Q1 2022 Heron Therapeutics Inc Earnings Call
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Good day, ladies and gentlemen, and thank you for standing by and welcome to the Heron Therapeutics first quarter 2022 earnings conference. As a reminder, this conference is being recorded now I would like to turn the call over to David Harris, Our executive Vice President Chief Operating Officer. Please proceed.
Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Heron Therapeutics first quarter 2022 earnings conference. As a reminder, this conference is being recorded. Now, I would like to turn the call over to David Szekeres, Executive Vice President, Chief Operating Officer. Please proceed. Thank you, Jason. Good afternoon, everyone, and thank you for joining us.
Thank you, Jason and good afternoon, everyone and thank you for joining us.
David Szekeres: With me today from Heron are Barry Cork, Chief Executive Officer and Chairman, John Poynan, President and Chief Commercial Officer, and Kimberly Manhardt, Executive Vice President of Drug Development and Board Director. For those of you participating via conference call, the slides will be made available via webcast and can also be accessed by going to the investor relations page of our website following the conclusion of today's call. Before we begin, I would like to remind you that this call will contain forward-looking statements concerning Heron's future expectations, plans, prospects, corporate strategy, and performance, which constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.
With me today from hearing a Barry Quart, Chief Executive Officer, and Chairman, John pointed President and Chief Commercial Officer, and Kimberly Manhart Executive Vice President of drug Development Board director.
For those of you participating via conference call. The slides, they're made available via webcast can also be accessed by going to the Investor Relations page of our website following conclusion of today's call.
Before we begin I would like to remind you that this call will contain forward looking statements concerning <unk> future expectations plans prospects corporate strategy and performance, which constitute forward looking statements for the purposes of the safe Harbor provision under the private Securities Litigation Reform Act of $19.
David Szekeres: Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements.
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Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in our filings with the SEC.
In addition, any forward looking statements represent our views only as of the date of this website webcast and should not be relied upon as representing our views as of any subsequent date.
We specifically disclaim any obligations to update such statements now ill turn the call over to Barry.
David Szekeres: Now, I'll turn the call over to Barry. Thank you, David. Welcome, everyone, and thank you for joining us. The first quarter was a major turning point for the commercialization of XenRelief with the official rollout of expanded indications achieved in mid-December. You will hear from John that we are now reaching critical mass in terms of ordering accounts with a 68% increase in unit demand in the first quarter compared to the fourth quarter. This has allowed us to make significant progress in reducing the excess inventory at distribution centers.
Thank you David welcome everyone and thank you for joining us.
Barry Cork: So next quarter, you should see dollar sales of 400 milligram vials match demand, with continued increases in ordering accounts and formulary approvals. We anticipate seeing similar to greater quarter-over-quarter increases in coming quarters. With our CINV franchise, as we noted last quarter, we observed modest growth and are feeling sufficiently confident in this market post-COVID-related disruptions to provide guidance for full year 2022. During the first quarter, we continued to prosecute our NDA for HDX-019 for post-operative nausea, POND, which has the potential to be many times larger than our CIND business. There are no outstanding information requests from FDA, and they have already provided initial labeling comments.
First quarter was a major turning point for the commercialization of generally with the official rollout of expanded indications obtained mid December .
You will hear from John that we are now reaching critical mass in terms of ordering accounts with a 68% increase in unit demand in the first quarter compared to fourth quarter.
This has allowed us to make significant progress in reducing the excess inventory at distribution centers.
So next quarter, you should see dollar sales of 400 milligram vials match demand.
With continued increases in ordering accounts formulary approvals.
Through status and multiple idms moving towards therapeutic interchange with Zen release, we anticipate seeing similar to greater quarter over quarter increases in coming quarters.
With our C. A N V franchise as we noted last quarter, we observed modest growth in our ceilings sufficiently confident in this market post COVID-19 related disruptions to provide guidance for full year 2022.
During the first quarter, we continued to prosecute our NDA for HD X O one nine for post operative nausea.
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Which has the potential to be many times larger than our C. I N E business.
There are no outstanding information request from FDA and they have already provided initial labeling comments.
Lastly, we've continued to focus our energies on both cutting costs and partnering ex U S territories for Zen released.
Barry Cork: Lastly, we've continued to focus our energies on both cutting costs and partnering ex-U.S. territories for ZIN relief to extend our cash run. We've made significant progress in both areas, with our goal of completing at least one partnership this quarter. Overall, the first quarter was an important turning point for Heron, and we're excited to review our progress with you today. I will now turn the call over to Jon to discuss our achievement of important commercial and corporate milestones. Jon?
To extend our cash runway.
Made significant progress in both areas, where Theyre go all of them are completing at least one partnership this quarter.
Overall first quarter was an important turning point for Haren and we're excited to review our progress with you today I will now turn the call over to John to review, our achievement of important commercial and corporate milestones.
Yeah.
Thank you Barry I'm excited to share our first quarter commercial results. We continue to make significant progress with the same really launch during my presentation I'll start with a number of updates on key performance metrics related to this progress.
John Poynan: Thank you, Barry. I'm excited to share our first quarter commercial results. We continue to make significant progress with the Thin Relief Lawn. During my presentation, I'll start with a number of updates on key performance metrics related to this progress. And then I'll finish with an update on our strong first quarter commercial results with our oncology care business. I'll start by summarizing the Zen Relief launch highlights to date by sharing our scorecard of leading indicators.
And then I'll finish with an update on.
On our strong first quarter commercial results with our oncology care of business.
I'll start by summarizing, but generally launch highlights to date by sharing our scorecard of leading indicators.
John Poynan: During our first three quarters of launch, we have continued a strong cadence of adding new unique ordering accounts, which have been growing by about 50 accounts per month. We're also very encouraged by the increases and the account reorder rates, which have grown from 50% in the first three months of launch to 80% in the first nine months of launch. We continue to gain formulary approvals for Zen Relief in targeted hospitals with a run rate of 32 formulary approvals per month during our launch.
During our first three quarters of launch we have continued a strong cadence of adding new unique ordering accounts, which have been growing by about 50 accounts per month.
We're also very encouraged by the increases.
And the account reorder rates, which have grown from 50% in the first three months of launch.
The 80% in the first nine months of watch.
We continue to gain formulary approvals for generally targeted hospitals with a run rate of 32 formulary approvals per month during our watch.
John Poynan: Importantly, we're seeing excellent growth in Integrated Delivery Networks, or IDNs, adding XenRelief to formulary. We believe adding IDN support is a critical component in potential therapeutic interchanges, with key accounts switching from XBRL to XenRelief for indicated procedures in the future. Finally, since our last series call, Zin Relief has, Please see pass-through status for separate reimbursement for ZIN relief outside of the surgical bundle payment. This is a key competitive advantage since ZinRelief is the only local anesthetic separately reimbursed in the hospital outpatient setting of care, which represents an estimated 59% of our indicated procedures.
Importantly, we're seeing excellent growth and integrated delivery networks, or idms, adding Zen relief to formulary.
We believe adding IV and support is a critical component and potential therapeutic interchanges with key accounts switching from EXPAREL because it didn't relate for indicated procedures in the future.
Finally, since our last earnings call. It's been released has receive pass through status for separate reimbursement for generally outside of the surgical bundle payment.
This is a key competitive advantage something really fits the only local anesthetic separately reimbursed in the hospital outpatient setting of care.
Which represents an estimated 59% of our indicated procedures.
Slide number six benchmarks the number of unique ordering accounts during the first nine months of launch based on Symphony Health data.
John Poynan: Slide number six benchmarks the number of unique ordering accounts during the first nine months of launch based on symphony health data. We continue to rapidly add new accounts ordering generally, with 451 ordering accounts in the first nine months of the year. This represents an increase of 46% from the 309 level in the first six months of life.
We continue to rapidly add new accounts ordering similarly, with 451 ordering accounts in the first nine months of launch.
This represents an increase of 46% from the 309 level in the first six months of launch.
In addition, literally had 80% of accounts reordering during the first nine months the greatest reorder percentage.
John Poynan: In addition, Zinrelief had 80% of accounts reordering during the first nine months, the greatest reorder percentage for all four products benchmarked in this analysis. We believe the growing reorder rate is an excellent indication of the strong real-world experience that surgeons are having with their patients. While the initial ZIN relief results are strong, aggressive expansion in the number of ordering accounts is a key priority in 2022, and we continue to make strong progress on this goal during April, as I'll show in my next slide. In April, we added 61 new unique ordering accounts, bringing the total to 512 in our first 10 months of launch.
For all four products benchmark in this analysis.
We believe the growing reorder rate is an excellent indication of the strong real world experience that surgeons are having with their patients.
While the initial didn't really results are strong aggressive expansion in the number of ordering accounts is a key priority in 2022, and we continue to make strong progress on the skull during April as I'll show on my next slide.
In April we added 61, new unique ordering accounts, bringing the total to 512 and our first 10 months of launch.
John Poynan: This account total represents ZIN relief orders from 27% of our 1,900 target accounts. Zen Relief unit command grew by 68% in the first quarter over the fourth quarter. However, it's important to recognize that the COVID Omicron surge stunted Zenerleaf during the second half of December into early February. During the surge, our customers were faced with delays in elective surgeries as a result of policy decisions, positive patient pre-op COVID tests, and staff shortages.
This account total represent zimbra weak orders from 27% of our 1900 target accounts.
Generally unit demand grew by 68% in the first quarter over the fourth quarter.
However, it's important to recognize that the Covid omicron Serge stunted generally during the second half of December into early February .
During the search our customers were faced with delays in elective surgeries as a result of policy decisions positive patient Preop Covid test and staff shortages. Nevertheless, we were able to demonstrate monthly growth of 42% for February and 25% for March.
John Poynan: Nevertheless, we were able to demonstrate monthly growth of 42% for February and 25% for March. During the first quarter, the 200 mg SKU demand units grew by over 106% based on a broad expansion of XenRelief's label indication, which utilized this dosage strength for surgical procedures such as bariatric, foot, and ankle. While April was the highest demand month total since launch, the monthly growth in April slowed compared to the prior two months in the first quarter.
During the first quarter, the 200 milligram S. K U demand units grew by over 106% based on broad expansion of the Zen reliefs label indication.
Which utilize this dosage strength for surgical procedures, such as very attract and inks.
While April was the highest demand months total since launch the monthly growth in April slowed compared to the prior two months in the first quarter.
During late March and the first couple of weeks of April our sales team reported a slowdown of elective procedures based on spring break for patients and surgeons.
John Poynan: During late March and the first couple of weeks of April, our sales team reported a slowdown of elective procedures based on spring break for patients answered. In order to test this feedback, we looked at the rolling five-week period ending April 15 and compared that with the prior five-week period. As this demand slide shows, Xen Relief grew by 12% during this period, while Xthloral actually declined by 3% during the same time. The level of Zinc relief inventory in the distribution channel continues to be an area of great interest.
In order to test the feedback we looked at the rolling five week period, ending April 15th and compared that with the prior five week period.
This demand slide shows then relate grew by 12% during this period, while EXPAREL actually declined by 3% during the same timeframe.
The level of relief inventory in the distribution channel continues to be an area of great interest.
John Poynan: As we described in our fourth-quarter call, there was excess initial stocking inventory in the distribution channel. Since that time, we've continued to make meaningful progress in burning through that inventory based on increases in generally demand unit volume sales. First quarter net sales were $1.1 million, which was net of $300,000 in returns for short-dated product and continued progress to draw down the initial stocking inventory based on demand orders from hospitals and AFC.
As we described in our fourth quarter call. There was excess initial stocking inventory in the distribution channel.
Since that time, we've continued to make meaningful progress and burning through that inventory based on increases in centrally demand unit volume sales.
First quarter net sales were $1 $1 million, which was net of $300000 in returns for short dated product.
And continued progress to draw down the initial stocking inventory based on demand orders from hospitals and a S seats.
In order to better understand the inventory level in the distribution channel. We are reporting the ex factory reorder rates based on demand unit volume for both F. Skus.
John Poynan: In order to better understand the inventory level and the distribution channel, we are reporting the X factory reorder rates based on demand unit volume for both SKUs. Ultimately, our goal is to have X factory orders at 100% of demand unit volume, meaning the distribution channel is replenishing its inventory for every demand unit sold to a hospital or ASC. Through March 31st, the 400 milligram SKU reorder rate was 92% of demand unit volume.
Ultimately our goal is to have X factory orders at 100% of demand due to volume, meaning the distribution channel is replenishing their inventory for every demand units sold to a hospital or ASC.
Through March 31st the 400 milligram S. K you reorder rate was 92% of demand unit volume.
John Poynan: Fortunately, through March 3rd or May 3rd, the X-Factory order rate now exceeds 100% of the demand units. In other words, the 400 mg SKU has stabilized, and Zin relief demand units should be reflected in X-Factory unit sales as we go forward. With respect to the 200 milligram SKU, the reorder rate through March 31st was 41%, indicating there was some excess 200 milligram inventory in the distribution channel at the end of the first quarter.
Fortunately through March 3rd or May 3rd.
The ex factory order rate now exceeds 100% of the demanding it in other words, the 400 milligram S. Ku has stabilized and generally demand units should be reflected.
And ex factory unit sales as we go forward.
With respect to the 200 milligram S. K U the reorder rate through March 31 was 41%, indicating there was some excess 200 milligram inventory in the distribution channel at the end of the first quarter.
John Poynan: This isn't surprising with the 200 mg SKU accounting for 26% of the total Zin relief demand unit volume. We've already observed significant improvements in the 200 milligram X-factory reorder rate through May 3rd with a 67% X-factory reorder rate, based on the accelerating growth of the 200 milligram SKU. We expect to burn through the remaining excess 200 milligram inventory by the end of the second quarter, just like we did with the 400 milligram FKU in the first quarter.
This isn't surprising with the 200 milligram S. K U accounting for 26% of the total didn't relief demand unit volume.
We've already observed significant improvements in the 200 milligram ex factory reorder rate true may 3rd with a 67% ex factory reorder rate based on accelerating growth at the 200 milligram S. K U.
We expect to burn through the remaining excess 200 milligram inventory by the end of the second quarter, just like we did with the 400 milligram S. K U in the first quarter.
Now, let's dive into the details of our new business pipeline. This slide highlights the continued rapid progress that they didn't really cause making with formulary approvals.
John Poynan: Now, let's dive into the details of our new business pipeline. This slide highlights the continued rapid progress that ZinRelease is making with formulary approval. At the end of February, we reported 260 formulary approvals.
At the end of February we reported 260 formulary approvals.
John Poynan: This number has continued to grow at about 30 new formulary approvals per month since the launch to 319 total approvals. And those accounts actually making P&T decisions, over 90% of hospital P&T committees are adding fin relief to formula. Importantly, an estimated 68% of our formulary approvals are for unrestricted usage of Zinrile. We're also making excellent progress and expanding, gaining an extension of the unrestricted formulary approval to include the broader label approved by the FDA in mid-December. The remainder of the second quarter will contain about 60 additional P&T committees scheduled to review ZIN relief before the end of the quarter.
This number has continued to grow with about 30, new formulary approvals per month since the launch of 319 total approvals.
And those accounts actually making PMT decisions over 90% of hospital P&C committees are adding zimmerly formulary.
Accordingly, an estimated 68% of our formulary approvals are for unrestricted usage of generally.
We're also making excellent progress in expanding gain.
Gaming expansion of the unrestricted formulary approval to include the broader label approved by the FDA in mid December .
The remainder of the second quarter.
Well contained about 60 additional PMT committee scheduled to reviews and released before the end of the quarter.
John Poynan: In addition, a number of hospitals and IDMs, which implement a one-year moratorium to add all new products following FDA approval, will become available for P&T committee reviews in the third quarter. New formulary approvals help us establish a critical pipeline for news and relief business and remain a key priority for our commercial team. Next, I wanted to highlight a key top-down strategy of targeting Integrated Delivery Networks, or IDNs, to create new system-wide opportunities for therapeutic interchange from XBRL to ZIN-related for indicated procedures. Thus far, 46 IDNs have added XenRelink to their formulas.
In addition, a number of hospitals and idms, which implement a one year moratorium that all new products. Following FDA approval will become available for PMT Committee reviews in the third quarter.
New formulary approvals helped us establish a critical pipeline for news and really business and remain a key priority for our commercial team.
Okay.
Next I wanted to highlight a key top down strategy of targeting integrated delivery networks are idms to create new system wide opportunities.
John Poynan: These IDN systems include over 1,100 institutions in their system with 41% of the approvals for unrestricted use of XenRelink. In addition, these 46 IDNs account for about 676,000 annual ZIN relief indicated procedures and 77 million XBorel sales. Our success with IDNs allows us to work with senior-level decision-makers who are evaluating switching from XPAREL to XenRelay for indicated procedures. Now, let's drill down on the 13 IDNs that are interested in a potential therapeutic interchange.
Therapeutic interchange from EXPAREL to then really for indicated procedures.
Thus far forty-six Ibm's have added 10 relate to their formularies. These IBM systems include over 1100 institutions in their system with 41% of the approvals for unrestricted use of centrally.
In addition, these forty-six ibm's account for about 676000 annual Zinn relief indicated procedures.
And 77 million of EXPAREL sales.
Our success with IBM allows us to work with senior level decision makers were evaluating switching from EXPAREL to generally for indicated procedures.
Now, let's drill down on the 13 90 ends that are interested in the potential therapeutic interchange whats in reliefs expanded label indications, it's not surprising that idms are looking to save millions of dollars for a product.
John Poynan: With XenRelief's expanded label indications, it's not surprising that IDMs are looking to save millions of dollars for a product that is actually demonstrated to have Superior Clinical Results for the Standard of Care Bupivacaine. We are thrilled to be partnering with both pharmacy and physicians to drive their internal evaluations with Cinderly. Of the 13 IDNs who are interested, 11 have already initiated their internal trials with Zinrelate, and initial feedback on the trials has been very positive across a wide variety of surgical procedures.
Which is actually demonstrated superior clinical results to the standard of care of bupivacaine.
We are thrilled to be partnering with both pharmacy and physicians to drive their internal evaluations with centrally.
Of the 13 IV and so we're interested 11 have already initiated their internal trials will generally.
Initial feedback on the trials and it's been very positive across a wide variety of surgical procedures.
While moving forward a large IBM certainly take some time, we expect the first I D N therapeutic interchange decision to be made by the end of this quarter.
John Poynan: While moving forward, a large IDN certainly takes some time. We expect the first IDN therapeutic interchange decision to be made by the end of this quarter. The CMS approval of pass-through status for separate reimbursement of Zin Relief for Medicare patients is a game-changer for us. Zin Relief is the only local anesthetic separately reimbursed in the hospital outpatient setting for the next three years.
The CMS approval of pass through status for separate reimbursement abscind relate for Medicare patients as a game changer for US Jim relief is the only local anesthetics separately reimbursed in the hospital outpatient setting up here for the next three years.
John Poynan: This is a significant competitive advantage since we are now actually cheaper than using generic bupivacaine, and Xperil's pass-through status in the hospital outpatient setting of care expired years ago. This important approval builds on our existing reimbursement strengths already in place. In the fourth quarter, CMS issued ZinRelief a specific C code, C9088, for separate reimbursement in the ASC setting of care effective January 1, 2022, for permanent reimbursement even beyond the typical three-year pass-through period.
This is a significant competitive advantage since we are now actually cheaper than using generic bupivacaine.
And EXPAREL is pass through status in the hospital outpatient setting of care expired years ago.
This isn't in this important approval builds on our existing reimbursement strength already in place in the fourth quarter CMS issued generally specific CCAR see 9088 for separate reimbursement in the ASC setting of care effective January one two.
2022 for permanent reimbursement, even beyond the typical three year pass through period.
Our market access team has done an outstanding job with reimbursement coverage from commercial and Medicaid Payors, we've already obtained separate reimbursement outside the surgical bundled payment for Zen relate with more than 123 million covered lives in afcs.
John Poynan: Our market access team has done an outstanding job with reimbursement coverage from commercial and Medicaid payers. We've already obtained separate reimbursement outside the surgical bundle payment for ZinRelief in more than 123 million covered lives and ASCs. And in some cases, it's also reimbursed in the hospital outpatient center.
In some cases, it's also reimbursed in the hospital outpatient setting.
A key component of our pricing strategies, even without separate reimbursement are.
John Poynan: A key component of our pricing strategy is, even without separate reimbursement, our lower acquisition costs benefit customers across settings of care where the drug may be paid for under the surgical bundle payment. This next slide we've shown in a wide variety of different versions in the past. Today I'll focus on the purchase price savings and the reimbursement benefits. Switching to ZinRelief provides a cost savings of 25% to 32% based on the wholesale acquisition cost, or WAC, and a savings of 42% to 48% based on our 340B price offering compared to XBRL.
Lower acquisition cost benefits customers across settings of care or the drug may be paid for under the surgical bundle payment.
This next slide we've shown.
And a wide variety of different versions in the past.
Today I'll focus on the purchase price savings and the reimbursement benefits switching to didn't really provides a cost savings.
25% to 32% based on the wholesale acquisition cost or WAC.
And the savings of 42% to 48% base number 340 D price offering compared to EXPAREL.
John Poynan: This is a huge financial incentive for customers to switch to ZenRelay. From a reimbursement perspective, using XenRelief is profitable for Medicare patients and the hospital outpatient and ASC settings of care. In these challenging financial times, 340B accounts can experience a financial benefit of over $429 per patient by using ZinRelief rather than XBorel. Based on these economic benefits, it's not surprising that large IDNs are now conducting therapeutic interchange evaluations. I'll close the Xen Relief section with our key priorities for 2022. Our top priority is to leverage the new label indications for faster growth. This will be accomplished by expanding existing surgeon usage to new procedures.
This is a huge financial incentive for customers to switch to generally.
From a reimbursement perspective, using generally is profitable with Medicare patients in the hospital outpatient and ASC settings of care.
And these challenging financial times 340, <unk> accounts can experience a financial benefit up over $429 per patient by using generally rather than EXPAREL.
Based on these economic benefits, it's not surprising that large idms are now conducting therapeutic interchange evaluations.
I'll close it's been really section with our key priorities for 2022.
Our top priority is to leverage the new label indications for faster growth. This will be accomplished by expanding existing surgeon usage into new procedures.
We're also making excellent progress in accounts with existing didn't really formulary approval to remove restrictions and allow us to be used in all of our newly indicated surgical procedures.
John Poynan: They are also making excellent progress in accounts with existing Zen Relief formulary approval to remove restrictions and allow us to be used in all of our newly indicated surgical procedures. Our second priority is to increase usage within ordering accounts by increasing the number of surgeons routinely using XenRelate. Many accounts initially evaluated XenRelate with only two or three surgeons from larger practices.
Our second priority is to increase usage within ordering account by increasing the number of surgeons routinely using generally Manny.
Many accounts initially evaluated and relief with only two or three surgeons from larger practices.
Based on the excellent outcomes with their patients we were actively utilizing their experience to support expanded use of chips in really with their colleagues.
John Poynan: They send excellent outcomes with their patients, and we are actively utilizing their experience to support expanded usage of XenRelief with their colleagues. Our third priority is to gain formulary approvals at new targeted IDMs and hospitals. Increased access in our pipeline for growth, and Therapeutic Interchange Opportunities, is the key to this goal. Finally, we'll continue to maximize separate reimbursement outside the surgical bundle payment for Zindelic. The April 1st pass-through status for relief in the hospital outpatient setting is already making a positive impact.
Yeah.
Our third priority is to gain formulary approvals at new targeted ibm's in hospitals.
Increased access and our pipeline for growth.
And therapeutic interchange opportunities is the key of this goal.
Finally, we will continue to maximize.
Our separate reimbursement outside the surgical bundle payment for centrally.
The April 1st pass through status didn't relief in the hospital outpatient setting is already making a positive impact.
John Poynan: In summary, we've already made strong progress with a number of leading indicators, which gives us confidence that 2022 will be a significant year of growth for Xen Relief. Now, I'd like to shift gears and review the first quarter results for our Oncology Care Franchise. During the first quarter, our oncology care team did an outstanding job of growing our CIMD portfolio net sales by 13% over the prior quarter. This growth was driven by a 22% increase in Cervanti demand units in the clinic setting of care, a market dominated by generic competition. The second quarter 2022 CIMB Net Sales Guidance is in the range of $22 million to $23 million, as our gross net revenue will be a bit lower on higher demand units sold during the quarter.
In summary, we've already made strong progress with a number of leading indicators, which gives us confidence that 2022 will be a significant year of growth for generally.
Now I'd like to shift gears and review the first quarter results for our oncology care franchise.
During the first quarter, our oncology care team did an outstanding job of growing our C. I M B portfolio net sales by 13% over the prior quarter.
This growth was driven by a 22% increase of Sabanci demand units in the clinic setting of care a market dominated by June of generic competition.
Our second quarter 2022 C. I M. B net sales guidance is in the range of $22 million to $23 million.
As our gross to net revenue will be a bit lower on higher demand units sold during the quarter.
It's our belief that boats and bumpy and soft dollar poised for growth in 2022 based on two key factors.
John Poynan: My belief is that both Symbionte and Sustel are poised for growth in 2022 based on two key factors. First, we continue to see improving reimbursement tailwinds as generic cost prep and average sales price reimbursement decreased to $26.35 in the second quarter of 2022. In addition, effective January 1st, separate reimbursement in the hospital outpatient segment ended, which will make the Symbonti value proposition much more attractive in 2022. Ivy Atkinsia's ASD reimbursement has decreased by over $180 during the past year, so there's less value they can offer, which benefits both Sustel and Synvox.
First we continue to see improving reimbursement tailwind as generic fast prep at an average sales price reimbursement has decreased to $26.35 in the second quarter of 2022.
In addition, effective January 1st separate reimbursement in the hospital outpatient segment ended which will make somebody sent out the value proposition much more attractive in 2022.
I mean, you can see as ASP reimbursement has decreased by over $180. During the past year, southern plus value they can offer which benefits both soft all anson bounty.
As Barry mentioned, we're now providing full year.
Barry Cork: As Barry mentioned, we're now providing full year 2022 CINV Net Sales Guidance in the range of $89 million to $93 million, representing a 7% to 11% increase over prior years. A potential tailwind in the IV bag shortage some accounts are experiencing, which benefits Synvanti as the only NK1 that doesn't require an IV infusion bag. In addition, there's a backlog of oncology patients as a result of COVID that we believe will create opportunities for both products since they can be used in HECC and the majority of MECC patients. As new patients re-enter the system for treatment, this will create a significant growth opportunity for both products. That concludes my prepared remarks. I'll now turn the call back over to Barry. Okay?
2022 C. I N b net sales guidance in the range of 89 million to $93 million, representing a 7% to 11% increase over prior year.
A potential tailwind in the IV bag shortage, some accounts are experiencing which benefits and body is the only NK one that doesn't require an IV infusion bag now.
There's a backlog of oncology patients as a result of Covid that we believe.
Great opportunities for both products until they can be used and heck in the majority of Mac.
Patients as new patients reenter the system for treatment.
We'll create a significant growth opportunity for both products.
That completes my prepared remarks, I'll now turn the call back over to Barry.
Alright.
Thanks, John throughout.
Barry Cork: Thanks, John. Throughout the call today, you've heard the commercial numbers from both of our product franchises. But to wrap up on our financials slide, of keen interest to everyone, as of March 31st, 2022, we had cash equivalents and short-term investments of $111.9 million, and accounts receivable of approximately $41 million. We expect net cash used for operating activities of between $37 million and $39 million in the second quarter of 2022.
Throughout the call today, you've heard the commercial numbers from both of our product franchises, but to wrap up.
On our financial slide.
Of keen interest to everyone as of March 31, 2022, we had cash cash equivalents and short term investments of $111 million 11.
$11 9 million and.
And accounts receivable of approximately $41 million.
We expect net cash used for operating activities of between 37 million to $39 million in the second quarter of 2022.
As noted on the next slide completing an ex U S partnership to improve the balance sheet is one of our highest priorities.
Barry Cork: As noted on the next slide, completing an ex-U.S. partnership to improve the balance sheet is one of our highest priorities. Slide 20 contains important catalysts for the company. The most important of which are completing an ex-U.S. partnership for ZinRelief, completing the necessary work needed to submit SNDA-2 for ZinRelief to further expand the indication, for CIMV achieving 89 to 93 million in net product sales in 2022, and for PONV, obtaining FDA approval for HDX 019 by September.
Slide 20 contains important catalyst for the company.
The most important of which are completing an ex U S partnership for generalist completing the necessary work needed to submit S. N D. A to for Zen relief to further expand the indications for.
C. A N V achieving 89 to 93 million and net product sales in 2022.
And for P. O N D. It's obtaining FDA approval for HD X O one nine by September .
As noted we've already received initial labeling comments for this NDA.
Barry Cork: As noted, we've already received initial labeling comments for this NDS. Slides 21 and 22 contain important safety information for Zen Relief. These slides are available on our website. With that, we are ready for your questions. Operator?
But 'twenty, one and 'twenty two contain important safety information for generally these slides are available on our website.
With that we are ready for your questions operator.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Thank you we will now begin the question and answer session tests. A question you May Press Star then one on your Touchtone phone.
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Operator: To withdraw your question, please press star, then 2. At this time, we'll pause momentarily to assemble a roster. Our first question comes from Brandon Folkes from Cantor Fitzgerald. Please go ahead.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Brandon Folkes from Cantor Fitzgerald. Please go ahead.
Hi, Thanks for taking my questions and thank you for the color on the coal.
Brandon Folkes: Hi, thanks for taking my questions, and thanks for the color on the call. Maybe just, can you talk about where you aren't gaining formulary approval? What is the reasoning behind those decisions? Is it just label? Will it just take time? Just any color there.
Maybe just can you talk about we aren't gaining formulary approval what is the reasoning behind those.
Decisions or is it just label it just take time, just any color there and then you mentioned.
Barry Cork: And then you mentioned, you know, the priority to execute an ex-US partnership. Can you just talk about the environment you're seeing there, where you may bring in a substantial upfront? Are we in an environment where partners are looking to pay a substantial upfront? Thank you. Sure. Thanks, Brandon. I'll take the second question and turn the formulary question over to John.
The priority to execute an ex U S. Partnership can you just talk about the environment, you're seeing there where you may bring in a substantial frankly are we in.
And environments, where partners are looking at.
And to pay a substantial upfront. Thank you.
Sure. Thanks, Brandon I'll I'll take the second question in terms of the formulary question over over to John in terms of partnering we have a significant partnering.
Barry Cork: In terms of partnering, we have significant partnering activities underway, which is why we felt confident enough to identify it as certainly a key catalyst coming up in the near future. And because of the fact that we have several different companies where we have discussions ongoing, late-stage discussions, I think we can safely say that significant interest gives us the opportunity to ask for significant upfront payments from companies. So I can't really say much more than that, but certainly there's a lot of interest in the product.
Activities under way, which is why we felt confident enough to do identify it as it is a certainly a key catalysts coming up in the near future.
And because of the fact that we have several different companies where.
Where we have our discussions ongoing late stage discussions.
I think we can safely say that.
With significant interest gives us the opportunity to.
As for significant upfront payments from from companies. So I can't really say much more than that but certainly.
There's a lot of interest in the product obviously surgical procedures are.
Barry Cork: Obviously, surgical procedures are ubiquitous around the globe. The ability to significantly reduce pain and get patients out of the hospital are all very attractive endpoints. Not everywhere has the opiate crisis as the U.S. and Canada, but pain is still a significant issue around the world. So with that, John.
The greatest around the globe are the the ability to significantly reduce pain and get patients out of the hospital are all very attractive end points are not everywhere has an opiate crisis as the U S and Canada.
But pain is still a significant issue around it around the world.
So with that John .
Sure so.
John Poynan: Sure. So first of all, I guess, from a committee standpoint, I think we're doing extraordinarily well. We're getting over 90% of those P&T committees that actually review them to really approve them, and we're increasing the number of unrestricted usage approvals that we're getting. So all of those are very positive, Brandon. The accounts that aren't, I would put in two primary buckets right now.
First of all I guess from a P. M East commodity standpoint, I think we're doing extraordinarily well, we're getting over 90% of those TNT committees that actually reviews and relate to a pretty bad and we're increasing the number of unrestricted usage approvals that we're getting so the all of them.
Those are very positive Brandon.
The accounts that aren't I would put in in two primary buckets right now one would be just the those that have a moratorium as based on their policy of not approving any drugs not just been released but any a drug by the FDA that was approved for at least one year until it's been on the market place just a game experience.
John Poynan: One would be just those that have a moratorium based on their policy of not approving any drug, not just SYN relief, but any drug by the FDA that has been approved for at least one year until it's been on the marketplace just to gain experience. And fortunately, we're coming up on that, and we would expect to reengage with a number of those accounts in the third quarter. The other set of customers that are not approving us are primarily accounts that are currently utilizing a generic cocktail worth of using bupivacaine as a background.
And Fortunately, we're coming up on that and we would expect to re engage with a number of those accounts in the third quarter.
The other set of customers that are not approving us are primarily accounts that are currently utilizing a generic cocktail work of.
Using bupivacaine as a <unk>.
Brown and you know that's something that we continue to work with you know based on the fact that we got superior clinical data head to head against Bupivacaine. You know, we're trying to work through the surgeons those are generally driven by pharmacy, where they're trying to maintain budgets, but.
John Poynan: And that's something that we continue to work on based on the fact that we have superior clinical data head-to-head against bupivacaine. We're trying to work with surgeons. Those are generally driven by pharmacy where they're trying to maintain budgets. But fortunately, those have been less than 10% of the accounts out there, and we continue to try to work on them through Surgeon Champions. Thanks very much. And do you mind if I just ask one more question, as you talk about rising champions?
Fortunately those have been less than 10% of the accounts out there and we continue to try to work.
Through surgeon champions.
Thanks, very much in demand if I just ask one more.
What surgeon champion and Youll concrete order rates, obviously look very good do you have any commentary in terms of.
John Poynan: Your account reorder rates obviously look very good. Do you have any commentary in terms of actual surges at those accounts? Are they reusing the product, reordering the product? Yeah, great question.
Surgeons at those account or they reusing the big button reordering the product.
Yeah, Great question, So you know.
John Poynan: So, you know, what we are seeing is we're getting, you know, really excellent reorder rates with 80% of accounts during the first nine months reordering XynRelief. So that's very exciting for us. But those are really driven by surgeons that have started using the account from kind of day one. So what we're hearing from surgeons is that, you know, they're getting better results with XynRelief than what they've seen in our clinical trials just because of some of the limitations that we had on the ability to use multimodal analgesics.
What we are seeing is we're getting a really excellent reorder rates with 80% up accounts. During the first nine months of reordering Zenner life. So that's very exciting for us, but those are really driven by surgeons that had started using the account from kind of the product from day, one so what we're hearing from from <unk>.
Surgeons is that Theyre getting actually battle better results Watson related than what they have seen in our clinical trials just because of some of the limitations that we had on the ability to use multi modal analgesics.
John Poynan: So the feedback from them has been phenomenal. I just spoke with a surgeon last week who actually was a former XPAREL user and had recently done, you know, over the last several months, 400 patients with XynRelief and just said this is a total game changer for his practice and his patients. Thank you very much.
The feedback from them has been phenomenal I just spoke with a surgeon last week too.
Who actually was a former EXPAREL user in and had recently done you know over the last several months 400 patients with my wife and just that this is a total game changer for his practice and his patients.
Thank you very much.
Certainly.
The next question comes from Josh Shimmer from Evercore ISI. Please go ahead.
Josh Schimmer: Certainly. Thank you. The next question comes from Josh Schimmer from Evercore ISI. Please go ahead.
So it's been relief is performing according to your internal expectations.
Barry Cork: Transcripts provided by Transcription Outsourcing, LLC. Josh, I appreciate the question. Taking the second one first, again, our primary goal right now, as noted, is to conclude at least one, if not more, partnering activities, which we believe will play a very significant role in terms of our financing needs. We want to get those completed before we look at any other types of financing activities, because we hope that we'll be able to complete our financing activities with partnering events or certainly go pretty far down the road.
So why didn't you express clearer caution since consensus estimates are meaningfully above the the report itself, so far or if it's not meeting your expectations, whether it be unexpected headwinds.
That you've run into and then most investors are waiting for you to address your financing requirements is there something that you're waiting for prior to taking action and if not why haven't you addressed this yet thank you.
A N G Josh.
I appreciate the question, taking the second one first.
Again are our primary goal right now is as noted is to conclude.
Least one if not more partnering activities, which we believe will play a very significant role in terms of our financing needs are we want to get those completed before.
Before we look at any any other types of financing activities not because we hope that we'll be able to complete our financing financing activities with partnering events. We're certainly go pretty far down the road and that's the reason.
Barry Cork: And that's the reason why we haven't done anything else. The partnering activities, as you know, always take a little longer than expected, but we anticipate concluding one or more of those very soon. And in terms of the performance of ZinRelief, I think that we had provided very clear information last quarter that, because of the excess inventory, the target for the first quarter would be really driving use and demand units, but that probably was not going to be represented in terms of dollar sales because we needed to work down the excess inventory.
Why are we haven't done anything else.
The partnering activities as you know always take a little longer than expected.
But we anticipate to conclude.
One or more of those very soon.
And in terms of the performance of Zen really if I think that.
That we had provided very clear information.
Last quarter that because of.
The excess inventory.
That is the target for first quarter would be a.
Really driving driving use and demand units, but that that probably is not going to.
Barry Cork: As John noted, we've made significant progress in alleviating the excess inventory completely for the 400 at this point, and we are making significant progress on the 200. And certainly, we will try to provide as much color as we can in terms of expected sales going forward. It's obviously a very dynamic period at this point, and I think that I'll let John provide his opinion as well. But the one thing that certainly has slowed down the launch was the initial label.
That would be represented in terms of dollar sales because we needed to to work down the excess inventory.
As John noted.
We've made significant progress and alleviating the excess inventory completely for the 400 at this point.
And making significant progress on the 200.
And certainly we will.
Tried to provide as much.
You know color as we can in terms of expected sales.
Going forward, it's obviously, a very dynamic period.
At this point and I think that.
You know I'll, let John provide us his opinion as well, but the one thing that certainly has.
Slowed down the launch was the initial label them with now address that and then the second thing that.
Barry Cork: We've now addressed that. And then the second thing that we've run into that was somewhat unexpected is the desire by virtually all of our significant customers to want to do their own assessments of the product before moving forward aggressively. And those assessments take time.
We've run into that was on it somewhat unexpected is the desire by virtually all of our significant customers to the wanted to do their own assessment of the product before moving forward aggressively.
And those assessments take time as John noted for the idea in a process of interchange are they're all moving forward with their own internal assessments are the feedback has been very positive. So we're not concerned about the fact that they.
Barry Cork: As John noted for the IDN process of interchange, they're all moving forward with their own internal assessments, and the feedback has been very positive. So we're not concerned about the fact that they want to do their own assessments. It just takes a lot of time.
Wanted to do their own assessments. It just takes a lot of time.
Barry Cork: And so we're hopefully coming to the end of the first process there for an IDN switch, and hopefully the rest will follow relatively soon after that. John, did you want to mention anything else? Yeah, I'll add a bit of color to that, Barry.
And so we're hopefully coming to the end of the first process there for an idea and switch.
And hopefully the rest will follow relatively soon after that.
John do you want to mention anything else.
Yeah, I'll I'll add a bit of color to that Barry. Thanks, So I guess from my perspective, Josh If you look at a number of indicators.
John Poynan: Thanks. So, I guess from my perspective, Josh, if you look at a number of indicators, access and formulary approvals have been doing extremely well. The number of ordering accounts has been doing extremely well. The reimbursement that we've been able to get, not only with just getting pass-through status but with commercial and Medicaid payers, is excellent. And the reorder rate is great. Where we're not meeting our goal right now, I would say, is that we would like to be generating higher volume per account than we are. And I think that there are a couple of reasons for that.
The access and formulary approvals has been doing.
Extremely well the number of ordering accounts has been doing extremely well.
Where the reimbursement that we've been able to get not only with just getting pass through status, but with the commercial and Medicaid payers is excellent and the reorder rates, great, where we're not beating our goal right now or would you say is that we would like to be generating higher volume per account than what we are.
And I think that there are a couple of reasons for that one is that as Barry indicated we started off with three indicated procedures and and even though the market research indicated that our surgeons.
John Poynan: One is that, as Barry indicated, we started off with three indicated procedures. And even though the market research indicated that surgeons would use them broadly off-label, that's not what happened in practice. And we're starting to see that change now. And the other is just the internal assessment. You know, a number of accounts were fooled by a previous competitor that came out, and they promised them 72 hours' worth of coverage. And it only gives them 24 hours.
Surgeons would use it broadly off label, that's not what happens in practice and we're starting to see that change now and the other is just the internal assessment.
Number of accounts were fooled by a previous competitor that came out and they promised them 72 hours worth of coverage and it only gives them 24. So that you have to see in their own hands, what Zane relief could produce unfortunately has been really has been producing great results with their patients. So it's taken a bit longer than what we would like to.
John Poynan: So, they had to see in their own hands what Xen Relief could produce. And fortunately, Xen Relief has been producing great results with their patients. So, it's taken a bit longer than we would like to generate the volume levels on an account basis, but the other metrics that we're tracking, I think, are going very well. Very helpful. Thank you for providing that additional color. Looking forward to the subsequent quarter. Thanks, Josh.
To generate the volume levels on an account basis, but the other metrics that we're tracking I think are going very well.
Very helpful. Thank you for private bank that that additional color looking forward to the subsequent quarters.
Thanks, Josh Thanks, Josh.
The next question comes from synergy Bellinger from Needham <unk> Company. Please go ahead.
John Poynan: Thanks, John. The next question comes from Sergey Belanger from Neatham & Company. Please go ahead, whole questions on the left. I guess first, can you just talk about where you've seen product updates so far in terms of procedures and settings of care? And then secondly, a follow-up on a prior answer, talked about the process from formulary acceptance to ordering and usage being longer than expected, and just maybe describe that process and if there's any way it could be sped up. John, why don't you take this? Okay, so I'm sorry, could you repeat the first question? I was writing down your second one, sir?
Yeah.
Couple of questions on the left I guess first can you just talk about.
Where you have hidden product uptake so far in terms of procedures and.
Setting of care and then secondly, a follow up on the prior answer.
About the.
Process from.
Formulary acceptance to ordering and usage being longer than expected.
And just maybe describe that process and if there's any way it could be sped up.
John why don't you take those.
Okay.
So I'm I'm, sorry could you repeat the first question I was writing down your second one the search.
Sergey Belanger: Procedures in terms of setting up a care and what are the procedures we're seeing and where. Thank you, Barry. So if you look at it overall, of our 512 ordering accounts, about 58% of those are hospitals, and 42% are ASCs. Those hospitals, those 58% are generating 76% of our business, and obviously, the difference is 24% being generated by the ASCs. If you look at the procedures that are being used at, you know, I think we've had, you know, a tremendous head start with the original three indicated procedures of total knee replacement, hernia, and bunionectomy, so not surprising, those are big ones.
Procedures are in terms of setting of care and pop what what are the.
Procedures that we're seeing and where.
Thank you Barry.
If if you look at it overall.
Our 512 ordering accounts about 58% of those are hospitals and 42% of our afcs.
Those hospitals and those 58% are generating 76% of our business and obviously the difference is 24% being generated by the assets.
If you look at the procedures that are being used out you know I think we had you know a tremendous head start what the original three indicated procedures.
Our total knee replacement.
And and Bungie inactivate, so not surprising those are big ones, what we've seen during the first quarter with the expanded label is a real increase in the amount of total hip.
Sergey Belanger: What we've seen during the first quarter with the expanded label is a real increase in the amount of total hip replacements, and the results have been remarkable with that. We're also seeing a lot of bariatric and foot and ankle surgery, so those would be the key drivers from a procedures standpoint. As far as the process is concerned, the process of formulary approval is only the first step. It also requires medical executive approval, which usually takes about 30 days, and then you have to get computerized into the order entry system.
Hip replacements and the results have been remarkable with that we're also seeing a lot of bariatrics and foot and ankle surgery. So those would be the key drivers from a procedure standpoint.
John Poynan: The pharmacy has to order it, and it has to get it to patients. But I think what we're seeing right now is that many of these accounts will approve the product, and they will do an internal trial evaluation, and it may be in a single surgical procedure, it may be in multiple surgical procedures, or they'll do anywhere from 5 to 10 to 20 procedures to get a sense of how it's working and whether it really delivers on that 72-hour promise that we're making.
As far as the process.
The process of a formulary approval is only the first step. It also then requires a medical executive approval, which usually takes about 30 days and then you have to get computerized into the order entry system. The pharmacy has to order and it has to get to a patient, but I think what we're seeing right now is that many of these.
Accounts they'll approve the product.
Zen relief in and they will do any internal trial evaluation and it may be in a single surgical procedure. It may be and in multiple surgical procedures, where they'll do anywhere from five to 10 to 20 procedures to get a sense of.
How it's working and whether it really delivers I'm I'm about 72 hour promise that we're making are.
Fortunately those are going very well, but they generally start those with only two to three surgeons. So it takes time to get through that process and do their initial evaluation then they want to do follow up visits with those patients. So it's.
John Poynan: Currently, those are going very well, but they generally start those with only two to three surgeons, so it takes time to get through that process and do their initial evaluation. Then they want to do follow-up visits with those patients, so it's not as rapid as we would like.
It's not as rapid as what we would like but what we are seeing is based on the terrific results that they're getting more patients we're leveraging that experience with their colleagues to get new surgeons at it and I think that's one of the real benefits that we're gonna be seen the remainder of 2022 is as these trials are ongoing and the <unk>.
John Poynan: But what we are seeing is, based on the terrific results that they're getting with patients, we're leveraging that experience with their colleagues to get new surgeons added. And I think that's one of the real benefits that we're going to be seeing the remainder of 2022 is, as these trials are ongoing and the results continue to be positive, more and more surgeons will be using it. So that will make a key impact on driving volume at the individual account level and expanding the number of procedures that a surgeon uses. One more question for Barry.
<unk> continued to be positive that more and more surgeons will be using it so that'll make it a key impact on driving the volume at the individual account level that in and expanding the number of procedures that a surgeon using centrally.
Barry Cork: As we think about XUS partnerships, can you just remind us where the product is approved and where it's been filed? And do you expect this partnership to significantly extend your cash runway, or are there other avenues also being evaluated? Sure, yes, so the product is approved in Canada and the European Union and several other countries that accept European Union approval, Iceland, and other countries. The product is available for submission in many other countries, in terms of the package of data that we have is fileable in other countries. We just have not yet moved forward to submit the product in other countries, but we're in discussions with companies about doing that.
One more question for Barry.
As we think about the ex.
Ex U S partnerships can you just remind us.
Where the product is approved and where it's been filed.
And do you expect this partnership to significantly.
And your cash runway or there's other avenues also being evaluated.
Sure, Yes, so the a D a.
Product is approved in Canada.
And the European Union and several other countries that accept the European Union approval.
Iceland and in other countries.
The product is available for <unk>.
A submission in many other countries in terms of the package of data that we have is file a bowl in other countries. We just have not yet moved forward to submit the product in other countries, but we're in discussions with companies about doing that.
At and so the fact that Oh.
Barry Cork: And so the fact that the product is not approved in a region has not been an obstacle in terms of finding companies that are interested in moving forward in that region. And as I said, the goal is through one or more partnerships to make significant headway in terms of the financial picture of the company. We continue to look at ways to reduce burns.
The product is not approved and are in the region is has not been an obstacle in terms of finding.
Companies that are interested in moving forward in that region.
And.
As I said the goal is is through one or more partnerships to make significant headway in terms of the financial picture of the company.
We continue to look at ways to reduce burn that's the additional approach and then <unk>.
Barry Cork: That's the additional approach. And then, obviously, once we've completed both of those activities, we'll take a look and see if there's any additional gap that needs to be filled through another route. And we'll certainly evaluate all possible approaches and make sure that we do take the best route for a shareholder. And certainly at the current share price, you know, using equity is certainly very low on our list in terms of something that we'd want to do.
Asleep.
Once we've completed both of those activities will take a look and see if there's any additional gap.
That that needs to be filled through.
Another another route and we'll certainly evaluate all possible approaches and make sure that we do take take the best route for.
Shareholders.
Certainly at the current share price.
I'm using equity is certainly very low on our list in terms of something that we'd want to do.
Our next question comes from bore Speaker from Cowen. Please go ahead.
Unknown Speaker: Our next question comes from our speaker from Cowan. Please go ahead. First, I just want to understand. My understanding is that there's a financial incentive for using Xenrolift in the hospital setting compared to some of the other drugs available. Can you confirm that and is that in any way affecting sales? Why isn't it driving greater hospital adoption than we're seeing so far? John, do you want to take that?
First I just wanted to understand my understanding is that there's a financial incentive for us.
Using a general left in the hospital setting compare to some of the other drugs available can you confirm that and are you seeing that in any way affecting sales Ah why isn't in driving greater hospital adoption that we're seeing so far.
John you want to take that.
Sure.
So really a couple of ways to look at that horse you're correct. There is a financial incentive and using zimmer weight in the hospital outpatient setting.
John Poynan: Sure. So, there are really a couple of ways to look at that source. You're correct, there is a financial incentive for using Xen Relief in the hospital outpatient setting. First, there is reimbursement for Medicare patients where there is actually reimbursement that's provided for Xen Relief. Xen Relief is the only local anesthetic that is reimbursed for Medicare patients in the hospital outpatient setting of care.
So first is with reimbursement for Medicare patients, where there's actually reimbursement that's provided to generally similar weeks since the only local anesthetic that is reimbursed for Medicare patients in the hospital outpatient setting of care and if you look at it.
John Poynan: And if you look at it, in a non-340B hospital, you make about $12.50 every time you use the 400 milligram vial of Xen Relief. And you make almost $75 per vial in a 340B hospital. So, a very substantial benefit there. You compare that with a product like Expiral where, if you use their WAC price, since there's no reimbursement outside the surgical bundle, it costs $354. So, a major benefit there. If you also look at a hospital setting, if they're getting packaged reimbursement as part of the surgical bundle, because we have a significant benefit from a WAC perspective and also a 340B perspective, you can save, with the 400 milligram, about $87 per unit compared to using Expiral. In a 340B, it's 149 or 42%.
And nine 340, B Hospital, you make about $12.50 every time you use the 400 milligram.
Viola Similarly, Andy.
And do you make.
Almost $75 per vial and a 340 B hospital, so very substantial benefit there you compare that with a product like EXPAREL, where if you use their WAC price since there's no reimbursement outside the surgical bundle that costs 300.
$54. So no major benefit there. If you also look at a hospital setting if they're getting a package.
Reimbursement as part of the surgical bundle because we have a significant benefit from a WAC perspective, and also a 340 b perspective.
Can save at what the 400 milligram about at $87 per unit compared.
Compared to using EXPAREL and a 340 B. It's 149, 42%. So we get you both from a cost savings perspective, as well as a reimbursement perspective that it really benefits.
John Poynan: So, we get you both from a cost savings perspective as well as a reimbursement perspective that really benefits the hospital. As far as why it hasn't taken on quicker, if you look at it, we actually just got pass-through status on April 1st of this year. So, we are already starting to see some benefits with accounts looking to move more rapidly. So, I would say that you will start seeing accelerated growth in the hospital setting of care as we go forward. I got it.
The hospital as far as why it hasnt taken off quicker if you'd look at it we actually just got pass through status on April 1st of this year. So we are already starting to see some some benefits with accounts looking to move more rapidly. So I would say that you.
And you will start seeing accelerated growth in the hospital setting of care as we go forward.
Unknown Speaker: And my second question is about the financial strategy. Are you considering just selling royalties or fully selling your non-core assets, I don't know if they're considered non-core assets or basically the chemotherapy and nausea management franchise? Or is that not something that you're considering at this point?
Got it and my second question is on the financial strategy are you considering just so selling royalties are fully selling your I'm not I don't know if there instead of noncore assets or basically.
The chemotherapy and nausea management franchise.
Or is that not something that you're considering at this point.
Well I think that for us a it would be appropriate to say that the you know we are certainly evaluating all different avenues.
Barry Cork: Well, I think that for us, it would be appropriate to say that, you know, we are certainly evaluating all different avenues with partnering as non-dilutive dollars being the primary target. And we feel very comfortable that we'll be able to generate significant deals there. And then, as I said before, once we complete our cost-cutting activities, get the burn down, as well as bring in significant upfronts in terms of partnering, we'll take a look and see where the gap is and utilize one of several different approaches to fill the rest of that gap.
With with partnering is non dilutive dollars being the primary target.
And we feel very comfortable that we'll be able to to generate a significant deals there and then as I said before once we are complete.
Our cost cutting activities get the burn down as well as bring in.
Significant upfronts in terms of partnering we will take a look and see where the gap is and utilize one.
You know of several different approaches to fill the rest of that gap.
Great. Thank you for taking my questions.
Unknown Speaker: Great, thank you for taking my question. Boris, good to hear from you. Our next question is a follow-up from Kelly Shee of Jefferies. Please go ahead.
Of course, good hearing from you.
Our next question comes is a follow up from Kelly She of Jefferies. Please go ahead.
Thank you for taking my question. So the reorder rates office, there I'll ask kindly break down by a 400 and the rest of the 200 milligram and 92% and 41% and it seems like a pause this tender from the coupon wondering how does the 200 milligram with how do I wait well they evolve.
Kelly Shee: Thank you for taking my questions. So, the reordering rate for Xenrolift currently breaks down by 400 versus 200 milligram is 92% and 41% and seems like consistent from Q4. I'm wondering how the 200 milligram reordering rate will evolve into 2022? And the relevant question is, is the economic incentive for 200 versus 400 similar in terms of dollar value for hospital settings and also under 340B? John, do you want to take that?
Into 2022, and the relevant question is is that our economic incentive fall 200 versus 500 are similar in terms of a dollar value fall hospital settings, and also under Oh, sorry, I thought it'd be.
John you want to take that.
Sure.
So Kelly I. The first question I would say is that I'm very price per milligram.
John Poynan: Sure. So Kelly, the first question I would say is that the price per milligram between the 400 and 200 is virtually identical. So there is no real financial benefit of a hospital using one versus the other. I think what you're seeing as far as usage with 26% of our business coming in at 200 milligrams since launch is really reflective of only having one procedure that was indicated by the FDA that used the 200 milligrams. That was a funginectomy.
Between the 402 hundred is virtually identical so there is no real financial benefit.
By hospital using one versus the other I think what you're seeing as far as usage with 26% up our business coming and the the 200 milligram since launch is really reflective of only having.
One procedure that was indicated by the FDA that used the 200 milligram that was funding back to me.
So as we expanded the label in mid December we started seeing a very significant growth of the 200 milligram in fact during the first quarter. It grew by.
John Poynan: So as we expanded the label in mid-December, we started seeing a very significant growth of the 200 milligram. In fact, during the first quarter, it grew by over 106%. So its growth is accelerating, and a lot of that is small to medium abdominal surgeries, as well as foot and ankle surgeries that are now available that weren't originally available based on the FDA limitations of indication. So what we would expect is we've already seen very significant growth where we ended the first quarter at a 41% reorder rate for the 200 milligram.
Over 106%. So its growth is accelerating in a lot of that is small to medium abdominal surgeries as well as foot and ankle surgeries that are now available that weren't originally available.
Based on the F D a to limitations up indication. So what we would expect as we've already seen very significant growth, where we ended the first quarter at 41% reorder rate for the 200 milligram.
John Poynan: Just through May 3rd, we're already up to 67%, and by the time we end this quarter, we would expect that we should have depleted the inventory of the 200 milligrams. So we're making great progress with that, and if you have any follow-up questions, please let me know. Thank you. And also, could you comment on the split of volume and also dollar value for the round of use in hospital and ambulance center settings?
Just through May 3rd we're already up to 67% and by the time, we end this quarter, we would expect that we should have depleted the inventory of.
The 200 milligram so.
We're making great progress with that and if you have any follow up questions. Please one yeah.
Thank you and also could you comment on the plate.
In a flat volume and also dollar valeo, a fuzzy around left us at a hospital and.
Hum and wellness center settings.
Yeah, right right now the the split from a demand standpoint and 76%.
John Poynan: Yeah, right now, the split from a demand standpoint is 76% in the hospital outpatient setting or the hospital overall for the 400 milligram, and 24% of the volume is in the ASC. It's pretty similar. I don't think there's a material difference between the ASC and the hospital. It's probably a bit higher. I'm sure if you look at it, that the overall rate of Xenrolatents launches is 26% within the ASC market. It might be somewhere between 30 and 32% that would actually be in the ASC for the 200, and that's because bunionectomies would typically be done in more of an ASC setting as opposed to a hospital outpatient setting.
In the hospital outpatient setting them up or the hospital overall for the 400 milligram and 24% of the volume that's in the ASC.
It's pretty similar I don't think there was a material difference between the AFC in the hospital, it's probably a bit higher on onshore if you look at it.
The overall rate of Zimmer leap since launch is 26% within the ASC market. It might be you know somewhere between 30, and 32% that would actually be.
And in the AFC for the 200, and that's because funding activities would typically be done in more of an ASC setting as opposed to see why a hospital outpatient setting.
Thank you very much.
John Poynan: Thank you very much. You're welcome. There are no more questions in the queue. This concludes our question and answer session. I'd like to turn the conference back over to Barry Quart for any closing remarks. Thank you, and thanks to everyone for joining us on the call today. We're really pleased with the progress this quarter and look forward to keeping you updated. The conference is now concluded. Thank you for attending today's presentation.
Youre welcome.
There are no more questions in the queue. This concludes our question and answer session I'd like to turn the conference back over to Barry Port for any closing remarks.
Thank you and thanks to everyone for joining us on the call today, we're really pleased with the progress this quarter and look forward to keeping you updated.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
John Poynan: [music] CONGRATULATIONS! © The Bulletproof Executive 2013, [music] © BF-WATCH TV 2021, [music] David Szekeres, David Szekeres, David Szekeres, David Szekeres David Szekeres, David Szekeres, © BF-WATCH TV 2021 © BF-WATCH TV 2021 © BF-WATCH TV 2021 © BF-WATCH TV 2021 © BF-WATCH TV 2021 [music] © BF-WATCH TV 2021 [music] © BF-WATCH TV 2021 © BF-WATCH TV 2021 © BF-WATCH TV 2021
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