Q4 2021 Paratek Pharmaceuticals Inc Earnings Call
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[music].
Greetings and welcome to the protect pharmaceuticals full year 2021 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is being.
It is now my pleasure to introduce your host Sarah Higgins, Vice President of Finance controller and principal accounting officer. Thank you you may begin.
Good morning, and welcome to parents, that's year end 2021 earnings and corporate update conference call a press release with the company's financial results was issued earlier today and you have also posted slides on our website, which we will refer on this call. Both can be found at www dot parakeets form of Dot com.
It just depends on today's call are Evan Loh, Chief Executive Officer, Adam Woodrow President and Chief Commercial Officer, and Randy Brenner, Chief development and regulatory officer.
Michael began executive Chairman and I will also be available for questions.
Before I turn the call over to Kevin I would also like to point out that we will be making forward looking statements, which are based on our current expectations and beliefs.
Payments are subject to certain risks and uncertainties and our actual results may differ materially.
I encourage you to consult the risk factors discussed in our SEC filings for additional detail and then.
Thank you Sarah.
And thank you all for joining our year end 2021 corporate update call.
Before I begin my overview of <unk> 2021 performance and our growth strategy for 'twenty to 'twenty two.
I'd like to comment on a world now faces geopolitical uncertainty, including the potential use of or exposure to biological and chemical weapons.
That's world leaders elevate their focus on preparedness and protecting their citizens and Warfighters, we believe that use iris broad utility against my anti microbial resistance.
Owned infections, and bioterrorism pathogens should make it an important lifesaving component of the U S government strategy and actions being formulated to address these emerging threats.
The entire para tech team is committed to providing use iron supported these in support of these efforts if and when the need arises.
Now I'd like to review our performance in 2021, which was a very successful year for <unk>.
As you'll see on the next slide net sales from these iris core commercial business for the full year landed at the top end of our guidance range at $68 $2 million.
Strong demand coupled with disciplined execution resulted in consistent year over year growth and use Iris core business with a triple digit compounded annual growth rate since news Iris U S launch in February of 2019.
Net sales from our core business has increased each year since launch from $11 $5 million in 2019 to $68 $2 million in 2020 one.
We anticipate this growth profile to continue in 2022 with an estimated 50% increase year over year that will result in net sales from use iris core business of between $95 million to $105 million.
As seen on this next slide our commercial launch performance over the first three years of its U S launch continues to materially differentiate xyrem as one of the most successful IV oral antibiotics launched in the last decade.
We believe that the strength of the commercial business is driven by disciplined operational execution combined with new Cyrus many clinically important product attributes that are illustrated on this slide.
These include once daily oral and IV formulations that enables utility in every clinical setting of care.
Clinical efficacy against resistant pathogens in two approved indications and a favorable safety and Tolerability profile.
As you can see illustrated on this next slide room, we remain focused on three pathways to news I ever revenue opportunities.
First use iris core commercial business.
This continues to be the main driver of our current revenue growth performance.
Having both once daily oral and IV formulations enables us IRA to have clinical utility in every setting of care.
Accordingly, we believe that consistent year over year growth in both the hospital and community settings will continue, especially as the Covid pandemic evolves to an endemic infection.
I'm excited to announce that in 'twenty to 'twenty, two we will embark on the second phase of our disciplined expansion of the new Xyrem community sales force, we believe our strategic emphasis on revenue growth through commercial expansion is appropriate and.
Timely and will result in greater value to our shareholders.
Second non tuberculosis, mycobacteria disease or N T M N.
<unk> represents a promising future growth opportunity in the orphan disease space and.
T M of the Mycobacterium abscesses subtype as a rare disease with currently no approved therapies in the U S alone.
Aerotech estimate that N T M. Obsessed this represents a potential 1 billion dollar addressable market opportunity.
The I N T M. Obsesses, we're excited about new data published just last week that Randy will review in more detail that we believe opens up the potential for broadening use iris clinical utility in mycobacterium avium complex or Mac pulmonary disease.
Third U S government opportunities, we believe that there is broad potential for news Irish used across it and you look across the U S government.
Not only through our BARDA Bioshield public private partnership that is aimed at protecting all Americans against bioterrorism threats, but across our health and human services sectors that address pandemic preparedness needs and broadly across the department of defense as an important agent to protect our active war fighters let me.
Restate that use iris broad utility against anti microbial resistance wound infections, and bioterrorism pathogens should make it an important lifesaving component of the U S government strategy and tactics being formulated to address today's emerging threats.
Now I would like to review a pair of <unk> 2021 financial highlights as well as our financial guidance for 'twenty to 'twenty two.
Full year 2021, total revenue was $132 million compared to $46 $9 million for the prior year, an increase of 177% over the prior year.
Total revenue for 2021 was comprised of the following first.
XI regenerated net U S sales of $106 $1 million, which included <unk>.
$68 $2 million from the core commercial business and $37 $9 million from the initial procurement of news IRA under the BARDA contract.
Iris full year 2021 net U S sales represents a 173% increase compared to full year net U S sales of $38 $8 million in the prior year.
Second government contract service and grant revenue earned from cost reimbursement under the BARDA contract was $15 $9 million, a 137% increase from $6 $7 million in the prior year.
Third collaboration and royalty revenue of $8 $2 million, which included a $6 million milestone payment earned from XI lab upon the N M. P. A approval of Xyrem in China.
The balance primarily represents royalty revenues earned on sales of say Sarah in the U S.
R&D expenses were $30 $4 million for the full year, 2021 compared to $23 $9 million for the prior year.
The increase was primarily due to compensation expense and cost for activities reimbursed under the BARDA contract.
SG&A expenses were $119 $4 million for the full year 2020 one.
Impaired to $89 $9 million for the prior year.
The increase was primarily due to compensation expense and costs incurred for the new Xyrem community expansion.
We reported a net loss of $59 $1 million or $1 22 per share for the year ended December 31, 2021, compared to a net loss of $96 $5 million or $2 19 per share for the prior year.
This significant improvement reflects the commercial success of new Zara, the first BARDA procurement and disciplined operational execution.
In this slide we note that pair tech ended the year with $95 $5 million in cash cash equivalents and marketable securities.
Now turning to our 2022 financial guidance.
I will begin on the left side of this slide which is focused on year over year total revenue growth since launch.
Peritrack estimates full year 2022, total revenue to range between 155 and $170 million.
The majority of this full year 2022 revenue estimate consists of news Iris U S. Net product sales, which are expected to range between $133 million to $143 million.
This estimate is comprised of two components first core news IRA commercial revenue is estimated to be between $95 million to $105 million represented by the Orange Histogram bar.
Second the next BARDA procurement represented by the Green is the Grand bar valued at approximately $38 million, which is anticipated for delivery as early as the end of 2020 two.
We expect to deliver topline pilot animal efficacy data to BARDA in the fourth quarter.
For our contract positive topline data from this study will trigger the second procurement.
However, given the internal BARDA review and acceptance process. There was a chance that revenue will be recognized early in the first quarter of 2023.
The balance of the full year 2022 revenue estimate consists of BARDA government contract service and grant revenue between $20 million to $25 million and collaboration and royalty revenue of approximately $2 million.
Again, this BARDA contract service and grant revenue provides 100% reimbursement for the estimated full year 2022 BARDA R&D and SG&A expenses that as noted in the light Blue histogram on the annual expense chart on the right side of this slide which is focused on R&D and SG&A expense.
Full year 2022 R&D and SG&A expense is expected to be between 160 and $170 million comprised of two components.
First core business, R&D, and SG&A expense, which is estimated to range between $140 million to $145 million represented by the dark blue histogram bars.
Second BARDA R&D and manufacturing onshoring costs, both of which are subject to full BARDA reimbursement, which is estimated to range between $20 million to $25 million.
In closing it is important to highlight that we project our three year compounded annual growth rate or CAGR through the end of 2022 for our core xyrem commercial revenue to be 105%.
While the CAGR for our core business Opex over the same period is planned to increase by only 3%.
In aggregate. These data represent our continued focus on maximizing revenue growth disciplined capital allocation and predictable operational execution against our stated objectives I would now like to turn the call over to Adam.
Adam.
Kevin.
<unk> of new Zara in both the hospital and community settings continues to progress well.
As Evan noted.
Strong demand and consistent execution has resulted in impressive year over year growth and use our core commercial business.
Net sales from our core business increased 76% year over year from $38 8 million in 2020 to $68 2 million in 2021, we.
We anticipate that this growth will continue in 2022 with an estimated 50% increase year over year to a range of between 95 to 105 million in net sales from the news article business.
Equally important gross demand has increased 84% year over year from $44 3 million in 2020 to $81 7 billion in 2021.
<unk> growth continues to be driven by demand.
I'd like to provide a little color on our progress and expectations for the coming year.
As a reminder, our initial launch strategy was to focus on the hospital business for the first two years.
Our objectives were to build endorsement and prescribing with key influencers in the antibiotic space, namely <unk> physicians.
In addition, we wanted to establish consistent and broad based market access in the outpatient setting before expanding our promotion into the community setting, which we then initiated during the first quarter of 2021.
By the end of 2021, we had approximately 90 customer facing sales representatives split equally between the hospital and the community.
The hospital team continued to grow new Zara throughout 2021, despite several COVID-19 related headwinds.
These challenges included limited physical access to certain key hospitals.
Absence of formulary and stewardship reviews, and a continued reduction in face to face context with infectious disease doctors during the ongoing Covid panic.
Despite these headwinds we continue to see annual double digit growth in the core news or our commercial business and hospitals and their adjacent sites of care.
This segment of our business accounts for 75% of our prescription days of therapy.
As the year unfolds, we expect to see the hospital business evolved more in line with our pre covet experiences.
More specifically COVID-19 patient hospitalizations are falling in concert with the declining Homochrome Covid cases, and we're seeing an increase in the rates of elective surgical procedures.
Further we believe that there will be a return to more frequent and regularly scheduled for Maria Stewardship Committee reviews.
As the hospital environment continues to improve we anticipate significant revenue growth from the hospital segment in 2022.
Our focus in the hospitals continues to be on the physicians, who care for patients with known or suspected resistant pathogens with multiple comorbidities.
We continue to feel confident that the oral formulation of news IRA enabling early discharge.
These patients will remain an important value proposition for hospitals physicians.
In addition to the cost savings realized by the health care system, a shortened length of stay also reduces the risk of patients to pick up a hospital acquired infection with yet another resistant bacterial pathogen.
In this next slide based on projected patient data primary market research and the geographic coverage of our sales team. We believe that it will be approximately 300000 skin and pneumonia patients that fit the news our target patient profile by 2028 in the hospital setting.
Today, our internal data allows us to estimate that we are approximately one five we have a 1.5% share of this addressable market opportunity and we believe that we can grow the share to between six and 12% by 2028.
Importantly, these patients represent on label use ours addressable market opportunities for skin and pneumonia only.
As previously discussed we expanded our promotional effort into the community setting in 2021.
Our focus continues to be on primary care doctors, Podiatrists and a select group of dermatologists.
We are pleased with the data trends associated with this commercial expansion and C earlier trial and usage with these physicians when compared with hospital based physicians.
The community segment of the business already makes up 25% of our prescription days of therapy.
Bind with the hospital business as seen in our slides during his prepared remarks, we continue to see meaningful separation of news I was called commercial growth from other recent IV oral launches.
With broad based market access established combined with the earlier adoption by targeted physicians in the community setting we remain confident in the potential of news IRA in this market segment.
Ultimately the goal of our community expansion is to reach 160 representatives in the community in a phased approach.
In 2022, we plan to add approximately 40 additional sales representatives to broaden our geographic coverage and increase our penetration into new and existing territories.
Aligned with our historical disciplined approach to capital allocation, we will strategically increased the associated medical science and reimbursement resources needed to support the expansion into these new territories.
Cost of this expansion is already incorporated into the expense guidance even provided earlier.
Future expansions will be driven by the success of the current plan.
Our promotional approach to both skin and pneumonia in the community like the hospital is to focus on patients that have suspected resistant pathogens with concomitant comorbidities or allergies.
This patient type is very poorly served by the existing generic oral options in the market today.
Our estimate based on a Q V. A data market research and geographic coverage is that that will be approximately 750000 skin and pneumonia patients who fit this demographic graphic in 2028.
By this time, we believe we can achieve between 9% to 14% market share.
Importantly, these patients represent use all of his own label addressable market opportunities for skin and pneumonia.
As you can see on this next slide we expect that the community generated business will reach parity with the hospital drive business in terms of prescription days of therapy by the end of 2023.
Based upon our internal analytics from the first three years of commercial launch combined with these market share projections, we expect that they will be consistent and continued year over year growth in both the hospital and community.
In summary.
Given the dosing flexibility of a once daily well tolerated broad spectrum oral and IV formulation.
We continue to focus on our two pronged approach with a dedicated hospital team focused on early hospital discharge and our community team focused on hospital avoidance.
We expect continued year over year growth in both the hospital and community settings.
Hospital promotion is fundamental to our business given the influence it has on the outpatient setting of care.
Revenue growth here. However is more closely tied to the return to normal in terms of hospital access formulary reviews and elective surgical procedures.
The community setting will see revenue and prescription days, if there is the growth a little faster year over year as we add more promotional effort broaden our geographic coverage and penetrate more deeply into the primary care and podiatry prescriber base.
Our focus in both settings remains gaining new trial lists and repeat usage by building awareness and establishing trust and credibility with physicians, who are saving lives and treating serious community acquired infections, each and every day.
And with that I'd now like to turn the call over to Randy.
Thanks, Adam.
The development manufacturing and medical affairs teams had a very productive 2021 across multiple fronts with a number of upcoming an exciting 2022 deliverables.
Plan for our commercial community expansion just described by Adam In addition to our hospital focused medical team Medical Affairs ran a pilot program of a small number of targeted community based medical science liaison or MSL to engage in scientific exchange with community health care providers.
[noise] excuse me they were strategically placed in densely populated metropolitan areas with a large presence of primary care practitioners and supported medical education.
Feedback on this team and the interest of primary care physicians and education clearly supports the additional M. S. L that will be hired in 2022 and parallel to the planned commercial community expansion.
As Evan noted earlier in this call. We are very pleased with the progress we have made to date under our project Bioshield contract last year. We were excited to announce that BARDA accepted delivery in June of the first is our procurement as well as the activation of an additional option in September that led to the expansion of our project Bioshield work and increase the overall valley.
<unk> of the contract by $19 million.
Together with BARDA, we furthered the work performed for both the anthrax treatment and Pep development programs under the animal rule.
Efforts last year, we're focused on evaluation of the in vitro activity against multi drug resistance facilitated through ACO strains as well as the pharmacokinetics of amount as a matter of cycling that both Rabat and nonhuman primate animal models for inhalation anthrax the data from the PK studies support to pilot animal efficacy studies, the first of which is in.
<unk> and is targeted for the fourth quarter of 2022.
Our amended BARDA contract formalize the trigger for purchase of the second is our procurement value to $38 million. Upon BARDA has received a positive top line data from this rebate pilot efficacy study.
We also continue to partner with BARDA to advance our FDA post marketing commitments as a reminder, this work includes reimbursement for the following activities.
First our ongoing adult pneumonia post marketing study, which has been enrolling since February of 2021.
Second the pediatric program in its entirety, our first pediatric study exploring the pharmacokinetics of Omadacycline in children and adolescents ages eight to 17 was recently initiated.
And finally, the five year Microbiological surveillance program, which has just completed its third year of note. There has been no observed development of new Xyrem resistance to date in any of the indicated pathogens.
We are also pleased to report on the continued progress in 2021 of our onshore program for the manufacturer of desire in the United States.
This work has positioned us for a number of important milestones in 2022. Most notable is the U S based production and commercial availability of new Zara tablets, which we anticipate in the second half of this year.
Our U S based supply chain for a commercially available antibiotic is particularly important in this time of pandemic planning and preparedness.
Beyond project, Bioshield and consistent with our commitment to build news hours long term value. We continue to actively pursue lifecycle initiatives for new Xyrem in 2021.
These included a label expansion with the oral only pneumonia indication generation of data to support the extension of the room temperature shelf life of new Zara and <unk>.
Clinical activities related to government research and other areas of scientific interest.
An important an additional lifecycle expansion effort includes our continued commitment to advance the development program for MTM pulmonary disease caused by Mycobacterium abscesses, including non clinical and clinical studies.
FDA granted new Zara orphan drug designation for the treatment of N T M not only for obsesses, but for all subspecies of N T M, including Mycobacterium Avium complex or Mac last October .
This designation from FDA further reinforces and validates the important unmet need in this underserved patient population.
[noise] several important LTM non clinical studies were completed in 2021 first amount of cycling demonstrated potent in vitro activity against multiple multi drug resistant.
Obsesses clinical isolates.
And that is likely to also demonstrated potent bacterial sidled efficacy and in in vivo mouse model of lung infection against four micro bacterium obsesses strains, including three clinical drug resistant isolates.
Bacterial sidel potency for a tetracycline is not common but speaks to our confidence in the future clinical utility of Omadacycline and this devastating lung infection.
Further despite the extended duration of exposure in these studies resistance was not observed would suggest a very low risk with a development of resistance for Omadacycline and important clinical feature at a lung infection that requires chronic antibiotic therapy.
Finally in an in vitro combination study omadacycline. It did not exhibit antagonism with any of the 14 different antibiotics tested and exists exhibited synergism against several M. Obsessive strains when combined with antibiotics from several different classes.
We believe these data provide meaningful scientific information to physicians, who in the absence of any FDA approved anti biotic must choose the best possible antibiotic combination regimen for such a devastating bacterial pathogen.
[noise] enrolment in our parent and protects U S based randomized phase II study of pulmonary at T. M infections caused by M. Obsesses began in 2021.
This is a rare disease enrollment is estimated to take approximately two years. Most sites are now initiated and enrollment is progressing as expected.
This is the first placebo controlled study in this chronic and rare disease and will provide a much needed clinical data set of efficacy and safety data and micro bacterium obsesses patients. This study along with the non clinical studies will be the foundation for our next discussion with regulatory authorities.
In addition to power to X progression of the development program Scientific research and clinical case series continued to be published for example at I D week 'twenty 'twenty. One there was a poster presented showing data from 31 NTN patients in an ongoing real world study supported by Powertech are treated for up to 20 months with once daily oral news iron.
This is a real world study Omadacycline continues to be safe and well tolerated with good patient outcomes.
Most recently the results of an investigator initiated study demonstrating the potent activity of new Zara and a dynamic hollow fiber model of Mac pulmonary factory was published in the journal of anti microbial chemotherapy desired demonstrated considerable efficacy and potency against Mycobacterium avium as seen in the figure on the left of this.
Hi.
Importantly observations from this study showed that the highest exposure of Omadacycline study demonstrated comparable potency as that team with a three drug standard of care regimen and again about a cycling was bacterial sidel in this study.
Given these encouraging findings powertech plans to conduct further research evaluating the activity of Omadacycline and other non clinical studies that gets back.
Efficacy and Tolerability challenges associated with certain existing standard of care antibiotics used to treat Mac pulmonary infections further highlight the need for the development of novel antibiotic treatments for the estimated 100000 cases of MTN pulmonary disease caused by Mac in the U S, which is 10 times more prevalent than Mycobacterium abscesses.
In addition to N T M data generation and other important scientific areas continued to expand through 2021 and will continue in 2022 through multiple avenues.
We remain excited about the level of interest in a matter of cycling leading to ongoing research collaborations with several government and academic laboratories focused on generating data in diseases, such as malaria wound blasts sexually transmitted infections bio threats and other difficult to treat pathogens of interest to the military.
As Evan noted we were excited to report that our partner in China XI lab received approval from China's National Medical products administration or N N P. A of news IRA for the treatment of adults with pneumonia and skin and launched new Xyrem in December of 2021, and the greater China region with its co promotional partner Hanmi.
<unk>.
We believe that approval and launch in China as well as the additional data generation opportunities being pursued by power Tech will further broaden the potential for new Zara to reach into new and clinically important patient populations.
Antibiotics are needed globally, and we continue to battle the crisis of anti microbial resistance is iras and important clinical option for physicians to save lives and serious community acquired infections, where resistance is of concern.
At this point, we would like to open the line for questions operator.
Thank you at this time, we will conduct a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is any question queue you.
You May press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing this darkies once again Thats star one to ask a question at this time one moment, while we poll for our first question.
Our first question comes from Ed Arce with H C. Wainwright. Please proceed.
Hi, Good morning, everyone. This is Thomas Yip asking a couple of questions for Ed Congratulations on a great quarter.
First over.
Over the past couple of slides can you go over the market opportunity.
T M <unk> caused by Mac compare to the opportunity of MTM caused by Mycobacterium abscesses, they estimated at a $1 billion.
Yeah, Hi, Thomas this is Randy so you've seen in our corporate deck and you've heard us speak before an evident mentioned in his opening remarks that we have done a pretty thorough market assessment for micro bacterium obsesses and believe that in the U S. The market is about $1 billion opportunity, what we know for Mycobacterium Avium <unk>.
Lex or Mac is that the number of patients is about 10 times larger.
In the U S from a Mac that it isn't micro bacterium obsesses.
So that you can assume that the market opportunity is significantly larger than the $1 billion market opportunity for mycobacteria obsesses. The other thing that Thomas it's Evan.
Other thing that we've learned and in terms of our market research that that there are several other regions in the world.
Have a.
The prevalence of Ah <unk>.
T M micro bacterium obsesses disease that is comparable to.
What we see in the U S, specifically, Japan, and South Korea, together and we are exploring as we've mentioned before in the past opportunities there to think about what a development path might look like we also see that setting as a potential springboard to potential strategic partnerships as we look to <unk>.
Sure that.
There is the right amount of support for a registration type of program in those particular regions.
Understood and then perhaps on the clinical side.
For N T M back what would the plan be to enter the clinic is it possible to start a new study in 'twenty to 'twenty, two and once the overarching clinical strategy here.
So we continue to evaluate the potential clinical strategy for Mac. The hollow fiber data is relatively recently so we're working through what our clinical development program might look like we know that the next step is to do some in vivo work in Mac to ensure that the in vitro potency that we saw in the other hollow.
Fiber model translates over into an in vivo model, but we'll come back to folks with the plans for any clinical program for Mac and as Evan mentioned earlier, the Mac opens up potential discussions with partners outside the U S. As well so we'd like to think about Matt from a global perspective, I think it is important to note also that.
In these particular.
Orphan disease settings.
That publications continue to drive I think physician knowledge and comfort with considering a new innovative antibiotic options for this type of devastating chronic disease. We're very encouraged by some of the real world evidence that Randy mentioned that Xyrem has been used in these particular settings.
For a daily oral therapy for upwards of two years with a very good safety and Tolerability data and we believe that our commitment here to the physician community to enter patients is to publish as much as we can both on any vivo in vitro as well as a clinical utility basis for both.
N T M obsesses and now that we have this Mac data, we will be exploring opportunities to further the scientific knowledge base in Mac pulmonary disease as well.
Understood.
We look forward to there was a new nuclear clinical data.
And then perhaps one question regarding to the <unk> other than the impressive U S growth.
<unk> seen and then projected for 2022.
As part of your 20.
2022 guidance.
Two millions and royalty and collaboration revenue.
This primarily royalty revenue from xylem and what's your outlook in the Chinese market.
Yeah. It's there did you want to take that.
Sure happy to I'll address maybe the financial impact and then we can talk about there Michael.
Yeah.
The $2 million in royalty revenue.
Is that related to so I'd say all right and then you asked about that problem.
Product upon the market.
Amaral.
And and.
And then do you want to take it.
Alright, and as it relates to the XI milestone excuse me by loyalty.
As you recall, we entered into a loan agreement with Highbridge capital.
On the web.
Bye bye.
Q that lender until we've been paid alone and call, which was after I've been under $60 million, we executed late last year.
The Thomas.
The launch in China as Randy noted got underway in December of 2021.
We know that does I had is working hard to get the product listed on the.
And our D L a listing.
Schedule in China, and I think they've guided somewhere within the next year that that will be accomplished and we do think that the commercial Ah <unk>.
Success story there will.
I think it will accelerate once that listening has actually taken place.
Understood.
So much for taking my questions are looking forward to a great year.
Thank you very much.
Once again, ladies and gentlemen to ask a question. Please press star one on your telephone keypad. Our next question comes from Bert Hazlett with B T. I D. Please proceed.
Yes. Thank you congratulations on all the progress you've covered a lot of the topics I was going to ask about but just could you give a little bit more with regards to the timing and the scale of this.
The second phase of expansion into primary care and does the.
Characterization of it is a second phase of expansion mean that there's potential for a third phase and are any other structures.
Maybe corporate.
Hartner ships or otherwise.
Any of the structures for expansion in consideration at all thank you.
Adam you want to take that.
Yeah, Thanks, but I am.
So we're gonna put 14th as as we mentioned we put 40 representatives in we'll probably start that around the middle of this year.
You know one of the things that we know is that it takes approximately 12 months for a newly minted.
Community sales representative to reach profitability.
Actually in the field so growth this year.
Driven by the success of the last year's reps, who basically now funded themselves and have enabled us to continue to expand our planning is if things continue to go to the plan.
We will look to expand every year for the next three years until we get to that 160 number at around about the same sort of time, which is mid year each year.
Okay.
Again, just following up what were there any other structures contemplated other than a build out internally.
Yes of course, we have looked externally and we still continue to look externally.
Ideally if we had the resource we would like to get there quicker one way to do that as you know, but it is to look to partner. The fact remains that there are very few companies out there that there's only one.
Product in their bag.
In a community setting it's not an area right now where there are a lot of available field force is looking for additional products, but he certainly something we've considered and would consider continue to consider because obviously it accelerates our growth.
Revenue projections, while we can't predict Bert is what's going to happen.
And I believe this.
Is is evolving quickly here that the COVID-19 pandemic as it falls into becoming more endemic will open up opportunities for both the hospital as well as from the.
Community side.
If those events lead to more acceleration in terms of our forecast and our overall commercial performance success as we've seen to date.
Obviously, we'd like to bring forward.
More expansion on the community side as our capital structure allows for but one of the things that has been important to us as is to be disciplined with regards to this and we'd like to see as we've said before future expansion is being driven by the success of what we're currently planning for this year's expansion. Yeah. I think one thing I would add Anthony is that a community.
Pension is being done under.
Under the shadow of coffee it all the way through.
We've never experienced what it's like to promote news or in the community without that sort of a shadow.
In place unlike what happened with us in the hospitals, where we did get 12 months before Covid came along and we know that we were we're certainly.
But growing fast or pre COVID-19 .
We've grown post COVID-19 .
As Evan alludes to ship the environment improve my.
<unk> enable us to expand quicker.
Well, thank you for that congratulations on the progress. Thank you.
Once again, ladies and gentlemen to ask a question at this time that star one on your telephone keypad.
There are no further questions in queue at this time I would like to turn the call back over to Evan Loh for closing comments.
Thank you operator in closing I would like to note today that we are facing the so-called silent pandemic due to the rise of anti microbial resistance around the globe.
It is real it is good.
Getting worse.
And.
It clearly appears inexorable.
We've just experienced from the current Covid pandemic in the modern world pandemic start regionally, but can't very quickly become global.
That carrier do not care about regional borders and are happy to use humans as their host for both replication and transport.
Accordingly.
So not only lifesaving globally, but also vital to U S National security.
Aerotech and use are ideally positioned to help address not only the EMR challenge, but other bioterrorism pathogens that could threaten the lives of all Americans. We look forward to keeping you apprised of our continued progress goodbye for now.
Thank you. This does concludes today's teleconference. You may disconnect. Your lines at this time and thank you for your participation and have a great day.