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Edited Transcript of NEOS earnings conference call or presentation 8-Nov-19 1:30pm GMT

Q3 2019 Neos Therapeutics Inc Earnings Call

GRAND PRAIRIE Nov 17, 2019 (Thomson StreetEvents) -- Edited Transcript of Neos Therapeutics Inc earnings conference call or presentation Friday, November 8, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Gerald W. McLaughlin

Neos Therapeutics, Inc. - CEO, President & Director

* Richard I. Eisenstadt

Neos Therapeutics, Inc. - CFO, Treasurer & Corporate Secretary

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Conference Call Participants

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* Jason Nicholas Butler

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Kenneth Charles Cacciatore

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* Louise Alesandra Chen

Cantor Fitzgerald & Co., Research Division - Senior Research Analyst & MD

* Rafay Sardar

BMO Capital Markets U.S.

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Presentation

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Operator [1]

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Good morning, and welcome to the Neos Therapeutics Third Quarter 2019 Financial Results Conference Call. Today's call is being recorded. (Operator Instructions)

For introductory and opening remarks, I am turning the call over to Richard Eisenstadt, CFO of Neos Therapeutics. Please go ahead.

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Richard I. Eisenstadt, Neos Therapeutics, Inc. - CFO, Treasurer & Corporate Secretary [2]

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Thank you. Good morning, everyone, and welcome to our third quarter 2019 financial results conference call. This morning, we issued our financial results and corporate highlights press release, which is available on our website at www.neostx.com. I'm joined on today's call by Jerry McLaughlin, our CEO.

Before we begin, I'd like to read the following regarding forward-looking statements. During this call, we will make statements related to our business that may be considered forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements concerning the commercialization of Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER oral suspension; the financial results of and outlook for our business, including with respect to net revenue per pack; script volumes and market share; the intended benefits for our commercial strategy; our expectations regarding the brand exclusivity for our ADHD products; our patient access program, Neos RxConnect; the capabilities of our technology and our research and development activities, including the timing and progress of our product candidates; future expansion of our product pipeline through business development activities; and our current and future financial position.

Forward-looking statements may often be identified with words such as we expect, we anticipate, upcoming or similar indications of future expectations. These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to the inherent risks associated with development and commercialization of our products and product candidates, that we may not realize the intended benefits of our new commercialization strategy and that preliminary or early indicators of performance may not reflect actual results of operations for any period. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our most recent SEC filings.

I'll now turn the call over to Jerry.

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [3]

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Thank you, Rich, and good morning, everyone. The team here at Neos has been executing on all fronts, and I look forward to highlighting our accomplishments within our commercial business and our continued progress toward achieving profitability, as well as our advancing development pipeline and lead candidate, NT0502, which we're developing for the treatment of chronic sialorrhea, commonly referred to as excessive drooling.

Specifically for our ADHD business, we reported growth in net product sales and net revenue per pack for our core 2 products: Adzenys XR-ODT and Cotempla XR-ODT. While overall prescription volumes dipped slightly this quarter, this is consistent with the change in commercial strategy we unveiled late last year. As we continue to push toward our goal of achieving profitability, it's important to note that for the fifth quarter in a row, we reported a reduction in our quarterly net loss, which reflects our focus on generating profitable prescriptions and driving continued gains in operational productivity.

Using our performance analytics platform, we are monitoring and assessing our commercial performance on an ongoing basis using real-time data. Throughout 2019, we have been continuing to enhance and refine these analytics, which has enabled better informed and more timely business decisions and tactics. Ultimately, we're using this information in support of our 3 key commercial objectives: first, to grow commercial prescription volumes; second, to increase our market share of prescriptions among our targeted prescriber base; and third, to achieve incremental increases in net revenue per pack.

Let me review what we are doing to achieve success in these key performance metrics. We are focused on effective marketing of our products within our target prescriber base. For Cotempla XR-ODT, we remain focused on pediatric and its adolescent ADHD patients between the ages of 6 to 17. Our Cotempla clinical data demonstrated a 61% reduction in a range of ADHD symptoms 1 hour after dosing with a significant response lasting a full 12 hours, which is very important for all ADHD patients, but particularly for our target patients who need an ADHD medication with both a fast onset of efficacy and a sustained 12-hour duration of effect, thus providing coverage during the school day and beyond for homework, sports and other activities.

For Adzenys XR-ODT, we are focused on adults with ADHD, the fastest-growing segment of the market, where we believe the effective ADHD symptom management offered by Adzenys XR-ODT will particularly resonate with physicians and patients.

We have a specialty sales force of approximately 75 territory specialists that are operating under specific objectives within a prescriber base that has the largest net revenue potential for our ADHD medications and the ability to help as many ADHD patients as possible. These efforts are focused squarely on accounts where we believe we can generate more profitable business.

Additionally, we are and will continue to expand the Neos RxConnect network. This best-in-class Neos-sponsored patient access program operates through a network of pharmacies and offers affordable and predictable copays to all commercially insured patients, regardless of their individual insurance plan. Neos RxConnect was created in early 2019 based upon extensive research and feedback from health care professionals, referred to as HCPs, about their frustrations in prescribing what they believe to be the most appropriate medications for their patients. Too often, medications are not available for patients at the pharmacy, or the copay is widely variable and unpredictable, resulting in patient complaints and callbacks to their HCP, which leads to frustration as well as additional work and hassle for the HCP and their office staff.

We designed Neos RxConnect to focus on addressing 3 core barriers: first, provide coverage for all commercially insured patients, regardless of their individual insurance plan; second, establish an affordable monthly copay that remains stable, allowing as many appropriate patients as possible to benefit from our ADHD medicines; and third, eliminate as many of the hassles as possible that frustrate the HCP and their office staff and prevent patients from receiving the intended medication. We believe our Neos RxConnect network truly differentiates both Neos and our ADHD brands from the competition, offers tremendous value to our customers, and we are very encouraged by both the growth of and the response to this program that we've seen to date.

During the quarter, we substantially expanded the number of participating pharmacies in the Neos RxConnect network. Also, with the addition of a large regional grocery store chain, we expect that there will be an excess of 450 pharmacies in the network at the end of November 2019, representing a 200% increase since the end of the third quarter of 2019. Furthermore, we expect to continue expansion of the network to support our customers and business.

Turning now to the specific commercial performance numbers this quarter. For Adzenys XR-ODT, net revenue per pack was $122, a 13% increase over the same quarter in 2018. And for Cotempla XR-ODT, net revenue per pack was $128, a 19% increase over the same quarter 1 year ago. This continued growth reflects the significant strides we have made in 2019 to shift to more profitable business channels and market segments.

Aggregate prescriptions for our core commercial ADHD products as reported by IQVIA decreased 6% in the third quarter of 2019 compared to the same quarter of 2018. We attribute this decline to our decision at the end of 2018 to move away from a volume-based strategy to a profitable growth strategy by better aligning our sales force and target prescribers to support long-term revenue growth. As part of this shift, when we announced our commercial reorganization in late 2018, one of our key objectives was to increase the productivity of our sales force and overall commercial organization. We have, to date, seen very meaningful improvements in this area. For example, when we look at total Neos ADHD prescriptions per sales territory, we have realized a 45% increase in the third quarter of 2019 compared to the third quarter of 2018, while at the same time, reducing overall sales and marketing spend by more than 1/3. We continue to believe that there's a lot of potential to grow these products into the future and look forward to reporting our progress.

Now turning to our development pipeline. We believe that NT0502, our lead development candidate, is a tremendous asset with the potential to address a high unmet need for the treatment of chronic sialorrhea, a condition where more than 1/3 of patients with neurological conditions such as Parkinson's disease, cerebral palsy, ALS and mental retardation exhibit excessive drooling as a result of an inability to sufficiently swallow saliva. Approximately 1.4 million patients in the United States experience this condition on an annual basis, and physicians report that they reserve treatment for only the most severe patients due to the treatment-limiting side effects and complex dosing regimens associated with currently available treatments. This results in too many patients being forced too often to suffer with the social stigma and meaningful clinical issues associated with this condition.

Let's take a moment to focus on the impact of excessive drooling in Parkinson's disease specifically. The challenges these patients face range from mild wetting of the pillow during sleep to embarrassing outpourings of saliva during unguarded moments. As it advances in severity, excessive drooling can be an indicator of a more serious difficulty with swallowing, known as dysphagia, which can cause an individual with Parkinson's to choke on food and liquids and can even lead to aspiration pneumonia. This is clinically important, as aspiration pneumonia is one of the leading causes of death in advanced Parkinson's disease patients.

NT0502 offers the promise of a new treatment option for these patients. This compound is a new chemical entity and a selected muscarinic receptor antagonist that, based on preclinical data, we believe preferentially engages receptors in the salivary glands relative to currently available treatments. We also believe that NT0502, if approved by regulatory authorities in the U.S. and elsewhere, will offer an important new treatment option to many of the millions of patients and their caregivers with the potential for both an improved tolerability profile and a more acceptable dosing regimen. We plan to develop NT0502 as an orally administered formulation that is likely to be dosed only once or twice daily without the complex titration requirements commonly seen with currently available treatments.

We are on track to initiate pilot PK work during the first quarter of 2020, and we are committed to advancing this potentially transformative treatment option as rapidly as possible. We will also seek opportunities where we can to leverage our existing commercial infrastructure with the acquisition of currently marketed products to complement our existing portfolio with a focus on CNS, as we believe there's a large opportunity to address symptoms associated with neurological disorders that exacerbate overall disease burden.

In conclusion, with 40% year-over-year revenue growth this quarter, strong momentum with our Neos RxConnect network, continued improvements in our quarterly operating net loss and exciting progress in our development pipeline, we believe Neos has a bright future ahead. We feel that our commercial and corporate strategy makes us well positioned for long-term growth, and I'm really proud of all the team has accomplished over the last year.

With that, I thank you, and I would like to call -- turn the call over to Rich.

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Richard I. Eisenstadt, Neos Therapeutics, Inc. - CFO, Treasurer & Corporate Secretary [4]

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Thank you, Jerry. As of September 30, 2019, we held $25.3 million in cash and cash equivalents and short-term investments. As previously announced, subsequent to the end of the quarter, in early October, we put in place a secured credit facility for up to $25 million in loans based on accounts receivable, which provides us with available funding for general working capital needs or investing in some of the initiatives Jerry outlined today.

Total product revenue for the 3 months ended September 30, 2019 were $17.5 million compared to $12.5 million for the same period in 2018, a 40% increase. Total product revenues for our ADHD portfolio were $16.2 million for the 3 months ended September 30, 2019 compared to $11.9 million in ADHD product revenue in the same period in 2018. Net product revenues for our generic Tussionex continued to increase, reaching $1.3 million in the third quarter of 2019 as compared to $600,000 in the same period in 2018, a 117% increase.

For the 3 months ended September 30, 2019, gross profit was $11.1 million compared to $5.5 million for the same period in 2018. Gross margin as a percentage of net product sales was 63% in the 3 months ended September 30, 2019, as compared to 44% in the 3 months ended September 30, 2018.

R&D expenses for the 3 months ended September 30, 2019 were $1.6 million compared to $2 million for the same period in 2018. Selling and marketing expenses were $7.1 million for the 3 months ended September 30, 2019, compared to $10.4 million for the same period in 2018. This decrease was primarily as a result of the impact of the restructuring of our sales and marketing organization, which occurred in the fourth quarter of 2018.

G&A expenses for the 3 months ended September 30, 2019 were $2.8 million compared to $3.5 million for the same period in 2018. Loss from operations was $400,000 for the 3 months ended September 30, 2019, an improvement of $10.1 million as it compared to the $10.5 million operating loss reported for the same period of 2018. Net loss for the 3 months ended September 30, 2019 was $2.1 million, or $0.04 per share, compared to $12.7 million, or $0.43 per share, for the same period in 2018. This represents the fifth consecutive quarter where we've reduced our quarterly net loss.

With that, we'd like to now turn to the Q&A portion of the call. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Louise Chen from Cantor.

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Louise Alesandra Chen, Cantor Fitzgerald & Co., Research Division - Senior Research Analyst & MD [2]

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Congratulations on the quarter. So I wanted to ask you what you think will continue to drive the uptake of your ADHD franchise. It's obviously done quite well. The revenue per pack has improved. How much more room is it for the revenue to improve and the channel distribution -- how should we think about the upside here?

And then on your sialorrhea product, what is your development strategy? Can you provide more details here? And in the past, you said that there were about 1.4 million patients that suffer from sialorrhea. And what's your expected rate of penetration? Are there any competitors for your product? What's the current standard of care?

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [3]

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Louise, thank you very much, and I appreciate the questions. With regard to our ADHD business, our focus going forward and we think where the drivers will be, will be an increased volume of prescriptions, increasing our market share in our target prescriber base. And you had mentioned net revenue per pack. We're thrilled with the progress we've made. As we go forward, we look to experience incremental gains in net revenue per pack. But the key drivers for our business will be the increase in prescriptions and market share.

As we look to the fourth quarter, as you know, we potentially would see a pullback in net revenue per pack in the fourth quarter, which is standard for this time of the year coming up, but we see incremental gains going forward.

Key drivers for our business will be the continuity now we have in our sales force after the changes we made last year, the strategy we have for our brands. And we believe Neos RxConnect is a really true differentiator and a key driver for our business as it addresses some of the large negative forces in the industry around patients getting the appropriate medications, right, the lack of affordable copay, unstable copays that are inconsistent and the major hassles that prescribers face in order to get appropriate medications to their patients. With the continued expansion of our Neos RxConnect network, the increased awareness among prescribers and acceptance and adoption of it, we think that will continue to be a big driver going forward.

With regard to sialorrhea and NT0502, as time goes on, we'll talk more about the clinical program. We are excited that we're on pace to enter pilot PK studies in the first quarter of 2020, and we will aggressively move the plan forward and share more with you as time moves on. We're very excited about the opportunity. This is a real, we think, a gem in that you have patients with very significant neurological disorders that have a real impact on their quality of life.

And the associated symptom of excessive drooling just really is extremely burdensome in an already difficult life. And unfortunately today, when we talk to physicians, is that they'll reserve treatment only for the most severe patients simply because of the fact of, and this gets into the other part of your question, the existing standard of care of older nonselective anticholinergic agents are really difficult to work with in terms of the dosing frequency and because of their non-selectivity, a lot of treatment-limiting side effects.

On the other end of the spectrum, you have a more invasive approach with botulinum toxins, but they could be difficult to administer in this population. So it really leaves a wide open field to expand the treatment of sialorrhea, if we can, in fact, improve the tolerability and improve the dosing regimen for patients. So we're excited about that going forward.

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Louise Alesandra Chen, Cantor Fitzgerald & Co., Research Division - Senior Research Analyst & MD [4]

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Can I squeeze in one more question here? If I -- you could...

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [5]

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Sure.

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Louise Alesandra Chen, Cantor Fitzgerald & Co., Research Division - Senior Research Analyst & MD [6]

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So you had given this guidance before. Gross margins in the 60s. Flat, low- to mid-teens R&D, what have you. Do those older metrics still hold? I didn't see a reaffirmation today. So I just wanted to get your thoughts there.

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Richard I. Eisenstadt, Neos Therapeutics, Inc. - CFO, Treasurer & Corporate Secretary [7]

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We haven't given guidance for next year yet on our expense. We don't give guidance on the revenue at this point, but they do still hold. I mean we had said we'd be in the mid-60s by the end of this year, and we are -- gross margin is a little bit more variable for our company than a lot of companies. As you know, companies that manufacture their own products, such as ourselves and there's several others out there, end up instead of having a basically fixed cost per unit of product you buy, you have your overheads that, some quarters, they get absorbed like in our second quarter of this past year, when we were running full out, making product for the back-to-school season. And then when you come off a little bit from that aggressive pace for the slower parts of the year, then you don't absorb your overhead. So there's a little more pressure on gross margins during those quarters.

But yes, we thought we'd be in the mid-60s. We think that it will continue to increase as our volume increases and as net revenue per pack also increases. And we think that it ultimately will get into the mid- to upper 70s with -- as these products continue to expand. That's probably a little ways off yet, Louise.

On expense management, we're probably, for G&A, going to continue at the same pace for sales and marketing. We've -- with our sales force now stabilized, we'll probably be able to invest in some additional programs to support that sales force. So although we've been guiding to the low- to mid-30s for the full fiscal year, we continue to expect, going forward, Louise, that, that's sort of the range that we'll be in.

And then for R&D, the one additional expense -- other than sialorrhea program, which does not cost us much money yet and probably won't even into next year, the one additional expense that we may be incurring is additional costs related to our post-marketing commitment studies related to Adzenys and Cotempla. We've not been spending all that much on that so far in 2019, but that could come back into play as we get into 2020 and beyond.

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Operator [8]

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And our next question comes from the line of Ken Cacciatore with Cowen and Company.

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Kenneth Charles Cacciatore, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [9]

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Just -- I don't know if you mentioned this in the prepared remarks, Jerry, but how many -- what percent of prescriptions are going through RxConnect at this point? And is it possible you'd give us some anecdotal feedback of what you experienced when a clinician starts utilizing RxConnect? I don't know if you have actual metrics, or can you give us some anecdotal thoughts?

And then lastly, now that you're establishing RxConnect, is there any reason why you'd want to revisit some of the locales that you exited? Or they just simply have bad coverage and even establishing RxConnect back in some of those other places just really wouldn't make sense?

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [10]

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Ken, thank you for the questions. And I'll pick them off one by one. We've increased the percentage of our prescriptions through the network through the course of the year. We're roughly about 20% now that are processed through the network. And to get to -- and we expect that to continue and increase, particularly as you've heard in the prepared remarks, we've increased the number of pharmacies in the network by over 200% just since October 1. And we would look to continue to expand that going forward. So we're really excited about the addition of a large, reputable regional grocery store chain to the mix that will really help our business.

And the reason -- we did a lot of work ahead of launching the network. But then over the summer, we conducted a number of advisory boards. And I could tell you why I was out in 10 different territories, met with a couple of dozen physicians, both those who have adopted and those who haven't. And really, the interesting thing is that once you differentiate Neos RxConnect from traditional copay offers and copay cards and programs and a physician tries the program, there is an instant surprise and almost an exceeding of expectations. So we go through a sort of initial trial and then adoption and then advocacy.

And frankly, when we were in Advisory Boards, those who had moved along the chain of experience with the network become true zealots. And what they say, this has fundamentally changed their practice, and it gets back to some of what I talked about in the prepared remarks. The system is broken for them. They want to prescribe certain medications that they think are clinically appropriate and give the best chance of success for the patient. Too often, the patient goes to the pharmacy -- a traditional pharmacy, and it's not available. Or they go and the copay is not what they thought, or it's different from 1 month to the next, or copay programs are not processed correctly. Those questions and complaints come back to the physician in their office and create an inordinate amount of work and tension in the office and then also negative feedback for our brand.

So what we find is that once folks get on board, they're sold and they become true advocates of the program. So our goal going forward is to increase availability of the network, awareness of the network, trial and adoption. Because we know once we get them there, it's really beneficial for the practice. And because we bring that value, it's going to be beneficial for our brands.

And in terms of geographies, we've already been doing that. We committed that we would -- when we made the changes in our target geographies, we would constantly look at the metrics, the analytics, the evolution of our business, the evolution of Neos RxConnect and revisit our targeted geographies. We've made slight tweaks, I'd say modifications in the middle of the year, and we will probably make a couple of more modifications as we enter next year as well. So we'll continue to look at that as the network evolves and our business evolves.

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Operator [11]

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And our next question comes from the line of Jason Butler with JMP Securities.

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Jason Nicholas Butler, JMP Securities LLC, Research Division - MD and Senior Research Analyst [12]

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Just a quick follow-up on RxConnect. Jerry, any color or insight you can give us to where that number -- that greater-than-450 number can go in 2020? Or any sense of how those pharmacies are distributed geographically? Are you still largely concentrated in any areas? Or are -- do you have pretty good coverage across the -- your -- where you have the sales force territories right now?

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [13]

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Yes. Jason, I mean we won't give specific numbers on how large we can see this going forward, but we are confident in our ability to continue to increase the number of pharmacies in the network. As I mentioned earlier, we're just in the process of adding a large regional grocery store chain. We'll go through that experience, and we'll see if there's more opportunities there. There may be other opportunities to take bigger leaps forward in terms of the -- expanding the network.

We still keep it pretty concentrated in the target geographies where we compete. I mean that's the goal, right? Is to provide our sales representatives and our targeted health care physicians and the patients with as many options within their geographic area. And the goal over time would be that it's well within reach of a drive for a patient.

The good news is, in many of these pharmacies, they do offer free mail order to patients so they don't have to be in close geographic proximity. But as we all know, the more you offer, the more -- the higher quantity of options you have and that are closer to their home or the physician's office, that's going to be more to our advantage.

So we continue to see meaningful growth in this going forward. We don't see an end date to that. We're very pleased. We believe the more we add to the network, the more opportunity it gives for our brands and for -- to add value for our customers.

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Jason Nicholas Butler, JMP Securities LLC, Research Division - MD and Senior Research Analyst [14]

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Great. Great. And then just one question on 0502. Can you just walk us through the formulation work that you've done since you got the product and then what the target profile -- PK profile you're looking to achieve and show in this Phase I trial is?

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [15]

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Yes. So we've been exploring a number of different formulations. We still have work ongoing. We have been leveraging our ion resin technology, our microparticle technology. We believe the technology can offer some advantages in very predictable clean kinetics.

As far as the dosing regimen, we're evaluating whether there's a need -- right now, the dosing regimens are at least 3 times a day. So we believe that if it's at a minimum twice a day, we think that will be a competitive advantage. It's sufficient for this market. We're exploring the opportunities and the options to take it to once a day as well. So -- but we believe we have a competitive advantage at either once or twice a day.

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Operator [16]

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And our next question comes from the line of Gary Nachman with BMO Capital Markets.

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Rafay Sardar, BMO Capital Markets U.S. [17]

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It's Rafay on for Gary. On a sequential basis, can you help us reconcile how sales for Adzenys and Cotempla increased 16% sequentially while net revenue per pack was up low single digits and Rx has declined low single digits?

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Richard I. Eisenstadt, Neos Therapeutics, Inc. - CFO, Treasurer & Corporate Secretary [18]

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Yes. I think I can help you. We don't book off of prescriptions. We book off of what we sell into the distribution chain. So it's actually true -- actual true orders. So the Rx growth doesn't necessarily mirror what the wholesalers do. Sometimes, we've experienced countercyclical movements. So we'll have sell-offs some periods we think they should be buying and buy-ins in periods we think they might be selling, but it's really based on wholesaler sales. And you can back into the number by taking the net revenue per pack into the total revenue to see what the units were for each quarter.

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Rafay Sardar, BMO Capital Markets U.S. [19]

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Okay. And can you also comment on the impact of any competitive dynamics in the quarter, specifically the launch of Ironshore's product and what impact that may have had?

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Gerald W. McLaughlin, Neos Therapeutics, Inc. - CEO, President & Director [20]

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Yes. This is Jerry. I'll take that question. We've seen that launch, and for the effort, there are several hundred sales representatives promoting that product. We have seen modest uptake in the product. We believe our product stands -- Cotempla, it competes in the methylphenidate space, so it's mostly direct competitor of Cotempla. We believe our product stands on its own merits with the clinical data. What patients want and need and what parents want for their children is a medication that works fast and lasts 12 hours. And we believe Cotempla XR-ODT really delivers what the market needs with a rapidly acting and sustained relief throughout the day. We'll see how that progresses over time with the competition. But on a per representative basis, we think we're holding our own from a competitive standpoint. And we don't see it as a major threat in the near term.

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Operator [21]

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And I'm showing no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude your program, and you may now disconnect.

Everyone, have a great day.