Q2 2023 Ligand Pharmaceuticals Incorporated Earnings Call
Thank you for standing by my name is Brian and I will be your conference operator today.
At this time I would like to welcome everyone to the ligand second quarter 2023 earnings webcast.
All lines have been placed on mute to prevent any background noise.
The speaker's remarks, there will be a question and answer session.
I would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question again press Star one.
Thank you Simon.
Simon <unk> head of Investor Relations you May begin your conference.
Okay.
Thanks, Brian welcome to ligand second quarter 2023 financial results and business update conference call. Please note that there are slides accompanying today's call for those dialing in on the phone lines. These can be accessed by going to the investors section of our corporate website, where you can find the link to the webcast on our IR calendar page.
Yeah.
Today, when discussing our financial results, we will use non-GAAP financial measures and some of our statements will be forward looking including those related to our financial condition results of operations financial guidance and the impact of the COVID-19 pandemic.
Please review, our disclosures and forward looking statements on slide two.
Additional information concerning risk factors and other matters concerning ligand can also be found on our earnings press release, and our periodic filings with the SEC that can be found on the investors section of our website at ligand Dot com.
We undertake no obligations to revise or update any statements to reflect events or circumstances. After the date of this conference call. A reconciliation between the non-GAAP financial measures, we discuss and the closest GAAP financial measure can be found in our earnings release issued earlier today.
We can today for ligand will be Todd Davis CEO .
Although espinosa, CFO , and Matt Kornberg, President and CFO I'd now like to turn the call over to Todd Davis.
Thank you Simon and good afternoon, everyone. Thanks for joining our second quarter 2023 earnings call I am pleased to have the opportunity to speak with you today and share some of my thoughts on the company's performance and recent developments let.
Let me begin with the snapshot, where <unk> stands today over.
Over the past several years, we have created a growing and diversified portfolio of royalties.
With a higher margin operating model those investments are created our current strong balance sheet and a large portfolio of biopharmaceutical assets, including seven major commercial stage products that are delivering on our current growing financial performance <unk>.
Key late stage assets that have near to intermediate term potential to further grow our commercial royalty base.
And what we call our farm team.
Over 75 earlier stage assets that will feed into our later stage pipeline and drive long term growth.
Yeah.
This portfolio is driving our performance, including solid second quarter, both operationally and financially.
As Todd will describe in detail here. Shortly today, we are raising our adjusted EPS guidance to $4 85 to $5 when compared to guidance introduced at the beginning of the year of $3 10 per share to $3 30 per share.
This increase was driven by 20% to 25 per share from the strength of our operating income.
And an additional $1 50 per share from the sale of Viking stock.
Revenues for the second quarter of 2023 or $26 million highlighted by over $20 million in royalty revenue.
We ended the quarter with cash and short term investments of $219 million.
We have paid off the remaining balance of the convertible notes and are now debt free.
Robert will go into greater detail on our financial performance and developments.
There were several positive developments across our commercial stage and pipeline products during the second quarter as well.
<unk> received FDA approval for truss foray in Iga neuropathy in February we believe that <unk> has the potential to be one of <unk> most significant royalty assets.
In June Verona pharma submitted an NDA for approval of <unk> for treatment of COPD, which had approved.
<unk> contributing royalties in 2024.
There were several significant clinical updates from our late stage portfolio and Matt will discuss the detailed portfolio update later in this call.
In addition to the existing portfolio driving these results. We are also focused on new deals to grow the late stage pipeline and further accelerate our financial growth.
We have also added several talented business people and established a presence in Boston.
This will allow us to broaden our partnering approach and increase our dealmaking activity to drive growth and profitability slide.
Slide six summarizes the expanded tactical approaches we use to grow our royalty portfolio.
These are one project finance through which we provide development capital to fund our clinical stage programs in return for royalty contracts on future sales.
Two royalty monetization, where we purchase existing royalty rights owned by inventors universities or companies.
Three M&A, where we buy companies with valuable assets or partnerships and realize the value of those assets, while rationalizing the operations.
<unk> four platform technology acquisitions, we look for technology platforms with high operating margins and existing license contracts and we seek to generate new guarantees by operating those platforms.
Let me expand on tactic number three M&A with regard to a recent transaction on July 17th we announced we entered into an agreement to acquire the assets of November .
For $15 million in cash, while providing up to $15 million in debtor in possession or dip financing to support their chapter 11 reorganization.
The asset purchase agreement is subject to approval by the bankruptcy court.
<unk> lead asset <unk>, Joe is in development for Molluscum Contagiosum with an NDA currently under review at the FDA with a <unk> date of January 2024.
We previously provided capital to Nova entering royalty interest in this program and leave it to a significant market potential.
A large portion of the patient population as untreated.
And this may be the first FDA approved prescription drug treatments for Molson that can be used at home there are.
Also other indications and assets under development and their nitric oxide platform as well as a basket of commercial products.
<unk> has focused a significant amount of effort this year and fortify our business team, including a sharpening of our capabilities expertise and credit reorganization and operations to execute on opportunities like this.
Since becoming CEO in December of 2022, our priority has been to scale, our business development and investment capabilities. So that we can consistently originate novel deals with high value clinical products with capable partners. This requires networks execution in due diligence.
Capabilities senior.
Senior level relationships and capital we have made a number of important senior hires strengthened our legal resources added several investment analysts to the team and expanded our geographical footprint.
Our typical investment is in a product with high clinical value.
No more than four years to market launch with.
With strong evidence of safety and efficacy.
We believe there is a substantial need for capital in the development space and an opportunity to generate superior risk profiles.
In this arena, we currently have term sheets out to a number of Counterparties and expect that some of these will start to materialize in the second half of 2023.
We have done this while rationalizing other areas of the business and improving our P&L by reducing overall expenses.
To summarize <unk> has a robust existing portfolio and pipeline that offers us significant financial growth. Additionally, we are executing on a broader business strategy to accumulate additional assets and drive further cash flow and profitability into our business.
We have a strong balance sheet no debt and positive cash flows that can be invested in the assets that we expect to come through our BD pipeline.
Other key execution element.
To grow earnings is to reduce our operating expenses, we have been able to achieve this we're scaling up the business operation and expanding execution capability with <unk>.
Here on slide seven shows how the combination of increasing royalty revenue revenues and a lean operating structure is expected to lead to growing profitability and cash flow for ligand over the coming years.
Now Tahoe Espinosa, our CFO will provide more details on the Q2 financial results are.
Our full year 2023 financial guidance following cargo our president Matt Kornberg will review progress in our portfolio operations and growth drivers title.
Thanks Todd.
As Todd mentioned, the second quarter of 2020 has enabled a strong quarter financially with continued impressive performance in the royalty revenue line.
Total revenue for the quarter was $26 4 million, which is a 10% increase when excluding contributions from Kobe captisol sales in the prior year period.
Revenue for the second quarter of 2022, including COVID-19 related sales was $50 1 million.
Royalty revenue increased 15% to $20 4 million from $17 8 million a year ago.
This growth was driven by strength in amgen's kyprolis as well as growth in sales of drugs using the pelican platform, namely human sale relays and backs new beds.
Captisol sales were $5 2 million for this quarter versus core Captisol sales of $3 3 million in the same quarter of last year with the increase due to the timing of customer orders.
Total captisol sales in the second quarter last year were $29 5 million with $26 $2 million of that related to COVID-19.
We did not have any COVID-19 related captisol sales this quarter.
Contract revenue for Q2, 'twenty three ways.
7 million versus $2 8 million last year. The decrease is driven primarily due to the timing of partner milestone events.
We continue to focus on maintaining a lean operating structure and maintaining <unk> at.
Managing costs to maximize our operating margins in Q2 aggregate G&A and R&D operating expenses decreased by 12% when compared to the prior year quarter.
G&A expenses in the second quarter of 2023 were $11 3 million versus $12 1 million in the second quarter of 2022.
The decrease is primarily due to a decrease in head count related expenses as well as lower legal and accounting costs post the <unk> spin out.
R&D expenses in the second quarter of 2023 were $6 9 million.
$8 5 million in the second quarter of 2022 with the decrease attributable primarily to decreased head count related expenses.
GAAP net income from continuing operations in the second quarter of 2023 was $2 3 million or <unk> 13 per diluted share and this compares with a GAAP net income from continuing operations up $12 6 million or <unk> 74 per diluted share in the.
Prior year quarter.
The decrease in GAAP net income this quarter as compared to the same quarter last year is largely due to the COVID-19 COVID-19 related sales in the prior year offset by increases in royalty revenue gains from short term investments and an increase in interest income.
Adjusted diluted EPS for the second quarter of 2023 was one.
Dollar 42.
Versus <unk> 43 in the second quarter of 2022, which excludes COVID-19 related Captisol sales.
The increase in adjusted EPS is partially driven by gains in sales.
Biking, therapeutic stock, which accounts for approximately 69 of.
Adjusted EPS in the quarter.
Turning to the balance sheet this quarter, we paid off the remaining $77 million.
Convertible note balance in cash as of June 32023, and we had cash cash equivalents and short term investments of $219 million. This includes our investment in Viking common stock, which is approximately $36 million at June 32023.
Turning now to guidance, we are reaffirming total of 2023 revenue to be in the range of $124 million to $128 million and increasing adjusted earnings per share to now be in the range of $4 85.
To $5, which is an increase of 25, driven primarily by gains from additional sales of Viking therapeutics stock.
Our 2023, we expect royalty revenue to be in the range of <unk> $78 million to $82 million Captisol sales up $24 million, which is a $3 million increase from prior guidance and contract revenue of $22 million, which is a $3 million decrease from prior guidance.
I think it's useful to highlight that we started the year with adjusted EPS guidance of $3 10.
Just $3 30 and have since raised a couple of times to what is now $4 85 to.
The $5 of which approximately $1 50 is attributable to realized gains from the sales of <unk> stock.
As a reminder, due to the unpredictable nature of the pandemic, we exclude captisol.
COVID-19 related sales from guidance and we'll update investors as orders are received and shipped each quarter.
Finally, I'd like to direct listeners to our second quarter earnings press release issued earlier today for a reconciliation of our adjusted financial results to the GAAP results I talked about.
I will turn the call over to Matt to provide an update on the portfolio.
Thanks Tyler.
I am going to cover three primary topics I'll review some of the key revenue drivers that are driving our second quarter results I will provide several updates on our key pipeline assets and I'll discuss our recent acquisition proposal for <unk>.
Slide 12 displays our key commercial and late stage pipeline assets our portfolio of over 100 partnered programs as highlighted by the 11, we list here on slide 12.
The products listed are currently approved or in phase III development. Our current commercial portfolio portfolio contains over 25 programs, but seven of those are significant significant enough that investors should focus on them in the near term.
There are also multiple key pipeline programs that we see as potential drivers of growth over the medium term.
Turning now to slide 13. This slide provides the details about the key commercial programs currently driving our growth I'll touch on a few of the key highlights from the second quarter.
In February <unk> received approval for <unk> in Iga nephropathy, and immediately began marketing the drug we earn a 9% royalty on sales and we expect that this will be a significant driver of long term growth for our royalties.
<unk> reported sales of $3 5 million for Q2, which is their first full quarter of commercialization.
<unk> has indicated that the full Iga nephropathy protect trial data, which is expected in Q4 2023 should be a catalyst for a change in the label and a ramp in adoption. Despite that <unk> disclosed that they had 146, new patient form submitted in Q1 and 417 in Q2 the Cigna.
Difficult growth and potential new patient forms provides good evidence of a successful product launch and ramp.
Iga nephropathy affects an estimated 150000 patients in the U S and a similar number in Europe , approximately 30% to 50000 of the U S patients are expected to be addressable under the indication approved PD accelerated approval.
So as far as the first non immunosuppressive treatment approved for this indication.
Consensus sell side estimates analysts estimates purpose built for Pillsbury peak sales in Iga nephropathy exceed $1 billion by two by 2030.
If this is achieved this would make first foray against most significant royalty contributor.
Another highlight from the quarter with Kyprolis Kyprolis is marketed by Amgen and a majority of the countries around the world as well as by <unk> in Japan in Beijing in China. This is an important drug for treating multiple myeloma in Q2 2023. These companies reported a combined quarterly revenue of over 370 million.
And the product is on track to easily exceed the $1 3 billion of global sales realized in 2022.
<unk> marketed by jazz is a recombinant erwinia asparaginase to use as a component of a multi agent chemotherapy regimen for the treatment of children and adults with al our LVL.
This product continues to do extremely well in a market, which has historically constrained by supply issues.
In Q1 of 2023, <unk> reached a record level with $86 million in sales. We look forward to jazz is Q2 commercial report later this week.
Back to <unk>, a $15 billion pneumococcal vaccine utilizing <unk> hundred 97 vaccine carrier protein produced using the Pelican expression technology platform.
<unk> is now marketing vaccine Vance in both the adult population and the pediatric population.
Merck announced $168 million in vaccine van sales in Q2 2023.
Second quarter results confirm for us that the product is tracking to easily exceed the original 2023 consensus sales estimates of about 100.
We have about $300 million.
Lastly on this slide core capsule sales have outperformed our expectation for the year as reflected by the increase in guidance for this revenue item.
We report Captisol sales on a separate line item from our royalties, but this business is another.
Our major drivers of revenue and profitability.
The gross profit from Captisol should equate to about $14 million, which would be in line with our largest current royalty other than kyprolis.
Slide 14 lists of programs with significant phase III or later events that we currently view as key pipeline programs that will drive our revenue growth in the weeks following our currently approved programs.
<unk> Pharmaceuticals filed for approval of <unk> in Europe in May of 2022 jazz.
<unk> recently announced that they adopted a pas de risked adopted a positive opinion from the European Medicine Agency Committee for medicinal products for human use that recommended the European Commission marketing authorization of <unk>.
With a positive opinion in hand, we expect the EMA will provide a decision on approval no later than the end of September .
In terms of new products and product approvals on June 27, Corona submitted an NDA to the FDA for approval of <unk> for the maintenance treatment of patients with COPD.
<unk> also published results from its phase III enhanced trials in the American journal of respiratory and critical care.
<unk> demonstrating improvements in lung function symptoms and quality of life measures a substantial reduction in the rate and risk of COPD exacerbations and a favorable safety profile.
This is a very large market and analysts now estimate the product could reach blockbuster annual sales.
Merck announced its phase III clinical trial of <unk>, six an investigational 21 billion pneumococcal conjugate vaccine.
Had met key Immunogenicity and safety endpoints and two phase III trials.
If approved <unk> would be the first pneumococcal conjugate vaccine specifically designed for adults.
Results from the stride three trial demonstrated statistically significant immune responses compared to advisers PCB 20 in vaccine naive adults versus serotypes common to both vaccines.
Positive immune responses were also observed for serotypes, you need to be 116.
Additionally results from the stride six trial demonstrated that <unk> six was immunogenic immunogenic for all 21 pneumococcal serotypes in the vaccine among adults who previously received a pneumococcal vaccine at least one year prior to the study.
Cabela announced the planned pivotal phase III study design of Q2 on Rapamycin for the treatment of Microsystems lymphatic malformations. Following previously announced positive phase II results in which the drug showed statistically significant improvement on primary and secondary endpoints.
Microsystems LMS are serious rare chronic chronically debilitating genetic disease for which there are no FDA approved therapies.
Despite that positive news Cabela announced Q2 on Rapamycin did not show a treatment effect when compared to placebo in the pivotal phase III trial in Pachyonychia congenital and they will discontinue development in that indication we.
We look forward to the potential for <unk> to rejoin our key phase III pipeline as they progressed this program into MLM.
Finally on slide 15, I'll provide an update on the <unk> transaction.
On July 17th lagging entered into an agreement to acquire the assets of November $15 million in cash and provide up to $15 million and dip financing to know van inclusive of a $3 million bridge loan in connection with <unk> chapter 11 reorganization.
The asset purchase agreement is subject to approval by the bankruptcy Court <unk> lead program for <unk> gel is in development for molluscum can take contagiosum.
Infection with an NDA filing with the FDA and assigned a <unk> date of January five 2024.
In the event the agreement is approved and our bid is successful and we anticipated bankruptcy sale and auction process <unk> will acquire the <unk> assets consistent with our strategy. We will then restructure the business and seek to out license or sell the existing development programs and commercial business assets and make the technology platform available to the industry for additional <unk>.
<unk>.
<unk> current commercial portfolio is led by a product called rotate for rosacea symptoms on the development side. In addition to the <unk> gel product portfolio includes products for acne.
So co mycosis words, atopic dermatitis and more.
Underlying nitric oxide platform technology is unique to the company and provides a broad range of opportunities for program creation.
Our goal through this transactions to Shepherd the November programs through the bankruptcy and come out the other side with a portfolio of exciting programs to add to our partner portfolio.
In the event of an overbid, we believe that our current economic rights to <unk> gel will be in the hands of a new owner with the ability to commercialize the program in a robust robust way and generate value for ligand.
We're excited about the prospects for the overall portfolio and we look forward to updating investors on our progress across all of these growth drivers in future on future earnings calls and at Investor conferences, I will now turn the call back over to Todd for some closing remarks. Thanks, Matt ligand offers public equity investors with an opportunity to gain unique.
Closure across a broad array of products technologies disease areas and indirectly through the transactions industry participants without incurring the typical pharma and biotechnology category challenges are highly concentrated event risk for.
For value creation. It is important to convey that our overarching in core metrics for both the assessment of the existing portfolio.
As well as new and additive deals is to achieve attractive returns and to increase actual earnings per share for shareholders. Our aim is to do so in a manner that has the risk distributed across a multitude of assets therapeutic areas and counterparties in that manner. We are then in a position to <unk>.
<unk> attractive total shareholder returns for equity holders.
We do this we are hoping to bring innovative products to market that can address unmet needs and benefit patients and physicians.
We're excited for a productive second half of the year.
We will now open the call for questions operator.
Yes.
At this time I would like to remind everyone that in order to ask a question Press Star then the number one on your telephone keypad.
Pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Joe <unk> from H C. Wainwright. Your line is open.
Hey, guys. Good afternoon, thanks for taking the questions.
So first I'd like to ask about Captisol overall.
What is the current mix look like between research and commercial and also do you envision.
Captisol for death severe essentially hitting a baseline that could maybe address the choppiness of how you report the numbers.
Zero this quarter, but we know there is obviously use.
Thanks, Jeff.
Good good questions.
First on the mix between commercial and clinical Captisol.
Yes.
We've disclosed that number over time in our Ks and Qs I don't know if we disaggregate it.
This year in the quarterly Q, but.
The the way to think about it is.
The commercial products that are on the market are all effectively still growing.
They are stable or growing and so we're seeing increased commercial use but we're also seeing increased clinical use as a lot of the programs move through the clinic and <unk>.
<unk>.
Later clinical stages.
We can certainly look at the number in.
Think about providing the details to investors in the future, but my sense is the commercial products have.
Taken more than half the share of the Captisol business at the current moment, but those numbers bounce around as folks start bigger clinical trials.
And.
In the commercial products continue to grow.
On your sorry, sorry, yeah yeah.
Yes.
On your second question on capsule for Covid.
<unk>.
And the sales.
Related to <unk> from Gilead.
We have not had any sales this year.
Related to Covid.
And that's in Stark contrast to the last three years.
But as if anyone pays attention to both the trends in hospitalizations as well as Gilead quarterly reports you can see that they continue to use.
This is and number two I just wanted to sort of get a sense of the size of your Boston footprint. Thanks, a lot.
Sure I'll I'll take the the share repurchase comment and then maybe Todd I'll make some comments about our Boston office plans and footprint Uhm. So.
So investors will remember that over the last eight years or so we've had three different share repurchase plans in place. The first one was a couple of hundred million dollars put in place in in.
Late 2015 through September of 2018 under that plan I I don't think we were retired very many shares at all if I remember just a handful and tied to the <unk>. The original <unk> and maybe a few others here and there the second plan we put in was.
Another couple of hundred million that after we had sold Promacta and had several hundred million dollars of excess proceeds on hand, we used to eventually retire uhm between that plan and the third plan over $600 million of stock in a two and a half year period.
Or so.
Following the separation with omni app and the sort of establishing of our go forward plan here with Ah Ah taught in a C. E O. We we discuss with the board and internally a plan of what made sense for a size of repurchase plan and we offer just a $50 million based on the amount of capital we.
Wanted to ploy on the M&A side as well as the cash phone current cash balance we see it just as good corporate hygiene to have both you know a share issuance ATM type plan in place as well as a share repurchase plan in place at anytime we don't have any specific plans to use the repurchase plan immediately well mom.
<unk>, the markets and prices and consult with management and the board to determine when exactly to to use the plan.
And I would just add that I think there's there's robust investment opportunity in the market right now so that's a competing interests, but we do want to have that in place of minutes. It for general corporate hygiene purposes with regard to the question Joe in the Boston footprint.
We basically have five folks that are based out of the Boston office right now so pretty small from a head count of perspective, but it's a skilled deal team that can <unk> and it's a good base in general for East Coast operations, where there's a lot of activity cause you know in the form of space and some of our.
Senior executives a couple are in Pennsylvania, one of our senior executives in Connecticut. So this allows us to coordinate and a non virtual manner and I think execute more efficiently and the deal scenarios that we're engaged in.
Got it I appreciate all the collar guys.
Okay. So.
Your next question comes from <unk>, That's Craig Hallum Capital Group. Your line is open.
Good afternoon, and congratulations on the quarter I've got a couple of different questions here, but maybe first up one of the things we've been hearing I guess, so far this quarter is that pharma and biotech companies I've kind of been shifting priorities focusing more on later stage opportunities I'm, just curious how that impacts some of your.
Portfolio of partnerships in and what are you hearing and seeing from them and how does that kind of playing all does that kind of what's behind the change in the contract and services lines.
Mmm.
Yeah, I think that so in general.
The industry shifting to later stage earlier stage that has not really impacted our portfolio in any specific way.
As I think.
The investors know our portfolio consists of over 100 programs total it's spread pretty typically across late stage programs Midstage early stage preclinical et cetera, and I don't know that we have any specific evidence of of any company in our portfolio shifting.
Priorities off of our program aren't a later stage type assets or anything like that so.
So far we haven't seen any impact in our portfolio specifically from that as it relates to the the low contract payment number in this quarter.
I think there is always the the idea that.
Once we're big enough that this will be a steady state number on an annual basis, but from quarter to quarter basis, we still will see quarters, where events just happened to to move in or out of a quarter. In this particular quarter I I don't know that we had envisioned any specific.
<unk> milestones that it didn't hit this year sorry. This quarter overall, you know for the year, obviously, we reduce the contract line by by 3 million. That's a result of several milestones that uhm did push out into next year. There aren't any that we feel are lost they're just wanted.
That are taking a little bit longer to materialize than than we thought so I'm. So far no specific other impacts or anything that would follow along the lines that you were thinking.
That that's very helpful. And then regarding gross margin uhm kept us all gross margin.
Historically <unk> the mix in any given quarter would could have a pretty big impact on that if you were seeing more clinical samples I believe those carried a higher gross margin versus the commercial we we I think you mentioned earlier that this quarter was a little bit more leaning toward.
Does the commercial side you saw an uptick in gross margin to 68 is that.
Can we expect to or should we see some improvement in I guess annual gross margins towards the upper end, you know upper sixties or how should we be thinking about that thank you.
Yeah, I mean, I I would say over the longterm, Yeah, you should expect margins too.
And prove you know I would say modestly from where we are here, but definitely.
Definitely we do see underlying cost structure efficiency. So we do we do we do it forecast that over the longer term, we'll see some some better margins, but you're right the from quarter to quarter. It's it's largely influenced by the mix and it is it is leaning.
It is leading more towards the the the commercial side this quarter.
Got it alright, thank you.
Your next question comes from Larry solo of C. J S Securities. Your line is open.
Great. Thank you and good afternoon. Good evening, just a couple of questions on the on the on the royalty out lucky unchanged outlook.
I know I know, it's not an exact time to put them like.
My math correct, you were up about 23% in the first half and the mid 20th got and kind of suggest would suggest pretty flat back half I know, there's a little bit of a range that I know things move around a little bit, but I just try not to give any more color on a royalty line that should cheer up.
Seasonally right. So just trying to figure out how yeah.
<unk>, what some color there.
Yeah, I mean, a couple a couple of thoughts I promise I had been escalating royalty rate. So we we you know expect like we have seen in in past years, I promised and can continue to increase S as that.
Royalty higher royalty rate kicks in the second half of the year. We're still early in the launch of the the Pelican platform products. So we're you know I would say, we're we're being conservative feels feels far and you're just launched last border. So.
There's still a little bit of uncertainty there and.
So.
I would just say, we're being conservative and cautious with a <unk>.
Okay Uhm okay.
That works for me and then just in Pelican I appreciate somebody updates got it.
<unk> $6 million in Q1, Uhm does it part I have the ability to multiply by four <unk>.
<unk> 340, or something like whatever that would be to come out to supply. This year, if it got to that and what what is the size of the European market relative to the U S.
Yeah. Thanks, sorry, Uhm, so jazz does not give guidance for its products and uhm. We respect their wishes. So we don't make any predictions on the products either but I think it's fair to say that if you look at the last year.
Their quarterly pacing was relatively stable throughout the four quarters.
And we have no reason to believe that should be different this year.
You know it was certainly trending up throughout the year last year, but we'll we'll just I think they report tomorrow, we'll get the the number from them Tomorrow and hopefully it's you know it's a good number of all we'll see where it goes in terms of Europe market I I think the the patient population is you know typically the most of it.
Patient populations. It it just disease areas I should say it sort of follows the typical population dynamics, where Europe is it's roughly the same a number of patients as the U S.
But I I think there's pricing considerations as well as competition in Europe . It doesn't exist in the U S. So I don't know how that will translate to.
Sales, but it should be additional sales beyond the U S at a minimum.
Okay, and then just lastly on the on the Pelicans seems to <unk> put the one crowd you didn't update or mentioned and are you prepared <unk> I think I had a good start to the electric would've not mistaken any change that any update on now.
Can you remind us like progress on how you get through over the Biosimilar and.
And the competition from generic thing update their <unk>.
Yeah. Thanks Bye yeah. So for those that don't have a cough Ah Tara parotitis alternative to Eli Lilly Forte Oh. It is not therapeutically switchable. Currently there are two generic competitors that are attempting to get a <unk>.
<unk> Switchable version four two approved as well as Elvidge and her partner trying to to get our product approved as therapeutically switchable at the.
Uhm dispensing level.
Level.
It's so at the current moment there are really only two terra paratype products available, it's for tail and <unk> to repair tied version.
And their market share seems too if you look at scripts and the data that's out there. It seems to have settled in a bit at the current levels, where we're realizing three or so a little bit more of that million dollars or a royalty each quarter that's been.
And the last three I think or maybe the last four quarters for us but were anxiously waiting.
Waiting to see what other market dynamics unfold, we don't have an update specifically around the pursuit of that therapeutically switchable rating is the F. D. A continues to be a dialogue with with all three parties.
Okay I can squeeze one morning, just lastly, any thoughts authenticated submit back every year for.
Different parts in Q3 and Q4 for the for Captisol in in the remaining.
D revenue.
Yeah, No I think at this time you know I think it's the best we can do is take the remainder of the guidance for Captisol, how 'bout through my contract.
And and spreading you know over the two quarters. The royalty line that pointed out earlier will will escalate as long as the product just continue to grow up with that.
Yeah like I get that thanks, I appreciate that thanks again.
Alright, thanks, Sir.
Your next question comes from <unk> from Barclays. Your line is open.
Good afternoon, they said the shell <unk>, taking the whole question. That's real quick one I'll <unk> given that at least I've had is waiting a decent a conditional approval for I G. A in Europe and a potential for approval traditional approval <unk> given.
<unk> is working with commercial pop in and he knew so what will be the royalty structure like Paul sportsman intense European revenue, one <unk> <unk> <unk> <unk> <unk>. Thanks.
Yeah. Thanks.
Yeah for those that don't remember <unk>, sorry trip beer pays a tiered royalty of 15 or 17% worldwide on.
The feel sorry program and we share that royalty with Bristol the originator the original originator of the drug and so we keep 9% of the royalty at both tears.
Worldwide, so sales in Europe , even through the partner travel back to us at at those rates and anything above that is what my trivia keeps so we do get 9% worldwide.
Got it very helpful. Thank you.
Thank you.
Again, if you would like to ask a question Press Star then the number one on your telephone keypad.
There are no further questions at this time. This concludes today's conference call you may now disconnect.
[music].