Q1 2021 Flexion Therapeutics Inc Earnings Call
[music].
Yeah.
Good afternoon, ladies and gentlemen.
Welcome to the flexion Therapeutics first quarter 2021 financial results conference call. At this time all participants are in a listen only mode. We will be facilitating a question and answer session at the end of todays call. If at any time during the call you require assistance. Please press star followed by zero and they coordinate.
It will be happy to assist you I'll now turn the call over to Scott Young collections, Vice President of corporate Communications and Investor Relations.
Good afternoon, a short while ago, we issued a press release announcing our Q1 2021 financial results. In addition, today, we are introducing refreshed metrics to provide increased visibility and insight into the commercial performance of zorana.
Our earnings press release, and the commercial metrics slide can be found under the investors tab on the company's website and a replay of this call will be accessible there shortly after its conclusion.
Today's discussion will be led by <unk>, Chief Executive Officer, Dr. Michael Clayman, and he is joined by Melissa Layman flexion as Chief commercial officer, and David <unk> Flexion as Chief Financial Officer.
On today's teleconference, we will be making statements relating to future financial and business performance market conditions strategies, and other business matters, including expectations regarding revenue cash utilization clinical regulatory and commercial developments and anticipated milestones, which are forward looking for.
Statements within the meaning of the private Securities Litigation Reform Act. These.
These forward looking statements are subject to various assumptions risks and uncertainties, which change over time and such statements speak only as of the date of this call.
Additional information on the factors and risks that could affect flexion business financial conditions and results of operations are contained inflections filings with the SEC as well as on inflections website.
I will now turn the call over to Mike Clayman.
Thanks, Scott and thank you all for joining.
In April we pre announced preliminary net <unk> sales of $24 $6 million for the first quarter 2021.
And in this afternoons press release, we confirmed those results and reiterated our full year net sales guidance of 120 million to $130 million on today's call. We will provide an update on our commercial progress and walked through the refreshed commercial metrics that Scott mentioned and <unk>.
<unk> all share updates on our pipeline programs and then we will recap our first quarter financial results.
However, I would like to first discuss an important personnel update.
As you all know David Arc, which has capably served as our Chief financial Officer since May of 2018, and I was truly disappointed when he recently informed me of his decision to leave the company to pursue new opportunities day.
David has been a key member of our senior management team and I'm very grateful for all of his contributions throughout the past few years I know I speak for our entire organization and.
And wishing him continued success.
As he embarks on a new phase of his career.
I'll look to him to share some additional color on his decision when he provides a financial update.
While we will Miss David's leadership, I'm tremendously pleased to announce that Fred Driscoll will be stepping in as David successor.
Fred was our Chief Financial Officer, beginning in 2013 led us through our IPO in 2014 and was at the financial helm at the launch of Zelle right up.
With that as backdrop for Ed is uniquely qualified for this important role.
He possesses an intimate knowledge of our organization and a deep understanding of <unk> value proposition and we are fortunate to have him back.
Fred and David will be working together in the coming weeks to ensure a seamless transition for.
It is currently joined US on the call today, and I would invite him to make a few remarks later in the agenda.
Shifting to other recent news yesterday at the American Academy of Gene and cell therapy, or <unk>, we presented new preliminary data on FX to old one our investigational intra articular gene therapy for the treatment of knee OA pain.
While the primary aim of our phase one single ascending dose study is to establish the safety and Tolerability of FX two O. One in low mid and high dose cohorts with five to eight patients in each we are encouraged to see that two patients in the low dose cohort experienced durable improvement.
And pain extending out to one year post treatment.
As we reported yesterday FX too old one was generally well tolerated in the initial low dose cohort two patients had self limited grade to index knee adverse events of pain, swelling and infusion, which were possibly related to treatment and were managed conservatively.
In addition to safety and Tolerability. We are also investigating exploratory endpoints assessing pain relief using womack eh and functional improvement using coos tools at <unk>, we showed that for of the five patients in the low dose group reported improvement in wall.
Mac, a pain scores compared to baseline at weeks 12, and 24 and two of the three patients for whom we have week 52 data, we're still reporting improvements in pain one year after treatment.
Flying validated criteria.
50% decrease in pain is considered substantial and two out of the five patients experienced sexual response at week 812, and 24 following treatment and one of the three patients who had been on study for at least a year continued to report substantial improvement in pain at.
52 <unk>.
Importantly, all five patients remained in the study at 38% to 56 weeks post treatment, which is encouraging as it indicates a day have not felt compelled to seek alternative treatments to manage their knee OA pain.
As we have previously discussed our vision for FX to one is that in addition to providing at least six to 12 months of pain relief. It will also help improve function.
In the low dose cohort functional improvement from baseline assessed via cruise was observed in four of the five patients at week 24, and all three of the patients with week 52 data.
Preliminary data from the mid and high dose cohorts at the single ascending dose study are anticipated in the second half of 2021 and as we announced in an 8-K yesterday morning, one participant in the high dose cohort experienced gastrointestinal bleeding and atrial fibrillation.
Which required hospitalization.
An adverse event, resulting in hospitalization is deemed serious but the investigator determined this to be unrelated to study drug as dictated by the protocol any serious adverse event or SAE, regardless of related net requires a pause in study enrollment.
Followed by a review of the event by the independent data monitoring committee or DMC for this study and subsequently the FDA.
Those reviews were completed as of Tuesday afternoon, both the DMC and FDA agree with the investigators assessment and endorsed the re initiation of the trial.
Accordingly, we are resuming enrollment.
While the data are preliminary we are encouraged by the results, we're seeing and they support our belief that FX. Two O. One holds the potential to provide a differentiated durability of therapeutic effect at the site of disease. We look forward to sharing additional data in the second half of the year, including the.
<unk> of Synovia fluid from patients to assess biological activity of FX, two O, one locally and they're drawing which could potentially correlate with clinical endpoints over time.
Briefly touching on FX 301, our investigational locally administered peripheral nerve block for control of postoperative pain, we continue to enroll patients in our phase <unk> proof of concept trial and remain on track to share preliminary efficacy data later this year.
At this point I'll turn it over to Melissa.
Thank you Mike.
It has only been a few weeks since our last update in that time, we held a virtual national sales meeting, where we focus on our strategic priority and rolled out a number of new supporting tools all of which was met with great enthusiasm by the entirety of our sales organization.
Access to these new tools in conjunction with a return to pre COVID-19 steel travel levels has resulted in a level of focus and excitement that I have to say is unprecedented within my tenure here at flexion and we believe will serve as an impetus for potentially growing our business in 2021 and beyond allowing for increasing.
<unk> of patients to experience the impact that's already from hubs and managing their knee OA pain.
As we discussed on our last call we have three strategic priorities first positioning and market segmentation second pricing and physician reimbursement.
Third amplification of the patient voice and I can say that following our recent meeting our entire commercial organization is hyper focused on executing against each of them.
Regarding our commercial metrics, we think providing the same metrics for the past several years.
Now that we have more than three years in March we believe that this is the right time to introduce revised commercial metrics that can provide greater and more meaningful visibility into our commercial performance.
Historically, we presented a cumulative U S already utilization spanning back to the earliest days of launch.
So its comparisons for our early days on market are no longer as relevant as they once were.
<unk>.
My other son provide views of the relative performance on a more current quarterly basis.
At this point I'll walk through the refresh metrics that we introduced put out.
Starting with slide two we're providing revenue and unit demand for the current versus prior quarter and for the current quarter versus same period in the prior year.
Additionally, this dashboard view provides a summary of key metrics and a few highlights specifically net revenues for the quarter of $24 $6 million.
Net of the 2040 for accounts that purchased from Q1, 90% of all purchased in the prior quarter.
With slide three we closed the view to provide the last four quarters of net sales versus the previous deal, which describes quarterly sales going back for launch.
As we discussed on our last call. We are pleased with our net sales performance at $24 $6 million in Q1, which is particularly encouraging in light of the headwinds that we detailed on that call.
On slide four we're now presenting demand on a quarterly basis.
As a reminder, we primarily sell neurology specialty distributors and we recognize sales upon receipt of product by those distributors.
Demand refers to the actual orders placed via accounts such as physician practices clinics on certain medical centers are hospitals with those specialty distributors.
From a demand perspective, we are particularly pleased with Q1 performance as demand grew by 6% over Q4 in a period that is typically down in demand by roughly 10% across the intra articular injection Martha.
In our last slide number five we breakout purchases by volume and accounts and discrete quarters as a method to more clearly illustrate how our business is moving from quarter to quarter.
This view continues to illustrate how practices generally move through these errata adoption continuum from trial to adoption and ultimately to inclusion in standardized treatment protocols for knee OA pain management.
This shows you the total number of units purchased within the quarter and volumes of one to 100, 101% to 300, and 301 plus unit as well as the number of accounts purchasing at these volume within the quarter.
In Q1, roughly 38 percentage already unit for purchased by accounts quarterly volumes of more than 100 kits versus Q1, 2021 'twenty, 7% a variety units came from accounts purchasing on quarterly volume of greater than 100 cash.
Based on historical medical claims data for OE K diagnosed patients who received in Ireland Jackson within the 99 accounts that make up our top two purchasing shares we estimate pro rata share in these accounts may be as high as 46%.
Our goal with these new metrics for us to present them in a way that averaging more discrete performance indicators within and between the quarters versus continuing to look at our business performance cumulatively back to watch.
While we believe these provide a more current and instructed you of our progress. We welcome feedback from you and I look forward to sharing our progress against these metrics in the coming quarters.
With that I'll turn it over to David.
Thanks, Melissa as Mike mentioned, so rather than net sales in the first quarter were $24 6 million, which reflects a gross to net reduction of 18%.
This reduction includes rebates to health care providers that are variable and based on the volume of product purchased.
We reported net loss of $28 6 million for the first quarter of 2021 compared to a net loss of $36 8 million for the same period of 2020.
Cost of sales were $6 1 million from $2 3 million for the three months ended March 31, 2021, and 2020, respectively.
Research and development expenses were $14 million and $21 1 million for the three months ended March 31, 2021, and 2020, respectively. The decreases in R&D expenses of $7 1 million was primarily due to a decrease of $3 6 million in development expenses for us already.
Due to a reduction in lifecycle management activities, a decrease of $2 2 million related to FX 201 program costs.
Largely due to the $2 5 million milestone payment for the first human patient in the phase one clinical trial, which occurred in the first quarter of 2020 as well as a decrease of $3 4 million in salary and other employee related costs.
Decreases were partially offset by an increase of $2 4 million in expenses to FX 301, due to the achievement of certain development milestones specifically the clearing of the IND by the FDA and the initiation of the phase <unk> clinical trial, both of which occurred in the first quarter of 2021.
Selling general and administrative expenses were $27 6 million and $29 3 million for the three months ended March 31, 2021, and 2020, respectively.
<unk> expenses were $19 1 million and $20 5 million for the three months ended March 31, 2021, and 2020, respectively. The year over year decrease in selling expenses of $1 4 million was primarily because the majority of industry conferences and physician speaker programs remain virtual due to <unk>.
<unk> <unk> 19.
Though more physician offices are opening business travel remains low compared to pre pandemic levels.
General and administrative expenses were $8 five and $8 8 million for the three months ended March 31, 2021, and 2020, respectively.
Interest expense was five 2% and $4 7 million for the three months ended March 31, 2021, and 2020, respectively.
We anticipate full year 2020 ones or whether sales in the range of $120 million to $130 million.
In addition, we continue to expect that our full year 2021, total operating expenses, including cost of sales R&D expenses and SG&A expenses will be in the range of $195 million to $205 million.
As of March 31, 2021.
We had $154 3 million in cash cash equivalents and marketable securities compared with $175 3 million as of December 31, 2020 based on our current operating plan. We believe that our current cash balance is sufficient to fund our operations into at least mid 2022.
In closing I'd like to share some perspectives on my time at flexion.
It has been a privilege to work with Mike and the other members of the management team.
So that the departure of any CFO.
Always a notable event so let me state unequivocally. It is in no way a reflection of the confidence I have in this team for <unk> for the prospects for reflection as a whole.
Well I had no interest in leaving I was presented with a rare opportunity.
One that will allow me to more fully utilize my strength and which expands my scope of responsibilities.
Flexion is an amazing organization that is making a real difference from the lives of patients and while I will have a different vantage point I look forward to watching its continued success in the years to come.
With that I'll turn it back to Mike.
Thank you David and thank you for all of your hard work over the past few years, we have made tremendous progress during your tenure and we deeply appreciate all that you've done.
While David's tenures coming to a close a new chapter and Fred Driscoll. His career inflection is just beginning and to this point I would invite Fred to make a few remarks Fred.
Thanks, Mike.
It's a real pleasure to be on the call today and I am extremely excited to be rejoining the company.
Since my retirement I have been closely following flexion progress. So ret is ramp and the addition of two potentially transformative pipeline drug candidates.
In the last few years the company has evolved into a significant player in the musculoskeletal space and the importance of its mission and the impact of <unk> has only grown.
I share David's view of collections future <unk>.
I firmly believe that with this product, it's winning commercial strategy and the passionate people, who make flexion such a remarkable organization. The opportunity ahead of us is tremendous and I am thrilled to be back.
Thanks, Fred and welcome back before I hand, it over to the operator for Q&A I would briefly summarize the first quarter as one of progress building momentum.
And optimism about the improvements we are seeing across the nation.
As Melissa mentioned the energy in the field is at an all time high our confidence in <unk> potential has never been greater our pipeline continues to advance and we have a tremendous management team in place.
Those are all the ingredients needed for a very bright future and I know that each and every individual inflection is committed to realizing it.
At this point I would ask the operator to open up the line for Q&A.
Thank you to ask a question you will need to press star one on your telephone once again Thats Star one and you touched on telephone to ask a question to withdraw your question press the pound key to ensure there is adequate time to get to everyone participants are asked to limit themselves to two <unk>.
Questions. If you have additional questions. Please rejoin the queue and we will come back to you as time permits. Thank you.
Our first question comes from the line of Elliot Wilbur of Raymond James Your line is open.
Thank you good afternoon.
First question for Mike just a point of clarification on the 201 study protocol.
Does any ethane.
Trigger.
<unk> for the trial.
And review by.
The DMC or just share.
Events.
Elliot the simple answer is yes, any assay is the first time. This factor has been injected into the knee drawing out of an abundance of caution the FDA really strongly pushed in that direction.
Because sometimes determinations of related news by investigators might get called into question.
But after subsequent review and in this case.
We were asked to take what I'll call a belt and suspenders approach. So any assay would have triggered the cascade that was seen with this assay.
Steady pause investigator determination study pause DMC review FDA ultimately green light that's how it worked at this time.
And.
It would be the case for anything.
That is an essay.
Okay and now debt.
The initial <unk>.
Data has been presented can you just maybe describe for us some of the feedback perspectives that you receive within the clinical community and maybe some of the <unk>.
Important takeaways.
And subtleties that maybe arent so obvious.
And the poster abstract itself.
Yes, Elliot I would say this.
There is tremendous enthusiasm in many circles for the potential for FX 201, the data that we presented at <unk> was the low dose cohort. It's still preliminary it's not fully mature and I think that people are looking to see not only what we have with the <unk>.
Low dose cohort, which has some promise in it as as linear.
And we went through that in this script, but also to see what happens with the mid and high dose cohort, especially over time. So I think it's just early.
I think there are a lot of people who are keenly interested in this gene therapy approach in this specific vector and are hungry for additional data and we're eager to share that the all of those data at the right time.
Okay, and just last question here I understand there's only.
Sample size.
Five.
Obviously, <unk> now to efficacy data as it credibly difficult, but just in terms of thinking about the clinical benefit of the product.
I mean, you had two patients for that basically I think responded all the way out to 24 weeks and then.
Several where we saw 30% reduction and 50% reduction for longer periods of time I guess, how do you think about sort of what's clinically meaningful here in the context of a reduction from baseline versus the duration of.
<unk> effect because it seems like there were some patients where maybe the reduction wasn't as great, but you had benefit out too.
I think it was.
Can't remember 38 weeks, maybe a day.
Yes.
Yeah, well, we have to have both we have to have magnitude of effect.
And we have to have durability out to I mean, our product profile, so as meaningful decreases in pain and improvements in function for at least six to 12 months.
And certainly it would have to be at least 30% and for.
Frankly, ideally much closer to 50%.
Okay.
I'll jump back in the queue. Thank you.
Thanks Elliot.
Thank you. Our next question comes from the line of Madhu Kumar of Goldman Sachs. Your line is open.
Hey, guys. Thanks for taking our question. So thank you know about FX two O one Andy index.
Can you give us a little granularity on.
On kind of.
What happened to lose index.
<unk>, which patients they were in.
You can kind of give.
Give us some share information and then kind of stepping back from debt.
What do you think is an acceptable tolerability profile for <unk>.
H therapy drug given what you've done so far particularly in terms of index.
From this year.
Yeah well.
These were adverse events in two out of five patients from the low dose cohort that played out over the course of days or weeks. There as you know their grade too so they were not.
Moderate to severe and they resolved with conservative treatment.
I think we're gonna have to look at what the day to tell us to do in terms of.
Efficacy balanced by in this case.
Modest and judge to be tolerable AE. So I think it's really way premature for us to say chapter and verse on exactly what the equation will look like clearly the more tolerable. This product is the better.
But everything is benefit risk and.
If there is extraordinary benefit.
That would.
Balance out to some extent some degree of local adverse events, if that should persist but.
I don't want to be in the mode of speculating in the absence of the data.
Okay.
Net and the patient to add.
Index.
For the agents.
Didn't achieve that 50% reductions like how should we sort out kind of which patients had these events as compared to the patients who received benefit yeah, we've not yeah.
It's a great question Madhu, we've not publicly disclose that and that's not something we're prepared to talk about.
But we will absolutely be transparent with those data at the right time.
Okay, great. Thank you very much.
Thank you. Our next question comes from Serge Belanger of Needham.
Needham <unk> company your line is open.
Hey, good afternoon.
I guess my first question to Mike or Melissa have you completed other spot surveys with your group of wells.
So Peter since we last spoke.
Just to give us an ideas we're seeing.
Improvements in patient volumes.
And the early part of the second quarter and then second question just a bookkeeping one for David.
Since you've.
We started manufacturing in the fourth quarter are we now reaching steady state levels.
Of Cogs or should we still.
I expect to see some variability in the second quarter.
Thanks for most of the do you want to take that first question, Yes, I think for the.
First one so the last time that we checked in on patient flow to practices.
Near the end of February.
We have heard no change.
In sum.
One off conversations with practices as well as with our field leadership team that.
<unk> flows remain.
At around 80% of pre COVID-19 levels, and then we did that checking back in February.
Also asked the panel of 30, or so orthopedist, how long they expected that to remain and they had said they thought it would carry through to at least the mid.
Part of this year.
Yeah, Hey, Serge it's David on your question about Cogs.
So.
As I said previously.
We are we were expecting to get back to.
Normalized pre COVID-19 gross margin percentage.
<unk> levels. This year first quarter gross margin percentage was 75% a bit lower than what we what we'd anticipated we expect that to improve during this year, but to continue to have a certain level of inherent operational and cost variability as we are ramping up.
Beyond this year I think that's when we start thinking about steady state.
And getting to.
A target gross margin percentage of around 90%.
Thanks, David.
Thanks Serge.
Thank you. Our next question comes from Gary Nachman.
BMO capital markets. Your line is open.
Hi, This is evan for OXXO and in for Gary. Thanks.
Thanks for taking my question.
First day.
On the initial low dose that is there any modifications.
We're able to implement for different cohorts for the remainder of the trial.
And secondly for the router.
Sales reps now in terms of face to face interactions with physicians.
Is there any modifications you plan on doing either to the sales sales force or the target physicians.
Yeah.
So.
I'll answer the first question was obviously will take the second but just if you would clarify for me what.
What kinds of modifications are you asking about.
I guess in terms of the safety in any ways.
Our dosing frequency or.
Just any way yes.
I would say this.
Based on the very mild nature of these aes and the low dose cohort.
There would not be a compelling reason to modify the protocol.
Obviously, what we will do is look at the entire data set.
Low mid and high dose and ensure that we're doing what's right for patients and for the product. So.
There is certainly nothing I can tell you with confidence that there is nothing in this data set that would have pushed us.
To consider a modification of the protocol.
And with regard to the second question around.
The degree to which our sales force is back to face to face interactions with our customers.
I would say sort of what I've said previously which is that across all of our 100 or so MDM territories RF theyre able to see some percentage of their customers in some cases all of their customers in some cases 60 70, 80% of their customers in terms of face to face office visits.
And that's just based on what individual practice policies are.
With regard to.
Allowing.
Industry visits to come back and with regard to the second part of your question around any foreseeable changes for the sales force.
Still in the process of scientists synthesizing our findings relative to our optimized footprint I would I would simply say at this time, we don't anticipate any material changes to the size of our sales organization.
Come on.
Thank you.
Thank you our next question comes from.
Patrick <unk> of <unk>.
C. Wainright. Please go ahead.
Hi, good afternoon, and congrats on all the progress with pro rata on the pipeline I'm wondering should we think of the regulatory bar for approval of a gene therapy treatments such as FX 201.
As being consistent with the updated guidance FDA has provided on disease modifying drugs and if it is can you discuss your level of confidence that 201 could demonstrate a benefit on both the pain scores as well as disease modification and then related to the disease modification. How would you be measuring are evaluating these modifications.
In the current trial underway or in a larger phase II trial to follow.
Okay.
Pat Thanks, very much for for those questions are good questions I think it's fair to say that there is.
Far from.
Clear understanding of what the agency will accept for disease modification.
The guidance is pretty high level.
And we are.
For capturing X Ray and MRI data, but the key thing is to have a validated endpoint from the imaging studies that that one can hang their hat on that will be endorsed by the FDA and I'd say, that's very much in front of us.
We are particularly interested in.
Durability and magnitude of pain relief and functional improvement.
And.
That if we get at least six to 12 months of that of meaningful improvements in those domains.
That will be enormous.
Icing on the cake would be evidence of disease modification and I know you know this path, but I'll just kind of.
Point out that patients make the decision to get their knee replaced patients with advanced OE, which for patients with advanced pain and functional compromise makes a decision to get their knee replaced not because of an imaging study.
They get there just the decision to get their knee replaced based on the fact, they can't leave the lives. They want to leave lead and have pain that is refractory to available therapeutics, so from our perspective.
Being able to hit on both of those cylinders pain and function.
Good.
Provide tremendous benefit to patients.
And I have the great potential the potential to not have those patients need to make a decision about knee replacement as soon as they might otherwise again. This is all in front of US we have to generate the data, but the logic that hangs together here is around symptom improvement.
As a prelude to delaying the need to make a decision.
For total knee replacement.
Yeah. That's helpful. Thank you very much.
Thanks, Matt.
Thank you. Our next question comes from Francois <unk>.
Of Oppenheimer. Your line is open.
Alright, thanks for taking the questions and best of luck David on the next.
On the next job.
Just wondering Melissa in terms of the new metrics here.
Is there a particular order in particular.
Particular reason for the order that they are presented.
On slide five I guess.
We purchased accounts, you've got 100 up to 300 more is there kind of a maximum threshold, where you think accounts can only purchase a certain amount of units per car.
Order.
No no intention behind the order of the slides just kind of thought debt summary, slide upfront followed by.
Our revenue performance and demand performance, and then sort of a breakdown of wire demand performance came from seem logical.
And with regard to do we think there is sort of a ceiling on penetration at the account level.
We don't certainly certainly theres not one insight today, I think that even among our highest losing customers. We continue to believe that we've only scratched the surface with the opportunity.
Within a given hcp's patient population, but also across <unk>.
Practices patient population.
Okay, Great and then Mike in terms of the WOMAC a score can you just remind us I think.
Back a few years ago still red had shown some serious.
Improvement over.
In both in all three WOMAC, a b and C. So I was just wondering why on the show Womack is there reason here.
Well, we were particularly focused on pain and function and coos as an instrument actually encompasses.
WOMAC C function domain for Womack.
And asks questions beyond that it's a very it's a instrument that's very familiar to the orthopedic community.
And we made the decision to use that this time around as maybe even a more robust characterization of functional improvement.
Okay, Great and then just lastly in gene therapy is there.
Sometimes people think about astronomical costs here can you just remind us why it might be a lot less expensive here for OA of the knee.
Yeah, I mean, because we're injecting locally and we're asking the vector to produce sufficient protein to achieve a therapeutic concentration in five MLS I mean basically.
Teaspoonful worth upwards.
About that any way a very small volume.
It is.
You compare that to the volume of the interim vascular space. The blood volume that's about 6000 ml. So this is three orders of magnitude less so you can dose down proportionately.
Proportionately to achieve the therapeutic concentration knee drawing.
And by dosing down.
Your Cogs are less challenging and that creates pricing latitude that will allow you to charge a price that will be consistent with deriving value for.
For.
The product.
But we will not be astronomical.
Okay, great and what someone if six months durability was shown why would someone choose that will read out over this is there any reason to or are they sure. It gets other yeah.
We get asked this a lot Frank.
It's a fair question.
What you get was already.
As you get.
Rely highly reliable.
Pain relief for three months for months.
I mean, 93% by your own day to 93% of patients respond to is already that's pretty remarkable and so for for a person who is entering ski season is going on a trip somewhere and wants to have that reliable pain relief.
And knows that it's going to kick in within a matter of days <unk> will be in my humble opinion, I expect still retro will be to continue to be the tried and true.
Therapeutics that will address that need for someone who.
Has different circumstances and wants to.
Have a longer.
Pain relief for what we have what we have in front of us is how.
What the magnitude will be and how durable that will be and how expensive it will be and all of those factors have to be put together in an equation that.
Patient and physician decide on but I I can given the unmet medical need here, Frank let's pull way up.
8 million knee injections a year.
And many many patients over 1 million patients going to total knee replacement a year the unmet medical need is vast and the field needs multiple.
Effective therapies.
Okay, great. Thank you very much.
Thank you.
Thank you for our next question comes from Carl Byrnes of Northland.
North land capital management your line is open.
Great. Thank you congratulations on the progress.
Looking at the demand being up 6% sequentially over the fourth quarter.
Despite the challenges of COVID-19 and the power outages extended power outage that is in Texas.
<unk>.
The deductible GAAP, but you also get in the first quarter do you have any sort of visibility or read into what the pent up demand as these anomalies might be.
Thanks.
It's a great question.
I don't know that I would characterize it necessarily as pent up demand.
Probably a combination of the reflection of us being back out there in full force.
Practices.
Touching up with their own patient populations that may be from <unk> to a lesser degree.
In the quarter Christina in Q1.
And just.
<unk> improvement with regards Inc.
Sales effort, our blocking and tackling up off the account level.
Great. Thank you.
Our next question comes from Daniel Buzzy.
RBC capital markets. Your line is open.
Hi, everyone I have a couple of questions on the commercial metrics that you disclosed today are first if we look at the old commercial metrics I think around 4400 total accounts had purchased <unk> since launch.
But if I look at the slides today only about 2000 accounts purchased during the first quarter can you help reconcile those two numbers for us how much of the difference is accounted for by variability in the timing of orders versus accounts that have tried it already but are no longer using it.
Second it looks like roughly 12, 5% of also read of demand in the first quarter came from your top 10 accounts is there anything unique or different about those accounts that explains the large order sizes.
To tease out whether that's an achievable target for what maybe a more typical account. Thank you.
Both great questions. So I think the big difference between what you saw in terms of cumulative accounts purchasing to date.
Versus the 2040 for that purchase from Q1 is 100% what you suggest book, which is just a difference from a timing.
Within a quarter when an account might make that purchase price.
And based on when they might have.
Wanting to sort of shore up their assets to Rebating. It may have more to do with just the way the for patients are flowing.
But I don't think that there is anything else that connects or disconnects that total number of cumulative accounts purchasing with.
Those that purchased from Q1 with regard to your second question about the percentage of our accounts that purchased in Q1.
In the top tiers, we actually look at this data a bunch of different ways and got to the conclusion as I stated in my prepared remarks that.
Among those 99 accounts that comprise the top two tiers of purchasers in the first quarter.
Our penetration rate.
Could be as high.
60 plus percent.
I think we look at that as a potential model for <unk>.
We can go with.
Some more significant proportion of our accounts in the event that we're able to apply the same level of voice and intensity around a broader base of accounts. The way that we have with those 99 accounts that today in the top two tiers for first quarter purchasing.
Okay, and if I could ask a quick follow up are those top 99 accounts do they tend to be larger than your average accounts.
They are.
Really across the board in terms of.
Net number of docs the number of patients that they see the size of the opportunity.
Theres no sort of unique or set of unique characteristics that tie those 99 accounts together.
Got it I appreciate the color.
Yes.
Thank you. Our next question comes from Bruce Jackson of the Benchmark Company. Your line is open.
Good afternoon, and thanks for taking my questions.
So for Melissa a couple of quarters ago, we were talking about the increase in the backlog for total knee replacement surgeries.
Have you seen any change in that backlog and the market and with your physician survey, they said things might get back to normal.
Middle of this year, how long do you think that the backlog in surgeries might persist.
So when we when we did our last checking with our panel of Orthopedists back in February we asked about both the resumption of patient flow practices versus print.
COVID-19 levels.
As well as sort of where things stood from DLR standpoint, and they cited in both cases that they were still living around 80% I would translate that to mean that we.
We worked through the majority of the backlog of Teekay procedures.
Certainly as we get above 100 got about 80% in both settings of care, we might expect to see.
Some dribbling in of upside.
And.
We get back to normal.
Normative levels of Teekay procedures, as well as more normative levels of patient flow to practices.
Okay, and then one follow up if I could the other.
The thing that gets discussed a few quarters ago is the ability to access some of the high prescribing accounts to add suddenly had some time to evaluate.
All right.
What's the experience been like and those accounts are they reordering and are you getting more of it the physicians within those practices to start using silverado.
Yes, I think I think what you're referring to is the fact that during the height of the pandemic, where physicians were out of their offices and relegate it to their home offices and not seeing patients that gave us the opportunity through remote means to be able to access some hcp's that we may be previously had had.
A harder time, accessing and I think that.
Our experience has been that a not insignificant percentage of those hcp's that we were able to access remotely during that sort of heightened period of the pandemic have resulted in.
From new customers coming on.
Okay. Thank you very much.
Mhm.
Thank you at this time I would like to turn the call back over to Mike Clayman for closing remarks, Sir.
Okay.
Yes, I'd like to just thank everybody for their time and attention. Appreciate your support we're excited about where we are and what the future holds for us.
And we're looking forward to updating you on our progress over time be well everybody.
This concludes today's conference call. Thank you for participating you may now disconnect.
Yes.
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Yes.
Yes.
This growth.
Good day.
Thank you.