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Edited Transcript of VLRX earnings conference call or presentation 8-Aug-19 8:30pm GMT

Q2 2019 Valeritas Holdings Inc Earnings Call

BRIDGEWATER Aug 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Valeritas Holdings Inc earnings conference call or presentation Thursday, August 8, 2019 at 8:30:00pm GMT

TEXT version of Transcript


Corporate Participants


* Erick J. Lucera

Valeritas Holdings, Inc. - CFO & Secretary

* John E. Timberlake

Valeritas Holdings, Inc. - President, CEO & Director


Conference Call Participants


* Steven Michael Lichtman

Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst

* Gregory Peter Chodaczek

Gilmartin Group LLC - MD




Operator [1]


Good morning. My name is Sharon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Valeritas, Inc. Second Quarter 2019 Earnings Conference Call. (Operator Instructions)

Greg Chodaczek, Investor Relations, you may begin your conference.


Gregory Peter Chodaczek, Gilmartin Group LLC - MD [2]


Thank you, operator, and this is Greg Chodaczek with the Gilmartin Group. Thanks for participating in today's call.

Joining me from Valeritas is President and Chief Executive Officer, John Timberlake; Chief Financial Officer, Erick Lucera; and Dr. Jessica Barnes, a Consultant to the company.

Earlier today, Valeritas released financial results for the quarter ended June 30, 2019. If you've not received this news release or you'd like to be added to the company's distribution list, please send an e-mail to ir@valeritas.com.

Before we begin, I'd like to remind you that management will make statements during the call that are forward-looking statements within the meaning of the federal securities laws, such as our financial guidance.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. For a list and description of those risks and uncertainties, please see the Risk Factors section of the company's most recent annual report on Form 10-K, or subsequent quarterly reports on Form 10-Q with the Securities and Exchange Commission.

Valeritas disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. This conference contains time-sensitive information and is accurate only as of the live broadcast, August 8, 2019.

I will now turn the call over to John Timberlake. John?


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [3]


Thank you, Greg. Good afternoon, everyone, and thank you for joining us. I am very pleased with the company's performance during the second quarter, and especially with the robust growth and acceleration in our V-Go prescription volume.

For the quarter, we posted revenues of $7.5 million, representing growth of 16% over the second quarter of 2018 and a 17% sequential growth over the first quarter of this year.

As we discussed during our last earnings conference call, we believe the first quarter was our low watermark in terms of year-over-year revenue growth, and we expect quarterly top line growth will continue to increase each subsequent quarter of this year.

In the second quarter, we once again experienced strong volume growth, as total prescriptions grew in excess of 22% on a national basis. What is extremely exciting was our growth in our target accounts, where total and new prescription grew year-over-year by 36% and 42%, respectively.

As a reminder, target accounts represent those at V-Go prescribers in which our field-based sales team call on and support.

Total prescriptions from those accounts or prescribers in which our field team does not support our so-called non-targets decreased by 7% as compared to the same period in 2018. However, on a sequential basis, those prescriptions from these non-target accounts actually grew by 5%, demonstrating that our limited but effective non-sales force resources are helping maintain volume in these non-targeted accounts.

When you look at the sales territories that were in place at the beginning of the year, which you can consider can-do same-store sales, total and new prescriptions in those target territories grew in the second quarter, 33% and 34%, respectively, and that total volume from these target accounts represented over 85% of all of our target account for prescriptions.

The remaining volume in target accounts is being generated by our newly established sales territories.

Total and new prescriptions in target accounts across our newly established sales territories grew year-over-year by 58% and 112%, respectively, and they grew sequentially from the first quarter by 40% and 48%, respectively.

As a reminder, we added approximately 25 new sales territories in the first quarter, and all those sales representatives were on board and trained by the end of February.

During the month of March and April, the primary focus of these new sales representatives was getting a core number of prescribers in their target accounts full of experience with the V-Go with their own patients.

This was accomplished using V-Go through a V-Go early access program, leveraging our past initiation program learnings that demonstrated when we get a prescriber experience with multiple patients in a short-time period, that leads to faster prescriber adoption of V-Go.

Through April, the team enabled over 150 prescriber accounts to gain clinical experience with over 450 new patients. Because we saw a meaningful increase in June prescriptions in our newly created territories, we are confident this approach will lead to the newly established territories contributing to the third quarter results and contributing even more significantly to the fourth quarter results.

Our accelerating prescription growth rates are a validation that the programs that we have put in place and a strong execution of our field-based teams are producing strong results.

The second quarter was the first full quarter in which our V-Go Cares program has been in effect.

As a reminder, our V-Go Cares program integrates our patient and provider interactions under one umbrella, including, but not limited to, our field sales representatives, our field-based contract V-Go certified trainers, our live CDE patient coaches, our reimbursement support services and our integrated CRM system.

This past quarter was that first full quarter leveraging all these resources to enhance the patient experience through the prescription journey.

During the second quarter, we saw over a 40% increase in the number of patients trained by our contract field trainers, which allowed our sales representatives to ultimately get more patients trained in their territories and allow them to more time to sell.

Now 71% of the patients contacted by our live CDE patient coaching partner, Cecelia Health, enrolled into our coaching program. That's up from 64% in the first quarter.

And the number of patients who actually graduated through the coaching program nearly doubled in the second quarter, but we are very encouraged by the early results from all of our V-Go Cares programs components and believe they will enable our territories to accelerate their growth in the coming quarters.

I believe everyone who follows the pharmaceutical or the medical device sector or even listen to the national news knows that pricing pressures on drug and device manufacturing has increased.

As a reminder, approximately 95% of all V-Go prescriptions are actually fulfilled at retail or mail order pharmacy, which provides significant advantages to our patients with type 2 diabetes.

Our net price was negatively impacted throughout the first half of the year due to the increased pressure from intermediaries and managed care organizations. However, we are confident that the price erosion we experienced in the first half will stabilize, and we will actually expect a slight increase in our net price second half of the year based on our recent formulary wins.

The further reminder, on July 9, we announced in a Form 8-K filing with the SEC that V-Go was recently adopted in the commercial plan formularies of Cigna, Humana and CVS in the preferred position.

Inclusion on these formularies under the preferred status will not only allow patients easier access to V-Go, but it should also lower their out-of-pocket costs and reduce the company's co-pay assistant expenses.

This significant accomplishment, which we had factored into our 2019 plan and into our full year guidance from the beginning of the year, was the result of our continued generation of clinical and pharmacoeconomic data that has consistently demonstrated of benefits in the value of switching patients with type 2 diabetes from insulin injection therapy to the V-Go.

Over the next several months, our sales and reimbursement teams will continue to inform doctors about these recent formulary changes, and they expect to see positive incremental changes in our prescription trends starting in the third quarter and even more so in the fourth quarter as we continue to educate our target accounts with these formulary wins and the benefits to their patients.

Now this past quarter was another busy one for our clinical team.

During the quarter, positive clinical data in type 2 diabetes populations from that VERDICT study was presented at the International Society for Pharmacoeconomics and Outcomes Research, or ISPOR, at their annual meeting as well as the American Diabetes Association 79th Scientific Sessions.

Among the data shared was an analysis focused on adult population, 65 years of age or older with diabetes, which demonstrated a significant reduction of 1.5 in A1C over 5 months and resulted in nearly twice as many patients achieving evaluated A1C quality performance measures. Documented severe hypoglycemia or low blood sugar was also reduced in this analysis, which is a very important consideration in treating older patients with diabetes. It's also very important to note that over 50% of patients with type 2 diabetes are actually who are on insulin or actually over 65 years old.

Secondly, analysis was presented using V-Go to transition patients' straight from basal or background insulin regimen to basal bolus therapy using the V-Go. This approach supported a drop of 1.3 in A1C with V-Go without an increase in a total daily insulin dose from baseline and with 16% fewer prescribed concomitant medications and less reported hypoglycemia.

Lastly, data was presented in the first week of July from a retrospective study of the HealthCore Integrated Research Database, which used a comparative design to assess up to a year of health care administration claims, compare the outcomes in patients prescribed multiple daily injections of insulin to those using V-Go for insulin therapy.

Findings supported a less insulin dispense with V-Go and savings of approximately $1,300 per patient over the 6-month period for those patients using V-Go compared to being prescribed multiple daily injections.

Another great outcome of all of our clinical data was having the American Diabetes Association, or the ADA, include the use of a disposable patch-like device, such as V-Go, for instant delivery in its annual Standards of Medical Care in Diabetes 2019 published in the Diabetes Care.

Inclusion in this year's standards of care marks the first time such a device has been incorporated into the ADAs current global practice recommendation and provides further support for our managed care team and sales team as we continue to work towards the vision -- our vision to make the V-Go the standard of care for how patients with type 2 diabetes deliver insulin.

As we discussed during the first quarter conference call, we are supporting an ongoing investigator-initiated study to evaluate lower-cost insulin therapies administered via the V-Go to demonstrate similar glycemic or glucose control and risk of hypoglycemia, or low blood sugar, with significantly less expensive insulin.

Taking this one step further, in July, we began working with the FDA to expand our label to include the lower cost regulating the insulin in V-Go. We believe we can complete this necessary work and obtain clearance by the end of this year.

Now regarding our efforts outside the United States. Movi, our distributor in Italy, has completed a comprehensive process to gain reimbursement acceptance by province by province basis. And I'm very pleased to say that they were successful in gaining reimbursement in 20 of the 21 provinces. With us behind them, they now have started marketing V-Go more aggressively with their national field sales team.

Our distributors in Australia and New Zealand continue to market V-Go, focused on a cash-paying patient. And just last month, a U.S. endocrinologist, who is a very strong advocate for V-Go went to Australia to speak and share her experiences with the Australian physician community.

Other distributors in our network continue to work to gain reimbursement acceptance in their respective markets.

Our current annual guidance assumed a relatively small contribution from our international partners in the fourth quarter, given the fact that we have provided Italy with initial stocking at the end of 2018.

Turning to R&D. We remain on track to introduce our V-Go SIM, Simple Instant Management, Bluetooth connected accessory device with a pilot launch in each of our U.S. sales regions in the fourth quarter this year, with a full launch in the United States by the end of the first quarter of 2020.

As a reminder, the V-Go SIM is a snap-on accessory, which detects and record basil and bolus instant usage and wirelessly sends this information through the SIM smartphone app.

The V-Go SIM will be an optional accessory and V-Go will continue to operate as it does today, with or without the V-Go SIM.

And finally, we recently announced results from 2 preclinical studies demonstrating that our proprietary h-Patch wearable device was effective in delivering cannabidiol, or CBD, and apomorphine subcutaneously.

As a reminder, h-Patch is the technology behind the V-Go and V-Go is our branded name using that technology to deliver insulin.

We are very excited about these results and their potential opportunities to leverage and advance our h-Patch technology while generating non-dilutive capital and potentially significant future cash flows.

We have submitted this data to several major medical conferences, and we look forward to presenting our data later this year.

I will now turn the call over to Dr. Jessica Barnes, who will provide an overview of the results from our preclinical PK study using our h-Patch to deliver apomorphine subcutaneously and describe its potential market opportunity. Dr. Barnes?


Unidentified Participant, [4]


Thanks so much, John. I just want to reiterate that we feel the Valeritas h-Patch technology provides a proven and highly precise subcutaneous infusion delivery technology with over 20 million devices used by patients. It was designed to be a cost-effective and user-friendly option, and we believe it has broad applicability beyond just insulin delivery.

In continuing our efforts to look at novel valuable uses of the h-Patch technology, the company first chose to test cannabidiol, or CBD, and apomorphine, or apo.

The company and I discussed CBD on July 30, and today, I'll be discussing apo, a drug currently on the market for Parkinson's disease. The challenges with apo are very different from those of CBD, which we discussed last week. The response to a single dose of subcutaneously injected apomorphine is qualitatively comparable to that of oral levodopa. However, the incidence and severity of side effects, including nausea and vomiting, limit the frequency of apo use. The challenges here relate to a peak/trough phenomenon, common in roots of administration that provide relatively fast onset of activity.

In this case, in particular, apomorphine administered by subcutaneous injection is rapidly absorbed by the body. And blood levels of the drug peak quickly. With this rapid peak of drug, the nausea and vomiting are debilitating. Once the peak subsides, the therapeutic level of drug settles in where side effects are not problematic and symptoms improve.

Due to the drug's short half life, it is then eliminated from the system and a new dose needs to be administered with patients often requiring 3 to 5 injections each day.

In planning our strategy to leverage the h-Patch technology beyond diabetes, we wanted to pick therapeutics that would strongly benefit from the subcutaneous infusion route of administration and have a significant positive impact on a patient population. Apo provides Parkinson's disease patients with immense benefits and is an L-dopa sparing treatment strategy. But just as described, the side effect profile is often problematic.

The h-Patch technology provides a wonderful potential opportunity to eliminate peak/trough challenges. The continuous subcutaneous infusion design allows for slow and even dosing of apo, avoiding the rapid peak and drop of drug levels in the body, while providing therapeutic levels of the drug translating to better Parkinson's disease symptom control.

As a reminder, the h-Patch is a wearable device, continuously delivering drug into the subcutaneous tissue whereas apo is currently administered with an auto-injector for multiple subcutaneous bolus injections or in some countries, a bulky belt worn infusion pump device, inconvenient for both patient and caregiver.

Our apo proof-of-concept preclinical pharmacokinetic, or PK, study evaluated apomorphine delivered over a single 24-hour period using the h-Patch.

One dosing regimen, 10 mg for 24 hours was tested with PK evaluated at time points out to 48 hours from the start of infusion.

Our results show apomorphine levels were detectable in the blood within 2 hours of the beginning of infusion and gradually dropped off after completion of the h-Patch infusion at 24 hours.

We believe the h-Patch represents a unique delivery mechanism for apo, ideally partnered with a company whose forte is formulations with molecules prone to chemical instability.

These study results have been submitted for medical conference presentation this fall. The top line results of this proof-of-concept study are just like the CBD results, very encouraging and open the door for additional pilot studies that help demonstrate the value of Valeritas' h-Patch, which provides reliable, uniform dosing, allowing practitioners and patients an additional level of comfort and peace of mind.

As we look to the future, we will continue to design and execute capital-efficient proof-of-concept studies that leverage the h-Patch features to show the breadth and impact of potential customer and consumer-friendly products.

I will now turn the call back over to John Timberlake.


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [5]


Thank you, Dr. Barnes. I hope that everybody follows the huge value we see in the use of our h-Patch technology.

I will now turn the call over to our CFO, Erick Lucera.


Erick J. Lucera, Valeritas Holdings, Inc. - CFO & Secretary [6]


Thank you, John, and hello, everyone. My comments today will focus on revenue, margin improvement and expenses.

Our full financials will be available in our 10-Q, which will be filed later today with the SEC.

In the second quarter of 2019, revenue increased 16% to $7.5 million as total V-Go prescriptions grew 22% versus the second quarter of 2018 and even more exciting, grew 36% in our target accounts.

Gross profit in the second quarter was $3.7 million versus $3.1 million in the second quarter of 2018.

Gross margin for the second quarter was 49.5%, up from 47.6% in the prior year, driven primarily by higher sales volume.

Total operating expenses for the second quarter were $16.8 million, up $3.7 million versus the same period in 2018, driven primarily by a 50% increase in the number of sales reps, which went from 50 to 75, the integration of over 80 field-based V-Go certified trainers and live remote patient coaches into our V-Go Cares program and promotional spending to targeted health care providers.

Our operating loss for the quarter was $13.1 million compared to the operating loss in the second quarter of 2018 of $10 million, driven by the increase in operating expenses, as previously described.

Turning to guidance. Based on our second quarter results and prescriptions through July, we are tightening our full year revenue guidance to a range of $31 million to $33 million, representing an annual growth of roughly 22% at the midpoint of the range.

Based on the prescription trend we experienced through July, we remain confident that our revenue growth rates will continue to accelerate throughout the year and return to 30% year-over-year growth in the second half of 2019 due to our V-Go Cares program and anticipated increased contributions from our new sales reps.

We anticipate gross margin to trend upwards throughout 2019 as our revenue growth rate accelerates in the second half of the year.

We expect to exit the fourth quarter of 2019 with gross margins between 52% and 54%.

At this point, I would like to turn the call back to John for closing comments.


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [7]


Thank you, Erick. As I stated at the beginning, I am very pleased with the results of our second quarter, especially with our volume growth. And with our revenue growth now we accelerated due to the programs we have put in place over the last 6 months.

Based on the increase in the prescriptions we have experienced through July, we continue to believe the revenue growth we experienced in the second quarter will continue to strengthen and accelerate throughout 2019.

I'm also very proud to say that Valeritas surpassed a very significant milestone in the second quarter as we sold our 20 millionth V-Go insulin delivery device in the United States.

I would like to acknowledge and thank all of our employees who work tirelessly to help thousands of patients simplify their lives and improve their glucose control for the use of our highly effective, simple-to-use insulin delivery device.

With that, operator, could you please open the call for questions.


Questions and Answers


Operator [1]


(Operator Instructions). Your first question comes from Steven Lichtman with Oppenheimer & Company.


Steven Michael Lichtman, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [2]


John, you mentioned a number of metrics, which is really helpful. But I just wanted to circle back on the sales force. Can you talk a little bit about the 25 new reps, the impact they're having? And any early metrics you can provide on that front?


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [3]


Sure. Thanks, Steve. So I know I did throw a lot of metrics out there. So I think the most important thing is we look at our target accounts and as we mentioned, they grew, overall for all our target accounts, 36% year-over-year. If you look at our new reps versus our existing reps or kind of the same-store reps, the same-store reps generate about 85% of all that volume in the target accounts and our new territories generated about 15%. So again, you can see the volume is still coming from the existing team. If you just look at the existing team and just look at they did in their target accounts, they actually did grow their own accounts really close that same number, around 34%. So the existing sales are really strong still. So the new guys, the new team who have been in place, as I mentioned, at the end of February training, really started selling only in about May, with the focus on our early access program, they grew their business by about -- they grew the business -- over 40%, I apologize. They grew 58%, and in new access, they grew 112%. But again, they have a smaller denominator. So again, they make about 15% of our volume, Steve, and they're going to show that growth. And really, most of that growth came in the month of June, because that's when they were really focused on generating prescription business after their early access program. So we'll see that they made a very small contribution in the first -- in the second quarter here. They'll make a larger contribution in the third quarter, and I think even a much greater based on -- looking at our past launches with our sales teams, they'll make even a bigger contribution in the fourth quarter.


Steven Michael Lichtman, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [4]


Got it. So as you mentioned, given that plus the Cares program, you mentioned prescription trends remained strong in through July here and sounds good heading into the back half. Can you walk through a little bit more on the slight price offset? And it sounds like you have pretty good visibility on that stabilizing with the new reimbursement wins. Can you just walk through the pricing aspect again?


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [5]


Sure. So through the first half of the year, we actually had about a net price, not a listing price, but a net price to our bottom line of a negative 0.2. It was decretive to our revenue in the first half of the year, and that is due to the ongoing pressures both by the intermediaries, through the kind of all the people in between from the time we ship product, the time it actually gets to our patient and the managed care organizations. So with our contracts that we've mentioned, we had a couple in over the year, and we named 3 additional wins in commercial in July. What that will do is how it helps us in our net price is the reduction in the co-pay cost. So if someone -- if a patient is paying a higher co-pay with a higher tier formulary position, we have a higher out-of-pocket cost to organization through the co-pay assistance programs. By getting the patient to the lower co-pay, we have reduction in those co-pay cost assistance programs, and that will be greater and offset the incremental increase in our rebates that took us to get those positions.


Steven Michael Lichtman, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [6]


Okay, got it. And then you also through -- at a number of metrics around the Cares program, in general, can you talk about how it's increasing sort of overall patient flow? Because I think that was sort of one of the big targets of grabbing people from their connections through the website and then accelerating patient flow. Can you talk a little bit about how -- what you're seeing so far on that front?


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [7]


Yes. So as a reminder for everybody, the really -- the Cares program is really, as Steve said, it's getting patients aware of the product, helping them understand the product, getting them through training, supporting them after they've been trained and on our products. So it was kind of what we call the before a prescription filled and then the post prescription fill, which helps us with persistency in long term retention. So I think in the second quarter with that fully operating, we sent over, I don't know the exact number, but over a 1,000 new patients that went through that cycle. And again, not every patient goes through that. This is kind of incremental what we're trying to get to. So we brought in over 1,000 patients into that program and over half of them completed it, completed means they've gone through the beginning, they've been trained, they had a product, and we've helped them through up to their first refill. And that's kind of the standard is really helping to get to that first refill. So we believe this is really going to help us on 2 fronts, not only get more patients through the front end of that what we kind of call the funnel, but even more importantly, make sure their experience is very good in the first 30 days, so they get that first refill, have very high success, and therefore, that will lead to longer-term persistency. And again, I don't have data yet longer-term because we haven't had it in place. So I can't tell you what it's done 3, 4, 5 months later. That's the goal that we believe will provide longer-term persistency.


Steven Michael Lichtman, Oppenheimer & Co. Inc., Research Division - MD and Senior Analyst [8]


Got it. And then lastly, John, or Dr. Barnes, if she is still on, can you walk us through sort of what additional steps you can take on either the CBD or the Parkinson's side prior to initiating partnerships? Is there some additional data that we could see from you guys in the coming quarters?


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [9]


Yes, I'll do initial comment. And Dr. Barnes can add into it. So at a macro level, Dr. Barnes can explain the first set of the proof-of-concept. From our point of view, we've already had inbound interest. And this is the important thing. Over the years, we've always had a kind of a inflow of interest to use our technology, but it's been -- we've been reactive and it's usually been a lot of times, just not the right molecule for our device or would require us to make major changes -- physical changes to our product, which can be done, but it's a distraction to our organization. The effort that Dr. Barnes has really helped us lead is to pre-identify molecules and drugs that would benefit greatly, as she has explained, with our technology, but very importantly, from my point of view is, we can actually use our existing 3 SKUs that we have already developed to do initial testing with any partner because we pick products that we can get that next phase without having to make modifications to the device.

I'll let Dr. Barnes add some more to your question.


Unidentified Participant, [10]


Thanks, John. So I'm going to break this into 2 sections, right? I'll talk about the apo first because that's new on this call, and then we can circle back on the CBD. So the apomorphine molecule is quite a bit finicky, and there have been some other companies that have spent quite a bit of time and money and efforts working on the apomorphine formulation to get something that really is more concentrated and stable. So at this point, from our perspective, we probably won't do more studies with respect to apo until we identify some partnerships that are working on formulations that make sense for us to go and do a kind of a study where both of us are contributing.

We will definitely be presenting that data this fall. The data has been submitted to several medical meetings, and we're trying to figure out once those acceptances or declines come in, which makes the best sense for the conference to go to, particularly to get that preclinical data in front of the right audience to really generate that interest and have people be able to see the value of a worn device. The real value here is that currently the large belt-driven infusion devices that are pushing quite a large volume, really can only be worn certain parts of the day, whereas the h-Patch technology is much more available to that 24-hour time period. And so that's really where the apomorphine sits, it's really the proof-of-concept.

On the CBD side, we've talked internally about the potential next steps. And as John said, we're starting to see some significant interest from the outside. And so what we want to do is try to stack the deck and provide as much information and data that we can to draw interest in. Separate from apomorphine, which is kind of a more unstable molecule, the CBD is pretty stable, and we have a pretty nice formulation that we're working with. So we're investigating some additional opportunities to go back into a preclinical model. And maybe even beyond that to show something that's a little bit more results driven rather than just really the chemistries about delivery and the PK.

So we're talking internally about what those next steps are, there's some possibilities that we're discussing. And we're just trying to make sure that whatever steps we take are the best and the most appropriate for the business.


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [11]


I think it's important to note that -- I think, Steve, important is, again, we're not looking at capital intense or very expensive type outflows from the organization. I think we can do very efficient things. Even with the CBD, we talked -- Dr. Barnes talked about to show that next step. And ultimately, again, our intention is not to be a CBD sales and marketing company, for example, our apomorphine, but it's to leverage our technology to help a drug company bring a much better regimen to the marketplace, in return we would have economic benefits from that as well.


Operator [12]


At this time, I will turn the call over to the presenters.


John E. Timberlake, Valeritas Holdings, Inc. - President, CEO & Director [13]


Okay. Well, thank you, I really appreciate everybody joining us on our call today. As I mentioned, I'm very excited about our growth that we experienced in the second quarter and really excited for the things we have in place for continuing to accelerate our growth in the third and fourth quarter. So thank you, again, and have a good evening.


Operator [14]


This concludes today's conference call. You may now disconnect.