Q1 2021 Palatin Technologies Inc Earnings Call

Alright.

And Mr.

Good day, ladies and gentlemen, and welcome G D.

Oh, Jeeze first quarter fiscal year.

Operating results conference call as a reminder, this conference is being recorded.

Beginning remarks, I'd like to remind you all and the statements made by Palatin.

Or not and historical facts and maybe forward looking statements. These statements are based on assumptions and it may or may not prove to be accurate and the actual results and it may be.

[noise] materially from those interest faded due to the variety of risks and uncertainties discussed and the companies much recent filings with the security Exchange Commission. Please consider such risks and uncertainties carefully and evaluating vs forward looking statements and intelligence prospects now and.

And can you just call and which are his.

Doctor call scanner, President and Chief Executive Officer and technologies. Please go ahead Sir.

Thank you good morning, and welcome to the Palace and technologies first quarter of fiscal year 2021 call Doctor call, Spanish CEO and President Palatin with me on the call. Today is the will power to the executive Vice President and Chief Financial Officer, and Chief operating Officer.

And today's called Google by financial and operating updates and we sincerely hope that you and your families are safe and healthy as you and he was supposed to be changes worried about by the COVID-19 pandemic, not and turn the call over to Steve and he'll provide the financial update as well as an update on D C. Steve.

Thank you Carl and good morning, everyone.

Regarding the first quarter and it's September 30th 2020.

Net loss for the corner was 3.9 million or two cents per share compared to a net loss of 4.5 million or two cents per share for the comparable quarter of 2019.

My Litchi gross sales for the period July 25th to September 30th amounted to $809100.

We recognize.

Negative 288000, and $560 and <unk> net product revenue and that B net of allowances and accruals.

We recognize no contract and license revenue for the quarter compared to 97000 and $379 for the comparable quarter of 2019.

Total operating expenses for the quarter or 3.7 million, including a 1.6 million gain on the license termination agreement related to my litchi with a Mac this compared to a 5 million dollar compared to 5 million of operating expenses for the comparable quarter of 2019.

As of September 30th 2020, and the company had 86.6 million and cash and cash equivalents and 5 million and accounts receivable compared to 82.9 million and cash and cash equivalents and no accounts receivable as of June 30th 2020, and no outstanding debt.

The amount of cash and cash equivalents of 86.6 million puts.

Puts cat Palatin and a comfortable position to find it's anticipated operating results well through county or 2021.

Regarding.

By Lucy and July 2020, Palatin announced the mutual termination of its license agreement with Aimak Pharmaceuticals.

Four by Lucy.

Under the termination agreement Palatin regained all North American development and commercialization rights for by D. C.

Hey, Mag made.

A 12 million dollar payment to Palatin at closing.

And we'll make a 4.3 million payment to Palatin on March 31st 2021.

Palatin assumed all by at least and manufacturing agreements and a mag transferred information data all the assets related exclusively too bye Lucy including existing inventory.

A mag is providing certain transitional services to palatin for a period to ensure continued patient access to policy and regulatory compliance during the transition back to Palestine.

Palatin is reimbursing a mag for the agreed upon costs of the transition services.

The accounting treatment up this transaction.

Resolve it and a 1.6 million dollar gain when the license termination.

Regarding my Litchi commercial activities.

We've been pretty busy the last few months.

Due to a certain extent there was very limited support for by Lucy.

During the first half of 2020 and and prior to Palatin regaining the rights.

Some of the items that we have made what we believe are very positive steps are we have solidified the distribution network and procedures, we've improved contact and prescribers with prescribers and health care providers to virtual meetings, we've increased insurance reimbursement coverage and we.

We just recently initiated a highly selective digital marketing and telemedicine campaign to rebuild awareness and demand among premenopausal women with an initial G O targeting approach to top prescriber and digital locations.

Car will expand on some of these points related to by Lucy and also give US a program update for pelicans other.

Programs under development Carl.

Okay, Great [laughter]. Thank you see.

Yeah as we continue to operate under the COVID-19 pandemic primary concern of ours has been the safety of our employees, our patients and our health care providers.

And partners.

And such we've instituted I work from home policy and March if continues to remain and and in fact for our office staff. However, our research laboratory is open and functioning.

Fortunately for US most of our keyword research and development partners continue to remain and operation and by using teleconference and various on line meeting popular and so we have been effected and continuing to advance our programs.

Whoever we understand with research of activities. There can be further disruptions to visit activities based on research and so the virus, which is currently happening across the country and.

And we will be prepared for this potential outcome.

And she mentioned July 2020, reacquired Bodie see from a Mac pharmaceuticals, just as a reminder, amax divestiture of the least he was based on strategic and operational changes and a mag and not have the potential value of of Lucy.

Hello, Steve covered some of the details of at least the commercial plan, there and number of accomplishment and I would like to emphasize when we required the D. C and late July there have been limited marketing efforts and nominal focus.

Oh, the distribution and patient access of it Lucy.

This has led to a sub application experience and <unk>.

Unfavourable economics.

Under siege directions, and we have assembled and excellent and motivated commercial team that is rapidly address these issues over.

Over the last quarter, we get solidifies of Lisi distribution network and.

And prove the patient experience by retraining, our specialty pharmacies, and we have expanded insurance coverage.

And Additionally, we are engaged with health care providers, who virtual office visits and virtual meetings. These.

These activities are leading to a much better patient experience improve relationships with prescribers and improved economics have laid the foundation for us to begin and Steve mentioned, a selected G O Tardy marketing campaign.

These accomplishments that had been done and I believe cause he record pace I've put us and a strong position to demonstrate the potential value for D C and cost effective manner and obtained our ultimate objective three licensing or at least he to a committed partner insuring. The continued availability of a V C. As a treatment option for premenopausal women with H S. D D high price.

Sexual desire disorder, and it's it's natural return on investment.

As we move on and then even know pals and as a primary scientific focus.

On the line of court system, which is involved and the regulation of energy balance, including food and take sexual function and resolution of inflammatory responses.

Our first successful out of court and program was based on the role of the Atlanta quite system and regulating sexual function. This research work resulted and discovery of a Lucy and its eventual approval by the F. D. A as the first on demand treatment for premenopausal women with hyperactive sexual desire disorder.

Current research focus is on developing drugs that target and the line the ability of the modern coding system to resolve or turned down inflammation. We have to those multiple drug candidates that and preclinical models have demonstrated the potential to resolve a variety of inflammatory conditions.

And research conducted by Us and and I'll just have shown the targeting immune cells with drugs that modulates Atlanta Court and system results and the resolution of Pro-inflammatory processes.

Pro resolution activities include mediating conversion of immune cells from inflammatory to regulatory states. In addition of the production of inflammatory confirmatory cytokines such as.

And a alpha and it's just look and six.

And others and the.

Upregulation and anti inflammatory cytokines, such as interleukin Tech.

In addition to melodic line system plays a role reduces fibrotic response that occurs as part and many inflammatory diseases. The fibrosis resulted from inflammatory diseases has long term negative consequences.

And the health of patients.

Therefore, we believe that and Atlantic Horton drugs will have broad utility and treating inflammatory diseases. We have developed stage drug candidate sparkles diseases, such as dry eye disease.

Other corner vs indications non infectious uveitis and retinal diseases. We also have equivalents day struck candidate for casual intestinal diseases, such as ulcerative colitis.

R. P L 9643, and and Atlanta Court receptor agonists that we get face to study and dry eye disease, using eyedrop formulation and January of 2020.

Dry eye disease also known as radical justified sica affects the cornea and congestive of the eye, resulting irritation redness pain blurry vision.

This is a very and we believe that by activating Atlanta Court and system locally P. O 9643 will reduce the inflammation that underlies many negative aspects of dry eye disease.

July of 2020, and the study was fully and rolled with 160 dry I use patient and we are on track per data and December of 2020.

The primary objective of this study is to provide the day to required to advance P. O 9643.

Stomach solution at a later stage clinical trials, which would start to the first half of 2021.

A day to come in before your and I would like to review the trial design and our regulatory strategy.

And points would cry disease clinical studies are divided into two categories signs and symptoms sinus direct evidence of disease Examples Parkway Elysian and cheer productions.

Systems are patient experienced aspects of disease, and examples of blurry vision and itchy eyes T.

T O 9643 face to study and they multicenter randomized control study.

Very P. L 96432, placebo with a 12 week treatment furious.

And the co primary endpoint are a sign of try and disease, which is corneal and keep your corneal Flores These danny and a symptom.

Aqua discomfort measured by and.

Validated chiaro scale.

We have also include it multiple secondary and points that measure P. P. O 9643 effects on signs and symptoms of dry disease.

It's difficult to use only a single primary endpoint.

And a face to study with multiple secondary and points. However, after discussions with the FDA you chose to use co primary and points with the strategy debt current phase two study could potentially be used as one of the two requires basically pivotal studies.

Both of the co primary and points are statistically significant.

We've designed to study so that multiple outcome support the faster and appeal 9643. These potential outcomes include statistical significance for one or both of <unk> co primary endpoint or other signs or symptoms and the primary what specific subpopulations that apart the secondary and point analysis.

[noise] swallowing the strategy reduces phase two risks and allows for the possibility that the phase two study maybe use is one of the two required phase III pivotal studies.

Mark with a dry eye disease treatments represents a substantial commercial opportunity or 2 billion and annual sales and continued growth based on patient demographics, we believe the potential <unk> and favorable Tolerability and safety profile of P. L. My 643 will allow for substantial market penetration of the dry bucket.

And I'm moving out to P O 8177.

For calling every disease and particular dark COVID-19 program and preclinical disease models P. O 8177 has demonstrated anti inflammatory activity and the ability to protect lung tissue from damage due to fibrosis.

As a potential treatment for patients with COVID-19 affected P. O 8177 may reduce the information a lot and fibrosis associated with progressive disease.

And the second quarter and Catholic Twenty-twenty wheel discussions with Varda concerning P. O 8177, and as a potential treatment for patients with COVID-19 infections and one of the outcomes of this discussion was the device and we move P. O 8177 forward and begin discussions with the FDA concerning a potential.

Physical trial, and Covid patient and the second quarter of 2020, we submitted a P. I N D.

Standard package to the FDA and received detailed advice on the requirements to progress P O 8177 and to clinical studies.

Following a current P. O 8177, COVID-19 plan and we were Kentucky, and all the required activities needed to file it investigation and who drug at.

Application or 90.

And began cause it'll studies and COVID-19 patients vs includes such activities as clinical protocol development selection of and C. R O clinical trials identification and the manufacturer appeal 817, and placebo and active doses.

Whoever the COVID-19, pandemic hasn't packet or ability.

To complete the required manufacturing activities due to a delay and acquiring the syringe is needed to manufacture active and placebo doses muted.

And we anticipate that we will not be able to complete the P. O 8177 manufacturing until the first half of 2021 and two.

Until these activities are completed we will not be able to file and I I D and begin a study with P. O 8177.

And discuss the previous calls press releases and our 10-K landscape for treating and conducting clinical studies and COVID-19 patients is rapidly evolving.

Which impacts of design risks and ability to conduct clinical studies and COVID-19 patients.

And we have considered the risk and uncertainty of conducting COVID-19 clinical studies startup T. O 8177 clinical study is subject to receiving external funding and operational support and we are in the process of applying to government programs that provide such support.

Earlier this year, we apply to the governments active program to support til 8177.

And we recently received a positive review what we're unfortunately and form at the active programming is no longer funding earlier clinical programs and his prioritize the funding only face free programs. We continue to seek other sources of external support and look forward to hopefully finding successes support for this program.

Ah clinical trials retinal disease indication you scheduled to begin and the second half of 2021 and this is a slight delay due to the impact of COVID-19, and we were using the additional time to expand our scientific understanding of them line accord and system and I can and diseases.

Updating on <unk> call and released formulation for P. O 8177, as a treatment also colitis and other inflammatory bowel disease.

Kentucky to require frequent it'll activities.

And drug manufacturing and this program remains on track to begin a face to proof of making a study and the first half of 2021 and finally based on our research work and the natriuretic peptides system.

Our drug candidate T O 3994, which is and natriuretic peptides receptor Agnes is going to be evaluated and a face to a clinical study and hard to the patient with their objection fraction clinical study is a collaboration with two major academic medical centers and and supported by the American Heart Association I'm.

And have to report that patient enrollment has begun and the first patient has been dosed.

You can find additional information on our programs and on our website W. W. Dot Palatin dot com.

[noise] response to the pandemic executive management employees and board of directors acted quickly to adjust our business operations and we have been able to continue to advance our programs and.

Dressed and the COVID-19 pandemic, we took immediate actions to ensure the safety of our employees patients and health care partners.

Our ability continues to advance up and developed programs and are healthy cash position will allow palatin to emerge from the pandemic and a strong position.

Are released and commercial activities have made significant progress.

Under <unk> directions, we have put in place and excellent commercial team.

That is addressed many of the deficiencies, we inherited from a Mac pharmaceuticals.

And we have now begun selective marketing buffet Lucy we continue to work with our Chinese and Korean partners, which are now advancing Billy seemed to clinical studies and to support their regulatory submissions for ultimate approval and sale of at least and and those territories.

We continue to believe and.

[noise] value of Lucy as a treatment for women with H S. D. D have you. This is a major opportunity to increase the value of our company.

Try vs program and we initiating completed enrollment phase two clinical study we were on track for data and December and preparing and move forward with the data is positive.

As we continue to look forward to the rest of 2021, and we will continue to deal with the operational challenges posed by the COVID-19 pandemic, we have a strong pipeline of novel pedal candidates and we will remain focused on there and fascinate.

Based on the research were completed and the past year, we are positioned to start clinical studies, and COVID-19 patients ulcerative colitis, and one or more accurate and he's indications and 2021.

And clothing I would like to thank the Palatin and team and all our development partners for their rapid adjustments to a new working environment and their continued dedication to the advanced and have a lychee commercial activities and our other novel drug cabinets and.

And that what was it called questions.

Thank you and you would like to ask a question. Please signal by pressing star one and your telephone keypad, if you're using a speaker phone. Please make sure that and eat function as turned off to allow your signal to reach our equipment again that is star one to ask and audio question well pause for just a moment until now everyone the opportunity to signal.

And her first question and be friendly John Newman from kindergarten.

Hi, guys. Good morning. Thank you for taking my question Uhm first question is just wondering how much longer a Meg will continue to provide translation transitional services excuse me for my Lucy and then also wondering if you could talk about potential licensing discussions four by V C and.

And what you'd be looking for here. Thanks.

Hey, John and thanks for the question and Steve I'll take this one and Carla jumping with color the.

It is confidential on the period of time, but suffice to say, it's gonna be orderly, we negotiated with with a mag and what we think is a very reasonable amount of.

And have time regarding the transitional services and that that.

And I'd also carries over I think you're probably aware a mag is is and.

It's gonna be acquired by Covas, I believe that transaction is targeted to close very shortly and if not this month so.

So we don't see any any issues with with and in that regard.

Regarding.

And the the re licensing and and <unk>. The U S. As in North America, We are you know and and multiple discussions where.

We're we're trying to go about it and what we call very direct way and that the first few months post the uhm the termination of a license and I should be getting and the right. There were just as call did more than elude to on his presentation. On this <unk> prepared remarks, there was just a lot of <unk>.

Work that had to be done before we could.

You know if you will have what we consider to sustain substantive discussions and move forward. So that is underway for the most part it's it's pretty traditional we're looking for someone that plays and the female health care space that landscape has the infrastructure and and is committed we.

<unk>, we have a lot of flexibility palatin, because we can be a very supportive partner depending on the company. The size. The focus we can handle the CMC anything you know and a nice way other than than the commercial efforts. Even though we are we are having that right. Now so I think that puts us and a position to be to be fly.

<unk> I think the the work we've done in the past, it's it's been less and four months that we've got and the product back and to be cleared the suit wasn't completely tailored in that regard so where we do believe that we will be in a position at some point in the future too seriously consider.

Licensing and and make the best decision for the shareholders.

Alright, and I'm not sure I think that John.

Yeah, He's a little <unk> one of these we've also accomplished is really which will help and licensing is really.

Stopping to stopping our dependency on.

So a lot of those things like manufacturing distributions. These agreements have already been transferred over to Palatin. So a lot of the things that you know we'll need to be in place that you can have a a valuable license and and and a quick license turnover are really transitioning or have already transition from a Mac and palatin and as we've been changed.

They needed attention and and and I've been cleaned up and and they're functioning. So we would like to be able to turn it off which was a partner you know a a a like a well well machine that functioning. So that this can be just dropped into the bag and they can just focus on the commercial activities and I think that's the way that will get you know a maximal value for the product and and a lot of those things have been done already and and I.

Relatively shortly.

He won't be that dependent on a Mac for much of anything.

Okay, great. Thank you.

Thank you and our next question will be from Jim and again and.

From H D line right.

You guys. Thanks for taking the question. So first just based on your earlier comments about a mag and a sale Jacobus I just wanted to adopt the final I here. So is there anything that we need to be aware of with regard to the change of control our number one and and number two when you look at the pipe line you are seeking additional.

<unk>, you're seeking funding external funding for the COVID-19 program for 80, 177, so I thought it might be a good opportunity to just give us a little bit of a reminder, and me a little bit of a reminder, with regard to the preclinical data that you have and hand that gives you encouragement for the program. Thanks.

Okay sure just dealing with the transition.

We've already been in contact and it's through Steve is really already been in contact with the Covid senior management and they can.

Confirm that they are we.

Will be in place and continue to support any other changes will services that we do need from them. So I don't think there'll be like we just like to be nominal with no impact of that effect transition.

We should close shortly we're moving out and lose you you you highlighted still for P. O 8177, uhm potentially as a treatment for Covid patient will take that and a couple of of direction. So from a preclinical standpoint.

And you will clearly we know that feel it and 177 and through a variety of models has shown a suppression of production of Pro-inflammatory cytokines.

What was quite Ah interesting to us and and quite encouraging to US was really work that was done and a.

And model of lung disease, which.

As for.

Interstitial pulmonary fibrosis, which is done and it was called the Bleomycin model, which is one of the standard models that really looks at the effect of a drug to impact a lung fibrosis, which is really a key detriment and he's and patient and we should really nice success and reducing the fibrosis that occurs and lungs and that model.

So that and so so there is a nice setup preclinical data from both of anti inflammatory side and that's on the.

<unk> sighed, they're really supports transitioning into clinical trials and really we've had review by you'll both the barter program and the active program and and and the scientific reviews have been very positive. It's just that with the wealth of compounds moving through and and it.

Desire to have late stage compounds.

It's <unk>.

We can wind up with great site and reviews, but come back when you're ready for phase III type of responses. So what we're doing along those lines is we've actually brought in a group that specializes in and helping to get funding.

Funding for.

Programs, such as P. O 8177, and we're resubmitting grass and and other applications to get for support and.

Unfortunately, because we've had a little bit of a delay and the manufacturing and what we will have the time to play these things out.

<unk>.

Irrespective of the financing if it comes in or not we may choose not to go forward, if we don't get financing and Kobe patients, but we do believe and the value appeal 8177 and for treating.

Cute lung diseases general and we look at maybe moving and I and a different indication that may be easier for us to get at clinical trial flights and patients.

Yeah that would that would be hard to do and with Covid patients right now without support. So we do think that it will go forward and and lung disease and one manner or another it's just not clear until we really play out the granting process and and external funding process, which way, which way we'd go and.

Got it very helpful. Thanks, guys looking forward to a lot of important catalysts and the near future.

Us too.

Thank you and our next question and be from Michael Higgins from landmark down and.

Okay.

And and this is Edward on from Michael I. Appreciate you Gotta take and our questions just starting with vital you see here. It looks like there was a 1.1 million dollar charge and the quarter and that generated the negative net sales just wondering if if that's correct and whether this is record and charge and in terms of net margins just wondering what we should look for in the next few quarters.

And.

Hey, it Steve.

Well if that number is not correct I have to talk to our outside auditor's, but it is correct. The the strategy out of the gate by a Mag was about demand they did not.

If you will have certain procedures in place where you'd have the insurance reimbursement that was just not their initial strategic.

<unk> they.

And they were going to evolve into if you will instituting those procedures were you <unk>.

And you you get the insurance reimbursement they started the ex procuring coverage expanding the coverage and then the divestiture process started so what what what <unk>. What you say is if you understand how how badly she has been distributed and and sold the first script and the square.

And you find this for auto injectors.

Palatin subsidize and and make it done it prior subsidizes 100 per cent of that so that means the patient has zero dollar copay.

Zero out of pocket for the first for the square for script all subsequent scripts the refills, they're out of pocket cannot exceed $99. So what you have is a little bit of a perfect storm right now as we got the product back and that.

We're expanding the coverage and I think we're we're making some very significant increases in that regard, but we importantly, we adjusted to procedures with the specialty pharmacies, whereby we are seeking insurance reimbursement on all the doses. So as of right now you have a very.

Substantial amount of.

Day all set.

The rebates the allowances from the say the positive gross the garage sales that for this period resulted in and net sales as we go forward that is going to be turned to positive sales and ideally significant positive sales.

A little bit further down and the state and we also have the cost of the cost of goods sold you can see that it's we have a very very good margin.

Even.

Once we.

Get get some things in place and and the insurance reimbursement and the demand is is moving and the right and the right direction.

Gross profit margin will exceed 90 per cent. So they take away their and what is this is a tiny definitely we've.

Remediated certain procedures and processes, there and place now and it is increasing every week and every month.

Alright that sounds great I appreciate that clarity uhm and just as a follow up on that point. It looks like you have you know sales worry about eight and 10000 you have a 5 million dollar one right for the year and then are these initial revenues and based on demand or does it include some of the stocking and destocking from the <unk> transition.

And I watch where.

We believe the I I wouldn't extrapolate from what we just did for July 25th through September 30th.

Carl highlighted and is prepared remarks, and I commented there there was work to be done before we could move forward with the attack and the the awareness and and the demand the insurance coverage needed to be expanded priest certain procedures to allow for insurance.

Embarrassment needed to be modified and corrected it, especially pharmacy level. So our.

Our position is that the demand will increase and ideally simple significantly as we go forward. We did also just recently start there's G O targeting digital marketing campaigns, and you might say well, yeah recently and <unk>.

<unk> within the last few weeks and even though we've had the product for a little under four months.

It would have made no sense to start that campaign. Prior you don't want to increase the demand and also if you will have a negative negative impact on on what type of revenue dollars and cash dollars. You were you were ignoring as the as the manufacturer. So we believe we're and a really good position with that too as we're attacking and van Gogh.

Forward to to have that upswing and the demand curve.

I'm Gonna I'm Gonna, just kind of maybe put it.

Because I'm not an accountant and.

Unfortunately, according to Steve I'm Gonna put in and more blunt terms. We inherited was a product that was really just aborted and it had a negative.

Net sales and we couldn't tolerate that we need to make money when we sell.

Hello, Hi, Lucy script, and we needed to put a lot of these and place to do that and we've done that now.

So we're now and a position where we can work on increasing and demand because instead of having said increased demand costing us money without going to make money.

I don't know maybe I'm, a little silly I think when <unk>. When you sell something you want to make money when you sell it so and we needed to fix put in place the infrastructure and allowed us to do that and that and that's not the case and that's going to expand.

Again, and he would modest we have good insurance coverage and <unk> and we're gonna have even better as we get into the new year, We've got a great team working with us and we're expanding coverage.

Almost every day.

And the other questions and sort of.

Yeah, you sort of cramped and my next question is there you mentioned on the previous call about the digital marketing campaign and the coverage and spend a few numbers are and that I was hoping you could talk a little bit about how much your and best thing and it looks like you're looking at for the digital marketing campaign and and if you can find any updates on the coverage uhm compared to the lockers call.

Yeah, I hate Steve the the coverage coming in and and it was it was it was really advancing as we were.

Taken the product back from a Mag, what was and at 50 per cent range. We.

And we're able to get that into the into the mid 60 range. The mid 60 range me and to find is a covered lives out there which is the the acronym that people use and we're we're we're aggressively moving forward. We we have.

A third party expert consult and that's assisting us and and this endeavor and our target is to is of course 75, if not 80 per cent.

By the first quarter of next year.

The so that's about as much.

Specificity I can give around the coverage and and it's always confidential on on the type of who's covering us but it's.

The general rule of thumb is there. There's five main covers covers groups and handle if you will 80 per cent of the of the covered lives. So we're and we're in a pretty good position there and that's in any and he pushed back once we get once we get the right person and and the right attention. This is a a product it's on demand we don't have any safety issues.

And the you know the the pricing and things of that nature or there's no pushback in that regard. So it's just a matter of a tiny difference again, so our our our plan is to come and bye bye during the first chord that <unk> north of 70 598 per cent of covered lives.

Okay, and so that that's exactly it and it gives you the marketing.

Regarding the the digital marketing, it's and we're we're not we're not a photo commercial activity. We don't have a sales force and I I I believe and Karl believes and a lot of other people that probably be limited impact on a sales force during the day stage of the pandemic. So we're we're utilizing the the digital marketing the facebooks the Instagram.

And the telemedicine and it's the investment is what we think is reasonable it's it's between 500000 and and maybe $750000 for the first few months you know as your leg and glaring the the foundation and their thereafter, it's probably.

Probably will go down maybe 50 per cent and and as I mentioned earlier. This is a G O targeting where.

We view this as you know heightened proof of concept right, we're not going out and national there's certain areas that we want to show that if you invest a dollars you have the impact you have the the demand you have the the value proposition regarding the the net sales and that's gonna put us and what we'd leave it much better posish.

And and regarding the free licensing.

Okay makes sense and and just one final question on and 90 643, just about the phase three going forward. Just if you could provide that you've tried it a little bit of timeline uhm for the outlook Uhm. If you could also touch a little bit on the cost and the likelihood of partnering or retaining this asset depending on the.

Two adults and moving forward.

And it just in general terms and.

Yep.

Where we have positive outcome and we're fortunate if they were running a full phase III program next year, you're going to be it's gonna be about $20 million to complete all of the activities for a full phase III program, meaning all the manufacturing additional tasks were validation work well with clinical work and being in a position to get those studies done and they will.

Be done next year, the good thing about dry studies as they're very quick so if we started and the.

The first half of the year there'll be done and the second half of the year and and you're in a position to file. So it's a very rapid program and it's not for face free program that would lead towards and and and a submission is not particularly expensive, but it would be and the 20 million dollar range to really conduct all the activities, we would need to do and then and then it would be a position to file.

And and D a U.

They like late next year or early and and and 2022.

Okay. So it sounds like you'd be doing this in house and.

Yeah, I mean, we we have the data and we see it we certainly have had.

Steve and there's a lot of the visit development activities and we certainly have half luminary discussions with with potentially larger companies that we'd be interested in a dry eye product, but really until you have the data and your regulatory passport. We're just fully clear you can't you can't do much you know and that was gonna do a deal with us.

Day, depending so and that day to comes out we certainly will look at this development options. If they are on the table and we'll go from there.

HM.

Okay, well. Thank you guys a call for me I appreciate all the details.

Hi Tech.

Thank you.

Okay.

And just a question and answer session today, and like tend to call back over to Carl C. N N.

Great.

Well, thank you would like to thank everyone for participating on to call.

Good questions that we received help us clarify what's going on and the company. We look forward to continue to update you as things occur and I'm sure I'd be surprised if we don't have another call based around the data coming out to the dry Z study.

And December we look forward to that and we look forward to keeping everybody inform the price that we're making here team here is working quite hard and and.

There'll be a lot of the cost per set of coming and and we'll continue to come. So thank you be safe have a great day. Thank you.

Thank you, ladies and gentlemen, and this complaint today's teleconference. You may now disconnect.