Q2 2019 Earnings Call
Good afternoon.
This is Scott Young Vice President for corporate Communications and Investor Relations.
Before we begin I would call your attention to the metric slide that we will discuss in today's presentation.
Those slides can be viewed directly via the webcast in the 8-K, we issued this afternoon under the investors tab on our website flexion Therapeutics Dotcom. In addition, our Q2 earnings press release and an archive of this conference call can also be found there.
Today's call will be led by Flexions, Chief Executive Officer, Dr., Michael Clayman, and he is joined by David Our cohorts Flexions Chief Financial Officer.
On todays teleconference, we will be making forward looking statements that include commercial financial clinical and regulatory projections statements related to future financial or business performance conditions or strategies and other business matters, including expectations regarding net sales operating expenses cash utilization clinical regulatory and commercial developments and anticipated milestones are forward looking statements within the meaning of the private Securities Litigation Reform Act.
Flexion cautions that these forward looking statements are subject to various assumptions risks and uncertainties, which change over time.
Additional information on the factors and risks that could affect flexions business financial conditions and results of operations are contained inflections Form 10-Q for the quarter ended June Thirtyth 2019 filed with the SEC today and other filings, which are available at www Dot FCC dot Gov as well as Flexions website.
These forward looking statements speak only as of the date of this call and flexion assumes no duty to update such statements.
I will now turn the call over to Flexions CEO , Mike Clayman.
Thanks, Scott and thank you all for joining the call. It's my pleasure to provide an update on flexion second quarter business performance today, I'll summarize already its progress in the market discuss our recent regulatory and clinical activities and then provide an update on FX tool one our preclinical gene therapy program for osteoarthritis.
After that I will turn it over to David who will review our latest commercial metrics and our second quarter financial results and provide some color on the debt financing, we announced in our press release and in our 10-Q.
Following Davids update we will open the line and take questions.
To begin we recorded Zilretta net sales of $17 million in the second quarter, which represents growth of 16% over the first quarter were very pleased by this performance and are reaffirming our revenue guidance of $65 million to $80 million for full year 2019.
We believe that the second quarter marked an important step in the evolution of the commercialization of Zilretta and we attribute these results to three main drivers.
Organizational changes we have implemented over the past several months.
Traction we are gaining from the permanent J code and the positively reinforcing clinical experiences patients and prescribers are having with the product.
While I'm pleased to say that performance across each area of flexion was strong clearly our sales team and in fact, our entire commercial organization deserves special recognition for their work in Q2.
As David will discuss in detail the momentum in the field continues to build with respect to increasing utilization of zilretta in existing accounts and in the second quarter alone. We saw nearly 500, new accounts order zilretta, while we still have much work ahead of US. We believe these metrics bode well for both the near and long term prospects for Zilretta inflection.
Regarding our search for a chief commercial officer I can report that there is substantial interest in the role the search is progressing well and we will hire the right person at the very earliest feasible time.
Moving to Zilretta is label, we continue to have productive conversations with the FDA regarding our supplemental NDA to remove the limitation of use statement.
While we cannot make any assurances based on the strength of the data from our repeat administration trial, we remain optimistic about a positive FDA decision by our PDUFA date of October 14.
Next I'd like to discuss our clinical development activities on our last call. We mentioned that we paused enrollment in the phase III trial of Zilretta in hip OA pain due to a non safety related issue, which resulted in the inability to deliver a full dose in a small number of trial participants based on laboratory simulations. We've developed a working hypothesis about the root cause of the issue and we are now testing solutions informed by those insights in a small clinical study.
Pending positive data from that study, we expect to resume registration trial enrollment in the fourth quarter.
In addition, we remain on track to initiate a phase two trial before the end of the year, which will investigate the safety and efficacy of Zilretta in shoulder away and in adhesive Capsulitis also known as frozen shoulder.
In July we presented new findings from a post hoc analysis of the repeat administration trial of Zilretta in patients with Neo a at the American Orthopedic Society of sports Medicine.
This evaluated the efficacy of initial and repeated administration of Zilretta in patients with symptomatic neo a ranging in radiographic severity from Calgary, and Lawrence or Kal grades two to four.
Tail grade four is the most advanced form of Neo way is often referred to as bone on bone and had not been studied in zilretta clinical trials previously.
The analysis demonstrated that zilretta consistently and substantially reduced to only mean pain for at least 12 weeks after each injection in patients with tail grade for disease and that this was comparable to that seen in patients with kale grades two and three.
This is particularly encouraging as one might intuitively expect patients with tail grade for law to be less responsive due to the advanced state of their disease.
The incidents of treatment emergent adverse events were similar across all kale grades and the most commonly reported adverse events were consistent with those reported in previous clinical trials in Zilretta.
As for new scientific publications in May the results from a pooled analysis of data from three phase two three randomized clinical trials on the use of rescue medications with Zilretta were published in the peer reviewed journal pain in therapy.
The analysis showed that the overall number of rescue medication tablets used per day through week 24 was significantly less for zilretta compared to both sealing placebo and immediate release triamcinolone Acetonide crystal and suspension.
Regarding our pipeline, we are making excellent progress with FX to a one a locally administered gene therapy product candidate for all eight and remain on track for filing an eye candy and initiating a clinical study this year.
During the second quarter, we manufactured GMP clinical trial material and completed I end DNA willing Nonclinical studies, including GLP toxicology, Biodistribution and pharmacology studies.
Based on those results, we've established a potentially safe and efficacious starting dose for initial clinical testing.
Further we have demonstrated efficacy in terms of both symptomatic and structural effects across multiple animal species. Additionally in June the us PTCL issued a new patent which covers the composition of matter and method of use of FX to all one in the treatment of all a with a term through January of 2033, while we have great enthusiasm for FX to a one and we will continue to look for other opportunities to expand our pipeline. It is important to emphasize that the vast majority of our resources and investments are and will continue to be focused on zilretta.
I'll now turn it over to David but before I do I'd just like to note that we are pleased with the new debt financing that will discuss in more detail.
This provides up to $60 million in non dilutive funds to support our business operations and R&D activities.
Thank you, Mike I'll start by walking through our commercial metrics, which as Scott mentioned can be found on our web site and in the 8-K, we issued today I will then briefly cover the second quarter financials and provide further details on the new debt financing, which Mike mentioned.
So let me direct you to slide two which includes several key metrics that provide important context on the progress of Zilretta is a launch.
On the last call I explained that we expect the number of accounts, which we target to continue to increase over time as our sales reps and broaden their reach.
And as of the end of the second quarter, we have grown our target accounts to approximately 4400.
As of June 32733 accounts had purchased Zilretta, which is up from 20 247 purchasing accounts as of the end of the first quarter.
With respect to Reorders as of June 30.
2004 accounts for 73% of purchasing accounts had reordered zilretta at least want which is up from 1600, one accounts that place reorders by the end of the first quarter.
This is highly encouraging as it demonstrates that nearly three out of every four purchasing accounts have had more than an initial experience with the product, especially when one considers that our customer base continues to grow significantly.
Moving to slide three this graph provides our quarterly sales since launch and here you can see the impressive growth that we experienced in the second quarter.
Our 17 million in net sales in the second quarter represents sequential growth of 60% over the prior quarter.
Switching to slide four this slide and the remaining two slides reflect purchases of the wrapped up by accounts, which represent physician practices clinics and hospitals of various sizes and purchasing potential.
Here, we've provided the distribution of accounts that have purchased Zilretta since launch with account broken out into one of three groups. Those that have purchased one to 10 units.
Purchased 11 to 50 units purchased more than 50 units.
As you can see the majority of the approximately 2700 accounts that have purchased Zilretta have bought one to 10 units. This represents a strong and growing base as new accounts generally start in this group a small initial orders and then their purchasing increases in both frequency and size as they observe the clinical benefits of zilretta and experienced reliable and consistent reimbursement.
In addition.
As of the end of the second quarter. There were 461 accounts that had purchased more than 50 units.
This group is up by about 150 accounts or approximately 50% over the first quarter.
And while we are very pleased with this progression.
Even for these accounts, whom we characterize as early adopters. We believe there is substantial further opportunity to fully incorporate zilretta into their practices.
Moving to slide five.
You can clearly see the significance of these early adopting accounts on the total purchases of Zilretta to date.
While the total number of accounts that have purchased more than 50 units is 461, which is about 17% of the total purchasing accounts.
These accounts purchased approximately 63000 units or roughly 70% of all purchases since launch.
As we have mentioned previously accounts generally move along this zilretta utilization continue on from one to 10 units to 11 to 50 units and then to more than 50 units, which highlights the potential for significant sales from our current customer base of approximately 2700 purchasing account.
We expect our customer base will continue to grow as we add new accounts and on slide six you can see how the zilretta purchasing breaks out by new and existing accounts.
We continue to grow our base in a meaningful way with 400 to 500, new accounts coming onboard every quarter.
While we expect this will eventually slowdown it indicates the success, we have had and continue to grow our customer base and further bolsters our confidence that iretta can become the leading branded intra articular therapy for away knee pain.
So now let me briefly walk through the second quarter financial results, which we included in the press release issued this afternoon and in our 10-Q.
We reported net sales of Zilretta for the second quarter of 2019 of $17 million compared to net sales of $3.8 million for the second quarter of 2018.
The cost of sales was $1.4 million and point $9 million for the second quarter of 2019 and 2018, respectively.
The net loss was $36.5 million for the second quarter of 2019 compared to a net loss of $43.9 million for the same period of 2018.
The second quarter 2019, net sales reflect a gross to net reduction of 8%. The gross to net reduction is primarily comprised of distributor fees returns reserve and mandatory government discounts and rebates such as Medicaid 340, B. institutions, and Veterans administration and department of Defense.
Research and development expenses were $16.1 million and $13.1 million for the three months ended June 32019, and 2018, respectively.
The increase in research and development expenses of $3 million was primarily due to an increase of $1.2 million in salary and other employee related cost for additional head count and stock compensation expense as well as a 1.5 million increase in preclinical expenses related to our portfolio expansion activities and other program costs and an increase of point Fourmillion in development expenses for Zilretta.
Selling general and administrative expenses were $33.1 million and $31 million for the three months ended June 32019, and 2018, respectively.
Selling expenses were 24.8 million and $22.7 million for the three months ended June 32019, and 2018, respectively.
The year over year increase in selling expenses of $2.1 million was primarily due to salary and other employee related costs and external cost related to marketing and reimbursement support activities.
General and administrative expenses were $8.3 million for both the three months ended June 32019 and 2018.
Interest income was point $8 million and $1.3 million for the three months ended June 32019, and 2018, respectively.
Interest expense was $3.9 million for both the three months ended June 32019 and 2018.
We expect that our operating expenses will continue to increase primarily driven by commercial activities in support of Zilretta line extension clinical trials for Zilretta continue development of FX to a one and development activities associated with future additions to the pipeline.
As of June 32019, we had approximately $176.6 million in cash cash equivalents and marketable securities compared with 217.8 million as of March 31 2019.
We believe that our current cash balance and the expected proceeds from our new debt financing with the expected future sales of Zilretta and the ongoing prudent management of our expenses will bring us to profitability.
With that said it is important to add that as always we will be opportunistic as it relates to potential funding decisions and we will do what we believe is in the best long term interest of flexion and our shareholders.
Finally, as Mike mentioned, we are pleased to announce that we have secured 60 million in debt financing.
But lenders our Silicon Valley Bank.
Midcap Financial Trust.
And flex point MC LS holdings.
The debt financing is comprised of a 40 million term loan.
Which was fully drawn down at closing and a revolving credit facility secured by our accounts receivable of up to $20 million.
The interest rate on the term loan is the greater of the prime rate, plus 1.5% and 6.5% and the interest rate on the revolver is the greater of the prime rate and 5.5%.
In addition, both facilities mature in January 2024.
Todays financing replaces our 30 million debt facility with Silicon Valley Bank, and Midcap and approximately $8 million of the proceeds from todays financing will pay off the remaining amount owed.
At this point I would ask the operator, please open the line for questions.
Thank you.
That concludes our prepared remarks, we will now open the call for questions.
Ladies and gentlemen at this time, if you would like to ask a question over the phone. Please press Star then one on your telephone keypad.
My questions have been answered we shall move yourself from the queue similar press the pound key.
And our first question will come from a lot of Randall Stanicky with RBC capital markets. Your line is now open.
Hey, guys. This is Tim buzby on for Randall.
I have a couple of questions on Zilretta to start and then a follow up on FX to a one.
But first on Zilretta.
Clearly, making progress, bringing new accounts on board, but for those accounts that have yet to purchase still red can you describe the primary factors preventing them from doing so.
Second it might still be a bit early but do you have any qualitative or quantitative feedback that you can share your DTC efforts today.
More broadly speaking how important is patient advocacy in the neo a market.
Yes, all good questions and related to accounts that have yet to order zilretta.
I think it's a question of continued exposure.
Of physicians in those practices to the data.
Gaining experience through samples or commercial product to have that first experience and I think what you see from the metrics is at once there is a requisite experience with this product.
The experience drives further adoption.
And so we're continuing to find ways to get product to ordering accounts and increase their familiarity worked with leading physicians at those accounts and we're continuing to be bullish about our prospects going forward.
The fact that we added 500 accounts. This quarter suggests that in fact that progress is real as it relates to the DTC, we are not going to.
Speak about the data from those at this point, we may at some point in the future, but not now and then.
Patients in terms of pay patient, we believe patient advocacy is an important element.
In the ultimate success story of Zilretta and realizing our full potential we are devoting substantial resources to patient advocacy and I would say stay tuned because.
There may be an opportunity to do even more there.
Okay. That's helpful and just two part follow up on FX to Alon.
Part one assuming it moves into the clinic later this year can you give us a sense of the patient profile that you're likely to target for that.
And then part two I think when a lot of people here gene therapy, they think expensive.
So from an R&D perspective, this is probably a good one for David but how should we think about the costs associated with the phase one and subsequent trials over the next couple of years, assuming that program moves forward.
Well I'll, just I'll I'll start and David can add as you would like.
Where we're targeting patients with moderate to severe neo aid to begin with and we.
Have every intention of considering the potential refinement to that population, but to begin with we want to define.
Signal in that patient population in terms of pain relief and potential potentially disease modification as it relates to expense, we totally get what you are saying people hear the phrase gene therapy and assume.
Very very large price tags for those products one of the beauties of FX to a one.
Is that its injected locally into the knee.
And in a volume of five M., ALS, which is roughly roughly the knee volume. It does not take much protein to achieve the therapeutic concentration and as a result, the viral particle.
Dose that is required to do that we expect and we will have to show this will be literally orders of magnitude below.
What would be required with systemic therapy.
And as a result.
The Cogs associated with producing relevant doses are going to be substantially less than from any other therapies.
And the driver to the expense of clinical trials in this space is predominantly Cogs drivers.
And as a result, we believe that we can cost effectively develop.
FX to a one to the point of proof of concept and beyond.
Great Thats helpful. Thank you.
Yep.
Thank you and our next question will come from Gary Nachman with BMO capital markets. Your line is now open.
Hi, good evening its rothsay on for Gary.
What drove the strong gross margin in the quarter and how sustainable is that.
Sorry say that again.
What drove the strong gross margin in the quarter and how sustainable is that.
Yes. So this is this is David so yes as you noted we had a gross margin of 92%.
In this quarter that compares to the prior quarter when it was 83%.
We've been I think we've been very clear that there is inherent variability in our cost of sales as it's still relatively early days from a manufacturing standpoint.
Once we reach manufacturing steady state than than we think we're going to have consistent gross margins in the 90% range. So you will continue we will continue to experience some variability in the in the ensuing quarters until we achieve that steady state.
Thanks can you talk about what the sales force and commercial organization may be doing differently. If anything following some of the changes in the commercial leadership.
Sorry, sorry changes that the commercial team has implemented since the organizational changes.
Well, so I'd say that there are a number of different things that we're doing as it relates to the commercial organization.
We've talked about a number of them.
And I think we've actually cited them in in the script.
First of all it starts with people and I think we've done a very nice job in this the sales leadership in particular has done a nice job of ensuring we have the very best people in place to accomplish the strongest goals and I think that that's reflected in our.
Our sales numbers I think some of the things that David just has talked about in the script, including the ability for our.
Salespeople are mgms to take orders directly.
Helps facilitate things.
And the use of contracting with.
Group purchasing organizations, we think have the potential to.
Generate valuable data that can advantage us in the further.
Growth of Zilretta.
Great. Thanks, so much.
Yep.
Thank you and just as a reminder, ladies and gentlemen to ask the question over the phone that is star and then one on your telephone keypad.
Our next question will come from Elliot Wilbur with Raymond James Your line is now open.
Hey, it's really over.
Well there.
Couple of questions.
But here Mike just any.
Updates on the.
Moving forward.
The shoulder adhesive capsulitis.
Always studies just in terms of timing and then thinking about those studies in terms of the.
Those in profile of the product based on what occurred with hip away and what you may have learned from those studies any.
It's around changing either relative strength.
Concentration or viscosity of.
The product based on.
Some of the data that.
From.
The earlier studies in this indication you yeah. So first of all we are on track to start the shoulder studies in a way and adhesive capsulitis before the end of the year.
And I would say that the experience in the ship study the shoulder and hip.
Injection study that was really a PK study suggested in a small number of patients that one could inject the shoulder without difficulty and in the hip we did see a couple of examples of what we saw in the registration trial, we ascribe them to.
The subscriber ascribed those.
His situations too.
Inadequate dose preparation at the site level and if subsequently learned that it's it's more than that for the hip and Thats why we had to go to the lab simulations and ultimately do a small clinical study to convince ourselves that there is there is that injection approach that will allow routinely administer administration of the full dose we saw no problems in the shoulder in the ship study.
And we believe that fundamentally the anatomy of the shoulder lends itself to more straightforward injection than the anatomy of the hip.
So and so there is no plan to change the dose we will inject our intent and the protocols Hum dictates that we will.
Inject a full 32 milligram dose of Zilretta in shoulder for both.
Adhesive capsulitis in osteoarthritis.
Okay. Thanks, and just a couple of follow up questions around.
Commercial activities with respect to the.
Increase in targeted accounts I think it was roughly 300.
This period.
Any anecdotal feedback you can provide in terms of just sort of the.
Relative success or win percentage.
These newer accounts.
Whether it's bad.
It's been easier just based on.
Mark experienced to date, but anything you could share there in terms of.
Success at these particular accounts will be helpful.
Yes, I would say.
It's a good question I think the reasonable expectation is our ability to penetrate accounts generally is the same as our ability to penetrate new accounts and.
At least some of those 500, new accounts, new newly penetrated accounts came from.
The expansion of the base of total accounts.
I would just add I mean, I think also it's important to look at the increase in the number of accounts that have purchased more than 50 units from from.
Q1 to Q2, it's been almost been approximately a 50% increase.
On top of that the number of units on average at those accounts in that 50 units or more bucket.
Have purchased increased from 120 units to 136 units in the second quarter. So we're seeing both an increase in.
Higher purchasing accounts and the number of those accounts and their utilization in the second quarter, which is which is.
Well about that.
Thanks, I wanted to ask you one follow up question around that David is well I know this is probably.
Difficult.
Data point to actually get your hands on but with respect to these.
Hi prescribing.
Accounts or practices any sense of what.
This penetration is in terms of there.
Total overall.
PC utilization.
Yes, I mean without getting into a lot of granularity we feel that for the vast majority.
Of those 461 accounts that have purchased.
50 units or more we are we are still just scratching the surface, we still have opportunities for greater adoption among additional physicians in the accounts and then across a broader set of patient types. So we do think there is tremendous opportunity even with those.
And there's there's a handful of them that have utilized more than 500 units to date. So there's there's just a lot of room to run even with that even with that existing 461 accounts.
Thank you and our next question will come from the line of Patrick to Chico would burn capital markets. Your line is now open.
Hi, Good afternoon. This is actually Iris long on for Patrick Trucchio can you tell us what the working hypothesis is regarding the issue into phase three hip OA pain study and then secondly have you discussed this hypothesis with the F.D. and if so can you share with us any of the feedback you've received and then I have a couple follow up questions. Thanks, Yeah. So we're not getting into detail about the working hypothesis I just simply state that the laboratory simulations allowed us to understand.
The relationship to injection in the hip the anatomy of a hip and.
Material, that's being injected in a way that allowed us to fashion.
The very slightly revised injection procedure that we think has the potential to solve the problem because there was no safety issue associated with.
This inability to deliver a full dose and a handful of patients there was no need for FDA interaction.
Okay also regarding the only have trial, how soon would you expect enrollment to complete assuming that were students on schedule in Q4, and secondly, when should we anticipate topline data and submission of supplement and then finally can you explain to us the payer dynamics with the only had label expansion as in what you need a separate J code for we had with the existing J code cover this indication. This law. Thank you.
Yes, so as we mentioned earlier in the Q and a.
We are going to take.
The hip study kinetics step wise, let's first be sure we have confidence that we can inject a full dose at that point and we're not giving a timeline for that.
But at that point, we will re initiate the registration trial and it depends on when we re initiate the registration trial, which we expect we could be doing in the fourth quarter.
We'd be in a better position to guide to win when it's reasonable to expect data as it relates to the permanent J code, we fully expect that the permanent J code for Neo way will apply for hip away.
Okay. Thank you.
Thank you. Our next question will come five surrogate bellinger with Needham and company. Your line is now open.
Hi, guys. This is serge.
First question on this quarter's sales.
Obviously, a big jump from from the first quarter can you just talk about the monthly progression through the second quarter and.
I don't know if you want to talk about July sales, but maybe just.
Give us some color on whether we should expect some seasonality over the summer months.
Yeah, we're not.
Serge we're very we're very pleased with the progress throughout the quarter.
We're not going to continually talk about quarter over quarter sales.
We're not going to talk about July sales, because we talked about April sales by exception at a time when it was important to.
Reveal what was a very healthy month.
As as we followed that first quarter sales to give our investors.
Full confidence and in fact, we were headed in good direction, we don't feel the need to do that and we don't think frankly, its good corporate hygiene to be guiding to month by month sales.
And I'll stop there.
Seasonality.
Seasonality sorry.
I can take that yes. Please yes, so so surge as you can appreciate.
So rather sales are increasing we anticipate quarter over quarter growth throughout the year.
And.
But it's not unreasonable to look at that.
To look at other intra articular products in terms of how they track through the course of the year.
So if you look at the historical hyaluronic acid data.
You see that their weakest sales quarters are the first quarter and the third quarter again, we're in a different place, but thats just some additional context.
Okay. Thanks.
And then on the in terms of formulary coverage has there been any significant changes.
Over the last couple of quarters and.
I think you had previously discussed contracting has there been any.
Progress there.
Yes, yes, I would simply say as it relates to coverage. The coverage continues to be excellent Medicare 100% private commercial insurance is between 95 and 100%. So we're very pleased with that I'll, let David answer the question on contract, yes, so with respect to contracting.
That relates to agreements such as purchase arrangements with Gpos. For example, as you can appreciate we're not going to get into specifics on that.
It is something that we did.
Initiate embarked upon once we had the J code earlier this year. So it's still relatively early days with respect to contracts and we put in place and appreciate and we're not going to break out sales in any detail related to contracts, but it will be an important component tactic on a go forward basis.
Okay.
And then sorry, one last follow up on sampling and they're going to pass you've talked about.
10%.
Sampling represented about 10% of the purchased units.
Where's that number kind of resigned now.
Yeah. So so yes, we appreciate that we shared that information in the slides last quarter. We didnt. This time, because its we expect it to be pretty consistent quarter over quarter.
And in fact sampling for Q2 was in the 5% to 10% range of of purchases and we expect it to be in that range on a go forward basis also I'd just add that our philosophy around sampling is the same where we can make a sale we're going to make the sale.
And we're going to use samples to facilitate adoption or utilization.
Okay all right. Thank you.
Thank you.
Thank you. Our next question will come from the line of Frank first voice with Laidlaw. Your line is now open.
Hi, guys. Thanks for taking the questions congrats on the quarter just a couple here.
You talked about a lot of the metrics just now the sampling surge and Elliot, but I was wondering from your perspective.
This is a good base set of metrics at this at this juncture as you indicated and as we indicated we dropped sampling because we didnt feel like it added a whole lot of value at this juncture, we will undoubtedly think about the different groupings of purchases. So expect that we will we will change the breakpoints.
Going forward and in all fairness, we'll reevaluate the metrics on a on a regular basis. So if we feel like Theres limited utility and including particular metrics down the road because there's.
Theres nothing meaningful coming out of it we'll modify accordingly, but we feel good about the metrics that we have right now.
Okay, Great and I was just wondering if.
Sure a couple of years of launch here I remember the average injections for patients with only problems was about 1.5 injections a year, which is interesting for the amount of time that drug actually works.
Are you guys seeing any change in that are you expecting this 1.5 to actually increase.
Yes, it's difficult to say, Frank but I think that it's it is fair to say that once the limitation of use is removed we will be able to understand.
Reinjection in a clearer way than we can now.
The.
Just to provide a frame that one and a half injections per year.
In the immediate release teary population realize that 60% of those patients are won and done so the one and a half injections are concentrated in the 40% of patients who have satisfactory response in terms of magnitude and duration.
It would not be logical to expect that was already providing.
Better and longer pain relief that the incentive to be injected a second time would be higher.
And I think that it just remains to be seen exactly how that plays out but we won't have a fair appraisal of that until the limitation of use is removed.
Understood. Okay makes sense and then lastly, just in your search for the New Chief Commercial Officer are you looking.
As one of the checkbox to look for someone with ex us experience or should we more expect kind of a partnership or I guess, how long does this launch goals for us to start thinking about the potential outside the U.S.
Well I would say this Frank what's top of mind for US is an outstanding commercial leader who's done it who's been successful and.
Leads with U.S. experience. This is the us launch for the time being at least.
We believe the potential for this product is enormous in the us.
And so what's top of mind for US is finding the best leader who's been successful with with US launches, we would not in any way preclude the potential for going outside the us at the right time top of mind for US, though is the U.S.
All right. Thank you that's it for me.
Thank you.
Thank you there are no additional questions.
Well, thanks, very much everybody for your time and attention appreciate the good questions and we look forward to reporting back to you or our third quarter results in sometime in November take care.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program and we may all disconnect everybody have a wonderful day.