Avadel Pharmaceuticals plc (AVDL) on Q1 2021 Results - Earnings Call Transcript
Operator: Greetings and welcome to the Avadel Pharmaceuticals First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Tom McHugh, Chief Financial Officer. Thank you. You may begin.
Tom McHugh: Good morning and thank you for joining us on our conference call. This morning, we issued a press release providing a corporate update and financial results for the quarter-ended March 31, 2021. The release can be accessed on our website www.avadel.com.
Greg Divis: Thank you, Tom. Good morning everyone and thank you for joining us on our first quarter 2021 conference call. I will begin by providing an update on our business highlighting the significant progress we continue to make towards achieving FDA approval of and preparation for the potential commercialization of once-nightly FT218. If approved, FT218 will be the first and only once-nightly oxybate treatment available for people suffering from the debilitating orphan disease of narcolepsy. I will then turn the call over to Jennifer who will offer an overview of the progress we've made with our medical affairs and scientific communication plans for FT218. Richard will then provide an update on our commercialization and launch planning as we move closer to the PDUFA date and a potential approval. Finally, Tom will provide a review of the financial results to the quarter and we will conclude with a Q&A session. With that as an outline for the call, let's get started. As we are now nearly halfway into 2021, I can say that it has already been a significant year for Avadel with several key regulatory, clinical and launch readiness milestones achieved as we continue to rapidly advance our investigational once-nightly FT218 program. Most notably being the acceptance of the NDA filing with an assigned PDUFA date of October 15.
Jennifer Gudeman : Thanks, Greg. It's great to be here today to discuss the progress we've made with our scientific communications for FT218. Well, the Avadel team has known for some time how robust the broader rest on data set is, we are now fully engaged in externalizing these data so that the medical and payer community can also fully appreciate our positive findings with once-nightly FT218. Additionally, we have expanded our medical affairs team to further our connectivity in scientific exchange with key opinion leaders. As Greg mentioned, we were excited to present new positive secondary endpoint data at the 2021 American Academy of Neurology annual meeting, which was held last month. There are two key takeaways from these secondary data including. First FT218 demonstrated significant consolidation of sleep, significant increase in time in deep sleep, and significant decrease in light sleep compared to placebo for all doses evaluated, 6 gram, 7.5 gram and 9 gram beginning by week three. Disturbed nocturnal sleep is a frequent and bothersome complaint of patients living with narcolepsy. While most therapies for narcolepsy address only daytime symptoms, this newly presented sleep data from REST-ON supports that once-nightly FT218, if approved, could address nighttime symptoms of narcolepsy without having to wake up in the middle of the night.
Richard Kim: Thanks, Jennifer. And let me say that I am excited to be on the call today, and provide an update on our launch preparations for once-nightly FT218. During the March earnings call, I shared some of my initial insights and enthusiasm for joining the Avadel team, and for the amazing opportunity we have to transform the narcolepsy market. Well, I can say that over the last few months, I've had a chance to validate my initial impressions that if approved, once-nightly FT218 has the potential to gain market leading share in the oxybate class. Previously, I shared from our market research some key insights about unmet needs in the oxybate market, including that almost half of patients report refusing twice-nightly sodium oxybate when offered by a physician, primarily due to the need to take a second dose in the middle of the night, two-and-a-half to four hours later. And almost 60% of patients reported negative treatment experiences. What we see is that despite a time diagnosis of about 8 years to 15 years, patients on average, are usually initiated with pharmacotherapy around 3 months post diagnosis. In addition, patients tend to have their of narcolepsy treatment switched, or supplemented relatively quickly, with the average time to modify treatment from first to second line being about a month and a half., and the average time to modify from second to third line treatment being about only two weeks. From this research and other work we have done, the data sheds light on the challenges with twice-nightly oxybate treatment, and the propensity for patients to seek new options when available, as they continue to search for new ways to get more control over the daily impact that narcolepsy has on their lives. In the last couple of months, I have also had the opportunity to speak with treating physicians, as well as patients living with narcolepsy.
Tom McHugh: Thank you, Richard and I’m pleased to provide an overview of Avadel’s financial results. From a balance sheet perspective, we ended the quarter on a strong cash position with 205 million of cash, cash equivalents, and marketable securities. And as a reminder, in addition to the cash on hand at March 31, we expect to collect the remaining 8.3 million from the sale of sterile injectable drug portfolio that we sold last year on June 30 of 2020. Turning to our income statement, as a result of the sale of the sterile injectable products, we did not record any revenue in the quarter ended March 31, 2021 and we also did not record any expense for cost of products, intangible asset amortization, and changes in fair value of contingent consideration. The total of our R&D and SG&A expenses in the first quarter of 2021 were 14.8 million, compared to 13.4 in the prior year. As our preparations for the launch of FT218 continue to accelerate, we expect that our operating expenses will increase quarter-over-quarter during the remainder of the year, and be more heavily weighted in the second half of 2021 as we approach the PDUFA date in Q4. With regards to R&D, expenses decreased 1.6 million year-over-year to 3.9 million in the first quarter of 2021 versus 5.5 million in the prior year. The decrease is due primarily to the completion of phase 3 REST-ON clinical study for FT218, which concluded during the first quarter of 2020. SG&A expenses increased 3.1 million year-over-year to 11 million in the first quarter 2021 versus 7.9 million in the prior year. The majority of the year-over-year increase is attributable to costs for planning and preparing for the launch of FT218 if approved. Income tax benefit was 2.6 million in the first quarter 2021, compared to 9.5 million in the prior year. The year-over-year decrease is primarily due to benefits recognized in 2020 from the Coronavirus Aid, Relief and Economic Security Act. Net loss for the first quarter of 2021 was 13.4 million or $0.23 per diluted share, compared to a net loss of 0.9 million or $0.02 per diluted share for the same period of 2020. The increase in net loss and diluted loss per share is primarily the result of the year-over-year decrease in revenue due to the sale of the sterile injectable products. Diluted shares outstanding increased to shares this year versus 41.1 million shares last year. The increase in the number of shares is due primarily to the 190 million of gross proceeds raised from equity issuances during the first half of 2025. Finally, as Greg noted earlier, we are incredibly pleased with our progress to date and the momentum we are carrying into the rest of the year. We believe we're in a strong financial position with 205 million of cash on hand to fund the financial investments needed to complete the NDA review process, compile additional supporting scientific data to position FT218 in the market and continue to ramp up our launch preparations for FT218. Before turning the call back to Greg for closing remarks, we're going to open up the call for Q&A, and I'll now turn the call over to the operator.
Operator: Thank you. Our first questions come from the line of Paul Matteis with Stifel. Please proceed with your questions.
Paul Matteis: Great. Thanks so much. Appreciate the call and the questions. So, you guys said again that no news is good news, I guess, how do you think about certain inflection points in the review? And if there's any kind of like, I guess it's a mid-type of review meeting or some other kind of scheduled interaction where key issues that are related to certification and possible labeling are going to come up? Just kind of curious if there is anything that you would point to or having to think about the timelines as it relates to freedom to operate? And then separately, I wanted to ask are you expected to get orphan drug to exclusivity? How should we think about that? And if you do, what do you think that means for other once-nightly sodium oxybate that are in the pipeline, even though that might be low sodium? Thanks so much.
Greg Divis : Yeah. Thanks, Paul. Appreciate the questions. I think it relates to the review. I think, you know, our commentary, you know, we've tried to provide a little bit of context here that we're very, you know, again, we haven't been asked to certify, we're very pleased with the progress we've made on this front. And really the types of questions or the comments we've received during the review process to date, right. I think the one thing I will say is that, you know, the FDA doesn't typically notify an applicant when, you know, some portion of NDA is kind of complete, and they've checked the box and moved on, they really just move on. So, you know, as we enter, the second half of the review, we’ll certainly move to label negotiations and things of that matter that we would expect. I would say that our position remains the same. We certainly are not aware and don't believe there's any basis for certification on our side whatsoever, given the data we've provided, how that is reflected in our label and our overall regulatory filing strategy. That being said, even if we've been confirmed already, or we learn at a later date during review process that we've effectively navigated through any sort of certification risk, we certainly aren't going to speak on a publicly in advance of the FDA making the first comment publicly in the form of their decision on or around October 15. That being said, I think we feel really good about where we are, how we progress this aspect of the NDA, and where we sit today currently? As it relates to orphan drug, you're correct. We have – we were granted orphan drug designation on the plausible hypothesis that once-nightly FT218 could be clinically superior to the reference product, right. We believe that we provided a robust and complete rationale for our exclusivity request that has been in and is part of our NDA review. So, we certainly look forward to the FDA’s decision on it. It's not something we're relying on for our exclusivity protection, because I'll remind you that we've had a number of intellectual property patents granted already and many more in the queue, so to speak, that we believe will build the appropriate protections for the company. It was the first one to innovate and demonstrate a modified or extended release control GHP related product that, you know, can work for patients, and we certainly are going to protect that in every way, shape, or form. So, as its impact on other potential products that can come in the marketplace, if we're granted orphan drug, it would be something that they would have to demonstrate that their clinically superior to our once-nightly product, is how we think about it. Thanks.
Paul Matteis : Thanks, Greg. Appreciate it.
Operator: Thank you. Our next question is come from the line of David Amsellem with Piper Sandler. Please proceed with your questions.
David Amsellem: Hi, thanks. So, just a couple. So, on the review, I don't know if you can talk about this, but has the REMS portion of the discussion come up and when or when in the review does the REMS piece actually come up? understand that if you can. And then secondly, on the commercial landscape, I'm sure you're going to get this question an awful lot, but I have to ask it, which is with Jazz converting a significant number of patients over to low sodium what are your thoughts on getting some of those patients capturing some of those patients? And I guess as part of that, with Jazz a success here, does that mean you have to contract more aggressively in order to try to capture some share? So, how philosophically do you think about that? Thank you.
Greg Divis : Yes. Thanks, David. I'll take the first question. And then Richard, maybe I'll turn it over to you to have any perspective on the commercial question. As it relates to the REMS program, I would say, you know, again, I think for context and background it is not a topic that the first time we would be engaging the FDA on, it would be during the review. It's something we would have, obviously, given the criticality of it engaged with the agency in advance of our, even our initial submission. And I just, you know, remind everyone that as a 505(b) (2) application, it's not subject to any sort of single shared system. And we can, in essence, have our own REMS program from that perspective that will be obviously geared and specific to our own label, you know, should we get approved? In terms of the review process, I would say that, you know, there's little I think we can say specifics around it, other than, overall, I would say we're quite confident that the FDA has been through, you know, all aspects of our NDA, and it wouldn't get accepted if it wasn't in there already and for sure, because it's part of our submission. So, I would say generally speaking, whether it's REMS or anything else, we're quite confident the FDA has been through, at least initially, all aspects of our NDA.
Richard Kim: Yeah, thanks Greg. I’ll take over the rest of the question from you, David. So, you know, I guess first from our perspective, David, it's always great to see new treatment options come to the market, no matter how large or small the benefit is that's added. I think the key thing that we think of the early uptake of the mixed salt is that it really shows us – confirms our market research that there – in general there's a high degree of patient willingness to try new treatments, to gain more normalcy in their lives and a fair degree of dissatisfaction in the market. And we actually think this bodes well for the value proposition that, you know, for once-nightly FT218 as we believe that the majority of patients switching to mixed salt now to – they'll continue to demonstrate a propensity to seek new ways to improve their treatment as they go forward. Especially with an advancement like a once-nightly coming to the marketplace. So, and for us, you know, we remind ourselves that sodium was really not much of an issue. It's clearly when there's no other options, it makes sense. But we also know that from the systematic literature review, that's been done, that experts in the field have concluded that the sodium and sodium oxybate really doesn't create any additional cardiovascular risk for patients. So, at the end of the day, for us, the sodium oxybate has demonstrated a lot of great utility over the last couple of years, and new to nearly two decades safety profile. And that's really why we believe that ultimately, when given options, narcolepsy patients will also focus on getting more consolidated sleep without the need to take a second dose during the middle of the night. And as far as the payers are concerned, it's always been our position that we're going to fight this battle on our clinical value proposition. We don't want this to turn into convenience or soft play. So, having said that, we're clearly going to be very active with the payers, we don't want to get into pricing wars, anything. But we also know that at some point in time in the United States there usually is some sort of contracting that we will build in. But we are beginning that next level discussions with Paris, and we're looking forward to providing some more updates in the future.
David Amsellem: Great, thanks.
Operator: Thank you. Our next questions come to the line of Francois Brisebois with Oppenheimer. Please proceed with your questions.
Francois Brisebois: Hey, thanks for taking the questions. In terms of the data at AAN, is there anything, you know that some of the data extremely old, but any comparisons here to twice-nightly for the extra secondary endpoints or is it mostly placebo? Any kind of, I know it's difficult to do, but any cross comparisons that are out there?
Greg Divis: Jennifer, you want to answer that?
Jennifer Gudeman: Yes. Hi, good morning Francois. Thank you for your question. You know, my general philosophy is that I think FT218 status should stand on its own. We know that there are inherent challenges whenever we're having any sort of cross study comparisons, obviously, potentially differences in trial design, as well as in patient demographics or clinical characteristics. That being said, I talked a little bit about the Epworth score in my opening remarks, and perhaps that's relevant to highlight. We're extremely pleased with the fact that our score with the 9 gram dose was 10.4. As I mentioned, the score of 10 or below is considered normal, and with all of the caveats that I described, in terms of limitations with cross-study comparisons, I think it is still relevant to recognize with the twice-nightly sodium oxybate, their of score with the 9 gram dose was 12. So, you know, as Richard had mentioned in his remarks, our belief is that patients who have this chronic condition that once they're diagnosed they're living with for the rest of their life then their aspiration is returning to normal. And with our Epworth scores coupled with the fact that one does not need to wake up in the middle of the night to take that second dose, we believe that that's going to be a very attractive option for patients suffering from this condition.
Greg Divis : Yeah, Francois, and I would just add to Jen, thanks, great comments. As she noted, it's hard to make those comparisons. And I think just to reiterate, the point, I think, everything we present and all the data we've looked at, and the data we're going to share in sleep only continues to just reinforce and support the overall pivotal study results that really like that you can't quite – our data is compelling. And with an adverse reaction profile that looks exceptionally well, you know, strong as well. So, we're just excited about the prospects of how 218 looks and the data it presents and I think the more we get an opportunity to share this data with the medical community, you can see the more interesting and excited they get about it, as they're learning more about us from that perspective.
Francois Brisebois: That's great. Thank you very much. And just in terms of the education, maybe this is more for Richard, I would assume that, you know, this is a fairly straightforward, kind of new product in terms of, you know, comparing it to twice-nightly, is this something when you speak to physicians that is, you feel like the physician education will be difficult, or, you know, at conferences, from your interviews, there's something that's pretty straightforward, and they get it?
Richard Kim: , I've learned to realize in my life not to take anything for granted. So, I think the messaging is straightforward and simple. But you know, I think the great news is with the work at Jennifer has done is, now we have this great scientific foundation to go forward with. And if approved, of course, it'll really give us great foundation to really have a very clear, simple message. So, the good news is, as you know, physicians are very deeply familiar with using oxybate treatment. We just hope this message and deliver something that's simpler for them and their patients to be able to use. So, yeah, I look forward to getting out there and having more of those conversations when we can, but I think they should be, our goal is to make this a simple communication to build off of their experience that physicians already have.
Francois Brisebois: Okay, great. And then just all that data that you guys are working on the extra secondary endpoint, now that it's all filed and accepted, there's nothing here on the NDA or that can affect the label? Or is this still something that the FDA can look at?
Greg Divis : Yeah, I think, when you think about the label, it's predominantly your primary endpoint data that will be most represented in our label. So, I don't – any post hoc analysis that we'll do that you'll see at the SLLEP meeting will not be in our label at this stage, but it's additional analysis, we think is relevant for the clinical community to understand, you know, in different patient populations as an example, that we think is important for as they think about the use of once-nightly FT218 in the future to have more data to look at, and really just to round out the complete clinical profile of FT218.
Francois Brisebois: Okay. Okay, great. And I guess my plan is a little more from the sales reps perspective, if it's not in the label, how much can they discuss it? And on that note, have you shared how many reps or when you would hire them?
Greg Divis: Yeah. Richard you want to take that?
Richard Kim : Absolutely, great. Sorry. And Frank, you know, as far as the label, I mean, first, Jennifer's team is doing a fantastic job in beginning this real push for our clinical data that'll be out there. So, we really believe and trust in the work that they continue to do. And as far as the Salesforce is concerned, we haven't made any final decisions yet. I think we're getting into stages now where we're really starting to get zoned in some of the numbers. We sort of traditionally guided towards 50 or 60, but I think for us, we're still assessing, sort of the face-to-face, the digital communications that will go on. And the other thing for me, as well is that ultimately we know that this is a relatively concentrated marketplace, as we've spoken about. Around 1,600 physicians make up 80% of the prescription volume and less than 500 make up 50%. So, the good news for us is that will give us some flexibility and how we go want to go to this marketplace. So, those decisions will be coming up in the upcoming months as we get ready to support the launch at once-nightly FT218.
Francois Brisebois: Great, thank you very much.
Greg Divis: Thanks, Frank.
Operator: Thank you. Our next questions come from the line of Marc Goodman with SVB Leerink. Please proceed with your questions.
Madhu Yennawar: Hi, thanks. This is Madhu on for Marc. We just had a question on, sort of when you're thinking of disclosing other products that you are internally developing that leverage your controlled release technology. Thanks.
Greg Divis: Yeah, thank you. I think it's a great question, because we certainly know how important it is as we move through a potential approval and launch, the, what's next question will certainly come about. And I would describe it this way. We've done quite a bit of planning and haven't even initiated some early work on what we would characterize as what's next beyond FT218, but I don't think we're at a place where we'll discuss specifics at this stage. I mean, we're very focused on executing against the current regulatory and launch readiness strategy, which is very important for us. But I think as you think about it, right, in potential future areas for, you know, expansion, you can think about in the form of lifecycle management, you can think about, you know, whether it's a pipeline in the product, you can think about our leveraging technology, our technology platform, both in SLEEP or in relevant adjacencies from that standpoint is, kind of a couple of legs of the stool, if you will, in terms of how we think about going what's next. But I would say, at this stage, we remain very focused on 218, while we plan and begin to do a little work on the other aspects of our portfolio, and at the right time we’ll come forward and provide some more insights to our shareholders for sure. Thank you.
Madhu Yennawar: Thanks.
Operator: Thank you. Our next questions come from the line of David Sherman with Lifesci Capital. Please proceed with your questions.
David Sherman: Hi, guys. I was wondering if you could talk a little bit more about how you're planning to engage with non-prescribers in an effort to expand the existing oxybate prescriber base. And then I was curious to hear a little bit more about how you're planning to, kind of engage and advertise to consumers down the road if it's approved.
Greg Divis: Richard, do you want to go first?
Richard Kim: Yeah, sure. Thanks for the question, David. So as far as non-prescribers, we know that, sort of within any sort of given a year, there's around physicians who prescribe oxybate. So, we believe that's relatively concentrated. So, to your question around non-prescribers, to be candid, I think the initial thrust of our focus will be on current prescribers of oxybates, who have the experience, but because of the proposition of a once-nightly FT218, where I think you're going is, we do believe that there is an opportunity to expand the treater base going forward as well. So, you know, I think what we see is, interest has grown in the narcolepsy class with other new novel therapies who have come to the marketplace. So, we intend to, sort of capture some of this momentum. And just, you know, we're – I think, also, we're not going to be too specific around who's going to be invited to some of our speaker programs going forward as well. And as far as, sort of how to, sort of connect with a lot of the patients that are out there, we believe that the patient voice is really critically important in the treatment of narcolepsy, as there really aren't, as you know, markers, blood markers, or scans that really helped assess the impact of this disease. So, you know, our commitment is really to, sort of focus on getting the appropriate education through the venues that patients seek information today. And we think there's really good opportunities for us to get out there because the narcolepsy community is in general, pretty active online. So that really, digital communication provides a very focused opportunity for us to reach out and make sure that the proper education and information is out there on what we're doing in narcolepsy and upon approval for once-nightly FT218 as well.
Greg Divis: Yeah, David, just one additional comment to Richard's, you know, comments around market expansion or prescriber expansion. I want to differentiate those a little bit, only because we believe within the current prescriber audience of these 4,000 plus per year, and, you know, and those who are, you know, within that subset to prescribe a lot more, there is a fairly reasonable sized cohort of patients, you know, in every practice is a little bit different, but in aggregate, that are sodium oxybate eligible as defined by those current prescribers who aren't going on sodium oxybate, as Richard described a little earlier, whether that's because the physician has decided not to treat them, or the patient has decided not to go on it, the predominant reason is dosing related. So, in that category, we believe there's expansion opportunities within the current prescriber base, which makes it even that much more efficient for us accordingly.
David Sherman: Okay. Thanks for taking my question.
Operator: Thank you. Our next questions come from the line of Robin Garner with Craig-Hallum. Please proceed with your questions.
Robin Garner: Hi, good morning, and thanks for taking my question. You shared some new patient insights earlier in the call, for context can you share with us a ballpark of how many patients you've been able to engage during your market research?
Richard Kim: Yeah, thanks Robin. We, you know, patient market research is one of the interesting things that we do here as well. And I would say in general, what we've seen is, we've been able to engage with hundreds of physicians, patients and payers, we don't always sort of break out the exact numbers of what we've done there. But it's fair to, sort of say that it's more than it's dozens upon dozens of patients. And then what we've also done is, also done individual conversations as well, to get more qualitative perspective. So – and going forward, we will continue to do this. Not only through market research, but our engagement through patient advocacy and other sources as well. So, I can say, from my perspective, the feedback from the payer work that we've done, if it's in market research, speaking to advocacy groups or individuals is generally pretty consistent. And I think, even though that there are some individual needs to patients out there as well. So, hopefully, that gives you some of the perspective from what we do in a patient research.
Greg Divis: Yeah. And Robin, I'll just add one more comment to that to Richards, and that is, you know, in particular, as time continues to go and the market continues to evolve, we're doing robust research. And it is a combination of both qualitative insights, as Richard described, but statistically and market research based that are robust, and, you know, appropriately designed and with demographics that are meant to represent, you know, our target audience and geographically dispersed accordingly. So, we try to get, you know, that's large to give us the right views and not make decisions based on very, very small sample sizes, but on large robust work products.
Robin Garner: Okay, thank you for that. And then just lastly, will you be presenting any new data points at the SLEEP Congress?
Greg Divis: So just to be clear, are we presenting any new data at the SLEEP Congress is what you asked?
Robin Garner : Yes, that's right.
Greg Divis: Yeah. Okay, Jen, do you want to answer that.
Jennifer Gudeman: Yes, I do. Hi, Robin, thank you for your question. So, the new data that is being presented are post hoc analyses and this is data that we think is really relevant for clinicians to understand. So the abstracts have been published for the SLEEP Congress. And our three post talks are looking at efficacy stratified by subgroups. So, in T1, and T2, looking at efficacy by the subgroups of stimulant use or no stimulant use, and also examining the weight loss that occurred with FT218. And, as I mentioned in my opening remarks, the consistency of benefit that is seen with FT218 underscores just how robust these findings are, and how consistent the efficacy is. And so, we look forward to having that full presentation in just a month's time.
Robin Garner: Okay, thank you.
Greg Divis: Thanks, Robin.
Operator: Thank you. Our next questions come from the line of Oren Livnat with HC Wainwright. Please proceed with your questions.
Oren Livnat: Hi, guys, can you hear me?
Greg Divis: Yeah, hi Oren, good morning.
Oren Livnat: Good morning. I just want to return back to the review process, you know, with the caveats, you know, we understand you can't comment on anything you can't comment on, but I'm getting a lot of questions as we get closer towards the PDUFA regarding, you know, any unknowns, obviously, your tolerability profile looked really good in phase 3, yeah, at least as good as . But people are asking me what do we know or what did you already submitted with regards to the safety or risks around your drug delivery technology in general, specifically, I'm getting asked about those stumping work you've done or food effect work you've done and how that might factor into, you know, the benefit risk calculation? And then also just in the review, on the manufacturing front, I think in the past, you've mentioned bridging studies that, you know, need or plan to do, can you just remind us is that just for your backup domestic supplier for post approval, or, you know, and how the FDA can inspect your original European manufacturer in time? Thanks.
Greg Divis: Yeah, great questions. You know, as it relates to the technology itself, although I would say that this formulation is unique on its own to a certain extent, the technology has been approved in the prior product it is a beta blocker, commercialized by another product, another company, in the past. So, the technology has been through, and if you will, an FDA process, so to speak, from that perspective, although, you know, again, this is a, you know, an application of that technology in that process, with, you know, with its, you know, tailored to, you know, sodium oxybate in that regard, but I would say that, as it relates to the – all of the non-clinical work that we had to do in our submission. Again, we believe it's robust, it's complete, whether that's our food effect data or otherwise. And the work we provided to, you know, validate, you know, this formulation and how this formulation performs in different settings that are required relative to our NDA. We feel really good about our submission. And obviously, that includes, you know, the drug interaction data that we provided, as well, as part of our NDA submission. As it relates to our CMC, yeah, you know, we have a primary supplier who has been making this product for well over five years. We filed with over three years of stability data, during the review process we’ll tick over four years actually of stability data. So, they've been making it, you know, at this scale for quite some time. So, we feel we have a robust manufacturer who's been doing it for a long time. But we also recognize we wanted to have another source and a backup source. We've done all that work. We've completed those bridging studies, if you will, and that will be an action that will occur post approval, as you referenced.
Oren Livnat: And with regards to access to your European facility given, you know, COVID dynamics. You know, .
Greg Divis : Yeah, sorry. Again, that, you know, we've seen some of the recent guidance from the FDA that has recently come out about how they'll, you know, prioritize inspections. The limited number, you know, less than one half of 1% or so that they claim are facilities that didn't get inspected tied to a review over the last 18 months that they needed to inspect. That being said, this facility was recently inspected, just prior to the pandemic. And with no observations, , if you will, we've done all of our work to prepare for any sort of PAI with our partner, our CMO. So, at this stage, I would say there's nothing more to say on at this point. And if anything comes up, we'll certainly update accordingly. But we see no reason that PAI would be determined at this point. But you know, again, we have to work and see how the NDA process unfolds.
Oren Livnat: All right, appreciate it. Thanks.
Operator: Thank you. Our next questions come from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your questions.
Unidentified Analyst: Oh, hi. This is in for Matt. Thanks for taking our questions and congrats on all the progress so far. Maybe just the question on the market research, you mentioned that there were high levels of treatment refusals and high discontinuations after treatment starts. And you said, the second dosing as a main issue, but can you provide any color on any other sources of refusals and discontinuation and how FT218 might be positioned to capitalize on it? And my other question is just any updates you can provide on the switch study enrollment? Thanks.
Greg Divis: Yeah. Richard, do you want to start with the first one? And maybe Jen, take the second?
Richard Kim: Sure. No problem. Thanks, . So yeah, as far as the research is concerned, you know, we often focus on the inconvenience of getting up during the middle of the night for a second dose for the twice-nightly oxybate. But beyond that, there's a lot of other concerns that go on around, you know, the fear of waking up a partner, the leaving out your medications out at the nights and with kids running around the house. So, there's a lot of stress on these patients that we find from the research in regards to more than just getting up during the middle of the night. And I think what we generally sort of see there is, it's not easy. Also, a lot of – some of the patients have now gone to adjusting their dose that is called asymmetric dosing to maybe take more of her dose earlier on and less later on during the middle of the night. So, I think there's a lot of factors that continue to go on there with these patients that go beyond just the perceived inconvenience of the second dose. And I'll pass it over now to Jen on the second part of your question.
Jennifer Gudeman: Thank you, Richard. And thank you for the question, Raymond. So, we are now at just about 60 patients or approximately a 20% increase from our last call. We've got a number who are in the screening process right now. So, we're looking to add to that overall number. We're also continuing to activate sites. And of course, all of this is happening still in the remainder of the backdrop of a worldwide pandemic. There's also the unique aspect with FT218 because it is not yet FDA approved is considered a schedule one medication, which necessitates patients having to come in once a month to pick up the medication. What we're really pleased with in regard to this open label switch study are the insights that we're gathering and the primary purpose of course, is long-term safety and tolerability. And we're also seeing in addition to good results there, sustained efficacy with FT218 as well. And then lastly, it's preliminary, but the feedback that we're getting in regard to the preferred dosing regimen once or twice-nightly has been extremely positive for once-nightly FT218.
Unidentified Analyst: Thanks.
Operator: Thank you. There are no further questions at this time. I would like to turn the call back over to Greg Divis for any closing comments.
Greg Divis: Thank you again, and thank you everyone for your questions. In closing, to say I'm proud of every team member’s contribution is to where we are today would be an understatement. It's been a very, very busy few months. But it's also exciting to see us closing in on the PDUFA date, and wrapping up our preparations for the next chapter in our company's history. And I just want to reiterate, and rest assured that this entire team is working very hard every day to deliver the best possible results for all key stakeholders. That includes patients and providers, but also importantly, so includes our shareholders and we'll continue to keep you apprised of our progress. And with that, we thank you for joining the start of the week and the start your day with us and wish you a great rest of the day. Thank you.
Operator: Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.
