Q3 2020 Amphastar Pharmaceuticals Inc Earnings Call
[music].
Our third quarter earnings call at this time, all participants are having said all that mode.
Okay, we will conduct a question and answer session.
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Loading among other things statements relating to the Companys expectations. He.
Regarding future financial performance.
Backlog.
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The timing of SB filings or approvals, including <unk> and EPS.
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Its share buyback program and other future events.
Such as the impact of that well be making the damage.
Okay sponsorship business and government teed up and down on our operations and personnel.
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Actual results may differ materially from films in the forward looking statements are you still have a number of factors, including those described and I felt sorry, <unk> filings with the Securities and Exchange Commission.
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I would now like to turn on French over to your host Mr., Dan <unk> Vice President of corporate Communications. Please go ahead Sir.
Thank you operator, and good morning, everyone welcome to ample star's third quarter earnings call. My name is Dan Dishner VP of corporate Communications Joe.
Joining me on the call are Bill Peters, CFO, and Tony Mars Senior Vice President of regulatory Affairs and clinical operations.
We appreciate everyone joining us today, and we look forward to sharing some of our very exciting pipeline updates, how well primegene has trended and other great news.
I would like to first start by sharing the exciting pipeline update I just mentioned I'm pleased to announce our intranasally up in Africa, and India that will target the up enough for an auto injector market.
Thus far our inter nasal up in different product has completed its phase one clinical trial and we plan to begin a phase two clinical trials in the first quarter up 2021, well.
While they usually do not discuss phase one clinical trial results I'd like to share that we believe our novel formulation of Epon Afren significantly increase the drug absorption rate well using an inter nasal root of this delivery for anaphylaxis treatment.
This offers a very attractive non invasive delivery option compared to the currently marketed epon efron products that being of course as an intramuscular injection.
Where they are with the auto injector.
We're excited about the potential opportunity this brings to strengthen our portfolio and providing new treatment option for patients having an anaphylaxis reaction.
For FNF rent auto injectors, the 2020 equivalent data annualized sales has an addressable market of over $4 billion.
Moving on to business, our third quarter saw sales growth of 4% compared to the same period in 2019.
Net revenues in Q3 compared to the prior quarter Salim Syed decrease of 3%.
We are attributing that primarily due to the impact of our Imus product portfolio, which previously had benefited from market to market shortages and the third quarter saw lower demand due to the market shortage resolution right.
Regarding primatene mist, we continue to see progressive growth on this product due to our recent Kroger store launch and our nationwide TV radio and digital marketing campaigns. We will soon publish an updated presentation on our website, where you can observe the private teens still presents a strong growth trajectory as the product is seen sales growth of four.
Per cent compared to the previous quarter, we have great confidence in our abilities to continue to grow Primatene. Therefore, our AD spend for prime and Tidjane will increase by 20% or to put it in dollar terms in the range of I did an additional one to 2 million on an annualized basis.
Moreover, I am pleased I'm pleased to announce that we are working on adding an additional distribution point for primatene mist with a nationwide mass marketing retailer, which we anticipate the launch sometime in the first or second quarter of 2021, we will continue to explore other opportunities in large retail chains.
And on a final note on Primatene I'd like to announce that we'll be investing in a new TV commercial we also will invest in digital media to broaden our market reach in the 18 to 34 year old demographic. We continue to reiterate our guidance for Primatene, It which is to Ics, which is expected to reach prior peak sales of 65 million annually.
<unk> next year and 2021 as we advance we continue to expect our marketing spend to be a lower percentage of sales.
Regarding our recently launched up enough and multi dose vial product Q3 has demonstrated that this product still benefits from its 180 days of market exclusivity as we still make our reintroduction into this market demonstrating this are up enough and multi dose vial saw incremental growth by 7% compared to the prior.
This quarter. We previously stated that we want to be competitive in this market without severely disrupting it and the goal has been going as planned.
With our M.P. 001 product, we were given a good duper target action date for the third quarter of this year or the fourth quarter. If another preapproval inspection was needed. We wanted we want to disclose that we're still awaiting a decision from the agency as they have not postpone the good duper date. However, the action date was not met while MPS.
001 is still on the same review cycle, we continue to maintain a positive dialogue with the agency and are still excited about eight A.M.P. 001 as it is still on track to become the first generic to hit the market.
Regarding M. P zero zero twos projections, we remain confident that the agency will find it to be therapeutically equivalent and continue to anticipate a fourth quarter due for target action date.
Although news about M.P. 001 may temper and P. 002 status expectations are good do the date is still in the fourth quarter. We'll keep you updated if we hear a response regarding the product progress with the agency as needed.
Regarding our China facility in Nanjing, otherwise known as an P. It continues to advance towards completing construction of its finished pharmaceutical product facility and then eventually for a finished product launch for the Chinese domestic market regarding an update on the timeline towards completion will provide one as we approach closer to the date in the future.
Sure.
On a similar note to our international effort, we continue to progress on our Imus UK products launch and anticipate our first launch in early 2021. We're currently having we currently have multiple products on file and are working through the approval process.
Next I'd like to bring up our insulin programs, we have made progress on our insulin biosimilar products, specifically in the characterization and clinical stage and <unk> and <unk> in our final pipeline item I'd like to bring up is inter nasal naloxone, we remain our guidance for Refiling intranasally blocks in in 2021 on another.
There are no I'd like to talk about at Knott's apparent briefly although although there have been exit and a new entrant into the nocs apparent market. We have a long term commitment to this product and this product has shown some improvement seeing a 22% increase compared to the same period in 2019, and a 14% increase compared to the previous quarter.
Her attributing this to a greater market opportunity presented just recently, we're confident that our quality systems will prove to be the difference as our longstanding experience in this area. Since we are the only company that manufactures both the knots, apparently apiay and finished product in the United States.
Finally, we continue to see success in our pipeline development as demonstrated by our international up enough from products progress. We remain committed to the prospects of M.P. 001, and 002, while we anticipate prime a team sales to trend upward as we approach allergy season, although.
Although factors outside of ample starts control may have tempered some expectations for now we want to assure everyone that our success is made organically and as demonstrated by our R&D scientific and technical progress.
Especially regarding intranasally up enough rent and the proprietary formulation technology of this product we are confident that our pipeline development will continue to demonstrate our technical capabilities.
I will now turn our call the call over to our CFO Bill Peters to discuss our third quarter financials.
Thank you Dan.
Sales for the third quarter increased 4% to $83.4 million from $80.1 million in the previous years period, Primatene mist saw sales growth of 255% to $13 million from $3.7 million in the third quarter of last year with strong sales to our current customers growing online sales.
At Amazon Dot com as well as the launching of privacy missing Kroger, which is one of the largest for food chains in the country.
[noise] Inox apparel sales increased 22% to $11.6 million from $9.6 million as have a less than aucs apparent market.
Enough from multi dose vial sales of $2.8 million in the second quarter back on the market.
Other finished pharmaceutical products, a sales decline of $4.1 million as a competitor who had previously had supply issues returned to the market.
Our insulin they pi business had sales of $2.1 million down from $4.4 million last year as last year's sales numbers included a $1.5 million amendment fee for mankind.
Cost of revenues increased $46.9 million from $44.9 million.
Margins were relatively unchanged at 44% of revenues, we had increased gross margins related to newer higher margin products, such as private to Miss an FNF friend multi dose vials, which were offset by lower sales of the locks on and other finished pharmaceutical products.
Selling distribution and marketing expenses increased 14% to $3.7 million from $3.2 million due to advertising and distribution costs, including television commercials for privacy met.
General and administrative spending increased 6% to $11.7 million from $11 million due to higher legal expenses.
Research and development expenditures decreased 5% to $17.6 million from $18.6 million as lower expenses in China were partially offset by increased costs related to our Biosimilar insulin program, our generic inhalation program and our newly disclosed intranasally up in that front.
Okay.
The company reported net income attributable to Amphastar, our shareholders of $3.9 million or eight cents per share in the second quarter compared to net income of $1.3 million or three cents per share in the third quarter of 2019, the company reported and adjusted net income of $7.6 million.
Or 15 cents per share compared to an adjusted net income of $5.2 million or 10 cents per share in the third quarter of last year.
Adjusted earnings exclude amortization equity compensation impairments of long lived assets and one time events.
In the third quarter, we had cash flow from operations of approximately $8.8 million as we reduced inventory and accounts receivable levels.
During the quarter, we used a portion of our cash to buyback approximately $4.3 million of stock.
I will now turn the call back over to Dan.
Yes, operator, we're ready for the Q and a.
[noise], ladies and gentlemen, if you have a question at this time. Please pass the Star then the number one key batch drilling telephone. If your question has been <unk> I'm, sorry are you need to remove yourself from to keep the specified.
Our first question comes from GE Club use of Wells Fargo Securities. Your line is open.
Hey, Thanks for taking the question.
Well I Wonder if you could just comment on the trends for prime at Ti.
In the quarter it looks like the growth slowed a bit sequentially.
We had no leveling off in the pantry loading to begin the year I think you launched Kroger at the beginning a quarter or so if you could just touch on how thats going if there is any other retailers you could launch in that.
Hi, you're thinking about the upside to that $65 million target.
Sure Great Yeah, we still private teams still just the trajectory still good there might have been some you know slow because you know the pantry loading as weve talked about in the past, but we still feel like you know the trajectory is kind of returned to what we expected it to be.
You know.
Kroger introducing it to Kroger has gone really well, we see that there Amazon has been doing doing well as as well, even though we still believe that this product is ER or in the physical stores has done as we've seen a better there, but we do believe Amazon will continue to be an important component of it.
We are planning, where we're hoping to launch in the first or second quarter of next year into a major retailer. So we hope that will also help.
To help this there with the growth of the sales and as we said you know we believe that the advertising campaign that we've done that come with the commercials, adding a new commercial we believe that that's really going to help us and we believe that the those peak sales of 65 million that we had previously we believe we can get back to there really.
Easy Yeah, just a couple more points one is that we're updating the slide on the the that shows the in store sales levels to our investor presentation of its not out there now it will be by the end of the day. Additionally.
They trigger earlier in the quarter actually wasn't earlier in the quarter is actually the late in the quarter. So while we did have some load in sales to Kroger on they did not have the opportunity to put in reorders. During this fall.
Got it that's helpful. And then just on 001 is the leading fundamental.
What's causing a fill in with the FDA.
Yes, Hi, this is Tony.
We don't really we don't really see anything its debts triggered a delay it's not as though we'd go were going through cycles with the agency right now were in routine communication with the with the agency I'm essentially just getting kind of routine updates.
What they're telling US is just that they have not met their action day.
So we're not really clear we just we just expect it's part of their normal review cycle for a complex product like this.
Uh huh.
That's right.
Oh My God.
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Good morning, Gary there.
Can you hear me.
Oh, there you are.
Are you there.
Hello.
Operator, we don't hear anything on our end.
One moment Sir.
[noise].
Operator can we just moved to the next question.
<unk> management your line is now open.
Hi, there can you hear me.
Yeah, There you go.
Great I don't know what happened there, but its profit sagar on for Gary.
Regarding the interim nasal FNF for an opportunity I'm curious how long do you expect it would take to run the phase two trial and what additional studies would be required after that.
Yes, Hi, this is Tony again, where we've been working pretty closely with the agency on this product what I can say is we're very encouraged for from.
Some of the comments that we've received from the agency, they're very very positive. They are very clear on what the expectations are as Dan said, we've completed our phase one.
The results are very promising <unk> it its PK profile is very encouraging.
And we're planning to go into this the phase two.
Trials very shortly thereafter.
Rather than get into the complexities and the scale of the trials what I could say is that broadly if things go. According to our plans and we would anticipate to be filing this application sometime in 2022.
Thanks.
Then I was also hoping you could comment on gross margin heading into 2021.
No there was an incremental benefit and 2020 for prime a team that won't reoccur. So just any color there would be helpful. Thank you.
Yeah. So while we did have the issue with private team, where we had expenses many of the components that were purchased prior to the approval and that Didnt help the gross margins last year and this year, we burn through those components were still a using a P.I., which had been expense prior to launch, but that's becoming a small.
Aren't small around to the cost of goods. However, the primacy Miss is still going to be growing next year and because of that we will have a higher sales of a more a product that is well above our corporate average so that will help the gross margins in general also that the products that we expect to be on the market next year M.P.O. Wayne.
On an M. P O two should have higher gross margins than our corporate average as well. So we think that those those trends will help us increase our gross margins next year.
Thank you.
Our next question comes from <unk> <unk> from <unk> capital. Your line is open.
Hi, Thanks.
It looks like your third quarter was came in a little short versus expectations and consensus expectations I'm sort of wondering if some of the revenue that.
We thought you were going to get in the third quarter might be shifting into the fourth quarter or even the first or second quarter of next year, obviously, you're still waiting for a one.
Maybe all too well what do you guys think the likelihood is that.
That these product approvals really shift into it.
2021.
Yeah. So this is the first thing there Tim is that yeah. We you know there's definitely always timing. Some of these things are onetime things. Some are just timing yeah, we with a with the other finished pharmaceutical products. We did mention that or we did have a competitive return to the market. So that was what was causing the sales decline there and that that should come.
In future, but things like private teen are very strong and we expect growth in that product very definitely ended the fourth in the fourth quarter and well into next year. As we're still are talking about $65 million as our sales target for next year and on NPO, one, though too at this point in.
The approval cycles since we don't have approval today I would say that there it's unlikely that we would have any material sales from either of those products in 2020.
Okay, and then you talk a little bit about just the up enough from multi vial injection.
Products I mean, how's it doing in the hospital market I know you.
In one basically the first generic into that market, where there are other competitors that enter.
No. We're the only ones. So we have a 36 month exclusivity so happy about that to be in that position, we are gaining market share and the sales last quarter were primary load into the wholesalers in the Sept for sales this year, which were higher than last quarter were restocking and indicate the.
Actual sales levels that we have now ourselves or our market share grew over the course of the quarter. So we think that the that product will also continue to grow sales as we look into the fourth quarter of next year.
Okay.
And then maybe just one last question on this intranasally up enough front.
You know.
Given the phase one data that you have I mean, whats your plan and 2021 I mean are you.
Into need I mean, what what additional studies will you need to run I'm, assuming you you've met with the FDA recently or do you plan on meeting with them to sort of discuss.
What else what other clinical studies you'd have to run here.
Yeah, Hi, this is Tony we we haven't had 'em correspondence with the agency we have an idea that we filed with Dan I'm, they've seen our clinical plan and gone through a.
2021, and we'll have a number of trials that will be performing.
We have a pretty good grasp of what those trials are Tom it's their types of trials that we've done before we're familiar with doing Intranasally type trials were.
We're familiar with FNF ran into in trials with AEP and a friend. So I think 2021 is where the bulk of our trials will be completed.
They'll be phase two and phase III trials that will be performed during that time, but the emphasis is we've been working with the agency on it and they're really the comments that we've received from the agency on this have been very positive I really want to emphasize that.
It seems there very hungry for a product like this.
Some of the strengths that we have for this product I think they've been able to see.
We really have.
Created a special enhancement agent they.
They were going to be using with this that really will give us good differentiation in our product I will have a superior product that will be used for to consumers.
We're very encouraged by that and we think the agency as well.
Okay great.
Thanks.
Thank you.
Our next question comes from David I'm Fine I'm slightly from there your line is open.
So on the.
The two injectable pipeline products or one or two I may have missed this but.
And then you said or can you say, whether you've had preapproval inspections or for one or both of these products. That's number one and then number number two is you know on the the market shortages I think you cited.
Potential I forget what the figure was good but some revenue benefit from.
The market shortages. So can you talk through what resolved what hasn't been resolved and what you think what kind of benefit if any you can derive from any market shortages going forward. Thanks.
Yeah, I can speak to that pre approval inspection for these two products empties years or one and zero is there are two we previously disclosed it we've had inspections for both of these.
[music].
M.P. is there is there are two in particular is the most recent sad and these were very rigorous inspections, where they inspected every possible facility or component of our operations, including manufacturing our clinical side, where were these trials have been perfect.
Armed and the laboratories, where the analysis has been done so those were very positive and overall, we don't anticipate to have additional.
Inspections associated with these the results were positive for all of those.
And your second question related to the shortages there were multiple shortages and many of our critical care products that are on the hospital crash cards.
Includes products like.
Dextrose sodium bicarbonate have enough friends. So lot of these products had.
A competitor who was frequently out of the market that competitor was shipping it seemed like for most of the quarter and are near the end of the quarter. So.
We did not have the same level of sales because of their return to the market you know they've had multiple outages and shortages over the last 10 years, and we really can't predict whether they will or will not be able to watch that either demand or.
That's that's out there for these products, but we do know that we have the ability to do that and we have the increased capacity that we put on earlier this year.
So so we do have the capacity and the ability to meet demand should there they have shortages.
Okay, great. Thanks, guys.
Okay. Thanks.
Our next question comes from.
Well part of Raymond James Your line is open.
Okay.
Thanks. Good morning, just a first question I wanted to ask was around the international Ethernet friend Development program I'm I'm presuming the path to approval is to be a.
A b study versus injectable Epon efron, but just wanted to ask you just to confirm if that's the case.
Well, we're doing via the route of Ive approval is that Andy a three to five if I'd be too route so I wouldn't quite call. It a a D on but we're not comparing it to just a general happen after an injection well be looking at the.
The.
Intramuscular at B. Penn type of device as far as what will be comparing it to you.
Okay. So I.
I guess.
So trying to understand is this.
You know a PK study or is it or does it actually mean, there's gotta endpoints in studies like this that's that's impossible, but I'm just trying to.
Good.
Little bit better sense of.
Of what has to happen given sort of the relatively short timeline that you have.
Outlined in terms of.
Potential filing.
I want to be careful about not disclosing too much what I, what I will say is it's it's a there's a strong PK component to it maybe that will that will give you enough.
Okay and is this is this an internally developed program or is it is it partner.
No. This is a this is part of the capabilities that we have this was completely developed internally.
Our scientists here came up with the concept and on what they've done is pretty extraordinary and as we get closer and we'll be able to disclose a little more about it.
You'll get a sense for some of that it is something that we have IP that we have.
Filed for and.
Once once that comes to satellite I think you'll get a real good sense of what we're trying to do but essentially we're using a special enhancement excipient to assist in the absorption of DAP Anat friend in and once you see what that is and how we're doing I think it's going to really it's.
It's going to be clear how advantageous this product will be.
Okay.
Okay.
Thanks for that and just.
Just want to ask a question on Dr Pepper and trends in the in the quarter. You may have addressed this your prepared commentary I apologize I got on a little bit late here, but in terms of the the incremental step up.
We've seen this in the past basically when you've had the opportunity to kind of go after a off contract sales on a short term basis doesn't seem like that's the case in terms of what drove the upside this quarter just trying to get a sense of how that helped.
How sustainable dish this increase ish.
Yeah, so its not off contract sales basically.
When you have left the market there were some some you know we'd be able to gather up a portion of what a they had so hopefully our sales level and stay at this level, but you know this this markets seen a lot of twists and turns but you know as Dan did say in his prepared remarks. You know we're this is a product that we're in.
For the long term and we and we make the P. I would make the finished product both here in the U.S. and we're very.
Confident about our prospects product and as a long term a generator of value for us.
So speaking of line and on the lines of long term value generation with Teva, leaving the market any chance that this product start behaving more like the biosimilar that is rather than a commodity generic in terms of pricing.
That's our that's our hope, but you know we haven't necessarily seen that yet.
Okay fair enough.
Just real quickly on on Primatene haven't seen the updated slide deck, yet to get kind of the latest data in terms of sort of the the uptake here, but any other metrics you could share with us in terms of how many stores the products on the shelf on and I guess.
In terms of.
Somebody.
Early launch sites kind of what you're seeing in terms of Ah in terms of a pull through.
Per week, I guess, just sort of how we look at them.
Yeah, I think I think worth you know it's been read every to everywhere, we launched the product it's been well received and so we feel like you know the no. We just recently launched in Kroger that was towards the end of the quarter, we expect that to do well, where we're really close to being able to.
At another large retailer to our distribution points and so we we we believe that that will also be a big thing and we continue invest in the advertising because we do see.
Very positive trend when we when we with our advertising both television and digital media and I think with our digital media, we're really going to target I'm kind of the 18 to 34 demographic and expand expand that market. So we were excited to see how that how it's received a in that group.
And just you know the chart that that will be in the <unk> on the Investor side does does show continued upward upward growth in the weekly sales, so I'll say that.
Okay and just a last question you are re Anda filer on.
They suppression been a lot of discussion about their product and financial markets as of late given.
That we're approaching a trial date for a group of filers as well is the possibility that a eagle may in fact, not heavy blocking exclusivity position and has also suggested it may be positioned to launch at risk just any updated developments or thoughts on.
Youre filing with respect to some of these recent emerging facts would be helpful. Thanks.
Sure so will be it'll be in our 10-Q, which we hope to get filed by the end of the day today, but.
But we did settle during the quarter and that settlement is confidential and it would be difficult to other settlements that you've seen and these cases, where there's multiple filer. So solve we can really say at this point.
Okay. Good thank you.
Good day.
Our next question comes from Serge <unk>, Yeah. Your line is open.
Hi, good afternoon.
Couple of questions on the FNF and opportunity here.
I guess the first one is.
Once you're a 180 day extensively expires.
How many generics do you expect to enter the market.
And then just more broadly.
I'm, hoping.
How big is this market and you know as you think of your you.
That's an EPS some product in development, what kind of role do you think it could play in this oh.
Up an African market.
[music].
Yeah, Okay. So yeah the size of the market I do know its currently over $100 million and size and.
So we expect to get a.
Fair share of the market.
And Oh, we are you know not probably there yet, but we're happy with the gains that we've gotten over the course of of the time, so far as far as competitors go you know this is a product that yes. It.
What is the grandfather product for a long time, yet there was really only two competitors in it for very long period of time. So we're not we don't know of any other competitors and so I would are our best guess is that even though we have a six month exclusivity that that goes into the well into the fourth quarter here I'm not expecting any significant number.
Competitors in the near future. So we think this is going to be remain a strong product with you know relatively high margins and we think that we will get our reasonable share you know in the not too distant future and that's on our multi dose vial, yes, I think the other question or second.
So your question was about the Intranasally weapon effort is that correct.
That's correct.
Okay and how he.
Now can you revisit that question because I think it yeah.
[laughter] Kinda got mixed in there with the first part [laughter] just your overall thoughts on what kind of.
Opportunity you see with essential nasal products.
Competing against these various injectables.
Well I think as we said, we do believe that it it presents a new way of in a safer way maybe of of having up enough read and you know we're excited by it because the technology. That's behind it is you know what we've seen.
It's been very very very positive. So you know the market opportunity I think we said was I got it I think the Acquity Adidas data for 2020 for the auto injector epinephrine market as 4 billion or so.
So that's the addressable market that we're targeting.
Does that help yeah.
Yes, absolutely and then can we revisit the the IMS UK.
Alex and fees were recorded.
Quite a while back.
Can we just get an idea of how many products and the opportunity to present.
Yeah. It was about eight products and I think we've said this is a an annualized mid to high single digit million dollar opportunity for us. We've yeah. We waited until we had the new capacity online earlier this year to really focus on those because we really didn't have enough capacity to.
Satisfied the domestic market, but now that we have that capacity you know, we'd we'd hope to have that online earlier, but now that we have that capacity. We are we have turned our focus back to the UK market and Tony can give you a little bit of an update on a you know where we are with the sums that and getting those products relaunch.
Yeah, we have a number of products on file with the M. HR, a they're going through a little bit of a shuffle between Brexit.
As well as koby Adair, they're essentially on lockdown in most of the M. HR Ray are working remotely, but nonetheless, where we're working with them on that we are addressing any issues that come up but the applications are on file with them.
And we just continue to work through questions that they may have on that.
Hi, Thanks you.
Thank you.
Our next question comes from David Steinberg ask Jefferies. Your line is open.
Hi, guys its actually a chung for on for Dave a couple of questions.
You haven't talked about a year I think you had you know.
Talked about your first Russ respiratory inhalation Anda filing.
Update on that.
ER and then also just a quick question on.
On your question they spend you know kind of sequentially.
Sequentially kind of what we should expect going into fourth quarter, and then and then kind of in 21.
You know the investments that you're looking to add on to this year.
Yes, Hi, this is Tony I can address the inhalation filing the trials are wrapped up all the trials that we needed to do for that product, they're completed and were just compiling information as we prepare.
Prepare for the filing that we anticipate to do.
Later this quarter.
And the as far as the SG they spend a lot of that in the quarter was related to legal expenses, specifically, we were getting closer.
We had a lot of expenses along for the back of the press in case and also.
The Lexus scan case, another the Vas oppressing cases settle those go away, so that should flatten out somewhat but or <unk>.
In the selling expense line, we are targeting an increase in spending in the fourth quarter for advertising on Primatene mist and we're also looking to increase that spending next year as well, but in both of those cases are our belief is that sales is going to be sales.
You're going to increase faster than our spend so that will have increasing operating margins from that product.
Great. Thank you so much.
No problem.
Operator, that's it yes.
At this time I would like to <unk>, <unk>, <unk>, <unk> <unk> and for other compounds.
I want to thank everybody for joining us today to share and our exciting news on our pipeline specifically with our international Epiburn product. We look forward to continuing to update you as these programs progress and we look forward to a good next.
Q4, and meeting with everybody that everybody. Please stay safe and have a have a good weekend.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.
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