Q3 2022 Collegium Pharmaceutical Inc Earnings Call
Greetings and welcome to the Collegium Pharmaceuticals third quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. During this conference call. Please press star zero on your telephone keypad. Please.
Please note that this conference call is being recorded.
I'll now turn the call over to Don shop at Argot partners. Thank you you may begin.
Welcome to go against Pharmaceuticals, third quarter 2022 earnings Conference call.
I am joined today by Joseph <unk>, Chief Executive Officer, Colin Tucker, Chief Financial Officer, and Scott Dreyer, Chief Commercial officer.
Before we begin today's call wanted to remind participants that none of the information presented today is intended to be promotional and that any forward looking statements made today are pursuant to the safe Harbor protection of the private Securities Litigation Reform Act of 1995.
You are cautioned that such forward looking statements involve risks and uncertainties, including without limitation. The rest of them may not be able to derive the expected benefits of the acquisition of <unk>.
Delivery Sciences international on the proposed schedule or at all.
Yeah, well they commercialize their products and that we may incur significant expenses and may not prevail in the current or future litigation pertaining to our business.
The rest of the other rest of the company are detailed at the Companys periodic reports filed with the Securities and Exchange Commission.
Our future results may differ materially from our current expectations discussed today.
Our earnings press release, and this call will include discussion of certain non-GAAP information you can find our earnings press release, including relevant non-GAAP reconciliations on our corporate website at Collegium farmer dotcom.
I'll now turn the call over to Collegium CEO Joseph Arnie. Thank you Don.
Thank you.
Joining the call.
Today, we will discuss our performance during the third quarter and through the first nine months of the year and provide perspective on our outlook for the remainder of 2020.
One would expect 2023.
Uh huh.
We are focused on building, a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions.
During the third quarter Collegium continued to support the communities, where we live and work highlighted by our charitable donation to an additional sponsorship of the mass bio Ed foundations 2022 life science workforce coffers.
Education recruitment inclusion and retention of a more diversified talent pool for our growing industry.
<unk> is a nonprofit which provides life sciences educational programs to teachers and students of all background.
We are also proud to have helped our second annual day of service in which our employees nationwide volunteered in service of organizations that are important to them.
Growth.
I want to thank the Collegium team for their hard work dedication and commitment to our mission.
2022 has been a pivotal year for collegial.
Throughout the first nine months of 2022, we executed on our strategic priorities and delivered on the goals we communicated at the beginning of the year.
We close the financially transformative BDSI ideal establishing collegium as the leader and responsible pain management.
We completed the seamless integration of BDSI and expect to achieve run rate synergies of approximately $85 million up from 70 from the $75 million target, we shared when we announced the transaction.
We delivered record net revenue and adjusted EBITDA driven by the acquisition of BDSI.
We completed the renegotiation of <unk> ER contracts that represents 54% of all prescriptions based.
Based on the plan decisions. We have received we are pleased to share that we achieved the goal of materially rolling back the discount rates and maintaining brought access starting in January 2023 X stamps CER gross to net will be less than 65%, which we expect will.
Immediately accelerate top line growth.
We advanced our position as the leader and responsible pain management growing the market share of our branded extended release pain portfolio. We.
We participated in pain week. This past September with 11 poster presentations, highlighting and raising awareness of clinical in real world data on our differentiated and distinctly position product portfolio.
And in March we executed a master settlement agreement resolving all twenty-seven pending opioid industry related lawsuits brought against the company by cities counties and other subdivisions in the United States.
Each of those lawsuits has now been dismissed.
We made significant progress against our key objectives in the first nine months of 2022.
We are on track to achieve all of our 2022 strategic and financial goals and because of our strong execution. We are updating our 2022 full year guidance we.
We are confident that our recent achievements position us for a banner year in 2023.
We remained laser focused on executing our three phase action agenda.
In the second quarter, we successfully completed phase one the seamless integration of BDSI and our efforts are yielding results. We are on track to exceed our original run rate synergies target of $75 million and now expect to achieve approximately $85 million and run right synergies with.
The first 12 months of closing the BDSI transaction.
At the start of the second quarter, we transition to face to generate momentum and have made significant progress versus most of our operational objectives.
Of note, we successfully completed expanse of ER contract renegotiations, which ensures a gross and net of less than 65% beginning on January 1st 2023.
We expect BELBUCA antics stamps E R to grow volume and market share moving forward both products are highly differentiated distinctly position and fundamentally well positioned to grow our.
Our commercial organization is fully trained engaged in building on their learnings to generate prescription momentum in 2022 and growth in 2023.
Our execution in 2022 positions Collegium for a banner year in 2023, we will transition to phase three of our action agenda accelerate in January we expect to see an immediate acceleration of top and bottom line growth in 2000 twenty-three propelled by <unk> E R.
Gross to net of less than 65%.
Prescription growth of BELBUCA, an extension E R and the full year impact of the synergize cost structure.
Our singular focus and deploying capital is to create value for our shareholders and our top priority is business development.
We are committed to taking a disciplined approach and we believe current market conditions are conducive to delivering on our business development objectives. We are focused on commercial stage opportunities with peak sales potential of over $150 million.
Importantly, we are looking for assets that are differentiated with exclusively that runs into the 20 thirties.
Our strong financial position, including robust cash generation and rapid paydown of debt leaves us well positioned to allocate capital and a focus and thoughtful manner.
We are committed the strategically investing in the growth of our business to create longterm value as well as leveraging our share repurchase program to opportunistically return value to shareholders.
Our third quarter results reinforce the conviction we have in our business strategy, we're making meaningful progress on our goals and are strongly position for top and bottom line growth in 2023, I will know him to call over to calling for a discussion of the financials.
Thanks, Good afternoon, everyone Keith.
Q3, with another <unk>, we generated record revenue record record adjusted EBITDA and.
And leveraged our strong cashback to pay down debt, while returning cash to shareholders share repurchases.
As a reflection of our execution, we increased our targeted run rate synergies BDSI acquisition to approximately $85 million.
Louisiana strengthened financial position throughout 2022, and we expect to capitalize on this moment in 2023.
Financial highlights for the third quarter include total product revenue with a record 127 million for the third corner and increased 661% from the third quarter of 2021.
That'll be it the net revenue was $38.8 million in the third quarter of 2022.
<unk> that'll be at the sales were impacted by a transient destocking of the channel at the end of the quarter <unk>.
<unk> E. R. Net revenue was 38.8 million and <unk> and that in the third quarter. It was 66%.
Lower question that was primarily driven by a one time benefit to returns, which I would speak about shortly for.
For the full year 2022, we now expect a question that can be less than 73% and starting in January 2023, as a result of the successful contract renegotiations gross and that will be less than 65 per cent.
Yeah since a franchise net revenue was $44.4 million in the third quarter.
Operating expenses, which included.
Based compensation expense or $38.4 million in the third quarter compared to $32 million in the third quarter of 2021.
Adjusted operating expenses, which exclude stock based compensation and acquisition related expenses were $32.5 million in the third quarter, an increase of 25 per cent from the third quarter of 2021.
Net income for the third quarter was zero point $5 million income from operations was $20.5 million in the third quarter.
non-GAAP adjusted EBITDA with a record $74.9 million for the third quarter versus $37.3 million, sorry, $37.3 million in the third quarter of 2021.
Gap EPS was one penny in the third quarter of 2022 verse 23 cents GAAP earnings per share basic and 22 cents GAAP earnings per share diluted in the third quarter of 2021.
non-GAAP adjusted EPS was one dollar and 10 cents in the third quarter versus 65 cents in the third quarter of 2021.
In addition related to the returns matter that we disclosed in February of this year I am pleased to share that we have reached comprehensive resolutions of our returns related dispute with all three wholesalers overall the returns adjustment results at any one time positive impact of revenue in the quarter of $4.7 million.
When you see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results.
As of September 30th our cash balance increased to $134.1 million during the quarter, we paid off $25 million in that we expect that our net leverage will be below three times net debt to EBITDA by the end of this year.
Are strong operational performance in the third quarter demonstrates the strength of our business model. We are on track to achieve all of our 20th 22 financial goals, notably growing revenue at greater than two times the rate of adjusted Opex. We are pleased with our performance and are poised to continue strengthening.
Our financial position.
Moving to our 2022 financial guidance as we successfully executed on our financial priorities. We are updating the guidance ranges for product revenue adjusted operating expenses and adjusted EBITDA.
For 2022, we now expect total product revenues in the range of $455 million to $465 million.
We expect our adjusted operating expenses in the range of $125 million to 130 million and total adjusted EBITDA in the range of 250 million to $255 million when.
We look forward to providing 2023 financial guidance in early January which will reflect an acceleration and top and bottom line growth.
We are focused on creating value for our shareholders three thoughtful and disciplines business development BT remains our top priority for capital deployment and given our strong financial position, we have the ability to support additional transactions near term.
We are rapidly deleveraging the balance sheet with net leverage expected to be below three times net debt to EBITDA by the end of this year and to be less than two times by the end of 2023.
We expect to pay down $100 million in debt by March 2023, and fully repay our pharmacon term loan by March 2026.
Our ability to Delever quickly is a testament to our strong cash generation.
Our financial strength enables us to pursue acquisition pay down debt and Opportunistically returned value to our shareholders through our board authorized $100 million share repurchase program.
During the third quarter in October 2022, we returned $10 million in capital to shareholders through repurchases under the 100 million dollar share repurchase program authorized by our board we have approximately $42 million remaining under this program.
Overall, we are pleased with our performance this quarter and are solid financial position reflects our ability to execute on our strategic priorities. We are in a phase of growth and value creation and are focused on finishing 2022 strong and entering 2023, even stronger I will now turn it over to spot.
Thanks Kelly.
I'm excited to report that we have successfully completed the contract renegotiations with plans that account for 54% of all <unk> your prescriptions.
This was the top commercial priority in 2022, and it will feel the acceleration of expansion E. R. Revenue in 2023, I can now confirm with certainty that <unk> and that will be less than 65% beginning in January importantly, in addition to materially rolling back rebates, we were able to maintain our.
Exclusive and parody access positions for the vast majority of the renegotiation opportunity let.
Let me take a moment to highlight the results of the extant E R contract renegotiations.
And plans that represent approximately 90% of the current prescription base that was subject to a renegotiation <unk> E. R will maintain its exclusive your oxycodone physician or parody position that oxycontin.
Plans work stamps that you are maintained exclusive physician are both the largest plans and the plans that have demonstrated an ability to control and drive market share over the past several years, we expect volume growth from these plans in 2023.
And plans that represent approximately 10% of the current prescription base that was subject to renegotiation <unk> E. R will move to a non formulary position.
It's important to note that this change <unk> E. R N a parody position that oxy cotton at these accounts.
As a group these plans are smaller and have demonstrated less control.
We expect that the benefit of no longer paying discounts will offset any potential pressure on prescriptions.
Overall, we expect to grow ick stamps at your volume and market share and 20 twenty-three any accounts in which it stamps E. R maintained its access position at.
At a level that offsets any potential pressure work stamps that you always move to non formulary Lamb.
Lastly, I want to emphasize that we have ample room to opportunistically secure new wins, moving forward, which will serve as a catalyst for prescription growth, while maintaining <unk> E. R. Gross to net below 65 per cent.
From now until the end of the year, we're focused on taking actions to ensure we grow ick stamps E. R. Within the accounts, where it stamps a continues to have exclusive access.
These actions include building join action plans with the Payors to tightened formulary control and utilization management to move patients who remain on oxycontin to extend its E. R.
To communicate to H E PS and patients the preferred formulary position of Icke stamps E. R. Vers oxy cotton any associated lower co pays for patients.
And to launch new personal and non personal promotional tools to pull through the exclusive access position of Icke stamps E R and accelerate growth.
Collegium pharmaceutical is the leader in responsible pain management, our organization and our pain portfolio are viewed favorably by Hcp's Bell.
BELBUCA <unk> E R and your center E. R have a combined 50 per cent share of the brandy our market.
The fundamentals of our growth drivers BELBUCA and <unk> are strong specifically both products are seen as highly differentiated by H G. P's have broad prescriber basis strong market access positions.
Only products growing market share and the brandy our market in 2022.
But other products are well positioned to grow volume and share in 2023.
That being said thus far in 2022 prescription volume is flat with both brands verse 2021, we plan to address this to improve commercial execution.
Pain market as in competitive, but it's complex to succeed requires exquisite execution in terms of education on our products and the navigation of the pair landscape.
Beyond commercial execution, there are internal and external factors that contributed to <unk> E. R volume trends in 2022.
External Lee in person patient office visits have still not returned to pre COVID-19 levels adversely impacting the new to brand market pay.
Pain practices continue to experience significant turnover in mid level prescribers and administrative staff.
These people understand how to navigate the complex payer landscape.
From a collegiate perspective are commercial organization experienced a fair amount of disruption in the first half of 22.
Due to our fourth quarter of 2021 restructuring in the first quarter of 2022 acquisition of BDSI.
This resulted in changes to our field forces territory alignments customers and portfolio for most of our field force BELBUCA with a new product that's far more complicated than <unk> E. R. I believe that our commercial team is just beginning to hit its full stride with BELBUCA.
From now until the end of the year or commercial organization is focused on taking action to fuel the growth of Icke stamps and BELBUCA in 2023 <unk>.
These actions include executing training to strengthen the knowledge and impact of our sales professionals launched.
Launching new educational resources for our sales team to use during their interactions with a C. P. As in pharmacist, introducing new nonpersonal promotional content N channels, which reinforced the clinical differentiation of <unk> E. R N BELBUCA.
Watching new personal and nonpersonal promotional tools to pull through the strong access positions of <unk> BELBUCA.
And supporting payers as they ensure that the value of <unk> E. R is clearly understood, enabling stronger formulary controls were <unk> exclusive.
In closing I'm proud of the many accomplishments that the commercial organization is achieved this year, especially the successful renegotiation of contracts for example, E R, which will drive gross to Netflix stamps or below 65 per cent starting on January 1st and fuel the acceleration of ick stamps that you are revenue in 2023.
Confident that the actions, we're taking now will elevate our level of commercial execution generate momentum for the remainder of the year I drive acceleration in 2023, I'll now turn the call back to Joey.
Thanks, Scott, we are making significant strides forward as we build a leading diversified specialty pharmaceutical company committed to improving the lives of people living with serious medical conditions 2022 has been a pivotal year for Collegium and we remain focused on executing our three phase action agenda.
I'm encouraged by our progress in 2022 and confident the 2023 will be a banner year I will now open the call up for questions.
And at this time, we will be conducting a question and answer session.
You would like to ask a question. Please press star one on your telephone keypad, a confirmation call will indicate your line is in a question Q U.
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The participants usually seeker equipment and may be necessary to pick up your handset before pressing this darkies.
One moment, please while we pull for questions.
And our first question comes from the line of David and.
Film with Piper Sandler. Please proceed with your question.
Hey, Thanks, So just had a few so just wanted to clarify. So you you said I think it was.
54% of all ex family are prescriptions represented by the contracts renegotiated son, I'm, just sort of wandering the other remaining R. X's one of those and is it safe to say that yeah, you're you're at a place where it's status quo for for now.
So you just wanted to clarify there. So that's that's number that's number one number two is you talked about <unk> E. R. Returning to volume growth next year, it's not just better economics.
And and you know the comments about better commercial execution certainly are not lost on me, but you know in the context of a shrinking Oxycodone E. R Pi.
What do you think just beyond commercial execution.
In other words external factors do you think can get the.
The product back too.
More aggressive growth trajectory next year.
Profiling perspective, and then you know the same question I guess is four BELBUCA again, I mean is is growth of BELBUCA sort of beyond commercial executions is predicated on.
More in person office visits made what else do you think are factors that could <unk>.
Get that product growing in a more aggressive direction. Thank you.
Right. Thanks, David This is Joe I'll take the first question and then hand, the expansion BELBUCA questions off the Scott. So when you think about the payer landscape as we move forward with regards to <unk> E. R. This year, we had the opportunity to renegotiate with plans that represented 54% of prescription.
<unk> next year will have an opportunity to renegotiate with plans that account for another 30% of all prescriptions and I think it's important that we also emphasize with what it is we accomplish we also have more than enough head room to Opportunistically go out and try to secure additional wins.
Which will also serve if we're successful in doing so as a catalyst for prescription growth with <unk> E. R. And then Scott can take the other two questions. Yeah. Thanks, David and to your other two about the growth of X stamps and BELBUCA look first and foremost again, we need to execute better right as I mentioned in my <unk>.
<unk> remarks, these internal and external factors were real thing in 2022, and so the way I look at it is there's a controllable and uncontrollable right from a from an external standpoint, those are noncontrollable in terms of patient office visits and new to brand, but the fact of the matter is I I believe that over time, we'll see some battles back there.
The other thing is if you look at growth opportunity and I look at the market, there's plenty of room for both brands to grow in the market right <unk> sitting with a 35 share and Oh, we are so there's plenty of room for us to grow from from from there and you know you look at BELBUCA same thing about a mid 30 sure that'd be broken market plenty of opportunities to grow so.
I don't see any issue with the markets in terms of us being able to grow the last thing is on those internal factors look those are controllables and that's where all our focus is right now 100 per cent of our focus is on those controllables and taking actions to grow next year next year Lastly, the fundamentals of these brands are really strong right still in <unk>.
<unk> research the brands reviewed is highly differentiated really brought in growing prescriber basis and strong market access physician. So all of that put together is what makes me feel confident that as we move into next year will be able to reinvigorate growth.
[laughter] that's helpful. Thanks, guys.
Alright, Thanks, David.
Alright next question comes from the line of <unk> William Blair. Please proceed with your question.
Thanks for the excellent breakdown and congrats on the progress during the quarter.
No you answered all my questions.
David question, but maybe as you kind of way sure bipack buyback potential.
Investing in a current franchise and kind of additional development can you just talk to us about.
Can you give us a sense of where there is rank.
Internally for capital Department.
Sure David at all or sorry, Tim I'll hand that went off to college.
Hi, Thanks for the question. So it's fair capital allocation priorities. They remain consistent with past discussions, which we will prioritize business development seeking out commercial stage assets is our first priority.
Our terms of our Pharmacon note and in that we'll we'll be paying those down pretty rapidly with $100 million paid off in the first year, so paying down our debt and then also opportunistically continuing to return capital to shareholders via the share buyback program, we have about 42 million renaming through the end of the year.
The only other thing I would say, we're working for planning process. If there if we believe that there would be value in making additional investment in support of the current portfolio. Obviously, we have the wherewithal to do that when you look from a sigh structure the big part of the cost structure, we believe.
<unk> sighs correctly, and there's not a need to make additional investment in.
In the current inline portfolio at least from the big parts of the cost structure.
Okay understood and maybe taking back into a b D. A little bit more could you just give us some kind of a refresher on areas are looking out obviously I like I said was something that came in that vehicle.
Can follow up you know previously can you just kind of you know.
Refresh that's an opportunity for fans of the opportunities that you come across.
Sure Great question, Tim look I think when we look at the current market environment, which we think is really conducive to getting a deal done we're not thinking of it so much through the lens of a therapeutic priority, but are really anchor two one we're looking for assets that are meaningfully.
Traded which we think is critical for.
For a multitude of reasons in particular reimbursement the peak sales potential of over 150 million is the threshold that matters to US and then of course, we are looking for exclusivity into the 20 thirties from a look if there was something in the pain space directly that leverages the infrastructure.
We have in place that certainly would be a preference I've spoken in the past about neurology being an adjacency that we think makes sense, but when you when we assess the current market conditions, we want to be a little bit more flexible and opportunistic.
Understood. Thank you.
You got it thank you.
Our next question comes from the line of brand New folks with Cantor Fitzgerald and please proceed with your question.
Hi, Thanks for taking my questions and congratulations on the pregnancy and let me just one for me falling on from the any line of questioning.
You have to compromise any gross tanith in any of the other products and then put failure as much protocol.
To achieve that extends that goes to <unk> or should we think of the other products remaining relatively stable crescent foot fight and 23, an extensive question, it's in premium to that place and 65%.
Sure. Thanks for the question brand that all him that one off to call them.
Thanks, Brandon Uhm no for the <unk> renegotiation, there was no compromises or anything to any other products within our portfolio and broadly for the remaining products, we do expect stability.
Thanks, and just one follow up sorry. This may have in Austin. The first question I'm I'm a stay on task at.
Earlier in the year I think we talked about 50% of contracts being renegotiated this year I think.
Talk about 54% on the call and it may be 30% next year.
Is that how we should still think about it all the 30 per cent of the standard contract up for renegotiation next year.
Yeah. Brandon. This is Joe there is an additional 30% of its stamps of contracts up for renegotiation in 2023, that's correct.
And and you will focus on those 30 per cent now that you're sort of achieved success on such a large majority of the contract this you're still going to be.
<unk> driven Oh could reset you should have something elsewhere, maybe that could be volume driven how should we just think about add if you have any changing your price on that negotiation on Thursdays.
Yeah. So great question, I think with existing contracts with its Samsung the approach will be similar to what it is that we did from a renegotiation and 122, which from our view really speaks to the value and the performance of its stamps E. R over time.
And plans recognizing the clinical differentiation in the positive impact that <unk> E. R. Can make the other point that is important to continue to emphasize as we now have significant head room, which enables us to opportunistically look to secure new payer wins when the.
Opportunity presents itself and if we're successful in doing so that certainly would serve as a potential catalyst for prescription growth in market share gains.
Alright, Thank you very much and congratulations again.
Alright, Thanks Brandon.
Our next question comes from the line of service Langer with Needham and company. Please proceed with your questions.
Hi, good afternoon, thanks for taking my questions.
I guess the first one a follow up on.
Okay. The first question.
With.
54% of our.
Contracts, that's been renegotiated and the other 30 per cent coming up next year.
Should we expect a continuous gross and net improvements on an annual basis going forward.
And then.
A similar renegotiation opportunities available for W.
Yeah. So <unk> great Great question, what the way I would think about it and I don't want to get ahead of ourselves. Our commitment is managing expanse of ER gross and that to less than 65%.
On a forever basis.
Now with the renegotiation opportunity that would certainly have a margin benefit but we also with the head room, we have will be walking to secure.
<unk>, new additional <unk>, which we think would serve as a catalyst of growth and most important as a company committed and it Lee as the leader and responsible pain management, we always want to try to improve the access to.
<unk> E R for physicians their staffs and most of all to the patients and I'll, let Scott comment on BELBUCA.
Yeah. Thanks, Sir so yeah, when we look at BELBUCA and the rest of the portfolio. The fact of the matter is first to reiterate with Joseph our goal is always to have is brought up access as we can for our full portfolio. We want patients to have access to our products right now when we look at where we are in this negotiating season. The gross an esper BELBUCA are very reasonable so.
<unk> two new centre and so we always are looking at things come up to do would be called pruning, whether that knee, maybe reducing a discount rate, while maintaining access or in situations, where it's a bad contract will will walk away and any additional things I have nothing to report on right now, but that will all be contemplated and reflected in the guidance that we get in January .
Okay, and then just one last one any any update on the <unk> <unk>.
Launched in migraine, it's been a couple of quarters now.
First foray into C N S. Just.
Give us color and how that Scott.
Yeah, So search great question.
The first thing I would emphasize is when we did the BDSI acquisition, we were clear that the driver of the acquisition was one the associated in synergies because of the direct over one half of the two core businesses number two the opportunity to add a differentiated growth driver and BELBUCA.
To the portfolio and then the elixir Blanch was under way and we've said, we're going to synthesize learnings through the course of the year and make a decision on how it is will handle the asset move.
Moving forward. So we're synthesizing those learnings and expect to be making some decisions very soon on how it is that we're gonna handle it but when you think about <unk>.
<unk> I'm on a going forward basis, it's really maximizing the potential of our pain portfolio and building the company through acquisition of commercials stage assets with all of the parameters that we've outlined.
Thank you.
Sure.
Our next question comes from the line of Ray Frasier would choose security. Please proceed with your question.
Great. Thanks for taking the questions into rats on the progress Uhm I'm curious if you had a sense for where the address and that could reach in 2023. Okay. Next I'll play an important role in might be hard to predict.
I'd be curious if you can talk about anything beyond that is a targeted less than 65.
Sure. Greg appreciate the question for now what I would say is we can confirm it will be less than 65% will be issuing our guidance in early January which will certainly you know frame.
Frame, the acceleration and <unk> E. R revenue in at that time will also give some perspective on how to think about <unk>.
Got it that's helpful.
You said and the things that you can control when do you think that was the.
Start to yield results uhm.
Are we sort of weeks away from reinvigorated share growth quarters away I'm curious, how you're thinking about that.
Sure. So great question I'm Gonna start on that because I think Scott gave a very good answer to the overall question, but one thing that I would emphasize that I think is really important to understand was a learning for us and in particular the people in our commercial organization is just held differ.
Current BELBUCA is in terms of one physicians awareness of the product to the complexity associated with education around BELBUCA and the navigation both at the pharmacy and payer level in terms of the get the prescription adjudicated and Phil.
So that's a long way of saying I believe we're on the verge of hitting our stride and when we do I believe will be in a position, where we will see growth in volume and market share and that's been a process of learning reeducation focusing in on education, and it's a little bit of a different.
Dynamic than extensor, because as you know the buprenorphine market is in fact growing.
Which really should benefit BELBUCA, because it's so differentiated for a multitude of reasons one of which is the dosing range relative to view trans patch. So we think there's really good opportunity to get BELBUCA.
Growing from a volume and share perspective, moving forward that one more so than <unk> stamps is.
Is about execution, along with just hitting our stride and being as good as we can be.
And the promotion of the product.
Got it and I just wanted to follow up on your comment on assets that can be of interest.
Curious on areas beyond pain in neurology, what other areas might make sense.
Thank you.
Yeah, Great question, I'm, not going to get into calling out therapeutic areas, but rather reinforce what it is that we're looking to accomplish so one more looking for commercial stage assets that are meaningfully differentiated.
So we don't want Commoditized or me to assets. We think that's a line to the mission of the company and critical from a reimbursement perspective.
We're looking for assets that have peak sales potential of over $150 million and we want exclusivity into the 20 thirties and when we assess the current market conditions contrasting are financially strong position to the current marketplace. We think it's conducive.
To getting a transaction done and we want to remain opportunistic and flexible.
Great. Thanks for taking the question.
Alright, Thanks correct.
And last final question comes from the line of Oregon with that with a C. Wainwright. We proceed with Ya.
Alright, Thanks, I have a few.
Clearly, you're not going to give us any more color on what less than 65 per cent means I guess until you get some guidance. So that'll be a highly anticipated I guess just asked me to think about how you even look at an approach that guidance in terms of conservatism since I I guess, you won't really know the mix of product until you get.
Into the air and then even later and get the sort of I guess, the rebates coming back your way you know how do you approach that guidance. You know do you have a just a sort of a volume bogey you have in mind and then just say I hate to start let's go at 65 or 64.9 per cent [laughter] So to speak and then we'll.
Walk through the air and see how it goes or there's some other approach and I have a couple of follow ups. Thanks.
Sure. Thanks for the question or and I'll have that one off the call it.
Hi, <unk>. Thanks for the question I think.
<unk>, how will propose guidance will be what we'll have robots thoughtful guidance that we set out through the year as far as the forecasting the in N out dynamics first stanza as you would in any given year, we have our forecasting model and for payer shifts. There are all sorts of analogues net will leverage to come up with what will be weak.
Estimates for the year and that will be incorporated into our planning and guidance.
Okay and.
One thing you mentioned that it was pretty interesting I think anyone asked about is this notion of growing market share within I guess established exclusive contracts.
I think you ordered it as <unk>.
Improving control increasing control on those formularies yep.
How much sure do you already have and it sort of mature exclusive contracts now and what is going on with those straggler oxy cotton patience, though you know what could change going forward that hasn't already changed to date.
Okay, Thanks, or and I'll pass that one off the Scott.
Yeah. Thanks, Orange, So when you think about it as we've through the years talked about the exclusives right in the lab, we feel good that we can achieve a more.
Chairs above 65%, so what's behind my comments areas with all of the plans. They have stepped Y as approaches as the years go on so with the exclusive that had been in place for a year or two now we turn the year, there's an opportunity to work with literally just control right, where they identify oxycontin patients and they move them all.
<unk>. So that's what we're referring to when we talk about that and in general we can see getting to market shares in you know.
Above 65.
Okay and can you talk about the weighted average of your total share now across.
Exclusive contracts.
Orange. So this is Joe I'll take that one so there is a range of share with an exclusive contracts that we're not gonna get into the specifics what I would say to you is Thursday significant opportunity.
And every one of the exclusive plans to grow volume and market share the size of which is also dependent upon their season in the in and out and movement of patients to the various plans. So well we feel really good about as we've maintained the exclusive positions on the biggest Medicare part D. <unk>.
<unk> that have the highest controls in which there is a significant opportunity to continue to grow which we believe will offset any potential pressure, where we remove to a non formulary parity position with oxy cotton.
And that 10%, which is lower control.
Okay.
And just on the <unk> I wasn't sure if you quantify the impact from that one time revenue gain what would've question. That's been on <unk> without that positive adjustment in this quarter or I guess another way to look at it is what is the question. It on that recognized on that piece that was.
Added.
Great question, or and and I didn't specifically state. This yet so the question that is <unk> for the quota absent the returns adjustment would've been 73 per cent.
Thank you and just sorry, one last thing my connection was fuzzy when you gave the individual product sales results for this quarter do you might just running through those three or four numbers real quickly I apologize.
Sure so for the third quarter of 22, so a total of 127 million.
38.8 for BELBUCA 38.84, <unk>, you sent to franchise $44 for <unk> 3.6, Alex said another 1.4 total.
Thank you so much well I look forward to your guidance.
Great. Thank you what I'm sorry.
And we have reached the end of the question and answer session I'll now turn the call back over to Joe for closing remarks.
Great. Thank you and thank you everyone for joining the call today I look forward to updating you on our progress have a great evening.
And this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
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