Q4 2020 Paratek Pharmaceuticals Inc Earnings Call
[music].
Greetings and welcome to the Peritrich Pharmaceuticals fourth quarter and full year of 2020 earnings conference call. At this time all participants are in a listen only mode of question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is being written.
I would now like to turn the conference over to your host Ben strain Vice President of Investor Relations.
Good afternoon, and welcome to pair of Teck's fourth quarter and full year 2020 earnings and corporate update conference call. Our press release for the company's fourth quarter and full year results was issued earlier today and we have also posted slides on our website that will be referred to on this call. Both can be found at www.
You got pair of tech pharma Dot com.
Participants on today's call are Evan Loh CEO.
Adam Woodrow President and Chief commercial officer.
Andy Brenner, Chief development, and regulatory Officer, Michael Berg on Executive Chairman and Sara Higgins, Vice President of Finance controller, and principal accounting officer will also be available for questions.
Before I turn the call over to Evan I would like to point out that we'll be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially I encourage you to consult the risk factors discussed in our SEC filings.
For additional detail Kevin.
Thank you Ben good afternoon, and thank you all for joining our fourth quarter and full year 2020 earnings and corporate update call.
Before I provide an overview of our corporate highlights I would like to thank all of our per tech employees, who have worked tirelessly and courageously throughout 2020 to ensure the continued commercial success from these IRA and the advancement of a pair of <unk> mission to provide lifesaving medicines for patients in need in this challenging pandemic environment.
I'd also like to acknowledge and thank the selfless and dedicated health care professionals, who each and every day are putting themselves at risk being at the bedside to save lives of patients in need.
The strong quarter over quarter revenue growth seen through the first three quarters of 2020 continued into the fourth quarter as us IRA generated net revenue of $12 $4 million the.
The 14 per cent increase over the third quarter.
For the full year 2020, us IRA generated $38 $8 million, which was at the high end of our most recently communicated commercial range well exceeding our original core business, new Xyrem for commercial sales guidance of $28 million that we had provided in February of last year.
Our belief and confidence in the long term commercial success of Muse IRA continues unabated based upon the 2020 performance metrics of these IRA through continued strong demand in the hospital care settings.
Throughout 2020, we continued to execute and deliver against our objectives targeting our priority hospitals, while providing educational scientific exchange to ensure that physicians understand and appreciate the desire is unique profile.
Use of Iris one stay on the well tolerated oral and intravenous formulation combined with us Iris broad spectrum profile offers a much needed new life saving antibiotic for patients with serious community acquired infections and.
In today's Covid environment desirous of ability to minimize hospital stays with the oral formulation is especially relevant for many prescribers and potentially meaningful benefit for patients.
Desirous of continued quarter over quarter growth in 2020 is not only of significant achievement in a volatile and rapidly evolving health care setting.
The reflection of the clinical importance and the positive patient outcomes with the with news IRA in the hands of clinicians.
The launch success to date has established us IRA as one of the most successful antibiotics launched in the last five years.
We've always believed that and use the iris product profile makes it a very attractive option for community use specifically its broad spectrum profile and once daily oral formulation.
With access to the Xyrem now firmly in place combined with significant support from infectious disease specialists, who have been successfully treating patients in the hospital setting.
We believe that the time US right now two years post launch to further strengthen our launch trajectory by expanding commercial promotion into the primary care setting.
The community expansion will initially focus on the larger of the two approved indications serious skin infections, which in our estimation is an approximately 2.2 billion dollar addressable market opportunity.
Adam will provide more details on us exciting commercial development for Xyrem.
Okay.
As noted on this next slide in 2021, we will be focused on a number of exciting and potentially transformative priorities and what should be a catalyst rich year for both per tech and us are.
In addition to the community expansion of the news IRA launch into the primary care setting we anticipate the these catalysts include to BARDA procurements of news IRA for the strategic National stockpile.
The FDA decision on the new Xyrem NDA for the oral loading dose in cap.
The initiation of a phase <unk> study for new Zara in N T M abscesses and the approval of news IRA in China for both skin infections, and pneumonia, which will trigger a $6 million milestone payment from XI lab to pair tech.
Randy will provide additional details on both the N P M and BARDA programs in his prepared remarks.
Before I hand, the call over to Adam I would now like to provide per tax fourth quarter and full year 2020 financial highlights and review our 2021 financial guidance.
Fourth quarter of 2020 total revenue was $16 million, an increase of 17% over the prior quarter and 78% over the fourth quarter of 2019.
US IRA contributed $12 $4 million in net U S sales in the fourth quarter, an increase of 14% over the prior quarter and an increase of 130% over the fourth quarter of 2019.
Fourth quarter 2020 government contract service and grant revenue were $2 8 million versus $2 $7 million in the third quarter of 2020.
Of note no revenue was generated from the BARDA contract in 2019 as it was executed near the end of December of that year.
Full year of 2020 total revenue was $46 $9 million with new Xyrid generating $38 $8 million of net U S sales in 2020, a 237% increase over the prior year.
The government contract service and grant revenue and collaboration and royalty revenue contributed an additional $8 $2 million in 2020.
Fourth quarter, R&D expenses were $6 $3 million compared to $9 $1 million for the same period in the prior year.
Full year 2020, R&D expenses were $23 $9 million compared to $39 $6 million in 2019.
The decrease in both periods is primarily the result of lower clinical study costs, partially offset by an increase in expenses incurred under the BARDA contract and third party manufacturing process scale up to meet expected future demand for new Xyrem.
Fourth quarter, SG&A expenses increased $3 million to $24 $3 million when compared to the same period in the prior year due to cost incurred to realign our hospital territories and our community expansion.
Full year of Twenty-twenty, SG&A expenses were $89 $9 million compared to $89 $1 million in the prior year.
Now turning to our 'twenty 'twenty, one financial guidance I will begin on the left side of the slide which is focused on R&D and SG&A expense.
Full year 2021, R&D and SG&A expense is expected to be between 150 and $155 million comprised of two components. The.
The first component is the core business R&D and SG&A expense of $130 million.
Which is represented by the dark blue stack of the 'twenty 'twenty, one histogram bar.
This represents an increase of 20% over 2020, but as noted in the left most dark blue 2019, histogram bar a level of core business R&D and SG&A expense that is consistent with 2019 pre pandemic levels.
The expected and modest increase in the core business R&D and SG&A expense in 'twenty 'twenty, one compared to 2020 will be driven by the allocation of capital to the primary care expansion and the initiation of the phase <unk> study of N T M.
Both efforts will drive in our estimation significant value for both per tech and for all shareholders.
The other component of full year, 2021, R&D and SG&A expense will be driven by BARDA R&D and manufacturing onshoring costs, both of which are subject to full BARDA reimbursements, which is anticipated to range between $20 million to $25 million.
Turning now to the right side of the slide per check estimates.
Full year 'twenty 'twenty, one total revenue to range between 166 and $177 million.
I'd like to provide a breakdown of this estimated revenue range.
The majority of this full year 'twenty 'twenty. One revenue range estimate consists of 2021 us IRA U S. Net product sales, which are expected to range between $138 million to $144 million.
This sales revenue range estimate includes between $68 million to $62 million from the core new Xyrem commercial business represented by the Green stack in each of the revenue histogram bars, and an additional $76 million from two expected BARDA procurements for the SNS represented.
The Orange stack in the 'twenty 'twenty, one revenue histogram.
The first of these two BARDA procurements is expected to occur of the first half of the year, but the second BARDA procurement occurring in the second half of the year.
The balance of the 2021 revenue.
Full year consists of royalty and collaboration revenue of approximately $8 million in BARDA government contract service and grant revenue between $20 million to $25 million.
Again, this BARDA contract service and grant revenue provides 100% reimbursement with the estimated full year 'twenty 'twenty, one on BARDA R&D and SG&A expenses as noted previously.
While we do not typically provide quarterly guidance, we anticipate the core news IRA of commercial business to be modestly impacted in early 'twenty 'twenty, one due to the ongoing COVID-19 pandemic.
Limiting face to face interactions with hospital based physicians.
Lighter than normal flu season, and the reorganization of our contracted hospital sales force, which Adam will provide more details on shortly.
Our revenue guidance assumes an acceleration in the second half of 'twenty 'twenty, one driven not only by our expectation that hospital access will improve as vaccination coverage brings us closer to herd immunity.
But also by the maturation of both the hospital based sales team and the community sales expansion, which just kicked off this month.
Late in the for our fourth quarter. We also entered into a 60 million dollar non recourse loan agreement with an affiliate of our bridge health care investment advisory.
This loan will be repaid using 100% of the royalty proceeds from our license and collaboration agreement with XI lab, plus an initial 2.5% revenue interest from the company's U S. Net sales of new Xyrem the law.
Later of which.
Kind of will carry an initial annual cap of $10 million per year.
All of <unk> lab related milestone payments, including the near term use IRA approval milestone are excluded and remain 100% with per tech.
The net proceeds of the loan together with cash on hand was used to prepay in full all obligations outstanding under the company's amended and restated loan and security agreement with Hercules capital.
Importantly, I would like to emphasize that the our bridge loans is nonrecourse the pair tech and extends the maturity and amortization period to as late as 2032.
Which is up to nine years beyond that of the Hercules facility.
We believe that this financing as structure provides further strategic flexibility to our balance sheet and materially strengthens our overall cash position.
Based upon our current operating plan as just described we anticipate our existing cash cash equivalents and marketing secured marketable securities of $125 $2 million as of December 31, 2020 provide for a cash runway through the end of 2023 with a path pathway to cash flow breakeven.
I would now like to turn over the call to Adam Adam.
Thanks, Kevin.
Before I begin I'd like to welcome our new sales representatives that have joined the Powertech family over the past couple of bumps.
We have a tremendous opportunity ahead of us to provide news on rest of patients in need and I look forward to the journey with each of us.
The U S launch of can use our of continues to progress well with strong quarter over quarter growth sales since launch even in the face of the challenging and ongoing.
The 19 pandemic.
As you can see from this slide you Xyrem net revenue grew 14% in the fourth quarter when compared to the third quarter.
We are particularly encouraged by these results in the fourth quarter. Despite increased COVID-19 related restrictions due to the spiking levels of the virus. The further affected representative access and productivity.
Regardless of these headwinds we have not wavered from our strategic focus on gaining institutional access building awareness and establishing trust and credibility with physicians who of saving lives and treating serious community acquired infections every day.
In the fourth quarter and at least for the foreseeable future COVID-19 has and will continue to present the number of challenges.
We saw a considerable impact the patient flows to position the institutions and offices from early March through the balance of 2020 and into 2021.
These reduced patient flows were accompanied by declining generic broad spectrum antibiotic utilization when compared to 2019.
Would you just position, but physical access to hospitals and a reduction in our ability to interact with physicians face to face does not represent the historical environment for personal interactions and scientific education normally associated with the introduction of the new antibiotic. These.
These dynamics of all so it might be an increasingly challenging environment to engage with hospitals to obtain formed restates us now.
Nevertheless, our business continued to grow quarter over quarter throughout 2020, and we continue to effectively and efficiently operate within a hybrid sales model. The consists of both face to face and virtual interactions.
We see this model of existing well into the second half of 2021 with the steady shift to the more impactful face to face interactions as the year progresses.
We have supplemented our sales force efforts with virtual marketing and sales tools and as such in the fourth quarter of 2020, we're able to achieve $12 4 million in new Saar of net product sales, representing a 14% increase versus the prior quarter Istar.
Establishing these IRA as one of the best antibiotic launches in the past five years.
Even against the very challenging backdrop.
Use the IRA gross demand increased from approximately $12 9 million from the third quarter of 2022, approximately $13 5 million in the fourth quarter of 2020, and thus growth in the fourth quarter was driven by demand.
The U S commercial launch of new Zara is continuing to meet materially differentiate yourself from other antibiotic launches over the past five years, driven by strong operational execution and use all of US many product attributes that include one broad spectrum efficacy, including resistant pathogens across two.
The common indications.
Two of favorable safety profile consistent with news on Iris Tetracycline heritage and three convenient once daily oral and IV formulations that enable the utility multiple settings of care.
Accordingly. These factors continued to build strong demand and supports Powertech commercial launch strategy, which is focused on the hospitals and adjacent sites of care for the first two years about launch.
We believe that the continued commercial success in these hospitals on adjacent sides of care will translate into future success in the primary care setting.
From a market access perspective, we made great progress with approximately 300 million lives covered as of the end of January.
We acknowledge that we still have some books do with Medicare However, our overall denial rates, including for Medicare beneficiaries and off label utilization are extremely low there.
Therefore, we believe that our current coverage is more than adequate to support our planned expansion into primary care.
With commercial reimbursement now solidly established combined with significant support from infectious disease specialists who've been using these IRA since successfully since launch in early 2019, we decided to expand our efforts into the primary care setting per.
Our original plan.
In addition to our current access from physician support the plan.
Turning to expanded property cat builds upon the small pilot program targeted at primary care physicians.
Of this pilot program kicked off in the middle of 2020 and ran through the end of the year.
The data provided by the pilot suggests the user has an opportunity and skin infections to address significant unmet needs in the primary care setting, but building awareness among primary care physicians the can beat the clinically meaningful trial and adoption.
Like the pilot our initial launch into primary care will focus on the $2 2 billion dollar market opportunity for skin infections.
Our conversations with these commissions over the past several months. It is clear there is of tremendous unmet need for a well tolerated once daily oral broad spectrum antibiotic that includes coverage against the MRI site the skin infections.
Generic antibiotic options are universally challenged by the significant bacterial resistance or serious safety concerns limiting the clinical utility.
This is verified by our utilization data from the pilot the suggest primary care physicians first trial of us IRA of cars quicker and with fewer Kohl's the with the hospital based physicians.
We have a plan also the <unk>.
Broaden our sales efforts to include community acquired bacterial pneumonia after the anticipated approval of the oral only loading dose regimen later this year.
Turning now to our hospital sales force.
Having a contract sales force at launch allowed us the opportunity to refine and then select the most productive and tell them to the hospital sales representatives.
In the fourth quarter of 2020, we realigned the hospital territories across the United States to focus our efforts for the most productive targets and converted the most highly productive sales representatives into full time powertech employees.
This reduced the overall size of our hospital footprint.
Subsequently, we have filled the vacancies created in the hospital realignment and recruited most of the new primary care sales force.
These new sales Representatives representatives completed the trading in January of now started detailing doctors this month.
Our expectation is that by the second quarter, we would of approximately 45 hospital based representatives on approximately 40 primary care representatives in the field.
The sales teams will be supported by specialized payer and inside sales organizations.
Given the realignment of recruitment of the new sales personnel. During this on the last quarter. We expect it will take a few months before we see the full impact of these changes.
So Paul one month in to the community expansion and the early signs are encouraging.
We believe we're on the right path for Us IRA and are well positioned for long term commercial success.
And we look forward to reporting on our continued progress in the quarters ahead.
And with that I'll now turn the call over to Randy.
Thank you Adam I'd like to begin by thanking the power Tech team for their hard work in making significant progress advancing our research development manufacturing and medical affairs activities 2020 was the standout year that included many successes such as advancing the preclinical clinical and manufacturing work under the BARDA Anthrax program.
The sharing of new data for publication and at a number of medical conferences and progressing our pipeline with the submission of the oral loading dose regimen for cash and start up activities for our phase <unk> study of MTM with enrollment to begin as early as the first half of 2021.
We believe all of these efforts will have the potential to build significant value for physicians patients and shareholders.
As noted earlier, our BARDA partnership continues to progress well. This unique public private partnership is the recognition of our jointly share commitment to advancing <unk> in the fight against the anti microbial resistance and to develop new Saar as a potential treatment against bioterrorism pathogens, including anthrax and the procurement of the desire for the strategic national.
Stockpile.
Together with BARDA, we continue to make important progress advancing our efforts to offshore of the manufacturing revenues IRA that will enable us the secured additional supply chain for desire within the us parity.
Power Tech along with our U S. Onshoring partners have completed the knowledge transfer of our manufacturing process for the API and we are currently in the development stage of this initiative the process flow equipment selection and facility modifications have been planned and the process development of engineering are expected to be completed in 2021.
The process validation will begin in early 'twenty two with the goal of having commercial supply of produce in the United States starting in 2023 to.
For the best of our knowledge of news IRA will be the first and only antibiotic to be made in the us including API production.
This is an important deliverable for the BARDA Powertech partnership, but also fulfills the white house's executive order to onshore production of medicines codified in the FDA has recently published the central medicines of West Palm, which of amount of cycling, we're sort of designated.
We also continue to make significant progress on the anthrax animal rule program of <unk>.
PK study of rabbits was recently completed which will lead into the pilot efficacy studies and the species. In addition, powertech evaluated a matter of cycling the mic's against 100, additional anthrax range, which continued to demonstrate potent mic's and was considered effective against all of bacteria test it.
Of note the collection of Isos had of strain resistant to doxycycline and a strain resistant to separate of office in the two antibiotics currently on the SNS due to their approval against anthrax many years ago.
We're pleased to report that Omadacycline activity was not impacted and either of those resistant strains. These data will be shared at an upcoming scientific Congress.
Based upon very recent dialogue with BARDA, we are aligned in the it expecting the first procurement in the near term and the second procurement in the second half of 2021.
Importantly, based upon feedback from BARDA the delay in the first procurement is not expected to have any impact on the timing of our future procurements.
Beyond the work with BARDA. We also continue to progress some of our other lifecycle opportunities for new Xyrem for the first of these is the us NDA for our oral loading dose regimen for community acquired bacterial pneumonia.
Application was submitted in July of last year with our action date set in May of 2021.
We are also pursuing the program for a rare disease non tuberculosis mycobacteria of pulmonary disease caused by Mycobacterium abscesses our MTM.
As a reminder, non tuberculosis mycobacteria of assess us as an orphan disease with no FDA approved therapies.
<unk> feedback from the Kols community continues to highlight the clinical unmet need for an efficacious and well tolerated oral antibiotic to treat infections caused by Mycobacterium abscesses.
Patients with pulmonary Michael bacterium obsesses have many symptoms that include severe fatigue fever, cough and shortness of breath.
Antibiotic therapy durations can often be lifelong of duration based upon our internal market analytics pulmonary Michael bacterium obsesses has the potential $1 billion addressable market in the us alone.
We are advanced in the startup activities for our phase III study for this disease with the initiation of the study plan for as early as the first half of 2021.
The study is a placebo controlled randomized monotherapy study of MTM obsesses pulmonary disease in patients who are not receiving other treatments. The study size will be approximately 75 subjects randomized on a one five to one ratio the.
The RFP will be for 12 weeks for the efficacy endpoint assessment at that time point.
Due to the small numbers of patients for this rare disease. We expect overall of that this study will take about two years to complete enrollment who will provide more details about the safety and efficacy endpoints, which include both simple and microbiology assessments at a future meeting.
This is an exciting of lifecycle opportunity for new Xyrem with significant potential to address important unmet medical needs.
2020 was of great year for data generation and medical affairs activities for Powertech. In addition to progress with the initiation of our 10 non clinical and clinical studies in our investigator initiated research program. There were 19 Omadacycline manuscripts that were accepted for publication that address the use of the news IRA and special pathogens population.
<unk> or disease states that will further define its unique therapeutic profile and.
In parallel real world evidence from two ongoing observational studies and independent case series continued to be published in peer reviewed journals, describing the clinical features and outcomes of patients with challenging infections, receiving omadacycline, including non tuberculosis mycobacteria I'm obsessed.
The osteomyelitis.
Besides of the VIX story will continue to expand throughout 2021 with additional evidence from our investigator initiated research program in areas like diabetic foot and C difficile infections and.
In addition, non clinical research studying the activity of Omadacycline alone and in combination in a rat osteomyelitis model and studies in Mycobacterium abscesses and Mycobacterium Avium complex or Mac will build on the growing scientific data for news IRA.
The medical field team will also take the learnings over the first two years of the launch to work with institutions to continue to implement skin and pneumonia of clinical protocols to optimize treatment algorithm algorithms when considering treatment with news IRA.
Importantly in time for the launch expansion into the primary care setting. We are also also launch of new Medical affairs. The website as a resource for health care professionals health care providers can use this website to request medical information access are completed bibliography access product resources on new Zara and request funding for investigator initiated.
Research. It also provides educational tools of resources related to the antimicrobial resistance additional disease day of resources on skin infections as well as community acquired bacterial pneumonia will be available soon.
Additionally, in order to fully support the community expansion Medical affairs will extend resources to provide scientific and medical engagement in the community with thought leaders primary care physicians and clinical research institutions more specifically the community focused field medical team is being deployed to allow face to face engagements with primary care providers.
And deepen mechanisms to educate and ensure access to new xyrem.
Last with regard to the NDA review in China. The regulatory process continues to make good progress with the approval expected in the first half of this year triggering of $6 million milestone payment from XI lap to power Tech.
We believe that the China approval and the additional data generation opportunities will further broaden the potential for new Zara to reach into new and clinically important patient populations.
At this point, we would now like to open the line for questions operator.
At this time, we'll be conducting a question and answer session. If you'd like to ask the question. Please press star one on your telephone keypad of golf.
Information tone will indicate your line is in the question queue.
The press star two if you'd like to remove your question from the queue for park.
It's using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Yeah.
And our first question is from Amit <unk> of idea with SVP Leerink.
Hi, This is decently on from me thanks for taking our questions.
Maybe two if I may.
The first.
In terms of the first $38 million.
The BARDA procurement I'm just curious what dialogue have you had recently maybe on the status of the <unk>.
Pre EUA, which I assume is sort of the remaining step to getting this award.
Sure. So this is Randy I'll take that based on recent communications, we believe that the scientific review of the mouse PK data, which was the most recent data submitted to the free UA has been completed by FDA and then based on the very recent discussions with BARDA, we're aligned and expecting that the first procurement will be triggered in the near term.
<unk>.
Great. Thank you.
Okay, maybe my second question than us.
I guess, just on the $62 million to $68 million.
The guidance for the core commercial business I guess it seemed like consensus was estimating maybe a number of slightly above the I guess, maybe just relative to the strong performance you did in 2020.
How do you sort of how are you sort of thinking about the growth trajectory in 2021 maybe in terms of like you know the relative to the impact from Covid.
The community launch.
And then sort.
I guess the sales force realignment. Thank you.
And on do you want to take that.
Yes, I'll take that.
Look.
You know one of the things first and foremost we have to.
The cognizant of is it's very difficult to predict how.
COVID-19 is going to continue to impact our business, but.
But as we mentioned earlier on.
We definitely had a you know of.
Failing that we're going to see a modest impact in the early part of a.
Part of this year.
Mainly because of Covid pandemic still ongoing.
The limited face to face interactions with other hospital based physicians, we've got a very very low.
The flu season.
And obviously reorganized and contracted US sales force as we went into the new year, which is why we provided guidance on the quarters, which essentially is saying the from our perspective, we expect to see the impact of the expansion into the community really kicking into gear as we get into the second half of the year.
Yeah.
What I would build on that is that that guidance range that we that we provided US you referenced I think is what we are.
Comfortable with day.
<unk> based upon some of the uncertainties piece of the Covid that being said I think foundational <unk> were very strong as you saw in terms of the quarter over quarter growth in terms of what our hospital sales team was able to do we think that will continue to grow and expand incrementally and then when you add the expansion with regards to the primary care sales force.
I do see that the second half of this year will that work.
We've got confidence in terms of the acceleration of that of that growth curve and we will come back to you each quarter to give you more fidelity once we see those numbers coming for it.
Great. Thank you very much.
And our next question is from Ed acre with H C. Wainwright. Please state your question.
Hello, everyone. This is Thomas Yip asking a couple of questions for us congratulations on the very strong corner for Indian Syrah.
So perhaps for questions related to the.
For the SMT.
For all of the only of formulation.
For any remaining work.
That needs to be completed or are there any updates from the FDA so far.
So as far as the remaining work the the answer is no I mean, the study was.
The submitted within the US NDA filing in July of last year. So on.
<unk> for data is upcoming in May of this year and as of right now no further updates to report on with regard to out of the review of progressing.
Okay. Thanks for the update.
And then are you.
You guys clarify the only for a rent the what's the water sector.
For the two to two <unk>, a part of the procurement and one point of one one is near term on one.
The second half.
Just curious if for any.
Going forward should we expect I mean anything.
Funding for different tranches procurements.
Yes sure. So thank you for the question. This is Randy again.
General of the way the BARDA contract was structured as the.
The for 2500 treatment of courses were originally spaced about one annually over the first four years of the contract.
Because of the initial delays in the review of the pre EUA from FDA due to COVID-19, and other priorities that we're focused from FDA.
That first procurement is the one that has shifted out a little bit now into 2021, but our anticipation is the the timing of the future procurements will remain generally annually over the next three years of the contract.
But that being said there will be compression and having to this year, which we're delighted to be able to.
We anticipate at this point.
Okay that sounds good thanks for clarification, and then switching gears to.
The the neuron Tms study you gave some details on the phase two day.
What are some preliminary thoughts.
Regarding some of these sites.
And the specific geographical areas that you guys.
Focus on are they on the chances to expand to other outside.
I'll start from the United States.
So at the current time the current plan is to conduct the study entirely in the us.
As far as specific study sites go in general I think people generally know where the MTM centers of excellence are and why our people ultimately get referred to.
To have the final diagnosis of MTM, all species of MTM, but specifically mycobacterium assesses so the.
The cycle of both generally align around the the major act of the major academic centers as well as some of the.
The other NTN specialty centers that exists across the us.
Okay. Thank you very much for the other room for us.
That's it for us.
For now.
Back in the queue that book.
Thanks for the questions on the port for it does.
401.
And our next question is from Kevin <unk> with G Research.
Hi, Thanks for taking the questions wanted to follow up on a N T M. Randy you went through some of the.
The details of that study so I may missed.
One of two of them trying to keep track but.
I thought you had said the debt.
Patients in the study.
Well basically be non.
Not on any therapy, so they won't be on any sort of background.
Antibiotic cocktail or off label antibiotic use the Cisco, it's going to be.
Basically washed out and purely placebo patients or kind of what sort of background therapy for these patients going to be able to be on.
Yes, so thanks for the question on these.
Patients will generally be I'll call them newer diagnosed.
On patients so.
They will come into the study most likely not on other therapies or had been on.
The previous therapies and that stopped for some period of time and you are right that this is that this is a monotherapy placebo controlled study looking at the symptom primarily the symptom relief of.
The new Saar of monotherapy versus placebo for a three month period of time.
Kevin just on the you know just to just to add a little bit more color.
In the newly diagnosed patients when they get referred to these are.
The specialty centers generally the physicians like to recommend a lot of pulmonary toilet therapy to try to move secretions and they generally do that for almost a three to four months period of time. So over this period of time it is completely consistent with their with their care algorithms that the addition of another antibiotic into.
Another placebo controlled arm is actually in addition to the standard of care. So it's a.
We're very excited about the ability to look at a monotherapy intervention to improve the symptoms of these.
Of these chronically ill patients.
Great and as far as of.
The endpoints of I mean, the have you guys determined on what the primary endpoint would be the is it going to be some for the patient's symptom scores are going to be diagnostic tool and.
For the I'm.
Sorry, I'll start and I'll start with that and follow up from there.
So.
As I think we've shared before we've had a couple of meetings with FDA over the last.
The 12 months or so the talk about generally about.
The clinical trial endpoints for MTM of an MTM Mycobacterium assesses and and as you may know the FDA is really pushing for more of a symptom relief endpoint rather than the microbiological endpoint.
So.
The the symptom endpoint will be the efficacy assessments that we look at first.
Not to say, we won't look at microbiological cure as well, but in a 12 week study of maybe harder to show.
The significant changes and microbiological endpoint so the shift at that point will be the ones that we look at.
Primarily.
Okay Kevin.
The FDA of couple of years ago had a advisory panel, specifically about MTM, where they walked away from a micro biologic endpoint as the primary endpoint because of the vagaries of how these individuals' respond to combination cocktails of antibiotics and so symptoms are really the I think the driver here and we think that there's an opportunity here for.
US to create a symptom scale, that's not too different than the symptom improvement scale that was used for our pivotal on pneumonia trial, Randy and his team of had lots of dialogue with the FDA and I think generally we're aligned here and we're looking for to be able to share what that looks like and it is in it.
The upcoming meeting debt.
We are planning to conduct in the near future.
Great and I'll get through the two last one so to this just one of any powering.
So on the sort of efficacy you would expect to see in symptom reduction and then.
Do you feel that this would be data.
If you're generating you're able to hit those primary endpoints and possibly share something on the secondaries are would this be viable data or would you have to run what do you anticipate having to run a phase III.
Yes so.
I think well hold off giving too much of her on the statistics on the power assumptions at this time I think as Ed had mentioned, where we're planning to have a more detailed review of the the <unk> study design and an upcoming meeting that we will schedule soon and we're still working through some of the specifics around that so if you don't mind I'll deflect that question until a future discussion.
As far as the study itself goes I mean, we've.
This is the phase III <unk> study, we're not calling it the phase III study for a reason.
We do believe based on what we've seen from the case series of that had been published and what we're hearing from the Kols community that there's a very clear of place for Omadacycline in the in the treatment of Mycobacterium assesses where there are no FDA approved therapies and the need for an oral therapy is super high.
And so so.
We continue to stay on by the fact that of the data from this study is robust enough.
That there will be on opportunity for us to go back to FDA and have discussions about how best to include this information in the label and the potential indication, but I think we got a little ways to go on that and we'll see how the data comes out but.
The study is designed as the phase III study with the the ultimate goal should the data support at the FERC future discussion with FDA on how it supports label changes.
Great. Thanks, there is another aspect to this that Randy you are actively discussing with FDA, which which is focused around the long term safety extension of what that component might look like and I think that there is still yet to be determined how that how that component will evolve right.
Yes, that's correct so.
You were listening to my words carefully you heard that Theres the 12 week study.
Our clinical team is working through the logistics on the opportunity to enable patients as they complete the study to roll into an open label extension, which would allow us to collect the longer term safety data on the use of Omadacycline is the control setting and also allow us the study omadacycline with some of the other combinations that are considered standard of care.
So more to come on that in the future.
Yeah.
And as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is on the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys for a moment.
Please while we poll for further questions.
Okay.
The next and final question is from Bert Hazlett with <unk>.
Thanks, Thanks for taking the question congratulations on the progress folks.
Just first one for us just to come back to the.
Board of reimbursement or the board of purchases excuse me so just to.
The probe a little bit more given some of the.
The issues with the first payment.
Gives you the confidence that the second payment will actually occur within 2021.
So on.
We've had a.
We've had ongoing discussions with the with BARDA.
Not only through the joint development team that we have with them but.
But we are in contact on a regular basis with senior senior leadership at BARDA. The very recent phone calls.
Allowed us to continue to align and feel very comfortable and very confident in our current guidance.
Okay.
Thank you and then just the coming to the reimbursement question.
Kind of coverage.
Adam mentioned during his comments that there were some.
Some would love to chop in terms of Medicare Adam could you put a little bit more on.
On that subject in terms of things you'd like to accomplish in the not too distant future with regard to coverage in Medicare.
Yes more of a happy to look remember first we got about 300 million lives covered which is a huge number and we are of very small amount left in the in Medicare.
Still got a little bit of work to do.
Right now.
Focus actually has always been on the Medicaid and the the commercial because from a skin perspective, that's the most important population.
And it enables us.
So the community two 2 billion dollar addressable market.
The the Medicare Wood to chop, which is what you allude to US a couple of of the pie is still.
Holding out and in negotiations and we are cautiously optimistic that they will come through within the within the quarters ahead, but as I said before for the purposes of our commercial.
Approach into the community setting into into primary care is actually more of the Medicare patient population. The cascade. It's the pneumonia overloading dosing regimen approval later on in the year that would benefit from the.
From the the rest of the Medicare coverage, but the the other thing I should point out is that.
We get an extremely low.
<unk> the refusal right.
In high single digits.
Which is.
The remarkable achievement for a new branded agents on even on the market for a couple of years and that's not just on label that sort of the off label. So we don't really have a big trouble big issue with the with.
Making sure we get through the benefits of investigations and the approval for prescribing of <unk> in.
In either of the hospital of the community setting.
Yes, I think the debt and Bert just to add to that.
I think Adam and his team have continued to commit to a specialty.
The pharmacy support model.
We've had a great relationship with the vendor that that we've created as well as having a very strong internal team that is fully committed to ensuring that everyone who has had the potential eligibility has the support they need to go through the the.
The process to get coverage and we've had we've had success within the within the Medicare population as well even in even in Cvs, where we do not have the defined contract in the Medicare population. We continue to see that CBS comes forward, but it does take half.
The half a day or a day longer in those particular settings not ideal but at least he can.
The move forward.
We.
We provide every type of support you can imagine.
For ensuring that the patients have the including bridging the sampling program.
We are obviously ensure the rates affordable for patients. So everything's in the that will continue as we move into the primary cash side as well, but so nothing has changed the only thing that's likely to change actually over the over the next year as we may will expect.
The the.
The number of sites from a specialty perspective of where we actually hold product overtime.
Just to just because we were expanding geography as we move into the primary care side.
That's great and then just actually did have one question with regard to sales force structure.
You mentioned I think 45 in the hospital of <unk> 40 of primary care as you.
Look to the traction that you hopefully get in primary care at what point do you start to assess whether that 40 patient sales force is right sized again, there's a lot of variables here with regard to COVID-19 and the the access that the primary care reps might get but is that do you could take a look.
At six months post the approval of the oral loading dose is at 12 months of at what point do you reassess the 40 person primary care sales force.
Well first.
Nothing will be determined based upon the the the additional add on indications because of far and away of the largest indication is actually the skin one actually on the community $2 2 billion versus $1 5 billion.
But we will be on it will be on ongoing assessment somewhat similar to what we did with the hospitals.
We know that the primary care side is actually a target rich environment.
We could quite conceivably of put a lot more representatives in there because theres that number of.
Of physicians that potentially could be targets, but if we find the we're tracking to plan.
On based you know we use the pilot.
And everything we learned in that pilot to help assist with that project.
Our projections would be for this field force and if we find we're at.
We are tracking to plan after the first quarter of two we'll definitely look to see whether we need to add it's highly unlikely that we will need to shrink in the side just by virtue of the sheer size.
Of the targets that were going for because there is a lot more primary care targets and they're all.
Institutional targets.
Yes Bert.
I think one of the things that Adam has done in a really really I think thoughtful and disciplined way is too.
Walk before we run and we did that with our institutional sales force in terms of getting metrics on understanding their performance before expanding and changing territories et cetera, which he did in the in the in the.
At the end of last year, I think because of the data that I think we're able to the preliminary data that we're able to generate and see from more than six months of the <unk>.
<unk> focus and modest sized community pilot.
That data plus the data in terms of the expansion into the 40 will give us I think a good set of metrics to the gauging.
On what we want to see from a productivity standard before we actually start adding reps.
With that we're very excited about this expansion because we think that the foundation of the institutional sales force being as effective as it has been.
The.
It has been characterized by the most talented and most productive individuals that we had from the contract sales relationship and we think that we know the phenotype of what we're looking for in the talent base that the.
That we have now recruited too.
I think portends, a very auspicious upcoming 2021.
Terrific look forward to more.
Progress. Thank you thank.
Thank you.
Thank you for.
On ladies and gentlemen, we have reached the end of the question and answer session and now I would like to turn the call back over to Evan low for closing remarks.
Thank you operator.
In closing I'd like to thank you all for your time and attention today. Your continued interest in <unk> <unk> per tech are important to us.
The journey of making us the IRA commercial success is well underway as the wealth of microbiological data and clinical outcome studies on <unk> Zara continues to expand we are increasingly confident in the potential of these are to be an effective and a much needed. In addition to the armamentarium of antibiotics available to physicians to save lives, particularly when resistance is of.
Concern.
The BARDA collaboration also positions <unk> as the leader not only with the potential to provide us the IRA for bioterrorism pathogens, but as a leader in innovation for the broader IV sector in the battle against anti microbial resistance. We will continue to be focused on being disciplined in our capital allocation executing and delivering on our commitments as well as building long term.
Value for patients physicians and our shareholders.
The opportunities ahead of us to be able to provide a novel life saving antibiotic to patients motivates us all at per tax.
We'd like to thank the patients who have participated in our clinical studies.
And our employees, who have worked hard tirelessly and passionately to provide the xyrem for patients in need and those surplus and dedicated health care professionals, who are at the bedside each and every day we.
We very much appreciate your continued support and interest we look forward to keeping you apprised of our continued progress in the quarters ahead goodbye for now.
Thank you. This concludes tonight's Web conference you may disconnect. Your lines at this time. Thank you for your participation in the type of great evening. Thanks.
Yeah.
<unk>.
Okay.
Yeah.