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Adamas Pharmaceuticals Inc (ADMS) Q4 2018 Earnings Conference Call Transcript

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Adamas Pharmaceuticals Inc  (NASDAQ: ADMS)
Q4 2018 Earnings Conference Call
March 04, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to Adamas Fourth Quarter 2018 Financial Results Conference.

At this time, all participants are in a listen-only mode. (Operator Instructions) And now it's my pleasure to turn the call to Mike Bigham of Investor Relations.

Mike Bigham -- Investor Relations

Thank you, operator, and good afternoon, everyone. Before we begin, I would like to remind everyone that this call will contain forward-looking statements, which are subject to risks and uncertainties. Any statements regarding future events, results or expectations are forward-looking statements. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We undertake no obligation to revise or update these forward-looking statements in light of new information or future events. Information concerning factors that could cause actual results to differ materially from those contained in or implied by such forward-looking statements are discussed in greater detail in our Form 10-K filed with the SEC today.

I'll now turn like to turn the call over to Dr. Greg Went our Chairman and Chief Executive Officer.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thank you, Mike, and good afternoon, everyone. Thank you for joining us today. I'm here with Alf Merriweather, our Chief Financial Officer and Dr. Rajiv Patni, our Chief Medical Officer.

As we reflect on our first year commercialization of GOCOVRI, we are pleased to have closed out the year with $34 million in sales and approximately 15,500 total prescriptions. More importantly, we brought the significant benefits of GOCOVRI to Parkinson's patients to reduce both dyskinesia and OFF time.

As we look forward to 2019 with a strong year-end cash position, we are focused on the two most immediate drivers of value to patients and shareholders alike. First, we are focused on advancing the commercialization of GOCOVRI and second, we continue to advance a potential additional indication for GOCOVRI for the treatment of walking impairment in patients with multiple sclerosis.

As we disclosed earlier in the year, we expect to have top line data in the second half of this year from our ongoing Phase III study in this population. Rajiv will provide more information on this opportunity later in the call.

In 2018 we had a strong start to GOCOVRI commercialization. We are energized about both GOCOVRI's ability to positively benefit patients and its robust market opportunity. In 2018, we met our overall goals, introducing GOCOVRI as the first and only FDA-approved medicine for the treatment of dyskinesia in patients with Parkinson's disease. In 2019 we expect to continue to expand the use of GOCOVRI by broadening prescriber adoption and increasing positive prescriber and patient experience.

Our confidence comes from the large effect on reducing both dyskinesia and OFF time, resulting in a 45% increase in functional time, the rapid penetration of GOCOVRI in certain areas in which prescribers who understand GOCOVRI science, are treating a broad spectrum of patients and seeing firsthand GOCOVRI's impact on those patients. And once patients experience the benefit of GOCOVRI, they generally remain on the medicine.

In 2018, patient persistence for GOCOVRI was nearly 60% at six months. This real world strength and persistence is generally consistent with our clinical trial experience. We see these as confirmation of both GOCOVRI's efficacy and its market potential.

Since our last call, we completed extensive field research and implemented changes to our commercial execution to expand the GOCOVRI experience. Firstly, we've evolved our promotional messaging. The revised messaging enables our neurology account specialist to more widely and more effectively communicate the scientific rationale for the clinical benefits of GOCOVRI.

Specifically, we condensed our messages into a compelling and cohesive four pillar GOCOVRI narrative that emphasizes its demonstrated benefit in terms of less dyskinesia and less OFF without adjustments to levodopa dosing, it's demonstrated efficacy and safety profile, the diagonal role glutamate hyperactivity plays in dyskinesia and OFF time and finally GOCOVRI's unique bedtime dosing administration allowing for PK coverage upon waking. In addition, we deployed new selling tools, including new disease stage and sites, patient profiles, patient video clips and mechanism of disease and mechanism of action animations, all to better educate prescribers.

Secondly, as we explained on our Q3 call, we are focusing execution efforts on the regional centers, which treat a substantial portion of the 150,000 to 200,000 patients we are seeking to reach. We have equipped our neurology count specialist with tools to distinguish between those movement disorder specialists that use amantadine as a part of their treatment toolbox and those who don't.

In certain regions we've seen strong adoption of GOCOVRI by the first group who understand the challenge of treating both dyskinesia and OFF without worsening either, but slower adoption by the second group, many of whom used less levodopa as a means of managing or avoiding dyskinesia at the expense of more OFF time.

Moreover, this group does not typically use amantadine immediate release because in their experience, it is associated with limited efficacy and/or poor tolerability. For this latter group, we believe based upon market research and confirmed through field feedback, that we need to more strongly emphasize the connection between dyskinesia and OFF time and the role glutamate hyperactivity plays in the occurrence of both as PD progresses.

This education will help prescribers appreciate their patient's journey as well as GOCOVRI's unique ability to reduce both dyskinesia and OFF as an adjunctive non-dopaminergic therapy. So they don't have to leave their patients off. Importantly, our neurology count specialists are now better equipped to tailor information to prescribers based upon their approach to treating underlying Parkinson's disease. We see, educating those clinicians (inaudible) using amantadine as a substantial opportunity to expand the breadth of GOCOVRI prescribing.

Finally we have evolved our QuickStart program into a broader free trial program to allow more prescribers and patients to readily experience firsthand the benefits of GOCOVRI. This option will also potentially encourage trial of GOCOVRI in a broader array of patients with dyskinesia consistent with the population on which GOCOVRI was studied.

We see as a proof point, our learning from 2018 that we needed to better educate prescribers about the appropriate use of GOCOVRI and the availability of the 68.5 milligram starting dose for patients with moderate to severe renal impairment, Many PD patients are elderly and thus more likely to have renal impairment. Such patients not properly dosed on GOCOVRI could have and in some cases have had negative experiences on the medicine with the occurrence of adverse events.

Accordingly, we armed our field team with specific messages around appropriate dosing and added the 68.5 milligram dose as a reduced dosing option on our treatment form. We are already seeing a positive impact of this approved education.

We believe that prescribe -- advancing prescriber education and positive experience with GOCOVRI through these and our other commercial efforts will drive the use of GOCOVRI going forward. We are excited about the potential of these approaches, which are live in the field today. Of course, we are still relatively early in our launch, actively learning and we expect it to take a few quarters for these improved execution efforts to take effect.

During this time, our results may continue to fluctuate quarter-to-quarter. As we look back on the latter part of 2018, we specifically note a slowing in the rate of total prescription growth quarter-to-quarter, which we see continuing into the first part of 2019. While seasonal phenomenon maybe playing some role in this, we are focused on the improved execution previously mentioned in order to expand GOCOVRI use and adoption in 2019 and beyond.

Success for us for GOCOVRI is to be -- for it to be widely considered the key adjunctive therapy for levodopa and other dopaminergic therapies, as a part of a treatment strategy to reduce both dyskinesia and OFF time for Parkinson's patients, thereby allowing prescribers to target functional time as their treatment goal. That in fact has started and our job now is to expand it.

With that I'll turn over the call over to Alf. Alf?

Alfred G. Merriweather -- Chief Financial Officer

Thanks Greg and thank you all for joining our call today. As we announced in January through our first year of full commercialization, we recorded GOCOVRI product sales in the amount of $13.3 million for the fourth quarter and $34 million for the full year 2018. This was recorded on the sell-in method with revenue recognized typically upon delivery to our specialty pharmacy.

For the fourth quarter, the approximate number of total paid prescriptions was 5,730 compared to 4,740 in the third quarter. Total prescriptions for the year were approximately 15,500. An important indicator of the performance of GOCOVRI is the persistence expressed as a percentage of patients who remain on drug after six months remained strong in 2018.

Regarding expenses, I am pleased that we ended 2018 with full year R&D and SG&A expenses of $39.3 million and $109.1 million respectively, below the low end of our guidance ranges by approximately $0.7 million and $6 million respectively. Regarding our overall operating results, net loss for the quarter was $28.9 million or a loss of $1.06 per share in both cases, reduced from the immediately preceding quarter. Overall, use of cash for the quarter was $22 million, about the same as in the third quarter. Cash and investments as of December 31, 2018 were $211 million, positioning us well to execute on the strategies discussed earlier in this call.

Let me now turn to our outlook for 2019. We expect continued total prescription and revenue growth for the year based upon the benefits of GOCOVRI and the commercial initiatives to drive demand the Greg noted. Because we are still very early in the commercialization of GOCOVRI, we are not providing prescription or revenue guidance in 2019.

During 2019 on a quarterly basis, there may be some unevenness in the trajectory over coming quarters. Specifically, there are number of seasonal factors, I think that can impact all pharmaceutical companies that may affect our results in the first quarter and potentially into the second quarter, including the Medicare Part D donut hole and New Year coverage and plan changes with the deductible resets. In addition our new free drug trial program while expected to benefit, the amount of total prescriptions for the year could have a negative impact on paid prescriptions in the near term.

Turning to our operating expenses; we are providing the following full year 2019 expense guidance. We expect R&D expenses of $35 million to $45 million and SG&A expenses of $120 million to $130 million respectively, including stock-based compensation. Such stock-based compensation expense for R&D and SG&A is expected to be approximately $3 million and $15 million respectively.

I'll now pass the call over to Rajiv to comment on progress in our development program for ADS-5102.

Rajiv Patni -- Chief Medical Officer

Thanks, Alf. I will begin by reviewing our 570-patient Phase III trial in multiple sclerosis, which is enrolling very well suggestive we believe of a strong interest on the part of both the MS physician and MS patient communities. We had targeted completion of enrollment by the end of 2019 and as we reported in January, we now expect completion of enrollment in the first half of 2019 and topline data in the second half of 2019.

Since walking impairment is a central feature of MS progression and morbidity and dalfampridine is the only FDA-approved medicine to improve(ph)walking speed, the treatment of walking impairment remains a significant unmet medical need. Additional medicines with different mechanisms of action are needed to improve walking speed and improve other aspects of walking such as functional mobility and walking distance. We are very excited about the pending data from this trial.

I'm happy to announce the American Academy of Neurology, AAN, has accepted our abstract for presentation at their upcoming meeting in May 2019. In the Congress poster we, will present the study design and baseline demographics. First on the study design, I would like to remind you, we revealed the design with the FDA at the end of Phase 2 meeting and to emphasize that in the study, we are evaluating the effect of ADS-5102 versus placebo on walking speed as well as functional mobility and distance.

Functional mobility, which involves balance and transfer will be assessed by the time to up and go test. Distance will be assessed by the 2-minute walk test. Taken together, these measures constitute complementary measures of walking or ambulation; coupled with the 12 item multiple sclerosis walking scale, we seek to generate robust data with ADS-5102 using both physician assessments and a patient reported outcome.

There is one other study design feature I would like to draw your attention to. We are enrolling patients with reduced walking speed, which by protocol is defined as the following. The patients complete a 25-foot walk in 8 to 45 seconds. This broad population is composed of the expected 2 subgroups. Patients treated with dalfampridine in the past, that is the prior dalfampridine subgroup and those who were never treated with dalfampridine in the past. That is the dalfampridine naive subgroup.

In the baseline demographics page of the case report form, investigators will provide the reason dalfampridine was discontinued in the prior dalfampridine subgroup. Thus far, approximately 50% of the enrolled population were treated with dalfampridine in the past. This subgroup is reasonably sized as we expected.

Moreover, the statistical analysis plan includes pre-specified subgroup analysis. Based on our Phase 2 data, and of course subject to Phase 3 confirmation, we expect ADS-5102 to have a consistent treatment effect irrespective of prior dalfampridine use. In conclusion, our thesis on the potential role of ADS-5102 in walking impairment in patients with MS pending Phase 3 data remains unchanged.

Number one, a relatively large treatment effect in a broad population using complementary measures of walking. Number 2, approximately 30% to 35% of patients experiencing at least a 20% improvement in walking speed. Number 3, a treatment option in dalfampridine failures.

With that, I will turn the call back over to Greg.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thanks, Rajiv. So to summarize, we plan to continue to focus in 2019 on our two most immediate drivers of value to the patients and shareholders alike. Our current updated commercialization of GOCOVRI to benefit more Parkinson's patients and advancing the potential additional indication for GOCOVRI in multiple sclerosis.

As to the latter, we look forward to seeing top line results of the Phase 3 study later into the year and continuing to communicate with you about the commercial opportunity we see in this population, which we believe is substantial. Our experience commercializing GOCOVRI is preparing a dominance to effectively seize that opportunity as well.

We remain committed to our mission to bringing the benefits of our time dependent biology approach to an increasing number of patients with CNS disorders. I'd like to add my thanks to the entire Adamas team for their contributions this quarter.

And with that, I'll open the call up to questions. Operator?

Questions and Answers:

Operator

Thank you. (Operator Instructions) And our first question is from David Amsellem with Piper Jaffray. Please go ahead.

David Amsellem -- Piper Jaffray. -- Analyst

Thanks. So just a clarification question on the -- on 2019 and the outlook for GOCOVRI. So should I take your comments to mean that you are backing off of your prior guidance that prescriptions or share would double and I guess the second part of the question is, I guess in the absence of guidance, are there any kind of guide post that you could point us to regarding the trajectory of the product, particularly considering that you had provided certain clear markers regarding expectations last year. How should we think about that? Thanks.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

David, thanks for your question. Listen, as we started with third quarter call and reiterated today, our goal right now is to drive growth in TRX through the strategies I just described. We then implemented a number of these in the last few weeks at our National Sales Meeting as we came off the call and really spent the fourth quarter developing the materials and the new tools that we've rolled out to the field. So they are now all live in the field.

As we look back from the end of last year, as I mentioned on the call, we did see a slower rate of increase in the TRX and given that trend in the end of the fourth quarter and going into the first quarter are not going to provide any specific TRX guidance this year, or revenue guidance. So we'll continue to drive that growth through spreading the GOCOVRI message, broadening the GOCOVRI message around and it's typical early spring launch, we're really not in a position right now to guide quarter-over-quarter for this year.

David Amsellem -- Piper Jaffray. -- Analyst

Okay. And then as a follow-up. So you're talking about the off-time benefits and emphasizing that as part of the overall detailing message, I guess what I'm struggling with here is that OFF time are -- the benefit is in the label. This is not new. So why wasn't that part of the initial commercialization plan and given that it's already in the label and that presumably movement disorder specialists are aware of it, what kind of incremental benefit can you get out of that refined marketing message?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

So I think David, and I think you've experienced this in many, many, many launches, it is a learning experience and certainly we've done nothing to change the label for GOCOVRI. It was always positioned in Section 14 of the label. But what we've learned through the course of the three quarters of launch in addition -- in additional research, is just how to pull the messages together for our neurology count specialist to impact the broadest possible audience of physicians and particularly those movement disorder specialists who are less familiar with amantadine, who may predominantly employ dopamine sparing and dopamine adjustment strategies in their treatment of Parkinson's and as we learned during the launch, there are ways that we can better tell that story, put that story in our neurology count specialist hands.

We're also focusing on that just remarkable diary data sitting there in Section 14 that highlights the ability to reduce the off -- the ability to increase the functional on time. So it's really refinement, learning from what works and what works at the top, in the top neurology count specialist hands and then beginning to apply those learnings toward the rest of the -- rest of the US and rest of the territories.

David Amsellem -- Piper Jaffray. -- Analyst

I'll jump back in the queue. Thanks.

Operator

Thank you. Our next question comes from Jason Butler with JMP Securities. Please go ahead.

Roy Buchanan -- JMP Securities LLC -- Analyst

Hi, it's Roy on for. Jason. Thanks for taking the question. I just had one, if you could give us an update on the development plans for 4101? In 2019, your R&D expense guidance seems to life for our phase 3 start, that's the first question. Thanks.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

So with regards to -- thanks for the call Roy -- for the question Roy. In terms of 41, we continue to work on establishing the clinical supply and manufacturing and infrastructure for the program. We continue to focus on a loss of exclusivity date for VIMPAT in the early part of 2022 and we will be providing updates as we move that product forward into an announceable clinical study but until then, we're going to minimize our comments.

Roy Buchanan -- JMP Securities LLC -- Analyst

Okay. Sorry I had one more on 4101. Maybe you can't answer, but was there anything unique in the FDA feedback to the program versus other adjunctive treatment anti-epileptic, thanks?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

The feedback for, -- thanks Roy. The feedback that we're operating, actually Rajiv, why don't you handled that question?

Rajiv Patni -- Chief Medical Officer

As we previously reported, the 4101 development program is centered on an efficacy trial in the adjunctive setting in patients with refractory partial onset seizures.

Roy Buchanan -- JMP Securities LLC -- Analyst

Okay. Thanks Rajiv.

Operator

Thank you. Our next question is from Tim Lugo with William Blair. Please go ahead.

Tim Lugo -- William Blair. -- Analyst

Thanks for the question, was the backing off of your prescription goals for 2019 driven by something which occurred in the past two months and if so, should we be modeling some sort of reset in Q1 and can you also discuss your thoughts around GTN for the year? So we still expect high-teens or low 20s?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Tim, thanks for the question. The answer to the first question is, no. It's just based upon our ability to provide real revenue and -- real quarterly annual revenue guidance and TRX guidance. Nothing in the last two months, but really what we are seeing right now and how we're focusing all of our energies on driving that right now. So given the stage we are at launch, given the quarter-over-quarter fluctuations, we are not going to be providing guidance until those item stabilize. In terms of GTN Alf?

Alfred G. Merriweather -- Chief Financial Officer

Yeah. No change in our expectations Tim from what we've previously said.

Tim Lugo -- William Blair. -- Analyst

Okay, fair enough. And sequentially should we be expecting growth throughout the year in GOCOVRI in terms of just net product sales?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Tim, what we think the current trajectory, which is, it's just very difficult to model as you know four quarters into a launch. We're pleased with where it is overall. The strategies we are employing right now are specifically intended to drive TRX and adoption into the areas where we're seeing lesser performance. We're very enthused by what we're seeing in some really core areas as adoption has occurred both broadly and deeply, but we still need to make progress and we believe the tactics we're laying out are going to allow us to grow and we will be monitoring it and reporting it to you very carefully as the next couple of quarters proceed.

Rajiv Patni -- Chief Medical Officer

But just one very specific sequential aspect Tim, the Q4 to Q1 transition is affected by the things that we mentioned in our prepared remarks in terms of the sort of the Part D doughnut hole and insurance plan resets. So at the beginning of year, those certainly as with every pharma company should be expected to have an impact sequentially as you go from Q4 to Q1, on both revenue and potentially on prescriptions.

Tim Lugo -- William Blair. -- Analyst

Okay, thanks. I'll hop back in queue.

Operator

Thank you. Our next question comes from Ken Cacciatore with Cowen & Company. Please go ahead.

Ken Cacciatore -- Cowen & Company -- Analyst

Hey guys, thanks. Just couple questions here, just I'm a bit confused, maybe like some of the others, trying to understand first, if you could at some point give us new prescriptions that would be helpful, because I want to ask about tolerability. It seems you're talking about fluctuations are slowing prescription growth. I am just trying to understand is there any issue with tolerability and wanting to understand the retention of patients. That's just one question. Maybe you can discuss it for us.

And then maybe talk about some of the clinicians that are currently prescribing. Are you seeing them writing more or are you seeing some of these clinicians writing less? Just really confused by the commentary. At this point I think enough clinicians had touched the product that we wouldn't have a slowing and you all not being able to give us a little bit more color on the go forward. Thank you.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Several questions there Ken, Greg, thank you for those. Let me take the tolerability first. The tolerability we're seeing we comment on the last call that we attributed some of the prescriber experience to tolerability concerns and it really does show up in 2 places. One is physician adoption as they have their initial experience with GOCOVRI and we observed and I commented on in my prepared remarks that if a physician did not properly account for the renal impairment state and dosed with too higher but initial dose of GOCOVRI, that could and we noticed it did lead to some negative physician experiences.

If you recall, way back to the second quarter call, we talked about some of the trialing and the(ph)N equals one experiences and I would chalk some of those N equals one not being favorable to that. So we made a change, we learned, we made a change and we've seen a substantial increase in the utilization of the 68.5 just based upon the messaging we rolled out in the fourth quarter. So we think that one is proceeding well right now. We think there's a better dialog going on between our team in the offices to make that happen.

The other major measure of tolerability is how do people persist on the product and clearly we are seeing a level of persistence, a level of durability that matches nearly our clinical trial experience with GOCOVRI, which is very much in contrast to what physicians are used to with add on treatments in this area. They're just the evidence is very strong. So it's really not -- that's not the phenomena we're working with. The phenomenon that we are seeing and that we are driving hardest toward is where we have an understanding of the OFF dyskinesia access and the benefit that GOCOVRI can provide and it maybe the underlying scientific rationale in those areas where we see the greatest success we are attempting to learn as much as we can from those what our sales force is doing in those areas, what's happening in those geographic areas and really apply those learnings broadly to the rest of the country, and we're still in the process of doing that Ken and are focusing our energy right now on those lessons learned and bringing -- rolling out to the field those tools that we think will allow them to recognize better and message more successfully to drive that initial adoption.

Finally, we have altered our free drug programs so that people can experience GOCOVRI prior to completing, just making it more readily available prior to completing their coverage process and we think that may and hopefully be a great driver here over the next couple of quarters to get the TRXs growing to where they need to grow for us to achieve our goals.

Ken Cacciatore -- Cowen & Company -- Analyst

Okay, thank you.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thanks, Ken.

Operator

Thank you. And our next question comes from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad -- Bank of America. -- Analyst

Hi, thanks for taking my questions. So I just wanted to ask a little bit more about your plan to allow free trial for full 28 days, which you allow patients to extend beyond that?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

No it's a 28-day program Tazeen, at this time.

Tazeen Ahmad -- Bank of America. -- Analyst

Okay. And then wanted to get your thoughts also on how you're thinking about the overall ramp? So if you're not giving guidance on specific numbers on script growth, where do you think you can guide us to where the growth could be? Is the growth going to come from doctors that have already been prescribing it or are you looking more to growth from new prescribers?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Great question. It kind of ties into cans(ph). Where we're seeing adoption that we're pleased with in those areas, what we're seeing is both a breadth of adoption in an area, as well as the depth of adoption and physicians are continuing to prescribe GOCOVRI and we see them deepening that as is common in the launch of a new product. Where we need to be successful with the efforts that we're laying out that we've just introduced to the field in the last couple of weeks is in areas where the adoption is not as deep with the number of experiences that the physicians have had are not a significant as I'd like to be and we believe from what we've seen that the market is every bit as big as we thought it was based upon how the top areas are performing.

But in those areas where we're not seeing that performance, we really need to get you know if you will, the fire started, get that deepening beginning so that physicians and then neighboring physicians can see the impact that GOCOVRI can have, both on their reduction in dyskinesia, but their ability to manage these patients more effectively through the improvements and reduction and off time as well.

Tazeen Ahmad -- Bank of America. -- Analyst

Okay. And then the last question Greg is about your payments for your Royalty-Backed HCRP note, can you give us some details about that, for example, when it's due and the amount that you're paying out?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Tazeen, we make payments (inaudible) percent royalty on GOCOVRI revenues. There is also the first $15 million annually that was our(ph)revenues that come in the 2020 to 2025 timeframe. So the cash payments are the royalty base, revenue base, which makes it very flexible structure. There's a coupon rate of interest that is paid out of the royalties and that actually is picked in the first 9 quarters. So that interest is still being accumulating into principle for the time being.

So there is no fixed amortization schedule that originally had a term of 10 years, non-recourse to the company. So it's a very flexible revenue driven to the cash flows to be paid over time, but based on royalties, not on the fixed amortization schedule. So any royalties in excess of interest goes to pay down the debt.

Tazeen Ahmad -- Bank of America. -- Analyst

Okay, thank you.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thanks Tazeen.

Operator

Thank you. Our next question comes from Marc Goodman with SVB Leerink. Please go ahead.

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

Yes, hi. Two things. First, is the more aggressive free drug trial program really the major change with respect to how you're viewing 2019 and how you don't want to provide guidance on how things have changed a little bit with respect to prescriptions and paid prescriptions, I'm assuming because we're going to have prescriptions. They're just not going to be paid prescriptions, right. And then second question is can you talk about the milestones for this year with respect to IP and what we're going to be looking for as the year progresses? Thanks.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Mark, thanks for both of those. Let's make sure I can remember them both. With regards to the contribution of the free trial program, we've been reporting only paid prescriptions since we brought GOCOVRI to the market and so there is no question that a part of our belief today is driven off of how would that program roll out, how -- what percentage of prescriptions we'll use the free trial as a front-end to a paid prescription and so that does affect our viewpoint, not at the long-term opportunity.

We're taking this move, because we believe based upon what we've seen that we need to in order to expand physician experience with this drug provide them this. We think it will perform better than the Quick Start program that we had in place for the first 12 months of commercialization. And so that definitely factors in to what Q1 from a revenue and from a total prescription paid prescription is going to play out because of how many -- what percentage of folks received 28-day is unknowable at this point have --

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

And how long will that program be going on?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

I don't have any comments about that's going to go on as long as it works. So as long as we can drive prescriber experience, we will continue to have it. We will evaluate it of course, on an annual basis, but I will take a look at that as it's going on.

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

Hold on. Before we move on cash flow, I want to make sure just clear. So the donut hole, everybody understands that, planned changes, we all understand that that's across the industry and then your third comment was about the free drug trial program. So that really is the only thing that's a little bit different from how you would view the first quarter, if we went back three months or four months, is that fair to say or is there anything else?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Those are the -- those really are the major changes complemented with our efforts to drive TRX demand.

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

And that's also the reason why you mentioned that it may have some impact into 2Q because you may be keeping that program into 2Q as well?

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

It will be in place for this calendar year and we will evaluate it at the end of this calendar year for continuation next year.

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

Got it, OK.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

And then on the IP calendar the -- we obviously have two ongoing litigations, one with us Osmotica patent infringement and one paragraph IV with Sandoz. Obviously not going to comment specifically on the litigation, but the calendar is a mid-year Markman in the Osmotica litigation and the Markman and Sandoz litigation is in the first part next year.

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

Thanks.

Operator

Thank you. Our next question comes from Ram Selvaraju with H.C. Wainwright. Please go ahead.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thanks very much for taking my questions. Can you hear me.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Yes, hi Ram.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Hi, so just very quickly, few things for all of you I guess. Firstly, maybe the first set is for Alf. Could you give us a more clear breakdown of G&A versus sales and marketing spend as pertains to the guidance you've given for 2019 and then could you also give us an update on what the full current headcount is along with the current estimated headcount specifically in administrative positions please.

Alfred G. Merriweather -- Chief Financial Officer

Ram, we don't break out our expense externally but beyond SG&A. So I can't really give you much beyond the SG&A bucket to SG&A and R&D and the two categories that we report by. So I think if you look at the guidance, we're fairly consistent with last year. So the pattern of spending isn't going to be significantly different and say if anything that change will be in the commercial piece rather than administrative piece, but there's going to be some movement in both. So can't really give you any specifics on that.

And with regard to headcount we -- there is a -- but we do disclose that in the 10-K by certain categories. I would refer you to that first those details.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Okay, thanks. With respect to the free drug program, I know several other people had asked about this, but maybe you could give us some more color on whether we should be thinking about it in terms of you using it as a potential response to OSMOLEX or not and also if you have any color on how aggressively you're seeing Osmotica pushing OSMOLEX as a product at this point, that would be helpful.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

So with regard to the -- thanks Ram, with regards to the free drug trial program, we launched with a QuickStart program, which allowed us to kick in free drug, it's a -- the adjudication process on the claim had not progressed to completion by day 5. We could kick another into Quickstart and this was I would say, a bit of a minority approach, but it worked actually extraordinarily well in the areas that we had uptake for the first 12 months of the launch. But we did observe and we did listen to the field that there were physician's offices who were so accustomed to samples and other forms of programs that would precede there reimbursement experience that we felt it prudent to put this in place, and made that decision really without consideration and before considering anything with regards to the introduction of OSMOLEX. With regard to the introduction of OSMOLEX, we understand it has launched, we understand from our field that it is available, but we're not really seeing a whole lot update at this point or getting a lot of feedback at this point that that product is a hindrance to the adoption of GOCOVRI.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Okay, that's very helpful. And then maybe a couple questions for Dr. Patni. The dalfampridine experience subgroups that you alluded to in the context of the INROADS trial, I was just wondering, hypothetically if the INROADS trial reports positive data in this subgroup specifically, could you potentially use that as a way to offset or pre-empt or get around potential prior offer requirements in MS? I'm just asking for hypothetical. I understand its conjecture at this point, but would appreciate your perspective on that, since you mentioned that there is this subgroup in the trial.

Rajiv Patni -- Chief Medical Officer

So allow me to speculate if in fact the trial demonstrates an effect on those measures of walking that's similar or consistent in both of those patients who were on dalfampridine and not on dalfampridine in the past, then I would (inaudible) that, that would be a very useful point for the payer community and that's precisely why per my prepared commentary, this was a prespecified subgroup analysis.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Perfect. And then just on ADS-4101, just because of the wording in your press release and your comments today, I was wondering if you could kind of either confirm or reject the hypothesis that if VIMPAT loses exclusivity, before 4101 gets to the market. Does this or does this not destroy the rationale for the program per se?

Rajiv Patni -- Chief Medical Officer

Does not, meaning, we have always believed that the diurnal seizure pattern that we observed in our retrospective analysis of a large data set is real that by tuning out a tolerability component of the lacosamide pharmacokinetic profile, we could obtain higher doses at comparable tolerability or better tolerability at comparable doses and that, thirdly that VIMPAT upon the loss of exclusivity will grow disproportionately relative to other generic Antiepileptics. So we'll be in it -- if we conduct as Rajiv has described, one of the first head to head clinical programs of a novel time-dependent driven profile versus the current generic standard of care that it is a positive value proposition on its own merits.

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Thanks very much.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thanks, Ram.

Operator

Thank you. And our next question is from Serge Belanger with Needham & Company. Please go ahead.

Serge Belanger -- Needham & Company, LLC -- Analyst

Hi, good afternoon. Just two questions for me. First one is, have you noticed any changes to GOCOVRI coverage starting in January '19 and then the second one is kind of backed away from some guidance parameters here for the start of the year, just wanted to know if the 20% to 30% peak markets share that you've guided for in the past, remains intact here.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Serge, thank you for both questions. The answer to the first one is, no. We have not noticed any differences in the beginning of the year with payer coverage and we continue to monitor those carefully so that we are maximizing access to GOCOVRI for our patients in need. So that's number one.

On your second question, the 20%-30%, on the second -- look, we believe very strongly and are seeing it in the areas in which adoption has occurred early and deeply that GOCOVRI can achieve a position as this ideal adjunctive to levodopa at the point patients enter this phase of the journey where the threats or occurrence of dyskinesia begins to limit physician's use all forms of dopamine, levodopa and other dopamine adjunctives.

So we remain very excited about the long-term opportunity. I believe we've laid out in the call, the steps we're taking to educate physicians both in their understanding of this point mechanistically how the time dependency of this glutamate hyperactivity affects every day and the progression of these patients and it's our jobs here with the data set we have in place and further enrichment down the road to really bring this to product to where it belongs based upon the data that we've been able to generate for it and that's really where we're driving for its long-term.

So we will continue to evaluate how this grows quarter-over-quarter and it's a sense over the next couple years and I think have a better idea of where we're going to end up a couple of years down the road here, but we remain excited in what we're seeing and I think what folks are hearing on physician calls in those areas where adoption has occurred and is continuing, is suggestive of a very, very strong benefit that we're going to be able to see well into the future.

Serge Belanger -- Needham & Company, LLC -- Analyst

Okay. Thanks.

Operator

Thank you. And our last question is from Irina Koffler with Mizuho. Please go ahead.

Irina Koffler -- Mizuho. -- Analyst

Hi, thanks for taking the questions. I wanted to revisit prior guidance on the gross to net in the 25% to 35% range. So with this 28-day free drug program, are you going to jump into that range more quickly this year and will you be able to stay in that range or do you think you'll go above the higher end of it and also if you start contracting with Medicare Part D, do you think you'll exceed the higher end of that range or is it all still within this range contemplated? I think that's the first question.

And the second question, can you comment on the number of prescribers you have now? I believe you had about 1200 the last time you reported. So correct me if I'm wrong on that and just let us know where you are? Thank you.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

So Irina, on the gross to net, that 25% to 35% was always intended as sort of long-term framework, which would be at a point in time when likely we would have substantial contracting both on the Part D side and on the commercial side. So I think long term that's played out. I think it's -- where that ends up, depends on the level of contracting that we get into and we'll just have to wait and see. So that was a long-term thing not a short-term thing.

I think we indicated on the Q3 call that we expect it to be kind of in the high teens to low 20s for this year and that reflects the donut hole, and all those issues that we saw last year, included the donut hole, being bigger this year than last year. So that's no -- really, no change in that gross to net framework for either near-term or long-term.

And with regards to the number of prescribers, we ended up approximately 1600 at the end of the year Irina and a lot of what we've talked on, on the call today is really taking the subset of those who've got large practices and really driving the GOCOVRI message home and delivering greater depth of prescribers in that area and that in those centers as well as increasing prescribers in 2019.

Irina Koffler -- Mizuho. -- Analyst

Okay. Thanks.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Thank you.

Operator

Thank you. And ladies and gentlemen, this concludes our Q&A session for today. I would like to turn the call back to our CEO, Greg Went for any final remarks.

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

So, thank you, every one for your time today.

time today. We look forward to see you at conferences over the spring and giving an update on our continued progress on our next call in May. Thanks very much.

Operator

And with that, we thank you for participating in today's conference. This concludes the program and you may all disconnect. Have a wonderful day.

Duration: 51 minutes

Call participants:

Mike Bigham -- Investor Relations

Gregory T. Went -- Co-Founder, Chairman & Chief Executive Officer

Alfred G. Merriweather -- Chief Financial Officer

Rajiv Patni -- Chief Medical Officer

David Amsellem -- Piper Jaffray. -- Analyst

Roy Buchanan -- JMP Securities LLC -- Analyst

Tim Lugo -- William Blair. -- Analyst

Ken Cacciatore -- Cowen & Company -- Analyst

Tazeen Ahmad -- Bank of America. -- Analyst

Marc Goodman -- SVB LEERINK Partners LLC -- Analyst

Raghuram Selvaraju -- H.C. Wainwright -- Analyst

Serge Belanger -- Needham & Company, LLC -- Analyst

Irina Koffler -- Mizuho. -- Analyst

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