Q1 2020 Earnings Call
[music].
Good morning, and welcome to Carlo Pharmaceuticals, first quarter 2020 financial results Conference call. At this time all participants are in listen only mode. Following management's prepared remarks acuity session will be held.
As a reminder, this call is being recorded.
I would now like to turn the call ovitz or no Rajan chemists weren't senior Vice President of strategy for color Pharmaceuticals. Please proceed.
Thank you operator, and thank you all for participating in today's call.
Joining me from the company are Mark I Wiki, Chairman, President and Chief Executive Officer, Todd bays, more Chief operating Officer, Mary Reman, Chief Financial Officer, Tim Brasil, Chief Medical Officer, and Amin Chen Chief Scientific Officer.
Today's call is being webcast slide.
Webcast link can be found in the investors and media section of our website at Www Dot call Rx Dot com.
During this call we will be referring to non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.
A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release issued today, which can also be found on our website.
On this call, we will make certain comments about call it as future expectations plans and prospects that are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These statements will include observations associated with our commercialization of inbuilt. This statements regarding the regulatory and commercial plans for I see this including the timing of the FDA review of R&D.
Sufficiency of our cash resources and projected revenue.
These statements are based on the beliefs and expectations of management as of this conference call.
Actual results may differ materially from our expectations. The company undertakes no obligation to revise or update any statements to reflect events or circumstances. After this conference call.
Investors should carefully read the risks and uncertainties described in today's press release as well as the risk factors, which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statement included in the company's quarterly report on form 10-Q, and other filings we make with the SEC.
The form 10-Q will be filed with the FCC later today and will be available on our website I will now turn the call over to color CEO Mark I wiki.
Thank you Niranjan good morning, everyone and thanks for joining US earlier today, we issued a press release detailing our first quarter 2020 financial results and recent business highlights.
Before speaking to our progress I want to acknowledge the ongoing cobot 19 pandemic.
These are challenging and uncertain times for all of us in a matter of months the way, we live and conduct business has been significantly changed and many of us have experienced firsthand the social economic and emotional burdens brought by covert 19.
Like all of you we are deeply grateful to the doctors nurses and other healthcare professionals on the front lines and we are hopeful that ongoing efforts across the world will soon result in new therapies and vaccines to treat.
And prevent the further spread of covert 19.
In spite of covert 19, the first quarter was marked by substantial progress across our business in March we announced positive top line results from stride three our third phase III clinical trial of by Subarus and earlier. This week, we announced a resubmission of our new drug application for our service to the FDA.
We believe that the application will be considered a class two resubmission subject to a six month review period under PDUFA and we are preparing to launch as soon as before year end.
David 19 related restrictions on elective procedures, which includes most ocular surgeries have negatively affected in deltas prescription and revenue as Todd will describe shortly.
However, based on our interactions with customers. We are optimistic that deferred procedures will be rescheduled want to the safe to do so in expecting deltas prescriptions in revenue to return to growth.
Let me take a moment to review the data from stride three and read reiterate I believe I service has the potential to become the preferred first line prescription therapy for the short term treatment of dry eye disease. These strider three achieve both of its primary endpoints as well as key secondary endpoints with a high degree.
Statistical significance.
We observe statistically significant improvements in the primary symptom endpoints of Okcular discomfort severity at day 15.
In both the overall intend to treat population and in a subgroup of patients with more severe discomforted baseline as well as in the pre specified sign and point of contact table Hyperemia significant results were also observed for total corneal staining a day 15 in the ITC population.
Additionally, I subarus was so safe and well tolerated with adverse events in intraocular pressure increases comparable to vehicle.
Together these data replicate positive sign and symptom results from previous trials and demonstrate I suitcases ability to address the substantial unmet needs of people living with dry eye disease. In the complete response letter that we received last year. The FDA indicated that positive results from an additional clinical trial.
Was needed to demonstrate efficacy and supportive resubmission of the NDA with the stride three results in hand, we believe weve satisfied this request and we are confident that we've provided a robust package to support approval of I assume this.
With the NDA Resubmission behind US, we're now actively planning for a potential approval and launch by the end of the year.
As we look ahead. We are also fortunate to be operating from a position of financial strength in the first quarter, we completed a public offering of common stock and in April we received additional funds when the underwriters partially exercised their option to purchase additional shares together with the sale of common stock under our existing ATM to.
Realty, we raised approximately $147 million in gross proceeds since the beginning of the year.
Which will fund our operations into at least the second quarter of 2022, well beyond the potential launch of ice who vis without I will now pass the call over to Todd base more our chief operating officer to provide further details on deltas and I Subaru Cogs.
Thank you Mark and good morning, everyone.
Let me begin today with and deltas are twice daily Postsurgical ocular corticosteroid.
The first quarter there were over 42000 prescriptions have been belt as reported by Symphony Health.
Which represents a decrease of approximately 9.5% over the fourth quarter of 2019.
Due to the impact of covert 19.
Through the first two months of Q1 prior to covert 19 impacts adulterous prescriptions were up 4% compared to fourth quarter 2019.
While the overall walk through the steroid market was down 2% and the branded market was down 14% during the same time period.
As Mark alluded to beginning in March 2020, and continuing into the second quarter prescriptions have been dealt us has been affected by the ongoing cobot 19 pandemic.
Let us federal and local governments have implemented restrictions on elective procedures, which includes the most occupancy surgeries.
Perspective limitations to negatively impact full year and built this revenue for 2020.
That said we are encouraged for a couple of reasons first based on our interactions with high care professionals across United States. We believe physicians, who moved quickly to reschedule deferred procedures. Once restrictions are lifted which gives us confidence that in both us prescriptions and revenues will return to growth.
In fact, the most recent weekly report from Symphony Health, We achieved 35% week over week increases in adult us and our Rexs and overall market prescriptions were up 3.6%, marking the first week of growth since the deferral of elective procedures began in early March.
Second prior to the onset of covert 19 pandemic prescriptions were tracking up quarter over quarter, suggesting continued positive growth trends and strong demand.
We continue to be encouraged by the strong reception to investors among our target I care professional audience.
45% report, having already prescribed in deltas and prior to the pandemic, we have achieved a branded new prescription market share of 18.3% among are called on eye care professionals.
We believe the strength of this reception reflects both the strong clinical profile than belt us and the effectiveness of the color sales team.
While we have suspended substantially all in person interactions with our customers, including business to physicians offices clinics and hospitals. Our salesforce continues to provide support virtually through both telephone and web based technologies.
The team was able to transition swiftly to a virtual working model, we're pleased with their productivity over the last several weeks.
Going forward, we will continue to follow recommendations from us centers for disease control and prevention as well as federal state and local governments and we'll continue to access when it is appropriate for all employees, including our salesforce to return to normal work practices.
This will include a phased approach for sales representatives to return to the field individual states allow elective surgeries to recommence.
Several states have already begun to do so.
Our representatives in those states have begun to reengage in person sales calls with those practices that are open for business and are willing to see sales representatives.
In parallel with the ongoing efforts on adulterous our commercial team has been busy with launch preparations for a service and we believe we are well positioned to execute on a potential launch later this year.
Given the significant overlap in call it targets foreign belted anti service, we believe we will be able to launch a suit soon after approval relying on our existing 57 sales professionals to target the top drive high prescribers, who collectively represent approximately 70% of all dry eye prescriptions.
At the FDA approved like service, we plan to expand our Salesforce to approximately 100 to 125, representing.
Salesforce of this size will allow us to effectively cover the eye care professionals, who are responsible for about 85% of all dry eye prescriptions.
Our account director teams preparing to engage payers in dry eye disease state discussions.
We will leverage the team to quickly drive formulary reviews of like service, if and when approved.
We believe that I see this represents a tremendous commercial opportunity.
We estimate that there are approximately 33 million people suffering from dry eye disease in the use of which over 17 million have been diagnosed and our managed by an eye care professionals.
Our quantitative market research suggests that approximately 80% to 90% of these patients experience episodic dry eye players rather than continue with symptoms.
These players are inflammatory driven responses to a variety of triggers and feedback from both doctors and patients suggest they are not adequately managed by current therapies.
As we shared previously we believe that approximately 78% of patients artificial tears and approximate approximately 82% of patients on chronic daily prescription therapies suffer from breakthrough flares.
Moreover, data demonstrate that there's a high discontinuation rate among patients treated with existing prescription dry eye treatment options.
And our research indicates this is due to insufficient efficacy provided by these options and there are significant side effect profiles.
There is a clear need for a new treatment option. They can address the underlying inflammation of the disease provide rapid effective relief from the signs and symptoms of dry.
And is well tolerated by patients.
We expect the uptake of ice service that launch to be supported by the fact that they're already more than 17 million diagnosed dry eye disease patients visiting their eye care professionals on average two to three times a year.
Approximately 42% of these office visits occur because the patients actively experiencing a dry footwear.
That means we don't need to try patients into the doctor's offices. They are already there often explicitly looking for new treatment option.
We believe I service is well positioned to become the preferred first line prescription therapy, but the short term treatment the signs and symptoms of dry eye disease, which includes flares.
If approved I subarus will be the first and only okcular steroid to have an indication for dry eye disease.
Our research demonstrates that it is important eye care professionals for a few reasons.
First the efficacy or safety of steroids vary.
And I see this clinical data is viewed very favorably by prescribers.
Second inherent risk associated with prescribing off label steroids.
Third patients are more comfortable having a dry eye indication labeling of their medicine.
And for safety and efficacy that has been better by the FDA.
95% of the Doctor serving the market research stated that they are interested in the availability of a steroid with an FDA approved Tri Ed I try indication.
And most indicated they would prescribed by Super specifically for majority of their dry patients.
When we apply physician feedback from market research to the dry eye disease market. We estimate that there are more than 9 million dry eye disease patients that could potentially be prescribed by service.
Additionally, we estimate that there are over 330 million dry eye FLIR days per year in the U.S. alone representing a total addressable market potential in excess of $8 billion annually.
If approved as the only available short term treatment with a rapid onset of action to treat the signs and symptoms of dry eye disease. We believe we will be well position to capitalize on this opportunity.
I'll now turn the call over to marry to discuss our financial results.
Thanks Todd.
During this does that.
I will reference certain non-GAAP financial measures.
Non-GAAP financial measures.
Compensation depreciation and non cash interest.
For a full reconciliation of our GAAP to non-GAAP financial measures. Please refer to today's press release, which is available on our website.
Our cash position as of March 31st 2020 was $196.5 million compared to 5.4 million as of December 31st 20.
This increase reflects proceeds from our underwritten public offering of common stock, which closed in March 2020, partially offset by cash used to fund our operating expenses in the first quarter.
As of March 31st 2020 does not include an additional $7.2 million net proceeds we received.
As a result at the underwriters option to purchase additional shares in our follow on offering.
Together, we anticipate that our existing cash were neglect operation.
Second quarter 2020 <unk>.
For the first quarter 2020.
<unk> net revenue of $1.1 million compared to 1.4 million in the first quarter at 29.
Net revenues in the first quarter 2020 were impacted by higher reserves as compared to the same period in 2018.
As a reminder, we recognize revenue when we shipped to distributors.
We expect gross to net discounts to improve throughout the year and going forward.
Cost of product revenues for the first quarter of Twentytwenty.
Point $4 million compared to point 2 million for the same period 2018.
As we get capitalizing inventory cost greenbelt after receipt FDA approval in August 20.
Cost of product revenues for the quarter ended March 31st 2019 were more favorably impacted by cost, which were expensed as research and development prior to the FDA approval.
Non-GAAP cost product revenue was $4.3 million for the first quarter 2020, compared with 2 million or the same period in 2019.
<unk> expenses for the first quarter 2020.
$2.4 million compared to 18.2 million for the same period in 29.
<unk> expenses for the first quarter in 2020 compared to the same period in 2018 was primarily due to launch related marketing and selling expenses incurred.
During the quarter ended March 31st 2019 associated with the commercial launch of adult which were not incurred during the same period in 2020 as well in a decreasing stock compensation.
Non-GAAP EPS DNA expenses were $13.5 billion for the quarter ended March 31st 2020, compared to 16.3 million for the same period in 2019.
R&D expenses for the first quarter of 20 $25.4 million compared to 7 million for the same period 29.
This decrease is primarily due to a 1.7 million dollar decrease in external cost for the strike three clinical trial, partially offset by an increase in employee related costs driven by manufacturing employees allocating more time to do this R&D.
Non-GAAP R&D expenses were $4.6 million for the first quarter 2020, compared to 6.3 million for the same period in 2019.
Loss from operations for the first quarter of 2020.
$20.1 million compared to 24.1 million for the same period 2019.
Non-GAAP operating loss was $17.4 million for the first quarter 2020, compared to 21.4 million for the same period in 2019.
Net loss for the first quarter 2020 was $22 million were 54 cents per share compared to a net loss of 25.4 million or 75 cents per share for the same period 2018.
Non-GAAP net loss was $19 million for the first quarter 2020, compared to 22.5 million for the same period 2019.
Please refer to today's press release for the weighted average number of shares.
Calculation, our net loss per share for each of the quarterly periods discussed.
With respect to the impact of Cobot 19, we cannot estimate the linked and severity of this pandemic and that's cannot typically measured the impact on our financial results for the full year.
Not that it will have a negative impact on indulgence prescriptions and full year net revenue for 2020.
Further we expect full year operating expenses could be reduced as a result.
Restrictions in the activities of our Salesforce as well as a limitation of certain business activities. Other personnel as a result independently.
That concludes our prepared remarks for today I will now pass the call over to the operator for questions.
Thank you ladies and gentlemen, if you have a question at this time. Please press Star then one on your telephone and if your question has been answered will you extra move yourself from the Q. Please press the pound key.
One moment, while we allow the Julie.
Hello.
And our first question comes from the line of Chris Schott with JP Morgan.
Good morning. This is Chris there on for Chris Schott Congrats on the submission by saying this is an important milestone for the company.
So my first questions on for I assume its acknowledging it's early days for for the product with the recent FDA submission are there any appreciable impacts.
To the product from Cowen 19, or whether that be from a regulatory perspective or for that.
Pending product launch either a pending or after post approval.
And second on it for investors can you update us on where the products dads from a commercial and Medicare coverage perspective. Thanks, so much.
I do want to take that.
Sure Happy to say Hey, Chris Good morning. Thanks for your question well I start with adult this and your questions about coverage.
We currently have a little over 80% unrestricted commercial access current ulta, so with commercial payers, we're at about 23% with Medicare part D with all of our Medicare part D bid, having been submitted in the fourth quarter like last year, we expect the review those beds to occur.
And the second half of this year.
For consideration for Formulary addition on January one at the 2021 is as you know with Medicare always the opportunity that there's a positive decision.
Start date of being added to formulary can be moved up and we certainly will be pursuing that but at this point all those bids, Iran and we look forward the discussions with those different payers on those Medicare advantage, but aren't very happy with our commercial access.
No early this year, we're seeing actually a shift to more commercial business for and dealt us compared to the first you have launches our commercial accesses continue improve and that's obviously important because our commercial is a high yes. The current bulkers.
And.
Your questions on I assume this launch planning for a full underway the team doing a great job working remotely you have to cross functional launch planning team in place. They are meeting and working on launch plans on a weekly basis.
So really happy with the progress being made there.
And see no endurance from covert 19 on our ability to plan and be prepared for a launch before the end of this year I'll hand, it back over to Mark to comment on the filing and any potential impacts from a regulatory review standpoint.
You, probably not either one or two yes, yes, I did I was just thinking maybe Kim wants to answer that.
Sure.
We we are not aware of anything in particular that would slow down the review.
We have been dealing with the agency the up and like the vision on some other minor issues and they've been very responsive.
And have met all their timelines are so from a review perspective, there's nothing obvious you know the world is.
Changing a bit but that we don't foresee anything at this point that would slow us down.
But things can always change as we move forward.
That's helpful. One follow up question.
In Feltus, you guys highlighted expectations for a gross to nets to improve throughout 2020 or can you maybe just.
Talk to the magnitude of maybe piece of that change through the year.
Sure. Chris This is Tony I'm happy to take that you're right. We don't give direct guidance revenue guidance or goes to that guidance on adult is what we stated before is that we expect the gross to nets to continue to improve.
Well, we over the next 18 months or so into eventually settle in around where we believe the other branded.
Postsurgical ocular steroids are today.
Is somewhere in that mid 60% range on a on a gross to net discount basis.
So we believe we're heading in that trajectory in that we will eventually settle where the other branded started which are.
That's helpful. Thanks very much.
Thank you and our next question comes from the line of Liana Moussatos with Wedbush.
Good morning, and thank you for taking my question how should we this is to marry how should we think about operation expense.
Q2 versus Q1 and for the rest of the year.
Yeah. Thanks, Liana, So I would say just kind of overall if you looked at our operating expenses on a non cash basis for a non-GAAP basis, so cash basis only for 2018 it'd be about 82 million. So we expect overall even outside of Covidien.
Good day would be less than that because we finished the stride three trial. So having said that go in Q1 into Q2 normally we expect an uptick in expenses in the second quarter, a there's more meetings and things like that but given coded we would expect opex can probably be a flat to up.
On a bit less than Q1.
And then for the year overall like I said.
Less than 20 Nike.
Okay. Thank you very much.
Sure.
Thank you and our next question comes from the line of Byron I mean with Jefferies.
Yeah, Hi, guys. Thanks for taking my questions and hope you're staying safe Mark I guess, you know with the covert situation. The fact that you know a clinic clinics or shutdown how do you incentivize your sales force during the time at least as it relates to develop those because I think you're going to.
Some of those sales people when you launch I serve us.
Yes, great question I'm hearing and thanks for participating this morning. So we have done everything we can to really keep the salesforce engage there's a lot of home learning that's going on the <unk>, taking this opportunity to start getting everybody thinking about.
Ill.
What's going to happen when we get I see this approved and you're right. We expect to launch immediately what the current sales force and and then very likely if things return to normal expand the salesforce. After we we get approval so I feel like.
The teams are doing a great job things from home engaging with physicians and offices remotely and ideally as things begin to open back up weekend or just a quick start to getting them back out in the field.
Okay. That's helpful. And then I guess you know now that you've got stride three data in hand have you approach payers in terms of.
Yes.
The type of access that they would provide for ice service and the type of reimbursement or Oh.
Then ltvs have you done price sensitivity analysis and share that with payers to get you got the thoughts on potential price huh.
Yeah, It's a great question.
The data came and then the the cobot situation happened right away. So the truth is there hasn't been a lot done with payers since we've gotten the data, but certainly just before we had.
The data in anticipation of it being positive and maybe I'll turn it over to Todd and just have im getting some some high level thoughts on what we've been hearing from payers.
Sure, Thanks, Mark and really the crushing Darrin.
Weve engaged payers on multiple occasions preparing for launch.
With the product profile on I see years, I've had really good receptivity in recognition from payers.
For the need of a short term treatment for you know effective treatment for.
Signs and symptoms of dry eye disease.
No that we've seen as payers have been really receptor to this idea that although dry eyes, a chronic disease. The vast majority of patients do not have chronic or continual persistent symptoms. The vast majority of patient experience the episodic flares to their disease in which there symptomatic.
A few times a year and we're pacing acknowledge this is probably a lot of patients out there who do not require a daily chronic prescription medication would be just fine with a short term treatment. They can use of an AD databases when they're symptomatic.
So they're very receptive to that profile. They see it is meaningful and differentiated and what they told US is you know, although we haven't done our specific quantitative pricing research they've given us some good guidance I'm thinking about pricing as it relates to the current prescription dry therapies, which as you know all in that list price range.
John between five and $600 and so we think we've got a good strategy and understanding what payers expectations on that.
With some smartness pricing and modest rebate, we expect to gain very quick formulary coverage certainly your commercial payers within the first year of launch and then as you know with Medicare. It always typically takes a little bit longer, but we expect to enjoy a broad coverage with both commercial and Medicare payers.
Okay, and then maybe just a question on the regulatory aspects.
You know F.D.A. I think has restricted or manufacturing site visits so far I service or you're going to require a CNC CMC inspection and is there potential impact on coverage as a result of that.
Oh, I can give anyone else kimbre, yes.
First of all you know we're unsure of that that's not specifically known at this point however, the manufacturing process.
Or I assume this is virtually identical for that for in belt us, which was approved a year or so ago. So.
The FDA can rely on that then we don't think we will need inspections. There is possibilities of virtual manufacturing inspections.
As well and the place where we do the bulk of our manufacturing is.
I had inspections in the past so it's too early to really answer that question, but we're optimistic that that won't become an issue either because they.
I don't need to reinspect or because they can do virtual inspections.
Got it. Thank you if that was helpful.
Thank you and our next question comes from the line of Yi Chen with H.C. Wainwright.
Thank you for taking my question first question is have you observed any you see starting to reopen during the past week and if so how limited is their operation volumes compared to normal levels.
Todd you ought to take that.
Sure happy to take it and good morning gave the answer to your question is yes, we are seeing surgical center, starting to reopen and select needs.
I'm sure you're falling assuming there's some states have allowed elective procedures to begin again, which includes arcalis surgeries and and the ramp I think it's too early to say right now you know and at varying from practice to practice you can imagine there's quite a backlog of patients.
Likes it or on the market in.
And even many of their products that are in development are really not rapid acting products. When it comes to the the symptoms that patients experience and then interestingly as we reported we have a very meaningful effect on corneal staining.
And just two weeks in our trial, which if you compare that to other products. That's really quickly are really quick.
Action, if you look at <unk> clinical trial database on inferior corneal standing you're really not seeing it affected till 12 weeks.
So as we've shown the data to some of the top thought leaders in dry eye disease, they've had a really big a favorable reaction to that.
Not bad corneal staining benefit, which does make sense the product as a steroid it works very quickly and you know you're seeing kind of the door effect right on on the signs or the the real the most objective measures that that you can have the hyperemia, which is the the.
The immediate.
Symbol for the information sign of the information and then the repairing of the corneal surface, which shows up in that corneal staining data. So you know I think it's going to be a mix of endpoints. The rapid onset of action within a few days and really clearing up that okcular surface by looking at.
Hyperemia corny testing.
Thank you.
Thank you enter next question comes from the line of cuisine Ahmad with Bank of America.
Hi, there I'm running things for taking my questions why not about this can you talk to us about <unk> the percentage of targeted profession backed out of your sales force has been able to make contacts last.
Anthony extend that you'd have to stay you know what types of interactions are how many times interactions are needed on average with a sales wraps before a physician does right at scraps find out there.
Maybe the morning cuisine time do you want to take those.
Sugar morning busy and so you know we're focused on a a call your versus about 7000, mostly ophthalmologist. There are some optometrist we call on the cold managed to post surgical patient, but at this point, it's mostly ophthalmologist.
Call University of about 7000, I think is just shy of 3500 or nearly half of them that has prescribed so far and and you ask are really good question, how long does it take to get them on board and the call cycle is definitely a little bit longer for surgery I don't have exact number sales calls.
<unk>, it's a pretty intense isn't involved situation that I think I've I've described <unk> could be in a bit analogous to getting our product on a hospital formulary, where you have to do a lot of ground work on multiple decision makers, but once you get on that formulary you know you're open per per significant volume to come through the.
In the case would be surgical practices, it's not a foreign right, but rather a post surgical protocol and so you're really working to get uncomfortable to chronicle profile understanding reimbursement, making sure that the patients are gonna be able to get scripts skilled in depth. It's scripts are going to be affordable Haggard through you know coverage in their Medicare or commercial plan.
You should co pay reduction card and and once everything is set up and running really smooth you actually get added to the code surgical protocol, where you know most patients are getting a specific steroid I drop a specific nonsteroidal anti inflammatory any specific antibiotic and you know once you get to that point you can see.
Sort of what we call the flip a switch and volume and can come I'm very very quickly from these large practices.
Okay <unk>, how many of those 7000 knows that America has has to go for it had contacted.
All of them at this point.
Okay.
Oh.
Sorry, yeah.
So when you think of our 7000 targets. Those are the 7000 that we're calling on obviously with different reaching frequency numbers based on where we are in the cell cycle with those targets.
Okay.
Thanks for where it can I say that.
That I want it is on doctors will be part of your continued touch points can you point to think I think there's <unk> <unk> and I see this in you know the type of peace and presumably there a lot more young <unk>, let's try I relative and also how you're thinking about.
Rebating he didn't mention that for the chronically prescribed drugs. For example, there there could be found significant rebate happening would you consider the same level if rebating there and I guess the last question I'll ask because of of of the time that were and as we think about the unemployment rate in the U.S.
Unfortunately, continuing to tech higher how would you think about what kind of next to expect from pairs one that stuff Orange next year.
Yeah. So there there there's a few things and then let me see if I can <unk>. If there's anything on this please don't hesitate to to jump back again. So I do you think about the sales interactions with <unk>, they're gonna be much more traditional sort of retail based sales interactions.
Versus the their situation I. Just described was an adult is right. There surgical call is a very involved call Oh sales psycho with multiple calls multiple stake holders and really a a lot of worked at our sales force as a tremendous job of trying to get our product added to have a surgical protocol.
This is going to be much more traditional where you're you know reps are out detailing positions, providing some samples and croquet cards positions will start trial product right away with some patients that they think are good candidates and looking for feedback from patients and how they feel and then we expect that really positive feedback from patients were then you know further and further.
Reinforce no you know physicians using even more I see this within their practice. So I think a much more traditional sales interaction. We have said that we do claimed to grow the sales force from our current 57 to somewhere between 100 225, and that's where we can add a a large number of optometrist calc here. So the.
Roughly 7000 ophthalmologist simply call on today, 100% of them are are also dry our target. So there'll be great dual calls for both enveloped us and Pride service and then the future, we'll probably end up adding about 10000 or so optometrist that are very important dry prescribers the overall dry market prescriptions.
About half are produced by out small against them about half by optometrist. The ophthalmologists on a per capita bases are more productive writers because there's fewer of them, but on an overall volume basis for the entire market optometrist are extremely important described was and and and we look forward to you know growing and so forth and <unk>.
Wow.
<unk> you know.
We we.
Wouldn't call. It <unk> that I think is going on right now, they're certainly some rebating going on within the chronic therapy I think what's important Russian or interactions with payers is one that had told us that they do you I see this as being a sort of its own unique dry category. So you only have two oh short term drive therapy, and and therefore will.
Not run into any issues with contracts with the chronic daily medications that are out there right now and so that's an important understanding for US and then you know they're expectation is that you know we should be able to achieve abroad and open access for the product once we get on the market with an understanding and what we've actually had payers.
Back to us and say is that with a good short term acute therapy, we may be able to delay the time into which patients need to go on chronic daily prescription medications, because they can trooper drawing on a disease and the more I need a basis when depiction of something.
I think it was another question their presumed to them to get an answer.
Yeah, nothing today, so if there that the other part that I had asked about distribution dollar pair too paramax. So should we understand that that triad hastened seven that's my brought h. distribution as we sit here today, what proportion of scripts would you say would be commercial.
Yeah, you know if I lived in the market today current chronic though it's pretty evenly split you know about half the scripts or commercial a little more than half a commercial in the rest are Medicare maybe it's about 50% commercials, you know 40, 42% Medicare and then you know there's another 8% or so in there that's a low mix of a little bit.
Cash and Medicaid.
You know, we we would expect that to be this a similar situation for us.
You know I think it's interesting when you're <unk>. They have very good commercial coverage, but they've never been able to secure good Medicare coverage. Yeah. We're just commercial coverage they they've grown that two or 400 million dollar a year brand. So I suspect Novartis, we'll do you know, we'll work hard and and if they can increase the Medicare coverage.
Will open up a whole another opportunity for grill. So.
I think you know shy or now Novartis is showing you can be very successful with good access within one payer segment in their case commercial we're confident from the interactions we've had with pay or is that we're going to have very good commercial and Medicare part d. coverage.
I think over time, you've had a <unk> really good question, which which what's the impact of cogan in unemployment rates and how does that shift to pay or mix over time and you know I think it's too early to say I think we are whereas most of that there are likely to be fewer people with commercial coverage because of the high unemployment rate.
We'd have more casting patients in the market and so that's going to cause us to really take a look at what type of co pay programs do we need to have co pay assistance programs do we need to have that launch to support those patients who are gonna be good candidates didn't need to go on therapy. So I said I would say too early to say exactly what that impact is going to be but.
We are certainly keeping a close around it and and do expect at the high unemployment rates will have an impact on the number of patients in the U.S. that have commercial insurance.
Okay. Thanks, so much for the color.
True.
Thank you.
That I'll turn the call back over to C.O., Mark I wiki for any closing remarks.
Well I just take the thank everyone for joining this morning, you know despite though what's going on with <unk> 19 pandemic right. Now we are quite excited about the future for color thrilled that we've been able to reach submit the N.B.A. four I service and really.
Hoping that country in the world or get a back to normal soon so we can get back in the field and and really work on our plans with notice and hopefully get ready for that.
Launch of S., who is by the end of the thank you again and hope everyone stays a safe.
I have a great Dane.
Ladies and gentlemen, thank you for participating in today's conference. This does concludes the program and you may all disconnect.
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