Q1 2021 Aerie Pharmaceuticals Inc Earnings Call
Good afternoon. Thank you for standing by and welcome to the Aerie Pharmaceuticals first quarter 2021 earnings conference call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time also.
Today's conference call will be recorded.
And it is now my pleasure to turn the floor over to Aerie used to director of Investor Relations on me Bob Bob Vichy. Please go ahead Ami.
Thank you Jeff Good afternoon, and thank you for joining us with US today are Vince and Ido, Ares, Chairman and Chief Executive Officer, Tom Mitro, and he's President and Chief Operating Officer, Richard B now as Chief Financial Officer, David Hollander S Chief Research and development Officer, and John The rocker and just General Counsel today's call is also being webcast live on our website at investors day.
And a farmer dot com and it will be available for replay as indicated in our press release now for forward looking statements and non-GAAP financial measures on this call we will make certain forward looking statements, including statements forecasts and observations regarding our future financial and operating performance impact.
The impact of the COVID-19, pandemic, including our observations regarding ongoing operating expenses and net revenue per bottle. These statements will include observations and associated with our commercialization of Rhopressa and Rocco again, and the United States, our collaboration and Japan and prospects for a potential collaboration and Europe. They will also include plans and expectations regarding the success timing.
And cost of our clinical trials and Additionally, we will discuss progress regarding maintaining requesting or obtaining approvals from regulatory agencies on our products and product candidates.
Along with our with the associated business strategies regarding new products and product candidates. Finally, we will address 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 read carefully.
Investors should carefully read the risks and uncertainties and 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-Q Tomorrow and addition 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 with that and I'll turn the call over to Vince.
Thanks, Tommy and good afternoon, everybody. Thanks for joining us today and once again have quite a bit of exciting news to discuss and including our first quarter results excellent progress with our recently broadened pipeline and a positive outlook across the global strategy now let me start with the first quarter performance, our glaucoma franchise unit sales into wholesalers, which are the basis of our recorded revenue.
And as amounted to 257000 units for Q1 of 'twenty. One is represented 11% increase over the same quarter of last year of 2020 and solid growth. When you consider this is very solid growth. When you consider the fact that the first quarter of 2020 was the last pre COVID-19 quarter and.
It was a very strong one for us despite the impact of COVID-19, our franchise grew while the glaucoma market prescriptions, United States actually declined 6% and Q1 and Tom will be discussing that further during his presentation.
When comparing Q1 of 21 and to fourth quarter of 2020, our wholesaler volume declined by around 16% with two primary drivers we experienced a lower sequential volumes in Q1 of 2021 as the first quarter is typically the weakest quarter for our glaucoma franchise product is seen with many pharmaceutical products.
Due largely to the patient insurance deductibles and.
The volumes for Q1 at 21 were also affected by inclement weather impacting the central region and the United States, particularly in the month of February where we estimate we lost about two weeks of shipments.
To the extent the impact of COVID-19 20, COVID-19 pandemic on the pharmaceutical industry is improving we would expect our volumes to increase for the remainder of 'twenty one.
As Tom will discuss in a few minutes our recent volumes in terms of sales out to pharmacies and the acuity of prescriptions are now trending very positively our first quarter 'twenty. One net revenues of 23 million are up 13% over prior year and down 7% compared to the fourth quarter of 2020 driven by the value of volume.
Points I made a little bit earlier.
And as you've shown on our earnings release, our net revenue per bottle increased to $89 for the first quarter of 'twenty, one and that compares favorably to the 77 and $78 level, we experienced and the mid quarters of last year and it does represent an 11% growth over the $80 per bottle we reported.
And in Q4 of last year.
You'll recall that our fourth quarter earnings call in February we called out our expectation regarding the future stability of our net revenues per bottle, we outlined our strategy to increase that net revenue per bottle over time, including renegotiating wholesaler agreement and refining some of our managed care formulary contracts along with modest price increases.
We've executed on that strategy with the greatest lift.
Two are at revenues per bottle coming from and newly renegotiated wholesaler agreements with these agreements in place we expect our net revenues per bottle and.
And will be sustainable at these levels throughout the year in fact, not all not the entire change and the wholesaler agreement as reflected in the Q1 numbers.
Looking forward, we continue to remain cautious regarding COVID-19 effects on the eye care professionals practice over the next few months and while we are hopeful it. It's obviously very difficult environment to predict and as a result, we will not be providing specific 2021 guidance at this point. However, we do remain comfortable with current consensus analyst.
As Tom goes through his presentation today, I think what you'll see on the shipments out is and it's certainly heading in the right direction and fact, just this week alone. We've already set records in terms of our shipments are four Mondays and Tuesdays and and so it it's not the first time that we've actually hit.
It's a pretty good size number in recent weeks and so.
As Tom will discuss later will talk about the shipments out to wholesalers and it's going to be easy for you to take a look at those and looking at the growth rates, and we're experiencing and and be able and multiply that times roughly $90, a bottle and be able to figure out roughly where your numbers are where they should be.
If you think the impact of the COVID-19 pandemic on and pharmaceutical industries mitigated, we do expect any and increase and is selling G&A and administrative expenses to pre COVID-19 levels, primarily due to an increase in sales and marketing expenses as well as travel expenses. However, we do not expect an increase and spending to have.
And material impact on our net cash used in operations.
We are expecting and are seeing more states open up we are having more face to face meetings and Tom will talk a little bit more about what we're seeing on the commercial side of things.
I've spent the last street, a couple of days here and and our T P and our corporate headquarters fed a chance to visit face to face with.
And the various teams that are headquartered here and and so we are looking forward to seeing more and more states open up and it looks like many of them given some of the statements by their governors are thinking about opening up quite a bit and <unk>.
By summer of this year. So we're excited about the future potential for that and the impact on our positive impact on our revenues.
Now, let me turn the call over to Tom and he will provide further update on the clock U S glaucoma franchise and after that I'll cover the important highlights on the pipeline as well as the global front call.
Thank you Vince.
So just as we reported and our previous calls our glaucoma franchise continued to outperform the glaucoma market and all other branded glaucoma products.
Our first quarter 2020, one franchise prescriptions were up nearly 15% or 20000 prescriptions.
For the first quarter of 2020, while the glaucoma market was down 6% or down 550000 prescriptions for the same period.
I'll remind you the comparisons to Q1 of 2020 on particularly challenging given that was the last quarter that was unaffected by COVID-19.
And looking at the last 12 months ending March of 'twenty, and 'twenty, one and so to be clear that's April of 2020 through March of 2020. One our franchise grew by 135000 prescriptions or 29%, while the glaucoma market declined by 5% or over one.
1 million and 590000 prescriptions when compared to the previous 12 months share franchise continuing to produce significant growth while the market has experienced significant declines from.
It's plenty of reason for optimism.
Our sales out data, which reports bottles of our products that are shipped from wholesalers and pharmacies matched our prescription done our first quarter 2021 sales op units were up 15% compared to the first quarter of 2020.
With bottles and the month of March of 'twenty, and 'twenty, one alone exceeding 101000 and bonds again. This comparison shows a healthy growth rate, even though first quarter 2020 was largely unaffected by COVID-19, while first quarter of 2021 was in fact muted or holds on by COVID-19.
Looking at very recent data our sales in the month.
April we're up nearly 32% compared to April of 2020 another strong sign of recovery.
And there's been several key drivers for our growth and I'll briefly mention three.
First is on a rep activity, meaning our face to face calls with targeted physicians has shown steady increases as COVID-19 has declined.
The vast majority of physicians offices have opened and importantly have been very receptive to our reps are highly encouraging sign for the future. While our call quantity is not yet back to pre COVID-19 days, it's consistently climb and which is another good sign for the future.
And last week, we held our first in person meeting and the last 12 months with our sales management and medical affairs team the.
And the meeting followed two sales training needs, which were also in person.
And each of these meetings our enthusiasm from the team was outstanding and contagious our sales team like the physicians is very eager to return to pre COVID-19 normalcy.
And the sales management meeting, we were able to brainstorm and develop action plans for each of our district sales managers the sharing of plans among our leadership team to strengthen the mall the intensity and depth of our week long discussions was simply not possible.
Two zero.
Our team estimates of approximately 80% to 90% of offices are open at this point and many geographies a percentage is approaching 95%, but on the other hand, there are a few areas that are still hovering around 70% and then she does.
Those areas with a lower percentage of open offices or those that are still being challenged by COVID-19.
We were also able to highlight and discuss the successes we've had and various areas. So the rest of the team can replicate those successes as an example reviewed one area that moved from the bottom third of our districts to the top third by executing specific pull through plans with managed care wins.
Material also benefited from having a higher percentage of offices opening because of dissipating and COVID-19 levels.
A second key driver for growth is that our peer to peer education on meetings and now these programs offer opportunity for physicians to discuss efficacy and safety attributes from our products as well as their individual experiences. We also provided an opportunity to put side effects like hyperemia into perspective, when physicians, who the peers speak about treating large numbers of patients with our products they realized.
And the things like their own hyperemia concerns might in fact.
Be blown out of proportion.
So we see continued opportunity for these efforts.
And it continues to decline.
And our third our managed care coverage for both of our products is very good and making our products easier for physicians to prescribe for the large majority of patients.
Our coverage levels for commercial plans are and approximately 90% from the franchise and our Medicare part D Rhopressa, coverages, and 89% or rocket tenants over 70% when the low income subsidy or elas patients of approximately 50% are included.
And at least coverage levels were driven by our experienced market access team and combination with significant physician activity, which demonstrated the strong desire to have a product called <unk>.
Physician offices have submitted over 185000 prior authorizations for our two products since the launch of Rhopressa and as we said before we continue to refine our rebate agreements and with that there'll be a future changes designed to minimize or repay burden, while optimizing net revenue. So in summary, once again our free.
<unk> prescription volume grew more than any other brand and glaucoma products. We're looking at both the first quarter of this year and the last 12 months and far outperformed.
And the broader glaucoma market.
And our total prescriber count now exceeds 18000, we have nearly 10000 physicians, who prescribe and aerie glaucoma product routine and each month and approximately half those monthly prescribers have been writing on a weekly basis.
The highest prescribers of glaucoma products on the desktop 10, and nine physicians have maintained their prescribing frequency running nearly 30 prescriptions from us are.
Sales force strategy has remained unchanged with aerie sales team, calling on the 10004 hundred highest prescribers of 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 costs on the next 4400 highest prescribers.
We believe this approach represents an effective and efficient way to gain access and market share with as many physicians as possible on the data indicate that on our strategy is working as each sales force and show on market share gains and their respective audiences and fact based on our early success. We are adding more tower sales representatives to inform and targeted physicians are off managed.
Their coverage that's specific to their office.
So finally as pilot.
We've made excellent progress on increasing our net revenue per bottle and the first quarter of 2021, new meaning lower DSA rates were in effect for our three major wholesalers, we implemented a price increase in January of 2021, and as I said, we continue to refine our managed care rebate agreements. So in summary, before I turn the call back over to Vince.
And the capitalizing on the momentum we established prior to COVID-19, our glaucoma products are clearly capturing the imagination and prescriptions of many eye care practitioners and with our current managed care coverage levels, our strategy to move from monthly prescribers to weekly prescribers and our additional share of voice initiatives, along with formulary pull through.
We're seeing the associated benefits.
And that's I'll turn it back to you.
Thanks, Tom.
Regarding our they are research efforts, we continue to make great strides towards not only continuing to explore additional scientific and therapeutic avenues for both rhopressa and Rakuten, but also are spending quite a bit of time building out the pipeline and developing those so that we have sustainable growth over.
Over the last couple of months, we've reported on new publications that have explored Natasha <unk> role and improving the health of steroid damaged trabecular meshwork and animals, coupled with a retrospective look at the decrease and inter ocular pressure and patients with steroid damaged trabecular meshwork and that was simply accomplished by adding rhopressa to a number of.
Products that they were already using and the importance finding here. The important finding here is that it appears that rhopressa as we expected based on all the animal work. We've done is in fact in humans, restoring trabecular meshwork health.
As we prove that out over time, we think that that's going to be a great and incredible finding for the treatment of glaucoma patients and.
In addition, we have quite a few posters at the upcoming ARVO meeting and.
And both new research of our existing products. Some of that is things we've done other things.
Things that folks outside the company have been reported on but in addition to that and we have everything from that too and we're gonna be reporting on a new novel corticosteroid class of drugs that appeared to control one of the major adverse event of steroid therapy, and ophthalmology, which is that they cause spikes and and drug.
And the pressure so our new class of steroids actually is able to control that and this finding may revolutionize the anti inflammatory ophthalmic space and you'll certainly be hearing quite a bit more about that and the near future. Again. This is something that our research scientists here and our T P and been able to put together and a very short period of time.
Now turning to our dry dry eye product candidate <unk> 15, what $5. Two as you know we initiated the phase two b trial named Comet, One and October 2020. The trial is powered as a phase III and is testing two different concentrations of product comparing it to vehicle.
And the important news, we just released a few days ago was that despite the COVID-19 and the severe weather et cetera that trial is now fully enrolled with 369 patients compared to the target of 360 patients and we are seeing a pretty low.
Yeah.
Right of dropouts and and the study as.
As we expected with about 30 million dry eye sufferers and the United States enrollment completed at a pretty healthy pace as background. The active ingredient and a 15 five one and two is a potent and selective agonist of trip and made ion channel cold sensor and osmolarity sensor the regulators to your production and blend grade and the eye Inc.
Suddenly activating the trip and made a sensor and may reduce ocular discomfort by promoting a cooling sensation.
We believe the systemic benefit could ultimately be quite a differentiator for this product candidate and we always need to remember that dry eye sufferers always are complaining about whatever symptom. It is that they are suffering from so it is a symptom driven disease.
To be clear five one and two is designed to impact the underlying etiology of dry eye addressing the neurosensory component and modulating corneal trip and mate receptors again, the cold sensing thermo receptors on the corneal nerve endings and is very different.
From the anti Inflammatories or other products that simulate stimulate reflects tiers or the artificial tear products and their derivatives.
The primary endpoints for comment one or ocular discomfort, which is a symptom and tear production, which is the sign it.
And they've also added several secondary endpoints in the trials and we can learn as much as possible about the drug's performance. It also get ready for building a complete package and not only for approval, but also as we go out and start talking once the drug is approved and start talking to the managed care environment and.
The trial that we're conducting is for 90 days and duration with the primary endpoints for signs and symptoms at day, 28, and it'll be important and evaluate the timeframe. The greatest separation through the 90 day measurement period, and that's the greatest separation between active and and the vehicle and ultimately those findings we will inform the design of <unk>.
Any future phase III trials and.
And measure success for comet, one and statistically significant differences and signs compared to vehicle and step statistically significant difference and tempted compared to vehicle now that there's been a lot of questions I want to make sure. We clarify that there is no required minimum yield in terms of millimeters for the Schirmer test.
Which measure signs.
All we need to do is be statistically significant vs vehicle.
And then and that works as long as we also improve symptoms and statistically significant way.
So from a pathway to approval perspective safety and efficacy need to be demonstrated and at least two well controlled clinical trials.
Efficacy for signs and symptoms do not need to be shown and the same trial, but must be shown and multiple trials. As a reminder, our comment one trial is powered as a phase III. So if successful and may count as a pivotal trial.
Let's comment one now fully enrolled and we remain on track to read out top line data in Q3 of this year now.
Now turning to our retina pipeline, we continue discussions with regulatory authorities and both the U S and Europe to determine the most efficient and effective pass and phase III pathway for our dexamethasone and sustained release implant and known as a or 11 O five.
We do expect to have the phase III plan determined.
And we expect to enter trials in the second half of this year.
The phase II study top line data, we released back in July indicated that at six months of sustained efficacy and retinal vein occlusion for this product candidate, which is very different profile in terms of efficacy period.
Versus other injectable steroids and the market is azure decks, which generates about $400 million and revenues and the U S and Europe combined and.
It is important to remember and based on current market dynamics, the commercial potential for 11 O five will likely be greater and Europe as opposed to the U S with Europe being threefold the U S based on current.
Market data.
As I said before and its very interesting how the preclinical models predicted the phase II results for 11 O. Five is point to the advantage of our print technology platform. It is a manufacturing platform and has provided predictability and flexibility.
And we can continue and potentially customized product elution rate create various blends of bio erodible polymers.
Which allow for longer treatment periods, and thus reduce injection frequency and opens up the opportunities to a greater diversity of drug targets using small molecule drugs.
We believe that our print technologies and exciting platform for future innovation, and it's provided to high levels of flexibility and predictability and predictability ultimately shortening target and molecule selection and potentially helping determine probabilities of clinical success much earlier in the development cycle.
From a cost perspective on the retina side, the cost to achieve proof of principle.
And for any one of these retinal and searches typically and the range of $5 million to $6 million and Texas about a couple of years to get there. So it's very short period of time before we see the fruits of everything that we're doing.
And that leads us to our newest entrant and our pipeline designated as a R. 14 O three four sorry, which we introduced last quarter.
14, O three fours and preclinical preclinical interdigital implant that combines a small molecule pan VEGF inhibitor at CIT and it with a proprietary blend of buyer rotable polymers to provide controlled drug release with the potential to treat wet AMD or DMA patients for as long as 12 months with a single.
<unk> injection.
The center is a prime example of how the flexibility of our print platform and the blending of custom polymers allow us to create the right formulation to control the delivery of the active ingredient selected and in this case it happens to be accepted it.
Many of you know the retina space pretty well and you know that the doctors actually inject more frequently any vet jaffe inject more frequently and the early days and the early months of the patient and being on therapy, and then start tapering off over time the advantage of our print technology is we can actually design the release of drug over.
That same period of time, we've just simply one insert.
And and get it to last the full 12 months.
Okay, except to nib as a pan VEGF inhibitor, meaning that it inhibits signaling from all four isoforms of bet, Jeff, including a B C and D. Unlike any of the currently marketed VEGF inhibitors, plus it has a higher efficacy and less off target activity and other small molecule VEGF inhibitors.
Many of you know it sits and it is a known molecule and it is a tyrosine kinase inhibitor and it was approved back in 2012 for systemic use and the treatment of renal cell carcinoma.
And if successful this preclinical insurer and may provide significant benefits to total cost of health care for wet AMD and <unk> patients based on our preclinical data there is potential.
And that this preclinical and ensure we're require only one injection as I've mentioned before to treat these patients for up to a year.
And less frequent injections enabled the continuous releases of a potent small molecule active agent and there is potentially substantial benefits for physicians and patients alike.
So right now we are conducting IND, enabling preclinical studies for <unk>.
14 O three four and we plan to file and <unk>.
And the later in 2022.
As a reminder, we can utilize print technology to manufacture tiny sustained release implants at a rate of about 500000 units per year, and our 1000 square foot cgmp facility here and RTP in North Carolina.
And as I mentioned I've been here at corporate headquarters, where that facility resides and.
I was Uh huh.
Had a chance to visit with the team that runs that facility and a lot of the recent improvements that they've made on the manufacturing process et cetera may actually increase the capacity of that facility tremendously using the same footprint.
We do believe the efficiency and our manufacturing processes may also contribute to a sizable margin opportunity for our product candidates when and if they are approved and commercialized while again also driving overall economic value for patients and physicians.
Lastly, the first in human clinical trials for a 13 five O three a rho kinase and protein kinase C inhibitor sustained release implant product candidate continues to progress for a forward.
And we currently expect to complete the dose escalation safety evaluation with a current implant design and Q1 of 'twenty two.
Regarding 503, we have high level of confidence and our print technology will deliver the active ingredient over desired released period based on my earlier comments, though we are currently focused on is trying to figure out exactly how much of that active ingredient and needs to be in the insert and order to get the desired results and the retina.
And I had the opportunity to meet with many of and the research and discovery teams here. They develop new methodologies that have actually allowed us to.
More predictably figure out what the right dose response curve is and in a real kinase inhibition area to actually at the top and it becomes a U shape, where we can add enough rho kinase two to get to the point of getting Max efficacy and and we exceed that we see the efficacy drop well with the new information we have we act.
Italy, we're able to achieve that and so now we have a much better picture in terms of what the concentration needs to be.
And lastly, shifting shifting to our globalization strategy. Our Santana collaboration is moving forward on schedule and the first phase III trial, and Japan is well underway and enrollment we do plan to read out topline results for this trial later on this year, we beliefs and 10 is an excellent partner in Japan, and ultimately and South Korea, India.
In Asia, and Malaysia, and some other countries as well.
With a full regulatory approval of our glaucoma franchise and in the EU and the recent approval of rock Lambda or rocker Tan and Great Britain on.
Along with a positive Mercury three data we are in discussions with potential collaborators and the region.
Some have expressed an interest beyond Europe, including other parts of the world such as China, and the Middle East or even Latin America, we believe that we should be able to complete a collaboration agreement before year end 'twenty one.
While these discussions continue we are proceeding on our own to begin the process each of obtaining pricing and Germany chips. At no time is lost is consistent with what we did and Japan, where we negotiated with the P. M. D E on the phase III pathway before we sign with a partner to ensure continuous forward momentum as we have pointed out in the past.
If I call them and market and a top five European nations alone totaled 105 million bottles and 2019 compared to just 55 million bottles here and the U S. We believe the volumes in Europe, who would represent an excellent opportunity to further utilize our Athlone facility in Ireland, which is already growing and volume due to production for the year.
The us market and we ultimately anticipate producing for the Japan market as well that day.
This point I'd like to turn it over to rich to cover the financials.
Well. Thanks, Vince has been discussed on our combined Rhopressa and Rakuten and revenues from the first quarter of 2021 totaled.
<unk> 3.0 million.
Our normalized gross margin for the first quarter was 90%, which is consistent with previous quarters and in addition, layered on top of cost of sales is approximately $4.4 million and ethanol.
And on plant overhead associated with start up commercial production.
Since we are and the early stages of production that idle capacity number will fluctuate quarterly depending on the number of batches produced and a quarter whether from a commercial or clinical supply, but we expect it to trend downward on an annual basis as we continue to add volumes to the ethanol and plant.
Our first quarter 2021, GAAP net loss was $42 million on 91 cents per share when excluding the $8 $7 million of stock based compensation expense.
Total adjusted net loss was $33 $2 million.
72 cents per share.
For the first quarter of 2021 adjusted cost of goods sold was $6 $2 million and adjusted total operating expenses were $42 $2 million with adjusted selling general and administrative expenses of $26 $3 million and adjusted research and development expenses of $15 9 million.
Oh.
For the first quarter of 2021 our net cash used in operating activities was $31 million, and we had $208 $2 million and cash cash equivalents and investments.
As of March 31, and 2021.
And importantly, the net cash used in operating activities of $31 million and the first quarter 2021 is much improved from the first quarter of 2020 for which we reported $41.8 million and net cash use and this reflects revenue growth and continued expense control.
Shares outstanding at quarter and totaled $46 9 million.
For additional information regarding our first quarter and prior period comparisons. Please refer to today's earnings release and on.
Form 10-Q, which we expect to file tomorrow and.
Now I would like to turn the call over to the operator for questions Yes.
Understood at this time I would like to inform everyone in order to ask a question Press Star then the number one on your telephone keypad.
We'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Annabel <unk> from Stifel. Your line is open.
Hi, all.
Thanks for taking my questions congratulations on <unk>.
Growing through a declining market.
No.
And the majority of the age demographic vaccinated and offices.
Is there opening up have you actually have that.
Opposite has actually been seeing patients come in at what point do you think the broader glaucoma market is going to turn around do we see turnaround and what.
And what types of patients are coming in are they presenting is more severe than they were on the past requiring more aggressive treatment.
And then second question on rebate I think on Mr comment, but.
Have the rebate negotiations with payers.
Completed and should we.
And as soon that the current net price has those rebate benefits or is that something that's going to improve over the course of the year. Thank you.
Yes.
So hi, Annabel.
I'm going to have Tom give you a little bit of color here and on just what we're seeing around the country relative to the COVID-19 reopening and the impact of patients the kind of patients et cetera, because we were able to listen to all 14 of our district managers present, the outlook for their particular districts and so we got pretty granular and some and some cases, but overall.
We do see the markets opening up again.
Many of the major markets.
As Tom mentioned in his remarks, and some of the biggest markets that we had.
New York, and Illinois, and places like that and even to some degrees, California hasn't rebounded yet because the governor's happened and open them up yet, but the good news as it and as far as we can tell and certainly it's been reported that many of those governors youre thinking that they're going to open up. This summer. So we do think that we still have maybe a couple of months to go and there'll be.
Slow trickling and maybe some improvement and the overall market for glaucoma products, but then certainly for the second half of the year, we expect.
Who knows maybe we will be back to the.
The growth rate to do we would expect to see from the market perspective overall.
So let me turn it over to Tom.
To give you any more color that he may want to add.
Sure. Thanks, Thanks, Annabel for the question just to note on the on the physicians, commonly here and they talk about is that they are really eager and get their existing patients back into the office because what they're finding is as patients have come back and many of the patients have lost some of their vision and of course patients don't really realize that because it is very slow progression.
But and the last year, because they weren't coming in and maybe their compliance slipped because they weren't coming in and they did find that the glaucoma progressed. So that's what the physicians are very eager to find their existing patient base and get that back and there as quickly as we can and we think.
That will like you said will fuel the fuel the growth of the market, especially in the and the second half.
And I also asked about rebates that are are we done and I don't think we're we're not we're not we're not done there we will see things and all of our agreements a couple of argument was better said for the part D.
Medicare part D changes that will come into play next year and won't be this year, but will come into play next year and our team is talking to a lot of the managed care accounts both in the commercial as well as part D about redoing, our agreements and lowering our rebate amount. So now it's gonna be and ongoing.
Our process for us.
And hopefully we'll continue to have ongoing success as well.
And Annabel just to be perfectly clear Annabel just to be perfectly clear, we do expect to see some continuous improvement and the $89 per bottle, even yet this year, while Tom's absolutely right that there'll be more coming and will trickle into next year as well there is still some some ways to go.
Go even this year.
Great. Thank you so much.
Yes ma'am.
Your next question comes from the line of Serge Boulanger from Needham and company. Your line is open.
Hey, good afternoon.
Thanks for taking my questions.
I wanted to revisit the.
The increase in price per bottle I think last quarter, you had talked about a potential 4% increase over 2021.
Obviously, you've exceeded that greatly so far and maybe just walk us through.
The 11% and the first quarter, how much of that was the price increase and how much was the.
And negotiations with wholesaler agreements.
So the image based search so the majority of the change was due to the wholesalers. So there was a small price increase at low single digits kind of thing and so it was not near as dramatic as you know we don't net out 100% of that so it was pretty low relative to the overall impact but it was real.
Driven by <unk>.
And just the beginnings of what the wholesaler impact was going to be.
No to be in the first quarter of the year. We always are cautious about any surprises and we may see on the Medicare part D side in terms of.
And a tailing rebates that are coming in and things like agile, we always have to be a little bit cautious until we see that that final bill but.
I think it's.
It was good news for US. This time, there was no surprises relative to that so we were able to see the full brunt of the efforts that Tom and his team.
<unk> executed on and so that's how we got from the roughly $80 or the $80 that we reported for Q4 to the 89 for this year and over the first quarter.
Okay, and I think and in the.
The past year.
On the amount of target is.
On $100 per bottle is that still.
And on track.
And it certainly looks a hell of a lot better today than it did when we were at 77 doesn't it.
So yeah, I think so I think it will.
We're just we're getting bigger so we're able to negotiate better deals with wholesalers and as Tom said, we're not done yet and we're not done yet with the managed care side and things like that and we're.
Analyzing all of that so I think youll starts trickling youll see us to continue to trickle up towards that $100. Mark we just cant commit at this time, Mr. When we're going to hit them.
Okay.
And my next question is just about.
I think it was last year around this time, you announced the expansion of Medicare part D coverage maybe.
And maybe just talk about that pulled through.
And those plans are a year later.
So we continue to report out on the pull through that we see him and let Tom give you. Some highlights in terms of what we've been able to accomplish with that big plan and we signed up last year.
Right around the may timeframe, but.
And.
The pattern that we set and some of the things that we've been able to do in terms of adding tele sales et cetera, certainly has supplemented the effort of our field force, but Tom.
Sure sure I'd be happy to give you some.
And some data on this we've talked about this and at the beginning of last year and in May we actually got on one of the largest plants and the part D space since that time, our volume and our market share specific and that plan has doubled and were quite pleased with that and quite proud of that because as you might guess the field activity went out obviously.
And the reasons, everybody knows about COVID-19 and those sorts of things so even in a muted.
And with a muted sales force, we were able to double our market share and double our volume and we did that by developing specific pull through plans that are aimed at individual doctors and individual territories that are important to the plan. So we're talking about.
Things that make.
Have a great deal of importance with the physicians and obviously that helps quite a bit so and by the way that's not the only point, we have pull through plans going on with many accounts throughout the nation now because we think that that is a very very important because obviously that time physicians minds and obviously its on our minds. So.
I hope that gives you some color to it but wherever double share and double our volume and that plan that we talked about.
Alright, thank you.
Yes.
Thanks.
Your next question comes from the line of Stacy <unk> from Cowen and company. Your line is open.
Thanks for taking my questions. Congratulations on the continued progress.
A few questions and.
So first with this kind of increasing cap rates around Rockwell and our sales reps going to push and types of switching from a profit to Rockwell Tan.
And are you finding that there are certain preferences are prescribing habits amongst these high prescribing clinicians.
And then my second question is do you have any updates on the number of bottles per script.
And it's 90 day bottle and satcom.
And the last quarter, and then I have a follow up on that pipeline.
Okay. So.
On the refresh it and.
And Rocco Tan and terms of the better coverage and what physicians are doing.
I think the right from the very beginning on the launching those two when we had both of them and the market. We were very we thought we were very clear in terms of positioning and and it's taken us a while to make sure that that all gets translated and the doctors are beginning to understand Stacy we have doctors that won't use rocket tan or just focus on rhopressa as a junked up there.
European or just perfectly happy there we have other doctors that.
And where it really rhopressa riders jumped right on rocket head and just started using net and alike and and we have a whole bunch and the middle that use a little bit of both and have found a home for both products and so.
A lot of it is purely driven by the success that they have when they add products these products to their armamentarium and.
As we increase coverage as we are seeing and some of our major markets, where that big managed care plan, we're taking place at the minute that we get.
The efficacy message established with a doctor and they see that it is reimbursed at a decent rate for their patients. They start writing it and then some of them the more they write the more they use in terms of.
One or the other or both and so we don't see any.
Any particular pattern there is trending one way or another.
In terms of the number of bottles.
I think and the industry I'm going to let.
Rich answer that because we've been tracking that now for quite a while as a reminder, we do we did see a significant bump when as we were entering COVID-19 because folks didn't want to and we're not sure whether they're going to leave their homes or not and so we were starting to get up and getting up to more industry averages relative to our bottles per script.
But let me just average give you the latest on that.
That's right, so Vince going back to the pre COVID-19 quarter, and the first quarter of 2020.
And we were saying about 1.35 models per script.
For the first quarter of 2021 on average that is now up to 144.
Bottles per script, and we've seen some weeks that have gone beyond that so I would say right now and the 1.45.
Potentially going upward from here.
Got it and then if I could just clarify from the earlier questions.
That 89 on net.
Price per bottle is that something that you expect to be kind of a trough on net price for the year or I guess asked another way that day.
To continue to improve throughout the year.
We do expect it to continue to improve throughout the year.
And it may not all be all one quarter or the other we made stabilize and a quarter and then it starts creeping back up the next and that kind of thing.
But we do expect the.
For it to be better as the year progresses.
Got it thank you.
Mhm.
Your next question comes from the line of from Louise Chen from Cantor. Your line is open.
Hi, Thanks for taking my questions I had a few here. So first question I had was do you expect the first quarter 'twenty, one and a S. P. S $89, a bottle to be a trough and 2021 meaning every quarter will be above this or is there. Some one time reason why the <unk> 'twenty one ASP was higher and then can you talk.
About the market opportunity and unmet need for your intra vitriol pipeline do you have a few products there and they seem quite interesting and could be market, leading and then last question I have was that dry eye is becoming more of a crowded space with several products and development and some newly approved products.
Just curious how your product with fit and the treatment paradigm if it move forward into commercialization. Thank you.
Sure, Hey, Louise and so and we expect that the $89 as I mentioned earlier is.
Is sustainable and we do expect it to go up from there now what may not happen is like for example, we could be that we stick around the $89 $90 range for the next quarter and then it goes creeps up a little bit more beyond that before exiting the year. So it's not a steady climb to a particular <unk>.
Number it will be sort of.
Like a stair step fashion, because we do have.
Further discounts that are coming at arb, sorry, further reductions and rebates that are coming our way as the year progresses, but we think we're pretty comfortable and putting a 89 is the floor for the year.
On the Red and Lynchburg side, we think that there is a great opportunity. We think that if you start with the closest one and which is 11 O five.
The market as I mentioned is principally in Europe and combined.
And be targeting the and market opportunity that <unk> has taken over and they currently sell roughly $400 million on a worldwide basis, and we think that.
That product works, mainly to some patients three months and so we think that having the six month efficacy on this product is going to be well worth the while for the patient satisfaction and the treatment of diabetic macular edema et cetera and it.
It is principally a European thing the retina doctors and and Europe tend to use steroids first and then for a number of different conditions and net add veg F and U S is a little bit different they haven't been satisfied with some of the things that they've seen so they immediately go to vet, Jeff and so for.
For them, it's going to be it's going to take a little bit for us to help explain to them that in fact, we really do last for six months and and some of them are beginning to see data on and certainly we have a lot of the big time rent of guys that are working with us on this program. So.
They are very much pushing us to develop the product for the U S. Because I think there'll be a home here for it beyond what we currently see for product psychology deck. So there's great opportunity there.
On the.
Small molecule bed, Jeff inhibitor and <unk>.
He has been targeting six months, whether its a big protein or <unk> or some sort of a drug delivery system. There's all sorts of mechanisms being news as you know where the proteins or drug delivery systems or in the case of one company, where they tried to link it.
They are taken and antibody and linking it to a polymer and so.
But all of those seem to be sort of in that four to six month range in terms of efficacy. So we think that the ability to leapfrog all of that and go straight to 12 months and be able to mimic what they do with multiple injections by one small insert we think has a huge potential for us that would allow us to.
Many of these things plus the fact that it is a pan VEGF inhibitor not just blocking.
That Jeff and so that's a big.
Positive for us on the dry eye side.
And we think we're pretty cleared and our slide deck and the number of presentations, we've made about 512 and the sense that.
With the mechanism of action that we have we're very much differentiated from the anti inflammatories that are out there from those from those that are actually looking at reflexed hearing are activating reflects tearing receptor and.
Way of increasing to your production and order the artificial tears and so we think that the cold sensing receptor.
Broad based play and we could be used on our own or if patients needed. They can be our product can be used in combination with some of the other ones and so we do think that while it is a crowded market don't forget that only two to 3 million patients are actually treated whereas there's about 30 million and they get diagnosed so.
It's a huge opportunity still.
Thank you.
Hum.
Your next question comes from the line of Yigal <unk> from Citi. Your line is open.
Hi, this is purely on price.
Thanks for taking our question.
The question, we had was just.
And given volume.
And well surpassed pre COVID-19 levels at this point.
Talk a bit about what you.
And you can see to feel comfortable reintroducing guidance.
And then Eric.
And then we had a couple of follow ups on guidance.
Hi.
So specifically is what I've been talking about Carly is it's the opening up of all of the major states and as I said, there's at least two or three big ones that are yet to open and fully and and so it's.
We're struggling to.
And come up with the right number and <unk> and provide a range that would be meaningful to you and the other analyst.
Until those things happen because we don't know how quickly they really are going to open up as Tom said.
We've got a bunch of states like my home State, which is Florida that we've got 95% access which is terrific. But then we have some other ones that are down to 70%, but and there are major states.
These are some of the states that we're top of the list last year before COVID-19 and so as they open up and.
And again based on what we're hearing it could be later on this summer and so by the time that we're finishing up Q3, then maybe by then we will we'll be in a position to to.
To make some of those kind of calls but until then it's just it's just hard from to predict what the impact.
Slow openings are going to be.
Okay got it that makes sense.
And then I guess, just turning to the dry eye program can you.
Forget about the rationale for selecting ocular discomfort and subprime.
For the phase two.
Other potential from that Guy I like guidance.
And then similarly, the rationale for selecting care production at the price.
And Larry sign over other potentially approve Bob.
I'm sorry go ahead.
Thank you Sir.
Okay.
Right so.
We got Dr. David Hollander on the call one of the advantages of having David on our team is it easy cornea trained dock. We also have on our board.
Guy who is the chair of ophthalmology at John Hopkins Who's also a cornea trained dock. So we know quite a bit about the space. We know a lot of the dry eye specialists around the country and and what we do know is that from a patient treatment point of view this as a symptom driven disease and so are we.
We think that that's a that's a big deal so patients don't really care that they're increasing tier production. They don't really care that they are corneal staining is good or bad. It's just they just want their eyes to feel better, but let me have David talked to you a little bit more about why we picked that particular endpoint.
Sure and thank you Vince Great question, so going back to the to the actual MLA.
As well as this trip and made receptor we know that by delivering this drug we're going to produce a cooling sensation and one of the biggest things that dry eye patients complain about is <unk>.
And just comfort and discomfort and their eyes, and we also know that.
Providing this cooling sensation and will satisfy and reduce that discomfort. So ocular discomfort with selected us as our primary we are as part of this <unk> study also including other endpoints, which will potentially inform later studies. So we are looking at <unk>, we are looking at.
On ocular pain.
We are looking at at the standard Sandy questionnaire. So all of those are part of it but discomfort, we think best fits within mechanism mechanism of action as far as tear production.
With signs and there are also other signs you can look at but based on the MLA.
This trip and eight will stimulate basal tear production, so not and acute reflects tier but the actual basal tear production. As this is involved in and the overall tear film homeostasis. So it's purely based on MLA as well as what the patients really will benefit from in terms of that symptom.
And discomfort, which they will feel as well as the MAA for the sign and so that gives you a little clarity hopefully on the rationale for the sign and symptom.
Yes.
Well. Thank you and then if I could just squeeze in one market and that hypothetical question and you mentioned that the phase II.
And it's powered at this phase III, So I guess net.
Data look good and the third quarter and you achieved statistical significance on.
And it is the plan to then Brian and another child.
Child pretty much identical and designed to call on it wanted to serve and.
And pivotal study.
I understand the next steps on probably depend on the details on the data I just wanted to get any early thoughts on how you're thinking about kind of on balance.
Okay.
Yes, it's a good question because we could simply run it and as you saw it only takes us about.
Year showed start to finish to get that done it is obviously the highest risk.
Unfortunately, the track record in front of US has not been particularly positive getting an approval with just two trials and so we could hedge our bets and and due to additional trials just simply to hedge our bets and then in addition to that we're going to have to do a 12 month safety. So.
It does give us a lot of opportunities, but the great thing about.
If the first one works it certainly makes your life a lot easier and it gives you an awful lot of options about how you can move forward quickly to get approval. So.
But we're looking at all of that but like you said very smartly. It's it's all going to depend on the balance of the data because if it's right on the cusp then we may not want to take as much of a risk so.
We'll just have to wait and see.
Okay got it. Thank you very much for taking the question.
Mhm.
Yeah.
Your next question comes from the line of Dana Flanders from Guggenheim. Your line is open.
Okay.
Great. Thanks for the questions I just had.
Two quick ones.
I guess first what's the gating factor on the EU partnership.
Discussions I mean, it sounds like you're close to the finish line, but just curious.
And if there's any more color there or is it.
And economics and agreement on geographies and any more color would be helpful.
And then I noticed alcon alcon and purchase of Brynza.
Would be curious to get your take on them as a potential competitor.
And then also just the price they paid I mean, it seems like a somewhat favorable comp for <unk>.
<unk> and.
White of Rockwood Ten's potential, but would love to get your take on that as well. Thanks.
Sure.
So.
On.
I'll address that one first so you know as we think about the Alcon piece and you know us and brings has been around for a long time. It's a combination of two products that are dosed three times a day.
If you look at the prescription data.
And do the Doctor sort of start with one and then add the other one and the answers not very often and.
And so.
But.
And while their gross sales are probably a few hundred million dollars.
Net sales of roughly half of that so to pay.
We're guessing but call it seven X or show revenues for that net revenues for that product that declined 21% and Q1 on a year over year basis.
And it seemed pretty stay steep, but we like the fact that it could end up being a good comparator in terms of the value of Rhopressa and Rocco Tan.
In terms of good valuation metrics. So I. Thank you for that can you repeat the first part of the question though.
Oh I just.
Take on them as a competitor and it sounds like you answered on the comp question.
And then I had a question just on kind of the gating factor for your EU partnership and the European partner, Yes, I'm sorry, so on the European side, it's kind of interesting. So again I'm sitting here and RTP visiting with the folks that are actually have and the interface with Santana.
Partner and all of the different territories, Japan is pretty straightforward and we've got a team over in Japan, that's helping them out there and doing a lot of the work supported by the folks here, but in addition to that they have Korea and a bunch of other smaller countries. The amount of work that is required to go into some of these countries is pretty dramatic and so one of the things that we're really wrestling with is.
As we think about partnerships and we talked about some of the morning.
In addition to Europe, they wanted to Latin America, and the Middle East and things like that it's we're still a small company and we still have you know, including the sales force of about 400 people and total and alike and so we're trying to figure out whether the.
The difference and economics and some of these deals are worth it to go after some of those smaller markets relative to the fact that we're going to end up having to increase staff in order to support those kinds of partnerships and so.
That's just simply a balancing act, but you're right. We're just trying to and finalize the economics of use of our facility and Athlone as manufacturing et cetera et cetera, but.
None of these are apples to apples comparison, so it just takes a little while longer just to and.
And like in our own minds try to settle on what we want to do but as soon as we can do that we're going to sign it and as we said earlier, we think we'll do that this year.
Alright, thank you.
Thanks.
Your next question comes from the line of Greg Fraser from true width and Securities. Your line is open.
Thanks, and good afternoon, and you mentioned the volume and prior authorizations that had been submitted for Rhopressa and Rotterdam, which I think speaks to the motivation of docs to get their patients on the drugs and curious about on the commercial side and what portion of covered lives and that require prior authorization.
So I'll, let Tom answer that yes.
Yes, sure very few because we have coverage and about 90% of the commercial lives on a nationwide basis, so that would be and 10% would be would require a prior authorization, but so it's very small very very small and of course the spot.
Got it Okay, and then question for rich how do we think about gross margin trends in the coming quarters and do you.
And would expect the idle capacity costs to decline materially this year from the Q1 level I know you expect them to trend down on an annual basis overtime, but curious whether that could be material improvement and the next few quarters.
Well it will bounce around from quarter to quarter actually sequentially. It came down a bit.
I do expect on an annualized basis right. So you really can't peg it specifically quarter to quarter, because it will fluctuate.
Based on commercial batches or clinical product that's produced.
And I believe you'll see a notable decline.
And that idle capacity charge this.
And this year versus last year.
And for reference last year was $17 million.
So we will see a decline this year and it should continue to decline from there based on continued volume growth from the U S business.
And ultimately of course.
Plus we do a European deal.
That will make a big difference with regard to that capacity utilization as Vince just mentioned.
Great. Thank you.
Your next question comes from the line of DC Yang from Mizuho Securities. Your line is open.
Hi, good afternoon, and thanks for taking my question.
Just three questions. The first one is for Tom Tom would you help us to clarify I think he and the prepared remarks.
You mentioned April year over year growth was 32% and therefore.
And therefore bother with growth or was it.
Net sales growth and the second question. He is also on the line for Pollo strategy would you give us a quick update on where things are and if you ask and reach.
We're looking for thank you.
Sure let me handle the first one that's easy the 32% was in bottles so that.
Shipments from wholesalers and to individual pharmacies and units are bottles.
Yes.
Great. Thank you.
Yes.
Okay and I'm sorry, the second question I missed.
It was the past strategy.
Yes, yes that pulse strategy has worked very very well.
We do we are trying to increase the number of monthly prescribers and weekly prescribers that we've had the interesting thing is even in the year of COVID-19, both monthly and weekly prescribers were increased by over 1200.
So that just shows you just narrowing the focus and to increase the frequency of cost that we can make on those doctors really helped and of course, then we supplemented that with our contract sales organization that we put in and they they gained share and this tower sales team. They also gained share. So we're very happy with the results of our pulse strategy and and how.
We were able to execute with that.
Thank you Tom and then.
A couple follow up questions on the R&D side, so with regards to <unk> 11, five with on the gating factor to start the phase III and then.
The next question is on the cash front given all these additional R&D activities do you expect them to do additional capital rate. Thank you.
Sure.
So the gating factor on 11 O five as the final feedback from both the EMA as well as the FDA in terms of what the clinical trial design needs to be remember what we're trying to do is our harmonize the two requirements and have one come and protocol.
Realizing that we may have to analyze the data differently, depending on whether we're trying to get EU approval or U S approval.
As you can imagine dealing with two regulatory guidance and trying to get them to agree on anything and it's not the easiest thing and the world to do so it's taken us.
Some time to kind of square that up and determine what the best path forward is.
Because the market is principally in Europe.
We will lean towards satisfying the European requirements prior to the FDA wants.
But until we have the final meeting, which should take place over the next few months.
We're not going to be able to determine that.
And so yes.
From that perspective.
We feel pretty good about starting and at the end of the year, but we're not 100% sure yet how best to harmonize that and so that's the primary and that is the gating item.
Thank you.
The final question was on cash runway.
Oh.
And so.
As we reported we've got a couple of hundred million dollars worth of cash we continue to have us.
Our low cash burn for the years per quarter is a rich already outlined and because we do expect that we're going to be able to sign a European deal before the end of the calendar year, that's like doing and other financing and so just as a stake and the ground we've mentioned that.
And you should be thinking that it's at least as.
And is beneficial to us as the Japanese deal was realizing that this is going to be at least that big of a territory could be bigger.
Because of some of the additional territories et cetera, so, but if you need a stake and the ground now you could use the same financial structure and the like that we saw on the Japanese deal. So it'll add a significant amount of cash tuition and so that'll help quite a bit plus.
Plus the fact that our business continues to grow so we continue to decrease our cash burn.
Yeah. Thank you Vince.
Yes ma'am.
Okay.
Your next question comes from the line of Frank <unk> from Oppenheimer. Your line is open.
Okay.
And asked and answered here. So just a quick one here on 14th zero three or four you talked about the one year duration, but you talked about potentially having a better efficacy profile. Here is this something that's just based on the fact is pen that yes. There is there any data on the preclinical side that that would.
That would.
And explain this potential better efficacy.
We do believe that.
So far no one's been able to prove out that blocking all the veg F is the right thing to do and Theres been a lot of speculation about the retina doctors and Thats exactly the right thing to do in terms of get the kind of results that they're looking for.
But.
No one's been able to run that trial, there's a few companies as you know on the and the retinal space that are with drug delivery systems that are that are trying now to take some of the small molecule Pan VEGF inhibitors out there.
David.
Hollander actually mentioned to me that one of the veg F inhibitors out there actually does a and B and I think it's I'd Lea and do you remember David.
Yes.
And that's true what we're looking at a pan VEGF.
And we believe that it will certainly be as good as if not the potential for better by covering all of the Oh.
All the isoforms, so that that's where it's coming from as well as the duration as well as potentially no loading dose required us as everything else is requiring essentially three.
Injections upfront. So we think those are sort of the trifecta of of elements that could really lead us to be a standout.
Great. Thank you very much.
Okay.
Your next question comes from the line of Elliot Wilbur from Raymond James Your line is open.
Thanks, Good afternoon.
And a couple of questions for Tom.
On both the market and then marketing and then I have one additional follow up after.
After these so Tom with respect to just the market in general outside of your data point that reps you are indicating they think that.
Practice reopening or at roughly 80% to 90% do you have any sense of what patient flow metrics, maybe within that in terms of kind of where things stand with respect to diagnosis visits just trying to get a sense potentially are sidelined or pent up demand.
Don't know if looking at the trailing 12 months and glaucoma Rx is being down 5% is a good metric or not and it seems like a relatively light number I guess, given the drop off and in patient traffic, but just trying to get a sense of whether or not you could see a more pronounced acceleration in terms of.
Our next generation once we get back to sort of 100 that 100% or if you think that that 5% and this kind of a good representation of what maybe what may be sidelined.
And then as a follow up to that just thinking about the marketing game plan going forward.
What tools techniques or lessons have been learned I guess.
Over the course of the pandemic.
Do you think will materially alter the strategy going forward. It just seems like companies are able to do a lot more with less so I don't know what happens when you kind of get back to normal in terms of some of the traditional techniques companies use with respect.
And the.
And physician meetings and alike or you just sort of add on top of that with the contract organization and a telehealth.
But just trying to get a sense of kind of what you think is for the new normal in terms of the specialty promotional model.
Sure Elliot let me go back to your first question that went about.
And what Youre, saying, if you think there really is pent up demand there and I think I think it's a very astute question because I think there is we know that from our data that we received from <unk> last year that they were about 600000 on.
Ophthalmology diagnostic visits.
Not.
This did not happen last year and like I was saying earlier to one of the questions. We know that ophthalmologists are highly concerned.
About glaucoma patients because many of that I've seen have lost vision and the patient may not realize that until the doctor tells them and say look at your record here, you've lost fish and you can't recoup that vision. So there is a big concern there and thats, what ophthalmologist and trying to get them back to their offices for now there isn't that type of situation. If you look.
And that's something like a cataract surgery right because of a cataract surgery. They will wait for their cataract surgery. All those sorts of things are obviously, there is a financial gain from the physician there, but the key thing is they really want to get us a all comer patients back and their offices and theyre doing whatever they can including calling patients and trying to trying to get it back and touch them get them to income.
And to cut back on the office, so and so we think the market will come back and come back and.
And a very nice way because they they.
We will not forget about those 600000 visits that they don't have they're trying to recoup them and make them happen again.
And.
Let's take a part of it and really what's going to change now and what were the lessons learned.
As you know a lot of specialties learned things like you can do zoom meetings with physicians and and all those sorts of things sort of like telemedicine and you can have presentations that are given via zoom by representatives, well that doesn't really work and ophthalmology very well on a broad sense ophthalmology is a far more personable.
Specialty and.
The work that we've done with our market research asking physicians, how it will change and they continue to say we want to see reps. We enjoy the communication we have with reps we understand they like the learnings that they get from representatives about what's happening with our company those sorts of things. So there'll always be a place for those types of zoom type costs with physicians, but it'll be far and few between.
And <unk>.
<unk> is an example that are very difficult to get to those sorts of things are great use of zoom, but on a broad based system I don't think so I do think though that one of the things that we've we've seen time and time again is the impact of educational meetings.
Half with ophthalmology, because they like sitting around talking about new products like ours, and finding out where they work where the best ways to use them. How do you do how do you treat hyperemia, how do you get through those sorts of things and learning just from the people to prescribe and awful lot because they found the ways through it first so I think we'll continue to invest heavily and those like I.
And on my prepared remarks, and I think that will continue to invest heavily and making face to face cost with the practitioners that are out there and the market, which may sound, Michael and school.
And thats, what the customers really want.
Okay, and then I have one just quick follow up question as well with respect to.
Price and no shortage of questions on on the topic, but I guess outside of the rapid assembly and a bunch of late stage assets, it's been kind of the story of the past.
On several months so.
Yes.
And understand the mechanics of the renegotiation of wholesaler agreements and those can be rather significant in terms of impacting the net price I guess, what's a little bit less clear to me is what's happening.
Happening on.
On the managed care side that would allow you to sort of.
Renegotiate some of those.
Rebate agreements not sure if it's just changes and the category or competitive behavior, but really what's the what's the lever there in terms of being able to.
And we negotiate.
And price points with with Manny.
Managed care.
Yes.
Thats helpful. When we first started calling on managed care and we had absolutely no leverage at all.
I mean, we had no products on the market growth.
Sorts of things. So we were sort of holding towards managed care deltas right and as I said, though here's the rebates you got to pay on me we negotiated the best we could all those sorts of things, but they had all the leverage on their side of the table well now they are sitting there and they're looking at the growth that we've had with our products with our products and they also recognize the number of prior.
Originations that have been submitted and they realize that theres position demand. There. So now leverages coming back to our site and that happened both with managed care as well as wholesalers by the way, but but with that we can sit there and say demand is not going away, we need to get we need to do something with our rebates are going to make us more more more of a even trade between.
And we both win both managed care entity as well as us and so that's really what's done it but it's all been demand generated by physicians, both prescriptions as well as the prior authorizations that have got managed care to actually listen to us and Thats, what I thought.
And we think that will continue and as we've said before it's not a one time deal. We think that this will be a and ongoing process towards through the years. So so that's really what's driven it.
Okay. Thank you.
Turning to call back to Vince and needle and he's chairman and CEO for final remarks.
Well thanks, all for joining the call as you can see from not only the presentations and.
Paired remarks, but also from the Q&A that we made an awful lot of progress on the commercial side.
Ben.
Really working hard to get our net prices up we were able to do that we've been able to get their managed care coverage and we've now been able to get the pull through and I think we're pretty well positioned relative to the market as Tom mentioned as.
To better take advantage of as patients start coming back and we see more and more states opening up we haven't missed a beat relative to building the pipeline and the teams are.
Anywhere from our research and discovery, all the way through our clinical and regulatory side have done a great job and moving everything forward and last but not least.
We're very very comfortable and where we are from a.
The global partnership point of view and the decisions and we're gonna make us a year.
Progresses, and so again when and thank all of you and you can that you can rest assure that we'll maintain our usual level of transparency as we progress throughout the year. So have a great evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Goodbye.
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Okay.
And.
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Okay.
And.
And.
And we will.