Q1 2020 Earnings Call
[music].
Greetings and welcome to the agile Therapeutics first quarter 2020 financial results Conference call. At this time, all participants are any listen only mode.
Question answer session will follow the formal presentation. If anyone would require operators. This is part of the conference. Please press Star Zero Wonder telephone keypad. As a reminder, this conference is being recorded it's now my pleasure to trickle over to Matt Riley Investor Relations for the company. Please go ahead Sir.
Hello, everyone Welcome todays conference call to discuss our first quarter financial results for 2020.
Operator: Greetings and welcome to the Agile Therapeutics first quarter 2020 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
Before we start let me remind you that today's call will include forward looking statements based on our current expectations, including statements concerning our outlook for the fourth quarter and full year 2020 management's expectations for future financial and operational performance.
Operator: As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Matt Riley, investor relations for the company. Please go ahead.
Our business strategy and commercialization pipeline, our assessment of the size any value of the combined combined were more in all countries up with market and the potential market share for Twirla, among others statements regarding our plan prospects and expectation.
Matthew Riley: Hello, everyone, and welcome to today's conference call to discuss our first quarter financial results for 2020. Before we start, let me remind you that today's call will include forward-looking statements based on our current expectations, including statements concerning our outlook for the fourth quarter and full year 2020, management's expectations for our future financial and operational performance, Our Business Strategy and Commercialization Timeline, Our Assessment of the Size and Value of the Combined Hormonal Contraceptive Market and the Potential Market Share for TORLA, among other statements regarding our plans, prospects, and expectations Such statements represent our judgments as of today, are not promises or guarantees, and may involve risks and uncertainties that may cause actual results to differ from those discussed in the forward-looking statements.
Such statements represent our judgment as of today are not promises or guarantees and may involve risks and uncertainties that may cause actual results to differ from results discussed any forward looking statement.
Please refer to those filings with the FCC, which are available to that should use website at www dot SPC dot Gov as wells on our website for the information concerning risk factors that may affect the company.
We undertake no obligation to update forward looking statements, except as required by law.
The information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions. Joining me on todays call. Our al Tomorrow, Agile Therapeutics, Chairman and Chief Executive Officer, Dennis Wright, Chief Financial Officer.
Matthew Riley: Please refer to the filings with the SEC, which are available through the SEC's website at www.sec.gov, as well as on our website for information concerning risk factors that may affect the company. We undertake no obligation to update forward-looking statements except as required by law. The information on today's call is not intended for promotional purposes and is not sufficient for prescribing. Joining me on today's call are Al Altomari, Agile Therapeutics Chairman and Chief Executive Officer, and Dennis Riley, Chief Financial Officer. Following our prepared remarks, we will open up the call to your questions. Now, we're turning the call over to Al.
Following our prepared remarks, we'll open up the call to your questions.
Now, let me turn the call over now.
Thank you Matt.
Good afternoon, everyone and thank you for joining us.
I want to welcome you to our first quarterly earnings call for agile therapeutics.
Before we begin I want to reflect on the times, we find ourselves in.
During this crisis, we're reminded on why we chose to be part of the health care and industry, namely to help patients.
For us it agile, we think about women and their health care providers.
It is the young woman looking to consider contraception, who must have that important conversation on a tele medicine platform.
Alfred F. Altomari: Thank you, Matt. Good afternoon, everyone, and thank you for joining us. I wanted to welcome you to our first quarterly earnings call for Agile Therapeutics. Before we begin, I want to reflect on the times we find ourselves in. During this crisis, we are reminded why we chose to be part of the healthcare industry, namely to help patients. For us at Agile, we think about women and their health care providers. It is the young woman looking to consider contraception who must have that important conversation on a telemedicine platform. It is the obstetric patient who is going to have a checkup alone while her partner or loved one is waiting outside the office in the parking lot.
It is the obstetrics patient was going to have a check up alone while her partner for loved one is waiting outside the office in the parking lot.
We think about the 2000, plus women who participated in a secure trial.
We think about 100 investigators and their teams that executed to secure trial.
We have even a greater respect for healthcare workers on the frontline keeping us safe and caring for our sick.
But for a business like ours now trying to build a company from our home offices.
We are what additional data for attitude to do other front line unsung heroes.
Alfred F. Altomari: We think about the 2,000 plus women who participate in the SECURE trial. We think about the hundred investigators and their teams that executed this secure trial. We have even greater respect for healthcare workers on the front line, keeping us safe and caring for our sick. But for a business like ours, now trying to build a company from our home offices,
It is our partner corium that continues to execute on our manufacturing preparation.
It is the computer tax the postal carriers and the delivery drivers who make the sacrifices. So we can go forward with agile without missing a beat.
I want to thank the agile team for taking on this challenging.
Finally importantly.
We recognize that we could not have done it without the investor base with giving us the financial support to carry on our business plan. We will always tried to be good stewards of your capital.
Alfred F. Altomari: We owe an additional debt of gratitude to the other frontline unsung heroes. It is our partner, Corium, that continues to execute on our manufacturing preparation. It is the computer techs, the postal carriers, and the delivery drivers who make the sacrifices so we can go forward with Agile without missing a beat. I want to thank the Agile team for taking on this challenge. Finally, importantly, we recognize that we could not have done it without the investor base who has given us the financial support to carry on our business plan. We will always try to be good stewards of your capital. Thank you for your support. We hope you and your families are safe.
Thank you for your support we hope you and your families are safe now, let's begin our business update.
I'd like to first address coven, 19, pandemic and its impact specifically on the agile business before make the preferred discussing our first quarter highlights and commercialization plans for Twirla.
At the emergence of the Coven 19 pandemic, we took proactive steps by moving all employees to work from home settings.
Our employees are the backbone of our organization and we prioritize their health and safety above all else.
Alfred F. Altomari: Now let's begin our business. I'd like to first address the COVID-19 pandemic and its impact specifically on the Agile business before discussing our first quarter highlights and commercialization plans for Twirlit. At the emergence of the COVID-19 pandemic, we took proactive steps by moving all employees to work from home settings. Our employees are the backbone of our organization, and we prioritize their health and safety above all else. To ensure business continuity during this pivotal time in Agile's history, all employees remain connected virtually, and thus, and thus far, have only had minimal disruptions to our day-to-day operations.
To ensure business continuity during this pivotal time in App Agiles history.
All employees remain connected virtually and us and thus far have heavily had minimal disruptions to our day to day operations.
We thank all our employees for their flexibility and commitments agile under these extraordinary circumstances.
The pandemic did not have a material impact on our Q1 financial results and it has not delayed the anticipated launch of Twirla, nor has it impacted our pre commercialization timeline.
Guidance today is the same it was on February 14, when Twirla received FDA approval. We believe we're still on track to ships for illicit trade in Q4 2020.
Alfred F. Altomari: We thank all our employees for their flexibility and commitment to Agile under these extraordinary circumstances. The pandemic did not have a material impact on our Q1 financial results, and it has not delayed the anticipated launch of TWRLA, nor has it impacted our pre-commercialization timeline. Our guidance today is the same as it was on February 14th when Twirla received FDA approval. We believe we're still on track to ship Twirla to the trade in Q4 2020.
Now turning to review of our first quarter 2020 results in more detail.
It was an important quarter fragile as we secured the FDA approval of Twirla and obtain the funding necessary to support our commercialization plans.
The FDA approval Twirla, what's game changing moment in the history of agile. The now allows us to take more control of our direction going forward.
Having an FDA approved product enables us to begin delivering on our short term goal of establishing agile in the contraceptive prescription marketplace and it's our first half step.
Alfred F. Altomari: Now turning to the review of our first quarter 2020 results in more detail. It was an important quarter for Agile as we secured the FDA's approval of Twirla and obtained the funding necessary to support our commercialization plan. The FDA's approval of TWRLA was a game-changing moment in the history of Agile that now allows us to take more control of our direction going forward. Having an FDA-approved product enables us to begin delivering on our short-term goal of establishing Agile in the contraceptive prescription marketplace, and it's our first step toward our longer mission to build a meaningful portfolio of women's health care assets that address unmet needs. Achieving our regulatory and clinical goals was not easy, taking hard work and dedication from our outstanding team at Agile.
Towards our longer mission to build a meaningful portfolio of Louis healthcare assets.
That address unmet.
Met needs.
Achieving our regulatory and clinical goals was not easy taking hard work and dedication for marks debt outstanding team at agile.
In addition, I would personally like to thank all those who made it possible for us to achieve this major corporate milestones, including our clinical trial patients researchers healthcare providers advocates and of course our investors.
In our view the contraceptive marketplace is not as well serve as the leave the approvals formula brings a new contraceptive option to the market for women that should be welcome.
Alfred F. Altomari: In addition, I would personally like to thank all those who made it possible for us to achieve this major corporate milestone, including our clinical trial patients, researchers, healthcare providers, advocates, and, of course, our investors. In our view, the contraceptive marketplace is not as well served as believed. The approval of Twirla brings a new contraceptive option to the market for women that should be welcome. Nearly half of the pregnancies in the U.S. are unintended, and we believe this is partially attributable to inconsistent and or improper use of the contraceptive method. Our market research tells us that women's individual preferences for contraceptive methods vary and change across their lifetimes as their needs change. Therefore, giving women more choices is thought to be critical in reducing unwanted pregnancy. Twirl is a once-a-week patch that provides a lower estrogen dose in line with the labeled doses of many commonly prescribed oral contraceptives. High estrogen doses in birth control products can be problematic, as they may contribute to an increased likelihood of blood clots.
Nearly half of the pregnancies in the U.S., our unintended and we believe this is partially attributable to inconsistent and door and proper use of the contraceptive method.
Our market research tells us that women's individual preferences for contraceptive methods vary and change across or lifetimes at their needs change.
Giving women more choices is thought to be critical and reducing unwanted pregnancies.
Pearl as a once a week patch the provides a lower estrogen dose in line with label doses of money, commonly prescribed oral contraceptives.
Hi, estrogen doses in birth control products can be problematic as they may contribute to an increased likelihood of blood clots.
Total is designed to reduce the reduced the burden associated with taking a daily brake control pill and is designed to be an less invasive method of birth control compared to injections implants rings or these.
We believe this is where twirla has an opportunity to potentially takes share of the 4.1 billion dollar estimated addressable market in the combined promotional contraceptive or CHC segment.
Alfred F. Altomari: Twirl is designed to reduce the burden associated with taking a daily birth control pill and is designed to be a less invasive method of birth control compared to injections, implants, rings, or IUDs. We believe this is where TORLA has an opportunity to potentially take share of the $4.1 billion estimated addressable market in the combined hormonal contraceptive, or CHC, segment. Based on our market research, we believe that at its peak, TROA may be able to obtain between a 5 to an 8 share of total prescriptions. Let me put in perspective what the value of a single SharePoint could potentially be to a branded manufacturer like Agile Therapeutics. In 2019, there were approximately 69.5 million total prescriptions reported in the CHC category. On average, the pharmacist dispenses approximately 1.7 units or months of contraceptives for each of these CHC prescriptions for a total of approximately 118 million monthly units or cycles in the CHC segment. For branded CHC products, WAC prices range from approximately $122 to $220, depending on many factors, including whether there is generic competition.
Based on our market research, we believe that at its peak throw up may be able to obtain.
Between five to eight share of total prescriptions.
Let me put in perspective, what the value of a single share point could potentially be toward branded manufacturer like agile therapeutics.
In 2019, there were approximately 69.5 million total prescriptions reported that CHC category.
On average the pharmacist dispenses approximately 1.7 units or months of contraceptive for each of these CHC prescriptions for a total of approximately 118 million monthly units or cycles in the CHC segment.
For branded CHC products whack prices range from approximately 122 to $220, depending on many factors, including whether theres generic competition.
For purposes of illustrating potential value of a market share point I'll use the current average whack price for the top 16, CHC products, which is approximately $169 per unit or month of contraceptive.
We were not providing guidance on our price at this time, because we're still evaluating our pricing strategy as we conduct discussions with managed care entities.
So you should not assign any meaningful any meeting to my using the average at whack price here.
Alfred F. Altomari: For purposes of illustrating the potential value of a market share point, I will use the current average WAC price for the top 16 CHC products, which is approximately $169 per unit or month of contraception. We are not providing guidance on our price at this time because we are still evaluating our pricing strategy as we conduct discussions with managed care entities. But you should not assign any meaning to my using the average WAC price.
So based on these assumptions, we estimate the value of a single share point to be potentially as high as $200 million.
For a company Avadel size in our view the market share is achievable. We believe we have the product and the people to execute on the plan.
We will continue to analyze the conscious that the market.
And upon and update our market research to evaluate the commercial opportunity for Twirla.
With the approval Twirla agile has accelerated its commercial activities and we are well capitalized to do just that.
Alfred F. Altomari: So based on these assumptions, we estimate the value of a single SharePoint to be potentially as high as $200 million. For a company of this agile size, in our view, the market shares achieved, we believe we have the product and the people to execute on the plan. We will continue to analyze the contraceptive market and update our market research to evaluate the commercial opportunity for twirling. With the approval of TWRLA, Agile has accelerated its commercial activities, and we are well capitalized to do just that. In February 2020, we signed a $35 million debt facility with Perceptive Advisors, a recognized leader in growth capital finance. To date, $20 million has been made available to Agile via the first of three separate tranches, and the additional $15 million will be available upon the achievement of certain revenue milestones in 2021. Later in February 2020, Agile raised approximately $48 million in net proceeds from a public offering of our common stock.
In February 2020, we signed a 35 million dollar debt facility with perceptive advisors, a recognized leader in growth capital financing to date $20 million have been made available to agile via the first of two of three separate traunches and the additional $15 million will be available.
On the achievement of certain revenue milestones in 2021.
We were fortunate to get this done a cut this we were fortunate to get this accomplished prior to covert 2019 pandemic.
Combined with our strong cash position as of the end of 2019, we expected our financial position gives us the runway to launch twirl in the fourth quarter of 2020 and execute our business plan through at least the end of 2021.
As of <unk> will describe in more detail, we had approximately $94 million in cash and cash equivalents on our balance sheet at the end of first quarter 2020.
Alfred F. Altomari: We were fortunate to get this done prior to the COVID-19 pandemic. Combined with our strong cash position, as of the end of 2019, we expect that our financial position gives us the runway to launch Twirl in the fourth quarter of 2020 and execute our business plan to release Twirl by the end of 2021. As Devin will describe in more detail, we had approximately $94 million in cash and cash equivalents on our balance sheet at the end of the first quarter of 2020.
And and another important part of our business execution plan is the addition of strategic new hires and I'm pleased to report on the progress on this front.
We recently added three new vice president to strengthen our team.
These include Amy Welsh Vice President of marketing, Keith promo, Vice President of supply chain and tourism Hearst from VP of HR administration. Each of these hires are critical to our growth as an organization.
Alfred F. Altomari: And another important part of our business execution plan is the addition of strategic new hires, and I'm pleased to report on the progress on this front. We recently added three new vice presidents to strengthen our team. These include Amy Welsh, Vice President of Marketing; Keith Frumwell, Vice President of Supply Chain; and Tristan Hurstrom, VP of HR and Administration.
These hires now round out our senior commercial leadership team.
The next phase of our cap our capabilities growth will be our salesforce.
And we're pleased to announce we're so we're partnering with scenario selling solutions.
In total we expect to higher 70 to 100.
People in a phased manner rather than in all at once a.
We expect to begin with the hiring of sales managers in second quarter 2020, and sales representatives to the added in the third quarter 2020.
Alfred F. Altomari: Each of these hires is critical to our growth as an organization. These hires now round out our senior commercial leadership team. The next phase of our cap, our capabilities growth will be our Salesforce. And we are pleased to announce we are partnering with Cineo Spelling Solutions.
We are fortunate not to be law locked into a large salesforce right now and we'll use this opportunity to build a non traditional selling model to handle the challenges of opposed coated 19 world.
Alfred F. Altomari: In total, we expect to hire 70 to 100 people in a phased manner, rather than all at once. We expect to begin with the hiring of sales managers in the second quarter of 2020, and sales representatives will be added in the third quarter of 2020. We are fortunate not to be locked into a large sales force right now, and we'll use this opportunity to build a non-traditional selling model to handle the challenges of a post-COVID-19 world. This will involve an emphasis on adding digital or virtual savvy sales talent capable of executing both tele-representative and traditional office-based sales tactics. Additionally, this approach will not require a nationwide configuration in order to reach our targets.
This will involve the emphasis on adding digital or virtual savvy.
Sales talent capable of executing both tell a representative and traditional office based sales tactics.
Additionally, this approach will not require a nationwide configuration in order to reach our targets.
Agile will be building potentially a new model that is adaptable to any business interruptions.
Well most companies are likely trying to rethink their sales forces nationally, we can build salesforce to engage with physicians virtually and their remote settings if necessary.
Once in place the focus of our Salesforce will be to target high volume opening plans.
And women's health nurse practitioners or physicians assistance.
Alfred F. Altomari: Agile will be building potentially a new model that is adaptable to any business interruption. While most companies are likely trying to rethink their sales forces nationally, we can build a sales force to engage with physicians virtually and in remote settings if necessary. Once in place, the focus of our sales force will be to target high volume OB-GYNs and women's health nurse practitioners or physician's assistants. In parallel, we're excited to announce the nomination of Sharon Barbary and the anticipated appointment of Dr. Sandra Carson to our Board of Directors. These two new board members bring unique backgrounds and extensive experience in their respective fields that will provide invaluable support as we advance towards the launch of TWRLA and evaluate our plans for our pipeline and future products.
In parallel we're excited to announce the nomination of Sharon Barbari and the anticipated force Pointman of Dr. Sondra Carson to our board of directors.
These two new board members bring unique backgrounds and extensive experience in the represented in the rep respective fields that will provide invaluable support as we advance towards the weren't launch of Twirla and evaluate our plans for our pipeline and future products.
John brings 40 years of pharmaceutical and biotech experience in leading financial operations through periods of growth in various senior roles throughout her career.
Alfred F. Altomari: Sharon brings 40 years of pharmaceutical and biotech experience in leading financial operations through periods of growth and various senior roles throughout her career. Dr. Carson brings significant clinical and research expertise in women's health coupled with established clinical experience as an OBGYN physician and regulatory experience for a membership on the FDA's advisory panel. Both Sharon and Sandra will join our board in June, and we look forward to their insights and contributions. I would also like to take this opportunity to acknowledge the contributions of Abhijit Lele and Bill McKee and to thank them for their service on the board. Abhijit is our longest-serving independent director and has been the lead independent director since 2016. Bill joined the board just before our IPO and has served as the chair of the board's audit committee since that time. We wish them both luck.
Dr Carson bring significant clinical and research Ics expertise and women's health, coupled with established clinical experience as an opening when physician and regulatory experience for membership on the FDA advisory panels.
Both set both Sharon and Sondra will join our board in June and we look forward to their insights and contributions.
I would also like to take this opportunity technology contributions of ABG outlay, and Bill Mckee and the thank them for their service to the board.
Averages our longest serving independent director and it's been the lead independent director since 2016.
Bill joined the board just before IPO and has served as the chair of the Board's audit committee since that time.
We wish them both well.
In the first quarter of 2020.
Agile initiated work with managed care and patient payers as part of a plan to gain market access for Twirla.
Based on the current contraceptive mandate in the Affordable Care Act all women get contraceptive for free with no copays.
There are 18 forms of contraception pulled out in the mandate and patches are one of the 18 forms.
Our objective is simple we want to build a value proposition minimizing or eliminating barrier. So that women can have access to twirla with no co pays.
Alfred F. Altomari: In the first quarter of 2020, Agile initiated work with managed care and patient payers as part of a plan to gain market access for Twirlo. Based on the current contraceptive mandate in the Affordable Care Act, all women get contraceptives for free with no co-pay. There are 18 forms of contraception called out in the mandate, and patches are one of the 18 forms. Our objective is simple. We want to build a value proposition, minimizing or eliminating barriers, so that women can have access to swirl up with no co-pays. In addition to the federal contraceptive mandate, there are a number of individual state mandates that can be leveraged as part of our overall access plan.
In addition to the federal contracts at the mandate there are number of individual state mandates that can be leveraged as part of our overall access plan.
The success of our managed care strategy will inform our salesforce rollout.
It is our intentional intention to only deploy representatives in markets that are unable or have access which ties back to our strategy to activate the salesforce in phases.
We're also building a patch replacement program. The guiding principle. This program is that if a woman lose the patch or otherwise needs one.
We are working on innovative program to get corrupt replacement patch on behalf of agile.
Alfred F. Altomari: The success of our managed care strategy will inform our Salesforce rollout. It is our intention to only deploy representatives in markets that are enabled or have access, which ties back to our strategy to activate the sales force in phases. We're also building a patch replacement program. The guiding principle of this program is that if a woman loses a patch or otherwise needs one, we will replace it. We are working on an innovative program to get a replacement patch on behalf of Agile. We do not believe that she should have to go back to her doctor for a new prescription and believe that this offering will be both compelling and convenient for patients, prescribers, and their payers.
We do not believe that she should have to go back for a doctor for new prescription.
And believe that this offering will we both compelling and convenient for patients prescribers and their payers.
Turning to manufacturing, we've been able to scale on schedule thanks to corium.
An experienced contract patch manufacturer.
We have completed the production of our pre validation batches and subject to final Kuwait control testing.
We expect to be complete that that to be completed soon we will then transition into the final validation phase.
In that phase, we will manufacture three validation batches of Twirla, we expect that these batches will be commercially usable product as previously guided we plan to complete these batches and time to support a fourth quarter 2020 ship date.
Alfred F. Altomari: Turning to manufacturing, we've been able to stay on schedule thanks to Coriam, an experienced contract patch manufacturer. We have completed the production of our pre-validation batches, and subject to final QA control testing, we expect that to be completed soon. We will then transition into the final validation phase. In that phase, we will manufacture three validation batches of Twirla, and we expect that these batches will be a commercially usable product. As previously guided, we plan to complete these batches in time to support a fourth quarter 2020 ship date. As part of TWRLA's approval, the FDA is requiring Agile to conduct a long-term perspective observational post-marketing study comparing the risk of VTE and arterial thromboembolism in new users of TWRLA to new users of other combined hormonal contraceptives.
As part of swirls approval, the FDA is requiring agile to conduct the long term prospective observational post marketing study comparing the risk of DTV and arterial form book Thromboembolism in new users of Twirla to new users of other combined hormonal.
Yes.
Fees requirement for Twirla is similar to a post marketing study requirement for another recently approved combined hormonal contraceptive.
The final study report for the Twirla study is scheduled to be submitted to the FDA in November 2032, with an interim safety data due in November of 2020 soon.
The company plans to begin designing the post approval studies and evaluating the related costs throughout the second half of 2020.
To recap, it's been a transformational quarter fragile fragile notwithstanding the coated 2019 pandemic.
By getting the FDA approval for Twirla and achieving our capital raise goals. We believe we're in a good position to launch Twirla in the fourth quarter of 2020 inline with our prior expectation ex expectations.
The anticipation US launch we will continue to build out our salesforce manufacturing operations and market access plan.
Alfred F. Altomari: The FAA's requirement for TORLA is similar to a post-marketing study requirement for another recently approved combined hormonal contraceptive. The final study report for the TORLA study is scheduled to be submitted to the FDA in November 2032, with interim safety data due in November 2026. The company plans to begin designing the post-approval studies and evaluating the related costs throughout the second half of 2020. To recap, it's been a transformational quarter for Agile, notwithstanding the COVID-19 pandemic. By getting FDA approval for Twirla and achieving our capital raise goals, we believe we're in a good position to launch Twirla in the fourth quarter of 2020, in line with our prior expectations. In anticipation of its launch, we will continue to build out our sales force, manufacturing operations, and market access plan. I will now turn the call over to Dennis Riley, who will provide an overview of our financial results for the first quarter of 2020.
I'll now turn over to call to Dennis Riley, who provide an overview of our financial results for the first quarter 2020.
Thank you al.
And thank you to everyone listening today.
First I'll review, our first quarter financial results.
Then I will cover our financial guidance before opening up the call to Q anyway.
For the first quarter of 2020.
Our R&D expenses were approximately $3.2 million.
Compared to 2.9 million in the same quarter a year ago.
Matthew Riley: Thank you, Al. And thank you to everyone listening today.
The increase in R&D was primarily attributed to our increased manufacturing expenses in preparation for commercialization.
Matthew Riley: First, I'll review our first quarter financial results. Then I will cover our financial guidance, for opening up the call to Q&A, for the first quarter of 2020. Our R&D expenses were approximately $3.2 million, compared to 2.9 million in the same quarter a year ago. The increase in R&D was primarily attributed to our increased manufacturing expenses in preparation for commercialization, although they were partially offset by lower expenses related to clinical development of T
They were partially offset by lower expenses related to clinical development of 12.
DNA expenses totaled 4.5 million in the first quarter of 2020.
Paired to 1.8 million in the same period a year ago.
We anticipate our DNA expenses will increase in the future with the commercialization of Twirla.
These expenses will likely include increased selling and marketing cost.
Including related payroll and operating costs.
Among other costs related to this commercial launch of Twirla.
Matthew Riley: G&A expenses totaled $4.5 million in the first quarter of 2020, compared to $1.8 million in the same period a year ago. We anticipate our G&A expenses will increase in the future with the commercialization of Twirla. These expenses will likely include increased selling and marketing costs, including related payroll and operating costs, among other costs related to this commercial launch of Twirla. The net loss in the first quarter was $7.9 million, or $0.10 per share, compared to $4.7 million or $0.13 per share in the first quarter of 2019.
Net loss in the first quarter was 7.9 million or 10 cents per share.
Compared to 4.7 million or 13 cents per share in the first quarter of 2019.
During the first quarter of 2020.
We were able to strengthen our balance sheet as evidenced by our strong cash position and current mix of debt and equity financing.
We ended March 31st 2020, with cash and cash equivalents of $93.9 million.
As Al mentioned earlier. This includes our successful first quarter 2020 debt and equity financing.
Matthew Riley: During the first quarter of 2020, we were able to strengthen our balance sheet as evidenced by our strong cash position and current mix of debt and equity finance. We ended March 31, 2020, with cash and cash equivalents of $93.9 million. As Al mentioned earlier, this includes our successful first quarter 2020 debt and equity finance, totaling combined proceeds of 68.4 million dollars. Moving forward, we plan to continue to monitor our spending. We expect operating expenses for the full year 2020 to be in the range of $52 to $56 million, and G&A will account for about 70% of that spending as we build out our commercial infrastructure. Net revenue in the fourth quarter of 2020, reflecting the initial launch of TWRLA, is expected to be between $4 and $6 million.
Totaling combined proceeds of $68.4 million.
Moving forward, we plan to continue to monitor our spending.
We expect operating expenses for the full year 2020.
To be in the range of $52 million to $56 million.
And DNA will account for about 70% of that spending as we build out our commercial infrastructure.
Net revenue in the fourth quarter of 2020, reflecting the initial launch of Twirla is expected to be between four and $6 million.
Based on our current.
Business plan.
Which includes getting tortola launched in the fourth quarter. We believe our current cash at March 31st 2020, we'll be able to fund our operations through the end of 2021.
If the covert 19 outbreak or other factors impact this business plan and our ability to generate revenue.
Matthew Riley: Based on our current Business Plan, which includes getting Twirla launched in the fourth quarter, we believe our current cash at March 31st, 2020, will be able to fund our operations through the end of 2021. If the COVID-19 outbreak or other factors impact this business plan and our ability to generate revenue, we can revise our plans accordingly, including curtailing some sales and marketing spending to continue to fund our operation.
We can revise our plans accordingly, including curtailing some sales and marketing spending to continue to fund our operations.
I also want to mentioned on this call that later this year as we near the launch of Twirla. We invite members of the financial community to our scheduled Investor Analyst Day on September 21, 2020 in New York.
This will be an opportunity from members of the financial community to get an in depth review of our commercialization plan.
Interact with management and discuss the progress we have made by that date as well as our future plans.
Operator: I also want to mention on this call that later this year, as we near the launch of Twirla, we invite members of the financial community to our scheduled Investor Analyst Day on September 21, 2020 in New York. This will be an opportunity for members of the financial community to get an in-depth review of our commercialization plan, interact with management, and discuss the progress we have made to that date, as well as our future plans. We'll continue to provide updates on this event as we draw closer. With that said, we're happy to take your questions. Operator, you may now open up the line for Q&A.
Well continue to provide updates to this event as we draw closer.
With that we are happy to take your questions.
Operator, you May now open up the line for Q and AG.
Certainly will now be conducting a question and answer session.
I'd like to be placed into question can you. Please press star 100 telephone keypad a confirmation total indicate your line is in the question Q.
To start to if you'd like to move your question from the Q.
For participants using speaker equipment, maybe necessary to pickup or headset before pressing the star keys. Once again thats stalled one to be placed into question Q.
Our first question planes coming from Randall Stanicky from RBC capital markets. Your line is alive.
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Hey, Good afternoon. This is Dan Bose the on for Randall.
The start off I, just have a few questions on youre selling model.
First how much capacity, where we had conduct face to face interactions with prescribers should the world returned to normal sooner than people expect.
Second does your phase and launched one that you could potentially have fewer than 70 reps hired by the time you launch.
Alfred F. Altomari: Our first question today is coming from Randall Sindicke from RBC Capital Markets. Your line is now live. Hey, good afternoon. This is Dan Busby on behalf of Randall.
Third what are you prioritize them in terms of sales rep experience, we're looking for people.
Alfred F. Altomari: To start off, I just have a few questions about your selling model. First, how much capacity will you have to conduct face-to-face interactions with prescribers? Will the world return to normal sooner than people expect?
We've been in the women's health space already or are you looking more for digital talent.
Great Hi, Dan its out so thank you for your questions out I'll try to do in order if it's okay.
Your first question about capacity, so will the world I mean, I think what we're trying to communicate Dan is that we want to build the capacity to call and doctors face to face if we need to right. So that's the plan there might be some doctors we identify in the call plan that might be more remote you know that what might always get telo telo.
Alfred F. Altomari: Second, does your phase launch mean that you could potentially have fewer than 70 reps hired by the time you launch? And third, what are you prioritizing in terms of sales rep experience? Are you looking for people who have been in the women's health space already, or are you looking more for, you know, digital talent?
Detailing if you will so we want to kind of assume the best than planned for the worst right. So in our when we're planning the capacity. So that's an important part I think what we're trying to communicate as we want to be flexible right. So the goal is that we want to be in the high prescribing offices. So we want to get in front of the offices centers.
Alfred F. Altomari: Hey Dan, it's Al. So thank you for your questions. I'll try to do them in order if it's okay. Your first question about capacity. So will the world? I think what we're trying to communicate, Dan, is that we want to build the capacity to call on doctors face to face if we need to, right? So that's the plan. There might be some doctors we identify in the call plan that might be more remote, you know, that might always get tele, tele, you know, detailing, if you will. So we want to kind of assume the best and plan for the worst, right, you know, so when we're planning the capacity, So, you know, that's an important part.
The epicenters where to put a most businesses.
What we're finding is that a lot of the overdue winds are in group practices. So we want to deploy activity against them with their doors or shot we don't want to wait he would want to be able to activate them and get them in front of so that's a that's a really so think of us being able to pivot and that's the most important thing were because we don't want to find ourselves short, so which directly goes out go.
Alfred F. Altomari: I think what we're trying to communicate is that we want to be flexible, right? So the goal is that we want to be in the high prescribing office. So we want to get in front of the office centers, the epicenters where the most business happens. What we're finding is that a lot of OBGYNs are in group practices, so we want to deploy activity against them. But if their doors are shut, we don't want to wait. We want to be able to activate them and get them in front of them. So think of us being able to pivot, Dan. That's the most important thing, because we don't want to find ourselves short.
To your third question, which you asked me about what we're looking to hire we're looking to hire experience mine on modern and the new world as much because we're looking for people with savvy skills, because it's great to have a relationship with an office space Rep, where they can walk and they have experienced with the office and we'll look for that but it's equally.
The important that they have the skills, we need that they can get on a zoom call. They can execute that really have the smarts. If you will to to really get in front of doctors. What we're seeing is that's where a lot of the farmers are stumbling you hire these reps have great relationships are used to office based calls and they can have a conversation on the call with a doctor or don't.
Alfred F. Altomari: Which directly goes on to your third question, which you asked me about what we're looking to hire. Experience might not matter in the new world as much, because we're looking for people with savvy skills. It's great to have a relationship with an office-based rep, you know, where they can walk in, they have experience with the office, and we'll look for that, but it's equally important that they have the skills we need, that they can get on a Zoom call, they can execute, they really have the smarts, if What we're seeing is that's where a lot of farmers are stumbling.
How the skill sets. So we're looking for both but equally important to experiences soppiness.
I would like it after one of our reps we might say in your call plan. You have 125 doctors, we want you to get in front of but we might say you about 25 or 30. Other doctors that we want you to always communicate with them on a on a trial detail. So if the world changes or to the business interruption your and your territory, we want you to be able to pay.
Alfred F. Altomari: You hire these reps that have great relationships, that are used to office-based calls, and they can't have a conversation on a call with a doctor or don't have the skill set. So we're looking for both, you know, but equally important to experience is savviness. So like, you know, if you're one of our reps, we might say in your call plan that you have 125 doctors we want you to get in front of. But we might say you've got 25 or 30 other doctors that we want you to always communicate with them on a teledetail. So if the world changes, or there's a business interruption in your territory, we want you to be able to pivot and go to all the teledetails. So we want a nimble, smart, flexible Salesforce. Q&A Q&A
David can go to all tell detailed.
Sales, so we want to nimble smart flexible Salesforce. Your second question what was your view the second question.
No I wondering if it yet at the number reps on phased rollout.
Could you have potentially less than 70 reps at launch.
Yes, the answer is we possibly to possibly so we're finally I'd analytics right now than we think in total.
Everything goes are well did 100 as the Max we see.
But we really see this is part of the managed care strategy. So like if a market like you're in New York, New York is an open or we don't have managed care, we're not putting a rep. There. We're just not doing it we don't believe reps can and opened doors in managed care, it's not like the old days. So when we focus on our final contracts where to sit back and say, okay were whereas the map open.
Alfred F. Altomari: Oh yeah, I was wondering if the phased rollout could potentially have less than 70 reps at launch? Yeah, the answer is possibly, possibly.
Alfred F. Altomari: So we're finalizing the analytics right now. Then, you know, we think in total, you know, if everything goes well, 100 is the max we see, you know, but we really see this as part of the managed care strategy. So like if a market like you're in New York isn't open, or we don't have managed care, we're not putting a rep there. We're just not doing it. We don't believe reps can open doors in managed care. It's not like the old days.
Do we still need work in our number ends up being 100, so be it number ended up being 40, so be it.
We will chase business that has enabled so I.
I think we'll have more than one deployment.
Right right now we see at least two waves.
But we see the bulk I'm coming on board early but we haven't done the team at the final T's and dotting. The I's so we hope to tell you more about that in September when you can see if not sooner.
Alfred F. Altomari: So when we find our final contracts, we're gonna sit back and say, Okay, where's the map open? Where do we still need work? You know, if the number ends up being 100, so be it. If the number ends up being 40, so be it.
Good question, Okay, Okay, Great and then just one follow up.
Managed care angle can you just give us an update on how those discussions are going.
You have a target in mind in terms of those specific coverage level by the end of the year, but decided launch thank you.
Alfred F. Altomari: You know, we will chase business that it's enabled. So, you know, I think we'll have more than one deployment. Right now, we see at least two waves, you know, but we see the bulk of them coming on board early, but we haven't done the final tees and spotting of the eyes. So we hope to tell you more about that in September when you can see if not. Good questions, thanks. Okay.
Now straight questions and the conversations are going well I mean as you know that this is a pretty dense number of payers will need 50 relationships you need less than 10 to to get the business on the conversations are going well were deployed in front of these customers right. Now we think our goal selfishly is that have every to have access.
Alfred F. Altomari: Okay, great. And then just one follow-up. On the managed care angle, can you just give us an update on how those discussions are going, and do you have a target in mind in terms of a specific coverage level by the end of the year, by the time you launch? Thank you.
Every patient country, if we took but we know that might not be realistic, but thats, where our goal is so we want to open up areas. The country. So we want to get the big planned Macbook knocked buttoned up early.
Alfred F. Altomari: Great question, Dan. The conversations are going well. I mean, as you know, this is a pretty dense number of payers. You don't need 50 relationships. You need less than 10 to get the business done.
So far so good.
It's a little.
A little bit early to sign contracts, because we're still a few months one from launching that product. So as we get closer to launching expect us announced some of these relationships, but for right now the competition, we're going lumber, we're generally happy with them, but I will keep you updated.
Okay, great. Thank you.
Thanks, Dan.
Thank you next question today is coming from Tim Lugo from William Blair. Your line is now live.
Thanks for taking the question and congratulations on the progress of the company over the past year on year.
Alfred F. Altomari: The conversations are going well. We're deployed in front of these customers right now. So far, so good. You know, it's a little, you know, a little bit early to find contracts because we're still a few months from launching a product. So as we get closer to launch, you can expect us to announce some of these partnerships. But for right now, the conversations are going well. We're generally happy with them, but I will keep you updated.
Thank you all kind of finally remember back when add compounds in phase three data were kind of unless there is some things, giving us up at night.
Hi, just and looking at Q4 guidance can you just describe a little bit more.
Alfred F. Altomari: Okay, great. Thank you.
Alfred F. Altomari: Thanks Dan.
In detail the 46 million is coming from what's expected to be loading of the distributor level is this.
Operator: Our next question today is coming from Tim Lugo from William Blair. Your line is now live.
Alfred F. Altomari: Thanks for taking the question and congratulations on all the progress at the company over the past year. I think we all kind of fondly remember back when adcoms and phase three data were kind of the most worrying things keeping us up at night. I just am looking at the Q4 guidance. Can you just describe a little bit more in detail the $4 to $6 million? Is this coming from, you know, what's expected to be loading at the distributor level? Is this... something that we should kind of build off of for our kind of quarterly estimates beyond Q4? I know there's obviously a lot of sampling going on in the women's health arena, so just trying to get my arms around what Q4 and this four to six million really represent.
Something that we see kind of build off road for.
Second quarter to quarter estimates beyond Q4.
I know, there's obviously a lot of sampling in this.
Well in South Korea, So just trying to get my arms around.
What Q4 in this 46 million really represent.
Well, thanks, Tim and I agree with you that so many events we've been through as a company comment I guess, what doesn't make a stronger I guess, but youre right now some of the events. We've been through now now facing that file at benefit comments here today.
Right and give you a little bit more detail on then yes, hi, Tim eat it is not ill.
Script based at that point will be loading the channel to make sure we have product available and the goal is to do that.
Early in Q4 and will be recognizing revenue accordingly, but.
Alfred F. Altomari: Well, thanks Tim, and I agree with you that so many events we've been through as a company don't make it stronger, I guess what doesn't make it stronger, I guess, but you're right, you know so many events we've been through now, and it's now facing this. I'll send us the comments to your questions okay, and give you a little bit more detail on them, yeah, hi Tim.
The scripts will follow and as you said, we will be doing a fair amount of sampling we believe in Q4.
So we don't expect him as we we don't expect to see a lot of prescriptions right should we still below the channel we get the doctors comfortable with the with the the Dragan in him to initiate therapy, which more often signs involves a sample. So we'd expect later on to get a better view of demand if you will so.
Alfred F. Altomari: we have product available, and the goal is to do that early in Q4. And we'll be recognizing revenue accordingly. But you know, the scripts will follow. And as you said, we will be doing a fair amount of sampling, we believe, in Q4.
But I wouldn't say straight line off I think it's just a load.
Fair enough.
And can you give maybe maybe how can you give us some idea about what's occurring in the contraception market outside of the World does swarms I know it seems like the generic patch on the market has gained market share over other alternative dosage forms in the past couple of years. So can you just maybe expire.
Alfred F. Altomari: Yeah, so we don't expect him as we, you know, we don't expect to see a lot of prescriptions right out of the chute. We load the channel, we get the doctors comfortable with the drug, and get them to initiate therapy, which more often times involves a sample. So we'd expect later on to get a better view of demand, if you will.
I mean, some of the underlying market dynamics, which may be occurring in which you'll launch into.
Sure. The pill business is still them most prevalent business, but you do see the non oral segment, which for US is the one we directly compete against is the other patch and the ring kind of nipping away at some share Tim So they it's not a.
Alfred F. Altomari: Fair enough. And maybe, Al, can you give us some idea about what's happening in the contraception market outside of oral dose forms? I know it seems like the genetic patch on the market has gained some market share over other alternative dosage forms in the past, let's call it, a year or so. Can you just maybe explain some of the underlying market dynamics which may be occurring and which you'll launch into?
A big Revolution, as an evolution they take a little bit a share here now because of promoted so they're getting some business I think the FDA my own opinion gives them everything's frame right. So a woman and she's getting a co pay.
Zero, so there's a little bit of what we think a consumer pull their same why not asked for brands in those cases.
Alfred F. Altomari: Sure, the pill business is still the most prevalent business, but you do see the non-oral segment, you know, which for us is, you know, the ones we directly compete against are the other patch and the ring kind of nipping away at some Sheratons, you know, so they...
These continue to be.
A method thats emerging however, we've heard a little bit based in the covert situation that women are having difficult time getting in front of doctors have ideas in the insertion them. So that's something we got to watch with the new Cobot World. Tom So I I, we so we see a little bit of share coming Tim, but I don't think its.
Alfred F. Altomari: It's not a big revolution; it's an evolution. They take a little bit of share here and there because they're promoted, so they're getting some business. I think the ACA, in my own opinion, gives them, you know, everything's free, right? So a woman, she's getting a co-pay of zero.
Alfred F. Altomari: It's a pleasure.
Big I think the market still our market research still size that coming out of low dose or lower dose patch is still very relevant that more than likely we're going to take share from properly everybody, but most likely though if we're going to achieve the five to eight share we're not going to get it will.
Alfred F. Altomari: So there's a little bit of, we think, a consumer pull there, saying why not ask for a brand in those cases? IUDs continue to be, you know, an emerging method. However, we've heard a little bit, based on the COVID situation, that women are having a difficult time getting in front of doctors to have IUDs and, you know, the insertion of them, you know. So that's something we've got to watch with the new COVID world. So I, you know, we see a little bit of share coming to him, but I don't think it's, you know, that big. I think the market still, our market research still says that, you know, it's coming out with a, you know, low dose or lower dose patch.
There is other products, it's more likely going to come off women that we're heading there what sell for the pills. So it's evolved a little bit simple proxsys liftings dove in a little bit stronger price share a little bit of evolution in share, but there seems to be a trend away from dailies I think thats something that we see across all the products. So that's why we're excited to be bringing on our product.
Alfred F. Altomari: It's still very relevant that, more than likely, we're going to take share from probably everybody, but most likely, if we're going to achieve the five to eight share, we're not going to get it off the, you know, those other products. It's more than likely going to come from women that were heading for the pill. So it's evolved a little bit since, you know, probably since the last time we dove in, a little bit stronger price, and share a little bit of evolution and growth, but there seems to be a trend away from the dailies. I think that's something that we see across all the products. So that's why we're excited to be bringing out our product.
Yes that makes perfect sense and maybe how can you just described.
The remaining risk around manufacturing after this pre validation batches.
For our who produced in behind them.
Yes, Im I mean.
Given there are lot with there's a number of you have I mean, you're right you go through it.
Zero, United Coms, and you think you're out it was in your plan sitting in Michigan, and you're watching TV at night watching the staying under a lot attention right now so corium as we now I think everybody remembers in Grand Rapids. So the corium organization was able to continue to deploy people. So they got people in their plant, making our product I mean, we made that pre buy.
Alfred F. Altomari: That makes perfect sense. And maybe, Al, can you just describe the kind of remaining risk around manufacturing after this pre-validation batch is produced and behind us?
Validation batch middle cut with Covance going on so we didn't Miss a beat we missed that maybe a couple of days in our plans, but so we have successfully completed the batch, meaning we made it which is the first thing at the first time, we've made and the end product with old.
Alfred F. Altomari: Yeah, Tim, I mean, you've been through a lot as a lumberjack. You have, I mean, you're right. You go through, you know, a CRL, you know, add pounds, and you think you're out of the woods, and you have plants sitting in Michigan, and you're watching TV at night, watching the state under a lot of tension right now. So Corium, as we know, I think everybody remembers in Grand Rapids, so the Corium organization was able to continue to deploy people. So they got people in their plant making our product. I mean, we made that pre-validation batch, the middle cut with COVID going on. So we didn't miss a beat; we missed maybe a couple of days in our plans.
Well, the serialization and everything on the line so thats exciting for US we've made batches before but never from soup to nuts and including in the de folding cartons. This is up trade product.
If you will by any other standards, but it's a big experiment. So it gives us the confidence to keep going forward and make the final validation. So we expect it to get the final Q a results. We don't expect any surprises we think we understand as manufacturing. So the interim results. We test along the way that we felt work in process it looks good.
Alfred F. Altomari: But so we've successfully completed the batch, meaning we made it, which is the first time we've made an end product with all, you know, all the serialization and everything on the line. So that's exciting for us. We've made batches before, but never from soup to nuts.
So it gives us the confidence with her role device and make the three big batches in those batches, we as we communicated we'll be able to sell them or use them as samples.
Alfred F. Altomari: And including the defaulting cards, this is a trade product, you know, if you will, by any other standards, but it's a big experiment, you know, so it gives us the confidence to keep going forward and make the final validation. So, you know, we expect to get the final QA results. We don't expect any surprises.
So.
We're moving forward Tim in the middle of at all that.
It's a little bit nerve racking and might watching that you're putting in Michigan [laughter], if I had no scaling it up.
Alfred F. Altomari: We think we understand it's manufacturing. So the interim results we test along the way, we call it work in process, look good. So it gives us the confidence to roll the dice and make the three big batches. And those batches, as we communicate, we'll be able to sell them or use them as samples. So we're moving forward, Tim, in the middle of it all, but it's a little bit nerve-wracking at night watching what you're planting in Michigan.
Yes.
Well congratulations again.
Again, there that's in forgotten.
Okay. Thanks.
Hi.
Thank you. Our next question three is coming from Leland Gershell from Oppenheimer. Your line is now lives.
Thanks, Phil.
Thanks for taking the questions.
Couple of questions from me first just want to.
Because we think about modeling expenses through the remainder of the year as you as you hire your sales organization.
Alfred F. Altomari: If I had nothing else to say, I'd be scared.
Alfred F. Altomari: [inaudible]
Through to Q1 sales managers and then and then the reps in Threeq you can you give us a.
Alfred F. Altomari: Well, congratulations to Dave.
Alfred F. Altomari: We're getting there, though, Tim. We're getting there.
Maybe just a rough breakdown of of what those different fractions of people, who look like in terms of numbers and also have a question about.
Alfred F. Altomari: [inaudible]
With the.
Operator: Thank you. Our next question today is coming from Leland Gershel from Oppenheimer. Your line is now live. Thanks, Fayal.
Guidelines to have at least when approaching the category.
Well at no cost you had of course is another patch.
Alfred F. Altomari: Thanks for taking the questions. There are a couple of questions for me. First, just want to ask, as we think about modeling expenses through the remainder of the year, as you hire your sales organization, kind of through 2Q with sales managers, and then the reps in 3Q, can you kind of give us a maybe just a rough breakdown of what those different fractions of people look like in terms of numbers? And also, I have a question about the ACA guidelines to have at least one project in the category bullet, no cost Yet, there are advantages to your patch versus, you know, what is a much older patch. Want to drill into maybe what the arguments that you could make, you know, to payers for, you know, preferential reimbursement of your patch over the other one. And also, if you could maybe help us understand, on a state by state basis across the country, what sort of proportion of the country you see is the lower-hanging fruit in terms of state mandates versus those that may be more difficult to get reimbursement for.
Yes, there are advantages to your patch versus what is a much older patch.
I want to drill into maybe what what the.
Arguments that you could make it to payers.
For preferential reimbursement of Terler.
Over the other one.
And also if you could maybe help us understand on the state by state basis across the country, what sort of the proportion of the country you see is the lower hanging fruit.
In terms of state mandates versus those that may be more difficult to.
At reimbursement for thanks.
Yes, So let me I'll do to second two and I'll, let Dennis helping with the first one so I'll take the second two and.
With the first one generally we see sales managers roughly having like a 10 one ratio. If you still we if we hire 50 reps we need five sales manager something in that range, we're not Don but directionally. That's what we're looking at and Dennis will guide you through the expenses and Furthermore, deep detail.
So with the with the Atlas got a question too which is to differentiation in the way. The act works to plan is required to have one part of our knowledge of the plant our interpretation of the federal mandate as they are required to have one dosage form or one product I'll call. It for every one of those 18 forms so.
Alfred F. Altomari: Thanks.
A case of the patches, they're required to have at least one so in ours when we come out specifically they could leave leave the mylan product on formulary add up side by side, which we believe it will take backs. We believe we have a good product and we're going to supported so so we could be parity.
Alfred F. Altomari: Yeah, so let me do the second two, and I'll let Dennis help me with the first one. So I'll take the second two.
Alfred F. Altomari: And, you know, with the first one, generally, we see sales managers roughly having a 10 to 1 ratio. If you so we, if we hire 50 reps, we need five sales managers, something in that range. We're not done, but Dennis will guide you through the expenses and a little bit more detail.
Alfred F. Altomari: So with the, with the act, let's go to question two, which is differentiation and the way the act works. The plan is required to have one part; our knowledge of the plan or interpretation of the federal mandate is that they're required to have one dosage form or one product, I'll call it, for every one of those 18 forms. So in the case of the patches, they're required to have at least one. So in our, when we go out specifically, they could leave the myelin product on formulary, add it up side by side.
They could leave that on there and leave us all.
Where they can do the reverse put us on and leave them off.
No.
Our philosophy and you know is we feel like we just want to be on equal ground. So we want to be on there. So a woman gets a zero copay, if we have to cohabitate on that wrong with them. We're fine with that so that's what we're in discussions with so you know up but again there are required to have one they can have too so.
Alfred F. Altomari: You know, which we believe is, you know, we'll take that because we believe we have a good product and we're going to support it. So, so we could be parity, they could leave that on there and leave us off, you know, or they could do the reverse, put us on and leave them off. You know, our philosophy, and you know, we feel like we just want to be on equal terms. So we want to be on there. So a woman gets a zero copay. If we have to cohabitate on that rung with them, we're fine with that. So that's what we're in the discussion with. So, you know, but again, they're required to have one, and they could have two. So, you know, either two or three outcomes is fine by me.
Either two or three outcomes as defined by me and ill.
So in the individual state mandates mandates were still digging in and understanding and Theres. Some overlay that sit on top of us in California is a one we look out a lot that says hey, when.
Brandon Hall, Brian the products, our interpretation or supposed have no copay, so it's a bit of an overlay on the federal system.
Then we're trying to see that that really work with when we talk to plans. When you read the plan guidelines. Some insight hey, we just little brands on nationally. So all indicators seem to say to us that we should get pretty decent reimbursement at that but the work being done right now, but so far so good but we.
Alfred F. Altomari: So in the individual state mandates, we're still digging in and understanding them. There's some overlay that's been on top of this in California is the one we look at a lot that says, hey, you know, in brand, all branded products, our interpretation are supposed to have no copay. So it's a bit of an overlay on the federal system.
I think we think we have a compelling value proposition, meaning value. The clear clinical differentiation is product that support we're going to give you know we have a past replacement program and other ancillary support that.
This is this is on we believe our technology just confusion technology brings something to the table. So.
Were from wellness put all that to bear in mind and put together good value proposition both clinically and.
For us, especially for the plans on central and welcome to guidance of how to think about the expenses like maybe just frame up total expenses and.
Yes.
We said, we believe our total opex will be in the 52 to 56 million range for the year.
And obviously Q4 will be.
Alfred F. Altomari: And we're trying to see if that really works. But when we talked to the plans, when you read the plan guidelines, some of them said, well, hey, we just let all brands on nationally. So all indicators seem to say to us that we should get pretty decent reimbursement for that. But the work's being done right now. But so far, so good.
A heavy quarter.
From an opex standpoint.
I would think something in the case.
15 to 18 million in that timeframe and then coming back.
Alfred F. Altomari: You know, but we think we have a compelling value proposition, meaning value, the clinical differentiation is the product, the support we're going to give, you know, we have a pass rate placement program and other ancillary support that, you know, this is, this is a, and we believe our technology, just confusion technology, brings something to the table. So, you know, we're willing to put all that to bear, you know, and put together a good value proposition, you know, both clinically and, you know, especially for the plans. So I just want to walk them through the guidance of how to think about the expenses, like maybe just figuring out the total expenses, and yeah, we'll do that.
RMBS be scaling up.
Let's say.
Yes, as we go quarter to quarter. So we're not we don't have reps now we won't have probably until August September.
Matthew Riley: Yeah, well, as we said, we believe our total OPEX will be in the 52 to 56 million range for the year. And obviously, Q4 will be, you know, the heavy quarter from an OPEX standpoint. I would think something in the 15 to 18 million range in that timeframe.
So it won't we won't get the big expenses until we get later in the year and maybe even a little later not depending on timing I mean, you see our first Q2 results Leland I mean, we've had a good quarter. We think we made the right investments, but if you look at what Dennis I need to spend for the year you can see it as a pretty big growth coming through.
Matthew Riley: And then coming back, you know, it'll just be scaling up, you know, let's say as we go quarter to quarter. So we don't have reps now. We won't have them probably until August or September. So it won't, you know, we won't have the big expenses until later in the year, and maybe even later.
Second and second third and articulate a fourth I think the whole annualization on that is in the fourth like Dennis right saddened by the I would expect in the third quarter, you can see a pretty significant bump, but it's all going to kind of.
Well if you will you know the biggest part of the spend will come in the fourth quarter in line with when we're deploying.
Alfred F. Altomari: I mean, you see, we've had a good quarter. We think we've made the right investments, you know, but if you look at what Dennis is saying he's going to spend for the year, you can see there's pretty big growth coming through to the second and second, third, and particularly the fourth. I think the whole annualization of it is in the fourth quarter, like Dennis has gotten, but I would expect in the third quarter, you're going to see a pretty significant bump, but it's all going to kind of, you know, if you will, the biggest part of the spend will come in the fourth quarter.
Okay, Alright, thats very helpful. Thank thank you a boat.
Thanks volumes.
Thank you. Our next question today is clean from orders of nod from C. Wainwright. Your line is now live.
Hey, guys.
I think theres some left.
We haven't really had the conversation regarding managed care with regard I guess regarding the differentiation from Xueling you said.
In the last question that you want to be at least a at parity with them. So do you think and year in conversations with managed care that they are going to see differentiation.
Alfred F. Altomari: All right.
Operator: Thanks for dialing in.
Alfred F. Altomari: Thank you. Our next question today is coming from Oren Livnat from H.C. Wainwright. Your line is now live.
With your product end Zoo Lane, I mean, obviously your lower Dallas, but how does that conversation resonating with them.
Alfred F. Altomari: Hey guys, I think there's some left. I guess we haven't really had a conversation regarding managed care with regard to the differentiation from Zulane. You said in the last question that you want to be at least at parity with them. So do you think in your conversations with managed care that they are going to see differentiation between your product and Zulane? I mean, obviously, your lower dose, but how is that conversation responding with them? And does the BMI restriction factor into that conversation at all? I do have follow-ups. Thanks.
And does that my a restriction factor to that conversation at all I didn't follow up thanks. So.
No are good question to me like I think what Weve fall back on is there still clients as they are still physicians are still pharmacists that make up the PMT committees of these organizations when we test our value proposition, our differentiation with physicians and.
The doctors, we talk to they see the difference right. They see the meaningful difference. So we would expect that the carried the day also there and I mean, it's come our ours confusion. The design of our product is relevant are supported a product is relevant our clinical differentiation. The did lower dose of Ashford is as relevant as compared to them. So.
Alfred F. Altomari: So, you know, no, we're in good questions. I mean, like, I think what we fall back on is there are still scientists, there are still physicians, there are still pharmacists that make up the P&T committees of these organizations. When we test our value proposition or differentiation with physicians and, you know, the doctors we talk to, they see the difference, right? They see a meaningful difference. So we would expect that to carry the day also there. And I mean, it's our skin fusion. The design of our product is relevant. Our support of the product is relevant. Our clinical differentiation, you know; the lower dose of estrogen is relevant as compared to them.
We think we think we have a good story and so far tracking really well, but to answer your question, Yes, we would expect at.
Affected to do that we we have pretty high aspirations. This product, we think we deserve at least parity if not better but you know parties okay awesome.
Additionally, the woman gets the cost products offering so we will we'll take our game to physicians and talking them about this differentiation eventually consumers so.
But we want to be mindful to consumer we don't want her to pay more zero because.
Alfred F. Altomari: So we think we have a good story and, so far, it's tracking really well. But to answer your question, yes, we would expect it. You know, we would expect it to do that.
Well so far so good.
Well that.
And I guess that does beg the question.
Pricing the end or co pay support I guess you have to work tradeoffs. There I mean are you willing to buy consumers all down to zero a on the co pay and it rather than the reimbursement side or do you think it's important to pay upfront to get the proper tiering.
Alfred F. Altomari: We have pretty high aspirations for this product. We think we deserve at least parity, if not better. But, you know, parity is okay. You know, functionally, a woman gets to cause products for free. So we will take our game to physicians and talk to them about this differentiation and, eventually, consumers. You know, but we want to be mindful of the consumer. We don't want her to pay more than zero if we can. Let's go for so good.
To be as frictionless as possible.
With managed care.
Okay tough questions I mean, it's going to come down to the math or.
Alfred F. Altomari: Okay, and that does beg the question of pricing and or copay support. I guess you have to work trade-offs there. I mean, are you willing to buy consumers all down to zero on the copay end rather than the reimbursement side, or do you think it's important to pay up front to get the proper care to be as frictionless as possible with Managed Care?
So we prefer we prefer zero co pays us so obvious I mean, you know.
Are we willing to work with managed care too soon to do that shore reward, but if we fit if we can't get that.
What we use a co pay card yes.
Well, we buy down to zero, that's a tough one from me right now.
Don't know yet so no yet, but we but it's going to be a sticker shock for the consumer right. You are trying to compete with zero versus say 50 or 75 box ill. Let me that's what they could be looking out that's up.
Alfred F. Altomari: Tough questions. I mean, you know, it's going to come down to the math, Oren, you know, so we prefer zero copays. That's so obvious.
The big Buydown.
So we don't we'd have to understands.
But the Coke co insurance in order to co traveling Pope I would be to make that decision and we don't we're not deep enough along the by not but.
Alfred F. Altomari: I mean, you know, you know, are we willing to work with managed care to do that? Sure, we would. But if we fit, if we can't get that, would we use a copay card? Yes. But will we buy it down to zero? That's a tough one for me right now. Don't know yet.
In general we would say we're willing to use copay cards.
Alfred F. Altomari: But we, but it's going to be a sticker shock for the consumer, right? You're trying to compete with zero versus say, 50 or 75 bucks. You know, maybe that's what they could be looking at.
If we need to buy not preferred.
That model, that's not a win in our minds.
But if we're in good discussions with a plan and we're trending toward so getting on formulary could have co pay card via bridge to get you to formulary sure sure them, but if it's a permanent loss than we've got to think hard about that.
Alfred F. Altomari: That's a, that's a big buy down, you know. But, you know, we don't we'd have to understand what the co-insurance, you know, or the co-traveling copay would be to make that decision. And we don't, we're not deep enough along the line at, but in general, we would say we're willing to use a copay card if we need to, you know, but not preferred. You know, that's not a win in our minds. But if we're in good discussions with a plan and we're trending toward getting on formulary, could a copay card be a bridge to get you on formulary? Sure, sure. But if it's a permanent loss, then we've got to think hard about that.
Okay, if I could move onto some of the actual commercial side.
Yes, [laughter] on the commercial side you did mentioned this a patch replacement program, which is.
I was something that has has been talking about for years.
A world has changed I guess since we first started this conversation and I'm curious if and when you're talking about voiding are not needing another prescription from their doctor is it safe to assume we're taking some sort of like bespoke.
Telemedicine solution that patients can use and if that is the possible under the regulatory framework today I think stopping you from using that platform to generate I guess originate scripts Allah on Europe saw him model.
Alfred F. Altomari: Okay, if I could move on to just the...
Alfred F. Altomari: On the commercial side, you mentioned this patch replacement program. You know, something that I have been talking about for years. The world has changed, I guess, since we first started these conversations.
Alfred F. Altomari: And I'm curious if when you're, you know, talking about avoiding or not needing another prescription from their doctor, is it safe to assume we're thinking some sort of bespoke telemedicine solution that patients can use? And if that is possible under the regulatory framework today? Is there anything stopping you from using that platform to generate, I guess, you know, originate scripts? You know, a NERCS or HIMS model?
So the second part of your question is yet you were looking at it. So we we we've been fascinated with so many emerging channels are still emerging right now there's not a lot of volume going through it has a lot of noise, but not a lot of volume at least that's our first caught but this might be the world where the world's heading so it behooves us to.
Continue to have these dialogue. The first one is the solution, we see with the patch replacement I mean right now if the current patch falls off.
They are pot deposit patch replacements go get another script and managed care pays for it you know that Thats solution. So a lot of times the woman's Gotta go back to get a new scrapped or dialed in we think thats not right. So what we want to do is offer her a better solution, where she calls number possibly and we you know we servicer, we said, okay, we'll we'll get.
Alfred F. Altomari: So the second part of your question is, yeah, we're looking at it, you know, so we've been fascinated with so many emerging channels that are still emerging right now. There's not a lot of volume going through them, there's a lot of noise, but not a lot of volume, at least that's our first cut. But this may be the world to which the world is heading.
Patch and we could do that through specialty pharma organization, that's authorized to be a pharmacists in effect.
But we think she she wakes up an exciting theres a packs for from US on there and we know when all those get a script for that we have to verify we don't give me wrong with the verify har by we can do that for a phone call to or Dr., we don't need hover chased down a script. We can just how the fought dr. valves for it so and then we.
Alfred F. Altomari: So it behooves us to, you know, continue to have these dialogues. The first one is the solution we see with the patch replacement. I mean, right now, if the current patch falls off, their patch replacements go get another script, and managed care pays for it. You know, that's the solution. So a lot of times, the woman's got to go back to get a new script or dialed in. We think that's not right.
Alfred F. Altomari: You know, so what we want to do is offer her a better solution where she calls a number possibly, and we, we, we service her. We said, okay, well, we'll get you a patch, you know, and we could do that through a specialty farm organization that's authorized to be a pharmacist, in effect. So we think, you know, she wakes up the next day, and there's a patch from us on there, and we don't, you know, we don't have to get a script for that. We have to verify that we don't don't get me wrong. We need to verify her identity, but we can do that through a phone call to her doctor. You know, we don't need to have her chase down a script.
And then that's a service that will provide the providers in the consumers that really should differentiate us too. So we think it's the right thing the first and foremost.
Pretty not that big of a cost for us from a goodwill perspective, but I think it helps our differentiation against this and other products and particularly is older products that will be competing with it just feels like the writing as they weren't especially in what's going on right now in the world, we feel stronger about it.
Just if I may on now I guess support side Samplings, obviously, a big thing are you thinking.
Alfred F. Altomari: We can just have the doctor vouch for it. So, and then, you know, we then that's a service that will provide providers and consumers with a service that really should differentiate us, you know, so we think it's the right thing to do first and foremost. It's not that big of a cost for us from a goodwill perspective, and I think it helps our differentiation against this and other products, and particularly these older products that we'll be competing with. It just feels like the right thing to do, or especially in light of what's going on right now in the world, we even feel stronger about it.
Thinking that the it's a more the merrier situation with sampling beyond Q4, two Allen 2021 need just you know at expensive paid prescriptions, perhaps it's worth it to get the product into People's hands or is that a real time balancing act you need to strike between revenue and sample.
That's what I had a good answer for that until Covance.
Because I thought samples were more mainstream but in the Kobin World. Our commercial group talk to me a lot about our first issue was can we even get in front of the Doctor Yeah, right. We talked about that with Dan's question earlier. The second question as well doctors see patient. We don't know that we don't know that and we'll pull back there be able to hand out a sample and will the patient take it a box touched by.
Alfred F. Altomari: I'm just, if I may, on the, I guess, support side. Sampling's obviously a big thing. Are you thinking that it's a more of a merrier situation with sampling, you know, beyond Q4 through all of 2021, and you just, you know, at the expense of paid prescriptions, perhaps it's worth it to get the product into people's hands, or is that a real fine balancing act you need to strike between revenue and samples?
Dr. So I think the sample ratio that we were once thinking is under question. So we feel that samples are important to launch the product, but if the samples or a full back of the old days or and when there was like 25 and for the our co pays where the Doctor was trying to help the patient out there we're going to in three months and Dale if the if that what were.
Alfred F. Altomari: I thought I had a good answer for that until COVID, you know, because I thought samples were more mainstream. But in the COVID world, our commercial group talked to me a lot about our first issue: can we even get in front of the doctor? You know, right?
Alfred F. Altomari: We talked about that with Dan's question earlier. The second question is, will doctors see patients? We don't know that.
Hearing from the doctors if to the numbers zero, if we're successful to zero co pay we want to get our enough drug we entered a pharmacist or to get into the system. So we're I think our got they're telling us our sampling maybe a little bit lighter than we originally thought in this category for a lot of reasons, So where again, we are getting our arms around this we think sampled don't Miss.
Alfred F. Altomari: And will the doctor be able to hand out a sample? And will the patient take it, a box touched by a doctor? So I think the sample ratio that we were once thinking is under question. And we feel that, you know, samples are important to launch the product. But if the samples are a fallback of the old days, or when there were like $25 and $50 co-pays, where the doctor was trying to help the patient out, they're getting two and three months. And, you know, if the number is zero, if we're successful in getting a zero co-pay, we want to get her enough drugs to get her to the pharmacy or to get into the system.
Interpret that as sampling goes and payroll to us, but I don't think it's the old style launch of dumping a bunch samples and wishing for the past I think it's I think.
I think it's more guided and more targeted in the not in more smarter than that so I.
I think post Covance teaching inside and then the question about nurse.
Alfred F. Altomari: So, you know, we're, I think our guts are telling us our sampling may be a little bit lighter than we originally thought in this category for a lot of reasons. So we're, you know, again, getting our arms around this. We think sampling, don't misinterpret that as sampling doesn't play a role. It does, but I don't think it's the old-style launch of dumping a bunch of samples and, you know, wishing for the best. I think it's, I think it's more guided and more targeted than that, and smarter than that. So I think Post COVID is teaching us that.
No sampling comes into that right that you style in you get dropped right. There's no sample there so.
I want to Tele medicine platform on or Telo, that's really telepharmacy platform, Intel and medicine.
That there's no theres no sampling I don't think Thats the way it worse. So you just get the drugs. So I think that final mix that were put together is going to dictate the number samples. So I think sample to play a role maybe not like they did in the past.
Alfred F. Altomari: And then the question about NERCs, no sampling comes into that, right? They just dial in, and you get the drug, right? There's no sample there. So, you know, if you go on a telemedicine platform or a tele, that's really a telepharmacy platform and telemedicine. You know, there's no sampling. I don't think that's the way it works, you know, so you just get the drug. So I think that the final mix that we're putting together is going to dictate the number of samples. So I think samples will play a role, maybe not like they did in the past. They're a bit necessary, but maybe not as necessary in a quantity perspective as we once thought.
They are bit necessary, but maybe not as necessary to quantity perspectives, we once dog.
Okay. That's helpful.
Calculator.
Thanks.
Thank you. Our next question is coming from extra Hong from Janney. Your line is Alan.
Hi, good afternoon.
I'm wondering about how to think about tireless launch any then that cobot 19 precautions restrictions to Evans.
In the event the ebb and flow over next several quarters. So how should we think about that and then any lessons our tactics learn from companies, who launched second quarter. This year.
Alfred F. Altomari: All right.
Operator: Take care. I'll talk to you later.
Our even greater launch third quarter. Thanks.
Alfred F. Altomari: Thank you. Our next question is coming from Esther Hong from Janney. Your line is now live. Hi, good afternoon.
Yes. Thanks, that's a good questions. The first one I mean, we have to be always mindful the risk right. I mean, we still have a plant manufacture our drug and Michigan. So our first risk profile is to say how can we get the drug manufacture. We believe we're in good shape, we believe.
Alfred F. Altomari: So wondering about how to think about Turla's launch in the event that COVID-19 precautions restrictions to Evans in the event that Evans spread over the next several quarters. So how should we think about that? And then any lessons or tactics learned from companies who launched in the second quarter of the, or even those four.
Weve you know in Michigan, that's as viewed as an essential employer. So we think we think we're okay, but I want to learn that risks at the first thing in my mind Mr., let's assume the nation's locked down again as it is now.
We want to build the salesforce to kind of apps right. That's what I've learned these pharma company that my peers that Didnt anticipate this have reps with no tools no.
Alfred F. Altomari: Yeah, yeah, thanks, that's a good question. The first one, I mean, you know, we have to always be mindful of the risk, right? I mean, we still have a plant manufacturing our drug in Michigan. So our first risk profile is to say, you know, can we get the drug manufactured? We believe we're in good shape. We believe, you know, we've, you know, in Michigan, that's viewed as an essential employer. So we think we're okay, you know, but I want to alert you that when things are at risk, that's the first thing on my mind, Esther.
No skills and no tools of how is having telemarketing KNL meetings Telemark telo.
AD boards tell detailing so they are scrambling right now the get vendors and people I got so we need to go all tele, we're going to be ready you should here that we will be ready to launch our national sales for or not and national our salesforce that if it needs to be a 100% talent. We can do that it was so we're buying the tools to train.
Alfred F. Altomari: Let's assume the nation's locked down again, as it is now, you know. We want to build a sales force that can adapt, right? That's what I've learned, you know, these pharma companies and my peers that didn't anticipate this, you know, have reps with no tools, no... You know, no skills, and no tools of how I'm having telemarketing at KOL meetings, telemark, So they're scrambling right now to get vendors and people like that. So if we need to go all tele, we're going to be ready. You should hear that we will be ready to launch a national sales world, not a national, a sales force, and if it needs to be 100% telemarketing, we can do that.
And everything that will need so that's what I've learned you know Ethernet when I talk to my peers that didn't anticipate this I.
Alfred F. Altomari: And so we're buying the tools, the training, and everything that we'll need. So that's what I've learned, you know, Esther, that when I talk to my peers that didn't anticipate this, um, you know, I think it's really important that we build that into our culture. Now, we hope, we hope we don't need that. We hope it's at least partially open, or, if not, regionally open. So we want to be able to adapt, adapt, and move. So what I've learned is if you don't have these tools and training and the right skills, it's hard to retrofit sales organizations. So we're going to build our mindset right out of the shootout. So that's what I've learned. I've spent a long time with other CEOs and commercial leaders, and, um, the commercial leader we just launched, we just announced Amy Welsh, came from an organization that built this in ahead of COVID luckily. So we're really fortunate to have Amy's knowledge of how to do this, you know, that can actually build it into our culture from a marketing perspective, and then Kimberly with the, the sales side.
I think it's really important that that we build that into our culture. Now we hope we hope we don't need that we hope it's at least partially open or if not regionally opens so we want to be able to ODAC adaptimmune. So what I've learned is if you didnt have these tools and training and the right skills, it's hard to retrofit.
Patients so we're going to build into our mindset rate others shoot us. So that's what I've learned I spent a long time with other Ceos in commercial leaders and.
Given the partial leader, we just launched what just announced Amy Welsh ill all came from organization that built this and how to covert Luckily. So we're really fortune of Amy's knowledge of how to do this you know that can actually built into our culture from a marketing perspective, and then Kimberly with the des sales side. So we're looking to learn from the situation.
So there could be a business interruption down the road for some other reason right it could be a snowstorm. It could the power outage, we want to never be caught with the ability of not top able to talk with softer and we don't need to knock on their door to do it. So that's that's what I've learned.
So on on the telling that.
Are you able to are you going to switch potentially or sales strategy on which doctors respond better to virtual conversation or will you target. Those doctors first are they more on willing to have those conversations I guess im just trying to understand itself, yes hedging it seems that yet.
Alfred F. Altomari: So we're looking to learn from this situation because it could be a business interruption down the road for some other reason, right? It could be a snowstorm. It could be a power outage.
Alfred F. Altomari: We want to never be caught with the ability of not teaching, be able to talk to the doctor, and we don't need to knock on their door to do it. So that's, that's what I've learned.
A quick read on the market is.
In a business interruption situation like we're going on I think what we see is all boats rising we're hearing and we're seeing doctors more receptive these tactics and ever because they have timing there day right you're not running from office office. So I think it's hard to isolate and I'm sure. There's people that like it more or like it lasts we want the ability to gets on all if we needed to that way and.
Alfred F. Altomari: So on the telemed, are you able to, are you going to switch potentially your sales strategy on which doctors respond better to virtual conversations, or will you target those doctors first? Are they unknown?
We were going to target esters, it's interesting in our analytics team prevented me Sunday Diodato striking we look at a practice Ray nearest in New Jersey that had 10 doctors in there literally and the lowest efile dr., we wouldn't have called on the traditional way because there's an added how much business with that Dr., how do we targeted the doctor.
Alfred F. Altomari: Yeah, I mean, the quick read on the market is, you know, in a business interruption situation like we're going on, I think what we see is all boats rising. We're hearing and we're seeing doctors more receptive to these tactics than ever because they have time in their day, right? They're not running from office to office. So I think, you know, it's hard to isolate, and I'm sure there are people that like it more or like it less.
When we read that solve that practice, it's one of the biggest practice in new Jersey and that person that we would have blown off happens to run the practice right. So we've got work smarter, we got to say hey, it's our job the call in that practice and all the doctors in there and we got to know who influences. This so we're I think what we've done is we're going to be a lot smarter targets.
Alfred F. Altomari: We want the ability to get to them all if we need to that way. And the way we're gonna target Esther is interesting. You know, our analytics team presented me with some data the other day that was striking. We looked at a practice right near us in New Jersey that had 10 doctors in it, literally. And the lowest decile doctor, we wouldn't have called on the traditional way because they're saying, ah, there's not much business with that doctor. But when we redesigned that practice, it's one of the biggest practices in New Jersey, and that person that we would have blown off happens to run the practice, right? So, we got to work smarter. We got to say, hey, it's our job to call on that practice and all the doctors there, and we got to know who influences this.
In groups are high volume practices and the doctors in there and be able to use all the tools that we have at our disposal. Some we said, let's get the reps right tools going right hardware, it's going the right sign on what's going the right training and lets hire the right profile wrap that can pivot. We also want them to be able to make an office space call like let's not go too much I mean, we do see a day of that office space.
Calls will be to predominate Carter Copeland, so they still need to be able to get eyeball to eyeball to after so.
We don't know the world, we're going to enter and in the fourth quarter.
Alfred F. Altomari: So, you know, we're, I think what we've done is we're going to be a lot smarter at targeting groups or high-volume practices and the doctors in there and be able to use all the tools that we have at our disposal. Some, you know, we said, let's give the reps the right tools, give them the right hardware, let's give them the right sign-ons, let's give them the right training, and let's hire the right profile rep that can pivot. We also want them to be able to make an office-based call.
But we're ready for either world and we're ready for a complete locked down or complete opening for some partial patchwork in between but we don't see enough in the data. It I'm sure we could figure that out there some doctors the might be more receptive.
We can see it early on it seems like all boats are rising temporarily.
Alfred F. Altomari: Like, let's not go too far. I mean, we do see a day when office-based calls will be the predominant part of our call plan, so they still need to be able to get eyeball-to-eyeball, too, Esther. So, you know, we don't know the world we're going to enter in the fourth quarter, but we're ready for either world. You know, we're ready for a complete lockdown or complete opening, or some partial patchwork in between. But we don't see enough in the data to be sure we can figure that out. There are some doctors that might be more receptive. You know, we can't see it early on. It seems like all boats are rising temporarily.
HM Okay, great. Thank you.
Thank you.
Thank you. Our final question today is coming from Jack Fernandez from Cambrian Bio pharma. Your line is now live.
Yes, Hi, gentlemen, and appreciate the work you're doing.
I had a quick question and.
Might be something you don't want to touch upon but.
I know a lot of the shareholder base is really concerned about this.
This overarching strategy to go about this.
Alfred F. Altomari: Okay, great. Thank you.
Ourselves.
Operator: Thank you.
I know you announced the two partnerships one of them to long term as in the 8-K today.
Alfred F. Altomari: Thank you. Our final question today is coming from Jack Fernandez from Cambrian Biopharma. Your line is now live. Yeah, hi, gentlemen, and I appreciate the work you're doing. I had a quick question, and it might be something you don't want to touch upon, but I know a lot of the shareholder base is really concerned about
Particularly curious if you consider partnering with a larger commercial partner.
And how you're going to essentially approach future discussions about acquisition.
Operator: [inaudible]
Sure. Thanks, Jack this is Allegheny down.
We we come to work to do what's best for all shareholders. So I think you'll you'll get to know us up you'll see that we're hoping to anything that drive shareholder value, it's always within our bones.
Alfred F. Altomari: yourselves. I mean, I know you announced it for partnerships. One of them is long term. It was in the 8k today. Particularly curious if you've considered partnering with a larger commercial partner and how you're going to essentially approach future discussions about acquisition.
At this point, we think the way we're doing it's very judicious with cash a partnering we are partnering as you as you pointed out we're not trying to build a massive in truck infrastructure, we're leveraging on the people's infrastructures to make the sufficient as possible.
We're open the partnering so thats did the world I mean for right now we believe the strategy. We're executing on is the best approach to build shareholder value.
Alfred F. Altomari: Sure. Thanks, Jack. This is Al again.
Alfred F. Altomari: You know, we come to work to do what's best for all shareholders. So I think you'll, if you get to know us, you'll see that we're open to anything that drives shareholder value. You know, it's always within our bones.
With that said.
We're all growing slide to listen you know on pain, we pride ourselves on being very flexible.
Alfred F. Altomari: At this point, we think the way we're doing it is very judicious with cash, a partnership. We are partners, as you pointed out. We're not trying to build a massive infrastructure. Instead, we leverage other people's infrastructures to make this as efficient as possible. We're open to partnering, you know, so that's the world. But right now, you know, we believe the strategy we're executing on is the best approach to build shareholder value. You know, with that said, we're always delighted to listen. You know, we pride ourselves on being very flexible. You know, I really believe that what we're doing in the U.S. is the best way we can gain shareholder value. I don't believe that in Europe.
I really believe that what we're doing in the U.S. is the best best in way, we congrats and good again shareholder value I don't believe that in Europe like so we would be opened to discuss anything anytime in Europe or Latin America.
We want to kind of use the U.S. as our beachhead, because thats, where the best economics are but we were delighted the partner in the U.S., we're delighted to sign up with somebody else that give us additional reach and additional coverage. So.
We have those discussions and we continue to have those discussions but the path for on I believe is the about path to create shareholder value, but on the saw lock and stone either Jack So it's it's a situation by situation basis, you know will do something interesting comes along the listener listen to it but.
Alfred F. Altomari: Like, we would be open to discussing anything, anytime, in Europe or Latin America. We want to kind of use the U.S. as our beachhead, because that's where the best economics are. But, you know, we're delighted to partner in the U.S. We're delighted to sign up with somebody else to give us additional reach and additional coverage. So we have those discussions, and we will continue to have those discussions. But the path we're on, I believe, is the best path to create shareholder value. But it's not a locking stone either, Jack.
You know we're here to do what's right for you in the shareholders and we think we're on the right path and we're not looking to build an empire cost and we're trying to do to sufficiently.
Thank you.
Thank you we received by the time for questions on to turn the floor back program management for any further closing comments.
Great well, thank everybody for dialing in and thank you operator.
Let me close the call by reiterating what would that we're pleased with the company's cash position I think you for down on the call. We were pleased with our continued strong execution as we really March forward to launching twirl in the fourth quarter of this year.
Alfred F. Altomari: So it's on a situation-by-situation basis. You know, if something interesting comes along, we'll listen to it. But, you know, we're here to do what's right for you and the shareholders. We think we're on the right path and we're not looking to build an empire of cost. You know, we're trying to do this efficiently, but thank you.
While the covert pandemic brings us really unprecedented challenges we remain on pace to achieve this milestone of getting this product in the marketplace.
Operator: Thank you. We're running out of time for questions. I'd like to turn the floor back over to management for any further or closing comments.
Having our employees work remotely to ensure their health and safety is not cost any to business interruptions I hope you've heard that someone on their call or hiring process. We continue to higher great people in this company.
Alfred F. Altomari: Great. Well, thank you, everybody for dialing in. And thank you, operator. Let me close the call by reiterating that we're pleased with the company's cash position. I think you heard that during the call.
Our next steps as you've heard as the higher on board sales managers in this quarter were in the calendar quarter Q2 at bring on the sales salesforce in quarter. Three. Additionally, we're ramping up our manufacturer with the qualification of our equipment, our large scale commercial equipment. There. It's in the final stages and where we plan on continuing into.
Alfred F. Altomari: We're pleased with our continued strong execution as we really march forward to launching Twirl in the fourth quarter of this year. While the COVID pandemic brings us unprecedented challenges, we remain on pace to achieve this milestone of getting this product in the marketplace. Having our employees work remotely to ensure their health and safety has not caused any business interruptions, and I hope you've heard that on our call tonight or during our hiring process.
The validation stage.
I also like to emphasize that all these activities supporters are supported by solid balance sheet and I reflect back on how important it was to do that pre covert Tom I must say, we call it a little bit of a break they're getting our balance sheet built ahead of this the situation.
Alfred F. Altomari: We continue to hire great people in this company. Our next steps, as you've heard, is to hire on board sales managers. In this quarter, we're in the calendar quarter of Q2, and we will bring on the sales force in quarter three.
Having an approved product gives us control of our destiny. So we like that for the first time, we're really excited by that opportunity.
Alfred F. Altomari: Additionally, we're ramping up our manufacturer, you know, with the qualification of our equipment, our large-scale commercial equipment there in the final stages. And, you know, we plan on continuing in the validation stage. I also like to emphasize that all these activities are supported by a solid balance sheet, you know, and I reflect back on how important it was to do that pre-COVID. I must say we caught a little bit of a break there getting our balance sheet built ahead of this situation. You know, having an approved product gives us control of our destiny, so we like that for the first time.
As Dennis mentioned Im just to remind you will be hosting an analyst day, and we'll be able to get deeper into some of the questions. You've asked us and in New York on September 20, Onest, We hope to see many of you. There. If you can personally if not we'll see virtually so we'll be ready there and that situation to to pivot to us on a lot of meeting or virtual meeting, but in closing I'd like to thank everyone for a job.
Earnings from the call today, and I hope everybody listening is safe and healthy I look forward to updating you and thanks for listening to our force Kong.
Alfred F. Altomari: We're really excited by that opportunity. As Dennis mentioned, and just to remind you, we'll be hosting an Analyst Day, and we'll be able to get deeper into some of the questions you've asked us in New York on September 21. We hope to see many of you there. If you can come personally, if not, we'll see you virtually. So we'll be ready there in that situation, too, to pivot to a live meeting or a virtual meeting. But in closing, I'd like to thank everybody for joining us on the call today, and I hope everybody listening is safe and healthy. I look forward to updating you, and thanks for listening to our first call; we're looking forward to keeping you updated. But thank you, everybody, and be safe and be well. Thank you.
Operator: Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
We're looking forward to keep you updated but thank you everybody and be safe and be well. Thank you.
Thank you that does conclude today's teleconference. You may disconnect. Your lines. This time and have a wonderful day, we thank you for your participation today.