Q2 2021 Paratek Pharmaceuticals Inc Earnings Call
Okay.
[music].
Thank you for standing by and US as the conference operator, welcome to the per Tech Pharmaceuticals second quarter 2021earnings call. As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation. There will be an opportunity to ask questions for joined the question queue. You May Press Star then 1 on your cash.
The phone keypad should you need assistance during the conference call you may signal, an operator by pressing star zero.
I would now like to turn the conference over to Paul Arndt with Life Science Advisors. Please go ahead.
Thank you operator, and good afternoon, everyone and welcome to parrot Teck's second quarter 2021 earnings and corporate update conference call a press release with the company's second quarter results was issued earlier today and we have also posted slides on our website that will be referred to on this call. Both can be found at www.
For you W. Dot parrot Tech pharma Dot com.
Participants on today's call are Evan Loh, Chief Executive Officer, Adam Woodrow President and Chief Commercial Officer, and Randy Brenner, Chief development and regulatory officer.
Michael began executive Chairman and Sara Higgins, Vice President of Finance controller, and principal accounting officer will also be available for questions.
Before I turn the call over to Evan I would like to point out that we will be making forward looking statements, which are based on our current expectations and beliefs.
These statements are subject to risks and uncertainties and our actual results may differ materially.
Encourage you to consult the risk factors discussed in the company's SEC filings for additional detail.
It is now my pleasure to turn the call over to Evan Loh, Chief Executive Officer Evan.
Thank you Paul Good afternoon, and thank you all for joining our second quarter earnings and corporate update call.
Per deck remains focused on excellence in operational execution and delivery against our stated corporate priorities in order to generate value for patients and our shareholders.
Accordingly, we remain confident that our efforts in 2021 will firmly establish the foundation for continued and long term commercial growth and your IRA and demonstrate continued for our progress in all aspects of the BARDA Bioshield public private partnership which is designed to develop new Xyrem is a novel metal medical counter.
Measure for the treatment of pulmonary anthrax.
As you can see from this next slide us iris quarter over quarter growth continued into the second quarter of this year generating a total of $52.8 million in net U S sales.
This revenue includes $14.9 million from the core new Xyrem commercial business, a 13% increase over the first quarter of 2021, and an 84% increase over the second quarter of 2020, we.
We believe this quarter over quarter growth was not only a significant achievement in this volatile and rapidly evolving health care setting.
It serves as a reflection of the clinical importance of positive patient outcomes with news IRA and the overall strength of our commercial business.
The balance of the $52.8 million and net U S sales was secured from the first BARDA procurement.
<unk> and accepted by BARDA in June of this year.
Accordingly per tech recorded revenue of $37.9 million from this procurement in the second quarter of this year.
Our confidence in the long term commercial success on these I remains unabated based upon the strong foundation of demand for new Xyrem that our sales and marketing teams have established in the first 2 years of the commercial launch which focused solely on the hospital care setting.
In early 2021 based upon performance data from my focused primary care sales pilot program conducted in the second half of last year, we expanded our commercial promotion into the primary care setting.
To date early signals of a trial and adoption in the community launch appear promising and auger well for future long term growth.
As seen on this next slide the monthly commercial revenue curve continues to validate than us Iris commercial performance to date represents 1 of the most successful antibiotics launched in the last 5 years.
The new Xyrem commercial launch dynamics continue to materially differentiate from any other IV oral antibiotic launches.
We believe that the strength of the commercial business is driven by disciplined operational execution combined with us Iras, many clinically important product attributes that include for.
First broad spectrum efficacy, including resistant pathogens across 2 common indications.
A favorable safety profile consistent with us Iris tetracycline heritage and third convenient once daily oral and IV formulations that enables us iras utility in multiple settings of care.
We anticipate that the positive growth trajectory of the core news IRA commercial business will continue through the balance of this year given the encouraging inbound feedback from the primary care based physicians, who have consistently articulated the need for a well tolerated once daily oral broad spectrum antibiotic that includes coverage against M. R. S. A for skin infections.
Further we believe that this community expansion will materially benefit from the additional long term value of the recently FDA approved oral only regimens in pneumonia for news IRA.
Adam will provide more details on the community expansion during his prepared remarks.
In addition to the continued growth and success of the commercial business. We are focused on 3 foundational catalyst beyond the community expansion for the Us IRA U S launch that we believe will create near and long term value for per tech.
All of these having occurred in the second quarter of this year.
First as a continued validation of the broad based commitment of BARDA to this unique bioshield funded public private partnership we were excited to announce that BARDA has accepted delivery of the first procurement amuse IRA valued at $37.9 million.
Second in late May of this year, we received FDA approval of our new Zara S. N D. A for the oral loading dose regimen in pneumonia.
We believe that this will be an important catalyst that will broaden and further expand the commercial growth opportunity for news IRA in both the hospital outpatient and primary care settings, we plan to launch the second community based indication as we entered this year's fall winter pneumonia season.
Third the initiation in June of this year, a phase <unk> study for knees IRA in a rare disease pulmonary non tuberculous mycobacteria obsesses for which there are no approved therapies.
To further support the need for additional clinical research to recognize N. T. M. Experts for also N. T. M treatment guideline authors collaborated on a recently published review article that expands on the current guidelines for the treatment of pulmonary Mycobacterium abscesses infections. These authors included omadacycline in their recommended.
N T M obsessed as treatment options and also noted that additional clinical studies in this disease are desperately needed Randy will prefer we will provide more details on our MGM program later in his prepared remarks.
I would also like to note an important recognition of the clinical utility of news IRA that occurred in July and another potential future milestone anticipated in the second half of this year that we believe will create longer term value for per test.
First last month in July Cdc's guidelines for the treatment and prophylaxis of plague was updated to include new Xyrem and.
The addition of Us IRA to the CDC guidelines provides further validation now across multiple agencies Inc.
Including beyond CDC, FDA and BARDA within the department of Health and human services of the potential utility of news IRA against pathogens that cause health and bioterrorism security threats, such as anthrax and plague.
A second event or milestone, which we anticipate will occur later this year is the approval of new Zara in China the.
The approval in China will trigger a $6 million milestone payment from XI lab and will make us IRA available and 1 of the largest antibiotic markets in the world today.
It is important to note that both of these last 2 catalysts remind us that antibiotics are truly global products, we cannot forget that anti microbial resistance is an ongoing pandemic that requires innovation such as that represented by news IRA in order to stay ahead of bacteria us ability to create new mechanisms of resistance.
Before I hand, the call over to Adam I would now like to provide per tax second quarter 2021financial highlights.
Second quarter 2021, total revenue was $57.5 million, which is comprised of the following.
He's IRA generated $52.8 million and net U S sales during the second quarter for <unk> 'twenty 'twenty 1.
This revenue is comprised of first $14.9 million from the core commercial business, which represents a 13% increase over the first quarter of 2021 and an 84% increase over the second quarter of 2020.
And importantly, $37.9 million from the first of our broader procurements.
Government contract service and grant revenue earned from costs incurred under the BARDA contract was $4.2 million for the second quarter of 2021 compared to zero point $9 million in the second quarter of 2020.
We anticipate a modest step up in contract service and grant revenue earned under the BARDA contract as we move through the year driven by activities associated with a U S. Onshoring of new Xyrem manufacturing. The continued enrollment of the FDA post marketing required study in pneumonia and further progress of the preclinical in vitro studies and large animal for.
Our mccook kinetic or PK studies in the Anthrax program.
Research and development expenses were $6.5 million for the second quarter of 2021 compared to $4.6 million for the same period in the prior year the.
The increase in R&D expenses for the second quarter of 2021 was primarily due to $4.2 million in costs that were reimbursed under the part of contract which included cost for the U S onshore any of them use our manufacturing and for FDA post marketing requirements, which includes the preparatory work for the pediatric studies when he's IRA in <unk>.
For the ongoing pneumonia study.
The remaining increase is mainly the result of startup costs incurred for the phase 2 B N T M obsessive study.
Selling general and administrative expenses were $27.1 million for the second quarter of 2021 compared to $21 million for the same period in the prior year.
The increase in SG&A expense is primarily the result of costs incurred for the new Xyrem community expansion and an increase in stock based compensation expense.
Due to the probability and timing of the achievement of performance based vesting milestones.
<unk> reported net income of $9.7 million or 20.
Of earnings per share for the second quarter of 2021.
Compared to a net loss of $23.1 million or <unk> 53 cents loss per share for the same period in 2020.
As of June 32021 per tech at $75.3 million in cash and cash equivalents.
Based upon our current operating plan, we anticipate our existing cash and cash equivalents plus the $37.9 million received from BARDA in July of this year for the first procurement of new Zara provide for a cash runway through the end of 2023 with a pathway to cash flow breakeven.
I would now like to turn the call over to Adam Adam.
Thanks, Kevin.
The commercialization of new Zara continues to progress well with consistent quarter over quarter growth seen since launch.
Alright continued access challenges due to the ongoing COVID-19 pandemic.
As you can see from slide 11 user.
US IRA KOL commercial net revenue grew 13% in the second quarter when compared to the first quarter of this year.
More than double the rate of growth compared to the prior quarter.
<unk> gross demand increased from $14.6 million in the first quarter of 2021 to $18.6 million in the second quarter of 2021 and.
An increase in $4 million in total thus growth continues to be driven by demand.
These honors once daily well tolerated oral and intravenous formulations combined with us our us broad spectrum profile offers a much needed new lifesaving antibiotic that is uniquely positioned to be applicable in every setting of care.
From the hospital and its potential to minimize hospital sites to the community, where there is a tremendous unmet need for a well tolerated once daily oral broad spectrum antibiotic that includes coverage against the MRI site skin infections.
These attributes in addition to having an approval in 2 common indications has enabled us <unk> launched a material materially differentiate itself from other recent IV oral antibiotics launched in the United States.
As discussed in previous calls our initial strategy was to launch into hospitals, focusing on the key influences in the antibiotic sector.
That being infectious disease physicians.
In parallel we worked with the pay us to gain favorable access in the outpatient community setting.
As we enter 2021 roughly 2 years after launch.
5% of our business was generated by hospital based physicians with IV doctors, making up approximately 70% of our prescriber base.
This validates the need for effective IV oral antibiotics for patients hospitalized with serious community acquired infections will see ADP.
Today, we continue our focus on growing our hospital business.
However, cognizant the hospitals continue to provide physical access challenges as they did for much of 2020 and these challenges are greater than those seen in the primary care setting.
We've also found pulmonary and stewardship committees remain distracted and focused on COVID-19.
And while face to face sales representative access to physicians in hospitals as per.
Clearly improved during 2020, it is difficult to predict when the hospitals will fully open up.
In the meantime.
Our hospital team continues to execute on a hybrid model between Tau successfully working virtually and in the adjacent sites of care, where the more impactful face to face access is more readily gain.
This strategy has enabled us to maintain our growth trajectory as we see new accounts adopt us IRA.
Specific patient types, such as patients with pneumonia in a high risk of C diff infection.
All for patients with skin infection, multiple comorbidities or allergies as highlighted on this slide.
At the beginning of 2021, having established IV endorsement and good patient access to us IRA in the community. We started recruiting our field force to expand promotion into the $2.2 billion dollar total addressable market for skin infections in the community.
Colin generic antibiotic options in the community setting a university challenged by the significant bacterial resistance or serious safety concerns limiting their utility.
During Q2.2021, we met our goal of 40 fully trained primary care specialists.
Detailing our oral only skin indication to a target audience of community based physicians made up with primary care doctors Podiatrists and a select group of high prescribing dermatologists.
Our sales messages to provide primary care physicians with a treatment option for serious skin infections that can potentially avoid the need for hospitalization.
Start at home stay at home with news IRA once a day <unk>.
Nights with physicians in today's COVID-19 environment.
After an initial settling in period. This team is performing well.
From prescriptions are tracking to the plan we developed based on the pilot program. We ran in 2020.
We have also recently received positive feedback on the reception of our small community based medical science liaison team. The Randy will provide more details on later in the call.
The second quarter has also confirmed our initial utilization expectations in the community, where we see primary care physicians and podiatrist in particular saw us IRA earlier more frequently.
The fuse sales calls when compared to hospital based on diesel Pulmonologists.
We assume the faster uptake in the primary cash setting is likely the result of the absence of stewardship committees and formulary restrictions bound in the hospitals as well as the tremendous unmet need in the community for new effective and well tolerated oral antibiotic in the skin indication.
The key for success in the primary care setting are ensuring access to us Ara for our patients and fulfilling prescriptions in a timely manner.
With that said, we are particularly pleased with our progress in the payer environment.
Between the insured patients in the Medicare patient population, where we see the vast majority of our prescriptions. We now have over 132 million lives covered with limited or no restrictions.
But perhaps what is more important is that after completing the benefits investigations. Our specialty network is able to fulfill approximately 95% of all prescriptions written usually within 24 hours and regardless of payer coverage status.
Our objective in the primary care setting moving forward is to fine tune our community targeting strategy based on the characteristics of the initial trial, it's the net utilization data for.
So accelerate initial trial and repeat usage.
We continue to evaluate this significant opportunity for further expect expansion and are looking forward to the launch in the fall of the see ADP oral indication, which we estimate to have a total addressable market with some $1.5 billion.
In summary.
We anticipate the momentum in hospitals and primary care will continue through 2021 and expect to see continued growth as we launch our newly approved oral only dosing for cat in the fall and maintain our focus on gaining new trial and repeat usage by building awareness and establishing trust and credibility with physicians who are citing line.
And treating serious community infections every day.
And with that I'd now like to call turn the call over to Randy.
Thanks, Adam let me start with some updates regarding our BARDA program as you heard from even a few minutes ago. We were excited to announce that BARDA accepted delivery of the first procurement of 2500 anthrax treatment courses of news IRA valued at $37.9 million.
Upon completion of this delivery of the first procurement BARDA as power tech to be its distribution partner for news IRA should it anthrax attack an outbreak occur per tech has agreed to partner with BARDA on this work at our current contract with modified last week to include an additional scope of work at funding for this effort for the United States government trigger a distribution request we are.
Excited to expand this partnership and the distribution phase and us power Tech distribution infrastructure.
And network to further play a part in protecting Americans.
With regards to the timing of future procurements as we noted last months. These will be linked to specific development milestones BARDA has confirmed to us that satisfactory top line data from the pilot efficacy study for the treatment of anthrax in rabbits will trigger a index procurement, we expect to have top line data in hand by the second half of 2022.
Together with BARDA, we continue to make great progress on the animal rule development program for Anthrax.
Efforts. This year are focused on the evaluation of pharmacokinetics of Omadacycline and both Rabat and non human primate animal models for inhalation anthrax a.
For PK study of rabbits was completed earlier this year, our second PK study of rabbits at initial initial PK study in monkeys is planned for the fall.
With regards to our BARDA sponsored Onshoring program. We are pleased to report on its continued progress in collaboration with BARDA all of our offshore partners have now been selected <unk>.
<unk> in our U S onshore partners have completed the knowledge transfer and initial analytical and process development work for our API process.
Additionally, we have ordered a necessary equipment and began construction of the facilities to enable commercial production of Omadacycline API.
Work is also ongoing at the partners for our U S drug product facilities, where we are similarly completed a knowledge transfer at a new initial analytical and process development for Omadacycline tablets that will move forward with the engineering phase of this project later this year for the Omadacycline IV drug product, we have selected our U S. Onshore partner are in the beginning phase.
The project.
<unk> continues to partner with <unk> to fund our FDA post marketing commitments recall that this contract line item is valued at approximately $77 million and includes reimbursement for our ongoing adult pneumonia IV to oral post marketing study commitment as well as reimbursement of our pediatric and microbiological surveillance programs.
Following omadacycline as placement of at FDA to Central Medicines list last year in July <unk> was added to the Cdc's updated guideline anti microbial treatment and prophylaxis to play recommendations for naturally acquired infections and bioterrorism response the.
The addition of news IRA provides further validation across multiple agencies within the department of health and human services of the potential utility of news IRA against pathogens that can cause health and bioterrorism security threats, such as anthrax and plague.
Plagued us a disease that affects humans and other mammals. It is caused by the bacteria yersinia passed us humans, usually get plague after being bitten by a road and flee that us carrying that plagued bacterium by handling an animal affected with plague or inhalation of infected droplets.
<unk> not identified and treated with an effective antibiotic play it can be rapidly fatal. It is present in the US today and cases are most commonly reported in the western and southwestern states, including Arizona, California, Colorado, New Mexico, and Texas, where wild rodents carry the bacteria and represent a surrogate for human infection risk.
<unk>.
Yeah.
Consistent with our commitment to build new Xyrem long term value. We continue to actively pursue lifecycle initiatives for news IRA in May we received FDA approval of our NDA for the oral loading dose regimen of community bacterial pneumonia, which was a big milestone for the program. This achievement as noted by both Evan Adam will augment the community launch as we are.
We're into the second half of the year and the pneumonia season approaches.
In addition, we have continued to advance our clinical development program for non tuberculosis mycobacteria pulmonary disease caused by Mycobacterium abscesses or NTN.
As a reminder, pulmonary MTM obsesses is a rare and orphan disease with no FDA approved therapies.
Feedback from the Kols community has continued to highlight the clinical unmet need for an efficacious and well tolerated once daily oral antibiotic to treat infections caused by Mycobacterium abscesses.
Upon our internal market analytics pulmonary micro bacterium obsesses represents a $1 billion addressable market in the us alone.
Startup activities for our phase <unk> clinical study of <unk> for treatment of pulmonary MTM with Omadacycline are underway.
Sites for this study are actively prescreening patients.
Anticipate initiation of patient enrollment soon is.
As a reminder, this study is a 3 month randomized placebo controlled monotherapy design that will enroll approximately 75 patients with pulmonary MTM infections caused by Mycobacterium abscesses.
This is a rare disease enrollment is estimated to take approximately 2 years. This study will provide much needed placebo controlled trial data in mycobacterium assesses patients.
Most recently to <unk> experts, who are also NTN treatment guideline authors collaborated on a recently published review article that expands on the current treatment guidelines for the treatment of pulmonary Mycobacterium abscesses infections.
The authors included additional agents, which are highlighted in green on this slide including Omadacycline and there are recommended treatment options based on Omadacycline is potent in vitro activity and reports of clinical success and real World case series.
In particular, the authors highlighted the potential of the oral formulation of Omadacycline given the lack of currently available oral treatment options and listed it first in order of preference for the new oral options. They included.
The authors also noted that clinical trials in this disease are urgently needed. Thus the excitement we have for our randomized study in MTM obsesses that we've just initiated.
In addition to LTM data generation will continue to expand throughout 2021 through multiple avenues first we continue to generate data with our partners within the US government and 1 of the in vitro bio threat studies has resulted in an abstract that was accepted at I'd week.
Second additional evidence continues from our growing IRR program. This includes study of C difficile infections bone and joint infections in MTM, both Mac and Mycobacterium abscesses.
<unk> have completed this year and non are currently underway from our IR program. We have 3 abstracts that have been accepted at Acme or I'd week with 1 lead author receiving the IV week trading award for the abstract.
And third real World evidence from 3 ongoing observational studies and independent case series continues to be presented at conferences and published in peer reviewed journals that describe the clinical features and outcomes of patients with challenging infections, particularly in MTM in osteomyelitis that receive omadacycline is a therapeutic agent.
Our real World retrospective claims analysis is underway that assesses the patterns of inpatient and outpatient antibiotic utilization in cap and skin. This study will generate a series of publications with a first abstract of news IRA to be presented at <unk> 2021 later this year.
All of this work has resulted in the acceptance of 11 manuscript for publication. This year that address the use of other news IRA and special pathogens populations or disease States and will further define its unique therapeutic profile.
The medical Affairs team has several activities planned to further support the community launch and the expansion of scientific education into this new health care base.
This included the placement of a small number of targeted community based education Medical science liaisons to further augment the primary care launch through scientific exchange.
For you strategically placed them in densely populated metropolitan areas with a large presence of primary care practitioners.
Education will focus on community antimicrobial resistant trends associated with the community acquired pneumonia and skin and soft tissue infections. The most up to day clinical care algorithms for these infections, coupled with the most pressing unmet needs associated with their treatment options.
Okay.
As you know we also have an ongoing omadacycline NDA review in China, and I am pleased to note that the regulatory process continues to make good progress with the approval expected later, this year, which would trigger us $6 million milestone payment from <unk> lab to power Tech.
We believe that the China approval in launch as well as the additional data generation opportunities being pursued by Powertech will further broaden the potential for news IRA to reach into new and clinically important patient populations.
At this point, we would now like to open the line for questions.
Yes.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then 1 on your telephone keypad Youll hear a ton acknowledging your request.
Using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then 2.
We will pause for a moment as callers join the queue.
Okay.
The first question is from Ed <unk> from H C. Wainwright. Please go ahead.
Yes.
Hi, Thanks for taking my questions.
Congrats on the continued progress this quarter.
3 questions for me firstly.
You had mentioned for the BARDA contract.
Alright.
Next procurement is upon us.
The data from from rabbits expected in the second half of next year I'm wondering.
If that would trigger the.
Second.
Procurement or is there any other before then.
And if that's the only 1 that we have visibility to in the timeline.
And then secondly.
The community launch.
Upon the started the pneumonia season.
I'm wondering if you could give us a little more detail around.
Exactly when activities would ramp up for that and I know you mentioned the MSL.
And some other would be placed in densely populated areas but.
Yeah.
Exactly what kind of activity.
Do you think could could.
Yes.
Explain how you expect to really reach the physicians there and then lastly.
Sure.
With the MTM enrollment.
Got it to take about 2 years is there any expectation for perhaps any interim data or any related publications.
Before then related to MTN. Thanks, so much.
Ed.
Thank you very much for the questions. So with regards to the <unk>.
Next procurement, maybe I'll have Randy addressed that question sure. So thanks, Ed Yes. Your statement is correct that the.
To data readout in the second half of next year regarding the pilot.
Rabbit treatment efficacy study is in relation to the net procurement or what we referred to sometimes as the second procurement.
The.
We're still in discussions with BARDA over the definition of progress and how the third and fourth procurements will be.
But there'll be linked to and we'll certainly share that once those discussions are complete.
And I think us and charity speaking Randy maybe you could take the.
Question, which is around the <unk>.
Trial and any visibility.
Visibility on interim data or publications so.
As of now.
It is a placebo controlled randomized trial with no plans for an interim analysis built into that.
That being said, we do anticipate not from our phase <unk> study.
But from a bunch of what I mentioned with regards to ongoing activities with <unk> and other case series being published that during the course of this clinical program there'll be multiple MTM publications.
Related to Omadacycline net it's used in that patient population that will be coming out periodically overtime, yes fair to say that the mic Ryback database is probably going to be the largest 1 right Randy.
Yes, I mean, thats part of our IR program great.
Hey, Adam other features of <unk>.
What activity you were planning for the community launch to ensure that we can reach.
The appropriate physicians.
Yep, Thanks, Ed so.
When are we going to start well, we've obviously in looking at this for some time now and right now we've just finalized our messaging in our materials for our Representatives. We got all about training programs put in place our representatives have been briefed.
At the end of this month.
Into September.
And they will obviously be fully trained on the oral only dosing regime.
In addition, we brought on education that we'll be doing through the.
Community based msos as a small team, but theres a good education that needs to be dominant can be completed by them.
We are also targeting obviously community based pulmonologists they will be added to the target list of our specialty.
Specialty Representatives and also we will be selecting high prescribing respiratory primary care doctors that will be added to the call list, but at the present time is really very much focused on skin.
The story is simple and will be kicked off in.
September in time for the flu flu campaign, and we will share more details of exactly what we've done the next call.
And then Ed just add because you specifically asked about the <unk> I can tell you in the few months that they've been out there.
The enthusiasm from the primary care physicians has been terrific day are thrilled to learn about antibiotic resistance I think we've been a little surprised how little these physicians are aware of even the resistance numbers and resistant patterns within their own regions there.
They are welcoming the opportunity to continue to educate themselves on.
Treatment paradigms resistance patterns and other things so the MSL experience to date in the community has been really really positive.
We anticipate that all that excitement online continue to growth.
Okay.
Fantastic. Thanks, so much.
As a reminder, it is star 1 to ask a question.
The next question is from Soo Jin Jiang from Jefferies. Please go ahead.
Hi.
For taking my question and congrats on that good day, a good quarter.
Could you share with us your current strategy or thoughts for the coverage obligation for <unk> in Europe and also my simple question is what percentage currently what percentage of the scripts come from the off label use. Thank you.
So <unk> I'll take the first part with regards to Europe as you recall when we actually submit.
Submitted our MAA, we utilize the exact same day.
Database that we use that was FDA that was FDA approved.
And.
Requested a second pneumonia study and thus we are conducting that second pneumonia study because of the fact that our analytics told us that the.
And that need was primarily in terms of resistant pathogens in the pneumonia sector, we decided to withdraw our application and we had initially planned to.
Await the results of that second pneumonia trial. The other exciting aspect of of Europe that we think is a big opportunity as well as a as we've explored the rare disease MTM. We've learned that in fact, there is as much.
T M. There in the European Theater as there is in the U S.
It is truly a global global disease, and we think that there may be an opportunity here to leverage the randomized phase II data as a way to open the door to have further discussions.
With the EMA, specifically about what.
Development and registration program would.
Would look like for.
For MTM in addition to the other indications that we had originally sought.
Adam do you want us to help them.
Yep Yep.
Yeah, I'll pick that up Kevin. So sushi you asked the question about what percentage of our businesses.
As we went into this year about half of our business was off label as we promote to infectious disease consultants for skin and pneumonia. They tend to use a drug in other indications notes a piece of the book.
Osteo and and some MTM.
Now, obviously migrating and adding to that with promotional in primary care.
And we're seeing a steady increase in the utilization for skin in the primary cash setting with that promotion, which is starting to eat into the sort of I suppose the proportion of our business for these off label. The reason for that being the primary care physicians tend to stay on label in terms of their utilization.
Right now, it's probably about 50.50, but I would expect for that will come down and we'll end up with a mix of about 60.40.
Probably as we go into 2022.
Yeah, <unk> just as 1 other 1 other addition to my earlier comments.
When you look.
Look at the.
The strategy that we undertook specifically about withdrawing the application that was it was important for us to be able to preserve the natural amount of market exclusivity.
And as you know the clock starts ticking on your initially initial indication, which could have been for the skin indication, which we thought was less.
Less valuable ultimately for us as well and we do think that win win win as we consider a rare disease opportunity like like MTM I think that there is going to be recognition for I think the innovation and the value that provides.
Rare disease and orphan setting.
Okay.
Okay, great. Thank you.
The next question is from Robert Hazlett from BTG. Please go ahead.
Yeah.
Yes, Thanks apologies if you've commented on this but.
Maybe Adam or.
Kevin you could comment on.
Physician access from your sales force us at normalized at this point and are you expecting any.
Potential waddling us with regard to that.
As different Covid.
Covid variance kind of course, the way through the system. If you've commented my apologies.
No I sort of mentioned day in my commentary, but.
Hospital access is still not.
Where we would love it to be which is back to where it was pre COVID-19 is.
Still restricted quite significantly and in some parts of the country, it's geographically dispersed.
And it really difficult to predict where that's going to go for exactly the reason you're intimating.
The new guidelines from changes I don't think actually helped us at this present time, having said that the accessing in the primary cash setting with a product cash flow for us is very very good and even the hospital team continue to work successfully in the adjacent sites of care.
And through us sort of remote setting.
Yes, and I think the other other aspect of the primary care access primary care access that I think is important to US is the fact that as Adam has described in the past I think that there is just a very a much larger.
Search feel to actually find physicians that.
Have patients that have the unmet need that us IRA Ken can.
Can provide in addition to that I think our specialty pharmacy approach.
Has really I think risen to the occasion in terms of optimizing its performance with regards to ensuring fulfillment, mostly within a 20 for a period of time for individuals that receive prescriptions for for news IRA and Thats, even generally in the case of accounts, even on the Medicare side, where we don't have a formulary listing.
We do have enough other trusting relationship there with those physicians and the providers were positive patient outcomes is really continuing to be very much aligned with what they are trying to deliver as well as well as what what we care about most.
And just 1 more related.
Thank you for that 1 more related components.
So you commented on it earlier I think with regard to the resistance data that you're providing is that resonating as it used to in days of old with different antibiotics.
To just hear how that's how that's playing out in the field.
Adam.
Yes, I can I'll answer that because I've been system recent advisory boards, it's fascinating.
Actually in the pneumonia space because there has not been anybody in there.
The physicians are blissfully unaware of how poor the susceptibility is for.
Strep Pneumo for example, with the oral antibiotics that a prescribed so there is a little bit of education to do there, which is what we were mentioning earlier AUM, having said that of course, 1 of the benefits is that we get a significant share of voice in that space.
It will be the first once a day drug in that space and some time for the treatment of community acquired pneumonia and.
The skin space, they're far more aware of it because theres been a number of products that are promoted the challenges with oral drugs without MRI site coverage. So capex is a greenfield site for us.
Really.
They are shocked and surprised when they see how pool the oral drugs. All I mean, you have to remember that they are using drugs that it between sort of 25.50 years old and the resistance rates vary from sort of 50% to 20% of the best.
And so.
We really do provide a highly efficacious alternative in a package.
Appears to have really good safety data.
I think Bert another data point, maybe I'll have Randy comment on is the feedback that we have from our small focused MSL interactions with the primary care docs, Yes, I mean, it's very similar to what Adam just mentioned that most of them are aware of antimicrobial resistance I mean, obviously they hear about it just like everybody else does it knows that exists.
And also very much aware of MSA and MRSA and the challenges around there, but in the pneumonia space. In particular, there is a lack of understanding why patients day gives <unk> 2 or 3 times keep coming back and it's not working and equating that to.
As Adam said that 25% to 45% to 50% resistant rates that exist for for many of the generic antibiotics. So it's in the community, it's definitely a message that doctor aware of but.
The education is certainly helping them understand how.
Bad day resisted patterns are in the different regions that we're talking to them.
Thanks, I appreciate the color look forward.
Gaining traction as you really lean into the oral sales effort. Thanks.
Thank you Bert.
This concludes the question and answer session I would like to turn the conference back over to Evan Loh for any closing remarks.
In closing I would like to thank you all for your time and attention today. Your continued interest in us iron per Jack are important to us the journey of making us IRA commercial success is well underway.
As the wealth of microbiological data and clinical outcome studies on <unk> continues to expand we are increasingly confident in the potential and desire to be an effective and a much needed addition to the armamentarium of antibiotics available to physicians to save lives in multiple settings of care down for.
He is ahead of us to be able to provide a novel life saving antibiotic to patients motivates us all of that per tech. We look forward to keeping you apprised of our continued progress goodbye for now.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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