Q4 2019 Earnings Call

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Operator: BF-WATCH TV 2021, Good morning, and welcome to the Aquestive Therapeutics fourth quarter and full year 2019 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star zero. As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, Ms. Stephanie Carrington, Westwick Investor Relations. You may begin.

Good morning, and welcome to your question Therapeutics fourth quarter and full year 2019 conference call.

At this time, all participants are in listen only mode.

The speakers presentation, there will be a question and answer session to ask a question during the session you'll need a press star one on your telephone.

If you require any further systems. Please press star zero.

As a reminder, this call will be recorded no look to introduce your host for todays conference Ms., Stephanie Carrington Westwicke Investor Relations you may begin.

Stephanie Carrington: Thank you, Operator. Good morning, and welcome to today's call to review Acquiescent Therapeutics' results for the fourth quarter and full year 2019 and business highlights. On today's call, I am joined by Keith Kendall, Chief Executive Officer, and John Maxwell, Chief Financial Officer, who are going to provide an overview of recent business developments and performance in the fourth quarter and full year. Additional members of the company's leadership team will be available for the Q&A. In total, we expect today's call to last approximately 60 minutes.

Thank you operator, good morning, and working on today's call to review the therapeutics results for the fourth quarter full year 2019 and business highlights.

Today's call I'm, drawing by keep Kendall, Chief Executive Officer, and John Maxwell Chief Financial Officer for going to provide an overview of recent business development and performance in the fourth quarter full year.

Additionally, members of the company's leadership team will be available for the Q1 day.

In total we expect today's call will last approximately 60 minutes.

As a reminder.

Stephanie Carrington: As a reminder, our remarks today correspond with the earnings release we issued after market close yesterday. In addition, a recording of today's call will be made available on the Questive Therapeutics website within the Investor Relations section shortly following the conclusion of this call. To remind you, we will be discussing some non-GAAP financial measures this morning as part of our review, fourth quarter, and full year 2019 results. A description of these measures, along with a reconciliation to GAAP, can be found in the earnings release we issued yesterday, which is posted on the Investor Relations section of Acquessive Therapeutics' website.

Our remarks today correspond with the earnings release, we issued after market closed yesterday.

In addition, a recording of today's call will be made about one of course of Therapeutics website, we Didnt Investor Relations section shortly following the conclusion this call.

To remind you we will be discussing some non-GAAP financial measures. This morning as part of a review.

Fourth quarter and full year 2019 result.

It's description of these measures along with a reconciliation to GAAP can be found in the earnings release, we issued yesterday, which is posted on the Investor Relations section of of course, if therapeutics website.

Stephanie Carrington: During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company, as described in the risk factors section included in the company's annual report on Form 10-K, filed with the SEC on March 11, 2020, and in our quarterly reports on Form 10-Q. As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to our business and the development, regulatory approval, and commercialization of our products and other matters related to operations. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which only speak as of the date made.

During the call the company well be making forward looking statement, where your mind you on the company's safe Harbor language as outlined in Yesterdays earnings release, as well as the risks and uncertainties affecting the company as described in the risk factor section included in the company's annual report on form 10-K filed with the FCC on March 11.

In each way and in our quarterly reports on form 10-Q.

As with any pharmaceutical company with product candidates under development and products being commercialized there are significant risks and uncertainties with respect to our business.

And the development record regulatory approval and commercialization of our products and other matters related to operation.

Given these uncertainties you should not place undue reliance on these forward looking statements, which always be are.

Good day made.

Stephanie Carrington: Actual results may differ materially from these statements. All forward-looking statements attributable to requests for therapeutics or any person acting on their behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law.

Actual results may differ materially from these statements all forward looking statements attributable through questar therapeutics or any person acting on behalf.

Our expressly qualified in their entirety Vida cautionary statement and the cautionary statements contained in the earnings release issued yesterday.

The company assumes no obligation to update its forward looking statements. After the date of this conference call whether as a result of new information.

Your events or other right, except as required under applicable law.

I'll now turn the line over.

Keith Kendall: Thank you, Stephanie, and thank you, everyone, for joining us this morning. In our remarks, John and I will be discussing a number of important developments in our business during the fourth quarter and over the first two and a half months of 2020. We will be joined by additional members of the Equestive Leadership Team during the Q&A session afterwards. As we committed through 2019, we delivered or achieved a number of important milestones related to the key drivers of value for our business. First, we held a very constructive pre-IND meeting with the FDA related to AQST-108, an oral sublingual film delivering systemic epinephrine that is in development for the treatment of anaphylaxis. Perhaps most importantly, at that meeting, we received confirmation that our candidate would be reviewed under the 505B2 regulatory pathway.

Thank you Stephanie and thank you everyone for joining us this morning.

In our remarks, John I will be discussing a number of important developments in our business during the fourth quarter and ended the first two and a half mugs 2020.

He will be joining by additional members of the quest of leadership team during the Q when a session afterwards.

As we committed through 2019, we delivered or achieved a number of important milestones related to the key drivers is value for our business.

First we held it very constructive pre I N D meeting with the F.D.A. related to eight QST went away.

Oral sublingual film delivering systemic FNF offering that is in development for the treatment of anaphylaxis.

Perhaps most importantly in that meeting we received confirmation that our candidate would be reviewed under the five all five beat to regulatory pathway.

Keith Kendall: Next, we received FDA acceptance of our NDA for LibriVance, a diazepam-based buccal film for the management of seizure clusters. We received a PDUFA goal date of September 27, 2020 from the FDA. We continue next to Gross Symposan, which now has an 18% penetration of the target prescriber base and has grown monthly shipments by over 24% between the end of September and the end of 2019. We raised additional capital in December, and we are preparing for the monetization of our apomorphine rights if approval is received on its PDUFA date of May 21st. Equally importantly, we are continuing to manage our costs and focus spend to extend our capital horizon. Let's discuss in a little more detail each of these key areas of focus for the company.

Next we received S.P.A., except in so far in D.A. for liver van Diageo, Pam based Buffalo film for the management of seizure clusters.

We received it produce a goal date of September 27, 2020 from the FDA.

We continue next to grow symposia, which now has an 18% penetration of the target prescriber base and has grown monthly shipments by over 24% between the end of September and the end of 29 team.

We raised additional capital in December we were preparing for the monetization of our apomorphine rights. If approval is received its PDUFA date of May 21st.

Equally importantly, we're continuing to manage our costs and focusing spend to extend our capital horizon.

Let's discuss it a little more detail each of these key areas of focus for the company.

Keith Kendall: First, as I said, we had a very constructive pre-IND meeting with the FDA in early February regarding epinephrine. At this meeting, the FDA confirmed two key points. First, the clinical development for epinephrine will be reviewed under the 505B2 pathway as proposed by a question, and second, that no additional studies would be necessary prior to opening the proposed IND application. They also gave us clear guidance about what they were looking for from our development program. The outcome of the meeting means that this will be a less complex, less costly, and potentially faster path to filing than originally anticipated.

First as I said, we had a very constructive pre I N D meeting with the FDA in early February <unk> regarding it up in Africa.

At this meeting you have taken from two key points first the clinical development for happened Efrain will be reviewed onto the five or five would be to pet way as proposed by a question and second no additional studies would be necessary prior to opening the proposed I N D application.

They also gave us cleared guidance about what they were looking for from our development program.

The outcome of the meeting means that this would be less complex less costly and potentially faster path to filing than originally anticipated.

The FDA also confirmed that understands that there was a significant unmet medical need among patients who resist the standard of care use of subcutaneous or intramuscular injections in the treatment of anaphylaxis and that eight Qs T. One or wait may potentially address some of those.

Keith Kendall: The FDA also confirmed that it understands that there is a significant unmet medical need among patients who resist the standard of care use of subcutaneous and intramuscular injections in the treatment of anaphylaxis and that AQST-108 may potentially address some of those unmet needs. We're now planning to open an IND in the second quarter of 2020. We're on target to initiate PK clinical trials before the end of the year. We anticipate providing additional updates to the market in the coming months as we gain greater clarity on the expected clinical development program. Next, as we committed, we filed our NDA for LibriVant in late November. That filing was accepted, as we anticipated, in January and assigned a PDUFA goal date of September 27, 2020.

Those unmet needs.

We're now planning to open a 90 in the second quarter of 2020, we're on target to initiate PK clinical trials before the end of the year.

We anticipate providing additional updates to the marketing coming months as we gain greater clarity on the expected clinical development program.

Next as we committed we filed our into gave for liver fat in late November that filing was accepted as we anticipated into January and aside the PDUFA goal date of September 27 2020.

Keith Kendall: We believe that LibriVant, if approved by the FDA, will represent a major contribution to patient care as compared to the available treatment options and will further expand patient choice as the first orally administered product available for its proposed indication. The FDA has recently indicated that when evaluating clinical superiority for drugs demonstrating a major contribution to patient care, it may consider such factors as convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, Advances in Ease and Comfort of Drug Administration, longer periods between doses, and the potential for self-administration. We believe that we can demonstrate why LibriVant, as an orally delivered product for this indication, has one or more of the attributes required by the FDA to be considered a major contribution to patient care relative to the currently approved and device-driven rectal and nasal product. We believe that LibraVamp will potentially contribute up to $300 million in peak net revenues within three to four years post-launch. Over one million patients in the U.S. have active, uncontrolled epilepsy and a need for rescue medication. Less than 10% of these patients are successfully treating their seizures with the current standard of care, a rectal gel application of diazepam.

We believe that labor Vance if approved by the FDA will represent a major contribution to patient care as compared to the available treatment options and will further expand patient choice as the first orally administered product available for its proposed indication.

The FDA has recently indicated that when a value in clinical superiority for drugs, demonstrating a major contribution to patient care that it may consider such factors as convenience of treatment location duration of treatment.

Patient comfort.

Reduce treatment burden.

Advances in easing comfort of drug administration.

Longer periods between doses and the potential for self administration.

We believe that we can demonstrate why liver van as an orally delivered product for this indication has one or more of the attributes required by the FDA could be considered a major contribution to patient care relative to the currently approved and device driven rectal and nasal products.

We believe deliberate family will potentially contribute up to $300 million in peak net revenues within three to four years post launch.

Over 1 million patients in the U.S. have active uncontrolled epilepsy and they need for rescue medication.

Less than 10% of these patients are successfully treating their seizures with the current standard of care, a rectal gel application of diazo Pam.

A medicine is only as good as its ability to be used by patients where they needed when they need it and then a form they accept.

Keith Kendall: A medicine is only as good as its ability to be used by patients where they need it, when they need it, and in a form they accept. And we strongly feel that LibriVant represents this type of improvement in patient care as compared to device-driven alternatives. That said, we cannot ignore the potential risk to the timing of a LibraVent launch based on the FDA's actions in January. We have an accepted filing for a product with a very strong value proposition, and we believe that we can demonstrate to the FDA that Libravant is clinically superior to the currently approved alternative. There are multiple paths to approval and market access for LibraVent, and we do not believe LibraVent will be blocked from the epilepsy market for seven years, and we are working to accomplish that.

And we strongly feel that liver fat represents this type of improvement to patient care as compared to device driven alternative.

That said, we cannot ignore the potential risk to the timing of Liberty <unk> launch based on the F. Da's actions in January.

We have an accepted filing for product with a very strong value proposition and we believe that we can demonstrate to the FDA that liberal vans is clinically superior to the currently approved alternatives.

There are multiple pads to approval and market access for liver van and we do not believe live event will be block from the epilepsy market for seven years, and we are working to accomplish that.

However, we will be thoughtful and prudent about our choice is recognizing need additional risk and appropriately manage our pre launch spend on live event and simpler than prior to having greater clarity on the timing of approval.

Keith Kendall: However, we will be thoughtful and prudent about our choices recognizing the additional risk and appropriately manage our pre-launch spend on Libravant and Symposan prior to having greater clarity on the timing of approval. Next, we remain focused on building our CNS franchise. We launched Snippazan at the very end of 2018. Symposan is a product we believe will ultimately generate $65 million in peak annual Met sales. Sympyzan has a meaningful value proposition for caregivers of patients suffering from Lennox-Gastaut syndrome or LGS.

Next we remain focused on building our CNS franchise.

We launched SIMPAS than at the very end of 2018.

Symptoms and as a product we believe will ultimately generate $65 million of peak annual net sales.

SIMPAS, Dan has a meaningful value proposition for caregivers of patients suffering from Lennox Gastaut syndrome or LG, yes.

We launched SIMPAS, and whose prescribers substantially overlap with potential prescribers of liver Vance with the aim of raising the profile of our foreign film technology.

Keith Kendall: We launched Nipazan, whose prescribers substantially overlap with potential prescribers of LibriVant, with the aim of raising the profile of our farm film technology. Symposan was developed and launched as a commercial precursor and eventual complementary product in support of the LibriVant opportunity. Simpazan gave us the opportunity to build out and pressure test our commercialization capabilities and processes prior to the commercial launch of Libavir. All of our commercialization efforts relating to Simpazam provide an opportunity for direct conversations with healthcare practitioners, patients, caregivers, advocacy groups, and others about the value of our farm film technology that will be the basis for LibriVan. On a sequential quarterly basis, we continue to be focused on the growth and further market penetration of Symposon. Since the beginning of the year, shipment volume on a monthly basis has grown over five times, and at the end of the year, it had grown over 24% since the end of the previous quarter.

Symposium was developed and launched as a commercial precursor and eventual complementary product in support.

Of the Liberal Vance opportunity.

[noise] SIMPAS and gave us the opportunity to build out and pressure tested commercialization capabilities and processes prior to the commercial launch of live event.

All of our commercialization efforts relating to symposium provide an opportunity for direct conversations with health care practitioners patients caregivers advocacy groups and others about the value of our Pharmfilm technology that will be the basis for liver van.

On a sequential quarterly basis, we continue to be focused on the growth and a further market penetration to symposium.

Since the beginning of the year shipment volume on a monthly basis has grown over five times and at the end of year had grown over 24% since the end of the previous quarter.

The prescribing base also continues to grow over 44% since the ended the third quarter with over 78% of those prescribers writing multiple scripts, we now have a penetration rate of 18% for the core target group of prescribers, we are focused on.

Keith Kendall: The prescribing base also continues to grow, over 44% since the end of the third quarter, with over 78% of those prescribers writing multiple scripts. We now have a penetration rate of 18% for the core target group of prescribers we're focusing on. Additionally, we surpassed our goal of having over 70% of lives covered by the end of the year. Symposan is strategically accomplishing what was intended when we developed and launched the product last year. The work we do to continue to build the revenue stream and market penetration of Symposan will be an important foundation for the successful launch of LibraVan. Finally, with respect to capital, as you know, we raised over $40 million in December, and we began the year with cash of just over $49 million. We have a great opportunity with LiberVant and Epinephrine, and we want to focus all of our energy and available resources on ensuring we move as quickly and as decisively as we can on those opportunities. Additionally, we need to recognize and react to the declining revenue from our Suboxone business.

Additionally, we surpassed our goal of having over 70% of lives covered by the end of the year of 29 team.

Symposium to strategically accomplishing what was intended when we developed and launched a product last year. The work we do to continue to build the revenue stream in market penetration is simple Dan will be an important foundation for the successful launch of liver van.

Finally with respect to capital is you know we raised over $40 million in December we began the year with cash of just over $49 million.

We have a great opportunity with Liberty had an effort and we want to focus all of our energy and available resources on ensuring we move as quickly and this decisively as we can and those opportunities.

Additionally, we need to recognize and react to the declining revenue from our suboxone business.

Keith Kendall: As such, we'll continue to manage our costs and target our spending in 2020. Those plans are reflected in our updated guidance. We have the capital required through early 2021, and we continue to expect to monetize our rights to Synovium's licensed apomorphine product once approved. That monetization would further extend our capital horizon.

As such we will continue to manage our costs and target our spending in 2020.

Those plans are reflected in our updated guidance.

We have to capital required through early 2021.

We continue to expect to monetize our rights casino volumes licensed apomorphine product once approved.

That monetization would further extend our capital horizon.

Keith Kendall: To summarize, going forward in 2020, we're focused on advancing our proprietary products. First, we're planning to open an IND for a quest of 108 epinephrine during the second quarter of the year and anticipate commencing PK clinical trials by year end. We are preparing for the anticipated launch of LIBRIVANT in the fourth quarter of 2020, assuming approval in late September in line with the PDUFA date. We will continue to efficiently grow Symposan shipments and revenue while establishing strategic relationships for us in the epilepsy market in advance of an anticipated liver failure. Finally, we'll continue to prudently manage expenses and capital and look to efficiently monetize our apomorphine rights on Synovium's product. As I said before, this product has a PDUFA date in May of 2020. We look forward to continuing to update you as we advance all of these initiatives throughout 2020. With that, I'd like to turn the floor over to John Maxwell, who will provide specifics on our financial performance and outlook. John?

To summarize going forward in 2020 were focused on advancing our proprietary products.

First we're planning to open and I and before a quest of one await FNF front during the second quarter, the year and anticipate commencing PK clinical trials by year end.

We are preparing for the anticipated launch of Liberty ramp in the fourth quarter of 2020, assuming approval in late September in line with the producer date.

We will continue to efficiently grow symposiums shipments and revenue, while establishing strategic relationships for us any epilepsy market in advance of an anticipated liberate launch.

Finally, we will continue to prudently manage expenses in capital and look to efficiently monetize our apomorphine rights on snow beams product.

I said before this product has it been do fugate PDUFA date in May of 2020.

We look forward to continuing to update you as we advance all of these initiatives throughout 2020.

With that I'd like to turn the floor over to John Maxwell, who provide specifics on our financial performance and outlook John.

Thank you Keith Good morning, everyone by now you will exceed our financial results in our 10-K and earnings release that were filed last month.

John Maxwell: Thank you, Keith. Good morning, everyone.

John Maxwell: By now, you will have seen our financial results in our $10K and earnings release that were filed last year. I want to draw out a few points from our 2019 results that are important in order to understand our updated 2020 financial guidance that we put out last night. Your questions on the 2019 results are welcomed during the Q&A session.

I want to draw out of your points from our 2019 results that are important in order to understand our updated 2020 financial guidance that we put out last night.

Your questions on the 2019 results are welcomed during the Q in a session.

Overarching, our 2020 guidance or some key principles that Keith outlined in his remarks, including.

John Maxwell: Overarching our 2020 guidance are some key principles that Keith outlined in his remarks, including We are focused in 2020 on our two most important value drivers, Libervance approval and launch, and the continued development of epinephrine under the 505B2 pathway. While we believe we can demonstrate that LibriVant will be approved as clinically superior to other currently approved alternatives, we will not include any LibriVant revenue in our guidance until we are certain of the launch time. Our pre-IND meeting on epinephrine confirmed that this product will be able to be developed faster and less expensively than previously projected, helping our R&D outlook for this product.

We are focused on 2021 or two most important value drivers lipper Vance approval and launch and the continued development of up enough right under the fiber fiber into pathway.

While we believe we can demonstrate the labor Matt will be approved as clinically superior to other currently approved alternatives. We will not include any liver Mount revenue in our guidance until we are starting to launch timing.

Our pre I am I reading on up enough for and confirmed that this product will be able to be developed faster and less expensively than previously projected helping our R&D outlook for this initiative.

In order to focus our investments on whatever Bath, an up enough run and considering expected additional generic erosion of suboxone, we will continue to manage our cost base across the business to extend our capital horizon beyond 20.

John Maxwell: In order to focus our investments on licorbant and epinephrine and considering the expected additional generic erosion of suboxone, we will continue to manage our cost base across the business to extend our capital horizon beyond 2020. On the non-dilutive capital front, we will continue our efforts to prepare for the monetization of apomorphism, shortly after the anticipated FDA approval on May 21. This additional capital, along with the reduction in projected cash burn, will take us well into 2021 and potentially beyond. While Suboxone is a legacy product for us, it remains a significant part of our near-term revenue outlook. We continue to perform well on Suboxone in 2019, but we have ceased making the AG in 2020 after Indivior's discontinuation of that generic product.

On the non dilutive capital front, we will continue our efforts to prepare for the monetization about them morphine.

Shortly after the anticipated at the FDA approval on May 21.

This additional capital along with a reduction in projected cash burn will take us well into 2021 and potentially.

While suboxone is a legacy product for us it remains a significant part of our near term revenue outlook, we continued to perform well on suboxone in 2019.

Well, we have ceased making the AG and 2020 after endeavor yours discontinuation of that generic product.

John Maxwell: Our revenue guidance in 2020 included only the branded product going forward. We also assumed continued erosion of market share in 2020; manufacturing revenue in 2019 was up 4%. This increase was on lower volume offset by an increase in price in 2019, that allowed us to maintain gross profit levels for the product. We have taken a price increase in 2020 as well, partially offsetting the expected volume decline in 2020. While Suboxone is a nice cash flow stream for the business, our future will be to focus on the development and commercialization of a proprietary asset, namely Cipazan, and, if approved, Libervant, and F&F. We do not specifically guide on Symposan revenue, as Keith mentioned previously. Our growth trends on wholesaler shipments to retail pharmacies, as well as for new and repeat prescribers, are very solid quarter over quarter. However, our revenue recognition is driven by wholesaler orders and can be affected by their inventory levels. We believe these levels of inventory have been managed down to reasonably modest levels at this point.

Our revenue guidance in 2020 input is only the branded product going forward.

We also assumes continued erosion of market share and 20 to 20.

Manufacturing revenue and 29 team was up 4%. This increase was on lower volume offset by an increase in price and 20 my team that allowed us to maintain gross profit levels for the product.

We have taken a price increase in 2020 as well partially offsetting the expected volume decline of 20 Twond.

While suboxone is a nice cash flow stream for the business, our future will be to focus on the development and commercialization up a proprietary assets, namely separate them and if approved lipper Bath and ethanol from.

We do not specifically guide on some of them rather than as Keith mentioned previously our growth trends on wholesale or shipments to retail pharmacies as well as for new and repeat prescribers are very solid quarter over quarter. Our revenue recognition is driven by wholesaler orders and can be affected by their inventory levels.

We believe these levels of inventory have been man, it's down to reasonably modest levels are at this point.

We're very pleased with the commercial performance and several of them and it's preparation everquest anticipated launch a blip or math in late 2020.

John Maxwell: We are very pleased with the commercial performance of Symphysan and its preparation of a cluster for the anticipated launch of Liberman in late 2020. We are reaffirming our previously provided revenue guidance of $35 to $45 million. This guidance factors in lower suboxone volume with higher prices per unit, continued steady growth of Simpazam, a $4 million milestone for apomorphine upon approval, as well as co-development fees and modest license fees and royalties. Our guidance does not include any revenue for LibriVant and will not until the product is approved. Our adjusted gross margin in 2019 was 66%. As our revenue base shifts towards our proprietary products, starting with Simpozan, and away from Suboxone, we expect that our adjusted gross margin will rise over time.

We are reaffirming our previously provided revenue guidance of $35 million to $45 million.

This guidance factors that lower suboxone volume was higher prices per unit.

We continued steady growth of some of them a 4 million dollar milestone for apomorphine upon approval as well as co development fees and modest license fees and royalties.

Our guidance does not include any revenue for live revamped and will not until the product is approved.

Our adjusted gross margin in 29 team was 66%.

As our revenue base shifts towards a proprietary products starting with several of them and away from Suboxone, We expect that our adjusted gross margin will rise over time for 2020, we're guiding to 70% to 75% based on this changing mix.

John Maxwell: For 2020, we are guiding to a 70% to 75% based on this changing mix. As outlined in the earnings release issued yesterday, our full-year non-GAAP-adjusted EBITDA loss for 2019 was $42.7 million, beating the top end of our guidance range. Our new adjusted 2020 guidance for the full year non-GAAP-adjusted EBITDA loss was improved by $20 million to $45 to $50 million.

As outlined in the earnings release issued yesterday, our full year non-GAAP adjusted EBITDA loss for 2019 was $42.7 million, beating the top end of our guidance range.

Our new adjusted 2020 guidance for the full year non-GAAP adjusted EBITDA loss was improved by $20 million to $45 million to $50 million.

This reflects a lower revenue base from suboxone.

John Maxwell: Solid growth and symposia, and focused investments related to the completion of liver vent work and the start of our PK clinical trials related to epinephrine. At the same time, we are focused on being as efficient as possible across the organization. We will continue to manage our variable cost structure at the plant to match the volumes of production and focus on the efficiency of LibriVant and SympaVant investments in pre-launch activities until we have clarity on the timing of approval. And careful management of our support organizations to be aligned with the arc of the various focused initiatives of the company. This translates into significantly improved EPIDA loss guidance from our January 10th guidance release. These actions also extend our cash runway into early 2021. As a result, we have lowered our previous cash burn guidance by $20 million to $45 to $50 million.

Solid growth in some of them.

And focused investments related to the completion of Lipper event work and the start of our PK clinical trials related to up enough room.

At the same time, we are focused on being as efficient as possible across the organization. We will continue to manage our variable cost structure at the plant to match the volumes or production.

Focus on the efficiency of Liberty Hamptons up as an investment in pre launch activities until we have clarity on the timing of approval and careful management of our support organizations to be aligned with the arc of various focused initiatives helped the company.

This translates into a significantly improved EBITDA loss guidance from our January TEP guidance release.

These actions also extend our cash runway into early twenties 21.

As a result, we have lowered our previous cash burn guidance by $20 million to $45 million to $50 million, we're preparing to monetize our apomorphine rights. Shortly after its approval on May 20 Onest.

John Maxwell: We are preparing to monetize our apomorphine rights shortly after its approval on May 21st. We believe that we will see substantial non-dilutive capital from this monetization. Our estimates are that the asset could be worth up to $100 million after approval. The net amount of capital that we take from the asset will be market and structure-driven but should be substantial and sufficient to carry us into 2021 and potentially beyond. Our Cache Runway Outlook will be updated after we complete the monetization. Additionally, our credit facility has an additional $30 million of re-openers available to be drawn as we achieve certain liver map milestones. In summary, our guidance for 2020 reflects continued cash flow from our licensee and proprietary products revenue base, as well as careful focus of our investments into the most value-driven aspects of our future, Brevantin epinephrine, and continued focus on capital conservation so that cash is extended as far as possible. Operator, we will now open the line for questions.

We believe that we will see substantial nondilutive capital from this monetization.

Our estimates are that the asset can be worth up to $100 billion after approval.

The net amount of capital that we take from the asset will be market and structure, driven but should be substantial and sufficient to carry us into 2021 potentially beyond our cash runway outlook will be updated after we complete the monetization.

Our credit facility has an additional $30 million of reopeners available to be drawn as we achieve certain lipper map milestones.

In summary, our guidance for 2020 reflects continued cash flow from our licensee and proprietary products revenue base.

Careful focus of our investments into the most value driven aspects of our future would prevent that up enough from.

Continued focus on capital conservation so that cash is an extended as far as possible operator, we'll now open the line for questions.

As a reminder, ladies and gentlemen to ask a question you will need to press star one on your telephone to withdraw your question press the pound.

Gary Nachman: As a reminder, ladies and gentlemen, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A transcript. Our first question comes from Gary Nachman of BMO Capital Markets. Your line is now open. Hi. Good morning, guys.

Please standby, while we compile the keep an eye roster.

Our first question comes from Gary Nachman BMO capital markets. Your line is now.

Hi, Good morning, guys first on one or wait I know you probably still working through it but describe what you anticipate the PK trials will look like and how long it'll take to run a since the program is accelerated a when could we potentially see data and will you be looking at just one day.

Keith Kendall: First on 108, I know you're probably still working through it, but describe what you anticipate the PK trials will look like and how long it'll take to run those since the program is accelerated. When could we potentially see data? And will you be looking at just one dose or several doses? And what would you need after the PK trials before you would be able to file? What additional studies, if any?

There are several do is and what would you need after that Teekay trials before you would be able to file what additional study if any.

Keith Kendall: Hey Gary, good morning, this is Keith. Given the proximity to the FDA meeting as well as the completion of the minutes, we're working with our KOLs now to get to what the design of those trials will be exactly, and therefore the timing. We're confident we'll be in the clinic with the PK trials before the end of the year. It's still our intention, as we've told you and everyone else, that once we work through that design and we know what that clinical path is, we'll have an investor day to walk everybody through it. I can't give you detailed answers to the questions, all of the pieces of the questions, but we believe we can get into and out of the clinic this year or very early into January of next year.

Hey, Gary Good morning, this is Keith I.

Given the proximity to the F B, a meeting as well as the completion of the minutes were working with our Kale wells now to get to what the design of those trials will be exactly.

And therefore, the timing we're confident we're going to be in the clinic with the PK trials before the end of the year, it's still our intention as we've told you and everyone else that once we work through that design and we know what that clinical path is will have an investor day to walk everybody through it I can't.

Do you view DPL to answers to the questions that all of the pieces of the questions.

But we believe we can get into went out of the clinic this year or very early into January of next year.

Okay I appreciate that and then yes hulliber that.

Keith Kendall: Okay, I appreciate that. And then, you know, for LibraVan, just walk through in a little bit more detail some of the reasons you're confident that the product provides a major contribution to patient care and that you should be eligible for the ODE. In any sense, what's happening with Neuralysis Valpoco, have they launched yet, and do you know the size of their sales force?

Walk through in a little bit more detail. Some of the reasons are confident that the product provides a major contribution to patient care.

And that used to be eligible for the odie.

The a and any sense, what's happening with your ounces out. So go they launched yet and you know the size of their sales force.

Keith Kendall: Yeah, I... Questions about Valtoko, you're going to have to address to Valtoko. I don't think they've got a long period of time in the market. I think the product just hit the market earlier this week or late last in terms of its availability. You know, for LibraVan, there are many paths for us to follow that we think will get us approval and market access. We don't think there's any scenario that keeps us out of the market for the period, the seven-year period of the exclusivity that the agency granted to Valtoko earlier in the year.

Yeah, Hey.

Questions about Bell telco, you're gonna have to address to the valve Togo I I don't think they've got a long period of time in the market I think the product just hit the market earlier this week or late last in terms of its a availability.

For liver van <unk>, there are many pads for us to follow that we think get us to approval and market access we don't think there's any scenario that.

Keeps us out of the market for the period. This seven year period of the exclusivity that the agency granted.

Two Val telco earlier in the year the past that we're currently focused on is demonstrating that way clinically superior as a major contribution to patient care. The agency was very clear in their writing to us about the criteria that they use to consider what at what is a major.

Keith Kendall: The path that we are currently focused on is demonstrating that we're clinically superior as a major contribution to patient care. The agency was very clear in their writing to us about the criteria that they use to consider what is a major contribution to patient care. We believe at the end of the day that LibriVant will be able to demonstrate this against the two device-driven alternatives available to people based on Diazepam for this indication, but their criteria include patient comfort and convenience of treatment. Treatment, location. To reduce treatment burden, ease and comfort of drug administration, and potentially for self-administration, both device-driven products in their instructions for use indicate that a caregiver is required. And from our perspective, the potential to self-administer is important. But those are the criteria that the agency is going to apply to products that make a major contribution to patient care. We're working within the, you know, the current process with the current filing to provide the necessary data so that the agency can make that determination.

Contribution to patient care.

We believe at the end of it day that labor event will be able to demonstrate that against the two device driven alternatives available to people are based on on diazo Pam for this indication, but their criteria includes patient comfort.

Convenience of treatment.

Treatment location.

Reduce treatment burden.

Ease and comfort of drug administration and potentially for self administration.

Both device driven products in there.

In their instructions for use indicate that a caregiver is required.

And from our perspective, the potential to self administer.

It is important but those are the criteria that the agency is going to apply to products on the major contribution to patient care. We're working within the you know the current.

Process with the current filing the provide the necessary data so that the agency can make that determination.

Okay, and just clarify for us is that a separate group within the FDA that evaluate though d. and they work in conjunction with the division. It's actually reviewing the NDA package because that all happening sort of simultaneously. There isn't there is an orphan drug group they work.

Keith Kendall: Okay, and just clarify for us, is it a separate group within the FDA that evaluates the ODE, and do they work in conjunction with the division that's actually reviewing the NDA package? Or is that all happening sort of simultaneously?

Keith Kendall: There is an orphan drug group. They work in conjunction with the reviewers, and typically, shortly after a product receives its approval, there's a 30-day window where the orphan group gets to weigh in. In this case, we're not sure. They'll take 30 days given the dynamics in the market.

In conjunction with the reviewers.

And typically what would happen is shortly after a product received its approval or there's a 30 day window, where the orphan group gets to opine a in this case, we're not sure they'll take 30.

Days, given the dynamics in the market with an existing product.

Okay. Thank you and then just the last question it seems that you're managing your cost.

Keith Kendall: Okay, thank you. And then just the last question, it seems that you're managing your costs very carefully. Where are you pulling most of those expenses from? Just a little bit more on that. And if you're scaling back on some spend behind Symposan, could that potentially impact the LibriVant launch in any way, as well as some of the pre-launch costs for LibriVant? Thanks.

All right it seems that you're managing your costs very carefully.

Where are you pulling most of those expenses from because it's a little bit more on that and if you're scaling back on some spend behind SIMPAS and could that potentially impact the live event launch in any way as well as some of the pre launch.

I live event.

Keith Kendall: Yeah, so we're taking costs across the business. I think there are three dynamics that obviously drive this for us.

Yeah, so where where where we're taking costs across the business I think theres three dynamics that.

Obviously drive this for us.

Keith Kendall: I think we've always been pretty prudent about the way we focused our spending. But for us, we've got a great opportunity with Epinephrine given the conversation we just had with the agency. And we want to focus our resources on running that as fast and as hard and diligently as we can. So some of the other R&D things we might have been doing will take a back seat. We can't ignore the fact that Suboxone's revenue is declining, and we have to variability adjust our costs related to that. And not only in the factory but the attendant costs that support the manufacturing of a product, uh... and uh... you know, as I said, we feel very strongly about liver band, but we can't ignore, it would be imprudent to ignore, the potential risk that the regulatory process for LibraVan proposes.

I think we've always been pretty prudent about the way, we focused our spend but for us we've got a great opportunity with FNF offering given the conversation we just had with the agency.

And we want to focus our resources on running at that as fast as hard.

And diligently as we can so some of the other R&D things we might have been doing.

We'll take it back seat we can't ignore the fact that suboxone as revenue is declining.

And we have to variabilize, our costs related to that and not only in the factory, but the attending costs that support manufacturing of product.

And you know as I've said, we feel very strongly about labor van but we can't ignore we would be imprudent to ignore.

The potential risk that.

The regulatory process for liver van proposes.

Keith Kendall: So, we are going to be thoughtful about the pre-launch spend that we make for Livervant and given that Symposan is a pre-launch program for the market to become familiar with our technology and become familiar with us as a company. In essence, a shake-out cruise for our commercial capabilities. We will limit and manage the timing of spend related to that until we get a little bit more clarity or we have an event that informs our confidence level about the outcome. We'll still have a sales force in place that will be able to launch LibriVant as soon as it is practical after it's approved. We'll just be a little bit smart about what the pre-launch marketing dollars are and when they're released.

So we're going to be thoughtful about the pre launch spend that we make for liver van and given that SIMPAS and is a pre launch program for the market to become familiar with our technology and become familiar with a us as a company.

In essence of shakeout crews for our commercial capabilities.

We will limit a and manage the timing of spend related to that until we get a little bit more clarity or we have an event that.

Informs our confidence level of the outcome.

We'll still have a salesforce in place that will be able to launch liver Vance as soon as it is practical after its approved.

I will just be a little bit smart about what the pre launch marketing dollars are and when their release.

Okay. Thanks.

Randall Stanicky: Okay, thanks. Thank you. Our next question comes from Randall Stanicky with RBC Capital Markets. Your line is open. Hey, good morning. This is Dan Busby on behalf of Randall.

Thank you. Our next question comes from Randall Stanicky with RBC capital markets. Your line is over.

Hi, Good morning says Denver has been on Forendo.

Hey, more on labor that hey, guys.

Dan Busby: First, you mentioned multiple paths forward for liver events, which kind of sounds like you may have contingency plans in place should FDA disagree with your assessment of clinical superiority. Can you just confirm if that's the case, and, if so, expand upon what those plans might be?

First you mentioned multiple paths forward letter that would kind of sounds like you may have contingency plans in place so definitely.

Clinical superiority.

That's the case and so on what those might be and then second.

Keith Kendall: And then second... Curious if you've found any historical precedents where FDA has made a similar decision with respect to clinical superiority in the past.

Curious if you found any historical precedent, where it made a similar decision with respect to clinical superiority and at that.

Keith Kendall: Sure, so I'll take them in reverse order. First, there are other examples of multiple products granted exclusivity using the same drug for the same indication. But none of the fact patterns exactly fits us.

Sure. So a I'll take him in reverse order first there are other examples.

Of multiple products granted exclusivity using the same a drug for the same indication none of the fact pattern exactly fits us there's no nasal to oral.

Keith Kendall: There's no nasal to oral, for instance, in the record, but there are multiple examples where more than one exclusivity was granted for the same active moiety and the same indication. We do have multiple paths because clinical superiority is defined in three ways from the agency's perspective. You can be superior from an efficacy standpoint, you can be superior from a safety standpoint, or you can be superior from a material contribution to patient care standpoint. We think all of those paths are available to us. We feel strongly about the strength of LibraVent versus those two existing device-based products and how it will perform in patients. But, as we said, we are focused on using the current application and demonstrating a major contribution to patient care.

For instance in a in the record, but there are multiple examples where.

More than one exclusivity was granted for the same active moiety and the same indication.

We do have multiple paths because clinical superiority is defined in three ways from the agencies perspective, you can be superior from an efficacy standpoint, you can be superior from a safety standpoint, where you can be superior from a material contribution to patient care.

Standpoint.

We think all of those pads are available to us.

We feel strongly about the strength of liver van versus those two device based existing products and how it will perform and patience.

But as we said we're focused on using the current application and demonstrating major contribution to patient care.

That's helpful. Thank you and then just a couple on apomorphine, one have you begun discussions yet with interested parties to listen from the expected timing around the potential royalty monetization announcement that something that we should expect during the second quarter following the need to do so.

Keith Kendall: That's helpful. Thank you.

Keith Kendall: And then just a couple of questions on epimorphine. One, have you begun discussions yet with interested parties? And two, can you just confirm the expected timing around the potential royalty monetization announcement? Is that something that we should expect during the second quarter following the May PDUFA?

Keith Kendall: Yeah, the PDUFA date is May. We have generally begun the process, but conversations can't start in earnest until we get a little bit closer to the date. We expect that activity to pick up as we exit March and into April. We would like to be in a position to have a deal in the can and ready to go, just waiting for apomorphine approval. But the transaction isn't going to happen instantaneously, so we'd like to have it complete in the second quarter. If it bleeds over into the very early part of the third quarter, that's not going to affect it.

Yes.

The May then the do for data is May we we have generally began the process, but conversations can't start in earnest until we get a little bit closer to the PDUFA date.

We expect that activity to pick up as we exit marching into April.

We would like to be in a position to have a deal in Mccann and ready to go just waiting for the apomorphine approval.

But the transaction isn't going to happen instantaneously, so we'd like to have a complete in the second quarter.

If it bleeds over into the very early part of the third quarter, that's that's not going to affect us.

Okay, great. Thank you.

Jason Nicholas Butler: Okay, great. Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is now open. Hi, it's Roy on for Jason. Thanks for taking the questions. Just a couple of non-Lieberman questions, I guess. So, the reformulation of Arthreotide, can you just remind us what's been done to date and what's ongoing and any timelines you can share on that?

Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is now.

Hi, its hardware on for Jason Thanks for taking the questions.

Couple of non LIBOR going to questions I guess, so yeah, we formulation of Aprea tide can you remind us what's been done to date and what's ongoing at any time line you can share on that.

Keith Kendall: Sure. Treatide has been in the clinic a couple of times. If you're familiar with our process, there's a number of dimensions within our film that can be managed to accomplish certain PK outcomes. We have been in the clinic.

Sure I treat tied has been in the clinic a couple of times, if you're familiar with thought process.

There's a number of dimensions within our film that can be managed to accomplish certain certain PK outcomes. We.

Have been in the clinic, we finish some trials at the.

Keith Kendall: We finished some trials at the tail end of 2019, and our expectation was to optimize the formulation now that we've iterated through it a couple of times. Our intention was to optimize our formulation to put it back in the clinic again in a more robust way. Octreotide is going to sit on the sidelines right now until we get through Epinephrine and Libravance. We don't want to distract ourselves from those two things, which we think are obviously very important and core to driving value in the company. We're not going to invest in additional resources to take on that project at this time, but we feel good about what we got out of the last iteration. We feel good about the optimization work that needs to be done, and once the time is right, we'll complete that work. Okay, that makes sense. And then on.

The tail end of 2019.

Our expectation was to optimize the formulation now that we've integrated through it a couple of times.

Our intention was to optimize our formulation.

To put it back in the clinic again in a.

In a more robust way octreotide is going to sit on the sidelines right now until we get through FNF RIN and live events, we don't want to distract ourselves from those two things, which we think obviously are very important in quarter driving value in the company.

We're not going to invest in additional resources take take on that project at this time, but we feel good about what we got out of the last Federation. We feel good about a though the optimization work that needs to be done and once the time is right. We will complete that work.

Okay that makes sense and then on exar ban in the U.S. and partnering discussions can you give us any details around.

Keith Kendall: Xervan and the U.S. are in partnering discussions. Can you give us any details on the level of interest or the state of progress?

Around the level of interest or the stated progress with the discussion.

Keith Kendall: Yeah, sure. So we continue. As you know, Exervan was approved late last year. It's not our intent to commercialize that product, as we've told everyone. We've already licensed it outside the United States. We continue to have conversations inside the United States. Right now, those conversations have been complicated by the fact that there's another product in that space that is seeking a sale. And now you have two products for the same indication seeking a sale, which is causing buyers to do a little bit more diligence work and comparison. So until that shakes out, my guess is that it'll take a little bit longer than we expected for Exervan to be licensed, but we still expect to license it this year in the U.S.

Yes sure. So we continue a as you know ex surveying was approved late last year, it's not our intent to commercialize that product because we told everyone.

We've already licenses outside the United States, we continue to have conversations inside the United States.

Right now those conversations have been complicated by the fact that there is another product in that space that is seeking a sale.

And so now you have two products for the same indication seeking a sale, which is causing buyers to do a little bit more diligence work in comparison, so until that shakes out my guess is that it will take a little bit longer than we expected for X event to be license, but we still expect a license it.

This year in the U.S.

Okay. Thank you.

Liana Losatos: Thank you. Our next question comes from Liana Losatos with Wedbush Securities. Your line is now open. Hi, thank you for taking my question.

Thank you. Our next question comes from Liana Moussatos with Wedbush Securities. Your line is now.

Hi.

Thank you protect a question Hey, Liana, how you doing.

Operator: Hey Liana, how are you doing?

Okay.

Liana Losatos: Good

Speed.

Liana Losatos: For 108, based on the timeline that you've given.

I find that yeah, then maybe reasonable to expect.

Liana Losatos: Would it be reasonable to expect some NCAA submission?

Commissioning.

Liana Losatos: [inaudible]

[noise] I I think it's I think it's reasonable, but we'll provide clarity to that once we have.

Keith Kendall: I think it's reasonable, but we'll provide clarity on that once we have put together the full protocol of trials that we require, and then we'll, somewhere along the line, have another conversation with the agency to make sure that we've got all the clinical work being done to generate all the data that they're going to want. But I do think that given the fact that they have confirmed that this is a 505B2 at our suggestion, and that they have indicated that they believe this will satisfy an unmet need for patients in this population, I think it's reasonable to bring the filing date forward from where we were expecting it to be before.

Put together the full protocol of trials that we require.

And then we'll somewhere along the line have another conversation with the agency to make sure that we've got all the clinical work being done to generate all the data that they're going to want a but I do think that given the fact that they have.

Confirm that this is a five all five beat to what are suggesting that they have indicated that they believe this will satisfy an unmet need for patients in this population I think it's reasonable to bring the filing date forward.

From where we we were expecting it to be before.

Okay. Thank you and my second question is about Opex Twentytwenty versus 29 team and then John with a little color on.

Liana Losatos: Okay, thank you. And my second question is about OPEX in 2020 versus 2019, and can you, John, give me a little...

URL: https://www.kenhub.com

Maybe how in the first half versus the second half of this year.

Liana Losatos: This is how it was in the first half compared to the second half of this year.

John Maxwell: Good morning, Liana. We're going to continue to manage our spending, and when you look at OPEX, as Keith had outlined, it kind of comes from three different categories: the factory spend, which we're going to continue to moderate as we see volumes decline over time. We're going to do some cost reductions that will have an effect in the first half of this year, so that goes down period over period. We're going to be very cautious around our SG&A spend and make sure that we time our investments around LibraVant pre-launch spend, including making sure that we're cautious and rational in terms of Snippezant spend but expect to continue to invest in that area but not ramp it up in the first And then on the R&D front, we'll continue to spend. Year over year, it'll be similar. We'll be spending on different areas, so more on Epinephrine over time and less on LibraVant.

Sure Good morning Liana.

We look we're going to continue to manage our spending and when you look at Opex as key that outlined to kind of comes from three different categories. The factory spend which we're going to continue to moderate as receipt volumes decline over time, we did as we mentioned.

Late last year do some cost reductions that will have an effect in the first half of this year, so that goes down.

Period over period.

We're going to be very cautious around our SDMA spend and make sure that we time our investments around.

Liveramp prelaunch spend including making sure that we're cautious and.

Rational in terms of surplus and spend.

We would expect to continue to invest in that area, but not ramping up in the first half and preparation as much as we might have bulk before.

And then on the R&D front, we'll continue to spend year over year it'll be.

Similar we'll be spending on different.

Area, so more on after an upfront overtime and less on Liveramp.

Thank you.

Thomas Flaten: Our next question comes from Thomas Flaten with Lake Street Capital Markets. Your line is now open. John, there was some margin compression in the fourth quarter, and you're guiding towards a pretty robust jump going into 2020. Can you comment a little bit on the fourth quarter and what the drivers are to get the margin?

Sure.

Thank you. Our next question comes from Thomas Slaton with Lake Street Capital markets. Your line is now.

Good morning, Thanks for taking the questions. John There was some margin compression in the fourth quarter and you're guiding towards a pretty robust jump going into 2020 can you comment a little bit on the fourth quarter and what the drivers are to get the margins up into the into the low seventys for 20 Twond.

John Maxwell: Yeah, a lot of the margin that you'll see move quarter to quarter is really going to be dependent upon the mix of revenue in that particular quarter. So, for example, license fees, which, as you know, have come down significantly, carry 100% margin. Our Stempazan product carries a very, very high margin. So as that number rises, you will see our margin increase. And then, obviously, Suboxone is a healthy margin, but not near as high as our proprietary product. So as we go forward into 2020, what you're going to see is a greater mix of Stempazan and a declining relative mix of Suboxone. At the same time, we have a milestone that we expect in the fourth quarter related to apomorphine, as well as all of our other normal royalty-related activity that would continue on an ongoing basis. So when you put that mix together, we do expect some increase in our margins, so from the high 60s to the low 70s. And over a period of time, that will continue to expand as our proprietary business grows as the biggest single factor in that.

Yeah, well a lot of the margin that you will see move quarter to quarter is really going to be dependent upon the mix of revenue in that particular quarter. So for example license fees.

Which as you know have come down significantly very 100% margin our.

Our symposium product carries a very very high margin. So as that number rises you will see our margin increase.

And then obviously suboxone is a healthy margin but.

Not nearly as high as our proprietary product. So as we go forward into 2020, what you're going to see is a greater mix of separate them and a declining relative mix.

For our suboxone at the same time, we have a milestone that we expect in the fourth quarter related to apomorphine as well as all of our other normal royalty related activity that would continue on an ongoing basis.

So when you put that mix together, we do expect some increase in our margins so from a high sixtys to the low seventies.

And over a period of time that we'll continue to expand as our proprietary business grows as the biggest single factor about.

And then questions regarding symposium, so sequentially down ex factory sales in the fourth quarter and I know there was a comment about driving inventories down do you think that do you think those inventories are substantially where the wholesalers want them and how are you thinking about ex factory sales kind of matching up with what you're seeing from a dumb.

Thomas Flaten: And then questions regarding Symposan. So, you know, sequentially down on X factory sales in the fourth quarter. And I know there was a comment about driving inventories down. Do you think that those inventories are substantially where the wholesalers want them? And how are you thinking about X factory sales kind of matching up with what you're seeing from a demand perspective in the market as we move into 2020?

Man perspective in the market as we move into 2020.

Did Thomas this is Keith.

Keith Kendall: Thomas, this is Keith. From our perspective, we can't control what each of the individual distributors does on an inventory basis. All we know is that scripts continue to grow at a substantial pace. Doctors writing prescriptions for the product continue to grow at a substantial pace and will fill the orders as they come in from the distributors. Levels of inventory exist where I don't think we have enough visibility into that, but as long as the scripts continue to grow at a healthy double-digit pace and as long as more doctors continue to prescribe it, we'll be sure it's available to whoever orders it.

<unk>.

From our perspective, we can't control what each of the individual distributors do on any inventory basis.

All we know is scripts continue to grow at a substantial pace.

There is writing prescriptions for the product continued to grow at a substantial pace, a and we'll fill the orders as they come in from the distributors what levels of inventory exist, where I don't think we have enough visibility into that.

But as long as the scripts continued to grow at a healthy double digit pace and as long as more doctors continue to prescribe it.

We'll be sure it's available to whoever orders it.

Thomas Flaten: And then with the planned, you know, cautiousness in spend, and there were some comments around, you know, continuing to invest in Symposan, are there initiatives that you had planned to undertake in 2020 to drive the growth of that product that will no longer be undertaken, or is it just, you know, keep on keeping on, so to speak?

And then with the with the planned.

Cautiousness in spend and there was some comments around continued investments in present or there are there initiatives that you had plant undertaken 2020 to drive the growth of that product that will no longer be undertaken or is it just.

Keep on keeping on so to speak.

Keith Kendall: No, I don't think, I mean, you have to look at it. I think you have to look at the CNS franchise as a whole. Sympathand was an opportunity for us to create a precursor and then ultimately a complementary P2 product for LibriVant. It was a shakedown cruise, in essence, for our commercial capabilities. We're happy about our reach, we're happy about our penetration in the prescriber base, which you've heard us say many, many times has a greater than 90% overlap with the folks who write LibriVant. We continue to look at that as not only a standalone product but a precursor marketing effort for LibriVant before its approval and launch. We're going to look across all of our spend from a commercial perspective, whether it be print marketing or other types of pre-launch LibriVant marketing, as well as Sympathand spend, and make sure that we're balanced given the clarity or lack of clarity right now we have around the approval for LibriVant.

No I don't think means you have to look at I think you have to look at the CNS franchise as a whole.

SIMPAS and was an opportunity for us to create a precursor and then ultimately a complementary P to product for liver van.

It was a shake down crews in essence for our commercial capabilities.

We're happy about our reach we're happy about our penetration into prescriber base, which you've heard US say many many times has a greater than 90% overlap with the folks will write a liberal van.

We.

Continue to look at that as not only of Standalone product, but a precursor marketing effort into for liver van before its approval and launch.

We're going to look across all of our spend.

From a commercial perspective, whether it be print marketing or other types of pre launch liberal event marketing as well as SIMPAS and spend and make sure that were balance given our the clarity or lack of clarity right now we have around approval for liver ban.

Great. Thanks, so much.

Raghuram Selvaraju: Great, thanks so much. Thank you. As a reminder, ladies and gentlemen, that's star then one to ask a question. Our next question comes from Raghuram Selvaraju with HC Wainwright. Your line is now open. Good morning, everyone. This is Edward on for ROM. I appreciate you taking the questions.

Thank you as a reminder, ladies and gentlemen that Star then one asked a question.

Our next question comes from regular Ram Selvaraju with H.C. Wainwright. Your line is now.

Good morning, everyone. This is Edward on for Rob I. Appreciate you taking the question.

Edward: Hey Edward, how are you doing?

Ed Wood, how you doing.

Good good so a lot of questions have been answered by just a few left here just wondering you talked a little bit about the salesforce and some of the interim that had been making.

Edward: Good, good. So a lot of the questions have been answered, but just a few left. Just wondering, you talked a little bit about Salesforce and some of the inroads that they've been making. I was wondering what inroads they've made with KOLs and the high-volume prescribers that would be most impactful if and when LibraVan is approved.

Just wondering what inroads they've made with care wells in the high bowling prescribers that would be most impactful when if and when LIBOR band is approved.

Keith Kendall: Well, I mean, as you've heard us say, in the target group of prescribers, we just passed about an 18% penetration rate. We think that's a pretty good number.

Well I mean, as you've heard us say in the into target group of prescribers, we just past about an 18% penetration.

We think thats pretty good number.

We have a.

Good lineup of Kao wells and other physicians in our Speaker Bureau, with delivering a good number of speaking sessions peer to peer.

Keith Kendall: We have a good lineup of KOLs and other physicians in our speaker bureau. We're delivering a good number of speaking sessions peer-to-peer, and we're happy about where those physicians and KOLs are, not only about the technology as it's applied to SimpraZan, but even more importantly, the position that they have about a prospective liver van product. If you were at our investor day, and I know you guys participated back in December, you saw the quality of the KOLs that are out talking about the value of the product and how it can help patients in the epilepsy space. So we feel good about where we are, and we feel good about the fact that that is manifesting itself in terms of the prescribing habits of the doctors in the targeted group.

And we're happy about where those physicians in Kao wells are not only about the technology as it's applied for Sim present, but even more importantly.

The position that they have about a prospective liver band product. If you were at our.

Investor Day, and I know you guys participated back in December you see the quality of Kao wells that are out talking about the value of the product and how it can help patients in the epilepsy space. So we feel good about where we are and we feel good about the fact that that is.

Yes.

Manifesting manifesting itself in terms of prescribing habits of the doctors in the targeted group.

Got it and then I'm.

Edward: Got it, and then uh... assuming liver van does get approved, what do you think the likely timeline is for broad reimbursement coverage?

Assuming live event does get approved what do you think the likely timeline is for broader reimbursement coverage.

Well one of the reasons why is this something that I think gets lost in the conversation. So that's a really good conversation one of the important reasons why we launched SIMPAS and like I said was as a shakeout crews for our commercial capabilities that includes access.

Keith Kendall: Well, one of the reasons why, and this is something that I think gets lost in the conversation, so that's a really good question. One of the important reasons why we launched Sympathand, as I said, was as a shakeout cruise for our commercial capabilities. That includes access to information. So we've got better than 70% of lives covered, as we said we would for Sympathand. That means we're not negotiating contracts. We're adding to the contracts. That is going to make it so much easier at the time when LibraVant is approved and ready to be launched.

So we've got better than 70% lives covered as we said we would for symptoms and that means we're not negotiating contracts were adding to contract that is going to make it so much easier at that time live revamp is approved and ready to be launched.

That's a good 0.2 more quick ones here is there any update on the Suboxone litigation front that you can provide breadth.

Edward: That's a good point. Two more quick ones here. Is there any update on the suboxone litigation front that you can provide for us?

There's there's no update other than the recently announced delaying some of the actions, but other than that no.

Keith Kendall: There's no update other than the recently announced delay in some of the actions, but other than that, no.

Okay, and then finally you mentioned.

Edward: Okay, and then finally, you mentioned a little bit of putting Octreotide on the back burner and kind of limiting some spending this year, but beyond 108, I'm wondering what other pipeline programs you're most enthused about as we move forward.

Little bit of putting octreotide on the back burner and kind of limiting some spending this year, but beyond went away I'm wondering what are the pipeline program through most enthused about as move forward.

Keith Kendall: We're focused entirely right now on Libervant and epinephrine. We'll revisit the portfolio once we have gotten epinephrine going and into its PK trials, and we've gotten past the PDUFA date with Libervant.

Well where were focused entirely right now on liver van and up in Efron, we'll revisit the portfolio once we have.

Gotten FNF ring going and Intuit's PK trials, and we've gotten past the PDUFA date with Liberty Man.

Edward: Alright, sounds great. Thank you, guys.

Hi sounds great. Thank you got.

Thank you.

Thank you I'm not showing any further questions at this time I would now like to turn the call back over to keep Kendall for any closing remarks.

Keith Kendall: Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Keith Kendall for any closing remarks.

All right well as always thank you everyone for taking time out of your day to join our call just to reiterate we are running as hard as fast at the things that are important to driving value for our company I getting after epon effort into its PK trials.

Keith Kendall: All right, well, as always, thank you, everyone, for taking time out of your day to join our call. Just to reiterate, we are running as hard and as fast at the things that are important to driving value for our company, getting epinephrine into its PK trials, resolving through to the PDUFA date liver vans, we'll continue to focus on growing Simpazan in a rational way over the rest of the year, and obviously, continuing to do the things necessary to manage our spend and to execute on an apomorphine We appreciate your time, and we look forward to updating you on all of these things as we progress through 2020. Thanks, and have a good rest of the day.

Resolving through to the PDUFA date liver Vance.

We'll continue to focus on growing.

SIMPAS than in a in a rational way over the rest of the year.

And obviously continuing to do the things necessary to manage our spend and to execute on an apomorphine monetization to continue to extend out our capital horizon through 2021.

We appreciate your time and we look forward to updating you on all of these things as we progress through 2020, thanks and have a good rest of the day.

Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

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