Q1 2020 Earnings Call
[music].
Good afternoon, ladies and gentlemen, and thank you for standing by welcome to the Rockwell medical 2021st quarter results call. At this time, all participants' lines are in listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During this session you'll need to press star one on your telephone please.
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I would now like to hand, the conference over to your speaker, they've missed Claudius by Slinger Investor Relations. Please go ahead them.
Welcome to Rockwell Medicals first quarter 2020 earnings results call. This is Claudius stifling or of Argo partners, the Investor Relations representative for Rockwell.
Michael.
Joining me from Rockwell medical on today's call, our Docker Russell Ellison, President and Chief Executive Officer, Angus Smith, Chief Financial Officer, Dr., Marc Hoffman, Chief Medical Officer, and Tim Coal Vice President of marketing.
Before we begin I wanted to know that certain matters. We will discuss may constitute forward looking statements within the meaning of the federal Securities Law words, such as May might will should believe expect anticipate estimate continue could potential pre.
Correct forecast project.
When intend or similar expressions or statements regarding intent belief or current expectations are forward looking statement.
Well Rockwell believes these forward looking statements are reasonable undue reliance should not be placed on any such forward looking statement, which are based on information available to us on the date of this release and which are subject to inherent uncertainty.
These forward looking statements are based upon current estimates and assumptions.
And are subject to various risks and uncertainties, including without limitation those set forth in rockwell's FCC filings.
Many of which are beyond our control and subject to change actual results could be materially different.
Accordingly, you should not place undue reliance on these forward looking statement.
Rockwell expressly disclaims any obligation to update or alter any statements whether as a result of new information future events or otherwise except as required by law.
This conference call it can be accessed on Rockwell Medicals Investor Relations page.
This call is being recorded on May 11, 2020 for audio rebroadcast and can also be access on the same web page.
At this time I would like to turn the conference call Overture, Rockwell Chief Executive Officer, Dr., Ross Russell Ellison Russell.
Thank you Claudia.
Good afternoon, everyone.
Thank you for goods on today.
It is in order to be with you in my new role as President and CEO of Rockwell Medical in addition to my continuing role on the board of directors.
Hi, George as CEO is to maximize the potential alerts to FDA approved products.
Alright, very dialysis and Triferic.
For patients and shareholders by developing Rockwell medical into a more medically implied typically driven company, which will drive adoption of our products will dialysis and the strategic identification in pursuit of new indications for triferic them other disease.
I look forward to providing you with an update.
On our business on our call.
Today, we will address.
Our commitment to the hemo dialysis community, particularly in light of the Cobot 19 pandemic.
Findings from the Triferic real World data retrospective analysis.
Progress on the commercialization of our two FDA approved product.
Other person in corporate update in a review of our financial and then well open up to accumulate.
Before we dive in.
I wanted to give you some perspective why.
George Rockwell and my vision for the future.
Through my role as a consultant and board member I've gained the index knowledge as well and its products.
Based on this knowledge and my decades of medical an executive experience in pharma and biotech.
I'm, particularly excited about potentially transformational attribute of our very kyrobak. They disregard yeah PC technology platform.
As you know Triferic is the first commercial product from our FCC platform and I believe Triferic is unlike any other iron products on the market today to deliver is 100% immediately bio available on the patients unimpeded by inflammation.
By virtue of this mechanism of action I believe our FPC platform whole potential to deliver meaningful clinical and pharmacoeconomic benefits to patients and health care providers.
Thereby transforming the way iron deficiency as managed across the globe in multiple therapeutic indication.
My charges the actualized this potential of our SVP technology for patients and for shareholders and.
And I see opportunity in two areas. The first is the ability to transform the way anemia is married for hemo dialysis taste.
We now have to after FDA approved formulations, and Triferic Britain and dialysis patients that provide us with unique opportunity.
I've spent a lot of prime in the dialysis industry my career and based on my experience I believe our Triferic portfolio has the potential to become the standard of care overtime.
And as I look to the future my goal is to build and leverage the medical capabilities at Rockwell is establishing to help accelerate the adoption of triferic in human dialysis study because decision, making in dialysis underpinned by medical scientific and Pharmacoeconomic data.
Generating additional clinical and Pharmacoeconomic data, including data from our real World data program will be a critical part of the plant and we are in fact collecting data on ongoing basis from increasing number of clinic.
Im pleased that we're in a position to give investors. The first readout from this real world data program on the call today.
Further I believe that over the course of the next 12 24 month the management of anemia in hemo dialysis is going to change.
Starting with the anticipated introduction next year.
If PHR switch or an alternative.
To a richer for even stimulating agents.
During my career I've been involved in the development of various therapeutic products, including your PHR.
And based on my experience I believe Triferic is well positioned to participate loan size of PHR to provide a more reliable and physiologic treatment in the media in hemo dialysis patients.
The secondary where I see exciting potential for value creation is through the development of Barrick power phosphate citric molecule or FCC to treat other medical conditions with unmet clinical need.
I believe it's the same attributes that make the molecule attractive in the hemo dialysis study.
Should enable it to transform the way iron deficiency of managed in a variety of disease States.
We have gained a wealth of experience from developing and commercializing triferic in Pima valid.
Which I believe will prove extremely valuable as we look to move into new therapeutic areas outside of the dialysis study.
To that end, we've launched a strategic initiative to identify and prioritize other therapeutic indications for future development.
This is a very exciting project for us as we look to build out the technology platform and address other disease States, where iron plays a critical role.
Our call today will be focused on the promise of our business and came about.
And later this year, we will progress turning to you the disease States, we intend to explore with information on their commercial potential clinical feasibility and on the projected timing caused to clinical proof of concept and value creation.
I'm joined on the call today by Angus Smith, our Chief Financial Officer, Dark month, Dr., Marc Hoffman, Our Chief Medical Officer, who joined the company in November 29 team as part of our efforts to enhance our measurement capabilities and by Tim Coal Vice President into marketing, Tim joined US in December 2019, and have more than 20.
Years' experience and marketing lifestyle products, including traditional I'd iron product.
Underlying our commitment to the hemo dialysis community is our dialysis concentrate business.
We are the number two supplier these products in the U.S. from which we generate more than $60 million an annual revenue.
Well Triferic is clearly the growth and profit driver for our business going forward.
The concentrates business allows us to develop and harvest relationships with key customers in the industry and is paving the way for discussions we're having with customers on partner.
Our response in the phase of the code in 19 pandemic has helped strengthen our relationships with these customers and I'm incredibly proud of the way our organization has rallied over the last two months to deliver on our commitment to our customers, which I'll discuss.
The other innovative part of our commitment to dialysis is triferic. The only FDA approved therapy in the U.S. indicated to replace iron and maintain hemoglobin is going to dialysis patients during each dialysis treatment. It has unique and differentiated mechanism of action, which has the potential to benefit patients.
And the healthcare system.
Eric deliveries are immediately and maintains hemoglobin, maybe move outs is pacing without increasing ferritin levels for the safety profile comparable to placebo and is not associated with iron overload and toxicity.
We now have two unique formulations of Triferic that are at FDA approved.
Thanks, Eric Dialysate, which we launched in May 29 team.
And we were excited to announce the FCC approval of Triferic Avenue, our Ivy formulation, just a few weeks ago.
Triferic Avenue enhances the Triferic platform and then it provides patients with greater access to our innovative therapeutic.
Hi, expanding administrative options for clinicians and is an excellent formulation for the development of new indications.
We plan to introduce Triferic Avenue in the United States later this year.
As I mentioned earlier I'm proud of the way our company has responded to the code at 19 pandemic.
I want to say a few words above the impact of the virus on our industrial business.
As everyone knows the world is facing an unprecedented challenges in managing the crisis.
The dialysis industry have faced some unique challenges in the face independently.
Because many patients are already carrying multiple co morbidities and patient lives are quite literally dependent on the treatment. They receive three times per week.
Furthermore, one of the downstream impact with Coben 19 can be multiple organ failure, including kidney failure and this is put further stress on both acute and outpacing dialysis clinic.
At times like this I role in supporting healthcare providers and patients is absolutely critical.
While we are still in the middle of the crisis and it's hard for us to predict the timing of when the world returns to a new normal let me offer a few thoughts on the impact to our business.
First we've seen no disruption to our supply chain for either concentrates of Triferic. In fact, we've been able to work with our customers to fulfill small pockets of higher demand for our concentrate for certain clinics are seeking to build safety stock in the face of the crisis or are facing shortages on certain products from other suppliers.
Second because of the fragile nature of dialysis patients.
Clinics have more or less close their doors, the non essential vendors, including our sales representatives and nurse educators and a pause any significant change in protocols to focus on managing the crisis.
This has impacted our ability to continue the promotion of in the medical education efforts for Triferic, though we have been working to continue our effort virtually where possible.
We're also closely evaluating potential impact of the cobot 19 outbreak across the globe on a regulatory clinical development timeline, particularly in China and India.
Finally, I'd like to applaud the efforts of all the central work and those on the front line working in dialysis clinics to ensure patients receive their lifesaving therapy in particular I am proud of the extraordinary efforts of our manufacturing and distribution employees, who come to work everyday to make.
Sure that we are following through on our commitment to the dialysis industry in pesos and standing with the industry in the face in the price.
Now turning to some of the highlights of the first quarter.
Net sales were 15.9 million, representing our house sales since Q4 2018.
For Triferic dialysate.
We ended the quarter with nearly 2000 patients on therapy, representing nearly 300000 annualized treatments.
Our active and committed evaluation programs for Triferic Dialysate now represent 36 independent and small dialysis organization clinic, a 260% increase from December 31st plenty 19.
And Tim will provide additional details on the launch metrics later in the call.
The first quarter also saw two significant event for Rockwell medical the FDA approval and drive third Avenue as I've mentioned and our licensing of Triferic right in India, The Sun pharma.
We were also thrilled to add Bob Radie to our board of directors, Bob significant executive commercial business development and clinical development experience will be great assets. The Rockwell medical as we execute on our business plan.
Finally, I want to highlight progress we've made in building out our real world data program for Triferic.
Through my work on the board and since I joined the company as CEO, it's become clear that our commercial team can benefit from additional tools to supplement our clinical trial data.
Demonstrates the potential benefits of Triferic. One of these tools that is frequently requested by prospective customers is the real world experience of other customers, particularly as it relates to clinical and Pharmacoeconomic measures.
We've continued to add clinics to the program and we now have 12 clinics from which we are collecting data a 50% increase from December 30, Onest plenty 19th.
With this in mind I'm excited to say, we are ready to present, the first readout from our real World data program on this call and I Hope this will be the first of many updates on this phone.
With that let me turn the call over to our Chief Medical Officer, Dr., Marc Hoffman to review the data Mark.
Thank you Russell.
I'm excited to be presenting the initial read out for more real world data program today.
As Russell mentioned, the collection analysis and presentation of real World data just incredibly important for Rockwell, but first let me put this in the context of the overall program.
As Russell mentioned, we're now collecting data from 12 dialysis clinics in the U.S. and one of my top priorities since joining the company has been should develop a plan to collect and analyze these data.
We believe that the output from this program has the potential to enhance the commercial medical and business development discussions that are critical to driving adoption for triferic across the globe in years to come.
Today's presentation, just the first of what we hope will be several meaningful read outs from this program.
Today, I will be presenting data from an independent dialysis clinic that adopt Detroit Burke in early 2017.
The clinic has approximately 65 patients in any given point in time and provided us with various clinical lab drug utilization and quality of life metrics their patients before and after they adopted triferic.
We are presenting data from a baseline period of three months prior to their switch to Triferic to 18 months following the adoption of choice there.
In randomized well controlled clinical trials like those used to generate registration data patients are selected using highly specific eligibility criteria, which are not fully reference reflected a real world practice.
In contrast, real world data, there's uncontrolled and unfiltered.
The data presented here is all comer data representing the real world experience at this site.
This is not constrained by clinical trial protocols are schedules or any patient selection criteria more did walk will have any input into the clinics and you need management practices.
In fact, it included patients who traditionally be considered outliers in data analysis for example, patients with an active infection lead or patients who are pretty hospitalization.
Sure objectivity and our observations all data.
And grass were developed by an independent statisticians.
It's important to note that the results represented here.
Were observed that a single independent clinic of approximately 65 patients and may not be representative of results are different practices and procedures are used.
At a high level, what we've observed through the analysis is that all the adoption of Triferic. The clinic saw substantial reduction and you say utilization at 15 to 18 months and more than 70% reduction in traditional RV on utilization.
Against the background at these reductions we also observe stable to increase in hemoglobin levels. The decrease in this treatments and improvements in key quality of life indicators.
Turning to the specifics so utilization.
We looked at the change in the average weekly dose per patient.
Of note, we saw a 16% reduction and the average weekly Esa dose per patient in the first quarter following transition to triferic and increasing to 23.2% reduction and the average Esa dose per patient per week during the six quarter following the transition.
This in the clinic that uses a long acting Isa silver Wheaton Alpha for anemia, where those changes, our infrequent and which may contribute to the elapsed time.
Changing utilization.
We also looked at the change in traditional I've learned division.
Total and on a per patient per week basis.
This particular clinic utilizes showed him FERC loopnet as their traditional IDR products.
What we observed was fairly rapid large and sustained decline in traditional IDR utilization first quarter following the adoption of charter.
We observed a 74% reduction and the average dose per patient per week.
Furthermore, during this period.
Sure referred and levels decreased by over 13% in the first year and greater than 16% compared to baseline at the end of the observation period.
In terms of hemoglobin.
During the baseline period patients had average hemoglobin within the target range of 10 to 11 grams per deciliter.
Within six months from Triferic adoption hemoglobin levels increased to 10.5 grams per deciliter and continue to rise to 10.8 grams per deciliter throughout the observation period.
These changes are noteworthy as they occur concurrently with observe reductions in both IDR and he is a utilization and importantly studies have shown that improvements in hemoglobin levels for human dialysis patients or associated with improvements in quality of life.
We also looked at the trend in mis dialysis treatments by patient importantly, mistreatments kind of a significant impact on clinic profitability as clinics lose out on the revenue from a patient visit would have fixed labor and facility costs that Theyre Forstall George.
During the observation period, the average number of patient visits per quarter was 2475 clinic visits per quarter.
What we observed is that following the switch to trucks are there was a reduction in the percentage of total potential. This treatments from 7.9 during the baseline period to 4.3 by the six quarter. Following the switch a reduction of 45% in total Miss treatments in the shift quarter following the switch.
Finally, we were very fortunate to this clinic was able to provide us with quality of life measures pursuant to the Kt Kewill 36 tool that was adopted by CMS not all clinics are able or willing to provide these data to us. So this presented us with a unique opportunity to look at trends and quality of life measures.
Following the adoption of Triferic.
Importantly studies have shown that a patient's perception of their physical and mental function is closely tied to patient outcomes.
To provide you with a little more detail on what is measured as part of the Kt Kewill well 36. This is validated instrument, which measures of patients perceptions of quality of life across five different actions.
Physical and mental physical and mental summaries, which measures general health activities and its ability to accomplish desire cash depression anxiety energy level social activities.
The burden of kidney diseases, such as how much kidney disease interferes with daily life.
Problems of kidney disease assesses symptoms associated with their underlying disease, such as shore muscles. It's your dry skin for lack of appetite and feeling washed out or drained.
Finally effects of kidney disease on daily life measures the impact of their disease on day to day life, such as their ability to work around the house or travel.
Each of the Kt QL 36, kidney targeted skills or short on a 100 point scale.
With higher scores, indicating better quality of life.
We observed improvements on each of the components scores and on the composite score year over year.
The dialysis outcomes and practice patterns study stops looks of patients who are on dialysis around the world.
While this data is highly subjective stops found a strong correlation between how people feel the quality of life and how will they do on dialysis.
So today, we presented data from single independent dialysis clinic prior to and 12 to 18 months. After the introduction of Triferic into their anemia management protocols.
The strength of the study.
Or the unbiased eight extraction from the electronic medical record, allowing examination of longitudinal hemoglobin Esa an ivy earned as used in the uncontrolled setting. This study is limited by its operational nature.
This observational study demonstrates that following implementation of Triferic dialysate at each treatment.
The clinic maintain hemoglobin concentration and reduced traditional ivy are used by more than 70%.
Additionally, Esa use decrease by greater than 20% over time and their trends for improvements in patient outcomes as well as a reduction in this treatments.
The results presented.
Cannot be generalize to other dialysis clinics settings, with a different patient mix, but interestingly, our consistent with the observations in the controlled clinical trials for Triferic foods and probably.
Rockwell is collecting and committed to analyzing data from an increasing number of clinics to further strengthen our database real world data.
With that I'll hand, the call over to Tim coal to discuss commercial metrics and Triferic after launch plant Tim.
Thanks Mark.
I am Tim coal Vice President of marketing at Rockwell.
I joined the company in December 2019.
I've spent more than 23 years, and the pharmaceutical and medical device industry.
Including some experience serving as marketing head for the Ivy Iron portfolio at Watson Pharmaceuticals, or we launched for less it.
Traditional IB iron product that used to treat anemia in dialysis patients.
So with that introduction I'll dive into some of the details of our Triferic dialysate metrics for the first quarter.
As of March 30, Onest 2020.
We had nearly 2000 contracted patients on therapy.
Representing approximately 300000 annualized treatments.
In the quarter, we signed for new contracts with dialysis clinics to adopt triferic dialysate, the conversion to new contracts, particularly from our MTO contract were impacted by the emergence of the covert 19 pandemic in the us in March.
With our amnio customer we had eight clinics train on Triferic administration and approved for adoption in mid March.
That held off on converting so that as for all dialysis clinics. They could focus on protocols to protect their staff and patients in the face of the cobot crisis.
And we had another four clinics in the queue for administration training in March that were not able to complete the training due to the pandemic.
Our active or committed evaluation programs with independent dialysis clinics and small dialysis chains now represent 36 clinics.
And more than 2250 patients that's a 260% increase from December 30, Onest 2019.
So we're very pleased with the strong performance of the program during the first quarter.
And the increasing the number of clinics committed to these programs is largely attributable to progress, we're making with prospective customers who on multiple clinics.
Evaluation programs have now been active for three full quarter since product launch and allow clinics to sampled triferic dialysate for three month period.
Our clear observation today is that a significant majority of the clinics you gain experience with Triferic.
Tend to stay with our product.
As evidenced by the 75% conversion rate from evaluation programs onto commercial contracts.
And while coded 19 has presented challenges to commercial companies throughout our industry, including our company.
We have equipped our field force with tools to continue to communicate virtually with customers.
So between the substantial growth in our evaluation programs.
And our continued efforts to maintain communications with our customers.
We expect to see a reacceleration of adoption of Triferic as the cobot 19 pandemic begins to resolve.
And us states reopen for business.
Next I'll turn to Triferic Avenue, our Ivy formulation of Triferic.
As Russell mentioned earlier, we were thrilled to announce the FDA approval of Triferic Avenue in March.
With this approval Triferic add new joins Triferic dialysate as the only Ftn approved products indicated to replace higher and maintain hemoglobin.
In adult patients with hemo dialysis dependent chronic kidney disease.
Triferic Avenue is designed for intravenous administration to adult hemodialysis patients.
And enhances the triferic platform by providing patients with greater access to our innovative therapeutic.
Expanding administration options for clinicians.
The therapy allows dialysis centers to administer triferic to patients regardless of the mode of bicarbonate delivery being used and less is more appropriate in cases, where the hemo dialysis clinic as using dry bicarbonate.
In terms of the launch plan for Triferic Avenue.
We are beginning our outreach to prospective customers to increase awareness of the impending launch.
Currently this includes reaching out to customers, who have expressed interest in triferic already in the past, but have been unable to adopted due to their use of dry bicarbonate technology.
We're also starting to engage with dialysis organizations that we have existing establish contracts with for Triferic dialysate to set the stage for adding Triferic Avenue to those agreements so that their clinics, who utilize tried by carbon systems can have access to triferic.
At same time of course, we are preparing integrated marketing communications and educational programs.
We will launch to signal commercial availability of product later this year.
In parallel we are manufacturing both sample and commercial product with the final FDA approved label and brand name.
We waited for the approval to manufacture rather than manufacturing product at risk.
And in the end this decision saved us several hundred thousand dollars in potential inventory write offs.
Once we have the product available we will apply the learnings from our launch of Triferic dialysate.
And initiate evaluation programs for prospective customers.
Expect to be in a position to initiate these programs during the third quarter.
The evaluation programs will be nearly identical to what we've rolled out for Triferic dialysate.
Clinics will have access to free samples for three months.
During the three months, we'll schedule lab reviews of the clinics at 30, 60, and 90 days to.
To evaluate the impact of Triferic.
While also ensuring proper training and education of the clinic staff.
In parallel will begin to negotiate commercial contracts with the clinics. So that we are ready to onboard them as paying customers. Once their three month evaluation is complete.
Accordingly, following the launch of devaluation programs in Q3, we plan to commence commercial sales of Triferic Avenue in fourth quarter of 2020.
As the first targeted clinics for early adoption reset three month completion point.
In their valuation program.
In terms of reimbursement, we continue to anticipate that Triferic Avenue will be reimbursed.
Within the U.S., our de bundle that has been established by CMS for Medicare patients.
It is also increasingly prevalent for Medicaid patients.
But importantly, we believe the cost structure for Triferic Avenue.
Enables us to make an attractive gross margins, while ensuring that this transformational therapy is broadly accessible to the patients who need it most.
We look forward to providing more detail on our commercial plans and progress in the coming months.
And with that I will turn it over to Angus Smith, our CFO.
For a review of our first quarter financials I guess.
Thank you Tim.
Turning now to our first quarter results.
The more fulsome description of our results can be accessed in both the press release, we issued this afternoon as well as our 10-Q filing for the quarter and I would encourage investors to read our detailed disclosure for a more complete understanding of our financial results.
I'd like to start by highlighting our liquidity position as of the end of the first quarter, which is as strong as it has been in several year.
During the fourth quarter of last year, we embark on a plan to position the company so improve our balance sheet and provide us with capital we need to execute on our business plan and achieved the milestones that we believe will create shareholder value.
With that and we were successful in attracting over $30 million of capital to Rockwell during the first quarter, most of which was non dilutive.
We ended the quarter with cash cash equivalent and investments available for sale of $48.9 million compared to approximately $26 million on December 31 2019.
Cash used in operating activities was $6.5 million during the first quarter of 2020.
The balance sheet with strengthened by a debt financing agreement within about as capital partners announced in March 2020, and while at the underwritten public offering of the company common stock in February 2020 for gross proceeds of approximately $8.1 million before deducting underwriting discounts.
We drew $22.5 million on the loan facility at closing and have access to another $12.5 million subject to satisfaction of certain milestones and conditions.
Additionally, we have approximately $35 million remaining under our aftermarket equity offering facility pursuant to which we may sell as such times, an amount that we deem appropriate shares of common stock to support our business plan.
The certain restrictions on use.
Turning to the income statement net sales for the first quarter of 2020 were $15.9 million, an increase of 2% compared to net sales of 15.6 million dollar for the first quarter of 2019.
The increase was primarily due to an increase in U.S. product sales of Triferic dialysate as a result of the commercial launch in May 2019.
Cost of sales for the first quarter of 2020 was $14.7 million, resulting in a gross profit of $1.1 million compared to cost of sales at $14.6 million and the gross profit of $1 million during the first quarter of 2019.
Gross profit increased in the first quarter 2020, compared to the first quarter of 2019, due primarily to an increase in U.S. product sales have triferic dialysate as a result of the commercial launch and May 29 team.
Operating loss for the first quarter of 2020 improved to $8.1 million from $8.8 million in the first quarter of 2019.
Improvement in operating loss was driven primarily by a reduction in operating expenses, which included a 1 million dollar reduction in selling and marketing expenses. A 900000 dollar reduction in DNA expenses, partially offset by a 1.3 million dollar increase in R&D expenses.
The decline in our sales and marketing expenses year over year are largely a result of the upfront investments. We made during the first quarter of 2019 to support the launch of Triferic Dialysate and were partially offset by our continuing investments in our sales and marketing infrastructure for Triferic.
The decrease in DNA expenses was driven primarily by reduction and legal costs associated with various litigation matters can have now been settled and lower stock based compensation and consulting costs.
Finally, the increase in R&D expenses reflects the investments, we're making to enhance our medical platform and generate data to support our triferic and FTC platform, including the data that we presented earlier on this call.
Net loss for the first quarter of 2020 was $8 million or 12 cents per basic and diluted share compared to a net loss for the first quarter of 2019 at $8.7 million for 15 cents per basic and diluted share.
An additional area that is important to our company going forward hit our international and business development activities for Triferic.
A significant objective for the company also increased access to Triferic in international markets and as we do this we see an opportunity to create value for our shareholders.
Importantly, we believe the real world data that we are generating for Triferic and one which was presented on the call earlier today has the potential to help accelerate some of the business developing discussions we're having around the globe.
During the first quarter, we entered into exclusive licensing supply agreements with some pharma to the rights to commercialize triferic in India.
India is a potentially attractive market for triferic with over 120000 hemo dialysis patients.
At the next step we expect some farmer will meet with regulator in India to determine a pathway to regulatory approval, which may or may not require a clinical study.
We initially expected this meeting to occur in April, but that's been postponed due to commit 19 outbreak and we'll hopefully occur during the second quarter.
In China, we are working diligently with our partner Wanbang biopharmaceutical to initiate a trial for triferic to support a filing for regulatory approval.
We expect that this study will be initiated later this year pending the resolution of the covert Nike outbreak in China.
Access to hemo dialysis in China has continued to increase at a rapid rate in recent years with over 600000, hemo dialysis patients in China, making it the largest single market in the world.
We remain excited about the potential for Triferic in China, and we expect to participate meaningfully in the commercial opportunity at Triferic is approved with an effective royalty in the low to mid 20% range of product sales.
We're also on the cost the filing our new drugs submission for Triferic Avenue in Canada, which has facilitated by the recent approval of Triferic Avenue in the us.
In South America, we're awaiting a regulatory approval decision for Triferic I'll save in Chile.
And progressing towards the commercial launch of Triferic dialysate in Peru, with our distribution partner there.
In both of these markets, we received a transfer price on Triferic sold to the distributor.
We're also continuing discussions for licensing triferic and other geographies, such as Europe and Japan.
And as I mentioned, we expect to leverage some of the real world data that was presented on this call and discussions with prospective partners to highlight potential pharmacoeconomics and health economic benefits and may be observed with triferic.
We believe that both of these markets will require clinical studies for triferic to facilitate regulatory approval and accordingly, the due diligence and discussions we're having are inherently more complex and some of the markets, where we are already partner.
I'll now turn the call back or Russell Russell.
Thank you Angus.
Ill now open up the line to questions.
Thank you as a reminder to ask a question you will be the press Star then one key on your Touchtone telephone.
And that star one to ask a question.
Our first question comes from Brendan folks with Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my questions and congratulations on the progress during the quarter. So as you can you talk about where you see I'd triferic, good Diana say Tite Pak fitting into the treatment paradigm went down by launched any change from the prior strategy and then secondly, how should we think.
Revenue conversion once the trial period with the kind of.
What do you think you convincing the whole operations to your product or would it be just put Jason patients. Thank you.
Yes, Thanks a lot.
I Didnt quite catch your second question, but Mark will take your first one sorry, Tim will take your first one and then perhaps after that if you could repeat the second part of your question.
Great. This great. This is Tim yes, I'm happy to take the question. So thank you for that question, we believe the opportunity for Ivy Triferic or Triferic Avenue is significant.
But 25% of the current US market, we estimate utilizes solid bicarbonate systems, which are about 20 million hemo dialysis treatments per year and that number is increasing.
As clinics shifts to machines that you saw it by car technology, and Thats really where we will be.
Focusing for promotional Triferic Avenue for patients that are treated there.
Our current current customers are all using liquid bicarbonate, what triferic dialysate and they're quite happy with the convenience that they get from this formulation and mixing with our powder packet and we don't anticipate those customers to be interested in the IB formulation.
So really we except we separate these two target markets and look at this an incremental opportunity for Triferic apt.
And what was the second part of your question Im sorry about that.
Maybe parse the evaluation programs that you had implemented.
Clinics shifting the standard operating procedure to cross to Triferic will witness beyond its sort of patient by patient basis. We may decide to go forward. It is tied back.
I'll take this.
Actually it.
They're shifting.
To have.
With rare exceptions to have.
Our multiple.
Managements of iron going on in the same clinic it ergonomically difficult for them. So they do like to be consistent across all patients unless there is a specific medical reasons for a given patient enough to do it hence the idea of evaluation program enhance the idea of.
Having protocols.
Creatives core that clinic by that clinic to use triferic.
It's those protocols that had been somewhat delayed by that coded epidemic because there are so focused on.
Preventing infection in their staff in their patients and then protocols around that.
Great. Thank you very much.
Okay.
Thank you and our next question comes from Rob.
So viju with H.C. Wainwright your line is open.
Hi, This is Blair, calling on for Rob just one for me.
What does the receptivity been like thus far for Triferic Avenue, among physicians in dialysis providers.
Okay Jim.
Yes sure thanks for that question.
So we have many customers that have expressed interest in Triferic Avenue and as I mentioned, we are just beginning to create awareness of this product following the FDA approval amongst our customer base.
The interest really is coming from customers that utilize exclusively saw bicarbonate technology and have a strong interest in triferic. The benefits you can bring because of its unique.
Can I profile.
But haven't been able to use the product. So we do have a pipeline as customers that are interested for that reason and again now with Triferic avenues to start the evaluation programs will be able to to start using it.
So receptivity has been good and again, we're just starting to generate awareness about the approval and.
Expand our efforts and talking to customers in preparation for the evaluation programs.
Perfect. Thanks.
Well.
Thank you and I'm showing no further questions I'd like to turn the call back to Dr. Olson for closing remarks.
Yes. Thank you.
And thanks, everybody for participating it's been a privilege to present, our quarterly update to you.
And I want to thank my colleagues smoke, Tim and anger and your participation and you do your time and attention.
And I look forward to the next opportunity to update you on our company have a great day and Stacy.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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