Q1 2022 Cara Therapeutics Inc Earnings Call

Yeah.

Good afternoon, My name is and I will be your conference facilitator.

We'd like to welcome everyone to Cara Therapeutics first quarter 2022 financial results and update conference call.

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Right any background noise.

After the Speakers' remarks, there will be a question and answer session.

If you would like to ask a question. During this time simply practice start and the number one on your telephone keypad.

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Please be advised that this call is being recorded.

I would now like to introduce Irish Francisco, Oney, and <unk> head of Investor Relations from Cara Therapeutics.

Francesco you may begin to go on.

Thank you Manny and good afternoon.

Just after market close today.

A press release detailing all the corporate progress and financial results for the first quarter in 2022.

The press release can be found on our website at www Dot Karen Therapeutics Dot com.

You May open this into a nice lifestyle and replay of today's call on the investors section of the website.

Participating on today's call I'm Christos.

Karen President and Chief Executive Officer.

Tom Brian Harris, Chief Financial Officer and Dr.

Cherokee's Chief Medical Officer.

Before we begin reminds me of the statements made on today's call regarding matters that are not historical facts are forward looking statements within the meaning.

Private Securities Litigation Reform Act of 1995.

Examples of these forward looking statements.

Statements concerning the company's ability to successfully commercialize is unchanged.

And to put that in.

The 20th launching plans future regulatory submission and potential future regulatory approval.

Company's ability to obtain and maintain.

Our wage and adequate reimbursement purposes infection.

Performance of our commercial partner.

Uh huh.

Pardon me.

Any sense of enrollment and data readouts from the company's plan uncle in clinical trial.

Potential results of ongoing clinical trials timing of future regulatory and development milestones for the company's product candidates.

Pencil for the company's product candidates to be alternatives in the therapeutic areas investigated the size and breadth of.

Okay potential markets for crisis management, the company's expected attach rates and the potential impact of COVID-19, and the company's commercial launches clinical development and regulatory timelines.

Yeah.

Are subject to risks and uncertainties actual results may differ materially from those expressed or implied by such forward looking statements.

These are described more fully in Cara therapeutics filings with the Securities and Exchange Commission, including the risk factors section of the company's report on Form 10-K for the year ending December 31st 2021, and its other documents subsequently filed with.

Well furnished to the securities gains.

And again.

All forward looking statements contained in todays call.

As of the date on which they want me Cara Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist.

After the date on which they were me with that I will now turn the call over to Chris.

Thanks, Irene and good afternoon, everyone. The first quarter was pivotal for Cara as we are now a commercial stage company moving our growth story forward.

First few weeks of portions of injections U S launch have proceeded as planned and all of our programs many of which we have recently detailed to you remain on track I will give some highlights on our encouraging progress in a moment.

Tom will follow with the financial update and after that we will be available to take your questions.

Cara Therapeutics has a unique condition focus and value proposition. We are building the world leader in pruritus, we see this as a differentiated value proposition and opportunity chronic pruritus is often a severe intractable problem for patients and a wide range of diseases and it.

Is underserved by currently used treatments.

This quarter, we continued to execute on our three strategic priorities, which we believe will put care on a firm path to sustainable growth.

Of course, our first priority is to maximize the commercial potential of course to the injection.

We are now in full launch mode in the U S. As you will recall the commercialization efforts in the U S are being led by our partner <unk> pharma, a leading renal pharmaceutical company in the U S.

But we are still at a very early stage of the launch so what we will share with you today as largely qualitative beginning in Q2, we will provide more quantitative data, which will paint a more detailed picture.

Now our primary objectives in the first four weeks of awards.

A have products shipped to wholesalers b have contract negotiations underway with the top dialysis organizations. She had D O systems updated with product pricing and reimbursement information to allow product boardroom D pivot the salesforce from disease awareness and patient identification.

To promote and courses of injection and E enhanced patient awareness to help speed them the launch trajectory.

Now I am pleased to report we are tracking to our expectations and are seeing very encouraging progress across all of these goals, let me elaborate.

First of course, <unk> injection is available to be ordered by dialysis clinics nationwide.

<unk> has been working diligently to ensure that the product pricing and reimbursement information and build it into their respective system orders can be placed.

That means a physician can prescribe it to a patient when they are identified as a candidate for the product and remember of course, you've injection reimbursement is in place via Medicare and need to dapple qualification now.

Now before has shipped product to wholesalers and wholesalers have started to ship product to dialysis clinics I am pleased to report that patients have received commercial product at this point.

Second Nephrologist are aware of course of injection and ready and starting to prescribe.

Since the launch meetings in March the before Salesforce has transitioned from patient identification to product promotion.

They are promoting portion of injection to positions advance practice providers and nurses.

And I am pleased to report that they have reached the majority of Hcp's at least once in the past four weeks now.

Anecdotally palpable excitement is also evident within the nephrology community around the introduction of this new breakthrough first in class product.

After the National Kidney Foundation meeting in March one Nephrologist real bad pursued injection is poised to change the treatment of Uremic pruritus.

And feedback from the field rides suggest similar tangible interest in this product.

Third patient outreach is expanding through new channels significant efforts have already been underway to raise patient awareness for pruritus in hemodialysis.

And as you know patients can be key drivers of demand for a product like pushes injection.

The latest activity is the first large scale education and awareness campaign on pruritus with chronic kidney diseases by the American kidney fund, which support from before.

That will pay off to all of this work is that patients finally can receive a treatment for a long standing unmet need.

And I would like to remind you that this is an underreported underserved patient population.

We are confident that the addressable market is about 40% of the total hemodialysis patients. This is a baseline of roughly 200000 U S hemodialysis patients with moderate to severe pruritus associated with chronic kidney disease. They are looking for answers and our product can provide one.

Looking ahead in the second quarter, we expect to share more quantitative metrics for you to track our progress we will disclose net sales a portion of the injection as well as carriers of revenue or the profit share. We will also update you on the units shipped from wholesalers to dialysis clinics.

This is a really good proxy for end user demand so dialysis clinics do not carry much inventory.

Now turning to markets outside the U S. The opportunity in Europe is squarely in our sites <unk> is now the first therapy available in Europe for the treatment of pruritus in hemodialysis patients on April 28, we announced <unk> was approved by the European Commission the U K.

Followed with the with this approval the next day.

As we mentioned before the EU approval triggered a $15 million cash milestone payment from our ex U S partner, the 4% is medical care renal pharma this payment adds even more strength to our balance sheet.

We expect the launch it could prove the by our partner in the EU to commence in the second half of 2022 and stay tuned.

Now, let's turn to our second strategic priority of advancing our oral portion of the phase III pruritus programs for non dialysis dependent advanced chronic kidney disease and atopic dermatitis. These pivotal phase III oral programs have started and are moving forward as.

Got it.

Now just to remind you these programs address significant markets in the U S. About 400000 patients have moderate to severe pruritus with advanced kidney disease.

In atopic dermatitis about 12 million patients suffering from pruritus now we believe we have the right programs to capitalize on these opportunities. There are no FDA approved therapies for poison either disease area. A currently used treatment have been insufficient.

As you recall, our third strategic priority is to expand the clinical utility of oral course, silver in other therapeutic areas, including <unk> and chronic liver disease.

And our next catalyst is approaching quickly.

These two proof of concept trial from the <unk> is on track to report topline data in the second quarter.

This trial is looking for an efficacy signal to establish a proof of concept clinical benefit in treating pruritus in Natal <unk>.

We will use this data to inform the development path in this indication.

In addition, the phase two data readout in primary biliary cholangitis associated pruritus remains on schedule for the second half of this year.

Simply put.

Our pipeline is progressing well.

Our approved product is starting to reach patients. So we are accelerating to full scale of care.

Now I'd like to turn the call over to Tom with details on our first quarter results over the Utah.

Thank you Chris.

As a reminder, the full financial results for the first quarter 2022.

It can be found in our press release issued today after the market closed.

Cash cash equivalents in marketable securities at March 31, 2022.

$209 6 million compared with $236 8 million at December 31, 2021.

The decrease in the balance primarily resulted from $25 5 million of cash used in operating activities.

For the first quarter of 2022 net loss was 27 7 million or <unk> 52 per basic and diluted share.

Compared to a net loss of $22 3 million or <unk> 47 per basic and diluted share for the same period in 2021.

Total revenue was $4 8 million for the first quarter of 2022 compared to $1 9 million during the same period of 2021.

The $4 8 million in Q1, 2022 related to Cortina injection commercial supply could be for pharma.

In Q1, 2021, the $1 $9 million related to license revenue earned from Mariucci pharmaceutical company from.

And the first initiation of a phase III trial for Uremic pruritus in Japan.

In February 2022, the company had not recorded any cost of goods sold related to commercial supply revenue is all inventory costs were incurred prior to receipt of regulatory approval of course, who injection.

Currently and accordingly, <unk> expensed as incurred.

In March 2022, with a company record and commercial supply revenue of $2 5 million with associated cost of goods sold $2 1 billion.

As these inventory costs were incurred subsequent to the receipt of the regulatory approval pursuant injection.

R&D expenses were $21 3 million for the three months ended March 31 2022.

Compared to $19 1 million in the same period in 2021.

The higher R&D expenses in 2022.

Principally due to increases in direct clinical trial costs and payroll related costs.

G&A expenses were $9 3 million for the three months ended March 31st 2022.

Theres, a $6 4 million in the same period of 2021.

The higher G&A expenses in 2022.

We're principally due to an increase in stock based compensation expense.

Which includes an additional $1 6 million compensation expense related to the modification of the company's former Chief Executive Officer.

<unk> awards in 2021.

As well as an increase and increases in payroll related costs.

Based on timing expectations and projected costs for <unk> clinical development plans Cara expects that its existing unrestricted cash and cash equivalents and available for marketable securities as of March 31, 2022.

Including the 15 million regulatory milestone payment.

And in April 2022 upon European Commission approval for <unk> will be sufficient to fund is currently anticipated operating expenses and capital requirements.

The first half of 2024 without giving effect to any potential milestone payments under existing collaborations for product revenue and the commercialization stage of injection.

With that I will now turn the call back over to Chris.

Thanks, Tom.

In summary, we are optimistic with the start of this year.

Our continued execution propels us down the road of significant value creation. The launch of course, you've injection is progressing well, we set our expectations and met them.

Hey, the product can be ordered by all dialysis organizations to reimbursement is in place three physicians know the benefits of the product and we're starting to prescribe and lastly patients are starting to receive placebo injection.

In the EU and U K <unk> is now approved providing a second significant market opportunity. The EU rollout is expected to start in the second half of 2022.

And the associated milestone payment of $15 million extends our cash runway into the first half of 2024.

And we are executing to deliver on our pipeline.

The oil programs have potential to create a platform product with a much broader market opportunity across many diseases.

It'll phase III programs in <unk> and advanced <unk> are underway the phase II proof of concept data in the otology prosthetics is expected in the second quarter.

Our PBC phase two data remain on track for the second half of 2022.

Now our strategy is to be the leader in bringing new treatments for pruritus to market in under realized opportunity of millions of patients. We have taken important steps this quarter to make this happen.

Now with that Tom Joe and I will be happy to take your questions.

Operator over to you to open the call up for questions.

As a reminder to ask a question you will need to press star one on your telephone.

Your question press the pound key please standby, while we compile the Q&A roster.

Your first question comes from the line of Joseph Stringer.

From need to have and company. Your line is open.

Hi, good afternoon, thanks for taking our questions.

Our question two questions from US the first one is on IV <unk>.

You mentioned that the addressable patient population you mentioned there.

40% or so of dialysis patients with moderate to severe pruritus I'm just wondering if.

If you could provide some additional color on.

There are patients that you believe that you can reach.

Response to etch or.

Any additional thoughts on how you think about those in terms of.

The initial patients for <unk>, and then sort of working your way up the tier.

To get more patients.

Yes, Jamie nice to hear from you.

Certainly so.

If you look at the literature, we see roughly 65% of of kind of hemodialysis patients in the U S suffer from some form of edge and again in the literature about 40% suffer from moderate to severe.

Writers.

Are undergoing dialysis and you kind of translate that now with in practice in the real world and we're hearing very similar numbers in terms of the addressable population.

So the 40% Joey is really what we view as the addressable market, there's roughly 500000 patients undergoing dialysis in the U S and about 200000 of them suffer from kind of this moderate to severe form of pruritus that would be a candidate for courses injection and you know.

Add Julien I mean, the Nephrologist agree that this is really a significantly under diagnosed.

<unk> among patients and that's really due to the lack of effective treatment options and the majority of Nephrologist. So we talked and we're hearing it from the field as well so they're gonna actively start to identify these patients now that they realize that there is a solution available. So so we feel pretty good about that number.

Okay, great. Thanks for taking our question you Gotta Joseph.

Your next question comes from the line of Jason <unk> from Bank of America. Your line is open.

Oh, Hey, good afternoon. Good evening. This is chi on for Jason Thanks for taking our question.

Maybe just a quick one.

Pinterest.

You know, what's been getting cautions of startups like expectations for second quarter, we're just going to be the first quarter. You know Carol report net sales have royalty contribution and whatnot.

Thanks, Tim.

Some color in terms of you know.

<unk> will start what is the one time, what do you expect from manufacturing fee and what do you expect from <unk>.

The accounting purposes. It looks like if you can lay it out for us I think.

Now there is kind of be in $15 million.

Mouse Chow expect a problem you expect to receive from <unk>.

How are you going to recognize that from a price perspective and in the rest of it is it kind of be from the <unk>.

Underlying demand if I pursue launch in the U S. And then hoping you can provide some color you know you recognize a commercial supply revenue of about $4 8 million in the first quarter and just sort of the manufacturing fee that you are considering I think you said that a recurring item. So just think about from that.

From a sales side modeling perspective should we keep is that going to be a separate item is the fact that it would be a recurring item.

Okay.

Wrapping your picture patient of course, okay. So if you can sort of help us understand the different components of our second quarter that'd be helpful. No no doubt.

I mean, let me, let me first alternative comp or some of the accounting on the P&L and how we're going to account for that but what I would stress.

Is what we intend I mentioned, some qualitative things around the early days of the launch of Q2, we will obviously provide much more quantitative metrics in the three metrics that we're committed to to provide just reinforces as one total net IV core soup sales.

Two will be core B cara's IV pursue those revenue and then the third which I think is really important because it gives transparency on demand generation, that's going to be aggregate wholesaler sales volume to customers.

We do believe this is a really good proxy for end user demand as I mentioned before dialysis centers don't carry a lot of inventory. So just wanted to be clear and those are the three metrics that will track consistently quarter to quarter beginning in Q2, let.

Let me turn it to Tom P&L accounting standpoint, hopefully you get those questions from chip.

Sure. Thanks, Chris.

The question was more on the transparency related to revenue and in particular on the on the commercial supply.

Related to.

The first one the license to $15 million milestone that'll be separated out that as part of our license and milestone license that milestone.

P&L line items will that'd be separating out.

As Chris just mentioned.

Transparency perspective, we will be showing on our P&L.

<unk> split revenue, which also being a separate P&L line and that will be disclosed in pursuit of injection net sales so you'll be able to see the comparison of the profit split process.

Jackson net sales decline.

And I think the first question if I got it right is related to <unk>.

Commercial supply revenue.

And so the commercial supply revenue will also be broken out separately.

And you had mentioned some more forecasting and modeling purposes, so that's related to supply them and ship over to a partner before.

And so.

As the products.

Demand starts to abate, we will be sending products to ensure our commercial supply to sell through the channel so that will be.

That will be transparent in our P&L on a revenue line item and the associated cost of goods sold that you'll see will be associated.

With that commercial supply.

P&L line, so you'll see from our disclosures this quarter to transparency between what was actually encouraged with the relative cost of goods sold starting in March versus anything that was expense. Prior so hopefully that answers all of your questions.

Now this is very clear. Thanks, so much we were getting some questions and we are aware of that as I said, so the spotty.

And just hoping to set up like get some clarity, hoping that you know we will have less body.

[laughter] numbers.

Looking at second quarter. Thanks, so much for the help.

And that's it for today.

You guys at our conference this week.

Looking forward to thank you. Thank you.

Your next question comes from the line of Danielle <unk> from Jpmorgan. Your line is open.

Good afternoon, guys. Thanks for taking our questions. A couple from me first with a little bit of over one month of commercial launch behind us what can you tell us about the initial activities.

Indicate that significant uptake is still an expectation for <unk> injection.

I have a follow up.

Yes, Daniel I will tackle the first one so so here let me just tell you specifically the first couple of weeks of the launch.

I mean, the <unk> team has really worked diligently to ensure that the product pricing reimbursement informations loading are loaded into the systems. So orders can be placed and deepwater ship product to wholesalers and wholesalers have started to ship product to dialysis clinics. So most importantly patients are.

Receiving commercial product Saturday and then the second thing.

Around execution I mean since the launch meetings in March the <unk> sales force has transitioned from patient identification to product promotion and they are promoting cushing objection to physicians and advanced practice providers of nurses.

And I'm really pleased to report that they have actually reached the majority of these hcp's at least once in the past four weeks.

And anecdotally I mentioned before in my prepared remarks, there's a high level of excitement.

A high level of excitement and then lastly.

Really up the efforts in terms of activating and engaging patients. We believe both before homecare believed that the patients are key drivers of demand.

So.

A lot of activity around activating patients that I mentioned again in my prepared remarks.

The campaign that they just launched with the American kidney fund would support from before so.

From my standpoint, and what we're seeing in the marketplace is quite encouraging.

There is a lot of excitement around the product, we're seeing ordering and we obviously expect that to accelerate.

In the coming weeks.

Great and in terms of activating and engaging this patient is it possible for you to quantify for us the potential.

<unk> contribution to that addressable patient population that can be driven by raising this patient awareness.

It's hard to quantify at this stage what I can tell you. It's a multi prong demand generation program, obviously bottoms up working with Nephrologist advanced practitioners as well as nurses and the patients entered the top down approach working with dialysis organizations. So the <unk> team its hard to put a number on.

On the kind of value creation of each of those.

But the team has done a very nice job, leaving no stone unturned in the marketing efforts, that's what I can tell you.

Okay, Great and then on the European launch can you provide us some color on how we should think about that launch for <unk> the reimbursement dynamics across different countries and then the economics involved with the JV.

Yeah, So I'll, let Tom tackle the JV question. If you allow me Daniel but let me, let me talk a little bit about Europe again early days I mean, the great thing is we have improved product.

Bulker Peruvia, we announced April 28.

The European Commission and overall, if you look at the opportunity in Europe , you're looking at about 300000 patients.

Undergoing dialysis in Europe , and we're hearing kind of the similar sort of prevalence for an addressable population of about 40% of that that population would be addressable for a drug like <unk> and I'd be remiss.

Medical My Chief Medical Officer, sitting next I'd be remiss not to tell you that there is a tremendous unmet need no approved therapies for these patients in Europe such as.

In terms of how you know what we've guided to before is it.

Launch will occur sequentially with countries beginning in the second half of 2022, Germany will traditionally the first country to launch in Europe will be no different.

The Peruvian.

Reimbursement is different.

Europe is not one country. So so.

Virtually it's different across the different countries, but again in terms of sequence of Orange in Germany. We will go first in the second half of this year and then the rest of the Western European countries will follow suit in the 2023. So we are quite excited about the opportunity in Europe again, similar dynamics in the U S. In terms of high unmet need no.

Proved therapies and the <unk> team has really done a good job preparing the market, it's not like Oh, well they've been they've been preparing the European market really at the same time, they've been working in the U S market. So we're quite excited about the potential there.

In terms of the JV, Tom maybe you can just cut the data about the JV with York with sure no problem. So Daniel D. As we mentioned earlier, there will be a $15 million in cash milestone which will receive.

April improved leverage.

Program related to the economics ensure traditional royalty based agreement.

The U S, where it's based off of net sales.

The royalty that tiered double digit royalty structure based off of net sales.

Outside of the U S.

Great. Thank you very much.

Thanks Daniel.

Your next question comes from the line of David Amsterdam from Piper Sandler Your line is open.

Hey, Thanks, I joined late so apologize if I missed.

These topics, but just on the launch.

Can you just talk about.

Who you think are the Ah <unk>.

Deal initial patients.

Or maybe I'll ask a different way can you just talk about.

Where is sort of the low hanging fruit.

In terms of pace.

Patients is that those who have already.

<unk> been on say oral antihistamines or gabapentin noise or.

How is your partner thinking about.

That's number one and then number two.

Can you just talk about pricing in Europe .

How do you think it's going to shake out relative.

To the U S. I mean to dampen the bundled notwithstanding but at least initially how how do you think that will shake out.

Yes, David Nice to hear from you let me tackle the last question because it's a bit.

More straightforward.

The price in Europe , obviously, we've just gotten approval.

The floor will work on pricing in the European countries with the government.

Ladies over the course of the next the next X number of months.

In terms of the expectation there I would tell you.

Obviously, it's going to be lower than the U S. In general to the degree of magnitude of how much lower we don't know yet I think that's work to be done by the <unk> with the value proposition again with the with the authorities in the European countries.

Your first question is a really interesting one on on patient segmentation.

And again, there's been a lot of market research and a lot of work done by the <unk> team and the care team on patient segmentation.

There are a lot of patients that have <unk>.

Basically tried and simply resigned to the fact that there is no great treatment alternatives. So we really believe that.

Activating these patients to tell their nephrologist and their nursing staff that Theres a solution now available we believe that they are low hanging fruit and what we're hearing in the marketplace is that once it's kind of like the marketing adage of magnify the problem loan resolution.

Really.

Talking about the solution with these patients they have been very active now engaging within nephrologist. So I think you know instead of getting into individual segmentation. That's what we believe.

Really it's a patient population that will be the initial patients to get on drug.

Okay. That's helpful. Thanks.

You guys gave.

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Your next question comes from the line of Annabel <unk> from Stifel. Your line is open.

Hi, this is calling on for Erik Congratulations on all that development and thanks for taking my question.

Toyota prosthetic that proof of concept data.

Well that's being reported.

Similar fashion.

Sorry about that title.

Pre dialysis study.

Any benchmark for Natasha if that we should be.

Yeah.

Some of the subs.

With placebo.

You need to see over placebo.

Alright.

Significant.

If successful would you be procuring.

The programs are you said data.

With all this activity in Europe .

And then second question is do you expect R&D expenses to increase throughout the quarter or so.

In a similar range as the fourth quarter.

You got it all have contact with the second one if you allow me, but let me turn it to.

The doctor can solve the supervisor the mortality or a set of assumptions.

Thank you for your questions.

We tackled the first part of it we will be sharing the data as we typically have done and with top line results.

For the study in this quarter pretty cute.

You were asking about benchmark.

And the counterpart of CDK.

To date, there has not been any robust placebo controlled study and to be able to glean on what the placebo response.

Behave like.

We will wait for our data.

And.

They can see what the placebo when the classic really nothing anything to speak to the unmet need.

Very little research.

He knows and thank you ladies and gentlemen.

So we look forward.

Okay.

I mean, you will occupy expectations.

Data in the next step.

As a small proof of concept study, we are expecting to see a numerical separation from placebo.

What we also would like to see is a consistent pattern of efficacy as we have seen a couple of points I think it would need areas.

On speed of action and sustained out to the eight week, we'll wait for the data reviewed comprehensively and then take it from me on what the mix it could be in the development plan.

Great and on the R&D expenses, Tom maybe just speak to the yes sure. So we don't guide on R&D expenses on a quarter by quarter basis.

What I would suggest and what I would recommend is.

We didn't provide guidance today.

Turning to our cash runway.

Which.

Carey's tour when comparing our ongoing operating expenses and development expenses into the first half of 2024.

And that does not take into consideration any.

Revenue associated with crossing the injection. So I think from that perspective that should help you get a sense of what we're expecting from a cash burn over into the first half of 2024.

Good good.

Helpful. Thank.

Thank you Youre welcome.

Your next question comes from the line of <unk> Kulkarni from Canaccord. Your line is open.

Good afternoon. Thanks for taking my questions. The first is on the launch and the second is a clarification.

It's good to hear that your partners launch is tracking below your expectations.

It's still early days do you have reimbursement, but if there's been any nitpicky pushback against the use of course to IV what have those been if at all.

This smart trickier from yet no we have not heard any pushback in fact that to reverse.

Yeah, I check in with the <unk> pretty much daily.

And I think the general theme is.

Excitement.

There hasn't been a lot of innovation in the CTV space in dialysis to begin with.

So a lot of excitement that there is a solution now.

And that's the general theme.

Understood and then the clarification you mentioned the inventory dynamics the way they work in dialysis clinics. So just wanted to clarify that on the $4 8 million of commercial supply revenue that shipping was close to actual put through the month.

Yes, Tom I'll, just I'm, sorry is that $4 8 million.

$4 8 million since Mark do you mind, just repeating the question.

The question was the $4 8 million, how does that shipping, but our commission work relative to the actual pull through demand.

Okay. So the way that works.

It is related to shipments to our partner <unk>.

Okay. So that's commercial supplies business in Q4.

From there the actual shipments.

People will then shipped to the wholesalers.

And from that wholesalers ship to the dialysis organizations.

So the revenue that we recorded was the commercial supply.

The chain starting over to visa.

Let me give me ask it another way then roughly how many months of usage would that correspond to that.

That we don't disclose.

Thanks.

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Oh, we have our next question.

From the line of Orin Loopnet from each C. Wainwright your line is open.

Okay for the last second punch and I think I tried a couple of times.

Got it if I could just I could just.

Ask a little bit about I know Youre limited in what you can say it.

Before launching this but I think you can talk big picture about.

Essentially you know what is the commercial model for this product in this space. They haven't talked about it in a while you know you mentioned the top down.

Effort from you know dialysis centers I'm trying to understand who is really the touch point, that's going to drive it.

Guess awareness and utilization or are prescribing of this product does before really have two in a typical pharma since their launch have too.

Make individual nephrologist aware of and fully educated on this product before they even start thinking about prescribing it aside from patient activation.

Or given that you know these patients are actually seeing these dialysis centers every other day.

Are they really the driving force here such that assuming for that is for example already is intimately familiar with this product will be very soon are they reaching out to their affiliated physicians to sort of drive awareness of this new option that's available.

Yes, it's a great question on the entire buying process. It is a rather unique ecosystem, that's why our multi warrant that.

No.

Nephrologist have to prescribe the product yet so they have to be educated and made aware of the product in order to prescribe it to the patient can get it.

Dialysis organizations health demand generation by talking to their clinics and training their nurses et cetera.

Making it available some deals have a job to play and demand generation as well and then the third part of that is for patients.

Kind of similar to other typical prescription markets is where the patients educated and activate it and actually pass for a drug they tend to get it it works pretty similar here.

The buying process.

Across all of those demand levers is where <unk> has allocated resources.

And that's why you know putting my marketing at all and that's why I'm very keen on the.

<unk> to date as well as the acceleration in the coming months.

I guess to ask it another way is without understanding the rules and the laws of the land here intimately myself.

Is there a possibility that.

<unk> two <unk> patients to Fresenius centers routinely is going to.

Be receiving any materials coming in from the present ESI it not from a V for rep directly that is raised.

Raising their awareness directly about this product.

Being available to their patients that they kind of if there's any centers.

And thats the top down approach with <unk>.

Could help raise awareness and educate.

The community as well, but the <unk> team has taken a bottoms up approach as well, obviously targeting the 4000 or so nephrologist and as I told you, where we're quite keen on execution and as you probably know very well losses typically fail because execution was poor and where we're seeing very strong.

<unk> controls on key performance indicators on the execution side by V for as I mentioned before they've hit pretty much all 4000, Nephrologist and the first couple of weeks of launch it's a very strong execution number. So it is bottoms up top down approach that I think really caters to the eco.

System and ESL V dialysis.

Alright, it sounds like a drinking game bottoms up top down.

EU commercial dynamics.

Just also on that front, how concentrated is that market across.

The swap of the continent. There you know is it similar or do you have large corporate players across.

Our country or countries or are these government provided dialysis facilities or is it just totally fragmented between not think about it being similar to the U S market, Yes, I would say every country is a little different but I would tell you. It's a fairly concentrated market as well maybe different players in the U S and the individual countries.

But concentrated as well.

Alright, Thanks, I appreciate that.

You got it.

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