Q2 2019 Earnings Call
At this time all participants are either leaving only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Today's conference call will be recorded.
It's now my pleasure to turn the floor over to he was director of Investor Relations at me, but Vichy. Please go ahead.
Thank you Dawn good afternoon, and thank you for joining US with me today are Vince Anido, Aeries, Chairman and Chief Executive Officer, Tom My job Aries, President Chief Operating Officer, Richard You know Aeries, Chief Financial Officer, Casey Kopczynski, Aeries, Chief Scientific Officer, and John the rocket or as General Counsel todays call is also being webcast live on our website investors not every pharma dot com and it will be available for replay as indicated in our press release.
Now for forward looking statements and non-GAAP financial measures on this call we will make certain forward looking statements, including statements forecasts and guidance regarding our future financial and operating performance.
Including our updated full year 2019, net revenue and net cash burn guidance. These statements will include observations associated with our commercialization.
Upper press and Rocco hint in the United States. They will also include expectations regarding the success timing and cost of our clinical trials. Additionally, we will discuss progress regarding maintaining requesting or obtaining approvals from regulatory agencies of our products and product candidates, including our efforts on international expansion Lastly, we will address our manufacturing activities and capabilities the potential of our preclinical product candidates and research findings or financial liquidity and other statements related to future events. These statements are based on the beliefs and expectations of management as of today. Our actual results may differ materially from our expectations investors should read carefully the risks and uncertainties described in today's press release as well as the risk factors included in our filings with the SEC.
We assume no obligation to revise or update forward looking statements, whether as a result of new information future events or otherwise. Please note that we will file our 10-Q by tomorrow.
In addition, during this call we will be discussing certain adjusted or non-GAAP financial measures for additional disclosures relating to these non-GAAP financial measures, including a reconciliation to the most directly comparable GAAP measures. Please see today's press release, which is posted on our website with that I will turn the call over to Vince.
I think the army and good afternoon, everybody. Thanks for joining us I recognize it all the current interest lies in the performance of our glaucoma franchise in the marketplace and that's certainly that's where we're going to spend most of our time today.
No we haven't seen this level of volatility of tumultuous stock performance for our company since back in roughly 2015 days when we missed the primary endpoint for rocket one it certainly has been a.
That was a tough year and certainly you know we came back from that pretty strongly and I certainly believe we're going to do the same thing now.
Today, we're a lot stronger than we've ever been with two innovative glaucoma products in the market that are performing very well on the patients that are trying it we have expansion plans underway in Europe , and Japan that are proceeding very nicely into exciting sustained release implant product candidates for retina that are in our pipeline.
I personally believe that and certainly more confident in our future today than at any point in our history certainly we've de risked the company and plan on moving forward to work towards achieving our goal of becoming the next major ophthalmic pharmaceutical company.
Getting to the short term concerns on Wall Street as I'm sure you saw in our earnings release, we are lowering our full year 2019, net revenue guidance range to $70 million to $80 million down from 110 to 120.
The approach to the updated guidance with the ANC grid only on a trend we've seen in our very short commercialization story.
Have you do you have good.
Updated guidance ranges Conservative case, I just calculated based on these recent historical growth rate, we obviously will be aiming to achieve revenue levels beyond the updated guidance range for 2019, and we will continue to provide regular updates I will talk about our med D wins will talk about shipments out from wholesalers to retailers et cetera. So none of that is going to change on a going forward basis.
No we look at where we are today, yeah, we see consistent growth in our product line and we're going to be talking about that during this call. In fact his recent reference point last week, our sales out the pharmacies achieved a new record of nearly 14200 units, which is roughly about a thousand units more than we saw in the prior week and so we're very excited about many of the things that are happening.
And we'll be talking about those.
Let's start by looking at second quarter, resulting associated commentary that will help further clarify.
What we're seeing in the market.
Our combined pressure rockets had revenues in Q2 totaled 15.8 million, bringing our year to date total revenues of just shy of $27 million. As a reminder, we long truck with hand in May of this year. So we just have three months of experience and we launch rhopressa roughly about 15 months ago. So again, a very new into the marketplace with both products.
As we said in our press release, our net revenues per bottle for the franchise is $94 for the second quarter and 96 year to date.
Not surprising that as we continue to penetrate Medicare part D.
As we said before net price to are not that price will decline.
Remember that the rebates are steeper in Medicare part D. Plus we were required by law now to pay for the 70% farmer funded portion of the donut hole.
We expect that net revenues for bottles may continue to decline slightly to the extent, our Medicare part D mix continues to increase.
You take a look at our.
In our latest corporate presentation, you could look at slide four and get a feel for how much of our business is coming from Medicare part D roughly 51% versus commercial pay portion of it which is about 34%. This is roughly in line with what is happening with other glaucoma products in the marketplace.
We internally viewed Natasha deals the franchise in both rocket 10 repressive specific segments the fill in that local market.
This is we haven't guided to revenues a repressive versus Rockland and we also did not break out the actual net revenues for rhopressa versus rock with him.
It's very early in the U.S. rocket 10 launch in Rockwood had revenues were immaterial to this quarter plus the pricing of each product is ultimately consistent remember, we price them pretty darn close to each other.
And so as a rocket pant picks up additional coverage, we do expect that the range between <unk> or the price difference between the two products to narrow.
Of course for those of you who are interested you can look at our separate sales out volumes to pharmacies. We report on a monthly basis for both were pressing rocketed <unk> and you can see sort of which way the products are trending.
Over the last month or two many of those are certainly Tom and I and others on the commercial side of the organization to spend an awful lot of time in the field because we wanted to understand what the issues were that that was keeping us from achieving some of the revenue projections that we put out there.
And the good news is that we didnt find that there are any issues related to the products themselves.
The physicians and the patients are very happy with what they're getting with rock rhopressa as well as rocket pen.
So that's terrific from a long term perspective, because we do think that that allows us to continue viewing these products in the same light as we've always looked at in terms of repressive being roughly 350 million future revenues and rockets and hitting that billion dollar Mark the majority the feedback we're receiving from the fuel continues to be very positive as it relates to the performance of both of these products and patient.
And some of you and many others have done independent.
Independently performed physician surveys can also confirm this kind of feedback again the products are doing what we expected them to do in the marketplace.
Physician's office didn't tell us that the biggest hurdle to greater Rhopressa and Roclatan usage is managed care coverage not product performance and we think this points to a very bright future because the coverage will come.
A number of prescribers continues to grow with total nearly 11000 eye care professionals, having prescribed either rhopressa or rocket Pan which represents roughly 75% of our total target audience of about 14000 eye care professionals.
Well over 3400 physicians are writing the partial rule that is rhopressa or rocket transcripts on a regular basis and by the way.
Just about a couple of weeks ago that number was 3000 and now we have 3400. So we continue to grow the number of prescribers that are.
Writing for one or the other on a regular basis and this case weekly.
We have about 6600 of our target audience that are now writing monthly which means that over time. These guys were we will continue to build the the the amount of prescriptions the writing for our products in their practices and they too will move towards writing on a weekly basis.
Focusing on rocket Tan we have over 19 1900 physicians have already written a rocket scan prescription. We're also currently have over 300 writers of rocket had only.
An interesting about two thirds of those have also become weekly writers.
We also as part of that of the 300 or so we have about 200.
Of those physicians, who have never prescribed and rhopressa prescription, but have written for rocket pad. So we do think that there's an awful lot of positive it's going on in the marketplace in terms of what's happening and I view. This is an impressive sign recognizing that it is early in the launch.
Another important metric is that approximately 17% of all prescribers already writing prescriptions for both Rhopressa and rocket Pan as they are now gaining experience within the torture dual franchise and learning how best to use our products in their treatment regimen.
The tar steal market share and a top decile practices is double what we're seeing in all practices about 2.5% market share in the top say, that's held 789 and 10 versus just about 1% or so everywhere else.
These large volume practices will continue to lead our volume growth going forward, while the smaller practices continue to make gains.
One other interesting note is that many optometrists.
Our becoming early adopters of broccoli pad, we have roughly about 2000 2500 of our call audience that represents optometry. So we're very excited about the fact that.
Those are becoming a early adopters for rock with him.
All this leads to growth in prescription volume or franchise prescriptions grew 26% in Q2 over Q1, that's pretty nice growth compared to the overall glaucoma market, which grew at only 2%.
Each product to simply needs time to settle it.
Weve guided in prior calls that once we get to complete coverage north of 75% Med D coverage for both Professen rocket 10, that's when we're going to see these products truly beginning to find their niche and settle into that prescribing habits of the physicians.
We were looking for example, so that we can give you in terms of.
What we're seeing and the closest example, where we're experiencing now for rocket Tan is what we saw back in 2007. When calm began was launched by Adler again.
Alpha Gagnon murmur was one of the flagship products for components and Alpha blocker.
At peak revenues of about 350 million or so in the marketplace. It launched in 1997.
For those of you who don't know calm began as a combination of Alf again plus timolol.
So al again was launched 10 years later calm began was launched.
And so that is the early or that's the only example that we can come up with it is close to the Rhopressa rocket Pan story, what's interesting is when come again once launched it took about nine to 12 months for each of the products to find its place.
So again like we are seeing in the marketplace today between repressing Rocco and there's an awful lot of turn going on in the Doctor's office and so they find a place for both products.
What's interesting also is that this is when al or Gan, what's at its prime. So this is it was in their hay days and so even they couldn't force any bigger adoption of comedy get even though they thought that was a much better product.
Over Alphacat had been out for a long time and so we're seeing many of the same dynamics occurring an awful lot of churn as a doctors try to figure out a home for both products, but this is as close to a. Good example is we can give you as to what we see happening in the marketplace today between Rhopressa and Roclatan.
Another important gauge the demand that we look at it.
Valuable leading indicators that prior authorization volume, which is obviously.
Part of the Medicare part D programs rocket has generated more than double the number of prior authorizations that we saw for the same period of time during the Rhopressa launch. This is an excellent indicator of demand and helps point to greater likelihood of gaining market access sooner.
As payers try to minimize or cause that by that I mean that as we get more and more prior authorizations written.
No that certainly incentive plans a managed care plans to sign up contracts with his for rebates et cetera to bring their overall cost down.
Some retail outlet perspective.
We have now about 25000 retail pharmacies across the country that are filled the rhopressa rocket Pan prescription up from about 21000, we reported for our first quarter earnings call in early May.
That represents nearly 40% of the retail outlets in the country.
However, even with that growth in the number of dispensing pharmacies inventory levels at retail are the sense lead the same today as they were back at the end of 2018.
So we've not seen any inventory build at retail and some folks have tried to speculate in terms of how we reach our revenue targets.
To give you some further statistics on this at the end of 2018, the number of bottles in the retail channel.
It's in the 45000 bottled range.
That's when we would be.
At that time, we only had about 17000 pharmacies that filled a prescription for rhopressa at the time.
As of now our products are being filled across 25000 pharmacies and the number of bottles in the retail channel remains.
At right at 45000.
Additionally for Rhopressa wholesale inventories remain two weeks in future demand demonstrating our sales growth is real growth wholesale channel inventory for Rhopressa at the end of the second quarter was approximately two weeks of future demand consistent with the beginning of the quarter. Rafa 10 of course is consistent with what we saw with Rhopressa in the second quarter of last year.
And that there is more of a channel effect, which will diminish over the next quarter or two as it did for oppressive.
So what are the things we're hearing out in the field. Let me just point to a couple so a few of them physicians are gathering increase experience with rhopressa in their impressive levels of intraocular pressure reduction. They are seen hyperemia will still occurring does not appear to be a major issue with the large majority of patients that is generally transient mild and not causing high levels of discontinuations.
Purpose is primarily being used as add on therapy, where patients are already on one or more other drugs. There are some eye care professionals, who are hesitant to change from their historic prescribing practice and not as inclined to remove therapies is came as a surprise to us and as recent as a couple of weeks ago I had dinner with a number of glaucoma physicians, who is really surprised that once they get the patient under control say by adding rhopressa, even on top of three other medications.
And they are not in a hurry hurry to start decreasing the number of prescription that that patients getting because they're pretty happy once they get those pressures down as low as possible.
We believe this change in practice will happen however through time as they gain confidence from repressed this efficacy effectiveness and also as the patients begin wanting to decrease the number of odd drops it they're subject to on a given day.
On any given day those are gravitating toward repressive just refresh on top of his PBGA, which we believe is the ideal combination are seeing good efficacy with just a two drops along with less hyperemia.
The ice exposure to fewer eyedrops.
While Rhopressa has majority formulary access across both commercial and Medicare part D. Plans, we still have more to go some of this relates to plans with which we have contracted the where the underlying four minute formulary have not yet instituted coverage. This may include custom formulary for other instances, where newly merged payers still don't have rhopressa on all of their underlying formulary.
We experienced the ladder with the recent contract with a large PBM that recently birds would insurance company.
Well, we have yet to gain coverage and the legacy insurance company formulary.
We do expect to obtain that coverage later this year as we conduct separate discussions with that particular formulary team.
So we do have the contracts in place, but not all of the sub plans are signing up for it. So again, we think that that has something to do with some of the uptake issues that we've been seeing.
Experience, thus far with rocket 10 has been very promising positions are not only sampling rafa tan and getting great results, but what's interesting is that perhaps because there are only on one eyedrop or perhaps because the efficacy rates are so much better.
There's not a whole lot of feedback that were getting relative to hyperemia associated with rocketed.
So his rapid candidates in the early stages of gaining formulary placement. After the rocket 10 samples are provided and coverage is not yet available. We are seeing doctors wait for the covered or provide either a sample or prescription of rhopressa to be taken on top of their favorite prostate gland than on an interim basis until the rockets and it's covered.
This is in addition to the prior authorization activity I discussed earlier.
Hi, this creates a situation where the patients need to return to the physician's office, a few times not only to get their interim repressive scrip, but also ultimately to get their rock tenn scrip. The cycle time for this churn as I call it could take months.
Especially when you consider that some of the busy practices may not be able to schedule their patients for a return visit for up to 60 days.
Herein lies the key reason why a comparison of the rockets hand launched to repress will launch is shortsighted and doesn't really reflect the ultimate potential for rocket Tan.
Launches are very different Rhopressa was approved in December of 2017, we did a soft launch including sampling to the top prescribers in March of 2018, and launched and physically actually launch the product in May of 2018, once our salesforce was in place.
Rocco 10 was approved in March of this year launched in May of this year and with that we sampled over the launch it with Rhopressa already on the market is causes a different launched dynamic, but the judge success, a rocket pan of 12 or so weeks after launch it's premature to say the least.
The single most important message here is that the unique position of gaining coverage for Rockwell Tam.
As it is and this is why we believe so strongly that the ultimate value of this franchise is going to be as we've always talked about.
With that the long term promise of both Rhopressa and rocket Tan remain intact and we continue to believe Rhopressa. Ultimately has the annual sales potential as I mentioned earlier, a 350 million plus a net use to annual sales and we believe rocket Tan ultimately has the potential to reach over billion in annual sales in the us as the first and only fixed dose combination product in this country for the reduction of IP that includes a prostacyclin and the only fixed dose combination product available in the United States that is dose once a day.
Just look at our phase three data on how effective rocktenn was in getting pressures down to low normal ranges.
In fact in that data from our Mercury trial Rhopressa also performed even better than it did in its own clinical trials and certainly it did better than EBIT, latanoprost did and getting patients pressures down to really low ranges.
Now, we need to be patient and work through the transitional phase where refresh it continues to gain share not only by additional coverage, but further penetration of covered lives.
But by physician continuing to experience to see the positive aspect of where rhopressa and rocket and fit into each treatment and to each patient's treatment paradigm.
Catalyst for growth in the remainder of this year and into the future will be formulary coverage for Rockwell can we expect that by the end of this quarter that commercial coverage for Rockwell Tam will be consistent with where we were.
Relative rhopressa for the same period of time last year.
Very importantly, as we progress through this quarter rocket 10, Medicare part D market access is exceeding where rhopressa was at the same period of time last year.
We are pointing to 30% Medicare part D access for rocket tank compare to 12%.
That we had for Rhopressa at the end of Q3 last year.
Were also aiming to have majority formulary coverage for Medicare part D for rocket hand by the end of 2019, which would be significantly more accelerated than we've experienced with rhopressa. As a reminder, today, we have about 75% Medicare part D coverage with Rhopressa and about 90% coverage on on the commercial side and we did that about a year or so after launch.
All of the aspects of the Rhopressa and rocket Pan launch I just walked through other drivers for our revised guidance quite simply while the franchise potential is unchanged. The volumes. The volumes, obviously are taking more time to build than we originally estimated.
The issue is simply time.
When all the dust settles and the doctors if there had been our experience with both products. We do believe rocket Pan will become the leader in the marketplace with his proven efficacy and one drop convenience and we believe rhopressa will settle in at.
Add on just on top of that Prosigna Landon.
Those are the original positioning statements for both products.
With that I am confident we will achieve incredible long term success.
When a change topics briefly as we continue to de risk our supply sourcing I'm happy to report that our own Ireland plant is making excellent progress in terms of readiness and it's expected to be ready for commercial production in early 2020 timeframe.
This is on top of the FDA approval of a second drug our contract manufacturer that I mentioned last quarter.
Turning to our initiatives beyond the United States, we expect to obtain the European regulatory determination of real kinda, that's rhopressa in Europe .
The approval later this year.
Which assuming its positive will result in us filing for RCW land, which is rocket Tan in Europe .
Sometime early next year.
We also expect to read out topline Mercury three result in the first half of next year to remind our Mercury three is a rocket and study and only in Europe .
Comparing it again for the leading combination product in Europe , and it's done primarily for pricing reasons.
The biggest positive surprise for US was the extraordinary level of interest in Rhopressa in Japan.
Which allowed us to enroll our phase our Japanese phase two trial far faster than we ever anticipated.
We now plan to read out phase two data by the end.
This year on that Japanese phase two trial.
Moving onto our retinal implant programs in spirit of brevity in I will say is our 11th five our sustained release steroids program is progressing well in the clinic and we expect our opine a protein kinase inhibitor, a our 135 oethree to enter the clinic very shortly.
Early stage research initiatives are also advancing as we explore our own molecules and the dry eye space and psoriasis just two examples of what we're doing.
Now before I turn the call over to rich I'd like to address that one of the other concerns that investors have had nets are perceived need for financing.
As always our job to ensure that we're adequately financed and it's also our job to obtain financing at the lowest possible cost and with the least amount of dilution possible.
And so as a reminder, and let's just do some quick math are opening cash balance for 2019 was over $200 million.
And our updated net cash burn guidance for 2019 is now between 160 and 170 million now when you add back in our available credit facility of $200 million that leases.
With the projected year end 2019 liquidity of over $200 million.
We've been spending roughly about 200 to 220 million over the last couple of years and we if we were to do that next year, we have enough cash almost to make it through the entire year. Even if you assume we don't sell one bottle of either Rhopressa rocket then.
So I do think that we have the liquidity that we need in a financial capacity that we need in order to sustain ourselves and move forward and continue building our company.
Now with that I will turn it over to rich to cover the financials rich.
Thanks, Vince as Vince mentioned, we recorded $15.8 million of net revenues in the second quarter, 46% increase over the first quarter of 2019, our franchise net revenues reflect volumes of over 169000 bottles for the second quarter.
Our gross margin for the quarter ended June Thirtyth 2019 was 95.5% our normalized gross margin was approximately 94.5% when considering inventory costs that were expensed prior to FDA approval of our products.
Our second quarter 2019, GAAP net loss was $47.2 million or one dollar four cents per share when excluding the $10.7 million of stock based compensation expense.
Total adjusted net loss was $36.5 million or 80 cents per share.
Adjusted total operating expenses for the second quarter of 2019.
Were $50.5 million with adjusted selling general and administrative expenses of $27.4 million adjusted pre approval commercial manufacturing expenses of $5 million and adjusted research and development expenses.
Of $18.1 million for additional information regarding our second quarter results and prior period comparisons. Please refer to todays press release.
And our Form 10-Q , which will be filed by tomorrow.
The cash burn for the six months ended June Thirtyth 2019 totaled approximately $92 million with $109.4 million in cash and cash equivalents remaining on our balance sheet as of June Thirtyth 2019.
Shares outstanding at quarter end totaled $45.9 million.
Vince already discussed our revised net revenue guidance at length also as Vince just outlined our net cash burn guidance has been updated as a result of the cash flow effects of the lowered revenue guidance net cash burn for the full year 2019 is now estimated at $160 million to $170 million compared to the previous guidance of $130 million to $140 million.
So again, we have $109 million in cash and cash equivalents on our balance sheet as of June Thirtyth 2019, plus we have the $200 million Undrawn credit facility, giving us total liquidity as of June 32019 in excess of $300 million.
And now I would like to turn the call over to the operator for questions Don.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone telephone. If my question has been answered or you wish Jim we're very soft from the queue. Please press please pass the husky.
Your first your first question comes from Annabel Samimy from Stifel.
Your line is helping.
Hi, guys. Thanks for taking my questions.
I have a few so I'm going to ask the obvious question first so when you think about the original guidance that you gave.
I guess.
Personally assumptions that went into that trajectory and why did you think it would be so much stronger than what you're experiencing now.
And I guess with that.
92 million burn a 109 million last clearly that should attenuate overtime and as you have increased so how should we think about coming out of the year and into next year.
And where that cash might take you.
So thats first question.
And.
Maybe you can help us understand also.
On price of I understand the press, sometimes dipped below 90, I imagine, it's clearly about that Medicare commercial next.
But what's going to allow you to bring that back up to that 100 level that you targeted.
And then lastly, just on on some recent work that we've done a good majority of docs, who are using rocket 10.
Head use rhopressa and probably less than 50% of their patients and you also mentioned the reaching new new targets some of them being optometrists and maybe even lower desktop physician so.
Our do you have any plans to expand your target audience beyond just the high Def thousand maybe take advantage of that interest from the upon first population that could could be of that.
Audience for you. Thanks.
Hi, let me see if I've got all the straight.
I can repeat that.
I've got these I've got that so on the on the sales assumption stuff and.
Like you we did lot lot of market research and everybody else did too and if you sit out there and you start showing these these doctors the product profiles and the differences between your press and rocket Pan everybody tells you immediately that they're going to use an awful lot of rock with hand, and maybe they'll find a home for rhopressa and nowhere in the market research and nowhere that weve done or anybody else's done did we anybody ever get into this churn thing and it was more of a yet as soon as I get into in my hands I'm going to use it. Some of you have had physicians on some of your panels and they talk about immediately moving all their patients over two.
Rocket and they were on Rhopressa.
Et cetera et cetera. So it always leaves you with with a feeling like.
It's all going to move very very fast and realities as we've talked about before what's happening in the marketplace. A lot of it has attenuated considerably by managed care coverage and so that certainly gives you a dose of reality and so when we put the assumptions together.
It was trying to do a balancing act between the fact that no new product had been introduced next category for over 20 years, plus the enthusiasm that we saw for the kind of data that we were showing in the clinical trials and so we certainly felt very good about sort of the uptake here when reality hit and we started seeing the managed care.
Impact, where we were doing really well and some of the markets and not too well and others, where we didnt have the coverage even if they were writing prior authorizations only about 40% of those prior authorizations, even though almost 80, 90% were approved only 40% of the ones that were approved were actually picked up because the co pays are too high.
So the patients were coming back so that's sorry, creating an awful lot of churn.
So again, the the basic assumptions that we made.
Didnt factor in as much of this reality picture as well, we're now seeing we thought that does the product profiles themselves and the enthusiasm for that the doctors had especially the high end glaucoma guys that yes, we would move through some of this stuff pretty quickly and it just reality hit and it just didnt happen. So those are the basic differences me assumptions and now we're just going back to only one.
Doing what we've already accomplished which is just watching our own growth patterns and and forecasting off of that and if they accelerate I guarantee it will be the first ones to tell you.
So that's on the sales assumptions.
On the price. So we do expect that we'll get back to that again the guidance that we provided a roughly $100.
$100 per bottle price overtime as we take price increases because again when you first get hit with all these rebates and the covering the donut hole et cetera, et cetera, et cetera, the Medicare part D coverage.
Take the biggest whack out of the rebates as the highest rebates we give.
Versus the commercial side, where we can use that co pay cards and so overtime as we take further price increases remember we took one.
In late fall of last year and so.
As we take other ones, we'll we'll start seeing that price start.
Hitting a floor and then start bouncing back up.
We do currently have.
All the Salesforce that we need to move forward.
You know the reaching a lower decile doctors.
Over the years, just hasn't been particularly fruitful for any company and so expanding just to get more of those don't make much sense and as I mentioned during the call or during the prepared remarks about.
2000, 2500 of our current call audience of 14000 already optometrist and so those are the high volume guys, which is ER, that's why they're on our call list and so we expect that.
That's going to continue.
On the cash side, which I think was actually your second question I'm going to turn that over to rich. So that he can give you some more details.
Thanks, guys, Hi, Annabel. So as you mentioned, we do have the net cash burn in the first half of the year.
$92 million, the second half of the year it will be less.
By definition, because we will have increasing revenues over the next couple of quarters, while our gross cash burn remains fairly even in the back half of the year. In fact gross cash burn may be slightly less in the back half of the year than the front half of the year.
So remember we gave a new range for net cash burn of $160 million to $170 million for this year. If you just pick the midpoint 165.
If we're already at 92 in the first half of the year, then you're going to end up with about 72 million and net cash burn in the back half of the year. So you can see a declining first half from 92 to say about 72 or so in the back half of the year.
And also you know Vince gave some math toward the end of his prepared remarks.
Just to address liquidity, we started 2019 with $203 million in cash and equivalents on the balance sheet.
With a net burn in the mid range of the current guidance of $165 million that leaves you with about 38 million of cash at the end of the year.
Kind of 19.
Then you have the credit facility for 200 million that you can add on top of that.
And you end up with year end 19 liquidity of about $238 million. The point that Vince was making was even if we had zero revenue next year that $238 million and liquidity could carry our gross expenses through the entire year next year.
Great. Thank you.
Thank you.
Your next question comes from Ken Cacciatore from Cowen and company. Your line is helping.
Hi, Thanks, guys. Thanks for all the different metrics.
For the first time in a long time at the put my pen down there were so many but just wanted to talk through a little bit of the what you're trying to say about the managed care and it taking a little bit more time can you just talk about how you're supporting those patients. Those your Rockland 10 sampling program, a little bit heavier and little bit longer than you would have.
Thought and then also similarly, we've been doing Doc checks and.
Hearing back that the hyperemia with rock within a surprisingly lower than Rhopressa, just actually curious as to why it sounds like Thats what.
You are hearing as well and then just lastly can you just remind us. It was I think you gave us the information, but by the end of the year, where the coverage should stand for for Rockwell 10. Thank you.
Sure Hey, Ken.
It's a good thing there were taping. This thing so that you can follow up on some of those numbers right.
So I wouldn't I'm going to answer.
Yeah, one of the two questions that you asked.
Regarding the hyperemia rates et cetera, because we're pretty excited about sort of what we're seeing in the marketplace and I'm going to let Tom talk a little bit more about the commercial side or the commercial question that you asked.
And so on the hyperemia rate. The other is kind of interesting. So again, we've been out in the field talked a lot of the dogs and in some of these guys are surmising the following.
Represses position with a lot of the high end glaucoma guys has always been sort of Max medical therapy, then they add rhopressa to it let's patients may be on three or four medications already in and.
The rise you know that's an awful lot of preservative, that's hitting those eyes to begin with much less the fact that some of these drugs are also air tends to the eye on top of that until that time, you add the fourth one.
There are already pretty sensitive and so they may have been seen a little bit more of a.
Sensitivity reaction to the base with allocation caused by Rhopressa wasnt paying it wasn't.
Irritation or anything like that it was just the basal dilation, causing the eyes to go a little bit further.
Get a little bit renter, and they became a little bit more noticeable for them.
And so what's really interesting about all that and again the drop it what we're seeing from an attrition rate when they do get the hyperemia after either adding into a prostate gland in or after a Max medical therapy is that.
The I hope it goes down.
The same number of patients that.
That we always talked about the roughly about 10 or 15% of them just really can't tolerate it so they're basically saying Hey look you know my pressures lower but.
I just can't do this red I thing that means that the balance of roughly 90% of them are pretty happy with or lower pressure and with whatever incremental hyperemia, they're getting they're saying and while it's worth it given that my pressures lower so we we like that but in case, a rocket and we think that it's it's simply because in many cases, they're not adding it to a lot of stuff is just using it by itself. So it's just one eye drop one load of beds of Kowloon chloride or be AK, which is our favorite preservative in the industry and therefore, they are not seeing.
Some of those effects and also balanced out by the way with.
Really low pressures and so I think it's the key I think it's the hyperemia is a problem. If you don't get a good pressure drop and if you do if you get a great pressure drop they're willing to live with with hyperemia and they just don't talk about it as much.
So let me turn over the first question to Tom.
Okay, well, thanks, all talk little bit about the commercial aspect of managed care cultures, what Wi Fi first off we're quite happy with our coverage for Rhopressa on where it's better really in the first year of having the product on the market with a brand new company, we've actually done very very well the thing I would say that really drove that was the PPA ways that our field force was able to.
I encouraged the physicians to prescribe because.
Hi, guys really in essence made managed care really pay attention to rhopressa. So anyway. There was very good but what we find on the other side from from managed care is that many of them as you know have gone through consolidations and acquisitions and when you put two organizations together, usually what happens is all formulary movements that thats additions stop.
But to the organization has come together, that's certainly happen to US earlier this year with the second largest payer in the marketplace, who had suggested to us that we were going to get rhopressa on their formulary early in the first quarter and our turned out to be the middle of the second quarter as a good example, nonetheless I think matters. There are still a very good story for us. If you looked at Rockwell 10, you'll see that as Vince said, we're running towards 30%. There were just shy of that now and we already have the number one plan and the nation that is covering a rock whatever we think others are going to come as the year progresses. So that's kind of our answer to if I can help with anything else. Please let me know.
Thank you.
Your next question comes from search Balanchine from Needham and company. Your line is open.
Hi, good afternoon.
Question for me on.
Robin downward pressure.
Since you mentioned it was a matter of time.
But you still believed in the long term prospects of both products.
You are expecting to see a big bump or.
Bump in Medicare coverage at the end of Q3 here.
When do you expect to see an inflection in real quick and should.
We see that in the fourth starting in the fourth quarter.
Well with the.
With the current when the most recent win in terms of rocket and occurring it actually occurred earlier this month.
And so towards the back end of this month and and beginning in September you start seeing some inflection point, there obviously right now because of vacations and all like the US as you know it is sort of get to tenure at a little bit but.
In fact, we think that.
Some of the growth that we were seeing in the marketplace in terms of shipments from wholesale to retail and simply could be reflecting not only a more uptake for rocket hand, but also and because of the better coverage, but also just the normal increase we would see just because it is covered much better than it was just a few months ago. So it's a it's a regional issue. The the plan that we sign when it's a national plan is it is concentrated on parts of the country. So you know it's not in every state, but it's certainly a in many of the states and so we are seeing some nice bumps there and so.
But if this win meaning getting to roughly 30%.
After three or four months relative to rhopressa getting to about 12% in the same period of time is any indicator and hopefully we'll be able to speed up our our race to get to about 75% Medicare part D coverage and do it sooner than we did with Rhopressa remember Rhopressa took us about a year.
And so if we can get there then I'd say as we exit this year beginning of next is when we'll start seeing a sort of both products in the marketplace and then the physician being able to write for either one depending on which one he prefers.
Okay.
And maybe just excellence for Tom can you just comment on.
Any recent changes in the sales force and then this point in the launch do you think it's adequate lease adequately sized and staffed to promote boats were prints on road content.
Yes first off to answer your second part of that question first yes, we definitely think that we're adequately sized to handle the people that are right in the most glaucoma prescriptions in the marketplace and said that includes about 2500 or so optometrist nearest big ophthalmology. So we don't see any material change in the size there.
The other question.
What we think is going on here is that we think that our sales force is doing a really nice job. We certainly had our changes in the sales force, which is common when you put in an organization in your first year, you'll find some people that say I want it when they want to be with a small company and I really want that spotlight.
Everyday and sometimes they don't sometimes a common quite natural for them to say actually up much better with a larger company where public we don't have as much attention on me, but we've gone through those growing pains and we think our salesforce from a quality standpoint is a is in fantastic shape right now and we're quite happy with their productivity and what they are what they are able to do with both products.
At this point.
Okay, and I guess, one last one.
And as you walked us through some of the cash burn projections and expected cash balances.
I think some of the retinal programs are expected to read out either late this year or early 2020.
Does this higher cash burn kind of change your strategy with advancing these programs in phase three trials.
Yes.
It really doesn't the.
When you think about the timing is timing related to some of the programs that we've currently got going so the retina programs you know so they actually will be reading out a little bit later this year through the first part of next year. So by the time, we sort those out and actually get more clinical trials back out.
Having talked to the FDA et cetera, et cetera, et cetera, we're looking at those things impact the more of the second half of next year. So their impact is is not as dramatic as perhaps you would expect it to be as much like what we're seeing with them.
With the Japanese study I mean, if we were able to accelerate it so were actually good results. This year and then we'll sit back and.
Kind of formulate based on the results with the protocol should look like go back to the FDA version of in Japan, The PMDA and and go talk to them, but by the time that we get back out into the clinic there it could be in the backend of next year's who as a result, we'll have plenty of runway by then we think the product will continue growing and are and certainly we'll decreasing.
Our cash burn.
Because we'll be selling more.
So I don't think it impacts the phase III, because we don't have anything scheduled to come out of where the phase III huge Britt phase three program will start early next year everything sort of back end loaded.
Thanks for taking the questions.
Sure.
Your next question comes from Essar has Allen from Oppenheimer. Your line is open.
Hi, Thank you for taking my question I have a couple then for you.
And a little bit about on that trend of parliamentary sort of describing the portfolio of products and what's driving that and then it sounded it sounds like you are a little surprised by that and so kind of curious to see how that compares to.
Having this perception for other glaucoma products historically.
Well typically they got to do we have a situation where glaucoma specialist or I'm, sorry, eight a. and optometrists, who focuses on patients and sees a lot of glaucoma.
In their practice tends to say yet they are the first ones to identify it so and to diagnose it and in many cases will ship it off and and send it off to a local by combing dock.
And so that's relatively common and then we'll start picking up prescriptions from them later on a few months later when the glaucoma dock is actually got the patient on a prescription and then the.
Then the patient comes back to the optometrists and the optometrist as following up.
And so you'll see a little bit of that that that dynamic what's interesting is I take it back to the optometrists that we know, especially the high end guys, who are really more Clint clinical optometrist and anything else you themselves as the patient advocates.
And so what we may be seeing here is that for those.
Optometrists for those doctors that they view something like rocket hand, where they can just give them one eyedrop and good two powerful drugs get their pressures down really really low decreasing their co pays et cetera, et cetera that they may be seen as a slight there. They are perfect answer for what their patients are really looking for.
They may be more than willing to.
To do that for a number of different reasons, maybe they get to keep the patients longer then we'll have to refer them up because the pressures are under control.
And again some of these guys are really high end from a clinical point of view so.
I think its.
55000, optometrists, so I'm not sure that I can take our 2500 and project that out to the full 55000, but certainly the guys that.
That we're talking to that are writing these scripts are.
Are the highest and optometrists the REIT glaucoma meds and so you know, it's a hell of a start for us but again it.
Surprising that they just popped out that quickly I have to admit that but.
But again as I as we thought about and talked about it internally I happened to visit with one of them in the Fort Lauderdale area and he was all over a rock with him and he had not had much experience with rhopressa, but then that he sort of.
Told me, what and I would I just told you which is he viewed himself is patient advocate so and this was a perfect drug for them.
Gotcha and then in terms of the children you'd mentioned that about the churn of about two to three months.
Do you anticipate a step up or.
Like Doc visits among the patients who walked away with a sample, let's say into Q our early Q.
Later, this year and how does that kind of work itself off over 2020.
So we think that the what we're seeing with the.
Higher desktop doctors that are supporting us the most the other sort of their accommodating for more patient visits and they're trying to get these patients back in a little bit sooner.
Some of them and try to sort of bypass it by giving the patient the sample of rock with hand, and saying Hey.
If you don't have any troubles.
Call Me, you know call me and we will set up a.
Something later on if you can tolerate it et cetera et cetera.
Other ones want to see them back in a shorter period of time, because maybe their pressure isn't under control.
And it's sort of spiking and they're worried about it so they're making room for him, but I think every practice is different so not everybody can bring them back on a short basis. So it could very well be that the high volume guys.
We have such a big.
Toward turnover in their practice meeting a lot of patients on any given day that maybe for some of them it's easier to slot these patients in because of.
Other patients not showing up et cetera et cetera.
But we are seeing.
We are seeing quite a bit of that churn, but it's very.
Practice specific.
Okay. Thank you.
Your next question comes from Elemer Piros from Cantor Your line is open.
Yes, good good afternoon.
Maybe a couple of numbers related questions too rich if I may.
Rich I presume that the pre approval manufacturing line item would disappear beginning in the third quarter would you be able to confirm that please.
It will.
Basically gets smaller over time and it will be pretty much gone when we get into next year.
Okay. So it could declining number that's correct.
Okay.
So if I'm correct, if I remember correctly your first half revenue was 26.7.
<unk> million.
And I also see.
25.7 million and accounts receivable.
Would you. Please tell us what is the trend in terms of day sales outstanding.
As we move into moved into this year.
Yes so.
You really have to look at accounts receivable and not so much from the beginning of the year to the end of this quarter, but you have to look at how we progressed in the course of the year. So at the end of the first quarter. Our accounts receivable were about 14.8 million now it's 25.7.
From a d. it from a dsos or days sales outstanding perspective.
You're really dealing with just a few.
Wholesalers are distributor if you will each of whom has their own terms.
The terms can range to about 60 days give or take some a little bit more some a little bit less.
So there is not an issue with regard to collections everyone's paying in accordance with their individual contracts.
Okay and you should just you should just elemer just follow the trends again, not using the starting point of the year, but follow the quarters and follow the revenue growth today and going forward, you'll see it you'll see a more consistent relationship.
Okay. Thank you heard it right and Vince.
I was wondering if you could address how you're going to address.
Yes.
The first potential sustained release I dropped that might come to the market next year.
I actually meant <unk>, you mean that Bimatoprost I'm, sorry, yeah, yeah, yeah. So we've known about this drug for quite a while and so it is a surgically induce procedure that is going to have to take place.
We are aware of a number of different things.
Specifically that there are some doctors that will try it and for some patients.
The procedure itself and the kinds of patients that are likely to be able to.
Take advantage of something like this or it's not the entire market. It certainly not all prostate gland and taking patients because.
The size of the angle that is required for that insert to fit.
Is got to be pretty big so only certain patients or can even qualify for number two.
If you take a look at the clinical trial results in and while they were able to achieve what they wanted to achieve it they're not as good as if you did the same thing with a eyedrop version of their drug.
So its purely for convenience sake, so for compliance sake.
And so and.
A lot of it is going to determine or be determine in terms of their uptake by the patient willingness to do a surgery and the co pays associated with that relative to taking a once a day eyedrop.
And the co pays associated with that especially by the time that this product gets out the door.
Bimatoprost will be genericized.
Okay, and so it's going to be.
An interesting.
Well the reimbursement fight for them and so from our perspective again there.
They were shown to be non inferior to timolol.
Not as good as their own Eyedrop.
And yet our.
Rocco Tan was actually shown to be better than latanoprost.
And so I think.
I'd, rather have our drug than theirs.
Okay. Okay, thanks want to treat that.
Mm.
Your next question comes from Difei Yang from Mizuho Securities. Your line is helping.
Hi, good afternoon, and thanks for taking my question.
Just a few here. So the first question is with regards to Rhopressa.
Commercial coverage that we that I think you have talked about a 90% I'm just curious all of these 90% what percent are all the way flow through too.
The participant.
And level.
I'm sorry are you at.
Hey, its rich.
Yes, you clarify are you asking how how much of it ultimately goes to the benefit of the patient.
Now how much actually I think Vince was talking about.
When you sign these.
Oh, My God management Yeah.
You're asking you're asking how.
The with regard to the 90%, which is overall contract access what is the underlying specific.
Formulary access.
Exactly so to the extend the patients are very.
They're very close actually.
It's as I recall in the 80 80 plus percent range. Okay. So in that case, it's fairly narrow what happens.
Remember with Rhopressa, we started getting our coverage very early.
So you get that contract coverage is that it takes you sometimes a few months to get all of the underlying.
Formulary coverage as Vince explained in his prepared remarks, so right now those those two numbers are very close on the Rhopressa commercial side.
Okay, I will now for Medicare side.
Medicare has got a little bit more to go using the.
The example that Vince also used in his prepared remarks.
But we do have the majority for med D for Rhopressa covered so the contract coverage is 75% as Weve said.
And over 50% is already covered in the formulary.
Okay.
And again that spread will narrow over time.
Yes Jill.
Then as you gain access to all of these coverages.
More specifically with regards to the Medicare coverage, we went from 40% to 75% on may 1st.
Do you think we have seen the inflection point from prescription perspective or are you expecting to see that inflection point.
So we started seeing some of the inflection point if you go back into the April timeframe.
May timeframe remember, we were sort of stuck at halfway through the first quarter things were moving well we were expecting.
Big when we didn't get it in Q1 it ended up trickling into Q2, and then as soon as we got it we started seeing a nice bump.
We're starting to see another nice bump now and so it just.
I it feels like.
It's going to be a.
Not as dramatic of big steps as I as we had with Rhopressa.
Where we went up to 12% and then also on with three or four months later, we jumped up to 40 and then another three or four months later, we jumped up to 75, I think its going to be a steadier growth rate to the ultimate target of an excess of 75% Medicare part D.
Yes, so Q, it's kind of hard not to believe that the increase that we just had a that I was talking about from last week and shipments from wholesale to retail jump in a 1000 units in one week wasn't and in part due to the incremental coverage Weve received we see rocket and continuing to grow really really nicely relative to the market and and yet we still see rhopressa growing so I think it's both sides or or just winning which is a great thing for us.
Okay. Thank you. Thanks for that clarification, then changing subject to roclatan.
So when you go out to have these coverage or managed care coverage.
Discussions how he is Rob will attend the yield as a class of bedrock is it viewed as rocking hibbett or use of yield as a PDH or maybe something else.
Yeah I can handle this is Tom by the way. So every managed care organization may do it a little bit differently, but in most cases most of time they look at it as a fixed dose combination product. So neither neither a real kind of inhibitor, nor necessarily Prost Atlanta butter, but a fixed dose combination product.
So its a category by yourself.
In many situations I cant say, all but in certainly in many situations.
Okay. Thank you.
For that clarification, then my final question with regards to liquidity needs, so, giving the increased cash burn.
Do you still feel comfortable that with your current liquidity are able to get to breakeven point.
Yes so.
There is no increasing cash burn right. So the gross cash burn.
Now is is still expected to be $210 million to $220 million. That's what it was when we gave guidance.
Remember difei there is an offset to that gross cash burn to get us down.
To net cash burn and that's basically the collections of accounts receivable from revenue offset by some rebate payments that cash net cash burn rate is going to decline.
I tried to explain this earlier.
So we had net cash burn in the first half of this year of $92 million, but the full year range.
His net cash burn up a $160 million to $170 million. So by definition in the back half of the year that net burn declines.
And so should be the case as our revenue continues to build over the next several quarters.
Okay. Thank you.
Thank you.
Your next question comes from Elliot Wilbur from Raymond James Your line is open.
Thanks, Good evening.
Just following on that line of questioning real quickly so based on all the commentary around cash resources and.
And expectations for performance of the franchise doesn't really sound like there's going to be in the in the real changes to the game plan.
Over the next four to six quarters at least in terms of trying to become a little bit more.
Fiscally prudent or or or cash conservative.
Well, we're obviously going to keep watching everything that we're doing now he added by welcome back the.
I think the we look at these things that we want to continue growing the business, we want to make sure that we're prudent with the cash that we do have.
And we feel pretty comfortable obviously with the guidance that we provided and and are comfortable with our liquidity, but it. It also we know the timing of things that are going to be happening.
And so it's not because we plan it it just happens you know, sometimes you get lucky and from a.
From a planning point of view, we know that as I mentioned earlier that some of the big expenses aren't going to preclinical trials are going to start kicking in until the back end of next year.
And so that does help us sort of feel pretty good about not having to scale back.
A whole lot I mean, we're always cautious about adding heads were cautious about capital expenditures cautious about all sorts of different things, but.
No. It's I wouldn't say, we're going to do it any differently than we've done in the past.
Thanks, Vince and then just want to ask a question going back to your comments at the beginning of the call regarding.
The sales expectations for Rhopressa, and Rocco Tan and consistent with the numbers you put out there historically.
The question really is more about no time to realization I guess, if you look at historical launch models, most products sort of reach.
Peak number kind of in the five to seven year timeframe, but it just seems like in the current environment launch curves just seem like they're a little bit more.
Compressed kind of on the front end. So I just wanted to get your thoughts sort of around timeline to realization of the peak numbers that you put out there.
Well as I said earlier, we you know we always thought that yeah, the uptake would be a little bit better than that obviously has been mainly because of everything that we were hearing everything that the dogs were beaten his back relative to their expectations of how quickly they would start writing for one or the other product et cetera et cetera.
And so.
But I think that the the normal trend would be.
Based on what we're seeing now you would expect to see a little bit of a delay and so we if we thought that we were going to get the peak sales and five maybe it becomes a six or seven years kind of time horizon.
The difference is it which is what I've been trying to point to which is that assumed certain trajectory in terms of your managed care uptake.
And so if we are able to accelerate our managed care uptake.
And we are as successful if not more successful.
With rocket and as we were with Rhopressa getting into that again, 75% Med D coverage after year, 90% commercial and so if we can move that up a little bit for rocket hand that could allow us perhaps to start bouncing back from you know sort of this churn period and things like that.
Ah to where we can get back to more an accelerated timeline.
Ever back to our original kind of timeline so.
Again, it goes back to how fast can we get to that.
At a 75% Medicare part D component and if the sooner we do it the better off we're going to be and the sooner we will get to those peak seven revenue numbers.
And by the way you know while we're you know we're talking about all this you know looking at the.
Uh huh.
Sort of the uptake on managed care for some of the other glaucoma products that have been launched.
In the same relative period of time, whether it was us or.
Rhopressa arm, sorry, or Zohydro, ER result, or any one of those.
The getting to where we did with Rhopressa in one year, the 75% Med D and 90% commercial stands out pretty nicely for us.
And so it's certainly not happening its not happening across the board that quickly.
So we like that.
No good fair enough and then.
Last question any updated data points, you can provide with respect to rhopressa in some more specific metrics in terms of.
Combination use of the product I guess the reason I asked the question I always assume that.
You know Rhopressa was obviously being used extensively in combination therapy and most likely.
In combination with Hana price. So it was really just a sort of a rockwell tan proxy and when rock within launch obviously thought that you know there will be a strong uptake, but there will be much greater cannibalization of Rhopressa then there has been.
Thus far so maybe that impression is not correct maybe in fact.
The nation in combination with standard process, just been a little bit lower than.
You know, we had anticipated, but it just curious sort of <unk> on.
Thoughts as to why Rocco 10, perhaps hazard cutting the Rhopressa franchise is as much as a.
So we would have anticipated and you can sort of see that in the fact that I guess that a you know at least as of the latest week launch just a little bit behind were.
Yeah. This is Tom I'm happy to take a stab at a couple of your questions. There first off we do know that about 15% of Rhopressa as current business.
His for initial therapy or treatment naive patients. So they are not you that those are people that for some reason or not candidates for prostate gland. Its right because that's what normally people would start off with so by the way we're quite happy with that the second thing is.
Yes, when Rhopressa first came out it was added on to therapy, meaning it was what we call maximum medical therapy or the end of line therapy. Prior to surgery. So the patient may already be using three products. They throw in rhopressa just to see what happened. Many were impressed with the results that they got to say certainly did not expect much and found out that they were getting a lot. So now what they're doing is that are moving up in their treatment paradigm and in many cases are replacing therapies with rhopressa, meaning that they are using it as a second or third line, but not the fourth line that sort of thing. So so we like that.
The other thing, we'll see it's interesting because you're talking about the trade off with Rhopressa and Roclatan. There how Rockland you assumed might eat into the Rhopressa Rhopressa business quickly I can give you. This fact since the launch of Rocco 10, which courses just in May.
We have picked up 1400, new prescribers of Rhopressa.
And we believe the primary driver for that is the physicians get infatuated with.
LP lowering of Rocktenn. They tried Rocco 10 fund not that it wasn't covered at a high co pay to it.
Brought the patient back to the office and then they gave them rhopressa because they in essence now they're just going to use two models that rather use one in roclatan would have said they just use to battle. So we like that I mean, we like the fact that.
That we've picked up more.
I mean 1400, new Rhopressa prescribers since may even in the face of having what we consider to be the most efficacious.
Hi, appealing agent on the market.
Okay. Good color. Thank you.
You're welcome.
Your next question comes from our end live <unk> from H.C. Wainwright. Your line is open.
Thanks for the question that has been a lot obviously I just want to follow up on that combination products.
Answer with regards to the reception you're getting for Rocco 10 from some payers.
And it occurred to me that maybe you can confirm if this isn't the case are any payers sort of keeping Rocco 10 like it is in a vacuum and not really thinking about how your the rhopressa guys come in with your second product such that they looking hey, Rockland is just a combination of two drugs that are out there and we have a policy for you know a lot in a long line of companies before you that have tried to do sort of line extensions and convenience play is when we say no on all of those things, where we pushed back pretty hard and are you seeing that and if that is the case in the past that you won't be able to get any premium over rhopressa and some number of plans. Thanks, but really the answer to that really is no that is they nobody's really putting us to a vacuum thinking or are they thinking. This is just like any other combination product and there's really two reasons for that first off. This is the first time they've ever had a company come in and say this product is to stick statistically better I'll be lowering than the.
The top selling product in the United States affect the world Adenovirus right. So this is a whole different playing field for them. The second thing remember their pricing strategy that we took forward with rocket and was the pricing very minimally above rock rhopressa.
So at the end of the day it doesn't really make a material difference from them, whether they are going to use or or reimburse rockland handover process. It's not it's not a monetary issue for them. So because of that there were quite willing to accept where we are with with rock with him.
All right.
Thanks.
That's it.
Thanks.
At this time I would like to turn it back to the Earpiece, Chairman and Chief Executive Officer, Vincent Anderson for any further comments.
Thanks.
Well, thank everybody for joining us. This afternoon, we try to give you some clarity about why we made the guidance changes et cetera, and hopefully we've achieved that.
And more importantly, however.
Oh, you're walking away from the call trial and with a clear understanding about how we feel about the long term prospects for both these products your press in rocket and there's nothing that we have seen in the marketplace. It it gives us any pause at all to continue.
No I wouldn't want to.
We continue to make is bullish about.
The future for both of these products.
Everything that we're seeing is Ah.
<unk> is positive for the patient and Doctor interaction point of view. This is all about two things number one making sure that we get an of managed care coverage and as we pointed to in the past trying to get to about 75% Medicare part D. 90% commercial is really sort of the trigger where just about every doctor out there can ride either product.
Refresher rocket and do their hearts content per specific patient needs and that's what we're trying to strive for number two is until we get there. We are seeing an awful lot of churn in the practices and and that's what's taking an awful lot of time to finally get those prescriptions out to show or <unk> into the retail market et cetera, but the good news is that we are making those that progress. We are getting the managed care wins and are coming in so hopefully overtime, the churn will decrease and in not too distant future. We're starting a.
The physician practices around the country find a the two homes for both Rhopressa and Roclatan.
So and while that's not the entire story of the company certainly that's where we wanted to focus today and hopefully weve answered everybody's question. So so again I want to thank everybody for listening in and sorry that we ran a little bit long today, but have a good evening. Thanks.
Ladies and gentlemen. This concludes today's conference. Thank you for participation and have a wonderful evening you may all disconnect.
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