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spk05: Greetings and welcome to the Paratech Pharmaceuticals full year 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sarah Higgins, Vice President of Finance, Controller, and Principal Accounting Officer. Thank you.
spk04: You may begin.
spk03: Good morning and welcome to Paratex year-end 2021 earnings and corporate update conference call. A press release of the company's financial results was issued earlier today and we have also posted slides on our website to which we will refer on this call. Both can be found at www.paratexpharma.com. Participants on today's call are Evan Lowe, Chief Executive Officer, Adam Woodrow, President and Chief Commercial Officer, and Randy Brenner, Chief Development and Regulatory Officer. Michael Bingham, Executive Chairman, and I will also be available for questions. Before I turn the call over to Evan, I would also like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. Evan?
spk02: Thank you, Sarah. Good morning, and thank you all for joining our year-end 2021 Corporate Update Call. Before I begin my overview of Paratech's 2021 performance and our growth strategy for 2022, I would like to comment on a world that now faces geopolitical uncertainty, including the potential use of or exposure to biological and or chemical weapons. As world leaders elevate their focus on preparedness and protecting their citizens and warfighters, We believe that New Zyra's broad utility against antimicrobial resistance, wound infections, and bioterrorism pathogens should make it an important, life-saving component of the U.S. government's strategy and actions being formulated to address these emerging threats. The entire Paratech team is committed to providing New Zyra in support of these efforts if and when the need arises. Now, I'd like to review our performance in 2021, which was a very successful year for Paratech. As you'll see on the next slide, net sales from Usiris Core commercial business for the full year landed at the top end of our guidance range at $68.2 million. Strong demand coupled with disciplined execution resulted in consistent year-over-year growth in Usiris Core business with a triple-digit compounded annual growth rate since New Zyra's U.S. launch in February of 2019. Net sales from our core business has increased each year since launch from $11.5 million in 2019 to $68.2 million in 2021. We anticipate this growth profile to continue in 2022 with an estimated 50% increase year over year that will result in net sales from New Zyra's core business of between $95 to $105 million. As seen on this next slide, our commercial launch performance over the first three years of its U.S. launch continues to materially differentiate Neusira as one of the most successful IV oral antibiotics launched in the last decade. We believe that the strength of the commercial business is driven by disciplined operational execution combined with Neusira's many clinically important product attributes that are illustrated on this slide. These include one stale oral, and IV formulations that enables utility in every clinical setting of care, proven clinical efficacy against resistant pathogens in two approved indications, and a favorable safety and tolerability profile. As you can see illustrated on this next slide, we remain focused on three pathways to New Zyra revenue opportunities. First, New Zyra's core commercial business. This continues to be the main driver of our current revenue growth performance. Having both once daily oral and IV formulations enables New Zyra to have clinical utility in every setting of care. Accordingly, we believe that consistent year-over-year growth in both the hospital and community settings will continue, especially as the COVID pandemic evolves to an endemic infection. I'm excited to announce that in 2022, we will embark on the second phase of our discipline expansion of the New Zyra Community Salesforce. We believe our strategic emphasis on revenue growth through commercial expansion is appropriate, timely, and will result in greater value to our shareholders. Second, non-tuberculous mycobacterial disease, or NTM. NTM represents a promising future growth opportunity in the orphan disease space. NTM of the mycobacterium obsessus subtype is a rare disease with currently no approved therapies. In the US alone, Paratech estimates that NTM Obsessus represents a potential $1 billion addressable market opportunity. Beyond NTM Obsessus, we are excited about new data published just last week that Randy will review in more detail that we believe opens up the potential for broadening Neuziris clinical utility in Mycobacterium avium complex or MAC pulmonary disease. Third, U.S. government opportunities. We believe that there is broad potential for New Zyra's use across the U.S. government, not only through our BARDA-BioShield public-private partnership that is aimed at protecting all Americans against bioterrorism threats, but across the health and human services sectors that address pandemic preparedness needs, and broadly across the Department of Defense as an important agent to protect our active warfighters. Let me restate that New Zyra's broad utility against Antimicrobial resistance, wound infections, and bioterrorism pathogens should make it an important, life-saving component of the U.S. government's strategy and tactics being formulated to address today's emerging threats. Now, I would like to review Paratech's 2021 financial highlights as well as our financial guidance for 2022. Full year 2021 total revenue was $130.2 million compared to $46.9 million for the prior year. an increase of 177% over the prior year. Total revenue for 2021 was comprised of the following. First, Newzira generated net U.S. sales of $106.1 million, which included $68.2 million from the core commercial business and $37.9 million from the initial procurement of Newzira under the BARDA contract. Newzira's full year 2021 net U.S. sales represents a 173% increase increase compared to full-year net U.S. sales of $38.8 million in the prior year. Second, government contract service and grant revenue earned from cost reimbursement under the BARDA contract was $15.9 million, a 137% increase from $6.7 million in the prior year. Third, collaboration and royalty revenue of $8.2 million, which included a $6 million milestone payment earned from Xilab upon the NMPA approval of New Zyra in China. The balance primarily represents royalty revenues earned on sales of CESARA in the U.S. R&D expenses were $30.4 million for the full year 2021 compared to $23.9 million for the prior year. The increase was primarily due to compensation expense and costs for activities reimbursed under the BARDA contract. SG&A expenses were $119.4 million for the full year 2021 compared to $89.9 million for the prior year. The increase was primarily due to compensation expense and costs incurred for the new Zyra community expansion. We reported a net loss of $59.1 million or $1.22 per share for the year ended December 31st, 2021, compared to a net loss of $96.5 million or $2.19 per share for the prior year. This significant improvement reflects the commercial success of Nusaira, the first bar to procurement, and disciplined operational execution. In this slide, we note that Paratech ended the year with $95.5 million in cash, cash equivalents, and marketable securities. Now turning to our 2022 financial guidance. I will begin on the left side of the slide, which is focused on year-over-year total revenue growth since launch. Paratech estimates full year 2022 total revenue to range between $155 and $170 million. The majority of this full year 2022 revenue estimate consists of New Zyra's U.S. net product sales, which are expected to range between $133 to $143 million. This estimate is comprised of two components. First, core New Zyra commercial revenue is estimated to be between $95 to $105 million, represented by the orange histogram bar. Second, the next BARDA procurement, represented by the green histogram bar, valued at approximately $38 million, which is anticipated for delivery as early as the end of 2022. We expect to deliver topline pilot animal efficacy data to BARDA in the fourth quarter. Per contract, positive topline data from this study will trigger the second procurement. However, Given the internal BARDA review and acceptance process, there is a chance that revenue will be recognized early in the first quarter of 2023. The balance of the full year 2022 revenue estimate consists of BARDA government contract service and grant revenue between $20 to $25 million and collaboration and royalty revenue of approximately $2 million. Again, this BARDA contract service and grant revenue provides 100% reimbursement for the estimated full year 2022 BARDA R&D and SG&A expenses that is noted in the light blue histogram on the annual expense chart on the right side of this slide, which is focused on R&D and SG&A expense. Full year 2022 R&D and SG&A expense is expected to be between $160 and $170 million, comprised of two components. First, core business R&D and SG&A expense, which is estimated to range between $140 to $145 million, represented by the dark blue histogram bars. Second, BARDA R&D and manufacturing onshoring costs, both of which are subject to full BARDA reimbursement, which is estimated to range between $20 to $25 million. In closing, it is important here to highlight that we project our three-year compounded annual growth rate, or CAGR, through the end of 2022 for our core New Zyra commercial revenue to be 105%. while the CAGR for our core business OPEX over the same period is planned to increase by only 3%. In aggregate, these data represent our continued focus on maximizing revenue growth, disciplined capital allocation, and predictable operational execution against our stated objectives. I would now like to turn the call over to Adam. Adam?
spk06: Thanks, Evan. Commercialization of New Zyra in both the hospital and community settings continues to progress well. As Evan noted, strong demand and consistent execution has resulted in impressive year-over-year growth in Newzara's core commercial business. Net sales from our core business increased 76% year-over-year from $38.8 million in 2020 to $68.2 million in 2021. We anticipate that this growth will continue in 2022 with an estimated 50% increase year-over-year to a range of between 95 to 105 million in net sales from the New Zyra Core business. Equally important, gross demand has increased 84% year-over-year from 44.3 million in 2020 to 81.7 million in 2021. Thus, growth continues to be driven by demand. I'd like to provide a little color on our progress and expectations for the coming year. As a reminder, our initial launch strategy was to focus on the hospital business for the first two years. Our objectives were to build endorsement and prescribing with key influences in the antibiotic space, namely ID physicians. In addition, we wanted to establish consistent and broad-based market access in the outpatient setting before expanding our promotion into the community setting, which we then initiated during the first quarter of 2021. By the end of 2021, we had approximately 90 customer-facing sales representatives split equally between the hospital and the community. The hospital team continued to grow New Zyra throughout 2021, despite several COVID-related headwinds. These challenges included limited physical access to certain key hospitals, the near absence of formulary and stewardship reviews, and a continued reduction in face-to-face contacts with infectious disease doctors during the ongoing COVID panic. Despite these headwinds, we continue to see annual double-digit growth in the core New Zyra commercial business in hospitals and their adjacent sites of care. This segment of our business accounts for 75% of our prescription days of therapy. As the year unfolds, We expect to see the hospital business evolve more in line with our pre-COVID experiences. More specifically, COVID patient hospitalizations are falling in concert with the decline in Omicron COVID cases, and we're seeing an increase in the rates of elective surgical procedures. Further, we believe that there will be a return to more frequent and regularly scheduled former stewardship committee reviews. As the hospital environment continues to improve, we anticipate significant revenue growth from the hospital segment in 2022. Our focus in the hospitals continues to be on the ID physicians who cares for patients with known or suspected resistant pathogens with multiple comorbidities. We continue to feel confident that the oral formulation of Nuzira enabling early discharge of these patients will remain an important value proposition for hospital physicians. In addition to the cost savings realized by the healthcare system, a shortened length of stay also reduces the risk for patients to pick up a hospital-acquired infection with yet another resistant bacterial pathogen. In this next slide, based on projected patient data, primary market research, and the geographic coverage of our SALS team, we believe that there will be approximately 300,000 skin and pneumonia patients that fit the Newzara target patient profile by 2028 in the hospital setting. Today, our internal data allows us to estimate that we have a 1.5% share of this addressable market opportunity, and we believe that we can grow this share to between 6% and 12% by 2028. Importantly, these patients represent on-label Newzara's addressable market opportunities for skin and pneumonia only. As previously discussed, we expanded our promotional effort into the community setting in 2021. Our focus continues to be on primary care doctors, podiatrists and a select group of dermatologists. We are pleased with the data trends associated with this commercial expansion and see earlier trial and usage with these physicians when compared with hospital-based physicians. The community segment of the business already makes up 25% of our prescription days of therapy. Combined with the hospital business, as seen in the slide during Evan's prepared remarks, we continue to see meaningful separation of New Zyra's core commercial growth from other recent IV oral launches. With broad-based market access established, combined with the earlier adoption by targeted physicians in the community setting, we remain confident in the potential of New Zyra in this market segment. Ultimately, The goal of our community expansion is to reach 160 representatives in the community in a phased approach. In 2022, we plan to add approximately 40 additional sales representatives to broaden our geographic coverage and increase our penetration into new and existing territories. Aligned with our historical disciplined approach to capital allocation, we will strategically increase the associated medical science and reimbursement resources needed to support the expansion into these new territories. The cost of this expansion is already incorporated into the expense guidance Evan provided earlier. Future expansions will be driven by the success of the current plan. Our promotional approach to both skin and pneumonia in the community, like the hospital, is to focus on patients that have suspected resistant pathogens with concomitant comorbidities or allergies. This patient type is very poorly served by the existing generic oral options in the market today. Our estimate, based on IQVIA data, market research, and geographic coverage, is that there will be approximately 750,000 skin and pneumonia patients who fit this demographic in 2028. By this time, we believe we can achieve between 9 to 14% market share. Importantly, these patients represent Newzara's on-label addressable market opportunities for skin and pneumonia. As you can see on this next slide, we expect that the community-generated business will reach parity with the hospital-derived business in terms of prescription days of therapy by the end of 2023. Based upon our internal analytics from the first three years of commercial launch, Combined with these market share projections, we expect that there will be consistent and continued year-over-year growth in both the hospital and community. In summary, given the dosing flexibility of a once-daily, well-tolerated, broad-spectrum oral and IV formulation, we continue to focus on our two-pronged approach, with a dedicated hospital team focused on early hospital discharge and our community team focused on hospital avoidance. we expect continued year-over-year growth in both the hospital and community settings. Hospital promotion is fundamental to our business given the influence it has on the outpatient setting of care. Revenue growth here, however, is more closely tied to the return to normal in terms of hospital access, formula reviews, and elective surgical procedures. The community setting will see revenue and prescription days of therapy growth a little faster year-over-year, as we add more promotional effort, broaden our geographic coverage, and penetrate more deeply into the primary care and podiatry prescriber base. Our focus in both settings remains gaining new trial lists and repeat usage by building awareness and establishing trust and credibility with physicians who are saving lives and treating serious community-inquired infections each and every day. And with that, I'd now like to turn the call over to Randy.
spk01: Thanks, Adam. The development, manufacturing, and medical affairs teams had a very productive 2021 across multiple fronts with a number of upcoming and exciting 2022 deliverables. The plan for our commercial community expansion, just described by Adam, in addition to our hospital-focused medical team, medical affairs ran a pilot program of a small number of targeted community-based medical science liaisons, or MSLs, to engage in scientific exchange with community healthcare providers. Excuse me. They were strategically placed in densely populated metropolitan areas with a large presence of primary care practitioners and supported medical education. Feedback on this team and the interest of primary care physicians in education clearly supports the additional MSLs that will be hired in 2022 in parallel to the planned commercial community expansion. As Evan noted earlier in this call, we are very pleased with the progress we have made to date under our Project BioShield contract. Last year, we were excited to announce that BARDA accepted delivery in June of the first desired procurement, as well as the activation of an additional option in September that led to the expansion of our Project BioShield work and increased the overall value of the contract by $19 million. Together with BARDA, we furthered the work performed for both the anthrax treatment and PEP development programs under the animal rule. Efforts last year were focused on evaluation of the in vitro activity against multi-drug resistance bacillus anthracis strains, as well as the pharmacokinetics of amatocycline in both rabbit and non-human primate animal models for inhalation anthrax. The data from the PK studies support two pilot animal efficacy studies, the first of which is in rabbits and is targeted for the fourth quarter of 2022. Our amended BARDA contract formalized the trigger for purchase of the second desired procurement valued at $38 million upon BARDA's receipt of positive top line data from this rabbit pilot efficacy study. We also continue to partner with BARDA to advance our FDA post-marketing commitments. As a reminder, this work includes reimbursement for the following activities. First, our ongoing adult pneumonia post-marketing study, which has been enrolling since February of 2021. Second, the pediatric program in its entirety, our first pediatric study exploring the pharmacokinetics of hematocycline in children and adolescents ages of 8 to 17 was recently initiated. And finally, the five-year microbiological surveillance program, which has just completed its third year. Of note, there has been no observed development of new Zyra resistance to date in any of the indicated pathogens. We are also pleased to report on the continued progress in 2021 of our onshoring program for the manufacture of Nuzaira in the United States. This work has positioned us for a number of important milestones in 2022. Most notable is the U.S.-based production and commercial availability of Nuzaira tablets, which we anticipate in the second half of this year. A U.S.-based supply chain for a commercially available antibiotic is particularly important in this time of pandemic planning and preparedness. Beyond Project BioShield and consistent with our commitment to build New Zyra's long-term value, we continue to actively pursue lifecycle initiatives for New Zyra in 2021. These included a label expansion with the oral-only pneumonia indication, generation of data to support the extension of the room temperature shelf life of New Zyra, and non-clinical activities related to government research and other areas of scientific interest. An important and additional lifecycle expansion effort includes our continued commitment to advance a development program for NTM pulmonary disease caused by mycobacterium abscessus, including non-clinical and clinical studies. FDA granted Neuzira orphan drug designation for the treatment of NTM, not only for abscessus, but for all subspecies of NTM, including mycobacterium avium complex, or MAC, last October. This designation from FDA further reinforces and validates the important unmet need in this underserved patient population. Several important NTM non-clinical studies were completed in 2021. First, imatocycline demonstrated potent in vitro activity against multiple multidrug-resistant M-obsessive clinical isolates. Imatocycline also demonstrated potent bacterial-cidal efficacy in an in vivo mouse model of lung infection against four mycobacterium-obsessive strains, including three clinical drug-resistant isolates. Bacteriocidal potency for a tetracycline is not common, but speaks to our confidence in the future clinical utility of imatocycline in this devastating lung infection. Further, despite the extended duration of exposure in these studies, resistance was not observed, which suggests a very low risk for the development of resistance for imatocycline, an important clinical feature in a lung infection that requires crotic antibiotic therapy. Finally, in an in vitro combination study, imatocycline did not exhibit antagonism with any of the 14 different antibiotics tested and exhibited synergism against several M-obsessive strains when combined with antibiotics from several different classes. We believe these data provide meaningful scientific information to physicians who, in the absence of any FDA-approved antibiotic, must choose the best possible antibiotic combination regimen for such a devastating bacterial pathogen. Enrollment in our Paratex U.S.-based randomized Phase IIb study of pulmonary NTM infections caused by M. abscessus began in 2021. As this is a rare disease, enrollment is estimated to take approximately two years. Most sites are now initiated, and enrollment is progressing as expected. This is the first placebo-controlled study in this chronic and rare disease and will provide a much-needed clinical dataset of efficacy and safety data in mycobacterium abscessus patients. This study, along with the non-clinical studies, will be the foundation for our next discussions with regulatory authorities. In addition to Paratech's progression of the development program, scientific research and clinical case series continue to be published. For example, at ID Week 2021, there was a poster presented showing data from 31 NTM patients in an ongoing real-world study supported by Paratech who were treated for up to 20 months with once-daily oral news IRAs. This is a real-world study, and metacyclin continues to be safe and well-tolerated with good patient outcomes. Most recently, the results of an investigator-initiated study demonstrating the potent activity of Nuzira in a dynamic holofiber model of MAC pulmonary infection was published in the Journal of Antimicrobial Chemotherapy. Nuzira demonstrated considerable efficacy and potency against mycobacterium avium, as seen in the figure on the left of this slide. Importantly, observations from this study showed that the highest exposure of imatocycline study demonstrated comparable potency as that seen with a three-drug standard of care regimen. And again, imatocycline was bactericidal in this study. Given these encouraging findings, Paratech plans to conduct further research evaluating the activity of imatocycline in other non-clinical studies against MAC. Efficacy and tolerability challenges associated with certain existing standard of care antibiotics used to treat MAC pulmonary infections further highlight the need for the development of novel antibiotic treatments for the estimated 100,000 cases of NTM pulmonary disease caused by MAC in the U.S., which is 10 times more prevalent than mycobacterium abscessus. In addition to NTM, data generation and other important scientific areas continue to expand through 2021 and will continue in 2022 through multiple avenues. We remain excited about the level of interest in hematocycline, leading to ongoing research collaborations with several government and academic laboratories focused on generating data in diseases such as malaria, wound blasts, sexually transmitted infections, biothreats, and other difficult-to-treat pathogens of interest to the military. As Evan noted, we were excited to report that our partner in China, Zai Lab, received approval from China's National Medical Products Administration, or NMPA, of Nuzaira for the treatment of adults with pneumonia and skin and launched Nuzaira in December of 2021 in the greater China region with its co-promotional partner, Hanwei Pharmaceuticals. We believe that approval and launch in China, as well as the additional data generation opportunities being pursued by Paratech, will further broaden the potential for Nuzira to reach into new and clinically important patient populations. New antibiotics are needed globally, and we continue to battle the crisis of antimicrobial resistance. Nuzira is an important clinical option for physicians to save lives in serious community-acquired infections where resistance is of concern. At this point, we would like to open the line for questions. Operator?
spk05: Thank you. At this time, we will conduct a question-and-answer session. If you would like to ask a question... please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time.
spk04: One moment while we poll for our first question. Our first question comes from Ed Ars with HC Wainwright.
spk05: Please proceed.
spk08: Hi, good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Congratulations on a great quarter. First, over the past couple of slides, can you go over the market opportunity of NTM caused by MAC compared to the opportunity of NTM caused by Mycobacterium abscessus that you estimated at $1 billion? Yeah.
spk01: Hi, Thomas. This is Randy. So you've seen in our corporate deck and you've heard us speak before, and Evan mentioned in his opening remarks that we have done a pretty thorough market assessment for Mycobacterium abscessus and believe that in the U.S. the market is about a billion-dollar opportunity. What we know for Mycobacterium avian complex, or MAC, is that The number of patients is about 10 times larger in the U.S. from MAC than it is mycobacterium abscessus. So, you know, you can assume that the market opportunity is significantly larger than the $1 billion market opportunity for mycobacterium abscessus.
spk02: The other thing that – Thomas, it's Evan. The other thing that we've learned in terms of our market research is that there are several other regions in the world that have a – prevalence of NTM, Mycobacterium Obsessus Disease, that is comparable to what we see in the U.S., specifically Japan and South Korea together. And we are exploring, as we've mentioned before in the past, opportunities there to think about what a development path might look like. We also see that setting as a potential springboard to potential strategic partnerships as we look to ensure that there is the right amount of support for a registration type of program in those particular regions.
spk08: Understood. And then perhaps on the clinical side for NTM with MAC, what would the plans be to enter the clinic? Is it possible to start a new study in 2022? And what's the overarching clinical strategy here?
spk01: We continue to evaluate the potential clinical strategy for MAC. I mean, the holofiber data is relatively recent, so we're working through what a clinical development program might look like. We know that the next step is to do some in vivo work in MAC to ensure that the in vitro potency that we saw in the holofiber model translates over into an in vivo model, but we'll come back to folks with the plans for any clinical program for MAC and As Evan mentioned earlier, the MAC opens up potential discussions with partners outside the U.S. as well, so we'd like to think about MAC from a global perspective.
spk02: I think it's important to note also that in these particular orphan disease settings that publications continue to drive, I think, physician knowledge and comfort with considering new innovative antibiotic options for this type of devastating chronic disease. We're very encouraged by some of the real-world evidence that Randy mentioned that Neuzira has been used in these particular settings for daily oral therapy for upwards of two years with very good safety and tolerability data. And we believe that our commitment here to the physician community and to patients is to publish as much as we can, both on an in vivo, in vitro, as well as a clinical utility basis for both And now that we have this MAC data, we'll be exploring opportunities to further the scientific knowledge base in MAC pulmonary disease as well.
spk08: Understood. We certainly look forward to the new clinical data. And then perhaps one question regarding the OSIRA. Other than the impressive U.S. growth that we've seen and projected for 2022, As part of your 2022 guidance, two millions in royalty and collaboration revenue, is this primarily royalty revenue from Zylab, and what's your outlook in the Chinese market? Yeah.
spk02: Sarah, did you want to take that?
spk03: Sure, happy to. I'll address maybe the financial impact, and then we can talk about the market. The $2 million in royalty revenue that we've projected are related to sales of Saesara in the U.S., so that's our second product that's on the market, and it's licensed to Amaral. And Evan, do you want to take – sorry, and as it relates to the Zai milestone, excuse me, Zai royalty, as you recall, we entered into a loan agreement with Arbridge Capital, and the royalties from sales by Zai are – going over to that lender until we repay the loan in full, which was, as a reminder, $60 million that we executed late last year.
spk02: Thomas, the launch in China, as Randy noted, got underway in December of 2021. We know that Zai is working hard to get the product listed on the NRDL listing list. schedule in China, and I think they've guided somewhere within the next year that that will be accomplished, and we do think that the commercial success story there will, I think, will accelerate once that listing has actually taken place.
spk08: Understood. Thank you so much for taking our questions. Looking forward to a great year.
spk02: Thank you very much.
spk05: Once again, ladies and gentlemen, to ask a question, please press star 1 on your telephone keypad. Our next question comes from Bert Hazlett with BTIG. Please proceed.
spk07: Yeah, thank you. Congratulations on all the progress. You've covered a lot of the topics I was going to ask about, but just could you give a little bit more with regard to the timing and the scale of this second phase of expansion into primary care? And does the... characterization of this as a second phase of expansion mean that there's potential for a third phase? And are any other structures, maybe corporate partnerships or otherwise, are any of the structures for expansion in consideration at all? Thank you. Adam, do you want to take that?
spk06: Yeah, thanks, Bert. So we're going to put 40, as we mentioned, we're going to put 40 representatives in. We'll probably start that around the middle of this year. One of the things that we know is that it takes approximately 12 months for a newly minted community sales representative to reach profitability actually in the field. So growth this year is really driven by the success of the last year's reps who basically now funded themselves and have enabled us to continue to expand. Our plan is if things continue to go to the plan, we will look to expand every year for the next three years until we get to that 160 number at around about the same sort of time, which is mid-year each year.
spk07: Okay, and again, just following up, were there any other structures contemplated other than a build-out internally?
spk06: Yes, of course. We've looked externally, and we still continue to look externally. You know, ideally, if we had the resource, we would like to get there quicker, One way to do that, as you know, Bert, is to look to partner. The fact remains that there are very few companies out there that have got only one product in their bag in a community setting. It's not an area right now where there are a lot of available fill forces looking for additional products, but it's certainly something we've considered and would continue to consider because it will obviously accelerate our growth and revenue projections.
spk02: Well, we can't predict, Bert, what's going to happen, and I believe this is evolving quickly here, that the COVID pandemic, as it falls into becoming more endemic, will open up opportunities for both the hospital as well as from the community side. If those events lead to more acceleration in terms of our forecast and our overall commercial performance success as we've seen to date, obviously we'd like to bring forward you know, more expansion on the community side as our capital structure allows for. But one of the things that has been important to us is to be disciplined with regards to this. And we'd like to see, as we've said before, future expansions being driven by the success of what we're currently planning for this year's expansion.
spk06: Yeah, I think one thing I would add, Evan, is that our community expansion has been done under the shadow of COVID all the way through. We've never experienced what it's like to promote New Zyra in the community without that sort of shadow in place, unlike what happened with us in the hospitals where we did get 12 months before COVID came along, and we know that we were certainly growing faster pre-COVID than we've grown post-COVID. So as Evan alludes to, should the environment improve, it may enable us to expand quicker. Well, thank you for that.
spk07: Congratulations on the progress. Thank you.
spk04: Once again, ladies and gentlemen, to ask a question at this time, that's star 1 on your telephone keypad. There are no further questions in queue at this time. I would like to turn the call back over to Evan Lowe for closing comments.
spk02: Thank you, Operator. In closing, I would like to note today that we are facing the so-called silent pandemic due to the rise of antimicrobial resistance around the globe. It is real, it is getting worse, and it clearly appears inexorable. As we have just experienced from the current COVID pandemic, in the modern world, pandemics start regionally, but can very quickly become global. Bacteria do not care about regional borders and are happy to use humans as their host for both replication and transport. Accordingly, bacteria are not only life-saving globally, but also vital to U.S. national security. Paratech and USI are ideally positioned to help address not only the AMR challenge, but other bioterrorism pathogens that could threaten the lives of all Americans. We look forward to keeping you apprised of our continued progress. Goodbye for now.
spk05: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. And thank you for your participation and have a great day.
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