Antares Pharma, Inc. (ATRS) on Q3 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, welcome to the Antares Pharma Third Quarter 2021 Financial and Operating Results Conference Call. I will now hand the conference call over to Tram Bui, Antares, Vice President of Corporate Communications and Investor Relations.
Tram Bui: Thank you, operator and good morning everyone. Earlier today, we announced our third quarter 2021 financial results and operating achievements. A copy of the press release and slide presentation for today's conference call are available in the Investor Relations section of the Antares Pharma corporate website. Before we begin, I would like to remind listeners that some of our statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include those related to our future financial and operating results, including our expectations regarding the impact of the ongoing COVID-19 pandemic on our overall business, operating results and financial condition, our ability to achieve the updated 2021 revenue guidance, future revenue growth, prescription volumes product launches and market share for our products and our partner products, FDA actions and potential regulatory approval for our, and our partner products, timing and results of ongoing and future development programs and clinical trials for our products and our partner products and future business development efforts. These forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially. They are identified and described in today's press release in the form accompanying in the accompanying slide presentation on slide two and in the company's filings with the SEC on Form 10-K and as updated in Antares' periodic filings on Form 10-Q and Form 8-K. Antares is providing this information as of the date of today's call and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements. Joining me on the call today are Bob Apple, President and Chief Executive Officer; Fred Powell, Executive Vice President and Chief Financial Officer; Dr. Peter Richardson, Executive Vice President, Research and Development and Chief Medical Officer; and Joe Renda, Senior Vice President of Commercial. Let's review the agenda for today's call on Slide 3. Bob will begin with a review of our overall business, including the recent licensing agreement for TLANDO and then hand the call over to Joe to provide an update on our commercial achievements and strategy for our proprietary portfolio. Dr. Peter Richardson will then discuss our R&D initiatives to Q4 handing the call back to Bob to provide a review of our Alliance business. Fred will then go through the detailed financials and Bob will conclude with closing comments before opening the line for your questions. Please turn to Slide 4 and I will hand the call over to Bob Apple. Bob?
Bob Apple: Thanks Tram, and good morning everyone and thank you for your interest in our third quarter results and operations update. As we look at the third quarter and year-to-date results, we are very pleased to report another record period of growth. We believe the operational and financial advancement we have achieved across our business, is reflective of the strength of our organization and highlight the multiple and sustainable opportunities that remain in front of us. Our third quarter and nine months revenue increased 20% and 28% year-over-year to more than $48 and $135 million. EBITDA in the third quarter increased to $11 million and approximately $29 million in 9-month period and income before taxes increased 45% in Q3 to $7.2 million and over 250% to $17.2 million in the nine month period. We achieve these impressive results through an extremely challenging time with the emergence of the delta variant affecting patient visits and physician access, as well as putting tremendous pressure on supply chain from our manufacturers and suppliers. Even with the strong headwinds in play, as I said and Teva's generic EpiPen continue to be the primary contributors to our growth again this quarter. We also expect the recent licensing of TLANDO, and the development of a ATRS 1902 for adrenal crisis rescue will further enhance our proprietary portfolio and be future drivers of our overall growth. Furthermore, we anticipate these internal achievements, coupled with the potential opportunities to remain with our Alliance business will create a foundation to continue to grow our business. Let me first start with the signing of the U.S. license for TLANDO in October, which is a twice-daily oral treatment for testosterone replacement therapy, tentatively approved by the FDA. We have committed to broadening our commercial proprietary portfolio and the opportunity to complement our existing therapeutic footprint with another testosterone offering to physicians and patients significantly enhances our near-term growth opportunities. Within the backdrop of a large and growing TRT market we have a sales force that continues to prove their success with XYOSTED and we expect continuously leverage their physician relationships to drive adoption of the old dosage form of testosterone. Based on our discussions with physicians and patients it is our understanding that there is a preference for more than one therapy option and our growing commitment to TRT will support our market share gains and revenue growth in this market. Overall, we remain fiscally diligent with prospecting for corporate development and believe the financial terms of the license agreement with an upfront payment of $11 million represents an attractive opportunity with a compelling story and natural field. We expect to launch these complementary product in the second quarter of 2022 upon FDA approval based on the expiration of an exclusivity period of the competing product. From a market standpoint, we believe TLANDO has several positive product attributes such as one dosage strength and less restrictive dosing instructions among others. They could set it apart from the other oral products. We also expect to conduct further diligence and assess the development opportunity for TLANDO XR, a potential once-daily oral treatment for testosterone replacement therapy, which we believe could represent a significant benefit for patients and physicians. I will turn the call over to Joe to provide an overview of our commercial achievements and provide more detail on our commercial strategy for an expanded proprietary portfolio. Joe?
Joe Renda: Thanks, Bob, and good morning everybody. I really appreciate the opportunity to join today's call. Throughout the year, our commercial organization has continued to perform quite well with our entire portfolio of products, including XYOSTED, NOCDURNA and OTREXUP and this was despite the challenges we faced with the delta variant that created physician access barriers and fluctuating patient volumes and this was particularly burdensome in this last quarter, but with that said, we were still able to demonstrate 32% year-over-year growth in our proprietary portfolio in the quarter and we believe we will have an even more compelling bag to offer both physicians and patients with the anticipated launch of TLANDO for next year. Let me start by sharing a little bit about our flagship proprietary product XYOSTED which continues to be one of the main drivers of growth. As you can see in Slide 5 in the third quarter XYOSTED total prescriptions increased 40% year-over-year and almost 50% year to date. And this is despite a slightly more limited physician access and decrease in patient visits that I just mentioned. We had some of our highest weekly performances of XYOSTED in both the month of September and October. And just to give you some perspective, and this is according to the IQVIA data, urology office visits are still down more than 30% from the pre-pandemic levels. Despite that, and with that said, we have the highest weekly performance of XYOSTED since launch of approximately 5200 TRxs just last week. Although, we saw a 60/40 in person versus virtual detailing mix in the third quarter, now with the delta variant subsiding we're starting to see physician access and patient volumes continue to improve throughout the month of October. And we expect it to continue as the remainder of the year unfolds. XYOSTED remains a top priority for our field force as they focus on driving deeper penetration within the existing prescriber base of nearly 10,000 physicians who are top decile writers. We're pleased with the 50/50 split between both new patient starts and switches from the IM injection particularly as those new patient starts may have been slightly started and the earlier part of the third quarter due to the variant. And our hybrid selling model really continues to work well as we flex between the in-person and virtual calls and that's really based on whatever the requirements are of the physicians' offices that we call on, as well as those respective markets. As we continue to successfully positions I said as a best-in-class painless subcu injection, we believe physicians and patients really have a preference for the different treatment options and that leads me to the opportunity we'll talk now about which is TLANDO on Slide 6. We have consistently noted that the TRT market really remains compelling from a size and growth perspective with almost 8 million total prescriptions injection still representing the majority of approximately 75% of the shares in that market, but the gels still hold us a substantial share of about 20%, which is roughly 1.8 million prescriptions and that's of the overall TRT market. Given those market dynamics we think an offering of both an injectable and oral therapy are highly synergistic and will only enhance our overall growth trajectory. We expect to launch - we expect to market TLANDO and XYOSTED together complementary as options for patients and physicians. And while, XYOSTED offers a convenient once-weekly painless injection option with a compelling clinical profile, we believe that patients who may prefer an oral treatment and may not choose an injection as their first option. So as I stated before, there are approximately 1.8 million prescriptions for gels, which may not be optimal for patients given the challenges that the daily application represents as well as the risk of transference. So the opportunity to have both XYOSTED and TLANDO in the sales force's bag next year gives our sales force the ability to have both options for physicians and their patients and it really allows them to choose what best option and treatments are best for their needs. Recently, we attended the National SMS&A Conference, which is an annual professional medical congress focused on sexual health and hormone replacement. And we had several medical key opinion leaders there that were familiar with TLANDO clinical profile and they expressed in their opinion that TLANDO has some distinct clinical advantages over the oral that's on the market today, such as no need for a complex titration schedule and a convenient BID dosing with the standard meal. These were some of the main attributes which also attracted us to the product and we'll use the next several months to put together a comprehensive launch strategy which will be inclusive of market research and nexus testing, and we're going to build a very strong launch plan for next year. As we plan for the final FDA approval based on the exploration of the exclusivity period, which is March 27 of next year, we also expect to expand the size of our sales force, leverage their existing relationships with health care providers and ensure we have the appropriate market access for TLANDO, which we anticipate will be similar to of XYOSTED, which garners a nearly 75% of covered commercial lives nationally. We recently expanded our field force from 79 representatives and we expect to have about 90 on board by the end of this year and that's to support our current portfolio. But with the addition of TLANDO we plan on increasing our sales footprint by an additional 20%, which will enable us to reach more prescribers in new markets, and ultimately these additional territories, we'll be able to cover about 95% of the total TRT prescriptions in the market. And we believe our current sales force will be able to successfully leverage their relationships with their urologists and or cardiologists and primary care physicians, as well as their clinical acumen to drive adoption of TLANDO .We will continue to support their efforts by enhancing the strength and size of our commercial organization to grow both XYOSTED and NOCTURNA in tandem with preparing for the launch of TLANDO on the second quarter of next year. In the meantime whilst XYOSTED remains the primary detailing focus for all of our representatives, we're also dedicated to the opportunity to continue to grow NOCTURNA. NOCTURNA remains a priority within our sales force and we continue to support their marketing efforts with branded consumer and healthcare provider digital campaigns, sales and marketing tools as well as physician education, and I want to take this opportunity to say a congratulations to the marketing team here at Antares as they were recognized recently as a top 25 marketing team by the DTC perspectives for their work on the digital campaigns for both XYOSTED and NOCTURNA. The digital strategy for healthcare providers remains a paramount part of our plan, as we believe that physician education is a critical component for the success of NOCTURNA. In the third quarter, we also took advantage of the slight shift in in-person customer calls and we're able to garner significant interest in our peer to peer education of speaker programs for NOCTURNA which you can see, as highlighted on Slide 7. We have hosted more than 35 programs across the country. We have educated almost 200 healthcare providers so far just this year and we have several other programs lined up between now and the end of the year. We really believe that NOCTURNA will require a normal sales cycle of a new brand launch, which is at least 6th in-person physician interactions really in order to affect prescribing habits. But the feedback so far we continue to receive on the programs we believe will also accelerate the future growth of NOCTURNA. I'll wrap up here by saying, as we look to finish out the year, our expectations remain high for XYOSTED. As the feedback from our customers and patients remains extremely positive. We believe NOCTURNA can be a future contributor to our revenue growth as we help physicians better identify these patient types in their practice. The energy and the spirit that's been shown by our commercial organization at our recent in-person regional sales meetings really provided greater evidence that this team is excited to increase script growth across our products both and also leverage their physician relationships, particularly now as we have an oral testosterone product in TLANDO that will potentially be added to their bag next year. Overall, everyone is invigorated with tremendous opportunities we still have in front of us to support the growth of our proprietary portfolio. And with that, I'm going to hand the call over now to Dr. Peter Richardson. Peter?
Peter Richardson: Thank you, Joe. Good morning, everyone. Throughout the year we've continued to advance our clinical development initiatives, which brings us to Slide 8 where we will begin our discussion with ATRS1902. We are pleased the FDA accepted our IND for 1092. And subsequently this is allowed us to initiate the Phase 1 study on time as planned. The development programs in 1902 is designed to support our proposed indication for the treatment of acute adrenal insufficiency known as an adrenal crisis in both adults and adolescents using our new proprietary auto-injector platform, now formally known . To deliver a stable liquid formulation of hydrocortisone. In the third quarter, we announced the first subjects for the Phase 1 study with dose, and I'm pleased to report for the first cohorts have complete the study as planned and samples will now be analysed. This crossover study in 32 healthy adults is designed to establish the PK profile with ATRS1902 compared to solid quarter evaluating the safety, tolerability, and epigenetics of our stable liquid formulation hydrocortisone when given by intramuscular injection. This study demonstrates our ongoing commitment to help underserved patients in need of acute rescue therapies. As shown on Slide 9, our development team creates a new device platform specific to the needs of these patients who suffer with adrenal crisis. Our goal is to provide a simple convenient injection versus the current multi-stack standard of care which is both cumbersome and can be challenging for patients and their caregivers, particularly in a time of crisis. We anticipate following this study next year with the second human factor study and the definitive bioequivalence study in the final auto-injector. These activities should keep us on track with our timeline for the anticipated Fiber 5 B2 NDA filing with the FDA towards the end of next year. Moving to our second internal development program, we've chosen to conduct additional preclinical studies for ATRS1901 our oncology formulation designed to be delivered weekly using an auto-injector. These look early next year and should then allow us to file our initial IND with the FDA shortly thereafter. We are currently reviewing data to confirm that the selected formulation will deliver the target levels of active drugs and this has actually been tolerated. Overall, we remain committed to progressing all of our development programs and we look forward to making additions to our pipeline in 2022 utilizing a formulation and of injector capabilities with an emphasis on rescue therapies. And with that, I will now hand the call back over to Bob. Bob?
Bob Apple: Thanks, Peter. Our commitment to the growth and development of our proprietary portfolio mirrors the opportunities we envision for our partner business, and I'll start with Teva's generic EpiPen. In the third quarter Teva's generic EpiPen outperformed with a pre-pandemic or normal back to school season as total prescriptions increased 91% year-over-year and they came in at a 58% market share of the EpiPen market as illustrated on Slide 10. Our continued success with this partner product was a primary driver to our 70% quarterly increase in royalty revenue. We expect Teva to maintain relative market share as we focus on maintaining a consistent supply of auto injectors despite labor issues with our manufacturers that was particularly challenging this past year due to pandemic. Furthermore, we believe our additional opportunities with Teva for generic Forteo and Byetta, will be a significant value in the future as we continue on their path for FDA approval. As Terren just noted on our third quarter call last week, we are fully committed to being leaders worldwide in generics. And as a way of a leap of regulatory approvals for launches. They are optimistic that they will see them in the coming quarters. With that XYOSTED, I trust our commitment as they have demonstrated a proven track record of success with EpiPen as a prime example. These complex generics such as EpiPen, Forteo and Byetta may take longer from an approval standpoint compared to non-complex generics but the results we've achieved with their EpiPen we will bring significant value to both organizations on approval. With Teva's pending product approvals along with the work we performed on the side development program in the third quarter and endorse development program for selatogrel which continues to enrol their Phase 3 trial, we believe we have a very robust alliance business that remain pillars of potential growth in the future. I'll now hand the call over to Fred for a detailed review of our -- of our financials. Fred
Fred Powell: Thanks, Bob, and good morning everyone. Our ability to continue to report another strong quarter with revenue growth of 20% over 2020 for a record $48.2 million and net income of $5.4 million or $0.03 per share, reflects the durability of our diversified business continued growth in both XYOSTED and Teva's generic EpiPen this quarter also contributed to our total revenue to date revenue increase of 28% to $235.3 million as compared to the prior year. As a result of our ongoing performance we have updated our full-year 2021 revenue guidance to a $180 to a $190 million, representing 20% to 27% year-over-year growth in the third quarter, we were also able to continue to strengthen our balance sheet with cash generation and recently we replaced our Hercules term loan with a credit facility from Wells Fargo, reducing our expected future interest expense. So let me now provide a more detailed review of the financial results for the third quarter and 9 months ended September 30, 2021 which brings us to Slides 11 and 12. Total revenue was $48.2 million for the three months ended September 30, 2021 a 20% increase compared to $40 million in the same period in 2020 for the 9 months ended September 30, 2021. Total revenue was $135.3 million, a 28% increase from $105.5 million for the comparable period in 2020. Sales of our proprietary products is asset OTREXUP and NOCDURNA generated revenue of $20.8 million and $58.5 million for the three and nine months ended September 30, 2021 compared to $15.8 and $43.2 million for the same periods in 2020. The 32% and 36% increase in proprietary product sales for the three and nine months ended September 30, 2021 compared to the same periods in 2020 were principally attributable to continued growth in sales for that asset. Licensing and development revenue was $3.7 million and $15.8 million for the three and nine months ended September 30, 2021 compared to $4.3 million and $8.8 million dollars for the comparable periods in 2020. The decrease in licensing and development revenue in the quarter was due to fluctuations and timing of development activities. While the overall increase in 2021 was primarily the result of incremental development and product maintenance activities with Teva and other ongoing partner development projects. Royalty revenue increased to $11.4 million for the three months ended September 30, 2021 from $6.7 million for the same period in 20, for the nine months ended September 30, 2021 royalty revenue increased over 83% to $29.3 million compared to $16 million for the same period in 2020. During the third quarter, the EpiPen market benefit -- benefited from a normal back-to-school season and Teva achieved a 58% market share, which accounted for the net increase in royalty revenue over 2020. Our gross profit was $31.8 million and $85.9 million dollars, representing a gross margin of 66% and 64% for the three and nine months ended September 30, 2021 as compared to $23.5 million and $61.4 million or 59% and 58% gross margin in the same period in 2020. The increases in gross profit and margin were primarily attributable to the increases in sales, sales and Epi royalty. Research and development expenses were $3.9 and $10.6 million for the three and nine months ended September 30, 2021 compared to $2.4 million and $7.8 million for the comparable periods in 2020. The increase in R&D costs were mainly driven by our internal development programs, as Peter discussed previously, we initiated the Phase 1 study for ATRS 1902 for Adrenal Crisis Rescue and we conducted preclinical work for ATRS 1901 in the third quarter. Selling, general and administrative expenses were $19.9 million and $55.2 million for the three and nine months ended September 30, 2021 compared to $15.2 million and $46.1 million for the comparable periods in 2020. The increase in SG&A in 2020 was primarily due to the incremental costs associated with the launch of NOCDURNA and an increase in sales and marketing expenses that had declined during the pandemic, in 2020. As a result of our strong financial and operational results, we reported income before income taxes of $7.2 million and $0.03 per basic and diluted earnings per share for the third quarter of 2021. And for the nine months ended September 30, 2021 our income before taxes was $17.2 million and earnings per basic and diluted share was $0.08 compared to $40.8 million and $0.03 per share in the comparable period of 2020. As a September 30, 2021, our cash balance was $57.4 million. Finally, to conclude my update, I'd like to discuss our recent credit facility, which we entered into with Wells Fargo. During 2021 we have generated $27 million in operating cash. This jump -- this cash generation has allowed us to reduce our Hercules term loan from $40 million at the beginning of the year to $20 million at September 30, 2021. As a result of our improved financial condition and performance, earlier this week, we extinguished our term loan from Hercules and an inter entered into a credit facility with Wells Fargo, in which we obtained a $20 million term loan the combination of paying down and ultimately extinguishing the Hercules term loan and replacing it with Wells Fargo debt will allow Antares to reduce our interest expense by approximately $3 million on an annual basis. The credit facility Wells Fargo also gives us access to additional borrowing capacity, providing the company with more financial flexibility I'll now turn the call back to Bob for closing remarks. Bob?
Bob Apple: Thanks, Fred. And we operate under wide umbrella of diversification and opportunities I believe our achievements year-to-date set us up for a nice finish to 2021. Despite significant challenges that persisted throughout this year due to the pandemic. Our commercialization demonstrated the growth opportunities across our proprietary portfolio with XYOSTED NOCDURNA and OTREXUP driving a 32% increase in that portion of the business. While Teva's generic EpiPen drove the 70% increase in our royalty revenue. In the first nine months of 2021, we saw significant increases in our revenue margin, net income before taxes EPS and cash generation. We expect the balance of the year to be a strong as the first nine months. I'm very proud of the efforts of all the Antares employees and thank them for their dedication and tireless work throughout this quarter and year performing extremely well in a very challenging time. As we map our future growth trajectory. We believe the in-license agreement for TLANDO and the advancement of ATRS 1902 will further enhance our proprietary portfolio and with a stronger balance sheet. We also expect to continue to pursue corporate development to support our strategic initiatives, as we, as we await the advancement and potential FDA approvals of our partner programs. Again, thank you for your interest and operator you can now open the lines up for questions.
Operator: Thank you. We'll take our first question from Greg Fraser with Trust Securities.
Greg Fraser: Good morning, guys, thanks for taking the questions. First one on XYOSTED, curious if there are any temporary impacts on gross to net in the quarter that we should keep in mind as we think about the fourth quarter?
Fred Powell: Hey, Greg, this is Fred. I'll answer that one. Now, there is nothing unusual in the third quarter gross and that we would expect to see take place and the repeat in the fourth quarter, it was a normal quarter for us. No unusual adjustments there.
Unidentified Analyst: Got it. And on TLANDO, do you think that product has the potential to achieve XYOSTED like market share? Any color on that how you're thinking about share potential would be helpful?
Unidentified Analyst: I'll take that question, and I'll let Joe add anything if I miss something. I mean, but we think TLANDO has as much potential as XYOSTED, because it's a really large market with testosterone replacement, there's over 8 million prescriptions and as successful as XYOSTED it's been. We're still in that 4% market share and so we still, we believe, is a lot of upside for both XYOSTED and bringing along TLANDO. We believe and when Joe was talking about earlier in his talk about 20 some percent of the market are gels, we believe that product really fits perfectly well in that market. And quite honestly, we're surprised anyone really uses gels anymore because of the challenges on a daily application of a large volume of gel get transparency issues and so forth. We believe those patients that may be going into those gels initially letting is going to be easy or they're afraid of injections will be really perfect potential patients for TLANDO. And so when we look at the overall market, we think this is much opportunity for clear, no as far as XYOSTED, and when we go into the doctor's offices. It's really about giving them the choice. We'll obviously provide both of the clinical data and show, if they do that both work extremely well and let them will allow their patients who choose based on their preference of a once-weekly painless injection or a daily twice-a-day oral tablet. And so, we think there's a lot of opportunities and we're really excited about it. We're growing our sales force to accommodate have in 2 products, basically side-by-side. When we go into those doctors' offices and I don't know Joe, if you have any other comments.
Joe Renda: Yes, the only other color I would give Greg, is that we're also realizing that when you look at the market, there is still a decent amount of business in the lower-deciles. So, the value of us expanding our footprint enables us to go to those lower-deciles desktop customers that we don't necessarily call on today and we think there is a great opportunity there not only for TLANDO but also for XYOSTED. And obviously, we're going to continue to focus on our top prescribers as XYOSTED, we think there is a huge upside in market share for XYOSTED as well as TLANDO. There is definitely space in that market for products like this especially when you've got obviously the convenience. We do with XYOSTED and then now the convenience of the oral and as I mentioned in my talk at the conference that I was at physicians were very excited to have a product that they don't have to have a complex titration schedule to deal with. So they're very excited about getting a chance to provide something to patients who just don't for whatever reason want an injection. And as Bob said, still are using gels, maybe because they are not aware that there is a convenient oral option that will be on the market.
Unidentified Analyst: Great, thanks for the color. The last question is on the outlook. The revised revenue outlook, are you guys include any contribution from partner products that are pending approval?
Unidentified Analyst: So when we looked at our guidance at the beginning of the year. The guidance is a bit wider, is on a $35 million to $200 million and that anticipated and the upper end of the range anticipate the potential approval Forteo, and so when we tighten the guidance obviously, we only have a couple more homes left to go. Over the years, we have had a little good view of what our products are doing, and when we look at our partner products, we don't assume any approvals and it's not a negative. We just feel from our guidance standpoint, we just put it in there as this is what we're going to do with our current business and that's why we're cutting mid-up. We know we increased the lower end and brought down the upper end a little bit, kind of reflective of where we think we're going to wind up from what we currently are selling today there's is always upside that we do get an approval, but we think from a guidance standpoint, given that there's only really 6 weeks or 8 weeks ago, we thought it was prudent to bring in that range.
Unidentified Analyst: Got it. Thanks very much.
Operator: We'll take our next question from Stacy Ku with Cowen and Company.
Stacy Ku: Congratulations on the progress. And thanks for taking my questions. We have a few. Looking at your guidance implies roughly 50 million in revenue for Q4. So how should we be thinking about next year's growth? Let me talk about what are the expected puts or takes for instance right now consensus revenue next year is roughly 230 million is the first question. And then the second question is, at this point what is driving new starts for XYOSTED just switching from IM are gels or are you trying to broaden your clinician reach as you've set stated with TLANDO. And then my last question is on for the partnered EpiPen you disclosed around 60% market share last time and trading updates now, so how should we be thinking about the future growth of this partnered product for next year or even as we think about Q4. Thank you.
Bob Apple: Thanks Stacy. I will take the EpiPen question version that gel of the XYOSTED, will come back on the overall guidance question. And the third -- first, we will cover that Epi - those two topics. So on EpiPen, they had a feeling. They've done a fantastic job of gaining market share in a very challenging market. Given that the brand leader previously you had a pretty long-established period of time where they were the brand, everyone knew the EpiPen was the product to use. So they have ended - they were around anywhere from 56% to 60% any given week and it's really a function of who is selling the product out whether it's coming through CVS or Walgreens or whatnot, but we believe that right now that's probably -- they're probably at the point of where it makes the most sense to be from a market share standpoint. We don't expect them to get any huge additional gains unless there is a supply interruption of a competitor. And so far we've been able to provide Teva with the necessary devices that they need in order to not only get that market share but also maintain it. So as we look forward, we think that if they maintain the relative market share that they have now, we'll still see growth next year because we weren't at 56% or 60 % market share at the beginning of this year and so we think there is still upside from a market share standpoint, overall. There was obviously there was a positive impact with COVID there were some -- there were on EpiPens being utilized or being leased available for the vaccines, when they were providing the COVID vaccine, COVID-19 vaccines in case someone had an anaphylactic shock on the case they had some adverse reaction to the vaccine. We expect that to not be as robust, next year. But overall, again, we still expect to see growth for EpiPen in 2022 versus 2021. So overall I think it has done a great job and we're very happy with where they are, from a market share standpoint, and again only expect to see any incremental increases if there is a supply disruption in the market. I'll turn the call over to Joe for the XYOSTED.
Joe Renda: So Stacy, thanks for the question about the new patient starts and the good news as I mentioned, we had our all-time high, highest week ever last week, besides that and what we're finding is that we're still getting the benefit of switches from the IM business, which is obviously a big portion of our growth, but we are also getting the other 50% from new patients. Where we see an opportunity as we go into that to those lower deciles through our expansion, we think there is even more business opportunity there that can be had with XYOSTED, and the other thing that big upside as we kind of look forward is the market kind of normalizes, we know that patient volume has decreased over this past year that we're beginning to see come back up towards normal. So as those new patients go into both urologists, endocrinologists and or primary care offices that are candidates for Testosterone and there'll be great options there for new patients that are truly new to therapy as well as for both sides that end then for next year, also potentially some that will be available for TLANDO because they might be patients that again may or may not want an injection. So that's were written by 50-50 is kind of where the split is right now between new starts and switches.
Fred Powell: And, Stacy, this is Fred. And I appreciate your comment or your question about guidance for 2022. I think it's still too early for us to comment about where the consensus is at in and I fully expect we'll do what we've done in the past and provide our guidance at the end of December, beginning of January. But what I can comment on is when we take a look at 2022 we're excited at what we're seeing with the expanded sales force that Joe mentioned a bit earlier. We continue to expect XYOSTED will be a significant growth driver for the organization going forward. And as Bob mentioned with that is EpiPen again it was, it's been a terrific year for us this year and we see that continuing into 2022 as well as we continue to manufacture millions of pens allowing them to reach the 58% or in near 60% market share that they have. With TLANDO that's going to be really the launch year, you know, and we'll be working on getting coverage throughout the year. We hope to have the coverage up to where that is at the end of the year, but certainly it will be a challenge at the beginning of the year having the coverage and having a launch in the second quarter, we won't see a full year's worth of revenue. With our other products Makena overall as a basket we expect them to be relatively flat. We're not looking at significant changes in any of those products at this time. One thing that we are thinking about when we're talking about the guidance for 2022 is not including unapproved products like we did this year. You know, with Forteo, and other potential product approvals that, which is why we set the range, is wide, as we did. We'll probably be looking more at just our existing products that we have and what we would expect our revenue to be. But overall, I think that the consensus guidance that's out there we will address but from this point right now, it doesn't seem all that far off from where we may be positive or negative.
Operator: We'll take our next question from David Amsellem with Piper Sandler.
David Amsellem: Thanks. So just have a few questions, first on TLANDO are you in a position to give us any color on the WAC or at least give us some sense of whether it's going to be similar to that of XYOSTED or maybe in a higher range how should we think about that? And is it safe to assume that the gross to net spread TLANDO will be similar to that of XYOSTED particularly given your commentary regarding the payer landscape ideally being similar to that of XYOSTED so that's the first set of questions. And then just a higher-level question about the business, as you're building out the proprietary portfolio and your in-licensing assets, how do you think about your partner products and specifically would you look to monetize some of these royalty streams as a way to accelerate the development to build out of your proprietary portfolio? Thanks.
Bob Apple: Thanks, David. I'll take the first question. And again, Joe can help out if needed. But on the question TLANDO and, have we decided on a wholesale acquisition price or WAC. The answer is, we have not yet, we still are doing, a lot of market research with payers as well as with physicians to really understand the value proposition that they see with a twice-daily oral capsule. And so, we don't want to, make any assumptions at this point obviously we use some internal numbers for our modeling and so forth. But we think clearly TLANDO has a value proposition that warrants a branded price that is, in the range of XYOSTED as well as what's out there which . And we just haven't decided where we're going to wind up yet. And so as we get closer to launch and we get more of that information in-house will be able to guide going to it a bit better. But overall, we do believe there is a, value there in that product and would warrant a branded price type of model. Joe, if you want to add on that.
Joe Renda: Yes, I mean as I mentioned, I think that we know that physicians appreciate the options -- having options. So we also know that one of the things, our team is right we think uniquely talented that maybe wasn't the same for the other role on the market is. We also can navigate the prior authorization process fairly, fairly well. Especially with our partnerships in USP well, so that we also think will help the launch of TLANDO be more successful than what we saw with the other one in the market. So we think those will certainly help us as we get out the launch here, and then get the access to a place where it's similar to that, as I said, I mean.
Bob Apple: With the gross to net, David, I think we would be looking at something somewhere we would be doing similar programs that we have right now, with our XYOSTED product whether it's the co-pay cards or looking at any other programs, we would certainly be looking at similar gross to nets over a period of time. First-year it's going to be unusual right because, depending on the coverage and the rebates, it's going to be hard to judge. But over a period of time I'd expect to be very similar growth.
Joe Renda: I think initially, we will be making sure that if a doctor writes it that it gets covered or not covered, but if it's not covered by insurance, because we're still waiting for that coverage to come into play, then there'll be different programs that we use as I said, first still free and things like that, and that where you get the prescription, filled. The patient gets on the product and obviously, if they have a positive response and they tend to stay on that product, and that's really important and valuable for us and for the product. And so where we might not have -- we clearly aren't going to have the same coverage out of the gate as we do with XYOSTED because it took a year to get to that 75% level. For XYOSTED and those other things that we can do to help the patients we probably offset some of those reductions that you would normally see in the payer coverage and so overall, probably going to see similar growth.
Bob Apple: Yes. And we didn't have, when we launched XYOSTED we didn't even have the partnerships, we do today with the SPs. So that's another difference as we kind of jump into the launch of TLANDO regardless of coverage at least we've got the SP partnerships that we anticipate will be valuable as we get patients on there.
Joe Renda: And for those who don't understand some of the terminology SPs are Specialty Pharma is where they -- we go through some of the smaller specialty pharma and they help adjudicate the claim for the doctors and the offices and that's been a real valuable tool for us. As we you know continue to get growth with XYOSTED and will use those same SPs weren't in place when we first launched XYOSTED for TLANDO. And so we see that the ability for that to actually have a positive impact sooner as opposed to later.
Bob Apple: I think it was the monetize --
Joe Renda: Oh, yes.
Bob Apple: -- portfolio or the royalties.
Joe Renda: If you, David. I think that when we look at our royalties that -- especially when you look at something like Epi, it's been a tremendous amount of revenue for us and a tremendous amount of value. We are generating a significant amount of cash from operations. And so I don't see the need -- we don't see the need to monetize our royalties. We think it's more valuable for the organization to have that revenue growth at the topline and we believe that through our cash generation through the ability if you wanted to take on additional debt to look at new business or corporate development opportunity that's the best avenue we believe right now for us. And so we're not looking at monetizing our royalties. We do continue to look at our portfolio with an idea OTREXUP fits from a pure strategic vision standpoint and that's something we're looking at as to whether or not, it makes sense to potentially divest OTREXUP. But again that brings a nice stable amount of revenue for us and we need to look at the pros and cons of looking at our portfolio as well. But as I said we're generating a significant amount of cash. Our balance sheet is really strong and we feel pretty good as far as where we are from a leverage standpoint.
Operator: We'll take our next question from Elliot Wilbur with Raymond James.
Elliot Wilbur: Thanks, good morning. First question for Bob, I may have missed this in your prepared commentary, but just wanted to get an update on the status of the Pfizer collaboration for the undisclosed asset and just current thinking on where that is and if and when in fact it may be disclosed?
Bob Apple: Yes. So we made a lot of progress in Q3 on that program with Pfizer and that's you know obviously despite them spending a tremendous amount of time on the vaccines with COVID-19 and so you know we're looking -- we're working on our filing strategy with Pfizer. You know, what's the best approach, you know, timing-wise, as well as what needs to be in that NDA filing. And so we're hoping that we'll have some clarity around that you know timing of that -- this quarter. And then you know as far as you know, when it gets filed we do believe there is a potential that it's a expedited review because of the area that's in rescue pen. And so, hopefully, at that time we filing or obviously we believe will discuss it what the product is and you know more to come on that.
Elliot Wilbur: Okay. And I want to ask a couple of questions of Joe, I guess specifically with respect to overall market trends you highlighted the slow recovery I guess in urology office. This is, I think you said 30% I guess we'd see numbers is actually suggested a little bit worse, I guess it's somewhat encouraging does look like it's turned a corner there. But if you think about the sort of below, you know trend line rates in terms of office visits, particularly within urology space how much of that is actually physician-driven versus just patient driven and then sort of how do you think about altering your strategy in terms of different approaches to patient activation to maybe help close that gap?
Joe Renda: Yes, it's a good question I had, and you're right, I mean the market trends for patient visits are certainly down pretty significantly and no matter kind of what data point you look at, you asked a good question as it relates to what's driving it, is it more of the patient visit versus physician access so to speak, and it really is a bit of a combination because especially when we jumped out of the gate in the first quarter of the year. We definitely still soft physician access as a challenge as we got into Q2. It certainly started to improve and then, then we got into the variant. And then we sort of started to see some physician access to get back to kind of challenges but challenging situation. But the good news is as we kind of get into Q3 as the challenge here Q3 we're starting to see that access go back up towards where it was in that Q2 timeframe as the variant starts to subside. And the patient volume is sort of following a similar trend in the urology space in particular, it seemed like it decreased more significantly than I didn't say the endocrinology space but with urologists it does seem as though as the variance sort of subsides you're starting to see patient visits come back up. And that's one of the reasons why you asked about our strategy, it's one of the reasons why we've gone really heavy on our digital strategy. So we invested a high percentage of our marketing budget on our digital campaign for both HCP's healthcare providers, as well as consumers, both branded and unbranded campaigns and we think that's been a help to get patients to be aware, even if they're not necessarily going to the doctor, that there is an option available for them from a testosterone treatment standpoint as well as with NOCDURNA we partnered with good NRx as well to get the word out on the brand. So we think that digital strategy has really helped garner some of the growth that we've seen even in that scenario where you've seen that patient volume kind of decrease, but so far, all things all signs are pointing to is beginning to improve and as I mentioned last week, we had our highest week ever and we're starting to see the virtual to in-person physician office visits go back towards where it was in Q2. So I think to seem as though that it's getting better. I'm not sure how long it will take to get back to where it was pre-pandemic but certainly going in the right direction.
Bob Apple: So I think the only thing I would comment too is that with the Delta variant it really hit a lot of our large or very robust kind of the material or you know it hit in the Texas and we have a, we have extremely a large amount of business in Texas in New York and all of the major metro areas and where there were flares of Delta. We saw an impact and we're starting to see that subside. And I think that's really key and why we're seeing the growth that we're seeing. But if you looked at our quarter-over-quarter trends from a prescription standpoint, Q3 was a challenge, because it is large spikes in the Delta variant, and we believe we'll start to see our growth normalize back again to where it was before that third quarter spike hit. So overall we're feeling really good about size that and we hope that the COVID-19 issues are getting behind us, but as we've seen with Delta, you never know and it's unfortunate thing because access is everything and the patients aren't going into the doctor's offices to be treated and it's difficult for us to get those new patients on which are really critical for us. See the type of growth that we want to see with Delta.
Elliot Wilbur: Okay, thanks. And then question for Fred. And I guess, said Joe and Bob as well. Just thinking about SG&A trends, sounds like there is going to continue to be sort of an elevated level as the investment in the business even outside of the sales force expansion, so I just want to get more clarity in terms of the timing of the sales force expansion. So that's going to be ahead of the launch of TLANDO. But I guess how are you thinking about sort of being able to offset that investment spend with sort of an immediate benefit at least in terms of incremental XYOSTED Rx's and then one last question, just on TLANDO and the segmentation. I guess as you drill down on that, do you think that there is preference differential in terms of prescribers difference between potentially the preference for oral product between in and urologists. Thanks.
Fred Powell: Yes, I think the first part of that Elliot, with regards to the sales force expansion. So we're going to have by the end of this year we'll have 90 sales representatives. By the end of this year and then the -- I mentioned about a 20% increase as we go into next year. Our plan is to have those folks on board in that first quarter of next year, so that we can be prepared for the launch, which will be in the second quarter. So that's where we see kind of the expansion, kind of taking place for the most part and then we'll evaluate as the year unfolds as it relates to whether or not we need additional folks or not, but that we think is going to be substantial for us to be able to do what we need to do with TLANDO. And you asked a good question about the segmentation because we do see an opportunity to both with our current prescribers as well as with prescribers. We're not currently calling on, there is opportunities for TLANDO's. So in our current prescribers, obviously there is especially those ones that are high users of dyes that they still do have some gel business as an example in their practice that we can take advantage of. They also still have some patients potentially that are preferring a non-injectable option so in those high prescribers. The lower deciles customers that we're not currently calling on today, when we've looked at the data, that seems to be where has gotten most of its use is in those lowered our sales. So by us increasing the size of our sales force to the degree that we mentioned, we're going to cover now 95% of the TRT market and we definitely think with that we'll be able to get to those lower deciles customers and be able to garner the TLANDO opportunity there as well as potentially some size that opportunity, But definitely we see that those lower deciles is being a good ground for our TLANDO and those higher debt sales are going to be a good ground for both TLANDO and -- I'm sorry, TLANDO and XYOSTED.
Bob Apple: And just to provide some additional color on that. We were at around 79 representatives in -- at the end of Q2, we expect to be at 90 by the end of the year. And so we do expect to see an . The question that you really asked now who is for XYOSTED in Q4 and clearly, in Q1, having 90 reps as opposed to 79 in the beginning of next year. For all intents purposes as, as we get through the hiring cycle we think that will have a positive impact on XYOSTED. And then when we add that other 20% by the end of Q1, we obviously are doing that for TLANDO. But also it's going to have a significant impact on XYOSTED and will reap the benefits of that in Q2 through the balance of the year, we're not providing guidance yet for next year, but we expect a very significant increase in XYOSTED revenue based on this sales force alignment and that's when you'll start to, I think you'll see growth in Q4 clearly, growth in Q4. And more growth in Q1 and then once we get that full team up and running. We expect to see the benefit of that through the balance of 2022 and again when we provide guidance. We will probably provide some guidance is of what our expectations are for XYOSTED and I think you'll see that there is a clear benefit in increasing we are penetrating our increase in the sales of our team in order to begin to that 95% coverage of all the scripts that are out there.
Operator: We'll take our next question from Anthony Petrone with Jefferies.
Anthony Petrone: Great, thanks for fitting us in here, could we -- maybe get an update and sort of look at EpiPen trends specifically 3Q of '21 versus 2019. It's up 13% that strikes us is higher than the normalized trend obviously coming off of the easy comp last year, but again the trend in 2019. So just maybe some thoughts on why that's elevated overall. And then as you look at the spread between Mylan and Teva, it's there are 58%. Where do you think Teva share can go over time and I have a couple of follow-ups. Thanks.
Bob Apple: Thanks, Anthony. On the relative to what Teva was able to achieve and what the market actually was able to achieve, it wasn't just Teva in the market overall in Q3 of 2021, it was up about 13 are actually I think even higher in relative to the 2019 third quarter market. The third quarter for EpiPen is always the best quarter because of back-to-school. And I think that we saw -- and a higher than normal, back to school effect, because last year, it was really, obviously we hope in Q3 last year, it was down significantly from the previous year and that was because no one's going back to school. I think what happened was parents didn't need to buy 2 pens they typically are two packs. They typically have one for school and the natively have one for the house or their car or whatnot. I think here we saw probably above normal growth because they all we're going back to school, they probably weren't buying the pens on a normal cycle because they were at home, they weren't going anywhere they weren't exposed to the type of issues that they worry about whether is peanut butter or whatnot. And so we do, we do recognize that it was a fantastic Q3 for the overall Epi market and obviously channel and us benefited because that was near 60% of that market share. And so we believe that giving at the - hopefully the COVID goes away at some point that the normal back-to-school market will be there. I think also what helps is too is, when we brought in a generic into the market and it's brought the price down and generally, I think it makes it more affordable for people to have the availability of those pens around. And so I'm not sure what's going to happen next year for the back-to-school, it could be at the same level, just because there's more, more kids that have peanut allergies. There is more availability of the devices with us sometime in the market. But overall, we do believe that the market will continue to be very strong next year in 2022. I answered that question on the previous analyst - from previous answers, I think that there are like anywhere between 36% and 60% and we expect that to kind of stay relatively the same going forward. The good news is that this year we started the time to start the year kind of low '40s market percent share. So we're going to see growth in 2022 versus 2021 and I think that we may see Teva take more market share if there are supply interruptions of the EpiPen from Mylan or doing click from Amneal. We just opened, we can't predict that there historically has always been a lot of supply interruptions, but we expect that if Teva can maintain that 55% to 60% market share. It's a very good product for both of us. It will continue to grow and that's what our expectations are. If you remember, Anthony, our highest expectations were they would get half this market and have already exceeded that. And so I think overall the markets not only happy about that. We're very happy. But we're also as a very, I think that they have done a fantastic job and they can maintain that it's great for both organizations.
Anthony Petrone: A couple of follow-ups on agreement. Just kind of high-level thoughts on how you think the competitive dynamic between TLANDO and XYOSTED sort of will play out with the launch and into next year. And then secondly, you also closed on the XR an option to develop TLANDO XR so just sort of looking at that development pathway just expectations on what that effort looks like and timing. Thanks.
Bob Apple: So, Anthony, so with -- I mentioned briefly in the talk about the SMS&A conference, which is a which the gathering of all the medical -- a high percentage of the medical professionals that treat the sexual disorder as well as hormone-replacement. And we were really pleasantly surprised by their comments about their familiarity with the clinical profile TLANDO and as they in their view saw that against XYOSTED and what they really stressed was this unique offering that will have with this no need for our complex titration schedule, our dose is really straightforward. The other product on the market is fairly complex and it takes a lot to get a patient to kind of a steady-state. So we think that's going to be a big upside for us, as well as they had commented on how the size of the meal difference potentially of what you need may need with versus what you'll need with TLANDO we see is kind of a standard meal, either way, you have to take it with food, but, so we see those factors as being a differentiator. The other big differentiator as I've mentioned before, is we've got a field force that is very knowledgeable and familiar with how the prior authorization process works in our partnership with the specialty pharmacies that wasn't true for the other product that's in the market. We think that's also going to be a distinct advantage for us because we could help the offices navigated that was sometimes of the complex process to get patients on therapy. So with those things, we think we have a good opportunity to do something very different in the market than what we saw with the other oral and the fact is the market once an oral, it's very clear that they want an option for patients. It's not a gel, that's not an injectable and so we're going to certainly try to position ours as being the best of the options that are available.
Joe Renda: And we don't see this really as a head-to-head competition with . I mean we see this as an ability to go into a market that's with gel market that still is really large and there is plenty of room for a number of products in this market to do really well. And so we're going to focus on what we believe in the benefits of TLANDO as well as the benefits of XYOSTED and really leverage the relationships we have with the physicians, which I think is one of the key things that the competitor may not have had coming out of the gate they really didn't have an established sales team. It was a new product launch and no relationships. Here we have some very, very solid relationships with a large number of the largest TRT writers and we're going to go in there with another offering that again may serve a need for different patients in your practice. And so we see it as an opportunity to really just to cast a wide net in a large market and we think that there is a lot of opportunity for all the products in the market.
Operator: We'll take our last question from Matt Kaplan with Ladenburg Thalmann.
Unidentified Analyst: Hi, this is Raymond in for Matt. Congrats on a good quarter. Just two quick questions. I was wondering how we should think about NOCDURNA in '22, is it coming more steady growth reflecting the patient education visits, and for 190.1 what are the gating factors for IND filing in 2020? Thanks.
Bob Apple: Yes. Thank you. I appreciate the question about NOCDURNA. I'll take at least the first part of that which is for 2022 what we're really seeing there's probably three key pieces that we know is important for NOCDURNA. One is having a full kind of normal sales cycle like what you would expect on a launch brand and we haven't yet had that yet with NOCDURNA when you think about the fact that with NOCDURNA it was launched kind of post immediately post-pandemic and still through that period of time where you saw patient volumes kind of down. So we're anticipating as we have a full year launch underneath our belt with NOCDURNA that will enable us to do the two other things that is really important and I think you mentioned which is one is physician education. I mean, we definitely think that helping physicians identify patient types is a, as a clear clearly an important part of the NOCDURNA messaging and so the speaker programs that we brough out this past summer have been a huge asset for us to help increase that education, as well as our field force is really been able to articulate to physicians with that patient type is that they're looking for with that NOCDURNA patient. So between those two things that sales cycle, the ability to educate and we also think that as we grow our footprint with regards to the sales people that we have in the market that that would be the third thing that we think is going to be a big asset to help us with NOCDURNA. So one of the things we realized is that more patients. I'm sorry, the more physicians rather that you educate about the brand, the more patients they can identify. So by having a larger footprint in the sales force will be able to call on more prescribers and be able to identify more patients. So we think that will benefit NOCDURNA as well in '22
Peter Richardson: John, it's Peter around 1901, the data that we generated in this last quarter has been helpful in understanding some of the opportunity for the product. We're very keen to make sure that we can deliver once weekly treatment in this area. So the data that this merger allows us to model further on that and then take the formulation, that's going to be finally used in the clinical studies, which has some advantages over the preclinical funds have been used to date to have that model and then tested before we go to the R&D, which we can expect to do around mid-year next year if all goes well
Operator: That concludes today's question-and-answer session. At this time, I will turn the conference back to Tram Bui for any additional or closing remarks.
Tram Bui: Thank you everyone for joining us today. Please feel free to reach out to me if you have any additional questions. Have a great day.
Operator: This concludes today's call. Thank you for your participation. You may now disconnect.
