Q2 2021 Kala Pharmaceuticals Inc Earnings Call
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Today's conference is scheduled to begin shortly please continue the standby thank.
For your patients.
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Good morning, and welcome to College Pharmaceuticals, second quarter 2021 financial results conference call at.
At this time all participants are in a listen only mode.
Following management's prepared remarks, and Q&A session will be held.
As a reminder of this call is being recorded.
I would now like to turn the conference over to Norwegian Kim of sworn senior Vice President of strategy of College Pharmaceuticals. Please proceed.
Thank you operator, and thank you all for participating in today's call.
Joining me from the company are Mark <unk>, Chairman, President and Chief Executive Officer, Todd days, Mark Chief Operating Officer, Mary <unk>, Chief Financial Officer, and Kim Brazzell, Our Chief Medical Officer of will also be joining us for the Q&A portion of today's call.
Today's call is being webcast live the webcast link can be found in the investors and media section of our website at Www Dot Kala Rx Dot com.
During this call we will be referring to non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.
Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release issued today, which can also be found on our website.
On this call, we will make certain comments about kala future expectations plans and prospects that are forward looking statements within the meaning of the private Securities Litigation Reform Act of the 19 magnify. These.
These statements will include statements regarding the potential market and commercial launch plans for I assume this observations of associated with the commercialization of ICD 10 and Belfast.
The sufficiency of our cash resources.
These and other forward looking statements are based on the beliefs and expectations of management as of this conference call. Our actual results may differ materially from our expectations. The company undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur. After this conference call, except as required by law.
Investors should carefully read the risks and uncertainties described in today's press release as well as the risk factors, which identify specific factors that may cause actual results or events to differ materially from those described in our forward looking statements included in the company's quarterly report on form 10-Q, and other filings we make with the.
SEC.
From 10-Q will be filed with the SEC later today and will be available on our website I will now turn the call over to Paula <unk> CEO Mark <unk>.
Yes.
Thanks, Niranjan and good morning, everyone. Thank you for joining us today to review call of second quarter of 2021 financial results and recent business highlights.
Since our inception Kala has been committed to advancing innovative treatments for eye diseases, we continue to execute on all fronts and benefit from our uniquely positioned portfolio.
It offers both near term and long term growth opportunities.
We now have 2 FDA approved products based on our proprietary amplify technology and are making good progress toward advancing our pipeline of innovative and CE development programs, which have the potential to treat both front and back of the eye diseases. As we've described before a key area of focus for Kala and 2021 is setting up of.
Sue this for long term commercial success and we are encouraged by our progress year to date.
We saw immediate effects from our initial sales force expansion and has significantly broadened the payer coverage to include some of the largest commercial pbms in the United States.
We also recently secured our first Medicare plan coverage and are working diligently to obtain additional access for Medicare patients.
As Todd will describe shortly we believe this creates a tremendous foundation for future growth and we're excited to continue offering this year versus the first and only prescription therapy, specifically for the short term treatment of dry eye disease, which includes dry eye flares.
We are encouraged by recent trends on in belt of suggesting that elective ocular surgeries are continuing to return to pre COVID-19 levels as vaccines are becoming more readily available.
We continue to believe that <unk> prescriptions and revenues will grow over time.
Importantly, as we enter the second half of 2021, we continue to operate from a strong financial position.
With the capital to continue executing against our strategic priorities, while maintaining balance sheet flexibility.
We anticipate that our cash together with anticipated revenue from my service and in Delta's will enable us to fund our operations for at least 2 years as we continue to invest in building out our eyes to this commercial efforts and advance our pipeline.
With that I will now turn the call over to Todd to review, our commercial progress with I see this and investors.
Thank you Mark.
I'll begin this morning of a progress update on the <unk> service launch the.
The remains of massive unmet need in dry eye disease. There are of an estimated 38 million of dry eye disease patients in the U S over $17 million of these patients have been diagnosed and are under the care of eye care professionals.
We estimate that about 75% of the total addressable market were approximately 13 million diagnosed patients are currently not treated with the prescription dry eye therapy.
Of those patients who have received a prescription medication nearly 80% discontinue their medication within the first 4 months.
Multiple patient market research studies indicate that approximately 80% of dry eye disease patients suffer from dry eye players and that these flares occur on average 4 to 6 times per year.
As the only FDA approved product for the short term treatment of dry eye disease. We believe <unk> has the potential to become the preferred first line prescription therapy.
We're committed to continuing to educate eyecare professionals about the underserved acute dry eye market and over time change the treatment paradigm for the millions of patients who would benefit from the short term treatment of their dry eye disease.
In the second quarter of 2021 Symphony Health and our patient hub reported $15.630, <unk> prescriptions, representing an increase of 93% over Q1.
As of the week ended July 23, 2021 data from Symphony Health and our patient hub indicated more than 28000 prescriptions for Ais service have been filled since the launch in January including over 2500 refill prescriptions.
More than 3800 unique eye care professionals have prescribed <unk> since the launch.
We are also encouraged to report that 62% of prescriptions in the second quarter were written per patients entirely new to prescription dry eye therapy, indicating first line use of meaningful progress toward our goal of becoming the preferred first line prescription therapy for the short term treatment of dry eye disease, which includes drawing on.
The players.
Of note, we are seeing the optometrist, who often see patients earlier in the dry eye disease cycle, the written and 55% of <unk> prescriptions to date.
<unk> grown our new to therapy prescription share of <unk>.
Measure of the number of patients newly initiating prescription dry eye therapy, and now sits at approximately 6% market share having surpassed <unk> to become the third most prescribed dry eye product for new the prescription therapy patients.
We conducted a survey of over 200 eye care professionals between late May and the end of June and the feedback was exceedingly positive.
72% of the Ecp's reported prescribing ICU versus in the past 30 days.
Approximately 83% of the ECP has indicated they expect to increase their prescribing of <unk> based on the education provided by their Kala sales representative.
Our promotional messaging was rated the most effective relative to other dry eye therapies and highly recalled by ECP.
These findings of very encouraging we believe indicate that our current strategy is yielding results and supports continued future growth.
In order to support the progress that we've made in building demand price service. We have increased our sales force from 91 Rep at the time of launch to 105 sales reps today, which covers of an additional 2300 targeted ecp's, bringing our total called on universe to more than 14000 eye care.
<unk>.
We are also encouraged by our progress and broadening of our payer coverage.
During the quarter, we announced that after <unk> 1 of the largest pharmacy benefit managers in the U S has added a service as of covered brand under its commercial formularies.
As of the end of the second quarter, we have secured coverage from approximately 56% of commercial lives representing approximately 96 million total lives.
In addition, as of July 1 we now have Medicare part D coverage for 7% of the Medicare population, representing an additional $3.2 million covered lives.
Consistent with the customary annual Medicare part D bid cycle contract negotiations for 2022 coverage are ongoing with additional decisions anticipated by the end of 2021.
We are pleased with this continued growth in payer coverage, particularly since we believe it is translating into higher prescription fill rates for Ais service.
Look forward to further growing our market access coverage, which will be a key driver of continued prescription growth.
Now turning to <unk> as.
As we've previously shared over the past.
The past year, the pandemic has negatively impacted the ocular surgery market, resulting in fewer surgical procedures and.
Surgical volume has started to recover we believe we will see in delta's prescriptions returning to quarterly growth.
In the second quarter of 2021, there were more than 41000 prescriptions of <unk> reported by Symphony health compared to 37000 prescriptions reported in the first quarter of 2021, representing an 11% increase quarter over quarter.
Despite the uncertainties of the pandemic continues to present, we believe that <unk> prescriptions and revenues will grow over time.
However, we remain unable to project the specific timing of quantified the potential impact on future revenues due to the potential disruptions of these continued uncertainties on elective ocular procedures.
Overall, we are encouraged with the progress we are making in the quarter over quarter growth in prescriptions achieved with both on the service and in belt. This.
We are making significant headway towards securing broad payer access and our goal of establishing <unk> as the first line prescription therapy for the short term treatment of genre of disease.
The team is executing against our strategic launch priorities and our ongoing efforts to engage with and educate the ophthalmology and optometry communities on a series is generating prescription demand.
Forward to updating you on our progress on future calls now.
Now I would like to turn the call over to Mary to review our financial results.
Thanks Todd.
During this discussion of our financial results I will reference certain non-GAAP financial measures. These non-GAAP financial measures exclude stock based compensation loss on extinguishment of debt non cash interest expense and depreciation and amortization.
For a full reconciliation of our GAAP to non-GAAP financial measures. Please refer to today's press release, which is available on our website.
Turning to a recap of the second quarter of 2021 of our cash position as of June 30 of 2021 and was $1.49.6 million compared.
Compared to $1.53.5 million as of December 31, 2020.
This decrease reflects cash used in operations largely offset by net proceeds of $40.7 million of received from sales of common stock under our aftermarket or ATM offering program and the 6 months ended June 32021, as well as the release of $10 million from restricted cash in connection with the refinancing.
Of our credit facility.
Service revenue increased to $1.7 million in the second quarter from $1.6 million in the first quarter of 2021, well prescriptions were up 93% during the second quarter relative to the first quarter unit shipped to our distributors on which we recognize revenue were down as a result of stocking during.
The launch in the first quarter of this year.
Overall, we are pleased with the increase in the number of prescriptions written in the during the second quarter.
For the.
The quarter of 2021, and we reported net product revenues of $3.1 million. This is comprised of $1.7 million of net revenue from IC with sales and $1.4 million of net revenue from the belt of sales compared to net revenue of 800000 from adult the sale of the kind of second quarter of 2020.
<unk> net revenues in the second quarter of 2021 decreased by 200000 as compared to the first quarter of 2021.
This decrease was driven by a reserve framed out this product returns of 500000 that we believe is largely due to the COVID-19 pandemic, which resulted in restrictions on elective surgical procedures.
SG&A expenses for the second quarter of 2021 were 28 million compared to $15.3 million for the same period in 2020.
The increase was primarily due to an increase in cost as a result of the launch of ice do this including the expansion of the sales force and increased stock based compensation costs.
Non-GAAP SG&A expenses were $24.1 for the second quarter of 2021 compared to $13.2 million for the same period in 2020.
R&D expenses for the second quarter of 2021 were $3.1 million compared to $6.1 million for the same period in 2020 the.
The decrease was primarily due to costs incurred on the stride 3 Collins phase III clinical trial of I stupid during the second quarter of 2020, which were not incurred during the same period in 2021, partially offset by increased spending on pipeline programs.
Non-GAAP R&D expenses for $2.1 million for the second quarter of 2021 compared to $5.3 million for the same period in 2020.
Loss from operations for the second quarter of 2021 with $29 million compared to $21.3 million from the same period in 2020.
Non-GAAP operating loss was $24.1 million for the second quarter of 2021 compared to $18.4 million for the same period in 2020.
Net loss for the second quarter of 2021 was $36.5 million or <unk> 57 per share compared to a net loss of $23.3 million or <unk> 42 per share for the same period in 2020.
Non-GAAP net loss was $25.8 million for the second quarter of 2021 compared to $20.2 million from the same period in 2020.
Please refer to today's press release for the weighted average number of shares used in the calculation of our net loss per share for each of the quarterly periods discussed.
That includes our prepared remarks for today I will now pass the call over to the operator for questions.
If you'd like to ask a question at this time. Please press. The Star then the number 1 key on your Touchtone telephone.
To withdraw your question press the pound key.
Again that is star then 1 if you'd like to ask a question at this time.
Our first question comes from Chris <unk> with J P. Morgan.
Good morning. Thanks for the question. So first 1 is on recent icy of your script trends. So based on Symphony health scripts, we've seen a flattening of <unk> growth over the last 2 months.
And when we look at the slowdown this is kind of despite the recent formulary additions for Cigna Optum Rx early in May.
So looking forward what are the key requirements to see a reacceleration of our service growth from here I'll start there.
Hey, Chris It's Todd I'm happy to take that question and good morning.
Actually if we look at the most recent 4 weeks compared to the prior 4 weeks of services. The only draw of high product that is growing the sub.
On the months are typically slower for the dry eye market script volume is less.
Versus the high months, which really start to come in the fall and going into the winter. If you look at the most recent 4 weeks versus prior 4 weeks of the overall dry eye market is flat and facts I dress down about a point in the half of 2 percentage points and.
Our service is growing at about 6% nearly 6% from the most recent 4 weeks versus prior 4 weeks. So we think during the summer months things are typically a little bit slower you of the holidays and vacation, but are encouraged by the fact that I service is generating the strongest growth rate of any dry eye product.
During that period of time.
That's helpful. And then second question. So on reported Q2 I see the sales.
We sold $1.7 billion of sales, which were largely flat quarter over quarter, while we had a service prescription growth of 93% quarter over quarter from 121. So can you help US bridge the reported sales versus the underlying script trends and.
I realize you guys don't provide forward guidance on gross to net but any comments on.
Kind of second half 'twenty 1.
Gross to net versus first half of 'twenty, 1 I think that would be helpful.
Yeah sure really good question so the.
The big driver of Rev.
Revenues being up just slightly versus first quarter of while ex swaps.
We're just working through the initial trade loads launch or launch load I should say so working through those initial inventories that we put out as part of the launch in the first quarter and as you know.
We recognize revenue when product is shipped to the wholesaler.
So we feel like we did a really great job of the second quarter of working through those initial.
Actual trade launch and AR and inventory levels of starting to normalize as Mario said, we actually ship less product in the second quarter. The wholesalers 1 of the first quarter.
Yes, it has slightly higher revenues, indicating improvements in gross to net.
So we do expect gross nets as we've said to continue to improve over time, particularly as our market access continues to improve and we have less scripts going through patient assistance programs and co pay reduction programs and more of the scripts getting filled.
Traditionally through payer contracts.
That makes sense and then.
Kind of the last 1 from me I think just like taking a step back.
It seems the street expectations are for a pretty steep acceleration of growth in the second half of this year.
So I think you have basically scripts.
More than doubling.
<unk> <unk> and then.
Further script growth at <unk>.
Do you think there should be a reset of expectations here or is there.
Are there the key catalysts, you see to Reaccelerate growth kind of of the second half of thank you mentioned the seasonality of the dry eye market.
Looking at the fall do you think youre going to see kind of a re pickup in growth for the receipt of scripts. Thanks.
Thanks, so much.
Yeah sure Chris.
We expect prescriptions to continue to grow as we've always said, particularly as our market access continues to improve we think that's going to be 1 of the most important drivers. We know the demand is much higher than the scripts that are actually being reported by symphony.
And there are a lot of scripts that are being written that are not getting filled because of lack of of insurance for that patient for those patients rather and so as we continue to improve our market access we expect our prescription fill rates to improve and demand to continue to grow and then the other thing I would just remind is that we're creating a market that did not previously.
The exist right acute dry eye market.
<unk> is something that was not promoted on previously.
Rarely where steroids Jewish in dry eye at the as you know we've shared with you in the past at less than 3% of diagnosed dry eye patients would receive a prescription for an off label steroids historically prior to the <unk> approval and launch and for the past 20 years eye care professionals have been told the dry eyes of chronic progressive disease.
And so for the first time, we are creating this new acute market and we're really encouraged by the progress we're making the receptivity from eye care professionals has been extremely positive both to the idea of diagnosing and treating the acute dry eye symptoms with the short term treatment and then probably more importantly, the free.
The Doctor, we get from those eyecare professionals once they've had the chance to prescribe <unk> for their patients. They are consistently reported that patients are getting a very rapid onset of action quick relief from their symptoms and that I see this as a very comfortable and well tolerated of eye drop. So we think those are all really great positive indicators for continued growth in the <unk>.
Second half of this year.
Thanks.
Yeah. Thank you Chris.
Our next question comes from French law of Gray Powell with Oppenheimer.
Hey, Thanks for taking the question so just to be clear this is not.
You know from Symphony too. This is more of a kind of of backlog here of this is now the question of you know like an 80% discount on I assume at the end of 90% discount.
Around there on and felt this cause is that fair.
Yeah. Thanks, it's Todd.
The.
But we're dealing with with a surplus of what we saw within the quarter is that we actually had less ex factory shipments as we worked through the initial.
Inventories that we put out with the launch in the first quarter yet.
Net worth with lower ex factory shipments net.
Revenues were up slightly quarter over quarter, which would indicate improving gross to nets.
Okay, alright, great and on the envelop this front.
How do you what exactly was I think Mary touched on some of it what's the reasoning there for the revenues to come down despite the scripts.
Doing what they're doing.
Yeah, well, we're not gonna have merit take that.
Sure Frank.
So the reason for that framed out this is really the $5 million reserve for returns that we booked in the second quarter.
So we've seen some units are returned to us expired and we believe that that is related to COVID-19 and the restrictions on the surgical procedures that we've seen.
So we believe that those units have of basically sat on the shelf and come back to us.
Used an expired and that was the reason for that was there in the second.
Second quarter.
Okay, Great and then just in terms of I assume it's the envelop. This I guess 1 after the other when can we expect if this ends out the thing kind of of onetime thing of the reserves and then on the I assume its front when can we start seeing you know of better correlation between symphony and the scripts and the actual revenues.
Yeah. So on the on the even felt the sprint.
Yes that was related to units that we'd seen returned and we do believe that that's related to COVID-19. So we believe that half million dollar reserve should cover us for related returns going forward.
And then I'll, let Todd Todd touch on the question about the stupid.
Okay.
Yes, I think on the service front, we've done a really good job working through those initial inventories that were put out in the first quarter and our inventory levels of starting to normalize.
And we expect we'll continue to do so throughout the third quarter.
So you know we don't give specific guidance Frank as you know some of them.
Try to be careful there, but we just say that we feel good about where our inventory levels are right now.
Okay, great and when you talked about the the.
The large volume of prescriptions that are written but still not fail based on reimbursement and.
Do you have any day.
You quantify at all what percentage of of scripts are still written but not failed or is that like very much correlated to the reimbursement levels now or not quite.
Yeah really good question not quite the there are third party data that are put out there.
Mmm.
The business 1 that looks at.
Across all categories scripts rejection rates with virtual rates paid claims rates.
And so when you look at reversals of rejections for I assume it's still greater than 60% of the prescriptions that are showing up at the pharmacy that are not getting filled so again, we think that points to demand that's more than double of the scripts that are getting filled in any given week.
And those scripts as we continue to improve our market access will result in higher paid claim rates and more scripts filled on a weekly basis.
Okay, great and I'm, the reimbursement side the Medicare win.
Is there any impact there in terms of the gross to net where it could be tougher on the gross to net if its Medicare versus commercial.
We feel good about that.
Of the contracts that we have in place and the level of rebates to get the access it's a.
It's our first win its a meaningful when I was with ESI and their Medicare book of business.
And we expect that to continue to grow we believe the most important thing is to get those Medicare contracts in place to open up that part of the market. As you know, it's it's about 40% of all trial of <unk> prescriptions are reimbursed by Medicare part D payers and now we look forward to continuing to grow our Mark Medicare access in the second half of the year.
Okay, great and I'm, sorry, if I could sneak in the last 1 here can you just remind us what you mentioned on sequel, there and just maybe remind us what exactly the secrecy sales have been and where you pass them in your prepared comments.
Yeah really good question. So I was referring specifically to what's known as <unk> share, sometimes it's called new to brand share of new to therapy patient starts.
And I think that's a really important indicator, particularly for newly launched products right. At this time of the year in any given week in the dry eye market is about 17000, new patient starts and that's defined as the patient that's getting their first ever prescription dry eye medication or at least has not been on a prescription dry eye medication for the prior 12.
Months.
And so we look at that the MBR racks of new to market share to see how we're performing from newly launched products and we're currently sitting at about 6%.
New to therapy market share.
Surpassed secret in the quarter, which we think is really indicative of us getting more first line use site as I said in the.
Prepared remarks about 62% of our prescriptions in the quarter were written from new to therapy patients, indicating that we're getting a lot of first line use when you look at the new therapy starts.
Obviously the spaces as the market leader they get about 69% of those 17000, new patients that are starting therapy every week XI gets about towards the 10%.
6% now and secrets about 3% of those new therapy starts and the weekly basis.
Hey, Frank it's Mark as they had gone out of it you have a little bit further if you actually look at the.
The last month, and we have to remember Theres a couple of holidays in this period, where the scripts were a bit flatter, it's not only of the low season, but theres holidays and that affects new products, a lot more and especially products without a lot of refill prescriptions.
Got it.
Get impacted quite a bit more when there is a holiday period, but if you look at those <unk> and the share.
We are up quite a bit in the past month.
Around 4.5% and for example of product like <unk> down 4%. So when we look at these leading indicators, including all of the prescriptions that are being written.
Although not all filled as Todd described and the market research, we feel like the upcoming months should be really strong.
Okay, Great and I appreciate all of the clarity. Thank you.
Our next question comes from Devine of Mod with Bank of America.
Yeah.
Hi, Good morning, guys. Thanks for taking my questions.
As it relates to the payer mix over time.
Would you say you would expect here of split between commercial and Medicare usage of <unk> and do you have any come from.
Let's say Restasis Earth day trial that can also help us that the figure out but the 1 that mix would be and then I have a couple of more follow ups.
Sure so.
Good morning by the way Thats.
Okay with the patient assistance program attached.
Oh, you know.
I don't have that number of author of the top of my head. We have a couple of different ways that the the patients can get access to like we were at of if we look at all programs are you. The user what you say is our our historical run rate for the full year. Since launch is probably about half of our prescriptions need a little bit more than half of our prescriptions were getting so.
Some type of Copay assistance program.
Because most of our scripts are commercial it's safe to assume that the split is very similar for the commercial book of business.
Okay, and then can I need to talk of bad I guess, Todd Uhm lots of type of thing written that not got the thoroughly at being executed on or the bank.
Uhm is there a range, but you could give up so give us a better a sense of what percent of the krebs or not being filled yet and whether that trend has been improving.
Yeah, <unk> really good question of the trend absolutely husband of improving.
During the first quarter of launch, which is very typical with the new product launches. The the rejection of reversal rates were in the mid 70 per cent and we have seen those numbers consistently improve I think we have David through the month of May at this point, there's always the will get more of of lag for per day to to be reported out and Ah.
The reason the most recent mark cause you combine rejections of reversals those numbers were in the low 60% sort of that's the only thing of <unk> remember a lot of our <unk> payer coverage as you know it didn't really start to come online until the middle or second half of 2 true and so it always takes a few months for the the payer coverage which of <unk>.
Come to the line to really start to help of an effect, but really encouraged by the improvement we saw in the month of May and we're looking forward to seeing the June data.
Okay, great. Thank you.
Yeah. Thank you.
Our next question comes from Chris Howerton with Jeffries.
Excellent. Thank you so much for taking the questions I think a lot of really excellent of questions were asked already so maybe just 2 from me Uhm..1 is that you noted the impact of your expanded sales force I guess I was just hoping are wondering if you could help us quantify that impact.
That you've been observing for the expanded sales force them in.
Then the the second question that I had made the date.
I know I am relatively new to the story, but what is the the stability 4 and belted and I guess what are your protocols to be able to manage inventory at the the surgical locations moving forward to make sure. The the same impact won't happen again in terms of the expiry. Thank you.
Yeah, I'm I'm I'm happy to take the question. So the the the new expansion of of the new represent of those retired or just coming on line now so we hired those folks and they really just began at the beginning of July they've been going through sales training of the month of July we got the first.
<unk> a representative of as it were trained out in the territory. Just last week. There was a few additional sales representative of those that were trained of this week will be in territory next week. So too early to say what the impact of that is but we're really.
Encouraged by the quality of the sales Representatives, we hired very experienced group of lot of ophthalmology giant I experience and the new representatives and of looking forward to seeing the impact we were able to increase our target universe from about 12002 more than 14000 I care professionals.
So there's going to be about another 23 of 2400 do I care professional force to call on that does not yet the detail that I see with us and we're certainly looking forward to getting out and getting some samples and getting some clinical experience for those individuals but of your your question on the adulteress I believe the the initial product it's back at.
The time to watch I believe had about 2 years of day. That's now been expanded there were up to 30 or 36 months of a total of David We think really the impact that we saw was out of 1 time impact of Covid from this past year.
We have a lot of products for example of it had shipped in 2019 the did not get used in 2020 that became short David as we got into 2021 and that was really what I get the driver of those returns were.
Okay that that makes sense got it okay, alright, well like I said I I really appreciate all of the discussion of and thanks for taking my question.
Thank you.
Our next question comes from the <unk> with H C Wainwright.
Thank you for taking my question could you could you tell us whether you have a target penetration rate for the Medicare part the unlimited access by the end of this year.
Yeah, Yeah, we have enough publicly shared what are internal targets all for market access obviously, we have <unk>, we've established for the cheap I think this.
This year as we have said all along the expect to get some minimal coverage of Medicare part D. We expected most of that to come on line in 2022, just based on the normal review bids cycles right you will be having those discussions in the second half of this year.
With most likely what would be start dates in January of 2022, but we do think there will be an opportunity like in the case of ESI to have some Medicare part the coverage start before the 2022 time period.
Okay and could you come in on the current development status for the glucocorticoid the preceptor modulator and also the terrorists incarnation of inhibitor and what should we expect during the next 12 months of Buddy's type of product.
Hi, This is Kim yes, we're from.
We're continuing to move forward with both of those we're actively screening compounds to try to find the optimal compound for the second Burger.
We're hoping in the next 12 months the in that program day of identify the league combat it'd be an and free clerical develop I'm heading for a night and day.
Also for both the <unk> and the.
T. K. We are also actively evaluating delivery systems from the back of the other than making good progress.
In that area and hope to have a finalized of.
Our approach there within the come with Mark.
Got it thank you.
Our next question comes from Tim Chang with Northland capital.
Hi, I wanted to get an update in terms of.
Hi, you sort of the commercial insurance coverage in the back half of this year sort of of expanding you see there's another big pharmacy benefit manager Cvs care, Mark I mean is that.
On your radar screen is another.
Formulary that might include I see this some time in the back half of this year.
Yeah. It is to have good morning, it's Todd and really that's the the really the next big working for US right. We've gotten 2 of the 3 big Pbms. We are in discussions of Cvs care, Mark if we're able to get out into the Cvs care Mark formulary of the second half of this year that would immediately jump I serious commercial interest.
You can access over 75 per cent.
And that along with continuing to execute on the existing contracts, we have of optimal rocks and with ESI with the the wrong custom clients, which a lot of times of smaller regional plans will allow us to continue to grow that access you do further.
The end of first quarter were 56 per cent commercial access but already here early in the third quarter. We've got some Wednesday of getting ready to come on line through those off tomorrow actually DSI contracts and I am confident will quickly habits of about 60% unrestricted commercial access.
But if we can tip Cvs care mark in the quarter like I said that would accelerate us quickly to Newark at 75 per cent access with commercial payers.
And maybe just 1 follow up.
How how has the response been when when the sales reps market I assumed as to the physician physicians out there.
How how much how much physician awareness is out there on the list and then how.
How much patient awareness.
On dry ice layers.
Is out there.
It seems like I assume is of great product with not a physician.
<unk> and patients aren't aware of.
Of this is a new treatment.
Yeah. It was kind of look I think you're hitting of really key point, there right as well.
They're educating mostly ikea professionals and we do have some direct the patient efforts ongoing and we expect later in the year to launch more broad digital direct the patient efforts that will help with.
Further educating and we think this was the big opportunity we know from all of our quantitative research to 80 per cent of patients reported they suffer from dry eye glares, but when you do the same quantitative research of Ikea professionals. They think it's about 40% of their patients that have dry I players.
So that tells US is a huge disconnect between what patients are experiencing and what physicians sink and we think the reason for that disconnect is there's just not historically been proactive discussions about dreary players because there has not been an F. D. A approved product to treat those patients.
So that's why I say I'm really encouraged with the progress of we've made but also recognize it takes time, we're creating a new treatment paradigm and you're talking about this acute dry market that nobody is talking about previously like I said I think the states has been on the market. The 18 years now so for the past 18 years, all Ikea of professions heard the.
As if this was a chronic progressive disease that you have to treat with the day daily Eyedrops, and we were out there educating about the the episodic manifestation of of the disease do the visa to try out the players and the fact that we've got a really great that'd be the rest.
Typically to that message has been overwhelmingly positive I know of it.
The the case of any new product launch it takes time to continue to establish uneducated on this new treatment paradigm.
Okay, Great no. That's that's very helpful. Thanks.
Mhm.
At this time I'm showing no more questions in the queue. Mr. <unk> I'll turn the call back to you.
Thank you everyone for joining us. This morning, we continue to to work diligently to grow both of our products were optimistic uhm with the launch of I service in the great feedback referred from I care professionals and patients and know that our product really need to of significant on that need is.
We've talked about during this call. We're encouraged by hopefully the reduction in and the impact of Covid and the the surgical market will return to normal and that will give us a good opportunity to get in belt. This back on the strong growth trend and we look forward to update.
Everyone soon as we make progress on our pipeline programs and again, thank you for joining us this morning.
This concludes today's conference call. Thank you for participating you may now disconnect.
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