Q2 2021 OptiNose Inc Earnings Call
[music].
Okay.
Good morning, ladies and gentlemen, and welcome to the afternoon second quarter 2021 earnings Conference call. At this time all participants are in a listen only mode. Later, we will conduct question and answer session and instructions will follow at that time, if anyone should require any assistance during the conference. Please press.
Car then zero on your Touchtone telephone of a reminder, this conference call is being recorded all of the I'd like to turn the conference over to your house, Mr. Jonathan Neely, Vice President of Investor Relations. Please go ahead.
Good morning, and thank you for joining us today as we review at the note of the second quarter 2021 performance on our plans for the remainder of the year I'm joined today by our CEO, Peter Miller, President and Chief operating Officer Rami on the Hood, our Chief Commercial Officer, Vic Gabelli and our CFO Keith got in the.
The slides that will be presented on this call can be viewed on our website at the nose dot com in the investors section before we start I would like to remind you that of discussions. During this conference call will include forward looking statements. All statements that are not historical facts are hereby identified as forward looking statements forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those.
By such statements additional information.
Information regarding these factors and forward looking statements discussed under the cautionary note on forward looking statements section of the earnings release that we issued today as well as under the risk factors section and elsewhere in most of <unk> and up into the most recent form 10-K and form 10, Qs that are filed with the SEC and available on their website at SEC Gov and on our website at <unk> Dot com.
You are cautioned not to place undue reliance on forward looking statements forward looking statements. During this conference call speak only as of the original date of this call or any earlier date indicated in such statement and we undertake no obligation to update or revise any of these statements. We will now make prepared remarks, and then we will move to a question and answer session with that I will now turn the call over to Peter Miller Theater.
Thanks, very much Jonathan and good morning, everybody.
We appreciate you joining us this morning.
Clearly is an exciting time for our company. We believe that we made strong progress in the first half of 2021 true towards our two core objectives.
Driving cash revenue growth and successfully completing our chronic sinusitis pivotal trials that have potential to unlock significant new value.
Starting on slide three.
I'd like to begin by highlighting four key takeaways from today's presentation.
First our Q2.2021 financial performance was aligned with our full year guidance.
Second we believe there are multiple opportunities, but we will continue to support revenue growth in 2021, we're very excited about the emergence of a stepwise care paradigm for the treatment of quantifying the sinusitis with nasal polyps much of the medical community gets adopted in other disease areas, such as asthma hypertension and pain.
This paradigm was the subject of an algorithm published in June in the international form of allergy in my knowledge authored by leading independent experts from both the E&P and allergy thought leader communities that highlighted the role of <unk> in the step wise care importantly, this expert group recommend the <unk> be considered in two situations.
One when traditional nasal sprays of been tried and found to be inadequate before a patient progresses to a higher tier care of such as surgery of biologics and two when symptoms recur after surgery.
As awareness of the stepwise care paradigm continues to grow we believe it could be very beneficial for the continued adoption of <unk> by physicians.
Another factor that we believe could support revenue growth in the remainder of 2021 is improvement in patient flow and physician access.
Although market conditions of improved during the last several months, we've not yet seen of complete return of the number of diagnostic visits by patients to Emt and allergy offices. Additionally, our sales representative access to those physician offices also remains below pre pandemic norms.
Although the future pandemic future, although the future pandemic environment is not entirely clear we believe our specialty physician environment will remain relatively stable and potentially improve from the last months of the year with respect to both patient volumes in the offices and on our representatives access to those offices.
Given the historical high promotional response, we have seen with <unk>. We believe this could be beneficial in driving growth.
In addition, we continue to see potential to get more benefit from our partnership with <unk> as the pandemic environment potentially improves access for their representatives as well.
Finally, we believe there is potential for improvement in the average number of prescriptions filled per patient per year. As a result of the changes we made to our co pay assistance program.
Third.
We completed the enrollment in our first pivotal clinical trial evaluating <unk> for the treatment of patients with chronic sinusitis in July and remain firmly on track tap topline results from this trial in first quarter of 2022.
We are now focusing all of our recruitment efforts on the second pivotal trial, which we expect to complete enrollment by year end and have topline results from the second quarter of 2022.
And fourth we are very enthusiastic about the opportunities for growth the successful chronic sinusitis trials would create.
<unk> could be the first drug ever to be approved by the FDA for the treatment of chronic sinusitis.
We believe these trials could not only put on.
B of breakthrough for the approximately 30 million patients from the U S who suffer from chronic sinusitis, but also a game changer for our business.
Chronic sinusitis data could create a multi fold expansion of the target population.
Could further increase product differentiation in our current physician audience.
Could be of strong basis for engaging of partner to help reach of substantially expanded physician audience and primary care can.
Can improve ex U S opportunities and therefore significantly drive additional value from the company.
Turning to slide four.
We had strong performance of second quarter, 2021, and I will briefly touch on the year over year growth highlights on this slide and the next.
In second quarter 2021, the were approximately 29000, new prescriptions for <unk>, a 55% increase compared to second quarter of 2020, and the highest number of new quarterly prescriptions for <unk> since launch.
While the market increased 19% over the same period of the second quarter of 2020 was the peak of pandemic related restrictions. We're pleased with the disproportionately high increase in new prescriptions for <unk>.
What's important here, though is that in addition to increasing the number of new prescriptions. We've also improved the quality of our new prescriptions due to changes on our co pay assistance program.
This has increased the proportion of covered patients filling first prescriptions, which we expect to drive higher refill rates and improved average revenue per prescription.
The total of number of <unk> prescriptions in the second quarter of 2021 was approximately 82900 <unk>. This represents 33% growth over the second quarter of 2020, and the market environment, which increased 5% over the same period.
Turning to slide five.
The <unk> market share increased from four 4% in second quarter of 2020 to five 4% in second quarter of 2021.
As market volumes potentially return towards the pre COVID-19 baseline in the later part of the year, we're focused on holding on to or adding to the gains we've made of market share.
Breadth and depth of physician prescribing as measured by the total number of physicians, who have patients filling <unk> prescriptions increase from second quarter 2020 to second quarter of 2021 as well.
Regarding breadth and second quarter of 2021, approximately 7200 physicians had a patient fill at least one prescription of <unk>, an increase of 16% compared to second quarter 2020.
Regarding the depth the number of physicians, who had more than 15 <unk> prescriptions filled by patients in the quarter has grown even faster with that number of increasing by 38% from second quarter 2020, the second quarter 2021 with more than 1400 physicians now in this segment.
In a few moments I'll provide some closing remarks, but I'll first turn the call over to our CFO CFO Keith <unk> for comments regarding second quarter of 2021 and perspectives regarding our corporate guidance.
Thanks, Peter and thanks, everybody for joining us today.
Going to slide seven.
As we reported <unk> recognized $18.4 million of expense net revenue an increase of 79% compared to the second quarter of 2020.
Based on available prescription data purchased from third parties and also on data we received directly from our preferred pharmacy network expense average net revenue per prescription for the second quarter of 2021 was $221 an increase of 35% compared to $164 in the second quarter of 2020.
<unk>.
The year over year increase in revenue per prescription is driven by the absence of the onetime assist program that was available to patients in the second quarter of 2020.
Combined with changes earlier this year to a co pay assistance program.
These changes were intended to increase revenue per prescription by reducing the rate of growth in prescription fills by commercially insured patients and plans that do not cover expense, while sustaining growth in covered plans.
The data suggests the changes had the targeted effect and we expect continued beneficial effect on revenue per prescription going forward.
Moving to slide eight.
Our guidance for full year and the remainder of 2021 is unchanged with the notable exception of revenue per prescription we have increased our expectation.
First in light of growth prospects for both prescriptions and revenue per prescription we continue to expect the <unk> net revenue will exceed $80 million for full year 2021.
Prescription volume factors supporting this could include the.
The place of enhancement steps care being embraced by more physicians in our target audience.
The potential improvement in the average number of prescriptions filled per patient per year that result from the changes we made two of copay assistance program the.
The changes we made to drive a greater proportion of prescriptions coming from patients with the with insurance that cover expense.
As I said earlier, our data and create these patients still had a greater number of prescriptions per year.
Improvements in patients visiting physician's offices, and our territory managers the ability to visit those offices.
As well as the <unk> co promotion.
Second with respect to expense net revenue per prescription we expect to see improvement of the remaining two quarters of 2021 relative to the first half.
And for the full year 2021, we now expect expense net revenue per prescription to exceed $200.
Previously we expected full year 2021.
To exceed $185.
And finally for the full year of 2021, we continue to expect operating expenses to be in the range of $137 million to $142 million.
Of which approximately $10 million is expected to be stock based compensation.
Total operating expenses, excluding stock based compensation of therefore expected to be in the range from $127 million to $132 million.
I'll now turn the call over to Rami to discuss our development programs.
Great. Thank you Keith turning to slide 10.
I'd like to briefly remind you of the basic design of our chronic sinusitis trials.
The two pivotal trials are similar six month studies evaluating both of the FDA approved doses of <unk> and of population with chronic sinusitis.
Turning to slide 11.
Okay.
Regarding the two pivotal trials, which comprise our chronic sinusitis registration program as discussed earlier, we recently completed enrollment for the first trial study of $32 five net.
Puts us firmly on track to have topline results in that first quarter of 2022.
All of our recruiting efforts are now focused on the second trial study 32 on six week.
Expect to complete enrollment for study of <unk> in the fourth quarter and to have top line results in the second quarter of 2022.
We previously reported having performed a planned blinded interim analysis to compare the observed variance in the first of the two hierarchical co primary endpoints from study <unk> 205 to the variance that we had assumed during initial trial design.
In June we completed a second similar planned blinded interim analysis.
The assess the variance in the second of the two hierarchical co primary endpoints and study of <unk> 205, the average of pacified.
The percentage of the average percentage of Opacify volume, which is the C. T scan endpoint.
We assess the variance in the change scores from baseline to week 24 like.
Like the first interim analysis. This analysis was intended to assess whether the variance assumptions in our a priori sample size calculations were consistent with the actual variance being observed in the trial.
The second analysis was performed on data from approximately one third of all patients projected to complete the study the.
The result was at the observed variance was lower and the variance that had been assumed for the purposes of sample size estimation. During the initial study design.
Given this result, and the similar results previously reported for the first hierarchical co primary endpoint, we reduced the sample size in the study from 378% to approximately 330 patients in trial <unk> 205, while maintaining our originally targeted statistical power for the final analysis.
Plan to allow a similar blinded interim analysis for trial 32, six when sufficient data, including a six month follow up CP scan data becomes available.
Moving to slide 12.
Regarding <unk> 109, our product candidate with potential utility for treatment or prevention of COVID-19, and for preparedness against the future Pandemics.
In early July we received approval from regulatory authorities in Mexico to proceed with the conduct of a randomized adaptive proof of concept single dose study to evaluate change in viral load after use of <unk> of 109 by adults with COVID-19.
Final approval from the regulatory authority took longer than anticipated at the time of our last earnings call, but study drug was made available in Mexico and the study is now open for enrollment.
Given the design of the study and the endpoints to be evaluated we expect to have initial results very shortly after each cohort completes enrollment.
Recent news concerning Colgate variance and breakthrough infections vaccinated people leads us to believe that there may be of useful rule from a product like <unk> 109 to address the evolving pandemic, even in the context of widespread vaccine availability.
As previously noted despite the excitement that we and others have for the potential value of <unk> 109, we are aware of the need to maintain sharp organizational focus on growing <unk> hands and on completing our chronic sinusitis trials.
Therefore, when data from our pilot study becomes available we anticipate seeking grants partnerships <unk> other sources of capital to support further development of <unk> of 109.
Before I turn the call back to Peter for closing remarks, I'd like to take a few minutes to put a brief spotlight on the significant opportunity that we believe will be created if we are successful in developing <unk> as the first FDA approved drug treatment for chronic sinusitis.
So turning to slide 14.
We believe successful chronic sinusitis development plus engagement with the primary care partner could enable promotion of exam to up to 30 million patients who have either nasal polyps or chronic sinusitis.
The chronic sinusitis program is important because although we are driving strong growth with the <unk> first indication in our called on specialty physician audience. There is greatly expanded potential ahead of us if rcs trials demonstrate efficacy.
Today enhanced promotion is aimed at a patient population of approximately 1 million who suffer from the nasal polyps and are actively treated in the specialty segment.
We are driving strong growth in that context, as evidenced by our expectation for at least 80 million of expense net revenue this year, which equates to more than 65% growth compared to full year 2020.
However, our chronic sinusitis indication would triple the size of the patient population for which we promote expense within our specialty audience on audience, where we continue to grow physician preferenced share to approximately 3 million patients.
Even more potential lies in the fact that chronic sinusitis paves the way from a primary care partnership because of the primary care setting square chronic sinusitis patients seek treatment first and most often.
The primary care partnership would enable active promotion aimed at a total population of 10 million patients who are actively seeking treatment 10 times the patient audience, we target today in the specialty setting.
In addition, we believe that up to $20 million more patients suffer from the symptoms of chronic sinusitis without regularly seeking treatment from a physician to day, possibly because they do not want surgery or do not feel there is anything new that their physician can offer them that they cannot buy on their own.
Of this large incremental pool of patients has potential to be activated by a primary care partner for example by direct to consumer promotion.
This results in a total patient population of up to $30 million for whom <unk> may be a suitable treatment option.
And Thats, an enormous increase compared to the approximately 1 million patients who have nasal polyps and are treated by the specialty physicians that are the current focus of our promotional sales efforts.
As a result, we believe there is opportunity for significant value creation through of primary care partnership.
I'll now turn the call back over to Peter for closing remarks Peter.
Thanks, very much Rami.
Before moving to the Q&A I'll take a moment to read the reiterate that we're pleased with the momentum we have built in the second quarter 2021, and are laser focused on continuing to grow enhance and completing our chronic sinusitis trials.
Thank you and now we'll open the call up for Q&A.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your <unk>. If your question has been answered or you wish to remove yourself from the queue. Please press. The accounts you have first question comes from the line of Gary Nachman with BMO capital markets are in line.
Okay.
Hi, Thanks for taking my question, the Evan <unk> filling in for Gary Nachman.
The first question is.
Have you seen a dramatic change in the number of patients in <unk>.
What are the key prescribers the expense.
How much more room from a recovery is there and how do you expect the patient volume trend in the back half of the year.
I think the best place to look at the answer that question. This is Peter is in the new growth in the new prescription category.
In the second quarter versus last year and versus the prior period and what we've seen tracking sort of new prescriptions, which really is the best indicator of sort of how patient flows are going into offices and this is for the category not just its hands. We haven't had a very significant decline in the second quarter of last year.
And since then <unk> seen a category that has recovered on new prescriptions, but frankly.
Didn't quite reach the levels of 2019 sort of of non pandemic year. If you will so while there certainly has been recovery and anecdotal comments from physician office of suggested patients really have returned.
There certainly is an opportunity for continued growth in patients returning.
By the way anecdotally, we do hear that are masking and other things did sort of limit the number of patients who had exacerbations of chronic rhinosinusitis patients with exacerbations, which potentially limit of our audience, even a little bit more during that period, but to answer. Your question. There is certainly is room for more patient volume returning.
In the back half of this year, obviously, there is some effects currently with the Delta variant but.
Of our expectation is there certainly is more room and minimally we believe will be at least the stabilization at the point we're at right now.
Great. Thanks for the color on that.
Another question in terms of.
Could you provide some more color around the cadence of even algorithm or expense recommended by experts the outlets have.
Have you seen any initial impact on the Kols community in terms of the prescribing behavior and how does that fit in.
And the marketing strategy going forward.
The <unk> start and then I'll follow up with some thoughts.
The algorithm as we highlighted early of the algorithm identifies <unk> as the treatment consideration of two key points.
After you tried sort of a standard inhaled nasal steroid.
Like the type of <unk> counter and before you escalate care to a higher tier like surgery or an injected biologic and then again at the second point in the algorithm.
The symptoms are recurrent after surgery.
Our anecdotal feedback from a variety of.
Thought leaders in the area is that there is a pretty widespread concurrence with the positioning every pants and both of those places and we do of course, the the product using both of those places and we hope to see adoption increased in both places.
As the algorithm becomes more widely disseminated.
I will make in terms of adoption in the market is that.
We really just started promoting the algorithm in the latter part of June so any impact of the algorithm is really not yet seen in any material way in our in our volumes if you will.
We are hearing very encouraging things and the part that is exciting to us about this is the group of physicians that have adopted the algorithm is our believer segment so of the.
Physicians were targeting roughly 10000, only about 1400 physicians have really adopted the algorithm.
Which means that we believe this expert group of physicians.
Giving this kind of.
Recommendation, if you will for where <unk> fits in the treatment algorithm could be of very potentially strong way to influence the balance of people who have not yet really adopted the algorithm and the practice. So we're very excited about it. We just were the big meeting with us on E&P positions a couple of weeks of.
Go Theres real general enthusiasm of the algorithm is being presented in many of the presentations that were being done by people at in presentations.
We look forward to ability to really grow the business behind this recognition.
Thanks for taking my question congrats on quarter.
Thank you.
And our next question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my question on congratulations on all of the progress.
So I keep had data suggests that it's Hans description of that coming in similar volume from the major chronic boxes.
Analytical or not because if we could put on chronic sinusitis and nasal polyps.
On this what's the value of the CF indication for your current target. Thank you.
While we're on laminates have you start and then I'll add some comments at the end here great. Yeah. Thanks for the question Brandon.
Of the IQ via data on prescribing by diagnosis in the specific category has limitations that really constrain its usefulness for understanding this issue may be different from other categories.
Our market research and our experience in the market to date suggests that although a minority of our prescribers choose to use the product across the indications, which makes them some of our largest prescribers today, a large majority of our called on prescribers do meaningfully limit their use of the nasal polyp indication, which is in part a result of of our current promotional efforts.
Which are limited to nasal polyps.
If expense is approved for a much broader indication of chronic sinusitis, we anticipate expanded promotional efforts will produce substantially increased depth of prescribing in most of our currently called on audience.
Furthermore, as the first and only product for the treatment of chronic sinusitis.
In that scenario, we believe there is potential for facilitated payer negotiations and coverage, which will also further lower perceived insurance barriers to physician adoption. So.
So overall, we think that there is a significant.
<unk> potential associated with the new chronic sinusitis indication and physician prescribing given the specialty audience.
Yeah, and I'll add to that and Rami I think covered it very well Brandon. Thanks for the question is that historically, we've said that outside of the believer segment debt that really as I said earlier has adopted not only the algorithm, but really is using our product in the broader group of patients the nasal polyp patients as evidenced by the fact, they are of very high share of.
Total intranasal prescriptions that are written which means in essence, they have to be using it a good bit broader but in that.
Dabbler segment as we call. It we've historically said that insurance on this one of the key factors that sort of limits on the <unk>.
<unk>, writing it more broadly and to be clear, it's physician's belief that our insurance is not as good as it really is and as we say all the time, we really have good insurance coverage of not only 75% to 80% of insurance slides covered but.
But we really had very few limitations to indication in the in the coverage that we have so we have pretty wide and broad access. However, many many physicians believe that of plans limit our product to nasal polyps, which as I said earlier is not that.
Not the actual situation, but it is of limitation. So we believe the <unk> indication in essence takes that issue away on the NIM.
It really lifts our sales reps go in aggressively and say look we have this indication and therefore there are not the limitations that you think are in place on.
And by the way as evidenced by the fact that we're growing the believer segment, we are chipping away at these perceptions.
By the fact that we're growing the business, but the indication will eliminate the issue altogether, so and as Rami mentioned earlier by the way the part that is probably the most exciting part of the indication is opening up.
The audience to another fee.
50000, physicians treating 7 million patients.
Significantly more patients on our current specialty audience that we think can be accomplished the of primary care partnership. So we are very very excited about the potential of the CF indication.
Great. Thank you very much that's very helpful. I appreciate the color.
From your next question comes from San Phan Basi with RBC capital markets. Your line is open.
Yes, great. Good morning, guys. This is Steve on for Dan. Thanks for taking our questions here two from me and ill ask on the upfront here. The first is I just wanted to hit back on the guide.
Based on results to get implied $50 million on the back half of the year.
Maybe you can talk to what gives you the confident that youre going to exceed the $80 million threshold.
Can you talk about if there is any seasonality youre expecting in <unk> are just some of the assumptions you have built into the guide with regard to the Covid and the Delta variant.
And then my second question, just with regard to sales rep access to physicians.
The color on what percentage of reps are seeing face to face interaction debt.
Maybe some trends youre expecting on the back half of the year.
Yes, I'll start with Keith maybe you can add some commentary as well.
There's obviously two things that drive that we believe are going to drive revenue growth. The first that we've commented on is we've seen a really nice increase in average net revenue per prescription so.
That was just the very set of nice.
The improvement that we've seen and it was not.
This is something that is fundamental because it changes that we made on our co pay assistance program. So on.
We have that is of very strong tailwind, but relative to your comment on on volume.
We feel really good about the ability to grow volume in the back half of the year for the for the reasons of the Keith identified in the script I'll reiterate on number one is the algorithm.
Our ability and actually may be a backup Steve because you asked first about the environment and maybe I should start there.
Clearly, it's hard to predict what the environment is going to be like with the variance in all of the rest on.
We think that if you look at what's happened to our access and patient flows I cover this a little bit earlier, but there was a significant impact obviously on both access and patient flow in the second quarter of last year, you started to see.
No.
Growth if you will in both areas in the about the October November timeframe.
<unk> family of sort of been stalled.
And.
There is improvement, but we're not quite at the level that we were at pre pandemic.
By the way despite it was despite the improvement that you saw in the spring of this year and the in the general environment.
Our specialty office environment didn't dramatically improve from the January February March time frame. So as we look forward. We don't think it's likely to get worse, the environment relative to our specialty office environment relative to the patient visits as well as rep access and.
We don't have a crystal ball like anybody else, but we believe there certainly is the possibility of an improvement.
And I'll answer your second question right now and then I'll go back to other growth drivers on.
Our target is to make a face to face calls.
We found by the way the face to face calls really are just that much more effective and virtual calls and virtual calls can be effected that face to face are more effective.
We're right now at about six so we are not where we want to be and thats largely because of the environmental issues that I talked about just a moment ago.
And importantly, I sort of said this in the call. When we have access we move our business, we're very responsive to promotion when we get the right number of calls on the right number of physicians. So.
We think back half will be minimally stable from a specialty audience environment potentially improvement in the latter part of the year, depending on what happens with the with the Covid.
The Delta and other variance.
More important though we have other factors are going to drive growth. The algorithm is we think potentially game changing on the near term of our ability to get broader adoption by a bigger number of physicians as Keith mentioned the changes on the co pay program not only provide value and average net revenue prescription we're seeing of wheel potential nice impact on refill rate.
<unk> because of higher proportion of our new patients are covered versus uncovered and we see substantially higher refills in people who are covered versus not covered. So obviously you should see a real nice impact on refill rate. We think we have not yet seen the full value. We can get from the Clio promotion. So you put all of that.
Gather and yes, we are confident in achieving $50 million on the back half of the year.
Great guys I really appreciate the color there.
From your next question comes from Ken Cacciatore with Cowen <unk> Company, Inc. Your line is open.
Hey, Peter I really great job by you and the team I want to talk about the CF indication.
And the partnering discussions for primary care it really seems as if we're almost looking at to kind of distinctly different products and what do I mean by that is.
Our partner is going to need to do DTC like you indicated and youre going to need to have broad access and theres going to need to be kind of mutual.
Thank coverage decision co pay assistance of decisions and programs like the intimacy when you're dealing with such an opportunity in dealing with the partner. So I was wondering if you could talk about that a little bit on may be.
Where these negotiations stand.
With a partner and not be looking to you the maybe even buyout of the whole company. It just seems like a massive opportunity and an intimacy with that partner that would be unique and distinct than what we normally deal with and again congratulations on all the progress on <unk>.
Very much looking forward to the CF indication.
Well, Ken Thanks, very much for the question and by the way I'm going to reiterate what is what we said before but we are really excited by the syndication because of the potential value in the specialty audience that I think Rami did a good job of answering the question from Brandon because I don't think people enough people are realizing that there is real value of the indication.
In the specialty audience, but as you're highlighting Ken.
It's a real game changer.
Think about the significant number of patients over 7 million patients currently being treated in primary care with another 20 million people who've likely lapsed because of inadequate good therapies, it's a big opportunity.
And for that reason, we're very very excited about it.
Relative to the partnering discussions because of the size of the opportunity I'll say, Ken we're very confident we're going to get the primary care partner and.
Relative to the question about the intimacy that would be needed in managing a relationship of partner relationship again, we're confident that we're going to be able to manage that.
And candidly can it's going to come down to the economics is the.
The if we get the if the economics that can be expected relative to our primary care partnership.
Theres going to be of wheel motivation on our part to make sure that we have a really very strong working relationship with the partner so.
We're as I said, we're feeling great about the opportunity and very confident we will get of primary care partner.
Peter when you're thinking about timing, obviously, we of the day, we need the data, but can you give us a sense of where we stand in discussions and maybe timing we should be anticipating.
Ken on I'm, not going to comment on those discussions I will just say I'll reiterate we're very confident we're going to get a partner.
Okay, great. Thanks, again, congratulations again.
Thanks, Scott appreciate it Ken.
Alright. Your next question comes from David Allen.
Palin.
Piper Sandler.
Hey, thanks.
<unk>.
In the.
Nasal polyp indication.
Certainly clear that you have room for a significant further penetration there.
So just within.
That indication can you talk about the need potentially for expansion of DTC activity over time, and the extent to which that can activate.
Patients.
Really more of the long term question regarding DTC within that setting and then secondly can you just comment on how aggressive you'd like to be regarding the addition of the asset whether it's the commercial stage assets, where you can leverage yourselves of infrastructure that you have in place.
Or even in R&D stage assets.
Kind of where your appetite lies.
At this point.
In terms of.
Bringing in another asset or multiple assets. Thanks.
Yes, thanks, very much David and relative to DTC.
As we've talked historically, we did do some pilot work with DTC with the nasal polyp indication and candidly we saw by the leasehold terrific patient activation there. The problem that we saw was the we have many patients going into offices. Many primary care offices that werent aware of the product. We also had the issue.
By the way because the product is indicated for nasal polyps. When you put that in of DTC AD. There are some patients who sort of raise their hand, and say I don't have polyps, even though they very well may have polyps. So we think the real value of DTC, David is really with the CF indication because if you think about the <unk>.
<unk> indication.
With our partner, we will have broad awareness of the product among.
A broad primary care audience and.
Obviously because of the products indicated for chronic sinusitis, we know from a lot of work that we've done if you say we have of product for chronic sinusitis, there's 30 million people, who say I have that the.
Product is the disease very well known very well diagnosed people know they have it. So we think ultimately DTC has the best the biggest application with the <unk> indication, having said that I think you know we learned a lot in our efforts that we did on the nasal polyp and have really gotten lots of.
Smart of how we're doing a lot of our digital efforts.
Typically against the nasal polyp group.
I hope that answers that first question on the second question, David relative to a new asset.
As we've reiterated right now we are laser focused on growing <unk> revenue and we're confident we're going to get to $80 million by the end of this year. We say this all the time when we get to an $80 million business that puts us on a run rate certainly north of $100 million potentially of protein approaching a 110 million.
<unk>.
And with on the expense side, our <unk> trials going away.
You really can see it.
The potential to get to breakeven on cash flow from operations. So that's our focus right now.
That's where we are while our efforts are all sort of targeted but there is real value in leveraging the terrific sales team that we have in place, calling on <unk> and allergists and while we don't see anything happening in the very immediate term.
We are absolutely looking to look to bring in some assets in <unk>.
Eventually.
Initially David certainly the focus will be on commercial stage assets.
But the eventually potentially.
Down the road for pipeline as well.
Alright, Thanks Peter.
Thank you David.
Alright, I am showing no further questions at this time I would now like to turn the conference back to Peter Millar.
Well. Thank you very much operator at this point, we will close the call. Thanks, everyone for attending.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.
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