Q1 2024 Assertio Holdings Inc Earnings Call
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Speaker Change: Good afternoon, and welcome to a third of your holdings first quarter 2000, instead of four financial Arista, Let's call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you 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.
Operator: Good afternoon, and welcome to Assertio Holdings' first quarter 2024 financial results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Matt Kreps, Investor Relations Manager for the company. Please go ahead.
Speaker Change: Please press star one again, thank you I would now like to turn the call over to Matt Kreps Investor affiliations further company East go ahead.
Matthew Kreps: Thank you good afternoon, and thank you everyone for joining us today, just after <unk> first quarter 2020 for financials.
Matthew Kreps: Thank you. Good afternoon, and thank you everyone for joining us today to discuss Assertio's first quarter 2024 financials. The news release covering our results for this period is now available on the investor page of our website at investor.assertiotx.com. I would encourage you to review the press release and tables in conjunction with today's discussion. With me today are Heather Mason, Interim CEO; Ajay Patel, CFO; and Paul Schwichtenberg, CCO.
Matthew Kreps: The news release covering our results for this period is now available on the Investor page of our website at Investor <unk>, TX Dot com.
Matthew Kreps: I'd encourage you to review the press release and tables in conjunction with today's discussion with me today are Heather Mason interim CEO <unk> <unk> CFO and construct embark CCF in just a moment with opening remarks and provide an overview of the business in Asia, who will cover our financial results and guidance I'll, let Paul with an update on our commercial.
Matthew Kreps: In just a moment, Heather will open the remarks and provide an overview of the business. Then Ajay will cover our financial results and guidance, followed by Paul with an update on our commercial strategy. After that, we will take questions from our covering research analysts. During this call, management will make projections and other forward-looking statements regarding our future performance. Such forward-looking statements are not guaranteed as to future performance and involve risks and uncertainties, including those noted in this afternoon's press release, as well as Assertio's filings with the SEC.
Matthew Kreps: Strategies.
Speaker Change: After that we will take questions from our covering research analysts.
Speaker Change: During this call management will make projections and other forward looking statements regarding our future performance such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this afternoon's press release as well as <unk> filings with the SEC. These and other risks are more fully described in the risk factors section and other sections.
Speaker Change: Our annual report on Form 10-K.
Speaker Change: Our actual results may differ materially from those projected in the forward looking statements.
Speaker Change: <unk>, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
Speaker Change: I'll now turn the call over to Heather. Please go ahead.
Heather L. Mason: Thank you, Matt and welcome everyone and thank you for joining us today.
Matthew Kreps: These and other risks are more fully described in the Risk Factors section and other sections of our annual report on Form 10-K. Our actual results may differ materially from those projected in the forward-looking statement. Assertio specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.
Matthew Kreps: And with that, I will now turn the call over to Heather. Please go ahead.
Heather L. Mason: Stepping into the interim CEO role in January I'm encouraged by the progress we are making as a business.
Heather L. Mason: and Matt. Welcome everyone, and thank you for joining us today. Since stepping into the interim CEO role in January, I'm encouraged by the progress we are making as a business, and I am deeply grateful to all of my colleagues at Assertio who continue to work tirelessly for our patients and clinicians and to drive long-term value for our shareholders. We are off to a good start this year. Our first quarter is tracking with our full year guidance, calling for sales of $110 to $125 million and EBITDA of $20 to $30 million.
Heather L. Mason: Deeply grateful to all of my colleagues edit studio, who continue really to continue to work tirelessly for our patients and clinicians and to drive long term value for our shareholders.
Heather L. Mason: There is demonstrated execution across several; Rolvidon Q1 sales were up 32% quarter over quarter. This is Rolvidon's fifth consecutive quarter of demand growth, a critical success measure in the intensely competitive long-acting GCSF category. Additionally, we completed enrollment of our Same Day Dosing Trial early in Q2.
Heather L. Mason: We're off to a good start this year, our first quarter is tracking with our full year guidance, calling for sales of $110 million to $125 million and EBITDA of $20 million to $30 million.
Heather L. Mason: There is demonstrated the execution across several fronts.
Heather L. Mason: Rolls it out in Q1 sales are up 32% quarter over quarter. This is <unk> fifth consecutive quarter of demand growth.
Heather L. Mason: <unk> success measure and the intensely competitive long acting G CSF category. Additionally.
Heather L. Mason: Additionally, we completed enrolment of roles at <unk>.
Heather L. Mason: Same day dosing trial early in Q2.
Heather L. Mason: We expect a data readout before year end, and the results could lead to an opportunity for product differentiation through medical society guidelines. Paul will expand on Rolvidon's performance and further growth plans. Indusyn still has one generic competitor, and our share of the overall molecule is approximately 50%.
Heather L. Mason: We expect the data readout before year end and the results could lead to an opportunity for product differentiation to medical Society guidelines.
Heather L. Mason: Paul will expand enrollment on performance and further growth plans.
Heather L. Mason: <unk> still has one generic competitor and our share of the overall molecule is approximately 50% we are working to maintain our volume at a competitive price while anticipating a second generic.
Heather L. Mason: We are working to maintain our volume at a competitive price while anticipating a second generic. We have successfully right-sized our organization, cut operating expenses, and have ensured we have the right team in place to deliver results. Additionally, we generated $7.5 million in cash in the quarter, important as we look to add accretive cash-generating assets that fit our lean commercial model.
We have successfully right sized our organization cut operating expenses and have ensured we have the right team in place to deliver results.
Heather L. Mason: Additionally, we generated $7 5 million in cash in the quarter important as we look to add accretive cash generating assets that fit our lean commercial model.
Speaker Change: I also want to be clear.
Heather L. Mason: We are not satisfied with where our stock price is, but we believe that driving sustainable long-term shareholder value is best achieved by growing sales and profitability, by diversifying our revenue streams, and by generating more predictable cash flows. These are the tasks we are focused on every day. Finally, our CEO search is on track. The board is committed to finding the best candidate with a balance of commercial, financial, and business development skills. We've identified strong candidates, and I look forward to announcing our next CEO soon. And with that, I'll pass the call over to Ajay to cover financials. Thanks, Heather.
Speaker Change: We are not satisfied with where our stock price is.
Speaker Change: But we believe that driving sustainable long term shareholder value is best achieved by growing sales and profitability.
By diversifying our revenue streams and by generating more predictable cash flows.
Speaker Change: These are the tasks we are focused on every day.
Speaker Change: Finally, our CEO search is on track the board is committed to finding the best candidate with a balance of commercial financial and business development skills. We've identified strong candidates and I look forward to announcing our next CEO soon.
Speaker Change: With that I'll pass the call over to a J to cover financials.
Ajay Patel: Thanks, Heather. Today, I would like to discuss our financial results for the first quarter of 2024. Before I begin, I want to note that my commentary will focus on sequential comparisons to fourth quarter 2023, given the acquisition of Spectrum and the generic competition for Rovidone, which is now our lead asset and brings with it associated changes in margin and operating cost structure. For the first quarter of 2024, our total sales were $31.9 million, down slightly from $32.5 million in the fourth quarter.
J: Thanks, Heather today, I would like to cover our financial results for the first quarter of 2024 before I begin I want to note that my commentary will focus on sequential comparisons to fourth quarter of 2023, given the acquisition of spectrum and the generic competition of <unk> that occurred in the prior year.
J: Third quarter.
J: <unk> is now our lead asset and brings with it associated changes in margin and operating cost structure.
For the first quarter of 2024, our total sales were $31 9 million down slightly from $32 $5 million in the fourth quarter.
Ajay Patel: Roll-down sales were $14.5 million and achieved 32% growth compared to $11 million in the fourth quarter, primarily due to volume. Indusin sales were $8.7 million compared to $10.8 million in the fourth quarter. As expected, the decline was due to the impact on volume and pricing from generic competition.
J: <unk> sales were $14 $5 million and achieved 32% growth compared to $11 million in the fourth quarter, primarily due to volume.
J: <unk> sales were $8 7 million compared to $10 $8 million in the fourth quarter as expected. The decline was due to the impact on volume and pricing from generic competition.
Ajay Patel: Excluding the impact of inventory step-up, gross margin in the first quarter was 78% compared to 79% in the fourth quarter. Inventory step-up was materially complete at the end of the first quarter. Turning to operating expenses, SG&A expense was $18.5 million in the first quarter, down 23% from $24 million in the fourth quarter. Excluding stock compensation, adjusted OPEX was $17.3 million in the first quarter and reflects the benefits from actions the company has taken to reduce and align expenses to its current asset portfolio. Gap net income for the first quarter was a loss of $4.5 million, down from a loss of $57.4 million in the fourth quarter. However, both quarters included the impact of non-cash adjustments, making them difficult to compare.
J: Excluding the impact of inventory step up gross margin in the first quarter was 78% compared to 79% in the fourth quarter inventory step up was materially complete at the end of the first quarter.
J: Turning to operating expenses SG&A expense was $18 5 million in the first quarter down 23% from $24 million in the fourth quarter, excluding stock compensation adjusted Opex was $17 3 million in the first quarter and reflects the.
J: <unk> from actions the company has taken to reduce and align expenses to its current asset portfolio.
J: GAAP net income for the first quarter was a loss of $4 $5 million down from a loss of $57 4 million in the fourth quarter.
J: Both quarters included the impact of noncash adjustments, making them difficult to compare however, adjusted EBITDA is a good indicator of the operating performance of the core business.
Ajay Patel: However, adjusted EBITDA is a good indicator of the operating performance of the core business. Q1 Adjusted EBITDA was a positive $7.4 million, increased from Q4 Adjusted EBITDA of $4.5 million due to the sales and OPEX favorability just noted. Please refer to our press release for a detailed reconciliation of our adjusted EBITDA results, crossing over to cash flows and our balance sheet. We generated $7.5 million in cash flow from operations in the first quarter.
J: Q1, adjusted EBITDA was a positive seven $4 million increased from Q4, adjusted EBITDA of $4 $5 million due to the sales and Opex favorability just noted.
J: Please refer to our press release for a detailed reconciliation of our adjusted EBITDA results.
J: Crossing over to cash flows and our balance sheet, we generated $7 $5 million in cash flow from operations in the first quarter. As we have previously noted quarterly operating cash flows will fluctuate due to the timing of working capital royalties and interest payments. Additionally, similar.
Ajay Patel: As we have previously noted, quarterly operating cash flows will fluctuate due to the timing of working capital, royalties, and interest payments. Additionally, similar to the P&L results, as we shift from Indus into Rovodon, there is a pronounced impact on operating cash flows, which will take a few quarters to be realized. Wovedon carries a higher gross revenue profile than Indusin, which results in higher upfront cash collection. But at the same time, Wolverdine also has a higher gross to net rate, which results in higher rebate settlements down the road.
J: To the P&L results as we shift from Indus into overdone, there is a pronounced impact to operating cash flows, which will take a few quarters to be realized.
J: <unk> carries a higher gross revenue profile than indecision, which results in higher upfront cash collections, but at the same time will be down also has a higher gross to net rate, which results in higher rebate settlements down the road.
J: Cash at the end of the first quarter was $87 million and debt was $40 million and looking at our cash deployment opportunities as Heather stated we are focused on investments that can grow sales and profitability in a manner that increases durability and predictability.
Paul Schwichtenberg: Cash at the end of the first quarter was $80.7 million, and debt was $40 million. In looking at our cash deployment opportunities, as Heather stated, we are focused on investments that can grow sales and profitability in a manner that increases the durability and predictability of the business. We are pleased with Q1 results but also recognize that stabilization and growth in the business is a multistage process that requires focus on execution and ensuring appropriate capital access is maintained based on internal liquidity, as well as external availability.
J: <unk> of the business.
J: We are pleased with Q1 results, but also recognize that stabilization and growth in the business as a multi stage process that requires focus and execution and ensuring appropriate capital access is maintained based on internal liquidity as well as external availability.
J: We are maintaining our previously announced guidance for 2024, we expect net product sales in a range of $110 million to $125 million, we anticipate adjusted EBITDA in a range of $20 million to $30 million I'll now turn the call over to.
Paul Schwichtenberg: We are maintaining our previously announced guidance for 2024. We expect net product sales in a range of $110 million to $125 million. We anticipate adjusted EBITDA in a range of $20 to $30 million. I'll now turn the call over to Paul to give commercial updates.
J: Paul to give commercial update.
Paul: Thank you AJ over the past few years, we have built a diversified cash flow generating asset portfolio focused on commercial assets aligned to our low cost efficient sales and marketing approach.
Paul Schwichtenberg: Over the past few years, we have built a diversified cash flow-generating asset portfolio focused on commercial assets aligned to our low cost, efficient sales and marketing approach. Last fall, we saw two major changes around our lead assets, Indusyn, and Rolodom, which occurred in short order, but we continue to maintain our commitment to generating cash flow and new opportunities within our existing product set. I know that many of you are very focused on our commercial plans and, in particular, our growth efforts around Rovidox.
Paul: Last fall, we saw two major changes around our lead assets and listen enrolled with which occurred in short order, but we continue to maintain our commitment to generating cash flow and new opportunities within our existing product set.
Paul: I know that many of you are very focused on our commercial plans and in particular our growth efforts around roadblock.
Paul: We reported a strong start to 2020 for his role with our net sales increased 32% over the prior quarter, including a 24% sequential increase in unit demand.
Paul Schwichtenberg: We reported a strong start to 2024 as Robodon net sales increased 32% over the prior quarter, including a 24% sequential increase in unit demand. Q1 2024 reflected our fifth sequential quarter of demand growth and the largest quarterly percentage growth since its first full quarter after launch. ASP erosion has been in line with expectations, holding the low single digits, and we currently have the second highest ASP in the class.
Paul: Q1, 2024 reflected our fifth sequential quarter of demand growth and the largest quarterly percentage growth since its first full quarter after launch.
Paul: ASP erosion has been in line with expectations holding the low single digits and we currently have the second highest ASP and the class.
Paul: We believe our market share in the clinic Medicare part D market. We currently serve as approximately 34%.
Paul Schwichtenberg: We believe our market share in the clinic Medicare Part B market we currently serve is approximately 34%. Our success to date has been driven by excellent performance in the clinic space due to our dedicated contracting and commercial access capabilities, even with strong competition from biosimilars. Our strategy is to continue to drive growth in this important segment, which is about one third of the total market, through both further market penetration into new sites as well as volume gains at existing clinics.
Paul: Our success to date has been driven by excellent performance in the clinic space due to our dedicated contracting and commercial access capabilities.
Paul: Even with strong competition from the Biosimilars.
Paul: Our strategy is to continue to drive growth in this important segment, which was about one third of the total market through both further market penetration into new size.
Paul: Well as volume gains at existing clinics.
Paul Schwichtenberg: We are leveraging our commercial sales team as well as digital promotion efforts to achieve further market penetration. We are also looking to expand into new hospital customers as we continually work toward building Rovidon into greater than a $100 million asset in the years ahead. Moving to Indescent, Q1 performance was in line with our expectations as we continue to adapt to a competitive market. Our efforts to date have resulted in approximately a 50% volume share of the market, although the generic competitor has priced aggressively.
Paul: We are leveraging our commercial sales team as well as digital promotion efforts to achieve further market penetration.
Paul: We are also looking to expand into new hospital customers as we continually work towards building rolled on into greater than a $100 million asset in the years ahead.
Paul: Moving to innocent Q1 performance was in line with our expectations as we continue to adapt to a competitive market.
Paul: Our efforts to date have resulted in approximately a 50% volume share of the market.
Paul: Although the generic competitor has priced aggressively we remain.
Paul Schwichtenberg: We remain focused on protecting our share and maximizing the value of Indusyn as a cash flow generating asset. Turning to Symposan, Q1 performance was in line with our expectations. While the active ingredient is widely known and well understood, Sympyzan is particularly appealing to certain targeted, hard-to-control patients due to its delivery mechanism.
Paul: <unk> focused on protecting our share and maximizing the value of <unk> as a cash flow generating asset.
Paul: Turning to <unk> Q1 performance was in line with our expectations.
Paul: While the active ingredient is widely known and well understood.
Paul: Symposium is particularly appealing with certain targeted hard to control patients.
Due to its delivery mechanism.
Paul Schwichtenberg: This is in part why it's a good fit to Assertio's platform and why we see additional opportunity in this asset. We are making an incremental strategic investment in Symposan to change our marketing mix and raise awareness with the goal to drive incremental volume growth starting in 2025. Lastly, I'd like to commend and thank our entire commercial team as they continue to execute well and deliver results. With that, I'll turn the call back to the operator for Q&A from our covering research analysts. Thank you. We will now begin our
Paul: This is in part why it's a good fit to our <unk> platform and why we see additional opportunity in this asset.
Paul: We are making in incremental strategic investment in simple <unk> to change our marketing mix and raise awareness with the goal to drive incremental volume growth starting in 2025.
Paul: Lastly, I'd like to commend and thank our entire commercial team as they continue to execute well and deliver results.
Speaker Change: With that I'll turn the call back to the operator for Q&A from recovering at research analysts.
Speaker Change: Thank you we will now begin our question and answer session. At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question simply press Star One again, we'll pause for just a moment to compile the Q&A roster.
Operator: Thank you. We will now begin our question and answer session. At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We'll pause for just a moment to compile the Q&A roster. The first question comes from the line of James Sidoti from Sidoti and Co. Please go ahead.
Speaker Change: The first question comes from the line of Jim Sidoti from Sidoti <unk> Co. Please go ahead.
James Philip Sidoti: All right, good afternoon. Thanks for taking the questions. We talked about the completion of the enrollment for the trial for Sam Day-Doson. Can you just go over the timeline now? What's the next step for that? And what do you think the potential for that is in terms of Additional Revenue if you should get that approval.
James Philip Sidoti: Hi, good afternoon, thanks for taking my questions.
James Philip Sidoti: You talked about the completion of the <unk>.
Enrollment for the trial for same day dosing can you to store window of a timeline, what's the next step for that and what do you think the potential.
Speaker Change: So that is in terms of.
Speaker Change: Of additional revenue.
Speaker Change: Should get that approval.
Sure Hi, Jim This is Paul here I'll address that question.
Paul Schwichtenberg: Hi Jim, this is Paul here. I'll address that question. So, the last patient has been enrolled. As we said earlier, we are in the data analysis phase right now. And we expect to publish the data, or sorry, present the data in Q4. As a reminder, this will not be a label change, but this will just be new data that will be available. We don't have any impact planned in 2024, which is consistent with our guidance. And I think any, you know, future impact is going to be determined.
Paul: So the last patient has been enrolled as we said earlier.
Paul: We are in the data analysis phase right now.
Paul: And we expect to publish the data I'm, sorry present, the data in Q4.
Paul: As a reminder, this will not be a label change, but this will just be new data that will be available.
Paul: We don't have any impact planned in 2024, which was consistent with our guidance and I think any future impact is going to be to be determined.
Paul: Okay.
Paul Schwichtenberg: Okay, and as you look at the new products to bring into the portfolio, you know, how critical is it that those products are able to be distributed through your virtual network? Is that a must? Are you considering products that would go to the more traditional in-person sales?
Paul: As you look at.
Paul:
Paul: The new products to bring into the portfolio.
Paul: How critical is it that those products are able to.
Paul: To be distributed through your virtual network.
Paul: A must or are you considering products that.
Paul: Would go through the more traditional in person sales force.
Paul: We are then kin to the go to market model in terms of.
Paul Schwichtenberg: We are open, Jim, to the go-to-market model in terms of direct sales versus more digital interaction.
Paul: Direct sales versus more digital interaction.
Paul: Alright.
Paul Schwichtenberg: Right. And in terms of product categories, I mean, are you focused more on pain management and cancer treatment drugs, or are you open to other types of drugs as well?
Paul: In terms of product categories.
Paul: <unk>.
Paul: Are you focused more on the pain management and cancer treatment drugs or are you open to other other types of drugs as well.
Paul Schwichtenberg: Although it'd be great, Jim, to have products in, for example, the oncolytic supportive care area. That's a small set of products, so we're looking more broadly than that, but we certainly would be thrilled to find something that even better leverages our current set of assets that are talking to doctors right now.
Paul: Although it would be great Ken to have products in for example, the <unk>.
Paul: Point of care area.
Ken: That's a small set of products. So we're looking more broadly than that.
Ken: We certainly.
Ken: It would be we'd be thrilled to find something that even better leverages our current.
Ken: R R.
Ken: Set of assets that are talking to the doctors right now.
James Philip Sidoti: All right, and then the last one for me, you know, what are your options to finance the deal? Are you considering debt or would you prefer to do an all-equity deal, or are you taking cash off the balance sheet?
Speaker Change: Alright, and then the last one for me.
Speaker Change: What are your options to finance the deal are you considering.
Speaker Change: Or would you prefer to do no equity deal or some of the cash off the balance sheet.
J: Hey, Jim This is a J I think.
Ajay Patel: Hey, Jim, this is Ajay. Yeah, I think it's all going to be predicated on the type of deal and the type of assets that are being targeted. We're going to look at the cost of capital from all three of those venues, right? In the current state of things, the cash utilization is most optimal, but we'll be evaluating and balancing it to ensure the cost of capital utilization is appropriate. All right, thank you
James Philip Sidoti: It's all going to be predicated on the type of deal and the type of assets. That's being targeted will then look at the cost of capital from all three of those venues right.
Speaker Change: The current state of things from the cash utilization was most optimal but we will be evaluating and balancing it to ensure.
Speaker Change: Cost of capital utilization is appropriate.
Speaker Change: Alright, thank you.
Speaker Change: Thanks, Tim.
Speaker Change: The next question comes from the line of Thomas Flaten from Lake Street Capital markets. Please go ahead.
Thomas Flaten: The next question comes from the line of Thomas Flaten from Lake Street Capital Markets. Please go ahead.
Thomas Flaten: Good afternoon. I appreciate you guys taking the time to answer the questions.
Thomas Flaten: Good afternoon I appreciate you guys, taking the questions Paul maybe I could just key off the last thing you said about symposium that youre, making a strategic investment I was wondering if you could clarify maybe a little bit more what that what that might look like and then you also said with plans for growth for 2025 is the implication there that there won't be any growth in 2024.
Paul Schwichtenberg: Paul, maybe I could just key off the last thing you said about Symposan, that you're making a strategic investment. I was wondering if you could clarify maybe a little bit more what that might look like. And then you also said with plans for growth for 2025, is the implication there that there won't be any growth?
Paul Schwichtenberg: I think the answer to the last part of your question is no, not necessarily. I think we're looking at, you know, kind of the continued growth that we've seen with Symposam. Maybe it's a low single-digit level.
Paul: I think the answer to the last part of your question is no not necessarily I think we're looking at.
Paul: The continued growth that we've seen with <unk> and maybe it's a low single digit level.
Paul Schwichtenberg: However, as I mentioned, we do believe that there is some opportunity in this market to get our message out there. And what we're looking to do is really shift around our marketing mix and where we're spending our dollars and put it in different places that we think will get us better access to physicians and patients that will drive volume going forward. Obviously, we need a little time to implement what we're trying to do, and that's why we're looking at the impact not really happening until 2025.
Paul: However, as I mentioned, we do believe that there is some opportunity in this market to get our message out there and what we're looking to do is really shifts around our marketing mix and where we're spending our dollars.
Paul: And put it in different places that we think will get us better access to physicians and patients.
Paul: And that will drive volume going forward, obviously, we need a little time to implement what we're trying to do and that's what we're looking at the impact not really happening until 2025.
Speaker Change: Got it.
Thomas Flaten: Got it. Thank you, Mel. Right. Yep. Heather, you mentioned the CEO search. It sounded like you were down to a relatively small number of candidates. Can you maybe give us some sense of who they are, where they've been, what kind of experience they have, just in a very generic way?
Speaker Change: Right.
Speaker Change: Yes, Heather you mentioned the CEO search.
Speaker Change: Founded like there was there was you were down to a relatively small number of candidates can you maybe give us some sense of who they are where they've been what kind of experience. They have just in a very generic manner.
Heather L. Mason: I'm not prepared to discuss that, Thomas, but to rest assured, we have set a very clear list of criteria from both an experience perspective and both functionally and in the marketplace and have been pleased with the caliber of talent we've been able to talk to. And when we get ready to announce them, Thomas, then we'll talk about the answers to your questions, but the bar is high. The bar is high, and we feel good.
Heather L. Mason: Im not prepared to discuss that Thomas.
Heather L. Mason: <unk>.
Speaker Change: Rest assured we are.
Speaker Change: We have set a very clear.
Speaker Change: A list of criteria from both.
Speaker Change: Experienced perspective in both functionally and in the marketplace.
Speaker Change: And have been.
Speaker Change: Pleased with the caliber of talent, we've been able to talk to.
Speaker Change: And when we get ready to announce and Thomas then we'll talk about the answers to your questions.
Speaker Change: The bar is high.
Speaker Change: Bar is high and we feel good.
Thomas Flaten: Got it. Ajay, you mentioned that the inventory step-up was going to be or was substantially completed by the end of the first quarter. Can you give us a sense of where you think margins can be given the new product mix, gross margins, that is?
Speaker Change: Got it.
Speaker Change: You mentioned that the inventory step up was going to be some what was substantially completed by the end of the first quarter can you give us a sense of where you think margins can be given the new product mix gross margins lettuce.
Speaker Change: Yes, I think we would say we are anticipating a slight.
Ajay Patel: Yeah, I think we would say we're anticipating a slight continued decrease in our margins from where they were, as I kind of said, at 78% in Q1. As indecent continues to decline, the margins start escalating towards overdone. I think targeting the mid 70s is a good target for us to maintain.
Speaker Change: Continued decrease in our margins from where they were as I tunnel side of the 78% in Q1 as <unk> continues to decline.
Speaker Change: <unk> start elevating.
Towards overdone.
Speaker Change: I think we're targeting in the mid seventies.
Speaker Change: As a good target for us to maintain.
Thomas Flaten: Got it, got it. And then just one final one, maybe for Paul.
Speaker Change: Got it got it and then just one final one maybe for Paul.
Speaker Change: For the clinics, where you are having particular success from a volume perspective is there something common amongst those clinics are they does it have to be or is it perhaps coverage is there something that those doctors see enrollment on that they might not see in the other products to help if you could maybe just kind of characterize those success.
Speaker Change: Clinics, a little bit.
Speaker Change: Well I think the short answer is we are having success across a broad number of clinics across the country.
Paul Schwichtenberg: For the clinics where you are having particular success from a volume perspective, is there something common among those clinics? Is it, does it have to be, or is it perhaps coverage? Is there something that those doctors see in Rolvidon that they might not see in the other products? Help if you could maybe just kind of characterize those success clinics a little bit.
Paul Schwichtenberg: Well, I think the short answer is we're having success across a broad number of clinics across the country. And, you know, where we're having success is where we've got good contracts in place, and they may, and also there's a lot of coverage in Medicare Part B, which is our primary space that we're playing in right now.
Speaker Change: And.
Speaker Change: Where we are having successes.
Speaker Change: Where we've got good contracts in place.
Speaker Change: <unk>.
Speaker Change: And also maybe.
Speaker Change: And we're also.
Speaker Change: There's a lot of coverage in Medicare part B, which is our primary space that we're playing in right now.
Speaker Change: Got it I appreciate it thanks, everyone.
Thomas Flaten: Got it. I appreciate it. Thanks, everyone.
Speaker Change: Thank you.
Heather L. Mason: As there are no further questions at this time. This concludes our Q&A session I would like to turn the call over back to header Mason for closing remarks.
Operator: As there are no further questions in the queue this time, this concludes our Q&A session. I would like to turn the call over to Heather Mason for closing remarks.
Mason: Thank you and I appreciate everyone, who has joined US today and I hope that today's call is given clarity.
Heather L. Mason: Thank you, and I appreciate everyone who's joined us today, and I hope that today's call has given clarity that we're doing what we said we were going to do. Our intent is to grow Rovidon, and manage this in. Ensure right-sized operating expenses. Maintain cash generation, be active on the business development front, and close in on a CEO candidate. And as we keep moving forward, we'll apprise you of any additional developments. If you'd like to arrange a call with management, please contact Matt Kreps directly, and we'll be happy to schedule a time. Once again, thank you for joining us. Ladies and gentlemen, this concludes today's conference.
Mason: That we're doing what we said we were going to do.
Mason: Our intent is to grow Roe, but on <unk>.
Mason: Manage and Nissan.
Mason: And sure right sized operating expenses maintain cash generation.
Mason: Be active on the business development front closing on a CEO candidate.
Mason: And.
As we have as we keep moving forward, we will apprise you of any additional developments.
Mason: Like to arrange a call with management, please contact Matt Kreps directly and we'll be happy to schedule a time once again, thank you for joining.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: Okay.
unknown: Please see the complete disclaimer at https://sites.google.com itself
Speaker Change: [music].