Q4 2019 Earnings Call
Good morning, My name is Maria and I'll be your conference operator today.
At this time I would like to welcome everyone to the AMAG Pharmaceuticals fourth quarter and full year 2019 earnings conference call.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session.
If he would like to ask a question. During this time simply press Star then the number one on your telephone keypad.
If he would like to withdraw your question passed the town Keith.
Just on my pleasure to turn call over to Miss Linda Lennox Vice President Investor Relations you May begin your conference.
Thank you Maria.
Good morning, and welcome to the Amax Pharmaceuticals conference call to discuss our financial results for 2019 earlier. This morning, we issued a press release for those of you don't have a copy you can access in the Investor section of our website at <unk> Dot com.
Please be reminded that remarks made during this call may include forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act 1995.
You want to emphasize that these forward looking statements involve risks and uncertainties that could cause actual results to differ materially from those golf in such forward looking statement.
Please refer to our 2018 form 10-K, and our 2019 form 10-Q as well as those included in our presentation material for full review of risks and uncertainties associated with our business.
You should also carefully read those risks that will be included in our upcoming 2019 form 10-K, which we expect to file later this week.
On today's call, we'll discuss certain non-GAAP financial measure measures with respect to our performance.
We use these non-GAAP measures for financial and operational decision, making and as a means to evaluate our performance measurement because we believe they better represent the ongoing economics of our business.
The definition of our non-GAAP measures are set forth in our earnings release, which was filed with the FCC today.
Copies may be obtained the FTC dot God and in the Investor section on our website.
This morning, we will keep our prepared remarks brief so we have ample time for today.
With me on today's call or Bill Heiden, our President and Chief Executive Officer, and had mild our chief operating and Chief Financial Officer.
Yeah, one type of cover 2019 and review our 2019 financial core value drivers for 2020 M.B. arm.
And our 2020 financial guidance Anvil, We we'll then open the call for Q1 day.
With that it's my pleasure to now turn the call over in a bill.
Thank you Linda.
Good morning, and thanks for joining us on our quarterly update call.
Before we get started on our financial review I wanted to mentioned that we announced this morning that our Chief Medical Officer, Julie Krop will be leaving a magazine ended the month.
Well, we search for a permanent or interim replacement annex medical development leaders will report directly to me.
Over the last several years, we have built out our development organization today have a strong 10 years leadership team Cross development and regulatory this is the team achieved three important regulatory approvals in the last couple of years and it's the same team.
Continue to drive our key development and regulatory priorities forward.
With that let's turn today's topic of Amax 2019 results.
Start with a recap of 29 team.
Wind here on slide four or some corporate milestones and I'd like to call. It a few of these.
We continue to make progress on our strategic evolution to expand the portfolio and progress valuable development stage products that can be significant unmet medical needs. In 2019, we acquire pair spear pharmaceutical adding a potential next generation anticoagulant reversal agent so granted to our development portfolio.
Yeah.
We continue to advance enrollment in the phase to be three a trial for eight metric for 23 orphan drug candidates in development for the treatment of severe preeclampsia.
Hey, My team also submitted in India in received FDA approval for by leasing, making our third regulatory approval in two years.
The commercial side of our portfolio, we launched by leasing in September and also continued to grow Intrarosa revenue end market share.
We had another strong year for Feraheme, achieving record revenue was $160 million, which was an increase 24% over 2018.
Despite these accomplishments we had a mixed year for Makena.
Due to sustain supply disruptions and increase generic competition that resulted in lost share. The company made the decision to exit the intramuscular market and through mutual agreement terminated the arrangement with brasco was our authorized generic partner.
Almost a year ago, we announced results with a prolonged study which was followed in October buying at the Advisory Committee meeting following the Advisory Committee meeting we did some see some market contraction and additional net price pressure in the fourth quarter. Despite these challenges to Makena subcutaneous auto injector maintains strong market share of six.
The 3% in Q4.
Going forward, we remain committed to working with the FDA to find a path that could allow at risk women to have continued access to Mckenna. We believe there's an urgent public health crisis in America as pre term birth rates continue to rise and Hydroxyprogesterone caproate or 17 P remains the only Sta approved therapy for this.
Honorable patient population.
With that let me turn it over to Ted to walk you through our fourth quarter and full year 2019 financial results.
Thanks, Bill I'll start with fourth quarter 2019, the first column on the left side of the slot.
Revenue came within the range that we pre announced in January.
As you'll recall, we recorded approximately $16 million revenue due to our settlement with the Archie. Thank you.
He had previously indicated they wanted to terminate their relationship with the company and we reached a settlement with at the end of 2019, which included a 10 million dollar payment you watch.
This $10 million in cash received along with the recognition of previously deferred revenue.
$6.3 million accounts for the collaboration revenue recorded in the fourth.
As we mentioned when we Preannounced our financial results in January the operating loss. We reported at that time did not include the impact of any impairment charges or associated acceleration of amortization that we expected to recorded in connection with the strategic decisions now at the same time.
During the fourth quarter of 2018, we identified indicators of impairment for our Mckenna Inter Rosa Israeli see assets related to the unfavorable left the AD com recommendation for Mckenna on October 29.
And the completion of our strategic review in decisions to divest intrarosa invite leasing.
As a result in the fourth quarter, we recorded noncash impairment charges of $155 million on our intangible assets, which are shown in a separate operating expenses.
As a result of these impairment charges, our fourth quarter operating loss was approximately $194 million.
We reported a 5.8 million to our adjusted EBITDA loss in the fourth quarter, which was in line with our expectations and represented a sequential decline in the lost from the third quarter 20, they too.
Moving to the third column from the West of the Slide you can see that revenue for the full year 2019 was approximately $328 million, which was within our guidance range.
Feraheme had a record year growing 24% over 2018, driven exclusively by volume growth.
Makena subcutaneous auto injector was off to a good start averaging approximately $40 million per quarter for the first three quarters of the year.
Unfortunately media coverage of the AD com meeting cost some confusion in the physician community.
Some physicians even bought the product had been pulled from the market.
During the fourth quarter, we observed a decline in Makena care connection enrollments, which unfavorably impacted revenues.
'cause makena care connection enrollments or a leading indicator of revenue we anticipate that the fourth quarter decline will also impact Mckenna revenue results in the first half from 2020.
Our commercial team has been in the field working to clarify that Mckenna continues to be available to at risk pregnant moms.
Further down the piano, our spending was in line with our expectations, you'll note impairment of assets line totaling approximately $230 million.
In addition to the fourth quarter charges I previously discussed the full year number includes a second quarter impairment charge of approximately $77 million.
Associated with Mckenna intra muscular product when the company made the decision to exit the intra muscular market and reached a mutual agreement with our authorized generic partner compressco to terminate their distribution and supply agreement.
Non-GAAP basis or full year loss of approximately $65 million was the midpoint of the preliminary results. We publish early in January.
And at the favorable and our guidance range for the year.
We are diligently managing our expenses as we look to become an adjusted EBITDA positive company in 2020.
I'll now turn it back to Bill.
Thanks Ted.
So you'll recall that in January we announced the results of the company's strategic review and our decision to focus on our four highest value product opportunities, Sean and a lot.
And the decision to divest by leasing its rosen.
Since we made the announcement in early January we've continued to progress our plans to implement these decisions and expect to be in a position to provide further details on the divestiture and the second quarter.
In early January we also announced that I'll be stepping down as president and Chief Executive Officer.
It's been an honor to lead a macro nearly eight years as we've transformed from a single product company to one with strong commercial and development capabilities that position us to bring new treatment options to patients with unmet medical needs.
Medialink following the announcement in January the board initiated a search for my successor, where the company expects to name by mid year.
All of us at AMAG remain committed to making this a smooth transition into the company remains on track to achieve its key priorities in 2020 and beyond.
Our decision to divest dry leasing into Rosa will allow amec to focus on its core value drivers continuing to grow feraheme working collaboratively with yet right on a path forward that would allow at risk pregnant women to continue to have access to Mckenna and developing seer brand tag and Amec for 23.
Feraheme has shown steady growth since it was approved the broader idea labeled two years ago. The IB iron market has grown in these recent years, which we believe is due to the increasing prevalence of underlying conditions anemia.
Our teams have done a great job understanding the idea in market identifying opportunities for growth and executing against our plans.
This helped us achieve record revenues of 168 million in 2019, as well as growing market share to 17.7% in the fourth quarter.
We anticipate that the IDR in market will continue to grow we believe this coupled with our ability to understand market dynamics and execute accordingly, well positioned feraheme for continued growth.
We also acknowledge that new competitors may enter the market. For example, monotherapy was approved in January for sale in the United States.
Although now appears to be facing a patent challenge and we have indications. The sandoz continues to pursue a generic version of Feraheme in there and which was submitted over four years ago.
Which as you know.
Could be launched as early as July 2021 under the terms of our settlement agreement, if they're able to secure FDA approval by a certain undisclosed state.
However, we continue to believe that there are significant barriers to bringing a generic ivy iron to the market.
Sandoz is unable to secure approval by that certain date. They can launch an authorized generic version of Feraheme in July 2022 for up to 12 months.
Sandoz right to distribute and amax obligation to supply the authorized generic product has been set up with standard commercial terms and profit split.
Over the course of 2019, we started to share that we're exploring new opportunities to grow Feraheme. These opportunities will take time to progress and none of these are baked into our current revenue guidance for 2020, but this work is a priority for the company.
Next I'll touch on the Makena subcutaneous auto injector.
Makena was approved nine years ago by the FDA based on the landmark meat clinical trial, which was run by the NIH and published in the New England Journal Medicine, and that study demonstrated a 30% risk reduction of treating at risk women with weekly administrations of Makena.
With high rates of preterm birth in United States, especially in underserved patient populations. The approval of Mckenna was encouraging news for pregnant women, we'd experienced proprietary member prior pre term birth and their positions.
As part of the original Subpart H accelerated approval there was an agreement to conduct a placebo controlled confirmatory trial, which was called the prolong study.
This study was ongoing and enrolling patients outside the United States when we purchased Mckenna in 2014.
Prolong study results, which were published in the American Journal, apparently ontology in October of last year did not show reduction in pre term birth rates with the use of Makena, but did confirm mckenna strong safety profile.
The pre term birth rates in the prolong placebo arm more appreciably lower than in the midst study, indicating a lower risk patient population and prolong.
The prolong study results highlight the challenges of many medical conditions and their treatments, which not well understood which patients are at highest risk of developing a condition or which patients would most benefit from treatment.
Importantly on October 25th after the prolong study results have been published a cod and SM FM updated their guidelines reiterating their recommendations for use of makena in the appropriate patient population.
As you know the FDA convenient Advisory Committee on October 29, and we're now harder work and follow up to that meeting, we're very committed to working with the FDA to agree on how best to gather additional data that will be most informative to physicians in the FDA finding a path forward that would allow eligible patients to continue.
Due to have access to makena.
Hey, Matt for 23 isn't development for severe preeclampsia.
This is a high risk potentially high reward program preeclampsia affects approximately 140000 women a year in the United States and about 50000. Those women are estimated to have a severe form a pretty much yet.
Great Glassia threatens to help pregnant women and their unborn babies and their condition typically results in a pre term birth and all of the attendant negative health consequences.
There are currently no therapies to treat frequency. So it's an enormous serious unmet medical need both here in the U.S. and internationally.
We have global rights to this asset to treat frequency and you can see that it obviously holds significant commercial potential.
Enrollment in our ongoing clinical trial continues.
You S and international sites and while these are difficult trials to recruit the unmet medical need demands that we continue to work hard on this project.
Our other development assets here for intact, it's an important to future core value driver with a large market potential there an estimated 6 million patients taking these novel oral anticoagulants form a low molecular would happen in the U.S. alone.
A subset of these patients approximately 150000, a year require a reversal agent.
These patients will be treated at approximately 3000 target hospitals across the U.S. either in the our or as an inpatient and our Feraheme salesforce is already in those hospitals today.
So your frantic as a differentiated profile with potential advantages over existing reversal agent.
We believe what is most important to punish and taking care of patient who has a serious bleed, whereas in need an urgent surgery lawn and Noah is to have the ability to rapidly reverse its anti coagulate effect.
Limiting the time from a rival in the hospital to administration of the reversal agent is of Paramount importance and an emergency situation. So a drug lexia brand type that does not require any preparation is and is ready for use is ideal.
Importantly in clinical studies Airprint Act has demonstrated a rapid and sustained reversal effect that persists up to 24 hours, which is important for patients who are bleeding or must undergo emergency surgical procedure that requires maintenance of normal clotting capacity throughout the duration of that procedure.
Finally from a safety perspective series granting has not demonstrated any pro coagulant signals to date.
Unlike a Mac for 23, we have global rights to this asset and we're already exploring potential X U.S. partnering opportunities.
Let me turn it over to 10 now who can walk you through our 2020 guidance Anvils.
Thanks, Bill Slide 11 presents the 2020 financial guidance that we published in advance of the JP Morgan Conference in January.
We believe this guidance captures a range or potential outcomes for our business as we navigate through some key uncertainties.
It's important to note that the guidance is presented on a continuing operations basis, meaning reflects our intention to divest intrarosa and by leasing therefore revenue and expenses associated with those products are excluded.
Our financial our actual financial statements will be presented in such a way when we qualify for discontinued operations treatment in accordance with the accounting rules.
Importantly, the strategic decisions to divest injuries and Bailey see allows us to remove more than $100 million of operating expenses as compared to 2018.
This opportunity for cost cutting is a key driver in our returned to profitability, which is an important goal for 2020.
Listed here on Slide 12 is our full set of 2020 goals. They include successful completion of the CEO transition.
Divestiture of Intrarosa in by Lisi.
Working with the FDA to drive the best outcomes for patients who may benefit from Makena.
Continuing to advance both of our development programs.
As it relates they make for 23 continue to enroll the phase Twob Uthreeoeight study in both the U.S. Index U.S. site in opened new sites.
Preserve rintega submit the investigational device exemption and initiate a phase twob study in healthy volunteers mid year.
And pursue ex us portfolio partnering opportunities.
Achieving our financial objectives, which include revenue of between 230 at 280 million in adjusted EBITDA of between 20 and $50 million.
Now, let's open the call for your questions operator.
[laughter]. Thank you the floor is now open for questions.
If you wish to ask a question at this time simply press Star then the number one on your telephone keypad.
If at any point. Your question has been answered and you wish term of yourself from the Q press the pound key.
Our first question comes from the line of Douglas Tsao as H.C. Wainwright.
Hi, good morning, Thanks for taking the questions just.
Maybe starting with Mccain are obviously, we're now a couple of months since the new year have you started to see some stabilization in terms of the volume decline that we really saw in the fourth quarter.
And second in terms of the restructuring and the cost savings on Ted you indicated those really be tied to its IVC and in progress.
Obviously, you haven't divested the asset yet so at what point should we expect to see the associate that's you know start to come down.
Hey, Doug it's bill when I start with a with Mckenna.
As we mentioned we have.
Some go forward visibility through the Makena care connection and so.
As we mentioned due to some of the press in the fourth quarter around the Advisory Committee, we saw a mechanic haircut enrollment.
Got a little soft in the fourth quarter, and we knew that would affect than sort of first half revenues for Mckenna. There has been some stabilization our field force has been able to get out and clarified to doctors that makena continues to be available.
And that we're working hard to ensure that that continues.
So our Salesforce is out in force I think clearly for a lot of reasons, we want to remove this cloud of uncertainty and I think that will help.
Physicians and patients.
So thats job one right now is to work with the agency.
Perhaps a path forward so that patients can continue to have access and we can the short positions that their patients can continue to have access to mckenna going forward.
It's also important to note that the softness we saw in Q4 informed our 20 Twond guidance.
So that's part of a wide range on the guidance revenue the revenue guidance in terms of managing expenses were always managing expenses carefully as we talked about throughout 2019, we were pulling the direct to consumer spend away from.
Into Rosetta make room to support the launch of by Lisi that continues into Rosa.
As a cash flow positive product from a direct product cost basis.
By the obviously is not we're continuing to invest in the launch for doing so very mindfully importantly, the divestiture process is moving along nicely and we're optimistic that we'll be able to deliver something announceable to the market as we as we indicated previously sometime in Q2.
Okay, great. Thank you and then one quick follow up on Makena has there been any change from a reimbursement standpoint, and then just also in terms of physician feedback in terms of a slower scripts that we saw obviously in fourth quarter. I mean was that really just driven by confusion around availability the product or were there. Some positions you just sort.
It became aware of the prolonged good and just decided there wasn't worth worthwhile. Thank you.
Sure. Thanks, Doug So on reimbursement we continue to have.
Virtually universal reimbursement so there's been no real challenges on reimbursement there has been some additional discounting and you'll see that to the net pricing on Makena, that's something that we've mentioned, but we continue to have very very.
Broad reimbursement in terms of the physician community you can imagine there's a spectrum Doug there was some confusion on some part of some physicians options availability. So we simply have to clarify that I imagine there are some physicians.
Who now maybe they.
Treated 100 patients and have patients who might have had a late preterm birth and might ask themselves that patient.
[laughter].
At significant risk and they may feel differently about about treating those patients. So I think some of the softness comes back.
I think some of some physicians may have altered their prescribing patterns, but I think all of that could be righted through some clarification and confirmation with the agency that there's a path forward and that Mckenna will remain on the market.
Okay, great. Thank you so much.
Thank you Doug.
Our next question comes from one of Jessica Fye of JP Morgan.
Hey, guys. Good morning, Thanks for taking my questions. Appreciate you, providing the adjusted operating profit and EBITDA guidance on a continuing ops basis, but given it for now you're still spending on.
Interesting by lease it can you talk about whether you expect AMAG cash flow from operations to be positive or negative in 2020 prior to accounting for any proceeds from divestitures.
Hey, Jeff It's Ted is a good question.
Certainly depends on when we transact.
But our estimate is I think a good place to assume is that cash flow for 2020 will be about neutral. So the EBITDA, let's let's focus on the midpoint EBITDA of 35 million, there's about 10 million of cash interest on the converts and 25 20 to 30 million.
And on cash spend for the period of time that we own the assets.
It's just pointed thats not including any upfront that we received by divestiture right.
<unk>.
Okay and can you make citations about how much investors can or should expect you to bring into the company when you divestitures and by Lisi maybe related to that.
Can you summarize what the terms would be if you were to return on those products to endoceutics or politician.
So.
In terms of.
The deal structure I don't want to go into too much detail because obviously there. So there's a balanced as you might imagine with upfront.
Monies downstream monies that might be based on milestones and royalties and so we're still in process on that and so I wouldn't want to.
Give any necessarily any.
In the direction.
On that and.
In terms of.
Just giving the products back.
That's not.
That's not the current plan I don't know what details contractually they would.
We would have there I think would have.
There's not much economics, if you will.
Hi, economic impact.
I recall from the contracts, but again currently that's not that's not the intention.
Okay.
Just thinking about the.
Revenue guidance can you just speak to you know the low end of the range versus high end of the ranch, we think of the low end is being.
Conservative or based on what you're seeing with Mckenna. So far this year is that.
Yes, so kind of a realistic part of the guidance range.
Well look.
Theres a lot of uncertainty.
We feel good about our feraheme business and the projections for 2020 feel like there is a little less.
It is a more narrow bound on our internal estimates of Feraheme. So as you can infer the majority of that uncertainties around Mckenna, it's hard to handicap, what the FDA is going to do it's hard to understand it's hard to estimate exactly how we're going to be able to return.
Undo some of that confusion in the prescriber market and get docs back to writing Mckenna more regularly we were encouraged by the about $40 million per quarter that we had back in the first few quarters of 2019.
But it can be very hard to get back to that level. So we wanted to provide a nice wide range to account for as you say hopefully in hindsight a conservative.
Number.
But given ourselves room to to navigate through a lot of uncertainty.
Okay, I'm, just I'm not sure I totally understand their response to Doug's question earlier, when I think you said on a keynote <unk>.
Stabilizing like two months the quarter now is there anything you can say about just directionally a one Q is tracking relative to Fourq you for Makena.
No I don't we normally don't comment inside the quarter I think that the question was again have we seen stabilization and I think the answer is generally yes, we've seen stabilization we've seen.
Qualitatively certainly as we've been out into the field, we were able to clarify.
Some physicians, who who simply miss understood due to some of the press about the outcome of the Advisory Committee. So we have been able to.
Confirm that with physicians and those physicians, who just simply weren't just misunderstood we were able to clarify that but for those physicians.
So so yes, there has been stabilization, we're not going to get into numbers this quarter.
Okay. Thanks for taking my questions.
Hey, Thanks Jess.
Our next question comes from one of Amy Sadia STB Leerink.
Hi, Good morning, Thanks for taking my question, maybe just a follow up on Mckenna to begin with.
So your guidance range, if you sort of just think about a stable feraheme.
Folman into 2020 suggests a.
A significant decline in Mckenna as the quarters progress this year.
Maybe that's a some level of conservatism on your side, but if you can give us.
The lower end upper bound off.
How mckenna could perform.
That that would be helpful. Maybe a scenario, but it does get pulled off the market how quickly would that happen and then on the other side if.
You come to an agreement with DST to conduct some additional study and its Dave in the market how long before it can come back to its prior quarterly run rate.
And then I have a follow up some questions on the pipeline.
Right so the.
Look the as you you're alluding to you you can probably in relatively accurately or within that and hitting distance I think about the range around feraheme and so the and we've guided that that the the range around our revenues really does try and capture some level of uncertainty.
Around Makena and as Ted just mentioned you could view the low end of the ranges Conservative that's right capturing.
Yes, very conservative view on how things might play out I think from our point of view given.
Given that level of uncertainty we thought it was best to provide a again a more conservative level guidance with the relative range around those revenue numbers.
And obviously our goal always when we give guidance is too.
Good day numbers that we think we can meet or beat and so I think thats really my commentary around around our guidance and and the numbers and then going forward. As you mentioned our goal is of course to confirm with the agency their view on Makena and that will remain on the market and I do.
I think that will be a positive piece of information.
In the prescribing community to the medical societies that they don't have to worry about not having treatment options for women, who are at risk of a pre term birth that there would still have access to.
To this product and I think that wouldn't be a positive which would be reflected eventually in our go forward numbers around makena.
Ted any additional common I guess, the only thing is that the reminding everyone that the the course of therapy is 14 to 18 weeks. So as your physician you see a patient do you want to start that patient.
On this course, with some uncertainty or whether or not the products going to be pool, right and we think that that may have been part of the calculus out there.
We can't give perfect assurance that right at the of course of therapy won't be disruptive.
So and we balanced our way through this and because we guide physicians said in terms of process. That's not how it works you would continue to have access but.
Positions are very focused on patient care I want to ensure I want one I guarantee if you will that there will be able to start incomplete therapy.
Mccain and so we want to give them that assurance as quickly as possible.
Okay.
Just on the pipeline I wanted to sort of understand some of the timeline, especially that julie's departure.
And can you remind us.
What we should be expecting in terms of some of the milestones around Sarah Palin tag and when would you be able to provide us with some type of an update around enrollment or.
Just a rough timeline around you muffled threes.
No completion of enrollment. Thank you, yes sure. Thanks, Let me start with there at the last part which is four to three because it's it's harder to predict right. We continue to enroll patients. We continue to open sites that both in the U.S. and outside the us and I think when we get to a number that that we think is somewhat of a mild.
I think that'd be a good time for us to to talk publicly about where we aren't enrollment.
On Seer brand Tag. We are currently working with pairs here technologies for the submission of the investigational device exemption and so there's a us a submission.
Theres, a 30 day waiting period, and then the phase Twob clinical trial.
Can be initiated we anticipate that that trial would be initiated sometime mid year.
And based on our expectations for.
Running that trial that we should have the trial enrolled and data by end of year. Early next on the to be that then would lead into an end of phase two meeting, which we anticipate would be in in 2021 with the agency to confirm the design of the phase three program.
And obviously once we have confirmation of that trial that will be initiated.
Next year as well.
It seems to there has been a delay in submission of the investigational device.
Submission.
Can you shed some light around what has taken.
This long and <unk>.
If there's any sort of the book that's been happening with regards to the device with the application that would be helpful.
Sure So no rework simply been.
Again.
Just to backup investigational device exemption request is submitted by pairs for your technologies. So that's that's a request that goes in from a company that.
We don't really have any quote control over working very closely with them.
The investigational device exemption will include the protocol that we've designed for us here for intact. So that's that's our job.
I would say some of the at the time, that's that's a past has been Harrisburg technologies doing all of the validation work that.
That they have agreed with the drug device division.
And.
That's important because we want to ensure that the the FDA gets exactly what they need so that this when this is submitted as a 30 day review and we can initiate a phase twob clinical trial. So theres very technology since been doing the work that was requested the devices unchanged, it's simply the validation.
Work that was requested by the agency and so again that will be submitted.
And we're targeting.
Based on our timeline would be able to initiate the to be.
Mid 2020.
Got it thank you very much.
Thank you army.
Our next question comes from one of Chris Raymond of Piper Sandler.
Thanks, just one question on Feraheme.
So I don't know if you guys are talking about this too much but I wonder if you could maybe describe how you're preparing for the potential market entrance of ships in the retail space.
Obviously, they've had some theres been some data showing potential Ivy I am sparing from from these compounds and I know you guys have volume outside of renal, but I think there there's still some term renal presence.
And effort for for that that franchise.
And I'm just kind of curious if you could maybe articulate how you're potentially preparing for them.
For that entrance steep.
Should should we be.
No sort of thinking about that as a major impact or if not why thanks.
Yes, so Chris it's Bill I don't have a complete answer today for you and I.
Get that I know the our medical team has been looking at this and there's actually.
There's a lot of work being done on this as you pointed out.
Most of our actually all of our business is certainly outside of Dallas. So we don't have any business in the.
Late stage.
Renal disease area and over the last couple of years, our growth has come primarily from outside of.
CKD and so that's been the lions share of our growth, but I want to answer your question more completely there certainly still some level of.
Uncertainty.
Around the hip products and specifically around the long term safety.
But let me get you a more complete answer Chris I, just don't have that in front of me.
Thank you.
Our next question comes from on a search Bollinger of Needham Company.
Hi, good morning.
Also a couple of questions on Feraheme can you just talk about some of the growth drivers for 2020, I think in 2019 the market the growth of the <unk>.
The iron market was the significant factor.
Is that expected to to continue in 2020.
And then you've talked about growth opportunities for the future for Feraheme disease go through a label expansion or maybe a change in formulation that extends the de IP. Just one is going to some additional color on how you're looking at these opportunities for the future.
Okay, great. Thanks for asking the question surge.
Tourism market growth as you mentioned, we've seen significant mark brugger, we've actually seen significant market growth every year for the past few years. So then the market continues to grow I think there's really two factors here we've got.
The growth in some of the underlying indications.
Patients who suffer from anemia, there's also been a concerted effort on the part of aim AG as well some of our competitors to talk more broadly about some of the patients who may benefit from intravenous iron.
Gastroenterology is an interesting segment, where there are many patients who suffer from for example, inflammatory bowel disease.
Those patients have difficulty absorbing iron in the got and so one of the one of the most efficient ways to treat those patients with intravenous iron and so that's been a nice growth opportunity for us and so I think that growth in the market should continue going forward that certainly.
Our expectation I think we still have the ability to continue to grow share as we mentioned our market share in the fourth quarter was 17.7%. So there's still a lot of market share.
For us to to grow into.
In terms of broader growth opportunities going forward.
I think there are certainly geographic potential opportunities does take a little bit longer but those those could be interesting as well feraheme opportunities outside the U.S., but as well as.
New indications and we're working on a couple of ideas and I haven't we haven't publicly talked about those until we have a little bit more confirmation on the path forward for those opportunities, but that those could create.
Additional growth opportunities market expansion opportunities for the use of specifically for Feraheme. So.
Couple of a nice growth opportunities going forward outside of of anemia, but as you mentioned, we do expect that the market will continue to grow in 2020 and beyond.
Thank you.
Okay. Thank you Sir.
[noise] again, ladies and gentlemen, if you wish to ask a question simply press Star then the number one on your telephone keypad.
Our next question comes from one Gregg Gilbert of Suntrust.
Thanks, Good morning, and have a few fill in light of Julie leaving can you update us on how discussions with the agency or going on Mckenna would it be unfair to assume that one thing has to do with the other.
Yes, I would not assume that Greg the our interactions with the agency a really led by our head of regulatory affairs and so.
No.
No change no relation.
We haven't commented on specific interactions with the agency around around the kenan not not going to do that today.
But nothing changes in terms of our expectations our goals and our strategies for working with the agency to ensure that patients can retain access to mckenna.
So that that plan continues and so no change.
Okay. This is same go for sort of.
Timelines on on pipeline I know some asked about that already but more generally are you confident and what's been laid out in terms of timelines in oftentimes you see a new CMO come into a company and reset the bar in various ways. So can you maybe speak to the continuity on that team and how confident you are and what's been communicated thus far broadly I'm sure.
Got it.
Sure sure look right now the focus is that because execution and so if I if I go through both Mckenna, but also our development stage assets. It's really about execution. We have the plans. We have the strategy is laid out and so now it's all about aggressive execution for four to three it's about enrolled.
In patients is about expanding the number sites in our clinical operations team is all over that and that's job 1% brand tag.
We have the plan, we're working with our partners at Paris Fear technologies, we anticipate filing the I'd and initiating the phase Twob clinical trial midyear.
So it's all about execution now and I have every confidence that.
That our team will continue to execute well and we will meet our goals.
Thanks, and one last one that you've been clear about the the divestiture process being on track with newest next quarter I assume you're prepared to stay on as long as as needed, but as the board communicated anything about how the CEO search is going in any timeline associated with that.
Hi, So I'm I'm aware of of progress on on the CEO search I don't think they have.
Communicated any specific timeline I have indicated that I'll stay through my successor being named and we brought onboard which I think it gives the board the ability to really do their work and find the ideal candidate for for the job we have roughly talked about a midyear.
Time point I think that was really based on experience in CEO succession at a three to six month timeframe is reasonable and so I think thats still a reasonable target for people to think about.
Thanks, a lot for the question.
Okay. Thank you Greg.
[noise] I'm showing no further questions at this time I would like to turn the floor back over to Bill Heiden for any additional for closing remarks.
Great. Thank you Maria so want to thank everybody for joining us on todays call and before we close I also want to publicly thank all my colleagues for all their hard work over the last year and we look forward to continuing to update you on our progress today Meg.
The year.
Thank you again as close as today's call.
Thank you. This does conclude today's conference call you may now disconnect and have a wonderful day.
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