Q4 2020 Nabriva Therapeutics PLC Earnings Call
[music].
Yeah.
Ladies and gentlemen, this firstly operating.
Today's conference is scheduled for the game momentarily until that time your lines will again be placed on hold.
Thank you for your patience.
Again, ladies and gentlemen, this is the operator did they use conference is scheduled to begin momentarily until that time your lines will again be placed on hold.
Thank you for your patience.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the W. You bought therapeutics fourth quarter plenty plenty of financial results call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
To ask a question during the session you will need to press star one on Hey, Charlie its Dan.
So that's why and you said your assistance Please press star zero.
Yeah.
I'd now like to hand, the conference over to the Speaker today, Mr. Gary Sender Chief Financial Officer, the floor is yours.
Thank you and good afternoon, everyone welcome to <unk> conference call and webcast to discuss the fourth quarter and full year 2020 earnings and business update before we begin I would like to remind everyone that this conference call and webcast will contain forward looking statements about the company the.
They are subject to the risks and uncertainties that could cause actual results to differ.
Please note that these forward looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events factors that could cause actual results or outcomes to differ materially from those ex.
Breast in or implied by such forward looking statements.
Are discussed in greater detail in our most recent filings on form 10-K, and our other periodic reports on forms 10-Q, and 8-K filed with the SEC.
Moving to slide three I'd like to share the agenda for today.
Ted Schroeder debris of a CEO, who will start with a review of key business items in 2020.
He will provide an overview of our 2021 priorities and will take you through a thorough commercial update.
Jennifer Schranz, our Chief Medical Officer will then discuss an exciting new development project as we explore the potential use of Zen later in patients with respiratory infections due to cystic fibrosis.
I will provide a financial review and Ted will wrap up the discussion and lead the Q&A session.
In addition to Chad, Jennifer and me joining us on joining us on the call for the Q&A session is Steve July on our President and Chief operating officer. The slides for today's presentation can be found on our website under the investors section I would now like to turn the call over to our Chief Executive Officer, Ted Schroeder.
Thank you Gary and thanks to everyone joining our call. This afternoon, starting with the review of 'twenty 'twenty. There is no doubt the COVID-19 made for a challenging year for the world the pharmaceutical industry and for debris. The I'm. So incredibly proud of the perseverance and dedication demonstrated.
Bye, everyone on and the breathe of team.
For 2020.
Pardon the breathe of 'twenty 'twenty represented a year of making great strides in shifting our focus to serve patients in the community and building positive momentum heading into 2021.
One of our major achievements last year was obtaining the U S rights from Merck.
<unk> and distributes of extra for patients with acute bacterial skin and skin structure infections also known as ABSSI.
Gaining the rights to Savak strout provided of complementary product alongside of our first marketed drugs and letter which was approved by the FDA in August 2019 for the treatment of adults with community acquired bacterial pneumonia or cap.
It's a testament to merck's confidence in our ability to market innovative antibiotics, we remain keenly focused on business development opportunities as we move forward.
At the same time of the extra transaction, the breather announced the partnership with ample of T health, a leading contract sales organization.
Through ample of tea. We are now pleased to have 60 sales representatives deployed reaching almost 8000 community health care providers. This effort coupled with the continued excellent managed care coverage for Zen letter has positioned us well towards our commercialization goals to expand the awareness and <unk>.
The scriptures growth for both products in the community setting.
Approximately 92% of total commercial lives have access to Zen letter was most of the coverage still being unrestricted without the requirements for prior authorization or a step at it.
Internationally in 2020, then let of secured regulatory approvals in Europe, and Canada, and the phase III trial completed enrollment in China.
Our regulatory filing in China is expected by the second half of 2021 by sign of that our local partner.
And as Gary will comment on later in the presentation in 2020, we removed the risk by paying down debt and recently strengthened our balance sheet with an extended cash runway that now gets us into the fourth quarter of 2021.
With that as an overview of how we executed in 2020, let me discuss our key objectives for 2021 on slide six first.
First and foremost is to build upon the commercial infrastructure, we implemented last year to broaden the prescription uptake for both send letter and the vac stroke.
Please keep in mind that three quarters of our current field force started after Thanksgiving.
Early trends remain encouraging, especially our ability to get direct sacks of direct access to medical providers.
We also anticipate that the extra will be transitioned to an a breather branded product early in the second quarter and we will begin recording 100% of the next sales on our net sales on our P&L.
More to come on that in Gary's financial section.
An important objective for debris. The this year is to remain opportunistic in finding ways to expand organically and through synergistic business development initiatives. In this regard you will hear from doctors shreds about our plans to initiate an important phase one study present letter impatient.
With cystic fibrosis, or CF, who often take antibiotics chronically.
Our decision was based on Zen letters, the ability to achieve high concentrations in the lung coverage of resistant organisms favorable safety profile and the large unmet medical need.
We anticipate having meaningful data readouts to share with you beginning later this year.
Additionally, we continue the focus on business development for zone, let it in Europe and other territories as we look to find partners to market the drug outside of the U S with.
With regards the CONTEMPO at our new drug application Resubmission. The FDA still has not determined how we'll conduct international manufacturing inspections during the COVID-19 pandemic. This.
This has negatively impacted many FDA product reviews.
It's important to know that we on our manufacturing partners have been in active dialogue with the FDA to ensure that all parties are prepared for a resubmission.
As a result next steps and specific timing of the can tipo NDA resubmission cannot be finalized until the agency issues industry guidance.
We in the industry of wait future communication from the FDA on the matter and how the agency plans to address foreign facility inspections.
Recall that no new non clinical or clinical data were requested in the FDA did not raise any other concerns with respect to the safety or efficacy of CONTEMPO.
Please keep in mind that our eight year of market exclusivity does not begin until tipo is approved by the FDA.
We will provide an update once we have greater clarity.
We know that you our investors are eager to hear about the path forward and so our way.
And lastly, we will pursue our 2021 objectives, while prudently managing our balance sheet and expenses and as we have historically done.
Now turning to slide eight let me walk you through our commercial progress and outlook.
You've seen the slide before but let me use it to reinforce the complimentary overlap in our targeted calling markets I think it's important to reiterate the shared physician specialties and focus for some extra on ABSSI and force then letter in cap strategically there are considerable.
Similarities in the prescriber base, particularly within primary care urgent care and infectious disease.
The market is large with these two products, having a combined total in excess of 5 million potential patients in the outpatient setting.
On slide nine we show the updated sales territories was 60 empathy representatives now on the field.
45 of them being added after Thanksgiving of last year.
We believe that the footprint of the 60 salespeople will effectively cover our target of 7800 physicians across the country. We.
We believe our current alignment gives us the ability to reach approximately 61 per cent of the historical so vexed of prescribers and roughly 57% other potential Zen let of prescribers.
That gives you some perspective on the health care provider side. So let me shift and talk now about what we are currently seen in the market and how we are systematically approaching our brand awareness and medical education campaign, given the COVID-19 dynamics.
What we have seen in the market as meat is a meaningful fall off in non COVID-19 related respiratory elements versus the versus the prior year's level.
Looking at total prescriptions for oral Levofloxacin, a commonly used quinolone antibiotic to treat bacterial infections as the benchmark the graph shows the steep 50% drop in total prescriptions year over year.
But it's still a big opportunity and we hope to participate even more as trends returned to normal while the market is challenging we are getting meaningful interactions with health care providers.
Starting with slide 11, I am pleased to share. The 33000 total sales calls have occurred since October over 6000 in family Medicine alone other.
Other top medical specialties include podiatry, dermatology and infectious disease and internal medicine.
Based on our efforts to date, we have reached approximately 96 per cent of the top two deaths sales of potential extra prescribers and 98% of potential top decile and let of prescribers truly a demonstration of our execution and ability to be able.
To reach our target physician audience.
The next slide shows that the majority of the primary care engagements approximately 56% had been in person, which is the third higher than the industry average overall, we are seeing some reassuring signs with improvements in access for certain regions or feedback from the sale.
<unk> force shows an increase in physician offices, allowing sales professionals to conduct educational lunches fulfill sample requests and deliver clinical messages admittedly. We are still in the early days as it takes multiple visits with physicians to educate them on a new drug, especially.
Given the fact that there has been a dearth of new antibiotics. However, what we are seeing is directionally positive and we remain hopeful that our access for face to face interactions will improve.
We are proceeding cautiously given the dynamics of the COVID-19 environment, but given our current confidence we were rolling out enhanced marketing materials and medical education programs in the weeks and months ahead as we aim to expand and lead as brand recognition recognition in order to drive new.
Prescription growth.
Some examples of these new initiatives for us in letter can be seen on the next slide.
Our goal is to optimize resources by focusing on enhanced marketing resources for Zen letter, which include both rep, driven and non personal promotion materials.
Few highlights include virtual education seminars delivered by leading specialist in the Pulmonology pulmonary community as well as outpatient focused promotional pieces, highlighting Zen letters inclusion and up to date recommendations for community acquired pneumonia outpatient treatment.
Additionally, we are focused on of new creative campaign expanded HCP education, and additional rep directed resources.
In parallel the managed market team continues to secure excellent managed care coverage for Zen later this can be seen on slide 14.
Over 248 million lives have coverage with send letter and we expect to further expand formulary coverage in <unk> and 2021.
Unrestricted access has edged over 78% versus 74% in the prior quarter major plans of being at it as we conveyed last quarter Humana, which is nearly 1 million lives came on board as of January January 1st 2021 also.
So with unrestricted coverage in summary, before I hand, the call over to Jennifer It is important to note that physicians historic knowledge of and experience with <unk> has initially hope opened the door for discussing zone letter.
With 60 field personnel now fully trained and deployed we would expect to see the pull through of prescriptions to increase as we move through the year and as Gary will explain in more detail. We are excited to be able to sell some of extra in the coming months under the breathe of label.
Now, let me have Jennifer talk more about why we are exploring the use of Zen letter and cystic fibrosis Jennifer.
Thank you Ted.
I'm excited to provide an update on our lifecycle management activities clicked on letter.
On the great deal of effort at the rightfully focused on diagnostics vaccines and therapeutics for the COVID-19 pandemic innovation directed at the silent epidemic and then the microbial resistance continues to fail to meet the growing unmet medical need.
Since its founding in 2006, they breathe of had been driven to develop new agents to address anti microbial resistance.
Letter the Sky bet in the lab, but in the breed that represent the first antibiotic, but they truly novel mechanism of action of proved in the U S and Europe and over 20 years.
To fully leverage the mother of unique characteristics. Our team is actively advancing projects focused on important unmet medical need and then let them they have the potential to address.
Turning to slide 16.
I would like to discuss the first of these projects focused on the treatment of bacterial exacerbations in patients with cystic fibrosis.
I think they both because it's the rare multi system disease the knee.
The cause of morbidity and mortality in patients with C F pulmonary.
Pulmonary complications due the vicious cycle of Bally obstruction inflammation and infection. The ultimately leads to end stage lung disease.
The process results of mutations in the C. S. T. R gene that leads to impaired iron transport of cross sells and various Oregon.
As shown on slide 17.
And abnormal the S. T. R of protein leads to an imbalance of iron regulation depleting water decreasing P H and increasing Nathan polymer cross links and the airway.
As a result, mucus becomes dehydrated thick and sticky and cannot be efficiently cleared, but the mucociliary system.
EBIT spelled that leads to the obstruction chronic information and bronchiectasis, creating an environment right for the bacteria to multiply or they take the house the fences and ultimately caused the acute and chronic bacterial infection.
Turning to slide 18.
Data from the cystic fibrosis Foundation research registry demonstrate that Staphylococcus aureus is the most prevalent organism isolated from the respiratory tract of CF patient with.
With 70% heading staph aureus, and up to 26% with persistent methicillin resistant staphylococcus aureus or MRSA colonization.
Importantly, the presence of staff pulmonary infection is associated with worse patient outcome such.
It is airway obstruction and increased hospitalization and notably the presence of MRSA. That's been associated with the median survival time that is 6.2 years shorter compared to CF patients without most of them.
Additionally, concerning our trends of increasing MRSA colonization and infection rates in older patients as well.
All of the co infection with Pseudomonas aeruginosa.
Unfortunately, there are no approved treatments for the potentially modifiable risk factor for mortality.
As shown on slide 19.
Data from a national Cross sectional survey of cystic fibrosis Foundation of accredited program evaluating the utilization of antibiotics, the chronic MRSA infections in CF patients, who have acute pulmonary exacerbation demonstrated there's a high variability in the antibiotics and dosages prescribed with.
Sulfamethoxazole trimethoprim, the nasal Ed and doxycycline being the most commonly prescribed agent and.
In adults in the outpatient setting importantly, the authors concluded there was no consensus of the best treatment approach for these patients.
Turning to slide 20, it is important to note that the most commonly prescribed treatments are limited by high rates of resistance as well as safety and tolerability issues, including the opinion of thrombocytopenia.
And peripheral of the optic neuropathy or renal toxicity, which may limit patient adherence to therapy.
Slide 21 summarizes the meadows unique properties of line to potentially address the unmet medical need in patients with cystic fibrosis, you'll have the staphylococcal pulmonary infections and.
Importantly, the amount of is approved for the treatment of community acquired bacterial pneumonia in the U S. Europe U K and Canada, they're susceptible organisms, including Staphylococcus aureus based on clinical response rates demonstrated in two phase III clinical trials.
In addition, as outlined on slide 22, the let it isn't known potent anti staphylococcal antibiotics and that the activity is unaffected by the presence of biofilm.
Lastly, the letter possesses a low mutation frequency against staph aureus, which is critical given the chronic nature of many of these infections in CF patients.
Crucial for the treatment of lung infection.
The one on slide 23 the law.
<unk> had excellent penetration into the epithelium lining fluid and macrophages in the lawn and has anti inflammatory properties that may disrupt the vicious cycle of the obstruction and inflammation they create an environment conducive for chronic bacterial infection.
Advancing to slide 24, I've summarized the amount of characteristics that I just shared with you.
Our team is actively advancing several studies to evaluate the potential of the meta in patients with cystic fibrosis.
We received extremely supportive feedback from our global scientific Advisory Board of C. S. Clinician scientists for the development of the letter for the treatment of staphylococcal pulmonary exacerbations.
Based on advisor input the breeder has mapped out a targeted development program beginning with the phase one safety and PK study in cystic fibrosis patients expected to initiate enrollment in third quarter 'twenty one.
Additional activity to be conducted in 2020 one it's the port clinician decision, making include assessing the potential the drug drug interactions with the Homelink prescribed medications D of patients utilizing the geological based biomarker of kinetic modeling as well as in vitro studies of the letters that.
<unk> and speed of CF patients.
Our team is excited to initiate these studies as soon as possible and for other data readout. Beginning later this year.
In summary, the letter in the proven and potent anti staphylococcal of antibiotics with unique properties that make it well suited as the potential treatment option for pulmonary exacerbations in patients with cystic fibrosis is caused by Staphylococcus aureus.
We are enthusiastic to work with the CF community to assess the amount of potential to address this important unmet medical need.
I will now turn the presentation over to Gary, but the financial review.
Thanks, Jennifer on Slide 26, I've listed some key financial highlights.
On the breathe of generated total revenue of approximately $2.5 million on the fourth quarter and $5 million for the full year 2024.
Fourth quarter revenues were driven by approximately $2 million in collaboration revenues, including our portion of sort of extra sales of.
The revenue consists of just in light of product sales of $47000 and continued grant income from the Austrian government.
Full year revenues include $2.8 million in collaboration revenue, including our portion of sort of extra sales commencing in the last week of September as well as milestone payments from our partners in China and Canada.
Also included in full year revenues was 108000 of Zen light of product sales and $2.2 million on research premiums in grant income from the Austrian government.
In 2020 in particular, we actively managed our expenses to optimize resources, we always wanted to ensure that our investments in commercial activities achieve our expected returns.
Our operating expenses increased by $6 2 million on the fourth quarter compared to the third quarter of 2020, primarily due to SG&A expenses, resulting from the relaunch efforts in the community with the expansion of the 60 sales reps in late November.
Additionally, in the fourth quarter, we recorded a noncash reserve for a minimum contract obligation associated with our contract manufacturing partners.
We expect that our commercial investments will increase in 2020, one as we fully realize the full year impact of 60 reps and the potential for a modest expansion as we monitor the macro environment and access to physicians.
We ended the fourth quarter with cash of $41 6 million, an increase of point of 2 million from the third quarter driven by proceeds from our December financing cash flows from collaboration and grants offset by our fourth quarter investments.
In March 2021 we completed a registered direct offering to bring on an additional $23 4 million of net proceeds into the company.
Together with the ATM proceeds received in 2021, we expect that our current cash balances will fund operations into the fourth quarter of 2021.
Let's now look of the details of our P&L on balance sheet. Please advance to slide 27.
Slide 27 provides details of our P&L and I ask that you look at the notes on the right side.
Our full year 'twenty 'twenty revenues of 5 million were driven primarily by collaboration revenue in government grants and.
Collaboration revenue included contribution from sort of extra sales in the fourth quarter on the last few days of September.
In light of product sales were impacted by us not investing in commercial efforts from April until the end of September and by the and by the second quarter write down of IV inventory, resulting in full year sales of $408000.
This was clearly below our expectations coming into the year and as I said, we optimize and preserved resources as we and everyone tried to manage the uncertainties of the pandemic.
R&D expense was significantly lower year over year due to an ink due to a decrease in development activities.
SG&A expense was lower compared to 2019 due to the termination of our sales force in April 2020, and a significant reduction in commercial efforts until the community relaunch of Zen later and so the extra in late September 2020.
We continue to allocate our resources in a thoughtful manner and make investments where the expected return is justified.
Interest expense was significantly lower given the reduction on our debt balances.
Please turn to slide 28, which has our December 31 balance sheet.
We previously discussed our cash balances inventory has increased primarily as a result of supply purchases in accordance with our contractual obligations.
The prepaid expenses increased due to the payments made to our contract manufacturing partners for news and letter of inventory.
Year over year debt balances are significantly lower due to the paydown of debt, which occurred in the first quarter of 2020.
Please advance to slide 29.
Focusing on sort of extra revenues for a moment I'd like to provide more color around the transaction specifically as it pertains to revenue recognition.
We currently receive of percentage of Merck's gross sales and we record those sales under collaboration revenue in our financial statements.
Once net breathe of begin selling sort of extra underwrite zone N D. C code and meets the requirements for distribution, we will record 100% of net sales on their product revenue.
One could expect a reported <unk> of extra sales to increase by a mid to high single digit multiple as we go from what in effect is like an earned royalties on <unk> sales to 100% consolidation of net sales.
And the overall economics are better for them to breathe and our gross profit firms of extra will meaningfully contribute to our marketing and selling investments.
For the next part of the call Ted will make some closing remarks, and then we will head into a Q&A session Ted.
Thanks, Gary.
In conclusion on slide 31, I want to focus on our priorities for 2021 last year based on market dynamics and our excellent managed care coverage, we adapted our commercialization strategy and pivoted to the community as.
As we look at what we have accomplished in 2020 and where we're headed this year. We absolutely believe this was the right decision. We believe that the best serves the needs of patients that require short course novel anti infective therapies for both cap NFC the.
The addition of Savak stroh of well known antibiotic has certainly facilitated greater access to providers, leading to meaningful discussions about send letters benefits.
Based on its promotional responsiveness and brand recognition, we anticipate seeing the return of historical peak sales trends for some of extra <unk> by mid 2022.
We recently announced the publication of the study documenting the high rates of Macrolide resistant Streptococcus pneumoniae throughout the United States. As a reminder, streptococcus pneumoniae is the leading cause of bacterial pneumonia in the United States. An example of a macrolide as they exist exist.
The ROE Meissen or Z Pak the.
The data showed that while the overall rate of Macrolide resistance was 39, 5%.
More concerning macrolide resistance in respiratory isolates was greater than or equal to 25% in every region of the U S. Macrolide resistance was also shown to be significantly more common and outpatient versus in patients.
And updated 2019 guidelines issued by the infectious diseases Society of America, and the American Thoracic Society. It was stated that macro lives should not be used as monotherapy if resistance rates are above 25% and instead physicians should consider.
The other antibiotics.
We believe that these data further support our medical education around the appropriate use of Zen letter for the treatment of adult patients with cap and our focus goes beyond cap as.
As we discussed we are seeking potential expanded indications for Zen letter in patients with cystic fibrosis.
This could be of $100 million to $150 million per year incremental revenue opportunity, so well worth of focus clinical trial of investment.
And we will continue the look for business development opportunities to license and let it outside of the United States and seek more complementary assets for our U S business.
Work continues on CONTEMPO, and we remain hopeful that the FDA will find ways to approved drugs awaiting foreign manufacturing inspections.
There are headwinds that we and others continue the battle given the ongoing impact of the COVID-19 pandemic for.
For example, the CDC has reported data showing that fewer people are getting sick of this year with the flu. In fact, there has been of 95% drop in flu cases year over year.
Awaiting two of significant dip in antibiotic prescriptions overall.
But the needs of the brave of team has experience flexible and patient focused we demonstrator of nimbleness in 'twenty 'twenty and I am confident that our results will improve.
Before we begin Q&A.
Want to take a moment to personally thank Gerry for his leadership hard work and insights over the past almost five years.
It is important to me and to Gary to have him consult for an extended period of time as he turns his attention to serving on boards I'm on.
On to officially welcome Dan Dolan as the company's incoming CFO day.
<unk> will become the CFO after tomorrow's close of business and I look forward to benefiting from his more than 20 years of experience. Additionally.
Additionally, I also would like to thank Jennifer for her contributions as the breathe as Chief Medical Officer and wish her the very best Gerry and Jennifer helped an important chapters of the breathe as long history, and we are grateful for their efforts throughout this critical period.
I would now like to ask the operator to open up the line for questions.
As a reminder, if you want to ask a question you will need to pass star one on your telephone keypad.
Dan that is star one on your telephone keypad.
You have the first question comes from the line of Ed is from H C. Wainwright. Your line is now open.
Great. Thank you and thank you for taking my questions.
And I appreciate all of the detail here, you've given for the quarter and for the year.
First question is on the.
The expected ramp in sort of extra of now that you have your your full sales force in place and trained them.
Making calls and.
And also importantly.
With.
So of extra also kind of helping complementary with the with the calls.
First question is around the.
Statement that you gave.
On the pathway.
As you move into the second quarter.
Ending this year's run rate for run on run rate excuse me force of extra aligning with the historic peak trends by mid 2022.
I Wonder if you could.
Explain a bit more what you mean by that statement and also.
If you could help us with.
Some sort of.
A quantification of that even if perhaps just a range would be helpful.
Yes sure Ed. Thanks. Thanks for the question I think of I'm going to let Gary talk about the financial pieces of the one thing I would say in response is kind of what what will drive of the.
On the business for the rest of the year of <unk>.
One thing that is true about <unk> is there is a.
Some seasonality associated with skin and skin structure infections.
Just fly in the not quite as severe as antibiotics for respiratory infections, but overall.
Prescriptions across all kinds of infections have been depressed because of the of the of the pandemic and so we do expect as we see things open up more people are out and about doing things and we move into the warmer months, we do expect to see a rise in the overall market and that will benefits of <unk>.
Xtra.
And then a return to the kind of prescription trends, we were seeing from Merck prior to them pulling promotion personal promotion of the product and so it will take some time for us the rebuild those.
Our relationships and.
Get samples remind people of the product, but there's a built in base of prescribers that we are targeting to get them Reenergized Gary I don't know if you wanted to talk about kind of the the the financial impacts of that.
Yeah. So if you use kind of IMS data in 2019 and kind of dollar is it you'd roughly you'd see that roughly the sales were about $60 million on a gross basis. So while we hope is that through the very focused effort.
We've talked about maybe some lessening of the COVID-19 headwinds that by the middle of next year, we could get back to you know back to levels like that.
And again right now we are recording base.
Basically a which in effect of royalty on merck's growth sales, but once we flip the having the breathe of zone brand of which we expect in the early in the second quarter, we will start to record of 100% of the net sales on our product revenue line and so that one should expect to see a pretty big increase there.
Because of the Gambro and the fact, we're getting a royalty today and we will eventually be booking 100% of net sales.
Right right Okay.
And then just from a big picture perspective, as we think about the.
The cadence of.
Sales from both products through.
Through the year is it.
Hum.
Trying to confirm that my sense about this is correct but.
Through the year I would imagine the.
The letter, it's still going to be the overwhelming.
Majority of revenues you would expect for this year.
Yeah, Gary you want to you want to talk about the.
Yeah, I mean, Ed we don't give specific products for cats, but I think.
Certainly then let us in a very early stage of its product lifecycle right I mean <unk> already launched.
The Hill.
Yeah and that right. So in light yet one should expect that sort of extra.
Would be.
The larger just because it is of more established brand in pet.
Whereas with the satellite out we're still on the early stages of.
Educating community based physicians about its attributes.
Right of course.
And if I may.
One question perhaps for.
Jennifer on your opportunity with C F.
Again appreciate all of the detail around the.
The the thesis here.
But wondering.
Specifically.
You begin to prosecute this potential and look for confirmation that this could work.
Where do you think.
Is perhaps the areas of risk where it could fail and in particular I'm wondering.
Realize that of course and cap ex in the letter has excellent penetration in the lung.
But CFS you mentioned is a whole different story, it's very heavy thick mucus and it's been a problem for other drugs and penetration as well on so I'm wondering if that's one of the areas that you're especially keen on understanding.
Are there any thoughts there would be helpful.
Yeah for sure. Thank you know what the good question and certainly on.
The track record for the treatment of especially for some of the Ers life treatment Kevin on board.
Unfortunately, you have had some sales phase III studies on I think what we saw the fact, we are extremely good at kidney both GAAP and MRSA. In fact, we do have breakpoints for MRSA awarded by the feel of Si.
I think your point being it's important to get the speed of from cystic fibrosis patients.
Because there are some differences in the type of staff that grow over time in this environment as you mentioned the.
The thick mucus the biofilm the anaerobic environment. So we'll be looking at the in vitro activity of with amylin on the.
Feed out of contemporary.
My breath of patients to look at activity and compare it to non CF patients. We also are interested in looking at on the PK perspective, when we do our phase one study we're going to be looking at.
At concentrations of Los Angeles, and urine, obviously at the metabolite, but also specifically in the.
Peter until we're getting ready to to look at that is a bit of it.
GAAP surrogate.
Also have done a lot of work in the earlier program for the letter and did the very high penetration into tissues.
One of the key attributes of Los Angeles, and then it goes to the tissue.
That would be the glandular tissue.
Around in the area, where you might be concerned of the.
The bacteria on kind of heading in the same share a spot on.
So I think the the phase one study one form of dosing and patients and Tolerability I think the non clinical work will help us with the in vitro activity on the.
Also we're looking at doing in animal model in Seattle to also look at left on the one to look at property of probability of target attainment as well. So I think the totality of data that we'll be able to get from on the inside both of the non clinical on clinical program and from what we understand from our global adviser that is sufficient information to them two and four.
Norm.
<unk> share of development and at that point, then we would make some decisions whether additional studies would be needed.
Yes, the kind of put put that into perspective.
On the good news here I think is that we can get those answers with relatively low spend and understand whether the current <unk>.
Commercial product the oral product actually is appropriate and our scientists in Vienna think think that it is.
On the benefit there from a from a patient standpoint is that the obvious convenience.
Certainly way.
Way better a patient convenience and having to be hospitalized and put them on an IV antibiotics for these of exacerbations.
From a from our perspective it takes a five day prescription for community acquired pneumonia and turns it into a 30 day prescription and that patient at today's pricing would be worth about $8000 and it wouldn't be unusual to see that same patient have two or three exacerbations per year, which would <unk>.
Put us squarely in a kind of of rare disease model for incremental business above above cap. So it's it's worth the effort. There's a week, it's not all coming out of the the than the breed directly out of the and the breathe of Treasury of the worse. There is some grant funding that supports some of these <unk>.
Activities and that's relatively straightforward to get an answer so we will know whether there's a there's a future program or not for a pretty insignificant spend.
Okay, that's great.
Ted Dr. Franz Thank you so much for the answers very helpful. You bet. Thanks said always appreciate the interest.
He doesn't have any of my questions at this time.
Ladies and gents on them that concludes today's conference call. Thank you for participating you may now all disconnect.
Yeah.
[music].
Yeah.
Yes.
[music].
Okay.
[music].
Yes.
Alright.
Okay.
[music].
Yes.
[music].
Yes.
[music].