Q3 2021 Myovant Sciences Ltd Earnings Call
Good day, everyone and welcome to mild and Sciences.
And year 'twenty and 'twenty earnings Conference call today's call is being recorded.
At this time I would like to turn the call over July and Paul Vice President of Investor Relations and viable.
Please go ahead.
Thank you operator good morning.
And thanks for joining us today for a general business update and to review the financial results on <unk> third quarter of fiscal year, 'twenty and 'twenty. Joining me for today's call are day America miles and Chief Executive Officer, Frank Carbo, President and Chief Financial Officer, Adele Goldberg interim Chief commercial officer and Dr. Juan Camilo, our whole now you've met.
Officer and.
Addition to the press release issued earlier this morning, the slides that will be presented during today's webcast are available on our investor relations website investors that miles and dot com.
During the course of this conference call, we'll be making forward looking statements. These include plans and expectations with respect to our products product candidates strategies opportunities and financials and all of which involve certain assumptions risks and uncertainties that are beyond our control and could cause actual results to differ materially from these statements and.
Question of these risks can be found in our SEC disclosure documents and.
In addition, my event does not undertake on obligation to update any forward looking statements made during this call.
With that I'll now turn the call over to Dave Marek Chief Executive Officer, Steve.
Thank you Ryan and good morning, everyone.
Since our last earnings reported in November I'm pleased to report that mild and has achieved for landmark milestones and.
And FDA approval, a collaboration agreement with Pfizer.
Positive data from our phase III extension study.
And a product launch.
Huge milestones that have helped transform us into a commercial stage company with compelling near term opportunities in oncology and women's health.
Before we review these milestones and more detail.
Let me first comment on the ore go VIX launch.
It's still early days, but I'm encouraged by the initial feedback we've heard from the field and the ordering trends we've seen after just five weeks.
Through the end of last week, approximately 1800 bottles of Argo VIX had been shipped into our distribution channels, which include our specialty distributors and specialty pharmacies and our free trial program.
We will learn more about this inventory and how it's being dispensed to patients as we receive more patient and provider level detail and data and the coming weeks.
From a customer standpoint, I'm pleased that 10 of our top 20 highest priority accounts have placed at least one order for or globex and overall of customers that have placed on order through the end of last week.
30% have already placed reorders.
So in summary, great progress on the early days of the launch, but we're just getting started.
In December last year, the FDA approved <unk>, our oral <unk> monotherapy 120 milligram tablet.
For the treatment of adult patients with advanced prostate cancer.
As the first and only approved oral gonadotropin releasing hormone receptor antagonist. We believe <unk> is poised to become the new androgen deprivation standard of care.
And this is based on its differentiated clinical profile, coupled with its patient preferred oral formulation.
And prostate cancer represents a substantial opportunity to improve or redefine care.
It is the second most common type of cancer and men and the United States with approximately 3 million men living with this disease.
And of those approximately 300000 patients are projected to receive androgen deprivation therapy or ADT this year alone.
And of those patients approximately 100000 patients will initiate ADT this year and about 200000, continuing ADT as part of their prostate cancer treatment journey.
And due to advances and prostate cancer care and and aging population.
And number of men with advanced prostate cancer and the U S is expected to grow by mid single digits annually and the coming years.
Also two out of three men with prostate cancer have cardiovascular risk factors and an estimated 30% of prostate cancer patients have diagnosed cardiovascular disease.
And in fact more men with prostate cancer die of cardiovascular disease and from prostate cancer itself.
And it's well recognized that injectable LHRH agonist, such as Leuprolide. The current ADT standard of care as well as certain other prostate cancer medicines may increase the risk of cardiovascular events.
The approval of <unk> now offers men with advanced prostate cancer rapid.
Profound and sustained testosterone suppression.
And this is without on initial surge and testosterone levels that can exacerbate clinical symptoms known as hormonal flare.
And for men, who receive time limited treatment courses and who would benefit from a faster return to normal testosterone levels.
<unk> offers testosterone recovery within 90 days of treatment discontinuation for the majority of men.
One other clinical attributes providers have told us they find most compelling.
That men treated with <unk> and the phase III Hero study had a lower incidence of major adverse cardiovascular events, including heart attacks strokes and death from any cause compared to those receiving LHRH agonist injections.
And finally.
As of one pill once a day therapy or <unk> provides a convenient alternative for patients compared to the injectable options, which require travel to the clinic or hospital for administration.
So as you can imagine this is particularly important for this population of patients with advanced prostate cancer during the ongoing COVID-19 pandemic.
Now, let's briefly review the mild and Pfizer collaboration that was announced shortly after the ore gold ex FDA approval.
In December <unk>, and Pfizer entered a broad collaboration agreement to jointly develop and commercialize <unk> and <unk> combination tablet and the U S and and Canada.
Together, we believe we will maximize the benefit rather Hugo looks can bring to patients across therapeutic areas and across markets.
We'll evenly split rail Hugo looks associated profit and certain development and commercialization expenses and the U S and Canada.
And exchange for these co development and co commercialization rights mild and is eligible to receive up to $4 $2 billion of net payments from Pfizer.
Additionally, Pfizer obtained on exclusive option to develop and commercialize <unk> and oncology outside the U S and Canada, excluding certain Asian countries.
So let me highlight more specifically the deal economics.
We entered into this transaction because we believe it's good for patients.
And it creates significant incremental value from myopia.
Adding pfizer's capabilities to our own has the potential to significantly increase the value of the rail Hugo looks franchise by accelerating product uptake and increasing overall peak revenue.
The partnership will also allow us to maximize the clinical potential for value Garlic's why.
Reducing miles and cash burn through the sharing of certain expenses.
The substantial deal economics dramatically strengthened our current financial condition and significantly improved miles and financial outlook and.
This will now enable us to invest and our pipeline beyond value garlic's sooner than we previously planned.
In addition to the $650 million upfront payment myopia and it could also receive additional payments of up to $250 million within the next 18 months.
This could be composed of up to $200 million of regulatory milestones for FDA approvals and women's health.
And as well as a $50 million payment that would be triggered should pfizer exercised its option to develop and commercialize rights to rail you garlic's and oncology outside the U S and Canada.
And this is a decision we anticipate Pfizer will make during the first half of this year.
Miles and is also eligible to receive up to $3 $5 billion of tiered sales milestones equally split between <unk> and oncology and relative <unk> combination tablet and women's health based on annual net revenues for each product and the U S and Canada.
Mylan and Pfizer will also split 50 50, certain rail Hugo looks associated development and commercialization expenses.
This will enable us to reduce our anticipated cash burn compared to developing and commercializing rail Hugo looks by ourselves.
So in summary.
The significantly increased value of the rail Hugo looks franchise that we anticipate from the collaboration.
Coupled with the rich deal economics is expected to more than offset the 50 50 profit split resulting in greater overall value per mile.
I'll now turn the call over to Juan Camilo to discuss the recent spirit extension results and to share some exciting details on a near term lifecycle opportunity relative <unk> combination tablet.
Juan Camilo.
Thank you David.
Last month, we reported the 52 week results for the Spirit extension study in women with endometriosis.
These results build on the positive 24 week data from the spirits wine and spirit two phase III trials were presented last year.
Speed, one and speed.
And then to called the science and enrolled women with moderate to severe pain and associated within the materials.
Surgically diagnosed and the last 10 years.
Approximate approximately 250 women were enrolled across both studies, and where and randomize one to one to one into three groups to receive placebo for 24 weeks relative <unk> combination therapy. Once daily for 24 weeks are really bullish monotherapy for 12 weeks, followed by 12 weeks of <unk>.
Other garlic's combination therapy.
This last group allowed us to compare the safety you rarely garlic's combination therapy with that rather garlic's alone over the first 12 weeks of treatment.
The two co primary endpoint defined as the proportion of women with a clinically meaningful and reduction in dysmenorrhea or menstrual pain, and a clinically meaningful reduction and non menstrual pelvic pain, both assessed by a numerical rating scale.
Our annualized after 24 weeks of treatment and compared their value Garlic's combination and placebo groups.
Following the 20 per week treatment period patients were given the option to enrolling and extension study for up to 80 additional weeks would that and initial analysis of efficacy and safety at week 52.
And another analysis will be conducted at week, one and four in about one year from now.
A total of 802 women enrolled in the extension study on.
All of whom received rally Garlic's combination therapy, regardless of their treatment assignment and spirit one and.
Chip.
Let's first review the 24 week results of this spirit studies.
As you can see from the data and the Orange columns over 24 weeks relative <unk> combination therapy demonstrated significant and very consistent efficacy results in both street studies with the responder rate for this mineral ria of about 75%.
Responder rate for non menstrual pelvic pain of over 60% and improvement and dyspareunia or painful intercourse and key secondary endpoint.
Women receiving value Garlic's combination therapy had minimal non clinically meaningful bone mineral density loss and a low incidence of hot flashes.
Could this result, and context, we present on the right side of the table. The results from the Ela Garlic's monotherapy pivotal studies called allowance, one and allows us to.
While these studies had all similar defines let me remind you that comparing data from different studies must always be done with caution.
As you can see after 24 weeks relative Garlic's combination therapy has and efficacy profile comparable to that of the hydrocephalic colleagues.
The safety and Tolerability profile and more like that of the low dose of alcoholics.
Let's now review the 52 week results of the Spirit long term extension study for those women, who received rather bullish combination therapy for one year.
The 52 week results for this group are consistent with the efficacy and safety profile initially observed through 'twenty per weeks.
85% and 73% of women, respectively reported clinically meaningful reductions in dysmenorrhea and non menstrual pelvic pain at one year.
And importantly, bone mineral density loss was which was minimal and not clinically meaningful after 24 weeks stabilize from week 24 to week 52.
The proportion of patients reporting hot flashes. After one year was also consistent with the initial 24 week treatment period, despite and observation period that was twice as long.
Now, let's consider these results in comparison to the results from the 52 week extension study for <unk> monotherapy, which are displayed on the right side of the table.
Once again, comparing data from different studies and must always be done with caution.
Results. After one year of treatment suggests that relative garlic's combination therapy has the efficacy profile comparable to or slightly better than that of the high dose of alcoholics with a safety and tolerability profile that is comparable to or slightly better than that of the low dose of <unk>.
Given this spirit extension data generated after one year, we believe relative Garlic's Commendation and tablet one pill. Once a day treatment has the potential to be a best in class option for women with endometriosis.
I'd like to use this opportunity to share with you and new clinical study, we plan to initiate income and weeks.
That we believe will provide valuable information to women and their health care providers and could further differentiate rallied <unk> combination tablet from other gnrh antagonist, we'd been options for uterine fibroids and endometriosis.
We learned from market research that contraception is important to women with uterine fibroids endometriosis.
Approximately 65 per cent of current uterine fibroid patients, taking oral contraceptives or treatment believe that contraception is an important factor and considering and uterine fibroids and treatment.
Similarly, approximately 78% of women, taking <unk> as a treatment for endometriosis and believe that contraception and is an important treatment consideration.
Currently available Gnrh antagonist therapies for uterine fibroids, and endometriosis required concomitant use of barrier or non hormonal contraceptives and their use with hormonal contraceptives, maybe associated with decreased efficacy and increased risk of adverse events.
Rather garlic's combination therapy has already demonstrated 100% ablation inhibition and the phase one open label single arm study in 67, and the women over and 84 day treatment period.
Based on these results we are planning to start the serene study.
Phase III study to assess the contraceptive efficacy of value <unk> combination tablet.
The serene study will enroll sexually active and healthy women ages 18 to 35 years with presumed normal fertility.
All women will receive once daily relative <unk> combination tablet for 13 28 day cycles.
The primary efficacy endpoint will be the product index defined it the number up on treatment pregnancies per 100 women and years of treatment.
Positive data from the Serene study could further differentiate really bullish and combination tablet by potentially adding the benefit of prevention of pregnancy for women being treated for uterine fibroids or and the materials. It is approved for those indications.
We believe that relative <unk> combination tablet, which combines 40 milligrams of <unk> with one milligram of estradiol and a half milligram of the project and North 200 and acetate.
Could have a meaningful impact in the field of women's health.
We have heard from prescribers, primarily obgyns that they are still looking for better medical treatment options for endometriosis and uterine fibroids as an alternative to surgery.
They are top priorities for treatment are very clear and consistent stopped the symptoms minimize the side effects and make it easy for them and their patients.
We believe that relative <unk> combination tablet has the potential to meet those streetman requirements based on the results from our phase III Liberty and its great clinical studies.
Symptom relief was significant in these studies within 90% average reduction and menstrual blood loss and women with uterine fibroids, and and 83% average reduction and menstrual pain for women with endometriosis, both after one year.
Relative Bullock was generally well tolerated with stable and bone mineral density at one year after and initial minimal loss following treatment initiation and rates of adverse events such as hot flashes.
Low I'm not meaningfully different from placebo.
Finally dosing for <unk> combination tablet these convenient one pill once a day with combination therapy from the start and it's the same for uterine fibroids endometriosis.
We believe we may have found the right balance, we'd rather bullish combination tablet.
Using estrogen levels to a range that improves symptoms, while minimizing the size effect of both estrogen.
And we look forward to potentially bring and this product that women with uterine fibroids later this year pending the Fda's decision, which we expect by June 1st.
I will not turn the call over to Adele to discuss the launch of our Globex Adele.
Thank you Juan Camilo it.
It has certainly been and exciting first month of our promotional efforts.
After our launch meeting just five weeks ago, we are already receiving tremendous prescriber interest and feedback which lead us to believe that <unk> has the potential to be everything we hoped.
Our long term goal is to establish ourselves as a standard of care androgen deprivation therapy for men with advanced prostate cancer.
Executing on our launch priorities represents the first step towards achieving this goal.
Educating physicians and they have confidence prescribing our buildings.
<unk> brought access by enabling seamless treatment starts and engaging patients to drive awareness are all foundational to our commercialization strategy.
We've made significant progress across each of these priorities, which I'll now review and more detail.
Due to the large percentage and in office dispensing and specialty pharmacy distribution, we believe that achieving broad our COVID-19 adoption goes beyond clinical education to encompass office economics, and operational considerations, including E prescribing.
I am happy to say, we are making significant strides across all three areas.
The critical component is being driven by our sales force who are initially targeting key prescribers and our quick with materials and technology to perform this function virtually as well as in person.
The economic component, primarily impact impacts those practices with in office dispensing capabilities.
The vast majority of these practices now have access to our gold ex contract, which was designed to ensure they are not economically disadvantaged when prescribing on clothing.
For those customers without dispensing capabilities, our goal because it's available through our specialty pharmacy network.
And finally, we need to ensure that prescribing on both VIX is seamless. This includes supporting office E prescribing systems, and sharing that practices and patients take advantage of reimbursement and financial support offered through the Arco ex support program and where necessary that are COVID-19 is appropriately.
Added to the clinical pathways to support prescribing.
We are very pleased with our early efforts to reach prescribers.
We have had over 10000 total touch points with healthcare providers since launch.
A high concentration of our meaningful interactions to date has been with tier one or tier two accounts and.
<unk> academic centers, and large neurology and oncology group practices that drive a significant share and ADT script.
We were able to accomplish this and just five weeks and almost exclusively with my events 100 person sales force.
We are proud to have hired a highly experienced sales team and urology and oncology, averaging eight years and many with local established relationships.
Anecdotally I representatives are seeing customer engagements, reaching over 30 minutes with tremendous enthusiasm for the clinical profile.
Particularly the compelling efficacy.
Cardiovascular profile and given the ongoing pandemic our growth exists oral formulation.
We are pleased to report that the Pfizer sales team is now fully trained and joined US in the field last week, which should bolster the early momentum that we were able to generate.
As mentioned previously the vast majority of in office dispensing practices have access to our contract pricing and these early efforts are translating into our globex orders and.
Fact, 10 out of our top 20 highest priority accounts have already placed orders and and another encouraging sign 30% of all accounts that have placed our growth ex borders have already reordered.
In addition half of our highest priority accounts have ordered <unk> and their E prescribing system, which is great progress.
We have also made notable progress and establishing broad patient access to our growth.
Our distribution channel with fully stocked with and 72 hours of launch and our patient support program, including the free trial program and co pay support for commercial patients went live during the first week of launch.
Regarding payer coverage approximately 30% of commercial patients currently have access to reimbursement today via pre review coverage.
And more and they have access to the formulary exceptions process.
Part D patients may also have access today and their formulary exceptions process.
Our patient support services include support for prior authorization and we have seen a good success rate with these request so far.
Engagement with payers continues with initial commercial coverage decisions expected in the first half of 2021.
Which should support coverage from most commercial patients beginning and the second half of 2021.
The path to broad Medicare part D coverage starts with submitting our bids for the 'twenty and 'twenty two plan here and we expect decisions by the May or June timeframe.
Following this decision we do expect some Medicare part D plans to offer access to our growth in 2021 with broad coverage anticipated no later than January 'twenty and 'twenty two.
Our strategy for engaging patients has three phases, two of which have already launched.
The golf our initial campaign is to drive early brand awareness with highly engaged patient, let them know where COVID-19 is approved and available and drive them to talk to their doctor.
And the second half of this year. After prescriber education milestones are met we will look to broaden our awareness efforts with the goal of increasing patient activation through targeted direct to consumer campaign.
Our efforts to drive patient adherence utilize a three pronged approach.
When a patient initiated <unk> nurse services are offered to each patient to coach them through the early days on therapy.
And welcome kit with information on what a patient should expect after starting on Covid as.
And as well as a treatment planner to help the patient and remain on track has also provided.
S. Treatment continues patients are sent monthly mailers that provide helpful information on our clothing and other content to maintain engagement and adherence.
We are off to a great start regarding patient engagement.
And the few weeks since launch we've had over 37000 total visits to our or Covid patient website.
83% of which were unique visitors with nearly one and five visitors downloading material.
And this is four times higher and our benchmarking data for other recent oncology product launches and likely reflects just how engaged men with prostate cancer and their caretakers are and making decisions regarding their health.
We are very pleased with the early progress we have made on all three of our launch priorities and look forward to keeping you updated and the future.
I will now turn the call over to Frank to review, our fiscal third quarter financial results.
Frank.
Thank you Adele and good morning, everyone.
I will focus my comments on the highlights of our financial performance in the quarter and refer you to our press release and form 10-Q issued earlier today for additional information.
Please remember that might've and fiscal year starts on April 1st So the financial results for the quarter ended December 31, 2020 represent our third fiscal quarter of 2020.
I will begin with revenue, we recorded $1 4 million of collaboration revenue, which represents about one week's amortization of the upfront payment received from Pfizer.
Given the signing of the deal occurred in late December the amortization periods in fiscal Q3 was very short.
Collaboration revenue related to the upfront payment will increase to $21 million in fiscal Q4 and is expected to remain constant each quarter thereafter over the next six years.
R&D expenses in the quarter with $35 million compared to $48 9 million for the comparable prior year period.
The decrease in R&D expenses, primarily reflects the completion and continued wind down of my of its phase III programs, partially offset primarily by increased expenses associated with the build out of my ovens and medical Affairs organization and preparation for the U S launch for Covid.
And the potential commercial launches of <unk> combination tablet for women's health.
Our R&D expenses in the quarter also reflects a cost sharing reimbursement from Pfizer of $7 $6 million for expenses associated with prelaunch commercial inventory.
SG&A expenses and the quarter were $49 2 million compared to $29 1 million for the comparable prior year period.
The increase was primarily due to increased spending on commercial readiness activities to support the U S launch of <unk>.
Personnel and related costs, including the hiring of our oncology sales force and other general overhead expenses as we continue to prepare for the potential commercial launches from <unk> combination tablet and the women's health indications.
Total operating expenses for the quarter was $79 $7 million of which approximately $7 million was stock based compensation.
We also incurred a $5 8 million gain on foreign currency during the quarter that was recorded and our other income line.
My haven't generated a net loss of $73 $8 million and the third quarter of 2020 compared to $85 6 million for the comparable prior year period.
On a per share basis on a net loss was 82 cents.
And third quarter of 2020, and 96 cents and the prior year period.
Now looking ahead, we expect R&D expenses over the next several quarters to be at roughly similar levels to our fiscal Q3, 2020, R&D expense, excluding the $7 $6 million of expense reimbursement from Pfizer.
Declining spend on clinical programs that are winding down as well as our share of certain expenses with Pfizer I expected to be offset by incremental spend on value <unk> lifecycle management activities, such as the planned phase III <unk> study.
And in upcoming quarters, where regulatory filing expenses incurred there could be modest deviations from this trend.
SG&A expenses overall I expect it to continue to increase from fiscal Q3 2020 levels as we continue to build out our commercial capabilities and support our commercialization activities.
This increase is primarily driven by the hiring of our women's health sales force, which we now expect will be comprised of approximately 120 sales professionals and is expected to occur in fiscal Q1 2021, as we approach the fta's uterine fibroid target action date of June <unk> 2021.
Additionally, our fiscal third quarter 2020 reflected only partial expenses of our prostate cancer sales force because the hiring occurred gradually over the course of the quarter.
Finally, please note.
That in fiscal Q4, 2020, we expect to record incremental noncash stock based compensation expense of approximately $28 million due to the accelerated vesting and modification of our former CEO of equity awards and Pan her separation from the company.
Let me wrap up by commenting on our cash position we.
We ended the quarter with $746 million of cash cash equivalents and marketable securities on our balance sheet. This was bolstered by the $650 million upfront payment that was received from Pfizer and late December 2020.
As of the end of fiscal Q3 was approximately $86 million of capacity remaining under the low cost loan facility that Sumitomo Dainippon pharma, our majority shareholder extended to us.
And additional 200 million loan commitment that was extended to us by DSP in August 2000, and 'twenty also remains available to us until March 2021.
Yeah.
Let me also remind you that there are several potential milestone payments anticipated in coming months that will further enhance our strong liquidity position.
As Dave mentioned in his opening remarks, my haven't could receive additional payments of up to $250 million under the Pfizer collaboration alone within the next 18 months. This could be composed of up to $200 million of regulatory milestones from FDA approvals and women's health as.
And as well as the $50 million payment that would be triggered should pfizer exercised its option to obtain development and commercialization rights to really go in oncology outside the U S and Canada.
This is a decision we anticipate Pfizer will make during the first half of this year.
So overall my event is well capitalized to advance our commercial launches and potentially expand our pipeline.
Now with that I'll turn it back to Dave for some closing remarks.
Thank you, Frank Adele and Juan Camilo and.
In summary, this is unexciting time for myopia and with the ongoing launch of <unk> and the potential upcoming launch of <unk> combination tablet.
And the uterine fibroids indication around mid year.
Our focus is squarely on successfully executing these launches and working with Pfizer to ensure we are efficiently, bringing these important therapeutic options to patients and the U S.
And as Frank highlighted we are approaching commercialization from a position of financial strength, which we expect to continue to build as we achieve additional upcoming milestones.
The one year spirit results position <unk> combination tablet as a potential best in class therapy for women with endometriosis and will support upcoming regulatory filings and the U S and EU.
I am extremely proud of all of the work done by the <unk> team to get us to this point and.
And I look forward to what's ahead.
You for your attention and now I'll turn it back over to Ryan to begin the Q&A session.
Thank you Dave operator can we now please poll for questions.
Ladies and gentlemen, and as a reminder to ask a question you will need to press the star and the one key on you touched on the telephone.
On your question. Please press the pound key please stand by while we compile the Q&A roster.
Now first question coming from the line of Jason Butler with J P. M Securities. Your line is open.
Hi, Thanks for taking the question and really appreciate all the details you ran through there.
I guess just the first one on the commercial side can you speak to the types of patients that are being initiated on therapy first.
And newly.
Newly diagnosed versus having been through prior therapies and severity of disease et cetera.
And then just on the contraception.
Program can you just speak to I.
And I guess I just review for US the data you have from your phase III trials and the completed phase III trials and extension studies in terms of pregnancy frequency and and just any regulatory dialogue or precedent that you think is relevant here.
Sure. Thanks for joining us this morning, Jason really appreciate the question.
I'll cover the.
And the types of patients and I'll ask a delta way and and then I'll turn it over to Juan Camilo further contraception study, but just as a reminder, when we look at the types of patients.
Just want to recall I know many of you know this rigor.
Regarding our distribution channel. So while we are a retail product. We don't receive the same data that would be typical as an oral agent and the retail setting recall were and the specialty pharmacy.
Distribution and therefore, the visibility we have as the product goes into our specialty distributors and then ultimately to in office dispensing.
The visibility we have on patient level data is limited so.
So I just put that as a reminder, and I will turn it over to Adele to add color on what we would expect to see in terms of the patient profile Adele.
Yeah. Thanks, Thanks for that and thanks for the question what I will say it is a bit early we will still continue to gather information on our patients and and have a bit more insight into that but what I can tell you today is that our medical affairs team is actually engaging our providers on how.
And how we would go about transitioning patients who are on other therapies as well as initiating and so what that tells US is we are we are hearing what we would expect to hear is that doctors are interested and starting patients on our low VIX, who are either new to therapy or who are.
So what I can tell you is that that's what we're seeing to date.
And then Juan Camilo would you take the contraception question.
Yes. Thank you.
So Jason.
We're excited and very excited about the concept and study and.
And I heard two questions and your question one and the.
And after that.
And comment on the pregnancies and cars.
And I'll start with the second one.
And as we mentioned in our prior presentations, we have seen a few pregnancy in our prior studies.
Mostly on the placebo patients, but a couple and patients receiving relative all inflammation therapy and these studies, we were not set up for assessing prevention of pregnancy and or patients wear.
And instructed to take other means for prevention of pregnancy every patient and these studies was required to.
And use non hormonal methods of contraception and so these studies are not really set up for assessing and Congress.
Efficacy of reservoirs and combination therapy, we have.
Shown before our alkylation inhibition studies that demonstrate and 100% of listing division and this is a study specifically designed to assess the effect of robotics a combination on ablation. So we're very very confident on.
And that and therefore, we and deciding to take the next step which is true.
Conducting studies that it's a pretty standard nine studies.
And the way.
On a look like when you are assessing contraception and so.
We are we have and started to run that study two.
That information and patient.
Physicians.
Okay.
Great.
Quick question.
Yeah that's helpful. Thanks.
And our next question coming from the line of Phil Nadeau with Cowen Your line is open.
And.
Good morning, and congrats on the progress and thanks for taking my question first one on the commercialization efforts with Pfizer can you discuss how you how the resources youre getting from Pfizer and their sales force is coordinating with your own plans and the U S who takes what and how is that decided.
Sure I'll kick off and once again I'll turn it over to Adele I think.
Again, we view Pfizer as really the ideal partner and not only for women's health eventually, but right out of the gates here with with prostate cancer.
And one of the areas that we really value from Pfizer is the long standing relationships, they have with customers and their knowledge of the <unk>.
Prostate cancer itself, but also the speed and which that they've moved to really activate around this launch and.
And that they were fully trained and in the field as early as just last week. So we're really heartened by the day.
And the speed in which they've been able to be trained and get up to speed on the on the therapy and then really start to contribute so.
Turn it over to adult add her protection perspective as well.
I would just ask you Cindy come online in the last week and what we're hearing and and actively monitoring is very active collaboration and Brownsville.
So the reps are coordinating in terms of accounts that they are making on the key items.
Drivers and also we are we're actively ensuring that they are working collaboratively as it relates to our most important accounts because in addition to the sales representatives that we have from Pfizer and we also will have the opportunity to tap into their key account managers and the teams that they have.
And that are covering these large packages and.
And those other accounts that are primarily the ones with the in office dispensing and we talked about.
Great that's very helpful.
Very helpful.
On the accounting for the day on a quarter.
How does it work pre and post profitability.
Is there a true up every quarter on your expense line on SG&A and R&D or will there be a separate reimbursement line.
And where you record some reimbursements as revenue pre profitability and then post profitability will there be a collaboration profit share on your expense line. Thanks.
Yes.
There was a little feedback on the beginning of that but I think Frank if you caught that question and I'll turn it over to you too.
Clarify.
Yeah, I think I caught it. Thank you Phil let me maybe speak more broadly about how the Pfizer collaboration will be reflected and our financial statements and this may be four points to make here. The first one is remember that my event will record 100% of the net product revenue so under our revenue.
Section and the P&L going forward there will be several captions one of them will be net product revenue that will show a 100% of the net product revenue that will also be a line that will be titled something on.
Collaboration revenue, which will be comprised of.
On the amortization.
<unk> payments from the upfront payment and any potential milestone payments.
And then under our cost of goods portion of the P&L, We will have a line item called <unk>.
Collaboration expense and that will reflect the.
The gross profit share with Fi that will essentially be comprised of the net product revenue minus cost of goods and half of that is attributable to two five or so I'll see that on a separate line item called collaboration expense and then third thirdly with regards to expense sharing the allowable expenses.
And that are subject to expense sharing will flow through the respective line items in R&D and and SG&A and the way. This will appear on our P&L is basically is a reduction and our expenses. So R&D and SG&A SG&A expenses will appear lower going forward and then there would have been without the Pfizer collaboration.
That is very helpful. Thank you and then one last question from US just on the.
It's a follow up to the question on the pregnancy study in terms of the Pearl index, what needs to be achieved in order to support question sure because they're on.
And a regulatory precedence for what you have to show.
Well and Camilo.
Thank you Phil.
As I mentioned before this is a.
Pretty traditional design.
Any other concept and study and it's based on on regulatory guidance document from the FDA and how that is done.
And it should be defined and the Pearl and Nick.
And I'm pretty simple calculation and just the number of pregnancies that occur.
Our 100 patient years of exposure. So so we.
Enroll patients that are.
Otherwise.
And to be fair trial, and they agreed to use around lowest combination therapy.
And <unk>.
Method for prevention of pregnancy, and then we collect the number of pregnancy and divided by the number of months that women were taking this.
And.
Thank you Ken.
And that gives you a problem index.
Right, but is there a specific hurdle that you have to reach like if the Pearl indexes over ex you can't get the Weibo, but if it's below ex.
Yeah, and I could you guys groups.
Yes.
We were not on a comment on that at this moment and I. Thank you.
And just wanted to demonstrate the ability to prevent pregnancy, and we're pretty confident based on our obligation and ambition data out of that debt.
And we will get.
Heartland ex that a pretty reassuring to physicians and patients.
Got it thanks for taking my questions and congrats again on the progress.
And our next question coming from the line of Eric Joseph with Jpmorgan. Your line is open.
Yeah.
Hi, good morning, Thanks for taking my questions.
Just wondering if you could elaborate on how long of a free trial period and being opposite of patients.
And with our <unk>, particularly among government and showed patients I guess youre well positions have sort of enough flexibility to rights to Medicare patients and so there is a formal part D.
And the coverage decision.
And then I have a follow up on the other assumptions study.
Yes, well good morning, Eric.
Regarding the free trial program and the free trial program is available to all patients as I'm sure. You know that has an extension of up to two months and then beyond that we have a bridge program. That's open to commercial patients and which enables patients to stay on therapy, while commercial coverage is being determined so too.
Two months for the free trial, and then and extension for commercial patients on bridge.
And regarding progress on what we're seeing in terms of Medicare coverage I'll turn it over to Adele.
Sure.
The point that Dave made it is is the right. One is that the free channel programs offered to both commercial and Medicare patients and what I can say about from the Medicare patients is debt.
They do and access and the formulary exceptions process and we're seeing actually and so we have debt formulary exception and fastest where those Medicare patients, where Medicare part D patients and I'll comment that we continue to have very good discussions with <unk>.
Medicare part D plans and I'll remind you that by May June timeframe on this year, we should have our decisions and we do expect on plans will come on.
On line, even in 2021 and of course, the majority coverage starts in January of 'twenty two.
Meanwhile, we will expect to see some plans and came on line issue.
Okay got it and.
I guess.
I'm, just trying to better understand the rationale strategic rationale behind the.
The contraception and study with the combination tablet is it correct to read this as a desire to directly compete with <unk> and potentially forgo the needs and step through.
On.
Oral contraceptive use.
And the Endometriosis segment and then if that's the case.
Uh huh.
Have thoughts around sort of pricing of the combination tablet changed.
Means and maximizing the value proposition there.
And Sir thanks.
Yes.
Regarding pricing I think were not and are positioned to talk yet about pricing, but I'll ask <unk> to talk about the strategic rationale.
Thank you, Dave and thank you Rick.
So so low.
And we just glad if I went and where we're not going to compete with combined hormonal contraceptive and the overall population.
And what we've heard loud and clear from from patients and from from their positions is that.
We're talking about the premenopausal population for both indications endometriosis and uterine fibroids and and in addition to wanting treatment for this condition and they want to manage their they're alive and contraception is a component of that so.
And as I mentioned in my remarks.
And what's available today in terms of gnrh antagonist and treatment.
And does not provide it well requires use of barra and methods of contraception debt.
Quite honestly are not mutually desirable by by patient nor nor consistently used.
So we believe that Havent seen day data from our overlays and inhibition and study with 100% ablation innovation.
And opportunity to provide.
A fool.
<unk>.
Prevention of pregnancy, and addition to treatment all seemed.
Symptoms on unit five and on the material.
If approved.
For these patients that deserve it and we believe that would be highly differentiating from other <unk>.
Drugs and the cloud.
Okay got it that's helpful. Thank you.
And our next question coming from the line of Paul Choi with Goldman Sachs. Your line is open.
Thank you and good morning, everyone. Thanks for taking our questions.
First just on the on the part D. Discussions I was wondering if you could just.
Clarify and elaborate a little bit.
First is there a possibility of.
Temporary codes for 2021 versus the exception process and then also just just just to confirm youre seeking a permanent J code or something comparable to that for 'twenty two.
So a dell I'll, let you address the.
Our expectations around part D coverage.
Yes.
Sure.
And and we can double check, yes, and in terms of course, we're not pursuing any of that.
Going with the standards process, so I'm not quite true.
That that's relevant for us and we have and having very good discussions with the payers and is unchanged.
On the commercial and on that.
Medicare side, and we started this process and of last year and.
And we're continuing it with coverage decisions midyear and plants coming online and thereafter.
Okay. Thanks for that thank you for that.
Then just with regards to Europe, and with regard to share or maybe tell us where you are with regards to your own commercial infrastructure build.
Specifically I know you are considering and still waiting on the potential Pfizer opt in but just where you are with respect to your commercial infrastructure development and in Europe.
Sure Paul I think when you look at the.
Women's health and Europe, we've already established.
Collaboration with Gedeon Richter, so were very enthusiastic as.
As we approach the potential commercial approval.
And uterine fibroids that we would hope would come around mid year, and so Gideon Richter will will be the lead commercial or will lead the commercial efforts and women's health regarding prostate cancer. As we've mentioned Pfizer has the first option a writer first refusal so to speak of the prostate cancer.
We expect that they will make that decision and the first half of this year and our negotiations and the collaboration they were very enthusiastic about that opportunity.
So we will.
Await their decision as we get closer should they choose not to take that option. We did have and still do have other partners, who are very interested and the prostate cancer opportunity in Europe, and so we will have plenty of time to.
Determined another partner that could potentially launch a prostate cancer and Europe. We are not currently building out our European infrastructure to support those launches directly we will do that through partnerships.
Okay, great. Thanks for that clarification, and then just lastly.
In terms of your.
Physician tracks, and just sort of where the European practitioners broadly see relative blocks fitting in in terms of ADT.
Landscape for prostate cancer can you maybe just comment on what your early market research is suggesting.
And that could potentially fit and thank you very much.
Thank you Paul I will ask adult to comment on the.
On your question.
Sure.
Search in Europe, we havent done an extensive amount.
And as prescribed and maybe you want to know I would suggest and but we see.
Patients with advanced prostate cancer and.
And the incorporation of ADT and a similar manner and just as we would expect in the U S. We have our goal.
We're becoming the new standard of care from ADT, we would hope to see that in Europe, but I'll ask one launch and yellow if he wants to comment on that.
And on prescribing.
It's pretty parallel.
Thank you and thanks.
And now I think.
I think youre right.
It's pretty pretty parallel to the U S.
Agonies are the primary.
On a form of a btu there.
And with the physicians that we've spoken in Europe, there is a high enthusiasm for it and <unk>.
<unk> net.
Being now available in a way that is.
Well not not available, but that could potentially be available for and oral route and they look forward to to seeing it. So so I don't think it's very different than what we've seen in the U S.
Thank you very much.
Thank you Paul.
And our next question coming from the line of Mohit Bansal with Citi. Your line is open.
Great. Thanks for taking my question and congrats congrats on all the progress.
Maybe a couple of questions to one question on Oh on the cadence of flow.
Revenues.
Uptake.
Forward.
And it sounds like Youre, saying that the low.
And so creating the awareness and obviously.
There is probably more towards the back half debt yield as you get into some of those Medicare plan and maybe more to come in 2022 and <unk>.
You didn't get right and.
And to that and I mean consensus seems to be assuming about a $50 million and 2021 calendar year.
Does this seem reasonable to you considering on that.
Well I.
I'm not sure I heard the entire question there was a little breakup there, but let me just speak to where.
Were not and are positioned to provide.
Revenue guidance at this point, we need a few more quarters I think to get a sense of the trajectory that we are seeing what we can say is that we are very pleased that.
We already have 30% of commercial plans that are providing.
Coverage.
<unk> to their formulary decisions and so we feel very comfortable that that's a great statement in terms of how payers are viewing the therapeutic area and the role <unk> can play we anticipate that we will have more commercial.
Decisions not only this quarter, but leading into second quarter, so our ability to mono and monetize the demand trajectory that we're seeing looks very promising and then as you mentioned in terms of part D. Plans I think a Dell mentioned that we expect that some of those decisions will begin happening we.
Late this year, but much of that coverage will actually take place begin at the beginning of next year. So that's when we would see more monetization of that patient volume will be more substantial as we get into the beginning of 2022.
So I hope that provides clarity on on.
And what Youre looking for there Mohit. This is a very very very helpful and maybe one big picture question now that cash you bought and issue for you.
The size of the Arps and you could have more cash coming in.
How are you thinking about.
Good day.
On value at Goldman Sachs and and.
Would that be something internally and them so.
Pipeline.
And I am quite intrigued by the R&D called line its R&D would probably be stable for a few quarters.
And just thinking about the future four to five years down the line and how you're thinking about using this cash and utilizing the cash to build.
Our company for future.
Yeah, well I'll make some intro comments and then I'll turn it over to Frank here, but I think from a big picture perspective, we have two large corporate priorities. This year. The first is execution, we will execute on our launches we will work diligently to make sure that we get our therapies in the hands of patients.
And part of that execution is also our regulatory filings and seeing those through but you've touched on the second large pillar of our strategy. This year, which is really building a sustainable.
Growth for many years to come and that has to do with really building out our pipeline I think our organization has demonstrated that we are on outstanding clinical development organization, and we want to leverage those strength to really make sure that we are building our pipeline.
And so when we talk about the cash the areas of focus will be first of all partnering with Pfizer on building out the rail Hugo looks franchise, because we see.
Additional opportunities, there and women's health and and cancer and oncology and so that will be one of the key areas of priority and we've already made significant progress with Pfizer and the discussions around the prioritization. There second in terms of building our pipeline of course, we have <unk> 602, and we are.
And what the different applications of that therapy could be and we will come back at a future day with kind of prioritization of how we see any potential development. There and then third is really the business development efforts as you can imagine we would stay closer to home in terms of our focus being women's health as well as on.
<unk> and those would be the areas of prioritization and and.
And building out our pipeline.
So those would be kind of the strategic direction.
And I'll turn it over to Frank if you want to add any further color on how we might allocate that and making sure that we.
As we look at business development, we're really looking towards the right valuation.
And maybe just to highlight again the comment I made about some of the directional guidance, where we expect R&D.
R&D expenses to grow as you said and we expect it to be constant over the next few quarters.
Keep in mind, I mean, R&D expense overall has come down quite substantially about $20 million from the same quarter a year ago, but we expect that now to be about constant because as Dave said, we have this proven development engine and we wanted to keep that engine humming and and the first instance, we are now doing this with some lifecycle management opportunities.
You heard the first example of that with the <unk> study that we plan to initiate and Theyre likely others to follow and then.
And beyond that of course, we are now evaluating other opportunities to bring and assets that extend.
The Maya and pipeline beyond the rail and go ex franchise.
Very helpful. Thank you regimens, Dave and Frank.
Yeah.
And our next question coming from the line of <unk> with Leerink. Your line is open.
Hi, Good morning, Thank you for taking the question.
Firstly, just on the Camacho from maybe a question from the Dol.
Can you talk about how your on the fly is the sales force and.
And instead of coordinating on.
Sort of splitting up debaters territory, etcetera, and you kind of talked about 10, I'm, sorry, 'twenty key accounts.
And can you help us understand.
How much the training of the top 20 accounts that you're focusing on.
For the total addressable market here.
And then secondly, I had a question on just sort of commercial coverage.
What is your anticipation with regard to <unk>.
Any type of prioritization that may be required even on the commercial side.
Our Medicare side in order to be ex alcoholic.
Adele.
Can you just on the.
Commercial range with prior authorizations, we are not true.
And any issues and that was when there.
And if they plan requires a prior off and it's usually just to ensure that patient.
Is actually according to label. So it's been very administrative 10 days early days on that but I just wanted to signal that we're not seeing any challenges as it relates to the officers who need any support with prior authorizations. We're in there, we're helping with them and and that's going extremely smoothly.
As it relates to Pfizer as I mentioned Theres, great coordination so the way to think about it is that our field representatives, our 100 field reps as well as they are 100, plus rug rats are working together they are collaborating on the highest.
R&D positions. These are the physicians that are on.
And our top decile theyre working most closely across those doctors and as I said we had.
Very good meaningful interactions, which the top accounts. These are the high priority accounts. They could be academic centers are mostly the large urology group practices oncology practices multi specialty disciplined seasonal ones that are generating a large share of the prescriptions, mostly they have and offer.
Dispensing and those are the accounts that we're really focused on some of them are volume and some of them are about influence.
Especially those large academic centers that I can rattle off to you, but those are the ones that.
And you would note that the big brand and ones that we're really focused on.
And I guess my question on the profit again my question.
Okay.
Sorry, and getting some feedback on but.
Is it that highly concentrated in terms of the market that the top 20 are extremely influential or carry a fair amount of prescription volume.
They are a combination of very influential as well as they are the ones that are having a lot of volume flow through them.
Got it.
Okay.
Alright, Thank you amie.
Thank you.
And that's all the time, we have for questions today I would now like to turn the call back over to our speakers for closing remarks.
Thank you Olivia.
And with our journey to commercialization is just beginning.
And it's built on a strong foundation from the efforts of last year.
In addition, we now have more resources than ever to look towards product development and pipeline expansion. So 2021 is certain to be a very exciting year from mile band.
And I am confident and our ability to deliver on our purpose of redefining care for patients. So thank you for joining us today and I look forward to keeping you updated on our progress.
Ladies and gentlemen. This concludes my line Sciences third quarter of fiscal year, 'twenty and 'twenty earnings Conference call. Thank you for your participation you may now disconnect.
Okay.
And again.
Good day.
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