Q1 2024 Delcath Systems Inc Earnings Call
Operator: Good day, and welcome to the Delcath Systems first quarter fiscal year 2024 financial results conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note that this event is being recorded. I would now like to turn the conference over to David Hoffman, Delcath's General Counsel. Please go ahead.
Good day and welcome to the Delcath systems first quarter fiscal year 2020, full financial results conference call.
Conference Specialist: All participants will be in the listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions.
Speaker Change: To ask a question you May press Star then one on strong for them.
Conference Specialist: I would draw your question. Please press Star then two.
Speaker Change: Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference off to David Hoffman Delcath General Counsel. Please go ahead.
David Hoffman: Thank you, and once again, welcome to Delcath Systems' 2024 First Quarter Earnings and Business Highlights Call. With me on the call are Gerard Michel, Chief Executive Officer, Sandra Pennell, Senior Vice President of Finance, Kevin Muir, General Manager, Interventional Oncology, Vojo Vukovic, Chief Medical Officer, and Martha Rook, Chief Operating Officer.
David Hoffman: Thank you and once again welcome to Delcath systems, 'twenty 'twenty, four first quarter earnings and business highlights call.
David Hoffman: Me on the call are Gerard Michel Chief Executive Officer, Sandra P&L Senior Vice President of Finance, Kevin Here General manager intervention all oncology.
Speaker Change: Ohio, Vukovich, Chief Medical Officer, and Martha Roke, Chief operating officer.
David Hoffman: I'd like to begin the call by reading the Safe Harbor Statement. This statement is made pursuant to the Safe Harbor for Forward-Looking Statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurance that such expectations will prove to have been correct.
Sandra Pennell: I'd like to begin the call by reading the Safe Harbor statement.
David Hoffman: Actual results may differ materially from those expressed or implied in forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expected or implied in the forward-looking statements. Please see risk factors detailed in the company's annual report on Form 10-K and those contained in subsequently filed quarterly reports on Form 10-Q, as well as in other reports that the company files from time to time with the Securities and Exchange Commission.
Speaker Change: This statement is made pursuant to the safe Harbor for forward looking statements described in the private Securities Litigation Reform Act of 1995.
Speaker Change: All statements made on this call with the exception of historical facts may be considered forward looking statements within the meaning of section 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934.
Speaker Change: Although the company believes that expectations and assumptions reflected in these forward looking statements are reasonable it makes no assurance that such expectations will prove to have been correct.
Speaker Change: Actual results may differ materially from those expressed or implied in forward looking statements due to various risk and uncertainties.
company: A discussion of such risks and uncertainties, which could cause actual results to differ from those expected or implied in the forward looking statements. Please see risk factors detailed in the company's annual report on Form 10-K.
company: Those contained in subsequently filed quarterly reports on Form 10-Q, as well as in other reports that the company files from time to time with the Securities and Exchange Commission.
David Hoffman: Any forward-looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances. Now, I would like to turn the call over to Gerard Michel. Gerard, please proceed.
company: Any forward looking statements included in this call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward looking statements to reflect subsequent knowledge events or circumstances.
Speaker Change: Now I would like to turn the call over to Gerard Michel Gerard. Please proceed.
Gerard J. Michel: Thank you everyone for joining us today. This is the first quarter that Delcath is reporting U.S. revenue, a significant milestone for the company. In the first quarter, revenue from our sales of Hepzato was $2 million, and for ChemoSat was $1.1 million. Given the March start for three of the four U.S. centers active in the first quarter and the temporary use of product sampling for some of the initial proctored cases, the $2 million in U.S. revenue was predominantly generated by treatments at Moffitt, with the balance of the other three centers active in the first quarter starting to generate consistent revenue in the second quarter.
Speaker Change: Thank you everyone for joining today. This is the first quarter Delcath since reporting U S revenue.
Speaker Change: Significant milestone for the company.
Speaker Change: In the first quarter revenue from ourselves or perhaps auto was $2 million and for Cumulus that $1 $1 billion given the March start for three of the four U S centers active in the first quarter and the temporary use of product sampling for some of the initial proxy cases.
Cumulus: The $2 million in U S revenue was predominantly generated by treatments of BOP BOP it would be balance of the other three centers activated in the first quarter starting to generate consistent revenue in the second quarter.
Gerard J. Michel: As we have discussed in prior calls, the pace of revenue growth in the short to medium term will be determined by the rate at which we can train and activate new treatment centers. Since our launch in January and in the seven weeks since our recent fourth-quarter call, we have made steady progress in expanding the number of centers we are engaged with and actively training. We ended the first quarter with four active sites, Moffitt Cancer Center, Stanford University Cancer Center, Thomas Jefferson University, and the University of Wisconsin.
Speaker Change: As we have discussed in prior calls the pace of revenue growth in the short to medium term will be determined by the rate at which we can train activate new trading treating centers since our launch in January and then the seven seven weeks since our recent fourth quarter call. We have made steady progress in expanding the number of centers we are engaged with.
Cumulus: They are actively training.
Cumulus: We ended the first quarter, but for our sites Moffitt Cancer Center, Stanford University Cancer Center, Thomas Jefferson University, and the University of Wisconsin.
Gerard J. Michel: As of today, there are six active treating centers, with the University of Tennessee and the UCLA Cancer Center having recently conducted their first commercial treatment. A further five centers have completed the necessary steps to conduct their first commercial treatment under the guidance of a proctor once hospital formulary committee approval is obtained and are in the process of identifying and scheduling their first patients for treatment with Hepatitis B. In total, there are 11 centers, an increase of two from our last call, currently accepting patient referrals and listed on our healthcare setting locator.
Speaker Change: As of today, there are six active trading centers with the University of Tennessee, and the UCLA cancer sector, having recently conducted their first commercial treatments a.
Proctor Once: A further five centers have completed the necessary steps to conduct their first commercial treatment under the guidance of a Proctor Once hospital formulary Committee approvals obtained is obtained and are in the process of identifying and scheduling the first patients for treatment with Pep Sato.
Proctor Once: In total there are 11 centers an increase of two from our last call currently accepting patient referrals and listed on our health care studying locator.
Gerard J. Michel: Beyond those 11 centers, another 7 centers currently have preceptorships scheduled or are part way through the preceptorship training. To date, we have had over 100 perfusionists, anesthesiologists, and interventional radiologists attend preceptorships representing over 20 institutions in the U.S., with some institutions sending multiple health care providers for the same specialty. As a reminder, the entire process from initially scheduling a preceptorship to activation can take approximately three months.
Proctor Once: Beyond those 11 centers. Another seven centers currently have preceptorships scheduled or partway through the Preceptorship training to date, we have had over 100, Perfusionist anesthesiologist and interventional radiologist 10, preceptorships representing over 20 institutions in the U S with some.
Proctor Once: Sending multiple health care providers the same specialty.
Speaker Change: As a reminder, the entire process from initially scheduling a preceptorship to activation can take approximately three months.
Gerard J. Michel: Given the significant level of commitment required from healthcare providers to become fully trained and certified under the REMS program, we believe all the healthcare providers and the cancer centers involved to date intend to incorporate Hepatitis C as a core part of their treatment regime for metastatic uveal melanoma patients. We continue to expand the number of centers with which we are engaging, with over 30 centers now somewhere in the process from preliminary discussions regarding the steps required to become a treatment center to actively treating patients.
Speaker Change: Given the significant level of commitment required from health care providers to become fully trained and certified under the Rems program. We believe all the health care providers on the cancer centers involved today intend to incorporate hemp Sato is a core part of their treatment regime for metastatic uveal melanoma patients.
Speaker Change: We continue to expand the number of centers with which we are engaging with over 30 centers now somewhere in the process from preliminary discussions regarding the steps required to become a training center to actively treating patients. There has been a definite increase in interest partially due to physicians in treating centers sharing their experience with physicians.
Gerard J. Michel: There has been a definite increase in interest, partially due to physicians at treating centers sharing their experiences with physicians at other centers which are not yet involved. There is certainly a component of what I might characterize as informal and independent peer-to-peer engagement.
Speaker Change: At other centers, which are not yet involved there is certainly a component of what I might characterize as informal and independent peer to peer engagement occurring.
Gerard J. Michel: In addition, increased interest can also be attributed to our permanent and product-specific J code becoming effective on April 1st. While we are aware that hospitals have successfully been reimbursed for the treatment using miscellaneous C codes prior to April 1st, the establishment of the permanent J-code has definitely simplified the reimbursement process and the willingness of formulary committees to approve the use of hep status. We believe we are on track to have 20 active centers by the end of 2024.
Speaker Change: In addition increased interests can also be attributed to our permanent and product specific J code, becoming effective on April one.
Speaker Change: While we are aware that hospitals have successfully been reimbursed for the treatment using miscellaneous code prior to April 1st the establishment of the permanent J code is definitely simplified the reimbursement process and the willingness of formulary committees to approve the use of <unk>. We believe we are on track to have 20 active centers by the end of 2024.
Speaker Change: For the approximate anticipated pacing of center activation remains at 10 active centers by the end of the second quarter 15 by the end of the third quarter and 20 to treating centers by year end, our projected average treatments per center remains at approximately one per month ramping to a run rate of approximately one and a half treat.
Gerard J. Michel: The approximate anticipated pacing of center activation remains at 10 active centers by the end of the second quarter, 15 by the end of the third quarter, and 20 to treating centers by year end. Our projected average treatment per center remains at approximately one per month, ramping to a run rate of approximately one and a half treatments per month by mid-year, and then reaching a run rate of two treatments per month late in the fourth quarter.
Speaker Change: <unk> per month by mid year, and then reaching a run rate of two treatments per month late in the fourth quarter.
Gerard J. Michel: It is important to note that given our expected ramp for both treatment volume and center activation, we should achieve $10 million in U.S. quarterly revenue in 2024, which will likely result in $25 million of cash proceeds from the exercise of the final tranche of warrants issued as part of our March 2023 finances. Sandra will share additional details on our financials in a moment, but I want to highlight that our effective gross margin in the first quarter was approximately 60%, despite the modest initial volume.
Speaker Change: It is important to note that given our expected ramp for both treatment per center volume and center activation.
Speaker Change: We shouldn't she achieved $10 million in U S quarterly revenue in 2024, which will likely result in $25 million of cash proceeds from the exercise of the final tranche of warrants issued as part of our March 2023 financing.
Speaker Change: Sandra will share additional details on our financials in a moment, but I want to highlight that our effective gross margin in the first quarter was approximately 60%. Despite the modest initial volume.
Gerard J. Michel: In addition to the significant commercial activity, we continue to support both internal and external efforts to add to the growing body of evidence that the PHP procedure is an important treatment option for patients with liver-dominant and uveal melanoma, as well as potentially other liver-dominant cancers. Recently, we announced the publication of results from the Pivotal Phase III-focused study of Hepzido and patients with unresectable metastatic uveal melanoma in the Annals of Surgical Oncology.
Speaker Change: In additional to the significant commercial effort activity, we continue to support both internal and external efforts to add to a growing body of evidence that the ph be procedure.
Sandra: He is an important treatment options for patients with liver dominant uveal melanoma as well as potentially other liver dominant cancers.
We: We announced the publication of results from the pivotal phase III study of <unk> and <unk>.
Speaker Change: With line of sight on.
Speaker Change: Resectable metastatic uveal melanoma, and the journal Annals of surgical oncology.
Gerard J. Michel: As previously disclosed at ASCO, the publication reported a statistically significantly higher overall response rate of 36.3% for HPSADO versus 5.5% from a meta-analysis of historical controls. Other efficacy endpoints included a 70% complete response rate and a 73.6% disease control rate. In addition, results from the early randomized stage of the FOCUS trial, which was initiated as a randomized two-arm trial but completed as a single-arm study, will be presented at a post-assembly session at the upcoming ASCO annual meeting in Chicago.
Speaker Change: As previously disclosed that <unk> the publication reported a statistically significantly higher overall response rate of 36, 3%, perhaps auto versus five 5% from a meta analysis of historical controls.
Speaker Change: Other efficacy endpoints, including 7% complete response rate with a 73, 6% disease control rate.
Speaker Change: In addition results from the early randomized stage of a focused trial, which was initiated as a randomized two arm trial, but complete it is a single arm study will be presented at a poster session at the upcoming <unk> annual meeting in Chicago.
Gerard J. Michel: Later in the year, we expect also to publish an expanded analysis of various patient subpopulations in a peer-reviewed journal. Liver-dominant metastatic disease is a significant therapeutic challenge in an area of high unmet medical need for many solid tumor types. To support additional clinical development in some of these areas, it is important for the company to build a strong commercial foundation in metastatic uveal melanoma in the U.S., both for purposes of funding trials as well as creating a network of treatment centers. We are well on our way to accomplishing this. While the interest level from interventional radiation has been... You're unable to hear me?
Speaker Change: Later in the year, we expect also to.
Speaker Change: Our published an expanded analysis of various patient sub populations in a peer reviewed journal.
The company: Liver dominant metastatic diseases, a significant therapeutic challenge in the area of high unmet medical need for many solid tumor types to support additional clinical development. Some of these areas. It is important for the company to build a strong commercial foundation in metastatic uveal melanoma in the U S. Both for purposes of funding try.
Speaker Change: Miles as well as creating a network of training centers, we are well on our way to accomplishing this while the interest level interventional ratings.
Speaker Change: Yeah.
Speaker Change: You are unable to hear me.
Operator: Can't you hear me? Yes, we can hear you. Can you hear me now? Hello? Yes, Gerard. We can hear you. You can go ahead. And when did I drop off?
Jeremy: Yes, Jeremy Please go ahead.
Jeremy: Yes, we can hear you.
Jeremy Smith: Can you hear me now.
Jeremy: Hello.
Jeremy Smith: Yes, we can hear you you can go ahead.
Jeremy Smith: And when did I drop off.
Operator: Can you tell me when I dropped off?
Speaker Change: You tell me when I dropped off.
Operator: We couldn't hear you for about 20 seconds.
Speaker Change: We couldn't hear you for it.
Speaker Change: About 20 seconds.
Sandra Pennell: Sandra, do you know where I dropped off?
Sandra: Sandra do you know where I dropped off.
Sandra Pennell: I heard you the whole time, but if you want to start back around at ASCO in Chicago, perhaps.
Sandra: And I've heard just the whole time, but if you want to start back around on fiasco, and Chicago, perhaps.
Gerard J. Michel: Okay, so you heard me the whole time. All right, always some technical difficulties somewhere.
Sandra: Okay. So you've heard me the whole time alright.
Sandra: Always some technical difficulties somewhere so let me rewind here.
Sandra: Apologies to the listening audience here.
Gerard J. Michel: So let me rewind, and my apologies to the listening audience here. All right. I'm going to pick up with, later in the year, we expect expanded analyses of various patient subpopulations, a little focus study, to be published in a peer-reviewed journal. Liver-dominant metastatic disease is a significant therapeutic challenge in an area of high unmet medical need for many solid tumor types. To support additional clinical development in some of these areas, it is important for the company to build a strong commercial foundation in metastatic UV melanoma in the U.S., both for purposes of funding trials as well as creating a network of treatment centers. We are well on our way to accomplishing this.
Sandra: All right.
Sandra: I'm going to pick up with later in the year, we expect expanded analyses of various patient subpopulations.
Sandra: Subpopulations.
Speaker Change: A study to be published in a peer reviewed journal.
Sandra: Liver dominant metastatic disease is a significant therapeutic challenge and an area of high unmet medical need for many solid tumor types.
company: To support additional clinical development in some of these areas. It is important for the company to build a strong commercial foundation in metastatic uveal melanoma in the U S. Both for purposes of funding trials as well as creating a network of treating centers, we are well on our way to accomplishing this.
Oncologists: While the interest level from interventional radiologists and investigating the use of Pep Sato hemostat treat other liver dominant cancers has been high for many years. This is not necessarily been the case for oncologists outside of metastatic Uveal melanoma.
Gerard J. Michel: While the interest level from interventional radiologists in investigating the use of Hepzato and ChemoSat to treat other liver-dominant cancers has been high for many years, this has not necessarily been the case for oncologists outside of MediSec, UVM, and melanoma. The launch of HEP-SATO in major cancer centers is increasing the level of interest from a broader set of oncologists to study HEP-SATO's use in treating other cancers, such as colorectal, intrahepatic cholangia carcinoma, and breast cancer.
Speaker Change: The launch of hip Sato and major cancer centers is increasing the level of interest from a broader set of oncologists to study Hep Sato use in treating other cancers, such as colorectal intrahepatic cholangiocarcinoma and breast cancer.
Gerard J. Michel: As mentioned in the previous quarterly update call, we plan to initiate one or more clinical trials of Hep-SADO and other tumor types within approximately a year and will provide further updates on those activities later this year. The CHOPIN trial, which is evaluating the effect of sequencing immunotherapy with chemosat liver directed therapy, is expected to be fully enrolled by the end of 2024. As CHOPIN is an investigator-initiated trial, we do not control the timing of data release.
Speaker Change: As mentioned in the previous quarter quarterly update call, we plan to initiate one or more clinical trials to hips auto and other tumor types within approximately a year and we'll provide further updates on those activities later this year.
Oncologists: The Chopin trial, which is evaluating the effect of sequencing immunotherapy with Cumulus that liver directed therapy is expected to be fully enrolled by the end of 2024.
Oncologists: Japan is an investigator initiated trial, we do not control the timing of data release. However, our understanding is that the study results, including the primary endpoint are still planned to be presented at a major oncology conference in the second quarter of 2025.
Gerard J. Michel: However, our understanding is that the study results, including the primary endpoint, are still planned to be presented at a major oncology conference in the second quarter of 2025. In summary, the company continues to activate centers consistent with our center activation guidance. In addition, while the treatment of metastatic uveal melanoma patients will support significant growth for the foreseeable future, we are planning to pursue additional indications given the tremendous unmet need for patients suffering from cancer of the liver.
Speaker Change: In summary, the company continues to activate centers consistent with our center activation guidance. In addition, while the treatment of metastatic uveal melanoma patients will support significant growth for the foreseeable future. We are planning to pursue additional indications given the tremendous unmet need for patients suffering cancer, but whether I will now hand the.
Gerard J. Michel: I will now hand the call over to Sandra to share some details on our financial position. Sandra? Thank you, Gerard. We ended Q1 with 27.8.
Oncologists: Call over to Sandra to share some details on our financial position Sandra.
Sandra: Thank you Gerard.
Sandra Pennell: We ended Q1 with $27.2 million in cash investments, and cash used in operations was approximately $9.6 million in the first quarter. The change in cash from year-end due to the use of cash required primarily for launch and center activation, offset by the 2024 private placement financing of $7 million. It is important to note that this financing was supported entirely by Delcath senior executives, board members, and existing institutional investors.
Sandra: We ended Q1 with $27 2 million in cash investments and cash used in operations were approximately $9 6 million in the first quarter.
Sandra: The change in cash from your angle to the use of cash required primarily for lines and center activation offset by the 2020 for a private placement financing I've got $1 million.
Speaker Change: It is important to note that this financing to support it entirely if I go cats senior executives board members and existing institutional in that case, we believe that our current financial resources are adequate to fund operations until the company achieved $10 million and U S quarterly revenue, which have been daiquiri trigger warrant exercises that was seen in <unk>.
Sandra Pennell: We believe that our current financial resources are adequate to fund operations until the company achieves $10 million in U.S. quarterly revenue, which would likely trigger a warrant exercise resulting in $25 million in proceeds. This $25 million should be sufficient to fund the company until we become cash flow positive. As Gerard previously mentioned, we remain confident that we will achieve $10 million in quarterly revenue in the U.S. no later than the fourth quarter of this year.
Speaker Change: $5 million in proceeds.
Speaker Change: There's $25 million should be sufficient to fund the company until we become cash flow pattern.
Speaker Change: Oh sure I previously mentioned, we remain confident we will achieve $10 million in quarterly revenue in the U S. No later than the fourth quarter this year.
Sandra Pennell: Revenue from our sales of Hepzato was $2 million, and ChemoSat was $1.1 million for the three months ended March 31, 2024, compared to $0.6 million for ChemoSat during the same period in 2023. Gross margins were 71% in the first quarter of launch. The cost of goods sold did include a positive adjustment for standard cost revaluation, a non-recurring item. Without the adjustment, gross margins would have been approximately 60%. For the three months ended March 31st, 2024, research and development expenses were $3.7 million compared to $4.7 million for the three months in.
Speaker Change: Revenues for myself that over $2 million in chemo that was $1 1 million for the three months ended March 2nd crashed 2024 compared to <unk> 6 million for keynote that during the same period in 2023.
Speaker Change: Gross margins were 71% in the first quarter of launch cost of goods sold did include a path to make health net Christina Cocreate reevaluation nonrecurring item without the adjustment gross margin would have been approximately 60%.
Sandra Pennell: The change in R&D expense is primarily due to a decrease in clinical trial activities offset by an increase in personnel-related expenses. For the three months ended March 31st, 2024, compared to the same period in 2023, selling general and administrative expenses increased to $8.8 million from $4.2 million. The increase is due to activities to prepare for commercial launch, including marketing-related expenses and additional personnel in the commercial team.
Speaker Change: For the three months ended March 31, 2020 for research and development expenses were $3 7 million compared to $4 $7 million because of three months.
Christina Cocreate: And at March 31st 2023, the change in R&D expense is primarily due to a decrease in clinical trial activities offset by an increase in personnel related expenses.
Speaker Change: Three months ended March 31st 2024, compared compared to the same period in 2023, selling general and administrative expenses increased to $8 8 million guys from $4 $2 million.
commercial team: The increase was due to activities to prepare for a commercial launch, including marketing related expenses and additional personnel and the commercial team.
commercial team: Yeah.
Speaker Change: Thank you.
commercial team: Back to you.
commercial team: Yeah.
commercial team: Yeah.
Operator: Moderator, can we now look for questions?
commercial team: Moderator can meet marijuana look questions yeah.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on a touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble a roster. The first question is from the line of Bill Bond, from Canaccord Genuity; please go ahead.
Moderator: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on the touched on film.
Moderator: You are using a speakerphone please pick up your handset before pressing the keys.
commercial team: If at any time that question has been addressed and you would like to withdraw your question. Please.
Speaker Change: Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
commercial team: Yeah.
commercial team: The first question is from the line of Billboard.
commercial team: From Canaccord Genuity. Please go ahead.
William Patrick Maughan: Good morning and congratulations on the strong early launch. I have three quick questions for you. So, first one, looking, just thinking through realized revenue per kit. I know you've said before that you're selling direct, so you expect to. Does your revenue for the first quarter reflect 11 kits sold? Is it that simple math? The second question is on your EU revenue. Obviously, in absolute terms, it was a modest tick-up. But in percentage terms, it was a very noticeable tick-up in the first quarter. So is that sustainable growth we're seeing, or just some quarter-to-quarter variability? And then finally, at scale, what do you expect gross margins to approach? Thank you.
Speaker Change: Good morning, and congrats on the strong early launch.
Speaker Change: Three quick questions for you. So first one looking just thinking through our realized revenue per kit I know you've said before that you are selling direct so you expect to there to not be a gross margin. So.
Speaker Change: Just quickly looking at the math here.
Speaker Change: Is it.
Speaker Change: Does your revenue for first quarter reflect 11 kids sold is it that simple math.
Speaker Change: Second question is.
Speaker Change: On your EU revenue.
Speaker Change: Obviously in an absolute in absolute terms it was a modest tick up but in percentage terms. It was a very noticeable pick up in first quarter. So is that a.
Speaker Change: Is that a sustainable is that sustainable growth, we're seeing or just some some quarter to quarter variability and then finally at scale. What do you expect gross margins to approach. Thank you.
Speaker Change: Yeah.
Gerard J. Michel: All right, let's kick those off one at a time. 11 kits assume that you're pretty good at math. There is, you know, we're ship and direct, so it's a fairly simple analysis, given our pricing is $182,500. Second question, in terms of Europe, we actually finally got a rep established in Germany, and she's been out there for about a year and change, but she's really good at getting some traction. Germany is the only market in Europe where there is really a consistent form of reimbursement.
Speaker Change: Alright.
Speaker Change: Kick those off one at a time 11 kits, but your math, yet you're pretty good at math.
Speaker Change: I mean, there is that we're shipping direct so it's a fairly simple analysis.
Speaker Change: Given our pricing is 182 five.
Speaker Change: Second question in terms of Europe.
Speaker Change: We actually finally got a rep.
Germany: In Germany established.
Germany rep: So that's fine she has been out there for about a year and change, but she's really finally getting some traction.
Germany rep: Germany is the only market in Europe, where there is really a consistent form of reimbursement. It says that he's scheme, where the hospital has to actually budget for the project for the use of the product and that's the way to how much they use in the prior year. So it's taken this rapid good year to get things built get in front of the hospitals say, hey, you need to budget for this so.
Gerard J. Michel: It's a ZEDI scheme where the hospital has to actually budget for the use of the product and estimate how much they'll use in the prior year. So it's taken this rep a good year to get things built, get in front of the hospital, and say, hey, you need to budget for this growth out of Germany, given I think, at best, we have maybe 15% penetration. So I think there's a ways to go there as well.
unknown: I think we'll continue to see a fair amount of.
Germany rep: Growth out of Germany, given I think probably the best we have maybe 15% penetration. So I think there's a way to got ways to go there as well and lastly in terms of gross margins I think that you know a peak revenue I would expect we should be closing in on perhaps close to 90% gross margins.
Gerard J. Michel: And lastly, in terms of gross margins, I think that, you know, at peak revenue, I would expect us to be closing in on perhaps close to 90% gross margins. It'll take us, you know, a good year and change probably to get to that point, but I think that'll probably be our peak in terms of gross margins.
Speaker Change: It'll take us a good year in change probably to get to that point, but I think that will probably be peak in terms of gross margins.
William Patrick Maughan: Okay, and a quick follow-up as I was thinking through that answer. The $10 million in a quarter that triggers the next tranche, is that just U.S. Hapsato revenue, or is that worldwide revenue? Just U.S. Okay, thank you.
Speaker Change: Okay and a quick quick follow up is I was thinking through that answer.
Germany rep: The 10 million in a quarter that triggers the next tranche is that just U S hemp Sato or is that worldwide revenue.
Sato: Just U S. Okay. Thank you.
Germany rep: Yeah.
Germany rep: Thank you.
Operator: The next question is from the line of Marie Thibault, with BTIG; please go ahead.
Speaker Change: The next question is from the line enough money that you bought.
Germany rep: With BTG. Please go ahead.
Marie Yoko Thibault: Hi, good morning, Gerard and Sandra, and congratulations on a really strong start to your commercialization here. I wanted to ask a little bit about the patient profile of the treated patients you're seeing so far. How are they doing? Are they coming back for additional cycles? Are you seeing any first-line treatments? Just any characterization of those first 11 treatments, if you can.
Speaker Change: Hi, good morning, Gerrard, and Sandra and congrats on a really strong start to your commercialization here.
Speaker Change: Wanted to ask a little bit about the patient profile of treated patients are seeing that so far how are they doing are they coming back for additional cycles.
Speaker Change: Are you seeing any first line treatments just any characterization of that first 11 treatments if he can.
Gerard J. Michel: Yeah, I think since the yen is fairly low, it'll be hard to give specific trends. But, Kevin, why don't you, you know, comment on the variety that we've been seeing?
Kevin Muir: Yes, I think since the yen is fairly low and it will be hard to give a specific trends, but Kevin why don't you comment on the variety that we've been seeing.
Kevin Muir: Sure, Gerard. Thank you.
Kevin Muir: Sure. Thank you.
Kevin: We've seen.
Kevin: We've kind of seen them all to this point with 11 treatments, we do have a.
Marie Yoko Thibault: Marie, we've seen, we kind of seen them all. To this point, with 11 treatments, we do have first-line patients as well as patients that have received other treatments. You know, when you launch a cancer drug, they just don't stop. The patients just don't stop the current treatments. They go through their current line of treatment, and then when they progress off that, they go to the next line. So we're seeing a combination right now of first line and second and third line patients.
Kevin: First line treatments.
Kevin: First line patients as well as <unk>.
Speaker Change: Instead of received other treatments.
Speaker Change: You know when you launch a cancer drug.
Speaker Change: Just don't stop patients just don't stop the current treatments they go through.
Speaker Change: Their current lines of treatment and then when they.
Speaker Change: Progress off that they go to the next one so we're seeing a combination right now first line.
Speaker Change: And third line patients.
Gerard J. Michel: And I would add, Marina, that we're seeing patients who are coming off of Tebby, coming off of Ipinivo, and then, yes, we are getting recurring patients. We have seen no trend of patients dropping off early in terms of not coming back for return. However, early days, so, you know, can't quite take that to the bank, but it's encouraging that patients are coming back.
Randy: Yeah, and I would add Randy that we were seeing in patients who are coming.
Randy Smith: Coming off a tabby coming off of it being evo.
Randy Smith: And then yes, we are we are.
Randy Smith: Getting referring patients. They are we havent see no trend of patients dropping off early in terms of not coming back for re treatment.
Marie Yoko Thibault: Yeah. Encouraging indeed. Okay.
Randy Smith: However, early days, so I can't quite take that to the bank, but encouraging that patients coming back to the treatment.
Randy Smith: Yeah, encouraging indeed, okay, and then I wanted to ask about reimbursement are you seeing any pushback or any hurdles to getting those payments. It doesn't look like it so far I'm just want to hear how that's trending and then with the J code and T. P. T status going into effect in April what you've noticed so far here in your second quarter.
Marie Yoko Thibault: And then I wanted to ask about reimbursement. Are you seeing any, you know, pushback or any hurdles to getting those payments? It doesn't look like it so far. I just want to hear how that's trending. And then with the J-code and TPT status going into effect in April, what you've noticed so far here in your second quarter, if customers are having success with that J-code, if everything's going smoothly. Thanks for taking the questions. Yeah,
Randy Smith: If customers are having success with that J code is everything's going smoothly. Thanks for taking the questions.
Gerard J. Michel: Yeah, obviously, we're on, you know, we're not... I will say, though, the hospitals are paying us. We are getting checks from them, so that's encouraging from our end. But, Kevin, why don't you talk a little bit about the change you've seen in front of the various formulary and finance committees since the JCOE has been in place.
Randy Smith: Yeah, obviously, we're.
Randy Smith: We're not.
Kevin: Sitting there are submitting for reimbursement to hospitals are so we know stuff anecdotally I'll ask Kevin to comment on that for a moment.
Kevin: I will say, though the hospitals are paying us we are getting checks from them.
Kevin: So that's encouraging from our end.
Randy Smith: But Kevin why don't you talk a little bit about you.
Kevin: The change you've seen in front of the various formulary and finance committees since the J code has been in place.
Kevin Muir: Sure. I'll echo Gerard's view from his statement. We are aware that... The claims from the first quarter, which were using temporary codes or miscellaneous codes, were accepted and were paid. That's great news. And when you look at the J code, it is just simplified matters for the hospital on their claims. So for the hospitals that are open and have patients that are being treated, claims have been much easier. And I think the biggest thing for us through this launch has been the formulary process.
Kevin: Sure.
Randy Smith: Oh, George view from from from his statement, we are aware that.
Kevin: The codes are the claims from the first quarter, which we're using temporary codes miscellaneous codes were accepted and were paid.
Kevin: That's great news.
Kevin: And when you look at the J code.
Randy Smith: It's just simplified matters for the hospital.
Randy Smith: For their claim.
Speaker Change: So for the hospitals that are open and have patients that are treating the claims have been much easier and I think the biggest thing for us.
Speaker Change: Through this launch has been.
Speaker Change: The formulary process, it's a much easier process much more predictable for the hospitals that we are.
Kevin Muir: It's a much easier process and much more predictable for the hospitals that we are attempting to open right now. So the formulary process has been much smoother. J code and the HCPCS approval, as well as the pass-through approval, have streamlined things, and it's just made the process for hospitals much more predictable. There's a fee schedule. They can look at it, and they can understand all of those things, and they can make their financial decisions and their revenue predictability in the future much easier, and it's really helping us as we go through our hospital activation.
Speaker Change: Attempting to open right now so the formulary process has been much smoother.
Speaker Change: J code and the <unk>.
Speaker Change: Picks approval as well as the pass through.
Google: Google has.
Google: Streamline things that just made the process for the hospitals much more predictable there's a fee schedule. They can look at it they can understand all of the things that they can make their financial decisions in the revenue.
Google: Predictability in the future a much easier and that's really helping us as we go through our hospital activation.
Kevin: Thank you Kevin.
Kevin: Youre welcome.
Kevin: Thank you.
Operator: The next question is from the Lion of Sudan, Long Nathan. Mr. Fitzstephens, please go ahead.
Speaker Change: The next question is from the line of Sudan wrong Nathan.
Speaker Change: Stephens. Please go ahead.
Sudan Long Nathan: Yes. Thank you, Gerard and Sandra, for taking my questions. So, real quick, first question.
Speaker Change: Yes, Thank you Jordan Zehnder for taking my questions real quick.
Jordan Zehnder: First question.
Sudan Long Nathan: Curious if the physicians are seeing patients that have been treated on ChemTrack or, you know, coming on FirstLine and then even how the physicians are viewing the treatment landscape now that HIPPS Advocate is available and launching at this point, and as the treatment landscape also develops in the coming years. And then secondly, whenever you're looking at future development in R&D, is that something that will be funded through the outcomes of the revenues of HIPPS Advocate, or is there – they just want to see your views on that for future R&D development and how you'd support that.
Curious if the physicians are.
Jordan Zehnder: <unk> patients.
Sudan Long Nathan: That have been treated can track or coming on.
Speaker Change: First line and then you then you know how the physicians are viewing the treatment landscape now that it's advocated is available and and launching at this point.
Speaker Change: And as this debt that you might escape also develops.
Sudan Long Nathan: Years, and then secondly.
Speaker Change: Whenever you're looking at a few.
Speaker Change: Developments in R&D is that something that will be funded through.
Speaker Change: The outcomes of the revenues that I don't get or is there.
Speaker Change: Just wanted to see your views on that.
Speaker Change: D development and how that how you would support that.
Gerard J. Michel: First off, Sudan, welcome to the Fold; I appreciate the coverage. In terms of, you know, are we seeing patients on the post-chemo track, I think the answer is yes. I can't tell you how many, but we saw patients post-ChemTrac in the clinical trial, and we've seen patients post-ChemTrac, you know, in the commercial setting. Given HIPAA, et cetera, we can't say, hey, what this patient has been on, but we do have someone from the company at every treatment, and they are occasionally the physician that will share with the rep or the clinical So the answer is yes on that.
Speaker Change: Sure first off first off Sudan, and welcome to the fold appreciate the coverage.
Speaker Change: <unk>.
Sudan Nathan: In terms of are we seeing patients post contract I think the answer D. S.
Sudan Nathan: I can't tell you how many but we saw patients post contract in the clinical trial and we've seen patients post contract.
Gerard J. Michel: In the commercial setting.
Speaker Change: Given HIPAA et cetera, we can't say, hey, what's the spacing, but on but we do have some from the company and every and every treatment and they are occasionally occasionally the physician will share with the with the rep or the.
Gerard J. Michel: To support specialist, but the history of the patient. So the answer is yes on that.
Gerard J. Michel: In terms of, you know, how the treatment regime and how, you know, how people view the landscape, how that's changing, I think that varies by doctor. Some of them are trying to figure out whether to use liver directed first, with us approved now, with a specific product approved. Where do they go with systemic first? I think there's a variety of opinions out there. So, I think it's... it varies dramatically. But these patients, unfortunately for the patients, all progress. It's very rare you get someone who has a complete response that lasts for a decade or so. And, you know, unfortunately for the patients, companies such as us and Immunocore will, for their subset of patients, probably have a shot at most patients in terms of a line of treatment.
Terms of how the treatment regime, and how you know how people view the landscape how that's changing.
Speaker Change: I think that varies by dock some of them are trying to figure out to the used liver directed first with US approved now with a specific product approved.
Gerard J. Michel: Or do they go with systemic first.
Speaker Change: And I think there's a variety of opinions out there.
Gerard J. Michel: So I think it's it's it varies dramatically, but these patients. Unfortunately for the patients all progressed, it's very rare you get somebody who has a complete response that lasts for a decade or so.
unknown: And unfortunately for the patients.
immuno car: Such as us and immuno car will for their subset of patients probably will have a shot at most patients in terms of a line of treatment.
Sudan Long Nathan: That's great. And then, you know, secondly, just in terms of your R&D, you know, future plans.
Gerard J. Michel: Yeah.
Gerard J. Michel: Great and then.
Gerard J. Michel: Secondly, just in terms of your R&D a.
Sudan Long Nathan: Oh yeah.
Sudan Long Nathan: Oh, yeah. Yeah. Yeah.
Sudan Long Nathan: You bet.
Speaker Change: How are we going to fund that is the question huh.
Gerard J. Michel: How are we going to fund that? That's the question, huh? The hope and plan is to fund it off the P&L. I don't want to be a serial fundraiser.
Gerard J. Michel: Yeah.
Speaker Change: Plant, but the hope and plan is to fund it off the P&L.
Speaker Change: I don't want to be a serial fundraiser.
Gerard J. Michel: I think most people who have spoken to me know I'm as sensitive to dilution as any investor. Now, if the stock works dramatically and there's tremendous opportunity in other indications, we'll never say never, but our preference is not to have to raise a lot of equity capital to fund this, but to do it off the P&L. We think that's feasible. It really depends on how much share penetration we get in this indication, but if we get meaningful penetration into it. I think that the capital should be there to fund a robust development program.
Speaker Change: I think most people who.
Investor: Spoken to me no I'm I'm sensitive sensitive dilution as any investor.
Gerard J. Michel: Now if the stock works dramatically and there's tremendous opportunity.
Gerard J. Michel: And the other indications.
Speaker Change: We will never say never.
Gerard J. Michel: But our preference is not to have to raise a lot of equity capital to fund. This do it off the P&L and we think that's feasible it really depends on how much share penetration we get in this in this indication, but if again, if we get a meaningful.
Gerard J. Michel: Penetration into it I think the capital should be there to fund a robust development program.
Sudan Long Nathan: Gotcha. Thank you. And again, congrats on the great launch here. Thank you.
Gerard J. Michel: Got you. Thank you and again congrats on the great launch here. Thank you.
Sudan Long Nathan: Okay.
Sudan Long Nathan: Thank you.
Operator: The next question is from the line of AL Chen with Laidlaw and Company. Please go ahead.
Sudan Long Nathan: The next question is from the line of Ian Chen with <unk>.
Operator: Law and company. Please go ahead.
AL Chen: Good morning and thanks for taking the question and my congratulations on the launch as well. Just quick, a few questions here. First one is that given the first quarter revenue or treatment mostly predominantly from Moffitt, and let's say 11 cases, should we consider Moffitt still be a dominant country with predominantly contribute going forward for the remaining of the year? Okay, so that's the first question.
AL Chen: Good morning, and thanks for taking the question and my congrats too on the.
AL Chen: Well launch as well.
AL Chen: A few quick questions here first one is that given the first quarter revenue or FEMA, mostly predominantly from moffitt and let's see.
AL Chen: <unk> cases should we consider David Moffett, you'll be dominant.
AL Chen: Okay.
AL Chen: Clark.
AL Chen: Dominantly goes over for the remaining of the year.
AL Chen: Okay. So that's the first question.
Gerard J. Michel: Yeah, I think Moffitt is probably going to be something on a run rate basis if they continue as they are to date, you know, something 40 plus a year again if they continue as they have today. There will be other centers that, you know, although we hope for more, may only do one every four or five weeks. And that's kind of where the average comes from that I've given in terms of guidance. But yeah, Moffitt's probably gonna be one of, you know, a handful of players that are regularly doing one a week if we, you know, fast forward in the video.
Moffitt: Yeah, I think moffett.
Gerard J. Michel: I think.
Gerard J. Michel: It's probably going to be something in the on a run rate basis. If they continued as they are to date.
Gerard J. Michel: Something 40, plus a year again, if they continue to have they have to date.
Gerard J. Michel: There will be other centers that you know, although we hope for more of them I mean, the only do one every four or five weeks and that's kind of where the average comes from that I've I've given in terms of guidance, but yeah market is probably going to be one of them.
Moffitt: You know a handful of players that are doing regularly doing one a week.
Gerard J. Michel: Fast forward a year.
AL Chen: Okay, great. That's very helpful. And the second question is that... to follow up the first one.
Gerard J. Michel: Okay, Great that's very helpful.
Speaker Change: The question is that.
AL Chen: Just follow up the first one.
Gerard J. Michel: I just want to know that in terms of European revenue, would that be, I mean, this quarter's revenue, would that be something we should sort of base ourselves upon as a basis moving forward? Or again, maybe just a sort of fracture or just a fructuation for the over... Yeah, no, I think we'll continue to see some, I don't want to say growth at that level because even though it's a small number, that type of growth would compound rather quickly.
AL Chen: Just wanted to note that in terms of European revenue would that be I mean this.
Gerard J. Michel: This quarters revenue would that be something we should sort of base at all.
Gerard J. Michel: Okay.
Gerard J. Michel: Going forward or.
Gerard J. Michel: Maybe just sort of structure.
Gerard J. Michel: Preparation.
Gerard J. Michel: Yes.
Gerard J. Michel: I think I think we'll continue to see some I don't want to say growth at that level, because even though it's a small number that type of growth would compound rather quickly.
Gerard J. Michel: But I think we'll continue to see growth, primarily driven by Germany. But I think, you know, this level that we're seeing now is more of a realistic level than we have had in the past. You know, for reasons that don't really matter to get into, the territories were fairly empty. And right now, we only have one representative in all of Europe, and she's in Germany. Hiring somebody to start in the UK shortly, with the mindset that reimbursement might be coming there in the next year or change. But yeah, I think this is a good baseline to work from, you know. Okay, great. Maybe the last question here.
Gerard J. Michel: But I think it will continue to see growth, primarily driven by Germany, but I think this level that we're seeing now is more of a realistic level than we had in the past.
Gerard J. Michel:
Gerard J. Michel: For reasons that doesn't really matter to get into the territories were fairly empty.
Gerard J. Michel: And right now we only have one rep in all of Europe, and choosing in Germany.
She: Hiring somebody to start in the U K shortly.
Gerard J. Michel: With the mindset reimbursement might be coming there in the next year or change.
Gerard J. Michel: But yeah I think this is a good baseline to work from.
David Hoffman: Okay, Great and maybe the last question David is that one of the important piece.
Speaker Change: Your growth is getting more general oncologist.
Gerard J. Michel: Boro and approaching them.
Speaker Change: Any updates in terms of the current status and what do you anticipate over the next 12 months in terms of this endeavor.
Gerard J. Michel: Yes.
Gerard J. Michel: Yeah, if I kind of tier the commercial efforts, it would be first, let's get these sites open, and then, you know, let's talk to the oncologists at those sites and make sure they're referring their own patients to them for treatment. And that's probably a larger part of our activity.
Speaker Change: Yeah, but if I kind of tiered.
Gerard J. Michel: The commercial efforts it would be first let's get the sites open.
Gerard J. Michel: And then.
Gerard J. Michel: Now, let's talk to be oncologists at those sites and make sure they're referring their own patients.
Gerard J. Michel: To be you know to for treatment and that's probably a larger part of the activity of our <unk>.
Gerard J. Michel: Oncology reps, the reps who are meant to call on oncologists and try to get referrals going. It's probably been focused to a large extent on the sites that were opened or are pending opening, and they've been trained. We have been successful in getting referrals. We've gotten patients referred to Moffitt's One, for example, but we've also gotten patients referred to other sites. I think six to 12 months from now, getting referrals going will become increasingly critical and probably the primary driver of growth. But it's early days right now because our focus is more on opening the centers and then, secondarily, getting the patients out of those centers treated.
Speaker Change: On college erupts, the reps, who are bent to call on oncologists can try to get referrals going on it's probably been focused to a large extent.
AL Chen: Okay, great. Thanks a lot. Again, congratulations on this.
AL Chen: Lights that were opened or are pending opening and they've been trained we have been successful in getting referrals that we've got.
AL Chen: And patients referred to market as one for example, but we've gotten you know patients referred to other sites I think six to 12 months from now.
AL Chen: Getting referrals going will become increasingly core critical and probably the primary driver of growth, but it's early days right now because of our focus more is on opening the centers and then secondarily, let's get the patients at those centers treated.
AL Chen: Okay, great. Thanks a lot. Again, congratulations on the program.
Speaker Change: Okay, great. Thanks, a lot and again congrats on the progress.
AL Chen: Thank you.
AL Chen: Thank you.
AL Chen: Yeah.
Operator: The next question is from the line of Sean Lee with HC Wainwright: please go ahead.
Speaker Change: The next question is from the line of Sean Lee.
Speaker Change: With H C. Wainwright. Please go ahead.
Sean Lee: Good morning guys, congrats on a solid quarter and thanks for taking my question. I just have two quick ones. Firstly, you mentioned 50 sites as your initial goal. I was wondering how easy it is to increase the rate that you are getting these sites active, and also, what percentage of the U.S. patient base do you expect these 50 sites will be able to cover?
Sean Lee: Hey, good morning, guys, congrats on a solid quarter and thanks for taking my questions.
Sean Lee: I just had two quick ones.
Sean Lee: Firstly.
Sean Lee: You mentioned 50 sides as your initial goal I was wondering.
Sean Lee: Whether it's.
Sean Lee: How easy is it to increase the rate that you are getting these sites.
Sean Lee: And also what percentage of the U S patient base do you expect.
Sean Lee: These 50 sites will be able to cover.
Sean Lee: Okay, how many sites did you say? I'm sorry, did you say 50 sites?
Speaker Change: Okay, how many sites did you say.
Sean Lee: I'm, sorry did you say 50 sites.
Sean Lee: I believe you previously said that your initial goal was 50 sites in the U.S.
Speaker Change: I believe you said you already.
Sean Lee: You'd previously said that your initial goal was the 50 sites in the U S.
Speaker Change: I think that I think.
Gerard J. Michel: Yeah, the number is probably going to be 25 to 35. That's our current kind of window that we're thinking about, of course, claiming full license to change that significantly if we believe it's worthwhile to go beyond that number. The 25 to 35 treatment centers, you know, if you look at just the patients being treated there, probably half or maybe a bit under half, but a lot of patients get a single consult or two consults at one of those sites and then go and have their local oncologist kind of manage their treatment based on what they learned in the consult.
Speaker Change: Yeah. The number the number is probably going to be 25 to 35 is our current kind of window that we're thinking about.
Gerard J. Michel: And.
Gerard J. Michel: Of course, claiming full license change that significantly if we.
Gerard J. Michel: We believe it's worthwhile to go beyond that that number.
Gerard J. Michel: The 25 to 35 treating centers if you looked at just the patients being treated there, it's probably half or maybe a bit under half, but most a lot of patients get a single consult or to consult with one of those sites and then go and have their local oncologists kind of manage their treatment.
Gerard J. Michel: Based on what they've learned in the consult we will need to.
Gerard J. Michel: We will need to, you know, to get a bite of the full market, we will need to be able to generate referral patterns. But again, I think that's quite doable given that, you know, with payer data nowadays, you know who has these patients. So we'll be very focused on that, and as I mentioned before, the importance of that growth driver will really come to the fore probably sometime next year. You know, right now, let's get the sites open and get the patients treated. They're already being seen by the oncologists at that.
Gerard J. Michel: To get a bite at the full market, we will need to be able to generate referral patterns.
Gerard J. Michel: But again I think that's quite doable.
Gerard J. Michel: Given that payer.
Gerard J. Michel: Payer data Nowadays you know who asked these patients.
Gerard J. Michel: So we'll be very focused on that and as I mentioned before.
Gerard J. Michel: That importance of back growth driver really come to before probably sometime next year, you know right now I would skip the sites open and get the patient treated are already being seen by the oncologists at that site.
Sean Lee: I see. That's very helpful. Thanks. My second question is on reimbursement. I was wondering if you would be needing to seek additional reimbursement from private payers, or is that not a big portion of the overall patient population?
Speaker Change: I see that's very helpful. Thanks. My second question is on reimbursement I was wondering.
Speaker Change: Would you be needing to seek additional reimbursement from private payers or is that not a big portion of the overall patient population.
Gerard J. Michel: Now, it's a significant portion of the patient population, I think probably a little bit over half, based on our research. But what happens is you generally don't get medical policy developed for an ultra-ultra-orphan product such as this. The payers, depending on the size of the payer, as you know, are highly fragmented.
Speaker Change: No. It's a significant portion of the patient population I think probably a little bit over half of them based on our research, but what happens you generally don't get medical policy developed for an ultra ultra orphan products such as this.
Gerard J. Michel: As you know depending on the size of the payer you know and it's you know it's highly fragmented some of them might not see you might not see a claim for every two years. Another one might see one two a year.
Gerard J. Michel: Some of them might not see a claim every two years; another one might see one or two a year. But it's not going to be the volume or the level that it's going to take to, you know, need to develop medical policies. And generally, you know, we have not seen any pushback from any commercial payers. And, you know, based on my own experience, I don't expect to see that for this ultra-orphan indication. It's on-label. There really are very few options for these patients. The only other option for a subset of these patients, and they're not necessarily competitive. Great. Thanks for that, and that's all the questions I have.
Gerard J. Michel: But it's not going to be the volume or the level.
Gerard J. Michel: It's going to take to a need to develop medical policy and generally we have not seen any pushback from any commercial payers and you know based on my own experience I don't expect to see that for this ultra orphan indication, but it's on label.
Gerard J. Michel: They're really there's very little options for these patients.
Speaker Change: On the other option for a subset of these patients.
Gerard J. Michel: And they're not necessarily competitive.
Speaker Change: The first and we're essentially in the same ballpark is that they are in terms of pricing.
Speaker Change: Great. Thanks for that and then that's all the questions I have.
Speaker Change: Thank you.
Gerard J. Michel: Okay, I guess that's it for the questions. Go ahead.
Speaker Change: Okay, I guess, that's it for the questions.
Gerard J. Michel: Go ahead.
Gerard J. Michel: I'll just close here. So, thank you everybody for your time today. I look forward to, you know, giving another update in August. And until then, enjoy your summer. Take care. Thank you. The conference call has now concluded. Thank you for attending today's presentation.
Speaker Change: Alright, I'll just close up here.
Operator: [inaudible]
Speaker Change: Thanks, everybody for your time today I look forward to.
Operator: Giving another update in August.
Operator: And until then enjoy your summer take care.
Operator: Thank you the conference call has now concluded.
Operator: Thank you for attending today's presentation.
Operator: Yeah.
Operator: Okay.
Operator: [music].
Operator: Hum.
Operator: Yeah.
Operator: [music].
Operator: , , , , , , , , , ,