Q1 2022 Liquidia Corp Earnings Call
Good morning, and welcome everyone to the liquidity of Corporation first quarter 2022 financial results and corporate update conference call. My name is Howard and I will be your conference. Operator today. Currently all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session.
Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference. Please press Star then zero for operator assistance at any time.
I'd like to remind everyone that this conference call is being recorded.
I will now hand, the call over to Jason Adair Senior Vice President corporate development and strategy.
Thank you Howard It is my pleasure to welcome everyone to today's conference call.
Before we begin I would like to remind everyone that today's call will contain forward looking statements based on current expectations such statements may involve risks and uncertainties that may cause actual results to differ materially from these stages expectation.
Further information on the company's risk factors, please see liquidity as filings with the Securities and Exchange Commission at Www Dot Dot Gov were on liquidity of web site at <unk>.
<unk> Dot com.
Joining the call today are Chief Executive Officer, Roger Jeffs Chief.
Chief Financial Officer, Mike Dakota.
General Counsel with December .
Other members of liquidity management.
I would now like to turn the call over to Roger for our prepared remarks, after which he will open up the call for your questions.
Thank you, Jason and good morning, everyone.
First quarter of this year reinforced everything that I believed to be true when I moved into the senior rolling CEO role in January .
Our products are needed.
Dedicated and focused.
And our confidence is high.
We are focused on things in our control first and foremost of which is commercially commercializing our products.
And a path towards profitability.
We remain encouraged by increasing payer support.
Ill injection.
Along with concurrent increasing demand.
Large national and regional payers have been reviewing and now enacting generic mandates for current cultural possible.
We are aware that additional payers expected to implement mandates in the second half of 2022.
Into 2023, reflecting acknowledgment.
It's no perceived difference in quality efficacy safety or patient support services with actual cross sell injection versus the branch grew modestly.
These payers to be great potential benefit to reduce costs.
First introduced nearly 20 years ago.
At the end of the first quarter, we argue the merits of our case.
In District Court with respect to hatch Waxman litigation that was initiated nearly two years ago by United Therapeutics.
<unk> EBIT reached this point in the proceedings.
So that our full positions and evidenced both as to non infringement and invalidity of the asserted patents could become publicly known and accessible.
We will continue to advance our position to the fullest extent.
This trial proceedings and related patent office sections.
Next step is the inter parties review or IPR against the 703 patent with oral arguments to be presenting tomorrow to the patent trials and appeal board or <unk>.
Consistent with past, earning calls we do not intend to summarize our arguments against the patents being litigated.
Thats very interested you can find much more information in the public domain to the courts Pacer system now that the trial has concluded what did the <unk> system.
What we will say is that liquidity remains confident.
Launching a trip yet is on the visible horizon.
We will update investors when decisions are vendor.
Continue to ask for your patience as it will likely be September or October before we have definitive information.
Regardless, we are not waiting to plan for success.
During the first four months of this year, we fortify the balance sheet and enabled an operating plan for long term value under Mike <unk> leadership, we have created a financing plan that allows us to optimize the path.
Towards potential profitability.
The combination of restricted debt.
Target debt equity financing and increasing sales into cross sell injection.
It provides us the flexibility required to navigate some uncertainty.
Without reliance on any one form of capital capital.
We will continue to tightly manage expenses in a disciplined manner, while also playing to win which more than the $100 million in cash allowance.
More specifically.
We will continue preparations to rapidly launch your trip, yet pending FDA approval and build commercial inventories accordingly.
We will build on the 280 plus patient years of exposure with <unk> by initiating new clinical trials in who group III patients among others.
We will advanced development of our next generation <unk> pipeline looking to improve on the product profile and dosing regimen and.
And we will monitor the external link landscape for programs that leverage our expertise in <unk>.
And the cardiopulmonary community.
I'm personally excited to build on the foundation created by the team who have welcomed.
Welcome to <unk> in January and then humbled by the drive and determination of the company as a whole to get new treatment options to patients, who equally need and a weight them.
While our eyes are on the future.
It is also important to recognize the great quarter, we have had so far this year with that Mike would you. Please highlight a few points from our financial statements.
Thank you Roger and good morning, everyone.
Our first quarter 2022 financial results can be found in the press release issued earlier today and on and on our Form 10-Q to be filed with the SEC after market close today.
And those documents you'll see that.
Revenue was $3 5 million for the three months ended March 31, 2022, compared to $3 1 million for the same quarter in the year prior.
Revenue related primarily to the promotion agreement with Sandoz during.
During the first quarter of 2021, the profit split percentage, we received under the promotion agreement was 80%, whereas during the first quarter of 2022. The profit split percentage was 50%. This decrease in profit split percentage was offset by a significant increase in the number of units sold for the quarter.
Cost of revenue.
Zero point $7 million for the quarter, which was the same compared to the first quarter of 2021.
Research and development expenses were $4 7 million or one.
$4 million decrease from the same quarter last year due to the timing of manufacturing related to the type of your program.
General and administrative expenses were $12 $5 million compared with $5 3 million, an increase primarily due to stock based stock based compensation and legal fees related to our ongoing litigation.
Other expenses in the quarter totaled $1 5 million, an increase of $1 3 million.
Over the same quarter last year due to the extinguishment of debt and increase in interest expenses on the restated loan with Silicon Valley Bank all totaled we incurred a net loss in the first quarter of 2020 to $15 9 million or <unk> 30 per basic and diluted share compared to a net loss of $9 2 million or 21 per basic and.
Sure for the first quarter of 2021.
Turning to our balance sheet, we ended the first quarter in a strong position, which we built upon in April as of March 31, cash totaled $57 8 million.
This balance included the $9 5 million net increase to our existing credit facility with SBB during the first quarter as previously disclosed.
In April we closed on approximately $53 $7 million of net proceeds from the sale of common stock in an underwritten public offering we are very encouraged by the demand for new liquidity of shares. Despite the recent downturn in the biotech index.
The impact of macroeconomic events and the uncertainty of <unk> litigation.
The equity raise included new investors familiar with the PAA space as.
As well as current investors of which 19% of the raise was funded by affiliates of two of our board members.
We believe that the company is financially prepared to launch you trap upon final approval by the FDA should that occur later this year, we see a path to potential profitability as early as 2023.
With that I'd now like to turn the call back over to Roger.
Thank you Mike as you know we are steadily building towards a transformative event with the potential launch of your trip yet.
We're grateful that the FDA issued a tentative approval last November and thankful for the patient community continues to wait for what we believe will be the first choice inhaled prostacyclin when finally available.
I would now like to open it up for questions. Howard first question. Please.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue simply press the pound key.
Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
Our first question or comment comes from the line of surge, but longer from Needham <unk> Company. Your line is open.
Hi, good morning.
A couple of questions for me I guess for Roger.
One of the common questions, we get from investors is whether you would launch at risk.
The 30 month stay expires and I know in the past you have said that it would depend on the facts at that specific time, but just curious coming out of the hatch Waxman litigation in late March.
Sure.
There is any change on that front and what are some potential scenarios you may face.
In October and then secondly.
Maybe just.
Walk us through some of the R&D projects.
Youre thinking about and when they may get off the ground. Thank you.
Yes. Thank you thanks, Alex good to hear from.
With regard to launching at risk I think the issue here, that's a highly nuanced question.
And.
The reason is is it.
Really depends on what claims survive and even and if the claim that that survives.
Is there any trend so.
Really it's difficult to comment on that because there's a lot of different scenarios that could play out.
The way, we've said and we've tried to say this in our opening as we really wont comment or probabilities on what.
What may happen I think we'll just wait to get more informed.
And then we will have a definitive decision process that will we think will matriculate by the fall.
Yeah.
Technically even if we win everything.
And we could launch we could then get final FDA approval. It would be a quote unquote launch at risk because things things would be appealed by the opposing party. So.
Obviously, though in that circumstance, we would launch and then again if things are a little bit more nuanced in terms of claims survival.
Infringement patterns et cetera, then we'd have to make some more.
Sort of thoughtful decision about what we would then so I can't really comment on specific.
Outcome other than to say.
2000, and swinging almost 24 months 30 months stay have now expired is only six months left.
So we're near goal and I think like we haven't linked to the final conclusion, which we remain confident in the merits of our case and are hopeful that we will launch at the end of this year.
And then in terms of R&D projects.
I think we're trying to we're trying to leverage the expertise that we're building we're building a very experienced and capable team the history of the employees in terms of.
Developing print.
New manufacturing moiety.
So we're trying to expand on that the one obvious thing then.
To develop a longer acting form of <unk>.
Said that instead of a four times a day inhalation therapy could be.
One or two times a day inhalation therapy.
So where that stands now we are in the process of doing the requisite preclinical studies.
Some of those are directed towards understanding what a single dose administration provides a.
Mirroring model in terms of kinetics that.
Work is underway I think we will have data in the near term.
We will be able to report on some data at the next earnings call, but we don't have data yet, but I think I would say that's kind of teed up as our number one goal is to start developing that lifecycle management program with.
With leverage the capabilities, we're building for new trivia.
So with that Matt.
Next question please.
Thank you. Our next question or comment comes from the line of Julian Harrison from <unk>. Your line is open.
Hi, good morning, Congrats on the progress and thank you for taking my question I'm wondering in the scenario, where there are more than one TPI to cross sell products on the market later this year.
What do you think are the most important considerations physicians and patients should make and determining what the best option for them is.
Yes, I think Thats a great question so.
I think let me speak to our product rather than so to speak against another product not speak about the attributes that we will bring to the marketplace.
So obviously, we bring portability and will replace the burden of <unk> licensed with the palm sized disposable simple device, which not only should.
Third reportable, but potentially should should allow for earlier introduction of inhaled <unk> to patients in need.
I think the thing that we've seen is that we.
A highly tolerant tolerated well tolerated therapy to the Tolerability is good.
It avoids.
Democrats facilities associated with the oral and pharyngeal process seconds, obviously, but.
But what's unique about your trip yet vis vis the.
Is that we can escalate the dose significantly beyond what Pemex has allowance that will change the therapeutic index of inhaled through cross sell through of our dry powder formulation with print.
Shortly.
In addition to Tolerability safety, our label has no black box warning and Theres, no sort of risk from an excipient.
So I think thats, an important lever that could distinguish the product.
As I said, it's titratable.
Italy, we've gone to three times target.
So in our long term open label studies, which you actually will have an abstract at Ats.
Next week.
And we can do this in.
Just a few easily administered breath, so I think youre seeing it.
No change in that in the health care personnel paradigm in terms of treatment needs and needs.
Again, Thats, where reported Ats, we're seeing very good durability.
We can keep patients longer before they move along to other therapies.
Most likely the next therapy for them would be perenco.
So I think that's an important aspect because.
Youre going to have a different retention curve, which is obviously a important different revenue curve.
In terms of storage, we can store.
Our product at room temperature for its product lifetime, So thats important.
One thing that's critically important.
In regard to the device two things one is we use a low resistance.
Resistance device, then easily easy to inhale and deliver the dose and where this becomes even more important perhaps is down the road in who group III patients where they're compromised from obstructive.
More restrictive lung disease. In addition to the pulmonary hypertension.
And then finally with regard to the device really there is no requirement for a while.
Composition of dependent you can hope and device.
And any number of ways that the drug you can drop the device and because the drug product is encapsulated.
No spillage Thats very simple easy to use it's used in.
Already in CF and COPD COPD patients commercially there is other companies using this device.
Like Internet and gossamer.
They run clinical trials, so it's what I'd call it a tried and true.
What what this will all mean.
In total instead.
We expect a very rapid transition from patients both on therapy and moved to inhaled therapy.
Two DPI.
Preferentially, we think to go to <unk> and.
And there's very good comparative to that if you look back in 2009 for lunch.
It launched.
Second the market then take this was already in the marketplace and.
And that market rapidly transitioned to <unk>.
I think so over time, particularly in new patient starts.
So and that was just a convenience play.
Without this sort of pharmacologic therapeutic index improvement that we're seeing with <unk>.
Again I've seen other estimates that are lower than what we would predict I think we would estimate the 80% to 90% of the techniques that market would transition to <unk> and then what the essence of.
Earlier use of longer retention, we think the address.
Adjusted captured patient base will grow from 3000 as it as it is.
Approximately today to probably 6000, and we can be steady state.
And then so that's kind of how we see the market playing out and the opportunity that presents itself, we can check in with Japanese guys quite messy.
Excellent thanks very much.
Thank you Julien for the question.
Next question please.
Thank you again, ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. Our next question or comment comes from the line of Andreas <unk>.
<unk> from Wedbush Your line is open.
Hey, good morning, and thanks for taking our question.
Can you.
Comment on preparations for the launch and how they've been progressing and how you expect operating operating expenses to change over the next 12 months. Thanks.
Yes. Thanks for the question Andreas Mike If you would answer that question. Please.
Yes, Gary.
Thanks for the question Andreas.
So for from an operating expense.
Spencer and preparation for launch so we are as Roger said.
We'll await the outcome of.
<unk>.
The preceding litigation proceedings.
We are planning to launch in Q4.
As we said we're very confident.
We are going through the process of pre commercializing from a combination of preparing launch inventories to building out the commercial and medical affairs team. So we really are playing too.
We are playing to win and feel confident that we will be able to assuming we're able to launch in Q4 that we will be prepared.
Relating to.
What our expenses will look like over the next 12 months, what I can what I can say is we're not going to give firm guidance on that we.
We do feel confident that as we said in our prepared remarks that if we're able to launch in Q4.
That we will be on a path to profitability as early as the as early as 2023. So we would expect expenses to increase as we get closer to launches as everyone would expect but we feel confident especially with our recent capital raise.
That we will.
Have a successful launch and potentially get to profitability in 2023.
Great. Thank you.
Thank you I'm showing no additional questions in the queue at this time I would like to turn the conference back over to management for any closing remarks.
Well. Thank you. Thank you everyone. We greatly appreciate you joining us on the call today.
State your continued interest in <unk> and we will update you on our progress throughout the year have a great day Goodbye.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.
Okay.
Okay.
Okay.
Yes.
[music].
[music].
Good morning, and welcome everyone to the liquidity of corporations first quarter 2022 financial results and corporate update conference call. My name is Howard and I will be your conference operator today.
Currently all participants are in a listen only mode. Following the presentation. We will conduct a question and answer session and instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference. Please press Star then zero for operator assistance at any time I would like to remind everyone.
This conference call is being recorded.
I will now hand, the call over to Jason Adair Senior Vice President corporate development and strategy.
Thank you Howard It is my pleasure to welcome everyone to today's conference call before we begin I would like to remind everyone that today's call will contain forward looking statements based on current expectations such statements may involve risks and uncertainties that may cause actual results to differ materially from these stated expectations.
Further information on the company's risk factors, please see liquidity as filings with the Securities and Exchange Commission at Www Dot Dot Gov Romney.
<unk> web site at liquidity a dotcom.
Joining the call today are Chief Executive Officer, Roger Jeffs Chief.
Chief Financial Officer, Mike Dakota.
General counsel with each other.
Other members of management.
I would now like to turn the call over to Roger for our prepared remarks, after which we'll open up the call for your questions.
Thank you, Jason and good morning, everyone.
First quarter of this year reinforced everything that I believed to be true when I moved into the sea Rolling CEO role in January .
Our products are needed.
He is dedicated and focused.
And our confidence is high.
We are focused on things in our control first and foremost of which is commercial and commercializing our products.
And a path towards profitability.
We remain encouraged by increasing payer support.
<unk> injection.
Along with concurrent increasing demand.
Large national and regional payers have been reviewing and now enacting generic mandates for parental through cross sell.
We are aware that additional payers expected to implement mandates in the second half of 2022, and then through 2023, reflecting acknowledgment.
It's no perceived difference in quality efficacy safety or patient support services with actual cross sell injection versus the branch grew modestly.
These payers to be great potential benefit can reduce costs on a drug that was first introduced nearly 20 years ago.
At the end of the first quarter, we argue the merits of our case.
In District Court with respect to hatch Waxman litigation that was initiated nearly two years ago by United Therapeutics.
<unk> EBIT reached this point in the proceedings.
So that our whole positions and evidenced both as to non infringement and invalidity of the asserted patents could become publicly known and accessible.
We will continue to advance our position to the fullest extent.
This trial proceedings and related patent answer sections.
Next up is the inter parties review or IPR against a set of 93.
With oral arguments to be to be presenting tomorrow to the patent trials and appeal board or <unk>.
Okay.
With past, earning calls.
And do not intend to summarize our arguments against the patents being litigated.
So thats very interested you can find much more information in the public domain to the Pacer system now that the trial has concluded what did the <unk> system.
What we will say is that liquidity remains confident.
Launching a trip yet is on the visible horizon.
We will update investors when decisions are vendor.
To answer your patients as it will likely be September or October before we have definitive information.
Regardless, we are not waiting to plan for success.
During the first four months of this year, we fortify the balance sheet and enabled an operating plan for long term value under Mike <unk> leadership, we have created a financing plan that allows us to optimize the path.
Towards potential profitability.
The combination of restricted debt.
Target debt equity financing and increasing sales into cross sell injection.
Provides us the flexibility required to navigate some uncertainty with.
Without reliance on any one form of capital capital.
We will continue to tightly manage expenses in a disciplined manner, while also playing to win which more than the $100 million in cash allowance.
More specifically.
We will continue preparations to rapidly launch your drip, yet pending FDA approval and build commercial inventories accordingly.
We will build on the 280 plus patient years of exposure with <unk> by initiating new clinical trials in who group III patients among others.
We will advanced development of our next generation you true up your pipeline looking to improve on the product profile and dosing regimen and.
And we will monitor the external link landscape for programs that leverage our expertise.
And the cardiopulmonary community.
I'm personally excited to build on the foundation created by the team. The Wellbore welcomed me in January and then humbled by the drive and determination of the company.
Hope to get new treatment options to patients who really need them.
While our eyes are on the future.
It is also important to recognize the great quarter, we have had so far this year with that Mike would you. Please highlight a few points from our financial statements.
Thank you Roger and good morning, everyone.
Our first quarter 2022 financial results can be found in the press release issued earlier today and on and on our Form 10-Q to be filed with the SEC after market close today.
And those documents you will see that.
Revenue was $3 5 million for the three months ended March 31, 2022, compared to $3 1 million for the same quarter in the year prior.
Revenue related primarily to the promotion agreement with standard during.
During the first quarter of 2021, the profit split percentage, we received under the promotion agreement was 80%, whereas during the first quarter of 2022, the profit split percentage with 50%. This decrease in profit split percentage was offset by a significant increase in the number of units sold for the quarter.
Cost of revenue.
Zero point $7 million for the quarter, which was the same compared to the first quarter of 2021.
Research and development expenses were $4 7 million or one.
$4 million decrease from the same quarter last year due to the timing of manufacturing related to the type of your program.
Yeah.
General and administrative expenses were $12 $5 million compared with $5 3 million an increase primarily.
Primarily due to stock based stock based compensation and legal fees related to our ongoing litigation.
Other expenses in the quarter totaled $1 5 million, an increase of $1 3 million over the same quarter last year due to the extinguishment of debt and increase in interest expenses on the restated loan with Silicon Valley Bank all totaled we incurred a net loss in the first quarter of 2020 to $15 9 million or <unk> 30 per basic and.
And diluted share compared to net loss of $9 2 million or 21 per basic and diluted share for the first quarter of 2021.
Turning to our balance sheet, we ended the first quarter in a strong position, which we built upon in April as of March 31, cash totaled $57 $8 million.
This balance included the $9 $5 million net increase to our existing credit facility with SBB during the first quarter as previously disclosed.
In April we closed on approximately $53 $7 million of net proceeds from the sale of common stock in an underwritten public offering we are very encouraged by the demand for new liquidity of shares. Despite the recent downturn in the biotech index.
The impact of macroeconomic events and the uncertainty of Utrecht via litigation.
The equity raise included new investors familiar with the PAA space as.
As well as current investors of which 19% of the raise was funded by affiliates of two of our board members.
We believe that the company is financially prepared to launch <unk>. Upon final approval by the FDA should that occur later this year, we see a path to potential profitability as early as 2023 with that I'd now like to turn the call back over to Roger.
Thank you Mike as you know we are steadily building towards the transformative event with the potential launch of <unk>.
We are grateful that the FDA issued a tenant approval last November and thankful for their patients community continues to wait for what we believe will be the first choice inhaled prostacyclin when finally available.
I would now like to open it up for questions. Howard first question. Please.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue simply press the pound key.
Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
Our first question or comment comes from the line of surge, but longer from Needham <unk> Company. Your line is open.
Hi, good morning.
Couple of questions for me I guess for Roger.
One of the common questions we get.
From investors is whether you would launch at risk.
The 30 month stay expires I know in the past you have said that it would depend on the facts at that specific time, but just curious coming out of the hatch Waxman litigation in late March.
What are some of that.
If theres any change on that front and what are some potential scenarios you may face.
In October and then secondly.
Maybe just walk us through some of the R&D projects.
Youre thinking about and when they may get off the ground. Thank you.
Yes. Thank you thanks, Alex good to hear from.
With regard to launching at risk I think the issue here.
Highly nuanced question.
And.
The reason is is it.
Really depends on what claims survive.
And if the claim that that survives is that it has been infringed so.
Really it's difficult to comment on that because there's a lot of different scenarios that could play out.
The way, we've said and we've tried to say the center opening as we really wont comment or probabilities on what.
What may happen I think we're just waiting to get more informed.
And then we will have a definitive decision process that will we think will matriculate by the fall.
Technically even if we win everything.
We could launch we could then get final FDA approval it would be a quote unquote launch at risk because things things would be appealed by the opposing party. So.
Obviously, though in that circumstance, we would launch and then again if things are a little bit more nuanced in terms of claims survival.
Infringement patterns et cetera, then we'd have to make some more.
Sort of thoughtful decision about what way with them. So I can't really comment on a specific outcome.
Outcome other than to say <unk>.
<unk> almost 24 months 30 months stay have now expired, there's only six months left.
So we're near goal and I think like we have a link to the final conclusion, which we remain confident in the merits of our case and are hopeful that we will launch at the end of this year.
So and then in terms of R&D projects.
We're trying to we're trying to leverage the expertise that we're building we're building a very.
Harrington capable team.
History of the employees in terms of developing print.
New manufacturing moiety.
Superb so we're trying to expand on that in the one obvious thing then is to try to develop a longer acting form of <unk>.
We said that instead of a four times a day inhalation therapy it could be.
One or two times a day inhalation therapy, so where that stands now we are in the process of doing the requisite preclinical studies.
Some of those are directed towards understanding what a single dose administration provides in a mirroring model in terms of kinetics.
That work is underway I think we'll have data in the near term.
Essentially if were able to report on some data at the next earnings call, but we don't have data yet, but I think.
So thats kind of teed up as our number one goal is to start developing their lifecycle management program that would leverage the capabilities were.
Building for new trivia.
So with that Ben next question. Please.
Thank you. Our next question or comment comes from the line of Julian Harrison from <unk>. Your line is open.
Hi, good morning, Congrats on the progress and thank you for taking my question I'm wondering and this scenario, where there are more than one DPI at your cross sell products on the market later this year.
You think are the most important considerations physicians and patients should make and determining what the best option for them is.
Yes, I think Thats a great question.
No.
Okay.
Let me speak to our product rather than so to speak against another product to speak about the attributes that we bring to the marketplace.
So obviously, we bring portability will replace the burden of <unk> license with the with the palm sized disposable simple device.
Not only should.
Make the therapy portable but potentially.
Allow for earlier introduction of inhaled <unk> to patients in need.
I think the thing that we've seen is that.
A highly tolerant tolerated well tolerated therapy. So the tolerability is good.
It avoids systemic toxicities associated with those oral inferential processes seconds obviously.
But what's unique about your trip yet vis vis they said is that we can escalate the dose significantly beyond what Pemex has allowance that will change the therapeutic index of inhaled through cross sell through our dry powder formulation with print.
Importantly.
In addition to Tolerability safety, our label has no black box warning and Theres, no sort of risk from an excipient.
So I think that's an important lever that could distinguish the product.
As I said, it's titratable.
Readily we've gone to three times that target.
So in our long term open label studies, which actually will have an abstract at Ats.
Next week.
And we can do this in.
Just a few easily administered breath, so I think youre seeing that.
A change in the in the health care personnel paradigm in temperature.
The ease of needs.
The again, Thats, where reported Ats, we're seeing very good durability.
We can keep patients longer perform they move along to other therapies.
Most likely the next therapy for them would be perenco.
So I think that's an important aspect because.
Youre going to have a different retention curve, which is obviously a report in a different revenue curve.
In terms of storage, we can store.
Our product at room temperature for its product lifetime.
So that's important.
Now one thing that is critically important.
In regard to the device two things one is we use the low resistance.
Resistance device.
Very easily easy to inhale and deliver that dose and where this becomes even more important perhaps is down the road in who group III patients where they're compromised from obstructive.
Or restrictive lung disease. In addition to the pulmonary hypertension.
And then finally with regard to the device really there is no requirement for a.
What I would call positional dependent you can hope and device.
In any number of ways and it will permit that the drug you can drop the device and because the drug product is encapsulated.
Spillage Thats very simple easy to use it's used in.
Already in CF and COPD COPD patients commercially there is other companies using this device.
My Internet and Gossamer.
In clinical trials.
It's what I would call it a tried and true.
What this will all mean.
In total instead.
We expect a very rapid transition from patients both on <unk> therapy and needed to inhaled therapy.
Go to BPI.
And preferentially we think to go to <unk>.
And there is a very good comparative to that if you look back in 2009.
<unk>.
Second the market then.
This was already in the marketplace and that market rapidly transitioned two tenths so over time, particularly in new patient starts.
So and that was just a convenience play.
Without this sort of pharmacologic therapeutic index improvement that we're seeing with <unk>.
So again I've seen other estimates that are lower than what we would predict I think we would estimate that 80% to 90% of the turbulent market would transition to <unk> and then what the essence of.
Earlier, you said longer retention.
Thanks.
Adjusted captured patient base will grow from 3000 as it.
Yes.
Approximately today to probably 6000, and we can be steady state.
And then so that's kind of how we see the market playing out and the opportunity that presents itself freight and trucking, which obviously was quite massive.
Excellent thanks very much.
Thank you Julien for the question.
Next question please.
Thank you again, ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. Our next question or comment comes from the line of Andreas <unk>.
<unk> <unk> from Wedbush Your line is open.
Hey, good morning, and thanks for taking our question.
Can you.
The comment on preparations for the launch and how they've been progressing and how you expect operating operating expenses could change over the next 12 months. Thanks.
Yes, Thanks for the question Andreas Mike If you would.
<unk> answer that question. Please.
Yes.
Thanks for the question Andreas.
So for on operating expenses in preparation for launch so we are as Roger said.
We'll await the outcome of.
<unk>.
The proceedings litigation proceedings.
We are planning to launch in Q4.
As we said we're very confident.
We are going through the process of commercializing from a combination of preparing launch inventories to building out the commercial and medical affairs teams. So we really are playing too.
We are playing to win and feel confident that we will be able to assuming we are able to launch in Q4 that we will be prepared.
Relating to.
What our expenses will look like over the next 12 months.
What I can what I can say is we're not going to give firm guidance on that we do feel confident that as we said in our prepared remarks that if we're able to launch in Q4 that.
We will be on a path to profitability as early as the as early as 2023. So we would expect expenses to increase as we get closer to launches as everyone would expect but we feel confident especially with our recent capital raise.
That we will.
Have a successful launch and potentially get to profitability in 2023.
Great. Thank you.
Thank you I'm showing no additional questions in the queue at this time I would like to turn the conference back over to management for any closing remarks.
Well. Thank you. Thank you everyone. We greatly appreciate you joining us on the call today.
State your continued interest in <unk> and we will update you on progress throughout the year have a great day Goodbye.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.