Q4 2020 Aerie Pharmaceuticals Inc Earnings Call
At this time all participants are in a listen only mode later that day.
A question and answer session and instructions will follow at that time today's conference call record day.
It is now my pleasure to turn the floor to average director of Investor Relations I mean Levy. Please go ahead.
Thank you Jerome good afternoon, and thank you for joining us with US today are Vince on Ido, Arris, Chairman and Chief Executive Officer on my job as President and Chief Operating Officer, Richard B now as Chief Financial Officer, David Hollander S. Chief Research and development Officer, Casey Kopczynski areas, Chief Scientific officer, and so on the rocker areas General counsel.
This call is also being webcast live on our website investors on Aerie farm on Dot com and it will be available for replay as indicated in our press release now for forward looking statements on non-GAAP financial measures on.
On this call we will make certain forward looking statements, including statements forecasts and observations regarding our future financial and operating performance impacts on the COVID-19 pandemic, including our observations regarding ongoing operating expenses and net revenue per bottle. These statements will include observations associates.
As I stated with our commercialization of Rhopressa and Rocco 10 in the United States a collaboration in Japan on prospects for potential cooperation in Europe. They will also include plans and expectations regarding the success timing and cost of our clinical trial. Additionally, we will discuss progress regarding maintaining requesting or obtaining approvals from regulatory agencies of our products and product candidates.
Including our strategies and plans with respect to our newly introduced preclinical pipeline candidate and finally, we will address our manufacturing activities and capabilities, our financial liquidity and other statements related to future events. These statements are based on the beliefs and expectations of management as of today, our actual results may differ materially from our expectations investors should carefully read.
The risks and uncertainties described in today's press release as well as the risk factors included in our filings with the SEC, we assume no obligation to revise or update forward looking statements, whether as a result of new information future events or otherwise. Please note that we expect to file our 10-K tomorrow.
During this call we will be discussing certain adjusted or non-GAAP financial measures for additional disclosures relating to these non-GAAP financial measures, including a reconciliation to the most directly comparable GAAP measures. Please see today's press release, which is posted on the Investor Relations section of our website lastly, as we indicated in our earnings release, we have posted to our website, a new deck addressing our new.
Preclinical sustained release retinal implant a R. One for tier three four and Vince will be discussing this latest addition to our pipeline during his remarks with that I will turn the call over to Vince.
Thanks, Tommy and good afternoon, everybody and thanks for joining US today, we have quite a bit of good news to cover today, so including our strong fourth quarter results a positive outlook across our global strategy and excellent progress with our pipeline, including a brand new preclinical implant and maybe once again demonstrate the value of our sustained release implant fall platform, we call print.
Let me start with the four quarter fourth quarter performance, our glaucoma franchise showed strong positive momentum in the fourth quarter with unit sales in the wholesalers as you know that's really the ones that I look at the most which are the basis of our reported revenues increasing to 307000 units in the fourth quarter. This represents an 18% increase.
The 261000 units in the third quarter of 2020, an increase of almost 50% from the fourth quarter of the prior year 2019, our full year 2020 net revenues of $83 1 million are up just shy of 20% over prior year and our volume certainly help with significant gains to pay your coverage in 'twenty.
20, along with increased awareness of our product profile and as I've mentioned before stabilization of our net prices.
Revenues.
Of $24 7 million from the fourth quarter increased nearly 23% compared to the $20 1 million in Q3 of last year as we further penetrated our formulary contracts with Gartner further increases in the number of regular prescribers, we have for our products and Tom will be discussing that a little bit later.
On our third quarter earnings call last November we called out our expectations regarding the future stability of our net revenue per bottle in fact fourth quarter net revenues per bottle was $80 $3 per bottle higher than in Q3, and consistent with Medicare part D share as we discussed previously our strategy to increase the net revenue per bottle O.
Her time, including renegotiating wholesaler agreements and refining some of our managed care formulary contracts.
And along with modest price increases would help us get to that stability and eventually start seeing a net price increase over time.
And its point the new herself so seller agreements are in place and the price increases have been implemented and managed care formulary contracts had been refined and we're going to continue to do that throughout 2021 and some of these.
Contracts that we are re reestablishing our won't actually impact our revenues are net price until 2022.
As we've said the revision on the wholesale agreements would have the largest beneficial impact on our net revenue per bottle going forward.
Benefits, primarily started doing into Q1 of 'twenty 'twenty, one and we expect a gain of about 5% or so to our net revenues per bottle for the full year 2021. So.
So obviously, we're very happy with the fourth quarter of this last year with a net revenues, which exceeded expectations and we are looking forward to potential continued volume gains and increases in net revenues per bottle as I. Just mentioned now looking forward, we do remain somewhat cautious regarding the COVID-19 effects on eye care professional practices over the next few months.
And certainly we see the majority of the states are the rates are declining in the incidents of your declining offices appear to be doing well, but certainly we're not in full recovery yet.
And it's very difficult environment to predict and as a result, we will not be providing specific 'twenty to 'twenty one guidance at this point.
Now on top of Covid.
Recent winter weather issues have hampered our product shipments across the nation for not just for us but for many pharmaceutical products well. This is obviously a temporary situation, where we may have lost a week or more volume. So far in 2021 as a result of what we were facing especially in the central part of the United.
<unk>.
This week appears to be rebounding quite a bit in.
Our distributors were talking about we're leaving a lot of their back orders and things like that so we're hoping to gain some stability this week or at least stabilization this week and get back to normal thereafter.
However, we can say that based on the volume growth, we're experiencing in the fourth quarter along with the net revenues per bottle trajectory. We expect we are comfortable with consensus analysts estimates for the eight year, which are approximately $112 million you should not expect any significant increases in our operating expenses in 'twenty two.
Only one.
The fact that our volumes have grown sequentially each quarter in 2022, the pandemic certainly gives us optimism that we can continue to grow and ultimately grow even faster rate once a physician's offices or backup pre COVID-19 patient volume levels now I'll turn over the call to Tom on mitral <unk> to provide a further update on our glaucoma franchise here in the U S.
After that I'll cover important highlights on our global and our pipeline from Tom.
Well. Thank you Vince our glaucoma franchise continued to outperform the glaucoma market and all other branded glaucoma products, our fourth quarter 2020 franchise prescriptions were up 25% or 32000 prescriptions over fourth quarter of 2019, while the glaucoma market was down 3% or down.
261000 prescriptions for the same period.
Looking at full year of 2020, our franchise grew by 180000 prescriptions were 45% over 2019, while the glaucoma market declined 2% or over 780000 prescriptions.
Further reflecting on our full year of 2020 acute via data suggests that approximately 600000 ophthalmology patient diagnosis visits were lost in the U S. Due to COVID-19 for all well understood reasons, such as office closings and patients reluctance to go in a physician's offices.
Obviously the reduction in diagnosis visits has a direct effect on prescription volumes, yeah, our franchise still demonstrated excellent growth.
Now narrowing the analysis down to this past January QB, a monthly prescription data show once again the growth.
From a market prescriptions were down in January 2021 by 6%.
Share to January 2020, primarily reflecting the COVID-19 effect.
Yeah, very importantly, our franchise prescriptions were up 17% comparing this January to January of 2020, So we continue to outperform the market.
And some of your franchise prescription volumes grew more than any other branded glaucoma product.
Looking at both the fourth quarter and full year of 2020, and we far outperformed the broader glaucoma market.
As you may have seen from our recent corporate deck, our sales out to pharmacies reached a record 104000 franchise units in the month of December alone.
Further our total prescriber count is now over 17500, and we now have nearly 10000 physicians, who prescribe an aerie glaucoma product routinely each month.
Currently half of those monthly prescribers have been writing on a weekly basis as well.
The highest or most frequent prescribers of glaucoma products, the decile 10, and nine prescribers right more than one and a half aerie glaucoma product prescriptions on an average day.
Our sales force is performing quite well detailing physicians largely in person, but there are certain regions of the country, where in person detailing has been curtailed and in those cases, we are fully equipped for virtual detailing importantly, we're getting our samples to the doctors' offices for their patient starts.
Also our contract sales organization in terms of sales groups are performing very well showing consistent market share gains within their respective customer sets are.
Average sales team calls on the 10400 highest prescribers from glaucoma products on top of that in July of 2020.
Our contract sales force began calling on the next 1400 highest prescribers and the tele sales team, which we added in June of 2020 calls on the next 4400 highest prescribers. We believe that this approach represents an effective and efficient way to gain access and market share with as many physicians as possible.
And we're still observing is that about 85% of the physician offices are open and eye care practitioners are seeing about 75% of the patient volumes. They saw prior to the pandemic.
Of course, we can't predict the future effects of Covid, but we're certainly happy with our continued growth throughout the pandemic.
Now as Vince mentioned, we've made excellent progress increasing our net revenue per bottle in the first quarter of 2021, new rates are in effect for our three major wholesalers, we implemented a price increase in January of 'twenty 'twenty, one and we continue to fine tune, our managed care rebate agreements.
Our coverage level for commercial plans are at approximately 90% for the franchise and our Medicare part D. Rhopressa coverage is at 89%, while Rocco Tien as over 70% when the low income subsidy or L. A S patients of approximately 50% are included.
With this excellent coverage, we've remained keenly focused on pull through strategies. So essentially that means gaining share within our base of covered lives by bringing a focused and tailored message to specific physicians within a specific managed care plan.
As an example, you'll recall that in May of 2020, we gained formulary coverage and one of the largest Medicare part D plans in the nation.
Since that time, our franchise units within that plan have doubled and our share has grown considerably as a result of our reps starting the new coverage information with a targeted physicians, which is exactly the performance we need to see.
So in summary on before I call I'll turn the call back over to Vince We're certainly capitalizing on the momentum we established prior to Covid.
Komar parks are clearly capturing the imagination and prescriptions of many eye care practitioners with our excellent managed care coverage levels, our strategy to move monthly prescribers to weekly prescribers are additional share of voice initiatives and our formulary pull through focus we believe even more success will follow.
Vince.
Thanks, Tom share.
Turning to our international expansion or Sandton collaboration in Japan is moving forward on schedule in the first of the phase III trials. There is well underway, we do plan to read out topline results from this trial later on this year, we believe Samsung will be an excellent partner in Japan, and ultimately some of the other Asian markets like South Korea and and.
Thailand, and Vietnam as well on the heels of the full regulatory approval for our equivalent franchise in Europe, along with a positive topline Mercury three data, we are seeing minimal meaningful inbound interest from sizable collaborators potential.
Potential collaborators in the region folks that are interested in licensing the products and commercializing force in Europe.
Well at least discussions continue we are proceeding on our own to begin the process to obtain pricing in Germany.
At no time has lost now this is consistent with what we did in Japan, whereby we negotiated with the P. M D. A.
Mind, you that's the F D. A in Japan on the <unk> phase III pathway, there before we sign with a partner again to ensure continuous forward momentum.
As we've said before the glaucoma market in the top five European Nations alone totaled over 100 million bottles in 2019 compared to about 55 million bottles in the U S. We believe the volumes from Europe would represent an excellent opportunity to further utilize our Irish plant, which is already growing in volumes due to the pre.
<unk> for the U S market.
Ultimately anticipate producing for the Japan market as well.
Turning to our pipeline in October of 2020, we initiated a phase <unk> trial for our dry eye product candidate a our 15 five one to our phase III trials named comment one is powered as a phase III and is testing two different concentrations of the product compare to placebo total about 360, a patient for now.
To date, the active ingredient 512 is a potent selective agonist of the trip on me ion channel, which is the cold sensing and osmolarity sensing.
Except or in the eye and regulators to your production and blinked, great Interestingly activating the triple mate receptor.
They reduce ocular discomfort by promoting a cooling sensation, we believe the systematic benefit could ultimately be quite a differentiator for this product candidate remember.
30 millions of patients about two to 3 million from our treated every patient out there believes that its symptoms that need to be in Peru for their health or their eyes and so the fact that we have a product that could be able to do that as a big deal for us the primary endpoints from comet, one or ocular discomfort.
Symptom and a tiered production and tier production, which is a sign we've also added several secondary endpoints.
To the trial design.
We can learn as much as possible about the drug's performance.
As I mentioned 30 million dry eye sufferers in the U S. We are experiencing solid enrollment in the program and we're on track to read out top line data in Q3 of this year.
Now turning to our retina pipeline, we are in the process of finalizing discussions with the various regulatory authorities from both the U S and Europe to determine the most efficient and effective phase III pathway for our dexamethasone sustained release implants that we call <unk> 11 O five.
We do expect to have the phase III plan pretty well determined as we ended the second half of this year.
The phase II study topline, we released last jet July indicated up to six months of sustained efficacy and retinal vein occlusion for this product candidate, which is a very very different profile in terms of efficacy period.
Over other injectable steroids in the market such as ours are decks, which right now generates over 400 billion in revenues in the U S and Europe.
It was very interesting is how the preclinical models predicted the phase II results for 11 O five.
At this point to the advantage of our print technology platform, which is a platform that has provided predictability and flexibility in our development programs, we can potentially customized drug elution rates and create various blends of buyer rotable polymers allow longer treatment duration and does reduce injection frequency.
And open up the opportunities to to a greater diversity of drug targets using small molecules.
Let me reiterate before I discuss our new potential pipeline candidate.
Our print technology is a very exciting platform for future innovation.
As provided at such high levels of flexibility and predictability, ultimately shortening target and molecule selection and potentially helping determine probability to clinical success.
Earlier in the development cycle.
Further from a cost perspective.
Cost to achieve proof of principle for all of our retinal inserts using print is typically in the range of $5 million to $6 million, which we have and therefore, we do believe we have a very efficient development platform.
To say it again, the five to 6 million cost is what it took to get 11 O five to the point, where it is today, which is phase III ready.
That leads us to a new entrant in our pipeline a our 14th zero three or four you just posted today in your slide deck on our website that outlines the features of this exciting new sustained release implantable candidate.
I don't plan on walking you through the slides in detail at this point, let me address some of the key points you will see in the presentation.
Yeah.
For 2014 zero three or four it is a preclinical inter virtual implant they combine to small molecule pan VEGF inhibitor exiting it.
Proprietary blend a buyer rotable polymers to provide controlled drug release with the potential to treat wet AMD or <unk> patients for up to 12 months with a single injection.
Zero three core is a prime example of how the flexibility of our print platform and the blending of custom polymer to allow us to create the right formulation in right environment to control the delivery of active ingredients selected in this case, it's accepted it.
Since it is a pan VEGF inhibitor, meaning it inhibits signaling from all isoforms, all four isoforms of bad Jeff I like getting of the currently marketed VEGF inhibitors plus <unk>.
<unk> has a higher efficacy and less off target activity. Another small molecule VEGF inhibitors. As you may know it sits and it was a known molecule tyrosine kinase inhibitor approved in 2012 for systemic use the treatment of renal cell carcinoma.
Now if successful.
Preclinical implant may provide significant benefit to the total cost of health care for wet AMD patients as I mentioned earlier, you will see in our slide day based on the preclinical data there is potential for this implant that he was the only require one injection to treat a patient for up to one year.
The less frequent injections.
Enabled by the continuous release, a potent small molecule active agent theres potentially substantial benefit from both physicians and patients alike.
The economics here are important consideration when you consider the worldwide anti VEGF market expected to grow to 22 billion by 2025, according to market scope.
So the next steps on the development of $14 three for toxicology work and other preparatory activities as we plan for an IND filing later this year.
As a reminder.
We can easily utilize our print technology to manufacture the small sustained release implants.
Rate of about half a million units per year, and our 1000 square foot facility and our corporate headquarters in North Carolina, We believe the efficiency of our manufacturing process and processes may also contribute to sizable margin opportunities for product candidates.
If they are approved and commercialized well again driving overall economic value for both the patients and the physicians Lastly, we are still making progress with our safety trial for a R. 13, five O three for wet AMD in Dnb remember this protein kinase inhibitor I'm, sorry to Rho kinase inhibitor.
On that we're developing using our insert technology as well and we are as soon as we get the safety done we will evaluate its prospects as we gain more information we are still evaluating different formulations of this early stage product candidate and do not expect to provide any clinical data. This year at this point I'd like to.
Turnover the call to rich to cover the financials rich.
Thanks, Vince and as Vince discussed our combined Rhopressa and Rocco 10 revenues from the fourth quarter 2020 totaled $24 $7 million.
Our normalized gross margin for the fourth quarter was 92% that's consistent with previous quarters. In addition, layered on top of cost of sales was approximately $4 $6 million in Athlone plant overhead associated with start up commercial production.
Since we are in the early stages of production that idle capacity number will fluctuate depending on a number of factors produced on a quarter, but it is expected to trend downward as we continue to add volumes to the Athlone plant.
While we aren't providing specific guidance for 'twenty, one we do expect to reduction rental capacity expenses for 2021 as compared to 2020.
Our fourth quarter 2020, GAAP net loss was $46 $1 million or $1 per share.
When excluding the $9 $6 million of stock based compensation expense. Our total adjusted net loss was $36 $5 million 79 per share.
For the fourth quarter of 2020 adjusted cost of goods sold was $5 $9 million and adjusted total operating expenses were $44 $8 million with adjusted selling general and administrative expenses were $28 $4 million and adjusted research and development expenses of $16 $5 million.
For the fourth quarter of 2020, our net cash provided that is provided by operating activities was $22 $4 million.
And we had $244 million in cash cash equivalents and investments as of December 31, 2020, the net cash provided by operating activities in the fourth quarter 2020.
$22 $4 million includes the upfront payment of $15 million from Santana from which we netted $45 million after withholding taxes.
Santana payment turned our net cash flow to the positive for the fourth quarter.
So we ended the year with a solid cash balance with 21 2021 prospects, including growth in net revenue continued controlled expenses and a potential European collaboration all positive elements to preserve cash.
Shares outstanding at quarter end totaled $46 8 million.
For additional information regarding our fourth quarter and full year results from prior period comparisons. Please refer to today's earnings release, and our form 10-K, which we will file tomorrow.
On one side note on our 10-K, it will have new and very useful disclosures on human capital.
And ESG, which covers the degree to which aerie has and will continue to incorporate environmental social and governance attributes into our operations, we take ESG matters very seriously and I believe you will find our new disclosure helpful. In gaining further insight into our ESG posture.
Now I would like to turn the call over to the operator for questions Jerome.
Thank you at this time I would like to remind everyone in order to ask a question. Please price Spike and then on your telephone keypad.
Your first question comes from the line now Annabel Sammy problems.
Your line is now open.
Yeah.
And of SME from flying.
Your line is on mute. Please hi, yeah on mute sorry about that thanks for taking my questions.
Great.
On a year I balance sheet questions alliston on where to start.
But maybe we can start with.
Expectations for revenue.
Revenue from prescriptions going forward.
Obviously, you've given us some nice color on that and you've gotten some benefit from wholesale agreements.
Managed care contract improvements.
Shall we assume the same trends.
I guess on more challenging first quarter, now and improving net pricing over the year.
So kind of we should assume I think in the past years, it's been different based on the mix, but maybe you can help us on that.
Just a follow up also.
So hi, Annabel on thanks.
Yeah, we do think that obviously the first quarter is always pretty challenging right. So if you take a look at sort of what's been going on in and we've got more and more Medicare businesses that we now have under contract et cetera. You know typically Q1 is a little bit soft only because of the what's going on with the deductibles happened to be mad et cetera, and right now certainly over the long.
Just a week or 10 days the weather certainly hasn't helped because we've seen a real slowdown in terms of the shipments out from wholesale to retail and shipments into the wholesalers themselves and so but I think theres plenty of inventories. So what we're seeing is after that 10 day period in <unk>.
Pretty good rebound and so I think we'll be in pretty good shape certainly as we look at this week it looks pretty strong and we expect that that's going on now going to continue so yeah. I think the overall trend is very very positive.
We've got quite a bit of information relative to our pull through into major plans. When we signed up in may of last year.
We went from.
Just a real small market share there about 0.8 or something like that and we were able to drive that and almost double the market share there and it just that more than pays for the rebates and so the.
Net sales organization I think has hit its stride and is now focused on pull through as Tom said and and it's beginning to show up. So are we expect our units to continue to grow we do expect our price has now stabilized and we will continue to grow as we see the impact of.
The renegotiations are the negotiations that we had from wholesalers and some of the plans and so we like the position that we're in at this point.
Okay and then.
Talk about share your new program mix such net program.
Obviously, your big play on differentiation as a potential 12 month.
Duration.
A number of other development programs that are there you know sort of slightly ahead of you on.
Stating the obvious here, but outside of the duration is there anything different about your net program and swing over 13, five or three.
Seeing that there can be no data readout. This year, how are you prioritizing that program in any way.
You need to do a little bit more work on that formulation from what your based on your comments.
Sure.
I'm going to give you a general answer and if we end up having to get more specific overtime, we have both Casey.
As well as David on the call. So we can call on them, but the on acceptance.
You're right. It is for 12 months delivery and that certainly puts us apart it sets us apart from just about everybody else out there that's working on it in this category, we're focusing on six months I think the big thing. There is you have to understand it exits and it has a very specific environment in which it has to live if you.
Well in order for you wanted to control the release of that product from any formulation.
Certainly our insert.
So what's really different about what we can do is we have access to an array of proprietary polymers and in this particular situation the team actually mixed and matched a number of different pharma.
Polymers to see which ones and in which concentrations we need to put them together to create the right environment to make exit the nib soluble enough. So that we can control its release, because theres plenty of data available that indicate what level of illusion dilution rates we needed.
To have for the product so what concentrations we needed to have in the eye to see the effect and that's how we built the in search and Thats why not only can we get enough juice in there meeting enough active in order to see the effect, but we know that we can maintain it with the uncertain. This blend of polymers out over 12 months two it's two things combined.
The flexibility of the technology to allow us to delivered over 12 months, along with the formulation capabilities of having multiple polymers in there that give us the differentiation we're looking for.
Got it.
Thank you.
Five months range could you just give us a little share I'm sorry.
Net three so it's really interesting. So we know based on all the work that we've now done with the 11 O five that the print technology works, because we knew what concentrations with dexamethasone, we need to get into the eye to get the six month. The fact that we were shooting for in the case of five O three.
So we now have proven print.
But now we have to prove that we understand what the right concentration is at five O three to get the kind of effect in the back of the eye that retina.
Retina.
Physicians are expecting to see for conditions like wet AMD, and <unk> et cetera, and we just haven't found that yet we're looking at right now are using the original insert and inserting more than one.
Fluctuating the concentration is to see where that gets us in and see whether that's an indicator of what.
What the right concentration is.
And so as soon as are we.
Finished this next set of patients, which is again very very small trial, but as soon as we get the next set of patients. We're hoping that it'll give us a clue as to what the right concentration is four or five O. Three and then we'll be able to sort of kick that program into high gear.
Okay, and if I may ask one more question because I've got the clinical guys here on I wanted to ask about the Triple agonist program.
So we know that the war.
Work that you've done or the work that's been done.
Bigger effect and a more.
So if you are a population that's where any thoughts on some P values that were acceptable so youre moving probably you're probably moving forward, obviously and that's more severe population you can get those attacks.
But it seems like you've been always angling to try to get a broader population, including mild patients.
Alright mild to moderate patients.
The cooling effect on this is simple symptom index. So how do you sort of reconcile that focus on the severe population the clinical trials and then the marketing angle of it to a more mild population.
So I'm going to have David actually get get into a little bit into the details on the clinical trial design that will help us answer the questions that youre looking for but just needless to say in this phase <unk> trial, you may remember that I used the words, we backed up the truck for all secondary.
I saw signs and symptoms that we can think of it all sorts of different ways of studying for dry eye, because we wanted to make sure that we used this particular phase two b trial, which again is powered as a three as the biggest data gathering study that we can possibly design and so that's what the team was able to do we're doing it both in environmentally as well as.
On a chamber and things like that.
So we think that that will be able to gather a huge amount of information that will help us not only further characterized molecule certainly design. The next set of trials would give us a leg up in terms of understanding how best to tell the story as we get into when we eventually commercialize this product if approved with the managed care agencies.
Our authority so David.
You want to talk a little bit about the clinical trial design and an answer Annabel its original question.
Sure. So great question, obviously, where we're focusing on ocular discomfort in chip production as our primary.
End points for a symptom and sign but we've built in a series of different endpoints, both environmental as well as using the controlled adverse environment otherwise known as the chamber.
And looking at a series of endpoints over the course of three months on <unk>.
Just to touch on your original question.
As you well know and as doctors and patients have experienced.
Signs and symptoms don't always correlate and what we saw in the phase Iia trial was actually very nice share production across the entire patient base on.
There was also a nice improvement in symptoms across all the patients. The P value was noted and just the more symptomatic patients, but we have represented in our faith in our phase <unk> trial is actually a fairly broad dry eye population across most signs they just happen to be.
A little bit more symptomatic. The other thing we've added in that that wasn't part of the phase Iia is all patients will be running on vehicle and if they have an improvement on vehicle, which is basically an improvement on artificial tears theyre not going to be included in the study. So we're particularly focusing on the symptomatic patients with <unk>.
Rod array assigns who do not improve on vehicle and those are the patients where we're testing and at the end of the day that should very well represent a broad array of the dry eye patient population out there.
Great. Thank you great.
Great. Thanks.
Thank you. Your next question comes from the line of Gan <unk> from Cowen and company. Your line is now open.
Hey, guys. Good evening, great to see the momentum moving in your favor here just a couple of questions. First just wondering is as you have a lot more experience now and obviously parity in coverage between Rhopressa and Rockwell 10 or at least we're getting there.
Talk about the sales force and the refinement of the message as we worked now.
Deeper last year into this year or are you positioning one product over the other is just a more of a focus on rhopressa on Rockwell 10 complements is there any good learnings you can tell us that had been maybe helping with this momentum second question I have is just on potential magnitude of the European agreeing.
I know you don't want to negotiate against yourself here on the line, but can you give us a sense in terms of maybe structure.
It's a V. Whether you were able to secure on the Japan agreement and then lastly, I just wanted to clarify the timing up for one four or three or four if you could just.
Ah repeat what it was that you said on the call. Thank you so much.
Sure.
Ken I'm on.
Take care of both the EU as well as the IMD answer and then I'm going to have Tom talk a little bit more about what we're doing from a messaging point of view out in the field related to the the agreement that we have.
On the interest that we have and doing partnerships.
For Europe.
Needless to say.
We have an awful lot of interest as I mentioned, we have a lawful lot of.
Folks who have a lot of experienced marketing ophthalmic products in Europe that are interested.
<unk>.
The thing that we're looking at is we've got everything from somebody who's looking at not only Europe, but wants to add other territories like for example, China or Latin America, or the middle East et cetera, et cetera, all the way down to Europe only and.
So that's going to dictate an awful lot of what we're trying to do or what we're able to do relative to the pricing point of view and or the.
Negotiation point of view.
We think that the upfront that we got in Japan was exceptional and certainly we think that that's a.
A reasonable starting point for looking at our European deal.
As well as additional milestones and royalties and stuff like that.
Which are you know more in market dynamics so.
The mid teens, or so or I'm, sorry in the mid teens to mid twenties and things like that but more importantly to US. We are just as important to US is the matter of factoring part of it because obviously, we've got the plant in Ireland, we know how to make Rhopressa rocket Tam. We've got capacity there that we can do that and just like for Japan, where we're gonna be matter of factoring for that market.
I do want to make sure that as part of this agreement.
Europe and other territories that we get the matter a factor I think that's an important component for the future of our company and we can put a dollar value on that because the more of that capacity NASA level, we use the better on overall gross margin looks and so it's pretty easy from a financial point of view to see what that impact is to hopefully add so.
That helps on on the EU partnering side on the R&D side, I think we'd be filing that later on this calendar year.
As we gather some additional information so we think that we'll be able to move that forward and so let me know.
Turn it over to Tom to talk about messaging in the U S.
Thanks, Ken So here's how things have changed over the last years I can tell.
Majority of last year, when our reps really did was self positions on getting them to do prior authorizations, because we didn't have the managed care coverage that we have now than we received last year. So they had to talk to physicians and they're doing it because as you probably realize.
It is a.
There's a lot of pain and time that it takes for a physician.
Be able to do those prior authorizations, but our representatives kept saying keep doing them keep doing it and sooner or later managed care will respond and by the way. They did and just you may remember the numbers came.
Through our launch.
Physicians submitted over 150000 150000 prior authorizations for our products to managed care. So it shows you we were successful on that and again. The end result is we have very good coverage that we have.
On our positioning is back to a more classical position on meeting we're talking about the benefits of patients on what patients to use a lot of right. So what normally what we talked about Rhopressa I'm sorry Rockwell.
We mentioned two where two things one it's a great a great drug to consolidate medications. Many patients are on more than one medication as you well know are on two or three they're using a prostaglandin and something else. We can say you can get rid of that and get rid of two bottles and just go down to one bottle. So consolidation along with efficacy is a real draw.
Or for that of course, the other one we're looking for the other type of patient is a patient that is using a prostaglandin and.
Meeting our second drop so instead of adding another drop is going to make the regimen more complex harder to follow adding additional co pay those sorts of things. We can say go to one co pay the simplest drug and the most powerful drug you can use and that's Rockwell here.
Rhopressa is an easy one as well too because what we talked about with Rhopressa as either initial therapy for those people, who don't want to use a prostaglandin because of the aes associated with prostaglandin and Thats on a big market, but the area, where we're doing it as an additive drug to a prostaglandin now probably thats, a ah patients would be using something like travel.
Net are at all kind of product or new Mcgann day, allergen product and there'll be willing to add that in there because they may just be fans of those products are not necessarily latanoprost. So we take the easier route interest say add rhopressa into that regimen and as you know from our previous calls the data that we have to support that of course is our most phase four trial, which is highly <unk>.
Competitor, a compelling information to show the additive effect of Rhopressa is outstanding, especially compared to their experience with other additive medications.
Hey, thanks, so much.
Let me correct something.
I think I ended up.
I misspoke relative to the <unk> D for <unk>.
14th zero three or four it is the IMD is expected to be filed later next year. So in the second half of 2022.
Great. Thank you so much.
Thank you. Your next question comes from the line of search spend on share from Needham and company.
Your line is now open.
Hey, good afternoon, a few questions from me.
First one for Tom can.
Can you just.
About marketing and the pulse strategy I think you've had a couple of quarters now where you've.
Use a contract sales force until their sales team to kind of expand your marketing reach can.
Can you just tell us a little bit about how.
That has resulted in weather.
You will keep those two activities going on.
Yes.
We're really happy with the pulse strategy and the results, we're seeing already which is very early when we look at our three sales forces. We look on our Aerie sales force can you remember they call on the 10400 physicians.
We gained over a half a market share point in their call that audience last year and by the way that has a lot because this market is huge so that translates into a nice increase in net sales. If you go to the contract sales organization. They gained <unk> two market share points, even though they just started calling on doctors in July and.
Again that is not an insignificant amount in two different from most of the standup from tier four but it is when you convert that to bottles into sales and then our telesales team gained.
<unk>, one five market share points during their day didn't start calling on physicians until June so well.
The point that we get excited about is look back and see all three of our.
Our sales arms gained market share in considerable market share in a very short period of time. So we're quite happy with the strategy overall and remember the whole strategy was designed around increasing.
The number of presentations in hips, but we can get to to those physicians and that's why that's why we set this up and it's working so far.
Okay.
Quick one for rich on the.
Price increase taken in.
The first half of January.
It was five or 10%, but.
How much of that do you expect to realize in wind.
Thanks.
Well if you start you start realizing it as soon as you take it. So it's it was effective January <unk>.
And it was 4% to 5% increase for Rhopressa, and then Rocco Tam So youll start seeing that certainly in the first quarter and you'll see it through the rest of the year as well.
As you know as I've said before.
It has to.
That increase was at a gross level right. So that increase is taken at wholesale acquisition cost you don't yield all that as you funnel your way through the various rebate agreements, but it will contribute to the.
The stability in.
On growth in our net revenue per bottle as Vince mentioned during the course of this year.
Thanks.
Thank you. Our next question comes from the line of Dan Sanders from Guggenheim. Your line is now open.
Great. Thank you very much for the questions and congratulations on all the progress.
Just had actually two questions on on your new preclinical program if I could.
Maybe first.
Can you just speak.
To your views on what you think kind of market acceptance will be from.
12 months duration vs. Six I imagine that it'll be a bit of a function of kind of the rescue rate you end up seeing in your studies, but I know at least initially.
That's kind of one of the reasons. Some of your competitors are not going after 12. So I'm wondering if you could just kind of comment on that.
And then secondly.
Other polymer programs have seen some particle aggregation issues.
It sounds like you're still working on on kind of formulation, but can you just speak to your polymer blend in tech.
Technology and kind of how you are.
Expect to avoid particle aggregation. Thank you.
Sure so I'm going to take those questions backwards or actually what I want to do is I'm going to pass the second part of your question relative to the polymer aggregation et cetera, and sort of where we are from a formulation point of view to Casey Kopczynski. You May remember Casey was original founder of the company and was the main driver for the acquisition.
And Vizio and then I'm gonna have after he has completed.
Answering then I'm going to turn it over to David to talk a little bit more about the.
Patient acceptance physician acceptance of 12 months vs. Six so Casey.
Yes, so the part of the aggregation issue.
And that is <unk>.
Isn't it.
Some other formulations and something we were very aware of at the very start in terms of our formulation work. So.
We did everything to make sure that would not be an issue with our blend.
I can say that the blend is not identical to but it's similar to what we have in the $5 three implant.
So we are gaining clinical safety data from from those studies, but so far we have no evidence for any issues with respect to particles.
Being produced that migrate to the front of the eye.
And we would not expect it based on how our formulation differs from formulations, where that's an issue.
David.
Yes, just to touch on on the goals of this program on a it is it is about duration, hoping key to achieve that 12 months duration. The other thing we're hoping to achieve here that will separate itself is we're not looking for there to be loading doses. So as you've watched a lot of the competitive products in the.
Our pipeline, it's been sort of a steady gradual of you get three loading doses and then you eke out a three months and then maybe get Fuller and maybe you get five where we're actually looking to try and you know really deliver on on what we believe the doctors and patients will want which is you know not to have those.
Loading doses and to have that sustained duration as you said, we will see in that first clinical study exactly.
Exactly the re treatment rate, we've been very impressed with.
Our R&D folks and their ability to predict the 11 O. Five is a great example of being able to predict the duration of effect and we expect to have a similar success.
With that prediction, but we will be looking closely at everything from from month six on but we do believe that the future really will be about duration and that the market will be very much looking forward to something well beyond six months in the coming years.
Thank you.
Thank you. Our next question comes from the line of Louise Chen from Cantor Fitzgerald your lifestyle, Alabama.
Alright, thanks, so much for taking our questions. This is Jennifer Kim on for Louise.
I have two questions here. The first one I know earlier, it's been asked about how we should think about net revenues per bottle, but I was just wondering if you could get a bit more specific on how you think it will shape up over the course of 2021 and whether or not you can continue to growth beyond 2021. So I think the average net revenue per bottle. This past year was around.
$81, where do you think <unk> 2021 my second question is on the extent net.
This product.
Uh huh.
Have you or could you disclose the doses used in your rabbit data that was in the presentation are on.
Shall we expect publication of that detailed critical preclinical data sometime in the near future.
Sure so on.
On the net pricing side, you may remember that for the calendar year, you're right. We ended up with a number that you mentioned, but on the other hand, he was driven by a pretty good sized number at the beginning of the year, we got down into the high Seventy's and we call that stabilization of the pricing and so its been trickling up ever since and so we do think that the.
The negotiations that we've taken place that have already taken place.
That are kicking in this year will allow us to get to.
As I mentioned during my prepared remarks about a 5% increase from our exit so again, just the 5% over the.
Exit of about $80 or so per bottle and so we think that that's going to move forward on on a timely basis and really start to.
On this first quarter now in terms of future expectations, we do have some contracts that will actually kick in.
In 2022.
So we do expect to see a continuation there, but then we're also looking at continually.
All of the contracts not only the new ones that we're signing but some of the old ones that are coming up for renegotiations and so.
Again, you'll start seeing some of those kinds of activities, we think using the.
On the model that we talked about back in May when we signed that last deal, which is average with the largest Medicare part D provider in the country.
So using that model going forward basis in terms of not only being careful about the rebates that we provide but in terms of how we position the product within the formularies et cetera, but more importantly, focusing on the pull through and making sure that sales force has all the data on a timely basis, so that they can generate the pull through.
Is the key to our success. So we do expect net price and you continue to move forward upwards and we expect that we're going to be able to continue that.
Going basis on the existent had been information.
What you have right now is.
All of that we're planning on providing.
The actual information that that could provide.
There's more inkling in terms of what we can do et cetera, we would take a hard look at some of that.
Some of the issues for example, like on the actual blending of our polymers et cetera that is proprietary so we're not gonna be releasing any of that.
But the actual data relative to who sits in of itself is pretty well known until you can look it up and see sort of what concentrations are required in the back of the eye to be effective and what we can tell you is based on the information that we've been able to generate that we are delivering that amount.
Into the eye on.
On over a sustained period of time.
Again, as David said, and we're eliminating the need for loading doses et cetera. So this is with.
Just one injection so that's been the target and so far the guys believe based on everything we see that that's what we're delivering.
Okay, great. Thank you.
Thank you. Your next question comes from the line of Greg Fraser from Julie Securities. Your line is now open.
Good afternoon folks thanks for taking the questions.
My first question is on the Europe opportunity.
When do you expect a decision on pricing in Germany, and as a price decision important with respect to discussions with potential partners for Europe.
So.
We haven't.
Actually started talking directly to the pricing authorities yet.
Our ideas and et cetera, et cetera, what I can tell you is that <unk>.
<unk> is the highest price combination product and its elsewhere in the mid twenties up there.
In the European market. So we do expect that because of our non inferiority study our results from our.
Mercury three data that we're going to be able to get somewhere in that ballpark and so.
Germany will be first and we but we do expect to start the negotiations for price, but we do expect that as we are doing that we will we should be able to sign up a contract sign up of partnering agreement before we actually have the final price set.
Got it okay.
By the way the potential partners are aware that we're moving forward with the pricing negotiations. So they're all aware that that's not going to be something that slows us down.
Got it okay.
And on expenses, you said, you're not expecting a significant increases in opex. This year are you.
Holding on line on spending due to the pandemic or should we think about the current cost structure is right sized for the longer term.
So if I take you back two or three years ago. We've had about the same opex for quite a while now and in a lot of that had to do with the decisions that we made that we were going to generate data.
On all of our pipeline projects.
And make decisions based on getting that data, but we wouldnt start any major new trials until after we had data on all the programs and so as you've seen we've been able to control expenses now for almost three years.
Part of that was driven by when we finished up.
Getting Ireland up to speed and so now it's all moving into Cogs and so that has helped tremendously.
We did get a lot of our studies completed.
Including not only the original phase two study in Japan, but the Mercury three one.
11 O five was done last year and the only then the last one in the bag. So we're waiting for is 512 that dry eye assets, which we will get that data later on in Q3 of this year, we won't start any additional trials until we get all that data and then kind of put.
It in front of us and decide.
How we want to move forward with further pipeline expenditures, we are taking all the necessary steps for example, 11 O five to move that into phase III trials, but we're going to wait until we get to 512 data before we execute on that because again, we don't expect.
Any big.
Big Spike in R&D expenditures this calendar year.
22 will be different but we will tell you upfront, where we're going to be spending the money and why and but that's more of a 'twenty two issued in 'twenty one.
Got it thanks for the color.
Thank you. Our next question comes from line of French Law voice from Oppenheimer. Your line is now open.
Hey, Thanks for taking the question a.
A lot was.
Sit here, but I just was wondering can you touch on a little bit more on the market.
Compare and contrast, Asia Europe, and the U S for glaucoma, obviously, you touched on pricing with <unk>.
Can you talk about pricing potentially in Asia, and just the competition there.
Sure so.
Everybody is focused on the Japan market because that's the one that's most relevant right now.
Look at that that market has been just shy of $1 billion in total dollars.
Has many of the same kinds of products that.
That are available elsewhere. There are some a lot of homegrown U R. Japanese centric glaucoma products as well.
But we have one payer there only and obviously, it's the Japanese government and so the payer system is very specific.
So what we do know is that they do value innovation.
And so having a new class of products. There is very important the fact that they already have a rho kinase inhibitor. There are some folks would look at that and say well that's a negative but in our case, we think it's a positive because that has a price already set and so that's going to be somewhat helpful. But more specifically our first.
Phase III trial that we started prior to signing up the Oh Japanese steel is a head to head trial with the product that is currently available in Japan and again, we think that we're going to be superior in terms of both efficacy and the adverse event profile based on what we know well.
Our dose once daily where their dose twice daily we do know that they were primarily on higher pressures, which is not particularly relevant in Japan, and we work pretty much across the board, but were very very strong and dropping pressures when a patient starting pressure is already kind of low end and have to halt.
Part of many of the EIS in Asia, where.
Not only do they suffer more glaucoma.
There are pressures tend to be relatively low.
They still get glaucoma, and so we think that our drug based on all the work that we've done with the Kols in Japan is tailor made for that particular market. So we think that the market dynamics are going to be in our favor to help you put it in perspective on a $1 billion on a $1 billion market. There. The product is that we're going to be going up again.
It's been on the market now for I believe three years.
And they have.
Just over 5% market share already.
And so we think that obviously, that's a great target force.
And again because of the once a day better efficacy and a cleaner adverse event profile.
We should be able to beat them in the market, especially given who our partner is Santa Inc. Is the largest ophthalmic pharmaceutical company in Japan.
They have a huge amount of firepower and presence in the market that will help us move our products forward.
Okay. Thank you that's it from me and congrats on the progress.
Sure.
Thank you. Our next question comes from the line up Elliot Wilbur from Raymond James Your line is now open.
Yeah.
Hey, good afternoon.
So.
Wanted to ask a question a couple of questions around.
From revenue assumptions, I guess first specifically a lot of questions on pricing.
But just thinking about.
Bottles per Rx trends.
That number seems to have kind of a persistent upward bias to it I think year end youre up maybe about 10% on a relative basis work versus where you were at the beginning and that number has trended up for really since the launch of the products, but how do we think about that over the longer term is there some point where that just hit the sealy.
Lena and flat lines or is there always some sort of modest upward bias to that number im referring specifically to.
Bottles per Rx and not wholesale versus retail.
No I got it.
You just want to make your life more difficult for yourself doing it that way, but that's okay.
So.
When you have in any other way.
Yes.
So.
We got a nice jump on bottles per script as we entered Covid back in March of last year, we saw a real big jump on 90 day supplies and you know obviously if people were worried about getting to their pharmacy and running out of out of product et cetera et cetera. So so that trend for us is.
<unk>, Tom Micro was telling me.
When I saw him in California earlier this week that we're now sitting right around on Wow 1.44 show bottles per script somewhere in that ballpark.
And so that's again a huge jump from where we've been because we've been in the one <unk> for a while.
And so.
It's also hard to get that similar data on competitors, but because we.
We've been in we've worked for a lot of those competitors, we think that the competitive data for other glaucoma products is sitting about 1.5 bottles per script.
And some of those products on the market for quite a while now.
Would you need to understand is we're in a different environment and so with the folks really more now accustomed to what's been going on and not going to the pharmacy and moving more and more towards mail order in.
And God only knows what impact Amazon entering the market is going to have on us.
Think that that number a while if you would've asked me. The same question a year ago, I'd say, our we'd have a ceiling of roughly one five bottles per script, but at this point given the dynamics and what we've all lived through over the last year.
I'm not sure that that's true anymore.
But again for now that's what we have.
Okay, and then just an additional follow up question on on net pricing it sounds like.
The renegotiation with respect to wholesaler agreements was the primary reason behind the.
The sequential increase in the number and just yeah.
Okay curious if those wholesaler.
Distribution agreements are those based on those percentage.
Numbers based off of our WAC.
Or is it just.
Our gross pricing.
Gross pricing.
In theory, then potentially large number relative to net for even a small percentage in.
Maybe there's some additional leverage there.
Franchise growth that kind of a fair comment.
Yes, I think that there's a that and also the way that we negotiated some of these agreements they they don't all kick in.
Mediately some of them are staggered somewhat and things like that so yeah. So I think that that's a.
That's there and then obviously as we continue to grow we will continue to.
Strive towards getting.
Those fees down as often as possible.
Okay. Then a question for yourself answer for Tom just.
Thinking about renegotiating some of your larger managed care contracts going forward.
You've highlighted several times the data from the most trial in terms of the.
The relative benefit of products sort of regardless of where it's used in the.
On the.
Therapeutic.
Spectrum.
Wondering have you guys considered.
Some form of.
Pay per performance incentives and in your contracts or is that something that would even be possible.
In the glaucoma market.
Hey, Tom do you want to take a stab at that one.
Sure I'll be happy to yes, we do.
Not really do those where they don't really do those that often now anymore you talked about pretty much forget your question right like a market share agreement. If it started from market share growth from extra why we will pay you know give you X amount of rebate for growth from extra Ziv will pay you a different amount right no I apologize specifically thinking about the efficacy of the product if you delay.
Or some sort of net reduction in <unk>.
Relative to competitors, then you can basically command a higher price point.
Yeah, we talked a little bit initially to the payers about concepts like that the problem is these bottles aren't very expensive.
Compared to.
A much larger.
Sure different clock from different classes of drugs from but I really not interest rate and that in ophthalmology <unk>, we would be because our product performs well, but they just don't want the time on a handful of the reporting and then coming back to do it for Suffolk that just isn't bad.
A big from a dollars on SUNS standpoint, or a unit standpoint.
Okay, and then last question for.
For yourself as well just thinking about some of the numbers that you guys had talked about from the day, we look at I mean, basically it looks like <unk>.
Wayne.
Sure.
Between net.
The cash.
Closing.
<unk> offices and the reduction in in patient counts going through offices, you know patient volumes or something around $60 to 65%.
What we consider to be normal, but if you look at trends.
And some of the earlier script metrics, such as new therapy starts and new to brand like those actually have been pretty good over the last couple of quarters, you had the dip in the second quarter, but they bounce back pretty quickly. It seems like the lag is more in in.
Refills in patients who've been on script for a longer period of time, so I'm trying to.
Not sure what that necessarily means when we return to normal as you just suggested a quicker bounce back or is there some way to potentially capitalize on that from a commercial perspective.
Yeah, well certainly when we look at the data, it's a little bit different than how you look at it earlier just to give you a sense for it but on ophthalmology, we know that.
<unk> says the new to brand.
<unk> 52 last 52 weeks over the previous 52 were down about 14%, where the <unk> total prescriptions are only down 8%. So the refill is by the way go to Brad Hurts. The acute this was all of ophthalmology, so acute care products.
Got hurt a lot more guests and of our glaucoma products like ours got hurt a lot less so that's what we see there, but really I think the thing that we try to do with physicians is based on what they know that they're supported by growth for commercial plants, we have a co pay cards and those sorts of things that keep people in the game and key people.
Refilling their.
Their prescriptions.
And from a keypad PR records up where they are where they have been on continuing to keep them growing.
Okay. Thanks, those are my questions.
Okay.
Thank you. Your next question comes from the line of <unk> Yang from Mizuho Securities. Your line is now open.
Yes, hi. Thank you this is Dan Clark on for <unk>.
Was.
Pricing in the quarter impacted at all by the Medicare coverage gap.
Oh, yes.
Always is.
We try to estimate it.
As best as we can and it's always.
A nail biter at the end when we finally get to bill, but I think rich and his team.
That handle that have done a great job this year and.
It came in.
Within the the a lot of them out per our expectations and so.
We do account for it and then.
Hopefully, we don't see a huge surprise, but I think is now that we've got.
A few years under our belt, we're getting very very good at estimating those rebates and we do also take into accounts any new Medicare part D plans that we signed up during the year like we did last year in 'twenty, where we signed up the largest Medicare part D provider in the country. So we did take that into account and we were able to.
Estimate that one pretty well as a result, so I think we're in pretty good shape relative to that but net net the answer is yes. It was impacted.
Okay. Thank you and then I appreciate the color on the percentage of doctors options that are currently open.
Roughly how does how does that percentage applied so that your top decile prescribers.
Tom.
Yes, we don't really break it out by decile.
You know that number we gave you are the desktops, we call on so I can't tell you tend to nine but we go down to Dessau. For example from those numbers I gave you really worked through their final form.
Okay, great. Thank you.
Yep.
Thank you no more further question hold on I would like to turn the call over to Vince <unk>, Chairman and CEO for final remarks. Thanks Jerome.
Thank you everybody for joining us today, obviously, we're very excited about the way we exited 2020 looking forward to 2021 and we'll provide.
Our usual transparency as we progress through the year. We do think we are hitting on all cylinders. At this point, we are growing revenues in the U S. On both on both products and as I mentioned, both a unit as well as the.
The net price increase there is it is helping us quite a bit we are making an awful lot of progress on our pipeline moving that forward to so that we can make major decisions about the company's future and continue to add products to our pipeline as a result, as you saw with our newest entry using print technology, we are expanding our reach outside the.
It states with partnerships.
In Sandton was a big one this last year, hopefully it'll have a huge impact on us as well completing a European deal and for other extended territories later on this year and we probably did get control over R. R.
Our own destiny relative to a matter of factoring by getting our Irish facility in Athlone approved for the manufacture of rocket in U S and rhopressa in the U S and we're now supplying patients with product that we're making and obviously as rich told many of you. We ended up the year in a very very strong cash position.
Which we expect to continue to move that forward, especially as we close on a on a European deal. So again I want to thank everybody for joining us Tonight have a good evening.
This concludes Tonight's conference call you may now disconnect.
Goodbye.
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