Q4 2021 PLx Pharma Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the P. L. Lexis farmers fourth quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.
Following the presentation there'll be a question and answer session. Please be advised that today's conference call maybe recorded.
I'd now like to hand, the conference over to Janet Barth Pls as Vice President of Investor Relations and corporate Communications. Please go ahead.
Thank you.
My pleasure to welcome you to P. L X. This fiscal 2021 fourth quarter earnings Conference call. Joining today's call are president and CEO , Natasha Giordano, and Chief Financial Officer, and head of manufacturing and supply chain Rita O'connor before.
Before we begin let me remind you that our full year 2021 fourth quarter earnings release can be found in the Investor Relations section of our website at Www Dot P. L X pharma dot com and as exhibits to the form 8-K, we filed ahead of this call.
This conference call may contain forward looking statements, including statements about or references to our outlook regarding the company's performance, our internal models and our long term objectives. All such statements are subject to risks and uncertainties that could cause actual results to differ materially from what we say during the call today.
Please refer to our most recent periodic SEC filings for more detail on these risks and uncertainties, including the risk factors section in our annual report on Form 10-K .
The company undertakes no obligation to update or revise any forward looking statements.
Additionally, the information we will discuss today contains certain financial measures that exclude amounts or are subject to adjustments that have the effect of excluding amounts that are included in the most directly comparable measure prepared in accordance with generally accepted accounting principles for reconciliation to the most comparable measures presented in accordance with GAAP. Please refer to the table in our earnings press.
<unk> available on our website and included as an exhibit to our form 8-K filed today for.
For the benefit of those who may be listening to the replay or archived webcast. This call was held and recorded on March 11, 2022. Since then <unk> may have made announcements related to the topics discussed. So please refer to the company's most recent press releases and SEC filings.
I will now turn the call over to Natasha.
Thank you Janet.
The way, we're still happy you joined MPLX team so welcome.
Morning, everyone.
I know, it's been awhile since our last business update we've been very focused on the launch of bass The war and we're delighted to speak with you today about our progress in building momentum. For example are our plan is on track and we're well positioned to grow sales substantially in 2022.
2021 was a pivotal year for our company in so many ways in February we received FDA approval of both that's M. D. H for basketball 81, and 325 milligram doses.
August we began to secure broad distribution and shelf space and launched into more than 30000 chain drugstores supermarkets mass merchandisers nationwide as well as ecommerce site, including Amazon in August we launched a national media campaign and deployed a cardiovascular care specialty field.
Score.
In November we reported our first ever product sales, which reflected the strong initial retail distribution.
We've been executing a fully integrated multichannel commercial strategy for that war, including a three pronged approach focused on retailers consumers and healthcare professionals.
Our research shows that the number one influence there for consumers is their own Doctor and second is brand familiarity.
In measuring our progress we look at the following key performance indicators retail consumption with strong unit and dollar growth over the last several consecutive four week periods.
As Lorne has become the number three brand in the health Heart Health segment. After a few short months.
And in fact, as TV campaigns, reaching more than 90% of our target audience with high frequency.
Fourth achieving reach and frequency with high volume target.
Our medical communication plans for health care professionals. All of these key indicators are positive and trending higher which reinforces our confidence in our strategy and validates that we're building momentum for Basel four we're pleased to see the effects of our integrated launch strategy taking hold.
And that's the combined efforts of our National Media campaign, and our cardiovascular care specialist medical communications product display support are all yielding favorable results.
That's to create a successful brands are being executed as planned. This is more of a process than an event first step the product has to be shipped retailer and available on shelf before you begin marketing to physicians and consumers next step is building awareness and driving trial, which we are in right.
Now that includes advertising and other marketing activities to inform and educate consumers and physicians about the product and driving trial use.
Michigan investments are typically made in advance of any meaningful product revenue as.
As awareness and consumption gradually built to adopt.
Then the awareness to building advocacy and adoption among health care professionals on average it takes several visits by a sales rep before a physician may become an advocate for the brand and starts to recommend it to their patients. When this happens it is D catalysts that can lead to meaningful.
<unk> growth we are at this juncture right now.
In terms of retail consumption, we're extremely encouraged by the most recent market data that shows that we are continuing to gain momentum with strong unit and dollar growth over the last several consecutive four week periods.
In fact.
In recent meetings with top retailers they reiterated their belief in the promise of Basil Orison innovation and have committed to continue our shelf placement through the end of the year.
Actually one of them said they want to win with us.
As awareness grows and more consumers see our ads and talk with their doctors about vascular we expect consumption levels to increase it is typically choppy at first but we do expect to hit an inflection point with this brand with a base of consumption starts to compound and grow exponentially. This will.
Happen as customers convert from trial to use creating a base of recurring consumption and become sticky and more like a subscription based model.
In the short time that basketball has been on the market. It has gone from having zero consumer brand awareness to becoming the number three brand in the aspirin arent health segment on a dollar share basis.
In fact, south Florida growing while other Aspen brands are declining.
Our integrated strategy, which focuses on the retailer consumer and health care professional is taking hold and we're incredibly proud of the success of our National media campaign in helping to build awareness amongst all three of these stakeholders. Our TV campaign includes high visibility programming.
During national Sporting events like the NFL playoff games plus coverage on a broad range of prime time shows, including CBS evening news and 60 minutes.
Preferably the campaign has delivered more than 3 billion impressions since launch reaching more than 100 million adults 60 years and older with high frequency.
Specifically to our target audience, our television campaign has delivered more than $500 million in crushing reaching more than 90% of this audience or nearly 15 million consumers with high frequency.
We see the effect of TV advertising in driving online activity to our brand website and other E Commerce bank as consumers search the web for more information as the commercial air in fact, our data has shown regular surges of Basil our sale on Amazon within 30 minutes of the spot.
Airing on T V.
We also see the effectiveness of this campaign through direct to consumer and physician feedback as well as through calls to our customer service centre from health care professionals, who saw the commercial and requested a meeting with one of our sales reps for two we see some samples.
Before moving on I want to confirm that we've implemented the national advertising division the NAC recommendations associated with a television commercial in online advertising to health care professionals and consumers.
Any D closed this compliance proceedings T L. Ax in late January and the FTC subsequently determined not to take additional action and we feel the changes make it even more clear of dashboards novel innovation.
Complementing our marketing efforts is our cardiovascular care specialists, coupled with medical communications support all focused on brand building brand awareness and driving adoption.
We're effectively targeting healthcare professionals affiliated.
100 heart and stroke hospitals in the U S and the surrounding high volume practices, using both personal and virtual tactics.
Our team is effectively reaching about 85% of target.
<unk>, 98% of the top group practice.
While more than 80% of Mark business are being made in person. We've also established effective video capabilities with one in person calls are not feasible due to COVID-19 or other restrictions.
We understand the importance of having both options to maintain our core values, which is averaging about 7% to eight calls a day.
In only a few short months, 22% of our targeted physicians. We've reached are already actively recommending <unk> to patients.
To leverage the sales reps time in the field, we're expanding coverage to surrounding practices cardiologist referral network to include other physicians nurses pharmacists and advanced practice providers to optimize our reach.
We're building the awareness day, and the recommendation phase with health care professionals and now we are embarking on the adoption phase.
Next we expect to see an inflection point of building wide spread adoption.
On the cost of that timeframe with our call frequency at a little over five calls to targeted H C. P.
Keep in mind that we're introducing an innovative new brand into a category that hasnt seen any innovation and over 50 years.
Our mission is to change the brand of aspirin used as the standard of care treatments in secondary prevention of heart attack for populated strokes.
It takes both reach and frequency with the health care professional.
And to build to trial and adoption.
She got some is still positive.
Remember the number one influence over our targeted consumer is their doctor.
Early adopters tell us that they value and innovation and its potential to address a real unmet need in their practice.
Some hcp's tell us that their patients who've tried basilar are tolerating, it well and theyre not hearing complaints.
And then both complete absorption and potential Gi benefits are very important in their practice.
Now that's easy to swallow.
Supplementing our local sales efforts, our medical communications team has been actively engaging and building advocacy with more than 100 regional and national cardiovascular thought leaders across the U S.
These activities include continuing medical education programs.
We're also leveraging virtual tools for outreach to broader audience for example, and targeting pharmacists, we've initiated a comprehensive email campaign to more than 350000 retail and hospital pharmacists.
The analytics on campaigns, so unique open rate of approximately 24%.
Which is double the benchmark open rate of 12% once again confirming their interest in a new aspirin therapy.
In addition, the first wave of pharmacists email drove significant web traffic Bassler HCP dotcom.
We've also engaged internationally recognized interventional cardiologist, Dr Gibson and NGL liver to conduct live multiple broadcast interviews in town hall meetings to educate on the benefits of aspirin therapy and encouraging patients to talk to their doctor.
We continue our commitment to advancing science surrounding aspirin therapy in partnership with Arsene Scientific Advisory Board and further expanding our medical communications for presentation and publication of important scientific data supporting bass alarm.
A review paper titled Pharmacokinetic, and Pharmacodynamic profile of a novel Phospholipid aspirin formulation with published online in January 'twenty, two and clinical pharmacokinetics. Our publication plan also includes the recently presented study further investigating the PK.
P D parameter of the marketed 81 milligram dose of that floor, which was presented as opposed to at the TCT Conference in November .
A manuscript of this study is being drafted now and.
And now I'll turn the call over to Rita O'connor, CFO and head of manufacturing and supply chain to further elaborate on those success indicators Freda.
Thank you Natasha and good morning, everyone. Our fourth quarter financial results were largely as anticipated, including net sales of $1 $6 million and operating expenses of $21 $6 million. After last quarter's strong initial distribution to 30000 retail stores, we've remained focused on creating.
[noise] awareness driving trial and building advocacy for vascular which is so critical in establishing a new brand.
Due to the strong initial product stocking in the prior quarter Reorders from our retail customers were minimal in Q4 as expected. This is perfectly normal for a new OTC brand launch we continue to expect more meaningful product reorders as Dazzler brand awareness grows in retail consumption gains traction.
That's gonna toss you explained earlier building a brand from scratch. It takes time and we're very encouraged by the recent consumption data for vessel or that show strong unit and dollar growth over the last several consecutive four week periods.
Which gives us reason to believe that we are building momentum.
Our prayer already at this time is to continue driving awareness and trial among consumers and healthcare professionals. We are confident that the inflection point in sales is coming soon as we built the stickiness with the customer in terms of repeat purchases.
And like a subscription model unit consumption will grow exponentially.
Relationships with our retail partners are strong and we have plans to further broaden our distribution. This year to include more groceries regional grocery chains with an in store pharmacy.
As is customary with OTC products retailers evaluated category and each product's performance about twice a year. This assessment could result in more or less shelf space, especially for new brands. We are so happy to say that after some recent retailer category reviews vascular remains in distribution in.
All accounts.
Our retail partners are committed to the brand and recognize the support we're putting behind it to further drive momentum.
Feedback from retailers has been favorable including vascular leaves the ashburn assortment and your marketing and packaging our breakthrough.
In addition to our physical retail partners e-commerce sites, including Amazon have shown surprisingly good growth in vascular as well.
It's Natasha already discussed we have seen a strong correlation between our national media campaign, and web traffic and E Commerce sales.
One of our many market dynamics, we have been navigating includes Amazon with its gating process that requires certain specifications or milestones to be met by all new products selling on its platform.
For instance, initial quantities of all new products have established inventory storage limits and told demand reaches a certain level. The good news is that that is the Lord demand quickly surpassed this milestone. However, during the process our product detail page temporarily showed out of stock because Amazon has sold through.
Those initial quantities.
This was especially true for the 325 milligram dose, which is sold more online than we anticipated. So we quickly pivoted to increase supply the higher dose and we are now in a much better position to meet demand.
We have also been navigating a technical issue with Amazon recently relating to documentation of our product packaging specifications. This has been a very high priority for us because as you know consumers don't just buy products on Amazon They use it as a search engine to learn more information.
For about two weeks or so Amazon temporarily suppressed our product display pages until we provided that additional documentation. We are highly confident in our product packaging, which are both FDA approved and compliance. We are pleased to report that both dose strengths of Basil are back on the Amazon.
Web site.
Moving from sales to cost of sales and gross margin our gross margin of 44% for the fourth quarter was slightly higher on a sequential basis, reflecting a more favorable product mix of the 81 milligram dose, which represented 86% of total net sales in the fourth quarter.
We are in the process of expanding our manufacturing capacity of thermo Fisher's plant in Cincinnati to provide much larger batch sizes for the 325 milligram dose.
We also expect consumers to trade up from the lower margin 12, count trial pack to the 81 milligram 30 count size as we build the stickiness I referenced earlier.
Together. These two factors should help drive improvement in our blended product margin rate by the end of 'twenty two.
Next our operating expenses of $21 $6 million were in line with the $20 million to $23 million range. We previously provided and primarily reflected increased promotional activities and expenses associated with associated with the commercial launch of Adler, which began during the third quarter.
As expected we have been heavily investing in advertising and other marketing activities. During the awareness phase of our launch to inform consumers and healthcare professionals about our new brand and drive trial.
We will continue to manage overall cost judiciously, and then maintain flexibility with our investments in advertising to ensure the appropriate correlation with expected sales growth.
Our planned investments in the front half of 'twenty two to further drive further awareness and trial are expected to yield strong sales growth in the latter part of the year.
On a sequential basis in Q1 of 'twenty. Two we are modeling slightly less operating expense spend in Q4 of 'twenty. One. This is primarily due to a strategic shift from high visibility television programming like the NFL to less expensive programming, such as network and cable news, which has strong viewership buyer.
Target audience.
Looking at R&D, we are modeling full year 'twenty, two R&D costs to be lower than 21, as our manufacturing activities will move to expanding dazzler capacity in Cincinnati.
Further development of our patent protected <unk> platform technology remains a priority and we are currently screening compounds for possible development with.
We plan to provide a product pipeline update by the end of this year.
Turning to selling marketing and administrative expense as anticipated higher selling and marketing expenses in the fourth quarter were primarily driven by expenses associated with the launch activities for vascular we.
We deployed our cardiovascular field force back in mid July of 'twenty, one and in August we launched our National Media campaign.
Our TV campaign include high visibility programming, such as the NFL playoff games and the recent PGA Honda Classic and Daytona 500, plus coverage on a broad range of prime time shows, including CBS evening news and 60 minutes through.
Through the end of February 22, we have incurred approximately $20 million in advertising expense, which is yielding very favorable results as you heard from Natasha.
Next on a GAAP basis, we reported net income attributable to common shareholders of $3 6 million or a net loss of 73 cents per diluted share.
Compared to a net loss of $8 $5 million or <unk> 87 per diluted share last year.
Our GAAP reported net income and 21 includes a noncash gain of $24 $4 million versus a loss of $4 $2 million in 2020 related to the change in the fair value of our warrant liability due to the fluctuation of the company's stock price.
And please refer to the Reg G table in our financial statements to reconcile the GAAP EPS to an adjusted non-GAAP number.
Turning now to some balance sheet items, we ended the quarter with a cash balance of $69 4 million, reflecting a cash burn for the quarter up $13 $2 million due to the higher level of sales and marketing activities, partially offset by the timing of receivables collected from sales with Adler.
As I said earlier, we are managing our costs judiciously significant marketing investments during the initial awareness phase of our launch where necessary and resulted in a significantly large portion of our target audience getting exposure to the brand. We will continue to complement these investments with the work of our cardiovascular care specialists.
In building, our physician network and educating through direct visits.
Overtime as a base of our loyal customers grow we will adjust our spending accordingly, and we continue to believe we have enough cash to successfully launch fazlur into 2023 with that I'll turn the call back to Natasha for some closing remarks.
Thanks Rita.
As you know from our experience launching well known brands in household names, we know what good looks like and we know what the best markers are well met.
<unk> is building for <unk>, we're on track with our plan and well positioned for sales and market share growth of 22, our key performance measures and market feedback are positive and trending higher.
<unk> has become the number three brand in the heart health category, we secured key retail shelf space commitments through the end of the year HCP adoption is growing and we have the right team the right strategy and the right tactics to make basehore a winning brands.
We are confident in our strategy and our execution of our launch plan focused on retailers consumers and healthcare professionals is with this multichannel approach that we believe that has the potential to transform the standard of care for secondary prevention.
I'd like to thank our Pls team and our partners for their dedication commitment and teamwork in support of advancing our strategic priorities and our mission of bringing the lifesaving benefits of our innovative liquid filled aspirin capsule therapy, thousands or tens of millions of patients who need it.
Operator, we can now open the call for questions.
If you would like to ask a question. Please press Star then one.
If your question has been answered and you'd like to remove yourself from the queue press the pound key.
Our first question comes from Jason Butler with JMP Securities. Your line is open.
Hi, Thanks for taking the questions and congrats on the progress first.
First one for me can you just maybe expand a little bit on your efforts with our with marketing with physicians, what you're hearing back from from prescribers and how they're in.
In whom and how they're starting to recommend the drug to use.
Yes, absolutely good morning, Jason.
The efforts with the HCP are extraordinary.
What we're hearing is extremely positive feedback one they're very interested in a new aspirin therapy since theres been no.
And in that category for decades, and also understand that the enteric coated aspirin tablets provide for erotic absorption, which is so very important for a secondary prevention patient to achieve platelet anti platelet benefit in a very reliable and consistent.
Way every day, so what they're telling us it's the complete absorption. In addition to the GI benefit that's very important to them also with the HCP that are in the adoption phase theyre, telling us that they're not getting some of them are telling us that they're not getting callbacks with the patients.
Tolerating it well that it works quickly that it's easy to swallow so the feedback they're getting from their patients is very very positive as well, we're getting that same kind of feedback Jason.
Reviews at Amazon and so we're really very encouraged because the product is doing what it was intended to do provide good reliable complete absorption and also reducing the risk of a stomach injury and so as we move hcp's from they're aware.
Ernest and trial phase into adoption, which is starting to occur now we're seeing a great interest in them recommending aspirin.
Two secondary prevention patients.
Great that's helpful. Natasha and then.
We think about you know reorders in.
That ramp.
Based on the data that you have can you give us any estimate of the proportion of the inventory build that has already been drawn down or how much inventory is still sitting at the from the from the initial builds.
Yeah. So it's Rita Jason how are you. So in terms of Reorders really arent seeing as much of those you know since the fourth quarter was depressed, but the volume if consumption has picked up exponentially, especially after the the big media campaign, we did over the holidays as well as in.
January two for heart health months, so there will always remain a certain amount in the channel you know thinking about it. So it will have the three facings usually on the shelf and then they'll reorder as the pull through comes in and we're really starting to see that pick up and so the reorders are a really imminent and.
To come through but there always will be something in the channels. So we've shipped in over $8 million. So far so a good chunk of that will remain so you should start to see reorders picking up now.
Great.
Well, thanks for taking the questions.
Thanks, Jason.
Our next question comes from home lot Cassandra Dws financial your line is open.
Good morning could you just expand upon your comments about the retailer relationships.
Are you still in those 30000 plus stores are or has there been.
Some variety and as far as what stores you're in.
Sure.
Every proud of our partnership with with the retailer. Yes. We are in all 30000 stores and we've gained commitments from our top retailers through the end of the year as you know they evaluate.
The program.
Adequacy and cyclically and so when we have these meetings with them. This is where we're hearing from them.
How much they believe product. They do believe that this is an innovation and that it's going to reinvigorate the product theyre seeing that basketball is growing by their own data right.
Honestly to see vascular growing in our initial stages of launch while other aspirin brands are declining is a tremendous key performance indicators for us to understand that the tactics that we're using are starting to take hold.
And so.
The Q4 sales were where they are that would imply something like that.
26% reorder rate is not adequate way to look at it or is there another way to look at how you are.
We're actually seeing this momentum.
Yeah. It's a great question. So the reorder rate was not as high in the fourth quarter as you know because of the stocking, but now you should start to see that that pick up and also to we're actually expanding our distribution I meant to.
Further regional grocery store change this year as well as we're also adding display as you may have seen in a lot of the big retail stores, a big push on displays in January and February leading up to heart health month, So there really.
Reiterate the feedback it's incredible feedback of knowing that were supporting this brand and not only putting it in the aspirin aisle, but putting it in the drive through trials passing through these big Blue displays are really eye catching and so the expansion is beyond just the aspirin category and it's expanding into display.
<unk>.
Okay.
Yes.
It's interesting because.
I mentioned in her prepared remarks that our.
Our retailers are telling us that the packaging and the way that it sits in there in those stores. It is breakthrough and eye catching and that's why they're investing in these displays and <unk>.
And it's showing its showing progress in that way. So I appreciate the question.
And my last question was.
What point would you feel comfortable and actually providing some sort of sales guidance.
You know we've been talking about that of course, you as you would imagine I know that everybody is very interested in receiving that guidance and at some point, we will absolutely share more data. The thing is in these early stages, when you're building awareness and you're starting to get adoption.
And you're starting to see conversion from trial to chronic use.
It's a process and so you'll see data that that's choppy and so but what we can say is that we've seen very strong growth for.
Four weeks consecutively four weeks four weeks.
Overtime average double digits. So we're seeing that growth starting to to occur and so the reason, we arent providing guidance or data at this point is because it's really not predictive of what's what we think is going to happen by the end of the year, we're investing now to get that conversion.
From awareness to adoption and so at some point, we know and we realize that everyone would like to see more data and we certainly appreciate that but that's why we're around we're kind of holding steady right now because we're in those initial days.
We're very encouraged by the key performance indicators, so that both we had a nice little gods.
And why we are waiting for the stickiness to kick in you know so then it's an annuity stream right. It compounds on itself. So as a new patient gets on vascular they're on it for the rest of their lives. So it's quite a great annuity stream for us so each month as we add new patients the existing patients are still on it everyday.
For the rest of their lives.
Okay, great. Thank you.
Yeah.
As a reminder, task a question. Please press Star then one.
Our next question comes from Elliot Wilbur with Raymond James Your line is open.
Thanks. Good morning first question for Natasha can I, just ask you to repeat what you had discuss with respect to the.
The number of targeted physicians that are actively recommending basketball I think you said, 22% just want to make sure that I have the denominator or the baseline correct in terms of what that number refers to because it seems like.
Rather extraordinary number.
Yeah.
Yeah, we're pretty pleased with that number as well, it's 22% of the HCP targets that we've reached.
And we've reached about 85% of our target, we're calling on high volume, obviously high volume cardiology, but we're also targeting top group practices across the country.
We're pleased with the progress that we're making as physicians start to move from awareness understanding the product.
Trying it going into the trial phase being how their patients react to it and then moving onto onto adoption, which is what we're starting to see right now.
Okay. So I guess the old classic pharma rule of thumb as it needed to four to six primary details before you really start to see an influence in terms of physician prescribing or recommendation behavior, but I'm, assuming that you have not reached that level of frequency with these prescribers, which suggests maybe.
That you know.
You might you.
You might see sort of better additional conversion.
Rather than having to wait for four to six details just kind of wanted to get your thoughts on that and then of those 22% that are actively recommending to patients do you have any sense in terms of.
How those recommendations have influence or translated into consumer behavior and how your whatever whatever gap there may be how you can more effectively close to that.
Yeah, you know we go back to what.
What we know and what we've studied through our market research.
One influence for our consumer is their Doctor and then number two is brand familiarity, which simply means we need to build the brand's identity, but what we like to say we were everywhere our consumers shop. So between those two things, that's where we invest our time and resources.
So the physician recommendation, it's really important.
To that consumer when you think about a secondary prevention patient a patient that may have had a heart attack or a stroke. There. They are highly motivated to not have another heart attack or a stroke there could be fatal. So you put those things together the stickiness that we like to talk about has increased even further because remember these patients.
They're going to be an aspirin therapy for the rest of their lives average 9% to 13 years.
At least I think that the pharma formula of four to six detail, Phil still holds true and where where it does take several calls, especially email cardiologists right. They are very data driven they want to understand the clinical side of things they want to understand that.
Can the P D data they want to understand.
The Gi data, which is which is published and so important that these studies are published in such high peer reviewed journals. These things are important to them, but you need to bring them through the process and so it does take several calls, but what we're looking for is to convert them to get to vascular.
Their drug of choice.
For the secondary prevention patient because it provides a complete reliable platelet inhibition in addition to reducing stomach injury, but yes. It does it does take a couple of calls and where we are in that cycle now where we're just starting to see them convert to adoption.
Okay I know last call you had mentioned plans to expand.
The reach of targeted card cardiologists, whether within the existing referral networks or we're moving to additional practices and clinics just wondering how you're thinking about that versus just a.
Being.
Current promotion levels on existing targeted cardiologist over the course of the year.
Yeah, you know I really I like the strategy, because if you think and you understand how cardiologist practice.
They depends on their referral networks and so typically those referral networks are close close by.
So first we target.
The top 100 heart and stroke hospitals, they're Excoriate group practices and we've broadened our reach to include the referral networks of those high volume targeted cardiologists, and so that will allow us to broaden our reach but also optimize the time of day.
In the field.
And tap on and influence network, because the cardiologists really do drive the treatment and the recommendations for these types of patients. So we've already expanded our universe of targets through.
Approaching the market this way to optimize region and.
And after lunch and things like that.
Yeah, and not only that reached the tasha to doctors the pharmacist as well you talked about the expanded pharmacist targets via our email strategies. So that's an important roles that we're getting a lot of reach too.
Yeah, and you know it and to build on that.
You you have physicians do you have pharmacists have nurses and you have the advanced practice providers and advanced practice providers are key in these group practices. They do a lot of the management of these patients.
So to broaden our strategy is really based on that the two.
Total office call. The total office conversion of people to understand that.
What this product can do for these patients.
And to become advocates and those programs are in place and starting to resolve.
Okay, and if I can direct your question to read it just with respect to.
Sort of initial ROI metrics on your your various.
Media efforts and promotional efforts just curious where you may be seeing better than expected performance in and where maybe things have not quite.
Met your initial expectations in terms of return on some of the initial investment and how that may influence.
Print media strategies in various.
Direct.
Direct promotional strategy over the balance of the year.
No great question, because one of the things that it was a little surprising was how much. The doctors are actually consumers of TV ourselves. You know we are getting so many calls to our customer service line from health care professionals wanting to either see a rep or get samples.
So that is one area that surprised me a lot.
Also our ecommerce sales are much higher than expected and including even though as out of stock and $3 25. So that also was very surprisingly on the good side. So the metrics of the TV advertising are very easy to measure, including our own website.
We're actually able to track within the minute of when a new IP address comes to our website and I was just blown away by as soon as we had that NFL playoff game. It was like the to our website and Amazon went through the roof, and then and even the Amazon <unk>.
Box switches, how many you convert to actual sales. We also see that is tremendous.
That percentage of buys like just one click of a mouse is.
It's much better than expected so I feel really good anytime my marketing team wants to go do you want to skimp on advertising I am saying no. We look at the metrics Youre showing me. So no I'm very very pleased with the the ROI on our TV spend and as Natasha was saying too I'm also very pleased with them.
Of the exposure that the reps are getting to doctors I mean, when they first talked about it to me like there's no way you're getting in to see these guys and over 80% rate in the top shows the visits or in person. So in terms of ROI I'm pretty pretty excited about it and as you know Elliott I've said multiple.
All times, we're going to manage the expenses and the beauty of that advertising is it is.
It really gains efficiencies as the years go on and I mean, I don't have to continue to spend all that money on the high visibility shows like the Daytona 500, and we're going to really shift towards our target audience in more less expensive programming and as we see that stickiness start to take hold.
Okay, and then maybe just two quick.
Quick final question.
You read it as well can you just talk about expected.
Capex investments over the balance of the year as you.
To expand production capacity and capability I guess related to the larger <unk>.
<unk> I think you've mentioned that last call just want to make sure that that is.
Schedule and everything is going according to plan there and then with respect to some of the metrics you referenced in the press release, specifically the Nielsen metrics for month ended.
For the four weeks ended.
February I Wonder if you can we share with us at a high level sort of what those numbers are suggesting in terms of unit volume and door growth rates. Thanks.
Yes.
So I'll take the Capex and start on on Nielsen data and Natasha can follow up on that in terms of the Capex investments we're all done.
We're working with our partners Thermo Fisher in Cincinnati, and they're already well on the way to starting expanding our $3 25.
As you know always supply chain, our can kind of impede some of those labor shortages, but I'm pleased with the progress you know you always wish you'll be sooner, but you should see minimal capex investments because we have all the equipment, we need for the expansion what you will see and what I referred to kind of an R&D is really more.
The testing the feasibility engineering batches for that scale up that will occur throughout the year, but not any material capex investments are planned for 'twenty two.
And I think you mentioned the Nielsen data metrics on unit and dollar growth. It's interesting to see because you know you asked about what else surprised me I was very excited that the actually the consumers are trading up from the 12 count which as you know we put in there is a trial size up to the third.
<unk>.
So it's showing that they're moving towards that subscription like model much faster than we had thought so the units are also going up and not just the dollars and.
Becoming the heart health the number three heart health brands so quickly.
And we're getting very close to the units as well and on the the number three brand. The Tushar do you want to add to that yeah I think.
No well said I think we're in the.
Early stages, we're in the awareness stage and we're building that that consumption based as the foundation because we dimension. That's how you start to grow to adoption and the patient becomes sticky I E going from the trial pack to cause pretty count and that's what we're that's what the.
Trial is they have to go.
Let us to adoption and stickiness of a patient that stays on basketball.
Oh.
Although you have some choppiness to week.
Week on week and month on month, we're really starting to see that transition going from awareness to adoption and from trial to 30 count and on average double digit growth that we're seeing so and as it starts to compound itself. It really does become.
Friction business. So we're pretty excited about about how strong foundation, where we're starting to build here.
Our next question comes from Leland <unk> with Oppenheimer. Your line is open.
Good morning, Thanks for taking my questions and my congrats on all the progress.
Two questions from for me I'm wondering if you could share with US you know when you did the initial stocking.
Was there a certain kind of even those with respect to that stocking than you expected.
All through various retailers and as we see reorders coming through in <unk>.
Kind of reflect.
Maybe just a lag by certain retailers or was it the case that maybe there was heavy restocking initially.
And those may be slower to.
Restock because of their winter inventories.
Hey, Leland Yeah in terms of the Choppiness in terms of putting it in the channel we were actually <unk>.
Pleased with how many retail stores and it's across the country.
So it's interesting because you know they put it in nearly all of their stores nationwide. So putting that initial stocking was significant and now we're starting to see the pull through now the fourth quarter was really as you know I mean, we were kind of waiting for everybody to make sure. It was on shelf I mean.
Our retailers have their own challenges in terms of Covid supply chain labor trying to stock the shelves. So it took them a little while which is why we really didn't go heavy on the media until the fourth quarter.
So.
That's where it occurred where the pipeline went in it took them a few weeks months to get it on the shelves and then once we knew that it was on the shelf. The displays were out there and then we turned on the TV campaign.
And then we're starting to see that pull through as we speak so the reorders are going to be choppy going forward. However, we'd like to see that eventually in the next couple of quarters is that kind of shipments equal consumption, which is also very difficult to.
Reject with fee and OTC brand, but we're seeing an awful lot of growth in like the southeast.
Texas, Florida area and a lot of our efforts from the physicians are coming out of those areas as well so that may lead to some choppiness because of just where the patients are but we're pretty confident about our distribution as well as.
The consumption that will pull that inventory down.
Okay. That's helpful and you sort of touched on this a little bit in terms of geography wondering to what extent you have visibility on areas that may be higher consumers versus lower so are we seeing more and maybe urban centers is it more even across the board or how should we think about kind of the.
The spread of demand across the country as we build out.
It's interesting because the demand is really coming around those top 100 heart and stroke hospitals that where we put our field force. So that's obviously concentrated in the southeast as well as in the northeast So I wouldn't necessarily say it was urban centers. However.
More or less surrounding the hospitals that these patients that really need this reliable therapy.
How should you want to add anything to that.
Right and you know, we really look at the demographics of our patient and revenue side as well.
So and we also look at when we think about the targeted efforts of steel for us.
High volume cardiologists that sit in high volume practices and their associated referral network. So that's what we're seeing drive some of this.
Right.
And then my last question is with respect to e-commerce , It sounds like Youre getting good good.
It would pick up there I'm wondering to what extent you can.
Either you have visibility on or maybe you could share with us.
The option.
Users may have to click on a subscription refill.
Versus a one time order and is it the case that maybe those who ordered kind of one to begin with have now begun to.
Check off that kind of you know regular refill.
Sure.
Paradigm.
Yeah, Great question, So our e-commerce sales as I said earlier are doing surprisingly well.
Amazon in particular, and that's why it was.
So important that we we got that back up online because we're noticing a significant increase in our subscribe and save many of those many of you know who shop on Amazon will know you get a discount if you sign up for a subscription and we're very pleased to see the growth in that area.
Now E Commerce sales why they're great on consumption as you know there are not a retailer.
So they don't have the stocking is that the other retailers do like Walmart for example, so Amazon has almost like ship to consumption way, so, but we're seeing a huge uptake in the subscriber.
Scriber and that gives us it lead to that's the stickiness and for the 30 count So which is also great that they've moved beyond the trial and now really want to take it every month.
Great great. Thanks, very much for taking my questions. Thanks lately. Thank you.
There are no further questions I'd like to turn the call back over to Janet for any closing remarks.
Thank you Michelle and thank you all for participating in our call today. Please feel free to contact me with any additional follow up questions have a great day.
This concludes the program you may now disconnect.
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