Q3 2023 Fennec Pharmaceuticals Inc Earnings Call

November 6, 2023

Okay.

Good morning, ladies and gentlemen, and welcome to spend it pharmaceuticals third quarter 2023 earnings.

Earnings and corporate update conference call at this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions on how to participate will be given at that time. As a reminder, today's conference is being recorded now I would like to turn the conference over to Phoenix, Chief Financial Officer. Robert Please go ahead.

Thank you operator and good.

Everyone.

We appreciate you joining us today for Phenix Pharmaceuticals third quarter 2023 earnings conference call.

During which we will review our financial results as well as provide a general business update.

Joining me from furnished this morning, as Rusty Rykoff, our Chief Executive Officer, and Adrian Hey, our Chief operating officer.

Before we begin I would like to remind you that during this call. The company will be making forward looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward looking statements.

References to these risks and uncertainties are made in today's press release and disclosed in detail in the Companys periodic and current event filings with the Securities U S Securities and Exchange Commission.

In addition, any forward looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

We specifically disclaim any obligation to update or revise any forward looking statements.

This conference call is being recorded for audio rebroadcast on Phoenix website, Www Dot fenech pharma dot com, where it will be available for the next 30 days.

And with that I will now turn the call over to Rusty right cough.

Thank you Robert and good morning, everyone.

The focus of today's call is to review update on the ongoing commercial launch efforts underway for bad Mark.

In the United States.

And we view, our global opportunities, including the recent approval in the U K and Europe.

There, we will detail our third quarter 2023 financial results.

All of which were outlined in our earnings press release issued this morning prior to this call.

We're very pleased to report that Denmark delivered strong third quarter revenues of $6 5 million.

86% increase over the second quarter of 2023.

Further this represents more than tripling our revenue since Q1 2023 from $1 7 million reported in Q1.

We continue to be very encouraged with the progress we've made with <unk> launch to date.

Even prouder of the work that is underway to sustain this momentum throughout the remainder of 2003 and.

And as we head into 'twenty four.

As a reminder, bedrock was approved by the FDA in September of 'twenty two.

Firstly on the FDA approved therapy to reduce the risk of cisplatin induced hearing loss in pediatric patients one month of age and older with localized non metastatic solid tumors.

We launched by end market in the U S. October 2022, so we're just marked our one year anniversary.

<unk> Martin became commercially available.

We're very proud of the team's ongoing commercial progress and see.

Catherine for Denmark, and fashion, we're supporting the pediatric oncology community continues to grow.

In fact, the team had a busy fall season, engaging robust discussions with key opinion leaders.

On the issue of Slopping. It you start with the <unk>, we simply at the International Society of pediatric oncology annual meeting.

On active tissue oncology Society annual meeting.

Health connect partners 2023, full hospital Pharmacy conference and the association of pediatric Hematology oncology nurses annual meeting, where we saw and heard firsthand about the importance of our work.

These conferences followed on the heels of an event, where we sponsored the heels Hillsdale College pediatric cancer awareness day football game, which proceeds from the day went to support multiple organizations engaged in the fight against childhood cancer.

These are just a few examples of how we are continuing to build strong relationships within the community.

In terms of commercial efforts to establish bed mark as a necessary complement agent when prescribing a cyst platinum based therapy for a child with a localized non metastatic solid tumors.

Our sales force is currently targeting 200, pediatric hospital centers, including Yohji, NCI and SCM institutions across the U S. The drive 80% of spot can use.

Based on these efforts we estimate at approximately 20% have written a trademark prescription in fact, we believe that some of the leading centers have already prescribed more than 25%.

Eligible patients under their care.

We're highly encouraged by the third quarters of double digit growth.

And your pediatric hospital centers prescribing by Mark.

And with the consistent repeat orders from existing accounts.

Further we continue to see success in large academic centers, including continued formulary approvals at several major pediatric hospital centers in the third quarter.

Geographically all of our territories have seen hep's prescribed benchmark and we have seen highly encouraging adoption within our target accounts that increasing over time.

In terms of patients we have seen utilization across several tumor types, including capital Blastoma osteosarcoma and germ cell tumors.

<unk> also continues to have broad and favorable payer coverage as evidenced by their approved U S prescription claims with.

With commercial insurance plans and Medicare part D plans.

As a reminder, we estimate among current benchmark patients approximately 50% of commercially insured we don't not at 50% insured through government sponsored programs.

The remainder have no or limited insurance coverage and may be eligible to receive bad market no cost to them under our patient assistant assistance program Fenech, Here's which is comprehensive single source program designed to connect bad Mark patients to both patient financial and product access support.

With regard to expanding in Europe, we announced in June.

EMA approval.

Bed, Mark, which is which will be marketed under the name <unk>.

But mark seat will be the first and only treatment approved in the European Union to address this area of significant unmet medical need.

Further in October the medicines and healthcare products regulatory agency NHRA, the UK upward fed Mark C for the same indication.

Following up on our strong U K.

Key opinion leader relationships earlier this fall, we presented background and they don't bet Mark C. At a hearing therapeutic summit organized by or NID.

The <unk> Institute and Youll see LH Biomedical Research center in London.

We continue to evaluate the best commercial pathway for the company in Europe, and the rest of the world either go it alone or with a partner whatever pathway, we select we see Europe as a not a significant opportunity to create shareholder value.

In closing I want to reiterate the focus of our commercial strategy remains on executing the following establishing pad market the necessary complement agent when prescribing cisplatin based therapy for a child with localized non metastatic solid tumor minimizing the barriers to access.

Rapid responses two product questions and establishing <unk> as the premier partner of choice among pediatric oncology community.

With that I will now turn the call over to Adrian who has been on the board of Phoenix Since 2014 and joined the executive management team authentic in August of this year as Chief operating officer.

Adrian will share his observations and opportunities. After his first 100 days on the job Adrian over to you.

Thanks, Rusty indeed, it's been an exciting first few months since joining Senate full time as chief operating officer.

As expressed on the call in August I've got two priorities. The first is accelerating the adoption of <unk> in the U S.

Preparing pad muskie for launch in Europe, as we continue to evaluate evaluate the strategic direction of the business.

As Rusty mentioned adoption of pet market in the U S continues to make solid progress we.

We continue to work with a number of key pharmacy committees in key academic centers, ensuring that Piedmont is included as standard of care.

Treatment protocols.

We benefited during the third quarter from growth in adoption and importantly.

Repeat orders and growth from existing customers and hospitals Adil.

Additionally, we wouldnt pharmacy, and Therapeutics committee approval at several leading institutions.

Further.

Now putting increased focus on the opportunity offered by Piedmont NCC endorsements.

In adolescents and young adults.

Ace.

And importantly, we have a category two rating to AA rating, which was achieved earlier this year.

To support this effort during the third quarter, we strengthened our sales team with several new hires who have significant expertise in selling into community oncology centers. When many of the AIA patients are treated.

<unk> with strengths strengthened our focus on managing the relationship with group purchasing organizations and we've signed contracts with a number of leading groups GPO endorsement will support use of Piedmont not only in the pediatric oncology centers, but in these community hospitals infuse.

<unk> centers and.

Tracy and the home.

We also will be partnering with a leading specialty pharmacy to provide home administration and importantly wiped back delivery to the hospital with direct billing to the insurance provider.

Medicaid.

Turning to Europe, we are making steady progress in preparation for the launch of <unk> in the first half of 2024.

These activities include the submission and approval of the German nuclear priced application. This was done in October 2023.

And it was accepted this allows us.

To sell Piedmont ski in German hospitals during 2024.

The health technology assessment dossier required for price approval.

Now at an advanced stage of development and will be submitted in quarter, one in Germany, the UK, France, Italy, and Spain. Additionally, we've had early and favorable interactions with several key countries regarding pricing and reimbursement.

And as Rusty said, we recently received NHRA approval in the U K.

With that I'll turn the call over to Robert to go over the financials for the quarter.

Thank you Adrian.

Our press release contains details of our financial results for the third quarter of 2023 that.

It can be viewed on the investors and media section of our website.

Rather than read through all of those details my comments today will focus on some key financial results and we anticipate filing our 10-Q this week with further details.

The company recorded net product sales of $6 5 million in the third quarter of 2023 versus $3 3 million in the second quarter for our net revenue growth of approximately 96% as.

As mentioned by Rusty net revenue has more than tripled since Q1, 2023, and we look forward to building from the momentum in the first nine months of 2023.

To reiterate remarks from Rusty and Adrian we're pleased with the growing acceptance of <unk> within healthcare providers during the third quarter and with the recent hospital formulary access approvals continuing early in Q4.

Overall, our opex during the period has remained well controlled and within anticipated ranges.

General and administrative expenses for the third quarter of 2023 were $3 8 million, which compares to $5 3 million in the second quarter of 2023 the.

The decrease is largely attributable to lower noncash employee renew narration and lower administrative and legal expenses.

As stated in previous quarters, the company began recording selling and marketing expenses when it expanded its payroll to included internal sales force.

Selling and marketing expenses include distribution costs logistics shipping and insurance advertising wages and commissions and out of pocket expenses.

The company recorded $3 $3 million in selling and marketing expenses in the third quarter of 2023 compared to $2 3 million in the second quarter of 2023 as the company increased marketing expenses in the U S.

And pre commercial activities in Europe.

We expect these levels to continue in the fourth quarter, but overall opex to be consistent with Q3, when including G&A.

R&D expenses are negligible as the company reduced research and development costs when it received FDA approval of <unk>.

The majority of traditional R&D expenses associated with <unk> are now recorded as G&A or capitalized into inventory and eventually recorded to cost of product sales.

Our GAAP net loss for third quarter of 2023 was $1 8 million or <unk> <unk> per share compared to a GAAP net loss of $5 4 million or <unk> 21 per share in the second quarter of 2023.

And $8 1 million or <unk> 31 per share loss in the second quarter of 2022.

As evident in the results, we have made significant progress and getting closer to breakeven on a GAAP EPS.

And finally, our cash position we ended the third quarter with approximately $12 4 million in cash cash equivalents and investment securities.

This includes $25 million of capital drawn under our existing Petrocorp convertible debt facility.

Our cash burn for the third quarter was approximately $2 5 million compared to $3 3 million in the second quarter of 2023.

As a reminder, we remain focused on reaching cash flow breakeven in the U S. As revenues grow and look forward to reporting our Q4 progress in 2024.

Finally, we believe our available capital when coupled with Petsmart revenue assumptions will give us sufficient capital to fund our operations through at least the next 12 months.

And operator with that we're ready for questions.

Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile our Q&A roster.

Our first question comes from Jason Knickerbocker with Craig Hallum. Your line is open.

Good morning, guys Congrats on a nice quarter here maybe.

Maybe just to start for me if we look at the model. It seems to me that you are actually built into your plan on launch where it seemed like the initial expectation was cash flow breakeven in Q4. This year looking at the model with revenue growing nearly 100% again sequentially you would need either drastic deceleration in that revenue are meaningfully elevated opex to not post positive cash flow from.

<unk> positive operating income in my model that paired with a strong commentary on center penetration penetration within some of those centers. It seems like breakeven the right way to think about the business. In Q4 is there anything that you would caution beyond on the go forward that I should be thinking about and I think about the model.

Okay.

Chase good question, perhaps Robert can answer that.

Yeah, Thanks, Jason Yeah as stated.

Opex during the period as it remained well controlled and within previously guided ranges.

For the third quarter specifically.

Look at our Opex it was roughly 7% to $7 5 million in cash expenses.

So based on those Q3 results, we are on our way to getting to breakeven.

Of course, this does exclude an EU launch, which as we mentioned we are evaluated.

Evaluating excuse me, but further will feel comfortable that our existing cash when coupled with pet mark revenue assumptions in the quarters to grow will give us sufficient capital to fund our operations to cash flow breakeven and positivity, that's what that's what we're working towards.

Great. Thanks for the color.

Maybe just two on Europe for me as well.

Maybe help investors think about the framework set inform decision on whether to partner go. It alone is at in terms of licensing deals that the royalty levels at the money upfront.

And then I guess paired with that just what geographic geographies within Europe should we think about from a country perspective generating the most meaningful volume within the first 12 to 18 months of launch.

K in Germany, just kind of more color there.

Yeah, Thanks, Jason I'll turn it over to Adrian because he has been working intimately in Europe from Dublin, and we'll be able to share his experience with.

For the last 100 days.

Hey, Jamie.

Thank you Mike I was on mute sorry.

Yes, Jay Thanks for the question.

I think.

First first of all with Europe, if we choose to go alone we don't bite off more than we can chew. So I think if we were going to do it ourselves we would pump in the major.

Do it ourselves in the major markets in Western Europe, and then we look to establish relationships with distributors for eastern Europe, and perhaps some of the smaller markets.

I have to say that.

In discussions that we've had.

Got it.

The vendors that are.

Helping us develop the health technology assessment dossiers.

Very encouraged by that views on what price, we will be able to achieve.

I think that the.

Gnomic argument.

<unk> is very strong.

However, when you look at the cost of deafness.

Covered by the health.

Systems in most of these countries.

Depression is heavily associated with definite.

For example, so we feel we can make a strong.

Demand for.

An acceptable price in Europe.

In Germany as I said, we submitted the price for the first.

Six months and that has been accepted.

So when we do launch.

We will launch at that price and then enter into negotiations with the insurance companies for that for the final price.

And then we are.

We have submitted.

Early access applications or are about to submit in early access application in France. So we ship.

You should expect to get some pre price approval sales in France early next year, but as we said.

We're continuing to evaluate all the options and if we do license out in Europe.

C will be looking for a big cash injection with <unk>.

Is that helpful.

Yeah and then.

If we kind of dig in a little bit on the Europe pricing there is greater than 50% decline from U S. Net price the right way to think about it or should I be thinking about that a little bit differently and then also a little bit of color on kind of an inpatient versus outpatient usage in the United States, maybe percentage of sales you know between both sites.

Of service and then kind of how the prior authorizations have been on the outpatient side from a coverage perspective.

Okay.

Quick question on your pricing yes.

Yes.

Based on where we are with Germany significantly more than 50%.

Sorry, so closer to.

Closer to 100% of the U S price will be the initial initial price in Germany, and then we said that subject to negotiation.

Expect to see.

And Europe is a request for some kind of <unk>.

Reising cap.

What came out of the discussions with the.

Well when you get while we were negotiating the price in Germany was the high cost the 17 year old testicular cancer patient.

Where they said it'll be close to 1 million euros.

So we can expect that.

I won't be covering a million euros. So we'll have to have some kind of cap and I think most European health authorities would I expect that but I think in terms of pricing we are looking at something.

Around 70% of the U S price.

To look at an average.

With the focus now.

Turning the focus to the AIA population if you just look at the patient numbers.

We talk about in the U S a $3 5000.

Accurate.

Population that patients who have localized disease treated with cisplatin.

If you look at the patient numbers in the U and the AIA population just taking one cancer.

There are three and a half thousand testicular cancer patients in the 15 to 39 year age group in the U S and if you add all of the other.

Tumor types of the unlikely to be treated with cisplatin.

Talking about 30000 patients.

A tenfold increase in the number of potential patients.

Of course, most of these patients are treated in the community.

It's a SP plus.

So as I said, we have just.

Started our sales team focusing on this population.

Early results have been very encouraging.

The sales closer to reporting.

Significant unmet medical need in this.

Positive reaction from from the community.

Thanks for the questions guys.

One of them.

Question.

Our next question comes from <unk> with capital One Securities. Your line is open.

Hi, Good morning, Thanks for taking my question and congrats on the quarter I guess I'll start with very simple just in terms of.

We're looking at actual sales number than you're seeing progress there, but just out of curiosity, what kind of metrics are you personally tracking over time to gauge your progress as it just repeat orders.

Just some specifics that help.

Hi, Henry.

I can start and turn it over to Robert and Adrian as well in general what we're looking for obviously our number one priority is to get the business to breakeven. So we're almost there from that perspective in terms of on the sales side, we absolutely have specific based on the on the.

<unk> discussed.

In the pediatric and nya setting going forward.

The sales force would be very well incentivized.

To to performing those Ngos populations.

And obviously, we're looking really to ramp the business going forward.

I don't know Robert or Adrian if you'd like to add anything else.

Yes, we haven't we have a number of metrics we have.

Pulmonary committees one.

We have repeat orders and repeat orders from those sensors.

We are.

Sure.

Ultimately, obviously, it's vials sold and revenue.

Okay got it thank you.

And then.

Alright, let me just add in there based on the individual.

Forming their territory and not an overarching goal.

Okay.

And you did mentioned in the prepared remarks that you've added some folks in our sales force.

So how many are you up to now and.

Okay.

Is there a different focus for these newer individuals or.

If you could just help clarify that a little bit.

Yes, so we are we.

We are we've kept the sales for consistent we are we have 12 salespeople in the field right now based on the territories that were discussing some of our earlier calls to target. These 80% of this blocking us.

And yes, the focus is.

Can imagine there is also some natural turnover in the Salesforce steam and we were able to we're looking after pick up some really talented individuals that sold in the community Center.

And can really expand the push.

For us the <unk> guidelines for <unk> for the use of fed Mark in this population. So we think just the timing worked out very well.

Okay, and if I could.

I think there are three three key things you need to have.

Actually first of all.

The NCC and guidelines with the category two eight.

Secondly, you need to have the agreements in place and endorsement from the GPO organizations.

You need a speciality fund.

Pharmacy that can supply.

Directly to communicate directly to hospitals directly to patients' homes.

And then you need an experienced sales force that is used to selling in this environment and we now have all of that in place.

So.

Our major focus now is the AIA population in addition to chipping away at the age.

Aric oncology centers.

Terrific so.

Just one more from me you did mention in your prepared remarks about partnering with spec pharma and and.

The home add angle administration angle what percentage of that.

That part of the market.

Curiosity well.

Yes.

If you if you look at the.

Pediatric oncology centers, which accounts for $3 5000 patients.

And then I think the majority of those right now the younger ones.

<unk> in the specialist oncology centers, but only the older patients.

Are either treated infusion centers or home or community hospitals, and as I said, there's probably around 30000.

In total.

So I think that the.

The opportunity real opportunity.

Lies in with the AIA population, where we've got end CCN endorsement, we've got reimbursement because it is a two way.

And it's financially attractive.

And also bear in mind that these patients obviously older and heavier so they're going to use mobile apps.

Right. Okay. Thank you. Thank you.

And just just to add one more.

The ability for us to provide.

Bias into the home setting of a patient.

Up to this point, we've not had this capability and we are having this capability now. So so that's certainly very encouraging in addition to the skill set required to sell into the into the community oncology as Adrian mentioned organic so.

So we have the full suite of products and the sales force to execute on this plan.

And that has been in place since the middle of October.

Hello all.

All of these things so.

We think we've got everything in place now.

Great. Thank you that's all.

Sure.

One moment for our next question.

Our next question comes from Charles Duncan with Cantor Fitzgerald. Your line is open.

Hey, guys good morning, Rafi and team congrats on.

Good quarter and thanks for taking our questions I had just a couple of them first of all if you fast forward a year from now.

Would you anticipate the majority of your file use.

To come from.

<unk> Creek younger patients color centers for excellence.

In treated in centers for excellence or would it be perhaps more from the AIA patient population given that they are generally larger archer folks et cetera.

And so what is the goal over the course of the next 12 months beyond just call. It revenue that you would like to achieve.

Yes, Hi, Jeff very good question I think the goal is.

Have you seen as Adrienne said, it's been here, we really have been focusing on.

Two additional opportunities one is the way I'd answer the second one is international in addition to all the work that we have done with the with a large pediatric Hospital center. So I think all of these things in place.

A year from now.

I would imagine that we could speak to all three of them contributing substantial amounts and of course, the IAA as you mentioned very well by the nature of the tumor types treated there and the nature of the cisplatin therapy treated there.

It would require a significantly more on the larger size of the patients of course would require significantly more vials a bad market. So <unk>. So yes, so I would say that's probably given that its starting at almost zero right now.

It would be would be probably the largest.

But don't underestimate that.

Pediatric hospital pediatric hospital, we made substantial progress there is steel.

Good good amount of activity and <unk>.

PMT wins under our belt as well as newer wanted to we're expecting.

So yeah, we could also pleasantly surprise there as well.

On the international side of course, what really is going to drive revenues. There is the is.

It's particularly Germany, and the UK and France.

No.

So certainly very encouraged by what <unk> been able to do in Germany.

Yes.

That's a great segue to my next question I was a little bit confused on some of the <unk> answers Rick.

Guarding pricing and <unk> pricing.

I know that can be kind of an artifact of the <unk>.

Certain country I guess I'm wondering if you could perhaps talk about the pharma co economic value of pet Mark M in Europe or in the UK versus here in the United States do you think there is a good recognition the downstream costs.

<unk>.

Cisplatin induced hearing loss.

And if you could gauge timing as to being able to talk about your strategy as it is that a goal for the first half of next year to be able to really come to conclusion on what next steps are ex U S.

Thanks.

Yeah.

Yes, I would answer that yes, I would answer the latter one and I will turn it over to Adrian.

Yes, so our goal would be.

Sometimes between now and middle of next year to have that answer on the on what we plan on doing either keeping.

The major five to our sales and partner and grasp or selling the European business to someone else right. So that all will depend on several factors imports.

Importantly, what is the cash upfront.

And so and maybe Adrian over to you in terms of the value proposition of.

European.

Dossiers.

Toward the health economics.

Mark to their to their health care systems.

So I think the first thing to say.

We remind everyone of is that although you've got actually in Europe to regulatory authorities now you've got the U K's NHRA.

The MAA and the other 27 countries you've got <unk> eight.

Way of assessing whether the country can afford to pay for a drug.

So in terms of the health economic argument that we are putting together I E can this country justify paying X for the drug.

We're well advanced in most of the European countries in terms of the dossier preparation and we feel.

Strongly that we will be able to present, a convincing argument to justify paying.

Some thing like at least 70% to 100% of the U S price.

Yes.

That's clear.

That makes sense.

There was a discount or where the actual price so that helps.

Alright, I think that will be there will be a mixture of some degree of discounts and tasks because whilst there will be willing to pay full price for a five kilo hepatic blastoma patient they won't be willing to pay full price for <unk>.

Hello tested testicular cancer patient, so theres got to be some kind of cap.

That makes sense and is there a recognition I think you mentioned the question is an example of the downstream costs.

Losing one's hearing and how that other crews.

Cost to not only as a patient.

Overtime.

And <unk>.

Different countries have different approaches for example, some will take into account.

Back a desk patients.

It is unlikely to be able to contribute.

Because there.

They drop out of school, they don't get well paid job.

They become a burden on the social security system. Some countries will take that into account and the assessment others will say well how much are they just costing the health care system.

Craig definitely not taking into account social security costs.

Lots of earnings et cetera. So each one of these countries has a slightly different way of looking at it so it's very difficult to generalize.

Where I would generalize is that we feel that in most of the countries. We've got sufficiently strong arguments to justify.

Yes.

A good price.

That's helpful looking forward to seeing the progress next year ex U S as well as U S. Great.

Progress and Nicole Thank you.

One moment for our next question.

Our next.

<unk> comes from <unk> <unk> with H C. Wainwright your line is open.

Thank you guys is it to pass on for Ross Silver Roger.

What kinds of information do you expect to disclose going forward regarding the commercial trajectory of pet market in the U S.

So for instance, a number of patients on therapy number of new and repeat prescriptions written.

Total number of prescribers or number of prescribers, who have written for example, greater than one prescription et cetera.

Yes, you can that's a good question as you could see we started giving a little more granularity of the business started building up in particularly with the accounts, where we have one PMT.

Right and.

As well as the repeat orders from those places and the penetration within the physicians within those places so I think as we as the.

The business builds up I think we will be more granular on that absolutely keep in mind, what we don't know of course is that given our label, but it covers many many tumor types, where it best best case, we're guessing what the tumor types that are that are that are being treated.

Okay. Thank you for that and then I have a several more questions. How would you describe the current status of being Berkman and formulary access for <unk> Mark.

So in terms of reimbursement, we have not seen any major issues. So that certainly has been encouraging.

In terms of in terms of the formulary process.

As you could imagine.

Hospitals in the U S are under tremendous financial pressure.

Their margins net operating margins are very clean.

On the other hand, something very positive what's happening to them, which is they are creating tremendous margin add their pharmacy labeling, particularly savings from biosimilars.

So as.

As we are moving forward to to get through a PNT convenient some patents. It takes it takes us more than once.

Those type of considerations come into play.

But obviously, it's not easy it's not easy to get through a PMT committee given all.

All of the considerations given that this comes from their DRG.

Alright, Thats very helpful and then how our.

Partnership discussions progressing in Europe, and when do you expect to launch the product there.

So I just from the previous question.

Yes, we expect to launch sometime in the second quarter next year.

<unk> May June next year is our best guess at the moment we are.

Going to a type two variation.

We're switching the manufacturer.

From.

From the U S basically into Europe a.

Our current manufacturer of Denmark. So he's also manufacturing trademark C and they would have to be approved in the type two variation. So I think as soon as we have that and then we obviously shipping label product into the European market then.

We will be able to give you a little more granularity of what month the launch would be but certainly we're working on that given all the preparation work. He is doing on the <unk>.

On the health economics.

Got it and then just a couple more questions do you have any plans to advance our drug candidates from your discovery stage pipeline into the clinic at this time.

Well I don't know if you know much about the history of our furniture, which was the price that's capex that helix, but we started with three and we have one.

So I think it's very important for us to establish this went on the market before looking to bringing something else here.

Got it Okay and then last question gentlemen, what is the long term competitive landscape look like for <unk> in the U S.

Alright.

Thank the most critical piece is what's is sloppy and remain a mainstay treatment.

Pediatric cancer, and we believe it will be.

Pediatric tumors in general and AOA tumors in general are very receptive.

Sensitive to cisplatin.

Oncology is a good use for the drug they know how to use it they are optimized so anything else that comes.

It really comes on top of this block and it comes at later stages. So I don't see anyone looking to replace its flattening.

So that's.

That's really the view that we have and what we see in the marketplace. So I don't expect substitution of this blocking anytime soon.

Got it thank you Rusty and detriment to the update I appreciate it.

And I'm not showing any further question at this time I'd like to turn the call back over to Rusty for any closing remarks.

Yes.

I would like to thank you all for joining us today, and we look forward to updating you on our continued launch progress and corporate milestones in future quarterly calls.

Thank you and have a great day.

Ladies and gentlemen, this does conclude today's presentation.

Okay.

[music].

Yeah.

[music].

Okay.

[music].

Yes.

[music].

Okay.

[music].

Good morning, ladies and gentlemen, and welcome to Fenech Pharmaceuticals third quarter 2023 earnings.

As a reminder, today's conference is being recorded now I would like to turn the conference over to Phoenix, Chief Financial Officer, Robert and Friday. Please go ahead.

Thank you operator, and good morning, everyone.

We appreciate you joining us today for Phenix Pharmaceuticals third quarter 2023 earnings conference call.

During which we will review our financial results as well as provide a general business update joining.

Joining me from furnished this morning, as Rusty Rykoff, our Chief Executive Officer, and Adrian Hey, our Chief operating officer.

In addition, any forward looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

We specifically disclaim any obligation to update or revise any forward looking statements.

This conference call is being recorded for audio rebroadcast on Phoenix website, Www Dot Phoenix pharma Dot com, where it will be available for the next 30 days.

And with that I will now turn the call over to Rusty rykoff.

Okay.

Thank you Robert and good morning, everyone.

The focus of today's call is do we view update on the ongoing commercial launch efforts underway for bad Mark.

In the United States.

And we view, our global opportunities, including the recent approval in the U K and Europe.

Are there we will detail our third quarter 2023 financial results.

All of which were outlined in our earnings press release issued this morning prior to this call.

We're very pleased to report that Denmark delivered strong third quarter revenues of $6 5, million% to 96% increase over the second quarter of 2023.

Further this represents more than tripling our revenue since Q1 2023 from $1 7 million reported in Q1.

We continue to be very encouraged with the progress we've made with Glenmark launched to date.

Even prouder of the work that is underway can sustain this momentum throughout the remainder of 2003 and as we head into 'twenty four.

As a reminder, bedrock was approved by the FDA in September of 'twenty two.

Firstly on the FDA approved therapy to reduce the risk of cisplatin induced hearing loss in pediatric patients one month of age and older with localized non metastatic solid tumors.

We launched by end market in the U S. October 2022. So we're just marked our one year anniversary since <unk> became commercially available.

We're very proud of the team's ongoing commercial progress.

The other four bed, Mark and fashion, we're supporting the pediatric oncology community continues to grow.

In fact, the team had a busy fall season, engaging robust discussions with key opinion leaders.

On the issue of Slopping. It you start with <unk>.

Simply it.

The International Society of pediatric oncology annual meeting the connective tissue oncology Society annual meeting.

The health connect partners 2023, full hospital Pharmacy conference and the association of pediatric Hematology oncology nurses annual meeting, where we saw and heard firsthand about the importance of our work.

These conferences followed on the heels of an event, where we sponsored the heels Hillsdale College pediatric cancer awareness day football game in which royalties from the day went to support multiple organizations.

<unk> in the fight against childhood cancer.

These are just a few examples of how we are continuing to build strong relationships within the community.

In terms of commercial efforts to establish bed mark as a necessary complement to an agent and prescribing of cisplatin based therapy for a job with a localized non metastatic solid tumors.

Our sales force is currently targeting 200, pediatric hospital centers, including CLG, NCI and SCM institutions across the U S. The drive 80% of spot can use.

Based on these efforts we estimate at approximately 20% have written a bad market prescription in fact, we believe that some of the leading centers have already prescribed more than 25%.

Eligible patients under their care.

We're highly encouraged by the third quarters of double digit growth.

Pediatric hospital centers prescribing by Mark.

And with the consistent repeat orders from existing accounts.

Further we continue to see success in large academic centers, including continued formulary approvals at several major pediatric hospitals, Dennis in the third quarter.

Geographically all of our territories have seen hep's prescribed benchmark and we have seen highly encouraging adoption within our target accounts that increasing over time.

In terms of patients, we can see utilization across several tumor types, including capital Blastoma sarcoma and jumps cell tumors.

<unk> also continues to have broad and favorable payer coverage as evidenced by their approved U S prescription claims with.

With commercial insurance plans and Medicare part D plans.

As a reminder, we estimate among current benchmark patients approximately 50% of commercially insured, 50% insured through government sponsored programs.

The remainder have no or limited insurance coverage and may be eligible to receive bad market no cost to them under our patient.

Assistance program Fenech, Here's which is comprehensive single source program designed to connect bad market patients to both patient financial and product access support.

With regard to expanding in Europe, we announced in June the EMA approval of <unk>.

Mark, which is which will be marketed under the name <unk>.

Mark seat will be the first and only treatment.

<unk> in the European Union to address this area of significant unmet medical need.

Further in October the medicines and healthcare products regulatory agency NHRA, the UK upward by <unk> <unk> for the same indication.

Following up on our strong UK.

Key opinion leader relationships earlier this fall, we presented background and they don't bet Mark C. At a hearing therapeutic summit organized by or NID.

The <unk> Institute and UCLA <unk> Biomedical Research Center in London.

We continue to evaluate the best commercial pathway for the company in Europe, and the rest of the world either go it alone or with a partner.

<unk> pathway, we select we see Europe as a not a significant opportunity to create shareholder value.

In closing I want to reiterate the focus of our commercial strategy remains on executing the following establishing bad market the necessary complement agent when prescribing cisplatin based therapy for a child with local lifestyle metastatic solid tumor minimizing the barriers to access.

Rapid responses two product questions and establishing <unk> as the premier partner of choice among pediatric oncology community.

With that I will now turn the call over to Adrian who has been on the board since 2014 and joined the executive management team authentic in August of this year as Chief operating officer.

Adrian will share his observations and opportunities. After his first 100 days on the job Adrian over to you.

Thanks, Rusty indeed, it's been an exciting first few months since joining <unk> full time as chief operating officer.

As I expressed on the call in August I've got two priorities.

First is accelerating the adoption of <unk> in the U S.

And preparing pad muskie for launch in Europe, as we continue to have value evaluate the strategic direction of the business.

As Rusty mentioned adoption of pet market in the U S continues to make solid progress. We continue to work with a number of key pharmacy committees in key academic centers, ensuring that Piedmont is included as a standard of care.

Treatment protocols.

We benefited during the third quarter from growth in adoption, and importantly, repeat orders and growth from existing customers and hospitals Adil.

Additionally, we wouldnt pharmacy, and Therapeutics committee approval at several leading institutions.

Further.

Now putting increased focus on the opportunity offered by Padma NCC endorsements.

In adolescence and young adults.

Ace.

And importantly, we have a category two rating to AA rating, which was achieved earlier this year.

<unk> with strengths strengthened our focus on managing the relationship with group purchasing organizations and we've signed contracts with a number of leading groups.

<unk> endorsement will support the use of Padma not only in the pediatric oncology centers put in these community hospitals and infusion centers and.

Administration in the home.

We also will be partnering with a leading specialty pharmacy to provide home administration and importantly wiped back delivery to the hospital with direct billing to the insurance provider.

Medicaid.

Turning to Europe, we are making steady progress in preparation for the launch of <unk> in the first half of 2024.

These activities include the submission and approval of the German Knowable price application. This was done in October 2023.

And it was accepted this allows us.

To sell Piedmont ski in German hospitals during 2024.

The health technology assessment dossier required for price approval.

Now at an advanced stage of development and will be submitted in quarter, one in Germany, the UK France.

Italy, and Spain. Additionally, we've had early and favorable interactions with several key countries regarding pricing and reimbursement and.

And as Rusty said, we recently received NHRA approval in the U K.

With that I'll turn the call over to Robert to go over the financials for the quarter.

Thank you Adrian.

Our press release contains details of our financial results for the third quarter of 2023.

Can be viewed on the investors and media section of our website.

Rather than read through all of those details my comments today will focus on some key financial results and we anticipate filing our 10-Q this week with further details.

The company recorded net product sales of $6 5 million in the third quarter of 2023.

$3 3 million in the second quarter for our net revenue growth of approximately 96%.

As mentioned by Rusty net revenue has more than tripled since Q1, 2023, and we look forward to building from the momentum in the first nine months of 2023.

To reiterate remarks from Rusty and Adrian we're pleased with the growing acceptance of <unk> within health care providers during the third quarter and with the recent hospital formulary access approvals continuing early in Q4.

Overall, our opex during the period has remained well controlled and within anticipated ranges.

General and administrative expenses for the third quarter of 2023 were $3 8 million, which compares to $5 3 million in the second quarter of 2023.

The decrease is largely attributable to lower noncash employee remuneration and lower administrative and legal expenses.

As stated in previous quarters, the company began recording selling and marketing expenses when it expanded its payroll to included internal sales force selling.