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spk02: today's conference is scheduled to begin shortly please continue to stand by thank you for your patience Thank you. Thank you. Good day and thank you for standing by. Welcome to the Radius Health Inc. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star, then 1 on your telephone keypad. Please be advised, today's conference may be recorded. If you require operator assistance during the call, please press star, then 0. I'd now like to hand the conference over to your host today, Ethan Holdaway, Head of Investor Relations. Please go ahead.
spk00: Hello, everyone, and thank you for joining us today. A press release and presentation that we will use to guide the discussion can be found in the investor relations section of our website. A replay of the call will also be available on our website three hours afterwards. Before we begin, I'd like to remind everyone of our safe harbor statement on page two. This presentation includes forward-looking statements and non-GAAP financial measures. You can find the reconciliation of GAAP to non-GAAP at the end of the presentation. Our most recently filed 10-K and subsequent filings identify factors that could cause our actual results to differ materially from those indicated by the forward-looking statements. Any forward-looking statements represent our views as of today only. On today's call, Kelly Martin, President and CEO, will start with his opening comments. Steve Helwig, our Finance and Accounting Officer, will then provide a financial update. Chaya Shah, Senior Vice President and Clinical Program Lead, will follow with an update on Elastostron and Abalaparatide development progress, and Bob Valentine, Strategic Business Officer of Abalaparatide, will finish up by providing a commercial update. We will then open the call for questions, and I would now like to turn it over to Kelly.
spk08: Thanks, Ethan, and good morning, everybody. Thank you for spending a few minutes with us today to go through our third quarter presentation earnings and some of the results of the business. It was a very busy quarter for us. We don't necessarily run the company quarter by quarter, but the activity level is very high across all aspects of our business, and we'll share that with you this morning. I'd like to highlight a number of things which we think are particularly important from the quarter. First and foremost, Bala Paratide On the male study, we announced positive results from the pivotal trial several weeks ago, a great step forward for that molecule and an interesting opportunity in the marketplace. Secondly, for abaloparatide, we resubmitted into the European marketplace last week. We had indicated that that was our goal second half of this year, that we would resubmit into Europe, and we accomplished that. Third thing for abalaparatide is the TD pivotal readout remains on time for a Q4 readout for this year. I know lots of people are focused and interested on that, as we are as well. In the elastostrand molecule, we announced that the pivotal trial delivered positive results, so our partner, Menorini Group, and ourselves are very pleased with that. We will go through with you very specifically during this call. Steve Helwig will outline the business relationship we have with Menorini. We also outlined that fairly explicitly in our earnings announcement. And Shia Shah will go through some of the highlights at the high level of that trial. Clearly an important step forward in the space and an important step forward for Menorini and ourselves. For RAD011, the Prader-Willi syndrome pivotal trial is on time to start towards the end of this year or the very early part of next year. And importantly, we've completed our lifecycle planning with that molecule. And over the next few weeks, we will announce and roll out additional indications that we will take forward with RAD011. all of which we're very excited about and looking forward to sharing our thoughts and thinking with you in the very near term. Our near-term focus as a business and as a company are multiple things, and we highlighted a few. First and foremost, Tim Lowe's commercial. We are focused on continuing from a growth point of view, a productivity point of view, and very specifically a segment focus point of view. As we indicated in the earnings announcement, our productivity is up. Our revenue is up. We would like to expand the denominator or the baseline of that business, and that's what Danielle and Bob Valentine are working on from a business point of view. From Abala Paratide, our preparation and anticipation of introducing mail indication to Abala Paratide, it's an important piece of work. something that we have done some work on to date and will continue to emphasize over the next several months, again, in anticipation of including the male indication in the U.S. for Ebola parasite. We're also doing preparation, as we have been doing, on the transdermal system, or TD. Important to us is what the actual data will say. That data will give us some definitive information with regard to pricing, reimbursement, and the segment or segments that we believe will be most applicable for TD. Last but not least, in the Bala Paratide, we continue to expand the global footprint of this asset. As we, again, indicated in the earnings announcement, a lot of progress is being made in Canada. A lot of progress is also being made in Japan, which I and remind folks it's the largest anabolic market in the world. And we will look to expand the footprint in other countries and or geographic regions as we conclude transactions. From an Elastostrand point of view, again, our focus with Menorini Group is to prepare and accelerate, if possible, the regulatory pathway and discussions in both the U.S. and Europe, It's something that we have an integrated approach to, and it's a very big focus of ourselves and the Menorini Group with regard to this asset. RAD011, we will initiate the Prader-Willi trial, and we'll also, as I said before, share some lifecycle opportunities for this asset. When we purchased RAD011, we very specifically indicated that this was a pipeline within a molecule, and we look forward to sharing that information. with all of you in the next few weeks. The last thing I want to touch upon is something I've touched upon before, but just wanted to remind and continue to emphasize, which is our approach and philosophy in running the business at Radius and the things that are very important to us as we build a distinctive company. First and foremost, our culture. We continue to build a culture around exceptional people who are very team-oriented, and we've made great strides and progress on that over the last 18 months, and we'll continue to make more. It's kind of a never-ending goal and objective and one that we're very focused on. We're very focused on executing against plan in a very high-quality manner. In the last year or so, We completed the enrollment on three pivotal studies. We've had readouts on two of the three. We're awaiting the third. We've resubmitted this asset into Europe. We are working closely with our partner in Japan on abalaparatide. We've in-licensed a synthetic CBD asset that has very broad applicability across neuro and neurobehavioral and psychiatric indications. And last but not least, from a business P&L and cash point of view, we're very resolute on managing all of those pieces together in a high-quality way. From a perspective point of view, we manage for short-term progress, but we also do that within an intermediate term map and roadmap. There's many things over the intermediate term we would like to accomplish in but you can only accomplish those if you get things done in the short term. And so we balance both short term with an intermediate view of where we're going and how we intend to get there. Very importantly, we strive to be outstanding stewards of capital, people who provide us capital, whether it's debt, equity, cash. We want to make sure that we are managing that capital in a thoughtful manner and You know, once again, managing for the short term but balancing against intermediate term objectives. We look at the company from a portfolio basis. We try to consistently see where we can reduce risk. That risk may be execution risk. It may be partner risk. It may be competitive risk. It may be pricing risk. Balance that risk with opportunity to create more on the upside, whether that's additional indications, additional geographies, additional partnerships. So we continually look at our portfolio from a risk and return point of view, and we try to manage risk down and opportunity upside up. And last but not least, we will continue to be active in our own capital structure, not be passive participants in our capital structure, When we have opportunities to improve our capital structure, we will do that at the right time and for the right reasons. And I think that's an important aspect of this company as you look forward to now three different assets with potential for both, with success, potential revenue, milestones, and growth. And so using that capital, prospective capital in return, part of the usage of that will be to be active in our own capital structure. I think that's an important thing to emphasize. So with that, as Ethan said, joining me on this call, we have some fantastic people. I'm going to turn the call to Steve Helwig in a second. He's our principal finance officer and is doing a great job in that role. You'll hear from Shia about both Elastostrand and Ebola Paratide in her role. guiding those two assets from a development and regulatory and operational point of view. And last but certainly not least, you'll hear from Bob Valentine on some of the core topics and analysis within the commercial space. So with that, I'm going to turn it over to the very capable hands of Steve Helwig, and he'll walk you through the key aspects of our financial performance for the quarter.
spk01: Steve? Thank you, Kelly. For Q3 2021, TMLOS net revenue was $56.8 million versus $50.4 million in Q3 of 2020, or a 13% increase year-on-year. This third quarter increase was driven by an increase in unit volume as well as net price. The total net revenue for Q3 2021 was down $21 million, or 27%, versus Q3 of 2020. This was due to the $27.4 million upfront licensing payment we received in Q3 2020 related to our agreement with Mentorini for the outlicensing of the Elastostrand asset. Moving on to the operating expenses on a non-GAAP basis, R&D decreased versus the prior year by $4 million due to the wind-down of our Phase III trials, and we expect the R&D expenses related to ADAM and wearable trials to decline substantially in 2022. Our selling general and administrative expenses were up $2 million for the same quarter versus a year ago, and this was due to a one-time increase on professional fees resulting from the implementation of Oracle, our new ERP system, offset by reductions in compensation from prior quarter reorganizations. As a reminder, non-GAAP SG&A excludes stock-based compensation. This all resulted in a total company-adjusted EBITDA of a loss of $10.9 million for Q3 of 2021 versus a positive $9.3 million in Q3 of 2020. This roughly $20 million swing, again, is primarily due to the $27.4 million upfront licensing revenue payment from Venturini in Q3 of 2020, partially offset by increased TMLOS net revenue in 2021. Excluding the impact of the Mentorini payment, the company made material progress in the reduction and realignment of its cost base, which also contributed to EBITDA improvement. Moving on to the year-to-date income statement, the total net revenue was down $10.9 million. This is due to a decrease in licensing revenue of $16.4 million, which was comprised of the $27.4 million mentioned previously for Mentorini in 2020 and offset by $11 million in 2021, mainly from the approval of Astabalo in Japan. This decrease in license revenue was offset by an increase in our Timeless Net Revenue of $5.5 million, driven by an increase in both volume and price. For operating expenses on a non-GAAP basis, R&D decreased by $29 million. This is due to the fact that in 2021, all the Emerald costs had been reimbursed by Mentorini. and additionally factors previously mentioned for Q3. Selling general and administrative costs are down $7.2 million, and this is mainly due to savings and compensation resulting from reorganizations that took place earlier in 2021. We have made progress since transitioning our sales approach in osteoporosis and expect to make continued progress. However, due to lower than expected year-to-date TMLOS revenue, We've adjusted our full year 2021 10 most revenue forecast to a range of 210 to 220 million versus the previous forecast of 240 million. We also forecast total company EBITDA to be in a range of a five to $15 million loss versus a previous forecast of a positive 10 million. Moving on to the next slide for cashflow trend. As of September 30th, 2021, we have a cash balance of 110 million. We had expected to be flat for the quarter with a cash balance of $100 million. This additional 10 is the result of timing on an expected payment that did not occur until shortly after the Q3 2021 close. Moving on to slide 11, here we framed out what the Elastostrand opportunity means for radius. As part of the agreement with Menorini, we are eligible to receive up to $20 million in development and regulatory milestone payments, up to $300 million in sales milestone payments, and tiered net royalties up to 9%. The net royalty includes royalties RADIUS is eligible to receive from Menorini, as well as royalties RADIUS pays to ESI. The royalties and sales milestones are based on global net sales of Elastostrand and include monotherapy, combination therapies, as well as other potential therapeutic applications of Elastostrand. On the next slide, we provide an overview of the assets intellectual property portfolio. Elastostrand currently has three issued patents, composition of matter expiring in August of 2026 and subject to patent extension up to August of 2030, method of treatment expiring in October of 2034, polymorph expiring in January of 2038, and then there are also additional patents that are pending. As a new chemical entity, Elastostrand has the potential to receive regulatory exclusivity of five years in the U.S., 10 years in Europe, and eight years without a generic competition in Japan, all of which are subject to regulatory approval. And with that, I'd like to turn it over to Chaya to give an update on the elastostrant development. Chaya?
spk13: Thank you, Steve, and good morning, everyone. As Kelly mentioned, in October, we announced positive top-line results for Emerald Trial, where elastostrant was evaluated as a monotherapy versus the standard of care in metastatic breast cancer patients. The design of the EMERIL study was a randomized, open-label, active comparator study. This trial met both its primary endpoints, the elastostrand-extended progression-free survival in overall population, as well as the ESR1 mutation subgroup, this demonstrating superiority versus standard care in all therapies. Based on these positive results, we are working in partnership with Mentorini Group on regulatory submissions for both U.S. and Europe. As a reminder, we will give detailed data and it will be presented at the San Antonio Breast Cancer Symposium between December 7th and 9th. Mentorini plans to further develop the elastosterone asset, including the combo therapy trials, as well as other potential therapeutic applications. It is a pleasure in partnership with Menorini to be able to deliver positive top-line results for the first-ever oral CERD for metastatic breast cancer. So moving on to the ADAM trial. We announced last month positive top-line results in evaluating temblors in men with osteoporosis. Adam was a placebo-controlled trial with 12-month duration. Men were randomized 2 to 1, Ovalo SC, with placebo. The trial results met primary endpoint and change in lumbar spine BMD at 12 months and P-value less than 0.0001. The study also met secondary endpoints related to BMD for lumbar spine and six months as well as hip and femoral neck at 12 months. The study demonstrated safety profiles consistent with the Evolve Heritide Study. And based on these positive results, we plan to submit a supplemental MDA in quarter one of 2022. This will be a 10-month review cycle. We'll also present detailed data, which will be published in the first half of 2022, and we'll present at an upcoming medical conference. So, on the next page, I'll go through a little bit more of additional development activities for a bowel paradigm. So, with regards to Tymlos Label, in September, we announced and updated to our mechanism of action section in Tymlos Label. This was followed by our histo data, which showed Tymlos stimulated new bone formation in humans. This label change allows us to clearly explain mechanisms of action to healthcare providers and patients. We also expect to hear from FDA on potential removal of the box warning from TMLO's label by the year end. And as communicated, we're on track for the wearable trial to receive top line readout before the end of the year. On the globalization front, On November 4th, we submitted a BALO-SC to EMA for potential approval in Europe. This is a, this MMA is a full submission. It leverages in totality evidence data from pivotal study, real-world evidence, post-marketing surveillance data, and Teijin, our Japanese partner, phase three trial data. We are optimistic that this information will be provided, will be a support of a favorable review. Our partners in Canada, Paladin Labs, plan on submitting regulatory application to Health Canada in quarter 421, so by year end. And we are discussing and progressing with additional XQF partners in various regions and countries. So this summarizes our Elastostrand development activities as well as our bottle of hair tied activities. And I will hand this off to Bob for a Temblor commercial update.
spk09: Good morning, everyone. I will provide an update on the TMLOS commercial progress, so if we could go to slide 19. In the third quarter, our TMLOS new patient shipments grew 10% year-over-year from the same quarter in 2020, and the 2021 quarters are collectively continuing to show year-over-year growth, building the patient cohorts for future contribution to revenue. From a strategic perspective, we are tracking some additional key indicators of our focus on the fracture patient as well as efforts towards expanding depth in key accounts. So our new patient contribution from the top 500 prescribers remains at 50% from Q2 to Q3. Our new patient growth within the top 50 prescribers grew significantly. 15% or more from Q2 to Q3. And our new patient growth among that same top 50 prescriber group accelerated faster in the ortho and spine segments than outside that segment. On the next page, we are also turning appropriate attention to positioning TMLOs for the future continued growth. So beyond the depth over breadth focus of our field course, we have a few key forward-looking requirements. We're working with some larger institutions to improve how postmenopausal osteoporosis patients are properly identified and how to improve processes for getting these patients the proper care for their underlying bone disease and bone conditions. And as we know, so many patients' osteoporosis goes undiagnosed that it never gives them a chance to properly get on anabolic therapy. We're also preparing the organization for what are a potential future male indication as well as a potential abaloperitide transdermal system product. So this includes deepening our understanding of these opportunities both broadly and in specific segments and patient populations. And it also means outlining market building work that will need to be done in advance of launch. So with that, I'll turn it back over for Q&A.
spk02: Ladies and gentlemen, if you'd like to ask a question at this time, please press the star, then the number one key on your touch-tone telephone. To withdraw your question, press the pound key. Again, that is star, then one, if you'd like to ask a question at this time. Our first question comes from Jeffrey Porges with SVB Lyric.
spk06: Thank you very much, and I appreciate the color on the call. A couple of questions on Tymlos, and then one on elastostrant. First, could you give us a sense of what proportion of the surgical osteoporosis, female osteoporosis cases are you now getting an anabolic, and then what your share of those starts is right now? And then secondly, could you talk about the relative price and access dynamics versus the generic teraparotide and how that is trending, what your expectations are there? And then lastly, on elastostrant, One of the big questions is relative tolerability, and I know the presentation is coming at San Antonio, but do you consider tolerability to be the Achilles heel of the elastostrant compared to the other SIRTs where we're starting to see data from pivotal trials as well?
spk08: Jeff, thanks for the questions. This is Kelly. I'll start with the last first. we're not going to comment on any of the data for Elastostrand. Uh, I would just say what we, we, we and Menorini put out in the, uh, announcement of the top line data, uh, was we did not flag, uh, safety as, as an issue. Um, and I think that would just leave that stand as is, uh, I think that sort of speaks for, for itself, um, with what we can, you know, for what, with what we can see right in our, in the data for, uh, for elastistran. I'll ask Bob to comment a little on a high level of how we're looking at the, if we're going back to abalaparatide, sort of the fracture surgical market segment and some of the dynamics on the generic side. And I will add some commentary as well after Bob's comments.
spk09: Sure. So, you know, I think, you know, we know that there's somewhere between 1.5 and 3 million fracture PMO patients in the United States. And, you know, we can all sort of do the math on how many of those patients are treated, though it's important to note that both, you know, our TMLOS patients are a mixture of patients who have had a fracture and our surgical patients and those who haven't. So... I won't try to point out exactly what our market share is, but I think that gives you a sense of the order of magnitude of the amount of patients and potential white space that there is for the entire market.
spk08: Yeah, and I would just add, Jeff, I mean, our overall market share or the overall market share of Anabox remains relatively low, sort of frustratingly low on a broad basis. As you know well now, our focus has been let's do a lot more with fewer, and that's working. And so Bob and Danielle are working to expand those numbers. If you look at our top 10 clients or top 15 clients or top 20 clients, the preponderance of all of that business is fracture patients. And, therefore, that gives us opportunity to kind of continue to expand that. But if you look at the overall business, it's still an extremely small percentage of both treated patients and fractured patients. And, again, we're not trying to get over our skis as far as breadth, but if we look at depth and continuing to add another 10 and another 10 and another 10, there's lots of opportunity there for anabolics in general and TEMLO specifically.
spk06: And, Joe, sorry, the question on the generic and your share of stats now?
spk08: When we look at the generic activity, it's an infinitesimal part of the business relative to us. There's some slight growth there at very, very low numbers, but nothing that is really on our radar screen relative to scripts and patients. We track it. We look at it. It's very low single-digit numbers, and that hasn't moved that much. It's slightly ticked up, Jeff, in the last few months, but, you know, nothing that has given us pause that something fundamental has changed, at least from what we have seen to date.
spk06: Great. Thanks, Kelly.
spk08: Thanks, Jeff.
spk02: Our next question comes from Corinne Jenkins with Goldman Sachs.
spk03: Yeah, good morning. So just maybe as you think about the change in guidance over the course of the year, can you just help us understand what were the factors that drove that disconnect between what we expected and then what played out, whether maybe it was new patient growth, persistence, or some other factor?
spk08: Thanks, Corinne. It's Kelly. I'll comment, and then Bob can add comments. But I think there's two main factors here. One is the conversion of patients. Our new patients, i.e., defined as those with TEMLO scripts, continues to grow nicely, if not very nicely. But for any variety of reasons, and there's several of them, the conversion of those, if you took 100% of the script patients, there's a meaningful number of patients that, for a variety of reasons, didn't convert from script to drug. So that's one bucket. And then the second bucket, as you said, is persistence. You know, the average time on drug for a patient is something that we're very focused on. And between Bob and Danielle and Sal Grasso, that is a big focus of ours. So we're adding patients, and we're adding patients in some depth in new sort of fracture-oriented practices. But we frankly need to do a better job on converting those scripts to drug and then extending the persistence, you know, in the appropriate manner. I don't know, Bob, if you want to add anything to that.
spk09: Yeah, I think that covers it pretty well. I'd just say, you know, throughout the year, you know, you kind of covered the back-end stuff. And throughout the year, and inclusive of the third quarter, we've made efforts as well to continue better aligning our sales approach to the focus on the fracture patient. And so we, of course, expect to see you know, long-term impact in a positive direction on those efforts as well. And fixing some of the, you know, the inherent pieces around conversion of patients and time on therapy will just continue to add to that.
spk08: So it's an area, Corinna, we're not terribly pleased with the top line where it is. Even though we've grown year over year, there's more to do there and there's more we have to get better at. And I think those two areas are Conversion and length on drug are two very specific things that we're focused on.
spk03: Okay, that's helpful. Then maybe can you just help us understand the cadence of milestone payments related to Alicestrin over the next year and of the 20 million in development and regulatory milestones, how much of that is attributed to the monotherapy versus maybe other combinations, et cetera?
spk08: The development milestones are, are all related to the monotherapy progress. The royalties and the sales milestones are related to any, in layman's terms, any utilization of the molecule, whether it's mono or combo, and combo in any number of combinations. We haven't outlined the milestone payments yet, From a market point of view, as of yet, I do realize that at some point we need to figure out how to frame that out with even more detail. But for now, it's something that between Menorini and us is still part of a confidential arrangement. The amplitude, I mean, let's put it this way, the amplitude of the sales milestones are kind of split between approximately half up to a certain level and the other half above that. So there's big, chunky payments there depending on where the molecule goes. I think this will become more important and more relevant once the data is released and once Menorini and ourselves come forth with additional regulatory filing approaches.
spk02: Great. Thank you. Our next question comes from Annabel Samimi with Stifel.
spk07: Good morning. This is Nick on for Annabel. Thanks for taking our questions, and congrats on all the clinical success. As you look to increase the fracture surgical market, what are you doing in terms of building a clinical database around the orthopedics opportunity, and how are you currently positioning sales calls? And then switching to PWS, is there anything that you learned recently in the most recent negative adcom for Levo Therapeutics that could have any impact on how you design the SCOUT trial and or how you think about its efficacy, safety expectations? Thank you.
spk08: Yeah, that's great. Bob, you want to take the first and then I'll talk about Prader-Willi?
spk09: Yeah, so I think the way to frame this up is we, you know, to just mention, we kind of remain very committed to the fracture patient strategy and what you're referring to as the surgical patient. And while the focus on fracture patients, first and foremost, is consistent, we're continuing to identify opportunities to refine where along the patient journey we're actually intersecting with these fracture patients. And then how we message to the health care providers on those calls about Tymlo's as part of that journey. So I think what we're doing is we're using data to identify the positions in the patient journey that are the best places to find those patients and communicate with the HCPs about the TMLOS value prop there.
spk08: And with regard to credibility, thanks for asking that question. It's a great question. Well, you know, to cut to the chase, We have learned and continue to learn an absolute ton from the other trials. First and foremost, we applaud both Levo and Saleno's effort in the space. It's, as you know, a tough indication. We have gotten to know some of the patient advocacy organizations very well in the last year. Let's applaud them. They are super focused on on their job of bringing forth potential therapeutic solutions to these patients. But we've learned by looking at and examining, even before the FDA meeting last year, all of the Levo detail and Salino detail, it's been exceptionally instructive to us on things that would appear to be the right way to structure things, patient behavior, It's a behavioral, in addition to genetic issue, it's a behavioral disease, so anticipating behavioral actions. The differences between ages, very important. Where behaviors may change based on age. Physiologically, you know, also many of these patients as they grow from 10 to 12 years old through teenage years, through young adulthood. Obviously, there's a lot of physiological changes going on. This is an eating disorder. So think about your metabolism, your body weight, your body mass, et cetera, et cetera, et cetera. So again, we certainly in no way, shape, or form wish any of our competitors to fail. That's not our objective. But we have learned a enormous amount in detail about a way to construct our trial using RAD011 in the most effective risk-managed way, and we're highly constructive on moving forward with a pivotal Prater-Willi trial. So more to come on that, and our team has done an exceptionally good job on providing preparing our pivotal trial in this space, and we can't wait to get started.
spk07: Awesome. Thank you.
spk02: Our next question comes from Jessica Thai with J.P. Morgan.
spk12: Hey, guys. Good morning. Thanks for taking my questions. First one is, can you talk about the commercial strategy for a BALO patch assuming success in that trial? How will you position that product relative to TMLOS?
spk08: Well, I think we put in the – Jessica, it's Kelly. Thanks. Part of it's going to depend on the data. And, again, I'll let Bob talk a little bit about some of his thoughts with Danielle, and then I'll comment as well. But, Bob, do you want to add some thoughts?
spk09: Yeah, so I'll just preface by saying we're continuing to tap into the market and market research and understand – how this product will be perceived and incorporated. But as you think about what the transdermal system is, I think there's a pretty clear and obvious set of patients that this would serve that current options are not serving, and those are sort of the needle-averse patients. So that's the clear and obvious segment, but we need to understand a little bit better beyond that segment for through the current patients that we currently target with TMLOS, where do we position the transdermal system relative to those patients, as well as relative to patients that aren't currently on TMLOS, maybe on competitors or aren't on anabolic therapy at all. To say more work to be done, we have some insights into some of the patient segments that are very clear and obvious, and then more work to do to understand the other areas of opportunity.
spk08: Yeah, and we've refreshed, you know, there was a lot of work done previously on market intelligence, market segment, market information, and the team has begun to refresh some of that. And I would say that, you know, from a fresh pair of eyes point of view, from myself, the feedback is more constructive now. and positive against certain segments, uh, particularly in the most obvious or people who, for any variety of reasons, don't want to, don't want to have a needle or, or needle phobic. There's a pretty good range of how big that market is. Um, and any of the numbers are pretty big from a denominator point of view. So I would say, and Bob and Danielle and Sal have done a good job of sort of refreshing, but there's a lot of constructive optimism, uh, for, for segments of the market with, uh, with the transdermal. And again, we look forward to getting the data and then moving forward from there.
spk12: Great. And can you also talk about how you think about the commercial opportunity associated with Tymlos in Europe, including how you think about pricing in that market?
spk08: Pricing is a challenge, as you know well, sort of across the board. That would be an asset, and I think I've referred to this before, but just to Be transparent and highlight it again. We would not build up a sales force in Europe. We would partner that asset. We've had a number of reverse inquiries coming in from European existing infrastructures. The only way, obviously, to generate value is from a portfolio basis. So somebody else who has an infrastructure who has a portfolio could add this. Again, part of the pricing is, again, based on data, as you know, based on competition, and it's something that we're exploring. So we will take a BD route in Europe, and, again, we've had multiple people interested, and we're in early stages of that discussion. But now that we've filed, I think those discussions will become more tangible over the next few months.
spk02: Great. Thank you.
spk08: Thanks a lot.
spk02: Our next question comes from Yun Yang with Jefferies. Our next question comes from Vikram Parohit with Morgan Stanley.
spk10: Good morning, and thank you for taking my call. This is Gospel on for Vikram. My question is, your release mentioned that you intend to use 50% of Alicetran milestone to strengthen your capital structure. Could you provide some detail on what this could look like?
spk08: This could look like as and or when we ever receive sales milestones that we will be active in our outstanding debt, should we have any, or outstanding convertibles, should we have any, or presumably our outstanding equity, which we have. We will be using those payments to address all three, you know, any part of our capital structure, which broadly defined that covers all of those things, plus any other thing that we have. So we could use it to purchase debt, purchase converts in the first instance, refinance debt, refinance converts, and or as we get through all of that at some point in time, purchase equity. So we would use it as a financial tool to strengthen the capital structure across the board. Thank you very much. You're welcome.
spk02: Our next question comes from Douglas with HC Wainwright.
spk11: Hi, good morning. Thanks for taking the questions. I think one of the things that you identified is as sort of the key for jump-starting the Timeless franchise was increasing or improving patient persistence. I'm just curious what you see as the key levers to doing that, and what are the drivers for patients not sort of going through their full course of treatment? Thank you.
spk08: Doug, it's Kelly. Thanks for the question. Again, I'll have Bob comment, and I'll give you my view as well if it's helpful. Sure.
spk09: Yeah, you know, there's going to be a variety of reasons in any therapeutic area, but specifically, you know, specialty pharma, where it's a daily injectable for patients to kind of maintain consistency with therapy, right? I think a lot of what we can do is around communication both to the healthcare provider as well as the patient around the importance of compliance and adherence to therapy, and that's an area that we'll we'll be able to continue to focus on. And I think there's things we can do sort of mechanistically back office perspective to make sure that those access kind of hurdles are minimized. So between communication and minimizing some of those sort of administrative hurdles, I think are areas where we can certainly focus and I think we'll have a lot of traction with respect to persistence on therapy?
spk08: I think more generally, Doug, you know, persistence for any therapy is a challenge across many indications. This is no different. I think this is particularly challenging when 80% of the people are asymptomatic. And that's why the more percentage of fracture patients we can have in our portfolio, the higher the probability is that we can extend persistency. And the more serious the fracture, pelvic or back versus wrist, then again you can extend it even further. So part of us... improving in persistency is to continue to migrate our patient population from asymptomatic patients to fracture patients. That takes time and it takes focus, but that's what we believe would give us the stickiest and best business as it relates to patient care and patient need relative to an anabolic like Tymlo's.
spk11: And I'm just curious, in terms of the comments around sort of things to help from an administrative standpoint or, you know, do you anticipate or, you know, what's the current sort of push to patients from the specialty pharmacy in terms of reminding them? And is it just when you say sort of some of the administrative, is it just reimbursement or is it just patients not getting their scripts refilled themselves?
spk08: Well, the answer to that is so we work with the specialty pharma companies, and we have put in place a number of programs with the specialty pharma companies with regard to follow-up with patients. I think the reality is, you know, we're a one-product company, and, you know, we're a spit in the ocean to most of these big pharma distributors. So we have to do a better job internally. We have to take resources internally. We have to own it. We can't just assume that the specialty pharma people are going to walk in and say, what can I do to help Radiesse and Tymlos today? Although while we get pretty good standard support and interaction from them, I think this is an area that we have to own and put the resources around. And, again, that's what Sal, Bob, and Danielle are doing. These are patients either on Tymlos or should be on Tymlos because they have a script Their HCP has made that determination. And we own that. We own that. It's most important to us. And so we're putting some resources to sort of provide an appropriate follow-up with those patients as best we can so we can convert more of them. Again, with the distributors, we have good relationships, and the pharmacies are But, you know, we're a one-product company currently, and, you know, we're just not big enough to demand, you know, sort of gold-plated service. And we get good service, but we need to do better. Okay, great. Thank you so much, Kelly. Yep, you're welcome.
spk02: Our next question comes from Yun Yang with Jefferies.
spk04: Hi, this is Malin. On for you. Thank you very much for taking my question. Just a quick follow-up to Jessica's question. Could you please perhaps quantify what percentage of anabolic-eligible patients are currently not on therapy due to injection fear? Thank you very much.
spk08: We can give you a broad list. Range? I mean, it's a big number.
spk09: Yeah, I think our best estimate is somewhere between 10% to 20% of patients who get to the point where a physician would recommend an anabolic therapy and hasn't already sort of discounted them for being sort of needle phobic, 10% to 20%. kind of what we're hearing so far is those patients would refuse on the premise alone of not wanting the sort of daily injection.
spk08: Yeah, if you take, as Bob said to follow on, Nolan, you have one to one and a half to two million fracture patients and 10 or 20% of those are needle phobic. You know, your denominator is that number. You know, it's 200 to 400,000 potential patients They're not going to all jump on the patch, but at least from a fertile market point of view and a market segment point of view, those two lines intersecting is obviously a pretty good bullseye for a different administration of the drug.
spk04: Got it. And just a quick follow-up to that. How many, could you maybe quantify how many percent are currently on Tymblos and you would expect them to be interested in switching to the patch? Thank you.
spk08: The current penetration of Tymlos for fracture patients is small, very low percentage, and that's for anabolics as a class, not just Tymlos. We're not looking at the transdermal system as necessarily a switching opportunity. By definition, if you're already on the drug and you're on the injectable, you're probably comfortable with that and presumably, or we would hope, it has a positive impact on your bone health. So we don't necessarily look at the launch of the patch as a switching opportunity. We look at it as an additive opportunity to the underlying patients. Anything you want to add to that?
spk09: Yeah, and maybe the other angle of the question is for patients who are about to become on therapy, and who would have otherwise chosen to go on therapy with a daily injection, you know, how many of those patients would choose the transdermal system. I think the answer to that question right now is that the feedback on the transdermal system from a healthcare provider perspective is extremely positive. They view the system as quite novel. And so I think we can anticipate that, you know, that the transdermal system will be viewed as a very viable alternative or option in the option set that includes Tymlo subcutaneous. And so some combination of healthcare provider and patient choice will ultimately decide which patients end up on subcutaneous versus transdermal. So I think that's another way to talk about that question.
spk04: Very helpful. Thank you very much.
spk02: Thank you. I'm showing no further questions in queue at this time. I'd like to turn the call back to Kelly Martin for closing remarks.
spk08: Thank you, and thank you all for your time. I just wanted to highlight a couple things. I would point you very specifically to our announcement detailing the Elastostrand business relationship. There are many important parts to that. I'd highlight several. One is the IP. Look closely at the IP and the runway in the already issued IP. That's number one. Number two, with regard to elastostrand, we worked extremely closely with Menorini on all aspects of this program and this molecule. Shia taking the lead on the molecule itself and the clinical development and the operationalization of the molecule. We also have dialogue with them on the future prospects of how to utilize the molecule, and that's a great open dialogue about many things. So I would point to the fact that our milestones and royalties travel. They travel geographically, they travel with combinations, and they travel with indications. So if you add that plus the IP runway, the opportunity for us as a financial asset is not insignificant, or as opposed to two double negatives, it is significant. And so I would just emphasize those things. We appreciate your time. We've had, as pre-advertised, our second half of 21 was very full. It remains very full. Third quarter, as half of that, was very busy with two pivotal readouts, We have one more to go in the fourth quarter. We look forward to sharing that data when we have it. We look forward to sharing with Menorini the Elastistrand data in December. And we look forward to advancing the RAD011 asset with more transparency with all of you in the near future. So with that, operator, we thank everyone for their time and have a great day. We look forward to continuing our updates. Thank you.
spk02: This concludes today's conference call. Thank you for participating. You may now disconnect.
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