Aquestive Therapeutics, Inc. (AQST) Q2 2021 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Second Quarter 2021 Aquestive Therapeutics Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker today, Stephanie Carrington with Investor Relations. Please go ahead.

Thank you, Operator. Good morning and welcome to today's call. On today's call, I am joined by Keith Kendall, Chief Executive Officer and Ernie Toth, Chief Financial Officer, who are going to provide an overview of recent business developments and performance in the second quarter 2021, followed by a Q&A session. In total, we expect today's call to last approximately 60 minutes. As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday. In addition, a recording of today's call will be made available on Aquestive's website within the Investors section shortly following the conclusion of this call. To remind you, the Aquestive team will be discussing some non-GAAP financial measures this morning as part of its review of second quarter 2021 results. A description of these measures, along with a reconciliation to GAAP can be found in the earnings release issued yesterday, which is posted on the Investor Relations section of Aquestive's website. During the call, the company will be making forward-looking statements. A reminder of the company's Safe Harbor language as outlined in yesterday's earnings release as well as the risks and uncertainties affecting the company as described in the Risk Factors section and in other sections including in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2021, and in our quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC. As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval and commercialization of its products and other matters related to operations. The impact of the ongoing COVID-19 pandemic is highly uncertain and cannot be projected with certainty or clarity. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributed to Aquestive or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events or otherwise except as required under applicable law. With that, I will turn the line over to Keith.

Thank you, Stephanie, and thank you to everyone on the call for joining us this morning. In our remarks today, Ernie and I will be discussing recent developments in our business during the second quarter 2021 and through July. As always, Ernie and I will be joined by additional members of the Aquestive leadership team during the Q&A session afterwards. I want to welcome Ernie on his first earnings call as our new CFO after serving in an interim role for us since last December. I and all the management team look forward to continuing to have Ernie on the team and contributing his experience to the gross growth of Aquestive. Through the second quarter, we were able to execute as we committed on our key priorities and delivered a number of important milestones that we'll talk about this morning. First and foremost, we continue to focus on building our CNS franchise. In mid-July, the FDA accepted for filing the resubmission of our NDA for Libervant, a Buccal Film for the management of seizure clusters. The FDA has assigned a PDUFA target goal day of December 23, 2021. As you may recall, Aquestive received the complete response letter from the FDA in September of 2020, completed a typing meeting with the FDA in November of 2020, and received further guidance from the FDA in February of 2021. Based on the agency's guidance, the submission included additional statistical modeling and supporting analyses of the existing clinical data. The company continues to believe that no additional clinical studies will be required for FDA approval of Libervant. Libervant, if approved, represents a significant addition to the treatment options available to this patient group. We're pleased with the FDA's decision to accept for review the Libervant NDA and remain committed to fill the unmet need for a non-invasive innovative product for the manager of seizure clusters in the underserved population of refractory epilepsy patients. We're developing Libervant as an alternative to more invasive, inconvenient, and difficult-to-administer device-driven products, including a rectal gel for patients with refractory epilepsy. As a result of issues these patients have with their current alternatives, a large portion of the patient population does not receive adequate treatment or foregoes treatment altogether. We continue to believe that Libervant, if approved by the FDA, will enable a larger share of these patients to receive more appropriate treatment by providing consistent therapeutic dosing in a non-invasive, innovative and preferred treatment form. Regarding FDA approval for U.S. market access, we believe that we provided a strong set of facts supporting a decision by the FDA of clinical superiority to prior-approved drugs for this indication in order to overcome orphan drug exclusivity based upon a finding that Libervant represents a major contribution to patient care. Now that the FDA has accepted for filing the NDA for Libervant and assigned a PDUFA goal date in December of 2021, we've reengaged with the agency and we'll update our prior communications to demonstrate our position that Libervant is an orally delivered product meets one or more of the following FDA criteria to be considered a major contribution to patient care. Convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, advances in ease and comfort of drug administration, and longer periods between doses. We continue to refine our plan for the commercial launch of Libervant. We've completed additional analyses related to the commercial opportunity, inclusive of patient needs and preferences and Libervant's attributes relative to other available products. We've started to prepare for commercial launch of Libervant, if approved, for U.S. market access, as soon as possible after that approval. Upon approval, we expect to launch with the existing sales force and then plan to expand further in 2022. We anticipate that capital available within our existing debt facility will be available if we choose to support the launch of this product. We continue to believe Libervant is an important new choice for epilepsy patients in a form they prefer. We remain excited about and believe Libervant continues to be a meaningful opportunity for the company and will generate material and significant sales revenues at peak. Our next priority is advancing our epinephrine program. As you may recall, this program encompasses two candidates, AQST-108 and AQST-109. Our first-generation candidate, AQST-108, was granted Fast Track designation last year and was given the go ahead by the FDA to use the 505(b)(2) regulatory development pathway, potentially making the clinical development trajectory faster and cheaper. Moreover, the FDA acknowledged that our sublingual film formulation of epinephrine satisfies an unmet need in the patient population relating to those patients resistant to taking intramuscular or subcutaneous injections. As such, our candidates have the potential to be transformative that is patient population as the first orally administered epinephrine-based rescue medications. We plan to request a meeting with the FDA in the coming months to discuss the data from the two completed Phase 1 PK trials with AQST-108. The data from the two Phase 1 PK studies demonstrate that AQST-108 can consistently deliver epinephrine sublingually and all subjects had measurable plasma concentrations of epinephrine. The top-line data for AQST-108 provides further evidence that we've developed a unique technological solution that can deliver epinephrine sublingually. We plan to the outline -- we plan to outline to the FDA, our strategy to develop AQST-108 in a separate indication beyond the treatment of allergic reactions including anaphylaxis. The first-in-human PK study for our second-generation candidate, AQST-109, a potential oral alternative to injectable epinephrine such as the EpiPen is progressing well. We are on track to complete Part 1 of this two part study and obtain top-line data in the second half of 2021. We anticipate scheduling a meeting with the FDA shortly thereafter to discuss a path forward for the regulatory approval for AQST-109 for anaphylaxis. Finally, our first proprietary commercial product SYMPAZAN continues to meet key performance metrics. Throughout the first quarter of 2021, SYMPAZAN continued to perform and grow. SYMPAZAN scripts shipped to pharmacies grew 14% quarter-over-quarter and 57% year-over-year. Our continued growth in prescriptions and net revenue demonstrates our ongoing ability to continue to connect with this group of prescribers even virtually and grow this product. Our strategy has always been to have two complementary products available to a common set of prescribers with SYMPAZAN leading the way prior to a potential launch of Libervant. We feel that our commercial team with the efforts on SYMPAZAN has done a good job establishing our footprint. In addition, in terms of our position with prescribers, the company's focused group of SYMPAZAN prescribers currently also right over 70% of the rescue scripts for nasal formulations of diazepam. They are familiar with PharmFilm technology and the major contribution to patient care potentially provided by Libervant to epilepsy patients. And they will be important as we prepare for a successful launch of Libervant once approved. SYMPAZAN also saw continued growth in the prescriber base with over 30% penetration into the company's focused group of prescribers with approximately 78% of those prescribers writing multiple scripts. We anticipate that SYMPAZAN sales will continue to expand, and this business will become a net positive cash contributor to the company in 2022. In conclusion, as we progress through the summer and into the fall, we're focused on advancing our proprietary products. Our team is continuing to focus on the commercial launch of Libervant, if it's approved and granted market access following the December 2021 PDUFA date. If approved for U.S. market access will launch shortly after that approval and immediately begin expanding the sales force at that time. First-in-human Phase 1 PK study for AQST-109 for anaphylaxis is progressing and we anticipate reporting top-line data from Part 1 of this two part study in the second half of 2021. Thereafter, we're planning for an FDA meeting to discuss the path forward for AQST-109. And in parallel, we plan to request a meeting with the FDA to discuss data from the two studies completed with AQST-108 and our plan to pursue additional indications of his candidate. As demonstrated by our second quarter results, and updated financial outlook, we continue to efficiently grow SYMPAZAN shipments and revenue, as well as expanding strategic relationships across the epilepsy market in preparation of a potential Libervant launch. We look forward to continuing to update all of you as we advance all of these initiatives throughout 2021. With that, I'd like to turn the floor over to Ernie, who'll provide specifics about our financial performance and outlook.

Thank you, Keith, and good morning, everyone. First of all, I would like to take this opportunity to say how happy I am to be part of the Aquestive team following the CFO appointment in June, after serving in an interim role over the past six months. I look forward to this exciting time and the growth of Aquestive as we plan for the potential approval and launch of Libervant and continue the development of our AQST-108 and 109 product candidates. By now, you will have seen our financial results in our 10-Q and earnings release that were filed last evening. As we typically do, we will address most of the discussion raised to the second quarter of 2021 results in the Q&A. Overarching our 2021 strategy are some key principles that Keith outlined in his remarks, including preparing for Libervant's potential approval and launch with a now defined PDUFA date, continuing the development of our epinephrine program, advancing our business development activities, executing prudent expense management, and diligently managing our cash position and extending our capital horizon. Our total revenues were $15.3 million in the second quarter of 2021, compared to $21.7 million in the second quarter 2020. As a reminder, second quarter 2020 revenues included a one-time $12 million recognition of license and royalty revenue as a result of the KYNMOBI FDA approval. Comparing the second quarter 2021 to the prior-year period, the company saw a 57% increase in SYMPAZAN net revenue, despite the continued market access limitations due to COVID-19 and a 47% increase in manufacture and supply revenue. Excluding the impact of the one-time KYNMOBI revenue in the 2020 period, total revenues in the second quarter 2021 would have increased $5.7 million, or 59% year-over-year. Our net loss for the second quarter 2021 was $12.4 million or $0.33 loss per share. The net loss for the second quarter 2020 was $2.3 million or $0.07 loss per share. The year-over-year change in net loss was driven by the one-time revenue events related to the KYNMOBI FDA approval, which obviously did not reoccur in 2021, and an increase in non-cash interest expense related to the KYNMOBI monetization transaction, which does not represent a cash outflow or monetary obligation at any time during the life of the transaction. SG&A expenses were 5% lower in the second quarter of 2021 compared to prior-year period. Non-GAAP adjusted EBITDA loss was $4.1 million in the second quarter 2021 compared to an income of $2.9 million in the second quarter 2020. The year-over-year change in non-GAAP adjusted EBITDA was driven by the one-time $12 million recognition of license and royalty revenue as a result of the KYNMOBI FDA approval. Comparing the second quarter 2021 to the prior-year period, the company saw a 57% increase in SYMPAZAN net revenue, despite the continued market access limitations due to COVID-19 and a 47% increase in manufacture and supply revenue. Excluding the impact of the one-time KYNMOBI revenue in the 2020 period, total revenues in the second quarter of 2021 would have increased $5.7 million or 59% year-over-year. Our net loss for the second quarter of 2021 was $12.4 million or $0.33 loss per share. The net loss for the second quarter of 2020 was $2.3 million or $0.07 loss per share. The year-over-year change in net loss was again driven by the one-time revenue events related to the KYNMOBI FDA approval, which obviously did not reoccur in 2021, and an increase in non-cash interest expense related to KYNMOBI monetization transaction which does not represent a cash outflow or monetary obligation at any time during the life of the transaction. SG&A expenses were 5% lower in the second quarter of 2021 compared to prior-year period. Non-GAAP adjusted EBITDA loss was $4.1 million in the second quarter of 2021 compared to an income of $2.9 million in the second quarter of 2020. The year-over-year change in non-GAAP adjusted EBITDA was driven by the one-time $12 million recognition of license or royalty revenue as a result of the KYNMOBI FDA approval. As of June 30, 2021, cash and cash equivalents were $34.2 million, an increase of $6.7 million as compared to $27.5 million as of March 31, 2021. The increase in cash during the second quarter of 2021 was due to $8.6 million in net proceeds from our At-The-Market or ATM facility, $2 million in milestones from KemPharm assured by the FDA approval of Azstarys, and $2 million milestone from Mitsubishi Tanabe for the license of U.S. rights to EXSERVAN, all of which were partly offset by cash used in operations. We expect that our existing cash and cash equivalents, revenues from our ongoing business, including SYMPAZAN, continuing business development activities and prudent expense management actions combined with ATM activity will provide adequate funds and meet expected cash requirements for the next 12 months. Separately, we expect the potential launch of Libervant if approved by the FDA for U.S. market access to be funded by the additional $30 million of contingent funds available as part of the existing 12.5% notes. Looking beyond Libervant, we expect royalty streams from license agreements to contribute to our future revenue. These royalty streams include Azstarys, which was recently launched by Corium under license from KemPharm, SUBOXONE in markets outside of the U.S. with Indivior, EXSERVAN in the U.S. with Mitsubishi Tanabe, and in the EU with Zambon, as well as the potential additional payments available under KYNMOBI monetization agreement. As outlined in the press release issued last night after market close, we are increasing our full-year 2021 financial guidance. SYMPAZAN growth, despite the continued limitations due to COVID-19, the performance of our manufacturing and supply operations and our other ongoing business activities generated strong operating results during the first half of 2021. As such, we have updated our full-year financial expectations as follows. Total revenues of approximately $46 million to $48 million increased from $38 million to $42 million in the prior guidance. Non-GAAP adjusted gross margin of approximately 70% to 75% unchanged from prior guidance. And non-GAAP adjusted EBITDA loss of approximately $39 million to $42 million improved from $42 million to $45 million in the prior guidance. It is worth reiterating that this updated 2021 financial guidance does not include any revenues from Libervant, which has the PDUFA date of December 23, 2021. With that, I'll now turn the line back to the operator to open the line for questions.

Thank you. [Operator Instructions]. And our first question comes from Gary Nachman with BMO Capital Markets. Your line is open.

Hi, congrats on the quarter and thanks for taking my questions. This is Evan filling in for Gary. I had a couple of questions. First, there was some solid growth from the SUBOXONE this quarter, how variable is that revenue given that guidance is raised quite a bit in 2021. And how long do you expect that to continue? I have a couple of follow-ups after this.

Sure. Thanks, Evan. Can you hear me okay?

Yes.

Okay, great. Well look, we -- we -- we're excited that SUBOXONE remains a strong presence in both the U.S. commercial and CMS markets and it continues to provide opportunities for Aquestive outside the U.S. We're obviously very pleased that the quality of this product both on our PharmFilm technology continues to drive meaningful revenues requested. We think it's demonstrated a resilience beyond what anybody would have expected a product like that facing the kind of generic opposition that it does. We think is we've done a really good job in continuing that product and its strength in the market. I -- well, it's -- we continue to say that that product is going to erode over time, but it has demonstrated that it is resilient. We don't think this is a one-time first half of 2021 event and that it will continue to show strength and resilience going forward. That said though, of course, our focus is for the future of Aquestive and delivering to the market, the transformative products in refractory epilepsy patients and Libervant and anaphylaxis with Aquestive-109 and potentially other products with Aquestive-108.

Yes. Thanks, thanks for the color on that. And my next question is can you provide some more color on how you've been preparing for a launch for Libervant with potential approval in December? How much overlap is there with a strategy with for SYMPAZAN?

Well, I'll give some remarks and then Ken Marshall, our Chief Commercial Officer, can add some additional color. It's -- SYMPAZAN was launched first and it was launched first for a reason. And while it continues to grow in its own right, much more important to us is the penetration that we've accomplished in the highly overlapping base of prescribers of SYMPAZAN and diazepam-based rescue medications. Actually the SYMPAZAN prescribers account for 70% of the nasal diazepam rescue prescriptions in the country. So that overlap is incredibly important for us. We think we've done a good job of penetrating the prescriber base. We think we've done a good job of demonstrating the value of PharmFilm and the contribution it makes to the care for those prescribers patients. So we're counting on that as a very important strategic element in helping us launch Libervant quickly and successfully. Ken, is there anything you want to add to that?

No, Keith. I think that's the key point. Our core team now establishing our platform of PharmFilm with SYMPAZAN and our core prescribers around 4,000 are writing the vast majority of rescue medicine. So we're going to be solid in that group. Maybe a piece to add to Keith is our medical team is also very busy putting our key data in the public domain. We've got a couple of big meetings that line up very well with our PDUFA date, CNS and AES, and we'll have some of our important data presented there to start to put that in more of a visible position.

Great. And my last question is regarding the AQST-109 and 108. When into -- in the second half are you currently planning to meet with the regulators and do you plan on discussing potential Fast Track designation for AQST-109 at this meeting?

Yes. So again, I'll start and then Dan, Ken can couple in. The exact date of the meeting is yet to be determined. We've got to pull the data together and make the request, but we intend to do that this year. I think that as we've said before, this is all about absorption and conversion in both the 108 and 109 products. We think the 108 product will likely be a product candidate for an indication distinct from anaphylaxis result; and that 109 or a successor product will continue toward an anaphylaxis indication. We think that given the agency's designation for Fast Track of 108, 109 needs all the same criteria for anaphylaxis, we're going to wait, if when we -- when we apply and we expect that we'll get the same outcome there.

Thank you. Our next question comes from Jason Butler with JMP Securities. Your line is open.

Hi, thanks for taking the questions. First one, maybe just a quick follow-up on the FDA meeting for 108, acknowledging that it's a different indication here, are there things that you think you can take away from the meeting that would have read through for 109, for example, the size of the safety database or other components of a development program that might read through some of those candidates?

Good morning, Jason. This is Dan. Absolutely, we already met with the FDA on Aquestive-108 pre-IND setting. And all of that work is related to anaphylaxis target absolutely has a read through. As we go-forward with both the meeting from 109 and 108, which would be separate meetings, because of the nature of pro-drug platform we have and the way the FDA guidance is on safety in particular; as you pointed out, work. But absolutely there is some cross-pollination and knowledge that we'll gain as we have those meetings. So we're -- as Keith said, we're very excited to meet with the FDA and we'll do that in the second half of this year and that should give us even more data on how to progress both targets.

Great. And then on Libervant, you mentioned you reengaged with FDA on the market access fees. Can you just give us a little bit more color there? I know you're not going to go into details, but is this a two-way conversation? Are you getting questions from the agency? Just any color around what the dialogue is right now on market access.

Yes, it will become a two-way conversation. We're waiting for them to come back to us. We reengaged by asking for a further conversation, resubmitting a fair amount of data that we have given during the first approval cycle. We intend to supplement that with some additional data that we've developed, since then around the major contributions of patient care, criteria. So we expect this to be the start of the process now that the application has been accepted. There was not much, they were going to engage on until there was something to engage on and it was the acceptance date on the July 23 that kind of kicked off that process. So it's early days real time, but we do expect it to be a robust two-way discussion.

That’s helpful. Thanks, Keith. And just last one from me, you mentioned you're continuing to do market research for Libervant, any updated goals on what you're hearing from potential prescribers on how quickly the market can expand to patients that are not using a rescue therapy now or how long it would take for this market to reach peak?

Yes, that's a great question, Jason. Obviously, we had a view of the ramp to peak when we thought, we would be the first alternative to the rectal gel or at least had hitting the market simultaneously with one or both of the nasals being delayed by the CRL, probably changes the nature of that ramp. The fact that the nasals have not expanded the market very much since their introduction into the market continues to indicate to us that there's a great deal of opportunity here. We continue in our marketing research to see patients express a preference for oral solution to choose from. So we're encouraged by that. And as we get closer to launch or at launch we'll update expectations, post-launch expectations on Libervant, where we continue to see this as a very significant addition to the choices the patients have and certainly a material and significant contribution to the revenues of the company once it's launched.

Thank you. Our next question comes from Daniel Busby with RBC Capital Markets. Your line is open.

Hey, good morning. I've got a couple more on Libervant, maybe to start with a follow-up to that last question. Is there a particular segment of the market that you expect to be early adopters? And second, assuming approval, can you update us on your expectations for payer coverage for Libervant both in terms of the ultimate level of access that you're targeting and also how long you think it will take to get there?

Sure. Ken, do you want to take that?

Yes. Sure. If you look at the market and segments that you can headed probably into two growth segments, the pediatric and the adult. The peds are routinely faster adopters, because they're cared for by a caregiver who is usually pretty motivated to help solve that problem. So if you look for fast uptake, that's where you'll usually see it. And that's what you saw with the nasals. As you look at the need in the market, which is about 80%, that's the adult piece. And that's the piece right now that's really just not engaging. They never engage with the rectal gel. And they have not in any material way engaged with nasals. And that piece is usually slower to come into the market, but will usually be your biggest contributor as you go in. So that does that answer the question on segments, Daniel?

Yes, that's helpful. Yes. And then just some color on payer coverage, if you could?

Yes. On the coverage front, we expect to have a good access there. I mean, if you look at what we've done with SYMPAZAN about 90% of all the scripts that go into the pharmacy come out, either through traditional coverage through the payer, or one of our programs. We will execute along those same lines. It'll take a few months to get the traditional coverage, usually takes six to eight months to get into the range of probably almost 60%, 70% of lives covered, but we've got programs that will offset those co-pays and help get patients access. So we don't see a big problem there. And frankly, if you look at the nasals, they've managed to get pretty good access in their first year. We think we'll do the same.

Thank you. Our next question comes from Thomas Flaten with Lake Street Capital. Your line is open.

Great. Thanks guys for taking the questions. Just since Ken's on, any updates on the state of the market in terms of rep access, office openings, closings, et cetera, particularly in light of the more recent Delta driven surge?

Ken, you want to take that?

Sure. Yes, Keith. Yes. We watched that very closely actually, because there's definitely a correlation. If you can get in front of physicians, it's much more effective than virtual. The market is normalized right around 75% lives. And that's what physicians and their staffs and 25% virtual and it's kind of stayed there. I am hearing some qualitative comments about the individual institutions, re-invoking masks and requiring vaccinations and putting their policies in place. So it may change back a little bit depending on how the Delta variant presents itself in the fall. But right now we've got good access and hopefully it stays there.

Great. And then just final question, what is your current expectation around timing of an ODE Decision? I kind of got the sense from the last call that you're thinking it's more likely that it might come simultaneous given precedent, but I'm just curious if you guys had any updated thinking on the ODE decision timing.

Sure. But we don't control the process and we're not sure we came and influenced the process. But it is our sense that it will be based on what's happened up to this point that is likely to be simultaneous with the Cedar review division -- decision. That said though, of course, we don't control the process and don't have visibility into it. It could be separated by days or as many as 30 days, we don't know. But our current view is that the decisions will be issued simultaneously.

Our next question comes from Andreas Argyrides with Wedbush. Your line is open.

Good morning, guys. Thank you for taking my questions. This is Andreas on for Leana. Just a quick one, most of our questions are already asked. Could you just provide color, looking forward on the pediatric opportunity for Libervant? Thanks.

Sure. Andreas, nice to hear your voice. Good morning. This is Dan. I'll start it off from the -- just the mechanical side of the label. So our current application is for 12 years now. So as soon as we get past our PDUFA date, I will leave with the FDA to work on a pediatric filing. We'll put pediatric filing in rapidly in 2022. And we expect to have a label down to two years of age as we get towards the end of 2022. I'm not sure was your question about the mechanics of getting it in the label or was your question about how big the market size in fact, area?

Yes, all those things. Just a little bit more on the opportunity as far and as well as the timelines and --

Sure. I give you the timeline. I'll turn it over to Ken to talk about what slice of the market that represents.

Okay. Dan thanks. Hi, Andreas. Yes, that's about from just a patient volume standpoint, it's about 20% of the patients. As I mentioned earlier, they usually are the earlier adopters because of the caregiver support that they get. If you look at where the market parses out now you've got Valtoco going down to age six and you've got Nayzilam going down to age 12. So it -- when we submit our data, if we're successful, hey Dan, correct me if I'm wrong, I believe we're going down a little bit lower than age six. We're going down to 2, so there'll be a segment that we would have be able to promote to uniquely that two to five group, and then we'd be able to compete one against Valtoco in that next segment between 6 and 12 so a little less crowded market there. Does that answer your question Andreas?

[Operator Instructions]. We have a question from Ram Selvaraju with H.C. Wainwright. Your line is open.

Hi, thanks very much for taking my question. So I just wanted to drill down a little bit further on 108 relative to 109. And if you could give us some additional clarity regarding the additional indications beyond the anaphylaxis that could be targeted with these two product candidates, as well as what the overall development strategy and commercial strategy might be for these two drugs. Thank you.

Sure. Thanks Ram. I'll start and Dan could add some color. We're very happy that we have been able to demonstrate that we can consistently deliver epinephrine sublingually into subjects. We think that there's a good deal of application for epinephrine beyond just anaphylaxis and a potential EpiPen alternative. And we intend to mine that technology and that capability through the program -- platform we've developed especially we can. It's probably premature to talk about the next indication we're doing the work to round that out. And if we don't have an indication to talk about it's equally premature to talk about the marketing strategy for product that's in the early stages of development. We're focused on getting through the current trial with 109, and then getting to a conversation with the agency on 109 and 108. We'll get those requests in this year. So we can meet with you as quickly as we can. Once we have those things buttoned up, we'll talk about what the implications for 108 is and what our thoughts about the market corridor.

Yes. Ram, the only thing I would add to that is beyond as Keith said; we're doing our homework on those indications so we have a fulsome view where we speak to the world where we are. But I think the really exciting thing about our approach on the platform when it comes to epinephrine. And if you think about the different ways that epinephrine can be used, especially in the allergy space, our ability to alter the profile of how epinephrine is absorbed and converted in the body is what really drive a lot of different opportunities. So we're pretty excited about the different opportunities in front of us, and we look forward to talking more about it in future.

Great. Fantastic. Also I wanted to ask if you have heard any indication from any prescriber or any reimbursement agency that if and when Libervant makes it to the market that would be any indication of -- implementation of some prior authorization requirements involving Valtoco?

Ken? I agree. No, we haven't had any conversation along those lines. Ken, you have any color to add to that?

No, it's just -- it would be -- there aren't a lot of precedents I can point to where payers try to leverage alternate delivery platforms. They're not stepping anybody through the rectal gel. I mean, and that's probably not a huge stretch to think about that one, but they don't usually step you through drug devices to orals. It's just -- they're just too different and there's just different characteristics and patient needs in those groups.

Okay. And then lastly, I was just wondering if you could comment on the Libervant partnering or commercial strategy as this pertains to ex-U.S. particularly Europe. And if you could comment on any potential relevance of the recent licensing deal that Martinez announced with Orion on a rare form of childhood epilepsy, and its potential relevance to Libervant if any. Thank you.

Yes. We continue to look at partnerships outside of the U.S. for Libervant across a variety of regions. It's interesting as you go around the world how the rescue medication space is very different in a lot of different places. So in Europe, we believe we have a very good handle on how that market is put together. And we have conversations that continue to progress. But just to be clear, our focus is absolutely on the approval and launch of Libervant here in the U.S. In terms of Martinez and their activities we have noticed from a far there, their recent success across a variety of elements, and that's a great for them. We have not put a great deal of thought into how their activities intersect with ours. We're more focused again on how we bring both Libervant and epinephrine to the market over the next couple of years.

Thank you. There are no further questions in the queue. I'd like to turn the call back to Keith Kendall for closing remarks.

Well, thank you, everyone, for joining us again. As we discussed, our second quarter and where we are, we look forward to continuing to update everyone as we go through the next phase of these activities. Obviously, we're focused on Libervant. We're focused on AQST-108 and 109. And we're focused on continuing to grow and position SYMPAZAN in the market. And as those activities progress, we'll continue to provide updates to everyone. We appreciate your time and we look forward to speaking to you again soon.

This concludes today's conference call. Thank you for participating. You may now disconnect.