Halozyme Therapeutics, Inc. (HALO) Q2 2021 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to the Antares Pharma Second Quarter 2021 Financial and Operating Results Conference Call. [Operator Instructions] I will now hand the conference over to Tram Bui, Antares’ Vice President of Corporate Communications and Investor Relations.

Thank you, operator, and good morning, everyone. Earlier today, we announced our second quarter 2021 financial results and operating achievements. A copy of the press release and slide presentation for today’s conference call are available in the investor relations section of the Antares Pharma corporate website. Before we begin, I’d like to remind listeners that some of our statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include those related to our future financial and operating results, including our expectations regarding the impact of the ongoing COVID-19 pandemic and mitigation measures implemented in response to the outbreak on our overall business, operating results and financial condition, our ability to achieve the 2021 revenue guidance, future revenue growth, prescription volumes and market share for our products and our partner products including XYOSTED, OTREXUP, NOCDURNA and Teva’s generic EpiPen. FDA actions and other regulatory activities, including actions with respect to Makena and potential FDA approval of Teva’s generic Forteo and Byetta timing and results of ongoing and future development programs and clinical trials including ATRS-1901 and ATRS-1902 hydrocortisone for acute adrenal crisis rescue as well as programs with Pfizer and Idorsia and other product development activities and business development efforts. These forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially. They are identified and described in today’s press release, in the accompanying slide presentation on Slide 2 and the company’s filings with the SEC on Form 10-K and is updated in Antares’ recent periodic filings on Form 10-Q and Form 8-K. Antares is providing this information as of the date of today’s call and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements. Joining me on the call today are Bob Apple, President and Chief Executive Officer; Fred Powell, Executive Vice President and Chief Financial Officer; Dr. Peter Richardson, Executive Vice President, Research and Development and Chief Medical Officer; and Joe Renda, Senior Vice President of Commercial. Let’s review the agenda for today’s call on Slide 3. Bob will begin with a level review of our business and then hand the call over to Joe to provide more information about our commercial strategy and achievements for our proprietary portfolio. Dr. Richardson will then discuss our R&D initiatives before handing the call back to Bob to provide an update on our partner business. Fred will then go through the detailed financials, and Bob will conclude with some closing comments before opening up the lines for your questions. Please turn to Slide 4, and I will hand the call over to Bob Apple. Bob?

Thanks, Tram, and good morning, everyone, and thank you for your interest in our second quarter results and operations update. As we wrap up the first half of the year, we are pleased to be able to report another record quarter for financial performance, which included $45 million in revenue, representing a 39% increase over 2020. EBITDA increasing 65% year-over-year to $7.9 million and a doubling of net income to $4.4 million or $0.03 per share for three months ended June 30. Our strong results continue to be driven by both our proprietary business led by XYOSTED. And our partner business led by Teva’s generic EpiPen. We believe XYOSTED’s total prescription growth of more than 50% year-over-year for the quarter is as remarkable as Teva’s 58% market share of the EpiPen market up from 38% one year ago. As we look ahead, we expect continued growth from both assets as well as robust contributions from our other products and development revenue, and therefore reaffirm our full year 2021 revenue guidance in the range of $175 million to $200 million, which represents 17% to 34% year-over-year growth. Even with our commercial business growing at a rapid pace. We continue to be focused on the future growth of our business and the importance of our pipeline, both internal product development as well as partnership opportunities. In that light, in the second quarter, we unveiling ATRS-1902 as hydrocortisone for adrenal crisis rescue, and our partner Idorsia announced they initiate their global Phase 3 study for selatogrel that utilizes our Quickshot auto-injector as a heart attack rescue pen. Furthermore, we still look forward to Pfizer’s pending NDA submission for an undisclosed asset in the second half of this year. Collectively, we believe that the advancement of our proprietary pipeline, in tandem with our partners’ development programs will support our strong growth trajectory. In other words, we believe the diversification of our business supports a foundation from which we will continue to grow. Now, let me hand the call over to Joe to provide an overview of our commercial achievements and strategy for continued growth for our proprietary products. Joe?

Thanks, Bob, and good morning, everyone. I appreciate the opportunity to join today’s call. I’m going to start by highlighting that I believe the success the commercial organization has achieved thus far with XYOSTED is impressive, particularly given the limitations during the pandemic. But more importantly, I believe there is still considerable growth to be garnered, which is one of the main reasons why I joined the company. And since joining Antares in May, I’ve had the opportunity to engage with quite a few of our different customers, as I’ve traveled out to 10 different markets across the United States. And I’ve met with over 25 different healthcare providers, including some of our urologists, endocrinologists and even some of our general practitioners, and really was the goal was really better understand their perspectives, as well as the perspectives of our field team members. And the physician feedback has been consistent. Many of our prescribers believe that XYOSTED is the best testosterone replacement therapy on the market. With approximately 9,300 physicians in the tough [indiscernible] that have already written XYOSTED, which you can see on Slide 5, we remain focused on further penetrating their prescribing behavior, as they see new patients coming into their office, as well as continuing to drive switches, which has really been a key component to our growth at the height of the physician office closures. In the second quarter, XYOSTED total prescriptions increased over 50% year-over-year, as well as 15% sequentially. In fact, June was our highest script month to date, and July is tracking really strong. As physicians’ offices have opened up more broadly, we have been seeing more strength in new prescriptions and are currently drawing and approximate 50-50 split between new patients and switches. Our growing refill rate has also highlights the strong persistence with our brand. I’ve really been impressed with the motivation from our field sales team. And they have been excited to get back into physicians’ offices more fully this year with an expanded bag, but still with a primary dedication on XYOSTED. We’re currently able to make approximately 70% of our calls in person and the remaining 30% virtually. With that said, we’re monitoring any new developments that may arise from the Delta variants. And we’re really prepared to ask that our customers and whatever approach is best for their practice. We believe that hybrid model will persist and we have found success in both in person calls as well as our virtual calls with our customers. When you look at the total testosterone market, it really remains compelling from a size and growth perspective. And we believe XYOSTED represent an effective therapy for at-home use. We expect to continue to grow our market share with more switches from painful IM injections, in addition to those new to therapy. In support, we have new branded consumer and HCP digital campaigns that are targeted to healthcare professionals and consumers through platforms such as Facebook, Instagram, Medscape, and Reddit. And it’s really to drive awareness from both the providers and the consumers. Our field team is also working with updated interactive visual aids that really highlight key features such as a steady PK, and with our virtually painless auto-injector that we believe will further enhance the growth of XYOSTED. Another element we believe will help sustain and really bolster our growth in the proprietary portfolio is the recent expansion of our field team. We went from 79 representatives to 85. And we expect that additional territories will provide us with more reach and targeting in some new markets. And although XYOSTED remains the primary detailing focus for all of our representatives as I just mentioned, we also remain dedicated to the opportunity to grow NOCDURNA. And the customer feedback has also been very positive for NOCDURNA, and we believe physician education remains a key component to driving growth with this product, which now brings us to Slide 6. We recently launched new branded peer-to-peer educational speaker programs across the United States with some of our key opinion leaders who are experts in treating patients who struggle with nocturnal polyuria and that we believe will further educate healthcare providers. Nocturnal polyuria affects approximately 88% of nocturia patients and it’s important that we help physicians differentiate the cause of frequent nighttime urination from benign prostate hyperplasia, and or overactive bladder. We also created branded consumer and HCP digital campaigns targeted at healthcare professionals and consumers and we’ve placed those on similar platforms as we did with XYOSTED. In addition, new sales and marketing tools will enable the field teams really to better describe the patient types that may be suitable for NOCDURNA in the physician’s offices. Internally, we have generated better territory insights. We’ve dedicated more focus to targeting strategies, and we’ve really enhanced the incentive compensation for our field team. Overall, we are adding new doctrine of NOCDURNA targets and writers every week, and NOCDURNA remains consistent with our expectations in this first year of launch. Based on what we’ve learned, we expect our marketing initiatives and a normal sales cycle really to enhance this opportunity. So to wrap it up, as we enter the back half of the year, we expect to continue to execute on all cylinders, and believe our commercial strategy presides that in NOCDURNA will continue to drive revenue growth. And as we look out further, we believe we have an extremely successful commercial organization that is excited to leverage their physician relationships with this enhanced bag. We’ve established a vision that’s really built around creating high performing teams that demonstrate excellence, and business management, a team with exceptional, professional and scientific acumen and one that really fosters a culture of collaboration and innovation, which we really believe will ultimately drive the performance of our brands. And with that, I’m going to hand the call over now to Dr. Peter Richardson. Peter?

Thank you, Joe, and good morning, everyone. First and foremost, let me start by saying that I’m delighted to be part of the Antares team. And I very much look forward to continue to develop and hopefully enhance the company’s proprietary development pipeline, along with the experience team here at Antares. Based on my background as a drug developer, and clinician, I’m privileged to help advance our lead internal product candidates ATRS-1901 and ATRS-1902 towards addressing the unmet needs of patients. In the second quarter, as we promised, we filed the investigational New Drug Application for ATRS-1902 for acute adrenal crisis rescue, which has been accepted by the FDA. The IND application for 1902 supports the proposed indication for the treatment of acute adrenal insufficiency known as adrenal crisis in adults and adolescents using a novel proprietary auto-injector, we have developed to deliver a liquid stable formulation of hydrocortisone, which brings us to Slide 7. The background, adrenal crisis is a potentially fatal condition resulting from an acute deficiency of cortisol, a hormone normally produced and released by the adrenal gland in response to stress such as infection, injury, surgery, or even anxiety. This occurs in patients with long-term adrenal sufficiency from conditions such as Addison’s disease. The current standard-of-care for adrenal crisis rescue is an administration of hydrocortisone, which is presently provided in the sterile powder that needs to be reconstituted with water for injection, and then drawn through a needle for intravenous or intramuscular injection. We think this represents a time consuming and cumbersome injection process characterized as having multiple steps, all of which could prove extremely challenging when in crisis. The ATRS-1902 we developed a new technology platform, which if successful, will deliver a liquid formulation of hydrocortisone stable at room temperature. Our development program aims to provide a reliable, easy to use two-step injection process for this patient population. As a leader in rescue pens, Antares remains dedicated to providing reliable, robust, simple and portable solutions to medical emergencies. Results from a formal human factor study that was recently completed by an independent U.S. based specialist group confirmed the ease of use and administration of ATRS-1902 in the hands of the patient [Technical Difficulty]. We conducted the usability study to assess use with untrained users of our novel auto-injector platform, as well as to explore the potential improvements. We expect to conduct an additional human factor studies to provide eventual submission of our NDA next year, all following confirmation of the appropriate pharmacokinetic profile in our planned studies. In this human factor study, 18 subjects participated, during which they use two delivery systems to administer the medication in the simulated emergency. The Antares drug delivery system is comprised of an auto-injector containing a prefilled syringe with medication, and the comparateur solid quarter considered standard of care was decided and it’s currently market for the dual chamber vial syringe, which was used to reconstitute and inject the medication. Overall, far fewer user errors were observed when participants use the auto-injector that when they use the vial, needle in syringe. We’re now training 17 out of 18 participants successfully gate simulated full doses of medication when using our auto-injector, while only one participant did so successfully when using the reference product. Needless to say, while this initial human factor study only represents a piece of the overall development program, we’re very pleased with these positive results that confirm our expectations for the potential ease of use of our auto-injector system, to deliver and essential therapy at the time of stress. And now with an active IND, we can initiate the first PK studies to confirm the pharmacokinetics of our formulation in the coming weeks. And if successful, the second study will be conducted using our final auto-injector combination product. As we noticed, these two studies, along with the human factor study are expected of successful to be the basis of an anticipated NDA filing with the FDA by the end of 2022. We understand the urgency to advance this asset, which will not only address a clear patient need, but also expand our proprietary product offering within our developing endocrinology franchise. Let me also mention ATRS-1901 which is a weekly formulation of an auto-injector administered product in uro-oncology. And we will be pursuing the 505(b)(2) pathway for this asset. Remain on track to file the IND for 1901 in the fourth quarter of this year; I will announce any clinical trial initiation accordingly. I look forward to share in greater detail on future calls. And beyond these two assets, we will continue to explore other opportunities that will leverage our pharmaceutical and device technology expertise to expand our pipeline. With that, I’ll now hand call back over to Bob.

Thanks Peter. Before I dive into our partner business, I think it’s important to reiterate our commitment to the development of our proprietary pipeline. We believe our proprietary hydrocortisone rescue pen represents a large revenue opportunity for Antares based on the current patient population. We believe the advancement of this internal development program, coupled with ATRS-1901 will support our future growth trajectory within our therapeutic footprint. With the commercial success we continue to garner with XYOSTED, we remain eager to leverage the commercial team, including with business development initiatives which remain ongoing. Our enthusiasm for our proprietary business also carries over to our partner business, which leads me to Teva’s generic EpiPen in Slide 8. As you can see Teva’s total prescriptions increased a 153% year-over-year, and it captured 58% market share at the EpiPen market. Teva’s success contributed to doubling of our royalty revenue in the second quarter. And we expect that a normal back-to-school season this year will help maintain this growth. As exactly this product has been in part due to our ability to produce and provide a reliable supply of millions of devices to meet the increased demand due to Teva’s market share gain and the associated demand around COVID vaccinations. Our relationship with Teva also extends to generic Forteo and generic Byetta, which remain future growth opportunities pending FDA approval. In addition, we’re excited for Pfizer’s NDA submission to the FDA for their undisclosed asset this year, and note that its lack of disclosure has not hampered its advancement. We continue to respect Pfizer’s wishes to keep the assay confidential, but also look forward to as potential contribution to our future growth. I’m also pleased with the progress of our partnership with Idorsia and their initiation of their global Phase 3 trial for selatogrel. We’re very excited to play an important role in this development program, which utilizes our QuickShot auto-injectors. The strong collaboration between our teams has allowed Idorsia to achieve this important milestone for this novel combination product and approximately 18 months from the signing of our development agreement. The opportunity to self inject selatogrel at the onset of symptoms from a suspected heart attack represents a compelling proposition for patients and we believe with Idorsia’s committed to that innovation could prove revolutionary, as well as transformation for Antares. We look forward to continue supportive Idorsia’s clinical advancement is selatogrel with clinical supply during the trial. I’ll now hand, the call over to Fred for a detailed review of our financials, Fred.

Thanks Bob. Good morning, everyone. We’re very excited to report another record quarter with total revenue increasing 39% over 2020 achieving $45 million. A net income of $4.4 million or $0.3 per share for the three months ended June 30 2021. We believe the diversification of our business remains a core strength in Antares, and we expect a strong performance from both XYOSTED and Teva’s generic EpiPen to persist and further supports our confidence to achieve our full year 2021 revenue guidance range of $175 million to $200 million. Furthermore, as we continue to generate cash, we felt it was prudent to make a prepayment of $15 million on our term loan with Hercules which reduced our principal loan amount and related interest expense. So, let me now provide a more detailed review of the financial results for the second quarter and six months ended June 30 2021, which brings us to Slides 9 and 10. Total revenue was $45 million for the three months ended June 30, 2021, representing a 39% increase compared to $32.4 million in the same period in 2020. For the six months ended June 30, 2021 total revenue was $87.1 million, a 33% increase from $65.5 million for the comparable period in 2020. Sales of our proprietary products XYOSTED, OTREXUP and NOCDURNA generated revenue of $19 million and $37.7 million for the three and six months ended June 30, 2021 compared to $14.8 million and $27.4 million for the same periods in 2020. The 28% and 37% increase in proprietary product sales for the three and six months ended June 30, 2021 compared to same periods in 2020 were principally attributable to continued growth in sales of XYOSTED. Licensing and development revenue was $7.2 million and $12.2 million for the three and six months ended June 30, 2021 compared to $2.7 million and $4.4 million for comparable periods in 2020. The increase in licensing and development revenue in 2021 was primarily result of incremental development and product maintenance activities with Teva and our other ongoing partner development projects. Royalty revenue doubled to $9.9 million for the three months ended June 30, 2021 from $5 million for the same period in 2020. For the six months ended June 30, 2021, royalty revenue was $17.9 million, compared to $9.3 million for the same period 2020. During the quarter ended June 30, 2021, the EpiPen market returned to pre-pandemic levels, and Teva achieved a 58% market share, which accounted for the net increase in royalty revenue over 2020. Our gross profit was $28.5 million and $54.2 million, representing gross margins of 63% and 61% for the second quarter in six months ended June 30, 2021 compared to $19.9 million and $37.9 million, or 62% and 58% gross margin in the same periods in 2020. The improvement in gross profit and margin were primarily attributable to the increases in XYOSTED sales and Epi royalty. Research and Development expenses were $4 million and $6.7 million for the three and six months ended June 30, 2021 compared to $2.4 million and $5.4 million for comparable periods in 2020. The increase in R&D costs were due to progress in our internal development programs ATRS-1901 and 1902. As Peter discussed previously, we submitted an IND application with the FDA in June of this year for the initiation of a clinical study for ATRS-1902 for the adrenal crisis rescue. Selling, general and administrative expenses were $17.7 million and $35.3 million for the three and six months ended June 30, 2021, compared to $14.4 million and $30.9 million for the comparable periods in 2020. The net increase in SG&A in 2021 was primarily due to an increase in sales and marketing expenses that had declined during the pandemic, and incremental costs associated with NOCDURNA. As a result of our strong financial and operational results, we reported net income of $4.4 million or $0.3 per basic and diluted earnings per share of the second quarter of 2021 compared to $2.2 million or $0.01 per basic and diluted earnings per share in the same period in 2020. Net income was $8.2 million, or $0.05 per basic and diluted earnings per share of the six months ended June 30, 2021, compared to a net loss of 200,000, or $0.00 per basic and diluted earnings per share in the comparable period in 2020. Finally, Antares generated cash from operations of $8.4 million for the six months ended June 30, 2021. As a result of our consistent cash generation, in June of this year, we made a prepayment of $15 million on our term loan to Hercules. This prepayment allowed us to reduce our principal loan balance of $25 million, as well as save on approximately $1.2 million annually on interest expense. As of June 30, 2021, after the Hercules payment, our cash balance was $45.1 million. I’ll turn the call back to Bob for closing remarks. Bob?

Thanks, Fred. I’m extremely proud of what we continue to accomplish at Antares. And our strong financial and operating results this quarter continue to reflect effect. Our positive results in both operations and development shouldn’t be a surprise for anyone, as we continue to map out our future and execute on all fronts. We believe our two current primary growth drivers XYOSTED and Epi are still in early stages of their product lifecycle and will continue to support our growth trajectory. We also believe that we are building a strong internal development pipeline and coupled with what our partners are accomplishing in their development programs. We believe we are poised for significant growth longer term and in the future. As we look ahead, we look forward to the potential continued growth at XYOSTED and a successful launch year of NOCDURNA, continued growth at Teva’s EpiPen, assuming a normal back-to-school season, by this NDA submission this year for potential FDA approval in 2022, the U.S. approval and launch of generic teriparatide by Teva; the initiation of clinical programs for ATRS-1902 our adrenal crisis rescue pain; the IND submission for ATRS-1901 this year; Idorsia’s patient enrollment in their Phase 3 trial for this selatogrel heart attack rescue pen; and finally new business alliance and business development opportunities. Again, thank you for your interest. And operator, you can now open line up for questions.

Thank you. [Operator Instructions] Our first question comes from [indiscernible] with Truist Securities.

Good morning, guys. Thanks for taking the questions. First on XYOSTED, how do you see the mix of patients evolving from the current 50-50 split between new and switches? As a pandemic headwind abate?

Yes, thanks, Greg. This is Joe. And I think if I heard your question correctly, you’re asking about the – how we’re seeing the evolution of the split. So, we’re still seeing about a 50-50 split between both the switches, and the new and obviously with the physician offices that have been opening up. We’re obviously seeing new patients coming in, which is obviously continuing to help our Antares grow. So it’s still about a 50-50 split though.

Yes, okay. Give a sense for how much of the IM market is self injection versus an HCP doing the injection?

Did you ask about that, could you repeat that question is the amount of how the growth is with the IND business that would you asked?

No. How much of the IM business is patients injecting themselves versus having a healthcare provider do it?

Got it. So, what we’re seeing more physicians are probably seeming to be enabling the patients to rely on their own injection. So we don’t see as many offices doing the injections themselves because obviously the pandemic created a scenario where patients weren’t able to do that. So more patients were doing that on their own. And that’s why we believe the auto-injector is really a key benefit for us, because obviously when patients doing, injection on their own, it’s very difficult and painful when they’re doing an IM injection versus using our auto-injector. So, we’re definitely seeing that trend for patients self administering now.

Got it. That’s helpful. And then I was just – I was wondering if you could comment, maybe high level on the potential for applying your auto-injector technology to more NCEs, should folks view the Idorsia collaboration is potentially the first of many, any color on that front would be helpful. Thank you.

Hey Greg., I’ll take that question. We obviously think our auto-injector or an injector platforms are obviously very compatible with all NCEs that, where they may need self injection products. Our QuickShot device, and others are very simple to use it’s a two-step process. And so I think as we continue to gain success with programs like Idorsia programs, like with Pfizer, when it becomes undisclosed, I think that’ll, increase our ability to get additional NCEs on our platforms. I think that, early on in our lifecycle of as a company, large companies, we’re concerned about our ability to produce millions of devices; we’ve obviously proven that in a very difficult product in EpiPen product and where we’re now the market leader with Teva. And so I think that the – with the combination of the success we’ve had with the Teva EpiPen in combination with potential success with Idorsia and a company like Idorsia replacing a lot of faith in our ability to get there very groundbreaking product across the goal line. I think that’s going to get us obviously more opportunities for new NCEs. And in fact, we continue to talk to other companies about our platform for potential new license opportunities. And so all of these success items, including XYOSTED will help us get more opportunities, particularly in the NCE space.

Great, thank you.

Thank you. Our next question comes from Anthony Petrone with Jefferies.

Great, thanks. Maybe to start off on 1902, congratulations on the IND filing there. Can you just a little bit more detail on the opportunity around acute adrenal insufficiency. You mentioned in the deck, there are 140,000 patients in the United States annually. Just wondering, when you look at that opportunity, what is the incidence of crisis within that 140,000? And I know it’s a bit early, but are there any early views relative to what’s out there currently on how this could be priced and I have a couple of follow ups?

Hi, it’s Peter. I’ll take the use of this in patients with adrenal insufficiency and how often they run into the situation and how to use it. The first thing is that the patient who is on maintenance hydrocortisone or XYOSTED [ph] they’re using to manage their disease should have one of these devices or the alternative existing therapies available for use at home, should they get into a situation where they’re stressed, either by injury or infection and unable to take a novel therapy and all the Endocrine society is recommended this should be available. In an ideal situation, a patient never has to use the device; you really want to be able to prevent that have this available, whether at home or traveling. Most patients will not use this every year. Some patients will need to use that on that and getting those numbers in exactly there. But the principle here is that all patients who have adrenal insufficiency should have access to a way of administering hydrocortisone in an acute situation. And that should be done as simply as possible.

Yes, and on the market side, we believe the market is actually bigger than what it is today because the current RLD product is very cumbersome. And I think that a large number of a number of patients don’t really use it as an option for crises, they typically will then just present themselves to the ER if they go into adrenal crisis. And so we believe that, there’s a much larger opportunity than what the RLD has currently going on today. On top as far as your pricing question, yes, we’re going to look into that as we continue to develop the product. Obviously, pricing is always a function of the benefits that you’re bring into that patient population into the healthcare system. And so as we gain more insight into how the product actually performs in the hands of patients, from a user standpoint, and show that the PK is consistent with the standard of care, we’ll obviously look to price it at, traditional rescue pen pricing, which is usually a premium to, just a normal maintenance therapy. So overall, we think it’s going to be priced well, and it’ll give us a really nice opportunity from a commercial standpoint, but importantly, we think it’s a significant advancement and benefit to patients who suffer from, Addison’s disease and internal crisis, that’s really the most important thing for us.

Okay. And then a couple of follow ups would be, first on generic EpiPen, if you sort of go back, it looks like we’re in a, certainly a more normalized environment relative to 2020. If you go back to the 2019 trend, you typically see a 3Q bump from 2Q, even though you’re we’re elevating into 2Q, but you still see a sequential increase into 3Q. So should we be expecting that, again for this year, for generic EpiPen, Teva share 58%, where do you think that can top out? And then the last one, I’ll just sneak in here. Just any updated thoughts on timing for generic Forteo? Thanks.

Sure. On EpiPen, Teva has been bumping around 55% to 60% market share and given, it really depending on any given week, and it’s really a function of whose patients are actually buying the device, whether or not they’re going to be covered for Mylan's product or Teva’s but clearly, Teva has done a great job in increasing their market share over the past year. As far as the market is concerned, we expect a normal back-to-school season based on all the news we’re hearing, everybody wants their children to go back-to-school. I think that, it’s important. And obviously going back-to-school, they’re going to have to be equipped with their EpiPens, and the schools are going to have to have EpiPens on hand, in case of an electric shock or, with kids with peanut butter allergy than these things and things like that. So the only thing I would say is that, the Delta variant is non – a wild card in all this right. And so, right now, it appears that everyone’s going back-to-school, but that obviously could change if things get worse. But we’re expecting it to be normal. And I think importantly, I think Teva’s market share in that, 55% to 60%, market share if that if they maintain that it’ll be a really strong quarter for Teva and for us. And so we’re looking forward to it. And then also, just as an FYI, that the first couple weeks of July have been very strong. And so we are seeing the trends fold out the way or that we expect them to at this point. And then on your final question or your other question on Forteo from a timing standpoint. Partnerships are great in that, when we have our partnerships, we benefit from their development, we benefit from their success, like you see, we’re happy. The one major downside of partnerships is we don’t control the file. We don’t control the disclosure of information. We don’t control, really the timing of launches and so forth. And that’s where we are with Forteo. Forteo, Teva is still expecting the approval for Forteo. We don’t – we’re waiting for the approval just like everyone else is. And hopefully they will get it across the goal line shortly. And that’s the only information we have. We’re in the same camp as everybody else with our partner, and they’re waiting for the approval from the FDA. So that’s the only update I can give. It’s a meaningful product. They continues to do really well in the marketplace. And Teva continues to have prior to review, and they were first to file, so that Garner’s a tremendous commercial benefit once the proxy approved.

Thank you.

Thank you. Our next question comes from David Amsellem with Piper Sandler.

Hey, thanks. So on XYOSTED and I apologize if I miss this, but can you just go through the switch or mix? What I mean by that is, these days, what portion of the switches are coming from IM versus the gels and as the pandemic eases Delta COVID notwithstanding, how do you expect that switch or mix to shift if at all? That’s number one. And then secondly, I have a question on OTREXUP. I know you don’t get a lot of questions on that. But you don’t have a broader rheumatologists business per se. So, can you talk about the overall fit of OTREXUP within the organization? Do you want to add more rheumatology focused assets where you can leverage that sales infrastructure? Or is that an asset that potentially you could find a taker for down the road? Thanks.

All right. Thanks, David. This is Joe, I’ll take the first question with regards to the switch mix. So, I think what you’re asking is, as we kind of go forward post-pandemic, do we see that changing one way or the other? We anticipate that obviously, and most of our switches your question, I think also was most of our switches are definitely coming from IM injections. We are getting obviously patients that were using either the gels and not satisfied with that. But what we’re really anticipating is that we’ll see more switches that’s going to be our goal as well, because as more physicians get exposed to XYOSTED as you saw, we’ve got over 9000 that have that have used it, as more physicians get exposed. And as more patients see the benefit of XYOSTED, we definitely anticipate that that switch will continue. But that said obviously with the market continuing to be really strong. We’re also anticipating getting new patients as well. So, we continue to see that, that mix to be an important part of the brand strategy going forward. And I don’t think, we don’t think necessarily that post-pandemic that we’re going to necessarily see a big shift one way or the other, except that ideally post-pandemic, as we saw early on will see new patients coming into the market. So that’s the one thing that we would anticipate to continue to happen as well. So, I don’t know, if you want to take the OTREXUP’s question.

Sure on the OTREXUP question, David, clearly, it’s not core to our, therapeutic presence in endocrinology, urology and in some primary care. OTREXUP it’s been on marker for seven years, it’s, a very small percentage of our sales teams time less than probably 10%. But it continues to do well, it, hasn’t – it’s not growing excessively, but it’s also not really going down either. So it’s a nice asset in our bag. Longer term, I think our, when you look at our development pipeline, it was 1902, which is a for adrenal crisis, that’s a endocrinology product. If you look at 1901, that’s a urology asset base to fit perfectly within where we are today from a therapeutic standpoint. We’re going to look to continue to expand that. So longer term, I think on OTREXUP in the right hands could do really well for us for another company. And so we will explore other options with OTREXUP, but right now it continues to add to our bottom line. And we’ll continue to detail, but longer term, you’ll obviously we are looking at other options for OTREXUP, so we can focus on the endocrinology, urology space as we continue to build that pipeline and improve not only our pipeline, but also improve the penetration of XYOSTED as well as NOCDURNA. So, I think that, it’s basically where we’re going to be going in the next couple of years.

Okay, that’s helpful. Thanks, guys.

Thank you. Our next question comes from Elliot Wilbur with Raymond James.

Thanks. Good morning. I apologize – might have missed this in your prepared commentary, but can you just, help me sort of reconcile the continued strong upward trajectory in XYOSTED or excess with revenue trends over the last couple of quarters, not sure I can necessarily put the pieces together, they’re kind of given what we’re seeing in terms of dispense data.

Sure. Elliot, this is Fred, what we have several large payers that we work with, and one of the largest ones we’ve worked with, was very late in their billings to us. In fact, their fourth quarter invoice for rebates didn’t occur during the year and close didn’t even occur during first quarter workflows, we didn’t get it till close to the end of the second quarter. And so the same thing happened with the first quarter invoice from that same payer, so we were two quarters out without having the updated invoices. And when we took a look at the actual amounts that came in versus the amounts that we had accrued, we were a little bit short, in each of the fourth quarter as well as the first quarter. So both of those small estimate changes all hit in Q2. As a result, you see that the revenue increased did not match the script increase that we saw from Q1 to Q2, but that was really, and we think it was a onetime item that took place that we’re caught up with now.

Sorry, Bob go ahead.

Yes. As with payers, it really depends on the patient mix. It happened to be a couple quarters where this particular payer had a large number of patients is unusual. And it just, if that can change at any given quarter the mix changes whether it’s one of the other major PBMs, or any of the other plans. And so that’s why you see a larger increase in the scripts than you did in the revenue, but we expect that to normalize go forward.

But you’re right, and it was cumulative, all taking place in the second quarter.

Okay. And again, just want to clear. So it was under accrual based on specific trends at one particular payer, rather than just sort of a general assumption a mix on your part, correct?

That’s exactly right.

Okay. And then turning to the hydrocortisone asset for adrenal insufficiency, assume that’s a relatively small prescriber base, and can largely be covered with existing sales force assets. But maybe you can just talk about kind of at a high level based on your early assessment, sort of, what you see is kind of the incremental call overlap with respect to prescriber base for that asset and what you currently have in the market, whether or not you think you can sort of cover 100% opportunity with existing infrastructure?

Hi, this is Peter. Just in terms of the folks who look after these patients tend to be specialists endocrinologists, a group that we do deal with, and it can be fairly well focused, and like Joe talk about the specifics of how we’re envisaging and we ultimate the call.

Yes, and thanks Elliot. Good question. And the good news is, that’s a physician group, the endocrinologists, as you know that we are in with today. So, we’ve built relationships with those customers today, we’ve got access to those customers today. When you look at the Solu-Cortef market, it’s about 60,000 TRxs. So, we definitely see an opportunity. And as you heard in the descriptor to what patients have to do today, compared to what they would do with our auto-injector, is just a huge, we see that as a really great opportunity. And something we’re going to be bringing to the market that I think customers will really appreciate, obviously, their patients will as well. But we’ve got pretty good access to that customer base today. And so we see it as a real good marriage with what we have already.

I think the only element that we would potentially add on is there is a pediatric consideration here. We’re looking at our product for adolescence as well. And so we looked at potentially adding about a dozen reps when the product is launched to focus exclusively on those pediatric endocrinologist, because we obviously we don’t call in most of them for XYOSTED, because most of the patients on testosterone are older – are males from the 16 and up. And so that’s the one area that we may see basically a larger number expansion of reps, but a very – but very modest relative to the overall size of the company of the commercial team.

Okay. And then I guess what, just with respect to the development path for that product, and if not you could provide kind of this early stage in terms of thinking about potential exclusivity avenues, and also request for some sort of abbreviated approval pathway?

So, it is an orphan population. And are – we want to explore that opportunity with the FDA. And we intend on doing that. We’re – the good news is the commercial assessment doesn’t require that to be an orphan product. But obviously, there’s upside if we do get it, and until we meet with the agency, the actual department within the agency that deals with orphan designations, we don’t want to promise anything. But our goal would be to get it to be the orphan exclusive. But as we move forward, we’ll give further updates as we do things. If you want to add some, Peter?

And also just emphasize, we’ve developed a novel formulation here, and we’re progressing with that – is that and this is also a new auto-injector platform, that’s going out, which is different from others that and I think both of those will be providing barriers to entry.

Okay, thanks. Just one last question for yourself Bob, just going back to me earlier commentary around the epinephrine marketplace, we’re getting lots of questions. Looking forward a little bit in thinking about 2020, we continue to see these elevated levels of epinephrine dispensing. I know you’ve got a reasonably good and longer term look into sort of how your partner’s expectations for that market may be shaping up, but just sort of any high level thoughts you may have in terms of sort of the sustainability of kind of what has been sort of an above average level of utilization for epinephrine products? Thanks.

Yes. As far as the Epi market going forward, we’re – we obviously more and more patients every year and we are subject to Epi [indiscernible], and these things and things like that. So, I think overall, the market continues to grow. And I think Teva will continue to capture the market share that they’ve been able to garner and potentially increase that, and it’s not really what – their initial goal was at 50% of the market, and they’ve obviously exceeded that. And so we’re not looking for them to take a tremendous amount of more market share, it’s just – there is a normal market out there for multiple products including Mylan’s EpiPen, but as far as the pandemic is concerned, there’s clearly been a lift on the units relative to the vaccines, and we see the vaccines continuing into the balance of this year. We also believe that there could be booster shots. That again, we’re not experts on COVID. And we know purport to be but, I think that there will be booster shots, and you’re going to have the same potential issue with booster shots as you do with the current vaccines. And so we believe it’s sustainable, it’s not going to be a cliff, it’s not like it’s been a doubling of the market, it’s been a nice benefit, after a very terrible 2020 market, because of the COVID. So, we think it’ll continue to be a very strong growth, opportunity for us and Teva and a minimum – it’s got a very long value for both of us as we see it as a very durable generic.

Thank you. Our next question comes from Gregory [indiscernible] with Cowen and Company.

Hey, thank you so much for taking our question and congratulations on all the progress. So yes, first one XYOSTED, this is a follow up to some of the previous questions. Do you have any guidance you’re willing to give in terms of the net value per RX that we should be expecting for the remainder of the year? Do you think it would kind of like continue to improve from what you saw in this quarter around 250 per RX understanding those dynamics that you mentioned in terms of rebate payments?

Sure, in George, this is Fred. We do expect the net selling price to increase in July of this year. We did take a small price increase for XYOSTED. And also when you couple in the factor that the under estimate for XYOSTED for the fourth quarter actually all occurred in the first half of this year. We expect both of those to normalize, if you will, and increase the net selling price as we look out through the rest of this year.

And the normal factors of reduced co-pay support as you go further in the year also increases our net selling price, and those dynamics haven’t changed. A lot of patients already through their deductible, there’s usually either very low or no co-pay at this point, depending on those certain situations. So, we typically see the co-pay support drop quarter-over-quarter and that we don’t expect to see any change in that. So that’ll increase to net selling price to product as we go into Q3 and Q4.

That’s very helpful. Thank you. And then just continue on XYOSTED, how to take these things change in preference we’re starting to see from positions might be in the future. As we, I guess, hopefully, over the pandemic, what levers can be pressed to achieve broader XYOSTED awareness and adoption?

So, I think you’re asking about potentially patient staying on therapy, I think it’s kind of the question you’re asking. And, really is we’re actually putting a really a nicest growth in the length of therapy. In fact, we’re now seeing patients beginning to stay on therapy, going towards seven months. So it’s showing a really great persistency for the brand, which obviously, again, speaks to the fact that patients are doing well on the brand. So that’s continued to grow. And if you look at our NRx growth, it’s actually as strong as our TRx growth. So it’s definitely showing signs that patients are not only refilling, but we’re obviously continuing to get new patients on the brand.

Great. And then our final question is on NOCDURNA. Because now that as you have a little more experience with the product, where do you think your commercial team can improve on the prior launch? And what is your biggest impression from the initial patient demand? Is there any condition education expected? And just in general, what are the most crucial aspects in low hanging fruits to growing the product?

Yes, this is Joe, again. Thanks so much for the question. With NOCDURNA, you mentioned that’s definitely what we see is – it’s been a critical element is that physician education component. And as I mentioned, in the opening comments, one of the things that we rolled out this year, just actually about a month ago, is key opinion leader educational programs across the country. We see those as really being instrumental and helping physicians really identify these patients. Because with post-pandemic, what was coming into physicians’ offices, they were they were just literally trying to catch up. So, what we’re finding is really being helpful to physicians and helping them really understand what are some of the patients sites that are in their practice today that might be kind of floating under the radar and these educational programs, as well as a revised interactive visually, that actually gives patient types that the physicians can look for. We see those two things as being really critical to helping really continue to grow opportunities with NOCDURNA.

This is great. Thank you so much.

Thank you. Our final question will come from Matt Kaplan with Ladenburg Thalmann.

Hi, good morning, guys. Congrats on the strong quarter. Wanted to dig into, I guess the three things; first XYOSTED maybe a question for Joe with respect to how important are I guess in person meetings with doctors, given success you’ve had during the pandemic to really continue to grow XYOSTED and what are you seeing out there now with kind of resurgence of the Delta version of the virus and your access to doctors offices?

Yes, thanks, Matt, really good questions. I would say that we’re – the good news is, we’re continuing to see physician access to be good certainly post-pandemic. As I mentioned, we’re definitely monitoring obviously this Delta variant. We haven’t seen any substantial changes yet in the market from an access standpoint. The one benefits over lining we’ve had with the pandemic was we really developed the capability around the virtual call. So this team has really done well and the brand team has also the marketing team has also provided the team with resources that they can use in that virtual setting. So, we still – as I mentioned, we’ve got about 30% of our activity. It still happening virtual. So even if physicians’ offices would get harder to access this virtual capability that we’ve developed, we think that that will continue to be able to garner opportunities with XYOSTED and NOCDURNA. And so that’s something we’re prepared for. So, we’re really able now to meet the customer wherever they need to, whether that be in person or virtual. But to your question, certainly in person, we see as the ideal opportunity, because there you can get into much deeper discussion with the physicians, as well as their staff members and things like that. So, we’re going to continue to obviously try to go towards in person where we can, but we’re going to be ready to modify or switch over to virtual as we need to.

Okay, okay, that’s helpful. And then a question on 1902, can you help us understand that kind of potential market dynamics there? I guess, I guess that most patients will not use their rescue pen, frequently. And then currently in the market, you mentioned also that most patients are, or a significant number of patients going to the ER to address their adrenal crisis. I guess, with respect to you pen should we think of it more as kind of an EpiPen situation where there’s going to be a certain shelf life where they need to refill their pens, even if they’re unused over a period of time?

Yes. It’s Peter. You’re absolutely right. This – the model, I think we should be thinking of is that the EpiPen where you don’t want to have to use that you’re trying to avoid that. But when you need to have the therapy, you want to be able to give it as simply as possible, it’s got to be available to the patient, and where possible to any caregiver in those situations where that might be needed. So this is a classic use the rescue pen and as you were Antares is able to provide pens that meet the requirements for being used in those acute situations. And that’s capability that I think we have here, and is one that patients and physicians will appreciate.

And Matt to your question about expiration or dating, it’s going to be similar to EpiPen, this is a product that’s probably going to have anywhere from 18 months to 24 months of stability, and so that patients will have to replace those pens on a regular basis. And obviously the instability that the expiration dating that you get for EpiPens starts from when they start making the drug. And so most patients, even though EpiPens have expiration dating of 18 months to 24 months depending on the brand. By the time the patient actually gets it from the pharmacy, he usually has about 12 months to 14 months of dating. And so it wouldn’t be that much different for our rescue pen for adrenal crisis. And so you want to be able to provide the patient with at least one year of coverage. And that’s what our goal will be overall and so that the patients will replace them just like they do with Solu-Cortef, which is today, they typically don’t use it and you hopefully don’t need to use it, but when they need to it’s there and it can save your life.

Great. Now that’s very helpful. Thanks for that color.

Thank you. That concludes our question-and-answer session. This concludes today’s presentation. You may now disconnect.