Q1 2022 Supernus Pharmaceuticals Inc Earnings Call
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Operator: Good afternoon and welcome to Supernus Pharmaceuticals' first quarter 2022 financial results. www.patreon.com.au At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time.
Good afternoon, and welcome to <unk> Pharmaceuticals first quarter 2022.
Conference call.
At this time, all participants on a listen only mode.
We will conduct a question and answer session instructions will follow at that time.
Operator: As a reminder, this conference call is being recorded. And I would now like to turn the conference over to Peter Vozzo, the Investor Relations Representative for Supernus Pharmaceuticals. Peter, you may begin. Thank you, Chris.
As a reminder, this conference call is being recorded.
And I would now like to turn the conference over to Peter.
Westwood Investor Relations representative.
Pharmaceuticals.
You may begin.
Peter Vozzo: Good afternoon everyone, and thank you for joining us today for the Supernus Pharmaceuticals first quarter 2022 financial results conference call. Today, after the close of the market, the company issued a press release announcing these results. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar, and Chief Financial Officer, Tim Dec. Today's call is being made available via the investor relations section of the company's website at ir.supernus.com. Following remarks by management, we will open the call to questions.
Thank you Chris Good afternoon, everyone and thank you for joining us today for the <unk> Pharmaceuticals first quarter 2022 financial results conference call today. After the close of the market. The company issued a press release announcing these results on the call with me today are <unk>, Chief Executive Officer, Jackatar, Chief Financial Officer, Tim Dec.
Today's call is being made available via the Investor Relations section of the company's website at IR dots the Pernis dot com.
Following remarks by management, we will open the call to questions. During the course of this call management may make forward looking statements regarding future events and the company's future performance. These forward looking statements reflects the Pernis is current perspective on existing trends and information any such forward looking statements are not guarantees of future performance and involve risks and uncertainty.
Peter Vozzo: During the course of this call, management may make forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factors section of the company's latest SEC filing. The actual results may differ materially from those projected in these forward-looking statements. For the benefit of those who may be listening to the replay, this call was held and recorded on May 9th, 2022.
These including those noted in the risk factors section of the company's latest SEC filings.
Results may differ materially from those projected in these forward looking statements for the benefit of those who may be listening to the replay. This call is being held and recorded on May nine 2022. Since then the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC.
Peter Vozzo: Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus does not assume any obligation to update these forward-looking statements except as required by applicable securities laws. I will now turn the call over to Jack. Thank you, Peter. Good afternoon, everyone.
So pernice declines any obligation to update these forward looking statements statements, except as required by applicable securities laws I will now turn the call over to Jack.
Jack Khattar: And thanks for taking the time to join us as we discuss our 2022 first quarter results. Following a productive year in 2021, in which we worked towards minimizing the impact of the 2023 Tocandex R transition, we have continued to execute on our long-term growth strategy and focus on our strategic priorities. Let me quickly recap our overall performance in the first quarter of this year.
Thank you Peter good afternoon, everyone and thanks for taking declined to join US as we discuss our 2022 fourth quarter results.
Following a productive year in 2021 in which we work towards minimizing the impact of the 2023 took mdx optimization. We have continued to execute on our long term growth strategy and focus on our strategic priorities.
Jack Khattar: Total revenues were $152.5 million, representing a 16% increase over the first quarter of last year. And adjusted non-GAAP operating earnings were $28 million, an 11% increase over the first quarter of last year. The first quarter of 2022 represents the first full quarter we record on all products combined from the acquisitions in 2020 and 2021. Note that net sales of Chakendi XR as a percentage of total revenues were 41% in the first quarter of 2022, significantly down from 72% in the first quarter of 2020, which was the last full quarter before both acquisitions.
To recap our overall performance in the first quarter of this year total revenues were $152 $5 million, representing a 16% increase over the first quarter of last year.
And adjusted non-GAAP operating earnings were $28 million, an 11% increase over the first quarter of last year.
The first quarter of 2022 represents the first full quarter. We report on all products combined from the acquisitions in 2020 and 2021.
Note that net sales of Trokendi XR as a percentage of total revenues was 41% in the first quarter of 2022 significantly down from 72% in the first quarter of 'twenty 'twenty, which was the last full quarter before both acquisitions. This was the result of great.
Jack Khattar: This is the result of great execution and corporate development and commercial operations diversifying our revenue base to minimize the impact of the 2023 Trocandy XR transition on our overall performance. Regarding Calgary, the product is off to a great start this year with continued momentum and prescription growth and ship. We are actively preparing for the launch in the adult market after recently receiving approval from the FDA for the treatment of adults. For decades, adult patients had only one non-stimulant treatment option available to them.
Execution on corporate development and commercial operations diversifying our revenue base to minimize the impact of the 'twenty two 'twenty three trokendi XR transition on our all over all performs.
Regarding <unk> the product is off to a great start this year with continued momentum in prescription growth and shipments.
We are actively preparing for the launch and the adult market. After recently receiving approval from the FDA for the treatment of adults.
For decades adult patients had only one non stimulant treatment option available to them. We are proud to be bringing innovation to the marketplace with the first novel non stimulant in 20 years adult patients now have a new safe and effective treatment option that helps them.
Jack Khattar: We are proud to be bringing innovation to the marketplace with the first novel non-stimulant in 20 years. Adult patients now have a new, safe, and effective treatment option that helps them stay away from controlled substances that have a high potential for abuse and dependence. Supernus expects to launch CalBRI for adult patients by the end of this month.
Stay away from controlled substances that have high potential of abuse and dependency.
So bonus expects to launch calibrated or adult patients by the end of this month.
This represents a significant expansion opportunity in the largest segment of ADHD market.
Jack Khattar: This represents a significant expansion opportunity in the largest segment of the ADHD market. According to the recent IQVX phone and 52-week data, the adult market now represents approximately 68% of the total market's prescription. Our launch of Calvary in the pediatric and adolescent market has been progressing very well, while we launched Kelby a year ago during a pandemic facing unprecedented headwinds.
According to the recent IQ VX fallen and 52 week data the adult market now represents approximately 68% of the total market prescriptions.
Our launch of Calgary in the pediatric and adolescent market has been progressing very well.
While we launched <unk> a year ago during a pandemic facing unprecedented headwinds <unk> is on track to become the most successful ADHD launch in the past decade based on IQ via prescription data aligning all recent ADHD launches on a monthly basis globally has been consistently.
Jack Khattar: Calgary is on track to become the most successful ADHD launch in the past decade. Based on IQVIA prescription data aligning all recent ADHD launches on a monthly basis, Calgary has been consistently outperforming most of the products since its launch in June last year and is well positioned to take the top ranking spot among all the recent ADHD launches. During the first quarter of 2022, total IQVIA prescriptions for Calgary reached 47,324 prescriptions, representing an increase of 38% compared to the fourth quarter of 2021. Prescriptions in the most recent month of March reached an all-time high of 18,380 prescriptions.
Warming most of the products since its launch in June last year, and is well positioned to take both top ranking spot among all the recent ADHD launches.
During the first quarter of 2022 called IQ via prescriptions for Kelebe reached 47324 prescriptions, representing an increase of 38% compared to the fourth quarter of 2021.
Script trends in the most recent month of March reached an all time high of 18380 prescriptions.
Jack Khattar: In addition, Calgary continues to expand its base of prescribers with over 6,900 prescribers in the first quarter of 2022, up from 5,600 prescribers in the fourth quarter of 2021. We now have approximately 195 sales representatives promoting Calgary to pediatricians, child psychiatrists, and adult psychiatrists. The company will continue to support the launch of Kelby in the pediatric and adult segments with heavy investment, which will significantly increase our commercial spend in the second and third quarters of this year.
In addition, Calgary continues to expand its base of prescribers with over 6900 prescribers in the first quarter of 2022 up from 5600 prescribers in the fourth quarter of 2021 we.
We now have approximately 195 sales representatives promoting calibrate to pediatricians child psychiatrist and adult psychiatrist.
The company will continue to support the launch of <unk> in the pediatric and adult segments with heavy investment, which will significantly increase our commercial spend in the second and third quarters of this year.
Jack Khattar: Regarding GoCovri, we are pleased with the performance of GoCovri during its first full quarter under Supernus, with net sales for the product reaching $22.6 million, representing a 28% increase compared to the $17.7 million reported by Adamas in the first quarter of 2021. Also, total prescriptions reached 10,736 in the first quarter of 2022, growing by approximately 23% over the same period last year. After the first full quarter post the closing of the Adamus acquisition, the integration has been substantially complete.
Regarding recovery, we are pleased with the performance of go property during its first full quarter under supporting us with net sales for the product, reaching $22 $6 million, representing a 28% increase compared with $17 $7 million reported by a damage in the first quarter.
<unk> and 2021.
Also total prescriptions reached 10736 in the first quarter of 2022 growing by approximately 23% over the same period last year.
After the first full quarter post the closing of the Atmos acquisition. The integration has been substantially complete our Parkinson's sales force is fully trained in the field promoting though property and we are tracking towards the upper end of our goal of $60 million to $80 million in synergies.
Jack Khattar: Our Parkinson's sales force is fully trained in the field promoting recovery, and we are tracking towards the upper end of our goal of 60 to $80 million in synergies in the first 12 months of owning the business. Orkandy XR and Oxteler XR continue to be promoted by a much smaller neurology sales force that is focusing its efforts on supporting the current prescriber base.
In the first 12 months of owning the business.
Trokendi XR and <unk> are continued to be promoted by a much smaller neurology sales force that is focusing its efforts on supporting the current prescriber base for the first quarter of 2022 net product sales of <unk> were $28 million essentially unchanged compared to the same period.
Jack Khattar: For the first quarter of 2022, net product sales of Oxteller XR were $28 million, essentially unchanged compared to the same period last year, while net product sales of Tropendi XR were $63 million, down from $72 million last year. For Apigen, the year-over-year decline in net product sales was mainly due to unfavorable changes at the beginning of the year and some Medicare plans and continued competitive dynamics. The company has been closely monitoring the situation surrounding the recently approved generic cartridge and has not seen a meaningful impact on our business to date.
Last year, while net product sales of Trokendi XR were $640 million down from $72 million last year.
On a quick in the year over year decline in net product sales was mainly due to unfavorable changes at the beginning of the year and some Medicare plans and continued competitive dynamics. The company has been closely monitoring the situations surrounding the recently approved genetic cartridge and to date has not seen it.
And back on our business.
Jack Khattar: Moving on to the pipeline, we continue to work closely with the FDA as it reviews the NDA for SPN 830, the infusion device for the continuous treatment of motor fluctuations and Parkinson's disease. The company is preparing for the commercial launch of SPNA-30 in the first quarter of 2023, assuming timely approval by the FDA. The PDUFA target action date for SPNA-30 is in early October of this year. For SPNA 20, our first-in-class, orally active mTORC1 activator, we continue to enroll patients in a phase 2, multi-center, randomized, double-blind, placebo-controlled design study of SPNA 20 in adults with treatment-resistant depression.
Moving on to the pipeline, we continue to work closely with the FDA as it reviews. The N D. A core SPN eight Cody the infusion device for the continuous freedman of more of the fluctuations in Parkinson's disease.
The company is preparing for the commercial launch of SPN 830 in the first quarter of 2023, assuming timely approval by the FDA.
It could do for target action date for SPN 830 is in early October of this year.
For SPN eight 'twenty, our first in class orally active and talk one activated we continue to enroll patients in a phase two multi center randomized double blind placebo controlled design study of SPN 820 in adults with treatment resistant depression.
Jack Khattar: The study will examine the efficacy and safety of spna20 over the course of five weeks of treatment in approximately 270 patients. The primary outcome measure is the change from baseline to end of treatment period on the Montgomery Asperg Depression Rating Scale Plotal Score, which is a standard depression rating scale. We are on track to initiate an open-label phase two clinical study with SPN817 in the second half of 2022 in patients with treatment-resistant seizures. SPN817 represents a novel mechanism of action for an anticonvulsant and utilizes a synthetic form of buprazine A, which is a potent acetylcholinesterase inhibitor with pharmacological activities and CNS conditions such as epilepsy.
The study will examine the efficacy and safety of SPN 820 over the course of five weeks of treatment and approximately 270 patients.
The outcome measure is the change from baseline to end of treatment period on the Montgomery as book Depression rating scale total score, which is a standard depression rating scale.
We are on track to initiate an open label Phase II clinical study with SPN 817 in the second half of 2022 in patients with treatment resistance seizures. SPN 817 represents a novel mechanism of action for an en banc on balsam and utilizes synthetic form of <unk>.
In a which is a potent <unk> cholinesterase inhibitors with pharmacological activities in CNS conditions, such as epilepsy.
Jack Khattar: Finally, we will continue to be active in corporate development, looking for strategic opportunities to further strengthen our future growth and leadership position in CNS. With that, I will now turn the poll over to them. Thank you, Jack. Good afternoon, everyone.
Finally, we will continue to be active in corporate development looking for strategic opportunities to further strengthen our future growth and leadership position in CNS with that I will now turn the call over to them.
Thank you Jack good afternoon, everyone as I review, our first quarter 2022 results. Please refer to today's press release.
Timothy Dec: As I review our first quarter 2022 results, please refer to today's press release. Total revenue for the first quarter of 2022 was $152.5 million, a 16% increase compared to $130.9 million in the same quarter last year. Total revenue in the first quarter of 2022 was comprised of net product sales of $147.5 million and royalty revenue of $5 million.
Timothy Dec: The increase in net product sales was primarily due to net product sales of GoCovery from the acquisition of Adamus in November 2021 and growth in new product sales of Calgary, which was launched in the second quarter of 2021. For the first quarter of 2022, combined R&D and SG&A expenses were $111.3 million, as compared to $95.7 million for the same period in 2021. The increase in expenses is primarily due to activities to support the launch of Calbray and integration costs associated with the Adamas acquisition. Amortization of intangible assets for the first quarter of 2022 was $20.6 million compared to $6 million for the same period in 2021.
Total revenue for the first quarter of 2022 was $152 5 million, a 16% increase compared to $130 9 million in the same quarter last year.
Timothy Dec: The increase is primarily due to the acquired intangible assets of Adam. Other income for the first quarter of 2022 was $12.8 million compared to other expense of $2.3 million for the same period in 2021. The increase is primarily due to a gain recognized from the sale of a subsidiary of Navitar. Operating earnings on a gap basis for the first quarter of 2022 were $2 million as compared to $13.2 million for the same period in 2021.
Revenue in the first quarter of 2022 was comprised of net product sales of $147 5 million and royalty revenue of $5 million.
The increase in net product sales was primarily due to net product sales of co coverage from the acquisition of a damage and November 2021 and growth in new product sales of Calgary, which was launched in the second quarter of 2021.
For the first quarter of 2022, combined R&D and SG&A expenses were $111 3 million as compared to $95 7 million for the same period in 2021.
The increase in expenses is primarily due to activities to support the launch of Calgary and integration costs associated with the <unk> acquisition.
Amortization of intangible assets for the first quarter 2022 was $20 6 million compared to 6 million for the same period in 2021. The increase is primarily due to the acquired intangible assets of <unk>.
Other income for the first quarter of 2022 was $12 8 million compared to other expense of $2 3 million for the same period in 2021.
The increase was primarily due to a gain recognized from the sale of a subsidiary of mandatory.
Operating earnings on a GAAP basis for the first quarter 2022 was $2 million as compared to $13 2 million for the same period in 2021.
Timothy Dec: The decrease in GAAP operating earnings is primarily attributable to the aforementioned amortization of intangibles associated with Adamas and higher expenses to support the launch of CalBank. On a non-GAAP basis, which excludes amortization of intangibles, share-based compensation, contingent consideration, and depreciation,
The decrease in GAAP operating earnings is primarily attributable to the aforementioned amortization of intangibles associated with the damage and higher expenses to support the launch of Calgary.
On a non-GAAP basis, which excludes amortization of intangibles share based compensation contingent consideration and depreciation adjusted operating earnings was $28 million, an increase of 11% compared to $25 2 million for the first quarter of 2021.
Timothy Dec: Adjusted Operating Earnings was $28 million, an increase of 11% compared to $25.2 million for the first quarter of 2021. Additionally, due to a corporate reorganization of the ADAMAS entities during the first quarter of 2022, certain state apportionment factors were favorably impacted. This favorable income tax benefit resulted in a net tax benefit of $10.9 million for the first quarter of 2022. Reflecting this tax benefit gap, net earnings were $25.6 million for the first quarter of 2022, or $0.43 per diluted share, compared to $5.7 million, or $0.11 per diluted share, in the same period last year. The company adopted a new accounting standard in January of this year using the modified retrospective approach. As a result, the company is now required to use the if-converted method for the convertible debt.
<unk>.
Due to our corporate reorganize organization of the abdominal entities during the first quarter of 2020 to certain state apportionment factors were favorably impacted this favorable income tax benefit resulted in a net tax benefit of $10 9 million for the first quarter of 2022.
Reflecting this tax benefit GAAP net earnings were $25 6 million for the first quarter of 2022, or <unk> 43 per diluted share compared to $5 7 million or 11 cents per diluted share in the same period last year.
The company adopted the new accounting standard in January of this year using the modified retrospective approach. The company is now required to use the if converted method for the convertible debt.
Operator: Because of this new standard, there are now approximately 6.8 million additional shares in the diluted EPS calculation. As of March 31, 2022, the company had approximately $437.5 million in cash, cash equivalents, and marketable securities, compared to $458.8 million as of December 31, 2021. The decrease in the quarter is due primarily to a milestone payment associated with the 2020 U.S. World MEDS Acquisition and transition and integration expenses related to the acquisition of Adama, which partially offset cash generated from operations.
Because of this new standard there is now approximately $6 8 million additional shares in the diluted EPS calculation.
As of March 31, 2022, the company had approximately $437 5 million in cash cash equivalents in marketable securities compared to $458 8 million as of December 31, 2021.
The decrease the decrease in the quarter is due primarily to a milestone payment associated with the 2020 U S World <unk> acquisition and transition and integration expenses related to the acquisition of <unk>, which partially offset cash generated from operations.
Operator: For the year ended 2022, the company reiterates its prior financial guidance for total revenue, combined R&D and SG&A expenses and gap and non-gap operating expenses. As such, we expect total revenues to be in the range from $640 million to $680 million, comprised of net product sales and royalty revenues. For the full year 2022, we expect combined R&D and SGA expenses to range from $460 to $490 million. This range includes the expected significant increase in marketing spend in the second and third quarters that Jack mentioned, as it relates to continued support of Calgary and its launch in the adult market.
For the year ended 2022, the company reiterate its prior financial guidance for total revenue combined R&D and SG&A expenses, and GAAP and non-GAAP operating earnings as such we expect total revenues to be in the range from 640 million to $680 million comprised of net product sales.
<unk> and royalty revenue.
For the full year 2022, we expect combined R&D and SG&A expenses to range from $460 million to $490 million.
This range includes the expected significant increase in marketing spend in the second and third quarters that Jack mentioned as they relate to continued support of Calgary and launch it in the adult market.
Operator: Overall, we expect full 2022 GAAP operating earnings to range from $20 million to $40 million, and non-GAAP operating earnings to range from $130,000 to $165,000. With that, I will now call back to the operator for Q&A. If you have a question, you will need to press star 1 on your.
Overall, we expect full 2022 GAAP operating earnings to range from 20 million to $40 million and non-GAAP operating earnings to range from $130 million to $165 million.
With that I will now call the back to the operator for Q&A.
Thank you.
To ask a question you will need to press star one on your telephone to withdraw your question. Please press the pound key.
Operator: If you have a question, please press the pound button. Stand by as we compile the Q&A. Our first question comes from David Amsellem on Piper Sandler. Your line is, Hey, thanks. Just have a couple.
Standby as we compile the Q&A roster.
Our first question comes from David <unk> of Piper Sandler.
Your line is open.
David Amsellem: First, on CalBRI, Jack, you referenced progress on the managed care landscape. I wanted to get a sense for how the payer landscape will evolve with adults. Now, in the label, is access going to generally be the same, or how we should think about contracting as it is now, and just the overall trend for gross to net, particularly again with adults in the label. So that's number one. Number two is on GoCovery.
Hey, Thanks, So just have a couple.
First on <unk>.
On Calgary Jack.
Jack you referenced our progress on the managed care landscape I wanted to get a sense for.
How the payer landscape will evolve with adults now in the label as access going to generally be the same or.
How are you should we should think about.
Contracting as it is now.
And just.
The overall.
Trends for gross to net particularly again with adults.
In the label so that's number one.
Number two is on <unk>.
<unk> coverage.
Jack Khattar: Another payer-related question. On this one, volumes are growing nicely, but as the footprint of the product grows, do you think any differently about how you interface with payers in terms of contracting? Do you think you're going to need to contract because historically that hasn't been a contracted product? So how do you think about that? And then lastly, on APICON, is the decline year over year more from the generics or Ken Moby, or a bit of both? Thanks.
Another pair related question, maybe just on this one.
Volumes are growing nicely, but as the footprints of the product grows do you think any differently about.
Hi, you interface with payers in terms of contracting do you think youre going to need to contract historically that hasnt been contracted products. So how do you think about that.
Then lastly on <unk>.
Is the decline year over year more from the generic.
Sure, Ken Mobi or better book Thanks.
Yes.
Jack Khattar: Yeah, sure. On the first question about Kelby and managed care and, and now with the recent approval for adults, any contracting that we have done basically covers the product, whether it's pediatric or adult. So from that perspective, our discussions with Vantage Care, with the payers, the PBMs, and so forth, and with Medicaid in the different states are about all the patient populations. So the recent approval should not restart a lot of these discussions or negotiations that have already occurred.
Yes sure.
On the first question on <unk> and managed care and.
And now with the recent approval for adults.
Any contracting that we have done basically covers the product, whether it's with <unk> or adults. So from that perspective, our discussions with managed care with the payers or pbms and so forth and the Medicaid.
States.
Is about all the patient populations. So the recent approval should not to restart a lot of these discussions or negotiations that have already occurred now we continue to work closely with the some of the Pbms with whom we haven't.
Jack Khattar: We continue to work closely with some of the PBMs with whom we haven't concluded or executed any specific contracts. We've been very pleased with the first major one that we landed in the fall of last year. That was CVS, where we have a Tier 2 status.
Concluded or executed any specific contracts, we've been very pleased with the first major one that we landed.
In the fall of last year that was Cvs would we have.
Tier two status, we are very happy with the partnership and appreciate the partnership with Cvs.
Jack Khattar: We are very happy with the partnership and appreciate the partnership with CVS. And, you know, the attitude that everybody here is actually trying to do something positive by making something that is a non-controlled substance available to 10 million adults or 16 million patients out there where most of the therapies are controlled substances. You know, 90% of the market is stimulants.
And.
The attitude that everybody who's here is actually trying to do something positive, but making something which is a non controlled substance available.
The 10 million adults or 16 million patients out there.
Most of the therapies are controlled substances, 90% of the market as stimulant. So we're happy to do that and we're happy to partner with everybody else was willing to really play a positive role here and trying to give people. Another alternative that is not a controlled substance that is not subject to high abuse potential and so.
Jack Khattar: So, we're happy to do that, and we're happy to partner with everybody else who's willing to really play a positive role here in trying to give people another alternative that is not a controlled substance that is not subject to high abuse potential and so forth. I mean, we also have the crisis that we just went over, obviously in the pain area, and we're hoping to make a positive impact on ADHD with Kelbree, which has an incredibly unique profile and, on top of that, is a non-controlled substance.
I mean, we also the <unk>.
So we just went over obviously in the pain area and we're hoping to make a positive impact in ADHD with calibration, which has an incredibly unique profile and on top of that as a non controlled substance. So so we continue to have.
Jack Khattar: So, we continue to have these discussions, you know, with all the PBMs, and hopefully, we'll make some more progress as time goes on. As far as Grosvenor is concerned, you may recall that in the fourth quarter of last year, we were in the high 50s.
Have these discussions.
With all the Pbms and hopefully we'll make some more progress as time goes on.
As the graph that specifically you may recall in the fourth quarter of last year, we were in the high <unk>.
Jack Khattar: It got a little bit worse, actually, in the first quarter, which is expected, as with all products, because of the high deductibles and so forth. So I would expect, moving forward, the gross net will continue to improve as time goes on. And, you know, our target hasn't really changed. As long as we hit somewhere in the 50 to 55 percent range, we should be in good shape.
It got a little bit worse actually with one with the first quarter, which is expected as with all products because of the high deductible.
Deductibles and so forth. So I would expect moving forward at the growth that will continue to improve as time goes on.
And our target hasn't really changed as long as we have somewhere in the 50% to 55% we should be in good shape. So we're not too far off.
Jack Khattar: So we're not too far off, you know, against our target. Moving on to GoCovery, as far as the payer, I mean, similarly, I mean, we'll continue to have discussions with payers, and if there was an area or a common ground here that could make a lot of sense for us that would be beneficial for our patients, as well as would be beneficial for the continued growth of the product, absolutely. You know, we're always willing to have these discussions on GoCovery as well as all other products.
Against our target.
Moving onto go property as far as the payer I mean, similarly, I mean, we'll continue to have discussions with payers and if there was an area or.
Common ground here that could make a lot of sense for us.
That would be beneficial for our patients as well it would be beneficial for the continued growth of the product absolutely you know where all of US are willing to have these discussions on gold property as well as all other products.
Jack Khattar: So that really doesn't change much, and then on Aprican, regarding the decline, a lot of it is because of recent changes on some Medicare plans where the product was moved from preferred to non-preferred status, so that really hurt us a little bit this year versus last year, and of course, the continued Q1 dynamics with the gross net worsening in Q1 versus the rest of the year. I think I have covered everything. Yes, he did.
So that's that really doesn't change much and then on APAC and regarding the decline.
It is because of the recent changes there has been some recent changes on some Medicare plans, where the product was moved from a preferred and non preferred status. So that's really hurt us a little bit this year versus last year and of course the continued.
Q1 dynamics with the gross to net towards sitting in Q1 versus the rest of the year.
I think I covered everything.
Jack Khattar: Thanks, Jack. Sure. Thank you. As a reminder, to ask a question, please press star 1 on... Our next question comes from Annabel Samimy of Stiefel. Your line is open. Hi. Thanks for taking our question. This is Jack calling in for Annabel.
Yes, he did thanks Jack.
Sure.
Thank you.
As a reminder to ask a question. Please press star one on your telephone to withdraw your.
Your question please press the penalty.
Our next question comes from Annabel Sammy.
Stifel.
Your line is open.
Hi.
Thanks for taking our question this is Jack calling in for Annabel.
Operator: For GoCovri, acknowledging that prescription trends are positive, this isn't a new product. So, in terms of messaging to physicians who should know the benefits here already, what was lacking, and what more do you need to do to reach your target audience? And will you need to invest a lot more here, or are you just going to leverage the infrastructure and the critical mass that you already have in Parkinson's? And for BD, what are you seeing in that landscape?
Critical carvery acknowledging that prescription trends are positive is it a new product.
So in terms of messaging to physicians, who should note the benefits here already.
What was lacking and what more do you need to do to reach your target audience.
And will you need to invest a lot more here or you're just going to leverage the infrastructure and the critical mass that you.
<unk> already had in Parkinson's.
And for BD.
What are you seeing in that landscape.
Jack Khattar: Obviously, the market conditions may make some sellers capitulate. Have conversations been picked up? And can we see anything more this year given the upcoming TROFENDI drop? Yeah, regarding GoCovri, we view GoCovri as still a new product. So, for us, this is a very important product for our future growth, and it is a future-growing asset, and we will continue to invest in it. Really, the short answer here, as far as the messaging or anything that has changed from before. I mean, the product was launched back in the 17, 18 timeframe, but it was relaunched again in 2021, which is a fairly recent launch when the label was expanded.
Obviously the market condition.
May make some sellers capitulate.
Conversations picked up and can we see anything more this year given the upcoming Trokendi drop.
Yes regarding the go coverage, we view recovery is still a new product so to US. This is a very important product for our future growth.
It is our future growing asset and we will continue to invest in are really the short answer here.
As far as the messaging or anything that has changed from before I mean, the product was launched.
Back in the 17 18 timeframe, but also it was relaunched again in 2021, which is a recent fairly recently launched when the label was expanded so again, we continue to see recovery is a major product for us with future momentum future growth specifically with the expansion of the label which is.
Jack Khattar: So, again, we continue to see GoCovri as a major product for us with future momentum, future growth, specifically with the expansion of the label, which is only a recent development, about, you know, 14 months ago, and we continue to invest in the product and message it appropriately, positioning it. Especially, it's a very unique clinical profile. It's the only product approved for dyskinesia and the treatment of episodes.
Only reason about.
14 months ago, and we continue to invest with the product and message.
Product appropriately positioning it, especially is a very unique clinical profile. It's the only product approved for dyskinesia and the treatment of off episodes.
Jack Khattar: There is no other product in the marketplace with that unique label, and that message is resonating with physicians, and we continue to see, obviously, the results that we reported with continued future growth and prescription. Now, the product certainly does benefit, regarding your other portion of the question, benefit from our existing infrastructure and our existence in Parkinson's overall. So, that's part of the rationale why we made the acquisition and the unique synergies between the U.S. World Med acquisition and the ADAMAS acquisition, obviously, in general.
No other product in the marketplace with that unique label.
And that message is resonating with physicians and we continue to see obviously the results that we reported was convenient future growth in prescriptions.
Now the product certainly buzz benefit regarding your other portion of the question does benefit from our existing infrastructure and our existence and Parkinson's overall, so that's part of the rationale that why do we made the acquisition and the unique.
Synergies between the U S Willamette acquisition and the Atmos acquisition, obviously in general So we'll continue to benefit from that over time.
Jack Khattar: So, we'll continue to benefit from that over time. And then, regarding the second question on business development, I mean, valuations are getting hit. No question, we all see the tape in the marketplace, but typically, in our experience in these kind of cycles, it really is dependent on a case by case scenario. If you have certain companies and they already have a long cash runway, and they don't need to tap into the capital markets, typically, their expectations of value don't change that quickly with the market.
And then finally regarding the second question on business development I mean valuations are at getting hit no question, we all see the debate in the marketplace.
But typically our experience in these kind of cycles. It really is dependent on a case by case scenario.
You have certain companies and they already have a long cash runway and they don't need to tap into the capital markets typically that expectations of value don't change that quickly with the market.
Jack Khattar: Others who may be in a little bit more of a desperate need to raise cash, their expectations might start becoming more closer to the reasonable range, so to speak. So it's really a mixed bag, all dependent on the case by case scenario of whoever the target is at that time. But we continue to look at different things that are available out there. We're very focused on trying to expand our pipeline as well. As we mentioned a few times before, as we launch Calgary in the adult space, and hopefully, we will launch the pump pending FDA approval in the first quarter of next year, the latest asset in our pipeline is in phase two. So if we can find something at a later stage, that will be ideal. And we're fairly agnostic, whether that is in neurology or psychiatry.
Others, who may be a little bit more of a desperate need to raise cash so that expectations might start becoming more closer to.
So the reasonable range so to speak so it's really a mixed bag all dependent on case by case scenario of whoever the target is at that time, but.
But we continue to look at different things without available out that we're very focused on trying to expand also our pipeline.
As we mentioned a few times before as we launched <unk> in the adult space and hopefully we will launch the pump pending FDA approval in the first quarter over the next year.
The latest assets in our pipeline is in phase II. So if we can find something at a later stage that will be ideal and we're fairly agnostic whether that is in neurology or psychiatry.
Jack Khattar: Great, thank you. And if I could have one more question. For Apikin, we've heard comments about how the dynamics of the circle of care with the product will make it difficult for generics to penetrate, but it seems like most of the comments are geared to new onboarding patients. Are there still barriers for patients currently on Apikin? Or in other words, why can't the generic just be used for the refill?
Great. Thank you.
If I could have one more question.
For APAC, Ken we've heard the comments about how the dynamics of the circle of care with the product will make it difficult for generics to penetrate.
It seems like most of the comments are geared to new onboarding patients are there still barriers for patients.
Currently on <unk> or in other words why can't the generic just be used for the retails.
What the the circle of care and the patient journey on APAC and it was not a very straightforward simple one so to street. There was a lot of handholding or there's a lot of important services that we offer to the patients not just <unk>.
Jack Khattar: What the, The circle of care and the patient journey on Apokin is not a very straightforward, simple one, so to speak. There is a lot of hand-holding. There are a lot of important services that we offer to the patients, not just later after they get the prescription, but even at the beginning when the prescription is initiated with a new patient. With the nurse educators and the network that we have out there, they reach out to the patient. They set up appointments with them, and they do training around the product.
Labeled after they got the prescription even at the beginning when the prescription is initiated within new patient.
With the nurse educators and the network that we have out there they reach out to the patient they set up appointments with them. They do training around the product they follow up with the patient on a routine basis. So this is not just initiation of new patients, but also continuous maintenance of the patients making sure they are doing.
Jack Khattar: They follow up with the patient on a routine basis, so this is not just the initiation of new patients but also continuous maintenance of the patient, making sure they're doing well with the product. Do they have any questions, any feedback? That feedback actually goes back to the prescribing physician, so there is a closed loop of feedback here surrounding the patient and the services we offer. In addition to all that, clearly, the cartridge that was recently approved as a generic to our cartridge still has to be used with our device and our pen; that will not be available for the genetics, obviously.
Well with the product do they have any questions any feedback that feedback actually goes back to the prescribing physician. So there is a closed loop feedback we're surrounding the patient and the services we offer.
And then in.
In addition to all that clearly the cartridge that was recently approved as a generic to our carpet still has to be used with our device and our firm.
So.
Jack Khattar: So we view that the situation so far has been evolving in the right direction for us. As I mentioned in my prepared remarks, we haven't seen any significant impact of the business as of today. Great. Thank you so much. Sure.
So that will not be available for the genetics, obviously, so we view that situation. So far has been evolving in the right direction for us as I mentioned in my prepared remarks, we haven't seen any significant impact of the business as of today.
Great. Thank you so much.
Sure.
Thank you.
Operator: Thank you. Thank you. And again, to ask a question, please press star 1 on your telephone. Stand by one moment as we compile, because I do not see any of you.
And again to ask a question. Please press star one on your telephone.
Standby one moment as we compile the Q&A roster.
Oh.
Speakers I do not see any further questions in the queue I will turn the conference back over to Mr. Jack <unk> for closing remarks.
Operator: I will turn the conference back over to Mr. Jack Khattar for closing. Thank you. Well, we are executing on our strategic priorities, focusing on our two key growth drivers for our future growth, Kelby and DoCovery. We're very pleased with the first quarter growth from these two products and look forward to building on the momentum for the rest of 2022. We will continue to work with the FDA to progress SPNA 30 towards potential approval by the FDA and to prepare for its potential launch in the first quarter of 2023.
Thank you.
We are executing on our strategic priorities focusing on our two key growth drivers for our future growth calibrate and go coverage. We're very pleased with the first quarter growth from these two products and look forward on building on the momentum for the rest of 2022, we will continue to work with them.
So progress SPN 830 towards the potential approval by the FDA and to prepare for the potential launch in the first quarter of 2023, I would like to thank all our employees for delivering another solid quarter, which positions us well for the remainder of the year. Thanks again for joining US today, we look forward to updating you.
Jack Khattar: I would like to thank all our employees for delivering another solid quarter, which positions us well for the remainder of the year. Thanks again for joining us today. We look forward to updating you on our progress throughout the year. This concludes today's conference. Thank you for participating. You may now disconnect. Have a pleasant day. [music]
On our progress throughout the year.
This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.
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Hello, everyone.
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