Q2 2019 Earnings Call
Operator: Welcome to the Revance Therapeutics 2nd Quarter 2019 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question and answer session. To ask a question at that time, please press star followed by the number on your touchtone telephone. If anyone has difficulty hearing the conference, please press star then zero for the operator's assistance. As a reminder, this call is being recorded today, August 5, 2019. I would like to turn the conference call over to Jeanne Herbert, Senior Director of Investor Relations and Corporate Communications for Revance. Please go ahead.
At this time all participants are in a listen only mode. Following management's prepared remarks, we will hold a question and answer session.
To ask a question at that time. Please press star followed by the one on your Touchtone telephone.
If anyone has difficulty hearing the conference. Please press Star then zero Operator's assistance as reminder, this call is being recorded today August six 2019.
I would like to turn the conference call over to Jeanie, Herbert Senior Director Investor Relations and corporate communications for reveal please go ahead.
Thank you Michelle.
Jeanne Herbert: Thank you, Michelle. Joining us on the call today from Revance are President and Chief Executive Officer Dan Brown, Chief Financial Officer Toby Schilke, Chief Operating Officer Dr. Abhay Joshi, and Head of Commercial Aesthetics and Therapeutics Dustin Sjuts. Earlier today, Revance released financial results for the quarter ended June 30, 2019. If you have not received this news release, or you would simply like to be added to the company's distribution list to receive future releases, please go to the Investor Relations section of Revance's website, which can be found at www.revance.com. During this conference call, management will make forward-looking statements, including statements related to Revance's 2019 financial results and guidance, the clinical development of our product candidates, business strategies, and planned operations; Anticipated Pre-Commercialization and Launch Plans and Potential Product Candidates and Technologies.
Joining us on the call today for more advance as President and Chief Executive Officer, Dan Brown, Chief Financial Officer, Toby Shockey, Chief operating Officer, Dr., API Joshi, and head of commercial aesthetic therapeutics destined to.
Earlier today Rhodanthe released financial results for the quarter ended June Thirtyth 2019, if you have not received this news release or you would simply like to be added to the company's distribution list to receive future releases. Please go to the Investor Relations section of Wrenches website, which can be found at www dot revamps Dot com.
During this conference call management will make forward looking statements, including statements related to it and since 2019 financial results and guidance the clinical development of our product candidates business strategies and planned operations.
Anticipated pre commercialization and launch plans and potential product candidates and technologies.
Jeanne Herbert: These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainty. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. Factors that could cause results to be different from these statements include factors the company describes in the section titled Risk Factors in our quarterly report on Form 10-Q for the quarter ended March 31, 2019, as filed with the SEC on May 9, 2019, Revance cautions you not to place any undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in its With that, I'll now turn the call over to Dan Brown. Dan?
These forward looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties.
Our actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties.
Factors that could cause results to be different from these statements include factors. The company describes in the section titled Risk factors in our quarterly report on Form 10-Q for the quarter ended March 31st 2019 as filed with the FCC on May nine 2019.
Vance cautions you not to place any undue reliance on forward looking statements and undertakes no duty or obligation to update any forward looking statements as a result of new information future events or changes in its expectations.
With that I'll now turn the call over to Dan Brown dense.
Dan Brown: Thank you, Jeanne. Good afternoon, and thank you for joining our second quarter 2019 conference call. Revance is pioneering new developments in neuromodulators from a long-lasting potential treatment for aesthetic and therapeutic indications to a prospective biosimilar to Botox. Our lead candidate, Daxibotulinum toxin A for injection, or DAXI, will be a disruptive offering in the aesthetic and therapeutic neuromodulator markets by providing patients and physicians with exceptional response rates and long-lasting results. In the largest aesthetic indication for neuromodulators, glabellar lines, DAXI is expected to require just two treatments per year to provide patients with lasting, natural-looking frown line correction all year long. We anticipate our first approval for DAXI will be quickly followed by a commercial launch in 2020. Revance plans to transform the patient experience, raising the bar from what can be expected from a neuromodulator treatment today. As we enter the second half of the year, we continue to make excellent progress in all three areas of our business.
Thank you Jeanie good afternoon, and thank you for joining our second quarter 2019 conference call.
Well the answer is pioneering new developments and neuromodulators from a long lasting potential treatment for a static and therapeutic indications to a prospective biosimilar to botox.
Our lead candidate Daxibotulinumtoxina for injection or taxi will be a disruptive offering in the aesthetic and therapeutic neuromodulator markets by providing patients and physicians with exceptional response rates and long lasting results.
In the largest aesthetic indication for Neuromodulators Glabellar lines taxi is expected to require just two treatments per year to provide patients with lasting natural looking frown line correction all year long.
We anticipate our first approval for taxi quickly followed by a commercial launch in 2020.
For bands plans to transform the patient experience raising the bar for what can be expected from an neuromodulator treatment today.
As we entered the second half of the year, we continue to make excellent progress in all three areas of our business.
[noise] anesthetics, our main near term focus is obtaining approval for taxi and Glabellar lines.
Dan Brown: In Aesthetics, our main near-term focus is obtaining approval for DAXI and Globellar Lines. We're on track to submit a BLA this fall for both 50 and 100-unit vial configurations, followed by a dynamic launch in 2020 that we believe will be the first truly differentiated neuromodulator compared to today's short-acting offer. To substantiate that fact, I'm excited to announce that Revance Sakura trial results have been accepted for publication in the upcoming issues of two prestigious journals. First, the Blue Journal, the peer-reviewed journal of the American Academy of Dermatology, or JAD. We believe this validates the robustness and significance of our Sakura Globeller trial results. Upon publication, the unprecedented results generated for DAXI will become part of an elite group of aesthetic papers published in JAD, the most widely read dermatology journal in the world. In addition, the SECURA data will also be published in Plastic and Reconstructive Surgery. This peer-reviewed medical journal and official publication of the American Society of Plastic Surgeons is the reference for the latest new procedures and techniques for all areas of plastic and reconstructive surgery.
We're on track to submit a be a late this fall with both 50 and 100 unit vial configurations, followed by dynamic launch in 2020 that we believe will be the first truly differentiated neuromodulator compared to todays short acting offerings.
To substantiate that fact, I'm excited to announce that advance. The current trial results have been accepted for publication in the upcoming issues two prestigious journals.
First the Blue Journal the peer reviewed journal of the American Academy of Dermatology or Chad.
We believe this validates the robustness and significance of our secure Glabellar trial results.
Upon publication the unprecedented results generated for doxey will become part of an elite group of aesthetic papers published in Jed. The most widely read dermatology journal in the World.
In addition, the sicker data will also be published in plastic and reconstructive surgery.
This peer reviewed medical journal and official publication of the American Society of plastic Surgeons is the reference for the latest new procedures and techniques for all areas of plastics and reconstructive surgery.
We expect publication online later this year.
Dan Brown: We expect publication online later this year. We continue to share the clinical results for DAXI at podium and poster sessions as well as in person at all the major aesthetics, dermatology, and plastic surgery conferences to build strong awareness among thought leaders on the power of DAXI prior to launch. In support of our commercialization efforts, we continue to build an experienced team of aesthetic professionals to lead our efforts in sales, marketing, regulatory, and medical affairs. Many have at least 20 years of experience in the aesthetic industry.
We continue to share the clinical results for DAC seeing podium and poster sessions as well as in person at all the major aesthetics, dermatology and plastic surgery conferences to build strong awareness among thought leaders on the power of taxi prior to launch.
In support of our commercialization efforts, we continue to build an experienced team of aesthetic professionals to lead our efforts in sales marketing regulatory and medical affairs.
Many have at least 20 years experience in the aesthetic industry.
Dan Brown: They have strong commitment and passion for facial aesthetics, which will serve us well as we position Daxi to disrupt the market and accelerate our progress towards commercialization. In terms of clinical progress, I'm pleased to announce that we have completed enrollment in our Phase 2 study in four centers and expect to complete enrollment in our Crow's Feet Phase 2 trial by the end of this month. These two dosing and injection site studies are the final pieces of a comprehensive program to determine how best to apply DAX to you across the upper face. They are strategically important as they will help maximize the potential of DAXI in facial aesthetics.
They have strong commitment and passion for facial aesthetics, which will serve us well as we position to actually to disrupt the market and accelerate our progress towards commercialization.
In terms of clinical progress I'm pleased to announce that we have completed enrollment for our phase two study in four headlines and expect to complete enrollment in our crow's feet phase two trial by the end of this month.
These two dosing in injection site studies are the final pieces of a comprehensive program to determine how best to applied to actually across the upper face.
They are strategically important as they will help maximize the potential of taxi in facial aesthetics.
As you've seen recently, we've made tremendous progress in strengthening our board of directors as we gear up for continued growth of the company.
Dan Brown: As you've seen recently, we've made tremendous progress in strengthening our board of directors as we gear up for continued growth of the company. To support our brand efforts, we're pleased to welcome new director Jill Bureau, who will chair our brand strategy committee. Jill has more than 25 years of experience building luxury, fashion, beauty, and consumer brands, and we look forward to her contribution in helping us forge the new standard in neuromodulators with the first truly premium offering. We followed Jill's announcement in June with the addition of another board member in July, Chris Nolet. Chris is an active business advisor and former Ernst & Young partner.
To support our brand efforts, we're pleased to welcome New Director Gilbert Rowe, who will share our brand strategy Committee.
Joe has more than 25 years experience building luxury fashion beauty and consumer brands and we look forward to her contribution in helping us forge the new standard in Neuromodulators with the first truly premium offering.
We follow Joel's announcement in June with the addition of another board member in July press and all that.
Chris has an active business adviser and former Ernst and young partner. He brings extensive experience in capital structuring licensing and mergers and acquisitions.
Dan Brown: He brings extensive experience in capital structuring, licensing, and mergers and acquisitions. We are thrilled to welcome Jill and Chris to our board, which is now nine members strong, eight of whom are independent directors. Turning to our therapeutic efforts, we continue to build a robust clinical development pipeline in the larger $2.5 billion therapeutic segment of the neuromodulator market. Revance recently completed the first phase of a research project intended to provide deep insights surrounding the value of each therapeutic indication for the DAXI franchise. We comply; we compile data for both providers and payers.
We are thrilled to welcome Joe and Chris to our board that is now nine member strong.
Eight of which are independent directors.
Turning to our therapeutic efforts, we continue to build a robust clinical development pipeline in the larger two and a half billion dollar therapeutic segment of the neuromodulator market.
We're being asked recently completed the first phase of a research project intended to provide deep insights surrounding the value with each therapeutic indication for the taxi franchise.
We complied, we compiled data for both providers and payers.
Dan Brown: The findings suggest there is definitely an unmet need for the surrounding duration of current treatments that creates an opportunity for a profound shift in treatment patterns. On the provider side, the results suggest a large potential for Daxi to become the first, First-line Botulinum Toxin Treatment. Furthermore, on the payer side, 75% of the interviewed would not restrict utilization of DAXI even at a premium price to the current in-market neuromodulator.
The findings suggest there is definitely an unmet need for.
First surrounding duration of current treatments that creates an opportunity for a profound shift in treatment patterns.
On the provider side the results suggested large potential for to actually to become the first.
First line botulinum toxin treatment.
Furthermore, on the payer side, 75% interviewed would not restrict utilization a backseat even at a premium price to the current end market Neuromodulators.
Dan Brown: This market research has reinforced our excitement about the therapeutic opportunities for DAX. In terms of our therapeutic pipeline, enrollment is on track for our phase three trial in cervical dystonia, for which we plan to release top-line results in the second half of 2020. Our Phase II upper limb spasticity trial continues to enroll patients, with full enrollment now expected in the first half of 2020. For our Phase 2 plantar fasciitis trial, patient enrollment is well underway, and we plan to announce top-line data for this trial in the second half of 2020. We'd also like to briefly mention the Biosimilar to Botox program. We received the formal minutes from the FDA for the February 2019 Biosimilar Initial Advisory Meeting. As we said on our last call, we got encouraging feedback that a biosimilar pathway for ONO botulinum toxin A is viable.
This market research has reinforced our excitement about the therapeutic opportunities for taxi.
In terms of our therapeutic pipeline.
Enrollment is on track for our phase three trial in cervical dystonia for which we plan to release top line results in the second half of 2020.
Our phase two upper limb spasticity trial continues to enroll patients with full enrollment now expected in the first half of 2020.
For our phase two point or fasciitis trial patient enrollment is well underway and we plan to announce top line data for this trial in the second half of 2020.
We'd also like to briefly mentioned the Biosimilar to Botox program.
We received the formal minutes from the FDA on the February 2019, Biosimilar initial advisory meeting.
As we said on our last call, we got encouraging feedback that a biosimilar pathway for Ono botulinum toxin a is viable.
Revance has since been in discussions with Mylan under potential development path and we'll share more details on this valuable asset as our conversations with Mylan proceed.
Dan Brown: Revance has since been in discussions with Mylan on the potential development path and will share more details on this valuable asset as our conversations with Mylan proceed. That covers our recent highlights. Now, I'll turn the call over to Toby to summarize our second quarter financial results. Afterward, I'll have a few closing comments before we begin today's Q&A session.
That covers our recent highlights now let me turn the call over to Toby to summarize our second quarter financial results.
Afterwards, I'll have a few closing comments before we begin todays QNX session Tobey.
Tobin C. Schilke: Toby?
Thank you Dan.
Tobin C. Schilke: Thank you, Dan. Starting with our cash, cash equivalents, and short-term investment balance, we ended the second quarter with $241.9 million. There was no revenue recognized for the second quarter. The revenue recognized in 2018 represented a portion of revenue earned from the $25 million upfront payment from Mylan under the Biosimilar Collaboration and License Agreement. Our OPEX during the quarter was $39.1 million, and excluding depreciation and stock-based compensation, it was $33.9 million. The earnings release we issued today outlines our financial results in full, so I won't go through the details on this call. I will note we are reiterating our 2019 guidance. Revance expects 2019 GAAP operating expense to be in the range of $173 to $185 million, and non-GAAP operating expense, which excludes depreciation and stock-based compensation, to be in the range of $148 to $158 million. We expect our CAST runway to extend through 2020 and the anticipated approval of DAXI and Globel Airlines. Finally, Revance's outstanding shares as of June 30, 2019, were approximately $44 million or $48.6 million on a fully diluted basis.
Starting with our cash cash equivalents and short term investment balance we ended the second quarter with $241.9 million.
There was no revenue recognized for the second quarter.
The revenue recognized in 2018 represented the portion of revenue earned from the $25 million upfront payment from Milan under the Biosimilar collaboration and license agreement.
Our opex during the quarter was $39.1 million and excluding depreciation and stock based compensation it was $33.9 million.
The earnings release, the earnings release, we issued today outlining our financial results and full so I won't go through the details on this call.
I will now we are reiterating our 2019 guidance.
Vance expects 2019, GAAP operating expense.
To be in the range of $173 million to $185 million and non-GAAP operating expense, which excludes depreciation and stock based compensation to be in the range of $148 million to $158 million.
We expect our cash runway to extend through 2020 and the anticipated approval of doxey in Glabellar lines.
Finally advances outstanding shares as of June Thirtyth, 2019 were approximately $44 million or 48.6 million on a fully diluted basis.
Dan Brown: And with that, I will turn the call back to Dan. Thank you, Toby.
And with that I will turn the call back to Dan.
Thank you Tobey.
We're Vance has continued to make substantive progress on or be late submission and our clinical development program for to actually in both the statics and therapeutics.
Dan Brown: Revance has continued to make substantive progress on our BLA submission and our clinical development program for DAXI in both aesthetics and therapeutics. Between now and year-end, we are on track to submit our BLA in the fall. Complete enrollment in nearly all of our clinical trials and advance our partnership opportunities. This should springboard us for a number of potentially significant value-creating events through year-end and in 2020. With that, I'll now open up the call for questions. Operator?
Between now and year end, we are on track to submit our be lay in the fall.
Complete enrollment in nearly all of our clinical trials and advance our partnership opportunities.
This should springboard us for a number of potentially significant value, creating events through year end and in 2020.
With that I will now open up the call for questions.
Operator.
Thank you ladies and gentlemen, if you have a question at this time Please press star.
Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press star and then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from the line of Annabel Samimy with Staple. Your line is open. Please go ahead.
And then the number one on your Touchtone telephone if your question has been answered.
First off when they can't please press the pound key.
To prevent any background noise, we ask that you. Please place your line on mute. Once your question has been stated.
Our first question comes from the line of Annabel Samimy with.
So your line is open. Please go ahead.
Hi, guys.
Annabel Eva Samimy: Hi guys, thanks for taking my questions and congratulations on the progress. A few questions, so first, just want to get a sense of what Jivo's just launched in the marketplace. It seems like they've been able to generate a lot of excitement for the product there with minimal differentiation. So based on what you're seeing from their experience, and what you're hearing, are you learning anything more about pricing, the elasticity of the market, and positioning that might help inform your strategy? The second question is just on the publication you expect in the AAD Journal; are there any incremental data points that we may learn that we haven't seen before? And then, if I may, with the third question, any updates on migraine development? I guess we're about a year plus into the full CGRP market now, and just wanted to know if you've seen any dynamics that give you greater impetus to move forward or greater comfort moving forward with that indication. Thanks.
For taking my questions and congratulations on the progress.
A few questions. So first.
Just want to.
So.
Just launched in the marketplace seems like they've been able to generate a lot of excitement for the product there with minimal differentiation. So based on what you're seeing from their parents, which are sharing are you learning anything more about pricing elasticity of the market and positioning that Mike.
On their strategy.
Second question.
Just on the publication.
A.
Are there any incremental data points that we may learn.
No we haven't seen before.
And then if I may.
Question any update on migraine development I guess.
Let's see TRP market now and just want to know if you've seen any dynamics that gives me greater.
Impetus to move forward or greater comfort moving forward without indications. Thanks.
Annabel high <unk>, we can't speak to the specifics of the jumbo launch, but I think what we can say based on the feedback from key opinion leaders and.
Dan Brown: Annabel, hi. We can't speak to the specifics of the JVO launch, but I think what we can say based on the feedback from key opinion leaders and physicians as well as consumers, as this market just continues to grow and we're continuing to see a very high level in the space, I think physicians and consumers are really trying to signal their desire for something different. I think JVO is for the current short acting segment. We're really trying to provide a differentiated formulation, a differentiated product that, as you know, moves us from the short acting segment to, for the first time, a long acting segment based on annualized correction of two treatments per year or less. So we think that's really responding. I think more broadly, you look at the Allergan AbV transaction as well as the Nestle-Galderma transaction with private equity.
Positions as well as consumers as this market just continues to grow and we're continuing to see a very high level in the space I think physicians and consumers.
Are really trying to signal their desire for something different I think to have a place for the current short acting segment, we're really trying to provide a differentiated formulation a differentiated product that as you know moves us from the short acting and for the first time, a long acting segment based on annualized correction. The two treatments per year or less. So we think that's really resonating I think more broadly as you look at the Allergan have bee transaction as well as the Nestle Galderma transaction with private equity it really does validate neuromodulators as the gateway the key differentiated product as part of an aesthetic portfolio and I think in our view provides us for extraordinary growth that for the first time.
Dan Brown: It really does validate neuromodulators as the gateway, the key differentiated product as part of an aesthetics portfolio, and I think, in our view, provides us with extraordinary growth for the first time physicians and patients are going to see a new experience. As to the publication, both in JAD, I think we're just really excited. I think the clinical team deserves a lot of credit because this is such a prestigious journal. There are so few aesthetic manuscripts in that journal.
ER physicians and patients are going to see a new newly experience.
As to the publication both in Chad and I think we're just really excited I think the clinical team team deserves a lot of credit. This is such a prestigious journal. There's so few acetic manuscripts in that journal, but there won't be any materially new data points and the publication, it's really validation verification that this is new science I think that it's.
Dan Brown: But there won't be any materially new data points in the publication. It's really validation, verification that this is new science. I think that these are unprecedented results, and I think that it reflects in the peer review process in both of those journals. But you really won't see any new data.
Unprecedented results and I think it reflects in the peer review process in both of those journals, but you really won't see new data relative to the migraine opportunity I think we still think that this is an opportunity as we continue to to look at a the use of taxi and in this particular indication.
Dan Brown: Relative to the migraine opportunity, I think we still think that this is an opportunity as we continue to look at the use of DAXI in this particular indication. We are looking at different trial designs. This is a complicated pathology. As we continue to see results with the CGRPs and the continued use of neuromodulators, we would not expect to start a clinical trial until the first half of 2020 at SUNUS. But we're continuing to look at that study protocol, kind of looking at the existing growth. And really, when we do start, we'll have something that's materially different than the way neuromodulators have been used before.
We're looking at a different trial designs. This is a complicated pathology as we continued to see the results with the CG Rps and the continued use of Neuromodulators, we would not expect to start a clinical trial until the first half of 2020 at the soonest, but we're continuing to look at that the study protocol kind of look at the existing growth and really when we do start we'll have something thats materially different than the way neuromodulators had been used before.
Okay, great. Thank you.
Annabel Eva Samimy: Great, thank you. Thank you.
Thank you and our next question comes from the line of catching up with Cowen and company. Your line is open. Please go ahead.
Operator: And our next question comes from the line of Ken Cacciatore with Cowan and Company. Your line is open. Please go ahead.
Hey, guys. Good afternoon, just a question and you alluded to it Dan talking but Allergan Abbvie Abbvie management has been suggesting that in a few years from now around 2023, they're expecting to still maintain with botox about 60% share. So they are actually kind of seating, maybe 10% to 15% share erosion.
Ken Cacciatore: Hey guys, good afternoon. Just a question, and you alluded to it Dan, talking about Allergan and AbbVie, AbbVie management has been suggesting that in a few years from now, around 2023, they're expecting to still maintain with Botox about 60% share. So they're actually kind of seeding maybe 10 to 15 percent share erosion, and it sounds like primarily to the long-acting, which would be you.
And it sounds like primarily to the long acting which would be used so.
As you think about launch and as we start getting hopefully excited about the opportunity. What do you think about that type of share gains for you over the next few years and can you talk about market expansion versus market share conversion you hit on a little bit, but but maybe help explain those that aren't in the market yet what why maybe a product like yours.
Ken Cacciatore: As you think about launch and as we start getting, hopefully, excited about the opportunity, what do you think about that type of share gains for you over the next few years? And can you talk about market expansion versus market share conversion? You hit on it a little bit, but maybe you could explain to those that aren't in the market yet why maybe a product like yours could help expand the market. And then lastly, it's still a little bit far away, but can you talk about how many sales reps you think you would need to appropriately position this product in the marketplace?
Could help expand the market.
And then lastly, just.
If it's still a little bit far away, but can you talk about how many sales reps you think you would need to appropriately position this product in the marketplace. Thank you.
Ken Thanks, Thanks for the questions I look I think our view is the you know the Abbvie Allergan transaction really reflects growth right. This is a growth segment and I think you're going to continue to see that with new entrants. We saw one this year.
Dan Brown: Ken, thanks for the questions. Look, I think our view is that the, you know, the AbbVie Allergan transaction really reflects growth, right? This is a growth segment. And I think you're going to continue to see that with new entrants. We saw one this year; Daxi will be introduced next year.
Actually will be introduced next year and so we see this pie expanding.
Dan Brown: And so we see this pie expanding. Look, no matter which way you cut the data, we're still at high single-digit penetration in the space. This market's going to continue to grow, and I think where you're kind of going into is that there will be much larger growth in the pie than there will be cannibalization of the existing pie. And I think for us, what we have said strategically, competitively, from a science perspective, from an innovation, from a protected technology is that we're going to approach this space in a materially different way.
Look no matter, which way you cut the data we're still at high single digit penetration in the space. This market is going to continue to grow and I think where you're where you're kind of going out in the pie is there will be a much larger growth in the pie then there will be cannibalization of the existing pipe and I think for US what we have said strategically competitively from a science perspective from an innovation from a protected technology is we're going to approach this space in a materially different way and I think for US is worried guard us of where that share ends up being I think this experience around annualize correction with two were frequent treatments per year resonates with two groups. Some of those will be the existing patients in neuromodulators today, they are comfortable with neuromodulators, they've integrated them into their facial aesthetics and they will be looking at sort of upgrading their treatment into something thats three to four times per year to two were or less per year.
Dan Brown: And I think for us, regardless of where that share ends up being, I think this experience around annualized correction with two or frequent treatments per year will resonate with two groups. Some of those will be the existing patients using neuromodulators today. They're comfortable with neuromodulators. They've integrated them into their facial aesthetics.
Dan Brown: And they will be looking at sort of upgrading their treatment into something that's three to four times per year to two or less times per year. I think the other segment where we've seen a lot of growth is in de novo patients. Patients, for whatever reason, may have had fillers. They're in the dermatologist's office having other procedures that they didn't want to take on a four times a year treatment. And so they've looked at something else. I think now when you look at the Sakura data, and it varied from trial to trial, but you had a large number of de novo patients. And I think what they're seeing with that experience in compliance is how it integrates into their daily life. They don't have to come back and get an appointment. They don't have to park and stay at a physician's office. And they look at the natural look.
I think the other segment, where we've seen a lot of growth is the de novo patients patients for whatever reason may have had fillers, there and the other dermatologists office, having other procedures that they didn't want to take on a four times per per year treatment and so they've looked at something else I think now when you look at the succor data and it varied from trial the trial, but you had a large number of de novo patients and I think what they're seeing what that experience in the compliance and by that is how it integrates into their daily life that you don't have to come back and get an appointment they don't have to park and stay at a physician's office and they look at the natural look and I think what you're seeing what actually is is higher response rates at all the intervals not just at six months, but at any interval.
Dan Brown: And I think what you're seeing with DAXI is higher response rates at all the intervals, not just at six months, but at any interval. And you're seeing a practice that allows them to have a natural look. And then, as a result, they get this better experience. We just think the combination of those is going to be very attractive.
And you're seeing a practice that allows them to have a natural look and then as a result, they get this better experience. We just think the combination of those is going to be at a very attractive we realize anesthetics were not going to get all the patients, but we think we're going to be a sizable driver of growth in this space.
Dan Brown: We realize that in aesthetics, we're not going to get all the patients, but we think we're going to be a sizable driver of growth in this space. And I would also say, Ken, on the therapeutic side, I think it's even, even... We try to touch upon that in the script and the qualitative and quantitative research that we're seeing, that we're seeing both providers and payers seeing what two treatments per year could resonate. We're seeing that utilization not only in the existing trials that are underway but in other indications where neuromodulators are used. And so we think the combination of having aesthetics as the engine to drive continued growth in therapeutics really becomes both a better outcome clinically, patient-reported outcome, and a better pharmacokinetic, and pharmacoeconomic benefit to payers. And you've got patients who've got really debilitating diseases and conditions that now, for the first time, have a product that could extend that, that efficacy that they've seen with neuromodulators up till today.
And I would just I would just say also count on the therapeutic side I think it's even even.
You probably touched upon that in the script and the qualitative and quantitative research that we're seeing that we're seeing both providers and payers seen what two treatments per year could resonate we're seeing that utilization not only in the existing trials are underway, but in other indications where neuromodulators and so we think the combination of having the aesthetics as the engine to drive continued growth on therapeutics really becomes both a better outcome clinically patient reported outcome, a better pharmaco kinetic pharmaco economic benefit to payers and you've got patients who have got really debilitating diseases and conditions that now for the first time have a product that could extend that that efficacy that they've seen with neuromodulators up till today.
Thanks relative to sales reps were still taking taking a look at that we haven't decided exactly what that specific number but I think we've modeled everything from what you see today in the most recent launch to something larger that and I think as we get closer to approval. We finished up our labeling work, we will be able to come back to you with more specific guidance on the size of the selling organization.
Ken Cacciatore: Relative to the number of sales reps, we're still taking a look at that. We haven't decided exactly what that specific number will be, but I think we've modeled everything from what you see today in the most recent launch to something larger than that. And I think as we get closer to approval, once we've finished up our labeling work, we'll be able to come back to you with more specific guidance on the size of the selling organization. Great, thanks.
Great. Thanks.
Thank you and our next question comes from the line of seamless Fernandez with Guggenheim. Your line is open. Please go ahead.
Operator: Thank you. And our next question comes from the line of Seamus Fernandez with Guggenheim. Your line is open. Please go ahead.
Oh, great. Thanks for the question so just two questions.
Seamus Christopher Fernandez: Oh, great. Thanks for the question. So just two questions. First, just on the journals, could you guys give us a general sense of the kind of data that we're likely to see in there that would be differentiated from what we've already seen at the different conferences and in what you've presented so far from the secure data sets? Just wondering if we might see the 2.2 point change and if there's anything different that we might see between and among the two journal articles. And then the second question, Dan, you know, you've taken opportunities to execute non-dilutive financing in the past. Can you just give us a sense, do you guys see non-dilutive financing opportunities on a go-forward basis? And if so, what are you guys thinking about that?
First just on the journals could you guys give us a general sense of the kind of data that is that we're likely to see in there that would be differentiated from we've already seen.
At.
That said the different conferences and then what you presented so far that's occurred datasets I'm just wondering if we might see the 2.2 point change and if there's anything different.
That we might see between and among the two journal articles and then the second question.
Dan you take an opportunity to execute non dilutive financing.
In the past can you just give us a sense do you guys see or non dilutive financing opportunities on a go forward basis and if so how are you guys thinking about that thanks.
Dan Brown: Thanks.
Okay. All good questions. Let me, let me take the journal publications first I think what you're going to see in those publications first and foremost is safety and I think we've been really pleased with the tolerability of the drug to use across what is the largest dataset ever for facial acidic so you're going to see a very strong safety profile nothing new than whats been reported with Neuromodulators before you're going to see efficacy on the two point composite at 30 days the primary endpoint, which is the most important not only to clinicians but to the regulatory authorities as well, which will dial into our label and you're going to see it response rates from two weeks all the way up to.
Dan Brown: All good questions. Let me take the journal publications first. I think what you're going to see in those publications first and foremost is safety, and I think we've been really pleased with the tolerability of the drug, the use across what is the largest data set ever for facial acidity. So you're going to see a very strong safety profile, nothing new than what's been reported with neuromodulators before. And you're going to see efficacy on the two-point composite at 30 days, the primary endpoint, which is the most important not only to clinicians but to regulatory authorities as well, which will be dialed into our label. And you're going to see response rates from two weeks all the way up to the 36 weeks that we follow patients. Remember, we have followed patients almost twice as long as any of the other sponsors to date.
The 36 weeks that we follow patients remember we have followed the patients almost twice as long as any of the other any of the other sponsors today, we're really going to focus the journal manuscripts on an endpoint, which is the most important and that's none to mild none to mild is the predicate endpoint that's in the labeling for the.
Dan Brown: We're really going to focus the journal manuscripts on an endpoint that is the most important, and that's none to mild. The none to mild is the predicate endpoint that's in the labeling for the existing neuromodulators, at least the two that have the strongest market share position, because we think it's not only the most important efficacy assessment for the regulatory authorities, it's also the most important endpoint for consumers. They go into their physician's office and say, "I have globular lines. I don't like them."
Existing neuromodulators at least the two that have the strongest market share position, because we think it's not only the most important efficacy assessment for the regulatory authorities. It's what's the most important endpoint for consumers. They go into their physician's office and say I have glabellar lines I don't like them, how long after treatment can I keep the none to mild that's the one that matters most.
Dan Brown: How long after treatment can I keep the none to mild? That's the one that matters most because that's how patients and consumers sort of dictate when they get primary treatment or whether they go back for repeat treatment. And I think you'll see this data in around six months. This is really unprecedented, how we've taken current neuromodulators from three or four months now to six months in a very large population that goes beyond six months. And so I think having those in a journal like JADD, as well as other plastic surgery journals, reflect the science and the robustness of the data. Relative to the question on non-dilutive partnering, I think we've been very successful in having very high-profile, non-dilutive business development opportunities and transactions in areas that allow us to run our core business in the U.S. and to build value based on the science and the data that we generate.
Because that's how patients and consumers sort of dictate when they get primary treatment or whether they go back for repeat treatment and I think you'll see this data around six months. This is really unprecedented how we've taken current neuromodulators from three or four months now to six months and a very large population that goes beyond the six month and so I think having those in a journal like Chad as well as the other plastic surgery journal reflect the science the robustness of the of the data.
Relative to the question on non dilutive partnering I think we've been very successful of having very high profile non dilutive.
Business development opportunities and transactions in areas that allow us to run our core business in the U.S. and to build value based on the science and the data that we generated we think the opportunity on with Mylan on the Biosimilar is a very unique opportunity we see our strength on the innovative sign we think there will continue to be a short acting market and we think thats better served with a company that is more passionate more focused on the biosimilar generic space I think relative to both Sun and China reflects an opportunity in a geographic area thats pose for long term growth.
Dan Brown: We think the opportunity with Myelin on the biosimilar is a very unique opportunity. We see our strength on the innovative side. We think there will continue to be a short-acting market, and we think that's better served by a company that's more passionate, more focused on the biosimilar generic space. I think, relative to Fosun in China, it reflects an opportunity in a geographic area that's ripe for long-term growth that we're not going to get to. So I think those highlight that we have a platform that will enable us to look at other opportunities to monetize the technology and other indications in other geographies, and we will continue to do that. And we look forward to coming back and reporting on those business development opportunities, those discussions, and our continued progress.
That we're not going to get too. So I think those highlight that we have a platform that will enable us to look at other opportunities to monetize the technology and other indications in other geographies and we will continue to do that and we look forward to coming back and reporting those business development opportunities as those those discussions continue to progress.
Thank you and our next question comes from the line of David.
Dan Brown: Thank you. And our next question comes from the line of David Amsellem with HyperJesse. Your line is open. Please go ahead.
Pardon me your line is open. Please go ahead.
Thanks, So just a couple of them first can you just refresh our memories regarding your thought process of the developments of the second vial size and specifically.
David A. Amsellem: Thanks, so just a couple. First, can you just refresh our memories regarding your thought process for the development of the second vial size, and specifically, I wanted to get your sense of, you know, how you see the different sizes being incorporated commercially. I mean, is that a way to be more flexible regarding your volume discount strategy? Help us understand, again, your thought process there. And then secondly, on migraine, you know, we've heard anecdotally of key opinion leaders and migraine specialists experimenting with the Botox injection protocol. So with that in mind, we're taking liberties, so I guess with that in mind, can you talk about how a different kind of injection regimen, not so much frequency of visits but actual number of injections may change with your regimen for DAXI, so help us understand Thanks.
I wanted to get your sense of how you see the different sizes being incorporated commercially when is that.
A way to be more flexible regarding your volume discount strategy help us understand again your thought process. There and then secondly on on migraine and we've heard anecdotally of.
The new leaders in migraine specialist experimenting with the Botox injection protocol.
So with that in mind or taken Liberty. So I guess with that in mind can you talk about how you know.
A different kind of injection regimen for much frequency of visit frequency of visits but actual number of injections.
They are.
Change with your regimen for pretax.
Dan Brown: David, I'll try to get to it. There are a number of primary questions and some increments thereof. I think relative to the second file size, I think for us, the clinical work with 50 units. We always recognize that 100 units is gonna be a workhorse because it will reflect in additional areas where the drug is used in the face. And as we sort of think about the continuum of our development, giving physicians the optionality to sort of look at single use, whether it's they look at other applications, keep in mind on the therapeutic side, we'll have 200 units on that. And so we wanted to sort of have that optionality depending on how physicians prepare their syringes at the start of the day, and how they look at the use of the drug on a per treatment basis, on a per patient basis.
So help us understand that as well thanks.
David I'll I'll try to get to there is a number of quest primary questions. In some increments are up I think relative to the second file size.
I think for US is the clinical work with 50 units, we always recognize that 100 units was going to be a workforce.
'cause it will reflect an additional areas where the drug is used in the face and as we sort of think about the continuum of our development, giving physicians the optionality to sort of look at single use weather as they look at other applications keep in mind on the therapeutic side. We will have 200 units on that and so we wanted to sort of have that optionality, depending on on how physicians prepare their surrenders at the start of the day, how they're looking at the use of the drug on a on a per treatment basis on a per patient basis and it also allows styles into our commercialization strategy on how we sampled to drug and how we how we use that as part of our commercial business. So I think it was an important part of the commercialization that guided us to take in a very short delay. So we could have both of those into the BLA filing at the same time and not require subsequent amendments I think relative to the migraine opportunity I think you've got two things that were.
Dan Brown: And it also allows dials into our commercialization strategy on how we sample the drug and how we use it as part of our commercial business. So I think it was an important part of the commercialization strategy that guided us to take a very short delay so we could have both of those in the BLA filing at the same time and not require subsequent amendments.
Dan Brown: I think relative to the migraine opportunity, I think you've got two things that we're looking at. One is the number of injections and the site of injections, which you mentioned, but you also have an opportunity to approve the efficacy of neuromodulators. I think not only in the chronic migraine space but potentially other indications where either neuromodulators or the CGRPs have not been as efficacious as maybe we would have hoped or maybe what was projected. So whether it's a frontline strategy and a given indication is chronic or other, whether it's part of a combination strategy, I think what's clear based on at least our conversations with key opinion leaders and what you're seeing in And there is gonna be an opportunity to use greater responsiveness and longer duration without changing the safety profile of neuromodulators to once again kind of continue the growth of neuromodulators in this space. And so I think that we've continued to sort of refine a protocol. I think we're feeling better about where we're at, and we'll certainly come back to you once we have better clarity on when we would start those trials and what those trial designs would look like.
Looking at one are the number of injection site of injections, which you mentioned, but you also have an opportunity to approve upon the efficacy of neuromodulators.
I think not only in the in the chronic migraine space, but potentially other indications, where the where either neuromodulators for the CJR piece has not been as education.
As maybe we would have hoped or maybe what was projected so whether it's a frontline strategy on a given indication chronic or other whether it's part of a combination strategy I think what's clear based on at least our conversations with key opinion leaders and what you're seeing in the market. Our neuromodulators are not going away and there is going to be an opportunity to use greater responsiveness longer duration without changing the safety profile of neuromodulators. So once again kind of continue the growth of Neuromodulators in this in this space and so I think that we've continued to sort of refine a protocol I think we're feeling better about where we're at and we'll certainly come back to you. Once we have better clarity on when we would start those trials and what those trial designs would look like.
So so if I may sneak in a follow up is it safe to say, you're perceiving the value proposition of vaccine migraine.
Dan Brown: So, if I may sneak in a follow-up, is it safe to say you're perceiving the value proposition of Daxian Migraine as.., you know, potentially efficacy based and not just Visit and number of injections based, and if so, do you do a phase two trial, some sort of head-to-head comparison versus Botox as you did in the Belmont study in the glabellar line setting?
As.
You know potentially efficacy based and not just.
Visits and.
Number of injections based and if so do you do a phase two trial or some sort of.
Head to head comparison versus Botox as you did in the Belmont study in nickel Teller line setting.
Hey, there's a lot of similarities in the way we pursue migrating to what we've done historically I think first and foremost is safety you want or whether you're looking at sites of injections. You are looking at total dose you want to make sure you haven't changed the safety profile and where you changed it you've been proved it so I think thats first and foremost in our thinking secondly, as we think there is a significant opportunity to improve the effectiveness of Neuromodulators I think we've learned a lot over the last 10 years or plus on how neuromodulators either it's by its a given condition state or whether it's something more broad I think we fundamentally believe that responsiveness first and foremost before you get to duration needs to be better than what's in market. Today I think the final piece is duration do you want to look at opportunities to reduce the frequency of injection and the impact not only on a patient basis, but on a payer basis as it relates to phase three I sort of want to comment on what will be the comparator, but I think you have to be able to compare where the market is today.
Dan Brown: There's a lot of similarity in the way we pursue migraine to what we've done historically. I think first and foremost is safety. You want to, whether you're looking at sites of injections, you're looking at total dose, you want to make sure you haven't changed the safety profile, and where you have changed it, you've improved it.
Dan Brown: So I think that's first and foremost in our thinking. Secondly, we think there's a significant opportunity to improve the effectiveness of neuromodulators. I think we've learned a lot over the last 10 years or plus about how neuromodulators work, either by the given condition, state, or whether it's something more broad. I think we fundamentally believe the responsiveness, first and foremost, before you get to duration, needs to be better than what's in the market today. I think the final piece is duration.
Dan Brown: You want to look at opportunities to reduce the frequency of injections and the impact, not only on a patient basis but on a payer basis. As it relates to phase three, I sort of want to comment on what will be the comparator, but I think you have to be able to compare where the market is today with neuromodulators and CRGRPs and what you're trying to create that's meaningfully different from those as part of that phase two trial, which will guide you into phase three. And I think, you know, that's something we want to get all aligned. We want to do it right. You want to get appropriately powered so you have meaningful data. And I think we'll continue to learn a lot this year on both, not only in the neuromodulators where they're going to continue to play a role, but what are those CGRP populations that may not be as responsive, and are there a way to address that population either with a new neuromodulator, DAXy, or in combination? And that's what we're trying to address in this protocol.
With Neuromodulators NCR GR piece, and what you're trying to create that's meaningfully different from those as part of that phase two got trial, which will guide you into into phase three and I think.
That's something we want to get all line, we want to do it right you want to get appropriately powered so you have meaningful data and I think we continue to learn a lot. This year on both not only in the Neuromodulators, where it's going to continue to play a role, but what are those see GRP populations that may be not be as responsive and are there ways to address that population either with a new neuromodulator doxey or in combination and that's what we're trying to address in this protocol.
Okay. Thank you.
David A. Amsellem: Okay, thank you.
Thank you and our next question comes from the line of.
Operator: Thank you. And our next question comes from the line of Serge Belanger with Needham. Your line is open. Please go ahead.
With Needham Your line is open. Please go ahead.
Hey, Thanks for the question. This is 10 on first.
Serge D. Belanger: Hey, thanks for the question. This is Tian on First Search. I just had a couple.
Just a couple so regarding the physician practices that are likely to I guess stop multiple brands.
Dan Brown: So regarding physician practices that are likely to stop multiple brands, as in having both a short acting and a long acting toxin, is your plan to initially focus on the 60 or so sites from the Sakura trials, given that they've already had some experience with Doxy? And, you know, how do you plan to expand that and potentially seek out other providers as you build out the awareness of the long-term potential that Doxy provides? Thank you.
As an having both the short acting in a long acting toxin is your plan to initially focus on the 60 or so sites from the city.
Given that they've already had some experience with oxy.
And how do you plan to expand that and potentially CECO other providers as you.
Filled out the.
So the long term potential that doxey provide thank you.
I think it was 65 centers as part of this occur a program I think those become a core part of our learning and those become the initial early adopters of the technology, because they've got comfort and experience of using using the product those positions already today teaching, they're providing the data the experience at various podium presentations. They were instrumental in the publications of sicker, and Chad and plastic and reconstructive surgery, and so I think there there are ready sort of part of that of that process. I think it was not only the centers, but it's the number of patients that were in soccer is such a larger trial size than any other predicate trial said it gives us an experience with the drug over the broadest cross section of patients and skin types and ethnicities male female and age and the like and I think that learning is one of the reasons and the size and scope of that trial why it made it into the journals that.
Dan Brown: I think it was 65 centers as part of the Sakura program. I think those become a core part of our learning, and those become the initial early adopters of the technology because they've got the comfort and experience of using the product. Those physicians are already today teaching; they're providing the data, and the experience at various podium presentations. They were instrumental in the publications of Sakura and JAD in plastic and reconstructive surgery. So I think they're already sort of part of that process. I think it was not only the centers, but the number of patients that were in Sakura. It is such a larger trial size than any other predicate trials that it gives us experience with the drug over the broadest cross section of patients and skin types and ethnicities, male, female, age, and the like.
Dan Brown: And I think that learning is one of the reasons and the size and scope of that trial why it made it into the journals that it did. But we will start the process, as part of our commercial strategy, of identifying those practices that want to sort of look at long-term acting, and how we sort of roll that out over time. And I think it will be very quantitative, and I think we've got a good head start on that. And as we look to come back in 2020 as we get closer to approval, we'll map out to you how we've identified those centers from the 65 today into something that's obviously much larger than that as we commercialize the product.
But it did but we will start the process as part of our commercial strategy of identifying.
Those practices that want to sort of look at a long acting.
And how we sort of roll that out over time, and I think it will be a very quantitative and I think we've got a good head start on that and as we look to come back in 2020, as we got closer to approval will map out to you of how we've identified those centers from the 65 today into something that's obviously much larger than that as we commercialize the product.
Great Thanks and.
Dan Brown: Great, thanks. And also, I think you touched on this earlier about the Fosun Pharma Partnership. Is there any kind of update there? Has anything started on their end?
Also I think you touched on this earlier about the Folsom pharma partnership is there any kind of update there has anything started on their end. Thanks.
So we are looking at the opportunity in China, specifically the teams work very well together nothing to report.
Dan Brown: So, we are looking at the opportunity in China specifically because the teams work very well together.
Dan Brown: Nothing to report as part of anything specific, but I think we continue to be very excited about the opportunity in China, not only for aesthetics but also for therapeutic purposes. I think there's an interest from the Fosan team in both, and those teams are meeting and looking at the development path, and hopefully, we'll be able to come back to you in the not-too-distant future with more specificity about when those trials will be starting and some projected timelines for approval. Actually, it will be very unique in that territory. I think the long-term future of the company in a market that has a lot of core experience with the market leader and is looking for some innovation in that space, and we're really excited about the China opportunity, and we think the Fosan team will do a good job with it.
As part of anything specific but I think we continue to be very excited about the opportunity in China.
Not only for Fedex, but for therapeutic I think there's an interest on from the focus on team on both and those teams are meeting and looking at the development path and hopefully we'll be able to come back to you in the not too distant future with more specificity of when those trials will be starting and some projected timelines for approval to actually it will be very unique in that in that territory I think the long lasting in a market that has a lot of core experience with the market leader and.
Just looking for some innovation in this space and we're really excited about the China opportunity and we think the first on team will do a good job with it.
Thanks.
Dan Brown: Thanks. Operator Thank you. And our next question comes from the line of David Marris with Wells Fargo. Your line is open. Please go ahead.
Thank you.
Our next question comes from the line of David.
Well Fargo. Your line is open. Please go ahead.
Good afternoon, if you could just give us some sense of the spending over the next 18 months or so so.
Operator: Good afternoon. If you could just give us some sense of the spending over the next 18 months or so, So, specifically, what's the rough percentage that you'd expect R&D to decline after the filings in, if you expect it to decline? Because you did also mention that you're going to be starting some new studies as well next year. And is there, do you expect there to be a meaningful ramp-up in SG&A in 2020? You know, in the first part of the year? And all of this is just to try to understand the cash runway. So, do you think the use of cash this quarter is going to be steady for the next six quarters or so? Any insight into that would be helpful. Thank you.
Specifically, what's the rough percentage that you'd expect R&D to decline after the filings in if you expect it to decline because you did also mentioned that you are going to be starting some new studies as well next year.
And is there and do you expect there to be a meaningful ramp in SGN a in 2020 .
In the first part of the year.
All of this is just to try to understand the cash runway. So do you think the use of cash this quarters.
Good to be steady for the next six quarters or so any insight into that would be helpful. Thank you.
David Marris: Thanks, David. This is Toby Schilke, CFO. You know, we've guided on earnings, and we've been consistent with our guidance of cash through 2020. Obviously, and we also have some specificity on sort of the ratio of our R&D spend to our SG&A spend. And obviously, that balance will change as we get closer to commercialization, but I don't want to get any more specific right now other than we're funded through
Thanks, David This is Toby showpiece.
We've got to get us on our earnings and moved but consistent with our guidance of cash through 2020.
Obviously.
And we've also been have some specificity specificity on sort of the ratio of.
Our R&D spend to our SGN, a spend and obviously that balance will change as we get closer to commercialization, but I don't want to get any more specific right now other than were funded through 2020.
Okay. Thank you.
Tobin C. Schilke: Okay, thank you.
Thank you and our next question comes from the line of Tim.
Tobin C. Schilke: Thank you. And our next question comes from the line of Tim Lugo with William Blair. Your line is open. Please go ahead.
With William Blair. Your line is open. Please go ahead.
Thanks for taking my question following up on David's non dilutive financing question. It sounds like you're looking more geographic deals is that safe to say or are you amenable to more specialty or indication specific deals that you might entertain touches something focused on only neuroscience or something focused on urology.
Operator: Thanks for taking the question. And following up on David's non-dilutive financing question, it sounds like you're looking at more geographic deals. Is that safe to say? Or are you amenable to more specialty or indication-specific deals that you might entertain, such as something focused on only neuroscience or something focused on urology? Would you even consider carving up a U.S. indication?
Would you.
Would you even look at carving up a U.S. indication.
Timothy Francis Lugo: Tim, hi. I think that when we look at business development, we look at it agnostically, and we first and foremost look at it this way: how do we create value for shareholders? And I think that the two areas that we've executed transactions with Mylan on the biosome when we were posted in China, we felt when we look at the value created for shareholders, it was better to do that in partnership than it was for us to do it directly and over a longer period of time. I think when we now reach this point in the development of DAX anesthetics and therapeutics, what we've shown to potential partners, whether it's small muscles in the case of aesthetics or larger muscles in the case of therapeutics, that the science and the data are different than what has been associated with other neuromodulators.
Tim High I think that when we look at business development, we look at it Agnostically and we first and foremost it look at it how do we create value for shareholders.
And I think that the two areas that we've.
Executed transactions with Mylan and the bias someone post on in China that we felt when we look at the value created to shareholders. It was better to do that in partnership.
Then.
It was for us to do it.
Directly in over a longer period of time.
I think when we now reached this point in the development of taxi anesthetics and therapeutics, what weve shown to potential partners, whether it's small muscles in the case of statics or larger muscles in the case of therapeutics.
That the science and the data is different than what has been associated with other neuromodulators and so it's opened up a number of discussions both anesthetics, which now given that the development work through phase three is done are more geographic base. Your question are there opportunities to look at that.
Dan Brown: And so it's opened up a number of discussions, both in aesthetics, which now that the development work through phase three is done, are more geographic in nature to your question. Are there opportunities to look at distribution and partnering opportunities from a commercialization perspective? I think when you look at therapeutics, the challenge is there are tens, if not hundreds of potential opportunities. And so, yes, they become very indication specific.
Distribution and partnering opportunities from a commercialization.
I think when you look at therapeutics, the challenges theres tens, if not hundreds of potential opportunities and so yes, they become very indication specific.
Dan Brown: I think what we said is that we want to keep the asset whole within Revance, and we want that to be North America. We don't expect that at this point we would look at other types of partnering in North America, but there could be other indications specific either by geography or by indication that we should continue to take a look at, and we are. And, you know, we'll certainly come back when those discussions are more mature, but I think that it's all about now getting DAXI approved and Gabella lines and commercial, having the most successful launch that we can possibly have next year, and then beginning to sort of roll out the therapeutic pipeline in a thoughtful way. Some of it will be all Revance, and some of it will be in partnership with someone else either by geography or by indication.
I think what we said is we want to keep the asset whole within romance and we want that to be North America. You should we don't expect that at this point, we would look at other type of partnering in North America, but there could be other indication specific either by geography or by indication.
That we should continue to take a look at and we are and you will certainly come back when those discussions or or more mature, but I think that it's all about now getting to actually approved in glabellar lines and commercial having the most successful launch that we can possibly have next year and then beginning to sort of roll out the therapeutic pipeline in a thoughtful way some of it will be all over advance some of it we in partnership with someone else either by geography or by indication. This what makes this taxi molecule such a value enriching opportunity is its not only the data that we've generated so far but it's a number of indications that you know.
Dan Brown: This is what makes this DAXI molecule such a value-enhancing opportunity, not only the data that we've generated so far, but the number of indications that could potentially grow those segments with something that's more responsive or longer duration or better pharmacoeconomics. I think it's an exciting opportunity, and therapeutics doesn't have as much visibility today as it should, but it will. And I think that's reflective of the type of discussions we're having with people who are in neurology and urology and other indications where neuromodulators are used today.
Could potentially grow those segments with something that's more responsive or longer duration or better pharmacoeconomics thinks as exciting opportunity and therapeutics isn't doesn't have as much visibility today as it should but it will and I think that's reflective of the type of discussions we're having people.
Who are in neurology and urology and other indications where neuromodulators are used today.
Okay. That's understood and you also added two new board members. This quarter there were some transitions from the C suite last year.
Dan Brown: Okay, that's understood. And you also added two new board members this quarter. There were some transitions from the C-suite last year. How settled do you think the management is currently, and where else do you want to add within the organization ahead of what should obviously be a very active 2020?
How federal.
How settled do you think the management is currently and where else do you want to add within the organization.
Ahead of what should obviously be very active 2020.
I don't think we couldn't be more thrilled on behalf of the board and the management team to attract people like Joe Borough and Kristen OLED I think these are seminal experts executives in their field, who have lots of opportunities and it reflects their excitement for the refinance platform and the future growth opportunities and for them to be a part of it.
Dan Brown: I don't think we could be more thrilled on behalf of the board and the management team to attract people like Jill Burrow and Chris Nolet. I think these are seminal experts, executives in their field who have lots of opportunities, and it reflects their excitement for the Revance platform and the future growth opportunities and for them to be a part of it. I'm really honored and thrilled, and not only are they just great executives, they're good people, and I think this is an extraordinarily talented, independent board of directors that's well positioned for growth. I think we've had a very stable management team, and that's been for a long period of time. We've operated the plan with the exception of a very short delay in the BLA filing.
Hi, I'm really honored and thrilled and not only are they just great executives are good people and I think this is an extraordinarily talented independent board of directors, it's well positioned for growth and we've had a very stable management team.
And that's been for a long period of time, we operated the plan.
With the exception of a very short delay in the BLA filing weve delivered and executed well I think really it's about building out the commercial infrastructure.
Dan Brown: We've delivered and executed well. I think really it's about building out the commercial infrastructure and trying to have the best in class organization and have that timed appropriately as you get closer to launching the product. But I think when you look at aesthetics and therapeutics, they follow where there's real clinically meaningful, commercially meaningful innovation, and I don't believe that we're going to have any problem continuing to attract great talent to this company.
And trying to have the best in class organization and have that timed appropriately as you get closer to.
Launching the product.
But I think when you look at us that exit therapeutics, they follow where there's real clinically meaningful commercially meaningful innovation and I don't believe that we're going to have any problem continuing to attract great talent to this company.
Understood. Thanks for all the questions.
Thank you and our next question comes from the line.
Barclays. Your line is open. Please go ahead.
Dan Brown: That's it. Thanks for all the questions.
Hi, Oh, thank you its great to see the program back see can you.
Operator: Thank you. And our next question comes from the line of Balaji Prasad with Barclays. Your line is open. Please go ahead.
Two questions.
Okay and back to can you give us an update on.
Duration front have you seen anything incremental since your last call.
Now to get any greater confidence on the six month expectation.
Balaji V. Prasad: And secondly, on Biosimilar Botox, recently on the call for the AbbVie-Elegan transaction, AbbVie made a statement that the Botox molecule is not very well characterized, and it's highly unlikely that one will see a Botox, or any other biosimilar Botox for a long time. So I'd also be very curious to know your comments on this, especially as it's a core part of your growth pillars, and why does there seem to be such a strong divergence of views on Biosimilar Botox? Thank you.
And secondly on now by some of the Bulldogs.
Recently on a call for the Abbvie undergone transaction have you made a statement that the botox molecule is not kind of Christ and it's highly unlikely that we'll see a botox mice nobody else what a long time, so ultimately, but curious to know your comments on days, especially as its going far afield growth pillars, and while he does there seem to be such a strong divergence of views on biosimilar products. Thank you.
Dan Brown: Let me take the DAXI and the six-month labeling. We continue to feel very confident in our ability to get a six-month label based on our discussions with the agency, based on the draft guidance, and based on predicate labels where the none-demiled follow-up. So as part of the manuscript, you'll see you won't see anything materially different, but there's nothing that changes our confidence, and we're looking forward to having those clinical labeling discussions with the agency next year once they're filed. Our confidence is high, and I think the simple fact is that, for the first time, there is clinically meaningful data at the FDA-mandated endpoints that shows that this will be an endpoint that can Now, for the first time, there is data around this annualized correction of twice a year, so I think we don't need to belabor that point any further.
Let me take the taxi and the labeling six month, we continue to feel very confident in our ability to get a six six month label based on our discussions with the agency based on the draft guidance based on predicate labels, where the none to mild follow up so as part of the manuscript you'll see you won't see materially different but theres nothing that changes our confidence and we're looking forward to having those clinical labeling discussions with the agency next year once they're filed our confidence is high and for that I think the simple fact is that for the first time there is clinically meaningful data at the FDA mandated endpoints that shows that this will be a.
Endpoint that can be achieved and its evolved over time from three months to three to four to up to four.
But there hasn't been data historically now for the first time there is data around this annualized correction of twice a year and so I think we don't need to sort of belabor that point any further as it relates to two a biosimilar I think we've been very clear that this is a this is a challenging but not impossible opportunity and I think it reflects the investments that we've made over 10 plus years in a state of the art manufacturing facility in the U.S. operating under select agent guidance.
Dan Brown: As it relates to a biosimilar, I think we've been very clear that this is a challenging but not impossible opportunity, and I think it reflects the investments that we've made over 10-plus years in a state-of-the-art manufacturing facility in the U.S. operating under select agent guidance, into chemistry manufacturing, and controls in the analytics to look at the predicate reference products relative to where we are today with API and drug product And I think that's the technology that's been developed by Revance. It's analytics, and it has required substantial R&D investment to get to this point. I think that there was tremendous uncertainty. I think anybody who's applied for that prior to the biosimilar initial advisory meeting would have shared that the bar is high, and the complexity is high.
Into a chemistry manufacturing and controls and the analytics to look at the predicate reference products relative to where we at today with API and drug product and I think thats been technology Thats been developed by Revance its analytics and it's good acquired substantive R&D investment to get to this point.
I think that there was tremendous uncertainty I think anybody who is appointed in that prior to the Biosimilar initial advisory meeting we would have shared that the bar is high the complexity is high but I think we came away from the meeting with the FDA I'm very pleased that there is a route forward, but we also recognize there's a lot of hard work in front of us and that will be a path that once we finish up our discussions with Mylan will we will comment on but I think our view is it's not impossible, but it's challenging and we will continue to do the work we think that asset has value and we're excited to continue that work further.
Dan Brown: But I think we came away from the BM meeting with the FDA very pleased that there is a route forward, but we also recognize there's a lot of hard work in front of us. And that will be a path that once we finish up our discussions with Myland, we will comment on. But I think our view is it's not impossible, but it's challenging, and we'll continue to do the work. We think that asset has value, and we're excited to continue that work further.
That's helpful. Thank you of the often discuss some startup.
Dan Brown: That's helpful. Thank you. Have the opt-in discussions started yet?
Dan Brown: I'm sorry.
I'm sorry.
Dan Brown: have had opt-in discussions with Mylan Startup.
Oh, the opt in discussions with my limbs problem.
Yes, we've continued get those those those discussions have had been initiated.
Dan Brown: Yeah, we've continued, yeah, those discussions have been initiated.
Okay, great. Thank you Thats helpful.
Balaji V. Prasad: Okay, great. Thank you. That's helpful.
Thank you.
Operator: Thank you. And our last question comes from the line of Douglas Tsao with HC Rainwright. Your line is open. Please go ahead.
Question comes from the line of Douglas with H.C. Wainwright.
As open. Please go ahead.
Hi, Thanks for taking the question. So first of all just in terms of Mylan just curious given the recent news around the transaction that they're involved in.
Douglas Dylan Tsao: Hi, thanks for taking the question. So first of all, just in terms of Mylan, just curious, given the recent news around the transaction that they're involved in, is there a change of control provision for you? And have you engaged them to reconfirm their sort of interest in continuing on?
Is there a change of control provision for you and have you engaged and to reconfirm their sort of interesting continuing on.
I think you only thing we're going to comment on today is that.
Dan Brown: I think the only thing we're going to comment on today is that, you know, we've continued to have discussions with Myelin relative to the FDA biosimilar advisory meeting, and they have an opportunity to opt in or opt out. We think, based on the data that's been generated, this is an asset regardless of which way they may proceed. And if they do opt in, there will be a non-dilutive payment associated with that and continued support of development. If they don't, we'll take a look at what's the best way to create value with that asset going forward. As we all know, there's been a lot of discussions with Myelin on what's part of that portfolio, and they'll certainly work through that in due course. And at the appropriate time, they'll make a decision on whether a biosimilar to Botox makes sense in their portfolio or not.
We continue to have discussions with mylan relative to the FDA Biosimilar advisory meeting and they have an opportunity to opt in or opt out.
We think based on the data that's been generated this is an asset regardless of which way that they would they may proceed and if they do often there will be a non dilutive pavement associate with that and continued supportive of development. If they don't we'll we'll take a look at what's the best way to create value with that asset going forward is as we all know there is a lot of discussions between with Mylan done what's the part of that portfolio and they will certainly work through that in due course.
And at the appropriate time, they'll make a decision on whether.
A biosimilar to botox makes sense in their portfolio or not.
And then Dan just as a follow up and then another question in terms of the data for crow's feet.
Dan Brown: And then, Dan, just as a follow-up, and then another question, in terms of the data for crow's feet as well as forehead lines, you know, do you have an expectation, you know, in terms of the value that DAXI might provide in those versus the value that it might provide in, say, clavellar lines, which obviously, you know, we've seen a whole host of data, and is there any reason to think that the data would be, vary from what we saw in the SECURE trials?
As well as for headlines.
You know do you have an expectation in terms of the value.
That taxi might provide in those versus the value that it might provide and say glabellar lines, which obviously, we've seen a whole host of data and is there any reason to think that the data would be vary from what we saw in the secure a trial.
Dan Brown: Look, I think that the responsiveness of neuromodulators, the duration of neuromodulators, Doug, changes from indication in different patient conditions. And so I think for us, there's nothing inherently different about a neuromuscular junction in the area of facial aesthetics or a neuromuscular junction in other areas that this drug may be used in. Upper Limb Spasticity and the like, that whatever that baseline duration is, we can advance it longer than what's on the market today. And I think the part of having the work with forehead and crow's feet lines is, this is, as I said on a prior question, it's not a gobellar line. This is a neuromodulator that has versatility across the face and across other anatomic areas. We want to make sure that we understand the safety, efficacy, and performance, which is both responsiveness and duration in all indications, and know what the right injection pattern is to simplify that for consumers.
Look I think that the responsiveness of Neuromodulators the duration of Neuromodulators, Doug changes from indication in different patient conditions, and so I think for US is there's nothing inherently different about a neuromuscular junction in area facial aesthetics or a neuromuscular junction in other areas of drug may be you cervical dystonia upper limb spasticity. Unlike that whatever that baseline duration is that we can advance that longer than what's in market today, and I think a part of having the work with forehead in Crows feet lines is this as I said on the on on on a prior question. It's not a glabellar line truck. This is a narrow modulator that has versatility across the face and across other anatomic areas. We want to make sure that we understand the safety efficacy and the performance and that is both responsiveness and duration in all the indications and know what the right injection pattern is.
To simplify that for consumers. There is no reason for them to kind of.
Dan Brown: There's no reason for them to kind of sort of left that unanswered, and I think for us it's about building out the label, building the clinical data set in a thoughtful way, rigorous way, and that's what we intend to do, and I think that that's what's required of an innovative molecule in an innovative space, is to work with your physicians to make sure you're getting the best possible result, whether it's facial aesthetics or therapeutics.
Sort of left that and answered and I think for US it's about building out the label building the clinical data set in a thoughtful way rigorous way and that's what we intend to do and I think that that's what's required of an innovative molecule in an innovative space is to work with your physicians to make sure. We're getting the best possible result, whether its facial aesthetics or therapeutics.
Dan Brown: I mean, I guess Dan, as a follow-up to that, would you think that six months is the right framework, or, you know, just as we look forward to those data sets, would you think it's possible that, while longer than the existing on-market therapies, it might be, you know, somewhat different?
I mean, I guess, then as a follow up that and said would you think that six months is the right framework or you are just as we look forward to those datasets should we would do you think it's possible that you know a lot longer than the than the need the existing on market therapies it might be somewhat darrin.
Look I think you want to look at a natural look and you want to look at you know for US is that the annualized dosing with two or 3.2 or fewer treatments, but does not every if you look at the crows feet data for example in the existing probably it's not very good. So I think for US as you want to look at whatever the bar is an advancing the state of the art that at the end of the day. The data is going to speak for itself and I think for US is whether its go behler lines or crow's feet or forehead are pluses moments pick your indication whether its cervical dystonia upper limb spasticity migraine.
Dan Brown: Look, I think you want to look at a natural look, and you want to look at, you know, for us, that annualized dose with two or fewer treatments. But Doug, not every, if you look at the crow's feet data, for example, in the existing product, it's not very good. So I think for us, you want to look at whatever the bar is in advancing the state of the art, and at the end of the day, the data is going to speak for itself. And I think for us, whether it's glabellar lines or crow's feet or forehead or platysmal bands, pick your indication, whether it's cervical dystonia, upper limb spasticity, or migraine. Physicians and patients want to see higher responsive rates. They want to see greater duration, and they want to do that without creating an unusual look or creating adverse events. And I think that's what we've tried to do as part of the DAXI program.
Physicians and patients want to see more sponsors rates, they want to see greater duration and they want to see that without creating an unusual look or creating adverse events and I think thats, what weve tried to do as part of the taxi program.
Okay, great. Thank you.
Dan Brown: Okay, great. Thank you.
Thank you.
Dan Brown: Thank you. And this does conclude today's Q&A session, and I would like to turn the conference back over to Mr. Dan Brown for any final remarks.
It does conclude todays.
I would like to turn the conference back over to Mr., Dan Brown for any final remarks.
Dan Brown: Thank you, Operator. In terms of our travel schedule over the next few months, we'll be at the Wells Fargo Healthcare Conference in Boston, the Morgan Stanley Healthcare Conference in New York, and the Cantor Fitzgerald Healthcare Conference, which will also be in New York. Please let Jeanne know if you'd like to meet with us when you're in your area, or otherwise schedule a catch-up call. With that, I'd like to thank each of you for taking part in today's call. Have a great day, everyone. Take care.
Thank you operator in terms of our travel schedule over the next few months will be at the Wells Fargo Health Care Conference in Boston, The Morgan Stanley Healthcare Conference in New York, and the Cantor Fitzgerald Healthcare Conference, which will also be in New York. Please let genie no if you'd like to meet with us when you're in your area or otherwise scheduled to catch up call.
With that I'd like to thank each of you for taking part in today's call have a great day, everyone take care.
Ladies and gentlemen.
Operator: Ladies and gentlemen, this concludes today's program, and you may all disconnect. Everyone, have a great day.
That's the base.
And you may all disconnect everyone have a great day.
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