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spk01: Greetings, and welcome to Avidel Pharmaceuticals' fourth quarter and full year 2022 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 Austin Murtaugh with Stern Investor Relations. Thank you. You may begin.
spk09: Good morning, and thank you for joining us on our conference call to discuss fourth quarter 2022 earnings. As a reminder, before we begin, the following presentation includes several matters that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. These risks include risks that products in the development stage may not achieve scientific objectives or milestones or meet stringent regulatory requirements, uncertainties regarding market entry and acceptance of products, and the impact of competitive products and pricing. These and other risks are described more fully in AVIDAO's public filings under the Exchange Act included in the Form 10-K for the year ended December 31, 2022, which was filed on March 29, 2023, and subsequent SEC filings. Except as required by law, Avidel undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events, or otherwise. On the call today are Greg Divis, Chief Executive Officer, Jennifer Goodeman, Senior Vice President of Medical and Clinical Affairs, Richard Kim, Chief Commercial Officer, and Tom McHugh, Chief Financial Officer. At this time, I will turn the call over to Greg.
spk02: Thank you, Austin. Good morning, everyone, and thank you for joining us for a company update and to review our fourth quarter and full year 2022 results. 2023 is proving, as we expect it to be, a pivotal year for Avidel. We've already executed on a number of significant milestones, including the recent completion of multiple strategic financings that paved the way for growth and value creation as we enter the final stages to bring LoomRise, are investigational once-at-bedtime oxibate therapy for the treatment of cataplexy or excessive daytime sleepiness in adults with narcolepsy to the market. With an oxibate-eligible patient community of 30 to 35,000 strong and the opportunity to address the most important unmet need, which requires patients to forcibly awaken in the middle of the night during a precise 90-minute window, LumeRise offers the potential to provide OxyBait patients the opportunity to have an uninterrupted night's sleep while commanding a meaningful share of the estimated $3 to $3.5 billion once at bedtime OxyBait market. I am proud of all that our team has recently accomplished, which has put us in a very strong position ahead of a potential final approval and the commercial launch of LumeRise. As announced yesterday, significant progress has been made in strengthening the company's balance sheet, providing us with the financial flexibility and a clean 10K ahead of the potential launch of Lumerize to the execution of a series of strategic financings, which in total provides the company with approximately $200 million of committed capital to support a potential Lumerize launch and a new April 2027 maturity date for 96.2 million of our convertible notes. The total capital includes $125 million from an equity raise and up to an additional $75 million in royalty financing with RTW investments. RTW, our largest equity holder, continues to be incredibly supportive of Avidot and Loomrise, and this additional royalty financing, along with the convert exchange and equity raise, provides us with the necessary resources and balance sheet to fully support the commercialization of Loomrise for people living with narcolepsy. Tom will provide further details a little later in this call, but it is important to state emphatically that the completion of these financing actions puts us in a strong financial position to execute on our launch priorities and deliver on our mission to transform Avidel into a commercial organization and a major player in the narcolepsy space. I want to thank everyone and especially all of our investors. who have supported us during this process and your continued belief in the promise and future of Avidel and Lumerize. Turning to our progress on the regulatory front, earlier this month we submitted a minor amendment to our Lumerize NDA requesting final FDA approval. This came shortly after the REMS patent was delisted from the FDA's Orange Book in response to the unanimous three to zero panel decision of the United States Court of Appeals for the federal circuit on February 24th, affirming the previous district court ruling ordering that delisting. Based on recent interactions with the FDA and the March 1st submission date for our minor amendment requesting final approval, FDA guidance to us would suggest timing to a decision could be around two months or approximately early May. Please note, actual timing is not in our control. However, we remain committed to continuing to do all we can to try to accelerate this. If or when we learn anything more specific, we will certainly share that information as appropriate. We also recently announced that the FDA approved our pre-launch activities importation request or player for Lumerize. This has allowed us to import Lumerize into the U.S. ahead of a final approval decision and puts us in a position to potentially shorten the time to product availability. With this, we expect to be in a position to have Lumerize available in about four weeks after a potential final approval. For the near-term final approval decision and the potential for product availability shortly thereafter, we have been focused on building and preparing our organization for the potential launch of Lumerize. Richard will join us shortly to provide a further update on our launch preparations and progress. And lastly, and certainly not least, we continue to expand the patent exclusivity for Lumerize, as we've recently been granted five additional U.S. patents for a current total of 13. These 13 U.S. patents provide Orange Book listable patent protection into early 2042, with many more applications pending at the U.S. Patent Office. We have a lot to cover today, so with that, I'll turn the call over to Jennifer for details on our recent scientific data presentation. Jennifer?
spk05: Thanks, Greg, and good morning. It's an exciting time for us. We closed out last year by presenting a total of seven posters between the American Neurological Association and the CHEST meeting. I will briefly highlight two of the posters. First, a real-world study with the Mayo Clinic to understand the top 20 comorbidities increased in people with narcolepsy compared to a matched cohort. The top 20 did not include cardiovascular disease, And second, a discrete choice experiment where, among 100 clinicians and 125 patients, the most important driver of Octavate treatment choice was a single dose. Whether it is medical congresses or individual KOL meetings our experienced MSL team are having, we consistently see unsolicited excitement and enthusiasm for the unmet need that Lumerize will fulfill if approved. The robust clinical study data of Lumerize and the clinical value proposition of avoiding middle-of-the-night dosing is well understood. Regarding the benefit of eliminating the middle-of-the-night dose, we supported research that was conducted by TRIN's community to better understand the patient experience with twice-nightly Osteobase. TRIN's community submitted these data, which were accepted as a late-breaking abstract, to the Advances in Sleep and Circadian Science meeting held in February. I will share a few highlights TRIN presented from their sample of 85 respondents with narcolepsy who have currently or previously taken twice-nightly OxyBase ART. Approximately 75% of the patients surveyed reported missing the second dose. Of that group, 65% shared that this happens at least monthly. 32% reported suffering injuries when waking to take a second dose of therapy. Of that group, one-third said this occurred at least monthly. These new trend data, which are consistent with what we have learned in our RESTORE study via patients switching from twice nightly, highlight the potential positive impacts that once nightly dosing will have on people living with narcolepsy. Let's turn now to the published data reporting additional safety concerns with currently available treatment regimens. In January, we published our findings in the journal Drugs, Real World Outcomes from the FDA Adverse Event Reporting System, or FAERS, of reports that showed patients are inadvertently taking their second dose of sodium oxibate less than 2.5 hours after their first, which can be associated with serious adverse events. It's relevant to consider what prompted this research. We have heard time and time again from people taking twice-nightly oxibates that this happens, and when it does, it can be a harrowing experience, as the publication underscores. The other consistent theme we hear is that patients don't report this to their doctors, the FDA, or the RIMS program, because they are fearful, if they did, that their therapy would no longer be accessible. It's well recognized that adverse event reporting is the tip of the iceberg. Reporting is voluntary for both patients and healthcare providers, and it is estimated that only about 10% of adverse events are reported. Without any other option, the reticence of patients to share these safety concerns and of clinicians to ask about potential safety concerns is not surprising. Yet, the risks are relevant. Among this sample, 27% of reports where dosing was less than two and a half hours after the first resulted in hospitalization, with another 22% associated with the use of emergency services. We look forward to providing a treatment option we believe will mitigate this serious safety risk of taking a CNS depressant earlier than is advisable, as well as overcoming the challenges of missing the second dose
spk11: and or taking it too late i will now turn the call over to richard to provide an update on the commercial opportunity and avidel's preparations for launch richard thanks jennifer and good morning everyone the great progress that greg covered has allowed us to finalize our pre-commercialization activities and today i will share some additional market research that continues to support why we believe bloomrise can have a major impact in the narcolepsy market In addition, I will provide further updates on our significant launch readiness progress. With the submission of the amendment for Lumerize to the FDA, the imminent decision for final approval, and rapidly approaching potential product availability, our commercial readiness have progressed . As we continue to progress to bring one-step bedtime Lumerize to the Narcos community. We've been working diligently over the past few months to drug availability following potential final approval, and this was further confirmed with the FDA recently granting our player. In this regard, we currently expect, depending on the potential final approval timing, to have product available in the market in approximately four weeks post-approval. Now, in addition to the player approval, we've made significant progress with our REMS and Patient Services Center, which will both be operational in advance of a final approval, and our supply distribution network, which will be fully operational when the product is available. Earlier this year, we performed new market research, which included sleep specialists with varying amounts of Oxabate utilization. Here's a few key takeaways. First, when shown the Lumerize product profile, sleep specialists give Lumerize the highest Oxabate market share. Now, receiving the highest overall market share from this research is horribly consistent with three previous demand studies we have conducted, representing insights from hundreds of sleep specialists. Supporting this with the vast majority of sleep specialists stated that they were either likely or highly likely to prescribe Lumerize. Second, with the introduction of Lumerize, over time, oxygenate usage in new narcolepsy patients is expected to grow by at least 50%. This is very consistent with previous research, where with the introduction of once-at-bedtime Lumerize, sleep specialists see more of their patients becoming eligible and being treated with OxyBase therapy. And third, sleep specialty utilization for Lumerize coming from switch patients currently taking twice-nightly OxyBase, as well as those who are unable to stay on twice-nightly therapy. Our research suggests Lumerize will become the first choice oxibate for previously untreated oxibate eligible patients. We continue to see the consistency from our market research about the impact that Lumerize can have in addressing the unmet need for people with narcolepsy and the significant interest from sleep specialists that can make Lumerize the preferred treatment in a growing oxibate narcolepsy market. Now, I'll provide an update on our readiness efforts. as we have significantly expanded the scope of our execution against our launch plans. First, we have packaged a significant amount of commercial supply for Lumerize in its primary daily packets. For product fulfillment, we have completed the REMS programming, and along with our patient services center, both teams have been actively ramping up their hiring and should be fully staffed in the next couple of weeks. We've also signed contracts with our full specialty pharmacy network. On the payer front, our team had several key meetings with decision makers at the GPOs and PBMs that manage over 85% of the commercially insured lives. With the favorable decision in the federal court, the REMS Patent Delisting, and our LUMARISE amendment submitted, our conversation with payers has accelerated around contracts and coverage for LUMARISE, and the feedback continues to be positive. We've also been focusing on building an exceptional team to support Lumerize. We have hired the majority of non-customer facing roles across the team and have made offers to the majority of our territory business managers or sales representatives and our field reimbursement team for them to start in the next couple of weeks. For our sales team, we have prioritized hiring people with rare disease experience, previous sleep experience, or experience with our target prescriber base, as well as their ability to deliver in highly competitive markets. Now, of course, like the rest of our team, being aligned to our core values and always putting patients first is a must. The energy and excitement from our current Avidel team and our new colleagues joining us is palpable, and our goal is to ensure everyone on our team is singularly focused on how to improve the lives of people with narcolepsy. We look forward to providing more updates on future calls, and with that, I will now turn the call over to Tom for an update on the company's financials. Tom?
spk12: Thank you, Richard. I'll note that full financial results are available in the press release in the 10-K, and details of our recently completed financing transactions are in the 8-Ks we filed. I'll start with comments about our recent financing announcements. I am pleased to report that we executed the financing strategy that we've been communicating for the past several months and accomplished two critical goals. One, secure $200 million of funding for the anticipated launch of Lumerize in the form of committed capital from a $75 million royalty financing and immediately available capital from a $125 million equity offering. Two, we addressed the maturity of the convertible notes, which strengthened our balance sheet and provides financial flexibility to focus on our launch priorities. Our financing strategy consists of three major components. First, we completed an exchange of $96.2 million of the convertible notes and, importantly, extended the maturity out to April 2027. This eliminates what would have potentially been a significant use of cash later this year and moving this debt to a long-term obligation significantly improves our balance sheet and financial flexibility. Second, we secured committed capital in the form of a $75 million royalty financing from RTW Investments. The funding will be available to Avidel in two tranches of $30 million and $45 million upon meeting certain regulatory and financial milestones and we expect the first tranche will be available following the launch of Lumerize. The second tranche of $45 million is available to draw at our option upon achieving a revenue milestone should we choose to do so. This component of our strategy provides us with security of a future funding commitment and with favorable terms such as a royalty rate of 3.75% and lack of financial covenants. We sincerely appreciate the support of RDW and the confidence they placed in Avidel to deliver the value we believe Lumerize promises. Third, we completed an equity raise which generated gross proceeds of $125 million. This component of our financing strategy provides the immediate capital needed to fund the launch of Lumerize. The significant support that our shareholders demonstrated through their participation in the equity offering speaks to the confidence they have in the potential value of Lumerize. As I previously stated, we are pleased with the results of our financing strategy, the faith investors have placed in the company, and their confidence in the opportunity that lives have had for Lumerize. On a final note, we reported 96.5 million of cash, cash equivalents, and marketable securities as of December 31st, 2022. For additional detail on our 2022 financial results, please refer to the press release issued earlier this morning or the 10K filed yesterday. The combination of cash on hand, the maturity extension, the convertible notes, and the capital we secured allowed us to file a clean 10K with a strong balance sheet. The actions we took last year resulted in closing out 2022 with over $95 million of cash, and that, in addition to the financing stretch we completed, puts the company in a strong financial position as we get ready for our anticipated launch of Lumar's. I'll now turn the call back to Greg for closing remarks. Thank you, Tom.
spk02: From where we sit today, we are operating from a position of strength across our organization on the cusp of a pivotal moment for the company as we transition to a commercial company poised for significant growth and rapidly approach the opportunity to make a meaningful and positive impact for patients and the narcolepsy community at large. The significant milestones we have recently achieved including submitting our amendment to the Loom Rise NDA, along with executing multiple strategic financings, are critical steps toward our mission, built on the foundation of a clear value proposition of Loom Rise, which has been recognized by our key stakeholders, including patients, sleep specialists, and shareholders. But the work our team has done over the past few months, from a legal, regulatory, financial, and organizational readiness perspective, We are in an excellent position to take our next step to bring LumeRise to the narcolepsy community. We are ready to deliver on the promise of LumeRise to transform the market and the lives of people with narcolepsy. We thank you for your support. We look forward to providing future updates on our progress. And with that, operator, we'll open up the call for questions.
spk01: If you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Chris Howerton with Jefferies.
spk06: Great. Thank you so much for taking the questions and just wanted to offer my congratulations on all the financing and the updates. I guess two questions from me. One would be in terms of kind of the pricing strategy that you're expecting to use, maybe you could give us a little more color on kind of how you're considering pricing of Lumerize in this market, and maybe there's a little corollary there. In those discussions, do the payers have the generic twice-nightly oxybate on their radar as part of that discussion? And then a second one would be just kind of, are you anticipating a bolus of launch or a bolus of patients expecting to get on Lumerize at launch, or should this be more of a gradual thing? Great, thanks.
spk02: Yeah, thanks, Chris. Richard, maybe you can start with the pricing and commentary, and then certainly I can comment on how we're thinking about forecast.
spk11: Yeah, sure. Hey, thanks for the question, Chris. So yeah, as far as our pricing is concerned, I mean, our opal strategy, based on the value proposition of Lumerize has been, you know, we're going to win with patients, win with providers, and in essence, really a draw with payers, really more from a parity perspective. So we've been very consistent in our messaging that our target price for Lumerize is going to be more in the parity range with the branded Oxibates. And, you know, as far as the AGs are concerned, yeah, we've definitely had a chance to speak to all the payers thus far. And I think the general feedback on the AG is it is being treated like a brand extension. It is, from what we see now, it is beginning to get coverage, but we haven't seen any movement of forced movement from a branded twice-nightly oxidative to the AG at this stage. So we've built our whole strategy knowing that the AG will be in the marketplace. So the fact that it's here is really very much in line with our plans. And so far, our conversations with the payers have been really, really positive as well. And Greg, I'll pass the next question to you then.
spk02: Yeah, I think, Chris, as it relates to how we think about the early months of launch, we certainly don't intend to guide with any specificity from that standpoint. We'll talk more about, you know, how we think the market opportunity is and what that looks like as we, you know, get through the next number of milestones from an approval and leading into a launch. But I think at the end of the day, the team has done a great job to think through all the potential things that happened early on in kind of ordinary course of product launches from reimbursement to transition into patient services center to securing coverage and whatnot. So we're putting in all the necessary capabilities to be able to address those things. And we're pleased with the progress we've made and the feedback we're getting both across the patient community, physician community, and payer community.
spk03: Okay.
spk06: Well, that's awesome. And again, congratulations, fellas. Thanks, Chris.
spk01: Our next question comes from the line of Adam Everts with LifeSci Capital.
spk08: Great. Good morning, and congrats on all the great news this quarter as well as strengthening the balance sheet. So I just wanted to ask, make sure I'm clear on what will be in place at the time of full approval, assuming that occurs in early May. I mean, it sounds like the commercial team, including the sales force, will be ready product will be available roughly four weeks later. And then just remind me, I think Richard maybe said it, on the REMS program. That will also be in place by approval or certainly by launch.
spk02: Yeah, thanks, Adam. Richard, do you want to comment on that?
spk11: Yeah. Hey, Adam. Thanks for the question today. So, yeah, as far as our operational perspectives, as far as REMS distribution, the REMS is, in essence, programming is done. We'll be fully staffed for both our REMS program and our patient services center within the next couple of weeks. So that first phase, we're ready. We could be booked a switch in just a couple of weeks here as well. To your point, as Greg had mentioned, supplies should be available approximately four weeks after a final approval. And our team is coming on board as well. So we are ready to be able to deliver this. And yeah, so all of our key components are ready to go in the next couple of weeks.
spk08: Fantastic. And then one quick one for Tom. Tom, you mentioned the second tranche on the royalty side. That was triggered by a regulatory milestone or a sales milestone?
spk12: The second tranche of $45 million is on a quarterly revenue milestone.
spk08: Fantastic. Thank you.
spk01: Our next question comes from the line of Francois Brisebois with Oppenheimer.
spk03: Hi, this is Dan Thangone on for Frank. Congrats on all the progress and thanks for taking our questions. Just a quick one from me, you know, in terms of the payer discussions, just wondering how useful or important are these real-world outcome studies that you have been doing? And, you know, is this coming up in these payer discussions from a payer's perspective in terms of reimbursement? Thanks.
spk02: Richard, you want to go or?
spk11: Yeah, sure. Yeah. Hey, Dan, thanks for the question. So I think the really great thing is with the recent regulatory and legal events that have come on, the payer engagement has definitely stepped up to that next level overall here as well. And I think holistically, the good news is we're really focusing on really strengthening the conversations around the clinical value proposition. So the team has been doing clinical presentations. And I think going forward, I mean, the the payers are always interested in real-world evidence. So those questions do come up, and I think we plan on sharing more of that as more of the data continues to be published as well. So overall, the conversation has definitely been a lot more shifted towards the clinical value proposition of BlueMize.
spk03: Great. Thanks for that. And just a quick one. I believe you already talked about it, just to be clear. In terms of the REMS build-out, So, at this point, on the technology infrastructure standpoint, is that already completed, and now staffing is the next thing?
spk02: In short, Dan, that is exactly correct, and staffing is ongoing now. So, as Richard noted, within a matter of just a couple weeks, that will be fully operational. And, Jen, I know this goes under your purview, so if you have any comments you want to add, please do.
spk05: You described it perfectly. So programming is complete. The staffing is taking place right now, and we're just a few short weeks away from being ready to go.
spk03: Awesome. Thanks for all the updates, and congrats again on the year. Thanks.
spk08: Thanks, Ben.
spk01: Our next question comes from David Amsalem with Piper Sandler.
spk07: Thanks. So just had a couple. You talked through the challenges with middle-of-the-night dosing, but I wanted to get your thoughts on potential counter-detailing messages from your competitor, things that we've heard anecdotally from KOLs like taking BloomRise too late at night, potentially interfering with morning functionality or even bedwetting. So How do you respond to those kinds of concerns, and particularly as it relates to competition and messaging, what is your counter to those kinds of concerns? So I'll stop there.
spk02: Yeah, thanks, David. Well, Jen, I'll let you go first, Jen.
spk05: Sure, that's great. We have conducted two relative bioavailability studies comparing lumerize to twice nightly sodium oxibate. And what we have shown is that our concentration eight hours after taking the dose is actually a little bit lower than twice nightly sodium oxibate. So based upon those blood levels, there would not be any sort of expectation of impairment the next day, and that certainly is not something we've seen in our pivotal clinical trial or in our open-label study. I think it's also really, really important to note that with inoxibate, you shouldn't drive or operate heavy machinery six hours after taking the dose. When you think about Lumerize, that covers the nocturnal sleep period. When you think about twice nightly and that 90-minute window when you can take your second dose, When patients are waking up later, that is a restriction with that additional six hours that oftentimes does interfere with next day functioning.
spk02: Thanks, Jen. Richard, anything you want to comment?
spk11: Yeah, you know, hey, David, I just want to sort of add, you know, it's quite interesting when we hear, oh, there's a bit of background noise here, David. There we go. Thanks. So, David, to your question, as far as counter-messaging is concerned, so I think for us, the one thing we have realized over the last 20 years is I don't think anyone has really thought making patients wake up in the middle of the night has been normal. And where we see that most predominantly is in our market research around de novo patients. will state that they would want to start patients on Lumerize. Why would they offer a therapy where you have to get up during the middle of the night? And to Jen's point, we also know that the, you know, if there's any tolerability issues with OxyBase, they generally tend to subside over time as well. But I think for us, where we sort of see it is physicians are speaking sort of with their votes as far as the need to not, or the ability to not offer that second dose. well so we you know if that if those are the counter messages that come up we're more than prepared to deal with them and our we believe our campaigns will address them head-on that's helpful if I may just make in a follow-up do you think you're going to be able to pull in patients who've got the low sodium already yeah so David you know when we do our patient research what we find about patients who have gone to the mixed-salt version of the pricing that off the base is They tend to be patients who have been diagnosed with narcolepsy for a shorter period of time, and they tend to be earlier adopters of therapy. They're generally not satisfied with treatment and seeking more. So even though they have switched to the mixed salt version, all of our patient segments show an extremely high level of interest in learning about lumerize or potentially switching. Ironically, the highest group just nudging out the Zyrin patients are those on the mixed salt. And our belief there is because they are the ones who are going to most often seek more that they can do to manage their narcolepsy.
spk07: Thank you.
spk00: Thanks, David.
spk01: Our next question comes from the line of Mark Goodman with SDB Securities.
spk10: Hi, thanks for taking my question. It's really on the line for Mark. Congrats on the progress. Can you talk about your operating expenses in 2023 based on your current commercial launch funding? Now we've raised another around $200 million. Do you need additional funding before breakeven? Thanks.
spk12: Yeah, thanks for the question. You know, we're really pleased with the amount of capital we've raised. We're not providing guidance on operating expenses. We're heading into 2023. But from our standpoint with the capital, that we now have, we're quick and good to go for a launch.
spk10: So that's very helpful. And also can you talk about the IP? You mentioned that you have 13 patents now carrying this product. What gives you the confidence about the strength of the IP position?
spk02: Well, I think first and foremost, we're quite proud of the fact that we're the first and only company to actually have innovated a one at bedtime or once nightly OxyBait treatment option, and you would assume that we have and will continue to protect it to its fullest extent. The patent families that have been granted so far, with many more to come, I would say we're quite confident in. They're generally directed to once nightly OxyBait formulations, which includes obviously our formulation, but other types of formulations, pro-drugs, totemers, alternate salts, and whatnot, as well as methods of treating patients in a manner that we believe is consistent with what our final label will be. So we're quite confident in the robustness of our intellectual property, the 13 orange book listed patents we have so far, and the more to come.
spk10: Got it. That's very helpful. Congrats again on the quarter. Thanks, Rudy.
spk01: As a reminder, if you'd like to ask a question at this time, please press star 1-1. That's star 1-1 to ask a question. Our next question comes from Matt Kaplan with Lattenberg Bellman.
spk04: Hello. Good morning. Hi, Matt. Hi. Just a couple questions. In terms of maybe one for Richard, can you provide some more color on the sales organization in terms of number of sales reps and number of regions and kind of your go-to-market strategy with the sales team?
spk11: Yeah, sure, Matt. No problem. So, you know, our sizing for the sales force is based off of the insight that there are less than 5,000 prescribers of Octobates in the last three years. Of that 1,600 make up 80% of the volume and less than 500 make up 50% of the total prescription volume. So we're sizing it around 50 to really sort of focus on those groups. But right out of the gate, we're probably going to spend a little bit more time on the 1600 that make up 80% of the prescription volume. Now, we will cover the entire group and also including a few high narcosis prescribers who don't use Octabase. And also interesting for us, if we do get some other sort of people interested earlier on, Our REMS is almost like an early detection signal, which will allow us to get out to those offices and really ensure that they're set up well before that first prescription goes forward. So we're starting to focus where the occupant experience is, and then from there we can expand over time.
spk04: And then in terms of your patient support services center, how will that function to help patients get reimbursement and get coverage?
spk11: Yeah, it's one of the things that I would sort of say is going to be our secret sauce this launch. You know, we know prescribing and fulfilling any specialty product in the United States is a challenge. It's just not made easy for folks. So it's beyond our patient services center. We'll be actually staffed with nurses, nurse care navigators. So they will understand more, both the clinical and the reimbursement aspects. They're actually going to be accredited in actually reimbursement services as well. So our goal there is each office will actually have a dedicated person that they can build a longer-term relationship. It won't be sort of mixing and matching different nurse care navigators. But the other thing that we are also building out concurrently and have already made offers for is our field reimbursement team. And those are folks who will be able to go directly into the offices of these specialists and really help support the staff that focuses on reimbursement, both in a live aspect there and then, you know, patient support center will help both the office and also guide the actual individual patients themselves as well. So we've really invested a lot of time and energy because, first, we believe that the Lumerife value proposition will generate a lot of excitement with prescribers and patients, but we've got to make sure that we've had and we've spent the time to build the resources to make sure that we can get the fulfillment taken care of as well.
spk04: Okay, that's very helpful. Thanks, Richard. And then a question for Tom in terms of the royalty interest financing with RTW, the terms there. Can you help us understand in terms of the amount you'll have to pay back to RTW if you pull down the full amount or if you only pull down the first tranche? Is it two and a half times the funding, or how does that work?
spk12: Yeah, no, thanks, Matt. I think one of the great things about the royalty financing is the flexibility we have on the second tranche where it's really at our option to draw it or not. So if you focus on the first tranche, you know, it's in our EK file and there's a lot of details out there, but the hard cap is 2.5x. Okay, that's helpful. Thanks, Tom.
spk07: Thanks, Matt.
spk01: That concludes today's question and answer session. I'd like to turn the call back to Greg Davis for closing remarks.
spk02: Thank you. And thank you, everyone. Thank you for your time and joining us today on our fourth quarter and full year 2022 earnings call. We appreciate your spending the morning with us and wish you a great rest of your day. Thanks.
spk01: This concludes today's conference call. Thank you for participating. You may now disconnect.
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