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spk00: Please stand by.
spk04: Your program is about to begin. Good morning, everyone. My name is Reed, and I'll be your conference operator. At this time, I'd like to welcome everyone to Eagle Pharmaceutical's third quarter 2020 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. At that time, if you have a question, please press star and 1 on your touch-tone phone. As a reminder, this conference call is being recorded today, November 2nd, 2020. It is now my pleasure to turn the floor over to Ms. Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. Please go ahead.
spk05: Thank you, Reed. Welcome to Eagle Pharmaceuticals' third quarter earnings call. This is Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. With me on today's call are EGLE's Chief Executive Officer, Scott Harris, David Pernoff, President and Chief Operating Officer, and our newly appointed Chief Financial Officer, Brian Cahill. This morning, the company issued a press release detailing financial results for the three-month sentence of September 30, 2020. This press release and a webcast of this call can be accessed through the Investors section of the EGLE website at EGLEUS.com. Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Eagles Pharmaceuticals Management as of today and involve risks and uncertainties, including those noted in this morning's press release and are filed with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. Eagle Pharmaceuticals specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. A telephone replay will be available shortly after completion of this call. You'll find the dial-in information in today's press release. The archived webcast will be available for one year on our website at eagleus.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on November 2nd, 2020. Since then, EGLE may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings. And with that, I'll turn the call over to EGLE CEO, Scott Tariff.
spk10: Well, thank you, Lisa, and good morning, everyone. Let me begin by saying that EGLE is quietly having a great year. Due to COVID constraints and the general state of the specialty segment, we have not spoken to as many of you and as often as in previous years. Through the first nine months of the year, Eagles had a number of critical successes that we believe positioned the company for significant growth over the next few years. This morning, we issued two press releases. The first was our quarterly earnings announcement in which we described the strong quarter and provide a roadmap to the near future. The second release announced the appointment of Brian Cahill, our new CFO, as well as a number of key additions to the clinical formulations and commercial teams that we believe will strengthen the executive team. This is Brian's first earnings call, and he will be speaking to you shortly. Brian has been with Eagle for four years as our VP of Finance. Collectively, these appointments provide us with the internal resources to focus on operational excellence and realize the full potential of our multiple pipeline opportunities. First, I'll review Q3 highlights and provide an overall business update. As I mentioned up front, the third quarter was very strong, coming in at $1.17 per diluted share on a non-GAAP basis and reflects, among other things, the efficiency of our business model. For the first nine months of this year, we earned $2.58 per share compared to $2.13 per share in the first nine months of 2019. Notably, this $2.58 is just three cents less than the $2.61 we posted for the full year of 2019. Given the strong performance to date, 2020 is shaping up to be a growth year for Eagle, and at the same time, we've been able to continue to support our R&D efforts and build our pipeline for the future. Let me take a moment to expand on what I mean when I discuss the efficiency of our business model. We've tried to build EGLE primarily through organic growth. In doing so, there may be periods similar to the one we just left, when earnings dip temporarily while the R&D cycle catches up. Now we are back on growth trajectory, and considering our expectations around launching vasopressin shortly, combined with Symbio's recent approval for bendamustine, And having received final approval for Pemfexi, we believe our prospects for earnings growth, not just in 2020, but in 21, 22, and beyond, are excellent. And keep in mind the impact that all this growth will have, especially considering that we only have 13 million basic shares outstanding. Beyond that, we are building out a strong pipeline. This includes Fulvestrant and SM88 in our oncology group. And on the critical care side of our business, we have a potential number of RANADEX expansion opportunities to offset the expected decline of Bendecca due to TRANDA competition in 2023. All of this positions us well for a period of sustained earnings growth that is already underway. We continue to reinvest our earnings in both our product pipeline and in the company. This year, we have bought back $33 million in stock, bringing total repurchases since August of 2016 to $205 million, or 22% of the company. Clearly, this constitutes a significant return of capital to our shareholders. As an example, at the time of our February 2014 IPO, our basic share count pro forma was 14 million shares, and today, As I just stated, six years later, it's 13 million shares. Let me turn now to our product highlights, beginning with vasopressin. I am pleased to say that vasopressin was formally granted prior to review by FDA last month. On our last quarter's call, I noted that FDA had asked us a few specific questions, which we responded to fully back in September. We are hopeful about receiving approval shortly and would then potentially plan to bring the product to market soon thereafter. Remember our original trial date was scheduled back in May, but was postponed due to COVID. We just learned that the new trial date is set for January 11th, 2021. The proceedings will be held over zoom and we expect the trial to take about one week. We anticipate that we will have a decision by around mid year. The 30-month stay just ended this past October, and based on the strength of our legal position, and if approved, we are seriously considering launching our product prior to this court decision. We continue to anticipate that when the launch does occur, we will maintain our 180 days of exclusivity. This is an important opportunity for us, and sales of Days of Strict are expected to reach $700 million this year. Turning now to our oncology portfolio. We have our first Bendamustine product approval with our partner Symbio in Japan, 250 ml bag, and are awaiting approval of the 50 ml 10-minute rapid infusion product. Symbio currently sells about $85 million in Bendamustine annually and will begin converting to our product in January. We anticipate that the royalties and milestones will build to $10 to $25 million per year. EGLE recently received the $5 million approval milestone payment, bringing the total received from Symbio to $17.5 million so far. This will become a consistent and meaningful income stream for us. Now turning to our full-to-strand product candidate, EA114, which targets estrogen receptor-positive HER2-negative advanced breast cancer. We just had a positive type C meeting with FDA, and have the minutes now. The next step is to submit the protocol. We believe we have a study design that will address all of the open questions, and we are targeting year end to complete this process. Once we reach alignment with the agency, we will provide a comprehensive update of the study protocol and other details of the program, probably in the form of an analyst day to take place early in the new year. You will also hear from top breast cancer thought leaders, We are really proud of this program and excited about the potential to improve outcomes in this patient population. We look forward to sharing more specifics around the study design, timing, cost, and anticipated benefits to patients. Now let me touch briefly on where we are with some of our ongoing other work in oncology and critical care. Pemfexi or pemetrexid for injection represents a significant opportunity for us as well. We have a unique J code, as announced last quarter. We also now have approval for the multi-use vial, which means we can participate in a larger segment of that market. And we're about 15 months away from the February 1st, 2022 market entry and are busy preparing to capitalize on this sizable opportunity. And as you may recall, in August, FDA granted orphan drug designation for SM88, which is our strategic partner, Time Technologies' lead product, for the treatment of pancreatic cancer. A pivotal trial to evaluate oral SM88 for third-line treatment of patients with metastatic pancreatic cancer is underway, and we understand that time will have data next year. This is an exciting and promising therapeutic and another valuable part of our oncology product portfolio that will continue to contribute to our growth over the next several years. Turning now to our Rhianidex portfolio, I'll start with Rhianidex for the treatment of brain damage secondary to nerve agent exposure. This month we are initiating dose-ranging studies in another animal model in non-human primates. These studies involving administration of Rhianidex intravenously and will help to demonstrate efficacy and delineate the appropriate dosing strategy. We are also going to include an arm using an intramuscular formulation of EA111 in the nerve agent program. These early results will then allow us to update our special protocol assessment or SPA and gain alignment with FDA prior to proceeding with the remainder of the GLP efficacy study. We are aiming to complete our low volume push IV for nerve agent program by the end of the second quarter of next year followed by a submission to FDA for approval. In terms of other Ryanadex indications under development, we have a research partnership with North Shore University Health System to study the potential use of dantulene sodium in treating traumatic brain injury, or TBI, and concussions. Our first study is concluding, and we expect to have results shortly. We look forward to sharing what we learn. Our collaboration with the University of Pennsylvania to develop an intranasal Alzheimer's disease indication for Anadex continues to focus on the unique role that calcium dysregulation may play in treating this disease. A second, more comprehensive preclinical model is starting this year. In August, UPenn's preclinical research showing that dantrolene sodium administered intranasally improved both memory and cognitive function in a mouse model of Alzheimer's disease. was published in the Journal of Alzheimer's Disease. We're also starting work on acute radiation syndrome this year. As you can see, with this exciting portfolio of potential indications for Ryanidex, we will be growing our acute care business to complement our oncology business. So when you step back and look at all of this, 2020 has already started what appears to be another growth, a strong growth cycle for EGLE. If we assume a near-term vasopressin launch, the Symbio milestones and royalties, and the Pemfexi market entry in 2022, you can see that we are entering a strong growth cycle. Looking ahead, full-to-strand SM88 with our strategic partner Time Technologies and the multiple Ryanodex indications could contribute to a considerable long-term growth cycle for 2020 and beyond. Before I turn the call over to Brian, I would like to also welcome Dr. Judy N. Cashin, John Kimmett, Dr. Valentin Kurt, and Dr. Gal Zanzou to the Eagle team. We hired all of these talented people to put us in the best position to advance our programs through the clinical phase and ultimately to the market. And with that, I am delighted to turn the call over to our new CFO, Brian Cahill, to discuss our third quarter financials. Brian.
spk02: Thank you, Scott, and I'm pleased to be with you all today. In the third quarter of 2020, total revenue was $49.9 million compared to $41.1 million in 3Q of 2019. Product sales during the third quarter increased to $17.3 million compared to $14.7 million in the third quarter of 2019. Increases in sales of BellRapso and Ryanadex were partially offset by a decrease in Vendeca product sales. Selrausa product sales were $8.7 million in the third quarter of 2020, compared to $3.4 million in the third quarter of 2019. Based on IMS data, Eagle's market share of Vendor Musting wholesaler shipments to end users was 8% of the U.S. Vendor Musting market for the third quarter. As we discussed in our second quarter results call, the COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically led to a reduction in the utilization of physician-administered oncology products. According to IMS data, pull-through of end-of-musting products is down approximately 13% compared to the period prior to the mid-March shutdown. We've yet to see a reversal in these trends, but continue to anticipate a normalization as outbreaks abate. We are encouraged by the American healthcare system's innovation to deliver life-saving treatments to patients in the face of the challenges that have stemmed from the COVID-19 pandemic. Third quarter Rianidix product sales were $4.2 million compared to $2.6 million in the third quarter of 2019. Orders for Ryanadex are cyclical, driven primarily by product expiries. Despite the challenges to our commercial efforts in accessing our current and potential customers precipitated by the COVID-19 pandemic, 2020 year-to-date Ryanadex sales have already exceeded full-year sales of any prior year period. the third quarter of 2020 royalty revenue was 27.6 million dollars compared to 26.5 million dollars in the prior year quarter of this and deca royalties were 27.6 million in the third quarter of 2020 and 26.2 million dollars in the third quarter of 2019. in the third quarter eagle earned royalties from teva at a 30% royalty rate following our amended license agreement. On October 1st, 2020, the rate increased from 30 to 31% for 12 months. It will rise again to 32% on October 1st, 2021, where it will remain for the life of the product. In the third quarter of 2020, we also earned a $5 million milestone payment from Symbio based on the approval of Triaxim RTD in Japan. Gross margin was 76% during the third quarter of 2020 as compared to 64% in the third quarter of 2019. The expansion in gross margin in the third quarter of 2020 was driven by, number one, an increase in Ryanadex sales, two, lower Vendeca product sales in the period to our marketing partner on which Eagle earns no profits, three, the increase in Vendetta royalty, and number four, the $5 million milestone payment from Symbio. On the expense front, R&D expenses were $4.8 million for the third quarter, compared to $10.2 million in the prior year quarter. The decrease primarily resulted from lower spending on our Vasopressin and Ryanadex DHS programs, as well as lower stock-based compensation expense. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the third quarter was $5.3 million. We are reiterating our 2020 non-GAAP R&D expense guidance of $40 million to $44 million as compared to $31 million in 2019. The anticipated R&D spend includes One, the EA114 pilot trial and CMC initiatives. Two, the Reamidex trials for the treatment of nerve agent exposure and acute radiation syndrome. Three, EA111 IND enabling toxicology studies and CMC scale of activities. Four, EA112 formulation development and additional preclinical work at the University of Pennsylvania and North Shore University Health System. Five, regulatory advocacy for costs for Rheanodex DHS. And number six, launch preparedness for vasopressin and Pemfexi. SG&A expense in the third quarter of 2020 decreased to $17.7 million compared to $18.5 million in the third quarter of 2019, primarily due to decreases in T&E, trade show costs, and external legal expenses. Excluding stock-based compensation and other non-cash and non-recurring items, third quarter 2020 SG&A expense was $11.9 million. We are reiterating our 2020 guidance that SG&A expense on a non-GAAP basis is expected to be $61 to $64 million as compared to $56 million in 2019. The year-over-year increase is largely attributable to higher sales and marketing payroll, partially offset by lower external legal spend and T&E expenses. Net income for the third quarter was $7.1 million, or 52 cents per basic and 51 cents per share, compared to a net loss of $2.4 million, or 17 cents per basic and diluted share in the prior year period. Adjusted non-GAAP net income for the third quarter of 2020 was $16.1 million, or $1.19 per basic and $1.17 per diluted share, compared to an adjusted non-GAAP net income of $3.7 million, or $0.27 per basic and $0.26 per diluted share in the prior year quarter. For a full reconciliation of non-GAAP Net income for the most comparable GAAP financial measures, please see the tables at the end of our press release. Our adjusted non-GAAP EBITDA for the third quarter of 2020 was $21 million compared to $4 million in the prior year quarter. Adjusted non-GAAP EBITDA for the three quarters of 2020 was $47 million compared to $38.3 million in the first three quarters of 2019. For the first three quarters of 2020, cash flows from operations, excluding shifts in receivables, was $38.9 million compared to $37.5 million in the first three quarters of 2019. For the 12 months ended September 30th, 2020, adjusted non-GAAP EBITDA was $57.7 million. As of September 30th, 2020, the company had $89.7 million in cash and cash equivalents, and $52.2 million in net accounts receivable, $34.3 million of which was due from TEPA. The company had $36 million of outstanding debt. Therefore, as of September 30, 2020, the company had net cash plus receivables of $105.9 million. In the third quarter of 2020, we purchased $28 million of Eagle's common stock as part of our $160 million share repurchase program. From August 2016 through September 30, 2020, we purchased $205 million of our common stock. With that, I'll ask the operator to open the call for questions.
spk04: If you'd like to ask a question over the phone, please press star and 1 on your telephone keypad. You may remove yourself from the question queue by pressing the pound key. Again, that is star and 1. We'll go first to Randall Sunicki with RBC Capital.
spk06: Great, thanks. Scott, I have a couple questions. First on basal pressing, you called out priority review at FDA. Can you help us understand what that means from a generic drug perspective and how that plays into your thinking on timing. And then the follow-up there is, for those on the line, give us a sense of where your confidence is in terms of willingness to launch at risk. So, that's number one. Number two, I just wanted to ask on the management ads, you announced the addition of a host of folks this morning. Should we be thinking about that as bolstering the bench or positioning for offense with respect to thinking around the business and more specifically business development? And then just a last one on R&D, drop down to $5 million this quarter. The implied guidance suggests a huge step up or a big step up in 4Q. If you could just clarify how you're thinking about the spending trends on R&D for the rest of this year, that would be great. Thanks.
spk10: Well, thank you, Randall. Good speaking to you. I took a lot of notes on your question, so if I missed something, chime back in. So, look, priority review, my understanding of it is that was granted to us primarily for two reasons. One, our 30-month stay is in the past, and we're first to file. And so what does that mean? What we know is having responded what we believe is completely to all the remaining questions, what we do know is that the file is under active review. And so based on what we've submitted in that active review and the priority review nature of it, you know, the best we can say is that we believe that that approval is going to come shortly. You know, there's no specific date that I can give everyone, but it is under active review, and we expect that this should happen, you know, what I would call the near term. It could happen at any time, but we'll just have to wait and see. That assumes that everything that we responded to, we did so in a satisfactory manner. In terms of the confidence at launching at risk, as we've stated over the last several months, Randall, is that we believe we have a strong position in our litigation, and we'd like to get to the market as soon as we can. That's in the best interest of our shareholders. And so we have not made a formal final decision yet as a board, but we're working diligently on coming to a conclusion. And I think there's a pretty good likelihood that ultimately we'll decide to get the product to the market and take advantage of all the hard work it takes to get this product approved and all the money that we've spent and just get going. And it's important to us. As I mentioned in my earlier comments, Now that we see the growth, we have pretty significant growth, 20 over 19, launch Vasopress and launch Pemfexi, and now that we have the SymbioRoyalty coming in, our growth looks wonderful going forward and have the ability to keep managing the pipeline. In terms of the management changes, we believe that we are very close, very close to building something very special. We have the revenue coming in, we have the earnings coming in, and we have what appears to be a near-term pipeline. This Type C meeting we had with FDA and Fulvestrant appears to have gone rather well. We have a protocol finalized between us and the agency. Once we do that, we'll know exactly the timing and all the aspects of getting that product to the market. We wanted to make sure that we have the very best people in this company to be able to close out what we've been working on a long number of years. We have a great staff. They're really very happy with the team that we've assembled over the years, but we think we've just hired some really incredible talent to just wrap this all up and get it done. And yes, on the BD side, it certainly gives us a better chance to take on more. It gives us a better chance to appropriately define the diligence items that are required to make a decision. So we're just really excited you know, with the growth stage that we're currently in and about the people and the products and the pipeline that we have to really go through some really great years again here. Hopefully I handled it all. And then, Brian, do you want to make a comment about the $5 million and where we are with R&D?
spk02: Sure. Yeah, I mean, you see our guidance, Randall. You're right. We do have a lot of activity and a lot of programs that I mentioned in the fourth quarter in particular. you know, launch preparedness for VASO, right? Remember, that's not approved yet, so there's a good amount of expense there, and the programs for EA-111 and other RAN index indications.
spk10: Randall, did we hit everything? Anything that we missed?
spk06: Yeah, that was helpful. I guess the only other thing, Scott, would be, as you think about BD, we ask you this question every quarter. You're sitting on $90 million in cash, and you have been active in BD. As we're sitting here today, should we be thinking that you are thinking about business development and how productive you want to be there any differently today versus prior quarters?
spk10: I believe, Randall, it's a very thoughtful question and it takes, I think, a thoughtful response. We do want to get the company bigger and we want to be smart about it. If you look at the BD that we've done thus far, the pancreatic cancer program that we have with time could wind up being very special. There's obviously risk when you're in clinical, especially in something in the nature of pancreatic cancer. But we feel good where we are so far and what we've seen so far coming out of that program. And it's that particular program and other programs like that that are of interest to us. But at the same point, in addition to time, if you look at the company now, we've really de-risked. Assuming Bezo gets to the market, You know, between vasopemfexia and the symbio royalties coming out, we have really very nice growth in earnings. We're making what we believe is really strong progress with R&D and clinical. I think as we look, and, you know, David heads up. He's here with me. David heads up the BD for us. I think we'd like a balance of clinical work and already marketed products, and we're looking hard, but we don't feel a lot of pressure. You know, we've really de-risked the pipeline and the earnings a lot over the last few months, and You know, we continue to look hard, but we're being very selective.
spk06: Got it. Thanks, Scott.
spk10: Thank you.
spk04: David Anselm with Piper Sandler.
spk03: Hi, this is Zach for David. Thank you guys for taking my question today. Sorry if I missed this, but one question regarding VASA is correct. Congrats on priority review, but So my question is, when you submitted the additional data to the FDA in August, what was the FDA really looking for there, given your confidence? And what are some of the issues that you think could surface as they do review the filing now?
spk10: Thank you. So the question really was the nature of the questions that they asked. A lot of it has been, you know, we've been in the in the FDA for two and a half years. We've done quite an amount of work. A lot of it all surrounds, as I mentioned on the last call, this is a polypeptide. And the whole field of polypeptides has a lot of work being done around it right now. And I believe that the agency has asked us to do work around a very old molecule. And being first to file and having an active research program going on, we've been asked to update I think the nature of the product and do work around the polypeptide side of things. We've done great work. It's made us far more knowledgeable. That was the basis of the majority of the questions. We believe that we've fully answered their questions. You never know until you know. We feel confident, quite confident. And now we'll just have to wait for them to get back to us. But as we said, we are under active review. Our 30-month stay has expired. We are first to file. They've given us a priority status. So we know that they're looking at it diligently. And all we can say at this point is what we've been saying, is that we're hopeful that we'll get an approval here shortly.
spk03: OK, great. And if I could slip in one follow-up on BD. Do you envision filing other in the future? Along the lines of that, does your team plan on sticking more with the 505B2 strategy?
spk10: I think the way to respond to you is that in our strategic plan, we are a 505B2 and proprietary technology company, right? So full of a strand, even though it's a 505B2, when we're done, we probably would have now dosed, I don't know, almost 900 patients. and subjects by the time that program is over. And we'll probably be $80 million or so into that. So not all 505 s are created equally. And you see some of our other 505 s where we had like Pempexi where you get a bio waiver and you don't put as much science behind it. We like to consider ourselves to be more science oriented now with work on Alzheimer's and concussions and certainly the novelty of SM88 on the pancreatic side of things. We don't have anything in the short term to talk to you about that we're working on, but we do believe with the team that we have assembled, we can handle complex AMDAs like vasopressin. If there are companies that need help in getting these difficult products through all the issues that it takes, we're very willing partners and very good partners, I think. We're looking at more of that. And we will continue to be an opportunistic company. And that's what I think we do best, and that's what we're going to continue to do. But, you know, I consider us to be a far more high science approach company than we were, you know, six years ago when we took the company public. Okay, great. Thank you. Thank you.
spk04: We'll go next to Tim Lugo with William Blair.
spk08: Please go ahead. Thanks for the question. So I guess, you know, we're all trying to poke around in the VASA press and timing. Could you maybe refine it a little bit more if you were to receive an approval soon? Would you consider a launch before year end, or is this something where you're, you know, you would probably address after the January trial?
spk10: Hey, Tim. Good to hear from you. Thank you. I don't believe we're in a position to answer that fully yet. We're just going through that. We only found out about the July 11th trial date a few days ago, so we need to regroup and talk about it. However, we're confident in our position. We'll probably come out of the four-day trial more confident. This is my guess, my hope. Let's see what happens. But we are focused on monetizing the asset as soon as we can. I wish I could give you a more detailed answer, but we're still looking at it. But either way, January 11th is right around the corner. We're going to find a way to bring value to shareholders as quickly as we can.
spk08: Okay, understood. And for the abandoned medicine products, you mentioned that kind of volumes haven't kind of normalized to pre-pandemic levels. Do you think we could see some sort of normalization in Q4 as it seems like oncology infusions are still kind of a focus and recovering across the industry, though obviously the pandemic concerns are heightening?
spk10: Yeah, Tim, let me have David respond to some of that for you. He keeps close track of it. I don't know if what you're seeing with your other companies or what you're seeing in the industry is different than we are. But David, why don't you give a little bit? Yeah, sure. Thanks, Scott.
spk07: Hi, Tim. How are you? Yeah, you know, basically, we're starting to see, you know, some normalization, as you know, right, as things in some parts of the country are improving. You know, you never know. It seems like we're starting to enter the second wave again, too. So it's kind of hard to predict. And some of these things are out of our control, but... you know, so far we think we're seeing some stabilization and more return to more normal visits, which is, you know, good for the patients. And so we're thinking that's most likely to kind of continue.
spk08: Okay, understood. And maybe just one last, David, question. You know, whenever you do launch, you're going to generate a ton of cash. Can you just give us a kind of sense of that trajectory you expect for the launch, you know, how durable it will be, what kind of the – that kind of shape and duration of that curve? And then what do you do with that cash? I mean, you mentioned BD, but you're going to, you know, have a major step up in cash if, you know, if a launch goes kind of as it would be expected. Would you look at, you know, kind of larger BD, more transformative deals, or would it be kind of smaller time-like deals as well as some buybacks?
spk10: We are going through our strategic planning process now because there are so many opportunities ahead of us. It's exciting to be going back into this growth curve and being so close with some of our key R&D programs. So the durability of the asset of vasopressin is a little bit unknown. What I can tell you is it's been a heck of a difficult product to get approved with what's been required for an ANDA. And I mentioned it on the last call, but the work that we've done, I mean, we have $25 million invested in this now. Half of that is in R&D, and you wouldn't expect to put that kind of money into an ANDA, and yet that's what the requirement was. And other than being first to file, you would never have committed to that level of spend. And so I don't believe that this is an easy ANDA for others to get approved. Now, having said that, it appears that Endo is settled with a lot of companies, and we don't know what the settlements are. So it's a little bit hard to predict, but we do believe that this product will be very valuable for a number of years. And it will generate a lot of cash for the company. And so then, you know, what do we do with the cash? We also have a clean balance sheet. We have net cash. We've been buying back our stock. So the fact that we've been taking a slow and steady approach to our business the last six years has really put us in a fun, wonderful position because we have so much opportunity to do with our stock and the balance sheet and the cash to really do anything that we'd like to. So we're looking at all the things that you're suggesting. And look, we bought back 22% of the company already.
spk00: Mm-hmm.
spk10: I don't know what's going to happen to the market. I don't know what's going to happen to our stock as we go through what appears to be a really good earnings period, assuming that basal pressing gets to the market. Who knows? If the stock doesn't react, we'll be buying back more of our stock because we believe in ourselves. If there's a transformational deal that we can do that is strategic and financial and accretive, we're not afraid to do that either. We like what we're doing in oncology. We like what we're doing in critical care. Could we do smaller deals? Sure. But we, you know, I view us as being an opportunistic company. I view us as having the ability to do whatever we need to do to continue this growth. And between the team that we already have with Brian and the entire team of people in the executive suite, David has been doing such a phenomenal job. for the company now with the new hires that we have to really add to this. You know, the sky's the limit for us if we could execute. It starts with the days of press and approval. Hopefully that'll happen. It'll build on the earnings growth that we've had, you know, that we've quietly snuck up on everybody and had growth in 2020. And so, you know, I think our opportunities are limitless. Let's just put our heads down and get it done and hopefully good things will happen for us.
spk08: Understood. Thank you.
spk10: Thank you, Tim.
spk04: And again, that is Star and One to join the queue. You may remove yourself with the pound key. We'll go next to Brandon Foulkes with Cantor Fitzgerald.
spk09: Hi, thanks for taking my questions. Congratulations to the new hires and Brian on the promotion. So I'm just going to stay on the basic question subject here. Given that you now have a formal priority review status, does this trigger anything sense of formalized timelines on it it's an ander but just are you yeah is the agency and any obligation to give you formalized timelines in terms of review for your application and then maybe secondly still on vasopressin um yeah if i look at the r d guidance and the inventory figure it looks like the manufacturing of the product still needs to be done so can you just give us any color in terms of the manufacturing lead time for vasopressin um how quickly you could turn that around to supply and market if you've got approval very, very shortly. Thank you.
spk10: Thank you, Brendan. We can't really comment more on the timelines. There's nothing more to say other than it's under active review, and we hope it's going to happen shortly. You know, it may or may not, right? It's not that exact, but, you know, we're hopeful with everything that we know and everything we see, and certainly having just received priority review, we feel good about all of this. We do have some inventory we can launch. We're obviously preparing for launch if we're able to, so I think our supply chain is in good shape. Our manufacturing is in good shape. We're taking this opportunity incredibly seriously. We recognize the value it is to our shareholders, to our company in bringing, you know, price down for the patient population. And so, no, we're in good shape and ready to go, and hopefully we'll get approval and make a decision. You know, we have the court case right around the corner, four days, and, you know, hopefully we'll have a good showing there that we expect to.
spk09: Did I answer everything sufficiently for you? You did. I want more color on Tommy.
spk10: If we had more color on Tommy, we would tell everybody, right? All we can do is give you the most up-to-date thinking that we have in a, you know, in a world that's not certain.
spk08: Yeah, exactly.
spk09: And look, you answered it perfectly in terms of, I think, what you can. I appreciate that. Maybe one last one, just sort of very, very high level here. You talk about the ship purchases you've done. You talk about how you sort of reached an infection point and, you know, you mentioned a lot of cash flow coming. I mean... If the public markets continue to not recognize that going forward, you obviously see a lot of value in your share. Would you ever look at taking the company private or any sort of strategic alternatives if your value is not recognized in the public markets going forward?
spk10: Yeah, that's also a very good thought process. The way we look at it, we've been buying back. We've been taking the company private share by share. over the last few years with the share buyback. We had, I think, $116 million, Brian, in authorized buyback. And we've reduced that by $25 million now. So we still have a pretty sizable amount authorized, whatever that number is, a sizable amount. We could go do another ASR if the stock doesn't react. There are a number of ways we can buy back the company. Would we take it private? Maybe. You know, that's probably a little bit more difficult, but I don't think we would rule that out. Look, I think we're just very, very focused, as we have been, on building shareholder value and growing the company. And we stuck to our plan, right? I know it was... We went through a little bit of a painful couple of years by sticking to organic growth and not making a deal to plug a couple of years of declining earnings, but we just thought slow and steady was the way to do this. We're thrilled about our balance sheet. We're thrilled about our cash. We're thrilled about the fact that we had the ability to buy back our shares at the prices that we bought it back, and hopefully that will prove to have been effective. you know, a smart move for us. And, you know, we're just going to do what we need to do to get the pipeline through, hopefully launch these products successfully, and, you know, see what comes our way. But the good news is we have the ability to do a lot, and we have a great team and great partners, and, you know, we're looking at anything and everything. If anybody has any thoughts, you know, don't hesitate to reach out to us. But, you know, we want to return value to our shareholders, and we're focused on that.
spk09: Great. Thank you very much. Thank you.
spk04: I'll go next to Greg Gilbert with Truist.
spk11: Thanks. Good morning, Scott and team. One more visa question. I think it's a different one than you've gotten. Is the settlement off the table at this point, given how far along we are and how complicated the number of filers are? other settlements or would you say that never say never until a court case actually happens?
spk10: Yeah, you know, Greg, thanks for the question. Good speaking to you this morning. You know, you never say never about anything in life these days, I think. You know, let's just see what happens all the way around. Let's get the approval. But look, I think our responsibility is to optimize the best we can the value to our shareholders and repay them for the money that we've spent today and take advantage of the opportunity that we've worked so hard at. And I think that's the wonderful part about our management team is we just, you know, are focused on improving shareholder value and returning as much as we can. And, you know, we will continue to do in every facet of our business what's in everybody's best interest and keep an open mind about all these things we've spoken about. You know, taking the company private, transformational deals, small deals, buying back your stock, settling, like we did with Lilly on Pemfexi, right? That turned out to be great for us, having a fixed date launch in February of 22. So, yeah, we're open to everything that will improve the shareholder returns.
spk00: Does that make sense?
spk10: Most importantly, I'm sorry, Greg, just to finish, but most importantly, right, and let's not lose sight of it, most importantly, in a way that maximizes the benefit to the patient population that we strive to serve. And so we haven't spoken about it a lot today because it was vaso-focused, but we're really, really excited about the potential full restraint and the tremendous value it could bring to this patient population, to metastatic postmenopausal breast cancer patients. At the end of the day, that's really the reason that we're in business, is to help the patients across this great country. And that's what we're mostly focused on. I'm sorry, I cut you off.
spk11: No problem. My other question was about your use of the word transformational a couple times. I haven't gone back to the last 50 conference calls to see how many times you've used that word yet. I'll do that later. But I'm curious if you're more open-minded to transformational change now than in the past, and if so, why? It sounds like you're open-minded about anything that would enhance shareholder value, but maybe you could drill down a little more on open-mindedness to transformational now, whereas it may not have made sense before.
spk10: Thanks. Yeah, well, let's see. I think it was Tim that brought up the word in the call first a little earlier. It wasn't Tim, and I'm taking it away from someone else that brought up the question. I apologize. But, you know, I think, Greg, you know, what happened here to us, right, you know, and you've been, you know, following the company and talking to us for, you know, pretty much the 15 years that we've been in business. You know, we came out of the gates of when we went public and, you know, we had a great run from an earnings standpoint and from a stock standpoint. And then, as I said earlier, you know, we decided to do this mostly internal, with internal growth, right? And we had that little dip for a couple of years, and it would be – it was harder to do something transformational when you had earnings declines. and you were waiting a few years for the pipeline to deliver. It would have been more difficult. We believed in the pipeline, and it would have been more dilutive to our loyal shareholders. And so now we just find ourselves in a different situation. We have pretty good growth, 20 over 19. Get VASA and these other products out. We have the Symbio behind us. You know, we're going to go through a large, you know, hopefully, hopefully significant growth period of time. At the same time, we've moved the rest of the pipeline. It's not just getting vaso to the finish line and symbio to the finish line and pemfexi to the finish line. Now we feel we're closer, much closer with full distrand and potentially with these new indications of dantrolene, ryanodex. We even have an IM version of ryanodex now being tested in our nerve agent study. So we're making progress. We have the people in place now, the people we had and the new paid people. And so maybe this is a better time to think about something transformational than it was over the last 24 months. And so, yeah, I think we're, you know, I think you're correct. I think there's, we're more open to things now than we were.
spk11: Next slide.
spk10: Thank you, Greg.
spk01: No further questions at this time. I'll turn it back to Scott Tara for any closing remarks.
spk10: Well, thank you, everyone. This has been a lively, great session, a great quarter. Thank you, everybody, for your questions. I thought they were remarkably thoughtful. Look, 2020 is shaping up to be a year of strong earnings growth for us, and we've made a great deal of progress across the board. That's what we're speaking about today. Vazo and Fulvestran have what I call company-changing potential. FullerStrand also has the potential to change the paradigm around the treatment of advanced breast cancer and improve patient outcomes. And we plan to finish out the year strong as we build upon our recent accomplishments and continue to deliver value to our shareholders and life-saving therapeutics to patients who can benefit. You know, we're just excited, and hopefully we have some really good, strong days ahead of us. So, you know, thank you. Have a great day. Stay safe, and we can't wait to speak to all of you again. Thank you.
spk04: And this does conclude today's program. We appreciate your participation, and you may now disconnect.
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