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Q3 2023 Fennec Pharmaceuticals Inc Earnings Call

Participants

Robert Andrade; CFO; Fennec Pharmaceuticals Inc.

Rosty Raykov; CEO & Director; Fennec Pharmaceuticals Inc.

Adrian Haigh; COO; Fennec Pharmaceuticals Inc.

Chase Knickerbocker; Analyst; Craig-Hallum Capital Group LLC

Noreen Qubier; Analyst; Capital One Securities

Charles C. Duncan; Analyst; Cantor Fitzgerald & Co.

Dipesh A. Patel; Analyst; H.C. Wainwright & Co.

Presentation

Operator

Good morning, ladies and gentlemen, and welcome to Fennec Pharmaceuticals' Third Quarter 2023 Earnings and Corporate Update conference call. (Operator Instructions) As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Fennec's Chief Financial Officer, Robert Andrade. Please go ahead.

Robert Andrade

Thank you, operator, and good morning, everyone. We appreciate you joining us today for Fennec Pharmaceuticals' Third Quarter 2023 earnings conference call, during which we will review our financial results as well as provide a general business update. Joining me from Fennec this morning is Rosty Raykov, our Chief Executive Officer, and Adrian Haigh, our Chief Operating Officer.
Before we begin, I would like to remind you that during this call, the Company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. References to these risks and uncertainties are made in today's press release and disclosed in detail in the company's periodic and current event filings with the Security US Securities and Exchange Commission.
In addition, any forward-looking statements made on this call represent our views only as of today. And should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking state. This conference call is being recorded for audio rebroadcast on Fennec's website, www.fennecpharma.com. We'll be available for the next 30 days and with that, I will now turn the call over to Rosty Raykov.

Rosty Raykov

Thank you, Robert, and good morning, everyone. The focus of today's call is to review updates on the ongoing commercial launch efforts underway for PEDMARK in the United States and review our global opportunities, including the recent approval in the UK and Europe. Further, we will detail our third quarter 2023 financial results, all of which were outlined in our earnings press release issued this morning. Prior to this call.
We are very pleased to report that PEDMARK delivered strong third quarter revenues of $6.5 million, a 96% increase over the second quarter of 2023. Further, this represents more than tripling our revenue since Q1 2023, from $1.7 million reported in Q1. We continue to be very encouraged with the progress we've made with PEDMARK's launch to date, and we are even prouder of the work that is underway to sustain this momentum throughout the remainder of 2023 and as we head into 2024.
As a reminder, PEDMARK was approved by the FDA in September of 2022. It is the first and only FDA-approved therapy to reduce the risk of cisplatin-induced hearing loss in pediatric patients one month of age and older with localized non-metastatic solid tumors.
We launched PEDMARK in the US. in October 2022, so we're just marked on our one-year anniversary since PEDMARK became commercially available. We're very proud of the team's ongoing commercial progress and our enthusiasm for PEDMARK and passion for supporting the pediatric college community continues to grow.
In fact, the team had a busy fall season, engaging in robust discussions with key opinion leaders on the issue of cisplatin-induced ototoxicity. We recently attended the International Society of Pediatric Oncology Annual Meeting, the Connective Tissue Oncology Society Annual Meeting, the Health Connect Partners 2023 Fall Hospital Pharmacy Conference, and the Association of Pediatric Hematology Oncology Nurses Annual Meeting, where we saw and heard firsthand about the importance of our work.
These conferences followed on the heels of an event where we sponsored the Hillsdale College Pediatric Cancer Awareness Day football game, in which proceeds from the day went to support multiple organizations engaged in the fight against childhood cancer. These are just a few examples of how we are continuing to build strong relationships within the community.
In terms of commercial efforts to establish PEDMARK as a necessary complementary agent when prescribing a cisplatin-based therapy for a child with a localized non-metastatic solid tumor, our sales force is currently targeting 200 pediatric hospital centers, including COG, NCI, and NCM institutions across the US. that drive 80% of cisplatin use.
Based on these efforts, we estimate that approximately 20% have written a PEDMARK prescription. In fact, we believe that some of the leading centers have already prescribed more than 25% of eligible patients under their care. We're highly encouraged by the third quarter's double-digit growth in new pediatric hospital centers prescribing PEDMARK, and with the consistent repeat orders from existing accounts.
Further, we continue to see success in large academic centers, including continuous formulary approvals at several major pediatric hospital centers in the third quarter. Geographically, all of our territories have seen HCPs prescribing PEDMARK, and we have seen highly encouraging adoption within our target accounts that are increasing over time. In terms of patients, we have seen utilization across several tumor types, including hepatoblastoma, osteosarcoma, and germ cell tumors.
PEDMARK also continues to have broad and favorable payer coverage, as evidenced by payer-approved US. prescription claims with commercial insurance plans and Medicare Part D plans. As a reminder, we estimate among current PEDMARK patients, approximately 50% are commercially insured, with another 50% insured through government-sponsored programs.
The remainder have no or limited insurance coverage and may be eligible to receive PEDMARK at no cost to them under our patient assistance program, Fennec-Heers, which is a comprehensive, single-source program designed to connect PEDMARK patients to both patient financial and product access support.
With regard to expanding in Europe, we announced in June the e-mail approval of PEDMARK, which will be marketed under the name PEDMARC-C. PEDMARC-C will be the first and only treatment approved in the European Union to address this area of significant medical need. Further, in October, the Medicines, and Healthcare Products Regulatory Agency, or MHRA, in the UK., approved PEDMARK-C for the same indication.
Following up on our strong UK. peer opinion leader relationships, earlier this fall, we presented background and data on PEDMARK-C at a hearing therapeutic summit organized by RNID, with the UCL Institute and UCLH Biomedical Research Center in London. We continue to evaluate the best commercial pathway for the company in Europe and the rest of the world, either go it alone or with a partner.
Whatever pathway we select, we see Europe as another significant opportunity to create shareholder value. In closing, I want to reiterate the focus of our commercial strategy remains on executing the following. Establishing PEDMARK as a necessary complement agent when prescribing a cisplatin-based therapy for a child with localized nonmetastatic solid tumor, minimizing the barriers to access, and rapid responses to product questions, and establishing Fennec as the premier partner of choice among the pediatric oncology community.
With that, I will now turn the call over to Adrian, who has been on the board of Fennec since 2014 and joined the executive management team of Fennec in August of this year as chief operating officer. Adrian will share his observations and opportunities after his first 100 days on the job. Adrian, over to you.

Adrian Haigh

Thanks, Rosty. Indeed, it's been an exciting first few months since joining Fennec full-time as chief operating officer. As expressed on the call in August, I've got two priorities. The first is accelerating the adoption of PEDMARK in the US., and second, preparing PEDMARK for launch in Europe as we continue to evaluate the strategic direction of the business. As Rosty mentioned, adoption of PEDMARK in the US continues to make solid progress.
We continue to work with a number of key pharmacy committees and key academic centers, ensuring that PEDMARK is included as standard of care in all treatment protocols. We benefited during the third quarter from growth in adoption and, importantly, repeat orders and growth from existing customers and hospitals. Additionally, we won pharmacy and therapeutics committee approval at several leading institutions. Further, we're now putting increased focus on the opportunity offered by PEDMARK's NCCN endorsement in adolescents and young adults, AYAs.
And, importantly, we have a category 2 rating, a 2A rating, which was achieved earlier this year. To support this effort, during the third quarter, we strengthened our sales team with several new hires who have significant expertise in selling into community oncology centers where many of the AYA patients are treated.
Additionally, we've strengthened our focus on managing the relationship with group purchasing organizations, and we've signed contracts with a number of leading groups. GPO endorsement will support the use of PEDMARK, not only in the pediatric oncology centers, but in these community hospitals, infusion centers, and administration in the home.
We also will be partnering with a leading specialty pharmacy to provide home administration and, importantly, white bag delivery to the hospital with direct billing to the insurance provider or to Medicaid. Turning to Europe, we're making steady progress in the preparation for the launch of PEDMARK in the first half of 2024. Some of these activities include the submission and approval of the German NUB price application. This was done in October 2023, and it was accepted.
This allows us to sell PEDMARK in German hospitals during 2024. The health technology assessment dossiers required for price approval are now at an advanced stage of development and will be submitted in quarter one in Germany, the UK, France, Italy, and Spain. Additionally, we've had early and favorable interactions with several key countries regarding pricing and reimbursement.
And as Rosty said, we recently received MHRA approval in the UK. With that, I'll turn the call over to Robert to go over the financials for the quarter. Robert?

Robert Andrade

Thank you, Adrian. Our press release contains details of our financial results for the third quarter of 2023. They can be viewed on the investors and media section of our website. Rather than read through all of those details, my comments today will focus on some key financial results, and we anticipate filing our 10-Q this week with further details.
The company recorded net product sales of $6.5 million in the third quarter of 2023 versus $3.3 million in the second quarter for a net revenue growth of approximately 96%. As mentioned by Rosty, net revenue has more than tripled since Q1 2023, and we look forward to building from the momentum in the first nine months of 2023.
To reiterate remarks from Rosty and Adrian, we are pleased with the growing acceptance of PEDMARK within healthcare providers during the third quarter and with the recent hospital formulary access approvals continuing early in Q4. Overall, our OpEx during the period has remained well controlled and within anticipated ranges.
General and administrative expenses for the third quarter of 2023 were $3.8 million, which compares to $5.3 million in the second quarter of 2023. The decrease is largely attributable to lower non-cash employee remuneration and lower administrative and legal expenses. As stated in previous quarters, the company began recording, selling, and marketing expenses when it expanded its payroll to include an internal sales force.
Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages and commissions, and out-of-pocket expenses. The company recorded $3.3 million in selling and marketing expenses in the third quarter of 2023 compared to $2.3 million in the second quarter of 2023 as the company increased marketing expenses in the US and pre-commercial activities in Europe. We expect these levels to continue in the fourth quarter, but overall OpEx to be consistent with Q3 when including GNA.
R&D expenses are negligible as the company reduced research and development costs when it received FDA approval of PEDMARK. The majority of traditional R&D expenses associated with PEDMARK are now recorded as GNA or capitalized into inventory and eventually recorded to cost of product sales.
Our GAAP net loss for third quarter of 2023 was $1.8 million or $0.07 per share compared to a GAAP net loss of $5.4 million or $0.21 per share in the second quarter of 2023 and $8.1 million or $0.31 per share loss in the second quarter of 2022. As evident in the results, we have made significant progress in getting closer to breakeven on a GAAP-EPS.
And finally, our cash position. We ended the third quarter with approximately $12.4 million in cash, cash equivalents, and investment securities, which includes $25 million of capital drawn under our existing Petrocorp convertible debt facility. Our cash burn for the third quarter was approximately $2.5 million compared to $3.3 million in the second quarter of 2023. As a reminder, we remain focused on reaching cash flow breakeven in the US as revenues grow and look forward to reporting our Q4 progress in 2024.
Finally, we believe our available capital, when coupled with PEDMARK revenue assumptions, will give us sufficient capital to fund our operations through at least the next 12 months. And operator, with that, we are ready for questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, if you have a question or comment at this time, please press star one on your telephone. If your question has been answered, you wish and with yourself from the queue, please press star one. Once again, we'll pause for a moment while we compile our Q&A roster. Our first question comes from Chase Knickerbocker with Craig-Hallum. Your line is open.

Chase Knickerbocker

Good morning, guys. Congrats on the next quarter here. Maybe just to start for me, if we look at the model, it seems to me that you're executing to your plan on launch, where it seems like the initial expectation was cash flow breakeven at Q4 this year. Looking at the model with revenue growing nearly 100% again sequentially, you would need either, drastic deceleration in that revenue or meaningfully elevated OpEx to not post positive cash flow from operations or, you know, positive operating income in my model.
You know, that paired with the strong commentary on center penetration, you know, penetration within some of those centers, seems like breakeven is the right way to think about the business in Q4. Is there anything that you would caution me on, you know, on the go forward that I should be thinking about when I think about the model?

Adrian Haigh

Yeah. Hi, Chase. Good question. Perhaps Robert can answer that.

Robert Andrade

Yeah, thanks, Chase. Yeah, as stated, our OpEx during the period has remained well controlled and within, you know, previously guided ranges. For the third quarter specifically, if you look at our OpEx, it was roughly $7 million to $7.5 million in cash expenses. So, based on those Q3 results, we are on our way to getting to breakeven. Of course, this does exclude an EU launch, which, as we've mentioned, we are evaluating.
But further, we feel comfortable that our existing cash, when coupled with PEDMARK revenue assumptions in the quarters to grow, will give us sufficient capital to fund our operations to cash flow, breakeven, and positivity. That's what we're working towards.

Chase Knickerbocker

Great. Thanks for the call there. Maybe just two on Europe for me as well. Maybe help investors think about the frameworks that inform, you know, decision on whether to partner or go it alone. Is it in terms of a licensing deal? Is it, you know, the royalty level? Is it the money up front?
And then, I guess, paired with that, just what geographies within Europe should we think about from a country perspective generating the most meaningful volume within, you know, the first 12 to 18 months of launch that, you know, the UK and Germany? Just kind of more color there.

Robert Andrade

Yeah, thanks, Chase. I'll send it over to Adrian because he's been working intimately in Europe from Dublin and will be able to share his experience for the last 100 days. Adrian? I think you might be on mute there.

Adrian Haigh

Sorry. Yeah, Chase, thanks for the question. I think, first of all, with Europe, if we choose to go alone, we don't bite off more than we can chew. So I think, you know, if we were going to do it ourselves, we would partner in the major, sorry, we do it ourselves in the major markets in Western Europe. And then we look to establish relationships with distributors for Eastern Europe and perhaps some of the smaller markets.
I have to say that in discussions that we've had with the vendors that are helping us develop the health technology assessment dossiers, I've been very encouraged by their views on what price we will be able to achieve. I think the economic argument is very strong when you cover, when you look at the costs of deafness that are covered by the health systems in most of these countries.
Depression is heavily associated with deafness, for example. So we feel we can make a strong argument for an acceptable price in Europe. In Germany, as I said, we submitted the price for six months, and that has been accepted. So when we do launch, we will launch at that price, and then enter into negotiations with the insurance companies for the final price.
And then we have submitted an early access application, or we're about to submit an early access application in France. So we should expect to get some pre-price approval sales in France early next year. But as we said earlier on, we're continuing to evaluate all the options. And if we do license out in Europe, obviously we'll be looking for a big cash injection with hefty wealth. If that helps.

Chase Knickerbocker

Yeah. And then if we kind of dig in a little bit on the Europe pricing there, is, you know, greater than a 50% decline from US net price the right way to think about it? Or should I maybe be, thinking about that a little bit differently? And then also a little bit of color on kind of inpatient versus outpatient usage in the United States, maybe percentage of sales, between both sites of service. And then kind of how the prior authorizations have been on the outpatient side from a coverage perspective.

Adrian Haigh

Okay. So first question, Europe pricing. Yes. Based on where we are with Germany, significantly more than a 50%. Sorry. So closer to 100% of the US price will be the initial price in Germany. And then we're subject to negotiation. What I expect to see in Europe is a request for some kind of pricing cap. So what came out of the discussions with the, well, we were negotiating the price in Germany was the high cost of a 17-year-old testicular cancer patient, where they said, it'll be close to 1EUR million.
So we can expect that, they won't be covering a million euros. So we'll have to have some kind of cap. And I think most European health authorities will expect that. But I think in terms of pricing, we're looking at something around 70% of the US price, if I'm to look at an average. With the focus of turning the focus to the AYA population, if you just look at the patient numbers, we talk about in the US, a 3,500 pediatric population, that's patients who have localized disease that are not treated with cisplatin.
If you look at the patient numbers in the AYA population, just taking one cancer, there are 3,500 testicular cancer patients in the 15-year to-39-year age group in the US. And if you add all the other tumor types that are likely to be treated with cisplatin, you're talking about 30,000 patients. So a tenfold increase in the number of potential patients. And of course, most of these patients are treated in the community and it's ASP plus.
So as I said, we have just started our sales team focusing on this population and early results have been very encouraging. The sales force are reporting that this is significant unmet medical need and there's positive reaction from the community.

Operator

Thanks for the question, Chase. One moment for our next question. Our next question comes from Noreen Qubier with Capital One Securities.

Noreen Qubier

Hi, good morning. Thanks for taking my question and congrats on the quarter. I guess I'll start with very simple, just in terms of, you're looking at actual sales numbers and you're seeing progress there, but just out of curiosity, what kind of metrics are you personally tracking over time to gauge your progress? Is it just repeat orders? Just some specifics would help.

Rosty Raykov

Hi, Noreen. Maybe I can start it and send it over to Robert and Adrian as well. In general, what we're looking for, obviously, our number one priority is to get the business to break even. So we're almost there from that perspective. In terms of on the sales side, we absolutely have specific, based on the populations discussed, both in the pediatric and NYA setting going forward, the sales force would be very well incentivized to perform in those populations.
And obviously, we're looking really to ramp the business going forward. I don't know, Robert or Adrian, if you'd like to add anything else.

Adrian Haigh

Yeah, we have a number of metrics. We have formulary committees, one. We have orders and repeat orders from the census. And ultimately, obviously, it's vials, sales, and revenue.

Noreen Qubier

Got it. Thank you.

Robert Andrade

And they're based, sorry, let me just add, and they're based on the individual performing in their territory and not an overall team goal.

Noreen Qubier

Okay. And you did mention in the prepared remarks that you've added some folks in the sales force. So how many are you up to now? And is there a different focus for these newer individuals or if you could just help clarify that a little bit.

Rosty Raykov

Yeah. So we've kept the sales force consistent. We have 12 salespeople in the field right now, based on the territories that we've discussed in some of our earlier calls to target this 80% of cisplatin use. And yes, the focus, as you can imagine, there is also some natural turnover in the sales force team. And we were able to, we're lucky enough to pick up in the sales force team.
And we were able to, we're lucky enough to pick up some really talented individuals that sold in the community center and can really expand the push to use the NCCN guidelines for AYA for the use of PEDMARK in this population. So we think just the timing worked out very well.

Noreen Qubier

Okay.

Rosty Raykov

And if I could add there, I think there are three key things you need to have or four, actually. First of all, the NCCN guidelines with a category 2A. Secondly, you need to have the agreements in place and endorsement from the GPO organizations. You need a specialty pharmacy that can supply, direct to the community, direct to the hospitals, direct to the patient's home.
And then you need an experienced sales force that is used to selling in this environment. And we now have all of that in place. So a major focus now is the AYA population, in addition to chipping away at the pediatric oncology centers.

Noreen Qubier

Terrific. So just one more from me. You did, Adrian, mention in your prepared remarks about partnering with Spec Pharma and the home admin angle, administration angle. What percentage of that is that part of the market? Just out of curiosity.

Adrian Haigh

Well, if you look at the pediatric oncology centers, which accounts for 3,500 patients, then I think the majority of those right now, the younger ones, are treated in the specialist oncology centers. But all the older patients are either treated in fusion centers or at home or in community hospitals. And as I said, there's probably around 30,000 in total there.
So I think the opportunity, the real opportunity, lies in with the AYA population, where we've got NCCN endorsement, we've got reimbursement because it's a 2A, and it's financially attractive. And also bear in mind that these patients are obviously older and heavier, so they're going to use more vials.

Noreen Qubier

Right. Okay. Thank you. Thank you.

Adrian Haigh

And just to add one more, the ability for us to provide vials into the home setting of a patient, we, up to this point, we did not have this capability, and we're having this capability now. So that's certainly very encouraging, in addition to the skillset required to sell into the community oncology, as Adrian mentioned earlier. So we have the full suite of products and the sales force to execute on this plan.

Rosty Raykov

And that has been in place since the middle of October, all of these things. So we think we've got everything in place now.

Noreen Qubier

Great. Thank you. That's all from me.

Operator

(Operator Instructions) Our next question comes from Charles Duncan with Cantor Fitzgerald & Co

Charles C. Duncan

Hey, good morning, Rosty and team. Congrats on a good quarter, and thanks for taking our questions. I had just a couple of them. First of all, if you fast forward a year from now, would you anticipate the majority of your vial use to come from pediatric younger patients, call it centers for excellence, treated in centers for excellence.
Or would it be perhaps more from the AYA patient population, given that they're generally larger folks, et cetera.? And so what is the goal over the course of the next 12 months beyond just, you know, call it revenue that you would like to achieve? Thanks.

Rosty Raykov

Yeah, hi, Jeff. Very good question. I think the goal is, I mean, it's really since Adrian has been here, we really have been focusing on two additional opportunities. One is the AYA, and the second one is international. In addition to all the work that we have done with a large pediatric hospital center. So I think all of these three things in place a year from now,
I would imagine that we could speak to all three of them contributing substantial amounts. And of course, the AYA, as you mentioned very well, by the nature of the tumor types treated there, and the nature of the cisplatin therapies treated there, would require significantly more in the larger size of the patients, of course, would require significantly more vials of PEDMARK.
So yes, so I would say that probably given that it's starting at almost zero right now, would be probably the largest. But don't underestimate both the pediatric hospital, I mean, the pediatric hospital, we made substantial progress, there's still good, good amount of activity [PVT] and PNT wins under our belt as well as newer ones that we're expecting.
So yeah, we could also pleasantly be surprised there as well. And on the international side, of course, what really is going to drive revenues there is the is particularly Germany and the UK, right, and France. So certainly, very encouraged by what Adrian's been able to do in Germany.

Charles C. Duncan

Yeah, and that's a great segue to my next question. I was a little bit confused on some of Adrian's answers regarding pricing and beyond pricing, and I know that can be kind of an artifact of a certain country. I guess I'm wondering if you could perhaps talk about the pharmacoeconomic value of PEDMARK in Europe or in the UK versus here in the United States.
Do you think there's a good recognition of the downstream cost of you know, cisplatin-induced hearing loss? And if you could gauge timing as to being able to talk about your strategy, is it a goal for the first half of next year to be able to, you know, really come to a conclusion on what next steps are ex-US?

Rosty Raykov

Thanks. Yeah, I would answer the latter one and I'll hand it over to Adrian. So yeah, so our goal would be sometimes between now and middle of next year to have that answer on what we plan on doing, either keeping the major five to ourselves and partnering the rest or selling the European business to someone else, right, so that all would depend on several factors.
Importantly, what is the cash up front? So, and maybe Adrian, over to you in terms of the value proposition of European health dossiers for the health economics of PEDMARK to their healthcare systems.

Adrian Haigh

Yeah, so I think the first thing to remind everyone of is that although you've got actually in Europe two regulatory authorities now, you've got the UK's MHRA and the EMA, the other 27 countries, you've got 28 different ways of assessing whether the country can afford to pay for a drug. So in terms of the health economic argument that we are putting together, i.e. can this country justify paying X for the drug, we're well advanced in most of the European countries.
In terms of the dossier preparation and we feel strongly that we will be able to present a convincing argument to justify paying something like at least 70% to 100% of the US price in Europe, if that's clearer.

Charles C. Duncan

That makes sense. I didn't know if it was a discount or the actual price, so that helps.

Adrian Haigh

I think there will be a mixture of some degree of discounts and caps because whilst they will be willing to pay full price for a 5 kilo hepatoblastoma patient, they won't be willing to pay full price for a 80 kilo testicular cancer patient. So there's got to be some kind of cap.

Charles C. Duncan

That makes sense. And is there a recognition, I think you mentioned depression as an example, of the downstream costs of losing one's hearing and how that accrues costs to not only the patient but the community over time.

Adrian Haigh

And different countries have different approaches. For example, some will take into account the fact that a deaf patient is unlikely to be able to contribute because they drop out of school, they don't get well-paid jobs, they become a burden on the social security system. Some countries will take that into account in their assessment.
Others will say, well, how much are they just costing the healthcare system, for example, and not taking into account social security costs and loss of earnings, etc. So each one of these countries has a slightly different way of looking at it, so it's very difficult to generalize. Where I would generalize is that we feel that in most of the countries we've got sufficiently strong arguments to justify a good price.

Charles C. Duncan

It's helpful. Looking forward to seeing the progress next year, ex-US as well as US. Congrats on the progress in the quarter. Thank you.

Rosty Raykov

Our next question comes from Dipesh Patel with H.C. Wainwright.

Dipesh A. Patel

Thank you, guys. This is Dipesh (inaudible) on for Ram Selvaraju. What kinds of information do you expect to disclose going forward regarding the commercial trajectory of PEDMARK in the US? So, for instance, number of patients on therapy, number of new and repeat prescriptions written, total number of prescribers, or number of prescribers who have written, for example, greater than one prescription, etc.

Rosty Raykov

Yes, that's a good question. As you could see, we started giving a little more granularity as the business started building up, particularly with the accounts where we have one P&T, right? As well as the repeat orders from those places and the penetration within the physicians within the physicians within those places. So, I think as the business builds up, I think we will be more granular on that. Absolutely. Keep in mind, what we don't know, of course, is that given our label, it covers many, many tumor types. At best, we're guessing what the tumor types are that are being treated.

Dipesh A. Patel

Okay, thank you for that. I have several more questions. How would you describe the current status of reimbursement and formulary access for PEDMARK?

Rosty Raykov

So, in terms of reimbursement, we have not seen any major issues. So, that certainly has been encouraging. In terms of the formulary process, as you could imagine, hospitals in the US are under tremendous financial pressure. Their margins, net operating margins, are very thin. On the other hand, something very positive is happening to them, which is they are creating a tremendous margin at their pharmacy level, in particular, the savings from bio-simulators.
So, as we are moving forward to get through a P&T committee, and sometimes it takes us more than once, those type of considerations come into play. But, obviously, it's not easy. It's not easy to get through a P&T committee, given all the considerations, given that this comes from their DRG.

Dipesh A. Patel

All right, that's very helpful. And then, how are partnership discussions progressing in Europe, and when do you expect to launch the product there?

Rosty Raykov

So, I just, from the previous question, yes, we expect to launch sometimes in the second quarter next year, probably May, June next year. It's our best guess at the moment. We are still going through a type 2 variation, where we're switching the manufacturer from the US, basically, into Europe. Our current manufacturer of PEDMARK is also manufacturing PEDMARK-C, and they will have to be approved in the type 2 variation.
So, I think as soon as we have that, and then we obviously ship and label product into the European market, then I think we'll be able to give you a little more granularity of what month the launch would be. But Adrian is certainly working on that, given all the preparation work he's doing on the health economics.

Dipesh A. Patel

Got it. And then just a couple more questions. Do you have any plans to advance other drug candidates from your discovery stage pipeline into the clinic at this time?

Rosty Raykov

Well, I don't know if you know much about the history of Fennec, which was the presence of companies with [hearx], but we started with three and we have one. So, I think it's very important for us to establish this one on the market before looking into bringing something else in.

Dipesh A. Patel

Got it. Okay. And then last question, gentlemen. What does the long-term competitive landscape look like for PEDMARK in the US?

Rosty Raykov

I mean, I think the most critical piece is, would cisplatin remain a mainstay treatment in pediatric cancer? And we believe it will be. Pediatric tumors in general and AYA tumors in general are very receptive, sensitive to cisplatin. Oncologists see a good use for the drug. They know a good use for the drug. They know how to use it. They've optimized it. So, anything else that usually comes on top of cisplatin, it comes at later stages.
So, I don't see anyone looking to replace cisplatin. So, that's really the view that we have and what we see in the marketplace. So, yeah, I don't expect substitution of cisplatin anytime soon.

Dipesh A. Patel

Got it. Thank you, Rosty and gentlemen, for the update. Appreciate it.

Operator

And I'm not showing any further questions at this time. I'd like to turn the call back over to Rusty for any closing remarks.

Rosty Raykov

Yes. Yeah. I would like to thank you all for joining us today, and we look forward to updating you on our continued launch progress and corporate milestones on future quarterly calls. Thank you and have a great day.

Operator

Well, ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.

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