Dover Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 6, 2023

There are 8 speakers on the call.

Operator

Morning, ladies and gentlemen, and welcome to Fennec Pharmaceuticals Third Quarter 2023 Earnings and Corporate Update Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions on how to participate will be given at that time. As a reminder, today's conference is being recorded. Now, I would like to turn the conference over to Fennec's Chief Financial Officer, Robert Andrade.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and good morning, everyone. We appreciate you joining us today for Fennec Pharmaceuticals Third Quarter 2023 Earnings Conference Call, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning It is Rusty Rykoff, our Chief Executive Officer and Adrian Hay, our Chief Operating Officer. Before we begin, I would like to remind you that during this Call, the company will be making forward looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward looking statements. References to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the U.

Speaker 1

S. Securities and Exchange Commission. In addition, any forward looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward looking statements. This conference call is being recorded for audio rebroadcast And with that, I will now turn the call over to Rusty Rykoff.

Speaker 2

Thank you, Robert, and good morning, everyone. The focus of today's call is to review updates On the ongoing commercial launch efforts underway for PedMark in the United States and review our global opportunities, including the recent approval in the U. K. And Europe. Further, we will detail our Q3 2023 financial results, all of which were outlined in our earnings press release issued this morning prior to this call.

Speaker 2

We're very pleased to report that Denmark delivered strong 3rd quarter revenues of $6,500,000 a 96% increase over the Q2 of 2023. Further, this represents more than tripling our revenue since Q1 2023 from $1,700,000 reported in Q1. We continue to be very encouraged with the progress we've made with Pedmarc launch to date, and we are even prouder Of the work that is underway to sustain this momentum throughout the remainder of 'twenty three and as we head into 'twenty four. As a reminder, pedmark was approved by the FDA in September of 'twenty two. It is the 1st and only FDA approved therapy to reduce the risk of cisplatin induced hearing loss in pediatric patients 1 month of age and older with localized non metastatic solid tumors.

Speaker 2

We launched Fedmark in the U. S. In October 2022. So we're just marking our 1 year anniversary Since PedMark became commercially available, we're very proud of the team's ongoing commercial progress and our enthusiasm for PedMark and passion for supporting the pediatrician college community continues to grow. In fact, the team had a busy fall season, engaging in robust discussions with key opinion leaders on the issue of cystophagy and eustodotoxicity.

Speaker 2

We recently attended The International Society of Pediatric Oncology Annual Meeting the Connective Tissue Oncology Society Annual Meeting The HealthConnect Partners 2023 Full Hospital Pharmacy Conference and the Association of Pediatric Hematology Oncology Nurses Annual Meeting, where we saw and heard firsthand about the importance of our work. This conference is followed on the heels of an event where we sponsored The Hillsdale College Pediatric Cancer Awareness Day Football Game, in which proceeds from the day went to support multiple organizations Engaged in the fight against childhood cancer. These are just a few examples of how we are continuing to build strong relationships within the community. In terms of commercial efforts to establish PedMark as a necessary complementary agent when prescribing a cisplatin based therapy for a child with a localized non Our sales force is currently targeting 200 pediatric hospital centers, including COG, NCI and NCM Institutions Across the U. S, they drive 80% of Cisplatin use.

Speaker 2

Based on these efforts, we estimate that approximately 20% You have written a Pedmark prescription. In fact, we believe that some of the leading centers have already prescribed more than 25% We're highly encouraged by the 3rd quarter's double digit growth In new pediatric hospital centers prescribing PedMark and with the consistent repeat orders from existing accounts. Further, we continue to see success in large academic centers, including continued formulary approvals at several major pediatric hospital centers in the 3rd quarter. Geographically, all of our territories have seen HCPs prescribed PedMark, and we have seen highly encouraging adoption within our target accounts They're increasing over time. In terms of patients, we have seen utilization across several tumor types, including hepatoblastoma, osteosarcoma And germ cell tumors.

Speaker 2

Padmark also continues to have broad and favorable payer coverage as evidenced by They are approved U. S. Prescription claims with commercial insurance plans and Medicare Part D plans. As a reminder, we estimate among current Fedmark patients approximately 50% are commercially insured with another 50% insured through government sponsored programs. The remainder have no or limited insurance coverage and may be eligible to receive FedMark at no cost to them under our patient assistance program, Pfenex Hears, which is comprehensive single source program designed to connect FedMart patients to both patient financial and product access support.

Speaker 2

With regard to expanding in Europe, we announced in June the IMO approval of PedMark, which will be marketed Under the name PedMark C, PedMark C will be the 1st and only treatment approved in the European Union to address Further in October, the Medicines and Healthcare Products Regulatory Agency, MHRA, in the U. K. Following up on our strong U. K. Key opinion leader relationships, Earlier this fall, we presented background and data on PedMark C at a Hearing Therapeutic Summit organized by are and ID with the UCL Ear Institute and UCLH Biomedical Research Centre in London.

Speaker 2

We continue to evaluate the best commercial pathway for the company in Europe and the rest of the world, either go it alone or with a partner. Whatever pathway we select, we see Europe as another significant opportunity to create shareholder value. In closing, I want to reiterate The focus of our commercial strategy remains on executing the following: establishing PedMark as the necessary complement Agent when prescribing cisplatin based therapy for a child with localized nonmetastatic solid tumor, minimizing the barriers To access and to hear rapid responses to product questions and establishing Pfenik as the premier partner of choice among pediatric oncology community. With that, I will now turn the call over to Adrian, who has been on the Board of FENIC since 2014 and joined the executive management team of FENIC in August of this year's Chief Operating Officer. Adrian will share his observations and opportunities after his first 100 days on the job.

Speaker 2

Adrian, over to you.

Speaker 3

Thanks, Rusty. Indeed, it's been an exciting first few months since joining FENAC full time as Chief Operating Officer. As expressed on the call in August, I've got 2 priorities. The first is accelerating the adoption of Pedmarc in the U. S.

Speaker 3

And second, preparing Pedmarcke for launch in Europe as we continue to evaluate the strategic direction of the business. As Rossy mentioned, adoption of Pedmark in the U. S. Continues to make solid progress. We continue to work with a number of Key pharmacy committees and key academic centers ensuring that PedMark is included as standard of care in all treatment protocols.

Speaker 3

We benefited during the Q3 from growth in adoption and importantly, repeat orders and growth from existing Additionally, we won pharmacy and therapeutics committee approval at several leading institutions. Further, we are now putting increased focus on the opportunity offered by PedMark's NCCN Endorsement In Adolescents and Young Adults, AYA. And importantly, we have a Category 2 rating, 2A rating, which was achieved earlier this year. To support this effort, during the Q3, we strengthened our Sales team with several new hires who have significant expertise in selling into community oncology centers where many of the AYA patients are treated. Additionally, we strengthened our focus on managing the relationship with group purchasing And we've signed contracts with a number of leading groups.

Speaker 3

GPO endorsement We'll support the use of Pedmar not only in the pediatric oncology centers, but in these community hospitals, infusion centers And administration in the home. We also will be partnering with a leading specialty pharmacy to provide home administration And importantly, white bag delivery to the hospital with direct billing to the insurance provider or to Medicaid. Turning to Europe, we're making steady progress in the preparation for the launch of Pedmarski in the first half of twenty twenty four. Some of these activities include the submission and approval of the German NUB price application. This was done in October 2023 and it was accepted.

Speaker 3

This allows us to sell Pedmarski in German hospitals during 2024. The health technology assessment dossier required for price approval are now at an advanced stage of development and will be submitted in quarter 1 in Germany, the UK, France, Italy and Spain. Additionally, we've had early and favorable interactions with several key countries Regarding pricing and reimbursement. And as Rusty said, we recently received MHRA approval in the UK. With that, I'll turn the call over to Robert to go over the financials for the quarter.

Speaker 3

Robert?

Speaker 1

Thank you, Adrian. Our press release contains details of our financial results for the Q3 of 2023. It can be viewed on the Investors and Media section of our website. Rather than read through all of those details, my comments today We'll focus on some key financial results and we anticipate filing our 10 Q this week with further details. The company recorded net product sales of $6,500,000 in the Q3 of 2023 versus $3,300,000 In the Q2, for a net revenue growth of approximately 96%.

Speaker 1

As mentioned by Rusty, net revenue has more than tripled To reiterate remarks from Rusty and Adrian, we are pleased with the growing acceptance of Pedmark within healthcare providers during the Q3 and with the recent hospital formulary access approvals continuing early in Q4. Overall, our OpEx during the period has remained well controlled and within anticipated ranges. General and administrative expenses for the Q3 of 2023 were $3,800,000 which compares to $5,300,000 in the Q2 of 2023. The decrease is largely attributable to lower non cash employee remuneration and lower administrative and legal expenses. As stated in previous quarters, the company began recording selling and marketing expenses when it expanded its payroll to include an internal sales force.

Speaker 1

Selling and market expenses include distribution costs, logistics, shipping and insurance, advertising, Wages and commissions and out of pocket expenses. The company recorded $3,300,000 in selling and marketing expenses in the Q3 2023 compared to $2,300,000 in the Q2 of 2023 as the company increased margin expenses in the U. S. And Pre commercial activities in Europe. We expect these levels to continue in the Q4, but overall OpEx to be consistent with Q3 when including G and A.

Speaker 1

R and D expenses are negligible as the company reduced research and development costs when it received FDA approval of PedMark. The majority of traditional R and D expenses associated with PedMark are now recorded as G and A or capitalized into inventory and eventually recorded to cost of product sales. Our GAAP net loss for Q3 of 2023 was 1,800,000 or $0.07 per share compared to a GAAP net loss of $5,400,000 or $0.21 per share in the Q2 of 2023 and $8,100,000 or $0.31 per share loss in the Q2 of 2022. As evident in the results, we have made significant progress and getting closer to breakeven on a GAAP EPS. And finally, our cash position.

Speaker 1

We ended the Q3 with approximately $12,400,000 in Cash equivalents and investment securities, which includes $25,000,000 of capital drawn under our existing Petrocor convertible debt facility. Our cash burn for the Q3 was approximately $2,500,000 compared to $3,300,000 in the Q2 of 2023. As a reminder, we remain focused on reaching cash flow breakeven in the U. S. As revenues grow and look forward to reporting our Q4 progress in 2024.

Speaker 1

Finally, we believe our available capital, when coupled with Pedmark revenue assumptions, We'll give us sufficient capital to fund our operations through at least the next 12 months. And operator, with that, we are ready for questions.

Operator

We'll pause for a moment while we compile our Q and A roster. Our first question comes from Chase Knickerbocker with Craig Hallum. Your line is open.

Speaker 4

Good morning, guys. Congrats on the nice quarter here. Maybe just to start for me, if we look at the model, it Seems to me that you're executing to your plan on launch, where it seems like the initial expectation was cash flow breakeven in Q4 this year. Looking at the model with revenue growing nearly 100 Again, sequentially, you would need either drastic deceleration in that revenue or meaningfully elevated OpEx to not post positive cash flow From operations or positive operating income in my model, that paired with the strong commentary on center penetration, penetration within some of those centers, Seems like breakeven is the right way to think about the business in Q4. Is there anything that you would caution me on the go forward that I should be thinking about when I think about the model?

Speaker 2

Hi, Chase. Good question. Perhaps Robert can answer that.

Speaker 1

Yes. Thanks, Chase. Yes, as stated, our OpEx during the period has remained well controlled and within previously guided ranges. For the Q3 specifically, if you look at our OpEx, it was roughly $7,000,000 to $7,500,000 in cash expenses. So based on those Q3 results, we are on our way to getting to breakeven.

Speaker 1

Of course, this does exclude an EU launch, which as we mentioned, we are evaluated evaluating, excuse me. But further, we feel comfortable that our existing cash when coupled with Pedmark Revenue assumptions in the quarters to grow will give us sufficient capital to fund our operations to cash flow, breakeven and positivity. That's what we're working towards.

Speaker 4

Great. Thanks for the color. Maybe just 2 on Europe from me as well. Maybe help investors think about the frameworks that inform decision on whether to partner or go it alone? Is it in terms of a licensing deal?

Speaker 4

Is it the royalty levels? Is it the money upfront? And then I guess paired with that, just what geographies within Europe should we think about from a country perspective generating the most meaningful volume within The first 12 to 18 months of launch, that the UK and Germany, just kind of more color there.

Speaker 2

Yes. Thanks, Chase. I will send it over to Adrian because he's been working intimately in Europe from Dublin and will be able to share his experience For the last 100 days. Adrian, I think you might be I think

Speaker 3

I was on mute there, sorry. Yes, Chase, thanks for the question. I think, first of all, with Europe, if we choose to go alone, we don't bite off more than we can choose. I think if we were going to do it ourselves, we would partner in the major sorry, we do it ourselves in the major markets in Western Europe, And then we look to establish relationships with distributors for Eastern Europe and perhaps some of the smaller markets. I have to say that in discussions that we've had with the vendors that are Helping us develop the Health Technology Assessment Dossiers.

Speaker 3

I've been very encouraged by their views on what Price we will be able to achieve. I think the economic argument is very strong When you look at the costs of deafness that are covered by the health Systems in most of these countries, depression is heavily associated with deafness, for example. So we feel we can make a strong argument for an acceptable price in Europe. In Germany, as I said, we submitted the price for the 6 months, and that has been accepted. So when we do launch, we will launch at that price and then enter into negotiations with the insurance companies for the final price.

Speaker 3

And then we have submitted an early access application or we're about to submit an early access application in France. So we should expect to get some pre price approval sales in France early next year. But as we said earlier on, we are continuing to evaluate all the options. And if we do license out in Europe, Obviously, we'll be looking for a big cash injection with hefty royalties, if that helps.

Speaker 4

Yes. And then if we kind of dig in a little bit on the Europe pricing there, is greater than a 50% decline from U. S. Net price The right way to think about it or should I maybe be thinking about that a little bit differently? And then also a little bit of color on kind of inpatient versus outpatient usage in the United Maybe percentage of sales between both sites of service and then kind of how the prior authorizations have been on the outpatient side from a coverage perspective.

Speaker 3

Okay. So, first question on Europe pricing. Yes, Based on where we are with Germany, significantly more than 50% Sorry, so closer to 100% of the U. S. Price will be the initial price In Germany, and then we're subject to negotiation.

Speaker 3

What I expect to see In Europe is a request for some kind of pricing cap. So what came out of the discussions with While we were negotiating the price in Germany was the high cost of a 17 year old testicular cancer patient Where they said it will be close to €1,000,000 So we can expect that they won't be covering €1,000,000 So We'll have to have some kind of cap. And I think most European health authorities will expect that. But I think in terms of pricing, we're looking at something Around 70% of the U. S.

Speaker 3

Price, if I'm to look at an average. With the focus of turning the focus to the AYA population, if you just look at the patient numbers, We talk about in the U. S. A 3,500 pediatric Population, that's patients who have localized disease that are not treated with cisplatin. If you look at the patient numbers in the AYA population, just taking one cancer, There are 3,500 testicular cancer patients in the 15 to 39 year age group in the U.

Speaker 3

S. And if you add all the other tumor types that are likely to be treated with cisplatin, You're talking about 30,000 patients. So a tenfold increase in the number of potential patients. And of course, most of these patients are treated in the community and it's ASP plus So as I said, we have just started our sales team focusing on this Population and early results have been very encouraging. The sales force are reporting that this is Significant unmet medical need and there's positive reaction from the community.

Speaker 3

Thanks for

Speaker 4

the questions, guys.

Operator

One moment for our next question. Our next question comes from Noreen Khubier with Capital One Securities. Your line is open.

Speaker 5

Hi, good morning. Thanks for taking my question and congrats on the quarter. I guess I'll start with very simple just in terms of you're looking at actual sales numbers and you're seeing progress there. But just out of curiosity, what kind of metrics are you personally tracking over time to gauge your progress? Is it just repeat orders?

Speaker 5

Just some specifics would help.

Speaker 2

Hi, Noreen. Maybe I can start it and send it over to Robert And Adrian as well. In general, what we're looking for, obviously, our number one priority is to get the business to breakeven. So we're almost there From that perspective, in terms of on the sales side, we absolutely have specific based on the populations discussed, Both in the pediatric and NYA setting going forward, the sales force would be very well incentivized to perform in those populations. And obviously, we're looking really to ramp the business going forward.

Speaker 2

I don't know, Robert or Adrian, if you'd like to add anything else.

Speaker 3

Yes. We have a number of metrics. We have Formulary committees. 1, we have repeat orders and repeat orders from the census. We are and ultimately, obviously, it's vials sold and revenue.

Speaker 5

Got it. Thank you. And

Speaker 2

they're based sorry, let me just add, and they're based on the individual performing in their territory and not an overall team goal.

Speaker 5

Okay. And you did mention in the prepared remarks that you've added Some folks in the sales force, so how many are you up to now? And Is there a different focus for these newer individuals or if you could just help clarify that a

Speaker 3

little bit?

Speaker 2

Yes. So we are we've kept the sales floor consistent. We are we have 12 salespeople in the field right now Based on the territories that we've discussed in some of our earlier calls to target this 80% of cisplatin use. And yes, the focus, as you can imagine, there is also some natural turnover in the sales force team, and we were able to we're lucky enough to pick up Some really talented individuals that sold in the community center and can really expand the push for to use the NCCN guidelines for AYA for the use of Fedmark in this population. So we think just the timing worked out very well.

Speaker 2

Okay.

Speaker 5

And if I could

Speaker 3

add there, I think there are 3 key things you need to have 4 actually. First of all, the NCCN guidelines with a category 2A. Secondly, you need to have the agreements in place and endorsement from the GPO Organizations. You need a specialty pharmacy that can supply direct to the community, direct to the hospitals, direct to the patient's home. And then you need an experienced sales force that is used to selling in this environment.

Speaker 3

And we now have all of that in place. So a major focus now is the AYA population in addition to chipping away at the pediatric oncology centers.

Speaker 5

Terrific. So just one more from me. You did Adrian mentioned in your prepared remarks about Partnering with Speck Pharma and the home admin angle, administration angle, what percentage of that Is that part of the market? Just out of curiosity.

Speaker 3

Well, if you look at The pediatric oncology centers, which accounts for 3,500 patients, Then I think the majority of those right now, the younger ones are treated In the specialist oncology centers, but all the older patients are either treated in infusion centers or at Home or in community hospitals. And as I said, there's probably around 30,000 in total there. So I think the opportunity, the real opportunity lies in with the AYA population Where we've got NCCN endorsement, we've got reimbursement because it's a 2A, and it's financially attractive. And also bear in mind that these patients are obviously older and heavier, so they're going to use more

Speaker 5

Right. Okay. Thank you. Thank you.

Speaker 2

That's all. And just to add one more, The ability for us to provide vials into the home standing of a patient, we up to this point, we now have this capability And we're having this capability now. So that's certainly very encouraging in addition to the skill set required to sell into the community Oncology, as Adrian mentioned earlier. So we have the full suite of products and the sales force to execute on this plan.

Speaker 3

And that has been in place since the middle of October, all of these things. So We think we've got everything in place now.

Speaker 5

Great. Thank you. That's all from me.

Operator

One moment for our next question. Our next question comes from Charles Duncan with Cantor Fitzgerald. Your line is open.

Speaker 6

Hey, good morning, Razzi and team. Congrats on a good quarter and thanks for taking our questions. I had just a couple of them. First of all, if you fast forward a year from now, would you anticipate the majority of your vial use To come from pediatric younger patients, call it Centers For Excellence, in treated in Centers For Excellence Or would it be perhaps more from the AYA patient population given that they're Generally larger folks, etcetera. And so what is the goal over the course of the next 12 months beyond just, And I'll call it revenue that you would like to achieve.

Speaker 6

Thanks.

Speaker 2

Yes. Hi, Jeff. Very good question. I think the goal is, I mean, it's really since Adrian has been here, we really have been focusing on 2 additional opportunities.

Speaker 4

One is

Speaker 2

the AYA and the second one is international, in addition to all the work that we have done with a large pediatric hospital center. So I think all these three things in place a year from now, I would imagine that we could Speak to all 3 of them contributing substantial amounts. And of course, the AYA, as you mentioned, very well by the nature of the tumor types treated there And the nature of the cisplatin therapy is treated there, would require significantly more and the larger size of the patients, of course, would require significantly more vials Fed Mark. So yes, I would say that probably given that it's starting at almost 0 right now, Would be probably the largest. But don't underestimate, but more the pediatric hospital, I mean the pediatric hospital, we made Thanks for progress.

Speaker 2

There's still good amount of activity and P and T wins under our belt as well as Newer ones that we're expecting. So, yes, we could also pleasantly be surprised there as well. And on the international side, of course, what really is going to drive revenues there It's particularly Germany and the U. K, right, and France. So certainly very encouraged By what Adrian has been able to do in Germany.

Speaker 6

Yes. And that's a great segue to my next Question, I was a little bit confused on some of Adrian's answers regarding pricing and Beyond pricing, and I know that can be kind of an artifact of a certain country. I guess I'm wondering if you could perhaps Talk about the pharmacoeconomic value of PedMark in Europe or in the UK Versus here in the United States, do you think there's a good recognition of the downstream costs of cisplatin induced hearing loss. And if you could gauge timing As to being able to talk about your strategy, is it a goal for the first half of next year to be able to Really come to a conclusion on what next steps are ex U. S?

Speaker 6

Thanks.

Speaker 2

Yes, I would answer the latter one and I'll hand it over to Adrian. So yes, so our goal would be Sometimes between now and middle of next year to have that answer on the on what we plan on doing, Either keeping the major five to ourselves and partnering the rest or selling the European business to someone else, Right. So that all would depend on several factors. Importantly, what is the cash upfront? So and maybe Adrian, over to you in terms of the value proposition of European Health OCAs For the health economics of FedMart to their healthcare systems.

Speaker 3

Yes. So I think the first thing to remind everyone of is that Although you've got actually in Europe 2 regulatory authorities now, you've got the U. K. MHRA and the EMA, The other 27 countries, you've got 28 different ways of assessing whether the country can afford to pay for a drug. So in terms of the health economic argument that we are putting together, I.

Speaker 3

E, can this country Justify paying X for the drug. We're well advanced in most of the European countries in terms of the dossier And we feel strongly that we will be able to present a Convincing argument to justify paying something like at least 70% to 100% of the U.

Speaker 2

S. Price in Europe,

Speaker 3

if that's clearer.

Speaker 6

That makes sense. I thought I didn't know if it was a discount or the actual price, so that helps.

Speaker 3

I think there will be a mixture of some degree of discounts and caps Because whilst they will be willing to pay full price for a 5 kilo hepatoblastoma patient, They won't be willing to pay full price for a 80 kilo testicular cancer patient. So there's got to be some kind of

Speaker 6

That makes sense. And is there a recognition, I think you mentioned depression as an example, of the downstream Extreme costs of losing one's hearing and how that accrues cost to not only the patients but the community over time.

Speaker 3

And different countries have different approaches. For example, some will take into account The fact that a deaf patient is unlikely to be able to contribute Because they drop out of school, they don't get well paid jobs, They become a burden on the Social Security system. Some countries will take that into account in their assessment. Others will say, well, how much are they just costing the health care system, For example, they're not taking into account Social Security costs and loss of earnings, etcetera. So each one of these countries Has a slightly different way of looking at it.

Speaker 3

So it's very difficult to generalize. Where I would generalize is that We feel that in most of the countries, we've got sufficiently strong arguments to justify a good price.

Speaker 6

That's helpful. Looking forward to seeing the progress next year ex U. S. As well as U. S.

Speaker 6

Congrats on the progress in the quarter. Thank you.

Operator

One moment for our next question. Our next question comes from Deepesh Patel with H. C. Wainwright. Your line is open.

Speaker 7

Thank you, guys. This is Dipesh on for Ram Selvaraju. What kinds of information do you expect to disclose Going forward regarding the commercial trajectory of PedMark in the U. S, so for instance, number of patients on therapy, number of new and repeat Prescriptions written, total number of prescribers or number of prescribers who have written, for example, greater than 1 prescription, etcetera.

Speaker 2

Yes. You can that's a good question. As you could see, we started giving a little more granularity as the business started building up, In particularly with the accounts where we have won P and T, right, and as well as the repeat orders from those places and the penetration within the physicians within those places. So I think as we as the business builds up, I think we will be more granular on that, absolutely. Keep in mind, what we don't know, of course, is that Given our label, it covers many, many tumor types.

Speaker 2

We're at best case, we're guessing what the tumor types are that are being treated.

Speaker 7

Okay. Thank you for that. And I have several more questions. How would you describe the current status of reimbursement and formulary access for Pedmark?

Speaker 2

So in terms of reimbursement, we have not seen any major issues. So that certainly has been encouraging. In terms of the formulary process, as you could imagine, hospitals in the U. S. Are under tremendous financial pressure.

Speaker 2

Their margins net operating margins are very clean. On the other hand, something very positive is happening to them, which is They are creating a tremendous margin at their pharmacy level, in particularly savings from biocimoders. So, as we are moving forward to get through a P and T comedian, sometimes it takes us more than once. Those type of considerations come into play. But obviously, it's not easy.

Speaker 2

It's not easy to get through a P and T committee given all the considerations, given that this comes from their DRG.

Speaker 7

All right. That's very helpful. And then How are partnership discussions progressing in Europe? And when do you expect to launch the product there?

Speaker 2

So I just from the previous question, yes, we expect to launch sometimes in the Q2 next year, Probably May, June next year, it's our best guess at the moment. We are still going to a Type 2 variation, We're switching the manufacturer from the U. S. Basically into Europe. Our current manufacturer of Pedmarc, so he's also manufacturing Pedmarc C and they would have to be approved in the Type 2 variations.

Speaker 2

So I think as soon as we have that and then we obviously ship and label product into the European market, then I think we'll be able to give you a little more granularity of The launch would be, but Adrian is certainly working on that given all the preparation work he's doing on the health economics.

Speaker 7

Got it. And then just a couple more questions. Do you have any plans to advance other drug candidates from your discovery stage pipeline into the clinic at this time?

Speaker 2

Well, I don't know if you know much about the history of FENIC, which was the presence of companies with HERIX, but we started with 3 And we have one. So I think it's very important for us to establish this one on the market before looking into bringing something else in.

Speaker 7

Got it. Okay. And then last question, gentlemen. What does the long term competitive landscape look like for Penmark in the U. S?

Speaker 2

I mean, I think the most critical piece is wuxisplatin remain a mainstay treatment Well, in pediatric cancer, and we believe it will be. It's pediatric tumors in general and AYA tumors in general are very Receptive, sensitive to cisplatin. Oncologists see a good use for the drug. They know how to use it. They've optimized it.

Speaker 2

So anything else that comes usually comes on top of cisplatin and comes at later stages. So I don't see anyone looking to replace Splatin, so that's really the view that we have and what we see in the marketplace. So yes, I don't expect substitution to be splatting anytime soon.

Speaker 7

Got it. Thank you, Rusty and gentlemen for the update. Appreciate it.

Operator

And I'm not showing any further questions at this time. I'd like to turn the call back over to Rusty for any closing remarks.

Speaker 2

Yes. Yes, I would like to thank you all for joining us today, and we look forward to updating you on our Continued launch progress and corporate milestones and future quarterly calls. Thank you and have a great day.

Operator

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

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Earnings Conference Call
Dover Q3 2023
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