Q1 2025 Eton Pharmaceuticals Inc Earnings Call
Speaker Change: I'll walk through the income instead of Kohl's first quarter only 25 financial results conference call. At this time all participants are in a listen only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request.
At this time.
Speaker Change: Like to turn it over to David Krempa, Chief Business Officer, Ed in Pharmaceuticals. Please proceed.
Speaker Change: Thank you operator.
Speaker Change: Good afternoon, everyone and welcome to <unk> first quarter 2025 conference call.
Speaker Change: The afternoon, we issued a press release outlines the topics we plan to discuss on today's call.
Speaker Change: The release is available on our website.
Speaker Change: Dot com.
Speaker Change: Joining me on our call today, we have Sean Johnson, our CEO, James Gruber, our CFO and <unk> <unk>, our chief commercial officer.
Speaker Change: Interest you for taking my questions on today's call, we won't be answering questions that are emailed to us.
Speaker Change: Can send their questions to Investor relations at <unk>.
Speaker Change: Uh huh.
Speaker Change: Before we begin I would like to remind everyone that remarks made during this call may contain forward looking statements and involve risks and uncertainties that could cause actual results to differ materially from those forward looking statements.
Speaker Change: Please see the forward looking statements disclaimer in our earnings release and the risk factors.
Speaker Change: Yes.
Speaker Change: Now I will turn the call over to our CEO Jonathan Johnson.
Jonathan Johnson: Thank you David Good afternoon, everyone and thank you for joining us today.
Jonathan Johnson: If you were with us for our Investor Day in March you heard about these transformational 2020 or.
Jonathan Johnson: And I'm proud to say the momentum has continued into 2025.
Jonathan Johnson: Our existing products are generating strong growth. We've recently added two high value commercial assets to our portfolio with the acquisition and relaunch of base in Belgium.
Jonathan Johnson: And we've advanced our pipeline setting the stage for two potential approvals in the next nine months.
Jonathan Johnson: We've seen no sequential growth product revenue for 17 straight quarters since the launch of our spring.
Jonathan Johnson: No. We are very proud of this track record of commercial execution, we're just getting started.
Jonathan Johnson: With a track attractive growth prospects for existing products and a strong late stage pipeline. We expect this strength to continue well into the future and we're very excited about what's ahead.
Jonathan Johnson: I'd like to begin with one of our important products.
Jonathan Johnson: <unk> is a complex biologic products used in treating patients two years of age and older who suffer severe primary insulin like growth factor one deficiency.
As Pete actually.
Jonathan Johnson: Affects an estimated 200 children in the United States.
Jonathan Johnson: When we signed the transaction in the fourth quarter, we were very excited about the deal given the strong strategic fit with our pediatric endocrinology and what we saw is a very attractive growth opportunity.
Jonathan Johnson: We're now five months into this transaction and I am pleased to say that it is exceeding our expectations.
Jonathan Johnson: Eastern sides from vendors opportunity to leverage our existing pediatric endocrinology sales force and commercial infrastructure as well as make new investments into community initiatives to raise awareness of this ultra rare condition.
Jonathan Johnson: Which unfortunately has seen an acreage number of childrens choice and diagnose in recent years.
Jonathan Johnson: And it's more than a year our production to go.
Jonathan Johnson: <unk> had 185 patients and science, there, but that number has been declining for years and we've got almost 67 patients.
Jonathan Johnson: Our acquisition late December.
Jonathan Johnson: With the significant investments we've made plus the hard work of our commercial team over the last five months.
Jonathan Johnson: I am pleased to say that the trend appears to a reverse.
We've now reached over 90 active patients and remain confident that we can reach our goal of 100 patients by the end of this year and even higher levels of <unk> com.
Jonathan Johnson: Missed diagnoses.
Jonathan Johnson: Long standing problem for disposition.
Jonathan Johnson: Physicians are presented with shorter stature positive patients and IGF, one deficiency is not necessarily top of mind.
Jonathan Johnson: And there isn't a great cabinet automatically prescribing growth hormones.
Jonathan Johnson: SP RSV acute patients generally have normal formerly soliris treatment.
Jonathan Johnson: Ladies and proper diagnosis, causing SPR.
Jonathan Johnson: Patients so that's the ecolab treatment window.
Jonathan Johnson: We feel that it's important for all shorter stature patients to be screened for severe primary IGF, one deficiency and are using our deep relationships in the pediatric endocrinology community to drive greater awareness of SPD <unk> for the screening.
Jonathan Johnson: Eaton is also working to expand access for U S patients.
Jonathan Johnson: Harmonize the U S and EU labels.
Jonathan Johnson: The definition of what constitutes severe primary IGF one deficiency differs between the regions.
Jonathan Johnson: While the hype courtyard is consistent the IGF.
Jonathan Johnson: What was not.
In the United States, a patient's IGF levels.
Jonathan Johnson: So were expanded deviations below the median.
Jonathan Johnson: While in the EU patients must be the bottom 2.5 percentile for their age and gender, which translates to approximately two standard deviations.
Jonathan Johnson: We have completed statistical analysis of the patient registry that is trapped hundreds of great. Thank all expectations over the last decade, and we believe it shows that the product has taken a factor.
Jonathan Johnson: Slightly broader EU label population.
Jonathan Johnson: We expect to submit a supplemental filings with SEC.
Jonathan Johnson: Second half of 2025.
Jonathan Johnson: Harmonizing the two definitions, we estimate that up to 1000 U S patients with clinical benefit significantly expanded treatment opportunities beyond the current 200 patients.
Jonathan Johnson: We are proud of the team's hard work to close integrate relaunched lux.
Jonathan Johnson: <unk> achieved in such a short period of time, it's a process.
Jonathan Johnson: What are the long term growth opportunity remains.
Jonathan Johnson: The label Harmonization.
Jonathan Johnson: During the quarter, we announced the out licensing of <unk> International <unk> Pharmaceuticals for an upfront payment of $4 3 billion.
<unk> international opportunities relatively small highly fragmented across more than 30 different countries that has low margins.
Jonathan Johnson: In addition, the out licensing of eliminated the need for instance, youre, making multibillion dollar G&A investments to support global infrastructure maintain foreign regulatory approvals and facilitate commercial and distribution activities.
Jonathan Johnson: We believe the transaction will be far more additive to each profitability than if we had commercialized product internationally ourselves.
Jonathan Johnson: The transaction also provided us with a $4 $3 million upfront payment recouping, a meaningful portion of our initial purchase price and providing excess capital that can be reinvested into our attractive pipeline of opportunities.
Jonathan Johnson: And finally, it eliminated the distraction resource partners that would have come with managing more than 30 territories and instead allows our team members to fully dedicate their time and attention towards rate by value U S product launches in 2025.
Jonathan Johnson: Our survey shows a similar philosophy.
Jonathan Johnson: <unk> first so we are confident that they will be a good partner for the project and ensure that the international case patients have access to this meaningful therapy.
Jonathan Johnson: Turning now to the opportunity.
Jonathan Johnson: <unk> been a strong growth driver for us for 17 straight quarters with no signs of slowing down.
Jonathan Johnson: In fact, the pace of referrals was actually increased in 2025.
Jonathan Johnson: As you May remember beginning of January we made our existing salesforce, 100% focused on pediatric endocrinology.
Jonathan Johnson: We believe this has driven increased efficiency, which the parent not overheated in the strong launch of <unk>, but also in an increased rate of new <unk> prescriptions.
Jonathan Johnson: Through April the number of new patient referrals received this year exceeds the first four months of any other year since launch.
Jonathan Johnson: Despite the relatively high discontinuation rate.
Jonathan Johnson: <unk> added a significant number of new patients this year and are quickly closing in on our 500 active patients.
Jonathan Johnson: Each of US we're encouraged by opportunities a strong start to the year and are expecting the rate your patient adds to our renal insufficiency brand charter to accelerate even further in the second half of 2025 with the anticipated launch of <unk> 400.
Jonathan Johnson: As we have discussed we continue to see a large portion of the market using unapproved compounded hydrocortisone their turner properties towards liquid dosage form weakened.
Jonathan Johnson: We believe approximately 50% of young children.
Jonathan Johnson: SBA liquid hydro cornerstones of that.
Jonathan Johnson: With an estimated 5000 in renal insufficiency patients are not years of age we continue to see a very compelling market opportunity for 400.
Jonathan Johnson: 84, <unk> producer date is just two weeks alone and we're prepared to watch quickly upon potential approval.
Jonathan Johnson: Manufactured our launch inventory and our specialty sales force and promotional campaigns are ready to go model.
Jonathan Johnson: We have been engaged in communications with the agency throughout the review.
Jonathan Johnson: Optimistic that they will meet their produce our goal date of May 28.
Jonathan Johnson: So very excited finally after many years of hard work. Our team is very excited to be on the cost of making this important medication available to the patients.
Jonathan Johnson: Transitioning now to another significant opportunity for.
Jonathan Johnson: The treatment of Wilson's disease, or Wilson disease, more correctly, a rare genetic disorder that causes excessive copper accumulation in the body.
Jonathan Johnson: Patient suffering from this condition through not for capitalized copper normally with their bodies absorbed at the conference.
Jonathan Johnson: Prevents it from late in the body and gals as an FDA approved treatment for patients with <unk> disease, something additional treated with accumulating Asia.
Jonathan Johnson: As the only FDA approved therapy for Wilson disease.
Jonathan Johnson: As with the anchor box, we were driving down.
Jonathan Johnson: Acquisition as we saw significant opportunities for <unk>.
Jonathan Johnson: <unk> grown our product and improve outcomes for patients.
Jonathan Johnson: As similar to severe primary IGF, one deficiency Wilson disease.
Jonathan Johnson: Very under diagnosed condition with a lack of product investments leading to inadequate awareness and education.
Jonathan Johnson: Wilson disease is estimated impact of approximately 10000 people.
Jonathan Johnson: While we estimate that only 2000 of those patients are diagnosed and actively on it.
Jonathan Johnson: Unfortunately, most patients are not diagnosed until they are in their <unk> or <unk> when sectors begin 2% after years of copper buildup.
Jonathan Johnson: This delayed diagnosis leads to worse outcomes.
Jonathan Johnson: Neurological damage and liver failure.
Jonathan Johnson: The increased frequency of genetic testing in recent years has led to earlier diagnoses a lot of patients to proactively started third lever for liver or other damage occurs.
Jonathan Johnson: But an unmet need still remains.
Jonathan Johnson: 2000 patients that have been diagnosed and are on treatment, we estimate approximately 800.
Jonathan Johnson: Therapy.
Jonathan Johnson: While the remainder are iron chelating agents, however, due to historical challenges with access affordability and awareness most patients on <unk> therapy appear to be using over the counter supplements rather than the FDA approved prescription products.
Jonathan Johnson: In nutritional supplements are different Florida, zinc, which have been shown to be less attractive than gautam.
Jonathan Johnson: We acquired <unk>, because we feel that we are the right company to address this dynamic we.
We launched the product in March with robust patient services, including a zero dollar copay for.
Jonathan Johnson: For the first time ever memory, Molson disease patient who walks.
Jonathan Johnson: So you can access that regardless under stress status.
We believe Eaton shares is one of the most generous bypass patient assistant programs and industry.
Jonathan Johnson: And what are the things that sets us apart from other rare disease companies.
Jonathan Johnson: Our relaunch has received a warm reception from the community, including patient advocates and leading Wilson disease physician.
Jonathan Johnson: We are currently.
Jonathan Johnson: Sure.
Jonathan Johnson: Commercial infrastructure and Eaton cares program. This migration kicked off in March and will be a multi pronged process output previous pharmacies work through inventory that remains in the channel. We expect the conversion to be largely complete by the end of the quarter on the third quarter at which time the outlets.
Jonathan Johnson: So again producing meaningful revenue.
Speaker Change: I am pleased to be able to solve the access and affordability issues that have impacted gels and use us for more than a decade. However, we believe that there is more that can be done to improve the lives and outcomes of Wilson disease patients.
Speaker Change: After access and affordability to zero loss product complaints among zinc therapeutic.
Speaker Change: Dosing requirements and unpleasant Gi side effects.
We set out to tackle these challenges with the development of <unk> 700, which we disclosed for the first time in March.
Speaker Change: <unk> 700 is an extended release version of <unk>, which we believe will eliminate the need for three times per day dosing as well as potentially reduce the Gi side effects that are reported by some patients on <unk> therapy.
Speaker Change: We initiated several hundred development last year prior to the acquisition of accounts and have now filed a patent on our proprietary formulation.
Speaker Change: We're now advancing this program at full speed and working with the top Wilson disease thought leaders prepare clinical study protocol.
Speaker Change: We are preparing for the manufacturing of registration batches later this year and had a meeting with the FDA in the second quarter to discuss our proposed clinical program.
Speaker Change: If everything goes as planned we expect to file an NDA in 2020 startup.
Speaker Change: We believe this product candidate has the potential to generate more than $100 million of future growth.
Our metabolic portfolio, which card like asset methane and test it out and Joe continues to provide steady revenue and cash flow.
Speaker Change: The group of products.
Speaker Change: Year over year growth in the first quarter a lot of predict significant.
Speaker Change: Going forward due to the rapidly increasing roughly properties from our high margin pediatric.
Speaker Change: It's in process.
Speaker Change: Turning now to our development pipeline.
Speaker Change: During the quarter, we were pleased to report that <unk> 600 fastest pivotal bioequivalence study, which allowed us to submit an NDA in late April.
Speaker Change: 680, <unk> proprietary patent or cabinet solution on desktop pricing under development for the treatment of central diabetes and separate us.
Speaker Change: Leading pediatric endocrinologists are water expressed the need for this product because it allows for the small precise and titratable dosing is required to treat pediatric patients.
Speaker Change: 8600, Paediatric endocrinology prescriber base and activity Sprinkle, <unk> 400, and a collapse.
Speaker Change: This should provide an important head start much commercial auto commercialization activities begin.
Speaker Change: We expect our application to be assigned 10 months review, which would allow for an approval and launch potentially as early as the first quarter of 2020.
Speaker Change: Prelaunch commercial activities are already underway and we are excited about the prospects for this important product.
Speaker Change: Eastern is also continuing to advance in Bolivia, which we acquired late last year.
Speaker Change: Im glad that is designed for the treatment of the ultra rare condition of neonatal diabetes, which impacts an estimated 300 soldiers in the United States and is within our pediatric endocrinology coal plant.
Speaker Change: Although the product has been approved in the EU. Since 2018. There are currently no FDA approved oral treatment for the condition and therefore, it is not possible for infants in the U S to receive the correct dose in an FDA approved manner.
Speaker Change: Today caregivers must either <unk>.
Speaker Change: His passion for our top on a pharmacy or crush adult tablets to create a suspension at home.
Speaker Change: Similar 8400 added <unk> 600, and blending it gives us an opportunity to bring our liquid formulations through the markets provide precise and accurate pediatric dosing.
Speaker Change: Our acquisition terms allowed us to have an FDA meeting to receive confirmation on the clinical pathways or 8-K that occurred.
Speaker Change: This mainly occurred in April.
Speaker Change: Ladies with how it went.
Speaker Change: The FDA was receptive to what we believe feasible clinical pathway to bring this critical treatment to patients in the U S.
Speaker Change: In the first quarter, we also unveiled another new internal development program <unk> hundred.
Speaker Change: Our fresh development partner Cross check will continue to work on advancing does that at all.
Speaker Change: Hydrocortisone auto injector and separately eternal matched the development visit Jacksonville, vial product, which we are calling EPA hunger.
Speaker Change: In addition to the large retail opportunity hydrocortisone injection, which we have discussed extensively there's an even greater choice of hospital study.
Speaker Change: A total of more than 5 million vials per year, and approximately $100 million itself.
Speaker Change: So it's very hospitals using <unk> for its dry powder via which must be manually reconstituted prior to administration.
Speaker Change: We have developed and filed a patent on a proprietary ready to use liquid formulation that we believe so.
Speaker Change: Reduced risk of medical errors and is an important factor as hydrocortisone is often used in the emergency room and operating groups.
Speaker Change: If development activities progressed as plan, we expect to make registration batches in the coming months and submit an NDA in early 2020.
Speaker Change: On the business development front, we expect the acquisition licensing transactions to remain a central part of our long term story and will continue to evaluate new opportunities for <unk>.
Speaker Change: Demonstrated that we can successfully execute value, creating transaction and we expect to continue to do so.
Speaker Change: However, our strong position allows us the luxury to remain disciplined and focused solely on products that are aligned with our ultra rare disease strategy.
Speaker Change: Typically our highest vessel for financial returns and value creation opportunities.
Speaker Change: As you refer today, it's a very busy time at <unk>, we have made great strides in our mission to bring as many new rare disease treatments to patients as possible.
Speaker Change: With two major product launches three launches already underway this year and the largest launch in our history potentially a matter of days.
Speaker Change: Never been a more exciting time for the organization.
Speaker Change: Following the expected loss of <unk> 400, and we see a clear path to achieve $100 million of revenue in the near term and much higher levels as our pipeline products to market.
Speaker Change: Through years of hard work our team has built an extraordinary organization and we continue to make progress every day towards our goal of becoming one of the leading ultra rare disease companies in the world.
James: With that I'll turn it over to James <unk>, Our Chief financial officer to discuss the financials and discuss the tariff questions James.
James: Thank you Sean.
James: I'll start by addressing the tariff situation.
James: Since that seems to be at the top of everyone's list of questions right.
James: We believe Eaton will see minimal impact from any of the tariff proposals discussed to date.
James: The majority of our products are produced in the U S.
James: <unk> does not hold any IP and any foreign countries.
James: And we do not have any intercompany transfer question.
James: Our primary exposure would be with <unk> and our Kennedy, which are both manufactured in Europe.
James: However, the anticipated cost of products purchased from Europe represents less than 5% of our forecasted revenue. So a 20% tariffs on European purchases would impact total company gross margin by less than 100 basis points.
James: And the potential impact would likely be even smaller in future years since our late stage pipeline products <unk> 406 hundred will also be manufactured within the U S.
James: In short we are not concerned about the impact of tariffs, but we will continue to monitor the situation closely.
James: Turning to our financial results, our first quarter revenue was $17 3 million.
James: Third to eight zero.
James: In the first quarter of 2024, an increase of 117%.
James: Net sales during the quarter included $3 3 million in licensing.
James: Of which $1 $8 million from the licensing of intellectual rights outside of the U S.
James: Although eaton is receiving $4 3 million upfront.
James: Accounting guidance results, we recorded $1 $8 million immediately with the remaining $2 5 million recognized the licensing.
James: We also recorded $1 $5 million of ICT revenue from a regulatory milestone event associated with our previous divestiture of DFS 200.
James: There was no license revenue recognized in the prior year quarter.
James: Product sales were 14.0.
James: First quarter of 2025.
James: Compared with $8.01 million in the first quarter of 2024, an increase of 76%.
James: This growth was driven primarily by increase sales about <unk> sprinkle and the addition of <unk>, which was acquired in late December.
James: We expect to we expect product sales to continue growing quarter over quarter throughout the rest of 2025.
James: We continue to expect to exit 2025 at an approximately $80 million annual revenue run rate.
James: Gross profit for the quarter was $9 $9 million.
James: Compared with five point year of note that the prior year period, primarily due to increased product sales.
Adjusted gross profit, which excludes the impact of acquired inventory step up adjustments and intangible amortization was.
It was 12.0.
James: Or 69, 5% of total revenue.
James: Versus $5 2 million of adjusted gross profit or 65, 6% of total revenue in the prior year period.
This increase was driven by continued growth of higher margin <unk> sprinkle.
James: And a recognition of higher margin licensing revenue in the first quarter of 2025.
James: We expect to report full year 2025, adjusted gross margin of approximately 70% and.
James: And long term adjusted gross margin to exceed 75% by 2028.
James: Yes.
James: R&D expenses for the quarter.
James: We're $1 2 million compared with zero point $7 million in the prior year period.
James: Primarily due to increased expenses associated with our <unk> 788 project development activities.
James: It's worth noting that in April we paid a $2 2 million NDA application fee related to our <unk> 600 submission.
James: That cost will be fully recorded as R&D expense in the second quarter.
James: We also expect to record a $500000 expense O&M linear licensing payment in the second quarter of 2025.
James: Besides these two onetime items, we expect R&D spending to remain largely in line with historical levels for the remainder of 2025.
James: General and administrative expenses for the quarter were $9 2 million compared with $5 2 million in the prior year period.
James: As mentioned in our fourth quarter call.
James: Increased SG&A expenses in 2025 planned and necessary to build out the infrastructure needed to support the significant growth in our product portfolio and revenue base.
James: These incremental investments include.
James: Our new dedicated five person metabolic sales team, which launched on January 2nd.
James: Commercial investments made in the product re launches of <unk> and <unk>.
James: Investment in our <unk> 400 launch readiness activities.
James: An additional corporate staff to support the growing portfolio in the areas of quality regulatory and finance.
James: On an adjusted basis, which removes the impact of share based compensation transaction related costs and other one time expenses.
James: G&A expense was $7 3 million compared to $4 4 million in the prior year period.
James: In addition to the planned increases in our infrastructure.
James: SG&A expenses during the quarter were also affected by relaunch and prelaunch commercial activities in the period.
James: We are not planning to make further significant investments in SG&A. This year and anticipate that adjusted G&A spending will remain flat or slightly declining in the remainder of 2025.
James: We believe that the investments we've made in G&A during the quarter will support revenue, it's much higher than where we are today and as a result, we expect to return to sustainable G&A growth in 2026 and beyond.
James: Adjusted EBITDA for the first quarter of 2025 was $3 7 million compared to zero point $5 million in the first quarter of 2024.
Total company net loss was $1 6 million in the quarter compared to a net loss of <unk> 8 million in the prior year period.
James: Net loss per basic and diluted share was <unk> during the quarter.
James: Compared to net loss per basic and diluted share <unk> <unk>.
James: Higher year period.
James: On a non-GAAP basis, we reported net income of $2 4 million for the first quarter of 2025 <unk>.
James: Compared to zero point $2 million in the prior year period.
James: And diluted earnings per share of <unk> <unk> for the first quarter of 2025 compared to zero cents in the prior year period.
James: Eton finished the first quarter was $17 4 million of cash on hand, and we generated $2 1 million of operating cash flow during the quarter.
James: This concludes our remarks and first quarter results.
James: And with that I will turn it over to the operator for Q&A.
James: Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone minerals brand name to be announced soon.
Speaker Change: A question simply press Star one again, please standby, while we compile the Q&A roster.
Speaker Change: Now first question coming from the lineup.
Craig Hallum: The Knickerbocker with Craig Hallum. Your line is now open.
Speaker Change: Good afternoon, congrats on the results here and thanks for taking the questions.
Speaker Change: Just first on anchor Lex Sean have you had your <unk>.
Speaker Change: Meeting with FDA to discuss that label expansion at this point.
Speaker Change: Maybe on a cost per client so we'll be looking forward, they're having that.
Speaker Change: I would say in coming weeks, possibly.
Speaker Change: Most likely July in my opinion.
Speaker Change: Follow ideally with the submission in the third quarter of the actual update we believe the data we have is compelling.
Speaker Change: It's based on patient registry data out of Europe, and should should support that label change.
Speaker Change: Great and maybe staying on the FDA front.
Speaker Change: I appreciate the commentary on 8400.
Speaker Change: Any additional color on any recent interaction with FDA that you can give us I mean are things progressing as you would expect.
Speaker Change: With a review at this late stage and then things like.
Speaker Change: Manufacturing inspections and final label discussions et cetera.
Speaker Change: Typically the last step review process of an NDA drug application.
Speaker Change: The labeling discussions and so the FDA provides commentary on your label.
Speaker Change: By packaging, we've received that commentary we have already.
Speaker Change: Had the submission.
Speaker Change: Back to the agency and so we believe that should be the final step I mean, we could hear something else, but it seems.
Speaker Change: To me that.
Speaker Change: Uh huh.
Speaker Change: We are on track for approval here in two weeks or less.
Speaker Change: Great I'm glad you upfront.
Speaker Change: It sounds like you like what you heard there.
Speaker Change: Does that mean, you expect to just need a fairly simple.
Speaker Change: PK study to support an NDA filing there are just kind of any additional color.
Speaker Change: We like the feedback from the agency.
You can tell in dermatology I would like to see us develop and get this product on market that provided a pathway. It didn't seem like they were.
Speaker Change: Fairly clear to us and what we need to do we did have a few clarifying questions. So we are planning a follow up meeting with the agency.
Speaker Change: To ensure that we are doing what they want and what they what their expectations are but I was very encouraged by that but the comments that we received back and I do expect that it would just be fair.
Speaker Change: Fairly straightforward PK study as you indicated.
Speaker Change: Got it.
Speaker Change: Pretty impressive continued progress on <unk> I think you said 90 patients.
Speaker Change: If I parse through the commentary on <unk>.
Speaker Change: On sprinkle.
Speaker Change: It doesn't take much for that $80 million run rate in Q4.
Speaker Change: To start looking pretty de risked.
Speaker Change: Is there anything I'm missing there or maybe any comments that you would have.
Speaker Change: On that on that Q4 run rate.
Speaker Change: No.
Speaker Change: At the appropriate time.
Speaker Change: <unk>.
Speaker Change: We feel very comfortable with the number.
Speaker Change: Across your question there.
Speaker Change: The question is.
Speaker Change: What would be revising that number at some point I think we're going to leave it where it is right now and we will see sales grow in the second quarter, but we're feeling pretty good about our sales of vigor and strong across the board.
Speaker Change: We couldnt be happier with the <unk> launch and the quick additional patients.
Speaker Change: We think of.
Speaker Change: Becoming a.
Speaker Change: <unk> sure.
Speaker Change: Help us to maybe provide some update on the next conference call.
Speaker Change: I'll leave it there thanks guys.
Speaker Change: Great. Thanks, guys. Thank you.
Speaker Change: Question coming from the line of Medicine on study.
Speaker Change: Your line is now open.
Speaker Change: Hey, guys. Thanks for taking our questions and congrats really firing on all cylinders here.
Speaker Change: So could you provide an update on the.
Speaker Change: Recent weekly <unk> prescription trends I mean, it really it looks like March was.
Speaker Change: Yes.
Speaker Change: Tremendous months is that kind of the proxy a barometer going forward.
Speaker Change: Yes.
Speaker Change: Sure on that point I would say that we're on.
Speaker Change: We have significantly increased the number of patients our.
Speaker Change: As we increase we expect that rate will go down.
Speaker Change: Yes.
Speaker Change: We're getting closer to that wherever that 185, a potential patients say that are in the U S.
Speaker Change: We would expect that.
Speaker Change: It stands today.
Speaker Change: There were.
Speaker Change: On a firing at all cylinders in terms of the launch of our products.
Expect to hit our goals, our revenue goals or exceed that of this year I think we'll exceed those goals like.
Speaker Change: I'd like to get a few more months under our belt and then we'll provide an update on I think probably we did indicate that we are now in the 90 patient.
Speaker Change: We'll give further updates on that rate.
Speaker Change: Better answer your question in terms of the trajectory of it.
Speaker Change: Got it understood and then on <unk> 400, if we assume approval is on time.
Speaker Change: What's the expected timing to first commercial revenue that you would book do you think this could be the end of <unk> story or maybe early <unk>.
Speaker Change: I'm thinking more of a Q3, we will be launching it.
Speaker Change: Actually right around the approval date.
Speaker Change: Okay.
Speaker Change: Spot.
Speaker Change: In our June let's say first week of June launch on the product.
Speaker Change: It takes a little bit of thought rotations to get the prescription because it's.
Speaker Change: Patients have to come back to the office and the doctors prescribe. It so I would say, there's a bit of a lag between the initial launch and then the actual revenue coming yet.
Speaker Change: From a revenue standpoint, I would really think more about that Q3 Q4.
Speaker Change: Well, we believe how rapid uptake, we know something that there's a lot of pent up demand for an oral solution.
Speaker Change: Maybe I'll leave it there.
Speaker Change: It won't have a massive impact in terms of revenue this year, but we think a lot of work.
Speaker Change: More significantly impacted the quarters after that.
Speaker Change: Got it thanks for that and then lastly, I really appreciate the color on the tariff risk exposure.
Speaker Change: <unk> looks to be really a non story any commentary.
Speaker Change: Theoretical exposure to the White House executive order a segmentation policy.
Speaker Change: Yes, thanks for the question.
Speaker Change: A question on other slides.
Speaker Change: I first heard about that I was.
Speaker Change: What to make of it there wasn't enough details to that.
Speaker Change: It relates to raw math now that we've had a chance to look at an adjusted I've also been able to do a little bit more background research on it I do not believe it while meaningful impact to us we only sell in the U S. So we're not selling products overseas.
Speaker Change: <unk> customers at lower prices than we saw in the U S.
Speaker Change: We believe that alone is pretty strong.
Speaker Change: Thanks.
Speaker Change: If we don't hit gold price.
Speaker Change: Pharma goes my opinion this is something that would potentially impact big pharma.
Speaker Change: But.
Speaker Change: We're also less relying on Medicare Medicaid that most pharma companies.
Speaker Change: No no Medicare business to speak up it's always Medicaid.
Speaker Change: In Medicaid, we lose money on any collections.
Speaker Change: Abbas.
Speaker Change: But we make money on Medicaid through products like that.
Speaker Change: Our coal mix.
Speaker Change: There are no plans for us to sell our products overseas that reciprocal or most favored nation pricing would not apply.
I believe in for our call.
Speaker Change: Yes.
Speaker Change: But we are a rare disease company, an ultra rare disease company. So I think that is.
Speaker Change: <unk> situation compared to mortgage standards pharmaceuticals.
Speaker Change: Got it thanks for that makes sense I think thats a good quarter.
Speaker Change: Yep.
Speaker Change: Our pleasure.
Speaker Change: Thank you.
Speaker Change: And our next question coming from the line of.
Speaker Change: Swam Nicola Mccaughan from HC Wainwright. Your line is now open.
Speaker Change: Thank you. This is RK from H C. Wainwright good afternoon, Sean John.
Speaker Change: Jim and David.
Speaker Change: So.
Speaker Change: I know you have had more experience with.
Speaker Change: The re launch of incorrect competitive gouging.
Speaker Change: But.
Speaker Change: In general Whats the feedback.
Speaker Change: From the sales force on Galvin anything anecdotal you can tell us about.
Speaker Change: How that launch is going in.
Speaker Change: What the expectations are internally.
Speaker Change: Adoption during.
Speaker Change: During 2020 guidance right now.
Speaker Change: So <unk> is an important product for the company, it's placing us squarely in the Wilson disease space.
Speaker Change: Aspire to become a key player in Wilson disease beyond just Gals, then obviously, we have our <unk> 700 product, which is an extended release version of our garrison.
Speaker Change: We think we'll have clinical trial results in January.
Speaker Change: A small study, we're running which will show the same efficacy with the.
Speaker Change: The three times a day dosing.
Speaker Change: Hopefully.
Speaker Change: Cyber attacks are so that is really the big opportunity.
Speaker Change: Editor Wix version of the Gals in itself is now.
Speaker Change: It's been great for patients because they had in the past supply issues that are have that but it is a zero.
Speaker Change: Zero co pay we never had that as a path to have that today, others overnight shipping. So we get the product to them very quickly. So we believe that product will add appreciable revenue.
Hello.
Speaker Change: <unk> uptake in that.
Speaker Change: Conversion.
Speaker Change: So on a well and we add patients on.
Speaker Change: So we see a steady stream of patients coming off book, although to say over the counter stock or compounded medicine.
Speaker Change: We were forced to go there frankly in the past because of the and accessibility of the knowledge center and the high co pays are charged by the acquired company.
Taken away all of those blockades. So I think and then the last thing I want to say, we're adding a really strong relationship with the Wilson disease Foundation and.
Speaker Change: From the leading prescribers.
Speaker Change: Treat Wilson disease.
Speaker Change: We have.
Speaker Change: <unk> been able to get their aircraft their thoughts or we can help patients. How we can do the best job to make sure that these patients are served properly.
Speaker Change: Thanks for that do you.
Speaker Change: And by any chance are you able to give us patient numbers that are on <unk>. At this point are we have to wait for the next update.
Speaker Change: I think for the next update will provide patient numbers because its still of a transition period, but I can tell you that it is growing.
Speaker Change: Better event. According to plan and are very pleased with the launch and the job that saw our chief commercial officer. Deepak. This is done with the organization, we have a dedicated sales team up in that space.
Speaker Change: Just like we have a dedicated sales team by our other endocrinology products.
Speaker Change: Perfect.
Speaker Change: Question for Jim.
Speaker Change: Looking through the cash flow statement.
Speaker Change: I see.
Speaker Change: And increasingly.
Speaker Change: Medicaid rebates.
Speaker Change: And also on the on the receivables so is this.
Speaker Change: Just trying to understand.
Speaker Change: What's behind those numbers.
Speaker Change: How sticky are those.
Speaker Change: Sure, let's start with the receivables so.
Speaker Change: Significant increase there part of that was call it normal operating activity with the addition of <unk> we.
Speaker Change: <unk> talked about.
Significant impact with Medicaid there, so with that product relaunch.
Speaker Change: Decent amount of addition.
Speaker Change: Yes, sorry with <unk> receivables.
Speaker Change: With the licensing revenue, even though we only recognized $1 8 million of.
Speaker Change: DSW.
Speaker Change: Licensing deal revenue in the first quarter, there was a receivable payment of $4 3 million. So we have not received that yet so a big chunk of it by $5 million increase receivables was licensing revenue.
Speaker Change: The remainder was just in cooler sales.
Speaker Change: On the Medicaid side.
Speaker Change: The increased liability.
Speaker Change: <unk> was almost entirely due to.
Speaker Change: And collects.
Speaker Change: Product re launch.
Speaker Change: So nothing out of the ordinary with the increased liability other than the fact that and we have a traditional patient mix.
Speaker Change: And in products in dollars or just higher with that product.
Speaker Change: Okay. Thanks, Thanks for that clarification I appreciate you taking my questions folks.
Speaker Change: Our pleasure thanks RK.
Speaker Change: Thank you.
Speaker Change: There are no further questions in the queue at this time, ladies and gentlemen. This concludes today's conference call. Thank you all for your participation and you may now disconnect.
Okay.
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