Q3 2021 Supernus Pharmaceuticals Inc Earnings Call

Operator: Good afternoon and welcome to Super News Pharmaceuticals' third quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will follow a detailed As a reminder, this conference call is being recorded. I would now like to turn the conference over to Peter Bozo, Westwick Investor Relations Representative for Super News Pharmaceuticals. You may begin. Thank you.

Good afternoon, and welcome to <unk> Pharmaceuticals third quarter 2021 financial results conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session instructions will follow at that time as a reminder, this conference call is being recorded.

I would now like to turn the conference over to Peter Basel of last week Investor Relations Representative for Supernovas Pharmaceuticals, you may begin.

Peter Vozzo: Thank you, Nika. Good afternoon, everyone, and thank you for joining us today for Supernus Pharmaceuticals' third quarter 2021 Financial Results Conference Call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernice's chief executive officer, Jack Katar, and chief financial officer, Tim Deck.

Thank you Nicole good afternoon, everyone and thank you for joining us today for <unk> Pharmaceuticals third quarter 2021 financial results conference call today. After the close of the market. The company issued a press release announcing these results on the call with me today are so pernicious Chief Executive Officer, Jackatar, and Chief Financial Officer, Tim Dec.

Peter Vozzo: Today's call is being made available via the investor relations section of the company's website at ir.surinus.com. Following remarks by management, we will open the call to questions. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Sopernis's current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factor section of the company's latest SEC filings. The actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on November 3rd, 2021.

Today's call is being made available via the Investor Relations section of the company's website at IR, that's a pernis dot com following remarks by management, we will open the call to questions. During the course of this call management may make certain forward looking statements regarding future events and the company's future performance. These forward looking statements reflects a pernicious current person.

Specter of on existing trends and information any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factors section of the company's latest SEC filings actual results may differ materially from those projected in these forward looking statements for the benefit of those of you who maybe listening to the REIT.

This call is being held and recorded on November 20th November three 2021. Since then the company may have made additional announcements related to the topics discussed. Please reference the Companys. Most recent press releases and current filings with the SEC. So furnace declines any obligation to update these forward looking statements, except as required by applicable <unk>.

Peter Vozzo: Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Sopernis does not have any obligation to update these forward-looking statements except as required by applicable securities laws. I will now turn the call over to Jack.

<unk> loss I will now turn the call over to Jack.

Jack A. Khattar: Thank you, Peter. Good afternoon, everyone, and thanks for taking the time to join us as we discuss our 2021 third quarter results and recent developments. During the third quarter, we continued to execute on our long-term growth strategy and the 2023 TrukendixR transition, as highlighted by the announcement in October of the proposed acquisition of Adamus Pharmaceuticals. This acquisition represents a significant step in further building a strong and diverse Parkinson's disease portfolio and aligns with our focus of acquiring value-enhancing, clinically differentiated products to treat CNS diseases. The acquisition will increase our revenue base and cash flow and reduce our dependency on Troken DXR. The transaction is also expected to be accretive in 2022.

Thank you Peter and good afternoon, everyone and thanks for taking the time to join US as we discuss our 2021 third the results and recent developments.

During the third quarter, we continued to execute on our long term growth strategy and the 20th twenty-three Trokendi XR transition as highlighted by the announcement in October of the proposed acquisition of a damage pharmaceuticals.

This acquisition represents a significant step in further building, a strong and diverse Parkinson's disease portfolio and aligns with our focus of acquiring value enhancing clinically differentiated products to treat CNS diseases.

The acquisition will increase our revenue base and cash flow and reduce our dependency on Trokendi XR. The transaction is also expected to be accretive in 2022.

Regarding <unk> the launches are progressing well in line with our forecast as expected prescription growth accelerated as we entered the back to school season for the month of September total prescriptions were 7132, an increase of 37% compared to the month of August and an increase of.

118% compared to the monthly average during the three months period prior to September.

Jack A. Khattar: Regarding Calgary, the launch is progressing well in line with our forecast, as expected prescription growth accelerated as we entered the back-to-school season. For the month of September, total prescriptions were 7,132, an increase of 37% compared to the month of August and an increase of 118% compared to the monthly average during the three-month period prior to September. In addition, the latest weekly prescription data shows total prescriptions of 2,248, an increase of 51% compared to the weekly average over the prior 12-week period.

In addition, the latest weekly prescriptions data shows total prescriptions of <unk> thousand 248, an increase of 51% compared to the weekly average over the prior 12 week period.

We also saw a significant increase of 340% in calories base of prescribers during the third quarter of 2021 compared to the second quarter of 2021 with more than 3470 physicians prescribing the product.

On the managed care front, we've made great progress by securing coverage with one of the key pbms and advancing discussions with the others also in Medicaid caliber is now covered as tier two or the better for 48% of all Medicaid lives versus 7% in the second quarter.

During the third quarter, we received acknowledgment by the FDA that they received our supplemental NDA for calories to treat adult ADHD patients and that they have a sign that the due date of April 29 2022.

Jack A. Khattar: We also saw a significant increase of 340% in Calvary's base of prescribers during the third quarter of 2021 compared to the second quarter of 2021, with more than 3,470 physicians prescribing the product. On the managed care front, we've made great progress by securing coverage with one of the key PBMs and advancing discussions with the others. Also in Medicaid, Calvary is now covered as Tier 2 or Better for 48% of all Medicaid patients versus 7% in the second quarter.

We continue to make progress on the April morphine infusion pump for SPN 830, and expect to file the NDA in this month.

For SPN 820, the R&D was filed in September of 'twenty, 'twenty, one and the phase II clinical study for treatment resistant depression remains on track for initiation by the end of 2020 one.

We are also pleased by our progress on SPN 817, with the Phase II program now targeted to start in the first half of 2022 for the treatment of focal seizures in adults.

Recall that SPN 817 represents a novel mechanism of action for an anti convulsant and utilizes synthetic form of few posing a which is a potent <unk> inhibitor with pharmacological activities and CNS conditions such as epilepsy.

In addition to the above we have achieved significant milestones with our internal research program the <unk>.

Jack A. Khattar: During the third quarter, we received acknowledgement from the FDA that they received our supplemental NDA for Calvary to treat adult ADHD patients and that they have assigned a PDFA date of April 29, 2022. We continue to make progress on the apomorphine infusion pump or SPNA-30 and expect to file the NDA this month. For SPNA 20, the IND was filed in September 2021, and the Phase 2 clinical study for treatment-resistant depression remains on track for initiating by the end of 2021.

Graham focuses on generating our own new chemical entities that target various CNS conditions.

Recently, two new chemical entities, SPN 443, and SPN 446 was nominated for further development. After successfully completing initial preclinical screening and lead optimization activities additional.

Additional novel molecules are also undergoing further optimization before being nominated for further development.

Moving onto the commercial products, we continue to be pleased with the performance of Trokendi, XR and <unk> Rx or despite declines in prescriptions and the reduced promotional efforts by the company since the launch of Calgary.

<unk> have been promoted by a much smaller neurology sales force that is focusing its efforts on supporting the current prescriber base.

For the first nine months of 2020 one the two products combined delivered net product sales of $314 million essentially flat compared to 317 million in the same period last year.

Jack A. Khattar: We are also pleased by our progress on SPN 817, with the Phase 2 program now targeted to start in the first half of 2022 for the treatment of focal seizures in adults. Recall that SPN 817 represents a novel mechanism of action for an anti-convulsant and utilizes the synthetic form of Euprazine A, which is a potent eschatocalinesterase inhibitor with pharmacological activities in CNS conditions such as

On a per game.

Year over year decline in net product sales was due partially to a higher level of channel inventory in the same quarter last year as well as the lingering effects of competitive dynamics that have prevailed for the last 12 months.

Finally in addition to the significant corporate development activities over the past last year and a half we continue to be active and looking for strategic opportunities to further strengthen our future growth and leadership position in CNS with that I will now turn the call over to Tim.

Jack A. Khattar: In addition to the above, we have achieved significant milestones with our internal research program. The program focuses on generating our own new chemical entities that target various CNS conditions. Recently, two new chemical entities, SPN443 and SPN 446, were nominated for further development after successfully completing initial preclinical screening and lead optimization activities.

Thank you Jack good afternoon, everyone.

As I review, our third quarter and year to date results. Please refer to today's press release.

Total revenue for the third quarter 2021 was $148 5 million, a 4% decrease compared to $155 1 million in the same quarter last year.

Total revenue in the current period was comprised of net product sales of $145 5 million and royalty revenue of $2 9 million.

The decrease in net product sales in the third or third quarter was due to a decrease in net product sales of <unk> and Trokendi XR.

This decrease was partially offset by an increase in net product sales from our other products.

Jack A. Khattar: Additional novel molecules are also undergoing further optimization before being nominated for further development. Moving on to the commercial products, we continue to be pleased with the performance of Trucandy XR and Oxtellar XR despite declines in prescriptions and reduced promotional efforts by the company. Since the launch of Calvary, the products have been promoted by a much smaller Neurology sales force that is focusing its efforts on supporting the current prescriber base. For the first nine months of 2021, the two products combined delivered net product sales of 314 million, essentially flat compared to 317 million in the same period last year.

<unk> was launched in late May of this year and we were very happy to report $2 4 million of net product sales in the first quarter of launch.

<unk> net sales include a temporary temporarily high commercial co pay deduction as we support patients during the early launch period, while we continue our commercial contracting efforts to establish access for patients.

For SG&A third quarter, 2021 expenses were $72 million compared to 50, $554 5 million in the same period last year.

This increase was primarily due to activities to support the launch of Calibrates.

Research and development expenses were $19 7 million for the third quarter of 2021 compared to $16 8 million in the same period last year.

The increase was due to higher regulatory costs related to the acquired products and costs associated with Myobloc post market commitment studies.

Jack A. Khattar: On Apican, the year-over-year decline in net product sales was due partially to a higher level of channel inventory in the same quarter last year, as well as the lingering effects of competitive dynamics that have prevailed for the last 12 months. Finally, in addition to the significant corporate development activities over the past year and a half, we continue to be active in looking for strategic opportunities to further strengthen our future growth and leadership position in CNS. With that, I will now turn the call over to Tim. Thank you, Jack.

Operating earnings were $32 6 million for the third quarter of 2021 compared to $56 1 million in the same period last year.

Net earnings were $21 6 million for the third quarter of 2021, or <unk> 40 per diluted share compared to $40 million or <unk> 74 per diluted share in the same period last year.

For the nine months.

For the first nine months of 2021 total revenue was $420 7 million, a 12% increase over $376 8 million in the same period last year.

Total revenue was comprised of net product sales of $412 5 million and royalty revenue of $8 2 million.

Timothy C. Dec: Good afternoon, everyone. As I review our third quarter of year-to-date results, please refer to today's pressure. Total revenue for the third quarter, 2021, was $148.5 million, a 4% decrease compared to $155.1 million in the same quarter last year. Total revenue for the current period was comprised of net product sales of $145.5 million and royalty revenue of $2.9 million. The decrease in net product sales in the third quarter was due to a decrease in net product sales of apicent and terkendi XR.

The increase in net product sales in the first nine months of 2021 was due to the acquisition of the CNS products from U S World Meds in June 2020.

Cost of goods sold for the first nine months of 2021 was $58 1 million as compared to $33 9 million for the same period last year.

The increase was primarily due to royalties associated with the acquired products and costs were rejected myobloc inventory.

SG&A expenses in the first nine months of 2021 was $203 million compared to $144 2 million in the same period last year.

This increase is primarily due to activities support the launch of Calgary.

Research and development expenses in the first nine months of 2021 were $69 4 million compared to $58 million in the same period last year.

Timothy C. Dec: This decrease was partially offset by an increase in net product sales from our other products. Kelbury was launched in late May of this year, and we were very happy to report 2.4 million net product sales in the first quarter of launch.

The increase is primarily due to the $15 million accounting charge for the habit tour corporate restructuring.

The contingent consideration gain for the first nine months of 2021 was $7 7 million.

This reflects the charge to the purchase price milestones, we expect to pay to use more minutes.

Timothy C. Dec: Calvary net sales include a temporary, temporarily high commercial copay deduction as we support patients during the early launch period while we continue our commercial contracting efforts to establish access for patients. For SG&A, third quarter 2021, expenses were $72 million compared to $54.5 million in the same period last year. This increase was primarily due to activities to support the launch of Calgary.

For the first nine months of 2021 operating earnings were $79 9 million compared to $130 7 million in the same period last year.

Net earnings were $51 million for the first nine months of 2021, or <unk> 94 per diluted share compared to $96 2 million or $1 79 per diluted share in the same period last year.

As of September 32021, the company has $849 3 million in cash cash equivalents and marketable securities compared to $772 9 million as of December 31, 2020.

Okay.

For the full year 2021, the company is adjusting its financial guidance.

Timothy C. Dec: Research and Development expenses were $19.7 million for the third quarter of 2021, compared to $16.8 million in the same period last year. The increase was due to higher regulatory costs related to the acquired products and costs associated with My Block post-market commitment studies. Operating earnings were 32.6 million for the third quarter of 2021, compared to 56.1 million for the same period last year. Net earnings were $21.6 million for the third quarter of 2021, or 40 cents per diluted share, compared to $40 million or $0.74 per diluted share in the same period last year.

Note that that no transaction costs associated with the <unk> acquisition are reflected in this new guidance.

We are lowering the top end of our revenue guidance range. This range is now $550 million to $570 million from $550 million to $580 million previously.

For the full year 2021, we are lowering our combined our R&D and SG&A expenses to a range of $370 million to $400 million from a range of $380 million to $410 million previously.

In addition, we are increasing our expectations for operating earnings to a range of $90 million to $95 million from a range of $70 million to $90 million previously.

We continue to expect full year 2021 amortization of intangible assets of approximately $24 million and a full year 2021 effective tax rate of 28% to 31%.

Given the magnitude and growing number of product acquisition related items, starting in 2022, we will be adding non-GAAP financial measures to our quarterly earnings press release, as we believe they provide greater transparency and can assist in understanding and assessing some furnaces business as well as <unk>.

Timothy C. Dec: For the nine months, for the first nine months of 2021, total revenue was 420.7 million, a 12% increase over 376.8 million in the same period last year. Total revenue was comprised of net product sales of 412.5 million and royalty revenue of 8.2 million.

<unk>, how we manage the business internally and set operational goals.

The non-GAAP financial measures that we will adjust our GAAP results will be amortization of intangibles depreciation.

Dock based compensation transaction cost.

And the income tax effect of those charges.

With that I will now turn the call back to the operator for Q&A.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question or answer. Your question has been answered question.

Yeah.

Your first question comes from the line of BBB Penguin from Jefferies. Your line is now open.

Timothy C. Dec: The increase in net product sales in the first nine months of 2021 was due to the acquisition of the CNX products from U.S. World Meds in June 2020. Cost of goods sold for the first nine months of 2021 was $58.1 million as compared to $33.9 million for the same period last year. The increase was primarily due to royalties associated with acquired products and costs for rejected myoblock inventory. SG&A expenses in the first nine months of 2021 were 203 million compared to 144.2 million in the same period last year. This increase is primarily due to activities to prepare the launch of Calgary.

Okay.

Thanks, Good afternoon, I have a couple of questions just generally.

How is.

Calgary doing.

Is this your expectations during the all important back to school assessment.

The season, and then just a little granularity on some of the metrics you might use in terms of.

Sampling.

Payer access I know that for example in sampling you indicated that youre putting 25.

Samples into the field is that still the same that has been used up if he could and any more samples.

And where are you in coverage and then I have a follow up after that thanks.

Yes sure.

As we mentioned.

He said the same thing basically last quarter. It is actually tracking exactly per hour forecast, even on shipments and prescription. So so far we're pretty pleased with the performance of the launch.

Specifically regarding sampling, yes, we continue to sample and that will be and will continue to be an ongoing activity for us.

Of course at the beginning of the launch and we are still in a launch mode. Obviously that will continue to be on the heavier side, but as time goes on on an ongoing basis. It will become more measured in line with obviously the uptake in the physicians activities.

Timothy C. Dec: Research and development expenses in the first nine months of 2021 were 69.4 million compared to 58 million in the same period last year. The increase is primarily due to the $15 million accounting charge for the Navitor corporate restructure. The contingent consideration gain for the first nine months of 2021 was 7.7 million. This reflects the charge for the purchase price milestones we expect to pay to U.S. customers worldwide. For the first nine months of 2021, operating earnings were 79.9 million compared to 130.7 million in the same period last year. Net earnings were $51 million for the first nine months of 2021, or 94 cents per diluted share compared to $96.2 million or $1.79 per diluted share in the same period last year.

As far as the payer access as I mentioned in my remarks, we're really pleased with the progress that we've made in the last quarter, we signed up one of the very important key pbms.

On Board then the product is now covered and we are already seeing tremendous traction because of that.

And also we've made similar progress on the Medicaid. So we have now about 50% of the Medicaid lives approximately.

With a tier two or even better coverage. So we're pretty pleased with that it's taking time, but we expected that and Thats why obviously for this year our guidance on caliber is where it is as far as the net sales, but again back to the initial question you had I mean gross sales are tracking exactly.

As we expected at this time of the in the launch.

And then just to follow up on the sampling you mentioned jackets heavy.

When do you. So therefore, the actual scripts are understated at one point in time.

Coming months or quarters do you think we'll be able to get a more accurate read on to demand I E. What we see script wise is what.

You are seeing.

And actual usage by patients.

Timothy C. Dec: As of September 30th, 2021, the company has 849.3 million in cash, cash equivalents, and marketable securities compared to 772.9 million as of December 31st, 2020. For the full year 2021, the company is adjusting its financial guidance. Please note that no transaction costs associated with the Adama acquisition are reflected in this new guidance. We are lowering the top end of our revenue guidance range. This range is now 550 to 570 million from 550 to 580 million previously.

Then just secondly, you mentioned that the adult.

Approval is expected in next April.

Just curious.

Are you seeing any off label use and I guess, we would see that in the pill size.

The.

It's about $300 WAC for the 100 to 200 milligram dose, but above 200 milligram, which I assume would be all the adults.

Older children, it's almost $600 whack. So what are you seeing in terms of percent of the pillars that are the 100 to 200 million eggs versus above 200 megs.

Yes.

This is more of a rule of thumb, you would expect maybe a quarter to 50% of the samples to workers in sell through in the first six months or so.

It's a little bit slower than we expect expected initially with the conversion. So we're really watching it very closely.

Timothy C. Dec: For the full year 2021, we are lowering our combined R&D and SVNA expenses to a range of 370 to 400 from a range of 380 to 410 million previously. In addition, we are increasing our expectations for operating earnings to a range of 90 to 95 million from a range of 70 to 90 million previously. Continue to expect full-year 2021 amortization of intangible assets of approximately $24 million and a full-year 2021 effective tax rate of 28 to 31%.

And then regarding the activity as time goes on again, it really depends on how quickly. They physicians are going to the samples now obviously, what a lot of times screws up the tracking and these numbers as physicians are giving more than one sample the same patient or.

Giving it either at the same time or a few times in a row. So and you do have that kind of behavior, we don't want necessarily to discourage physicians from using the samples.

Especially with the coverage.

Coverage is coming online we want to make sure patients continue to be on the medication until the coverage comes online. So we try to be sensitive from that perspective, and therefore, the numbers are not always clean as far as reading the exact conversion rate for the samples.

Timothy C. Dec: Given the magnitude and growing number of product acquisition-related items, starting in 2022, we will be adding non-gap financial measures to our quarterly earnings press release, as we believe they provide greater transparency and can assist in understanding and assessing Sopernis' business, as well as reflect how we manage the business internally and set operational measures. The non-gap financial measures that will adjust our gap results will be amortization of intangibles, depreciation, stock-based compensation, transaction costs, and the income tax effect of those charges. With that, I will not turn the call back to the operator for Q&A.

Regarding your question on the adults, we're not seeing really too much at all because clearly we don't call on adult psychiatrist. So we are completely focused on child psychiatry and the pediatricians.

So other than some folks hearing about it we might get one or two requests to it or they have so it's really minimum at this point if there is anything.

And the Doe's regarding your question on the daily dose it is still a little bit on the lower side than we think it will end up.

We have published data from our open label extension and we saw that those actually with the children and adolescent creeping up over time somewhere between the 300 400 milligrams. So we expect that overtime. It will go up to the higher total daily dose, but initially you will expect physicians to.

Or would they be cautious with it see how it responds because even the 100 milligram was fairly effective if you remember from our phase III clinical study. So we're seeing very good response from the product on the clinical side, but that will take time for them to migrate a little bit more towards to the higher doses and certainly as the above.

Operator: As a reminder, to ask a question, you will need to press Star 1 on your telephone. To draw your question or if your question has been answered, press the pound or hash. Your first question comes from the line of Bede Steinberg from Jeffries. Your line is now open.

Comes onboard hopefully next year, we expect again that to be more in the probably 400 milligram range and may be closer to the 600, because we did test all the way up to 600 milligram.

Bede Steinberg: Thanks, good afternoon. I have a couple questions.

And just a final quick question, you've given us your target long term gross to net.

Jack A. Khattar: Jack, first off, how is Calgary doing versus your expectations during the all-important back-to-school assessment?

Could you help us with what the growth in natural shake out in the next couple of quarters.

Bede Steinberg: and then just a little granularity on some of the metrics we might use in terms of sampling.

Yes.

We said that we would love to be where we are today with our <unk>.

Current portfolio right. So we'll be pretty happy if we end up somewhere in the 45% to 55% give or take a gross to net.

Bede Steinberg: Payer access. I know that, for example, in sampling, you indicated that you were putting 25,000 samples into the field. Is that still the same? If they've been used up, do you put in any more samples?

And actually we've moved pretty well in the third quarter from the second quarter, we've moved about 10 points.

And we hope to move another.

10% to 20 points, so we should be I mean.

Jack A. Khattar: And where are you in coverage? And then I have a follow-up after that. Yeah, sure.

If it's a little hard for me to give you a target date is the one I'm going to hit the 50% or 55%.

Jack A. Khattar: As we mentioned, and we said the same thing basically last quarter, it is actually tracking exactly to our forecast, even on shipments and prescriptions. So, so far, we're pretty pleased with the performance of the launch. Specifically regarding sampling, yes, we continue to sample, and that will be and will continue to be an ongoing activity for us. Of course, at the beginning of the launch, and we are still in a launch mode, obviously, that will continue to be on the heavier side.

I mean definitely in the first half of next year, we should hope to get there.

We're working pretty hard to get there as early as possible, obviously, that's probably the best way of putting it.

Okay. Thank you.

Okay.

Your next question comes from the line of Ken Boller.

From Cowen Your line is now open.

Hey, Jack just a couple of questions you've had now a little bit of experience with quell breeding you've seen quite a bit of products and how they launched and you've been able to get feedback on those launches from clinicians understand.

Understand your experience. So as you kind of are getting this initial experience with <unk> can you frame for us.

Conviction in kind of the ultimate size do you think this could be bigger than stroke, Terra which was around <unk> 5 billion maybe.

Jack A. Khattar: But as time goes on, you know, on an ongoing basis, it will become more measured, you know, in line with, obviously, the uptake and the physician's activities. As far as payer access is concerned, as I mentioned in my remarks, we're really pleased with the progress that we made in the last quarter. We've signed up one of the very important key PBMs, so they're on board, and the product is now covered, and we're already seeing tremendous traction because of that.

Maybe bigger than Internet can you try to give us some kind of comparison as you take all these different disparate.

Data points that youre getting and try to help us understand frame out what you see and what you think in terms of the direction Thats going and then on the apomorphine pump you've been very conservative in how you talk about it which is understandable given the regulatory process has to play out but when we have discussions with our clinician consultants they are real enthusiasm.

Jack A. Khattar: And also, we've made similar progress on Medicaid. So we now have about 50% of Medicaid lives, you know, approximately with tier 2 or even better coverage. So we're pretty pleased with that. It's taking time, but we expected that, and that's why, obviously, for this year, our guidance on Calabry is where it is as far as net sales are concerned. But again, back to the initial question you had, I mean, gross sales are tracking exactly as we expected at this time of year.

That can talk about the need in late stage patients.

Obviously, you could get good pricing so could you help us understand a little bit of your a little bit of cautious optimism versus theyre more enthusiasm and what we should be thinking about that and then lastly, just would love. It if you would touch upon.

And whether it's great deal that youre doing with the dominance, whether youre going to be able to load and be in a position to do something like that again in the short term and if there's things that you see that maybe we don't see that that could be acted upon a little bit quicker than we think thanks. So much.

Bede Steinberg: And then just to follow up on the sampling, you mentioned Jack, it's heavy. So therefore, the actual scripts are understated. At some point in time in the coming months or quarters, do you think we'll be able to get a more accurate read on true demand, i.e., what we see script-wise is what we're seeing an actual usage by Bayesian?

Yes sure.

Regarding the first question as far as calibration.

You may recall in some folks on the on the call might recall when strata first launch they actually reached up to about 19% if I'm not mistaken market share penetration.

Bede Steinberg: And then, just secondly, you mentioned that adult approval is expected next April.

After the all ADHD market and they did that fairly quickly because they were the first.

Excuse me the first non stimulant product to ever enter the marketplace before that it was all those stimulants and the only products available the controlled substances.

Bede Steinberg: I'm just curious, are you seeing any off-label use? And I guess we would see that in the pill size. The, you know, it's about $300 a whack for the 100 to 200 milligram dose, but above 200 milligrams, which I assume.

But then the changes in the label came onboard people started getting also little bit disappointment as far as the performance of the product how quickly it works and so forth.

Jack A. Khattar: I assume it would be all the adults or older children; it's almost $600 wax. So what are you saying in terms of the percent of the pills that are 100 to 200 migs versus above 200 migs? Yeah, on the conversion. I mean, this is more of a rule of thumb. You would expect maybe a quarter to 50% of the samples to work themselves through in the first six months or so. It's a little bit slower than we expected initially with the conversion, you know.

And the product settled somewhat in the fall.

From a market share perspective somewhere around the 7%, 6% give or take thats, where it really ended up settling.

<unk>.

Also when they launched they peaked somewhere in the 4% to 5% and that's why actually the whole excuse me the whole category ended up being around 10% of the ADHD market.

What we hope to accomplish with caliber.

Hopefully in a performed way better than where <unk> and intuit have settled as far as our market share and we're starting to see some of the early signs actually that calibration is not being reserved only for use for people who are this satisfied with non stimulant actually some physician.

Jack A. Khattar: So we're really watching it very closely. And then regarding, you know, the activity as time goes on, again, it really depends on how quickly the physicians are. Going to the samples. Now, obviously, what a lot of times screws up the tracking and these numbers is physicians giving more than one sample to the same patient or giving them, you know, either at the same time or, you know, a few times in a row. And you do have that kind of behavior.

<unk> are using it.

A lot of patients who are on stimulants and dissatisfied with the stimulants or where the parents don't want to give their kids stimulants or controlled substances or products that could be of use.

And we're very encouraged with that especially early on.

Because of course, the easy positioning that physicians could see this or the perception would be well, let me see I'll just put patients who are on non stimulants today and theyre not happy, we'll let them try to calibrate.

That is not what's happening in the marketplace. So it's very encouraging the initial size that we are seeing as far as the patient profile.

Bede Steinberg: We don't necessarily want to discourage physicians from using the samples, especially with coverage. As coverage is coming online, we want to make sure patients continue to be on the medication until the coverage comes online. So we try to be sensitive from that perspective, and therefore the numbers are not always clean as far as reading the exact conversion rate for the samples. Regarding your question about adults, we don't see them very much at all because, clearly, we don't call on adult psychiatrists, so we are completely focused on child psychiatry and pediatricians.

On which the product is being used and adopted.

So that will tell us that eventually if our strategy is successful and the product continues to perform.

There is no reason for the market to be split up, 90% stimulants, and 10% and non stimulants.

Because I'm always I believe and I always talk about the fact, when I talk about it from our experience in the category, but also as a parent myself.

There is no reason for a parent to put their kid on a stimulant on a controlled substance if they have another option that really works works well works early in a safe and tolerable.

And to me as a pattern that's a no brainer I mean thats.

Decision I will make every day.

And give my Kid the chance to take a non stimulant.

That could work really quickly, which we're seeing in the marketplace in line with what we saw in our phase III and the clinical data safe tolerable discontinuation rates on our phase III studies are in the 2% to 3%.

Bede Steinberg: So other than some folks hearing about it, we might get one or two requests here or there, so it's really minimal at this point if there is anything. And the dose, regarding your question on the daily dose, it is still a little bit on the lower side. Then we think it will end up. We have published data from our open-label extension, and we saw the dose actually with the children and the adolescents, you know, creeping up over time, somewhere between 300 and 400 milligrams.

And very tolerable drug and very easy to take it's easy for the parents with the refills and all these issues and it's also easier for the physicians.

If you really think about these physicians will prescribe a heavily.

For them, it's a huge amount of work for them to do the refills every single month for every patient they have on the stimulant medications. So all in all I should hope and we definitely are targeting to be much bigger than what's out there.

On the second question regarding the pump.

As far as some.

Some people sensing that we had a little bit more conservative regarding the potential of the pump I mean, we did mention that in Europe. For example on a unit basis. The bomb sells about multiple fold of what the April can pen.

Bede Steinberg: So we expect that over time it will go up to a higher, you know, total daily dose. But initially, you know, you will expect physicians to take, you know, be cautious with it, see how kids respond. Because even the 100 milligram dose was fairly effective, if you remember from our phase three clinical studies. So we're seeing very good responses from the product on the clinical side, but it will take time for them to migrate a little bit more towards the higher dose.

Sales in Europe. So certainly there is an example, where the pump could outperform.

The injection single injection pen.

But every market is different clearly the reimbursement coverage here in the U S was a little bit different than in Europe.

And Thats, why we talk a little bit more conservative stance on it and when we made the acquisition we mentioned somewhere about 125 to 175 as peak sales.

Bede Steinberg: And certainly as the adult comes on board, hopefully next year, we expect, again, that to be more in the probably 400 milligram range and maybe closer to 600, because we did test all the way up to 600 milligrams. Okay, and just a final quick question. You've given us your target long-term.

Is that a possibility we could easily beat these numbers.

Absolutely I mean that is a possibility we believe that could be easily achieve.

But again, we need to see the label, we need to see where the product ends up as far as the actual indication and therefore from there how can we position the pump because the need is there no question about it the big question is.

How.

Our wide of a window is it going to be in other words is it going to be applicable to patients who are only severe patients patients who are moderate and severe.

Jack A. Khattar: Could you help us with what the gross and nuts will shake out in the next couple quarters? Yeah, I mean, we said that, you know, we would love to be where we are today with our current portfolio, right? So we'll be pretty happy if we end up somewhere in the 45 to 55, you know, give or take, gross. And actually, we've moved pretty well in the third quarter from the second quarter.

Jack A. Khattar: We've moved about 10 points, and we hope to move another another, you know, 10 to 20 points. So we should be, I mean, It's a little bit hard for me to give you a target date as to when I'm going to hit the 50% or the 55%. But I mean, definitely in the first half of next year, we sure hope to get there, and we're working pretty hard to get there as early as possible Obviously, that's probably the best way of putting it

Operator: Your next question comes from the line of Ken Kakhtiator from Cowan. Your line is now, okay?

From the line of David and fill them from papers handler. Your line is now open.

[noise]. Thanks, So just have a few wanted to come back to Calgary and regarding the the P. B. When can you talk about the <unk> the formulary tearing for that product is it totally unrestricted.

Jack A. Khattar: Hey, Jack, just a couple questions. You've had now a little bit of experience with Quelbrie, and you've seen quite a few products and how they've launched, and you've been able to get feedback on those launches from clinicians and understand the experience. So as you kind of are getting this initial experience with Quelbray, can you frame for us your conviction and kind of the ultimate size? Do you think this could be bigger than Stratera, which was around a half a billion? Maybe bigger than Intellia? Can you try to give us some kind of comparison as you take all these things into account?

And then secondly, more more broadly.

Regarding the payer landscape for for Calgary are you seeing or you negotiating I should say with payers such that you can eliminate any step throughs or at least avoid a non stimulant step through just talk about philosophically, what you're trying to <unk>.

Accomplish will take your contracting discussions and then I also had a question on April can with the decline in sales I'm, assuming a lot of that is the availability of <unk> I guess the question. There is do you expect further pressure or do you see sort of a bottoming out.

Jack A. Khattar: These different disparate data points that you're getting and try to help us understand, frame out what you see and what you think

Of that product anytime soon thanks.

Jack A. Khattar: in terms of, you know, the direction.

Yeah.

Yeah on the coverage I mean in line with a lot of the comments we've made historically.

Jack A. Khattar: And then on the acomorphine pump, you've been, you know, very conservative in how you talk about it, which is understandable, given, you know, the regulatory process has to play out. But when we have discussions with our clinician consultants, they're real enthusiastic and talk about the need and these late stage patients, which, obviously, could get good pricing.

Clearly getting complete open access and a lot of the P. B M. As in a lot of the plans you know they come to you with ridiculous high you know rebates. So they're looking for as far as you know what would it take to give you open access so what takes the time in these negotiations is clearly something that is.

More reasonable that we could work with them to make sure first of all patients get access to this you know what we believe is an incredible treatment options for a lot of patients out there, but with reasonable rebates. So that we can work with to give us the right coverage. So ideally yes of course, you know you want the space.

Jack A. Khattar: Could you help us understand a little bit of your little bit of cautious optimism versus their more enthusiastic approach and what we should be thinking about that? And then lastly, I just would love it if you would touch.

<unk> to get access to this medication without a lot of the step at its but realistically they'll probably be some step edits. We're trying to work our way through those you know step edits through our negotiations and continued discussions and we've made a lot of progress of that and that's why we're pleased with at least landing the first contract.

Jack A. Khattar: And then lastly, I would love it if you would touch upon, you know, BD and whether it's a great deal that you're doing with the dominance, whether you're going to be able to reload and be in a position to do something like that again in the short term. And if there's things that you see that maybe we don't see that could be acted upon a little bit quicker than we think, thanks so much. Yeah, sure.

Here.

And improving the coverage on the product.

And as far as you know where do we land I mean, it is conceive of look you were going to land in different lands, a different status or different tiers of different coverage I mean, there was no one way.

Jack A. Khattar: Regarding the first question, as far as Calabry is concerned, you may recall, and some folks on the call might recall, when Stratera first launched, they actually reached up to about 19% of, if I'm not mistaken, market share penetration of the whole ADHD market. And they did that fairly quickly because they were the first, excuse me, the first non-stimulant product to ever enter the marketplace. Before that, it was always stimulants and the only products available to controlled substances. But then the changes in the label came on board.

That's the Spinotti who's gonna be covered across all the plans. So there will be a variety of step throws or or P. A's or whatever the case might be the different plans will put in place and we expected that even from the beginning I mean, we knew that would end up being the case in this category, especially in where.

Seeing that and a lot of other categories and not just in ADHD.

Regarding April can I mean, we had the third quarter last year as briefly I mentioned in my remarks, we had it a little bit unusually a high third quarter last year. So that's why this quarter was a tough comparison so to speak I think if you remembered in the second quarter, we did about 27.

Million, if I'm not mistaken on net sales. So this quarter was about $25 million.

I mean, we see that banana settling somewhere in the mid 20th probably on a quarterly basis uhm.

Jack A. Khattar: People also started getting a little disappointed as far as the performance of the product, how quickly it works, you know, and so forth. And the product settled somewhere in the, from a market share perspective, somewhere around 7%, 6%, you know, give or take. That's where it really ended up settling.

That's what we hope to be now the competitive pressures continue with getting the movies have been on the market for about a year now so where we've seen that's pressure we continue to see some of those pressures on it as well.

And like every category also you see but I suppose on the managed care and continued pressure on the managed care because the more activity in any category you start seeing more pressures on their managed care as well. So we're seeing some signs of that.

Jack A. Khattar: In Tunev, also, when they launched, they peaked somewhere in the 4 to 5%. And that's why actually the whole, excuse me, the whole category ended up being around 10% of the ADHD market. What we hope to accomplish with Calabry is perform way better than where strata and Intunif settled as far as market share is concerned. And we're starting to see some of the early signs, actually, that Calabry is not being reserved only for use for people who are dissatisfied with non-stimulants.

So.

Okay. Thank you.

Once again, if you would like to ask a question. Please pass Taiwan telephone I gotcha.

Your next question comes from the line of animals.

<unk> <unk> <unk>.

Hi.

My question.

Go back to.

Coverage.

Are they requesting that.

That's true.

Okay.

Jack A. Khattar: Actually, some physicians are using it on a lot of patients who are on stimulants and are not satisfied with the stimulants or where the parents don't want to give their kids stimulants or controlled substances or products that could be abused. And we're very encouraged by that, especially early on, because, of course, the easy positioning that physicians could see this, or the perception would be, well, let me see, I'll just put patients who are on non-stimulants today and they're not happy. We'll let them try Calgary.

Anyway.

First question.

And.

What.

Population.

Prescription or from switching.

Or other stimulants person.

Treatment.

And then.

Yes.

[noise] going from.

Okay.

Can you just remind us.

And if that's the case.

I guess.

What.

Actually.

Okay.

Regarding the step throws it's really a mix as I mentioned earlier I mean, the different plans will have different.

Coverage of different schemes, so to speak some through and not a non stimulant some through stimulants.

Jack A. Khattar: That is not what's happening in the marketplace, so it's very encouraging to see the initial size that we've seen as far as the patient profile on which the product is being used and adopted. So that will tell us that, eventually, if our strategy is successful and the product continues to perform, there is no reason for the market to be split up 90% stimulants and 10% non-stimulants. Because I'm always a believer and I always talk about the fact that, and I talk about it from our experience in the category, but also as a parent myself.

So it's really a mixed bag so to speak as far as the percent of patients who are coming from non stimulants or stimulants. The only thing I can point to as we recently completed a survey as far as to where these patients among our prescribers as to where these patients are coming from or what type of patients physicians are starting.

In Calvary on.

And we're we're really encouraged as I mentioned earlier to the earlier question on the potential of Calvary. Eventually we're very encouraged with the early signs that actually a good portion of these patients are coming from the stimulant site.

Jack A. Khattar: There is no reason for a parent to put their kid on a stimulant, on a controlled substance, if they have another option that really works, works well, works early, and is safe and powerful. And to me as a parent, that's a no brainer. I mean, that's a decision I will make every day and, you know, give my kid the chance to take a non-stimulant that could work really quickly, which we're seeing in the marketplace in line with what we saw in our phase three clinical data. It's safe and tolerable. I mean, discontinuation rates in our phase three studies are in the 2% to 3% range and a very tolerable drug. And It is very easy to take.

This satisfied with the stimulants and the side effects and tolerability issues and so forth.

Another good chunk of patients is coming from current non stimulants.

And also interestingly.

A good portion about a quarter of the patients physicians reported.

Putting really patients who have what they characterize as complex ADHD as well so ADHD with a lot of other comorbidities.

Because as many of you may know stimulants also are not contraindicated.

A lot of areas, where you might have a mood disorders or other conditions associated with ADHD. So.

Really it makes a bag, but we're seeing a good healthy a number that is coming from the stimulus side as far as the starter kit. It's initially.

Jack A. Khattar: It's easy for the parents with the refills and all these issues, and it's also easier for the physicians. If you really think about these physicians who prescribe heavily, for them, it's a huge amount of work for them to do the refills every single month for every patient they have on these stimulant medications. So all in all, I sure hope, and we definitely are targeting it to be much bigger than what Stratera did.

Two weeks.

Sample size and therefore, that's why we're seeing potentially in a lot of ways. We are seeing physicians, giving more than one starter kit and therefore pushing out a little bit the conversion.

Sort of your prescriptions.

So we continue to monitor that I mean, we have our reps obviously, they do monitor how quickly physicians go through samples, but also at the same time, how many prescriptions over it and they will not threatened so we can.

In a way, but at the same time as I mentioned earlier, we are trying to strike a balance here, we want people to be happy and trying to use the product and encourage them and enthusiastic about it so.

Jack A. Khattar: On the second question regarding the pump, I mean, as far as some people sense that we are a little bit more conservative regarding the potential of the pump. I mean, we did mention that in Europe, for example, on a unit basis, the pump sells about, you know, it's a multiple fold of what the apocin pen sells in Europe. So certainly, there is an example where the pump could outperform the, you know, the injection, single injection, pension pen.

We'll try to manage that in a smooth manner as possible without disrupting physicians excitement about the product and so forth.

Yeah.

[noise] strictly.

No.

Yeah.

I mean access to physicians.

I'm sure you're probably hearing that from a lot of companies hasn't gone back to what it used to be pre COVID-19.

So there is no question about that as far as access for each to physicians.

Is impacting and it has impacted.

Everyone's business, including us, including even the Calgary launch, including the epoch in business as well.

Jack A. Khattar: But, you know, every market is different clearly. The reimbursement, and the coverage here in the US is a little bit different than in Europe. And that's why, you know, we took a little bit more of a conservative stance on it. And when we made the acquisition, we mentioned somewhere about 125 to 175 as peak sales. Is there a possibility we could easily beat these numbers? Absolutely. I mean, that is a possibility.

But yes, I mean, the impact on a book and is is a combined effect of many things, including yes, COVID-19, including the increased competition from Ken Moby Yeah.

Yeah.

Yeah.

Yeah.

Right.

Yeah.

Scott.

High level.

Where.

Washington.

Jack A. Khattar: We believe that could be easily achieved. But again, you know, we need to see the label. We need to see where the product ends up as far as the actual indication is concerned. And therefore, from there, how should we position the pump?

Okay.

Just move on to the next.

Level of care.

Whatever.

We've seen and we've heard about examples.

Across all these examples so to speak all these categories. So we've heard about patients who have tried can movie haven't been satisfied different efficacy profile and physicians put them back on April can.

Jack A. Khattar: Because the need is there, no question about that. The big question is, how, how, how, well, how wide of a window is it going to be, in other words, is it going to be applicable to patients who are only severe patients, patients who are moderate and severe, and therefore, is it across stage four and five of the disease, or is it across stage three, four, and five, and so forth? So it heavily depends on the label and where we end up with the product.

We've heard of people, who says well can moby is more convenient so I can just.

Take a sublingual tablet and instead of an injection. So I mean, you're going to see a lot of flow of patients back and forth across of these products until they settled with the product that is most suitable for them.

Yes in our case of course, it's a little bit more complicated the initiation because you have the nurse the involvement of the nurse and training the patient on using the injectable the pen itself the titration all of that.

Jack A. Khattar: So that's why we've taken so far a more cautious approach, but it's a great product, and one of the major reasons why we made the acquisition is because we believe that it will be a great growth driver for us in the future. And then the last question on business development. Absolutely, as I made a remark in my prepared remarks, we continue to look at, you know, different opportunities.

But that's also part of the service that we offer our patients I mean, it's for some patients actually like that they like that handholding the training.

Those who really follows up with them see how they're doing on the medication the compliance.

And also reporting back to the physician so it's really part of what we call our circle.

Of care for the patient does not just here as a prescription and good luck with it and see what happens to you know we like to really service of these patients and help them and that's part of it as far as the whole April can experience.

Great. Thank you.

Jack A. Khattar: We will reload the balance sheet, so to speak. The business on its own will continue to generate even more cash flows next year, you know, reloading our balance sheet. And therefore, we will continue to look at the opportunities, whether it's on the licensing side or product acquisitions or company acquisitions. I mean, for the appropriate opportunity, we could also potentially raise more money to do the right transaction.

There are no further question at this time out.

Oh.

Thank you we remain focus on the launch of Calvary and look forward to closing the acquisition of a damaged by the end of this year or early 2022. In addition, we look forward to submitting the NDA for ESPN, a 30 this month and get back on the regulatory path towards potential approval next year.

With the <unk> acquisition calories growth and the launch of SPN, a 30, our dependency on Trokendi XR will be much reduced by the time of genetics enter the market. We look forward to updating you on our progress and thanks again for joining us today.

Operator: Your next question comes from the line of David Amsalim from Piper Sandler. Your line is now open.

This concludes today's conference call. Thank <unk>. Thank you for being you may know.

David A. Amsellem: Thanks, so just have a few. Wanted to come back to Calbury and Regarding the PBM, when can you talk about the formulary tiering for that product? Is it totally unrestricted, and then secondly and more broadly? Regarding the payer landscape for Calgary. Are you seeing or are you negotiating, I should say, with payers such that you can eliminate any step-throughs or at least avoid a non-stimulant step-through? Just talk about philosophically what you're trying to accomplish with your contracting discussions.

[music].

David A. Amsellem: And then I also had a question on Apocan with the decline in sales. So I'm assuming a lot of that is the availability of Kinmobie. I guess the question there is, do you expect further pressure or do you see sort of a bottoming out of that product anytime soon? Thanks.

Jack A. Khattar: Yeah, on the coverage, I mean, in line with a lot of the comments we've made historically, clearly getting complete open access, you know, a lot of the PBMs and a lot of the plans come to you with ridiculous, high rebates that they're looking for as far as, you know, what would it take to give you open access. So what takes time in these negotiations is clearly something that is more reasonable, that we could work with them to make sure, first of all, patients get access to this, you know, what we believe is an incredible treatment option for a lot of patients. out there, but with reasonable rebates that we can work with to give us the right coverage.

[music].

Jack A. Khattar: So ideally, yes, of course, you want these patients to get access to this medication without a lot of these step edits, but realistically, there'll probably be some step edits. We're trying to work our way through those step edits through our negotiations and continued discussions. And we've made, you know, a lot of progress there, and that's why, you know, we're pleased with at least landing the first contract here and improving the coverage on the product. And as far as, you know, where do we land?

Jack A. Khattar: I mean, it is conceivable that you're going to land on different plans, different status, or different tiers or different coverage. I mean, there is no one way that this product is going to be covered across all the plans. So there will be a variety of step-throughs or PAs or whatever the case might be, you know, that different plans will put in place.

Jack A. Khattar: And we expected that even from the beginning. I mean, we knew that would end up being the case in this category, especially, and we're seeing that in a lot of other categories, not just in ADHD. Regarding Aprican, I mean, we had the third quarter last year, as I briefly mentioned in my remarks, we had a little bit unusually a high third quarter last year, so that's why this quarter was a tough comparison, so to speak.

Jack A. Khattar: I think if you remember, in the second quarter, we did about 27 million net sales, if I'm not mistaken, so this quarter was about 25 million. I mean, we see the product settling somewhere in the mid-20 million. When it's probably on a quarterly basis, that's where, you know, we hope to be.

Jack A. Khattar: Now, the competitive pressures continue. You know, with Kimmobi, he's been in the market for about a year now. So we've seen that pressure. We continue to see some of those pressures on it as well. And like every category, you also see pressures on managed care and continued pressure on managed care because the more activity in any category, you start seeing more pressures on managed care. as well. So we're seeing some signs of that also.

Operator: Once again, if you would like to ask a question, please press Tar 1 on your telephone or touch tone. Your next question comes from the line of Annabel Sam Nimi from Stiefel. Your line is now open.

Annabel Eva Samimy: Hi, thanks for taking my question. Just to go back to the restrictions that you're seeing on the coverage side as far as step-throughs, are they requesting that patients step through stimulants or just non-tebrose? So I guess that's the first question.

Annabel Eva Samimy: Do you have a sense of what percent of the population or the prescriptions are from switching from stimulants or other stimulants versus patients who are new to treatment? And then I guess on the conversion rate of patients going from Start up to actually, Can you just remind us how large the starter kits are? Is it just a couple of weeks of treatment, and if that's the case, then I guess why does it take six months to see what a true conversion rate is from starting the actual prescription.

Annabel Eva Samimy: Yeah, regarding the step-throughs, it's really a mix, as I mentioned earlier. I mean, the different plans will have different coverage, different schemes, so to speak, some through non-stimulants, and some through stimulants. So it's really a mixed bag, so to speak. As far as the percent of patients coming from non-stimulants or stimulants, the only thing I can point to is, you know, we recently completed a survey among our prescribers as to where these patients are coming from or what type of patients, you know, physicians are starting Calbri on. And we're really encouraged, as I mentioned earlier, by the earlier question on the potential of Calgary eventually.

Jack A. Khattar: I'm encouraged by the early signs that actually a good portion of these patients are coming from the stimulant side. They're dissatisfied with the stimulants and their side effects and tolerability issues, and so forth. Another good chunk of patients is coming from current non-stimulants. And also, interestingly, a good portion, about a quarter of the patients, physicians reported, are really treating patients who have what they characterize as complex ADHD as well, so it is ADHD with a lot of other comorbidities.

Jack A. Khattar: Because, as many of you may know, stimulants are also not contraindicated in a lot of areas where you might have mood disorders or other conditions associated with ADHD. So it's really a mixed bag, but we're seeing a good, healthy number that is coming from the stimulant side. As far as this starter kit goes, it's initially, it's too weak.

Jack A. Khattar: weeks, and sample size, and therefore that's why we're potentially seeing physicians giving more than one starter kit and therefore pushing out a little bit the conversion into real prescriptions. So we continue to monitor that. I mean, we have our reps. Obviously, they do monitor how quickly physicians go through samples, but also, at the same time, how many prescriptions they've written or not written. It's a way, but at the same time, as I mentioned earlier, we're trying to strike a balance here.

Jack A. Khattar: We want people to be happy and trying to use the product and encourage them to be enthusiastic about it. So we'll try to manage that in a smooth manner as possible without disrupting, you know, physicians' excitement about the product and so forth.

[music].

Annabel Eva Samimy: Okay, and if I could just ask one more question on Facebookine. Is it strictly Kenmovie, or is it still the COVID restrictions mixed with Kenmobi being a very easy access type of?

Jack A. Khattar: I mean, access to physicians, and I'm sure you're probably hearing that from a lot of companies, hasn't gone back to what it used to be pre-COVID. So there is no question about that as far as access to reach physicians is impacting and has impacted everyone's business, including us, including even the Calvary launch, including the Apocan business as well. But yes, I mean, the impact on Apocin is a combined effect of many things, including, yes, COVID, and including the increased competition from Kinmobi. Yeah,

Annabel Eva Samimy: I guess my point was that they need a nurse to be able to start them on the treatment. So is that the rate-limiting step for you? And at some point, Kenmobi's got, I guess, some high levels of irritation. So is there a point where patients wash through Kenmobi and then they move on to, say, go back to apokine or move on to apokine plus, or do they just move on to the next level of care, whatever that drug is? Um,

Jack A. Khattar: We've seen, and we've heard about examples, you know, across all these examples, so to speak, all these categories. So we've heard about patients who have tried Kinmobi, haven't been satisfied, have a different efficacy profile, and physicians put them back on Apocan. We've heard people who say, well, Kinmobi is more convenient, so I can just take a sublingual tablet instead of an injection. So, I mean, you're going to see a lot of patients flow back and forth across these products until they settle with the product that is most suitable for them.

Jack A. Khattar: Yes, in our case, of course, it's a little bit more complicated, the initiation, because you have the nurse, the involvement of the nurse, and training the patient to use the injectable, you know, the pen itself, the titration, all that. But that's also part of the service that we offer our patients. I mean, some patients actually like that. You know, they like that, you know, hand-holding the training, a nurse who really follows up with them.

Jack A. Khattar: see how they're doing on the medication, the compliance, and also reporting back to their physicians. So it's really part of what we call our circle of care for the patient. It's not just here as a prescription and good luck with it and see what happens to you. Now, we like to really serve these patients and help them, and that's part of it, as far as the whole apocan experience.

Operator: There are no further questions at this time. I'll turn it over back to Jack.

[music].

Jack A. Khattar: Thank you. We remain focused on the launch of Calabry and look forward to closing the acquisition of Adamas by the end of this year or early 2022. In addition, we look forward to submitting the NDA for SPNA 30 this month and getting back on the regulatory path towards potential approval next year. With the Adamas acquisition, Calbri's growth, and the launch of SPNA-30, our dependency on TrachendixR will be much reduced by the time generics enter the market. We look forward to updating you on our progress, and thanks again for joining us today.

Operator: This concludes today's conference call. Thank you for participating.

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