Q2 2020 Nabriva Therapeutics PLC Earnings Call

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Ladies and gentlemen, today's conference is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.

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Ladies and gentlemen, thank you for standing by and welcome to the New breed Therapeutics second quarter 2020 financial results call. At this time all participants are in listen only mode. After the speaker's remarks, there will be a question and answer session to.

Last question. During this session you want me to press Star one on your telephone keypad.

I would now like to turn the call over to Mr., Gary centered in a brave its chief financial Officer.

Please go ahead Sir.

Thank you and good afternoon, everyone. Welcome to breed this conference call and webcast. When we will discuss the second corner 2020 earnings and also provide a business update.

Similar to last quarters earnings call. The slides for today's presentation are posted on the company's website www dot the brief a dot com and can be found under the investors tab in the events and presentations section.

We recommend that you refer to the presentation as we will be using those slides for today's discussion.

Before we begin on slide two I would like to remind everyone that this conference call and webcast will contain forward looking statements about the company.

These statements are subject to risks and uncertainties that could cause actual results to differ.

Please note that these forward looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly released the results of any revisions to these forward looking statements in light of new information or future events.

Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward looking statements are discussed in greater detail in our most recent filings on form 10-K, and our other periodic reports on forms 10-Q, an 8-K filed with the FCC.

Moving to slide three I'd like to share the agenda for today.

Ted Schroeder in a breather CEO will start with the business update Francesco Maria Ladino never even chief commercial officer will present, an overview on the commercial highlights and the strategy for the relaunch and then let up and some extra following the recent transaction with Merck.

Then dr., Dennis Jennifer Srams White, our Chief Medical Officer will discuss the exploration of expanded studies was sent a letter.

I will provide a financial review and Ted will come back with in summary comments and lead a key when a session.

In addition to Ted Jennifer and Francesco joining us on the call further QNX session. It's Steve July on our President and Chief operating Officer.

I would now like to turn the call over to our Chief Executive Officer, Ted Shredder.

Thank you Gary and thanks, everyone for joining our call. This afternoon.

Let's start on slide five earlier this year the management team laid out the company's Twentytwenty strategic priorities. These priorities included the shift to commercialization for isn't letter to the community yeah active pursuit of business development and licensing opportunities with the focus on community based products.

Obtaining approval UBS and let it in Europe in Canada.

Pairing for the launch of can Tipo and the thoughtful management of the brief its balance sheet and expenses.

The breather has spent the last several months planning preparing and executing on our strategic plan to shift our commercial focus to the community and leverage our capabilities through business development.

Even amidst the ongoing cobot 19 pandemic, which as you know has created limitations on how we can conduct our business and has impacted revenue we have been working diligently towards attaining these goals in the first half of the year.

The recent developments, we have announced have set a solid foundation to optimally position our assets as we continue to maneuver and manage your way through the challenging environment.

Let me summarize where we stand as of today.

As you recall market dynamics, coupled with our excellent payer coverage is what dictates the breathes shifts to the community.

Focus on the community is well underway and subsequent to the end of the second quarter, we announced that in a breather entered into an exclusive agreement with Merck to promote and distribute cyvex drought. This accretive transaction strengthens in the bravest commercialization organization and is expected to drive product uptake.

Given the community.

At the same time, we announced the Merck deal, we also announced our agreement with amplify the health and put the formerly known as Publicists is a leading pharmaceutical contract commercial organization, who will provide community based customer engagement and sell services for both of extra ends Atlanta.

We view the deal with Merck and the amplitude arrangement as true Differentiators and ones, we think distinguished in a breather from our peers.

Community acquired bacterial pneumonia and ABSSSI represent two the three most common reasons why patients visit a doctor for an infection.

As far as an letter or managed care coverage continues to expand in the second quarter as of June greater than 226 million or approximately 76% of all U.S. covered lives have access to send letters for cat.

Francesco will go into more detail, but the majority of the access remains unrestricted with no utilization management.

We think this adoption speaks to the value of than letter because it offers a short course of monotherapy with a favorable safety profile, especially versus fluoroquinolones.

We had the opportunity to take a fresh look at our prioritization of physicians and sub specialties.

Internationally, we have also made meaningful progress play obtains inlet approvals from health, Canada, and the European Medicines Agency.

We are actively considering partners to brings in letter to European patients.

Now, let me turn to can Tipo as we disclosed in June we received a complete response letter from the FDA for compete though.

Even though our manufacturing partners were prepared to hosted inspection ft Ace travel restrictions due to covert 19 prevented 13 from visiting the sites.

Yes, the a did not request any new clinical data and they did not raise any concerns regarding the safety or efficacy of can tipo.

Lets unknown at this time as when and how the FDA will execute international inspections, which has important implications for the timing of the resubmission of the can people in D.A. and its subsequent approval.

Once our manufacturing partners received feedback on their proposals to the FDA for how the agency can complete the required inspections.

We will request a formal type a meeting to collaboratively find a potential path forward.

Well I can't predict the exact timing for the interactions with the FDA I can assure you that they can people program remains a high priority for our team as well as for our contract manufacturing partners.

We are remaining prudent and how we manage our resources and we'll continue to do so the agreement with Amplyx. He is an example of that it gives us a structure that is flexible and efficient and can be scaled as appropriate to reach community based health care providers for both then let answer backstroke.

With the funds we raised in May we have a cash runway into the first quarter of 2021.

Turning to slide six let me spend a few minutes highlighting some extra show and how this transaction aligns with one part of our business development strategy.

Cyvex stroke isn't Oxylate unknown class antibacterial, it's a short course once a day oral treatment therapy that addresses the most most common pathogens that cause add see including methicillin resistant staff or is better known as Marissa.

As you will see later in todays presentation. There is a highly complementary customer base for sort of extra ensign, let it including infectious disease and urgent care physicians as well as primary care prescribers.

Some extra will be procured from Merck and the breather will be responsible for marketing sales and distribution in the U.S. through the ended December 2023, with renewable three year extensions.

As exciting as this is extra promotion and distribution is coupling that with our ample teen engagement allows for synergies and scale with the previous commercial team.

Ample t. as prior experience with Cyvex Trail and we believe there is already good brand recognition of the product by health care providers, which should enhance our access.

On slide seven I will touch on some additional details about our international efforts for Zen letter.

The approval from health, Canada for the Ivy and oral formulation. Since then let up for community acquired pneumonia came on July 10.

On July 28 European Medicines agency also improves and let up for cat, representing the first new antibiotic class approved for patients with cap in Europe, including the United Kingdom in nearly 20 years.

Our Chinese partner sign event continues to engage with the National Medical products administration to expedite development activities and regulatory filings for is then letter.

Sinovac has resumed recruitment activities, where theyre efficacy and safety study in China.

Lastly, the breather entered into an exclusive agreement with web clinical supplies and let up on a named patient basis. The named patient program is designed to ensure that physicians contingent on meeting the necessary eligibility criteria.

And receiving approval can request the Ivy Orals and let up on behalf of patients who live in certain countries, where it is not yet available.

We have made substantial advancements over the last several months to properly position, our commercial efforts for the current ever involving ever evolving environment.

We are confident that with the addition of extra though the amplify the sales effort the outstandings and let it instead of extra managed care access and thoughtful resource management that in a brief is well prepared for the community relaunch and Reengagement with physicians.

Let me now turn the call over to Francesco.

Thanks, Pat and good afternoon to everyone on the cool.

Moving on cards opening I'm going to share more details about the extended the maturity, we additional that extra to our portfolio and our plan to relaunch delta and connect so you'd lighting and with the help our contracts have partner.

Let's start on slide nine brief overview of the acute bacterial skin and construction infection, commonly referred to as I see.

I don't see infection include cellulitis wound infection, and convenient access and have treated in a variety of setting and he is one of the most frequently bagnold infection.

The most common fibrogen, causing ABSSSI he stopped areas, including the two existing strain also known as Mercer.

Turning to slide 10, so thats, so either not so good living on antibiotic indicated for the treatment the biopsy in both adults and seems like fuel adolescence patient.

That's right, we're going to activity against a broad range of power Gen, including MRSA with a once daily dosage.

It's a little formulation has shown 91% bioavailability, there's no need for loading those no food interaction and no major dr. dragging collection, especially with the SS NOI onto the press an agent.

He has a favorable safety and tolerability profile any clinical trial and the very low discontinuation rate.

So that is available in order and Ivy formulation and just given once daily sort of short six day course of monotherapy for ups.

Hey, good morning, this slide 11, and I would like to review the overlap in expected synergies as we kind of the launch of done late items that extra.

Approximately 3.3 million patients are treated in the outpatient setting for oxy and the key her kept professionals involved with the management of the station on comedy could walk Theres infection. This is the nation wide trees and dermatologists.

Similar to our analyses cap about 5% of still the prescriber account for more than 50%.

Antibiotic distinction for ABSSSI.

Target the right sheds prescriber to optimize the outpatient business opportunity for both some extra ends on later.

Given the very high volume of patient treated by these providers to both cap and Oxy primary care physician you didn't get an infection to his position I'm going to be a key shipped out to get customers group.

They account for more than two third of the potential agent for both some extra and then later and yet our highest priority as we execute the relaunch of the portfolio.

Our final targeting list will also include keep prescribed affords them later like Pulmonologists as well as key prescriber for sexual function by trees and dermatologists.

Moving on to slide 12, consistent through our strategic shift we plan to focus on the appropriate compensation yachts patient setting with than later.

Annually more than 2 million adult patients with cap of treated in the outpatient setting generating more than 50 million base of antibiotic therapy. These patients are generally older modest you working age we come on Comorbidities, such as hypertension or by the we don't read out previous antibiotic exposure and who the risk score suggesting.

That the patient can be treated at home.

80% of the station I've covered by either commercial or Medicare part D plans.

The latest build and growing managed care coverage is one of these piece trend and the reason for competency now an ability to gain adoption has been proven we restart bentek selling effort.

Right.

You should look familiar and during the second quarter, we continue to expand our managed care coverage for them later.

I would have market access the inconvenience to do a tremendous job. We're pleased to see that our managed care coverage is exceeding our expectation and as of June 2020 about 226 million what about 76% of all U.S. quoted life have access to delayed and most of the after he's on restricted Weve noise. In addition management.

Checked step edits or prior authorization, we have made good progress with both commercial as well as Medicare part D plans.

The Colby pandemic had an impact on formulary reviews for doesn't later with some of the Medicare part D plans, but we contract in place with less failures, we expect and later coverage to further increase in Q3 as previously disclosed effective July 1st then they buy idea, what's going to the J code that allow outpatient use to be.

Reimbursed SP plus 6%.

Turning to slide 14, I'd like to share more heat and Bob laid off managed care coverage and the significant formulary wins to date.

In addition to major plans like express scripts, United Health Group optimistic at nine Tri care.

The second quarter, then later with and without restriction to the formulary, so prime therapeutic downstream plan, including Blue Cross Blue Shield, the Texas, Illinois in Oklahoma as well as healthcare services core pushing commercial coverage close to 90%.

Based on our initial assessment Canexel also has excellent managed care comics and given to demonstrate the success of our market activity. We expect to continue to expand coverage for both kind of laid out into next year.

Turning to slide 15.

Let me share to what we believe are going to be the critical success factors for layoffs Relaunching. The community we have been refining our messaging platform. The clearly communicate that latent value proposition for community patient, we will leverage local resistance data from the old antibiotics and you would focus on Delek us if you could see a key dry.

I have a full adoption and its ability to offer to cure for patients in just five days given the Colby pandemic employees in any business will not be welcome back toward if they have bressler. They seem to these particular an important for the millions of people who don't have the flexibility to work from home we.

I will emphasize that labor has a short five days monolith happy and we will continue to differentiate on the 50 profile versus floor appeal.

We will leverage our extending commercial and Medicare part B coverage, we will identify the right target customers and he and ensure the white frequency of interaction to generate prescription growth.

And we will do that as shown on slide 16.

By prioritizing the target customers towards the later into Mexico, using multiple criteria, we will focus on geographic area. We the highest concentration on patient subscriber and we will consider the high level of overlap between tapping, obviously describer, including the prioritization of flex throwing the laid out here.

40 prescribers.

We will assess the managed care coverage for than later in some extra the cobiz restriction for ACB access and we've also identified those physician wireless long seems to remote detailing we will also honing our distribution of both product to ease patient access we will partner with employee health and we will deploy that.

Stagger fashion, we have plenty to have a small number of since that perhaps 15% 20 in the field as soon as early September and he plans to expand into a 50 to 60 person sales force by the end of the year, considering all the Cobiz restriction and eventually we plan to further expand the number of says that in 2000.

21.

Quantity the contracted organization not only provides the flexibility to scale Alco scaled down and access to position in true, but allow us to do within a very efficient effective an expedited manner.

Moving on to Slide 17, we're very excited to partner with ended the house as it gets ready to relaunch both sell laid out into next joined the community I'm pretty healthy brings extensive LK sales experience and capability. This important everybody as we approach the execution of the launches.

100% healthcare focused and with the health has been delivering solutions to the pharmaceutical industry for over 35 years any the past two years. They have launched more than 40 product and conducted approximately 7 million healthcare provider personal interaction.

They also have experiencing virtual engagement channels, the new norm as we anticipate that moving forward. The total customer engagement model would be a blend of face to face and remote communication they've been working with most of the top 20 pharmaceutical company and had experienced in multiple therapeutic area, including infectious disease.

And as Wocket, putting active they provide a field services for select.

And we'll be provides an agreed by the flexibility to generate organizational agility and help manage resource deployment turning to slide 18, any conclusion, you additional sit extra large portfolio create a substantial combined opportunity in that community seems more than 5 million patients are treated ATSI and trail.

We will partner with empathy health to ensure flexibility with a community base skill set we will revise our customer segmentation and targeting and we will deploy see us wrapping a face approach at HCP offices, we established with a focus on high potential targets sort of portfolio.

Critical to success will ensure the appropriate frequency on the like target and we will also continue to leverage effective digital and one personal promotional element of the marketing mix will continue to work on expanding the already drilled managed care coverage for both and laid out in some extra and we will enhance the brief.

Specialty pharmacy network and homebuilding reach while expanding availability in the retail channel.

Community acquired bacterial pneumonia Nazi represent two of the three most common infection in the outpatient settings, and we firmly believe that the addition of sexism ventilator creates significant synergies in Seattle and will allow nabretta to extend our footprint in the community in the near term I would now like to hit to turn.

The coal over to Jennifer.

Thank you for Tesco I will expand upon some of the topics discussed at the last earnings call instigate some new projects.

Given the unique properties as a matter we continue to advance lifecycle management projects and address the global healthcare crisis at any microvision debt and the unmet need within the medical community.

Turning to slide 20, as we have learned all too well from the recent cobot 19 pandemic. The host in your logic response to an insult can result in a significant inflammatory reaction, causing lung damage in patients with acute respiratory tract infections.

As a result modulating the immune response is the agent such as corticosteroids or Macrolide antibiotic has become commonplace in patients with inflammatory condition.

The anti inflammatory effect of Atlanta had been evaluated and I'm hearing model by polysaccharide and just some lynch affiliates, which demonstrated that met his ability to significantly reduce local information as measured by total sell initiatives accounts and that bronco LDL over the value fluid that's comparable to decks.

The methadone unknown potent anti inflammatory drug.

This result is particularly promising valving positive results from the Kobe 19 recovery trial demonstrated dexamethasone led to a significant reduction and mortality and patients requiring supplemental oxygen.

If we ever is excited to partner with the Australian Research promotion agency. It was awarded US a grant as part of the emergency covered 19 call for proposals that will fund experiments to further characterize the anti inflammatory and immune modulatory properties of the Atlanta and other compounds in our proprietary term yield in library.

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If validated the possibility to assess the utility of them letter in the management of inflammatory condition, including cystic fibrosis funky at this as a chronic obstructive pulmonary disease will be possible.

Turning to slide 21, I would like to review how is that led us property aligned to potentially address the unmet medical need if he is with cystic fibrosis.

As background see asset the progressive genetic disease. They causes persistent chronic lung infection is severely limit a patient's ability to breeds over time giddy mutations ended function and the cystic fibrosis trans membrane conductance regulator or CSAPR gene.

He might be wondering how cans and let it potentially improve the lives of patients at the fibrosis.

Based on data from the cystic fibrosis endangerment restrict registry Staphylococcus aureus is the most prevalent organism isolated front of aspire to attractive sheltering with cystic fibrosis and up to 26% of all patients. The CF has persisted methicillin resistant Staphylococcus Orient, our murcia colonization or pulmonary.

Infections.

The present, a staff mcopco plumbing infections in patients with CF is associated with worse outcomes and Murcia in particular has been associated with a median survival time that is 6.2 years shorter and noted that Murcia.

Additionally concerning.

Our trends of increasing Murcia colonization and infection rate an older cohorts intelligence that said listen and honestly region asset.

It is important to emphasize that there are no approved treatments, which often our chronic animal Andre said for this potentially modifiable risk factor for Mcalenney in CF patients.

Moving to slide 22, then let it is the potential option for patients with MSS say or Mercer pulmonary infections as it is a known potent anti staphylococcal antibacterial agent. They became the activity in the presence of Biofilms and possesses a loan mutation frequency against efflorescence.

The letter had excellent penetration is epithelial lining fluid and macrophages in Atlanta, and what oral and intravenous Atlanta are approved for the treatment acumedia chloride ammonia in the U.S. in UK, and Canada, but just that double organisms.

As discussed earlier, then let an anti inflammatory properties, maybe a particularly important attribute any difficult to treat chronic infections.

Based on their latest characteristics that are aligned with managing infections in patients aseptic fibrosis, we are exploring funding opportunities to further esas the potentials and let it for the management upcoming exacerbations caused by Marcia.

Lastly, let's turn our attention to then let us the commercial in the treatment of another significant unmet medical need multi drug resistant sexually transmitted infections or sci.

Turning to slide 23.

S.T.I. rates have continued to search for the fifth straight year concerning public health officials because left untreated S. T. I can increase went to rest for HIV long term pelvic abdominal pain infertility and pregnancy complications.

I see it got area, Michael plasma genitalium have become increasingly difficult to treat good increasing rates of addictive and as a result have been recognized but a significant at least until then prevention as urgent and emerging threats pathogens, respectively, and their 2019 antimicrobial resistance threats report.

As you can see on slide 24.

The letter has potent in vitro and that trust activity against a theory had done area and Microseismic Genitalium as well as committee extra come ahead.

And because of its unique mechanism of action. The letters activity is maintained against multi drug resistant clinical isolates the patient failing treatment with high doses of a determination moxifloxacin indicate cyclists.

What is most noteworthy is that letter possesses activity against all of the most common causes of urethritis is driven by.

Making it an ideal syndromic treatment option, which would be a significant advances and the management I think important public health threat.

We continue to progress this program with great support and have an actively collaborating with the global team that Sci expert to design and execute on a development program to evaluate them at as potential as a syndromic treatment for yet your its write us and service items.

We are executing additional in diesel work, it's really an investigator initiated study we plan to support an open label K series evaluating the Atlanta in patients with refractory resisted Michael plasma Genitalium infection.

We are excited about the potential to discuss innovative program with regulatory agencies in particular with the FDA at the upcoming workshop on the development of treatment for Sci, which is expected to be held in the fourth quarter of this year.

In summary, as we continue to live and Kobe 19 pandemic. It is a stark reminder of the important that preparedness for infectious disease threat and the anti infective research and development and the steady flow of new antibiotic agent is important as far as global health and economy.

In closing as an infectious disease physician and mother for children I Sincerely Express my gratitude for frontline responders school administrators coaches and our teachers as we approach fiscal year.

We are committed at every other to make our scientific research is available to improve health outcomes in the patients we discussed today and in studying this global public health pandemic.

I will now turn over the presentation to Gary that financial review.

Thanks, Jennifer on Slide 26 that listed some key financial highlights.

The breather generated total revenue of approximately $485000 in the second quarter.

As expected and disclosed in our prior financial update.

Also continued to build and lighter orders primarily from their initial strong stocking at launch and given the lack of promotional efforts in the second quarter, there was minimal prescription or sales activity to pull through existing inventory.

I will discuss some onetime adjustments made to conservatively reserved against our then let ivy inventory and product in the channel.

Other sales is comprised of collaboration revenue and grant income from the Austrian government.

Like with all companies the covered 19 pandemic has made it difficult to predict future sales.

There are a variety of scenarios, which could evolve for the rest of the year, depending on demand and our ability to get sales representative actively promoting both sent a letter of extra.

We're excited about getting community.

Thanks reps back working to educate physicians about our approved products utilizing both direct and remote tactics, but sales in subsequent quarters in 2020 are difficult to forecast.

We actively managed our expenses to preserve resources, we want to ensure that when we deploy our commercial and medical education efforts, we achieve our expected returns.

Our SGN a spending was cut in half in the second quarter compared to the first quarter and was lower than prior year.

We expect that our commercial investments will increase going forward as we carefully deploy sales reps to discuss folks have extra anthem latta with the medical community.

We will also purchased our initial some extra supply from Merck in the fourth quarter.

We ended the second quarter with cash of approximately $50 million.

We added approximately 39 million to our cash balances in the quarter through our equity raise and ATM activity.

We expect that our current cash balance will fund operations into the first quarter of 2021.

Let's now look at the details of our TNL on balance sheet. Please advance to slide 27.

Slide 27 provides details of our PNM now and I ask that you look at the notes on the right side.

The actual product sales generated in the first quarter were in the second quarter are predominantly for the oral version of that Atlanta, which carries a higher gross to net than the Ivy formulation.

We booked a 38% gross to net reserve against our second quarter product sales.

We recorded a 300000 dollar returns reserve adjustment for slow moving then let at Ivy inventory based on an assessment of what was in the channel.

This represents 50% of then let Ivy inventory held at our specialty distributors.

This adjustment was partially partially offset by a favorable 200000 dollar gross to net adjustment based on past claims activity and expected discounts and rebates.

Overall, the combination of our actual product sales the returns reserve and the gross to net adjustment resulted in $48000 of negative product revenue for the second quarter.

Under cost of goods sold we recorded a 400000 dollar noncash adjustment for San let Ivy inventory due to the uncertainty of commercial activities underlying I'd sales.

This is consistent with our stated focus on a community for which prescriptions tend to be for the oral for Orals and letter.

R&D expenses lower year over year due to a decrease in activities and as I mentioned, SG and able to significantly reduce based on our active management of resources.

Interest expense was significantly lower given the reduction in debt balances.

Please turn to slide 28, which has our June thirtyth balance sheet.

We previously previously discussed our cash balances.

Prepaid expenses increased primarily due to accrued insurance expenses and due to payments made to our contract manufacturing partners for news and led to inventory.

Year over year debt balances are significantly lower due to the paydown of debt, which occurred in the first quarter of 2020.

For the next part of the call Ted will make some closing remarks, and then we will head into a QNX session.

Thanks, Gary.

In conclusion as we've laid out we've adapted how we think about promoting our products to help providers and how we think about maximizing access for patients.

We have built upon our favorable early managed care coverage and our implementing new programs to leverage access.

It's taking time to put the pieces in place, but we're confident that it is the right strategy in the current environment.

Our goal is to be position for success under a variety of ever evolving cobot scenarios as well as in the post cobot world.

On re launch of our community based sales effort amplitude will utilize both face to face interactions and virtual engagement channels with targeted physicians.

We will continue to be opportunistic as we evaluate business development and in licensing opportunities to find assets that fit in the previous realigned infrastructure in core capabilities.

Adding cyvex stroke is a demonstration of our ability to bring in complementary assets.

With that let it instead of extra together, we are in a stronger position to leverage our selling effort in the community.

We believe the some extra transaction with Merck sets us apart from our peers and we look forward to sharing our progress with you in the coming quarters.

Jennifer reviewed some exciting and an important new programs that we are pursuing primarily with grant funding.

We are focusing our proven development expertise on rare infectious diseases, where there is a high unmet medical need.

The duration of therapy for many of these are longer than how doctors treat acute infections. We believe that this is a good investment of our resources will drive shareholder value and is absolutely consistent with the breezes mission.

We look forward to updating you on our progress in these important pursuits.

I'd now like to ask the operator to open the lines for questions.

Operator.

Sure at this time, if you have a question.

You may I ask it by pressing star one on your telephone keypad. If your question has been answered then you wish to remains yourself from the Q you may data by pressing the pound key well pause for just a moment to compile the key when a roster.

Your first question comes from the line as Alan Carr.

Sorry your line is open.

Thanks for taking my questions.

Now you can comment on.

So texture, what's sort of momentum at hand, this over time that.

Sales have been a bit volatile.

Can you comment on that and what sort of momentum you might be able to.

Leverage once you start taking over and then also I guess can you comment on what what amply brings.

It is they have some added.

Expertise or knowledge around.

Around this space in the community setting thanks.

Yes sure. So so thanks for that question about the the momentum with Cyvex stroke, and what the sample to bring to the to the parties who will so Francesco why don't you go ahead and talk about.

What we know about the sub extra sales trajectory and that's true notional responsiveness.

Sure Alan Thank you so much for for the question first of all so let me. So that's sort of when was promoted in the past actually initially by ended itself and then by Merck was experiencing a very very steep growth in prescription.

And I guess, some extra really represent a very good examples of how antibiotic can be very very well.

Promotional sensitivity, so we know that even twentytwenty selection prescription have been declining.

This is primarily given the lack of promotional activity. So we strongly believe that as we reactivate promotion with anybody we will be able to bring back.

Prescription.

Especially because anything historical basal prescriber that had been using selects Joel.

On many many patients so we believe that he might be able to some has begun.

Activity back to reflect the sale and second question, the lots with them up and busy and what he brings to the table. So as I mentioned mpvs and their experience organization.

In this phase of the content fees are going addition, they have experiencing the infectious disease space.

There would be launching multiple brands and they have a specific experience with an extra so.

We believe that they might really given the brita, what we need to quickly to reactivate connect you'll see us on one hand and establish a basis for growing done later than anything that has the second goal.

They also being guys being experience in managing these virtual over multi engagement.

We will we all hope that we will be out of these koby situation as quickly as possible, but I guess, we all agree that the work is going to be different anyway, and so our expectation is that that engagement with customers will be a blend of face to face as well as remote and I think that.

Well. The offers also then experience in remote engagement channel that will be extremely helpful, especially as we as we conceded that we launched stealing a phase where there are some college restriction place.

Okay. Thanks in them well continue.

We have essentially you will have a discussion with the FDA that.

Weeks away or hurt underway.

Yes, so thanks, Ellen with a question about can keep though and the FDA interactions.

Steve here that you are the closest to so that process. So why don't you go ahead and responses that question.

Sure. Thanks, Thanks for the question so.

As we communicated previously our contract manufacturers I've been in dialogue with FDA.

And then have informed the agency that they remain prepared to host inspections.

And there are waiting at the age response to.

They may be able to achieve completing those inspections in the face the travel restrictions. So it's at this point a little bit difficult for us to comment on specific timing around that.

And when a meeting may happen with the agency.

But this remains very copper mine for us for our partners and we continue to be very diligent.

Try to work with the agency to come to a solution as best as possible.

Yes.

It's actually can you clarify that that the next.

The next interaction and made discussion between you and the FDA or is it going to be once they can get.

A a visit scheduled to the to the manufacturer.

So just to clarify a little bit more so there's I guess two parallel communications going on one is between the manufacturers and the agency.

In trying to ensure that they're aligned and working towards a plan to have those inspections happened in the second is between us and the agencies the sponsor of the NDA to map out the appropriate timeline. So those two things are basically so together.

Okay, all right well, thanks for taking my questions.

Thank you.

Again, if you'd like to ask a question. Please press Star then the number one on your telephone keypad.

Your next question comes from the line as Ed Arc from H.C. Wainwright.

And your line is open.

Great great. Thank you.

Thanks, everyone for taking my questions.

And congrats on all the recent progress on regulatory and BD fronts.

Thank you. So three questions for me I think I'll start by following up on the previous question.

You are with yourselves or with your contract organizations what.

I guess, what I'm asking is.

Is there any possibility for.

You to come to an agreement with the agency.

For some sort of a virtual inspection in other words.

Documents that need to be checked and everything else is there any way to get around perhaps or is there any discussion.

Around the possibility of getting around.

A physical inspection and waiting until whenever that happens.

And I've got a cup followed.

Yes. So on that question about is or is there an alternative to a physical onsite inspection and I think the answer to that is that we believe that the flexibility to do that is within the regulatory authority of the FDA that they have the regulatory authority to conduct.

These.

Inspections as a desk review as utilizing.

Remote methods like like video or.

Even having a qualified representative that's in country.

Resolve some of the parts the inspection for the FDA. So we do believe there are a number of tools with the FDA has available our contract manufacturers will be making a proposal about how they believe that they could host and fill in that meet the requirements of the inspection. So that's there.

Their role in the FDA will only communicate with them about that and then as Steve indicated earlier, our our role once that once that.

Conversation occurs between the manufacturers in the office of manufacturing quality within the division, we will work through the the timeline and the re submission so.

That that's kind of the stadium, where it is but just to reiterate we do believe the FDA has the regulatory authority to do this.

They have other means available other tools in the tool kit.

Okay. Thanks for that clarity.

And then regarding your.

Your recent agreement with ample ulti.

I know that when you announced it there was some discussion around how despite the fact that this is our.

Contracted service.

And would otherwise be all else equal a bit more expensive than sort of in house.

But you had.

Taken some pains to too.

Describe a a value based approach to this and I was wondering if you could.

Described that a bit qualitatively.

Yes, so qualitatively I think when you start thinking about.

What the what what's the expense of having a contract sales organization.

And what are you getting for that if the you know the additional management fee that's on top that well right off the bat one of the things that you know, it's kind of a push from the.

I would say from the previous standpoint, because recall, we had a hospital specialty sales force that we're in a brief employees were now morphing into a community based sales force and so just general salaries are lower for that type of salesforce than a specialty salesforce with the.

So there's not a real big change and what our historical investment in Salesforce have been the benefits of course are.

Much greater one we're tapping into an organization that has dozens of contract sales forces with dozens of manufacturers in the field and so we can learn from them, what's working and what's not particularly when it comes to remote engagement and.

So we can leverage that that expertise that would be hard for a small company like in the breed of that have a wide enough do and would that we've lined up trying to buy it through secondary sources anyway that comes with the amplitude team I.

I think their ability to.

To quickly and nimbly put sales reps in geographies that are experienced and and more responsive to what the access levels are.

You're not only just traditional access but also the access in the in in a pandemic.

Environment as well as where we have managed care access and distribution that support physician prescribing. So I think that nimbleness and flexibility coupled with their broad view of what's going on in the marketplace really offer significant advantages.

To near breakeven as we as we feel the sales team and are looking at how we can appropriately educate physicians.

In the current environment.

Okay.

Great and then last question if I may.

Regarding some extra ends and letter as you work with them with the two to bring that forward.

Together in the marketplace.

How how would you address concerns by some.

Investors and others as they look at this the there was a potential here for.

Each to cannibalize the other and ABSSSI. Thank you.

Well so yes. So the question about cannibalization in ABSSSI between the two products.

And I think thats.

The answer to that I think is relatively straight forward.

Then let it is only approved for community acquired bacterial pneumonia in adults.

And.

Cyvex stroke is approved for the treatment of.

Bacterial acute bacterial skin and skin structure infections, and adults and adolescents and that's it. So we will only promote those two products.

I think that the.

That that the positioning of Zen Leta into Millenia is as strong it's got a particular role to play a new class IV antibiotic in that area and it has not traditionally been a strong area for the use of of other products in the class pneumonia has not been there.

There is strongest area. So I think we're playing to the two strengths of the two antibiotics appropriately positioned and appropriately differentiated for the for their approved indications.

Thanks again.

You bet. Thank you.

Your next question comes from the line as Kevin Kedra from key research.

Kevin Your line is open.

Hey, Thanks for taking the questions a jump a little late Tencents from your earlier comments are opposed to use.

Sure ill discuss this.

But with the with the transition towards the community setting and putting up Cyvex true.

You guys do have several ivy products, including potentially compete CFO.

Are you thinking about I know the rest of thinking about bringing in products like you did with sort of extra have you guys considered the idea of.

Maybe outlicensing or divesting some of the Ivy products.

To a company I might be more focused on hospital might be able to.

Maybe a more success there without having to take on the cost to do that.

Yeah No. It's great question, it's we're shifting toward the community what about the what about the hospital focused.

I think one of the realities right now is that.

Access to the hospital is.

Effectively not not possible because of because a pandemic restrictions, but looking towards the future. We are considering a variety of scenarios to manage our portfolio by the products.

We're open minded and while we believe it's important that hospitals have access to new antibiotics that treat seriously ill patients. We're we're flexible in our thinking about how we can best optimize the resources and.

Yes tone for those products so.

Can't say much more than that but we remain open minded about how we would structure the business.

Okay. Thanks mm.

On some of the.

He showed on what the letter can do opportunities and see a.

I know some of that funded with grants, but how fortunate grant funding to get you connect gets you to.

Proof of concept data and how much are you guys willing to kind of spend to get some of these programs to proof of concept data given where you are financially and putting a lot of your resources into commercialization of two products.

Yes, so I think they I think we have the animals like the the susceptibility data from an in vitro standpoint, it certainly gives us encouragement that those programs.

Could be important and the.

In the case of CF I think the understanding the PK in CF is is particularly important and we do believe that we can get there with grant funding and then we'll be at a decision point and if because the PK doesn't hold up there is no program. The move forward if the PK looks.

Promising and CF patients and antibiotics. The PK is particularly difficult if we get passed that hurdle. We understand that then I think its a.

It's a program that we can look forward to that changes the focus of the company from acute antibiotics too.

Rare disease rare infectious diseases that have a different trajectory in a different economic value.

Yes. Thanks.

You bet.

And there are no further questions at this time, ladies and gentlemen, this does conclude todays conference call. Thank you for your participation you may now disconnect.

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