Q4 2019 Earnings Call
[music].
Greetings and welcome to Phoenix fourth quarter fiscal year 2019 earnings call.
This time, all participants will be in listen only mode.
Question answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.
Please note this conference is being recorded.
At this time I'll turn the conference over to Tim Mccarthy Lakeside Risers, Mr. Mccarthy you may begin.
Good morning, Thank you for joining our conference call, we provide an update on Nexus business as well as review our financial results for the fourth quarter.
Fiscal year end 2019.
It was released detailing the results crossed the wire earlier. This morning and is available on the company's website. A replay of this call will also be archived on a company website.
During the course of this conference call the company will make projections or forward looking statements regarding future events, including statements about financial business and clinical milestones anticipated in fiscal year 2020 and beyond.
Encourage you to review the company's passed on future.
Filings with the FCC, which identify specific factors that may cause actual results or events to differ materially from those described and afford looking statements.
You can find our assay see filings in the Edgar database at Www Dot FCC dotcom or in the <unk> Investor Relations section at our website at Www Dot Sina Dot com.
This morning, we are joined by Dr. Johnson, <unk>, Chief Executive Officer, Mr., Jeff Gordon Chief Operating Officer, Dr., Rudolph Kwan, Chief Medical Officer, Mr. rentals, <unk>, Chief Financial Officer, Mr., Tim Cook Senior VP global commercial oncology.
Who will be available to answer questions. After the prepared remarks.
With that I'll turn the call it a johnson for introductory comments.
Thank you Tim.
And thank you everyone for joining us this morning.
The major progress 18 actually throughout 2019 has faced away for another exciting improved <unk>, Yeah, 2020, actually execute our mission to become a global leader, even bring even though we have cancer treatments to the market 80, improving health outcomes for patients.
Our immediate focus is to obtain regulatory approval for our two most of my boss candidates oral paclitaxel and it took the Dublin argument.
Before we have demonstrated success in phase three clinical studies.
In parallel we continually invest in and expand our commercial infrastructure.
On a strong position to launch and commercialize the first off out for parts you oncology therapeutics.
Oh Soundbars candidate these type of doubling argument.
It's just part of <unk> Admiral.
It's a treatment for kidney care folks as.
We're delighted to share do we have already submitted and due to the FDA.
We'll share more information once where confirmation.
Application has been a softer.
Our <unk> Admiral is responsible for the regular chip fighting in Europe, and you'll be managing commercial activities in both the U.S. and Europe.
The private into submission for oral Paclitaxel is supported by a strong clinical data package.
Equally the results from our phase three trial in metastatic breast cancer completed in 2018 19.
This trial successfully met its primary efficacy endpoint.
<unk> East statistically significant improvement overall response rate for Orbactiv PAREXEL compare to R&D architectural.
We've talked to update on the trial and the San Antonio breast cancer Symposium in December.
Also I know sitting at a conference or Paclitaxel demonstrated a significant improvement in overall survival.
I would note that this is the first arotech, saying to demonstrate a significant improvement in response rate overall survival in a phase three study with much less the rocky.
We are on track to somebody that Andy you asked for architectural will not be providing additional details at this time, but we'll share that view of this sentence body Usfifty one is confirmed.
It's important to looked at it would be about distinct multifamily Esa regulatory pathway.
However, we all know that combinations battery is a standard in the present and future.
We'll continue to explore paclitaxel, except backbone of chemotherapy going forward, including combination with pocket it even though therapies.
In December we announced expansion of our strategic partnership without Chinese panel Cintra pharmaceuticals to exclusively develop and commercialize architectural oral beautiful teekay and type in the building automation, even China, Hong Kong and Macau.
Sure sure pharmaceutical he says he didn't Chinese pharmaceutical company with proper are indeed, and commercialization capabilities in the region and we are excited to collaborate with them to tap into one of the largest health care markets either well.
I know the terms like the expanded agreement we are entitled to receive an upfront payment of 30 million.
And we also eligible to receive development sales and all the milestones pay this up to another 170 million as well as tier royalties on commercial necessarily have licensed products.
The total deal size is potentially worth 200 million excluding royalty payments.
We look forward to lead into clinical development of this portfolio Ultrapars clinical stage products, what the ultimate goal of surfing patience and addressing the very attractive market opportunities that exist in China.
Hi, guys are underway to calmes clinical trials.
Having already secured a partnership in China.
We continue to explore the best options to leverage the value of our clinical assets you Alta territories worldwide.
It is yours would have always believed that the most comparing strategy you still commercialize our record EXL ourselves, but we have active ongoing business discussion development discussions with potential partners in all the major markets in order to maximize the global revenue potential.
I would add to that beyond conventional our licensing agreements, we're considering opportunities to collaborate all add additional indications and explore combination therapies with partners.
Product sales for a four year pretty 19 exceeded our expectations a campaign I heard it of the guidance we issue even November.
Jeff and Rendell will provide more details.
Finally, we continue to maintain a healthy balance sheet.
Cash and short term investment as at December 31st printed 19 were 160.8 million.
Improves the proceeds from the private placement we completed in December in which we raised net proceeds of 59.4 million from a group of institutional investors.
Rental we provide you with more details on this transaction.
I'll now turn the call over to other members of the management team beginning with Dr. would applaud our chief Creative Officer, who will give an update on our R&D activities.
Also joining us on a call today is with the team called our senior Vice President of global commercial oncology.
During today's discussion fuel per watt information on the very possibly section we received in San Antonio.
He will also provide an update on I'll tell you launch activities ahead of the anticipated oral packet xol approval.
But first Rudolph.
Go ahead.
Thank you Johnson.
Let me begin that up independent alignment for the Tritan enough that seen the cat posted.
As Jonathan mentioned I'll end, the fourth of independent has.
That's happening, but then submission.
The by strong clinical package, including two positive phase three study.
Demonstrated excellent efficacy and cutting safety profile.
We believe that tend to calculate this represents a lot and attractive market and the commercial environment may get even while favorable in the coming yes.
We remain confident that have been evidenced clean safety profile.
As a competitive that bought page opex, It think 8-K therapies.
Which are limited by site that that negatively impact patient compliance.
Albermarle has been stated that it plans to launch tepid nibbling light, but in the us in yield.
In Q, what China, he tried to what and Q2, twentytwenty, what respectively subject to regulatory approval.
Now onto our architect so, especially Cody I would like to provide a recap of the data that we said at this thing Antonio breast cancer Symposium.
We had last earlier intention IP and then I'll phase three study in metastatic breast cancer successfully met its primary endpoint.
In the final analysis of the primary endpoint, we showed that patients treated with oral bucket XL at an overall response rate 14, plus 4%.
Pat will try to five plus 6% for patients treated with Ivy Petrotec. So.
Fred's up 14.8%.
This was statistically significant with a p. burial zero.
Heroes zero five.
These results what base up the specified modified intent to treat that analysis.
We were very excited to announce that thing Antonio that treatment with oral packet Txcell also result in an improvement in overall survival in that trial.
In the pre specified MIT T. population. The median overall survival for patients treated with our Opex EXL was 37.9 months compared to 16.9 labs, but those are Ivy tech. So a difference of 11 months.
The P. burial was zero plus zero re Fi.
The headset race off Ciro 0.684.
Overall survival was a secondary endpoint in trial. It was an objective add pie that January recap the bio oncology as the more important at outcome in the past that trial.
This was a relatively early kind of data and I would note that we were able to show the survival benefit making the result, all the more impressive.
We believe the safety data oral predicate had so we'll be a family kept pet compelling for both doctors that patients.
There was an impressive reduction in the rapidly.
Clinically relevant incidence of great too or high end. The ruthie occurred in 31 by 1% of patients are Ivy prep kit EXL versus only 76% for those on all Rhopressa detector.
There were also face a common dose limiting site that techs in therapy that frequently results in that meet those reductions.
There was also a decrease in LLP ship with this site that being report in 48, plus what percent of Ivy Petrotec cell patients worth it.
Eight plus 8% oral excel.
Furthermore, Gi adverse events were manageable with pathetic therapy.
Give us a stall efficacy data at excellent tolerability of oral paclitaxel together with the convenience of that oral rich of administration, we are extremely confident about unique and competitive product profile.
We believe that the body of data we have generated will have established oral prep excellent Esa treatment of choice for patients receiving chemotherapy fall, but aesthetic breast cancer.
A small oncologists in the us have become aware of the pull thats off of oral brackets hexcel. Following the same Antonio preset patients.
We received multiple inquiry and request to support investigator initiated trials.
We have been evaluating this requested we plan to will fall what that number this program, which will which we believe we'll keep all USBC since experiences that drops and if approved.
Sure.
Well introduction into the oncology community.
Let me turn to other studies of oral Paclitaxel.
Our facelift poke rep in kill tennis Angiosarcoma stopped enrolling about 12 months ago MP report the early data from this study theory shut in light team.
The initial response rate at the time of data announcement was clear and convincing with all seven patients who had received six weeks of treatment showed significant and leasable reduction of that killed penis angiosarcoma within one or two weeks of treatment.
Three patients that completely spot based RBC oneplus what criteria.
We plan to submit additional data copies of patients at medical meetings potentially in the first half of Twentytwenty.
With respect to outpace what to gastric cancer trial that buys oral paclitaxel with rubber Sarah Matt we allow verified by integrating the expansion cohort and expect to report additional data later this year.
Lastly, our phase one trial Aro Paclitaxel in competition have brought this up that for the treatment of AEP last October is progressing nicely and applied determination update dogs, we hope to have bought patients into the dose expansion cohort this year.
This will enroll patients with Ed was all but that the euro clearvale gastric orchestral as so backup or non small cell lung cancer into three independent cohort fill further you Barry the activity as safety of the study combination.
We believe this is only to beginning in terms of the burial we expect to demonstrate oral paclitaxel and our oral discovery platform overall.
I'll now turn the call Roper the Pimco will discuss the positive reception drops take Antonio and launch preparations for oral cut cut back so.
Thank you Rudolph and good morning, everyone.
Our strategy from the very beginning has been to build an organization with a strong market focus with an integrated business model that can leverage our proprietary commercial platform supply chain and manufacturing capabilities.
Building a successful specialty pharma business was the first step and has allowed us to build relationships and establish a supply chain in the oncology community.
Our efforts to build out the commercial infrastructure for oral Paclitaxel are now well advanced and we're in the process of making key leadership hires for our medical science liaison team. This quarter, we plan to have our account managers in place by mid year to begin engaging with commercial payors.
With regards to our oral Paclitaxel sales team, we plan to start hiring our initial 25 to 30 sales representatives beginning in the second half of the year.
We will then supplement this group with another 25 hires approximately three to six months post launch.
We have conducted extensive customer segmentation work and from our market research, we know that approximately 20% of high volume accounts treat nearly 70% of the patients.
We are focused on these hospitals and high volume practices, and we will be able to begin our promotional efforts once we receive FDA approval.
We plan to cover the remaining patient volumes through non personal promotion.
We continue to have internal and external discussions on oral paclitaxel pricing and plan to conduct more quantitative pricing research later in the year.
By now we have a good idea about the acceptable ranges for our products, which are similar to other branded breast cancer medications.
In 2019, we launched our Phoenix oncology brand.
Our goal is to increase awareness of in Phoenix, and its products among healthcare professionals and emphasize our company's long term commitment in the field of oncology.
We aim to establish at Dynex oncology as a patient focused entity developing and launching both innovative cancer medications, while providing a communication platform for patients and healthcare professionals alike.
The brand was launched ASKO last year and we continue these initiatives at the most recent San Antonio breast cancers Symposium. In addition, we're now conducting market research to measure the baseline brand awareness and then we will track our progress to increase this awareness throughout 2020.
Our oral pepper tax or abstract at San Antonio was accepted for presentation and it was selected for a prestigious press program and it received broad media coverage. For example, we generated over 20 original online and print articles and six video interviews of our investigators.
Dr Mazor.
In fact, our our program received over 68000, social media impressions.
Following San Antonio We conducted 47, one on one interviews with breast cancer experts.
The feedback we received has been favorable and focused on our dramatic increase in overall survival and the significant decrease in peripheral neuropathy.
As Rudolph noted we have also received a steady stream of inquiries from physicians interested in conducting their own clinical trials of oral paclitaxel, which we view as highly encouraging.
So in closing the Precommercial activities around the World Cup attacks are critical for the entire company and for all our stakeholders, we have an opportunity to create significant value not just with the launch of our first proprietary product, but also with additional indications add new therapeutics as our pipeline matures I look forward to progress up.
Based on future calls I'll now turn it over to random.
Thank you.
Product sales for the Street month and full year ended December 31st 2019 were 14.1 million and 80.5 million compared with 19 million and 56.4 million respectively for the three months and through year end September 30 for 28.
The decrease in products out in the three month and at December 31st Clean 19, as compared to the same period in 2018, but primarily attributable to lower sales of diesel pricing and touching a pie.
Like this and other revenue in the three month and December 31st 2019 was 20.3 million compared to 2.3 million in the same period in 2018.
The increase was primarily due to a 20 million milestone achieved during the three month and December 31st 2019.
In connection with the Amro license agreement.
We recorded 20.7 million and $32.7 million license and other revenue in 2019 and 2018, respectively.
Cost of sales for the three month ended December 20 at December 31st 2019 were 15.7 million compared to 14.3 million in the prior year.
The increase in cost of South was primarily due to an increase in a cost of specialty product out of 4.6 million offset by decreasing the cost of fiber threepi and apiay south of $3.2 million.
The increase in cost of specialty product sales was in line with that in specialty product revenue.
While the cost of fibrosis, Ruby and Apiay south decreased at the start floor rate than to respective fell due to continued fixed costs. This but despite decreased production.
Cost of sales totaled 69.6 million for the full year 2019, and increased up 48% as compared to 47 million for 2018, the increasing cost of south with largely in line with the increase in product sales.
Research and development expenses for the three month and full year ended December 31st 2019, or 21.8 million and 84.4 million, respectively, as compared to 20.8 million and 119.9 billion for the three months and year end it.
At December 31st 19, respectively.
The year over year decrease in R&D expenses with primarily due to a decrease in licensing fees related to the license our PCR technology product development and crank operations offset by an increase in preclinical development costs related to the archon into aggravation therapy, and TTR T. immunotherapy product.
An increase in R&D related compensation expenses.
Selling general and administrative expenses for the Fremont and year end December 31st 2019 were 18.1 billion and 66.7 million, respectively, compared to 11.6 million and 49 minutes for the three months and year ended December 30, Onest 2018, respectively.
The increased in SGN eight were primarily due to cost related to preparing to commercialize our proprietary products.
Net losses attributable to at Phoenix for the three month and year end at December 31st 2019, or 21.7 million and 123.7 million, respectively, or 2028 cents and the dollar and 67 cents per share respectively.
This compared to net loss for three months ended the three month and year end at December 31st 2018.
Of 27.1 million and 117 from 4 million of 41 cents and the dollar an 82 cents per share respectively.
At December 31st.
2019th the company had cash cash equivalents restrict cash and short term investments of 160.8 million compared to 107.4 million at December 30, Onest 2018 I.
I would note our 20 night till year end cashing truth 7.8 million funded by newer state for the construction of the bunker for 30, but does not include the 30 million payment. We are due to receive from share pharmaceutical as a part of the expanded license agreement.
In December 2019, we close with a number of institutional investors a private placement equity offering of 3.95 million shares of common stock so at a price up 15.
Point.
$15.
30 cents per share net proceeds from the offering were approximately 59.4 million.
Based on our current operating plan with our cash and cash equivalents as of December 30, Onest 2019, together with cash to be generated from our operating activities will enable us to fund our operations into first quarter 2021.
In terms of product out guidance, we expect 2020 year over year product sales growth to be in the mid single digits from 80.5 million in 2019.
The company does not give quarterly guidance, we will comment that our product sales are expected to be backend loaded in 2020.
Our guidance for 2020 has taken into account our discontinuation of visa present cells and the suspension of operations at our pipeline.
In 2019, which had meaningful contributions in the first nine month of 29 team.
For more detailed discussion on our financials, including those specific factors that contributed to the changes in our income statement as well its financial results for the year end at December 31st 2019th please refer to the form 10-K to be filed with SEC.
I'll now turn the call back over to Jeff Gordon.
Thank you Randall.
As Jim has already covered most of our pre commercial activities.
Im going to focus my discussion this morning on our specialty pharma and compounding businesses as well is providing a brief manufacturing update.
Product sales for the full year 2019 grew by 43% to 80.5 million.
The increase in product sales year over year was due to a 20 million dollar increase in specialty product sales from growing sales volume of existing products and the launch in sales of new products, along with an 11.8 million increase in fiber Threed. These sales.
Mainly attributable to base so for us in sales.
Im pleased to say that we were able to raise guidance twice during the year and then beat this guidance with the numbers we are reporting today, despite having discontinued sales vasopressin.
And sales from our existing airplanes instruments during the second half severe.
Let's say mix pharmaceutical division currently markets 30 products.
With Fiftynine skews and the Phoenix farmers solution markets, five brothers and 16 skews.
We expect to launch an additional seven products, including one significant cyber three brothers in the first half of 2020.
There has been are important recent development in the fiber threepi business with a closure of the Tommy Division had another major health care company.
This is opened up for potential window of opportunity for us.
And we're currently evaluating this situation and will position ourselves accordingly.
On the manufacturing front.
The exterior of our facility in Dunkirk, New York is now complete.
And we're in the process of completing all the interior work and the layout of the various suites.
We will be ordered in March April this year.
And the plant is expected to be operational by June 2021.
We expect to manufacture our injectable and fiber threed products and eventually our proprietary oncology products for commercial sale at this facility.
At our plants in China, we are currently only producing.
For our own clinical trials and registration needs and we are not producing commercial batches are they pie due to a decision we made to suspend commercial production based on discussions with the department of emergency management of geometry.
The Department has agreed that all manufacturing activities that are related to the approval of oral packed with that so can be continue without interruption.
It should be noted that we also have an alternative source odpi for our oral paclitaxel that is ready to supply the same high quality material.
And backup contingency plans to ensure there are no disruptions to our approval and launch.
We also want to emphasize that we're continuing to explore licensing opportunities of our proprietary products on a global basis.
We continue to make progress with the new 440000 square foot Apiay plant, which is being built to us.
Cgmp standards as mentioned previously construction on the new Apiay plant has been completed.
As a result of the recent outbreaks of novel Corona virus in China.
Most businesses in the country have experienced suspension and subsequent delay of resumption of operations to various extends well.
We expect there will be some delay.
In building out this new Apiay facility injunction and it is currently expected to commence operations in the second half of 2020.
Once operational the facility is expected to expand a reduction capabilities to further support our global clinical development needs and to ensure the supply.
Yes for commercial launches.
I will now turn the call over to Johnson for closing remarks.
This is a very exciting time for a Phoenix the in the we Didnt work performed by our R&D and clinical teams as a result into late stage clinical assets, we've very positive phase three data and the potential for each to change to stand of care in their respective markets.
The MD 84, tipping nibbling on them and has been submitted and together with the plan is fighting for architect. So we believe we are on the path for both office products to be launched commercially in 2021.
In parallel with this regulatory activities, we have been making the necessary investments in our but actually and commercial infrastructure to ensure a successful launch for our opex EXL upon approval and capture maximum value.
We have please also with the progress we have mixed advancing our pipeline and continue to explore opportunities with the strong clinical rationale for applying our office coffee platform and all the platform technologies I would now like to open the call for questions.
Operator, Please go ahead.
Thank you.
At this time will be conducting a question and answer session. If you like to ask your question. Please press star one from your telephone keypad and the confirmation total indicate your line is in the question Q.
The press Star too if you like to move your question from the Q.
Bids that are using speaker equipment baby necessary to pick up your handset before pressing the star Keith.
One moment, please what we pull for questions.
Thank you.
First question comes from the line of Robyn Karnauskas with Suntrust. Please proceed with your question.
Hi, This is and then on for Rob and congrats for the quarter and all the progress you guys have made I know you said turn the call you want your lot of details around the end da until it's been accepted but just want to get some clarity or you think that youre going to solve that day. After the final have team meeting regardless of the outcome. The meeting so then possibly around July.
We can probably expect an update on the outcome. There I'm just really quickly there first and then just few my follow up questions.
So with up here.
We certainly have a very confident with that data package, we already app from the phase three study and from our ongoing discussion with the FDA. So this final discussion with the FDA in early April what.
Be the last pieces, we want to cross all before we make a submission.
As we indicated before we're going to make the announcement.
The EPS symptoms after submission. So we have no intention to make a public announcement up the submission itself.
Okay, great. Thank you.
Very helpful. Thanks, and then I guess.
I'll follow you are still in aligning quick question on the interest at home I know there was lot excitement around that when you guys about data. If you can you talk little bit how enrollment is going and how many more patients. We may expect then that when you would think you want to talk they have ta about regulatory path forward for that indication.
Very good question as you know angiosarcoma.
Rare disease MBS obtained orphan drug designation from the FD and.
Late last year also from the European Health Authority and.
Ill early data, obviously is utilizing point in getting those destination and SM, Randy Ses Allah and robust actually very rapid.
We have been enrolled in very very well since the study stopped that in about 15 months ago, and we continue to generate exciting data what we have reported in the first seven patient has now been extend to a lot more patients and.
You will expect to see those additional data being communicated to medical community.
A very soon and of course, we are in the process all planning to interact with debt date to find the regulatory path forward and of course this will you'll expect that will.
Very soon that as soon as we got information about that we'll be making a non spun off directly to the possible angiosarcoma. So stay tuned on that one.
Great. Thank you so much real thing then I guess, one real last one for Tim can you talk about how the talk about the skilled team do you have the fully staffed to.
I get that 70% of accounts that you had mentioned or Keith where were long.
Process are you in filling out the field team.
Sure. Good morning. This is Tim thanks for the question.
We are in the early stages of building out the sales team, we're starting really with the medical team first the medical science liaisons because they can began engaging.
Operator experts immediately will follow them with our account managers, who will be engaging the payers. We can engage payers of population based decision makers well in advance of approval through a program called the pre approval of information Exchange Act and so that will be our second phase and then in the south.
Second half of the year, we will start bringing on our salesforce.
As they have limited things they could do prior to pre approval. So it's a phased approach science first then payer than the sales team and the goal being that they are in place and fully trained and ready to go whatever we receive final FDA approval.
Great. Thank you so much everyone for the questions.
The next question comes from the line of Kennen Mackay with RBC capital markets. Please proceed with your question.
Hi, Thanks for taking the question and congrats on the incredible progress through 2019.
Yes.
So it takes us enough medical oncology and lot of the excitement.
Sunil.
Couple of questions. It sounds like there's a slight delay maybe a one month delay in the planned.
So following in the last to accommodate the final needing I'll just hoping.
I'd imagine we've already had some interaction with the FDIC.
The other proceeds pre NDA meeting can you maybe just help us understand what remains to be discussed or agreed upon with the prior to the filing and again help us understand why youre. So confident you'll be able to follow promptly. After this meeting and then maybe related to that I was wondering if you could clarify breached.
I understand it would be STS one way or another on a needs of analyzing rockfalls overall survival data so that it could potentially be included in the label or maybe that's part of the upcoming April meeting.
Then lastly, I was just hoping you could elaborate a little bit on any impact to Chinese operations were targeting the two antibody concerning thats certainly sweeping the news cycle here. Thank you again.
Oh tenant excellent question.
The.
We we have a very strong package from our phase three program in accordance with.
The FDA the signed Cod.
Overall response rate SM approvable endpoint for a frac sand so our clinical study clearly demonstrate that based on the primary endpoint.
We win a very convincing the old Oh, well performing active control.
With us significant Verizon and P value both in the protocol specified and analysis and the and the.
I keep sheet and in addition, all the survival analysis, we're into right direction, especially the overall survival China in the protocol Csfive MIT, even early stage is set a significant with a different itself.
11 months in Fayetteville direct so so we're confident with the efficacy side the safety five Psi. The fact that we were able to achieve a dramatic reduction in the clinically relevant neuropathy east.
Strong pipeline, how stuff that we're the first arotech scene.
Oral formulation offer compile tech seen that well known and well known for the FDA full Ivy Paclitaxel. So we're very confident with regarding the clinical data set as it stands.
To fulfill whatever the FDA wouldn't need for approval as you rightly point now we want to have the opportunity as I articulated before.
Since the overall survival is so extreme pleasant upside that we did not planned fall we want some guidance from the FDA in order to maximize our chance of the label discussion includes thing that that the survival data in there so youre spot on that.
We certainly would take the opportunity to discuss this issue with the FDA.
Your second question about the overall survival I think I've answered that already.
So.
My question is all Colorado wireless, but before that I will also keep validly multi FIFA lightly cultish. The final at the meeting I think this of though behind your question, we already have ongoing dialogue and they've been checking all other pre clinical CMC questions. One by one with the FDA and we as I.
Indicate that we believe our clinical package is really strong enough. So read that final discussions really on the normal formality all the up the submission format.
Checking up those last items, but more importantly, as I indicated we want that the opportunity to optimize our labeling discussions.
John Sonnier wasn't part of the Carmel Iris, yes, just to add one when will comment is that as well has already indicated the discussion our communication of actually is ongoing and off duty I'm delighted to say that as he has indicated that all discussion would freak out to the preclinical I suppose the CMC package.
Everything the of discussion was very satisfactory. So therefore, the if you'd like the lost at this reason why does the quantity as saying that this will be the last piece of information more on a discussion would pick up to date clinical data.
With regard to your question on clearly this outbreak in China, how it affects I'll try to operation, obviously as organization employees come for us.
So our immediately we're happy to assembling supplies, we shipped to show machine to ensure that old employees will have the supply for them to be healthy at same time to ensure that the environment is safe before we will often chew up to continue the operation now let me emphasize the fact.
The the epidemic is not a company specific issue and I suspect that many other companies and that business activities in China will now actively monitoring the situation and we believe the impact our chop operate all chart operations weaving manageable now as some of our launch preparation we do have plenty.
And we do FMC and we have already excavated backup suppliers for most of our most critical products and also to work to secure auto suppliers as part of that normal cost supply chain activities I'm delighted to say, Doug based on our assessment they will be no delay in Andy.
Off our ongoing activities as well as no impact on the launch of products. According to the regulatory approval date.
Given the heart uncertainties associated with the Cobots academic at this moment is very difficult for anyone to predict how long does conditions will exist and extend the which is this the effect, but we will be closely monitoring the situation at the show East. We you saw earlier than expected Dan I believe this will only report.
Upside for our organization and I Hope I answered your question.
Yes, you did maybe two quick follow ups on that but first I'll. Just wondering if you could confirm that the rocks all submission.
Still going through the fiber part b, two pathway or whether composition to do you have had suggested maybe if you go through a different pathways and then separately for Johnson you are one of the world experts on the Rolla, GE and especially retroviruses. Just wondering if there was anything that could be done by the athenax team.
To potentially start looking at treatments for two owned by the stood in.
On the ground operations over the expertise thank you.
Ken first question I think confirmed that the fiber plan b to attack as steel what we are looking to us with the FDA.
The other minorities [laughter] with regard to your second question I think that you are potentially with the seeing are the evolution of and their virus tech can evolve into a more so sofa recurrent eubanks going forward and obviously the most important thing is whether there will be.
A whole set the wireless get high during the summer seasons, but having said that I mean I was someone to choose to help and Dan are on top of bio Greg Recolor. If you next activities for on behalf of global health of humanity I did help in fact I was hoping in terms of peace sign.
I think some of the early Colin of ours vaccines as well as some of the diagnostics and certainly I mean, the book is fully aware the bought up $48 my participation to be able to help and certainly if they are good opportunities going forward, a phoenix may be able to enjoy upside of but this.
A new people have us well and all these have been fully communicated to the board of directors and they're excited and they are encouraging us to to be helpful and writing stay tuned and if there's any new developments, we shall we bought it happy to disclose the potential upside surprises are for our stakeholders.
Thank you very much.
Your next question comes from the line of Chad Messer with Needham and company. Please proceed with your question.
Great. Thanks, Good morning, Thanks for taking my questions and can congrats on all the progress in particular with.
With the two end DHL filed in intending one.
One of your differentiating factors footprint Phoenix is your manufacturing and supply chain stuff and I think Jeff for his update on it but I was wondering where you get a little bit more quantitative on your preparedness for an oral paclitaxel launch I know in the past we've talked about.
A potential need for up to five or six metric tons of a paclitaxel to to supply the market.
Is that still your thinking and where do you guys feel.
Feel that you are in terms of being prepared to to be able to deliver that.
I'll keep this guidance was up 40 peak sales to be somewhere between two to.
Now for metric tons. According to our assessment. It was a pace of your simply on the number of patients that required therapy deterioration beat those required and then you back factored that into the amount of ipi require.
And our plaza in in China in Chongqing will be April if you operate you to operation to supply piece with no issue now, having having said that I mean as saw organization. They are fully integrated end to prepare for any potential interruptions based on our experience we would help.
We suggest the old and others to set up plan B and C. Because for a critical unmet medical better sunlight oral petrotec. So we have always we've had to responsibly to ensure no interruption of supplies now on this incident as I mean, the the society challenges that we are facing in China with some.
A lot of factory something explosion in China, a classic chemical factory as was the color virus I'd shoe were unexpected, but having said that how preparation is now paying off in terms of the fact that we were able to activate the plan b in terms of alter supplier and Im also we have another oversupply doesn't.
In case, there I saw right now with full confidence that we'll be able to be able to able to supply.
To satisfy the requirements on the needs of the patients, but not just in the U.S., but globally I will have to say Darby case. The issue is we saw earlier, which we are monitoring very closely and diverse supportive. This will only represent upside on grand nice upside surprise. This fall Playstation and also file stake holders.
Great. Thanks, and obviously most of our conversation today, it's been on on your two lead programs given given the critical juncture their app, but can we just get a quick update on a couple of the other things you guys are working on the TCR in the.
Margin Ace program, where did those sit today and what's the next next thing to look for from them.
Yes, our first of all as saw the C of the company I would like to congratulate the clinical team for chocolate data now let me just if you will some idea of the merits of scope of work that they're working on if I share with you would that be far yield for the NP four to manipulate it before.
Size is four gigabyte imagine the admitted few of the work that we're talking about in terms of India, and and I'm very happy with the quality of the submission and they're not working very actively on the architectural the timing is a function of the regulatory strategy.
Well as such we ensure that we get the best label for the product so that our oncology commercial team will be able to do a good job and taking advantage of the label now with regard to data programs. They are all advancing the since our most of the show this are focusing on the.
Most of the top two programs that we are also see entire want to talk to progress I'm delighted to report our feel very good progress with regard to the T cell T program as well as the Argentina, Argentina separation frankly program. There was some mine that interruptions because of the coil virus issue as well as some other.
Supply issue because you can imagine dot some of the key suppliers that are required will some of the the products that we manufacture were interrupted by by the recent events, but having said that we'll see where much on pipe and you are going to share more from us Indeed near future and I'll ask you to stay tuned there will be.
More new developments to piece programs as well.
Alright, great. Thank you John some appreciate the update.
Thank you.
The next question is from the line of Kevin the either with Oppenheimer. Please proceed with your question.
Okay, great. Thanks for taking my questions.
Maybe just following up on the earlier comments on the Angiosarcoma update.
It off.
You will there be an opportunity in the upcoming.
Medical meeting presentation to provide balsam durability of response data for at least a subset of maybe some of those for seven patients alongside a response data for larger cohort or should we expect you update to focus primarily on a response data.
Good question Kevin.
And just not comma.
Really ucaas both companies company in very Ltd patient population.
The typical patient population in now studies.
In the eighties on nikes, there's another subpopulation very much in the.
Hello, breast cancer surgery, and radiation that subsequent need the let up kind of the radiation related secondary angiosarcoma those will be typically in the sixties all the 70, okay. So those patients.
Do not tolerate treatment genuity very well, so theoretically tcten deep and major a question all four of those treatment. So we have already a math.
In that 30 patients we saw very early response, which is a very quick side. So the questions of the reality with definitely be AE and aerie of focusing on two please send in our presentation.
You can say that we certainly happy pairing full abstract a one step step that will notify the the method community Accordingly, and certainly where we're pleased with what we're seeing so far I think thats.
You should expect to see some data certainly coming out.
Terrific Thats, great and then maybe as my follow up question.
Jeff in your prepared comments you called out.
Specifically.
Saying youre exciting opportunity for a new product new five a three be product.
Yes can you expand a little bit more about that and maybe just as we think about a little bit of contacts for.
The product sales guidance for the year trying to kind of how important is you the introduction of any one or two products too.
Really be able to sort of generate some what would be pretty meaningful growth off of the fourth quarter revenue run rate for product sales.
Jeff.
So.
Let me answer the question on behalf of Jeff.
We do have a number products to be launch Johnson <unk> Johnson I can answer the question. Thank you.
We should introduced that product at the end of March.
And I would like to at this point in time left in products and until we introduce it.
Certainly you understand the changing climate in the fiber three d. business with the most significant competitor exiting markets.
That offers some very good opportunities I have to be Frank we're not a big player in that market.
We have several products that we think by just increasing our our stance in clearance, we can generate significantly higher market shares without really increasing costs much. So.
First product you'll see at the end of March.
Another product, you'll see probably in June coming out of it appears the upside is fairly significant but we're very satisfied with where the.
Sales forecast is now and all of this just represents upside.
Greg extremely helpful. Thank you for taking my questions.
Thank you. The next question is from the line of Yale Jen with label and company. Please proceed with your questions.
Good morning, and thanks for taking the questions and the congrats on the other progress so far.
I'll have a question on the Corona virus will take us at Frost valley different angle that the FDA.
Recent new suggested there as well maybe 150 drugs that could be at risk if the Chinese.
Yep.
Manufacturing was delayed so is that any of those things impact on I guess, Jeff your upside to all the operation or do you see any opportunity do you can pick up the slack.
Yeah, I think first and foremost is the fact that certainly.
Our customers are concerned about products coming in from.
From China.
We try to explain that all of the products are made in isolator conditions with really no human beings involved.
So acid right now we think that we're okay from that standpoint, but to be honest the delays that we're seeing mostly aronson supplies of.
The most rudimentary things like.
Paper for.
Yes.
You know product.
Portfolios for for inserts.
Or labeling.
We're we're handling all that in fact, we have a very significant launch of full bootstrap.
But just occurred with a with a Chinese company. So I think we're okay renal and these are important products and I think the idea is working closely with us.
Okay, Great. That's helpful and also just colorist in terms of the new airplanes in trunking debt.
You anticipate tool it will fully operational in second half of this year.
With that replaced all the capacity of the other stuff.
Oh, the title plant that they're no longer.
Oh outbreak.
Yes.
That does that is the plan.
And we have much much more capacity.
Better equipment.
So the plan is eventually everything's will.
We'll move over to the new facility I wanted to just state once again that the most important aspect of this juncture in government is working closely with US anything that has to do with the clinical needs to get Iraq, So approved and on the market.
They will be will allow us to do that without any restrictions and that's the most important thing and the other thing I want to add from Johnson's comments about our raw material for us is that not only do we have a secondary raw material source on impacted pack, so but also a.
Another one on and sequitur. So we're very very good position that no matter what happens we should be able to have no interruptions.
Okay, Great. That's very helpful and maybe the last question little housekeeping one in terms of the 30 million.
I guess milestones from.
I'll try not to do you guys anticipate receiving that first half of this year or any timeline you didn't suggest.
But.
Wrapping it recognition that are likely going to be our first quarter you bet.
Getting a payment youre right I mean, we'll be getting.
By the enterprise.
And we'll do on.
I would feel we amortize that or that will be something as both.
No amortization and will be as revenue.
Okay, great. Thanks, I appreciate it.
Your next question is from a lot of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.
Hi, good morning, Thanks for taking questions just wanted to follow up a little bit with Tim Cook in terms of the commercial preparations for OXXO and and get a little bit more sense in terms or more color in terms of the.
Size of the commercial for us that you're thinking about to target 70% of the physicians you that you're going to lot emphasize initially.
Sure. Thanks for the question Yeah, we've been spending a lot of time in doing research looking at what other companies have done what's been successful and so we feel that the right approach first I'll just start out when you think of the commercial team is not just the salesforce. It's the medical science liaisons as the account managers, calling on payers and then obviously, it's the cells.
Force so what we've seen though in our research is that if we really want to be efficient and effective.
There are about 1700 accounts that we really need to focus on.
Represent treating 70 plus percent of the patients and so our thought that is in terms of engaging those the initial effort would be with approximately 25 to 30, so that we can execute with excellence.
And then as we build momentum we would bring on another 25 to 30 shortly after launch.
We anticipate having.
Roughly seven to nine people, calling on the payers and we anticipate a medical sales force our medical science liaison team.
Between four and six reps, calling on the largest academic centers in the U.S. So that's the plan right now obviously things can change of new information emerges, but we feel pretty good about the plan and we feel that we won't be ready to turn on the efforts of the promotional efforts very quickly after FDA approval.
Great. Thank you that's very helpful and against second question, maybe more for Johnson.
I guess given the success of your first for discovery program a rock so.
Three phase three now.
Near term, India can you give us an update in terms of the other programs you plan.
And for that platform, including when he can and taxotere potentially and what what what what your plans are driving before.
The year I'm delighted to say that the team is doing very good shop in terms of advancing p. too.
Some most sought valves programs, but more importantly, you stat. Despite their very busy schedule, they're keeping the out of products.
So to speak to platform to continue to add backs.
I would like to say that I mean, the as part of our strategy in terms of timing to ensure first of all to confirm that the platform will follow BYD auto products will follow because you can imagine dot the regulatory path as a result of confirmation of the lead product will lead to a much more rapid and a Saturday.
The development of all the auto products to follow using the same strategy or the same platform. So I would like to see that to stay tune. They will be more data on all the programs that were working on debt coming now on top of that I'm also delighted to say that we'll have a very comprehensive product cycle.
Management program.
He means to stay on top of our record hexcel be template is moving advancing very well and we'll have our the preparations even 40 PGP pumping EBITDA would have a second generation already in hand. So if you asked me with regard to the quality of our product cycle management program.
We have a lot of us up being having big pharma experience I can tell today I will will all be seeing that we're very proud of our product cycle management program, So everything else.
Yes, advancing and we're delighted they're doing well and you'll hear more data so.
Hey, Thank you Jonathan Thanks for taking the questions and congrats.
Thank you.
Thank you at this time I'll turn the floor back to management for closing remarks.
Okay. Thank you very much for a while you're type we have a very good year and a I'm delighted to state that the.
Clinical team has done a tremendous job in terms of submitting.
The first Andy already and that the second one will come very soon pending on our discussion with FDA, which I've full confidence that this is become very soon I'm also delighted to say that the marketing team to see a good job to prepare us for the success and the business developing team is also very.
Looking very actively to ensure that we do not just capture the value of this particular products in the U.S. and Europe, but also capture the value of our product globally and with that I would like to say. Thank you 46 hold this fall below support and thanks again and now we'll talk to you.
Again next quarter. Thank you.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.