Q4 2019 Earnings Call
[music], ladies and gentlemen, welcome to.
Terrorists pharma fourth quarter and full year 2019, operating and financial results conference call throughout today's recorded presentation. All participants will be an they listen only mode. After the presentation, there will be an opportunity to ask questions.
I'd like to ask a question. Please press star one.
I'll now hand, the conference call over to Jack Howarth, Antares Vice President Corporate Affairs. Please go ahead Sir.
Thank you Shelby and good morning, everyone.
Earlier today, we announced our fourth quarter and full year 2019 financial results and operating achievements.
The press release at Slide presentation. Today's conference call are available on the Investor section of the Antares Web site.
Before we begin I'd like to remind you that some of our statements made during this conference call will contain forward looking statements within the meaning of the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1990 fives.
Examples of forward looking statements include those related to our future financial and operating results, including our expectations regarding our 2020 financial guidance and catalyst.
Due to revenue growth prescription volumes and market share for all products.
Product approvals and launches Sta actions and other regulatory activities results of ongoing and future clinical trials and other product development activities and business development efforts.
These forward looking statements are subject to certain risks uncertainties and actual results could differ materially.
Our identified a described in today's press release.
The accompanying slide presentation and from time to time in the company's filings with the FCC on form 10-K, and is updated and Antares recent periodic filings on form 10-Q and form 8-K.
And Terry just providing this information as of the date of today's conference call and does not undertake any obligation to update any forward looking statements contained in this conference call as a result of new information.
Sure events or circumstances after the date hereof, except as required by law or otherwise.
The company cautions investors not to place undue reliance on these forward looking statements [noise].
Joining me on the call today, or Bob Apple, President, Chief Executive Officer, and spread Powell Executive Vice President and Chief Financial Officer.
Let's review the agenda for todays call on slide number three.
I will begin with a high level review of our outstanding fourth quarter and full year financial results and review our 2019 highlights.
We'll go through the detailed financials and then Bob will conclude with some closing comments before opening up the lines for questions.
Now I'll turn the call over to our CEO, Bob Apple Bob Thanks, Jack and good morning, everyone.
2019 was an exceptional year for the company highlighted by the successful commercial launches of two products. In addition, I mean, new chemical entity to our development pipeline.
All right evolution as a pharmaceutical technology company continued as we delivered record revenue and the company's first full year of operating income.
Our primary focus in 2019 was to accelerate and expand our commercial footprint in both our proprietary and partner products.
I'm proud to say that our team has delivered on that gold.
This morning, we reported another record quarter and full year financial progress driven in large part by sales of our flagship products as I said as well as continued strong demand and growth the tevas generic actually pen.
On slide number for you will see that throughout 2019, we made steady financial in commercial progress posting four consecutive quarters of total revenue growth and we ended the back half of the year with two consecutive quarters of profitability. So the first time the company's history.
I like to briefly touch on a few few high level financial highlights before Fred presents a more detailed review later on the call.
Today, we reported fourth quarter revenue of $37.8 million, a 101% increase versus 18.8 million, we reported in the fourth quarter last year.
Truly an exceptional quarter by any measure.
This very impressive growth was driven by our key proprietary product zeiss it and tevas generic at B. Penn.
The continued commercial success, we achieved throughout 2019 allows us to raise our original full year guidance twice during the year.
And as you saw this morning, we ultimately exceeded the upper end of the $120 million guidance range as we reported full year total revenue of $124 million.
Let's take a closer look it what drove the dramatic increase in revenue for 2019.
Please turn to slide number five.
Yes, it has been on the market for a little over one year now and last year generated approximately 21 million in revenue exceeding street expectations of 17 million.
We believe that is a significant achievement for new product any mature markets, such as testosterone with payer dynamics, creating significant roadblocks on product uptake.
Further highlighting the success of designs did launch is that the same sales team was also grown otrexup our legacy are a product.
As I said fourth quarter total prescriptions continue to steep upward slope.
According to data from Symphony Health solutions.
As important new patient starts are increasing and refills continue to grow a great sign a patient persistence.
Since launch design studies recorded quarterly double digit prescription growth with sports.
Fourth quarter prescriptions, increasing 42%.
Versus the third quarter.
In the fourth quarter alone since we reported that approximately 28000 Zions said prescriptions were filled.
Through December 2019, approximately 62000, I say prescriptions have been still since beginning of year.
We believe much of this growth is due to innovative product attributes Sally messaging strong rental performance and the work we have done to obtain excellent coverage for potential lies that patients.
From an insurance insurance coverage standpoint, it bears repeating that he significant milestone was reached in the fourth quarter of 2019, when we contracted with another large pharmacy benefit manager.
Increasing our managed care coverage to approximately 72% of all commercial lives.
Our goal for last year was to cheat two thirds of all commercial lives covered in the first full year of lunch and we exceeded that goal.
Our sales reps are continuing to focus on large prescribers of testosterone products, we've grown our prescriber base to approximately 4700 unique prescribers upsized. It an increase of over 1300 physicians versus the third quarter metrics.
These prescribers have written prescriptions for more than 15000 patients since launch.
In summary, we believe we made great progress in our first year on the market and he early trends in 2020 are very positive with strong shipments in the first two months of this year.
According to simply prescription data instead is the fastest growing branded testosterone on the market.
Turning now to Tevas generic depend on slide six.
Tevas fully launched the audit.
You adult version of generic I'd be pen in July 19, and then wants to add B. Penn Junior in August.
When you look at the end prescription trends for 34th quarters of this year you can see an increase in market share for Tevas generic Debbie and in both quarters.
According to Symphony prescription data almost 237000 prescriptions were filled with tevas generic I'd be pen in the third quarter.
Representing a 27% share nearly every pad market.
And 183000 prescriptions were filled the fourth quarter, 336% market share.
Well the overall I'd be paying market decline in the fourth quarter due to seasonality tevas market share increased 9%.
According to the January prescription data.
Lets generic it'd be pay market share was 42%.
Tevas bets weekly market shares since launch was 45% very close to their stated goal of 50% share in 2020.
In 2019, even with the first six months or the year held back by limited commercial launch combined product and royalty revenue.
For the year from sales to the generic can't be paid by Teva result in more than 34 million in revenue for us.
We're very pleased with the progress payments made in 2018.
I'd now like to talk about whatever most exciting and Pratt perhaps underappreciated achievements of 2019, please turn to slide number seven.
Last November we entered into a significant new development agreement with the Dorsey or pharmaceuticals to develop a drug device rescue paying combining so lateral and new chemical entity with our Quickshot auto injector.
So at a girl is a fast acting and highly selective P to Y 12 receptor antagonist for the treatment I suspect it acute myocardial infarction, commonly referred to as a heart attack and mine for adult patients who have a history of heart attacks.
This is a very exciting and potentially large opportunity for both companies given the size of the patient population.
The put things in perspective, approximately 7.6 million Americans have survived a heart attack and our potentially at risk or another and Mike.
Every year around 550000 patients had their first heart attack and another 200000 have returned.
The product concept is very simple.
Patients who have had a previous am I would carry this lateral rescue pen with them just looking at B. Penn.
If they experienced the symptoms of a heart attack they would itself inject solana grow and then seek immediate medical attention.
Unlike a patient taken an oral medication. So medical injection is intended to work quickly to stop platelets from aggregating we're sticking together and may prevent a platelet plugs from blocking circulation due to coronary artery, thus potentially preventing we're minimizing the extent every recurrent heart attack.
Lot of robust tested into phase two studies, which according to Dorsey and demonstrated a rapid platelet innovation effect in patient experience and acute and might as well as patients with stable coronary artery disease.
According to the authors or the study the product that was also well tolerated.
This is potentially breakthrough rescue drug to treat acute MIT and we'd be used any addition to carry chronic oral P to I told therapies, such as plastics or brilinta.
So where she is currently preparing for a clinical bridging study I formulation, followed by a global phase three study for the pre hospital treatment of a suspected recurrent heart attack on the terms I'm or license agreement with doors, you will pay for the development of the combination product and take responsibility for obtaining global regulatory approvals and Tarzan indoorsy into.
And to enter into a separate license and commercial supply agreement under which Antares will supply fully assembled and label products to Dorsey at a cost plus margin and Indoorsy will responsible for global commercialization of the product pending FDA or Florida approval.
And tars will receive an already negotiated royalties on net sales of the commercialized product in all territories is important to know the doors here has obtained global payment protection for collateral with the U.S. patent expiring in 2034.
We're extremely pleased and excited to be working with the doors you on this potentially lifesaving, new chemical entity, assuming a positive outcome from their clinical bridging study, we would anticipate beginning to supply devices. Later this year for their phase three trial has endorsed she has got it to a potential 2021 initiation of the study.
Can you go into our pipeline of exciting and some near term catalyst.
Tevas generic Forteo Anda filing could be approved in late 2020.
As a reminder, hello believes the generic forteo and well be fully self suitable and still maintains first to file status.
According to lose 2000, 1910 10-K for Tayo achieved 1.4 billion in global sales with the U.S., making up 646 million total.
Our agreement with Tableau provides for us the southern devices that cost plus margin and then receive escalating royalties from high single digit to mid teen percentages.
If approved we believe the product represents a significant opportunity for both have than us.
Finally, our development of an undisclosed rescue paired with Pfizer continued support progressed well as evidenced by the development revenue earned in 2019.
As a reminder, subject to FDA approval, we will supply Pfizer with fully package commercial ready product at cost plus margin and then receive escalating royalties from mid single digit to double digit percentages on n. sales of the product. We will provide estimates on the development timeline and once we see more clarity from Pfizer.
And now going to turn the call over to Fred for details on are outstanding fourth quarter. Fred Thanks, Bob Please turn to slide number eight.
As Bob mentioned earlier on todays call 2019 was a tremendous year for Antares and our 2019 revenues reflect the success full year revenue was approximately $124 million, which exceeded the upper end of our guidance range of 115 $220 million and it represented 95%.
Increase over 2018 full year revenue.
In addition, we recorded our first quarterly income from ongoing operations as well as overall net income.
So let me start my financial overview by providing a detailed breakdown of our revenues and operating expenses for the fourth quarter and full year 2019.
Total revenue was $37.8 million for three months ended December 30, Onest 2019, compared to $18.8 million of 2018, a 101% increase.
For the year ended December 30, Onest 2019, total revenue was $123.9 million, a 95% increase over the $63.6 million reported in 2018.
Total product sales were $28.5 million for the fourth quarter compared to $14.2 million in the fourth quarter 2018, a 100% increase.
Importantly product revenue as a percentage of total revenue continues to grow and accounted for 75% of total fourth quarter revenue.
For the 12 months ended December 31st 2019 product sales were $92.1 million as compared to $47.9 million in 2018, a 92% increase [noise].
Sales of our proprietary commercial products is outstanding Otrexup totaled $14 million for the three months ended December 31st 2019 compared to $5.7 million in the same period 2018. The launch of exhausted continued to go as planned as fourth quarter revenue totaled $8.4 million.
Which reflected a 20% sequential growth versus the third quarter.
Our other proprietary commercial product attracts it grew 10% in the fourth quarter 2019 versus the fourth quarter 2018.
For the full year 2019, zoster, no tax revenue totaled $39.2 million versus $17.5 million in 2018, a 124% increase.
Licensing development revenue for the fourth quarter was $3.2 million as compared to $1.1 million. The same period in 2018 and for the full year 2019 was $7.5 million versus $6.8 million for 28 team.
Increases for the three and 12 month periods were primarily from Pfizer rescue pen and to have a pen development programs.
Looking ahead to 2020, we believe we will continue to see growth and development revenue with the Pfizer rescue pen entering the next phase of development as well as an increase in activities around the Dorset rescue Pat.
LT revenue was $6.2 million for the fourth quarter compared to $3.5 million for the same period 2018, 78% increase.
For the full year 2019 royalty revenue was $24.2 million compared to $8.9 million for 2018, a 171% increase.
The significant increases in royalty revenue for the three and 12 month periods were primarily attributable to royalties recognized from Teva on their net sales of their generic at B. Penn and from Hey, Matt on their net sales of the Makena subcutaneous auto injector.
Gross profit was $73.4 million for the year ended December 30, Onest 2019, as compared to $32.5 million for 2018.
Gross profit as percentage of total revenue increased to 59% at December 30, Onest 2019.
Up from 51% reported in 2018.
Operating expenses were $18.2 million for the fourth quarter 2019, compared to $14.9 million in 2018 for the year ended December 31st 2019, operating expenses were $72.4 million as compared to $49.1 million for 2018 the increase.
Operating expenses for the three and 12 month period of 2019 was primarily attributable to additional sales and marketing expenses associated with the launch themselves that.
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For the second consecutive quarter, we generated quarterly operating income for the quarter ended December 30, Onest 2019, our operating income was $5.6 million, which compares very favorably to the operating loss of $5.7 million. The same period of 2018.
Excluding the $12.5 million gain from the sale of the needle free business total operating profit for the 12 months ended December 31st 2019 was $1 million as compared to total operating loss of $16.6 million for 2018, excluding the $12.5 million gain from the sale of the needle free.
Business [noise].
Net income was $4.7 million with fourth quarter 2019, compared to net income of $6.1 million in 2018.
Full year 2019, we recorded net loss of $2 million as compared to 6.5 million dollar loss recorded in 2018.
Net earnings per share was three cents for the fourth quarter as compared to net income per share a four cents for them.
Quarter ended December 31st 2018, the 12 month period ended December 30, Onest 2019.
We reported a net loss per share of a penny versus net loss per share of four cents for 2018.
Important to note that the results of the three and 12 month periods of 2018 reflected the $12.5 million game from the sale of our needle free product lines apart Ferring pharmaceuticals.
At the end of the fourth quarter cash and short term investments were $45.7 million compared to $20 million to $27.9 million at December 31st 2018.
[noise] excuse me [noise].
During the fourth quarter 2019, we generated $3.8 million cash.
In 2019, we restructured our term loan with Hercules capital, adding an additional $15 million in depth to our balance sheet, bringing the total outstanding debt the $40 million. This non dilutive financing gave us the means necessary to appropriately invest and the launch of south stuff.
Finally earlier this year, we should 2020 full year net revenue guidance, providing a range of 130 $555 million.
Which includes arrange potential revenue scenarios for Amex Mckenna, we believe the lower end to the guidance range can be achieved without any 2020 revenue from amax Mckenna of course, we will continue to supply the Mckenna auto injector, Hey, Matt for their distribution to physicians and patients while they worked on the resin.
Solution.
If any with the FDA.
And continuing to provide access to the product.
From quarterly perspective, similar to 2019 and the pharmaceutical industry in general we expect first quarters ousted revenue will be the lowest for the year as high deductible plans always reset in the beginning of every year, but we also believe south that revenue will increase in each successive quarter of 2020, the midpoint of the guidance range for 22.
20 represents a 17% growth over 2019 revenue I'll now turn the call back to Bob Bob. Thanks.
And if you haven't noticed both red and I are both suffering from really bad colds and flu is going through our organization. So I apologize for the.
The coughing and the challenging.
Here.
But as you can see on slide nine this is being a very exciting time for in targeting for our shareholders. We had an outstanding year and we believe that our financial results and commercial successes continue to reflect the progress we made in growing our business.
We announced revenue guidance for double digit growth in 2020.
Despite uncertainties around revenue from one of our partner crops.
Our 2020 revenue guidance range of $135 million to $155 million.
We are poised to deliver a four year average revenue growth rate of 29% at the midpoint of that range.
We remain focused on driving commercial success, and we're committed to advancing our product pipeline.
We believe our pipeline will translate into future product revenue for a company over time.
It's probably worth mentioning that our auto injector devices are manufactured in three locations in the U.S. and the Prefilled syringes for proprietary products are not sourced from China.
Overall 2019 was an incredibly successful year for entire east and as a result, we believe we put in place a solid foundation for future growth in 2020 and beyond.
That concludes my prepared remarks were today operator could you. Please open the lines for question and answer session. Thank you thinking if he would like to ask a question. Please signal by pressing star one on your telephone keypad.
We're using a speaker phone. Please make sure your mute function, it's turned off to allow your signal to reach our equipment.
Again press Star one ask a question well pause for just a moment to allow everyone an opportunity to signal for questions.
Well take our first question from Anthony Petrone with Jefferies.
[noise], great and congratulations on on a great year for the company and good luck into 2020 hope everyone is feeling well there as well.
Maybe just to start on on Xyo stead, and sellout of Grill, just don't Xyo stead, maybe even when we look at just actual patients being prescribed so the 15000 put up or exiting the year.
Versus the refill rate I'm, just wondering on the actual new patient starts.
Well when considering that were at 4700 physicians, just where you think that number can go.
Through 2020, and what are the expectations, maybe sort of for peak penetration within.
The TRT market and then the follow up on slot to grow will be you know when we look into the back half of the year.
Heading into 20.
21, when that phase three study begins you know how large do you think that study will be and how substantial do you think the auto injector us or uptake within study specifically can be when once that begins.
[noise]. Thanks, Anthony So on your first question around.
On Zeiss that obviously, new patient starts are a critical part for the growth of as I said and Fortunately for US we've seen a very positive continuing trend of and our taxes on a weekly basis monthly basis. It really what you need to look at.
No. We are we expect to see continued growth in that area, we clearly having a even scratched the surface of the number of patients that are on testosterone therapy today, what we're focusing on is getting those doctors, who are writing to write for more patients and I think that what's happened is you know the initial year, we definitely had success.
Yes in getting those patients who were unhappy on there I am injection or they renewed a therapy sort of doctors, who wanted to put them on test on Xyrem said, because they felt like they were no as I said the best product on the market. We believe but you know I think that when we look at continuing to grow the product we need to.
Get those doctors to now start switching patients who are on I am who arent complaining doesn't mean, they're not unhappy it just means that they're not complaining and so part of the messaging is is really focusing on those patients I can't give you specifics as to how many new patients. We think we'll achieve over the next year is kind of hard for me to even know that number at this.
<unk>, but all I can say is again, it's a big focus of ours and we have had a lot of success in getting new patients every weekend, we expect to see that trend continue.
So things are going well as I've said again I think the other thing that Tim is worth mentioning presided said is that now that we're at you know about 72% of our lives covered from a commercial insurance standpoint. It was really didnt happen until September October last year, you know, it's starting to get a quite a bit easier to get patients on.
The product and I've always maintain that when a doctor writes a prescription if two out of four don't get filled they tend to get frustrated but once you get into that three out of four it starts to become a much easier product for them to adopt and so we're at that almost at that 75% rate. So I feel that we'll see continued.
Growth just based on the fact that we had really good coverage.
So that's I think for adjusted and answers your question for Sladek.
Thank you for sladek role.
Yeah. The adore she is responsible for regulatory and clinical program. They been communicating with the FDA vis-a-vis a pre oh and the phase two meetings things like that I would say that you know we don't know the final number but we're estimating that this study will be about 15000 patients glow.
Finally, but obviously, it's being run out of the U.S.
And dealt with through the F.D.A.O. and that's a number based on the fact that you know once a patient is on syllabic role when and when you roll in the study. They you know they're going to look for an outcome, where a patient has a heart attack and that doesn't happen obviously to every patient who's already had a heart attack. So I think that the number of patients.
Around 15001 and would anticipate.
Some percentage of those patients needing to use a lateral and so you know right now it's an early estimate but oh.
You know, we you know we will well, we'll see where it goes with the FDA with endorsing give updates as a phase three starts.
Thanks, again feel better.
[laughter].
Well take our next question from Elliot Wilbur with Raymond James.
Thanks, Good morning, Bob you touched on this in your prior response to some extent, but just maybe any additional detail you could share with us in terms of houses I said marketing plan may evolve over the course of 2020, specifically thinking about changes in.
The number of targeted docs frequency and then I know previously you've talked about potentially altering some of the co pay support programs and maybe they get past kind of the you know initial initial depressive effect. So some of the high deductible plans and the impact they have in the first quarter and anything.
You can share and with respect to just.
Do you DTC or social media, just maybe a little bit more color in terms of oh or changes to the overall marketing game plan for 2020.
Okay, great. So first I'd like to say that the marketing messaging has been pretty much spot on.
As far as a physician standpoint, and as a patient standpoint, so there isn't going to be many changes in the message steady levels of as I've said are driving the business or the level of the lack of those peaks and valleys a patients are seeing in real life are driving the demand and the fact that it's easy to use as painless. It's once a week all of those attributes are still the.
Biggest component of selling as I've said for us with physicians and patients.
Now with that said like you mentioned really is that you know in the beginning of every year. You know you have patients who are good beat their co pays reset and also importantly, a about 30% of all people in the country or on high deductible plans and so they typically have to burning through an average deductible thousand the $1500 per.
A year.
Before they start getting coverage for any drug what we've done to help compensate for that is Weve Ics, we've increased our co pay support.
For a short period of time, probably about three months, where weve doubled that support to help those patients get through that high co pay or.
Who are high deductible plans and we've seen great persistence with that program and all the one thing we didn't want to have happened where people that were on the drug we're very happy with it we're happy with I said and then they go to the pharmacy and they have to spend $300 for co pay were worse, sometimes you know we didn't want to lose those patients.
Even for just a few months and so we've accelerated or increase or co pay square, which said so far has shown really good results in persistent I think we'd have a very high persistence rate of about 70% I think in the first two months of this year. So we're very happy with that you know beyond that from.
Messaging Sampoerna social media, we have definitely stepped up our social media campaign, a you know utilizing.
You know Facebook Linkedin and other.
Other services, where you know if you are online searching about testosterone you will likely receive a banner AD for his eyes that.
For our product and so you know we were focusing on where we're spending obviously the first year you see what worked with didn't work and we were pushing those resources to where rethink we're getting the most ROI for for those programs. So social media is a big counts aspect and co pay support the other thing that we've.
Increased two is just generally adjudication services, just helping the doctors continue to deal with the price the prior authorizations, helping them where we have.
So our in house I guess adjudication wraps, if you want to call them handling when a script gets written if there needs to have certain things done where there's a prior authorization under a signature for me offices. They chase it down instead of our reps. It gives our reps more time to spend detailing.
Field and to your point earlier I leave you telling them more doctors and I think that's what we're going to do in 2020 as expands our reach into more prescribers. So he can get a continued growth and we're seeing right now.
Okay, Thanks, and I want to ask a follow up question around a pipeline activity during.
Of course of EUR 2020, any movement on some of the undisclosed programs such that might trigger disclosure.
Advancement into clinical trials or.
Some sort of IP filing or something like that might give a little bit more visibility into the identity of some of the the molecule.
Yeah. So I mean, I think you're referencing and advisory program, which is really our undisclosed programs and there's quite a bit a small thing going on with our investors.
You know and so.
I think that clearly the programs move forward clearly will be you know are conducting all the studies this year with Pfizer and so whether it's in clin trials or whether it's in some other filings you know, we're not sure when or how is going to.
Emerge as to what product it is but clearly we're talking to Pfizer on a regular basis, we have JSC knees joint steering committee meetings, and we're looking for that right time, when they're ready to publicly disclosed did disclose what the product is on it.
We're really excited about the asset we wanted out there, but obviously you know Pfizer. It's this is there a it's their product that we're working with them on and we want to respect what their wishes are and so but I think they theres a lot of activity.
It's happening that will probably making more evident as to what the product did and hopefully once we get a greenway from Pfizer will be able announce it what what the program is based on.
That's right after that any any no understood any decision points on that.
Methotrexate asset.
And if topic pregnancy.
That may be reached during 2020.
Yeah, I think that you know we're looking at that asset we believe it's a really good asset we think it's a very viable outlicense opportunity. It's not an area that we focus on we're trying to really you know drive our product portfolio into the areas, where we are where we commercially have a footprint you know Andrew.
Allergy urology, even some general correct, yeah GP products, just because we're in these offices and so I think that topic and we're going to continue to.
Look for a potential partner for that product.
We think it's got to it it's got a great opportunity.
For any companies that are in a women's health maternity and we'll we'll focus our efforts in that area at least initially and if you will see where you know there's interest there.
Okay. Thanks, one last question for Fred maybe I'm, just I'm give us some insight and it's impossible into GTN trends over the course of 2020 and also specifically any color commentary you could share on the strength and Otrexup.
Sales in the quarter, whether that was GTN adjustment.
Backdoor actually they the increase in sales had showed a pretty strong correlation with units. Thanks.
Sure not answer the first one or the the Otrexup question first and that was a really no reserve adjustments during the quarter. We continue to see a growth take place in Otrexup, we'd like you know we're looking for growth to continue into a 2020 certainly not the same.
Dramatic growth that we would expect exhausted, but still we would expect to see steady volume growth as we.
Go into all the 2020, when we take a look at the roast and that calculations that we have or a this year I think it's going to remain fairly stable from where we were at the end of 2019, and I say that because of the individual components as remember when we first launch the product we had a sick.
Nipigon amount of first bill free because we wanted to make sure that doctors that were actually writings Alistair for their patients actually had those prescriptions filled as Bob was mentioning we didn't want to pay ER doctors to prescribe and then their patients not received.
So stead and so that as a total percentage and the gross and that calculation has come down as now we have the over 70% coverage.
What the opposite side of that is rebates and during the year you know our rebates were relatively low as a percentage of the gross to net calculation going to the over 70% in the fourth quarter pushed our rebates amount a much higher than we had been during the full year.
Other than the a co pay support for the beginning of the year as Bob mentioned, you know doubling for you know high deductible plans you know we would expect the co pay support percentage remained fairly flat.
Flat for the entire year. So overall I don't see much of a change taking place from the end of 2019 to 2020 individual components may change, but overall expected to be about the same and in the you know in the mid Fiftys percent that we would see a dropping to the net revenue line.
Well take our next question from David and someone with Piper Stanley.
[noise]. Thanks, So just a couple so first you provided in the past some nice metrics on the usage set aside for as I've said in terms of the patient two words as faster on 19 cents since those here and I am injections or some though.
Switching from.
From the gels, he's talking about the the mix as we sit here today and how you expect that to evolve as 2020 progressive.
And then secondly, given that you had sales infrastructure in place.
Calling on.
Basically men's health prescribers.
Robin speaking how active are you looking for assets, you bring and where you can better leverage that sales infrastructure. Thanks.
[laughter]. Thanks, Dave So on your first question I believe that you know and then.
Later part of last year, our metrics for Zeiss they were over half our patients were new patient therapy starts and then again I mentioned that earlier that was clearly where the doctors were going in the beginning as they were comfortable writings asset for new patients we saw very high percentage.
As of our patients being new to therapy, which was a great sign because obviously amend the doctors were very comfortable with zaza being first line therapy. That's still continues as far as and being very comfortable at first line therapy. We have seen a shifting of the trend were towards the latter part of the end the latter part of last year and there and that.
And this year, we're seeing more of our prescriptions are switches from the I am which makes sense you know it's a it's a great products from an injectable standpoint, it's easy to use once a week, it's painless changed versus I am and so we're seeing about 60% I believe of our patients are switches from I am.
And then about 30 or 40% or you know new patient therapies and then we still it's interesting. We still are you know I'm not seen a big penetration on the Jos I think that's generally because when the men choose the Joel is because they're needle phobic and ER and so you know they still the new.
Patience will still say, hey, if I found given a choice of an injection versus a non injection I'll try to Joe when they try to gel Fortunately for us within three months or so they're very unhappy with it so they tend to be switches.
Later on but you know early early in the you know in the treatment paradigm, we still see patients go into some of the gels and clearly still smaller percentage overall, but still yeah. That's the first inkling, sometimes with the patients. So we're seeing again just to wrap it up on that aspect.
More of a or more of our sales are coming from Ah I am switches, which is good because.
Yeah, I am a piece of the market is around 70% of all prescriptions. So it's a very large part of the market. Then we can we can attack.
With regards to your second question on our men's health. Obviously, you know we have you know a very strong sales force of about 85 representatives, calling on urologist and endocrinologist as well some sexual medicine slash general practitioners, who write for testosterone products and so that is a big assets.
For us or organizations. So we have been very focused on looking at.
You know a already approved assets.
That are on the markets.
Where companies May.
Not be focused on that acid or they may be looking to get outside of that a therapeutic area and so we have a extensive b D. A in you know engagement or search for those type of assets and so what we would want to make sure is that if we do acquire or licensing another asset that it doesn't.
Hurt the growth of size, Stan so getting the right asset is the challenge but.
So the rest assure that we are clearly looking at.
Putting more product from us bag of our sales force in 2020 [noise].
[noise] and just a follow up on those comments it sounds to me that you don't have an appetite to bring in an asset where you're going to take on.
Significant foreign de risk is that a fair characterization.
Well I mean, I think that it's really.
I mean, we clearly are looking at even assets. They may be has already passed through phase two where you have reduced the risk of clinical failure at least as much as you can.
No I mean, we clearly look at you know even phase three assets it's definitely.
Sure I'm more our focus right now is more on commercialize assets, but that doesn't mean that you know at the right development asset comes all that we wouldn't look in the license. It again it would be we went to make sure that we don't drive our profitability down based on you know, what we're seeing on or upward trend until it's really.
The balance of Ah you know what asset makes sense for us.
But you know it doesn't you know we are looking at all assets that you kind of you need to build that pipeline, we oh, we have.
[noise], Okay, great. Thank you.
Well take our next question, Matt Kaplan with Ladenburg Thalmann.
Hey, Good morning, guys are you now you sound off on the phone.
[laughter] well thank you.
I appreciate it.
Actually better days ahead, I'm dead. So just wanted to dig in a little bit more to kind of year, you're kind of 2020 <unk> you know revenue guidance when 35 to 155. It appears as though there's kind of no new products, adding to that equation. There in terms of your product mix and and royalty stream.
I talk about the I guess with respect to that talk about the pipeline and potential new products coming in in 2020 or 2021.
With respect to like S.P.T.H., Santa tide internal programs and and then against lastly, kind of the timeline for a lot of well to the market.
I'll handle the first part of it with the the guidance that we issued a and where that was built upon and you're exactly right now when we took a look at the our guidance for 2020, we certainly do expect that the south that is going to continue to grow this year really be the most dynamic part of the the growth that we saw.
See and in our guidance at the same time, if you remember with Abbvie really being fully launched in the middle of EUR 2019, we only had the back half of the year for the full launch there. So we would expect that to be a significant driver of our revenue.
Taking a look at the you know where some of the a potential risk would be is makena and as I mentioned in our lower end of our guidance, we can hit that without having any revenue coming in from from Mckenna that obviously, we're already through the second a month of the year. So we will have some revenue but that's.
Really why you see the lower end, where it's at a when it comes to other products.
For 2020, we do not we have not built in anything for Forteo.
Itself has made the announcement that there could be on approval by the end of 2020, we did not model that into our upper end of our guidance and that would be an upside to our guidance. We certainly would expect that that would come certainly would hope that it would come into 2021, then as I mentioned, a little bit earlier with they'll try.
So again, we would expect some continued growth taking place with that product development is gonna be strong again, and we'd expect that the royalty that we will get from Abbvie will increase year over year. So overall you know that's how we built the the guidance with the other products. So I'll turn it over to Bob So first a couple of clarification.
On Makena, there's no indication that a that product is coming off the market anytime soon we just don't know and and Hey magazine and recently announced that they're working with the FDA to keep the product on the market. So our guidance reflect any believed that we have weathered a markets the price gonna stay on the market for the whole.
We are less than the whole year or not you know we believe they came as a great product and as a lot of value for patients that positions and we hope to that hey, Matt can come to an agreement with the FDA to keep the product on the market.
Secondly.
You know on the err on the for Tayo same thing our guidance does not reflect our belief our guidance. We did not put on improved assets in our guidance and that's why it's not in there. It's not that we don't believe it can be approved and launched its just the fact that yeah. We found that its most prudent to not put.
Unapproved assets or unapproved products in our guidance until they become a free we feel very confident about P.T.H.. We think it's a great asset and Ah you know I know, it's a very important asset for Teva products still doing really well for Lilly and we believe or you know if approved being.
On a for a fully self suitable first to priority not being first to.
Markets generic we'd be a very big asset for both of us. So I just wanted to clarify those two things on the other element outdoorsy.
Yeah. We believe you know based on what the doors is tours and again, it's very early they having started their phase three yet, but there are targeting like a 2024 type of approval potential launch it's not in a year or so it is a very large study its 15000 patients and you know were so and so you know we.
Yeah, that's more of a longer term pipeline asset for us, but the the magnitude of it is so large we just want to make sure that people understand you know not only the value of the asset but also just.
You know how impactful that product may be for people, who have suffered a heart attack or you know or may have a coronary artery disease. So we're excited about that and yeah. We'll see some significant development revenue during that period of time before a potential approval and launch but for US. It's it's really early.
Around the the novel concept of it you know a heart attack rescue pad that gets us really excited.
Pfizer no we haven't really given any guidance yet as to the timing, but clearly you know we think it's you know in that Oh, 23 timeframe, maybe a little sooner or later, it's really a function of when they get everything going and then when they disclose it you know I think a lot of has to do with is.
Is the regulatory timeline as to how fast the FDIC will review the product and so clearly nothing in 2020 from a product standpoint for the Pfizer transaction or.
It was doors here and so you know I think as a you know for it for 2020. Besides P.T.H.. There's obviously its anytime this though as a potential approval.
Not a large product, but still be nice single for us product itself is doing around $100 million it would be the first generic.
For diabetes Byetta still cells people still use it or it's just one of the older you know products for type for for diabetic for diabetics and so but Teva is still committed to getting that product across go line and you know, it's a hopefully they'll have a an approval.
In 2020 for that as well.
Right and then just in terms of internal programs that you're focused on that could add to your endo. Your ROE GP focused marketing effort when when should we have any more detail additional detail on on your internal pipeline.
Yeah. So you know I think in our 10-K, you'll see that we ROE that we're focusing where we are working on two different assets right now one for endocrinology and one is well in urology.
And there the early stage you know, we we would not announced with those products are until we had the I'd filed a we're hoping to have our pre I'd meetings. This year on those assets, we need we're doing some formulation work that obviously need to be successful as we look at our pipeline and we're looking at more challenging assets.
So in order for them to have more value in the marketplace and so yeah with the challenging assets you know, obviously, there's more risk and the Predevelopment stage, you know whether its formulation or just generally the clinical design and so you know a pipeline we continue to focus on where our commercial footprint as well.
Thank you.
Where again, we're looking to have a pre I'd meetings on two assets and hopefully if they evolve we'll be able announce what those assets are once we have a 90 filed with the FDA.
And I guess, it's on the internal programs was there a program that you're working on that neurology space previously and or am I mistaken.
There there was 70 no one and so we are you know that because it's not really in our area of where we're focusing we're looking to potentially out license that asset, but again, that's a early early stages and you know, we'll we'll give updates as we as we get more information to provide.
Guys.
Well, thanks for taking all the questions a breadth of brothers and feel there.
Matt Thank you.
Again, if he led by to ask a question. Please press star one.
Again to ask a question please press star one.
Well take our next question from Anthony Petrone with Jefferies.
Hi, just wanted a quick follow up I think you referenced earlier just on all Mccain I know, it's baked in the 2020 guidance, but you know anything as we sit here in March.
As it relates Mccain or just in terms of orders you've you've gotten in the fourth quarter and just the outlook.
Relative to where the 2020 range is today, just an update on Mccain. Thanks.
Yeah, I think that you know our shipments continue you know to a it's a bag a they gave guidance of I believe 80 to $180 million to $100 million was obviously is substantially less than what they do last I think last year. They did about 100.
20 different earned 2000 30, they haven't announced yet.
But were you know, we're clearly seeing shipments you know supporting that range and you know until.
Hey, Matt gives more guidance, it's really not our ours are placed to to say, but Ah Ah Mccain. It continues to be a good asset for us and for for a frame and again again.
We hope that they can come to an agreement with the FDA to keep that product than the market and anger and keep it available for physicians and patients, but yeah. We'll clearly see you know revenue in Q1 related to Makena and we expect to see the hopefully the rest of year and just expand just a little bit on the are you know.
As Bob said, we certainly expect fix a go through the rest of year, we do have orders for the rest of year, it's not as though they they're cutting it off after the first quarter and saying no more orders. So we continue to see Makena orders for.
Production throughout all of 2020.
Thanks.
There are no more questions in the queue at this time I like to turn the call back over to Jack Howarth for closing remarks.
Thanks, Shelby and thanks again for joining us on today's conference call. If you have any follow up questions. You can reach me at six or 935, 930, onesix that completes todays call.
All.
Today's call. Thank you for your participation you may now disconnect.
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