Q3 2022 OptiNose Inc Earnings Call
Third quarter 2022 performance and our plans for the remainder of the year I'm joined today by our CEO , Peter Miller, our President and Chief operating Officer Dr.
And our Chief commercial Officer Vic Gabelli.
Slides that will be presented on this call can be viewed on our website at <unk> dot com in the Investor section before we start I would like to remind you that our discussions during this conference call will include forward looking statements. All statements that are not historical facts are hereby identified as forward looking statements.
We're looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements.
Additional information regarding these factors and forward looking statements are discussed under the cautionary note on forward looking statements section of the earnings release that we issued today as well as under the risk factors section and elsewhere I've often noted its most recent Form 10-K and Form 10-Q that are filed with the SEC and available at their website SEC Gov and on our website at <unk> Dot com.
Youre cautioned not to place undue reliance on forward looking statements. The forward looking statements. During this conference call speak only as of the original date of this scope or any earlier date indicated in such statement and we undertake no obligation to update or revise any of these statements.
We will now make some prepared remarks, and then we will move to a question and answer session with that I will now turn the call over to Peter Miller Peter.
Thanks, Jonathan and good morning.
We appreciate you joining us today.
Starting on slide four.
We'll go into more detail in a moment, but I'd like to highlight five key takeaways from today's presentation.
First consistent with the expectations set on our last call we met with the FDA in September to discuss our supplemental NDA submission for <unk> as a treatment for chronic sinusitis.
Rami will cover this further during his prepared remarks in a moment in summary, we believe it was a positive meeting.
Our second key takeaway for today is that following the discussion with FDA, we now expect to submit our supplemental NDA in early 2023.
Third we remain enthusiastic about the potential addition of an indication to treat chronic sinusitis sees.
<unk> has diagnosed approximately 10 times more frequently than nasal polyps and in the current health care environment, where off label use is increasingly constrained by payers. We believe the new indication will allow us to access access significantly larger physician and patient audiences to drive growth.
Fourth we plan to materially reduce our use of cash in 2023, while continuing to position <unk> for successful launch for the first ever see us indication a launch that we believe can ultimately enable tremendous future success for our company.
Fifth.
I'd like to note that <unk> reached a milestone in the third quarter when the $1 million prescription was filled.
We'd like to thank my colleagues at <unk> for the efforts that made it possible to achieve this kind of scale is an approved treatment for nasal polyps.
And importantly, given the significantly larger population diagnosed with chronic sinusitis. It makes us excited for what May come next.
I'll now turn the call over to Ronnie to discuss the results of the reopened program and next steps.
Thank you Peter.
Turning to slide six.
On our last earnings call, we shared with you our development roadmap for the remainder of 2022, which included a pre NDA meeting with FDA that was planned for the end of September .
That meeting was conducted as planned and the feedback we received will help guide us as we prepare our submission.
Based on our current expectations for the scope of content to include in the submission. We now anticipate submission of the NDA in early 2023.
Previously, we expected that to occur by the end of 2022.
The additional time has enabled us to incorporate the feedback we received in September into the preparation of the submission.
We continue to anticipate that the standard FDA review period for this type of application would be 10 months and therefore, we continue to expect the FDA action date to fall in the fourth quarter of 2023.
Overall, we were pleased with the outcome of the pre NDA meeting and look forward to the possibility of <unk> being the first drug approved to treat the common disease of chronic sinusitis.
The meeting reinforced our belief that our clinical safety and efficacy database is sufficient to support the filing of the supplemental NDA for this novel indication.
Turning to the trials for a moment I'd like to remind you that we have previously reported that both reopened trials were positive showing statistically significant improvement on both co primary endpoints for patients treated with <unk> compared to those receiving the placebo comparator. We continue to believe that outcome measures of clinical importance or <unk>.
Particular interest to all stakeholders, including prescribers and patients.
Therefore, we are pleased to report that reopened as the first phase III program that we're aware of ever to show that a nasal therapy can significantly reduce the number of acute exacerbations of chronic rhinosinusitis.
For context exacerbations are a major source of disability for Crs patients.
Data suggest that there are approximately 10 million physician office visits for Crs annually and that approximately 70% of patients who visit a doctor for Crs receive an antibiotic making this a top driver of all adult ambulatory care antibiotic use in the United States.
As you are aware acute exacerbations, not only mediate loss of quality of life for Crs patients, but frequent antibiotic use can pose risks to both individuals such as changes to the nasal or gut microbiome and to society, such as the emergence of antibiotic resistant organisms.
It's comparatively easy to convey to all stakeholders the clinical importance of defining betting pool data from the reopened trials treatment with <unk> produced up to 66% reduction in acute exacerbations of Crs.
Turning to slide seven.
The successful reopening program is creating multiple opportunities for presentation of new and compelling data on <unk> at scientific meetings.
In September the results from the first of our two phase III trials reopened one were presented at the American Rhinologic Society annual meeting during the top rated abstract and clinical Rhinology section.
In October we presented a late breaking abstract podium presentation at I'd week 2022.
The week is a major conference for specialist in infectious disease.
The significant reduction in acute exacerbations and associated antibiotic use in chronic rhinosinusitis is important information for a range of stakeholders beyond our current targets of Emt and allergy specialty physicians and this was an opportunity to begin to engage with that larger audience.
Frankly, we look forward to presenting the results from the second of our two phase III trials reopened two on November 12 at the American College of asthma allergy and immunology annual scientific meeting.
In addition, we look forward of course to publishing the results of reopened one and reopened too in the peer reviewed scientific literature.
We are working actively with our distinguished scientific steering committee and look forward to sharing an update when our primary reported findings manuscript is published.
I'll now turn the call over to Peter to discuss our third quarter commercial performance.
Thanks Rami.
Turning to slide nine.
Before reviewing performance for the third quarter 2022, and our revised guidance for full year 2022, I'd like to take a moment to remind everybody that we continue to believe there are multiple factors to support future growth of <unk>.
Sure.
First and foremost we believe approval of <unk> as the first and only FDA approved treatment for CFS should we achieve that we'll create a 10 fold opportunity based on the number of patients diagnosed and treated for nasal polyps versus those diagnosed and treated for chronic sinusitis we.
We believe we can access a third of that opportunity within our current commercial footprint and create an attractive opportunity for our partner and primary care.
We are encouraged by what has been achieved with a nasal polyp indication to date.
In the third quarter of 2020 to the 1 million prescription of <unk> was filled.
This supports our belief that we can achieve a significant magnitude of product adoption in the much more commonly diagnosed condition of chronic sinusitis.
Importantly, we are also encouraged that with growing experience using <unk>, both by physicians and patients the product has become recognized as offering benefits in a real world practice.
In addition to the large number of patients physicians have chosen to treat both.
Both the comparatively high refill rate and our market research on physician and patient perceptions. All suggest that both physicians and patients are finding that <unk> offers meaningful treatment benefits.
Among physicians, we have seen ex hence recognized as having a distinct place in step wise care for Crs with nasal polyps as reported in our publication by leading independent experts from both the E&P and allergy thought leader communities and shared decision tool at <unk> Dot com.
On the payer side today, approximately 80% of commercial lives are in a plan that covers <unk> for the approved indication.
Given the clinical and economic value proposition <unk> offers compared to multiple alternatives. We believe there is potential to increase coverage in the future and obviously see significant opportunity. If there is an expansion of the approved indications to include chronic sinusitis.
Those factors support our belief.
And then <unk> approval in CFS has potential to drive the long term success of our business.
As a reminder, there are approximately 10 million patient visits to physician for nasal polyps or see us annually of those up to approximately 3 million patients are treated by physicians in specialties that are the focus of our current commercial deployment.
Based on our experience in nasal polyps, we believe the compelling clinical data from the phase III reopened program may lead to not only a new indication in late 2023, but also ultimately to recognition by physicians payers and patients of the clinical and economic value of using <unk> to treat the large population with these serious.
Chronic nasal inflammatory diseases.
Turning to slide 10.
That said, let me now discuss our expectations for the full year 2022, and then review the results for the third quarter.
On our last call. We noted that June and July were challenging months for new prescriptions based on factors, including fewer physicians and offices and reps, calling on physicians due to what we believe to be a greater than expected summer seasonality.
In addition, we had a greater than typical vacancy rate in our sales territories.
At that time, we believe that the fall allergy season will drive a market rebound and that new promotional materials, including exacerbation data from the reopened program filling vacant sales territories and other initiatives will enable us to increase market share and deliver the prescription is necessary to achieve 85% to $92 million of <unk>.
Net revenues for full year 2022.
Yes.
In August and September we observed a rebound in the <unk> market, but not the anticipated share gains for <unk>.
And based on the partial data available for October both trends appear to be continuing.
Although we believe that physician interest in prescribing enhance an actual writing of X Han's continues to grow we.
We believe payer constraints, especially for off label indications is decreasing the proportion of written prescriptions being filled.
In addition, the other programs expected to support share gains have not yet delivered their expected growth in the volume of filled prescriptions.
Because of these factors, we no longer expect market share gains for the remainder of the year and now expect revenues between $74 million to $78 million for full year 2022.
In third quarter of 2022, there were approximately 28000, new prescriptions for <unk>, a modest increase compared to third quarter 2021, while the market, which includes IMS prescriptions written by any physician for any condition, a large component of which our prescriptions for allergic rhinitis increased one <unk>.
Are sent over the same period.
For the first nine months of 2022, there were approximately 85400, new prescriptions, a 3% increase compared to the first nine months of 2021, while the ians market increased 8% over the same period.
Turning to slide 11.
In the third quarter of 2022, there were approximately 86600 total prescriptions for its hands, which is flat compared to third quarter 2021, while the market increased 1% over the same period.
For the first nine months of 2022, there were approximately 255000 total prescriptions for <unk>, a 5% increase compared to the first nine months of 2021, while the market increased 4% over the same period.
Turning to slide 12.
<unk> market share of $5 five 7% in the third quarter of 2022 was unchanged compared to prior year.
Breadth and depth of physician prescribing as measured by the total number of physicians, who have patients filling <unk> prescriptions did increase from third quarter 2021 to third quarter 2022.
Regarding breadth in third quarter, 2022, 7892 physicians had a patient fill at least one prescription of <unk>, an increase of 10% compared to third quarter of 2021.
Regarding depth the number of physicians, who had more than 15 <unk> prescriptions filled by the patients in the quarter grew as well with that number increasing by 2% from the third quarter of 2021 to third quarter of 2022 with approximately 1500 positions in this segment.
I'll now turn the call over to Jonathan to discuss third quarter financial performance.
Peter.
Turning to slide 14, as we reported after knows recognized $21 $21 million of <unk> net revenue in the third quarter of 2022, a decrease of 8% compared to the third quarter 2021, net revenues of $21 8 million.
The primary driver of the year over year decrease was a one time refund of disputed rebates of approximately $1 6 million in the third quarter of 2021 that did not repeat this year for that reason year to date results may be a better measure of performance.
Net revenue for the nine months ended September 32020 to $75 4 million, an increase of 8% compared to the prior year.
Turning to slide 15.
Based on available prescription data purchased from third parties and on data we received directly from our preferred pharmacy network.
Average net revenue per prescription for the third quarter of 2022 was $232 a decrease of 8% compared to $253 and revenue per prescription in the third quarter of 2021.
As I just mentioned the primary driver of this difference is the one time refund of disputed rebates in the third quarter of 2021 that did not repeat this quarter.
Net revenue per prescription would've been approximately $20 lower than the third quarter of 2021 without that refund.
The growth of year to date net revenue per prescription is less influenced by one time items in individual quarters are thus may be more informative to some year to date 2022 average net revenue per prescription stands at $218, an increase of 3% compared to 211 for the nine months ended September 32021.
As we discussed on our second quarter call. We made a change to our copay assistance program at the start of 2022 that was intended to increase net revenue and average net revenue per prescription by reducing the number and proportion of prescription bills by commercially insured patients and plan to have the high deductible.
We believe this change had the intended effect and increased revenue per prescription in the early part of the year. We believe the increase in revenue per prescription due to the change of copay assistance help offset the effects of increasing volumes through government plans and increases to contracted rebate rates in commercial plans, both of which have the effect of decreasing net revenue per prescription.
Turning to slide 16, we have revised our financial guidance for full year 2022 for both net revenues and operating expenses.
For the reasons Peter discussed earlier, we now expect <unk> revenue to be between $74 $78 million for the full year 2022, previously we expected net revenue to be between $85 million to $92 million.
Second we now expect average net revenue per prescription to be approximately $220 for the full year of 2022 previously we expected average net revenue per prescription to exceed $220 for the full year 2022.
For the full year 2020, we now expect operating expenses to be in the range from $127 million to $131 million of which approximately $9 million of stock based compensation.
That's down from our prior expectation of operating expenses in the range from $129 million to $134 million.
Of which approximately $9 million was stock based compensation.
With respect to operating expenses as Peter alluded to in his opening comments, we expect operating expenses in 2023 to decrease materially compared to 2022, both because of the natural reductions related to the conclusion of our CF research program and because of operational and promotional efficiencies that will reduce use of cash while continuing to position <unk> for <unk>.
<unk> launch.
Finally as noted in the press release. This morning, we amended our agreement with Pharmacon to eliminate the September 32022, and December 31, 2022, trailing 12 month revenue covenants.
I will now turn the call back over to Peter for closing remarks Peter.
Thanks, Jonathan.
Moving to Q&A I'd like to take a moment to reiterate that overall, we are pleased with the progress we made in third quarter of 2022 towards submission of our supplemental NDA for <unk>.
<unk> is an enormous opportunity relative nasal polyps.
And while our nasal polyp business is facing some headwinds it is a clinically important product that has achieved the scale that we believe creates an excellent launch pad for achieving the business potential that would be created by the first ever approval in CFS.
And now I would like to open the call up for Q&A.
As a reminder to ask a question. Please press star one on your telephone.
Please standby, while we compile the Q&A roster.
Our first question comes from Glenn <unk>.
Tangela with Jefferies. Your line is now open.
Yes. Thanks for taking my question I, just want to follow up on some of the comments.
Related to the revenue shortfall this quarter.
It sounds like Youre, making the case that youre, not really seeing a prescribing problem, but really more it was related to a decrease in the number of prescriptions being filled I was wondering if you could elaborate on that point, maybe maybe unclear to me.
And then as it relates to the sort of the <unk> guidance.
<unk> assumes no improvement again in the fourth quarter and I just want to.
Confirmed.
Are you seeing any sort of change in the pattern at all in <unk>.
Well Glenn Thanks for the question.
You understand it the way we communicated Glenn which is what we are seeing based on pretty good data sources, we believe to be true with the physician interest in prescribing actually is growing.
In our view this really isn't an issue of physician interest and I think thats proven Glenn the product really works. That's the one thing we know for sure.
And patients know that and I think physicians know that Youre correct that what we're seeing is the number of prescriptions are actually being filled.
He is not as high as a proportion as it was historically.
Especially with Pete with the Payors, focusing on limiting the product to the nasal polyp indication.
So.
And as I said it makes us feel.
Encouraged the physicians continue to write it we clearly have to find ways to address.
The payer constraints such that we can get an improvement in that area.
<unk> <unk> Glenn we just have to look at the trends that we saw in September and into early October we.
We did we just at this point in time have to believe those trends are going to continue and thats, what led to the guidance. It <unk> Jonathan do you have anything to add there.
No I think Thats well said.
Yes, maybe I just wanted to ask one other quick question on the expense side of the equation in the release you said you expected expenses to decrease materially in 2023.
I can understand why that's the case, but I would also assume that there there may be some incremental expenses around the commercial launch and I know I know you plan on doing this via partnership so maybe there won't be that much but.
Given the current burn rate right you pushed.
The supplemental NDA filing out into <unk>, if you get the standard 10 months review now Youre 10, almost at the end of next year and when we look at the cash on the balance sheet could you maybe talked about the balance sheet and sort of how you see that playing out and do you feel confident based on the reduction in expenses next year.
Have enough cash to make it through through to some type of an approval.
Hey, Glenn I'm going to take the first part and then I'm going to let Jonathan really handle the majority of it but the one thing thats unique about the opportunity that we have here is that the label expansion for <unk>.
We really built all of the <unk>.
Deployment necessary to capitalize on a significant portion of that opportunity. So we already have.
Our sales territories managers deployed against the physicians, who not only are waiting for the nasal polyp market, but who really are the best will be the best writers of chronic sinusitis. So there really is not a need for significant additional expense to prepare for the launch unlike a lot of other launches.
So I'll make that comment and then Jonathan I'll, let you handle the other questions yes.
I think Glenn.
The way, we're thinking about the operating expense plan for next year, yet there is obviously the natural reductions in expenses that come with the end.
The clinical trial program.
Remove a significant amount of expense from the R&D line.
But the other things that we're thinking about is when you look at our SG&A in particular sales and marketing.
I think we can look to be a little bit more efficient.
With our we spend capital to support the business with the <unk>.
Nasal polyps indication and look to preserve capital and.
Position <unk> for a launch in <unk>, which we think can be the significant value driver for us in the future.
I actually wanted to also maybe touch on or.
As Rami to touch on your points about the timing of the NDA filing previously we had expected that to come at the end of 2022, what we've communicated as early 2020.
Early 2023 for that submission.
Maybe rami you want to chime in on.
Thoughts about what the expectations should be for the date.
An action date from FDA.
Thanks, Jonathan I think Glenn you understood correctly, we're not talking about a large delay we do still expect this filing.
And the 10 month clock associated with that to put the FDA action date in the fourth quarter.
And so we're talking about a few weeks, we're not talking about.
Extended peer.
At a time the purpose of that of course is to allow us to.
And to optimize.
The filing itself the content of the submission in response to the comments, we got back from FDA during the pre NDA meeting in September and of course, that's the purpose of that meeting is to allow us to better understand what FDA wants to make sure all those things are baked into that.
And to that filing I will just reiterate also something else that Peter was saying which is that for the launch.
Many of the things that you think about having to do in a typical drug launch are already in place for our product. We the product is already in distribution channels. The managed care contracts are already in place for the product.
Footprint of our commercial organization covers already.
The range of doctors that we think are going to be most productive.
In prescribing of the new indication so a lot of the things that you normally think of in our launch.
<unk> sort of already in place and the last comment I'm, making that Glen is that just is it's unusual to have such a broad label expansion in the exact target audience Shorty, calling on they are familiar with the product and it has the potential and we're certainly not giving any guidance in this area, but it has the potential to have a reasonably rapid uptake because of all of those.
<unk>.
The reason to rapid expansion if you will.
Growth because of all those factors.
Okay. Thanks for the comments.
Please standby for our next question.
Our next question comes from David <unk> with Piper Sandler Your line is now open.
Hey, guys. This is <unk> on for David just a few from us on so.
So on the commercial front.
How did the payer constraints that we've seen this year adjusted your thinking or your strategy with regards <unk>.
<unk> growth for the product in 2023.
I mean do you think revamping the sales force or your efforts here as needed at all.
And are you in a position now to tell us how penetrated you are in your current call universe.
And then.
Quickly I noticed that volume growth for the category as a whole was sort of sluggish this quarter versus the previous year or two so any color on the puts and takes here would be would be super helpful and lastly.
We noticed that you revised the sales covenants of Pharmacon for this quarter and the coming quarter, but how do you think about the covenant requirements in 2023.
The approach really if you can't meet them.
Any color there would be helpful. Thanks.
Well, thanks, very much I'll take the first couple that you potentially can chime in if you feel like I'm missing pieces.
Relative to the adjustments to the strategy as we said on the call Isaac the thing we're encouraged by is.
Our data suggests we really are driving.
Our continued interest in prescribing <unk>.
The written prescriptions and what we are seeing as I mentioned is the proportion of those being filled.
Are being impacted by some of the payer constraints that I mentioned on the call, mostly as I said around limiting the product to people with nasal polyps and that's the dampening effect that we've seen sort of occurring.
More than we expected honestly that obviously led to the change in our thoughts around our projections for the year in terms of changing strategy.
We believe we have a very strong sales force that has done a very good job driving the interest in the prescribing. We obviously have to shift some of the focus to what we call pull through which is giving the dock our sales force and then the doctors the tools they need to make sure that the written prescriptions ultimately get filled because we have good data.
Isaac that when we have a significant number of physicians. The 500 physicians that we mentioned in that.
What we call our believer group, they're writing a lot of prescriptions for a large audience and they obviously are managing the payer issues. So we need what we need to do more effectively.
Is more broadly have that management, if you will apply to other physician.
Groups, and that's going to be our focus.
In addition to continuing to drive the interest in the product from an efficacy standpoint, we have to focus.
We have to get better frankly on the pull through side, but as I said there is evidence that we have a reasonably sizable number of doctors that are getting it done we just have to find a way to translate that to a broader audience.
In terms of penetration, we just continue to believe even in the nasal polyp business. We can grow we are as I said, we are generating the interest in the writing side. We just have to continue to work and making sure that gets pulled through on the back end if you will.
Jonathan I'll, let you address the question on covenants.
I'll also take on.
Your question about the category growth on a year over year basis, one thing to remind you is that what we pointed to.
For the summer months June July and kind of into August both July and August are a part of.
Q3, and I think what we saw over the summer was maybe a deeper trough than what's been historically seen in the in the.
Category.
What we did see is that in the fall which includes September .
There was a.
A good return to volumes inside of that market, but yet obviously.
Net of 1% growth on a year over year basis.
Asset capture the summer trough as well as kind of the return to what what.
It may look more like a typical fall.
On the covenant side, yes.
As we noted.
In the press release in the Q. This morning, we entered into the fourth amendment to the Pharmacon agreement.
Pharmacon waived the Q3 and Q4 trailing 12 month revenue covenants I think what you've seen historically is that as we've.
Come into points, where we needed relief on that agreement that was the point in time.
We addressed those things.
Yes.
I'll just leave it at that.
Alright, thanks, guys.
Please standby for our next question.
Our next question comes from Gary Nachman with BMO capital markets. Your line is now open.
Okay, great. Thanks, good morning.
Ron maybe you could elaborate more what was.
The feedback from FDA, causing the slight delay the filing what are some of the things that are specifically looking for when considering the much broader indications where there any surprises. There you said you needed more content. So maybe you could just give a little bit more color on that so that's number one.
And then Peter.
Have you been able to accelerate any of the partnership discussions for primary care, what's a reasonable timeframe to get that.
Hi.
How much of a possibility is it.
Youll be able to get that deal done it also sounds like maybe.
Planning more to do on your own but I'm, assuming that would just be in the specialty areas or even a possibility that you would do primary care on your own as well.
Okay, Gary Thank you very much for that question.
So.
As we said.
Our pre NDA meeting was at the end of September .
As a quick reminder, the primary purpose of a pre NDA meeting.
To have a discussion with FDA that helps to clarify the content of the planned submission. So you go through all the different kinds of things that they would like to see presented to facilitate their review.
And as a consequence to that conversation, we identified a number of incremental sort of tables and figures that would be helpful to them and the review it took a little time to generate those additional tables and figures, which is complete by the way.
And it.
It takes a few weeks to do that kind of work and that's the reason why rather than the end of 2022, we expect the the submission to be in the early part of 2023.
Peter and I will turn the other question would be yes, Gary.
Carry on partnering I'll begin with.
The opportunity that there really is a substantial opportunity in primary care as you've heard us say many times theres 7 million patients being treated in primary care and the thing.
Thinking about the primary care audience as they really do not have good treatment options for patients who have chronic sinusitis really they try the intranasal sprays their only real option is to refer patients into E&P or allergy. So we just continue to believe based on all the work we've done with primary care doctors there is a substantial opportunity there.
I'll start there regarding partnerships.
As you know Gary and as we've reiterated we as we've said a couple of times.
Because of the opportunity I continue to believe.
There is a that we will find a someone who's interested in the partnering.
It's a question of the timing of that.
If you look at deals that have been done historically, it's across a range of pre approval as well as post approval. So our focus there is on value maximization.
Relative to the partnering deal.
And as I said I continue to have confidence that we will have a partnership to take advantage of the primary care opportunity regarding doing it on our own Gary.
That is not in our plans currently I mean, we do believe by the way that there are a significant or a reasonable number of primary care doctors that we could shift our sales force to call on is about 2000 primary care doctors that actually wait they see as many <unk> patients as some of the larger E&P and allergy or.
Officers, so I think our.
Our thinking right now is we could very well deploy redeploy.
<unk> of our sales efforts against those 2000 doctors in the primary care space to capitalize on what could be a very good opportunity with our own sales force, but right now our plans are not to expand in a significant way with our own sales team to take advantage of the primary care opportunity.
Okay, Great and maybe just a follow up when you guys say that 2023 expenses will decrease.
Serially just what's the order of magnitude there if you could quantify that in any way and are you doing any real restructuring. So will you be modifying the sales team at all or just not back filling vacancies and if you do that how will you be able to grow next year.
Athel pilots like you said, you think you'll be able to.
Yes, Jonathan.
On the on the sales side of it.
We feel really good about our sales team Gary as we've said.
We know that that team is driving real interest in the product, especially on as we said on the written side, we have to get more focused with that team, giving them all the tools.
In order to get the pull through on the back end because of the payer constraints. So.
Our belief is the sales team can really can continue to grow this business even in the nasal polyp indication. So right now that's our that's our view.
Jonathan I'll, let you sort of handle the rest so Gary in terms of.
A precise number for 2023 operating expenses are typical practice has been to provide a specific operating expense guidance in connection with our fourth quarter earnings call.
So we're not we're not here today with a specific.
Target for operating expenses for 2023.
But I think if you were to look at our current <unk>.
<unk> for 2022, if you were to remove.
A significant component of the R&D expenses, that's going to create good momentum towards a $100 million operating expense level, but it will come back and be.
More specific about what our expectation would be.
For 2023.
But at some point in the future.
But that's probably.
One way to start thinking about the order of magnitude of change.
Okay. That's helpful. Thank you.
Please standby for our next question.
Yes.
Yes.
Our next question comes from Stacy <unk> with Cowen Your line is now open.
Hi, all thank you for taking our questions we have a few.
So first for 2023, thank you for describing in detail all the dynamics underlying average net revenue per prescription. So for next year what are your expectations for net pricing per prescription any additional color would be appreciated.
And then a follow up.
As you think about your updated thoughts on strategic discussions what options are you considering any potential avenues to maximize value creation.
We follow up with this question is recently saw another company that was acquired outright IHS. They had noted the initial conversations for ex U S. Right. So Peter we appreciate any updated commentary. Thank you.
Jeff I'll, let you take the first one I'll take the second one yes.
I think Stacy again in terms of our expectations for 2023.
I think what we've done historically as we've talked about expectations for revenue full year operating expenses and revenue per prescription.
In connection with our Q4 earnings call.
So again I don't think we have an expectation to set.
Today in terms of.
Revenue per prescription for next year.
I will turn it back over to Peter to talk about the rest of the questions. Yes, Stacy we've been very clear on value on the value creation front that are really singular focuses on optimizing shareholder value and within that frame.
We are.
We're going to consider all opportunities that can accomplish that.
And I'll stop there.
Thank you very much.
Please standby for our next question.
Our next question comes from Brandon Folkes with Cantor. Your line is now open.
Hi, Thanks for taking my question and I do want to just come back to that.
Ensure a headwind.
Onshore is interpreting anything in the statement negatively in terms of just kind of.
Down of off label scripts at this point in the year well can you just elaborate in terms of what that driver is.
Yes, I think that we have been on imaging just anything there would be.
Which would be helpful and then.
Is this just a headwind in the off label scripts will are they putting in more sort of requirements.
Anticipation and stuff like that in nasal polyps and actually a headwind in the nasal polyps scripts getting approved as well and then can you just remind us of the percentage of a comp scripts maybe year to date that have been off label with yet. Thank you.
Yes, Brandon.
Thanks for the question.
I think you understand it stood up pretty well Brandon.
Really the limitation is because we are indicated for nasal polyps. We in essence have increased enforcement. If you will of plans that are asking doctors to attest that the patient has nasal polyps and so would be.
The issue, we're having is really that that obviously has an issue around the potential outside of nasal polyp, writing and.
Our our data indicates that the majority of physicians are because of the payer environment not because of their belief in how the product works are limiting us to patients with nasal polyps, which is as you know a much smaller segment and the group that has chronic sinusitis.
Within nasal polyp approvals Brandon.
We have high approval rates, so if a patient if the physician diagnosed as it has the right diagnosis code, we have very high approval rates for nasal polyps. So that is by the way why we believe working with our sales team to on the what we call. The pull through we can continue to build this business because we know.
We can drive based on that we Shouldnt say no, but we believe based on current trends that we can continue to grow physician prescribing interest.
We just have to work to make sure. The sales team is giving the offices and the doctors all the tools necessary to make sure that as the approvals happen. So.
By the way what this bodes for CNS as we believe that we obviously are going to have a substantial opportunity with CFS because the population is much larger.
Our contracts many of our payer contracts or to the indication. So when <unk> is approved that becomes something that was in our contracts is something that can be written for.
And therefore, we could potentially see a nice uptake of the business potentially very large uptake of the business once we get the indication.
In terms of the business being written off label.
There is a reasonably large portion in total Brandon, but it's being driven by the roughly 500 doctors that are writing broadly. So there is a segment of the population of our physicians that is writing broadly for the product what's interesting by the way Brandon is that.
Even though doctors are most doctors do not right outside of nasal polyps. When the product is written outside of nasal polyps. It gets approved are reasonably.
Reasonably high percentage.
So our issue is it's not necessarily that it won't get approved by the approval rates outside of indication is much lower NCS and then nasal polyps excuse me, but it's still reasonably large.
So again all of these factors sort of lead us to believe that with the CF indication, we really could see a substantially larger business. We had headwinds on nasal polyps. We think we can absolutely get our sales team more focused as I said on the pull through and with the <unk> label, We think we can substantially larger business.
Thanks, so much I appreciate the color.
I am showing no further questions at this time I would now like to turn the conference back to Peter Miller for.
Closing remarks, well thanks, everybody for joining us. This morning, we appreciate the interest and look forward to being in touch.
This concludes today's conference call. Thank you for participating you may now disconnect.
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