Q3 2022 Coherus BioSciences Inc Earnings Call
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Good day, and thank you for standing by.
Welcome to the Coca curious the Biosciences incorporated quarter, three 2022 conference call.
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I would now like to hand, the conference over to your speaker today, <unk> <unk> Senior Vice President of Investor Relations.
Eric Please go ahead.
Thank you everyone. Good afternoon, everyone and thank you for joining us.
We issued a press release earlier today announcing our financial results for the third quarter of 2022.
This release can be found in the coherent Biosciences website is also attached to our form 8-K.
Today's call includes forward looking statements regarding <unk> current expectations about future events. These statements include but are not limited to our ability to gain approval for multiple new products and launch them timing of the end of our decline in revenue and timing of our ability to gain market share for any of our products.
Expectations about revenue growth projections of expenses and revenue, our future manufacturing capacity and our ability to return to profitability in 2020.
All of these forward looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results performance or achievements to differ from results.
Performance or achievements implied by the forward looking statement.
These statements are not guarantees of future performance and are subject to substantial risks and uncertainties that are discussed in our press release that we should take as well as the documents that we filed with the SEC.
Putting those in our quarterly report on Form 10-Q for the third quarter that we filed today.
We're looking statements provided on the call today are made as of this date and.
And we undertake no duty to update or revise any forward looking statements.
Quarterly results for the third quarter are not necessarily indicative of results for future periods.
With me today on today's call are Denny Lanfear <unk> CEO of coherence, Dr. Terri <unk> Chief Development Officer, Dr. Rushton Dias, Chief Medical Officer, Paul Reeder, Chief Commercial Officer, and Mcdavid Stilwell, Chief Financial Officer.
I'll now turn the call over to Danny.
Thank you Bart and good afternoon, everyone. Thank you all for joining us on our Q3 2022 conference call today.
Today I'll first review for you the market situation with respect to our two products and provide a little color for you.
Following that our CFO , Mr. Stilwell will discuss our financials in further detail, particularly as our efforts to reduce expenses as we focus on driving back to profitability.
Our chief commercial officer, Mr Rider.
We will provide an update of our assembly launch progress in new tanker market overview, and finally, our Chief Development Officer, Dr. <unk>, <unk> and our Chief Medical Officer.
<unk> will review, our I O pipeline progress.
This past quarter, we became a multi product company as we continue to effectively execute on our strategy of funding our innovative I O pipeline with revenues from our approved products, thereby positioning <unk> for long term growth.
Now last quarter, the Pegfilgrastim market became increasingly more competitive in anticipation of upcoming launches new competitors.
The incumbents in the market intensify their price discounting, which impacted because revenues for the quarter.
We continue our strategy to manage pricing for your deneke to support the expected on body injector launch in 2023, which we believe will serve as the next wave of UTI for market share growth.
We project Q3, 2020 to be our revenue Nader <unk>.
We will have now begun a series of launches, making us a multi product company.
Our second commercial asset. Similarly has now launched into the savvy billion dollar anti VEGF retro market and we look forward to the subsequent planned launches.
Coming months.
As we move through this period of anticipated revenue inflection.
We continue our efforts to identify efficiencies in the business.
And reduce expenditures.
Now this effort is bearing fruit and Mr. Stillwell will provide additional detail on an additional $75 million in expense reductions per our plan through year end 2023.
This quarter the Companys revenue growth drivers baton passed from eugenic at Assembly.
Our initial launch trajectory for Assembly suggests that we are on pace to deliver at least $100 million in revenue in 2023 from this product.
With the anticipated launches of toward Palomas use summary, and <unk> next year.
Look forward to growing our topline revenue to at least $275 million across the portfolio.
Which represents the lower bound of our internal forecast for 2023.
Given our projected top line growth and active management of expenses, we are projecting a return to profitability 2024.
I'll now turn the call over to Mr. Stilwell, Our review of the company's financial results. Thanks, David.
Thank you Danny.
The details of our financial results are in the press release 8-K, and 10-Q, we filed this afternoon. So I'll focus on just a few highlights.
For the third quarter of 2022, we reported an $86 7 million net loss on a GAAP basis or $1 11 per share compared to a net loss of $38 5 million or <unk> 49 per share in the third quarter of 2021.
Cash used in operating activities was $37 million.
Third quarter of 2022.
<unk> net revenues were $45 million a.
The decline from the prior quarter, resulting from lower share and lower net price due to increased competition and the pegfilgrastim market.
<unk> cost of goods sold increased significantly in the third quarter of 2022 to $35 2 million.
Due to the write down of $26 million of inventory at risk of breaching exploration prior to sale.
Recall that our <unk> strategy includes careful stewardship of our average selling price.
The write down is in large part the result of our choice to not pursue larger volumes of sales and steeply discounted prices.
The inventory, we wrote down originated through manufacturing orders placed in 2019 and early 2020 before the Covid pandemic impacted our business.
Gross margin for the third quarter was 22%.
Excluding the $26 million on the write down gross margin for the quarter would have been 80%, including mid single digit royalty on <unk> net sales.
Research and development expense for the three months ended September 32022 was $45 8 million as compared to $54 $1 million in the same period of 2021.
The decrease was driven by lower development costs and several clinical studies were completed in 2021.
Partially offset by higher compensation expense.
Selling general and administrative expense for the three months ended September 32022 was $44 8 million compared to $39 9 million for the same period in 2021.
The increase was primarily driven by higher commercialization expenses to prepare for multiple anticipated new product launches in 2022 and 2023.
We ended the quarter with cash and cash equivalents of $287 million compared.
Compared to a balance of $275 5 million at the end of the prior quarter.
The fda's approval of similarly during the third quarter was a milestone that opens access to $50 million on our tranche of debt through our credit facility with Pharmacon advisors, which we true it late September .
We are reducing our combined SG&A and R&D expense guidance for 2022 from a range of 375 million to $3 $95 million previously.
375 million to 385 million.
We continuously review processes program with vendors and head count for additional opportunities to reduce costs without impacting our launches and overarching strategy.
For 2023, we have identified an additional $75 million in such expense reductions and we expect total combined R&D and SG&A expenses to decline next year relative to 2022.
Todays reduction in 2022, R&D and SG&A expense guidance results from identification of cost savings across the company.
With anticipated rapid top line revenue growth expected for multiple new product launches through next year.
Well as the reduction in 2023 operating expenses, we believe we have the ability to execute our new product launches and continue our R&D investments.
As Jimmy indicated earlier, we project. These developments will return us to profitability in the first half of 2024.
With that I will turn the call to Paul <unk>, our Chief commercial officer.
Paul.
Thanks, David and good afternoon.
We are continuing to make excellent progress from the commercialization of our product pipeline and plan to launch four new products over the next 12 months led by similarly, which launched into the rest of the market on October <unk>.
Let me begin with your deneke.
Our strategy is to maximize long term value deneke franchise and to optimize the trade offs between price and share and to maintain a pace share that will enable growth, but our on body device launches in 2023.
<unk> will retain 45% market share.
So the on body segment will serve as the next wave of market share growth dynamic franchise.
While quarterly fluctuations with Asps can be expected.
Evidence or overall pricing discipline is reflected in <unk> disease, which currently holds the second highest in the.
Class.
This is important because a higher ASP will.
It will be a competitive advantage against the last oil growth when we launch our on body device upon FDA approval.
For the third quarter <unk>.
<unk> net sales were $45 million compared to $60 million in the prior quarter.
Majority of the sequential decline was driven by a 12% decline in demand and a 9% decline in net selling price.
Market share was 13, 5%, a one 5% decline from the prior quarter.
Overall demand units in the third quarter declined 12%, primarily in the clinic and non 340 <unk> segments.
Thirdly.
Which were impacted by irreversible price discounting by competitor Biosimilars and reduced commercial payer coverage in some markets.
Now I'd like to talk about the rest of our product portfolio, which includes similarly, our lucentis biosimilar.
Towards <unk>, our PD, one inhibitor and <unk>, our Humira biosimilar.
As Denny indicated <unk>.
<unk> is now a revenue growth driver as we enter the $7 billion anti.
Anti VEGF market.
Biosimilar market formation is now well underway and we are very pleased with the commercial launch which commenced on October three.
As you know similarly was FDA approved as the first and only fully interchangeable biosimilar lucentis and with all five FDA approved indications.
Both dosage strengths and 12 months of interchange ability exclusivity.
This complete label has been well received by the retinal specialists, giving them the confidence that they can safely transition currently treated lucentis patients to similarly expect the same clinical outcomes.
While we're only six weeks into the launch.
Share with you some very encouraging early data points.
First is sales.
Launch to date, we sold over 1800 units. They were first months for work at share was greater than the Biogen Biosimilars, which launched in July .
Second we're getting excellent access to prescribers as our sales and key account teams have delivered more than 1600, similarly presentation to targeted retinal specialists.
Reinforces our decision to hire an experienced and dedicated breakfast sales, who have extensive experience and existing customer relationships.
By reallocating resources from <unk>, we were able to achieve this with no incremental increase in total headcount.
Third is market access.
Similarly has confirmed coverage now on 100% of Medicare fee for service lives, enabling the reimbursement pathway for claims submitted under Medicare part B, which is the majority of patients with wet AMD had 40% of we set this business.
Our application for a permanent Q code has been submitted and we expect to launch <unk> in Q2 2023.
Given this positive reception of similarly by providers and the success of the launch so far we project 2023 revenues will be at least $100 million.
We will of course keep you updated from time to time as larger progresses into 2023.
Now regarding toward Palomar.
We're very excited about the potential to bring to oncologists and patients what would be the first and only PD one inhibitor indicated for nasal pharyngeal carcinoma model and to establish a new standard of care in all lines of therapy, including first line.
Our oncology commercial capabilities have been built to scale with significant overlap between new direct customers.
<unk> targeted prescribers.
Therefore, the launch of towards Palomar will be efficiently integrated into our existing oncology commercial infrastructure.
Commercial launch preparations are on track.
In the field facing teams have been fully trained.
We will be ready to launch toward upheld them directly upon FDA.
Now regarding you simply our Humira biosimilar.
Sebree was approved by FDA last December and we were preparing for launch in July 2023.
<unk> U S. Net sales were $17 billion in 2021, and we look forward to competing in this large market.
We continue to believe that price supply and product presentation will serve as the key criteria used to making formulary decisions and your <unk> is positioned well to compete on each of these criteria.
With respect to supply we are prepared to commit to supply guarantees.
<unk> invested more than $45 million in large scale state of the art manufacturing.
Our first year manufacturing capacity exceeds 1 million units or about 10% of the overall market.
We have the potential to triple the capacity at the current facility.
At the time of launch we will have 500000 several units ready for distribution.
We will be a high volume low cost manufacturer, enabling us the ability to also deliver a highly competitive price.
Are you similar strategy is well aligned with the formulary decision makers payers and Pbms.
We both seek to make the AD aluminum that biosimilar market as large as possible as quickly as possible.
We see this alignment is a source of competitive advantage.
In short we are confident that we will deliver a compelling value proposition can be a significant competitor in the marketplace.
I'll now turn the call over to Dr. La Valley for an update on the development of our pipeline.
Recently.
Thank you Paul and good afternoon, everyone.
I would like to begin with an update on our tour a polymath inspect.
Okay.
As you know the SBA.
Our tour a pallet that MPC application at December 28, 2000 and scale.
As we previously noted travel restrictions related to Covid.
And in Canada.
<unk> ability to compete in China, I think our Taliban BLA.
Well at the Fda's review of our BLA.
<unk> and our partner <unk> Biosciences.
Our currently engaged with the agency regarding <unk>.
Pending completion of the infection.
The FDA granted <unk> breakthrough therapy designation.
Instantly recognized the strength of the clinical data.
And the unmet need for patients with <unk>.
With respect to our early stage pipeline, our proprietary IL <unk> antibody CHS 1000, a tumor microenvironment modulator is progressing towards the IMD and we are on track for a filing in 2023.
The field has focused on T cell checkpoint inhibitors.
<unk> checkpoint inhibitors, such as <unk>.
<unk> may serve as an important approach for overcoming PD line rates again.
<unk> is expressed on Q importantly, myeloid cell types, and Chinese cells, and prevent antigen E town and macrophages that can dampen the T cell activation.
We believe the mechanism that myeloid modulator will be complementary with our Allomap and planned yes, Florida combination in a broad range that I would like to tumors, including lung cancer.
Okay.
Actually a line or a polymath non small cell lung cancer data that was recently published in the journal of clinical oncology. The top tier peer reviewed journal that is highly respected and widely followed by oncologists.
Publication reflect the importance of this data set in the context of combination therapies.
I'll now turn it over to Dr.
Ross <unk>, our chief Medical officer to discuss our pallet map combination studies.
Yeah.
Thank you Terry.
It's important to realize that Detroit zero, one data in non small cell lung cancer showed meaningful efficacy irrespective of PD lone status.
As Dave said is one of the reasons why we think there's a significant rationale to exploratory problem that in combination with other Io agents and specifically ticket and in particular as a potential treatment for lung cancer.
It is an important checkpoint and the data and the mix shift both support that important to antitumor activity.
As both PD, one antigen disrupt in the natrium effective two very distinct mechanisms has provided the rationale for the <unk> potential of dual PD one blockade.
Without PD, one with its mechanistic points of differentiation together with our FC silence ticket exploring the patient subsets.
For I O combinations will be a key focus of our toy pilot in that ticket clinical study.
We're on target to begin our phase one two study of toy pilot might be combination in multiple tumor types.
Non small cell lung cancer small cell lung cancer, and prioritizing the carcinoma and all comers.
Early next year.
Our pathogen sheet is also making good progress with antigen antibody trial and combination of toy pattern that in a dose expansion study in China exploring complementary genotype.
Non small cell lung cancer, and esophageal carcinoma, and we look forward to emerging data sets in the first half of 2023.
I'll now turn the call back to Denny completing remodels scanning thank.
Thank you Raj.
We believe this quarter marks an inflection point for coherent.
It really is a new revenue growth driver and we are now a multi product company with three more product launches projected over the next 12 months and increasingly diversified portfolio will drive topline revenue growth in 2023 and beyond.
Putting us on a path to profitability in 2024.
And with that I'd like to open the call to questions operator.
Thank you.
At this time.
We will conduct a question and answer session.
During this session, we would like to advise that each person is allowed only one question and one follow up question.
Any further questions that will require you to rejoin the queue.
As a reminder to ask a question already joined the queue you will need to press star one one on your telephone and wait for your name to be announced.
Please standby, while we compile the Q&A roster.
Our first question comes from Salim Sayed with Mizuho.
We're standing by selling your line is now open.
Great. Thanks, so much guys and thanks for the color on the question.
I guess I'll ask my question on the tour.
Inspection if I can.
Just curious what you guys when you guys talk about.
Opportunities are creative approaches just.
Just curious what the bookends here on what is being discussed.
The FDA.
<unk>.
In particular have been ruled out virtual inspection or is that still in the cards.
And then I guess.
I will just like lump it in here if I can just also that when you say opportunities does that have any regards to timing here just given COVID-19 cases are seem to be rising again in China. Thank you.
Thanks Billy.
Excellent question.
First one appraised the FDA for their very creative response, they've taken.
In terms of addressing the COVID-19 situation in China, we have a very strong collaboration ongoing with them I'll, let Dr. Valley provides you a little more color best we can on that and then address your time.
Yeah, Hi, Sir Sir.
And.
While the COVID-19 pandemic has turned our travel we are encouraged that situation.
While there are certain outbreaks theyre not in all region pipelines in time is decreasing and we are seeing more folks travel to China.
I can say about our discussions with the FDA.
In games, and we are pursuing green and that predicate to Friday.
Requirements to get rid of the unfavorable.
Okay, and then I guess for my follow up there.
Your guidance seems to still exclude the $25 million milestone payment so as your base case that.
Approval is not going to happen in 2022.
Our guidance excludes that milestone the whole time.
Okay, alright, thanks, so much guys I appreciate it.
Thank you thank you Lynn.
Thank you.
Our next question comes from Douglas Tsao with H C Wainwright.
Thank you for standing by Douglas.
Your line is now open.
Hi can you hear me.
Yes, Doug we can thank you.
Great. Thank you just wanted to start with a question on similarly, I'm just curious what youre seeing in the early days of the launch.
Is the volume that youre seeing in interests coming from accounts that we're already using a significant amount of lucentis.
And just curious what are they using similarly, just basically just swap out from Lucentis or is it just.
Creating an opportunity for them to rethink.
Broadly there are uses and selection of anti digest. Thank you.
Thanks, Doug Let me first say that we're very pleased with the launch of familiar I think Paul and his team has just done a great job there.
We pointed out with our remarks, and we surpassed the other.
The market Biogen after one month in terms of market share.
You recall that was <unk>.
We have a large pharma that cut out some six months ahead of us and it took us four months to surpassed them in terms of market share. So we're very bullish about the trajectory here with some relief and how thats going in the <unk>.
People that Paul has been able to recruit and go forward and provide the education, particularly with respect to the label the interchange ability and somewhat which is really key to the biosimilar market conversion.
With respect to your specific question.
The particular patient and so on I'll, let Paul make some additional remarks.
Tony Hi, Doug Yes.
Recall from previous conversations our focus at the time of launch was on around 450 accounts that were driving 80% of what we set this business. So that's where our focus has been that's been where the where the sales have been coming from and they seem to be coming from both.
Switch patients annually.
Julie started patients so.
As Denny said, we're very pleased with the uptake receptivity and we'll be looking forward to update you guys as a.
As the launch progresses.
Did you have a follow up Doug.
Yeah, that's it thank you.
Thank you.
Our next question comes from Georgia, Giordano with Cowen.
Jody. Thank you for standing by your line is now open.
Thank you so much for taking our question.
Maybe starting on similarly.
Our consultant Chegg syndicated basically we see like two camps of retinal specialists.
Dose who's prescribing is like a largely dictated by the insurance companies.
And feel comfortable prescribing a biosimilar.
And then those who are willing to go through the insurance groups to get patients into a product. They want to prescribe. So maybe are you is that does it match. What you guys are seeing and maybe if you can talk about your strategy in tackling both of these groups.
And maybe related to that as we think about those.
Insurance and Payors.
Have you provided any guidance in terms of where do you expect to be in.
With coverage in both commercial and Medicare.
Thank you for that question George I think one of the remarkable things about this market is there.
There is incredible reservoir of patients that are on report related to vast and about 44% and I think that the conversion of this market to Biosimilar Lucentis. Similarly, I think is well positioned to take advantage of that with respect to your question. Your first part of your question and I'll, Let Paul go ahead.
Take that.
Wanted to talk a little bit about insurance coverage.
Yeah, Hi, George Etfs, So no I think retinal specialists have the mix within their patient base of payers they've got patients that are pure Medicare fee for service others that are commercial and Medicare advantage. So.
We're focusing our efforts is around really the bulk of the lucentis prescribers that have the mix of those which is really important based on my earlier comments that we were able to get 100% of.
Policy coverage for the Medicare fee for service population.
The majority of wet AMD, which is the biggest bulk of this market and were 40% of what we set this businesses. So so now that reimbursement pathway is underway.
With respect to the commercial coverage.
Doctor has to use.
Off label Avastin because of a step edit.
They will very often transition those patients to a brand in Asia because of.
Efficacy or safety parameters and so switching is very common and our plan is to be the next in line after that Avastin trial. So.
As for commercial and Medicare advantage coverage.
Those negotiations are underway with commercial players payers, usually takes a quarter or so to get those online, but I'm very encouraged by the dialogue that's occurring.
And maybe as a follow up to that I guess some of the things that we've also heard in our Texas that somewhat.
Some of the doctors that are already seeing that insurance companies are requiring a step through biosimilar lucentis.
Before you can use lucentis do you have any data on that unlike what percent like when youre talking about.
Coverage.
Is the majority of the coverage in a similar fashion, where they require a step through <unk> before you can go to branded products.
I think it's a little early to quantify the full impact of the payer coverages. That's all occurring right now is the.
Commercial and Medicare advantage payers are sorting out their formularies.
I used to say with our differentiated label.
It's certainly putting severally in a very advantageous position.
As it relates to our clinical profile there so.
We will keep you abreast as is the payer coverage unfolds.
Alright, thank you so much and congratulations.
Yeah.
Thanks George.
Yeah.
Thank you.
Our next question comes from Jason <unk> with Bank of America. Thank you for standing by Jason Your line is now open.
Hey, guys. Thanks for taking my question. This is Bob on figures from <unk> Barry.
First question is with you guys say Dennis I was just wondering if you have any follow ups regarding the status of the <unk> filing in calendar year 2022.
And then my second question is with regards to Biosimilar Humira can you speak to our launch preparations and what you are doing to prepare for the launch and how do you envision payers adopting biosimilars that launched mid 2023, new and when they can only start contracting midyear is it your sense that pbms or contract annually.
And look to avoid having more than three product offerings. Thank.
Thank you.
Thank you. Thank you very much I'll handle the first one.
And we have consistently guided to a 2022 filings for <unk> and a 2023 launch and we standby that guidance and I think that we are quite certain of that and so we have no further comment upon that I'll, let Paul address your issues with respect to the <unk> market in the.
<unk> so on.
<unk>.
Yes, hi, Thank you for your question. So yes, I mean, we're in we're in full launch and operational and execution will node.
We intend to launch with a comprehensive commercial and patient services infrastructure.
To support the use similarly launch but.
As you would imagine it's a pretty competitive market. So I'm not going to provide specific details at this time.
Place it to say, we will be ready in July 2023.
To commercialize and launch with with our team and with ample supply guarantees prepares so we do expect.
That there will be biosimilars.
Commercial formularies in Medicare advantage formularies in 2023.
I think because most of us, including the summary will be launching this year.
Youll see a half year effect that we expect discovery to deliver meaningful contribution in the second half year with accelerated.
Uptake beyond that as for formulary designs too early to tell right now obviously, because those formularies are <unk>.
<unk> announced but.
I would expect to see both.
Biosimilars on many of those formularies.
The only additional comments I would make with respect to the payers and Bayou summary is that.
I think that we very prudently planned and invested in very large capacity manufacturing. So we wanted a few teams that can provide I think a significant percentage of the market.
Even to the largest players with our ability to do so and I think that.
It will benefit us with respect to our conversations with payers.
Thank you.
Thank you.
Our next question comes from Chris Schott with Jpmorgan. Thank you for standing by thanks, So much for the questions.
Great. Thanks, so much for the questions. My first one was on <unk> and I was wondering if my hands around how you're thinking about on body device pricing versus other biosimilars I guess I'm asking less about specific price.
But I'm just trying to understand as we see pricing continuing to decline across the broader <unk> market does that have a read across in terms of the size of the opportunity for on body or is that on body market almost an independent market relative to what we are seeing today and then I have one follow up after that.
Well. Thanks, Thanks for your question Chris.
Paul you want to talk to Chris a little bit about pricing on body, how we do things.
We've kept the ASTM thanks, Chris.
I think what we've seen really from the Covid pandemic was the creation of two distinct markets and segments within the Pegfilgrastim class your Azure you're on body segment.
We're on pro was still retain 45% of the market share that is where the reservoir of new market share growth will come from when we launched our own body device in 2023, So that's where that's where we're going to get our our gains there and thats where the.
Unity is high.
Do you price it and it's expected that the reimbursement, which is really the most important thing.
<unk>.
Is what's going to drive it and that's why we've been maintaining.
Disciplined price approach because the lower price today results in a lower reimbursement tomorrow, we want to position.
<unk>.
Our on body injector device.
Favorable position compared to Neulasta alone growth.
Okay. Thank you and the second one.
The second one just wondering about the two seven I think I heard you say at least $275 million in 2023 sales.
I just want to get my hands around that number I think you are estimating $100 million four with similarly, and I'm just trying to get my hands around I guess that would leave about $175 million for <unk>.
As well as Biosimilar Humira Tori. So can you just elaborate on the dynamics there or was that just a kind of a floor number.
Trying to get my hands around that figure. Thank you.
Thanks, Chris Yes, that's the floor and yes, you've got that right that's 100 gig.
Given the four similarly, and given the trajectory of your summary at this point all overall need.
A month or so into the launch we feel comfortable.
Talking about Florida for your salary of 100, I'm sorry, it's a relief of 100. Thank you and it also the rest of the portfolio in aggregate as you pointed out we will of course update you as time goes on we'll have more visibility with the similarly launch, particularly once we get the J code in wood.
Should happen right around the end of I think Q1 2023, but we're feeling we're feeling pretty good about it and were thus able to before.
400.
Okay. Thanks, so much.
Thank you.
Thank you.
Our next question comes from Sal <unk> with Barclays.
Thank you for standing by it okay.
Your line is now open.
Good afternoon. This is itself a lousy process and actually in our central taking outpaces, Here's a quick one fault Jorge Panama was the positive phase III data.
The LLC that we think twice or one could you add some color around potential supplemental BLA application for plc and potential filing pathway. Thank you very much.
Thank you. Thank you very much great question I'll, let Dr. The valley address that <unk>, yes.
Yes, good evening data from Hawaii.
So.
<unk> overall survival advantage.
The SBA I think indicated that February <unk>.
Has stayed at a single country data.
I would like.
<unk> U S medical action.
Corey regulatory flexibility for non small cell lung cancer and so while the choice of one study in the U S with not be ready for submission.
It can be library.
In terms of looking at our combination it establishes.
The contribution of components and torn Palomar and really position our pipeline with our ticket steady about to open a non small cell lung cancer and looking at other opportunities for giving additional anything on lung cancer.
Got it very helpful. Thank you.
Thank you.
Thank you.
As a reminder to ask a question I'll rejoin the queue you will need to press star one one on your telephone and wait for your name to be announced.
Our next question comes from Ash Verma with UBS.
Your line is now open.
Hey, guys congrats.
Congrats on all the progress.
Thanks for taking my question I have two so I guess, Mike on some early wanted to understand.
Tony Dave is there anything that surprised you in the marketplace on that.
<unk> assumption is <unk>.
The team's ability, helping do you think <unk> still an advantage.
The biopharm relation do you think that's still not a hurdle and if biosimilar.
I was asking is and you kind of like a hindrance at all.
And then on the second one so you can refill the high concentration are you still investing behind that.
The $75 million cost optimization that you mentioned is that general savings across the board or are you eliminating some.
Programs here.
Hey, I'll tell you. Thank you very much for the question Ash I'll, let Paul address several questions and secondarily and I.
Ill address <unk>.
In summary questions. Yes, we continue to invest in joint efforts with respect to high concentration, we think thats important to have that in the market as we go forward and we anticipate having that.
Directly after launch.
In the U S.
With respect to you want to call talk a little bit about the similar situation of ILS.
Market share.
Sure Dave.
I think we were really prepared coming into this launch and Thats, what <unk> does create we enter markets with a deep understanding of the customer we do our we do our diligence we've talked to them and we were very prepared for this I think if there's one thing that did surprise me.
How quickly.
Retinal specialists are getting comfortable with biosimilars. So the education that we're doing with them is really lowering.
There are concerns.
They are responding very favorably to our complete label and differentiated clinical profile the interchange ability is giving them greater confidence.
That they can safely switch.
Currently treated lucentis patients and expect the same outcomes.
So all of that I think has been very reinforced and so that's why it's giving us confidence to.
To provide.
The target projections for 2020.
Let me get to your question on the $75 million savings.
I'll let Mr.
So well address that David sure Yeah. Thank you Kash.
As we as we said we.
The $75 million in 2023 expense reductions come from across the company.
We are continuously reviewing processes programs vendors and head count.
It's safe to say that been eni's scrub.
Every dollar of where it heads out the door and when we can find opportunities to reduce costs without impacting launches and overall strategy you are going to do so so I have.
The options to defer certain investments.
And when I can identify the adoptions without impacting our launches I will make those I.
I will defer those costs for instance, there are certain manufacturing activities, which we have the opportunity to delay the subsequent years and so we can we can take advantage of that.
That's just some examples of the expense reductions come from across the company and they are opportunistic.
I think.
Just one more point I think that our programming spends are a really superb targeted.
David said very well described so we haven't really.
Cut any program per say here, we did a few may do a few things differently here and there, but I think the key take home message mcdavid delivered to us and were very.
Careful not to impact the commercial launches, particularly <unk> seen certainly off to a strong start.
We're not going to we're not going to cut things that are really really important particularly to the top line, but we're going to be fairly relentless with respect to squeezing things out of the middle line that we possibly can.
Alright, great. Thanks, guys.
Thank you.
Thank you.
Our last question comes from Doug Tsao of H C Wainwright Doug.
Doug Your line is open.
Hi, Thanks for taking the follow up just a quick question I think I heard I just want to clarify that you said that there was some loss of coverage for you Danica and some markets could you just provide a little more color on that thank you.
Yes, sure Doug Yeah, as you know.
Health plans undergo formulary reviews periodically and.
There is.
We evaluate those sort of business case, sometimes we choose not to participate.
Eight because of the.
The discount rebates that are required in.
So I think most of the any of the reduction in coverage that we've done we.
We did see for the.
The regional areas spotted throughout the country that being said.
We still have very strong and robust coverage for <unk> across the country.
100% on all the Medicare fee for service lives strong coverage in commercial as well as Medicare advantage. So we're going to we're going to continue to balance those.
Is pricing tradeoffs.
Last point I'd add Doug is we're going to make sure that we're in a in a strong position.
Onto the on body system.
In slide 23, and Paul and his team are actively reviewing the coverage in that context.
Okay. Thank you.
Thank you.
Thank you.
At this time I would now like to turn the call back over to Denny Lanfear CEO .
<unk> for closing remarks.
Thank you operator, and thanks, everyone for attending our call. We look forward to keeping you all updated as the continued progress in the coming months with the launch of some early in the next three launches coming up. Thank you bye bye.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Goodbye.
The conference will begin shortly to raise Johan during Q&A, you can dial star one one.
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