TherapeuticsMD, Inc. (TXMD) Q4 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and thank you for joining us for the TherapeuticsMD Fourth Quarter and Year End 2016 Results Conference Call. Following prepared remarks from the company, we will open the call for questions. I would now like to turn the call over to TherapeuticsMD Director of Investor Relations, David DeLucia. David, you may begin.

Good morning, everyone. Thank you for joining today to discuss our fourth quarter and full year 2016 financial and business results. This morning, TherapeuticsMD issued a press release announcing fourth quarter and full year 2016 financial results. The press release is available on the company’s website thepeuticsmd.com, in the Investors and Media section. On today's call from TherapeuticsMD are Chief Executive Officer, Robert Finizio; Chief Financial Officer, Daniel Cartwright; and Chief Medical Officer, Dr. Sebastian Mirkin. Also joining us for Q&A Chief Product Officer, Julia Amadio. I would also like to point out that Dr. Brian Bernick; Chief Clinical Officer is attending a national sales meeting and will therefore not be on today’s call. I would like to remind everyone that certain statements made during this conference call may be forward-looking statements. Such forward-looking statements are based upon current expectations and there can be no assurance that the results contemplated in these statements will be realized. Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and our annual, quarterly and other reports filed with the SEC. These forward-looking statements are based on information available to TherapeuticsMD today, and the company assumes no obligation to update statements as circumstances change. An audio recording and webcast replay for today's conference call will also be available online in the Investors and Media section of the company's website. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on February 23rd, 2017. With that, I'll turn the call over to TherapeuticsMD CEO, Rob Finizio.

Thanks Dave. Good morning everyone. 2016 was an exciting year for TherapeuticsMD. Our two late stage product candidates TX-004HR and TX-001HR continue to approach commercialization and are backed by two clinically rigorous development programs and positive phase 3 data. I like to start by listing a few of our major accomplishments during the past year. In July, we filed our new drug application for our first product candidate TX-004HR based upon the results of our complete clinical program, including positive data from the pivotal phase 3 Rejoice Trial. The product stepped into the NDA in September we received a PDUFA target action date of May 7, 2017. Assuming approval, we plan to launch TX-004HR in the fourth quarter of 2017. More recently, we reported positive topline data from the pivotal phase 3 Replenish Trial for a second product candidate, TX-001HR, our bio-identical combination of estradiol and progesterone for moderate-to-severe vasomotor symptoms due to menopause. We believe TX-001HR has the potential to become the first and only FDA approved bio-identical combination of estradiol and progesterone. And also a very valuable treatment option in the large growing and underserved market for bio-identical hormone therapy. The data supporting the market opportunity for TX-001HR continues to grow, which includes over 6 million annual FDA approved prescriptions as well as close to 18 million annual compounded prescriptions. Our relationship with potential distribution partners in the compounding pharmacy community were also strengthening through our BIO-IGNITE program will provide a detailed update on BIO-IGNITE later in the call. Finally, we continued to appropriately expand our sales and commercial infrastructure to prepare for the potential launch of TX-004HR. We’ve made important progress towards this goal including hiring of Dawn Halkuff from Pfizer as our Chief Commercial Officer. Our sales team has done an outstanding job building our prenatal vitamin business into the number one prenatal products by volume and the branded commercial payer in cash – base in 2016, and also the number of three prenatal by product volume if you include government payers. We believe we have the sale infrastructure in place as well as the established relationships in the OBGYN channel to drive a successful launch of TX-004HR if approved. On today’s call we’ll review these developments in our prepared remarks and then open up for Q&A. Dan will start with a review of our financial results, then Sebastian will provide a clinical update and I’ll review our recently announced BIO-IGNITE program and the progress that we’ve made thus far. We also want to remind everyone that we are hosting an Investor Day next Wednesday on March 01, in New York City to review both the opportunities in detail including our launch plans for the first time for TX-004. We look forward to seeing you there. Now let me turn the call over to Dan.

Thanks Rob. Both the fourth quarter and full year 2016 results are included in the press release issued today. Let me summarize a few key points. Net revenue from the company's prescription prenatal vitamin business was approximately $4.5 million for the fourth quarter of 2016 compared with approximately $5.6 million for the fourth quarter of 2015. Net revenues from the company’s prescription prenatal vitamin business was approximately $19.4 million for the full year 2016 compared with approximately $20.1 million for the full year 2015. Total operating expenses for the fourth quarter and full year 2016 increased compared with the fourth quarter and full year 2015. This reflects our continued investment in advancing our late stage product candidates. R&D expenses during the fourth quarter of 2016 were approximately $10.3 million compared to approximately $13.2 million during the prior year's quarter. R&D expenses during the full year 2016 were approximately $53.9 million compared to approximately $72 million during the full year 2015. These changes reflect a decline in clinical trial cost as we completed our Phase 3 trials. SG&A expenses for the fourth quarter of 2016 were approximately $16.3 million compared with approximately $8.6 million for the prior year's quarter. SG&A expenses during the full year 2016 were approximately $53.1 million compared to approximately $28.7 million during the full year 2015. This is primarily due to an increase in sales, marketing, regulatory expenditures and personal cost to support future commercialization. We are continuing to expand our women's health sales force and invest in pre-commercialization activities to support the potential launch of TX-004HR. In the fourth quarter of 2017 we expect these factors to increase the growth rate of our SG&A expenses throughout 2017. Turning to our bottom-line, our net loss for the fourth quarter of 2016 was approximately $22.8 million or $0.12 per basic and diluted share compared with approximately $17.5 million or $0.10 per basic and diluted share for the fourth quarter of 2015. Our full year net loss for 2016 was approximately $89.9 million or $0.46 per basic and diluted share compared with approximately $85.1 million or $0.49 per basic and diluted share for the full year 2015. Finally, we finished 2016 with approximately $131.5 million in cash compared with approximately $64.7 million at December 31st, 2015. As a reminder, our cash balance at the end of the third quarter of 2016 was $147.5 million, which equates to a cash utilization of approximately $16 million in the fourth quarter. We believe our strong financial position will allow us to continue to advance both of our late stage product candidates towards commercialization. Let me turn the call over to Sebastian for a clinical and development update.

Thanks, Dan. I would like to acknowledge our clinical and regulatory team for their commitments and hard work during 2016 to successfully complete the TX-001 Replenish Trial as well as numerous TX-004 related regulatory activities including the submission and acceptance of [Indiscernible] NDA. In December, we reported positive topline result from our Replenish Trial for TX-001 for this trial 1 milligram progesterone 100 milligram and this trial 0.5 milligram progesterone 100 milligram demonstrated statistical significance and clinically meaningful result across the four co-primary efficacy endpoints. In addition, endometrial safety was established with an incidence rate of endometrial hyperplasia of 0% across all doses. I would like to emphasize the significance of these results. The Replenish Trial established for the first time the distinct doses of estradiol in combination with progesterone demonstrated both endometrial protection as well as statistically and clear meaningful reduction hot flushes. We are excited to move forward with our TX-001HR clinical program and plan to have our NDA filed in the third quarter of this year. Should TX-001HR be approved, we will be the first and only FDA approved bio-identical combination of estradiol and progesterone. Now, I would like to turn the call back to Rob, who will comment on the progress of our BIO-IGNITE program.

Thanks, Sebastian. All right so earlier this year we announced the initiation of BIO-IGNITE. BIO-IGNITE is an outreach program to quantify the number of compounded bio-identical estradiol and progesterone prescriptions currently dispensed by the 3,000-3,500 compounded pharmacies in the U.S. and qualify their interests in distributing our hormone product candidates, if approved. Because compounded products are not reimbursed or FDA approved the prescriptions are not [Indiscernible] through the traditional drug data bases such as IMS or Symphony Health. However, the compounded pharmacies that dispense these products have the prescription data and we believe we’ll further reinforce the size of the market. BIO-IGNITE is our plan to go right to the source at the pharmacy level to articulate to our investors three important details. Number one; reinforce the size of this market through actual prescription data from the pharmacies. Number two, articulate the number of compounded E+P Prescriptions that are directly substitutable by our two potential doses of TX-001HR if approved and then number three, to find the potential revenue opportunity for TX-001HR through signed distribution agreements, leveraging traditional pharmaceutical wholesale distribution channels. Now, let’s walk through an example of the progression of our pharmacy or pharmacy network throughout BIO-IGNITE program. Step one, it begins with identifying the pharmacies that has expressed interest in dispensing our product candidates if approved. Number two, it’s having this pharmacies sign a non-binding letter of intent under which they share their current total compounded E+P Prescriptions which equates to TX-001HR volume as well as additional data points. And then number three, is entering into a signed distribution agreement with this pharmacy to dispense our products in lieu of compounding if approved. These are the typical steps for pharmacy network in the BIO-IGNITE program which enables us to appropriately allocate the resources needed for a successful launch of TX-001 if approved. Now, I’d like to provide our first quarterly update on BIO-IGNITE. We have officially signed a distribution agreement with Premier Value Pharmacy Compounding Network or PVPCN. This agreement is to dispense our products if approved, this network is one of the country’s largest and most esteemed compounded pharmacy network. It represents over 300 pharmacies and approximately 1.5 million annual prescriptions of compounded estradiol and progesterone that are directly substitutable to TX-001HR. We’ve also entered into non-binding letters of intent with an additional 362 pharmacies who will share their total compounded E+P Prescription data representing approximately another 500,000 annual prescriptions of compounded E+P that are directly substitutable to TX-001HR. In total, we’ve been in contact with over 20% of the high volume compounded pharmacies since we launched BIO-IGNITE just two months ago. We’ve identified 2 million annual prescriptions of compounded bio-identical E+P that are directly substitutable to TX-001HR and have entered into a distribution agreement addressing 1.5 million of these scripts. This puts us well on our way to potential converting the 12 to 18 million annual prescriptions of E+P in a compounding segment. We believe that our success with BIO-IGNITE in such a short time frame speaks volumes to the value of our late stage pipeline and reflects the changing dynamics of the compounded pharmacy industry related to hormones. This includes almost complete loss of reimbursement for compounded hormones and a sharp increase in regulatory cost and oversight in a compounding business which is only expected to grow overtime. In conclusion, we recognize that women and physicians continue to choose unapproved compounded bio-identical hormones that are cash pay instead of FDA approved synthetic hormones that are covered by insurance. Our company was founded on the goal to give women what they are already demanding for the management of their menopausal symptoms in a FDA approved format. It gives me great pleasure to see our product candidate’s one step closer to meeting this demand. 2017 is shaping up already to be a pivotal year for TherapeuticsMD. We have two late stage product candidates in large markets representing significant near term opportunities, revenue opportunities. Both product candidates have positive tail winds including demographic and regulatory factors and we have assembled a top team in the women’s house base to transition our company to a commercialization and capitalize on these growth opportunities. We look forward to the FDAs PDUFA target action date for TX-004HR on May 7 and the submission of our NDA for TX-001HR in the third quarter reflecting significant milestones for the company. Before we open up to Q&A, I’d like to remind everyone about our 2017 Investor Day next Wednesday March 1, in New York City. At the event for the first time, we’ll feature our go-to-market strategy for the launch of TX-004HR from the broader commercial team, we also will provide additional insights into the clinical, regulatory and commercial aspects of both of our late stage product candidates. We’ve assembled a very strong group of tailwinds [ph] and outside experts to review these topics with you. Presenters will include a former FDA regulatory director of the division of Bone, reproductive and neurological products who has previously reviewed and approved multiple VVA and VMS drugs similar to TX-004HR and TX-001HR. We will have top [Indiscernible] endocrinologist and sexologists who prescribe current therapies to treat both VVA and VMS. Key opinion leaders from the compounded pharmacy community including IACP, executives and one of the principles of the pharmacy Premier Pharmacy Value and Compounding Network to answer questions about the current state of compounding and our sign distribution agreement. These experts will also reflect on our BIO-IGNITE program and what represents for the future of the compounding industry. We appreciate your interest in TherapeuticsMD and your participation on our journey to transform the women’s health space. We’ll now open up the call for questions.

[Operator Instructions] Our first question comes from Jami Rubin from Goldman Sachs. Your line is now open.

Thank you very much. Just a couple of questions. Rob, first for you, the BIO-IGNITE partnership sounds really interesting. Does this in anyway await the need for a domestic partner and you’ve never really talked about pursuing a partner outside the U.S., if you could address that. And secondly, just I was wondering if you’ve been communicating with the FDA on Yuvvexy about the label. And if you want to maybe taking the opportunity right now to set expectations for what kind of label we can expect, i.e. a modified back box, no black box, sort of how should we think about it? Thanks very much.

Sure. Jami, so, BIO-IGNITE is put in place, so the company can gauge its resources needed for launch and articulated to the Street. So the lot of these data has been check, track through IMS. For modeling purposes, I’d like to put the whole opportunity kind of in perspective, right. So we have 1.5 million annual prescriptions, a substitutable E+P for TX-001HR. We were still being -- we’re going to price impurity and have VAC [ph] price between $230 and $250 a month. Assuming conservative rebates and discounts at 30% for scripts, you can throw the whole kitchen [ph] things in there to build your model. And there is one other thing that absolutely key that we do not see a lot of recognition for on the Street. It remind everybody that on top of that 1.5 million prescriptions through the compounders of BIO-IGNITE. There are another 3.5 million separate estradiol and progesterone prescriptions annually which is write in IMS data and referred to in our slides taken into this opportunity. This market is the most easily addressable and low-hanging fruit by TX-001HR which equates the total of 5 million prescriptions. This is all low-hanging fruit and you cam even articulate the ages of these women taking this progesterone and estradiol separate pills in our slide deck. So, I'd like everybody just a step back and look. We've been doing this for about 60 days. We have 5 million addressable scripts already. It’s really impressive. On your second question relates to the label. I obviously can't get into any FDA dialogue. It’s against company and corporate policy. The one thing that we do want reinforce is at our Investor Day I think it’s an appropriate place to have an open Q&A dialogue around this and any other regulatory questions anyone has. We've always talked about our internal planning surrounding the label. Our best case scenario is class labelling. We know that we have a differentiated physical, clinical and PK characteristics to capture significant share and drive a very successful launch. Our outside scenario was a highly deferential in label, that’s about as far as I can go on this fall, but we love to discuss it further with you at our Investor Day. With people by the way much more authorized and much more credible to speak to it than I am. Anything else, Jami?

No. That’s it. Thanks very much.

Thank you.

Thank you. And our next question comes from Louise Chen from Guggenheim. Your line is now open.

Hi. Thanks for taking my questions. So, a few questions here, so, first on the Yuvvexy approval. Just curious if you will sell this product through compounders, and if there's any benefit of doing that ahead of the 001 launch? And then secondly, we’ve received pushback that there’s a lot of topical products at the compounding pharmacy, and would that be a challenge for you to push that over to your formulation? And then lastly just here on the compounding opportunity, can you point an examples of other drugs that have been taken up compounders which could set a precedence for 001?

Luis, its Rob. So, starting at the top, actually kind of putting some of these together, so I think a great precedence for what we’ve seen previously for compounding products would be very easily looking at something like androgel, testosterone. So, before TESTIM or axiron or androgel was approved no one knew for a fact that hypogonadism was treated by testosterone. Although compounded pharmacies at this time is going to back pre-2008-2009. At this time compounded pharmacies had a 100% of the testosterone market, a 100% of it. They were reimbursed for which does not exist today for this testosterone, as well as there is no Drug Quality and Security Act making any knock off in essential copy and a lot of this was injectable oral intradermal. And as you can imagine these are all very different routes of administration. Well, as you know combines before the genetics came out the combined testosterone market was to be $1.6 billion and $2 billion and this was launch without support of compounders. This was launch when compounders lost money by selling it. But what they'll tell you versus compounding their own drugs which does not exist for us. The compounding economic environment will improve with essentially E+P, but what they’ll tell you and what I really -- this is a great topic to bring up on our Investor Day because we have number of the thought leaders there, is that when this was approved, when TESTIM was approved and Androgel approved it basically authenticated what these compounders and doctors have integrated medicine in primary care of docs [ph] have been saying for years and years and years. That it does work. It is safe. It is effective. And then neither there's an FDA approved drug, the compounding market grew for both the compounders and FDA approved to massive, massive amounts. I’d like to clearly say that we believe there are a lot more prescriptions of E+P then [Indiscernible] for women and men. And that we believe we will give credibility and we will open this space up to all the integrated medicine doctors and compounded pharmacies that been saying this stuff works. It can be proven, safe and effective in the economic environment, in the physician environment and the patient environment will all be improve. So, I know it’s a long way to answer your question, but I love to discuss this in a lot more detail at Investor Day, last to the route [ph] of administration. So we are directly tracking that. We believe that the doctor’s liability, the doctor’s validity of given something proven safe and effective as well as the patient having something that is proven safe and effective now covered by insurance, pharmacy improving economic environment as well as leading every medical societies demand for patients, doctors and the FDAs is a great environment for our E+P product and we do not see topical as a direct obstacle for converting this market at all. And we’re signing these agreements and these compounders would love to talk to about in live.

And just on Yuvvexy, are you will include that in any of your agreement? Is that on the table as well?

Absolutely, and we see these physicians, we see these pharmacies as key partners with both products. We only talk about E+P and high volume, because its not track by IMS and it’s a little bit more complicated, and as sales if approved and what we’re expecting assuming that happen we are going to offer our Yuvvexy product to this network for sure?

Okay. Thank you.

Thank you.

Our next question is from Annabel Samimy with Stifel. Your line is now open.

Hi, guys. Thanks for taking my question. You did a great job outlining how you’re going to approach the compounding market. Are you approaching the retail market in just the regular fashion? And with regard to Yuvvexy, I know that the compounding market is not as large. Do you view that as kind of a pilot program for I guess testing how the compounding market convert to an approved bio-identical. And then separately, I was hoping maybe you can detail, I guess the evolving competitive landscape for estrogen you have strong that’s going to improve. You have DHA that’s going to improve Intrarosa. Intrarosa can have a black box label neither of them are pure estrogen. So, one, does that change your competitive landscape for you, and two, does the fact that Intrarosa not have a black box. Can you correlate that to what might happen with your label? Thanks.

Absolutely. So, a lot there. Which one would you like me to start with?

Well, I should start with competitiveness if you want to go back.

Absolutely. So, Intrarosa has got a fantastic label. I mean, it’s really, really good. But I want to remember. I want to remind people think. Women suffering from symptoms of VVA have got barriers to being intimate. They have barriers to feeling hygienic. They have barriers to in overall wellness, pain, urination, things like that, itching and dryness. When you introduce a product like a cream that’s used every single day or something like Intrarosa that’s used every single day and then you into maintenance phase and its continue to be use every single day. You’re getting rid of the symptoms here. And that's great. But these large amounts of things that are used daily create new barriers that obviously impede intimacy, make a woman feel non-hygienic and these are physical characteristics that when used every day we believe are going to be obstacles that for the first time if approved our physical characteristics should completely remove. Our physical characteristics are elegant, fast dissolving, less than 2% to 3% of discharge and basically dose whatever it wants and working quickly, so there's really nothing there other than a very comfortable feeling. So, that's one of the big drawbacks we see with Intrarosa even though it has a fantastic label. The other thing is given such a great label, if that attracts more women into the space because there is 30 million untreated women just like an authorized generic could attract more women into the space, it's a perfect steppingstone to our product, because the issues that will be created from these products are the issues with the generics that will be the same as the branded products out today is a perfect steppingstone to what we believe if approved will be a fantastic product offering physical benefits that are not with the current dosing out there today.

Is that efficacy competitive with…?

It has to be used daily and if its not used daily and its use a few times a week like the older estrogen drugs it loses efficacy and there’s a number of white papers out there on this that I'm referring to. So it is not in my opinion, my personal opinion competitive in that way. Due to that a woman has to use a large ovule [ph] with an applicator every single day. And the outskirt of action if you look at the label is 6 to 12 weeks.

Okay. And how about the fact that it’s not a pure estrogen?

Well, remember, the fact that it's not an estrogen, its an analog to an estrogen, so its put in the Virginia and its metabolized into estrogen and its in fact if you look at the PK levels at day seven in their label and I know these are different women but you compared to our four or 10 micrograms, their levels are higher. They also have a level of testosterone. So it’s certainly an interesting approach.

Okay.

The one thing I would state just coming back to the daily dosing. They invested we believe you know a few hundred million dollars into the company, 200 million or 300 million from what we can see on some of the financial websites, and they completely walked away from the product, completely just walked away. As you know, Garrison [ph] number two healthcare – women’s healthcare company in the US, the number one worldwide. It’s got to tell you something about the dosing and the size and amount of the Ovule.

Okay, great. And now maybe you can talk about the compounding market for Yuvvexy, you’re using as a pilot program for the E+P market?

Absolutely. So, we believe Yuvvexy will build trust between us and our partners. We believe there's a nice opportunity there for us and our partners. And we believe the product profile is so vastly superior to anything that the compounders could make, it will be very successful. We really do. And then on the retail side, I just want to be clear that our products will be available from any retail pharmacy and even with the compounders were going through traditional distribution methods that are widely characterized and understood, kind of the spoken hub model with wholesalers and distributors. So, our products are everywhere for the patient to get. These compounded pharmacies that are women's health specialist offer a service to the physicians and to the women that you cannot get a large retail pharmacies like CVS or Walgreens and are typically just a different type of customer, and we want to support both.

Thank you.

Thank you.

And our next question comes from Jay Olson from Oppenheimer. Your line is now open.

Good morning, guys. Thanks for taking my questions. I had a couple on Yuvvexy and then maybe a follow-up on TX-001HR. I noticed in your press release, in your prepared remarks, you didn’t use the proposed brand-name Yuvvexy. Is that a sign that you might be working on that are different brand name? And then, also just a follow-up on Intrarosa. AMAG had indicated that they were planning to develop Intrarosa for the treatment of FSD, is that an indication that might be on the table for Yuvvexy?

Jay, its Rob, thanks for joining. I’m going to take Yuvvexy name, and then I’m going to turn over to Sebastian for the FSD, because it’s really out of my areas. So, I don’t know how many folks in the phone have seen the Yuvafem, that’s the authorized generic for Vagifem. It's got a really similar name to Yuvvexy. I mean that’s got to tell you something about who is worried about someone coming into the market, right. And now we want to line up with the Vagifem name, there is lot lining of the Yuvafem. So, we continue to evaluate alternate brand names and are considering other names given that fact and we believe these names could potentially be stronger and will give an official name upon approval. Sebastian?

So, it would be very interesting to see what [Indiscernible] will do with Intrarosa. Certainly if the claim if you don't have systemic levels it will be hard to hit the CNS, I mean, really interesting to see what they are going to propose. For us, we do have a very robust lifecycle management for Yuvvexy, for TX-004. We’re really looking forward to sort of working on that. We’re going to announce these shortly.

Okay, great. And then if I could just to follow-up on TX-001HR, congrats on the early progress with the BIO-IGNITE program and getting the 1.5 million script volume of compounded E&P. What is your target for total E&P compounded script volume prior to launch of TX-001HR?

So, we’re just going to give quarterly updates until we launch, is the current goal. I would like to say that I want to articulate to the Street, so let me step back on that point, Jay. There’s a lot of folks out there that take a little bit of question to the size of the market. So, one thing I want to say is not only we’re working through BIO-IGNITE to articulate to the Street, resources needed the size of opportunity but we’re also in discussions with IMS on this, because it's a new market that they are considering looking at. So that’s one piece of it. Number two, the overall opportunity -- there's 3.5 million separate estradiol and progesterone, FDA approved tablets tracked in IMS. If you look at our Investor Day that we even state the women's ages. Remember, to prescribed two separate pills is low-hanging fruit for us to have a single combined pill because women don't want to co-pays [ph], doctors do not want the liability if a woman does not take the progesterone. We all know that leads to hyperplasia endometrial cancer. And that’s two separate co-pays is just showing the opportunity here, 3.5 million scripts. You know, we believe we will be very successful with BIO-IGNITE. There is number and my team and part of the ability for us to show you the efficacy of my team in preparing this for launch if it articulate a clear number for you and a commitment through distribution agreements and then previously through LOIs [ph]. And there’s really, I promise we’ve get the best way to answer it. I would expect us to be very successful in just 60 days we’ve signed a distribution agreement for 1.5 million scripts and articulated a full 2 million scripts. So, I’m not sure if that answers your questions. It’s kind of roundabout way. If it doesn't please let me know.

Okay. That’s was helpful. We’ll look forward to learning more next Wednesday. And then just one last question on TX-001HR, when should we -- can you remind us when we’ll see the full replenish results?

Absolutely. Sebastian?

We’re going to be presenting all these at the Endocrine Society Meeting first week of April here in Orlando for you, so all of us are welcome to attend the meeting.

Great. Thank you very much.

Thank you.

And our next question comes from Bill Tanner from Cantor Fitzgerald. Your line is now open.

Thanks for taking the question. Rob, I want to go back to your PV-PCN [ph] example, So I think you mention that there are one point -- that they write 1.3 million prescriptions or fill 1.3 million prescription perhaps for E+P that are substitutable that you think would be substitutable for 001. So, wondering if you have a sense of the percentage – what’s that 1.3 million – what is that as a percentage of all of the E+P prescriptions that they write whether they are substitutable or not. So just thinking about if you could use PV-PCN as a proxy for the overall market, what is the TAM there, and then had a follow-up.

Yes. There’s a number of ways to look at that Bill. So, the first way I look at it is we don't have a higher dose and we didn't try a higher dose for perimenopausal. Rich Moon [ph] will be -- is one of the Principles and a Director on the company. He will be at Investor Day. By all means he will be an open book on their numbers. What they've shared with us is we address about 80% of their scripts and that 80% is actually 1.5 million. We can address a perimenopausal market segment. There's a couple of niches in there that we do not address, but we look forward to walking you through that or he does at our Investor Day and we’ll share all that with you. And by the way we want to articulate what we’re being communicated with that we are directly addressable to our products within our dosage range assuming the two are proved. And we won't take in anything that outside of arrange of what we can address in our BIO-IGNITE program.

And then, maybe a follow-up for -- maybe it's better for Sebastian. This is you think about then the E+P prescriptions that are filled for doses that would not be substitutable. Question would be what is a rhyme or reason for those particular doses? And could one contemplate at over time, percentage of those women might migrate over to what are the FDA approved doses that 001 could potentially provide?

Yes, Bill. That will be an alternative that they could have overtime, certainly something that we are exploring.

And Bill there is about 70% of market that’s like a 200 dose. And other perimenopausal women their hormone levels are up and down and you really have to override the systems, you need a real high-dose. We saw there’s such a small market niche, so we didn't do dose. We could do a follow-up study first to get that kind of market. Once we get some good revenues going here and just kind of own the market. The other thing is you know this customize dosing is really misperceived by the Street and I think that’s done purposely by some of the people that really don't believe in the product of the company. And if you look at that, doctors don't for the most part we have the script data -- the actual scripted data to back this up. Doctors don’t move between 0.5 and 1 milligram estradiol, they move to like 0.5 to 0.67 and have that be something we couldn’t address. What they’ll do is they’ll add-on other treatments onside of 0.5 or 1-100, so like testosterone is customization, they’ll add [Indiscernible] medicine, they’ll add DHEA is medicine, they’ll add estradiol and estrone [ph] and the customization is to treat other symptoms than the base hop latches and endometrial protection and 87%, 88% of those doses are 0.5 and 1 milligram. So the customization theory that we would need in between doses aside from what we already have, just do not held water with the market data we have. And we already have 20% of the market covered. It just doesn't exist. It’s a real hectic.

Well, that mean, that’s kind of the point of my question is how much of the doses that they're using. How much of that is actually biologically substantiated or how much of it is done empirically versus how much of it is done just because this is the way they've always done that there and potentially providing an opportunity for physicians to rethink how they’re treating patients by the way different doses that you're using there the women symptoms are perfectly fine or addressed?

80 to 90% to answer your question and we don't believe there's going to be any relearning of dosing at all here. And remember, with estradiol and progesterone there’s a safety component. And we know 0.5 treats that the majority of women and if not 1 milligrams treats up to 90% of the women. And you need an established dose of progesterone to protect the endometrium; unlike the other customization agents they don't stimulate the endometrium, so there's not such a tight dosing regimen. And there is no clinical statistical differences between 0.5 and 0.75 and 1 or 0.67 and 1, thus the prescriptions really are out there. There is a small niche that will do that, but we see it less than 7% to 10% in a prescription data we have which is 20% of the market.

Okay. All right, thanks.

Thank you. Good question.

[Operator Instructions] And the next question comes from Matthew Andrews from Jefferies. Your line is now open.

Yes, thank you, good morning. Three from me, Rob can you talk about how long you expect it will take to reach out and have a dialogue with the remaining you know roughly 2500 independent compounded pharmacies through BIO-IGNITE? Two, can you talk about where you are with the sales force expansion, how many of the 100 additional reps or so that you were going to bring on for Yuvvexy where you were hiring those, how many have been brought on, and when will they be finally hired? And then lastly three, as it relates to BIO-IGNITE what are some of the similarities with the Makena compounding pharmacy strategy after Lumara decided to partner with the compounding pharmacies and you saw a significant ramp in revenues. You know what can you take away from the Lumara experience that you have leveraged through BIO-IGNITE 3001? Thanks.

Thanks Matt. So how long, well, we have some time here. And we will pursue it. I have not put, sort of lot of goals, upper management will put timeframes around this. We will continue to pursue it, our top goal is on the sales side and the Biz Dev side is to launch Yuvvexy. Their second goal is to get the market ready 401. And is this a cross over exercise between sales and Biz Dev and channel development, they all have three different departments here. So that relates prior to the sales force expansion. So we actually have our national sales meeting going on this week, that’s why Dr. Bernick isn’t here. He certainly will be here future ones. This company is reinventing itself from a sales on the second or third burner in clinical development in the front burner to everyone from the CEO or Chairman to the [Indiscernible] here will be focussed on sales. Sales is in our G&A. We are a focused company. We’ve hired top talent again, and we have I believe between 65 and 75 reps hired of the 110 or 120 we need to get Yuvvexy out in the street, and that is our absolute top priority. The sales folks as you might have noticed are our prenatal [ph] numbers are focussed absolutely today at going out to their new offices or existing offices and not just working with the OBGYN for crossing over to the just appeared GYN segment, understand do their treat with hormones, do they treat VVA, how do they feel about estrogen, what products do they like, so all the profiling, so assuming approval which is what we hope for and expect here, they will be ready to go, know what offices are going, how the office staff feels and what the doctors preferences are and ways to align our products with those preferences. And then the last piece is Makena, we will have the team that actually developed this compounding strategy at Lumara/AMAG led by Joe Auci who we brought in here to do very successful thing. I think the key here is when Lumara launched Makena not only did they tell the compounding pharmacies that they couldn’t have the product which a 100% of the product was coming from compounders, but they actually turned around and sue them if they compounded it. The drug quality [ph] security act was not in place and Joe Auci came in and reversed that. He actually said, look these guys could be our best sales folks, these guys, these compounding pharmacies can be our best supporters and even after all those mis steps at launch, Lumara still turned around and I believe their latest numbers were between 60% and 70% of market conversion. Very impressive by then and we look to spot the same model, but keep it positive upfront, guarantee them that they can have the access to the product and make sure that it improves their economic environment and still supports the patient and doctors in the way that’s the most important to them.

Okay. Thanks see you next week.

Thank you. Look forward to everybody joining at investor day. And it’s just been a great quarter and we are getting ready to launch and we look forward to everyone that would like to join investor day to reach out to Dave and get – make a reservation and we love to see you there. Thank you.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. You may now all disconnect. Everyone have a great day.