Q1 2022 PLx Pharma Inc Earnings Call
Okay.
Yeah.
Ladies and gentlemen, thank you for standing by and welcome to P. L X form its first quarter 2022 earnings conference call. At this time all participants are in a listen only mode. Following the presentation. There will be a question and answer session. Please be advised that today's conference call will be recorded I would now like to hand, the conference over to <unk>.
Janet Barth P. L X Vice President of Investor Relations and corporate Communications. Please go ahead.
Thank you and Hello, everyone and welcome to today's conference call to discuss <unk> 2022, first quarter financial results and business update before we begin let me remind you that our 2022 first quarter earnings release can be found in the Investor Relations section of our website at Www Dot P. L X pharma dotcom and Asics.
Zibet to the form 8-K, we filed ahead of this call.
This conference call may contain forward looking statements, including statements about our 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.
<unk> 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 release.
Available on our website and included as an exhibit to our form 8-K filed today with the benefit of those who may be listening to the replay or archived webcast. This call was held and recorded on May 13, 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 Giordano, Box's, President and CEO .
Thank you Janet good morning, everyone and thank you for joining our call today, we have two special guests joining our call. This morning, both experts in their field, who will offer their unique perspectives on vascular our first guest as Mike Valentino, our executive chairman and industry veteran.
With nearly four decades of experience running multiple consumer and pharmaceutical businesses. Mike is associated with the success of several major brands like Benadryl Baltar in EU and meat and eggs or second guess is doctor assets Ali a preventative cardiologist and influencer.
Based in Houston, who will discuss why he has adopted vast war as his aspirin of choice in his practice.
To start off the call Rita O'connor, our Chief Financial Officer, and head of manufacturing and supply chain will review highlights of our first quarter financial performance, including an update on our cash position Rita.
Thank you Natasha and Hello, everyone.
We're all our first quarter financial results reflected our dual efforts to build on the sales momentum for vascular and judiciously manage expenses quarter over quarter, we achieved higher sales growth and lowered our operating expenses. However, we are not immune to the extraordinary macroeconomic factors impacting businesses like ours.
Such as supply chain pressures and labor challenges.
Nonetheless, we remain unwavering in our mission to drive awareness and trial of that war, among consumers and healthcare professionals.
During the first quarter, we saw steady growth in dazzle or across a number of metrics in both consumption and revenue as we continued to establish vast war in the market.
Beginning with revenue, we realized net sales of $2 $1 million in the first quarter as compared to $1 $6 million in the fourth quarter of 'twenty. One a sequential increase of approximately 31%. This brings us to over $10 million in total net sales of vascular since its launch eight months ago.
Including the initial trade stock to 30000 retail stores nationwide.
Our first quarter sales reflected shipments to retailers in conjunction with promotion and display support during American heart month in February .
Net sales of the 81 milligram dose, which consists of a 12 count 30 count S. K U represented approximately 79% of total net sales in the first quarter.
In terms of retail consumption, we have seen steady growth in both units and dollars over the 13 weeks ended March 26 versus the 13 week period ended January one 'twenty two according to Nielsen data.
As retail consumption of Basel or gains further traction we expect more meaningful sales growth in the second half of 'twenty, two and Natasha will explain how we plan to do that in a few minutes.
<unk> was the only product that grew within the overall heart health segment of the aspirin category Thats experiencing decline since October 21, when the draft aspirin guidelines were published and created confusion in the category.
We're building a solid base of Fas Lord users and remain confident that we will see an inflection point in vascular sales as we create the stickiness with the consumer and their repeat purchases led to exponential growth lead to exponential growth and unit consumption like a subscription model.
We continued our broad retail distribution nationwide across mass drug and grocery channels and are adding two regional grocery chains to the mix Publix and Harris Teeter trades.
Trade support as positive, including door count shelf display product signage and other individual retailer programs designed to drive trial. For example, during American heart month in February we had strong retailer promotion and display support.
And this month is national stroke awareness month, and we've partnered with several retail accounts on promotional pricing to drive vascular trial and conversion.
Additionally, we have more retail promotional programs planned over the next several months.
As previously noted our retail partners are committed to the success of our brand and we expect <unk> will continue with its broad distribution and promotional support through the end of the year.
Several large retailers are featuring fast or in their high visibility circular vehicles every month throughout the summer and fall.
In addition, our physical retail channels vascular is gaining a solid footing and ecommerce channels, which are easy to navigate and provide expanded product information visual assets and consumer reviews.
Amazon specifically is an important online sales marketing and promotion platform for <unk> or.
Our Amazon sales metrics show, a growing base of consumer trial and conversion as evidenced in the steady rate of growth in the Amazon subscribe and save feature for Faisel.
This base of subscribers has more than doubled and now represents nearly 30% of our monthly sales on the Amazon platform.
Leveraging our early success on Amazon, we have expanded our promotions on the platform to include reminder, advertising, which is a very cost effective way to increase conversion and create stickiness with consumers with encouraging results so far.
As we previously mentioned we have been navigating a technical issue with Amazon relating to packaging documentation in early March during the roughly 10 days past lowers offline there were no product orders from the Amazon website.
Once restored we recovered more than 75% of our baseline business in the first week and had fully recovered to baseline by the end of March we believe the sales impact of being offline was immaterial to our first quarter results.
One of the primary drivers of the sales recovery, where the subscribe and save orders that are queued up why were offline and we're automatically filled as soon as our online status returned.
Moving from sales to the cost of sales and gross margin. Our gross margin was 44% in the first quarter, which was in line with the fourth quarter.
We still expect to achieve improvement in our blended gross margin by the end of 'twenty two when we complete the expansion of our manufacturing capacity for 325 milligram dose until then we may have some variability in our quarterly gross margin, especially due to the macroeconomic factors I referenced earlier, including higher raw material.
Great and labor costs.
Our operating expenses were $19 $1 million for the first quarter of 'twenty, two driven by our investments to establish fazlur in the marketplace through our National television campaign, and our sales force marketing efforts to health care professionals.
Our disciplined spending in Q1 resulted in an 11% quarter over quarter decline in operating expenses in line with our guidance of being slightly less in Q4.
On a sequential basis, our expenses declined slightly due to a strategic shift away from some of the high visibility television program, we were doing like the NFL and college football events.
We are modeling another sequential decline in operating expenses for the second quarter as we pursue more cost effective promotions and maintain a keen focus on extending our cash runway.
We plan to maintain a base level of advertising on network and cable news programs and reallocate spend other priority marketing vehicles, including digital platforms.
On a GAAP basis, we reported a net loss of 39 cents per diluted share in the first quarter compared to a net loss of 73.
For diluted share of <unk> 21.
Adjusting for the fair value of the warrant liability, which represented income of approximately $7 $4 million or non-GAAP net loss per diluted share was <unk> 66 cents in the first quarter of 'twenty two compared to an adjusted net loss of 22 in the prior year period.
And please refer to the Reg G table in our financial statements to reconcile GAAP EPS to adjusted non-GAAP number.
Turning to the balance sheet as of March 31, 22, we had a cash and cash equivalents balance of $52 $5 million or cash burn of $16 $9 million was primarily related to sales and marketing activities, partially offset by the timing of receivables collected from sales of vascular as we.
Continued to mention we are very focused on our cash runway, we will maintain a disciplined spending approach to manage expenses, while still investing in strategic growth with Q1 as the peak, we're modeling lower levels of cash burn for the remaining quarters of 'twenty two.
While we still believe we have enough cash to complete our launch activities into 'twenty three our plan is to extend that cash runway beyond that we.
We regularly evaluate financing options available to us to support our investments in future growth plans, including product development opportunities using our <unk> technology platform we.
We are currently reviewing various options, including non dilutive financing as we are sensitive to the potential dilution effect associated with an equity raise we are also exploring potential business development and partnership opportunities as another source of non dilutive capital to.
To elaborate more on that subject I'll now turn the call over to our executive Chairman, Mike Valentino, whom I've had the pleasure to work with for many years, including our success at Adams respiratory Therapeutics, where we launched mutant and ultimately sold it to reckitt Benckiser for $2 3 billion.
We'll also share his perspective on our launch based on his extensive industry experience with numerous major brands Mike.
Thank you Rita and good morning, everyone.
For the past 10 years I've served as executive Chairman of P. O X former and during that time I've seen our P. L. Like squad technology evolved from being a novel idea discovered in the lab.
To becoming an innovative FDA approved drug deliberately delivery platform for Gaza, Lord protected by more than 30 U S patents through the year 2032.
During my nearly 40 years in the industry run several major consumer and pharmaceutical businesses, including Upjohn consumer products, all former generics Xanodyne pharmaceuticals, and both Novartis as North American and global consumer Pharmaceuticals companies I've also had the opportunity to build.
To start up from the ground up called Adams, respiratory therapeutics makers with Houston X and.
In addition, I have launched seven Rx to OTC switches among them such well known brands as Benadryl Lamisil Rogaine voltaren outside the U S end user mix in.
In addition, I've managed well over 100 brands, both domestically and internationally.
I think it's fair to say that I've seen at all from a brand point of view.
Each of these brand building experience since have prepared me well to understand the unique challenges and opportunities associated with the launch of a product like <unk> and I'd like to share this perspective with you today.
Let me say first that is extremely rare for brands to come off the launch pads like a rocket ship.
That's why we are all familiar with the highly unusual case histories behind such brands as Tesla, Google and Viagra.
Because they are few and far between.
I personally have not enjoyed the pleasure of a launch like that yet each of the brands that I've mentioned and countless others that I have worked on have all been successful.
It's also very rare in spite of best efforts that you get everything right on the first try.
The reality is that strong brands are developed over time as a result of continuous iteration.
There is no easy way the formula for brand building.
And building strong brands includes trial.
Turning and adjustment all brands go through stages of iteration to build upon and enhance what is working and make adjustments and changes based on what we've learned.
After eight months of marketing, we've just completed this stage with Basil or where we have now pressure tested all of our marketing elements and are making some adjustments to strengthen our brand offering and our value proposition.
You'll hear more on this from the Pasha in a few minutes.
But those adjustments are only half the equation the other half requires operational excellence and precise execution.
Which of course boils down to people.
And I want you all to know that I wouldn't trade our management team for any in the industry.
Nearly all have been in the trenches with me before and each has enjoyed success in building brands.
We experienced an extremely motivated to deliver our life saving aspirin to as many patients as possible.
I also want you to know that I fully support the adjustments, we are making and our plans to drive trial and conversion and I'm confident in the team's ability to execute quickly and with precision.
As an additional perspective on the launch I want to mention that Newson X became nearly a 500 million dollar brand in four and a half years and Adams fans.
And as at nearly $1 billion in sales in the U S as part of record been teaser.
In its first year <unk> sales were $14 million.
But grew to more than $60 million in year two.
I think that makes the point that building a brand as a process not a one shot event.
I'm confident that we have the right product the right team and the right strategy to develop <unk> into a major brand.
Before closing I want to reiterate what readers point earlier.
Was about our myopic focus on protecting the balance sheet and our cash runway.
This effort is multifaceted first as a result of the analysis I just discussed above we now know which marketing elements have been the most efficient by eliminating the inefficient ones and dialing up the elements that have given us the most bang for the Buck we've been able to extract some cost savings.
Next we continue to evaluate options to bring in new sources of capital including debt.
And finally, we're also actively exploring business develop act development activities is yet another way to source non dilutive capital. We're currently engaged with several major consumer companies and I am personally taking the lead on this project.
The range of possibilities being explored include first.
Licensing the technology for noncompetitive categories.
Speaking of development expense investment in Pls in exchange for certain future rights and third out licensing ex U S rights to Basil Lord.
While there are no guarantees that any of these deals will get done what I can say is that there is definite outside interest in what we have accomplished thus far and what we are building with Basil lore.
We have and continue to build value in the brand.
Natasha I'll now turn it back to you.
Great. Thank you Mike. We appreciate you sharing your perspective with us today since launching that Laura eight months ago, we've analyzed our sales and marketing productivity to determine which tactics are driving the most success and where we should make some adjustments and refining our plan we are incorporating the learnings.
<unk> from market data and feedback from healthcare professionals or HCP and consumers.
I'll first discuss what we've learned from the market since launch and then what we've done to refine our plan like most public companies. We faced our share of challenges. In addition to the struggles the broader market, especially the biotech markets. We're also managing macro economic factors, including inflation.
And continued COVID-19 impact.
To accommodate fact, Israel, it has impacted where and how consumers shop and it also has affected how hcp's treat patients and received new information for example, medical conferences and Congresses as a channel for face to face interactions have decreased and in person attendance is still low.
Now typically interactions with physicians at these conferences before COVID-19, we're much more robust than they are today.
This change we have been nimble and adapting our programs to address these market dynamics and remain focused on the things that we feel will build awareness and grow Basil one.
Another challenge impacting our category is the recent finalization of the United States Preventive services task force or the U S. P. T. S. App recommendations on aspirin therapy, which were first published a draft back in October of 'twenty, One and then recently finalized in April .
The media attention around this topic created confusion among consumers and hcp's alike.
Physicians tell us that they still have patients calling them every day asking if they should stop taking aspirin.
As a reminder, the U S. P. S. T. S recommendations are not new and pertain only to the use of aspirin for the treatment of primary prevention, meaning for people, who have never had a cardiac event. However for patients who have already had a heart attack or clot related stroke aspirin.
Is the cornerstone therapy. This confusing continues to put downward pressure on the overall heart health category. Despite these market conditions and other challenges we continue to deconcentrate in vascular, especially due to the positive feedback we've received from both HCP.
And consumers.
We received consumer input through various channels, including our customer care call Center online customer reviews and through physicians.
Here are a few examples of consumer sentiment vascular 81 milligram aspirin capsules are super small an easy to swallow it did not upset my stomach it all back.
325 milligram capsules are easy to swallow and provide fast relief for my minor arthritis pain.
Goes down smooth without the bitter taste of the chalky Aspen that ive been taking daily and we've even seen some mention of consumers being able to eliminate their acid reducer.
To generate more consumer feedback, we recently deployed a 200 patient survey across major U S markets.
Preliminary results from this study are very favorable with nearly 90% of the respondents saying they agree and the remainder saying they somewhat agree with the following I felt no issues with my stomach when taking vas along with or without food and makes me feel like I'm doing all that I can to help support.
My Heart health and when asked how satisfied are you with using vascular is your choice of daily aspirin therapy, and how likely are you to purchase Avalon.
Nearly 95% of the respondents said that they were either extremely well very satisfied and are likely to purchase.
We've also learned a lot through our interactions with health care professionals or HCP Hcp's are beginning to recognize that there is a difference between vascular and entire coated aspirin and that formulation matters.
Stress to us the importance of reliable and complete platelet inhibition in these high risk patients.
Early adopters are recommending vascular and have told us that their patients are tolerating as well and that they are not hearing complaints with this feedback we've engaged with a broader spectrum of HCP early adopters, including preventive cardiologist, who are at the forefront of secondary prevention peripheral artery.
Disease experts as well as practicing clinical cardiologist pharmacist and advanced practice providers, which include nurse practitioners and physician assistance and nurses, we are delivering a stronger message of differentiation through face to face and virtual interactions as well.
As through an expansion of our cost effective email communication campaign and medical education programs.
This group of esteemed HCP Influencers are on a mission.
Form even broader groups of their peers on the value of the vascular could bring to their patients and specifically the difference between Bangalore and other aspirin formulations as well as stressing the importance of aspirin therapy and the need for reliable platelet inhibition for these patients.
We've also learned that many hcp's do not receive a problem with enteric coated aspirin, which is the most widely used formulation of low dose aspirin in the market. There is a general belief among these physicians that entire coated aspirin should work as reliably and consistently as plain aspirin and that the coatings should solve the problem of local Inge.
Jerry to the stomach often associated with playing aspirin.
The truth is that enteric coated aspirin has several limitations, including delayed erotic and in some cases failed absorption.
In addition, there is a lack of definitive data on enteric coated aspirin to support its claim of preventing stomach injury by definition enteric coated formulations are delayed release.
This delay in absorption and the coding itself may impact how much aspirin is available to be absorbed.
In addition, the SDA professional labeling states that entire coated aspirin products are radically absorbed erratic absorption could mean that some patients may not get any aspirin absorbed at all on some days. This is an important distinction because having inconsistent absorption with variable platelet inhibition.
<unk> is a risk for patients being treated as a secondary prevention of cardiovascular events and trying to avoid having another potential fatal event.
Further this erratic absorption maybe exacerbated if the enteric coated aspirin has taken with food or by people who are obese.
I'd now like to introduce our next guest Doctor asked Us Ali.
Holly preventive cardiologist clinical associate professor of cardiovascular medicine at the University of Texas Health Center at Houston. He's a published author and has been featured on National and local news programs Doctor Ali is an influence among hcp's and has been an early.
Doctor a vast war we are delighted to have him on the call with us today to speak about why he feels so strongly about vascular as a foundational treatment for his patients Doctor Ali.
Good morning, and thank you Natasha and the helix team for having me speak to you all today.
I am a preventative academic clinical cardiologist at work in the largest medical center in the United States, The Texas Medical Center, and then one of the fastest growing cardiologist practices in Houston, Texas, I personally see thousands of new patients annually from all over the U S.
Our goal and mission has always been patients first and creating a center of excellence.
And evidence based medicine.
And guideline directed medical therapy G D M T.
I've had the privilege to work with and have mentors.
Top echelon of cardiovascular care throughout the United States.
Both in interventional and preventative side of medicine.
One of them, even being a Nobel laureate winter.
In regards to aspirin, we know that aspirin remains the cornerstone therapy for secondary prevention of cardiovascular events and is needed for complete platelet inhibition to prevent clots from forming and triggering another heart attack or stroke.
Yet after speaking to a number of my cardiology vascular heads of departments.
Before and after actually the recent American College of Cardiology meeting in Washington D. C last month.
Overwhelmingly these cardiovascular heads of departments are interested in the conversation around aspirin efficacy and safety.
My colleagues many of them.
Chairman's of.
Apartments in cardiology, we're really actually surprised about the following facts.
First that aspirin has not been tested with the rigor of an FDA approval process.
Remember too that the FDA states in the professional label that interior coated aspirin products are erratically absorbed from the Gi tract.
And that means our patients may get a delayed erratic and sometimes failed absorption of aspirin, which as we know is a lifesaving therapy in a S. CBD.
And this variable or radick absorption, maybe further exacerbated by food intake higher patient weight diabetes and other factors that may affect absorption.
Interior coated aspirin has also issues of gastric erosions and gastric ulcers.
So the bottom line is if were prescribing a medication that assumption by health care professionals, because that our patients are absorbing the exact dose that we intended to prescribe them simply put.
Physicians don't like variability, we like reliability and we'd like predictability.
Yet the most widely used formulation of aspirin enteric coated aspirin may not provide the intended protection. We have doctors have come to expect it's very fundamental if the drug doesn't get absorbed then it doesn't work then we're not doing their best for patient care.
Both the consumer and the health care professional should be made aware of their options regarding the differences in therapeutics and a shared decision process.
Both health care professionals and consumers.
Should sit down and understand their options and the best therapy for their patients I believe this is.
Patient health issue.
Vascular, which I call aspirin to Plano, the PK PD data from the published study on obese diabetics show that the extent of absorption matters and it determines the extent of aspirin responsiveness.
The coding of enteric coated aspirin tablets have significant implications on the bioavailability of aspirin in these high risk patients.
When we treat patients in an acute hospital setting for example, a stroke or heart attack or even peripheral vascular disease, where we can have a critical limb patients may be placed on four to five new medications post intervention when they leave the hospital.
With every new medication, there are potential side effects and it is difficult to know, which medicine is causing side effects when youre starting four to five medications at the same time.
At least for now at least for the aspirin component.
We can have an aspirin that reduces the risk of stomach injury.
Then the question is why not set our patients up for success from the get go.
Have prescribed vascular to hundreds of my patients and Tolerability has not been an issue.
Lastly, I don't want to take the risk of the variability of the absorption of aspirin and after discussing with my patients neither do they.
I think they have a better option in regard to their aspirin therapy now with <unk>.
Back to you Natasha and thank you for having me on your call today.
Thank you Dr. Lee Thank you for sharing your perspective with us today.
Messages are clear first dispositions number one concern is the health of their patients.
Physicians don't like erratic or variable absorption.
Dr. Lee and a growing list of other HCP see the difference between Bachelor and enteric coated aspirin. They appreciate and understand the data and they're recommending it to their patients importantly, they tell us that their patients are tolerating it well.
And now I will discuss how we've refined our plans and evaluating all the seed that along with market research and other data, we're making some adjustments to strengthen our brand offering and value proposition for both HCP and consumers.
We are intensifying our focus to more strongly differentiate basketball or some of the limitations of other aspirin and refining our plan, we're implementing more effective digital and virtual offerings to broaden our consumer and physician communication and adding cost effective multichannel programs to expand our.
Target audience, we're making a strategic shift in consumer marketing toward more cost effective programs, including email and online starts addressing the ever present trend of online shopping.
We're also maintaining a base level of TV advertising, which we now reaches our target audience. In addition, we have some unique programs plans with our retail partners over the coming weeks and months to Jive Basilard trial and conversion.
Additionally, we are also exploring digital placement of product testimonials, using a combination of celebrity endorsements and real patients could talk about their experience with vascular.
And marketing to HCP, we've developed and enhanced scientific narratives in collaboration with key scientific experts that supports the differentiation of vascular and reinforces the value proposition versus enteric coated aspirin for secondary prevention of cardiovascular events.
These key messages include bachelor's fast enteric coated aspirin is delayed bachelors bioequivalence of plain aspirin enteric coated aspirin is nuts.
Bachelors predictably and reliably absorbed entire coated aspirin is it radically absorbed as part of FCA professional labeling and finally bachelor's designed to help protect the gastro duodenal lining in contrast, Aspen has been shown to cause local stomach injury and enteric coated aspirin.
Which was developed to help reduce the stomach injury of Aspen last definitive data that it does indeed prevents stomach injury.
We are driving our enhanced messages further with HCP through thought leader led round tables at medical conferences, including showcasing bass alarm at the upcoming society for cardiovascular angiography and interventions. The Sky meeting later this month.
So to address the ongoing confusion among HC t's on the guidelines and the differences in aspirin formulations.
<unk> provided an independent educational grant to CME program earlier this week on the topic of aspirin therapy in 2022, Dr. Michael Gibson Professor of Medicine at Harvard Medical School was the Faculty program Director was joined by others Steams faculty from Madison.
Then from pharmacy and from nursing.
In addition, our cardiovascular care specialists are implementing new vascular sampling and patient use survey programs to drive physician adoption and consumer trial. These programs involve partnering with large cardiac cardiology group practices across the U S to display vascular.
Provide samples and education materials for patients on Doctor recommended aspirin therapy, we're encouraged by the broad potential of this program.
And finally, we've asked world recognized experts to take a deep dive into the appeal X data on vascular as well as all the data and literature that exists on aspirin they feel strongly that vas along with its fast and reliable absorption and designed to help protect some local injury could.
<unk> significant value across multiple parameters that could lead to better outcomes for patients. We're committed to advancing the science for vascular 81 milligram and have studies in mind for clinical development. We are in active discussions with two of the most reputable institutions in the country regarding a real work.
Evidence study on tolerance and adherence and plan to follow up with a head to head study versus enteric coated aspirin. That's how confident we are in vascular.
To wrap up I'd like to leave you with some facts.
As per the guidelines Aspen as a class one a foundational therapy for secondary prevention of cardiovascular events in patients may remain on aspirin therapy for the rest of their lives Ashwin is known to be tough on the stomach. The Pls guard drug delivery platform was designed especially to provide full bioavailability.
<unk> of active pharmaceutical ingredients and to help protect the gastro too on the line Faisel are the first and only FDA approved liquid filled aspirin capsule provides fast reliable and predictable absorption in platelet inhibition and was designed to help protect the gas Joe Joe on the line.
We're building a solid base of vascular users, we've analyzed our results today and listen to the market feedback we've adjusted our tactics to strengthen our brand offering and value proposition for vascular to both consumers and H C T through cost effective programs.
We're confident in the differentiation of vascular versus other aspirin formulations and are on a mission to transform the standard of aspirin therapy for secondary prevention of cardiovascular events for millions of patients. We believe we have the right team and the right strategy to make basilar winning.
Brand operator, we are now ready to move to Q&A portion of our call.
Certainly as a reminder to ask a question. Please press star one on your telephone to withdraw your question. Please press the pound key.
And our first question will come from Leland <unk> of Oppenheimer. Your line is open.
Hey, good morning, Thank you for taking my questions and thank you for the update.
A few questions from me.
First I mean clearly.
The U S G CSF guideline.
Is not helping.
You know me Scott said it is on the call, but maybe what can be done further to reverse.
The impact.
Of the kind of media and not maybe not getting into the details until you way down into the article about who should be on that versus maybe you shouldn't be.
And also with respect to them.
Price of patients, bringing he says.
As it is.
The hurdle.
What's your approach to advising providers with respect to.
Talking to patients about.
Price and counseling them on.
And getting them through.
The prices being central issue. Thanks.
Thank you Leland you know these are two very interesting questions and I think.
Rather than me taking them on I might ask Doctor active Ali who is in the trenches with patients every day to take that onto the Doctor I'll leave maybe first talk about your impressions of the U S. P. T S guideline confusing and what what can be done to broaden <unk>.
Fairness, sometimes HCP.
Sure. Thank you for the questions. So I'll take them both in order.
In regards to the new data on primary versus secondary prevention, it's caused a lot of confusion and muddying. The water. So there definitely needs to be a much better education and awareness in regards to what is primary prevention and what is secondary prevention and quite simply.
If you don't have the disease aspirin may not work if you have the disease.
After a socratic vascular disease, then Aspen works and that's what is secondary prevention. So there hasnt been a day since that information came out that I haven't had a patient come back to me with a recent heart attack or stroke, and asking me should I still be on my aspirin. So clearly.
When the data came out about primary prevention.
It caused a lot of confusion in the patient population, but I think as patients are going back and talking to their health care providers. There is a.
Reestablishment of what his primary versus secondary prevention, and what is the importance of aspirin as a life saving therapy in their regimen.
When we talk about cost and price I want to come back to our base we're talking about.
Saving lives, we're talking about life altering events like a stroke or a heart attack talking about the number one killer in America, which is heart attacks and the number five killer in America, which is cerebral vascular accidents or strokes and that's per the cdc's latest data on mortality in America.
So when we talk about cost the least expensive lifesaving line item and atherosclerotic vascular disease is aspirin, especially if you look at the cost of going to the hospital with a heart attack or stroke, the diagnostics the interventions and the multiple therapies up to five medications.
Out of all of those five medications.
Aspen is the least costly of of those medications some of those medications, causing costing thousands of dollars.
So clarifying the cost price issue. It is not an issue about the debates shouldn't be about the pennies that we're talking about an aspirin.
Talking about saving lives not the cheapest cost of the aspirin, but simply using the drug that absorbs the best and how does the job it's tending to do.
Yeah.
Does that answer your question.
Yes, no. Thanks.
Rachel.
Thank you.
Thank you and our next question comes from Elliot Wilbur of Raymond James Your line is open.
Thanks, Good morning, and good morning, Mike Good to hear your voice once again always a pleasure to have.
You bet.
I'm doing well thank you.
I've got a.
I was surprised a couple of questions here.
First is I think you may have just woken up the entire town of Levered because in Germany with your announcement that you are planning a head to head study against the.
The turret coated aspirin.
Just curious sort of what the primary aim there is in terms of.
Teasing out the relative benefit how much are you looking to <unk>.
So an efficacy differentiation versus safety.
Assuming possibly both but just wanted to confirm that and if I could ask perhaps Dr. Lee to weigh in on that how important do you think that data could be in terms of influencing prescriber behavior.
Yeah I'll take it on and then we'll ask Dr. <unk> to offer his perspective.
I think it's important for us given that aspirin is a lifesaving drug and that millions of patients really need reliable predictable bioavailability in order to prevent that next event that could be.
So our commitment to advancing the science.
We've been there we have a scientific advisory board that is actively working on on publishing manuscripts says as we speak and so we know that for a physician that bioavailability is really important doctor Ali mentioned, how they hate erratic goods.
So arps and they hate variability in these patients are so vulnerable to having their next event.
And so many people doctors included are not even aware that some patients may not get any aspirin absorption at all I'm given days and certainly that puts them at high risk. So, yes, youre right Elliot those components will be important to us, but we also.
I'm looking at providing more information in a real world.
And doing a study.
Rather quickly on adherence and tolerance because that is the issue that prevents people staying on an aspirin. So we're still confident that that's where it's going to prove to be very very important.
The treatment of secondary prevention.
And in terms of its importance to the medical community Dr.
Doctor Ali maybe you can share a few thoughts there.
Sure.
I wanted to point out that the issue of <unk>.
Anticoagulation and absorption is not a new story, if you look at no axe, which are the new oral anticoagulation in atrial fibrillation. This exact story of bioavailability absorption, which drug absorbs the bev and hence has better efficacy. It is not a new story.
I think what is the new story is that physicians are actually quite shocked.
Didn't realize that aspirin never.
Formulary of aspirin today did not go through the rigors of FDA approval.
Laura has.
And that there is new data now coming out about PK PD modeling get absorption and I think physicians as a whole hcp's the ones I've talked to which are key opinion leaders in the United States are really quite shocked actually I would use that word and they want to have.
<unk> about using the drug that actually works, especially when Theyre doing lifesaving interventions. So this story of bioavailability absorption I think it's great that the company standing behind it.
It's therapy and delivery systems, and and I look forward to the data coming out.
Okay. Thanks, and then a follow up question for you the Joshua.
Just wanted to get perhaps some additional perspective in terms of what you may be thinking about at least at this early stage in terms of exploring potential partnerships are you, referring specifically to sort of.
More ex U S efforts or.
Some type of.
Co promotion strategy with a larger company that provides.
Provide some additional near term capital and then you talked about some new avenues or new partners on the distribution front on the retail side, but curious what you guys may be thinking about or what you may have learned recently in terms of other channels of distribution.
Such as long term long term care I mean, it's even even if your extra level I mean, that's roughly a $200 million annual market in Bachelor it looks to be I think it's the leading brand kind of within that channel.
And I suspect that there's just.
It would be.
Channel there'll be relatively responsive to detailing promotion and would respond very well to the <unk>.
Efficacy aspect of the product, but just wondering what you may be thinking about in terms of.
More direct promotion to institutional channels that weren't necessarily part of the initial marketing plan.
Yeah. Thanks. Thank you Ali you know what let's take the <unk>.
Partnership question first and you heard from Mike some of our activities in that regard. So let me ask Mike to provide a bit more color on that subject sure. Thanks, Natasha and thanks for the question Elliot.
What I can say is that among the companies that we're talking to all of them were very impressed with what we've accomplished thus far and the reason for that is that they all understand how difficult. It is to build a brand from the ground up.
I understand that it doesn't happen overnight, but successful brands come as a result of continuous iteration and adjustment.
And here's what they are impressed with they are impressed with our science and technology. They are impressed with our vast patent estate theyre impressed with our advertising and our marketing materials on both the consumer and professional side. They are impressed with our 30000 plus door distribution.
They're impressed with the number and quality of off shelf display activity that we've been able to achieve.
And they were impressed with the potential new businesses that are technology could spawn and really so much more.
Their views on our progress thus far and this is the key point or not at all influenced by expectations of where we should be but rather a view of where we are after only eight months, which in their view is pretty damn good.
Theres no doubt they are impressed and theres no doubt that we are creating strong value in the vascular franchise.
Okay, Thanks, Mike and I'll take the question on.
Standing our.
Partnerships with more direct distribution, we actually do have some some plans.
The analysis to go to a couple of places one is large systems that are interested in implementing potentially vast lor as the product of choice upon discharge for patients where in the beginning.
As of mapping out how to execute that but I think that's really important.
And insightful question you asked US Elliot you specifically mentioned.
Not going to give too much more on that because we are in the beginning phases, but I'm pretty excited about the interest.
That we've seen so far.
For that concept.
Secondly, you asked about LTC VLCC environment and it is interesting because we know that there has been.
Some some interest in Bangalore.
On the LTC.
Aspect and so we're exploring that and how we could partner with those.
With those institutions directly so you'll hear more about that in our.
Our next update.
Okay and one final question if I may for for Doctor Ali just curious within your.
Subset of patients.
Treated for secondary.
Prevention is there a particular patient profile that you think is more suited for VAG Award then than another or do you really think that this should be standard of care for all patients all secondary prevention patients and then how.
How successful have you been actually getting these patients on therapy and getting them to remain on therapy kind of once they go through sort of the.
Initial.
First trial.
Basil lore.
And you mentioned sort of a lack of awareness among physicians in terms of the erratic absorption issue of Terry coated aspirin, how do you think that this message should be.
Best communicated or what's the best way to sort of get the.
Billboard out here or is it just more active engagement with the actual prescribers more engagement with PMT communities or thought leaders just wondering from your perspective, what do you think would be helpful. In terms of enhancing the messaging here. Thanks.
Thank you for the <unk>.
<unk> and.
Simply put when you have a life altering event heart attack stroke changing behavior occurs very quickly right you have to have something that happens and that's what secondary prevention is so.
Obviously, the patient has failed primary prevention, which is preventing the disease from happening so once the disease happens.
Changing behaviors occur.
Occur quite quickly I mean, if youre going from zero to five new medications with a stent in your heart or you've been in the ICU the intensive care unit or the cardiac care unit with a heart attack or a stroke and now expanding down to peripheral vascular disease, because you have blood vessels from head to toe. So if the insults in the brain.
Stroke Center hard, it's a heart attack and you like it's peripheral vascular disease each one of those.
It may require hospitalization may require a procedure so getting patients to check that is the optimum time for patients to change behavior, whether it's quitting smoking losing weight.
Improving their diet exercise, but in addition, adding medications. So the Congress there is a class one indication called shared decision, making this is per the guidelines. This is standard of care and shared decision, making it means that I and the patient.
Have an informative discussion on their options for their treatment.
And if I'm doing right for the patient then I'm going to offer the treatments that are going to best serve that patient. So that discussion is actually fairly clear and it's per the guidelines were doing shared decision, making and showing the best options for for patient care as far as strategy is to get the word out app.
Absolutely.
T committees.
Sure.
Running a little bit of a campaign talking to chairman's, who want to have much further discussions grand rounds, we can get the data because healthcare institutions to are in the business for providing the best and excellence in care and they want the best and the most excellence in treatment.
Strategies and programs and I believe this is a health care.
Issue that needs to be discussed in a much broader perspective.
And including speaking to organizations like the American Heart Association to clarify two patients the difference between primary and secondary prevention and the best strategies for those patients treatment.
Thank you Dr. Lee.
And our next question comes from Jason Butler of JMP Securities. Your line is open.
Hi, Thanks for taking the questions and appreciate all the detail you've gone into this morning.
First one for Doctor Ali.
I guess, just how consistent is it among your peers of the appreciation of the limits of entry coated aspirin and how consistent is it that it's a priority and I guess, maybe asked another way are you.
Or do you have any peers, the pushback or don't view this as a priority or is it ultimately gets situation where awareness is increases.
Your peers.
To use the product Basil and more.
Yes, and again I'm going to answer your question barring that this is not a new conversation when we're talking about high availability.
There is marketing materials in no axe right now in Afib in obese patients. This same conversation is being played out in another antechoir Glenn that has nothing to do with <unk>.
Heart attacks strokes has to deal with atrial fibrillation, another clot forming disease.
Again, that's again an event that has happened and no acts are right now playing this exact scenario and I think.
As physicians are listening and understanding that medication bioavailability PK PD is an issue and perhaps that's why patients are still having events or have new disease that occur.
One of the theories here is that youre not even absorbing the medication in some cases and we're talking about fundamental these or not.
Last three or four two way or to be these are class one indications for serious diseases and so on.
I think the fundamentals are there it is a now a campaign of educating both health care providers as well as patients and that's shared decision model and getting this up the ladder.
A broader perspective.
To make sure that patients are very clearly aware of their options and what the best options are for them, but we need to let them be informed of that option and I think that information is what vessel or is working on that messaging.
That's helpful. Thanks to Charlie.
Natasha.
I don't think you're making any changes to your trial sample and coupon program does that should we infer from that and its working well as intended or are there any changes that you're considering there and then just one for Rita can you give us any sense of how retailer inventory inventory levels are changing or.
Maintaining versus the end of the fourth quarter.
<unk>.
Okay.
Okay in terms.
Sampling and couponing I think was your question in how we're approaching it.
We actually are making some adjustments on on our sampling program. We've partnered with large cardiology group practices across the country right now that have adopted <unk> as an important piece in their regimen in treating secondary prevention.
And so we are providing.
Levier sampling there with coupons with patient education materials, as well and we're taking it a step further I mentioned earlier, we're doing a 200 patient survey with a with a very specific objective to get real data back from patients on how.
How they perceive that Laura how they tolerate that as Laura how they feel about it in terms.
Of protecting their their risk for cardiovascular disease or a fatal event.
And we're providing sampling and couponing there we know that our consumer is responsive to that approach and we've seen the data that validates that so we're being very focused in programs that we think will yield broader.
And faster success in uptake and conversion.
Specifically to that Laura and I will let Rita address your second question sure. Thanks, Jason Yeah real quick so as you know for heart months in February we actually did a lot of display promotions. So the retail inventory levels. We're there and we're just starting to see them come down and including it.
In May we are doing some promotions at shelf to draw down that inventory. So that we are expecting some significant growth in the back half of the year as we work down those displays and <unk>.
<unk> those promotions.
Okay, great. Thanks for taking the questions.
And our next question comes from a follow up Leland <unk> of Oppenheimer. Your line is open.
Thanks for taking the follow up sorry.
Sorry, I think my second question is that.
Cut it off if you could.
Now, maybe maybe respected management team maybe discuss.
What counseling approaches you could take.
In terms of patients who.
Who take issue with.
The more expensive price, obviously, a buzzword versus.
Just a regular aspirin and then I also have a second question, but please go ahead. Thanks.
Your question on on price for and cost for the patient from and how Hcp's suited.
Have that discussion with them is that is that your question circling back to them.
Yes, that's right that's awesome.
Okay.
Maybe I'll ask Doctor Ali again.
To ask your opinion, maybe briefly summarize how you get your patient to if there is a challenge in terms of price and cost how do you handle that conversation you talked a lot about the shared decision making process between a physician and patient how would you handle that.
How do you handle that since you have hundreds of patients on an bosler with with that patient how do you get them through that.
Yeah, I mean, it's just quite simply you know you have a new standard in your heart.
Your lives saved so.
So we got through the acute <unk>.
Assess.
Now, we really need to focus on secondary prevention processes and.
When we look at data from different medications, so you'd look at different trials. If you look at different differences in absorption as we talked about.
I am putting these patients on five medications right, one and we look at dual anti platelet therapy. So it's usually aspirin plus another medication that would.
So help with inhibition.
And making sure that the stent States open for example, if it's in your heart coronary stent and.
The discussion so far has been very key.
Quite simple that Theres, a lot of variability in the regular aspirin that youre getting.
That you may not.
Absorb any aspirin.
And the aspirin that that you may have been discharged from the hospital.
Switching over to Vas, Laura I have samples in my closet avid savings coupons and this is this is the medication that has.
Better.
Absorption so it's not a very difficult conversation when we talked about shared decision, making with the patients, especially when this medication is the least expensive line item out of the other medications that could cost.
Hundreds of dollars a month a month so.
Yeah, I think that's the answer I mean this is out of all the medications that therapies. The diagnostics to hospital stay this is going to be the lowest line item cost I want to make sure, though that whatever I'm, giving you that its being absorbed and its being efficacious and that you're being protected and so it's not a.
This is this really is a 10 second conversation once you're beyond the best formulation for you to keep that stent open and to prevent further atherosclerotic vascular disease.
And darker earlier with respect to.
Ah Ah patient.
Patients who.
Who are who may need to.
Who maybe to take let's say, a proton pump inhibitor or.
Some other junk.
Junket agent to help them with the Gi tolerability issues.
Regular aspirin.
Do you see that as kind of the special sweet spot.
Felicia for Bachelor or.
Is it really just kind of as Laura is simply a better aspirin and whether you are trying to ameliorate that side effect or not.
Once it simply be on vascular for various benefits thats perfect.
Alright, so inherent in your question right there.
Youre, saying that look their patients on aspirin, who now need to take an additional medication because theyre, having gi issues. So now I'm, adding more costs I mean, that's inherent in your question was look they're taking an aspirin now they have to be on another medication just to be able to take the aspirin. So that's that's that's a whole issue there and by the way.
Proton pump inhibitors, if you read in the CDC and NIH guidelines have their own issues with renal and cardiac.
Issues as well so now we're having to add additional cost and additional medications. So that's what I was saying earlier why not set the patient up from the get go with a a medication that has much better data on bioavailability. So that was the efficacy now youre talking about safe.
So when we talk about safety, we're seeing less Gi ulcers, Jai irritation, and we have a better formulation. So.
That's also another conversation I have with the patient like why and so I think that's a niche area that you are talking about but it's a good point and I have actually gone through my own database in my office to see how many patients are on regular aspirin and who are having to take an <unk> blocker and PPI I think it's preliminary to give you any.
Reporting on that but it just makes inherent sense to set the patient up for success from the get go rather than adding additional medications. So they can tolerate and another medication.
Great. Thanks, Thanks, so much for taking the follow ups. Thank you.
And I'm showing no further questions I would now like to turn the call back to Janet Barth for closing remarks.
Thank you Latanya and thank you all for participating in our call today. Please feel free to contact me with any additional questions. You may have have a great day.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation you may now disconnect.
Yeah.
Okay.
[music].
Sure.
[music].
Okay.
[music].
Yes.
[music].