of the.
Important aspects about the launch of Ivy Triferic is that in.
Dialysis treatments that use.
Solid bicarbonate cartridges are bags.
You are going to need to use IB triferic. So.
We're targeting I would say all segments, but particularly accounts that.
Have a need for solid cartridge or a solid bicarbonate solution.
This will have a fairly significant application.
Both domestically and around the globe.
Okay and then.
Can you give our new business update call you talked about a longer sales cycle and that's understandable and you've done a very good job in your conversion.
And my question is in the data that you've mentioned that you guys collecting is this purely related to few complications.
So going to be an element of cost saving data around yes Asian Ein usage and then.
If it is the last year as well how should we think about to Tom period collected data given what we saw in the Prime study. Thank you.
Okay. Thanks, so much Brandon so the.
The fact is that its did as complex to collect real world data now. These are the nature of the projects that we have ongoing right now.
We have an array of inclusion exclusion criteria and I think I mentioned some of this on the business update call as well.
And this can take a bit of time, but.
We want to make sure that we have an array of.
Data around USA and the iron sparing on the topline as as well as cost saving data hospitalizations.
Ms trends missed treatments numbers of transfusions et cetera.
Between the different groups and and so from that standpoint of time.
We believe that it does take for the time to collect this data and so as soon as we.
Get through the process will be able to present the results.
Great and maybe one more if I can just maybe directed towards Angus and it looked like from my side expense management to is really good in the quarter add any color in terms of how we should think about opex spending going forward. Thank you.
Sure Brandon Thank you for the question.
We haven't provided operating expense guidance as you know but.
Hello.
Highlights I'll say, because I know what you're looking at.
Our sales and marketing spend has come down a little bit as we've gone through the year.
Obviously, we launched dialysate triferic in the second quarter, we had to make a number of upfront investments to support that launch and I think thats.
Part of the reason why you saw some of the spend and sales and marketing.
A little bit front loaded this year.
On the R&D side, obviously R&D has also been a bit lumpy as we've gone through this year.
One of the main reasons for that is we had to 1.3 million dollar.
Andy a submission fee that we paid to the FDA Bakken back in Q2, we didn't have that.
During the third quarter.
So, yes, R&D spend with more or less inline with where we were.
In Q2, if you back out the NDA submission date, we have said that we expect R&D expense to start to go up in in the coming quarters. As we continue the clinical development of Ivy and dialysate Triferic as well as work through the data initiatives that Stuart mentioned.
And then DNA young dealing anything I mentioned at DNA, which we haven't covered.
As I said DNA has come down.
Because we started to put some of the litigation matters and the rearview mirror here.
We are in Q2, we were fully accrued for the deductible under our Dino insurance policy.
So some of the noise thats been in our financial results as a result of.
Those litigation matters.
Has started to it.
Come out of.
Quarter to quarter fluctuation in DNA expense.
Great very helpful and thank you very much.
Next question from Raymond from Piper Jaffray line is open.
Thanks, just wanted to circle back to the CMS final rule.
Stuart I guess some before this rule was made final I know you guys.
You talked a lot about how it could go either way.
But you still sound kind of surprised even in your.
The language that you use.
Very much disagree with.
With the decision I.
I guess some maybe.
For side should should we assume that Theres no recourse like this is the last final word and Theres no sort of appeal process.
And then second what what does it.
Is there any learning I guess in terms of trying to understand exactly where.
You kind of misread I guess, where CMS has had was with respect to this decision. Thanks.
Hey, Chris Thanks, Good to hear from you and look you know.
Tough decision when you come when you take a look at the rule the way it was initially postured.
One did not get the sense that.
Triferic was the IB trucker is going to be.
In eligible for today.
And.
And clearly we did strenuously object to the use of the FDA classification scheme, which the FDA themselves as essentially said does not representative the true nature of innovation of the products they approved so.
And we weren't the only group there were numerous trade associations and.
Support groups that also felt the same and sent letters but.
But at the end of the day. It is what it is you know I wouldn't say we were surprised.
I think that all the while we have modeled our business plans.
With the notion as I mentioned, the strong margin that we have with triferic from the cost structure point of view, we believe we can still participate very profitably inside the bundle.
And at the end of the day I don't think of precludes continuing discussions with the with CMS. So when I came on board I first order business was too was to sit down with CMS and we opened reopened the door with CMS I should say.
And we kept that door open over the last year been and Theyre, probably four or five times and we have a dialogue and they know our positions and we want to work together on the spirit of the of innovation in this space. So I don't think it takes away from the nature of the innovation or Triferic.
And which is a very important drug for the space. So hopefully that helps.
It does one more question.
So just on the on the sort of a cash in the runway you've got going forward I I suppose some of this will come on your Q, but.
Maybe tell us where you stand with respect to.
How much.
It was pulled down in the quarter.
If any and then maybe.
You got.
A number of catalyst slick filings for example in China in Canada. This year.
Some other.
Other catalyst or any of those associated with milestones I think you mentioned proactively that you had some non dilutive financing options.
So any color you can give on exactly how to go about.
Extending the runway would be great. Thanks.
Sure Thanks, Chris So.
First you asked about.
Cash activity during the quarter ATM usage, we did not use the ATM at all during the third quarter.
Only activity, you'll see from a financing point of view.
Reflected in the third quarter is we had about a million dollars of net proceeds associated with the extra not going to be over allotment margin financing I came in in July .
But like I said no no use of the ATM.
As we go forward.
You asked about China in Canada, So so the China.
License agreement, we have as a milestone paint the first real milestone payment associated with that deal with due upon approval.
And that's.
That's an $8 million milestone that thats due on approval.
And China, no no meaningful milestones to speak of power, Canada, rather no no meaningful milestones to speak of.
But yeah look as we go forward, we think we've got a number of options at our disposal.
To finance our business plan, we've got two very valuable businesses as as we've mentioned on this call. We've got global rights to Triferic that through both existing and future partnerships has the potential to bring in capital.
And we'll we'll look at a variety of different alternatives to fund our business plans as we go forward.
Thank you very much.
Next question is from my Gram silver Andrew friendly to relate.
Good afternoon, guys. This is Ed remarks on for Rob I appreciate you taking the questions.
Speaking of some of those international markets I was wondering how marketing efforts are progressing in Latin America.
And just wondering if you'd consider any stronger international marketing push for Ivy Triferic, considering a lot of those markets. There is a higher need and some more favorable economics versus the us.
Great question and I think.
Whether you're talking Latin America or around the world.
It's been quite obvious to us that the the opportunity for IB Triferic in the international markets is quite strong.
Again, I think outside the U.S. in particular, there's been a heavy push toward the use of solid bicarbonate cartridges and.
Solid.
By carbon bags and that just basically fits better with the IB Triferic model for infusion.
As opposed to using the dialysate version and Triferic.
Latin America's an attractive market for us and of course, we distribute concentrates and our.
Always looking at the strategy around leveraging relationships.
We have an approval in Peru, and we're expecting another one in Chile.
And around the World is saying is just mentioned from Canada to a number of all the.
China, the number of other markets, including Europe , and Japan, where.
We're in discussions with potential.
License partners so.
I'd say in a number of those markets really the driver will be.
Anticipate the driver will be IB triferic.
I see.
Okay, two more questions first just on the.
I Miss ruling.
I noticed that.
Yes. It was also discontinuing the application of the.
Rather prisa stimulating agent monitoring policy, just wondering how that might affect uptake of Triferic and then sort of to build on one of the previous questions. So just wondering in your conversations with CMS.
What do they say exactly was lacking in the step appeal that led them to not grant of that reimbursement for Ivy Triferic.
Thanks for the question at Tangguh speaking I'll take that the second the second question first I mean look the CMS came out in the final rule. They provided a lot of Q in a around everybody's comments and what their response what.
I think I think it at the end of the day.
They were stuck a bit between a rock in the heart place trying to too.
Obviously incentivize innovation, but at the same time limit costs and I think what ultimately came out of.
The ruling and there's a lot of that the answers they gave to comments out there is that.
And it feels like like managing cost with a core part of.
What what they're trying to do here so.
You know they provided.
If you look at our comment letter and the Q and a document that put out that is that.
Affiliated with the final rule you can see they put specific comments against each of our.
You too our comments and so thats all out there I'll turn the public domain again.
We think we've gotten innovative product here, we're going to continue to do the work we need to do to prove that through real world data.
Exercise as Stuart mentioned.
We're excited about that.
And your remind me your first question.
I just noticed that the USA monitoring policy was being discontinued.
Well through the CMS and just wondering if that had any effect on triferic uptake going forward.
I don't I mean again, thanks for your from a financial point of view I think what we're trying to show here is obviously, if you can reduce the usage of USA.
Which is.
Okay, what our real world data initiatives yield for us I mean that obviously has the financial benefit.
But.
They also have a black box warning associated with cardiovascular complications so.
I think reducing the usage of USA, regardless of the CMS monitoring policy.
Has clinical and financial benefits that we think.
Intimately.
Good benefit Triferic. So we're going to continue to look at look at that and look at that.
The overall impact of Triferic clinical pharmacoeconomic.
Health economic outcome perspective.
Okay that makes sense and I just wanted to make sure that that was that was still the case considering.
And just as the final question on the based concentrates business.
During a lot of the marketing focus for these triferic launches that should be coming up.
There have been ongoing I'm just wondering how we should think about the trending revenues for the Beast concentrates business seems to be pretty stable, but just as we go forward. If you could provide any guidance on that.
Sure sure. Thanks again, so yes, if you look at the last three quarters or so it has been fairly stable obviously the year over year comparison.
It's slightly unfavorable we had pretty strong Q3 in Q4 last year and that was largely due to sales in the international markets.
As I said in my prepared remarks, we've seen a little bit of a pullback in some of those markets, particularly in Latin America.
But we're working with our partner.
And then have worked with our partner to get back.
Some of those volumes and we'll continue to do that so obviously a lot of the focus is on triferic, but.
We think we've got a valuable business here in the concentrates and we're going to continue to work both within the U.S. and globally.
Try to expand that business and improve our margins and I think you saw in the third quarter, we signed a new four and a half year contract with with Davita with where the price increase I think thats. One of one example of the types of things will continue to work on as we look to.
Grow and improve the margin profile of that business.
Excellent well that's all from me. Thank you.
I am showing there no further questions at this time.
Good luck to turn the conference back to Mr. soon with ball.
Okay. Thanks, all once again for joining us this afternoon.
Ladies and gentlemen.
Includes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.