Q2 2019 Earnings Call
Welcome to the Paratek Pharmaceuticals second quarter 2019 earnings call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions to join the question can you hear me Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star and zero I would now like to turn the conference over to Mr., Ben screen, Vice President of Investor Relations and corporate Communications. Please go ahead.
Good afternoon, and welcome to Parateks second quarter, 2019 earnings and corporate update conference call a press release with the Companys second quarter results was issued earlier today and we have also posted slides on our website that will be referred to on this call. Both can be found at www Paratek pharma dot com.
Participants on today's call are Michael become executive Chairman, Evan Loh CEO .
Adam Woodrow President and Chief commercial Officer, and Randy Brenner, Chief Development, and regulatory Officer, Sarit Higgins, Oh, Vice President of Finance controller, and principal accounting officer will also be available for questions.
Before I hand, the call over to Michael I would also like to point out that we'll be making forward looking statements, which are based on current expectations and beliefs. These days statements are subject to certain risks and uncertainties and actual results may differ materially.
I encourage you to consult the risk factors discussed in our SEC filings for additional detail Michael.
Thank you Ben.
Good afternoon, and thank you all for joining our second quarter 2019 earnings call and corporate update.
We are encouraged with the progress we made in the second quarter advancing their commercial launch and these are in the United States.
In parallel we have continued to make strong progress towards several important milestone events expected throughout the balance of this year.
Evan and Adam will highlight our performance and upcoming milestones in greater detail.
We believe the performance of desire as seen in the first five months on the market represents the initial foundation for the continued future growth of this franchise product.
And we are encouraged by our early achievement.
[noise] essential elements for future growth are being carefully and methodically established.
Before I hand, the call over to Evan I would like to highlight some of the recent leadership changes we announced in late June .
As many of you are aware.
Having a low was promoted to CEO .
I would like to thank Kevin for his steadfast service and constantly professionalism over the many years he has devoted to paratek.
He has worked in close partnership with me. These past five years as Paratek was built from a small private development stage company.
Into a leading public antibiotics company with two approved antibiotics news IRA and say Sarah.
In connection with this announcement Adam Woodrow has also been promoted to president and will retain his current chief commercial officer title, while Randy Brenner has been promoted to chief development and regulatory officer.
Each of these three proven pharmaceutical executives has been responsible for the success of many commercialized drugs prior to joining paratek.
Including once working together as a team.
To develop and launch a leading antibiotic in their past.
Paratek isn't very strong hands.
Congratulations Evan.
Adam and Randy.
I look forward to continuing working closely with you to lean paratek into the next phase of its growth.
Evan.
Thank you Michael.
I'm honored to have the opportunity to lead paratek through the next phase of growth.
To continue to further establish paratek as a leader in the anti infective space.
And that the close partnership with Michael will continue to ensure delivery in lockstep with our strategic priorities.
I remain focused on creating significant value for our shareholders, while maintaining a clear focus on our commercialization and lifecycle expansion opportunities for new Xyrem.
Maintaining financial discipline and working closely with Adam to ensure that patients will have access to this potentially lifesaving therapy.
Let me begin with some financial highlights for the quarter.
We generated revenues of $2 million of which $1.7 million was attributable to new Zira net sales.
Our partner Almirall also continues to see success in the U.S. launch say Sarah.
We recorded say Sarah royalty revenues of $300000.
Yes gene <unk> expenses were 20.9 million for the second quarter of 2019 compared to $12.9 million for the same period in 2018.
The increase was primarily the result of the addition of a contract salesforce.
Higher marketing trade and distribution fees.
And additional costs in support of the commercialization of new Xyrem.
R&D expenses were $10.7 million for the quarter.
In 2019 compared to $14.8 million for the same period in 2018.
This decrease was primarily the result of the capitalization of use IRA commercial supply cost, which were partially offset by higher clinical study costs associated with our phase two yutai program.
We continue to remain disciplined from an opex perspective.
Balanced against investments in areas, we believe will create long term shareholder value.
We ended the quarter with $252.3 million in cash cash equivalents and marketable securities.
We expect a strong cash position will fund the company's operating expenses capital expenditures and debt service.
Beyond the first quarter of 2021.
From a commercial perspective, the U.S. launch of desire continues to progress well.
We saw a significant increase in demand.
Continued success in securing institutional and payer access.
And positive momentum in awareness metrics across our targeted prescribers.
For example, as a metric for progress and payer access at the end of the second quarter.
Approximately 50% of commercializing the U.S. now have access to new Xyrem.
And approximately 60%.
Of the 400 plus institutions, we are targeting now have institutional access.
We've also continued extensive and coordinated efforts across the commercial and medical organizations educating prescribers on the potential benefits of new Zira and building awareness.
As a result of these efforts.
Market research suggests aided awareness within our target prescribers has increased from 27% at launch to greater than 50% today.
These metrics tell us that we are making progress in establishing the foundation necessary for future commercial growth.
We believe that these leading indicators bode well for the future commercial success and desire.
Now turning to our guidance.
We are maintaining our previously provided guidance range of 10 to 13 million for 2019, New Zira net sales.
Our guidance assumes appreciable acceleration in net product revenue growth in the second half of 2019.
We believe this acceleration will be partially driven by recent initiatives, including increasing the size of the field force to approximately 60 sales representatives in time for the fall fluid pneumonia season.
Further expanding institutional access within our group of 400 plus targeted hospitals.
And securing one or more contract specific to certain governmental organizations.
We expect the full impact of these initiatives to be evident in the latter half of this year and extends into 2020 and beyond.
The timing of and results from these initiatives could cause actual results to vary from this guidance.
I would now like to turn the call over to Adam to review the commercial performance in greater detail Adam.
Thanks Evan.
The U.S. launch of news our continues to progress well and we are encouraged by this by several early leading indicators as seen in the first five months on the market.
We are particularly encouraged by the strong early interest in our once daily oral formulation.
We also believe we are setting the stage for significant sustained growth in usage in the years ahead.
In fact, the news on that launch has outperformed other more recent antibiotic launches over a similar timeframe on the markets.
And this is a testament to the strong product attributes and profile of news item.
As the first once daily or an Ivy broad spectrum antibiotic has been approved and maybe 20 years.
We believe that news IRA has the opportunity to address important unmet needs in the empiric treatment, both community acquired skin infections and community acquired pneumonia.
Whilst also addressing antibiotic resistant pathogens, which are causing five years with the older generic antibiotics.
In addition.
We believe that news on a safety and Tolerability profile provides a much needed alternative to existing antibiotic regimens such as the quinolones because of growing safety concerns is that hasn't been highlighted in that black spot black box warnings.
These honors key attributes are resonating with the medical community.
In recent market research over the physicians aware of news Audra approximately 95% have stated an intent to use.
As Evan mentioned USANA generated 1.7 million in net sales in the U.S. in the second quarter.
Compared to 1.3 million same in Q1.
This is an increase of 26% versus the first quarter.
Accounting for inventory.
As far as gross revenue demand increased from approximately 250000 in the first quarter of 2019 to approximately $1.7 million in the second quarter of 2019.
The significant increase.
Successfully use our starts in the hospital with specialists and our initial outreach continues to be directed towards early adopting specialists, including Heidi doctors pulmonologists.
Pardon me folks is the operator, please standby.
Hi is.
Over 50% of commercial lives in the U.S. now have access to new Xyrem.
We have also started to observe strong improvements with the government payers.
Such that we have achieved close to 50% access in Medicaid.
On July 1st.
Yes, I will drop was granted pass through status and received a unique C code, which helps facilitate utilization of news Iris Ivy formulation in the hospital outpatient setting.
You May have also noticed the news ARIA was recently granted a J code, which will be effective October 1st.
This is a full quarter earlier than the current coating cycle.
The J code is particularly important for reimbursement in all settings of care for the IB formulation.
As expected.
There are a number of institutions that have deferred using use our IP until these codes were available.
We believe that receiving these codes, particularly the J code earlier than anticipated.
We will eliminate one of the more problematic hurdles all new Ivy antibiotics encounter early in the launch.
Based on our early launch experience, we have recently activated at judicious expansion of the sales force to increase our geographical footprint.
We anticipate adding and training approximately 30 additional customer facing professionals with 20 of those being sales representatives in preparation for the upcoming influenza pneumonia season.
We are energized by our progress to date.
We believe we're on the right path with news RF and are well positioned for long term commercial success.
We look forward to reporting on our progress in the quarters ahead.
And with that I'd like to turn the call back over to Evan.
Thanks, Adam.
As we look towards the balance of this year, we have several important potential value drivers, which we believe should enhance value for shareholders.
We continue to pursue several compelling lifecycle opportunities for new desire to further broaden the potential news IRA to reach into new and clinically important patient segments, including oral only pneumonia.
Yutai, both complicated an uncomplicated subsets.
Along with encouraging progress with regards to potential partnerships with the department of defense.
Further we have submitted a proposal to BARDA in response to its recent project Bioshield request for proposal or RFP aimed at developing novel technologies focused on bio threat pathogens, such as anthrax and plague.
Our clinical program to evaluate the efficacy and safety of Madison likely to three years tract infections remains on track.
During tract infections are one of the most commonly diagnosed bacterial infections with approximately.
30 million scripts written per year in the us alone.
The rising resistant rates seen with the quinolone class.
Along with their attendant safety concerns as reflected in extensive black box warnings.
Have left treating physicians with a limited pool of viable treatment options to treat yutai.
In short there is a large and growing unmet need for a new broad spectrum, well tolerated oral antibiotic.
There is a compelling rationale for the potential use of the most likely to treat urinary tract infections based upon the high levels of the drug present in human urine.
Combined with its known in vitro activity against key Yutai pathogens.
One of our two ongoing phase two trials is designed to evaluate an oral only emas lagging treatment regimen in patients with uncomplicated urinary tract infections.
The second of our ongoing phase two studies is designed to evaluate the potential efficacy and safety of oral and intravenous amount is likely for the treatment of acute pyelonephritis, a common subset of complicated urinary tract infections.
These studies are designed to provide the data we need to determine how best to position a matter cycling in these underserved indications and to inform us on potential future registration paths for new Xyrem.
I am pleased to be able to report that both of these studies are now fully enrolled.
And we look forward to sharing topline data with you in the fourth quarter of this year.
We have also agreed on a path forward with the FDA to evaluate an oral only dosing regimen for new Zira in community acquired bacterial pneumonia.
The study is designed to demonstrate that our oral only dosing regimen will be comparable.
To the PK of our proven Ivy followed by oral dosing regimen in patients with pneumonia.
The FDA has requested PK profiles from approximately 20.
Cap patients to support the approval of this labeling language.
We anticipate that this study will initiate in the fourth quarter of this year.
And based upon the small size of the required trial, we anticipate a submission and potential approval for this new pathology in time for the 2020 influenza pneumonia season.
Outside the us our marketing authorization application or MAA with the EU format assignment remains under review.
In Europe , our 10 year market exclusivity for new desire in the EU begins with the first approval.
Therefore, ensuring approval of both the skin and pneumonia indications at the same time remains our priority to maximize the value of news IRA upon you launch.
As you May recall he guidance traditionally requires two phase III studies per indication for approval.
Based upon recent discussions with our assigned rapporteur and co rapporteur. They continue to suggest that a second pneumonia trial may be required for a cap approval.
While the review continues through the second half of the year, we will continue to provide further justification on the unmet need for new.
Pneumonia agents in the EU as well as how we believe that our existing program of three successful pivotal trials supports approval for both indications.
If the ultimate CH MP recommendation is to approve only a skin indication.
We will likely withdraw our application to preserve our exclusivity and wait for the completion of the US post marketing requirement pneumonia trial, thus, allowing for both indications to be approved in the EU concurrently.
As you know from our historical commentary the EU. The EU represents only a modest market opportunity compared to the U.S.
Our goal to partner in the EU once both indications are approved remains unchanged.
Early this summer we also submitted a response to an RFP issued from BARDA for project Bioshield.
The intensive project last year this to provide government funding to support the required late stage development activities needed for FDA approval of a break bio threat indication and for the purchase of the selected therapeutics for the strategic National stockpile in advance of the Biothrax indication.
In addition to these base awards the BARDA Bio Shield program May also provide funding for supplemental clinical program efforts related to any FDIC post marketing requirements.
The mandatory criteria to be considered for an award include first an asset that is either late stage in development for a gnomonic indication or approved within Gnomonic indication.
Second.
Proven or promising activity against resistant pathogens and known Pap bio threat pathogens.
And lastly, a developed and established supply chain.
Based upon the approved label for new desire in pneumonia combined with the promising in vitro and in vivo animal data against select Biothrax pathogens already in hand.
We believe the new Zira is well positioned to compete for funding from this program.
We expect that a decision regarding any such award will be made this year.
We're also encouraged by recent progress in Washington.
With respect to how antibiotics are reimbursed the disarm act of 2019 with bipartisan support was recently introduced to the house is intended to alleviate many of the reimbursement challenges that are disadvantaged the anti infective space by decoupling the payment for antibiotics from the DRG.
This house Bill closely matches a similar bill also known as the Disarm Act, which was introduced in the Senate several months ago also with bipartisan support.
Also this Friday the Ibps final rule from HHS was published with a revised and tap reimbursements scheduled for Q idea antibiotics.
Accompanied by a broad listing of 18, new ICICI ITD 10 codes that was centered around resistance to establish generic antibiotics that will be eligible for augmenting DRG payments.
We're encouraged by this progress and now believe we are closer than ever to meaningful payment reform for antibiotics.
With that we will open up the floor to questions.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
You will hear its own acknowledging or request.
If you are using a speakerphone.
Please pick up your handset before pressing any Keith.
To withdraw your question. Please press Star then too.
We will pause for a moment as callers join the queue.
The first question comes from Amy for idea of SVB Leerink. Please go ahead.
Hi, This is short and long for Amit. Thank you for taking our questions.
Congratulations on the good quarter, good ensure any colors on the revenue contribution from Ivy and oral formulation for the past two quarters and also the relative contribution from the two indications and also could you also talk about the status of adoption further.
Ian or are those thanks.
So just want to check that.
Got your question correctly, you are asking about the relative distribution between IB oral.
The indications and the third one I couldn't I didn't get.
Third one.
The current status of adoption for Ivy and oral.
Across different types of institutions.
Okay. So firstly ill answer that one first we're pleased with the progress that we might see a call with regard to adoption. We've now got 60% of our targeted institutions that have institutional access and as a reminder, institutional access basically means that the products either on formulary or will they reported although there is a specialty or and I'd cards. So that will allow utilization within the institution.
As regards the.
The split.
Right now, it's probably about 85.
So an oral 15% on TV.
In which is a little bit higher on the auto side than we expected we're seeing really good oral adoption. We're really pleased with it some of that is actually also driven by the fact, we might sell much headway in the outpatient space with regard to reimbursement with the payers because as I've mentioned, we are now seeing sort of 50% of the payers reimbursing.
Not just in the insured, but also in the Medicaid space, that's really starting to have an impact.
In terms of loss prescriptions.
And in terms of the actual indications the vast majority of our 80% of his on label.
It's too early to call out for overall split will be between.
Between the.
The.
The the cap in the skin indications.
Glycol empty box, if you will get a small amount of of off label utilization, which were also getting one final thing I should mention is that.
Whilst that split with regard to the IB enrollees is quite distinct in terms of at this present time is.
Clearly significantly more on the on the auto side.
The coating that we've just seen with regard to the C code and the the J code that will arrive in October will significantly enhance the ability to get reimbursed for the RV side from a hospital perspective.
Thank you.
Our next question comes from Bert Hazlett of BTI Ji. Please go ahead.
Yes. Thank you. Thank you for taking the question congrats on the progress in laying the foundation for future growth.
Just with regard to the the two things first of all the data readout with regard to phase two.
In Europe could you just remind us exactly when we should get the we should get the results and and the details that we will be looking for.
Evan for what would be considered a success in this phase two trial and then.
The government Biodefense contracts again seems to be a relatively new process that you are involved in.
Could you just kind of take us through the step by step what we should be thinking about in terms of awards and then in terms of the if there is an award what size or types of awards that might be granted for instance is there something for R&D reimbursement or would there be potential for direct purchases of new zira. Thank you.
Hey, Bert it's Evan Thank you very much for the questions I think when you look at the to utilize studies were pleased to as we said report that the studies have completed enrollment and it will be in the fourth quarter that we'll be able to share with your topline data from both of those studies I think when we look at the particular endpoints as you recall these were adaptive trials in design.
And we had multiple arms evaluating the full spectrum of dosing regimens.
That.
Will ensure our ability to.
Make sure that we have the right.
The the maximal dose that patients could.
Tolerate to be able to evaluate the the two co primary endpoints, which will be primarily symptom resolution terms of clinical symptoms as well as.
Improvement or amelioration with regards to micro biologic response, and there are certain thresholds that are have been published by the FDA in terms of guidance that we will be looking at so we'll be looking at both of those endpoints and because of the adaptive trial design and because of the robustness of the size of these trials. We think that these will provide very good guidance because with an adaptive trial risk.
Approach.
There will be a uneven randomization primarily to enhance the number of patients actually in the most effective arms and so hopefully those that those numbers will be.
Exciting for us to look at and help guide the path for the future in terms of thinking about how.
We could design a registration path for.
For new desire.
So as far as the.
Project Bioshield this was a.
A program that was announced through their request for information.
Back based on what's publicly available that the RFP is a pub is a a competitive process with potentially up to two awards as they've stated publicly and.
We believe has the potential to be significant for the designated Awardees.
As as Weve noted bird there is.
Three main parts there is the base program that specifically funds for moving it by a threat or approval through the animal rule plus a base procurement of up to 2500 treatment courses for the strategic National Stockpile. If you were to take for example, anthrax as an example, the CDC and Whr recommend a 60 day.
Of course of therapy and ER.
There is extension of that in this in the subsequent four years for up to 75 more than 7500 more.
Full courses that could be added to the strategic national stockpile and as Dave noted and as we had in our prepared remarks that the initial.
Acquisition.
Could be actually acquired prior to the actual approval.
Of the particular indication the second to the.
The second component of this is that there is potential cost sharing.
For FDA.
Required post marketing commitments and.
We think that the.
Given the label that we have with these IRA.
The fact that we have in pneumonic indication and that we have a established supply chain plus as you are aware the published in vivo and in vitro data specifically around.
Animal efficacy in anthrax, I think well positions us to compete for fans awards.
Thank you for the additional clarity appreciate.
Thank you Robert.
The next question comes from Michael Higgins of Ladenburg Thalmann. Please go ahead.
Thanks, Operator, congratulation guys and the early results.
Was hoping give us some insights as to what we've seen so far this year in terms of stocking in Q1 and Q2, how is that affected the reported numbers. Thanks.
So from a stocking perspective, if you think lost last month, I think what lots sorry last quarter.
Last quarter, when we would I had the same question.
About 85% of the.
The the sales were stocking up 15% was true demand.
I think it's fair to say, it's a complete opposite this quarter is closer to 85% true demand with 15% being stocking and that stocking just represents making sure that the.
Fusions and the wholesalers have sufficient supply to keep the adequate stock on hand, because obviously with the growth in demand what you're required to keep a couple of weeks on hand is more stock. So.
We're not surprised to see a bit of a of increased stocking you'll continue to see that with any drug that grows over time, but.
Just to put it into perspective is about 85 15.
Okay Thats very helpful. Thanks, and those early and it's hard to get a sense.
Good where the drug is being used per your comments.
I'm just trying to get a sense currently has there been any respiratory use at this point is it primarily skin.
I would expect some small police will use as you've mentioned.
I was just trying to get a sense so far of of how much uses in skin versus respiratory. Thanks.
Now there is a bit more use in skin remember. This is this the pneumonia skin pneumonia season was very short for us because we came in right on the tail end.
That was in February and we actually changed the focus because we bought two seasonal indications to it.
From sort of around September through March you focused on pneumonia, because that's the sort of influenza and secondary bacterial pneumonia season, and then skin is actually seasonally you see more skin infections in the in the summer.
So we had a very very short crop season. So whilst we are seeing more utilization in in skin and pneumonia, it's not surprising given the season that we ran at this present time, because we were in that skin season is present time and that is also the sort of first line.
Thats actually the first detail that we do at this present time, we switched from from the February to scan because of the seasonality.
And then lastly, the benefits that you pose in the C. diff.
And those that are predisposed to C. diff is that something that we'll find will be more pronounced in the winter season or is that something that's been a benefit so far given your comments of skin as a bit more calm summer. Thanks.
No succeed C. diff is is seasonal it occurs all the time.
If there's so many things that that.
Can.
Affect c. diff in an institution them, if you've got to an institution is going a problem with seat if you will be there with time.
The the fact is the C. diff and the lack of C. difficile associated with tetracycline is in general.
Which obviously is clearly a benefit for us having to date not seen a case of C. diff.
It is a message that resonates with certain institutions, specifically the ones that have.
I have a problem and those are obviously tree elderly to have had multiple courses of antibiotics.
Appreciate it thanks guys.
The next question comes from Jason Gerberry of Bank of America. Please go ahead.
Oh, Hey, good afternoon, guys. This is key on for Jason. Thanks for taking my questions. I guess, the first one would be in terms, how far south spot sales force expansion targeting 16 wrapped by end of 2019.
How should we think about the STN, a 420 twond he and Salesforce size, while it is true and up 2019, and I guess, the second question going back to the split of IP and oral for news IRA.
Are you seeing most of the oral utilized and I thought this charge from inpatient hospital I thought this charge from.
We are all or in a community setting just kind of want to see Q years, given you have such a sizable with distribution to overall are you seeing physicians basically comfortable prescribing this tracking patients on new syrah, even though that they made how happy initiate at our new star I think to begin with thanks.
So in answer to that question. The simple answer is yes, ER physicians are comfortable simply discharging patients on oral without having initially in initiated with an Ivy.
But we're also seeing utilization of our oral in a pure office by system. Some of these physicians that work in those pools at work in the outpatient setting and we're certainly seeing some utilization of nusantara oral in the outpatient setting where there's not been a hospital visit.
You know specifically for from the emergency room.
As regards to the impact on.
The other question you.
You had was around.
As Josh when we think about yeah.
Hi, Moshe with our sales force expansion, while at September 2019, 60, your EPS guidance.
Yes, I mean, clearly from our perspective. The reason we've gone to 60 Representatives is we're doing a focused approach based on where we where we see opportunity and we've taken a very judicious approach to our expansion not just because we don't see the point in expanding into places, where we don't seeing any traction or where we don't anticipate getting traction.
Getting traction, but also to to make sure that we managing our SGN eye on expenses very very closely.
The next question comes from Kevin Kedra of GE Research. Please go ahead.
Hi, Thanks for taking the questions and congratulations Evan on the promotions for the rest of the team maybe going a bit more into the <unk>.
I read a verse oral split first you mentioned the stocking gave good color there, but just wondering if there's a can you give anything on kind of the mix of stocking between the Ivy an oral I mean, given the use that you're seeing in oral I would imagine that.
Stocking might be a little bit higher in the channel right now for the Ivy than for the oral.
And then secondly, also given guy that they use that you're seeing with oral any change to the timelines are thinking about when you might start being more active in promoting this and the community I know the initial plan was to kind of settle up in the hospital for two years, and then expand into the community, but given where you're seeing early use.
Does that change at all.
Hi, Thanks for the question Kevin I got the first thing on the on the stocking you are quite right. There is a slight difference. There's obviously a lot more stocking of the oral then there is the Ivy I mean, the Ivy basically is distributed through three distributors the oral needs to be.
Distributed more broadly and we have a oral available in quite a number of retail settings and as a consequence, it's a larger volume of.
The.
The stocking is in the auto side.
You know, whilst you I don't want people to get too comfortable with the 85 15 split on the oral at this present time in terms of silos, because there's a lot of initiatives most notably the C code and the J code, that's coming that will have an impact on reimbursement and we always knew that some of the institutions certain places where they use Ivy antibiotics wouldn't come on board until they had a assurance of reimbursement and Thats, what the C code and the J code give you which is assurance of reimbursement without the vagaries of the of the payers and as a consequence getting those.
I'm getting the C code as we expected on time and the J code a bit earlier, we actually think that thats going to have a some meaningful difference in terms of the adoption of the IB going forward. So we may see that that sort of ratio of Ivy total change a little bit.
In answer to your question about the the overall utility and the uptake weve seen in the outpatient setting and.
Whether that will have an impact on the.
The company's desire to look at entering into the sort of community space a bit earlier clearly this is something that we are going to review.
You know by the end of this year I suggest that we're going to have such a meaningful access in the outpatient setting that we really do need to look closely at whether we want to focus some of our attention on the outpatient setting, but as you know you know to do that it's likely we are going to need to think about potentially partnership as one of those options.
Hi, Thanks, It's helpful. And then you mentioned the <unk> simple need of doing a second cap study to get European approval. You also have request from the FDA to do a kind of a follow on cap study.
Just to kinda cement the FDA approval, there Oh, there was essentially going to be or is there and the opportunity to kind of roll those into one study and is that built into it was anything like that built into your cash run rate cash runway a projection that you gave in to 2021.
Yeah, So I'll Oh, Kevin Thanks for the questions Evan I'll just answer the cash one more question and maybe I can have Randy talk a little bit more about the cap study design that we're contemplating at this point so the cappy Maher has been contemplated within our runway and.
We feel that given the.
Teekay studied the small PK study that we generally have a path of agreement on with a with the FDA allows us to have a little bit more flexibility with regards to.
The design of the.
Cap him our study and with that maybe I can have a Randy our chief development and regulatory officer speak a little bit to what that might entail.
Sure Yeah, Thanks, Evan so.
Your specific question around the ability to use or if we're required to do a second study in Europe to use the F.D.A. ammonia post marketing requirement to fulfill that need the answer is yes, our intention would be to use the single study to fulfill the need for the second study in Europe as well as the post approval could have we agreed to with the FDA so that would.
That was built into the efficiencies there with regards to the number of studies, we need to run.
With regards to the oral cap study that Evan just mentioned.
The small PK study that we talked about in the prepared remarks.
That is a different study as you as Evan noted a small numbers of patients.
Studies also within our existing cash runway.
That study we plan to start in the fourth quarter of this year.
Because of the small numbers of patients. It is a PK study in pneumonia patient said that ammonia season is the right time to run that study, we anticipate that that study will be done in time for us to get a supplemental NDA to the FDA to gain approval of oral start on cap in our label by the start of next year, the 2020 pneumonia season.
Great. Thanks.
The next question comes from Ed Arc of H.C. Wainwright. Please go ahead.
Hello, everyone.
It was actually is obviously about a couple of questions for us.
A first question.
Can you outline wars, you've seen some of the main factors driving new Sarah traction so far.
[noise] manufactures.
Oh, sorry, I'm from attraction perspective.
Look it's what we've always felt the the RV to oral and the ability of the fact that we do have an oral option.
So the fact that we cover the resistant pathogens cause problems for for these physicians the ability to get the hospital the patients out of the hospital quickly, which is why we're seeing the oral and the fact that we've got a drug that doesnt pull c. diff is a.
As a.
You know as a byproduct of utilization all of those factors and those messages resonate. It's the reason why.
When we were questioning doctors that have awareness of news out of that 95% of them have have given us an idea that they would like to prescribe it.
The other thing I should say is the term.
We should never take away from the fact that we've got a once a day drug which is different to many of the drugs that they use for discharge today.
Many of them are twice or three times daily in that that that is something that is clearly seen as an advantage.
Okay, yes that.
That's very helpful.
And then.
Regarding.
From a commercial standpoint.
What are some key characteristics.
Our early adopting hospitals and clinics that you've seen and also what the percentages.
All these new accounts, we order flow for.
So I'll tell you something interesting the larger teaching institutions are definitely those that tend to be the ones that adopt a little bit earlier.
Part of the reason for that we've come to realize is that they are less worried about the coding issues that we're less worried about the reimbursement issues that we've seen with some of these others that are waiting for c-codes.
And the like before then.
They'll adopt.
That's been very very clear from the from the early utilization. These institutions are extremely well funded they are also the institutions that have problems with beds and.
In general some of the other places that Weve seen utilization have similar characteristics to some of the teaching hospitals in their beds are completely full and they're desperately trying to get patients out and thats, where our oral once a day comes into play and Weve seen utilization in that setting.
Okay. Thank you and.
And then maybe approximately more.
Percenters or what fraction of.
Your council for.
Reorder sales are.
We're not we're not sharing that information at this present time.
Okay, Okay fair enough.
Thank you again put together the questions and congratulations on Nuvera progress so far.
Thank you. Thank you.
This concludes the question and answer session I would now like to turn the conference back over to Dr., Evan Loh, Chief Executive Officer for any closing remarks.
As there are no more questions. We will conclude today's call with a brief closing comment here.
In closing I'd like to thank you all for your time and attention today.
Your continued interest and use our and Paratek are important to us.
The journey of making desire of commercial success is underway.
The unique profile. These are specifically our once daily well tolerated oral is well positioned for long term commercial success, we very much appreciate your support and interest we look forward to keeping you apprised of our continued progress goodbye for now.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
And.