Q3 2021 Antares Pharma Inc Earnings Call
Ladies and gentlemen, welcome to the entourage for that third quarter 2021 financial and operating results conference call.
Today's recorded presentation, all participants will be in a listen only mode.
The presentation, there will be an opportunity to ask questions if.
If you would like to ask a question. Please press star one I.
Again that is star one if you would like to ask a question I will now hand, the conference call over to Tromp, Lilly and tourists Vice President of corporate Communications and Investor Relations.
Thank you operator, and good morning, everyone earlier today, we announced our third quarter 2021 financial results in operating a cheap at a copy of the press releases fly presentation for today's conference call are available in the Investor Relations section of being charged for mountain corporate web site before we begin I'd like to remind lifter.
Some of the statements made during this conference call with the pay and forward looking statements within the meaning of the Safe Harbor provision B U S. Private Securities Litigation Reform Act of 1995.
Examples are forward looking statements include those related to our future financial and operating results, including our expectations regarding the impact of the ongoing COVID-19 pandemic on our overall business operating results in fact financial condition, our ability to achieve the update of 2021 revenue guidance future revenue growth prescript.
Volume product launches in rocket chair for our products and our partner products F D. A actions and potential regulatory approval for our and our partner products timing of results, an ongoing and future development programs I clinical trial for our products and our partner products that future business development efforts.
These forward looking statements are subject to certain risks and uncertainties and actual results could differ materially. They are identified inscribed in today's press release in the form of a company.
And the accompanying slide presentation on side, two and in the company's filings with the SEC Unformed 10-K, and and updated in uncharted recent periodic filings tend to inform a K I.
Cars is providing this information as of the date up today's conference call and does not undertake any obligation to update any forward looking statements contained in this conference call.
All of new information future events or circumstances. After the date hereof, except as required by law or otherwise the company cautions the doctor's doctor place undue reliance on these forward looking statements.
Joining me on the call today, or Bob apples, President and Chief Executive Officer, Fred How executive Vice President and Chief Financial Officer, Dr. Peter Richardson Executive Vice President for research and development, Chief Medical Officer, and Joe Brenda Senior Vice President of commercial.
Let's review the agenda for today's call in flight three.
Bob will begin with a review of our overall business, including the recent licensing agreement for Thailand out and then hand, the call over to Joe to provide an update on a commercial achievements and strategy for our proprietary portfolio. Dr. Peter Richardson will then discuss our our D initiatives to him for him to call back to Bob's provide a review of our lives business.
Fred well then go through the detailed financials and bubble could conclude with closing comments before opening a line for your questions.
Please try to fight for it and I want him to call over to Bob Apple Bob.
And Sean and good morning, everyone and thank you for your interest in our third quarter results in operations update.
Are you looking to third quarter, either the results Zoe. Please report another record period of growth.
The operational and financial advancements, we've achieved across or a business is reflective of the strength of organization and highlight the multiple and sustainable opportunities remain in front of us.
Our third quarter and nine month revenue increased 20th and 28% every year to more than 48 and $135 million.
Easy going to fill a quota increase to $11 million in approximately $29 million and nine month period, and then an income before taxes increased 45% in Q3, two $7.2 million and over 250% to $17.2 million in a nine month period.
We achieve these impressive result, do an extremely challenging time with the emergence of the delta very effective teaching English and physician address as well as putting tremendous pressure on supply chain from the manufacturers and suppliers.
Even with the strong headwinds and play Zionist it instead of a generic epipen continued to be the primary contributors to our growth again this quarter.
We also expect the recent licensing of Toledo and the development of eight year is 19 O. Two for adrenal crisis rescue will further enhance our proprietary portfolio and be future drivers of our overall growth.
Furthermore, we anticipate eternal achievements, coupled with the potential opportunity to remain with our alliance business and create a foundation to continue to grow our business.
Let me first start with the signing of the U S license for Commando in October which is a twice daily will treatment for testosterone replacement therapy tentatively approved by the F. D. A.
Need to need to broaden our commercial proprietary portfolio any opportunity to complement our existing therapeutic footprint with another testosterone offerings to physicians and patients significantly enhances our near term growth opportunities.
Within the backdrop of a large and growing TR T market. We have a sales force. It continues to prove their success resides did we expect continuously leveraged their physician relationships to drive adoption of an cool dosage form of testosterone.
Based on our discussions with physicians and patients. It is our understanding that they're just preference more than one therapy option and our growing community to T. O T will support our market share gains and revenue growth in this market.
Overall, we remain physically diligent with with prospecting for corporate development and believe the financial terms of the license agreement with an upfront payment of $11 million represents an attractive opportunity with a compelling story and natural theme [laughter], we expect the lawsuits complementary product in the second quarter of 2020.
Two upon FTAA approval based on the expiration of an exclusivity period of a competing product.
From a market standpoint, we believe caliendo has several positive product attributes such as one dosage strengths and less restricted dosing instructions among others that could set it apart from the other oil products.
You also expect to conduct further diligence and assess the development opportunity for Toledo XR.
Potential once daily oil treatment for testosterone replacement therapy, which we believe could represent a significant benefit for patients and physicians.
Let me now turn the call over to Joe to provide an overview of our commercial achievements and provide more detail on a commercial strategy for an expanded proprietary portfolio Joe. Thanks.
Thanks, Bob and good morning, everybody I really appreciate the opportunity to joined today's call throughout the year. Our commercial organization has continued to perform quite well with our entire portfolio of products, including <unk> Doctor <unk>.
And this was despite the challenges we faced with the Delta variant that created physician access barriers and fluctuating patient volumes.
And this was particularly burdensome this last quarter, but with that said, we were still able to demonstrate 32% year over year growth on our proprietary portfolio in the quarter and we believe we will have an even more compelling bag to offer both physicians and patients with the anticipated logic Lando for next year.
Let me start by sharing a little bit about our flagship proprietary products is dead, which continues to be one of the main drivers of growth.
As you can see on slide five in the third quarter Zeiss that total prescriptions increased 40% year over year, and almost 50% year to date and this is despite the slightly more limited physician access and decrease in patient visits that I just mentioned.
Had some of our highest weekly performances precisely and both the month of September and October.
And just to give you some perspective and this is according to the activity of data Urology office visits are still down more than 30% from the prepandemic levels.
Yeah, despite that and with that said, we had the highest weekly performance advice that since launch of approximately 5200 T. Rexes just last week.
Although we saw a 60 40 in person versus virtual detailing mix in the third quarter now with the Delta various subsiding, we're starting to see a physician access and patient volumes continuing to improve throughout the month of October and we expect it to continue as the remainder of the year unfolds.
As I said remains a top priority for our field forces they focus on driving deeper penetration within the existing prescriber base of nearly 10000 physicians who are top decile writers.
[noise] fine we're pleased with a 50 50 split between both new patient start and switches from the I M injection, particularly as those new patient starts may have been slightly stunted in the earlier part of the third quarter due to the very end.
In our hybrid selling model really continues to work well as we flex between the in person in virtual calls and that's really based on whatever the requirements are of a physician's offices that we call on as well as those respective markets.
As we continue to successfully positions I said as a best in class Painless Subcu injection, we believe physicians and patients really have a preference for the different treatment options and that leaves me with the opportunity will talk now about which is commando and slide six.
We have consistently noted that the TRT market really remains compelling from a size and growth perspective, with almost 8 million total prescriptions injections still represent the majority of approximately 75% of the shares in that market, but the gels still hold us a substantial share of about 25%, which is roughly one eight.
Prescriptions and that sort of the overall T O T market.
Given those market dynamics rethink an offering of both an injectable an oral therapy are highly synergistic it will only enhance our overall growth trajectory.
We expect to launch herbs are we expect the market to Lando and Vice dead together complimentary as options for patients and physicians and while Guy said offers a convenient once weekly payments injection option with a compelling clinical profile, we believe that patients who who may prefer an oral treatment and may not choose an injection.
As the first option. So as I stated before there are approximately 1.8 million prescriptions for gels, which may not be optimal for patients given the challenges that the daily application represents as well as the risk of of transference.
So the opportunity to have both zeist at <unk> in the sales forces bag next year gives our sales force the ability to have both options for physicians and their patients and it really allows them to choose what's best option and treatments.
For their needs.
Recently, we attended the National SM SMA Conference, which is an annual professional medical Congress focused on sexual health and hormone replacement and we had several medical key opinion leaders there that we're familiar with Kalanders clinical profile and they expressed in their opinion that commando has some distinct clinic.
Advantages over the aural that's on the market today, such as no need for a complex titration schedule and a convenient VIP dosing with the standard meal.
These were some of the main attributes would all which also attracted us to the product and will use the next several months to put together a comprehensive launch strategy, which will be inclusive of market research and message testing and we're going to build a very strong launch plan for next year.
As we planned for the final FDA approval based on the exploration of Nintendo's exclusivity period, which is March 27th of next year. We also expect to expand the size of our salesforce leverage their existing relationships with healthcare providers and ensure we have the appropriate market access for to Lando, which we anticipate will be similar to.
As I said, which garners nearly 75% of covered commercial lives nationally.
We recently expanded our field force from 79 Representatives and we expect to have about 90 on board by the end of this year and that's the support our current portfolio, but with the addition of Colorado, We plan on increasing our sales footprint by an additional 20%, which will enable us to reach more prescribers and new markets and ultimately these additional territories will.
Be able to cover about 95% of the total TRP TRT prescriptions in the market.
And we believe our current salesforce will be able to successfully leveraged their relationships with their urologist endocrinologists in primary care physicians as well as their clinical acumen to drive adoption of Colorado.
We will continue to support their efforts by enhancing the strength and size of our commercial organization to grow both sides that anarch Donna in tandem with preparing for the launch of <unk> on the second quarter of next year.
In the meantime, Wildlife said remains the primary detailing focus for all of our Representatives were also dedicated to the opportunity to continue to grow knock knock.
Dr. <unk> remains a priority within our sales force and we continue to support their marketing efforts with branded consumer and healthcare provider digital campaigns.
Sales and marketing tools as well as physician education and I wanted to take this opportunity to say congratulations to the marketing team here at Antares as they were recognized recently as a top 25 marketing team by the TTC perspectives for their work on the digital campaigns for both sides and Doctor and Ah the digital strategy for healthcare providers.
Remains of Paramount part of our plan as we believe that physician education is a critical component for the success of knock Diana.
In the third quarter. We also took advantage of a slight shift in in person customer calls and we're able to garner significant interest in our peer to peer educational speaker programs for an actor and Ah, which is you can see is highlighted on slide seven.
We have hosted more than 35 programs across the country. We've educated almost 200 healthcare providers. So far just this year and we have several other programs lined up between now and the end of the year. We really believe that knocked earner will require a normal sales cycle of a new brand launch which is at least six in person physician <unk>.
Actions really in order to effect prescribing habits, but the feedback so far we continue to receive on the programs. We believe will also accelerate the future growth of knock Donna.
I'll wrap up here by saying as we look to finish out the year, our expectations remain high for Zeiss dead as the feedback from our customers and patients remains extremely positive.
We believe knockdown are can be a future contributor to our revenue growth as we help physicians better identify these patient types in their practice the energy and the spirit that's been shown by our commercial organization at our recent in person regional sales meetings really provided greater evidenced at this team is excited to increase script growth across our products.
And also leverage their physician relationships, particularly now is we will have an oral testosterone product in Colorado that will potentially be added to their bag next year.
Overall, everyone has invigorated with a tremendous opportunities we still have in front of us to support the growth over proprietary portfolio and with that I'm going to hand, the call over now two Dr. Peter Richardson Peter.
Thank you Jeff good morning, everyone.
There'll be year, we've continued to advance clinical development initiatives experiences to slide AIDS, we will begin our discussion Hai.
19 O two.
We were pleased Bsba accepted Int 19 O two and subsequently this has allowed us to initiate the phase one study on time was planning.
The development program to 19 O two.
<unk> to support our proposed indication for the treatment of acute adrenal insufficiency, known as adrenal conscious and both adults and adolescents using on mute.
She also inject platform now falling on his thigh.
To deliver a stable liquid formulation of hydrocortisone.
And the third closer we announced the first subjects for the Phase one study widows and I'm pleased to report or the first Gulf hopes of completed the study is planned and samples will now be analyzed.
There's also the study inputs two healthy adults is designed to establish PK profile of eight Giaga stunt you know two compared to solid quota evaluating safety Tolerability Palmer good Netflix of a stable likuta formulation hydrocortisone when given by intramuscular congestion.
This study demonstrates our ongoing commitment to health underserved patients to needed cute rescue Saturdays.
Shown on slide nine a development team creates new device platform specific to the needs of these patients who suffer with adrenal crisis.
Our goal is to provide a simple convenient injection versus the covenant Multistem standard of care, which you spoke cumbersome and can be challenging to patients caregivers, particularly in a time of crisis.
We anticipate following this study next year with the second human talk to study under definitive by equivalent study in the final also injector.
These activities should keep us on track without timeline for the anticipated five O five b two MBA filing with the FDA towards the end of next year.
Moving to a second internal development program, we've chosen to come to additional fee clinical studies HRS 19, no long or yoga oncology formulation designed to be delivered weekly using and also injector.
These Luka early next year. It should then allow us to file a initial IMD with the FDA shortly thereafter.
Currently reviewing data to confirm that the selected formulation will deliver the target levels of active drug.
<unk> stops really tolerated.
Overall, we remain committed to addressing all of our development programs and we look forward to making additions to off online in 2022, utilizing a formulation unbuilt inject to capabilities with an emphasis on rescue services.
And with that I will now hand, the call of October to fall.
Thanks Peter.
Our commitment to the growth and development of our proprietary portfolio mirrors, the opportunity to envision for our partner business and I'll start with tethers generic epipen.
In the third quarter Tevis generic epipen outperformed with a prepaid demick or normal back to school season, as total prescriptions increased 91% year over year and they commanded a 58% market share of epipen market as illustrated on slide 10.
Our continued success with this partner product was the primary driver to our 70% quarterly increase in royalty revenue.
We expect ever to maintain the relative market share as we focus on maintaining a consistent supply of auto injectors. Despite labor issues with our manufacturers that was particularly challenging this past year due to the pandemic.
Furthermore, we believe are additional opportunities with Teva for generic for tailwind Byetta will be a significant value in the future as you continue on their path for FTA approval.
As Tevye just noted on our third quarter call last week, they are fully committed to being meters worldwide and generics and as a weight.
Leap of regulatory approvals relaunches, they are optimistic that they will see them in the coming quarters.
With that <expletive>.
Trust your commitment as they have demonstrated a proven track record of success with Epipen is upon example.
These complex generic such an epipen for Teo and Byetta may take longer from an approval standpoint compared to non complex generics, but if Kevin can near the results achieved with their epipen, we will bring significant value to both organizations on approval.
We have as pending product approvals along with the work we've performed on the site development program in the third quarter and endorses development program for <unk>, which continues to enroll their fees to be trial. We believe we have a very robust alliance business that remain pillars of potential growth in the future.
I'll know who to call over to Fred for detailed review all of our financials Fred Thanks.
Thanks, Bob and good morning, everyone.
Our ability to continue to report another strong quarter with revenue growth of 20% over 2020 for a record $48.2 million and net income of five $4 million or three per share reflects the durability of our diversified business.
The continued growth in both south Easton toughest generic epipen. This quarter also contributed towards total revenue to date revenue increase of 28% for.
$135.3 million as compared to the prior year.
As a result of our ongoing performance, we have updated our full year 2021 revenue guidance to $180 million to $190 million, representing 20% to 27% year over year growth.
In the third quarter, we were also able to continue to strengthen our balance sheet with cash generation and recently replaced or Hercules term loan with the credit facility from Wells Fargo, reducing our expected future interest expense.
So let me now provide a more detailed review of the financial results for the third quarter and nine months ended September 30th 2021.
Which brings us to slides 11 and 12.
Total revenue was $48.2 million for the three months ended September 30th 2021, or 20% increase compared to $40 million in the same period in 2020 for the nine months ended September 30th 2021, total revenue was 135 $3 million or 28% increase from $105.
$5 million for a comparable period in 2020.
Sales of our proprietary products.
Or tracks and Mcdonough generated revenue of $28 million and $58.5 million for three nine months ended September 30th 2021, compared to 15.8 and $43 $2 million for the same periods in 2020 to 32 and 36% increase in proprietary product sales.
Three nine months ended September 30th 2021, compared to the same periods of 2020 were principally attributable to continued growth in sales for exhausted.
Licensing and development revenue was three 715 $8 million for the three to nine months ended September 30th 2021, compared to four three and eight $8 million for the comparable periods in 2020.
The decrease in licensing and development revenue in the quarter was due to fluctuations in timing of development activities. While the overall increase in 2021 was primarily the result of incremental development and product maintenance activities with.
Ongoing partner development projects.
Royalty revenue increase to $11 $4 million for the three months ended September 30th 2021 from $6.7 million for the same period 20.
For the nine months ended September 30th 2021 royalty revenue increased over 83% to $29.3 million compared to $16 million for the same period in 2020.
During the third quarter, the epipen market benefit benefited from a normal back to school season, and seventh achieved a 58% market share which accounted for the net increase in royalty revenue over 2020.
Our gross profit was $31.8 million and $85 $9 million, representing a gross margin 66, and 64% for the three nine months ended September 32021, as compared to $23 $5 and $61.4 million or 59, and 58% gross margin.
And the same periods in 2023.
The increases in gross profit and margin were primarily primarily attributable to the increases in sales and empty royalties.
Research and development expenses were three nine and $10.6 million for three nine months ended September 30th 2021, compared to two four and seven $8 million for the comparable periods of 2020. The increase in R&D costs were mainly driven by our internal development programs as Peter discussed previously.
We initiated the phase one study for Atr's 19 O two for adrenal prices rescue and we conducted preclinical work for HRS 19, O one and the third quarter.
Selling general and administrative expenses were $19 $9 55 $2 million for three to nine months ended September 32021, compared to $15 to $46 $1 million for the comparable periods of 2020.
The increase in SG&A in 2021 was primarily due to the incremental costs associated with the launch of knock dharna and an increase in sales and marketing expenses that had declined during the pandemic in 2020.
As a result of our strong financial and operational results. We reported income before income taxes of $7.2 million and three for basic ended looted earnings per share for the third 2021.
And for the nine months ended September 30th 2021, our income before taxes was $17.2 million in earnings per basic and diluted shows eight compared to $48 million and three per share in the comparable period of 2020.
As of September 30th 2021, our cash balance was $57.4 million.
Finally to conclude my update I'd like to discuss our recent credit facility, which we entered into with Wells Fargo.
During 2021 with generated $27 million in operating cash. This check this cash generation has allowed us to reduce our Hercules term loan.
$40 million at the beginning of the year to $20 million at September 30th 2021.
As a result of our improved financial condition and performance earlier. This week, we extinguished our term loan from Hercules and then enter entered into a credit facility with Wells Fargo, and which we obtained to $20 million term loan the combination of paying down and ultimately extinguishing the Hercules term loan and replacing it with Wells Fargo.
That will allow antares to reduce our interest expense by approximately $3 million on an annual basis.
The credit facility Wells Fargo also gives us access to additional borrowing capacity, providing the company with more financial flexibility.
I will now turn the call back to Bob for closing remarks, Bob Thanks, Fred.
As we operate under one umbrella of diversification and opportunities I believe our achievements unit gauged at us up for a nice finish to 2021.
Despite significant challenges it persisted throughout this year due to the pandemic.
Our commercial negation demonstrated the growth opportunities across our fulfillment proprietary portfolio with size did not during an otrexup driving at 32% increase in that portion of the business, while tevis generic epipen drove the 70% increase in a royalty revenue.
In the first nine months of 2021, we saw significant increases in our revenue margin net income before taxes.
And cash generation week.
We expect the balance of the year to be as strong as the first nine months I'm.
I am very proud of the efforts of all the entirety of employees and thank them for their dedication and tireless work throughout this quarter and year performing extremely well in a very challenging time.
As we map our future growth trajectory, we believe the enlightens agreement for Toledo, and the advancement of each year is 19 O. Two will further enhance our proprietary portfolio and.
And with a stronger balance sheet. We also expect to continue to pursue corporate development to support our strategic initiatives as well as we await the advancement and potential FDA approvals of our partner programs.
Again, thank you for your interest and operator, you can now open the lines up for questions.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
You're using a speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment.
Again press Star one to ask a question will pause for just a few moments to allow everyone an opportunity to signal for questions.
We'll take our first question from Greg Frasier with <unk> Securities.
Good morning, guys. Thanks for taking the questions.
First one.
Curious that there were any temporary impacts on gross net in the quarter that we should keep in mind as we think about the fourth quarter.
Hi, Greg This is Fred I'll answer that one now there was nothing unusual in the third quarter gross and that we would expect to see take place in the.
Repeat in the fourth quarter it was Ah.
Normal quarter for us no unusual adjustments there.
Got it M. P. Lando do you think that that product has the potential to achieve science bike market share any color on how you're thinking about share potential would be helpful.
Hey, Thanks, I'll take that question and I'll, let Joe add anything if I, if I missed something.
<unk> has as much potential.
<unk>, because it's a really large market with testosterone replacement is over 8 million prescriptions and as successful as I said, it's been we're still on that 4% market share and so we still we believe there's a lot of upside for both <unk> and bringing along <unk> we believe.
And when Joe was talking about earlier in his in his in his talk about 27% of the market or jealous, we believe that product really fits perfectly well in that market and and quite honestly and were surprised anyone real users gels any more because of the challenges.
None of daily application of a large volume of Joe that yet transference issues and so forth. We believe those patients that maybe go into those gels. Initially for the game is going to be easy or they're afraid of injections will be really perfect potential.
Patients for to Lando, and so we'll look at the overall market.
We can just as much opportunity for <unk> dead and when we go into the Doctor's offices is really about giving them the choice.
We will obviously provide both of the.
The clinical data and so they do that both worked extremely well and let them will allow their patient to choose based on their preference of once weekly painless injection or a daily twice a day or.
Tablet and so.
We think there's a lot of opportunity and.
We're really excited about it we're growing our sales force.
To accommodate having two products basically side by side when we go into the doctor's offices and.
I don't know Joe if you have any other comments yeah. The only other color I would give Greg is that we're also realizing that when you look at the market. There is still a decent amount of business. That's in the lower decile. So the value of us expanding our footprint enables us to go to those low lower desktop customers that we don't necessarily call them today and.
We think there is a great opportunity there not only for <unk>, but also for <unk>.
And obviously, we're going to continue to focus on our top prescribers resides dead. We think there's a huge upside in market share for Zaire said as well as commando, there's definitely space in that market.
For for product like this, especially when you've got obviously the convenience we do advice that and then now the convenience of the oral and as I mentioned in my talk.
At the conference that I was at physicians were very excited to have a product that they don't have to have a complex titration schedule.
To deal with so they're very excited about getting a chance to provide something to patients who just don't for whatever reason want an injection.
And as Bob said still are using gels, maybe because they are not aware that there is a convenient world option that will be on the market. So.
Great. Thanks for the color. The last question on the outlook revise revenue outlets have you guys include you need contributions from partner products that are pending approval.
Yeah. So when we looked at our guidance on the beginning of the year. The guidance was a bit wider was $175 million to $200 million and 19, netting dissipated and the upper end of the range anticipate the potential approval for Teo and so when we when the tightened the guidance. Obviously, we only have a couple more months left to go.
Over the years, so we have a real good deal when our products are doing and we will look at our partner products, we don't assume any approvals and it's not a negative we just feel from our guidance standpoint, we just put it in there as a this is what we're going to do with our current business and that's why we tightened it up we load we increase the lower end and brought down the upper and a little bit.
Kind of reflective of where we think we're going to wind up from what we currently are selling today, there's always upside that we do get an approval but.
We think for my dining standpoint, given that there's only really six weeks or eight weeks ago. We felt it was prudent to bring in that range.
Got it thanks very much.
We'll take our next question from Stacy too with Cowen and company.
Hi, all that crap places on the progress and thanks for taking my questions we have.
Looking at your guidance and pious roughly 50 million.
And Matthew for Q4, so how should we be thinking about next year, it's gross.
Let me talk about what are the expected puts it takes for instance, right now consensus revenue next year is roughly 230 million.
The first question.
And then the second question is at this point what is driving new status for Sassnet is just switching from I am Mcdonalds. There are you trying to broaden your clinician reasons, you've stated with Glenda.
And then my last question is on.
A partner Epipen, you disclosed around 60% market share last time, you're planning updates now so how should we be thinking about the future growth of this pregnant products for next year or or even as you think about Q4, okay.
Thanks, Nicki I.
I will take the Epipen question version that Joe handle the.
It will come back on the overall guidance question in the third.
We'll cover that after those two topics so on the.
An epipen.
They've had they've done a fantastic job of gaining market share.
In a very challenging market.
Given that the brand leader previously you had a pretty long established.
Period of time, where they were the brand and everyone knew the Epipen was listed product to use so they ended the.
Being around anywhere from 56% to 60% any given week, it's really a function of who's selling the product out in the <unk>.
Whether it's coming to a cvs or walgreens or whatnot.
But we believe that right now that's probably.
They are probably add deploying aware it makes the most sense to be from a from a market share standpoint, we don't expect them to get any huge additional gains unless there's a some unless there's a supply interruption.
Of a competitor and so far we've been able to provide taboo with the necessary devices that they need in order to not only get that market, but also maintain it.
So as we look forward, we think that if they maintain a relative market share that they have now will still see growth next year, because we weren't at 56 or 60% market share in the beginning of this year and so we think there is there is still upside from a market share standpoint overall.
There was obviously there was a positive impact.
With Covid there were some.
We're.
Audio epipen is being utilized or being leased available for the vaccines. When they were when they were providing the COVID-19 vaccine COVID-19 vaccines in case someone had anaphylactic shock and in case they had some adverse reaction to the vaccine.
We expect that too.
Not be as robust next year, but overall again, we still expect to see growth for epipen in 2022 versus 2021. So overall I think I would have done a great job and we're very happy with where they are from a market share standpoint, and again only expect to see any incremental increases if there is a <unk>.
Applied interruption in the market.
I'll turn the call over to to Joe for the.
Yep. So stacy thanks for the question about the new patient starts and the good news is I mentioned, we had our all time high highest week ever last week, besides that and what we're finding is that we're still getting the benefit of switches from.
From the I M business, which is obviously a big portion of our growth, but we're also getting the other 50% from new patients.
Where we see an opportunity as we go into debt to those lower Dessau through our expansion. We think there's even more business opportunity there that can be had with advice dead and the other thing that the big upside as we kind of look forward as the market kind of normalizes, we know that patient volume has decreased over this past year that were.
Beginning to see come back up towards normal so as those new patients go into the both urologist endocrinologist and or primary care offices that are that are candidates for testosterone there'll be great options. Therefore, new patients that are truly knew to therapy as well as for both sides said and then for next year also.
Actually some that will be available for <unk>, because they might be patient that.
Again may or may not want.
An injection so that's where we're at about 50 50 is kind of where the split is right now between new starts and switches.
And safely this is Fred and I. Appreciate your comment earlier question about guidance for 2022, I think it's still too early for us to comment about where the consensus is that and I fully expect we'll do what we've done in the past and provide our guidance. The end of December at the beginning of January but what I can comment on is when we take a look.
At 22 were excited at what we're seeing with.
With the expanded Salesforce that Joe mentioned, a little bit earlier, we continue to expect Zhao said will be a significant growth driver for the organization going forward.
Bob mentioned with Savage Epipen again.
Been a terrific year for us this year and we see that continuing into 2022 as well as we continue to manufacture millions of pens, allowing them to reach the 58 or 60% market share that they have with to lando, that's going to be really the launch here.
We will be working on getting coverage throughout the year, we hope to have the coverage up to where south studies at the end of the year, but certainly you will be a challenge at the beginning of the year, having the coverage and and having a launch in the second quarter, we won't see a full year's worth of revenue.
With our other products will track Subsume Makena overall is a basket, we expect them to be relatively flat, we're not looking at significant changes in any of those products up. This time, one thing that we are thinking about when we're talking about the guidance for 2022 is is not including unapproved products like we did.
This year with four tail and other potential product approvals.
That's why we set the range is wide as we did we will probably be looking more just our our existing products that we have and what we would expect our revenue to be but overall.
I think that the consensus guidance that's out there we will address book from this point right now it doesn't seem all that far off from where we may be positive or negative.
Really appreciate all the details thank you.
We'll take our next question from Damon and someone with Piper Sandler.
Thanks, So just have a few questions first on to Lando are you in.
In a position to give us any color.
On on the Wack.
Or at least you know.
Give us some.
A sense of whether it's going to be similar to that advise that or maybe in a higher range. How should we think about that.
And is it safe to assume that the growth and spread on to Lando will be similar to that size, particularly given your commentary regarding.
Landscape ideally being similar to that.
So that's the first set of questions and then just a higher level of question about the business is your building out the proprietary portfolio and you're in licensing assets. How do you think about your partner products and specifically.
Would you look to monetize some of these royalties streams.
As a way to accelerate the development the build out of your proprietary portfolio. Thanks.
Thanks, David.
I'll take the first question and again, Joe can you can help out if needed but on the question on <unk> and we decided on a wholesale acquisition price or whack.
The answer is we have not yet we we still are doing a lot of market research with.
With tears as well as with physicians to really understand the value proposition that desi with a twice daily oil.
Capsule and so.
We don't want to make any assumptions at this point, obviously, we use some internal numbers for our modeling and so forth, but we think clearly <unk> has a value proposition that warrants a.
Brandi price it is.
In the range of of Zionist it as well as what's out there with Japan, Zoe and we just haven't decided where we're going to wind up yet and so as we get closer to launch and we get more of that.
Information in house, who will be able to guide guy industry, a bit better but overall, we do believe there is val.
Values, there in that product and Woodward, a brand and price type of.
Model Joanna unappealing to added on that as I mentioned I think that.
We know that physicians appreciate the options having options. So we.
We also know that one of the things our team as we think uniquely talented at it maybe wasn't the same for the other or on the market. As we also can navigate the prior authorization process fairly fairly well, especially with our partnerships and the SP World. So that we also think will help.
<unk>.
The launch of Colorado would be more successful than what we saw were together on the market. So we think those we'll certainly help us as we as we get off the launch here and then get the access to a place where it's similar to that advice.
Sure.
With the gross and that David I think we would be looking at something somewhere we would be doing similar programs that we have right now.
R.
How's that product, whether it's the co pay.
Cards or looking at any other programs, we would certainly be looking at similar gross to next.
Over a period of time first year, it's going to be unusual right because depending on the coverage and the rebates.
It's going to be hard to judge, but over a period of time I would expect me to be very similar growth.
Have a initially will be making sure that if the doctor writes it that it gets covered or not covered but if it's not covered by insurance because we're still waiting for that coverage to come and play and then there'll be different programs that we use like we did with the ISDN first still free and things like that and that that way you get the prescriptions.
Filled the patient gets on the product and obviously if they have a positive response and they tended to stay on that product and that's really important and valuable for for us and for the product and so.
Where we might not have clearly aren't going to have the same coverage out of the gate as we do as I say, because it took a year to get at 75% level for.
<unk>.
Those other other things that we can do to help the patients will probably offset some of those reductions that you would normally see in the bay or comfort and so overall by going to see a similar gross yeah, and we didn't have when we log class and we didn't even have the partnerships. We do today with the Sps. So that's another difference as we kind of jumped.
Philosophy Lando, regardless of coverage so at least we've got the SP partnerships that we anticipate will be valuable as we get paid upon therapy and and for those.
Some of the terminology Peter subspecialty farmers, whereas we go through some of the smaller specialty farmers and May help adjudicate the claim for the doctors in the offices and it's been a real valuable tool for us.
As we continue to get growth with <unk> and we will use those same sp's who aren't in place when we first launched sized at four to land and so we see that the ability for that to actually have a positive impact sooner.
As opposed to later.
And there was you know I think there was some advertise.
Portfolio or the royalties Hey, David I think that when we look at our royalties.
Especially when you look at something like it's been a tremendous amount of revenue for us and a tremendous amount of value.
We are generating a significant amount of cash from operations and so I don't see the need we don't see the need to monetize our royalties. We think it's more valuable for the organization to have that revenue growth at the top line and we.
We believe that through our cash generation through the ability and we wanted to take.
Take on additional debt to look at new business or corporate development opportunity. That's the best Avenue, We believe right now for us and so we're not looking at.
<unk> our royalties, we do continue to look at our portfolio, whether or 900 trucks up fits from.
Pure strategic vision standpoint, and that's something we're looking at as to whether or not it makes sense to potentially divest trexall.
But again.
Springs, a nice stable amount of revenue for us and we need to look at the the pros and cons of looking at our portfolio as well, but like I said, we are generating a significant amount of cash our balance sheet is really strong and we feel pretty good as far as where we are from the leveraged standpoint.
Yeah. That's that's helpful. Thanks, Bob.
Yeah.
Thanks, David.
We'll take our next question from Elliot Wilbur with Raymond James.
Thanks. Good morning first question for Bob I May have missed this and you're prepared commentary, but just wanted to get an update on the status of the visor collaborations for the undisclosed asset and just current thinking on.
Where that is.
If and when in fact, it may be may be disclosed.
Yeah. So we made a lot of progress in Q3 on that program with Pfizer and that's obviously despite than spending a tremendous amount of time on the on the the vaccines with.
With COVID-19.
And so we're looking at we're working on ours filing strategy with sizer.
What's the best approach timing live as well as what needs to be neck, and neck NDA filing and so we're hoping that we will have some clarity around that.
Or timing of that this quarter.
And then as far as you know.
When it gets file we do believe there's a potential that it's a <unk>.
<unk> expedited review.
Because of the area that it's in the rescue pen and so hopefully at that time Lou filings. Obviously, we believe will this concludes with the product is and.
More to come on that.
Okay, then I want to ask a couple of questions of of Joe I guess, specifically with respect to overall market trends you highlighted the.
Slow recovery I guess and.
Urology office visit I think it's a 30% I guess, we'd see numbers is actually suggested a little bit worse. So I guess, it's somewhat encouraging does look like it's turned a corner there, but if you think about the.
Sort of below.
Trend line rates in terms of.
Office visits, particularly within the relative space, how much of that is actually physician driven versus just patient driven and then sort of how to you.
Think about altering your strategy in terms of different approaches to.
Takes an activation to maybe help claw.
Clothes that close that gap.
Yeah. That's a good question I had and you're right I mean, the market trends four patient visits are certainly doubts pretty significantly.
And no matter what data point you look at.
You ask a good question as it relates to what's driving is it more of a patient visits versus physician access so to speak and it really is a bit of a combination because especially when we jumped out of the gate in the first quarter of the year, we definitely still soft physician access as a challenge as we got into Q2, it's certainly starting to.
To improve and then then we got into the variant and then we sort of started to see some physician access to get back to kind of challenges a challenging situation, but the good news is as we kind of get into Q3 at.
The talent Q3, we're starting to see that access go back up towards where it was and that two two timeframe as the variance searched starts to subside and the patient volume is sort of following a similar trend.
And the urology space in particular, it seemed like it's decreased more significantly than it didn't say the endocrinology space, but with with urologists. It does seem as though that is the variance sort of subsides, you're starting to see patient visits come back up and that's one of the reasons why.
You asked about our strategy. It's one of the reasons why we've gone really heavy on our digital strategy. So we invested a high percentage of our marketing budget on our digital campaign for both Hcp's healthcare providers as well as consumers both branded an unbranded campaigns and we think that's that's been a help to get.
Patients to be aware, even if they're not necessarily going to the doctor that there is an option available for them from a from a testosterone treatments standpoint, as well as with knock Donna Reed.
We partnered with good R X as well to get to get the word out on the brand. So we think the digital strategy has really helped garner some of the growth that we've seen even in that scenario, where you've seen that patient volume kind of decrease but so far all things all signs are pointing to it beginning to improvement as I mentioned last week, we had our highest.
Week ever.
We're starting to see the virtual to in person visit.
Physician office visits go back towards where it was in queue too. So so I think think seem as though that it's getting better I am not sure how long it will take to get back to where it was prepandemic, but certainly going in the right direction.
The only thing I would comment too is that.
Delta very and it really is a lot of other large or very robust kind of America a horse.
It hit, Texas, and we have a we have an extremely large amount of business in Texas and you.
Work at all.
Metro areas.
Where there were flares of Delta, we solid impact and we're starting to see that subside and I think that's really key and.
And why Regina growth that we're seeing but if you looked at our quarter over quarter trends from a prescription standpoint, Q3 was a challenge because it is new large spikes in the delta ovarian and we believe we will start to see our growth normalize back again to where it was before that third quarter Spike here. So.
Overall, we were feeling really good about size dead any hope.
At the.
He told the 19.
<unk> are getting behind us, but as we've seen with Delta you never know and it's unfortunate thing because access is everything indications or go into the doctor's office and to be treated.
And it's difficult for us to get those new patients on which are really critical for us see that type of growth that we want to see which is that.
Okay. Thanks, and then question for.
Fred and.
I guess, Joe and Bob as well, just just thinking about SG&A trends sounds like there is going to continue to be sort of an elevated level is investment in the business even outside of the salesforce.
Expansion. So just wanted to get more clarity in terms of the timing of the Salesforce expansion. Soon that's going to be ahead of the launch of to window, but I guess, how are you thinking about sort of being able to offset that investment spin with sort of an immediate benefit at least in turn.
Ms of incremental desires did.
R X's and then.
One last question just on Commando in the segmentation I guess as you drill down on that do you think that there is.
Preference differential in terms of prescribers difference between potentially the preference for oil product between in Dos and urologists.
Thanks.
Okay I'll take the first part of that Elliott with regards to the Salesforce expansion. So we're going to have by the end of this year will have 90 sales representatives.
By the end of this year and then.
I mentioned about a 20% increase as we go into next year. Our plan is to have those folks on board.
In that first quarter of next year. So that we can be prepared for the launch which will be in the second quarter. So that's where we see Kennedy expansion kind of taking place for the most part and then we will evaluate as the year unfolds as it relates to whether or not we need additional.
Folks or not but that we think is going to be.
Substantial for us to be able to do what we need to do with the Lando and you asked a good question about the segmentation because.
We do see an opportunity to.
Both with our current prescribers as well as with prescribers were not currently calling on there's opportunities for for to Lando. So in our current prescribers. Obviously, there is especially those ones that are that are high users as I said, they still do have some gel business as an example in their practice that we can take advantage of they also still have some pain.
<unk> potentially that are preferring not injectable option, so and those those high prescribers.
The lower Dessau customers that were not currently currently calling on today when we've looked at the data that seems to be where <unk> has gotten most of it's.
Use as in those lower decile, so by us increasing the size of our sales force to the degree that we mentioned we're going to cover now 95% of the TRT market and we definitely think with that we'll be able to get to those lower desktop customers and be able to garner the <unk> opportunity there as well as potentially some some guys that opportunity.
But definitely we see that those lower decile as being a good ground for Atlanta, and those higher debt sales are going to be a good ground for both time and started clan to and as I said.
And just to provide some additional color on the daily.
We were at around 79 representatives.
At the end of Q2.
We expect to be at 90 by the end of the year and so we do expect to see and Roy. The question that you really asked for resides in Q4 and clearly in Q1, having 90 reps as opposed to 79.
In the beginning of next year.
For all intents and purposes as you as you get through to hiring cycle. We can get will have a positive impact on <unk> and then when we add that other 20% by the end of Q. While we obviously are doing that Fortunately enough, but also what it's going to have a significant impact on Zionist animal will reap the benefits of that in Q2.
The balance of the year.
Not providing guidance yet for next year, but we expect a very significant increase in zeist at revenue.
Based on Salesforce alignment and that's when you'll start deducting youll see growth in queue for clearly growth in queue for.
More growth in Q1, and then once we get that full team up and running we expect to see the benefits of that for the balance of 2022 and again when we provide guidance.
It will probably provide some guidance as to what our expectations are for zeist, It and I think you'll see that there is clear benefit and increasing our our penetrate are increasing the sales of our team in order to get to that 95% coverage of all of the scripts that are out there.
We'll take our next question from Anthony Patrol with Jefferies.
Hi, good morning, great. Thanks for filling us in here could we maybe getting an update and sort of look at epipen trends, specifically three Q of 21 versus 2019, it's up 13% that strikes us is higher than the normalized trend obviously coming off of.
Them easy comp last year, but again the trend in 2019.
Maybe some thoughts on why that's elevated overall and then as you look at the spread between Mylan and Teva.
Since they are 58%, where do you think to have the share can go over time and I'll have a couple of follow ups. Thanks.
Sure. Thank Anthony.
Relative to.
What time was able to achieve and what the market actually was able to achieve it wasn't just had loaded the market overall in Q3 of 2021.
It was up about 13 or actually I think even higher.
The relative to 2019 third quarter market.
Third quarter for Epipen is always the best quarter because of back to school and I think that we saw an X a higher than normal back to school effect because last year.
It was really obviously when you look at Q3 last fumes down significantly from the previous year and that was because no. One was going back to school I think what happened was parents didn't need to buy two pens typically are two packs a typically add one for school and then they typically have one for the house and a car or whatnot.
Here, we saw probably above normal growth because they all were going back to school and they probably weren't buying depends on a normal cycle because they are at home and they weren't going anywhere they weren't.
Suppose to the type of issues that a wary about avoiders peanut butter or bees or whatnot and so we do we do recognize that it was a fantastic Q3 for the overall at the market and obviously handle and US benefited because it was near 60% of that market share and so.
So we believe that.
Giving it hopefully at Colgate.
Who's away at some point that the normal back to school market will will be there I think also what helps us to as a.
<unk> brought in a generic into market and it's brought the price down and generally I think it makes it more affordable for people to have the availability of those pens around and so I'm not sure what's going to happen next year from the back to school it could be at the same level.
Just because there's more more kids that have peanut allergies, there's more.
There's more availability of the other devices with us and to have in the market.
But overall.
We do believe that the market will be continued to be very strong next year in 2022.
We have the final question.
Yes could bark box here.
Yeah.
I answered that question of the previous analyst.
Permanent previous answers I think thats.
Like anywhere between $56, 60%, we expect that to kind of stay relatively the same.
Going forward the good.
News as of this year, we started the cabin starting to your partner low forties market percent sure. So we're going to see growth.
In 2022 versus 2021.
And I think that you know we may see Kevin take more market share if their supply interruptions of epipen from Ireland or a drink to collect some of Neil we just felt that we can't predict at their historically has always been a lot of supply interruptions.
But we expect that attended to maintain that $55, 60% market share that it's a very good product for both of US It will continue to grow and.
That's what our expectations are.
Anthony.
Our highest expectations were that they would get half this market and have already exceeded that and so I think overall the markets are not only happy about that we're very happy but we're also.
It's a very I think I think that they have done a fantastic job and.
They can maintain that it's great for both organizations.
Great a couple of follow ups on the licensing agreement.
The agreement first just kind of high level thoughts on.
How do you think the competitive dynamic between T Lando and returns though.
It will play out.
With the launch and just into next year and then and then secondly, you also closed on the XR an option to develop the lando XR. So just sort of looking at that development pathway just expectations on what that effort looks like and timing. Thanks.
Sure Anthony.
I mentioned briefly in our in the talk about.
GSM SMA conference, which is a which the gathering of all the medical not all but a high percentage of the medical professionals that treat sexual disorder as well as hormone replacement.
And we were really.
Pleasantly surprised by their comments.
Their familiarity with the clinical profile calando and as they and their view saw that against Gen Tango and what they really stressed was that this unique offering that we will have with this no need for a complex titration schedule.
Our doses really straightforward.
The other product in the market is fairly complex and it takes a while to get a patient to see kind of a steady state. So we think that's going to be a big upside for us as well as they had commented on how.
The size of the meal difference potentially of what you need may need with Gen Kenzo versus what youll need with Atlanta, we see as kind of a standard mail either way you have to take it with food but.
So we see those factors as being a differentiator the other big differentiator as I've mentioned before we've got a field force.
That is very knowledgeable and familiar with how the prior authorization process works and our partnership with the specialty pharmacies that wasn't true for the other product thats in the market. We think that's also going to be a distinct advantage for us because we can help the offices navigate that sometimes is a complex process to get patients on therapy. So.
With those things, we think we have a good opportunity to do something very different in the market than what we saw with the other oral and the fact is the market wants an oral it's very clear that they want an option for patients. It's not a gel that's not an injectable and and so we're going to certainly try to position ourselves as being the best of the options that are available.
Global.
And we don't see this really as a head to head competition, which it turns out I mean, we see this as a.
The ability to go into a market niche with the gel market that's still.
It is really large and.
There's plenty of room for a number of.
Products in this market to do really well and so we're going to focus on what we believe in the benefits of <unk> as well as the benefits of <unk> and and really leverage those relationships. We have there been physicians, which I think is one of the key things that the competitive may not have had coming out of the gate.
Really didn't have an established sales team. It was a new product launch and had no relationships here, we have some really very solid relationships with the large number of the largest TRT writers and we're going to go in there with another offering that again may serve a need for different patients in their practice and so we see it as an opportunity to really judge.
To cast a wide net in a large market.
We think that there's a lot of opportunity for all the products in the market.
Okay.
We will take our last question from Matt Kaplan with Ladenburg Thalmann.
Hello, Hi, this is Raymond in for Matt Congrats on a good quarter. Just two quick questions. I was wondering how we should think about nocturnal in 2022 is it something more of a steady growth, reflecting the patient education visits.
And for 19, one what are the gating factors for Ireland D filing in 2022.
Yes. Thank you I appreciate the question around markdown I'll take the at least the first part of that which is for 2022, we're really seeing there is probably three key pieces that we know is important for number one is having a full kind of normal sales cycle like what you would expect on a launch brand and and we.
Haven't yet had that yet with knockdown that when you think about the fact that with knockdown that was launched kind of post immediately post pandemic and.
Still through that period of time, where you saw patient volumes kind of down. So we're anticipating as we have a full year of launch.
Underneath our belt with nocturnal that will enable us to do the two other things.
That is really important and I think you mentioned, which is one is physician education. I mean, we definitely think that helping physicians identify patient types is a as a clear and clearly an important part of the doctor in a messaging and so the speaker programs that we've rolled out this past summer I have been a huge asset for us to help increase that.
Education as well as our field force has really been able to articulate to our physicians what.
That patient type is that they are looking for with that with that doctor and a patient.
So between those two things that sales cycle.
The ability to educate and we also think that as we grow our footprint with regards to the salespeople that we have in the market that would be the third thing that we think is going to be a big asset to help us with nocturnal. So one of the things we realized is that more patients I'm sorry, the more physicians rather that you educate about the brand the more patients taking <unk>.
<unk>, so by having a larger footprint in our sales force will be able to call on more prescribers and be able to identify more patients. So we think that'll benefit not Venezuela in 'twenty two.
Okay.
And as Peter around 19, one.
The data that we generated in this last quarter has been.
Helpful in understanding some of the opportunity for the product.
Keen to make sure that we can deliver once weekly treatment in this area. So the data that this merger allows us to model further on that and then take the formulations can be finally used in the clinical studies, which has some advantages over the preclinical films that have been used to date to have that model and then tested before we go to them.
R&D, which we expect to do around midyear next year, if all goes well.
Thanks, and I'll add any color.
That concludes today's question and answer session. At this time I will turn the conference back to Tom Brady for any additional or closing remarks.
Thank you everyone for joining us today, please feel free to reach out to meet you have any additional questions have a great day.
This concludes today's call. Thank you for your participation you may now disconnect.
Okay.
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