electroCore, Inc. (ECOR) Q4 2018 Earnings Report, Transcript and Summary

Greetings, and welcome to electroCore Fourth Quarter and Fiscal Year 2018 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I would now like to turn the conference over to your host Hans Vitzthum. Thank you. You may begin.

Thank you, Devon, and thank you all for participating in today's call. Joining me are Frank Amato, Chief Executive Officer; J.P. Errico, Chief Science and Strategy Officer; and Glenn Vraniak, Chief Financial Officer. Earlier today electroCore released results for the quarter and year ended December 31, 2018. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements including, without limitation, our examination of operating trends and our future financial expectations are based upon the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risk and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. electroCore disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, March 27, 2019. And with that, I'll now turn the call over to Frank Amato.

Thanks Hans. Hello everyone and thank you for joining us today. I will begin with an update on our gammaCore commercial launch, then pass the call over to J.P. Errico, our Chief Science and Strategy Officer, for an update on our research and development initiatives and finally, Glenn Vraniak, our Chief Financial Officer to discuss our fourth quarter and full year financials. Then we will open up the call for your questions. We've made significant progress since our initial public offering in June 2018, building a commercial infrastructure to drive awareness of gammaCore amongst payers, physicians and patients. And today, I'm pleased to say that these efforts have begun to establish a solid foundation for future growth. I'll begin with a few highlights from the fourth quarter and full year. During the fourth quarter of 2018, there were more than 5800 prescriptions written, an increase of 30% over the third quarter. Momentum continued building into the fourth quarter with a favorable ramp. However, these results have yet to reflect the positive effect reimbursement will have for gammaCore, which largely started in this year. Reimbursement that includes individuals managed by CVS Caremark, Highmark, as well as the Federal Supply Schedule and more specifically the Veterans Administration and Department of Defense. Our reported fourth quarter 2018 GAAP revenue was $368,000. We also dispensed approximately $1.7 million worth of gammaCore prescriptions pursuant to ongoing promotional programs. These programs are designed for patients who do not yet have reimbursement, otherwise known as demand revenue. As such the potential demand product sales value of gammaCore prescriptions dispensed during the fourth quarter of 2018 was approximately $2.1 million. Our ongoing sales efforts to physicians continue to produce positive results. Through the fourth quarter of 2018, more than 1,800 unique physicians had written prescriptions for gammaCore. A 20% increase from the nearly 1,500 that had prescribed our therapy through the third quarter. By the end of the year our sales team had accomplished its goal of calling on most of the 6,400 target physicians. As it's typical for the pharmaceutical industry, it will take an average of four to six interactions like these to influence to prescribing behavior by physicians who are prescribing our product. We have by monthly focus on our highest targets, so they can gain clinical experience using our therapy. And as we continue to build momentum and increase the number of patients who receive reimbursement we will increase our sales force. Strategically building out the sales team through 2020 with the capability to reach 10,000 target physicians. We noted this expansion on our third quarter call, and I'm pleased to say that we remain on track to achieve this goal. Stepping back for a moment, for those of you who may be new to the story, gammaCore is our proprietary, non-invasive vagus nerve stimulation therapy. We developed it initially for the treatment of migraine and cluster headache, and believe it may have a number of other therapeutic applications. We received our first FDA clearances for the acute treatment of episodic cluster headache and then for the acute treatment of migraines. In late 2018, we received our first label for the prevention of a primary headache, cluster headache. In addition to expanding our indications, we have been enhancing the gammaCore device, as well. In August of last year, we introduced version 2.0 gammaCore Sapphire, a rechargeable and reloadable version of the therapy. The Sapphire, like the earlier gammaCore models is a handheld device shipped to the patient, either directly from our specialty pharmacy partners or directly from our distributor as it is the case in the VA or DOD. Key to on our ongoing growth is continued expansion of insurance coverage or reimbursement among commercial payers. We remain on track to achieve 75 million covered lives by the middle of this year and 100 million by the end of the year. We had an impressive quarter-over-quarter growth in covered lives over the past two quarters. From 33 million in Q3 with an additional 21 million in Q4 and 5 million more we just announced recently, adding up to the approximate 60 million covered lives that we currently have in the United States. Our managed care team headed by our Ardelle Ferris is spearheading these critical market access initiatives. Her team has already had a tangible and very positive impact on our efforts. Including the important favorable medical policy change and coverage decision by Highmark, the nation's third largest Blue Cross Blue Shield plan covering lives across Pennsylvania, Delaware and West Virginia, which we announced just last month. In another notable advance, we completed an agreement for inclusion of gammaCore in the U.S. federal supply schedule, which allows gammaCore to be prescribed and paid for within the Veterans Administration and Department of Defense. This agreement collectively represents access to an additional 21 million lives. And as a veteran and myself, I'm proud to report that the number of VA hospitals and military treatment facilities across the country now have access to and have begun to order gammaCore for our veterans, active military personnel, and their families. As discussed previously, we have had some logistical challenges with one of the compendium organizations making the availability of our product codes to pharmacy benefit managers a challenge. These issues have especially affected our negotiations with Express Scripts. As a positive step in overcoming that challenge, I am pleased to report that in late February, the unique identifier code for gammaCore was lifted by unanimous recommendation of the National Council for Prescription Drug Programs, NCPDP. GammaCore now has a recognized dosing standard across all compendia, including First Databank. With this peace now in place, we look forward to additional positive announcements regarding expanding reimbursement in the coming months. We also continue to make progress outside the United States. In November, the National Institute for Clinical Excellence or NICE, published a Medtech Innovation briefing on gammaCore for the treatment of cluster headache in the United Kingdom. This report developed by NICE, supports the National Health System when considering the use of new medical devices or diagnostic technologies. This briefing represents another validation of our vagus nerve stimulation technology, a significant step toward gaining widespread reimbursement in the United Kingdom with a final decision expected in November of this year. I'd like to make a comment about 2019 revenue, and how we see its progression throughout the year. Due to the timing of recent favorable payer coverage decisions and their implementation, we anticipate that revenue momentum will build throughout the calendar year. And therefore, revenue progression will be more backend loaded than consensus estimates currently indicate. Specific to the first quarter of 2019, we anticipate sequential growth in GAAP revenue from the fourth quarter of 2018 and anticipate accelerating growth from there as newly covered patients come online. It is worth noting that during the fourth quarter of 2018, a majority of our prescriptions were dispensed under promotional programs and we saw a substantial increase in the number of refills, suggesting that underlying demand continues to build. As we build the base and more of these prescriptions are reimbursed, these factors will drive the sequential quarterly revenue growth that we are anticipating this year. There is no question that receiving these favorable coverage decisions is a very significant positive for our company, and a very strong leading indicator. Importantly, we remain on track to achieve 75 million covered lives by mid '19 and 100 million by year end. This is impressive growth from the approximate 60 million covered lives that we have currently and bodes well for future prescription and revenue growth. Another strong leading indicator of future revenue growth is the percentage of our quarterly prescriptions, which are refills versus new. During the fourth quarter, we saw an approximate 300% increase in refill prescriptions as compared to the prior quarter, and now represents 33% of our total prescriptions written, which reflects underlying patient demand and satisfaction. As more refills are reimbursed, this will translate into recurring revenue. Again, our expectation that revenues this year will be backend loaded is purely a function of timing of payer coverage and reflects our strengthening fundamentals. As the base of covered lives, prescribing physicians and patient refills continue to increase, we expect these to drive continued revenue growth in the future. At this point, I'd like to turn the call over to J.P. Errico our Founder, Chief Science and Strategy Officer. J.P.?

Thanks Frank. As we've shared before, medical researchers the world over are busy studying vagus nerve stimulation for a variety of elements. This interest is the result of the ever growing body of scientific research demonstrating the potent effects of VNS, neurotransmitters, inflammatory mediators, metabolic signaling proteins and even on clotting factors. Translating this potential into the clinic and into commercial success ultimately requires payer reimbursement approval. And payers demand evidence based clinical presentations supported by peer reviewed publications. Fortunately, published clinical data is the cornerstone of our payer outreach efforts and in furtherance of this, I'd like to highlight one paper we recently announced that was published in the highly regarded Journal of the Headache and Pain, which is a retrospective study of chronic and episodic cluster patients who were using gammaCore for at least three to six months. Data in this paper showed a decrease in the number of cluster headache attacks per week from 26.6 attacks down to 9.5 for more than 64%. This analysis provides further confirmation of the data from our PREVA study, our multi centered randomized control trial, which showed a reduction in attack frequency of nearly 50% within a mere two weeks from the initiation of therapy and showed continued improvement out to eight weeks. Furthermore, in the most recent publication, the average duration of cluster headaches that did occur decreased by more than a third or 22.5 minutes. On the clinical front, we are working hard to follow up our third label claim, which we received this past year for the prevention of cluster headache. With the clinical data to getting clearance for the potential label claim for the prevention of migraines. To this end, we are in ongoing discussions with FDA around an application that we plan to submit to support this label. Providing additional support for that indication will be our PREMIUM II trial, which is designed to extend the findings from our prior PREMIUM I trial. It will enroll up to 500 patients in 35 sites across the United States and it began enrollment in the fourth quarter of last year. As we look out over the next two quarters, our ATOM and real trials will be initiated as well. ATOM will study the use of gammaCore as an acute migraine treatment for adolescents, while the real study is a trial of gammaCore and migraine in which the therapy is going to be used in the manner it is currently used in cluster headache that is as both an acute and preventive treatment. Not to be forgotten is the pilot study we will initiate later this year that will be the first formal investigation of gammaCore as both an acute and preventive treatment of post-traumatic headache. We are particularly pleased to be working with one of the leading voices in the field of posttraumatic headache, Dr. Bert Vargas. On this form of headache which impacts millions of Americans through concussions and traumatic brain injuries. As we've discussed previously, we believe there is also significant opportunity for this therapy to treat inflammatory conditions such as rheumatoid arthritis. Recent and upcoming conference presentations regarding the clinical effects of our device gammaCore in the treatment of patients with rheumatoid arthritis supports this belief and are the basis for our support of the recently initiated Genius RA study, using gammaCore to treat rheumatoid arthritis patients who have failed multiple biologic treatments. It is estimated that 1.6 million people in the U.S. suffer from rheumatoid arthritis. And there are no approved non systemic treatments. And unfortunately, the failure of biologic therapies often leaves these patients with very few effective options. We see an urgent unmet medical need among this segment of the rheumatoid arthritis population as that failure of current therapies typically results in continued bone loss, painful deformity and immobility. The current biological therapies dominated by TNF alpha inhibitors like Humira, Enbrel and Remicade cost the healthcare systems of the world tens of billions of dollars. We believe that a demonstration of the clinical efficacy of gammaCore in this patient population will open the door for us to advance up the continuum of care, perhaps to treating patients who have failed first line therapies, even before the more expensive biological therapies are employed. Finally, over the coming months, we look forward to sharing additional updates regarding publications and clinical study progress generated through our pre-clinical and clinical research partnerships with scientists and academic physicians around the world. Largely funded through public and private grants, this work includes both bench science and translational clinical studies in multiple other CNS and inflammatory conditions. Given the non-invasive nature of our therapy, gammaCore has become instrumental in advancing the field of vagus nerve stimulation and we intend to continue partnering with innovative thought leaders across the globe. With that, I'll turn the call over to Glenn for a detailed review of the financials. Glenn?

Thank you, J.P. Let's talk about the financials now. For the quarter ended December 31, 2018, electroCore reported net sales of $368,000. This is an increase of a $134,000 or nearly 60% from the fourth quarter of 2017 and an increase of $217,000 from the third quarter of 2018, reflecting overall an increase of sales of gammaCore Sapphire. As Frank noted earlier, the majority of gammaCore prescriptions during the quarter were dispensed under promotional programs. As a result, we're proud to report that we've delivered an additional $1.7 million of product sales value of gammaCore therapy to patients through our promotional programs. This includes vouchers or free therapy and co-pay assistance. Through our co-pay assistance program, we assist patients who have obtained commercial coverage with up to $100 of their co-pay at the time that gammaCore dispensed. We continue to believe these programs are accomplishing our objectives of providing patient therapy at no charge, demonstrating the benefits of gammaCore therapy to physicians who write prescriptions and promoting U.S. commercial payer coverage and coverage discussions as a result of patient and physician demand. The total operating expenses for the fourth quarter of 2018 were $15.9 million, which is an increase of $8.4 million compared to the same period in 2017, an increase of $2.3 million from the third quarter of 2018. This increase in operating expense was driven primarily by costs related to the expansion of the company's sales and marketing functions. Operating losses for the fourth quarter of 2018 were $15.7 million as compared to an operating loss of $7.5 million in the fourth quarter of 2017 and $13.6 million in the third quarter of 2018. Now, looking at the full year. Fourth full year, we generated net sales of $992,953 representing a 22% increase as compared to $811,457 for the full year of 2017. This increase in net sales is attributable to increased net sales of $376,578 as a result of commercial launch of our gammaCore products in the U.S. However, was offset by the change in our German business partnership. As with the fourth quarter for the full year, a majority of our gammaCore prescriptions were dispensed under the previously described promotional programs, and as a result we delivered approximately $4.7 million of product sales value of gammaCore therapy to patients through these programs. The gross profit for the full year of 2018 was $414,210 as compared to $292,925 for the full year of 2017. The total operating expenses were $54.9 million for the full year 2018 as compared to $25.9 million for the full year of 2017. And again, this increase in operating expense was driven primarily by costs related to the expansion of the company's sales and marketing functions. And operating losses for the full year of 2018 were $54.6 million, as compared to an operating loss of $25.6 million for the full year of 2017. Now, as for the balance sheet, cash, cash equivalents and short term investments on the balance sheet were approximately $68.6 million as of December 31, 2018 and we anticipate that our cash burn will be approximately $4 million per month, as it was in Q4 of 2018. And in closing, since joining electroCore in August of 2016, I have witnessed and been a part of a significant change here at the company. And I leave knowing that it can build upon a solid foundation that has been created over the course of the past few years. I'm confident that the initiatives that we've undertaken to build a world class commercial infrastructure will continue to yield very positive results. And I believe that gammaCore has the potential to evolve into a standard of care in a broad range of high value indications. I would like to take this moment to thank Frank and the entire team and wish all of them the very, very best. And now I'll turn the call back over to Frank.

Thanks Glenn. We recently announced that Glenn will be leaving electroCore to pursue another opportunity. Glenn has been instrumental in the successful launch of gammaCore, our initial public offering and the ongoing build out of our commercial infrastructure. We are thankful for his contributions and wish him the best and very well in his future endeavors. We're pleased with our performance during the fourth quarter as we successfully rolled out the next generation non-invasive vagus nerve stimulation platform, the gammaCore Sapphire increased our sales force sequentially grown the number of prescribing physicians by nearly 20%, gammaCore prescriptions by over 30%, and refills by over 300%. We continue to have constructive discussions with large pharmacy benefit managers and managed care organizations. As I mentioned at the top of the call, as we entered 2019 with significant momentum across both our commercialization and research and development initiatives, we look forward to providing future updates on our progress. And with that operator, please open the line up for questions.

[Operator Instructions] Our first question comes from the line of Vijay Kumar with Evercore ISI.

Maybe Frank I'll start the first one, the big topic of this is reimbursement. I think you mentioned a unique ID code was given by First Data Bank. Just in terms of the procedural next steps right, is this net now that you have the code? Can you just walk us through the next steps in terms of when one of the big PBMs, will sign in particularly express ESI, I think that's been a focus for investors.

Obviously, there have been a number of PBMs that we've been in conversations with, namely Express Scripts, OptumRx, Involve Rx and others to name a few. We've been in discussions with ESI in the past few weeks here, ensuring that when they reach over to their compendium First Databank, that they can get back the gammaCore code, once the gammaCore code comes back, they can then get into a contract discussion with us, starts out with the term sheet and then moves toward a contract that they bring up to their back committee. So we think that, you know, over weeks, to the coming couple months here into the second quarter that it's likely that we'll be able to pull through one or more of those PBM opportunities. With some of the other PBMs, they don't necessarily have to work with First Databank, I'm not sure who their compendia are, both for OptumRx and Envolve, it's just a matter of now working with their particular compendia to ensure that our code and that compendia have access to it. The NCPDP unanimous recommendation to have our code available across the United States should make it available to each and every compendia out there.

And maybe one on the financial side, you know, obviously some really nice step up sequential growth here in script volumes, refill rates, and number of unique prescribers. But I look at the cash burn, I think Glenn mentioned the cash burn will continue at the current rate of $4 million. I guess implicitly in that guidance of cash burn of $4 million, I guess what you're saying is the mix of prescriptions that'll be reimbursed, that that mix is going to improve, right? Because we're looking at sequential step up in prescriptions, number of patients via prescribers. All of that stepping, ramping up throughout 2019. But the cash burn is going to be constant at current levels. So, implicit in that $4 million number of the cash burn, are we assuming anything on ESI and some of the big PBMs coming in reimbursement and that maybe shifts the net revenue versus the gross revenue, maybe close the gap?

Yes, I think you've hit the nail on the head. When Glenn references a $4 million a month cash burn, that's an average burn for the year we expect. We've had that burn up until this point for the most part, that is outflows what Glenn is reporting on. So that's what our expenses are going to be. With respect to revenue that comes in to offset some of that burn, we do expect that to be sequential and accelerated through the year, as I mentioned on the call earlier. So, when we have some of this reimbursement that will come through for CVS Caremark, Highmark, also the federal supply schedule and any new PBMs and/or commercial insurance plans that we're expecting this year, additional Blue Cross Blue Shield plans to be exact, that will offset to a great degree some of that burden. I just want to add one other comment in here, and that is, although the burn will be on average monthly $4 million, we'll have months where we'll pay bonuses to the sales force and to folks in headquarters, and that'll pop up here and there on a monthly basis. But on average, we expect a $4 million outflow on expense or cash burn for the Company.

One other thing I would add is that we would plan to increase the sales force expense as additional coverage comes online to make sure that we continue to expand each of the territories into a larger prescribing base. So, I think that's kind of an offsetting component as well as you'll see as we go through the year.

Yeah. And we've discussed that we'll add additional sales force, as I mentioned in the call, as we get additional reimbursed life in the U.S market. So, it'll be an investment strategy that will align to where we have opportunities to drive revenue.

And Vijay, I would just say one more thing, which is when we use the term burn, that's not net of revenue. We're talking only cash outflows, as Frank mentioned. So you have to keep in mind that revenue input is going to offset that.

That was my next question because I was just trying to look at the 48 versus the cash on hand, that's helpful. Maybe if you look at the cues, it looks like the gross revenues of two, maybe 15%, 20% of that was net realized revenues. What do you think that realized versus gross, that mix is going to look like post ESI and some of the big PBMs, I mean, if you had to take a guess end of twelve months, would that mix be net to gross 50, a mix of 50 or I'm just trying to figure out what the net cash outflow would be because obviously that 4 a month that's the gross. And any comments I think would be helpful.

Yes, I would say that we would expect, of course, some more covered lives to increase the rebates and therefore increase that gross to net reduction from your gross sales to your net sales and therefore drop less to the gross profit overall. But as refills increase, there's an offsetting factor there for your gross profit line as well as we deliver refill cards at a very low cost. So there's a number of factors playing into that equation and that question, Vijay.

Our next question comes from the line of Charles Duncan of Cantor. Please proceed with your question.

I really appreciate all the, call it, granular information, prescriptions, growth, physicians writing them and then refills. And so appreciate that. I wanted to ask you about, physicians writing scripts. You said that you're up about 20%, 1500 to 1800 sequentially in a quarter, but you have, I think, 6400 or so targeted docs. And I guess I'm wondering, do you have specific goals for your sales force to continue to grow the number of physicians prescribing gammaCore or is it more going back to those initial prescribers and saying: "Where within your practice could you prescribe gammaCore more?" So, for example, I guess same-store sales versus broadening the prescriber base.

Sure, we do have reach in frequency goals for our sales force with a – are expected to reach a number of physicians on a daily, weekly and monthly basis. I'd say that as we get out into the marketplace and find the early adopters, which we probably have about 500 of those that prescribe our product on a pre-regular basis quarter-over-quarter, those individuals in some cases have several 100 patients on therapy today and have become kind of our regional advocates that are willing to also write letters to the commercial insurance carriers and show up at the clinical presentations that we give these commercial insurance carriers with their medical directors and chief medical officers and become real advocates for the brand and for the Company. In addition to that, we have folks who have indicated to us that as we get more regional coverage, like, for example, with the Highmark approval in Pennsylvania, Delaware and West Virginia, as we get additional regional coverage in other states that these physicians will come on and start prescribing at a much higher rate. Otherwise, the insurance companies require them to fill out prior authorizations, which are pretty lengthy documents in some cases. And also letters of medical necessity and send in a fair amount of paperwork for the patients they're prescribing the product to. So, we do see that number of 1800 growing pretty dramatically as we get additional plans coming on. And within those who are currently prescribing, we see them prescribing to much larger portion of their practice. In some cases, these physicians are prescribing our product for patients who they've pretty much run out of options with because those are the patients that they're willing to fill out the paperwork on. So, I think, I'm answering your question, Charles. There's a variety of different factors in the market, but we do have reach in frequency goals for the sales reps in addition to prescription quotas and we're starting to see that really expand out to include additional physicians as we get more coverage.

And then with regard to the patients being prescribed gammaCore, you mentioned pretty substantial increase in refill rate, and I was pretty happy to hear that. I think you said about 1/3 of current prescriptions written are for refills. I guess I'm wondering if you could characterize, are you getting more traction with migraines patients or prescriptions for migraines patients or chronic or cluster headache patients, are you penetrating one of the two markets more? Just characterize the kind of patients that are using gammaCore, being prescribed gammaCore.

Yeah, the majority of our prescriptions are being written for migraine right now. When I say written for migraine, the size of the migraine market is a 100 fold over the cluster headache market in the United States. So we did expect to have a good portion of those scripts coming in there. With cluster headache, you have, about 90% of the market is episodic. So patients go into about 4 to 12 weeks to go on our therapy for that period of time and then will remit and no longer require any type of therapy for 6 to 12 months or longer in some cases. So, we do see some cluster headache patients coming on and are getting anecdotal reports back from physicians on the success they're having. In fact, J.P., referenced a study that we just had published. It was a retrospective analysis looking at patients in the U.S. market and over in Europe who have been on our therapy for cluster headache, and the fact that those results were even better than what we saw in our clinical trials. So we are seeing patients on cluster, but we do feel that migraine will be the largest driver for the adoption of our therapy and the largest driver for the number of prescriptions that we'll realize both new prescriptions and total prescriptions as refills grow.

And I'm just curious and I had one question for J.P., but just says a follow-up to that question, over the course of the second-half of last year in terms of migraines therapy, a lot of, call it, new drugs came to market, those being the monoclonal antibodies to treat migraines. And I'm wondering if you've heard any anecdotal or actual scene data out of, for patients being prescribed gammaCore on top of the antibodies or the migraine?

Sure. In 2018, especially when we launched the product fully across the U.S. market after the IPO, so in July last year, physicians who were early adopters, which is about 20% of those 6400 that we referenced earlier, they indicated to us that they would be prescribing both the monoclonal antibodies, the CGRP antibodies along with gammaCore, because the CGRPs are have an indication for prevention. And if a patient has 10 headaches a month, those CGRPs will cover somewhere between two to four of their headaches. They're still left with six to eight headaches to manage through the remainder of the month, where a gammaCore would be a perfect option. So, we're seeing quite a bit of adjunctive prescribing going on in that regard. We're hopeful to be able to advance our migraine prevention indication with the FDA through the end of this year or perhaps into early next year, which would then put us as a direct competitor with some of the CGRPs. But for right now based on our label, we see physicians prescribing them in tandem.

And then my follow-up question, sorry for all the questions. But for J.P., relative to label expansion efforts, I'm not sure if I missed it, but on ATOM, did you talk about timing of the adolescents trial, and then do you have any additional information you could help us with regard to PREMIUM II trial in terms of the Baseline Patient data that you're enrolling in that trial? Are you enrolling patients for prevention that generally have a few migraines or ones that would be characterized more frequent episodic migraines?

The PREMIUM, I'm going to start in reverse order, the PREMIUM II study is enrolling well. We began enrollment in the middle of the fourth quarter and I believe we're in the early stages of getting all of the sites up and running. I think we have more than half of them enrolling at this point. So we're confident that that study is going to be complete by the late this year, beginning of next year, in terms of adolescent enrollment. And then, of course, being a prevention study, these patients, the last patient has to be in for six months to nine months before we'll have them complete the last visit. So there's still some time on that. But we are we're very confident that this study is designed well and that the study is designed reflecting on the results that we got from the PREMIUM I study and hope that it will augment our dossier when we go out and talk to payers about the value of using our priorities of prevention. In terms of the ATOM study, which is the adolescent treatment of migraine, of course the reasoning behind doing that study is to expand our label from 18 years of age down to 12 years of age. I think that many people have heard me talk about this before, but the peak penitence of migration into the population happens for women and post puberty in the age range of 13 to 15. The clinical study we're running there is designed as an acute therapy, not as a prevention therapy. So we're looking to advance the work that we did in the PRESTO study, which was the basis of our Acute Migraine label, and use that as the basis for expanding the label. Does that answer your question? I want to make certain I have covered everything you asked.

Yes, that's helpful. Although I would - I mean, I'm really intrigued with the adolescent use and so I'm wondering on timing. Can you give us a sense of timing of when that data could come from the atoms?

I would expect that that trial will take the same amount of time you would expect for a pivotal study in the acute treatment of Migraine, which the PRESTO study took us about 15 to 18 months. So I would expect it's going to take that time, probably end of 2020.

Our next question comes from the line of Sean Lavin with BTIG. Please proceed with your question.

It's Marie Thibault on for Sean Lavin. Thank you for taking the questions. And Glenn, I also wanted to say, you know, we enjoy working with you, so best of luck in your next role.

Thank you very much. And I appreciate that.

Frank, I wanted to touch briefly on your comments about revenue cadence in 2019. You know, I understand it's obviously very hard to kind of project how the year might turn out early in the launch and with reimbursement coming on board. But since you mentioned the cadence versus consensus, I hope to see - I think consensus is pointing to a $10 million range for revenue and total revenue in 2019. So the range you're comfortable with?

Marie yes, as far as the cadence goes, I think I'm speaking more when I reference that to how we see the kind of quarters rolling out here as more and more reimbursement comes online we anticipate more revenue to come online, obviously. For example, if you just look over the last 90 days, including the latter part of December and into, you know, right now we have the FSS contract and high marks so that added 26 million lives for us. As we add more, more lives into reimbursement and having folks come online, then we will realize more revenue as the quarters unfold. We don't see the growth being linear. We do, however, see that refills as they grow will drive growth, especially as we have more and more of those plans come online. So, I think the difficult part for us right now to really project, if you will, is when those lives are going to come online and subsequently when we'll have that revenue. Will we see the spike in revenue in the second quarter and the third quarter as consensus expected, or will some of that come on more in the latter part of the third quarter and into the fourth quarter. So, I know you're looking for a guidance number and right now it's kind of chunky. It's hard for us to really land a number that we can confidently project through the end of the year.

Since you mentioned refills wanted to touch on that briefly, I know refill were sort of third of total prescription order. Can you give me that same number, I guess, in terms of how many first prescriptions turned into refill prescriptions or have been turning into refill prescriptions in your lunch?

Yes, Marie, this is J.P. The answer to that question is at the present time, it appears to be around 30% to 35%, but it's growing and it's growing rather significantly. We believe that the reason for that is because as the payers come online, the cost or outlay that the patient has to take on in order to remain on therapy is reduced. And so as a result, we saw 300% increases, as Frank mentioned, quarter-over-quarter from third to fourth quarter in refills and we expect and anticipate that to continue to grow into the first quarter and so, I would caution taking anything that I'm saying right now as what it's going to be going forward, because these numbers continue to grow.

And we continue to increase patient acquisition. So, the top number is growing as well, which, you know, changes how that dynamic works, obviously, from a percentage perspective.

This is Frank, and I've rounded it out by saying that, we also enhance, as we've spoken to you in previous calls and have also commented on our Partners for Care program, which is really allowing the patients to continue using the therapy while they wrestle with their insurance company through the various different denials and appeals that have to go back and forth between the payers. On the PBM side or the pharmacy benefit side, those denials and approvals can take, somewhere, in the 60 to 75 day range. On the medical benefits side, you can see it taking, in some cases four to five months. So since the different plans are looking at us on both sides of the coin here being pharmacy benefit and medical benefit, we're going to continue to allow patients to have access to the therapy and as we do that, then there'll be more willing to fight and we think refills will continue to grow.

Okay, that's great to hear, yes, certainly a lot of underlying factors there to consider. Last question for me, thanks again for taking them. The Highmark win last month was nice to see and since it's a regional payer for the most part, I'd love to hear just anecdotally how that first month was looking, given that, providers in those regions are probably seeing a high proportion of their patients being covered gammaCore.

Yes, it occurred for us, I think, on the 18th of February. So there are patients who in those three states are currently on therapy that are coming back in to see their physicians to get their refills. And then physicians are identifying patients to bring them in to start to prescribe the product. We have a couple of doctors in those areas, specifically in Pittsburgh, namely one of them in Pittsburgh that has 250 patients on the therapy right now. So folks are, waiting for their therapy to run out for the month. When we cover them in our Partners for Care program and they are beginning to get refills. I don't really have a revenue number or a number to speak to right now, but there are multiple hundreds of patients that are on the therapy in those states right now who would be candidates for getting gammaCore paid for through Highmark. The medical policy change indicates that the patient has to - failed answers before, so non store anti inflammatory and to also at least to Triptan's. So physicians are going to have to ensure that they meet the requirements of the medical policy on that side. And then they have to also ensure that the patient has had some type of positive benefit using the therapy in order for the refill to get paid. So that's the other half to fill out paperwork to get the patient on the therapy to start with, and then they'll have to fill out paperwork for the first month indicating that the patient did get benefit. Beyond that, then the patient will get reimbursed. As the refills get filled by the pharmacy as they go forward.

Our next question comes from the line of Dave Turkaly with JMP Securities. Please proceed with the question.

First given you guys kind of [indiscernible] drug device continuum. You mentioned the sales reps from the ad carriers, where you think you're most successful in targeting folks, where they're coming from just any update there and you're looking to add where you're hiring from as 2019, progresses and then just a quick one on Genius RA study. Any details about the timeline there would be appreciated.

So, Dave, I'll cover the sales reps and then maybe we'll turn it over to J.P. since he's been working closely with the team here in clinical, on the Genius RA study. So what we've done from the start here is we've targeted pharmaceutical sales representatives with about 10 years experience, predominantly working in the headache field if we can find them. There have been very few headache companies over the past five years with assets that have been branded in the marketplace. So unless you are sourcing from the likes of Allergan with Botox, it was hard to find reps who had recent headache experience. So then we moved to those who had neurology experience and were selling products in the epilepsy and/or fulfillment disorder space. We'll continue to do that. These folks have access into the neurology practices. They understand how to operate within the neurology offices and also in assisting them with any building coding questions they may have or getting to the - appropriate resources with our specialty pharmacy. So that's how we'll continue to kind of align to and source our sales representatives. With that said, I'll turn it over to J.P. and let him competent Genius RA.

So the study in RA is designed as an open label study. It will enroll 40 patients. These patients will be gathered from largely the Florida area, we have the lead investigator is based in Florida. He already has experience using vagus nerve stimulation for the treatment of RA and has prescribed our devices, as he's allowed to do, for a number of his patients and has gained some anecdotal positive results from that. He is also aware of the work that was presented using our device out of - Denmark in which very positive results on patients who had failed other therapies. So he's very interested in the data and he is drawing from a number of his colleagues in the Florida area who have helped him in previous studies. So we are expecting that that enrollment will begin imminently and that he should be able to gain significant traction based on the prior work that he's done with the same sites feeding him patients.

We have reached the end of our question-and-answer session. And I would like to turn the call back over to Frank Amato, for closing remarks.

Okay. Thank you, Operator. Thanks, everyone, for joining our call this afternoon. We look forward to providing our next quarterly update in May. So have a great day. Thank you.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.