Q4 2020 Antares Pharma Inc Earnings Call
Ladies and gentlemen, who are currently on hold for today's on terrorists pharma fourth quarter and full year 'twenty plaintiff on absolute operating results conference call. We're currently awaiting the arrival of additional participants they should be starting shortly thank you for your patience and please continue to hold.
[music].
Ladies and gentlemen, welcome to the entire pharma fourth quarter and full year, 'twenty 'twenty financial and operating results conference call for.
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I will now hand, the conference over to Trombley on terrorists, Vice President and corporate Communications at Inc.
That's the relationship on Investor Relations.
Thank you operator, and good morning, everyone.
We are today, we announced our fourth quarter and full year 2020 financial results and operating achievements a copy of the press release and slide presentation for today's conference call are available on Investor Relations section of the old cars from our corporate website.
Before we begin I'd like to remind listeners that some of the statements made during this conference call will contain forward looking statements within the meaning of the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995. Examples of forward looking statements include those related to our future financial and operating results, including.
Our expectations regarding the impact on the ongoing COVID-19, pandemic and mitigation measures implemented in response to the outbreak on our overall business operating results for national condition, our ability to achieve for 2021 revenue guidance future revenue growth prescription volume and market share for our products.
And our partner products, including virus Bad luck dirt off on Cabo generic Epipen, FDA actions and other regulatory activities, including actions with respect to Makena and approval of tablets pending Andrews for generic for Teo and exert a tide timing and results on drilling and future development programs and clinical trials.
A trs 19 O. One in 19 named <unk> as well as programs with Pfizer in Georgia, and other product development activities and business development efforts.
These forward looking statements are subject to certain risks and uncertainties and actual results could differ materially.
Our identified and described in today's press release and the accompanying slide presentation on slide two and from time to time for the Companys filings with the SEC on form 10-K and updated in on Hartford's recent periodic filings on form 10-Q and form 8-K.
On parts is providing this information as of the day of today's conference call and does not undertake any obligation to update any forward looking statements contained in this conference call as a result of new information future events or circumstances. After the date hereof, except as required by law or otherwise the company cautions.
Investors not to place undue reliance on these forward looking statements.
Joining me on the call today are Bob Apple, President and Chief Executive Officer, Greg Powell Executive Vice President and Chief Financial Officer, as well as Pat Shea Senior Vice President of commercial.
Let's review the agenda for todays call on slide three.
I will begin with a high level review of our goods net.
Pat will provide a more in depth discussion on our commercial strategy and tactics for our proprietary portfolio from one bank drug for the detailed financials and Bob will conclude with closing for closing comments before opening the line for your questions.
Please turn to fight for and I will hand, the call over to our CEO, Bob Apple Bob.
Thanks, John and good morning, everyone.
Thank you for your interest in our Q4 and full year results and operations update.
We are very excited to report another record year with outstanding financial and operating results that we believe continue to highlight the strength of our diversified organization.
Our achievements drove a 17% increase in our fourth quarter revenue to over $44 million and brought our full year 2020 revenue to almost $150 million, an increase of 21%, which beat Street estimates and came on at the very top end of our revenue guidance range for the year.
We had impressive contribution of 58 per se year on year revenue growth from our proprietary portfolio in tandem with strong product development and royalty revenue from our partner business.
Furthermore, we had our first full year of positive net income, which was almost $10 million.
Or <unk> <unk> per share before the tax benefit.
Generating cash from operations on more than $21 million.
Throughout the year, we diligently advance the growth of our commercial portfolio, particularly you guys day and look to leverage the success of our commercial sales organization the relaunch of nocturnal.
We are also pleased to be able to share in the success of our partner products, such as tennis generic epipen.
While simultaneously developing a robust pipeline with our internal proprietary portfolio on top of our alliance pipeline.
Overall, we achieved record revenue for for our proprietary portfolio.
We supported our multiple pharmaceutical partners with their development programs.
As well as manufacturing millions of auto injectors for our products and our partners products.
We achieved these results all despite the ongoing impact of COVID-19 pandemic on our employees suppliers and the communities we serve.
As we look ahead, we believe our full year 2021 revenue guidance of $175 million to $200 million, which represents 17% to 34% year over year growth is a testament to the strong foundation, we have built.
Third with the significant growth opportunities, we still had in our near term and long term internal and alliance pipeline.
With that overview, it's moving to slide five the first focus on our proprietary portfolio.
Price margin business and represents the most significant growth driver of the company.
Well on trucks it remains a profitable product for us we remain focused on driving the strong demand for zeiss debt, which had revenue growth of 71 and 124% in the fourth quarter and full year 2020 versus the same periods last year.
Total prescriptions for as I said also increased 76% and 160% in the fourth quarter and full year 2020 versus the same period last year based on our TBA data.
In 2020, the testosterone market included approximately seven six total $7 6 million total prescriptions, primarily led by Injectables.
We feel we are in a very early stages on the market expansion and believe the demand for an easy to use once weekly virtually painless at home testosterone replacement therapy will further support the adoption of his eyes day.
It's our view that the advantages is is that have only started to resonate with physicians, particularly during the pandemic for an at home therapy, but more importantly, we also believe that the pandemic will establish new societal norms and medical practices that favor therapies that can be administered at home and non.
On the tradition traditional physician's office or medical setting.
We believe this paradigm shift will potentially benefit the majority of our products and our development pipeline.
On the ease of use at home delivery.
Is core to our technology platform.
As we look to expand our commercial footprint a key strategic goal for the company was to expand our product portfolio through business development, and we would see that in the fourth quarter with the agreement to license not <unk> in the U S from Ferring pharmaceuticals.
Donna indicated for fleet frequent niton year on Asia due to condition called nocturnal poly urea immediately expanded our urology portfolio and commercial presence in the therapeutic space.
We leverage our relationships with urologists and endocrinologists, we expect that our commercial sales organization will prove successful with this asset as they amortize debt given their track record thus far.
With that let me hand, the call over to Pat Shea, our senior VP of commercial Rahul take a deeper dive into the commercial strategy and progress for both Zions did not do that.
Thank you Bob and good morning, everyone. I appreciate the opportunity to highlight our 2020 commercial accomplishments as well as discuss our strategy going forward that we believe will continue to support the growth trajectory of our promoted products.
First and foremost we remain focused on our flagship asset <unk>, which has demonstrated.
Constrain it to be a formidable player in a large TRT market continues to growth.
From a results perspective fourth quarter prescription volume was our strongest quarterly performance of the year, achieving more than 43000 total prescriptions, a 13% growth over prior quarter.
Surely as Bob just mentioned.
<unk> achieved 160% growth in total prescriptions for the full year 2020 compared to 2019.
We are very encouraged by the continued receptivity on <unk> from our target audience. Despite continued operational challenges due to the pandemic. We remained focused on executing our hybrid promotional model to drive an increase in awareness trial and use of <unk> in the fourth quarter was particularly challenging resulting in.
In person calls to our targeted customers occurring on average approximately 50% of the time.
Our virtual detailing continues to be quite active and helps considerably when access to offices and providers has been hampered due to the pandemic.
Additionally, we continued our digital and social media efforts geared to raising awareness and activation with both patients and physicians.
So collectively we believe our promotional efforts are paying off.
Throughout last year, we established a solid foundation and presence in the TRT market.
We believe as I have said strong brand awareness and profile acceptance by our target universe, a growing prescriber base as well as overall prescription growth and momentum.
Are all positive indicators.
These accomplishments coupled with the execution of our updated targeting strategy and a new promotional campaign that strengthens the <unk> messaging platform around the attributes of convenience that Bob alluded to earlier have the brand poised for continued growth.
Early results. This year are encouraging as Viasat total prescriptions in January were the second highest monthly volume since launch coming off of a very very strong December.
Q1 is always a challenging quarter as the industry manages through the traditional dynamics of plan changes payer coverage and patient deductible resets. We will continue to implement all of our access and affordability programs to help patients get their <unk> prescription filled particularly in the first quarter.
Now I'll switch gears and update everybody on the progress of our nocturnal relaunch as a reminder, we implemented a highly focused soft relaunch approach in the middle of the fourth quarter with very limited selling materials and the promotional campaign that we essentially inherited from Ferring pharmaceuticals.
Our focus for the short period of time, we had in Q4 was to re was to start rebuilding nocturne awareness amongst our xyrem prescribers, while not interrupting our Zionist that momentum.
For those six weeks of knockdown of promotion, we were able to generate a modest trs lift amongst this focus group of targets, while preparing for a more extensive and thorough relaunch that occurred just last week.
At our recent virtual National sales meeting, we introduced to our sales force new training materials and selling tools, a revamped promotional campaign, new brand positioning and messaging as well as an enhanced targeting strategy.
To ensure we allocate the proper and appropriate selling time to reestablish nocturnal while remaining focused on our flagship XI is that we're continuing to call on existing <unk> targets, who also have the potential to prescribe nocturnal.
Additionally, we're infusing a very select group of new high potential knock during their targets, who are sales force will call on with minimal distraction desire.
Based on what we have learned during the limited time, we have been promoting doctor net and preparing for the full relaunch. We believe there is opportunity for this product to help patients suffering from nocturia due to nocturnal poly urea, our learnings have translated into a new more comprehensive campaign that we.
<unk> will increase awareness trial and use of nocturnal amongst our targeted physicians.
Before I hand, the call back to Bob I would like to reiterate that we remain excited with the opportunities we have in front of us for both desire standard nocturnal and believe that our commercial expertise in this space will support and enhance our growth Bob.
I'll hand, the call back to you. Thanks.
Thanks, Pat and I agree with you that we still have significant opportunities to enhance our growth through our proprietary portfolio as.
As we continue to execute on our commercial strategy for <unk>.
We will also continue to be aggressive and searching for other corporate development opportunities. While also remaining focused on the development of our internal pipeline.
Yeah.
Last year, we successfully advance our internal pipeline, which currently consists of 80 or at 19 O. One a potential weekly formulation of an auto injector administered product in neurology and HRS 19, O two and on and.
And then your technology and rescue pen.
We conducted free IV meetings with the FDA and believe we have the clinical and regulatory path forward with.
With positive feedback from the agency on a cycle <unk> development pathway for both assets, we remain on track to file the IND for $19 two in the first half of this year and $19 one in the second half of this year.
We look forward to providing more detail on these assets and their opportunity once we file the IND.
While these internally developed assets represent potential future growth drivers clearly fit our commercial footprint.
We also have a robust commercial and development pipeline with our partners and we do that we expect will continue to contribute to our overall growth.
We can start with <unk> generic epipen on slide seven.
The success of <unk> generic epipen and its contribution to our growth for the fourth quarter and full year highlights the benefits of a highly diversified business.
We are pleased to garner on attractive royalties and strong demand for our devices based on Teva success with their epipen. Despite challenges throughout the year due to the pandemic and a muted third quarter back to school season, which historically is the strongest <unk> quarter.
We expect additional growth in 2021 as tablet enter this year with a market share in north of 50%.
And we anticipate the COVID-19, vaccinations will provide an atypical and temporary boost in demand in epipen.
Given our low risk of an allergic reaction to the vaccine by some patients.
We are working with Teva to ensure adequate supply as demand increases.
We also remain excited for the potential U S approval and launch of tennis generic for <unk>. This year.
So I don't noted on the last earnings conference call. The day are expecting the approval this year.
Although set of launch generic for Seo in 11 European countries, Canada, and Israel This past year.
More significant opportunity remains in the U S.
Additionally, albeit a smaller opportunity Kevin noted that their anda for generic Byetta could also be improved this year, which also utilizes one of our multi dose pen products.
Let me also briefly comment on Makena before moving on to the Pfizer and endorsed these development programs for.
First and foremost makena remains on the market and we expect that to be the case for the foreseeable future.
<unk> has indicated that the FDA hearing has not been granted to date and the day are preparing for a potential meeting with a plan to address the fda's position.
We appreciate <unk> commitment to the product and the openness to work with the FDA to provide additional information <unk> conduct additional trials.
We will continue to supply makena to Covid as a.
Work through the regulatory process.
Turning now to our development program with Pfizer, which remains undisclosed based upon pfizer's desires for competitive reasons.
We're very excited to see Pfizer advanced asset late last year through clinical trials.
And targeting an NDA submission to the FDA this year.
As a reminder, this would be for a novel rescue pen and we believe will represent a large market opportunity.
Look forward to providing fully packaged product for Pfizer and potentially sharing their success with escalating royalties to low double digits. If this product is FDA approved.
And you see the most innovative partner product for for last we still believe that the Dorsey development program for a heart attack rescue pay could be transformational for the company.
We are very pleased to report that after completing initial usability and reliability studies with our quick shot device last year.
Dorothy adjust successfully completed the clinical bridging study.
With that Dorothy we will be able to initiate a global phase III, which they expect to occur in the first half of this year and we will be enrolling at approximately 14000 patients.
There are recent fast track designation by the FDA highlights the potential importance of this product.
We believe that the <unk> rescue pen represents a significant market opportunity for a dorsey and in cars, but more importantly, and may potentially be a breakthrough for physicians and patients and help save lives.
With that I'll turn the call over to Fred to discuss financials, Fred Thanks, Bob and good morning, everyone. I'm also extremely proud of all of our accomplishments this year.
For the fourth quarter of 2020 finished a very strong financial and operational year for Rytary.
Fourth quarter revenue of $44 1 million and full year 2020 revenue of $149 $6 million were both records as our revenue exceeded analysts' consensus as well as hit the upper end of our revenue guidance, our flagship proprietary products assets achieved over $46 million on revenue and grew 124.
5% over 2019, while our primary partner product set is that the pen achieved over $60 million on revenue and grew 46% from 2019.
And for the first time in its artist history.
Net income was achieved for the entire year looking forward for this year, our 2021 revenue guidance of $175 million to $200 million, representing 17% to 34% growth assumes we remain on a similar growth trajectory. So let me now provide a more detailed review of the financial results for the fourth quarter and full year.
And at December 31, 2020, which brings us to slide number eight.
Total revenue generated from product sales license and development activities in royalties was $44 $1 million for the three months ended December 31, 2020, a 17% increase compared to $37 8 million in the same period in 2019.
For the full year ended December 31, 2020, total revenue was $149 6 million or 21% increase from $123 9 million for the comparable period in 2090 day.
Sales of our proprietary products Zhao settled for exit and nocturnal generated revenue of 19, 7% and $62 $9 million for the three and 12 months ended December 31, 2020, as important as compared to 2014 and $39 $2 million for the same periods in 2019.
The 41% and 60% increase in proprietary product sales for the three and 12 months ended December 31, 2020 were principally attributable to continued growth in sales themselves.
In 2020 as asset achieved revenues of $46 5 million, which represents a $25 $7 million increase over 2019.
Product sales development revenue and royalties for our partnered products in total remained relatively constant between 2020 in 2019 as they totaled $24 for $86 $7 million for.
Three to 12 months ended December 31, 2020, as compared to 23, eight and $84 $6 million for the same periods in 2019.
While the amounts remained consistent between 2020 from 2019, there was considerable revenue changes among the individual partnered products in 2020, we saw tremendous growth of epipen market share as well as our epipen revenue as we recorded total revenues for devices development and royalties of $50 9 million.
An increase of $16 million over 2019 on.
Setting the positive gains we saw with Epipen was the overall revenue reduction from Amex Makena. Our total revenue in 2020 for Makena was $14 2 million, which represented a $10 $6 million decrease from 2019.
Our gross profit was 25, 1% and $86 5 million.
For the three and 12 months ended December 31, 2020, as compared to 23, 8% and $73 4 million value for the same periods in 2019 the.
The increases in gross profit were primarily attributable to the increases in south net sales.
Selling general and administrative expenses were $16, seven and $62 8 million for the three and 12 month periods ended December 31, 2020, as compared to $15 for $61 $8 million for comparable periods in 2019.
Net increase in selling general and administrative expenses for the three and 12 months period ended December 31, 2020 was primarily due to increases in equity based compensation costs, which were partially offset by reductions in sales and marketing costs incurred as a result of the various stay at home orders and travel restrictions related to COVID-19 pandemic.
As of December 31, 2020, we concluded that as a result of generating pre tax earnings utilization of net operating loss carryforwards and future projected pre tax earnings is more likely than not that nearly all of our deferred tax assets are expected to be realizable and may be utilized to offset future.
<unk> liabilities.
As a result, we recorded an income tax benefit of $46 $3 million for the fourth quarter and full year 2020, resulting primarily from the net valuation allowance release of $53 $4 million for our deferred tax assets.
This tax benefit resulted in 28, and 27 per basic and diluted share in the fourth quarter and full year 2020.
As a result of our strong operational results and tax benefits recorded net income was $51 $4 million or <unk> 31, and <unk> 30 per basic and diluted share for the fourth quarter of 2020 compared to $4 $7 million or <unk> <unk> per basic and diluted share in the same period in 2019.
Net income was $56 $2 million for 34 and 33.
For basic and diluted share for the full year ended December 31, 2020, compared to net losses of $2 million or <unk> <unk> per basic and diluted share in the comparable period in 2019.
Finally during 2020, we generated $21 $3 million on cash from operations as compared to using $10 $6 million on cash in 2019 at 31 $9 million reversal.
As a result, our December 31, 2020 cash and cash equivalents were $53 1 million I'll now turn the call back to Bob for closing remarks.
Thanks, Greg.
In closing as you can see on slide nine we delivered outstanding full year results with record revenue and profitability and significant cash generation and continue the upward momentum that we believe is indicative of the strength of our organization.
We strongly believe our diversified business provides sustainability and will help continue to advance and support our future growth as reflected on slide 10.
This slide shows the numerous opportunities there are still in front of us that include continue.
Continued growth of <unk> and the successful relaunch of nocturnal.
The potential U S approval on launch of generic Terra paradigm and <unk> this year by Teva.
The IND submissions for Atms 19, 1% and 19 O. Two this year for.
<unk> NDA submission this year for potential FDA approval in 2022.
And last but not least endorsing initiation of their phase III trial for the salada growth heart attack rescue pen.
Beyond the impressive list of 2021 potential milestones. We will also continue to aggressively pursue corporate development and business Alliance.
To accelerate our future growth.
With that I'd like to thank our employees for their many contributions to our success. This past year and dedication that have brought us to where we are today.
Operator, you can now turn open open the lineup for questions.
Thank you and as a reminder to ask a question. Please see what other pressing star one.
Our first question comes from Anthony Petrone from Jefferies. Please go ahead.
For all this is briana on for Anthony Congratulations on a great quarter on the year I'd like to start with two questions on your proprietary product line.
First on the operating under the January was the second highest volume quarter since launch and I was just wondering.
I guess, it's Adam.
Out of the ordinary income the seasonality for the product. So I'm just wondering what is really driving the momentum so far this quarter and is it largely driven by the uptick in COVID-19.
So I can I can hang on I call with the question over to Pat.
Thank you.
Yes sure so.
We've had a nice continuation of the momentum as we've talked about in the.
The opening remarks or in my remarks. So January I think it's a combination of the continued focus of our sales force certainly where we have confidence that the profile and the attributes that we've talked about relative to convenience and at home administration are all playing into that momentum.
And we believe as we just kind of come out of our most recent virtual national sales meeting with.
Dialed up emphasis on that convenience messaging.
We'll still see continued progress on momentum going forward.
Got it Okay, and then how does that help.
And then in terms of these new high potential targets that you mentioned are these existing they often customer or are they also are the types of for targets also potential day after tomorrow.
Yes, great question.
Majority of the of the what we're calling I guess, a hyper targets are existing <unk> targets.
Of which then a majority are pulled into our active called on universe. So so not only are they writing <unk>, but they are high potential within the TRT category.
Very helpful and then I'll just ask the two questions on your.
Partnered product line upfront. So what are your expectations for NTIC pen trends into the second quarter season are you expecting Albion stocking orders in Q on through next season, and then on for Tayo. I know you mentioned that Youre expecting U S lines from time of year can you give any additional clarity on expectations for timing.
And what kind of free stock auto injector the head of the Buildout.
Right. So on the on the IP question, we expect the transactions you would be pretty strong.
Relative to last year from the for the first quarter and potentially the second quarter for.
It's really due to the Covid pandemic.
The Mega sites in some of the other.
Locations that arent typically attached to a pharmacy or stocking at the pen in case patients have an allergic reaction to the vaccine. So we clearly have seen free.
On a significant increase at least through January and we expect that to continue probably for the first two quarters.
Obviously.
Once the vaccinations.
Of.
Finish up we'll see that temporary impact come down.
We also hope that there is a regular or full back to school.
Quarter this year in 2021.
With the with the pandemic hopefully being behind us for the.
For most parts in the September timeframe. So we expect the trends to be solid we expect the market share too.
We remain consistent in that 50% range and so overall, we will see growth for clearly for the balance of the year on epipen for for Teva and for us.
With regards to for Teo.
We are extremely disappointed that it hasn't been approved yet to the agency.
As it is.
On your review there is there is.
There's no updates to provide its been very frustrating for both Kevin for us for not that you have that approval, yet and once day pool happens there.
They are ready to launch they already have.
The launch quantities as you know we make the same exact product.
For Europe and Canada.
And in Asia, and Israel, and so <unk> is prepared to launch when approval happens.
Unfortunately with generic <unk>.
And as there are no real timelines that they have to file like a <unk> date. They argued <unk> date, but once they go outside of those could be the dates then it's really up to them as to when they.
Get to improve the product.
Good news is that it remains to be a priority review.
<unk> to be a first to file status. So we believe Teva will have six months of exclusivity and so we're just waiting for that approval to happen anytime.
Great. Thank you so much.
We'll now take our next question from David on <unk>.
From Piper Sandler. Please go ahead.
Hey, Thanks, just a couple so.
On first time guys.
Also on that Dana so.
So from that.
And I apologize if I missed this can you just talk about.
How are you thinking about.
Virtual detailing versus in person detailing and.
How do you see that evolving is as the year progresses.
I guess, how much does that really matter given that you've had success with the product even in a virtual setting.
One I just talked about in office.
Visits.
How do you expect for.
Apple trend.
And then just on on the reimbursement landscape can you just give us a little bit of a roadmap on how we should think about gross to net this year will look similar to what we saw.
In 2020, and then just quickly on that Donna.
Just on high level question, how do you frame. This opportunity just in terms of where do you think volume to go where do you think the dollar opportunity can be.
Hum.
Just give us your sense of how big you think this product group.
Thanks.
Yeah.
Yes. So this is Pat I'll answer the first part of the question relative to virtual detailing snapped up I guess against in person clearly we're firm believers that the in person face to face interaction with your customers is the most effective way.
To sell the brand and certainly we're optimistic as the year evolves, we will have more opportunities to have those face to face interactions with our customers I think we alluded to in the script.
Or in the overview, the fact that December 4th quarter or in person.
Calls has had dropped due to some of the issues relative to the pandemic, but at the same time, our virtual platform was really.
Running at a 100% so we see that balance continuing to be really important going forward.
But.
Doug firm believer that once we start getting into these situations, where you do have face to face as a more of a predominant interaction that that's going to be super helpful. Helpful for us to continue to grow the brand.
David This is Bob the more important aspect is really the patients getting to the doctors' offices.
We can do we can effectively detail the positions, whether it's a virtual platform or in person, obviously, we prefer to be in person, but the most important aspect is really the patient flow back into the doctor's offices and that is still not where it was before the pandemic. If you talk to any physician who is out there and I know.
I don't think it matters what practice they have or what indications are working on will tell you that.
Probably there their practices are down 25% to 50% because of the pandemic and so we're still seeing that we have about half the patients coming in that were coming into for the pandemic and so we're looking for a significant uplift when the pandemic starts to drop anything like you said in that.
Other people authorities, we've been very successful in growing nicely during the pandemic, but I think we would have had much more aggressive growth had it not been for the patients kind of slowing down into the office and so that's going to be key for us and we're hoping that with the rollout of the vaccines.
Things will start to come back to normal, but again, if it doesn't what I mentioned in my overview is that our devices. Our technology is really geared for this potential shift where the patients wanted to stay well do more remote.
Telemedicine and things like that will be I think our platform really will be ready for that and we will benefit from that but overall, we still want to see more patients coming back to the offices, but we're doing I think the team's done a great job with the detail thus far.
If you want to give.
Sure.
On the reimbursement for good morning, David when it comes to reimbursement I think we're probably I think we're probably looking at about a 50% gross to net deduction and the reason I say that is it's going to be consistent where we saw the end of 2020 and up.
Rebates, if youre, keeping constant or if youre, keeping your your coverage constant or increasing it. They only go in one direction. So that's always a pressure on on the gross to net deduction and then the other pieces. We plan to continue the same co pay level of support and for programs that we've had in the past. So I think when you take a look at that.
We're at 50% would be a reasonable assumption there.
And then on the.
Last question, Dave Tucker.
Doug a question for us to answer which is you know how how big do we think that product is going to be first of all we don't give really guidance on on product per product basis.
And it's a launch it's a relaunch of a product that we believe fits really well in our bag.
Urologists are obviously the key writers for people who have <unk>.
Nighttime urination issues.
But you'll also see some endocrinologists, possibly writing is because.
People with diabetes, who also have low testosterone will also have.
North Korea or due to nocturnal polyol.
So we're really starting to just see what type of opportunity lays in front of us with nocturnal.
We don't want to set any any expectations at this point until we really get to understand how the message is resonating.
Utilizations are going to happen in the patient.
What patients are going to be the best for it and more importantly, getting back to the original thing I had mentioned just a few minutes ago seeing patients come back on a more regular basis for <unk>.
Is it their doctors had talked about these type of issues and so overall, we think it's going to be meaningful product. We think the team's gonna do extremely well with it and a low.
Literally just launched a week or so ago in earnest after our national sales meeting, so with new materials with new messaging.
Really actually targeting not only our EPS.
They writers, but also now people doctors, who are right we're not career yes.
Is the first time on really going on outside of our as I said call quality is so low it will really start to see hopefully up uplift on that end and.
And we will be able to provide more color on it as the quarters go by.
Alright. Thanks.
Thank you and we'll take our next question from Elliot Wilbur from Raymond James. Please go ahead.
Good morning, Thanks, just following up on that line of commentary.
Question on specifically for for Pat.
What's happening sort of behind the scenes with respect to reinvigorating Dr. Donna.
Just wondering if there's any success metrics that you could point us to in terms of <unk>.
Trying to monitor the level of activity there before we start to see an upturn in our axis and should we be thinking about samples and the like.
Potentially negatively impacting Rx uptake as you are.
Launched the product basically just trying to get a sense of when it's reasonable to start to expect.
More pronounced turn an Rx trends.
Yeah.
Yeah. Thanks Elliot.
With the with the virtual National sales meeting last week and the whole new set of materials that the team has been including this enhanced targeting.
It's going to take a couple of cycles for people to get through that new material.
And then start to generate some some meaningful lift right. So everybody talks that it's going to take somewhere between $4 56 types of contacts before you start to see.
You see an impact and so we think that that can be accelerated a bit because we do have some foundation already set.
But but but we're certainly looking at that type of timeframe in terms of actual number of details before you can start to see a meaningful a meaningful rise as far as samples listen we're looking at that very carefully. We think we've allocated the right number of samples to our folks and have giving guidelines in.
A sample allocation and sample drops in order not to interfere with within Rx uptake and so we'll keep a close eye on that as well.
Okay. Okay. Thanks, and just a follow up question on <unk> trends, obviously a key.
He has to maintain momentum of the asset.
Still looking at relatively strong overall rx growth in the tier two market. Despite the pandemic effects, but clearly as I think Bob you suggested the.
The impact of a.
Lack of patient flow lack of new starch on.
Products, and including TRT therapies is becoming more noticeable so outside of <unk>.
That's all hoping for things coming back to normal and it.
A reacceleration in patient visits to offices, one of the things that seems to be a little bit more on your control is trying to drive additional switch volume from existing injectable therapy. So I am wondering if there is any.
Alterations for the game plan in terms of your Friday, a little bit more aggressive with respect to capitalizing on switch opportunities given the uncertainty in terms of on new patient starts.
Yes, Elliot great observation the answer to that is yes, a big part of.
Our recent national meeting and.
Let's say revised promotional campaign, but just for dialing up on.
Messaging platform.
The features of our brand that we think will will stimulate a switch and all the attributes that Bob had alluded to earlier the.
But once a week.
Dosing the ability to get the drug and administered at home.
Certainly our efficacy and what we bring to the table from a just from a general overall efficacy perspective adds to that story as well, but we've we've repositioned some of those attributes within the selling platform for our sales team in.
And have.
Asked them to go out and obviously prioritize those messages too.
The core group as I've said prescribers that we currently have part of our strategy is to look at those physicians and understand that they have a baseline right now of <unk> prescribing, we believe with this enhanced messaging and a high frequency strategy, whether it's in person or virtual that's going to help drive deeper per.
<unk> within that target group.
Okay. Thanks, and just a quick financial question for Fred with respect to gross margin performance in for Q.
Number one I guess sort of towards the lower end of the range of recent.
Performance, even though you had I think on.
Relatively high contribution from product sales a lot of moving parts make up that number but just any.
Any.
Thoughts there with respect to trends in the quarter and anything that we should be thinking about for 2021 that might be slightly different from 2020. Thank you.
I appreciate that and I think there are a lot of trends we saw exiting the fourth quarter, probably will continue into the 2021 and I say that because we we mentioned about how strong.
Epipen sales were in 2020, and we continue to expect that that's going to be a driver for us in 2021, but the more important driver really is going to be the disaster growth with epipen already at about 50% on the market give or take a couple of percentage points, we will see some incremental growth there and that is a lower.
Margin product than our proprietary products, but where we are expecting to see the larger growth would be in <unk> and that's really.
Look at margins going forward again, its going to be the proprietary products that's going to be.
Reading the process, but <unk> also has a very good margin as the otrexup. So that should be some improvements we should see over time in 2021.
What's going on.
And also for the one other point.
As important news with royalties from our partnered product, especially with the epipen since the overall market was down in 2020, and we're hoping there's a rebound in math for 2021.
With.
That is epipen, having a larger market share entering into the year. If the market is higher overall may keep that market share the royalties will certainly drop to the bottom line. So we should see improvement there.
Okay.
Well now take our next question from Gregg Gilbert from Deutsche Securities. Please go ahead.
Thanks, Good morning, I have a few.
Bob you mentioned earlier about patients, preferring therapies that can take at home during the pandemic is that a key metric you're considering when you're considering new business development deals or was that really to comment more specific to your own portfolio as it exists now.
Well I mean, I think it's clearly.
For our our own internal portfolio is one of the key attributes you know all of our products that we're developing internally are combination products.
For the ease of use at home administration is a key attribute besides the efficacy or the safety or wherever else, we're providing inc.
For the PK or whatnot, but.
But when you look at the partner products to they do they are focused on the same type of attributes whether it is a rescue pen or it's a.
Any other products like that.
Like like Teva are doing theyre going to be at home products and so I think we will I think our total portfolio benefits from that potential shift in and how patients approach their own care on a go forward basis.
So.
I think it's something that we will we will talk about more especially with our commercial team.
As far as as far as emphasizing it and I think we also talk about that with our with our partners and so they recognize the value of it.
I think it'll benefit us across the whole the whole company.
Great and net.
Testosterone market. It seems like the recent launch of the oral product is not affecting you up for you both can coexist and gain share from other dosage forms is that how you see.
On that marketplace in terms of the newer agents being smaller companies.
Different dosage forms sort of both with the ability to.
Eat into a large installed base of older dosage forms.
Yeah, Greg So far obviously there is one oral.
Testosterone product on the market and Hasnt done that well to this point.
But you know I don't know if it's the pandemic effects that you know if it's the sales organization or whatnot, but with overall there. It's a very large market and so there's an enormous amount of opportunity.
For for really any product that comes into the market as long as it is.
Patient friendly get your testosterone levels are maintained and so what we view it as is the oral potentially you would.
Have a patient population that.
Once in on.
Oral tablet as opposed to an injection may sacrifice, a daily dosing or from products that are on the market right now are twice a day oral products.
Versus an injectable and there's going to be a large percentage of patients that you know as we know 70% on the market are injectables and so we're focusing pretty heavily on those to switch them over to a much better injection. So overall there is plenty of market for.
On oral therapy as well as for for as I said I still believe we're the best product on the market relative PK and ease of use and once a week injection versus daily.
Daily tablets, but there's there's all different patients in this market. It's a large market. So these products going on potentially appeal to a different patient and there's plenty of room. So you know it's not a concern of ours, we keep an eye on it but we're focused on growing.
Our designers and writers on our <unk> business, and it's kind of independent of the oral products out there.
Great and lastly, sort of a business model evolution question should we be expecting any more external technology partnerships from you or should we assume that you are pretty much focused on turning your technology inward as evidenced by those <unk> you plan to file on proprietary products. Thank you.
Sure well I mean, so the good news is that we do have a robust internal pipeline with our 19 on 119 on soon so we're.
We're heavily focused on those because we think there are there are next desires stats you know over the next couple of years.
19, <unk>, two which is the endocrinology rescue pen and we believe that's a pretty accelerated development program were going on.
We're going to start the clinical study this year file in 2022 and potentially in 'twenty three approval. So in the world of pharmaceutical that's pretty darn quick.
And then a 19 O on the urology pen, which is not a rescue pen for more of a you know like as I say, a once weekly injection for patients.
Euro Unco space I think it will be a vast improvement a little bit longer a little bit more complicated program, but more still 24 filing. So it's not really that far away. So there are key for us to continue to develop our internal pipeline, but we will always be looking to use our our core.
Form our technology, you know our auto injectors in pen injectors for our alliance business, it's a great business for us.
It's a.
And one that brings us tremendous amount of upside with a very low risk.
That's been proven with Abbvie, we believe that'll happen with for Teo and with our for Azure programs on others and so we still have a very active alliance.
Business that we're trying to continue to develop and we believe that will also bolster our.
Our product pipeline, our development pipeline, we view, both our internal and external pipeline as one pipeline for us and so we will continue to focus on both.
Thanks, a lot.
Well now take our next question from Mats compliance from Lindenberg Thalmann. Please go ahead.
Hi, This is Raymond Inc. For Matt Congrats on the great quarter, just I guess two quick questions on how the pandemic.
Impact on 'twenty one.
Sales trends I was wondering if you would kind of sell from early evidence that the vaccination campaign.
Sales rebound in certain areas and perhaps that might lead to a bolus of new patients.
Surprise to the upside.
Okay.
Yes.
So Pat on we're.
We're just looking at each other as to who's taking the question.
I would say that at this point the vaccinations have not had an impact on the business, meaning like mix coming back I think people are still very cautious as to how they go about.
Their life right now and I think I only.
I'm not even sure what are we around 10% of the population vaccinated, it's not a very big number at this point hopefully the acceleration happens and then we will start to see.
Coming back to normal and then I think we will see a potential uptick in.
And as I said, but obviously, we're still continuing to see as I said grow throughout this whole period. So we're really happy about that but as far as like a surge.
In potential.
Operations and scripts, we feel I think we're looking to see that as more and more vaccines are rolled out to maybe 50% or more on the population. So overall, we haven't seen anything lately and in fact.
In Q4, we saw go the wrong way, we saw the spikes really impact some of our larger territories.
Where you saw spikes in Texas and you saw spikes in New York, and New Jersey, which are some of our best territories.
They are starting to normalize.
So youre seeing patients flow come back in but it's still not pre pandemic for sure.
So overall, we feel good about the business.
The next couple of quarters, we expect it to grow.
Okay cool thanks for additional color and I guess for the epipen, thanks for providing color on the vaccination.
Trends stockpiling from pharmacy, but I was wondering if the school reopening dynamics.
I also play a role in 2021.
Essentially for the 10 to 12 reps.
Yeah, we hope so.
Last year, we saw about a 20% decrease in the markets.
On the back to school and.
We expect that with them currently pushing to go back to school, even today with the pandemic still going on with it.
I think.
<unk> second graders are or eight graders or whatever depending on the state you're in <unk>.
We expect that in the third quarter of this year that there's going to be clearly a much better back to school impact.
Then we saw all last year, whether that's 100%.
Unlikely, but we don't know.
I don't know exactly what's going to happen six months from now, but we do anticipate that market returning.
To some degree and so we expect to see.
Growth from that general market coming back as well as these for <unk>.
Cautionary happy pads that are being sold on the.
First couple of months of this year because of the vaccination programs.
We think it is more as there's more and more mega sites. They tend to need more devices then.
There's a lot of the injections windup going to Cvs and Walgreens over time, they have at depends in their stock and so youre not going to see a huge influx of demand when they start to rollout for the pharmacies, but I think it's with all the the Mega centers and these other offsite locations they absolutely have to buy it.
And so that's been positively impacting January and into February.
Thanks, Thanks for the added color.
Hello.
For the questions in the queue.
Well, we thank you for your questions and your participation in today's conference call. Thank you very much. If you have any questions you can always reach out for Ya Tchambuli, our head of Investor Relations.
Thank you for this concludes today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.