Q3 2020 Eagle Pharmaceuticals Inc Earnings Call
Oh good morning, everyone. My name is read and I'll be your conference operator at this time I'd like to welcome everyone to Eagle Pharmaceuticals third quarter 2020 earnings results Conference call.
All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer period.
At that time, if you have a question. Please press star and one on your Touchtone phone Andrew.
As a reminder, this conference call is being recorded today November 2nd 2020 it.
It is now my pleasure to turn the floor over to Miss Lisa Wilson Investor Relations for Eagle Pharmaceuticals. Please go ahead.
Thank you Reed welcome to Eagle Pharmaceuticals, third quarter earnings call, Lisa Wilson Investor Relations for Eagle Pharmaceuticals with me on today's call are Eagles, Chief Executive Officer, Scott Terry [noise], Dave.
David Karnovsky, President and Chief operating officer, and our newly appointed Chief Financial Officer, Brian Cahill that's.
This morning, the company issued a press release.
Detailing financial results for the three months ended September Thirtyth 2020.
This press release, a webcast of this call can be accessed in the Investor section of the Eagle website that Eagle U.S. Dot com.
Before we get started I would like to remind everyone that any statements made on today's call. This call.
That express a belief expectation projection forecast anticipation or intent regarding future events or the company's future performance, maybe considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to Eagle Pharmaceuticals management as of today.
And involve risks and uncertainties, including those noted in this mornings press release and our filings with the FCC.
Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements.
Eagle Pharmaceuticals, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law a telephone replay will be available. Shortly after completion of this call you'll find the dial in information in today's press release.
Archive webcast will be available for one year on our website at Eagle U.S. Dot com.
For the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on November 2nd twice why sales.
Since then Eagle may have made announcements.
Related to the topics discussed so please reference the company's most recent press releases and that's you see pilot.
With that I'll turn the call over to Eagle's CEO Scott tariff.
Well, thank you Lisa and good morning, everyone.
Let me begin by saying that egos quietly having a great year due to covert constraints and the general state of the specialty segment, we have not spoken to as many of you.
And as often as in previous years.
Through the first nine months of the year Eagle has had a number of critical successes that we believe position the company for significant growth over the next few years.
This morning, we issued two press releases.
The first was our quarterly earnings announcement in which we described the strong quarter and provide a road map to the near future.
Second release announced the appointment of Brian cake sales, our new CFO as well as a number of key additions to the clinical formulations of commercial teams that we believe will strengthen the executive team. This.
This is Brian first earnings call and he will be speaking to you shortly Brian has been with the Eagle for four years as our VP of finance collectively these appointments provide us with the internal resources to focus on operational excellence and realize the full potential of our multiple pipeline opportunities.
[noise] first I'll review Q3 highlights and provide an overall business update.
As I mentioned up front, the third quarter was very strong coming in at $1.17 per diluted share on a non-GAAP basis and reflects a month among other things the efficiency of our business model.
For the first nine months of this year, we earned $2.58 per share.
Compared to $2.13 in the first nine months of 2019.
Notably this $2.58 is just three cents less than the 261, we posted for the full year of 2019.
Given the strong performance to date 2020 is shaping up to be a growth year for Eagle and at the same time, we've been able to continue to support our R&D efforts and build our pipeline for the future.
Let me take a moment to expand and what I mean, when I discuss the efficiency of our business model. We've tried to build eagle primarily through organic growth.
In doing so there may be periods similar to the one we just left when earnings didn't to dip temporarily all the R&D cycle catches up now.
Now we are back on growth trajectory and considering our expectations around launching days are pressing shortly combined with Sim bio's recent approval for bend to busting and having received final approval for Penntex C., we believe our prospects for earnings growth not just in 2021 and 21.
22 and beyond are excellent.
And keep in mind the impact that all this growth will have especially considering that we only have 13 million basic shares outstanding.
Beyond that we are building out a strong pipeline. This includes both the strength and SM 88 in our oncology group and on the critical care side of our business. We have a potential number of ryanodex expansion opportunities to offset the expected decline of bendeka due to train to competition in 2023 or.
All of this positions us well for a period of sustained earnings growth that is already under way.
We continue to reinvest our earnings in both our product pipeline and in the company.
This year, we have bought back $33 million in stock.
Bringing total repurchases since August of 2016.
The $205 million or 22% of the company.
Clearly this constitutes a significant return of capital to our shareholders. As an example at the time of our February 2000, or 14, IPO, our basic share count pro forma was 14 million shares and today as I just stated six years later, it's there.
18 million shares.
Let me turn now to our product highlights beginning with Bazell Crescent.
I am pleased to say that days of pricing was formerly granted priority review by F.D.A. last month.
On our last quarter's call I noted that ft. Eight asked us a few specific questions, which we responded to fully back in September.
We are hopeful about receiving approval shortly and would then potentially plan to bring the product to market soon thereafter.
Remember our original trial date was scheduled back in May but was postponed due to cope it. We just learned that the new trial date is set for January 11th 2021.
The proceedings will be held over soon and we expect the trial to take about one week.
We anticipate that we will have a decision by around mid year 30 months stay just ended this past October and based on the strength of our legal position and if approved we are seriously considering launching our product prior to this court decision.
We continue to anticipate that when the launch does occur we will maintain our 180 days of exclusivity.
This is an important opportunity for us sales of days a strict are expected to reach $700 million this year.
Turning now to our oncology portfolio.
[noise], we have our first then the Mustang product approval with our partner Symbio in Japan, 250 ml bag and are awaiting approval of the 50, M.L. 10 minute rapid infusion product sales.
Symbio currently sells about $85 million in bend, the Mustang annually, and we'll begin converting to our product in January.
We anticipate that the royalties and milestones we have built a $10 million to $25 million per year Eagle recently received a 5 million dollar approval milestone payment, bringing the total receive from sym bio to $17.5 million so far.
This will become a consistent and meaningful income stream for us.
Now turning to our full the strand product candidate EA, Onefourteen, which targets estrogen receptor positive hertwo negative advanced breast cancer.
We just had a positive type C meeting with FDA and have the minutes now the next step is to submit the protocol. We believe we have a study design that will address all of the open questions.
And we are targeting year end to complete this process.
Once we reach alignment with the agency will we will provide a comprehensive update of the study protocol and other details of the program.
Probably in the form of an analyst day to take place early in the new year. You also hear from top breast cancer thought leaders. We are really proud of this program and excited about the potential to improve outcomes in this patient population.
We look forward to sharing more specifics around the study design timing costs and anticipated anticipated benefits to patients.
Now, let me touch briefly on where we are with some of our ongoing other work in oncology and critical care.
Penn sexy or pemetrexed it for injection represents a significant opportunity for us as well.
We have a unique J code as announced last quarter. We also now have approval for the multi use vial, which means we can participate in a larger segment of that market and we're about 15 months away from the February Onest 2022 market entry.
And are busy preparing to capitalize on the sizeable opportunity.
And as you may recall in August FDA granted orphan drug designation for SM 88, which is our strategic partner time technologies lead product for the treatment of pancreatic cancer, a pivotal trial to evaluate oral SM 88 for third line treatment of patients with metastatic pancreatic cancer is underway and.
We understand that time, we'll have data next year. This is an exciting and promising therapeutic and another valuable part of our oncology product portfolio that will continue to contribute to our growth over the next several years.
Turning now to our Ryanodex portfolio I'll start with ran index for the treatment of brain damage secondary to nerve agent exposure. This.
This month, we are initiating dose ranging studies in another animal model and non human primates. These studies involving administration of Ryanodex intravenously.
And will help to demonstrate efficacy and delineate the appropriate dosing strategy.
We're also going to include in our using an intramuscular formulation of EA 111 in the nerve agent program. These early results will then allow us to update our special protocol assessment or spa and gain alignment with FDA prior to proceeding with the remainder of the GLP efficacy study.
We are aiming to complete our low volume push Ivy for nerve agent program by the end of the second quarter of next year, followed by a submission to FDA for approval.
In terms of other Ryanodex indications under development, we have a research partnership with North Shore University Health system.
To study the potential use of dantrolene sodium in treating traumatic brain injury or TBR and concussions. Our first study is concluding and we expect to have results. Shortly we look forward to sharing what we learn.
Our collaboration with the University of Pennsylvania to develop an intranasally Alzheimer's disease indication for any decks continues to focus on the unique role calcium is regulation may play in treating this disease.
Second more comprehensive preclinical model is starting this year.
In August you pens preclinical research showing that dantrolene sodium administered intranasally improve both memory and cognitive function in a mouse model of Alzheimer's disease was published in the journal of assignments disease. We're also starting work on acute radiation syndrome. This year as you can see with this exciting.
Adding portfolio of potential indications for Ryanodex, we will be growing our acute care business to complement our oncology business.
So when you step back and look at all of this 2020 has already started what appears to be another growth a strong growth cycle for Eagle if.
If we assume a near term bays oppressed and launch the symbio milestones and royalties and the pen sexy market entry in 2022.
You can see that we are entering a strong growth cycle looks.
Looking ahead for the Strand, SM 88, with our strategic partner time technologies into multiple ryanodex indications could contribute to a considerable long term growth cycle for 2020 and beyond.
Before I turn the call over to Brian I would like to also welcome Dr., Judy and Cashin, Jon Kimmins, Dr., Downton, Kurt and Dr. Gals on zoo to the Eagle team we.
We hired all of these talented people to put us in the best position to advance our programs to do clinical phase and ultimately to the market and with that I am delighted to turn the call over to our new CFO, Brian Cahill to discuss our third quarter financials Brian.
Thank you Scott and I'm pleased to be with you all today.
In the third quarter of 2020 total revenue was $49.9 million compared to $41.1 million in Threeq you have 2019 products sales during the third quarter increased to $17.3 million compared to $14.7 million in the third quarter of 2019.
The increases in sales of Bell wrap so and Ryanodex were partially offset by decrease in Bendeka product sales.
So ross or product sales were $8.7 million in the third quarter of 2028 compared to $3.4 million in the third quarter of 2019 based.
Based on IMS data Eagles market share of Bendamustine wholesale shipments to end users was 8% of the us spend the most the market for the third quarter.
As we discussed in our second quarter results call. The COVID-19 pandemic and associated Lockdowns have resulted in a decrease in health care utilization broadly and specifically led to a reduction in the utilization of physician administered oncology products.
And one last data.
Pull through of vendor muston products is down approximately 13% compared to the period prior to the mid March shutdown.
We have yet to see a reversal in these trends, but continue to anticipate a normalization as outbreaks of eight.
We are encouraged by the American health care systems innovation to deliver lifesaving treatments to patients in the face of the challenges that have stemmed from the COVID-19 pandemic.
Third quarter Ryanodex.
Product sales were $4.2 million compared to $2.6 million in the third quarter of 2019 orders for ryanodex or cyclical driven primarily by product expertise disc.
Despite the challenges to our commercial efforts and assessed in accessing our current and potential customers precipitated by the COVID-19 endemic 2028 year to date Radetich sales have already exceeded full year sales of any prior year period.
For the third quarter of 2020 royalty revenue was $27.6 million compared to $26.5 million in the prior year quarter of this bendeka royalties were 27.6 million in the third quarter of 2020 and $26.2 million in the third quarter of 2009.
Team.
In the third quarter Eagle on royalties from Teva at a 30% royalty rate following our amended license agreement on October Onest 2020.
The rate increased from 30% to 31% for 12 months. It will rise again to 32% on October Onest Twentytwenty, one where it will remain for the life of the product.
The third quarter of 2020, we also earned it.
$5 million milestone payment from some bio based on the approval of Treximet RCD in Japan.
Gross margin was 76%.
During the third quarter of 2020 as compared to 64% in the third quarter of 2019 the expansion in gross margin in the third quarter of 2020 was driven by number one an increase in ryanodex sales to lower Bendeka product sales in the period to our marketing partner or what is Eagle earns no profits three.
Three the increase and Bendeka royalty a number for.
The $5 million milestone payment from some bio.
On the expense front.
R&D expenses were $4.8 million for the third quarter compared to $10.2 million in the prior year quarter. The decrease primarily primarily resulted from lower spending on our vasopressin and Ryanodex CHF programs as well as lower stock based compensation expense.
Excluding stock based compensation and other non cash and nonrecurring items R&D expense during the third quarter was $5.3 million.
We are reiterating our 2020, non-GAAP R&D expense guidance of $40 million to $44 million as compared to $31 million in 2019.
We anticipated R&D spend includes.
We won the BA 114 pilot trial, and CMC initiatives to the Ryanodex trials.
For the treatment of nerve agent exposure.
And acute radiation syndrome three.
Three.
On 11, I, Andy, enabling toxicology studies and CMC scale up activities for EA 112 formulation development and additional preclinical work at the University of Pennsylvania, and North Shore University Health system.
Five regulatory advocacy for costs for Ryanodex CHS and.
Number six launch preparedness for vasopressin and FXC.
That's DNA expense in the third quarter of 2020 decreased to $17.7 million compared to $18.5 million in the third quarter of 2019 primary.
Primarily due to decreases in TNT trade show costs and external legal expenses, excluding stock based compensation and other noncash and nonrecurring items third quarter 2020, SDMA expense was $11.9 million.
We are reiterating our 2020 guidance that us unit expense on a non-GAAP basis is expected to be $61 million to $64 million as compared to $56 million in 2019.
The year over year increase is largely attributable to higher sales and marketing payroll, partially offset by lower external external legal spend and TNT expenses.
Net income for the third quarter was $7.1 million or 52 cents per basic and 51 cents per diluted share count.
Compared to a net loss of $2.4 million or 17 cents per basic and diluted share in the prior year period.
Adjusted non-GAAP net income for the third quarter of 2020 was $16.1 million or $1.19 cents per basic and $1.17 cents per diluted share.
Compared to an adjusted non-GAAP net income.
$3.7 million or 27 per basic.
And 26 cents per diluted share in the prior year quarter.
For a full reconciliation of non-GAAP net income for the most comparable GAAP financial measures. Please see the tables at the end of our press release.
Our adjusted non-GAAP EBITDA for the third quarter of Twentytwenty was $21 million compared to $4 million in the prior year quarter adjusted non-GAAP EBITDA for the three quarters of 2828 was $47 million compared to $38.3 million in the first three quarters of 29 team.
For the first three quarters of 2020 cash flows from operations, excluding shifts in receivables was $38.9 million compared to $37.5 million in the first three quarters of 2019.
For the 12 months ended September Thirtyth 2020, adjusted non-GAAP EBITDA was $57.7 million.
As of September Thirtyth 2020, the company had $89.7 million in cash and cash equivalents and $52.2 million in net in net accounts receivable $34.3 million of which was due from Teva.
The company had $36 million of outstanding debt. Therefore as of September Thirtyth 2020, the company had net cash plus receivables of $105.9 million.
In the third quarter of 2020.
We purchased $28 million of Eagles common stock as part of our 160 million dollar share repurchase Prober program.
From August 2016 through September Thirtyth, 2020, we purchased $205 million of our common stock.
With that I'll ask the operator to open the call for questions.
You'd like to ask a question over the phone. Please press Star then one on your telephone keypad you may remove yourself from the question queue by pressing the pound key again that is star one.
We'll go first to Randall Stanicky with RBC capital.
Great. Thanks, Scott I have a couple of questions first on phase. So pressing you called out priority review would ask you can you help us understand what that means from.
A generic drug perspective, and how that plays into your thinking on timing and then the.
A follow up there is for those on the line give us a sense of where your confidence is in terms of.
Willingness to launch at risk. So that's that's number one.
Number two I just wanted to ask on the management ads you announced the addition of a host of folks this morning.
Should we be thinking about that as bolstering the bench or positioning for offense with respect to thinking around the business and more specifically business development.
And then just a last one on R&D.
Drop down to 5 million this quarter the implied guidance suggest a huge step up or a big step up in for Q.
If you could just clarify how you're thinking about the spending trends on R&D for the rest assure that would be great. Thanks, [laughter] well. Thank you Adolfo good speaking T. I took a lot of notes on your question. So if I Miss something chime back it so.
So the priority review my understanding of it is that was granted to us.
Merrily for two reasons, one our 30 months stay is in the past and were first to file and so what does that mean, we what we know is having responded what we believe is completely to all the remaining questions. What we do know is that the file is under active review.
And so based on what Weve submitted in that active review and a priority review nature of it. The best we can say is that we believe that that approval is going to come shortly.
There is no specific date that I can give everyone, but it is under active review and we expect that this should happen what I would call the near term it could happen at any time, but we'll just have to wait to see that assumes at everything that we responded to we did so the satisfactory.
Banner in terms of the confidence that launching at risk as we've stated over the last several months Randall is that we believe we have a strong position.
Our litigation.
And we'd like to get to the market as soon as we can that's in the best interest of our shareholders.
And so we have not made a formal final decision yet is a board but.
But we are working diligently on coming to a conclusion and I.
I think theres, a pretty good likelihood that ultimately will decide to get the product to the market and take advantage of all the hard work. It takes to get this product approved and all the money that we spent and just get going and.
And it's important to us as I mentioned in my earlier comments.
Now that we see the growth and we have pretty significant growth 20 over 19 launch vasopressin launch pad Bexley and now that we have the symbio royalty coming in our growth looks wonderful going forward and have the ability to keep managing the pipeline.
Terms of the management changes.
We believe that we are very close.
Very close to building something very special right. We have the revenue coming in we have the earnings coming in and we found what appears to be a near term pipeline. This type C meeting we had with FDA in full the strain appears to have gone rather well, we need to have a a protocol finalized between us and the agent.
See once we do that we'll know exactly the timing and all the aspects of getting that product to the market. We wanted to make sure that we have the very best people in this company to be able to close out what we've been working on a long number of years, we have a great staff.
We're really very happy with the team that we've assembled over the years, but we think we've just hired some really incredible talent to just wrap this all up and get it done and yes on the BD side. It certainly gives us a better chance to take on more it gives us a better chance to appropriately define.
The diligence items that are required to make a decision. So we're just really excited with the growth stage that we're currently in and about the people and the products in the pipeline that we have to really go through some really great years again here hope.
Hopefully I handled at all and then Brian do you want to make a comment about the $5 million and where we are with R&D.
Sure Yeah, I mean, you said that you see our guidance Randall.
Right.
We do have a lot of activity in a lot of programs that I mentioned in the fourth quarter in particular.
Launch preparedness for base of right remember that's not approved yet so there's a good amount of expense there and the programs for 111 and other ryanodex indications.
Randall did we hit everything anything that we met.
Yes, no that was helpful. I guess the only other thing Scott would be as you as you think about BD. We ask you to US you get this question every every quarter right and you are sitting on 90 million in cash and you have been active NBT. So as we're sitting here today should we be thinking that you are thinking about business development and how productive you want to be there any differently.
Today versus prior quarters.
I believe Randall its a very thoughtful question and Ed.
It takes I think a thoughtful response.
We do want to get the company bigger and we want to be smart about it. If you look at the BD that we've done thus far.
The pancreatic cancer program that we have with time, you know could wind up being very special Theres, obviously risk when you're in clinical especially in something in the nature of pancreatic cancer, but.
But we feel good where we are so far and what we've seen so far coming out of that program.
And it's it's it's that particular program and other programs like that that are of interest to us.
But at the same point in addition to time.
If you look at the company now, we really de risked assuming basis gets to the market.
Between days open Phyxius and bio royalties coming out we've really very nice growth in earnings we're making what we believe is really strong progress with.
R&D and clinical I think as we look in your data heads off easier with me David heads up the BD for US I think we'd like a balance of clinical work and already marketed products and we're working hard but we don't feel a lot of pressure, we've really de risk the pipeline and the earnings a lot over the last few months and we continue to look.
Heart, but we're being very selective.
Got it thanks, Scott Thank you.
David Amsellem with Piper Stanley.
Hi, This is Zack on for David. Thank you guys for taking my question today.
Sorry, if I missed this but one question regarding that Greg Congrats on priority review, but some.
My question is when you submitted the additional data to the FDA and obvious what whereas the FDA really looking for that given your confidence and letters.
What are some of the issues that you think could surface as they do review the filing now.
So the question really was the nature of the.
Of the questions that they asked a lot of it has been we have been in the.
Any FDA for two and a half years done quite in the amount of work a lot of it all surrounds as I mentioned on the last call.
This is a poly peptide and the whole field of polypeptides is has a lot of a lot of work being done around it right now and I believe that the agencies asked us to do work around the very old molecule and being first to file and having active research.
Research program going on we've been asked to update I think the nature of the product and do work around the poly peptide side of things and we've done great work.
Maybe just far more knowledgeable and that was the basis of the majority of the of the questions.
And so we believe that we fully answered their questions.
I mean, you never know until you know, we feel confident quite confident and that would just have to wait for them to get back to us, but as we said we are under active review. Our 30 months stay has expired. We are first to file they've given us a priority status. So we know that they're looking at it diligently and all we can say at this point is what we've been saying is that we're home.
Fall that will get approval here shortly.
Okay, great and if I could slip in one follow up on the on do you guys do you envision filing other andas in the future along the lines of episodic or do you plan on sticking more with a diversified beaches strategy.
I think the way to respond to you is that in our strategic plan we are.
They buy both five b to a proprietary technology company right. So full of a strand, even though it's a five of five be too. When we're done we probably would have now dosed I don't know almost 900.
Patients.
And subjects by time that program is over and we'll probably be $80 million or so into that so not all five of buy btwos are created equally and you see some of our other five of buy Btwos, where we had like sexy, where you get a bio waiver and you don't put as much science behind it.
We like to consider ourselves to be more science oriented, though with work on all timers and can touch and certainly the novelty of SM 88 on the pancreatic side of things.
But that doesn't mean that we don't have anything in the short term to talk to you about that we're working on but we do believe with the team that we have assembled we can handle complex a anda phase by phase of press and.
And if there are companies that need help in getting these difficult products through all the issues that it takes were very willing partners and very good partners I think and so we're looking at more of that and we will continue to be an opportunistic company.
And that's what I think we do best and that's what we're going to continue to do but like I.
Consider us to be a a far more high science.
Approach company than we were six years ago, when we took the company public.
Okay, great. Thank you.
Thank you.
Well go next to Tim Lugo with William Blair.
Please go ahead. Thanks.
Sort of question. So I guess you know, we're all trying to poke around that if they hit their practice and a timing could you. Maybe your line is a little bit more if you were to receive an approval soon.
Would you consider a launch before yearend or is this something where you're.
You would probably addressed after the January trial.
Hey, Tim good to hear from you. Thank you.
I don't believe were in a position to answer that fully yet we're just going through that we only found out about the July.
11 trial day, a few days ago. So.
So we need to regroup and talk about it.
However, we're confident.
In our position will probably come out of the four day trial more confident.
This is my guess my hope.
Let's see what what happens, but we are.
Focused on monetizing the asset as soon as we can I wish I could give you a more detailed answer but we're still looking at it but either way.
January 11th is right around the corner we're.
We're going to find a way to bring value to shareholders as quickly as we can.
Okay understood and for the sort of domestic products, you mentioned that kind of volumes, how that kind of normalize to pre pandemic levels. Do you think that said, we could see some sort of normalization in Q4 as it seems like oncology occasions.
Our.
Are still.
Kind of focus and recovering across the industry, though obviously the pandemic concerns or are heightening.
Yeah, No Tim Thats, you know, let me, let me have David respond to some of that for you. He keeps close track of it I don't know if what you're seeing with your other companies or what you're seeing in the industry is different than the than we are but David why don't you give an order, yes, sure, though Scott Hi, Tim how are you going to basically.
We're starting to see some normalization as you know where it is or things up and in some parts structure improving you know you never know seems like restart owner to the second wave again too. So it's kind of hard to predict and some of these things are.
Out of our control but.
So far we think we are seeing some stabilization and more more return to more normal visits which is a good for the patients.
And so we don't think thats like most likely to continue.
Okay understood and maybe just one last question question whenever you do launch you're going to generate a ton of cash can you just give us a kind of sense of that.
That trajectory you expect for the launch how durable it will be what's kind of the.
What kind of shape and the duration of that curve and then what do you do with cash I mean, you mentioned BD, but.
But you're going to.
Have a nice.
Major step up in cash if if the loss goes kind of.
As a as it would be expected.
When you look at you know.
The larger BD more transformative deals or the would it be kind of smaller time like deals and as well as some buyback no. Tim that is you know very we are going through our strategic planning process now.
[noise] because there's so many opportunities ahead of US right, it's exciting to be going back into this growth curve and being so close.
With our some of our key.
R&D programs and so the durability of the asset evasive press and there's a little bit unknown. What I can tell you is it's been a heck of a difficult product to get approved with what's been required for an 88 I mentioned it on the last call, but the work that we've done I mean, we have $25 million invested in this now.
Half of that is in R&D, you wouldn't expect to put that kind of money into an a., India and yet that's what the requirement was and other than being first to file you would never have committed to that level of spend and so I don't believe that this is an easy and da for others to get approved now having said that it appears that endo settled with a lot.
Of companies. So we don't know what settlements are.
So it's a little bit hard to predict but we do believe that this product will be very valuable for a number of years.
And it will generate a lot of cash for the company and so then you know what do we do with the cash look we we also had a clean balance sheet. We have net cash we've been buying back our stock. So the fact that we've been taking a slow and steady approach to our business. The last six years has really put us fund wonderful.
Position, because we have so much opportunity to do with our stock in the balance sheet and the cash.
To really do anything that we'd like to so we're looking at all the things that you're suggesting look we bought back 22% of the company already.
I don't know, what's going to happen to the market I don't know whats going to happen to our stock as we go through this what appears to be a really good earnings period, assuming that bays oppressing gets to the market you know who knows if the stock doesnt react we'll be buying back more of our stock because we believe in ourselves. If there is a transformational deal that we can.
To do that is strategic and financial and accretive we're not afraid to do that either we like what we're doing in oncology, we like what we're doing in critical care could we do smaller deals sure, but we you know I view us as being.
An opportunistic company.
I view us as having the ability to do.
Whatever we need to do to continue this growth.
And between the team that we already have.
Brian and the entire team of people on the executive suite David's been doing such a phenomenal job for the company and now with the new hires that we have to really add to this.
The sky's the limit for us if we could execute it starts with the vasopressin approval hopefully that will happen. It will build on the earnings growth that we've had you know that we quietly snuck up on everybody and had growth in 2020.
And so.
No I think our opportunities are limitless, let's just let's just put our heads down and get it done and hopefully good things will happen of course.
Understood. Thank you.
Thank you Ted.
And again that is star and one to join the queue you may remove yourself with the pound key well go next to Brandon Folkes with Cantor Fitzgerald.
Hi, Thanks for taking my question and congratulations to the new highs and Brian on the promotion and say.
I found that they the cracking subject yeah.
Given that you now have a.
Full Bowl party you state that does this trigger any sense.
And formalized timeline on it it's an AD budget.
Yeah is the agency obligations gave you formalize timelines in terms of review for your application and then maybe secondly going back to the pricing.
Yeah, I look at the R&D guidance and the inventory figure it looks like the manufacturing of the product still needs to be done. So can you just give us any color in terms of the manufacturing lead time pulled by the press and how quickly you could turn that around to define market. If you've got a critical very very shortly thank you.
Thank thank you ran and we can't really comment more to timelines, there's nothing more to say other than it is under active review and we hope it's going to happen shortly it may or may not right. It's it's.
It's not that exact but we're hopeful with everything that we know and everything we see and certainly having just received priority review we feel good about all this.
We do have some inventory.
We can launch.
We're obviously preparing for launch if we're able to so I think our supply chain is in good shape, our manufacturing is in good shape.
We are taking this opportunity incredibly seriously.
We recognize the value it is to our shareholders to our company and bringing price down for the patient population and so nowhere in them. We're in good shape and ready to go and hopefully we'll get approval and make a decision and then we have the court case right around the corner for days and hopefully we'll have a good showing there that we expect.
Two.
Did I answer everything sufficiently for you.
You did I Miss that.
I want more color on Tommy.
[laughter] add more color on.
I think we would tell everybody right all we can do.
The most up to date thinking that we have.
You know the world its not certain.
Yeah, exactly and I can't get it perfect in terms of I think what you can't but I appreciate that maybe one last one just sort of very very high level.
You talk about the ship repair just as your guidance.
Okay about how you sort of reaching an inflection point here, we mentioned a lot of cash flow timing I mean.
In the public markets continue to not recognize that going forward.
Yes.
Would you ever look at taking the company private or any sort of strategic alternatives and if you've actually is not recognized in other markets going forward.
Yes. That's also you know a very good thought process you know the way we look at we've been buying back we've been taking the company private share by share over the last few a few years with the share buyback.
We had I think a $116 million, Brian the authorized buyback and we've reduced debt by 25 million.
Now so we still have a pretty sizable amount authorized whatever that number is a sizable amount.
We could we could go do another MSR if the stock Doesnt react there were a number of ways, we can buyback the company.
Should we take it private.
Maybe you.
That's probably a little bit more difficult, but I don't think we would roll that out look I think we're just very very focused as we have been on building shareholder value and growing the company and we stuck to our plan right. I know it was we went through a little bit of a painful couple years by sticking to organic growth.
And not making a deal to plug a couple of years of declining earnings, but we just thought slow and steady was the way to do this we're thrilled about our balance sheet. We're thrilled about our cash we're thrilled about the fact that we had the ability to buy back our shares at the prices that we bought it back and hopefully that will prove to have been.
You know a smart move for US and you know, we're just going to do what we need to do to get the pipeline through hopefully launch. These products successfully in you know see what comes our way, but the good news is we have the ability to do a lot and we're we have a great team.
Great partners and we are looking at anything and everything and if anybody has any thoughts you know don't hesitate to reach out to us but.
But we want to return value to our shareholders and we're focused on now.
Great. Thank you very much.
Thank you.
Well.
Well go next to Gregg Gilbert choose.
Thanks, Good morning, Scott and his team.
One more basic question I think its a different one than you've gotten.
It's a settlement off the table at this point given how far along we are in how complicated the number of filers Arne.
Other settlements or would you say that never say never and [laughter] until a court case actually happens.
You know Greg. Thanks for the question to speaking to you. This morning, you know you never say never about anything in life. These days I think.
You know, let's just see what happens.
All the way around let's get the approval.
But look I think our responsibility is to optimize the best we can to value to our shareholders and repay them for the money that we spent to date.
And take advantage of the opportunity that we work so hard and I think thats the wonderful part about our management team.
As we just you know our focus on improving shareholder value and returning as much as we can.
We will continue to do in every facet of our business.
What's in everybody's best interest and keep an open mind about all these things weve spoken about.
Taking the company private transformational deals small deals buying back your stock settling like we did with Lilly on FX. It right that turned out to be great for us having a fixed date launch in February of 22. So yes, we're open to everything that will improve the shareholder return.
Most.
Importantly, I'm, sorry, Greg just to finish, but most importantly, right and let's not lose sight of it most importantly in a way that maximizes the benefit to the patient population that we strive to serve and so we haven't spoken about it a lot today because they also focus but we're really really excited about the potential for this strategy.
And the tremendous value it can bring to this patient population to metastatic postmenopausal breast cancer patients at the end of the day. That's really the reason that we're in business is to help the patients.
Across this great country, and that's what we're mostly focused on I'm, sorry, I cut you off what where you can is no problem or mashed. My other question was about your use the word transformational a couple of times I haven't gone back to the last 50 conference calls to see how many times you have used that word yet I'll do that later, but I'm.
I'm curious if you're more open minded to transformational change now than than in the past and if so why it sounds like you're open minded about anything that would enhance shareholder value, but maybe you could drill down a little more on.
Open mindedness to transformational now, whereas it may not have made sense before thanks.
Let's see I think it was Tim that brought up the word in the call first a little earlier.
Tim and I'm, taking away from someone else that brought up the question I apologize, but I think Greg you know what's happened here too is right you know and you've been following.
Following the company and talking to us for pretty much. The 15 years that we've been in business. We came out of the gates when.
When we went public and you know we had a great run from an earning standpoint and from a stock standpoint, and then as I said earlier, we decided to do this mostly.
Internal.
With internal growth rate and we had that little dip for a couple years and it would be it was harder to do something transformational. When you had earnings decline and you are waiting a few years for the pipeline to deliver it would have been more difficult. We believed in the pipeline and it would have been more dilutive to.
Our loyal shareholders and so now we just find ourselves in a different situation, we have pretty good growth 20 over 19 get based on these other products out we have the symbio behind us.
We're going to go through a large hopefully hopefully significant growth period of time at the same time, we moved the rest of the pipeline. It's not just getting basically to the finish line and symbio to the finish line of Penford sexy to the finish line now we feel we're closer much closer with full of his strategy and potentially with these new indications.
Dantrolene Ryanodex.
We even have it.
Hey, I.
I am version of Brad Index now being tested in our nerve agent study so were making progress we have the people in place now the people we had in the new people and so maybe this is a better time to think about something transformational than it was over the last 24 months and so yeah, I think where you know I think you're correct.
Theres, we're we're more open to things now than we were.
Thanks, a lot thank you Greg.
Mhm.
No further questions at this time I will turn it back to Scott Katz for any closing remarks. Thank you everyone. This has been a likely great.
Session a great quarter. Thank you everybody for your questions I thought they were remarkably thoughtful look 20 shaping up to be a year strong earnings growth for us and we've made a great deal of progress across the board. That's what we're speaking about today, they though at all the strand have what I call company changing potential hold strain.
Also has the potential to change the paradigm around the treatment of advanced breast cancer and improve patient outcomes and we plan to finish out the year strong as we build upon our recent accomplishments and continue to deliver value to our shareholders and life saving therapeutics to patients who can benefit you know, we're just excited and hopefully we have some really.
Hi, good strong days ahead of us. So thank you have a great day stay safe and can't wait to speak to all of you again. Thank you.
And this does conclude today's program. We appreciate your participation and you may now disconnect.
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