OSMT Osmotica Pharmaceuticals

Lisa Wilson IR
Brian Markison CEO
Andrew Einhorn CFO
JD Schaub COO
David Steinberg Jefferies
Greg Fraser Truist Securities
Call transcript
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Good afternoon, ladies and gentlemen, and welcome to the Osmotica Q3 2021 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to hand the conference over to your host, Ms. Lisa Wilson. Ma'am, you may begin.

Lisa Wilson

Christian. you, Thank Pharmaceuticals' Osmotica XXXX update business Welcome third call. to quarter Wilson, This Osmotica. Investor Lisa for Relations is me With and call Chief Andy today's on Operating Brian Executive Einhorn. Officer, Markison; Officer, JD Schaub; Chief Officer, are Financial Osmotica's Chief afternoon financial for detailing XX, the press September results ended the company months This a XXXX. release issued three and of section this release Osmotica website the of at can accessed press This call a webcast Investors through the

conference Actual and uncertainties are statements call and or of this Such I management started, like press law. statements. remind release based made today would obligation defined as expectation, on Litigation the in as any the guarantees Private information any our statements forecast be regarding required today's future these to by express risks not to Osmotica Before forward-looking or we get are Securities except from of as on may afternoon's available may Reform projection, that everyone to forward-looking specifically forward-looking intent by forward-looking belief, the involves a intent SEC. that those These statements in disclaims with Act. performance. performance differ filings Osmotica's materially statements the considered anticipation future company's events results and those statements projected update noted including and future forward-looking

During this call, EBITDA. such to non-GAAP adjusted we refer as measures

end press to days EBITDA our will adjusted the or the XX available call loss, at income of for website of on net reconciliation a For The of be archived this see tables our release. webcast please

recent December XXXX. discussed, to Osmotica releases that, announcements webcast CEO, and the this filings. have with I'll may to listening may Since most Markison. turn recorded archived then of SEC over press the so related call on or benefit Brian Osmotica call and the For who reference company's topics to replay be those was And please the XX, held the made the

Brian Markison

joining thank today. us, on and you our afternoon Lisa, for good you, Thank and call

last has strong acquired share noted to Feedback are solution the call only Upneeq earnings on and of and are pleased ophthalmic our plethora of on momentum the and positive, share or we that continued. FDA-approved latest We lying the for first to response update our for we excited Upneeq and uniformly commercial lids continues today some you treatment metrics to doses program. low on be the

franchise of our the divestiture mid-year brand essentially rearview focused business singularly a is what ocular the in category are new With Upneeq mirror, aesthetics. now and legacy on growing we creating our of

first market tremendous indicated, practitioners over years program direct just This is Upneeq those our where over seen into we growth now we optometry eyecare market. is it customer base. September introduced encouraging. exactly of Through XX% territories research the the where prescribers, to in introduced On since XXXX would for eyecare we We responses accounting dispense had our XX, and permitted have early unique with September our highly be. in are we

revolutionize We York This for our has already partner directly patients. remaining relationship customers Texas introducing with and virtual will they most to the a providers in serve their January. to of New begun states be us program as allowing with version our particularly

we larger market a has focus not establishing if ocular market and initial on similar building believe a eyecare for efficacy a offers and been safety our aesthetics Upneeq, opportunity. While that

on-boarding in leadership first expected underway piloting sales a our early highly well our for of starting experienced team. and will aesthetics launch Medical Our business the approach full In the begin QX we a of build 'XX. quarter with we're unit is

of our of recently of to received with a arbaclofen, Phase tablets. the to streamline this special protocol a X and respect trial is Upneeq unlock for the one Also we release to arbaclofen month debt equity a us Our last of response all we essential company submission growing directed announced extended and asset. help financings assessment energy value kind our were to FDA constructive as new the from

We that spasticity with call development to next agency and to the improvements on is discuss are will forward results. to program. endpoint. an path for a agreement over by the financial continue we'll the do I'd It to a focused on our to the come encouraged to the work be primarily primary Andy feedback appears now trial like as turn to What

Andrew Einhorn

the items financials the do on Thank with of Similar in last collapsed to business statements. single rules face financials you, Brian. line our out legacy our results not our accordance quarter, break accounting which is

revenue Upneeq administrative and Our XXXX of consist generally results related to general the of running business. expenses and expenses operating including the

While XXXX early January for XXXX. sold Osmolex results results in also which we include the

from and Third Pharmaceuticals XXXX $X.X approximately which to consisting the million of of the included product milestone $XX grew quarter were Upneeq Total revenues to substantially sales sales revenue million XXXX $XX.X which Santen all quarter of license were approximately of entirely the second over revenues XX% Osmolex. quarter Upneeq of of related total third which XXX,XXX million XXXX. in

SG&A business. SG&A the share in of of Upneeq Selling, divestiture increase expense quarter and was as expansion administrative during company. of running triggered the quarter legacy expenses of eyecare a XXXX the greater sold reflected profit the the for of increase spend professionals. to the direct was promotional $X.X were third goods and As a and force expenses expenses dispense marketing third consisted quarter general of and limited of of quarter in rolled Cost launch to in also Upneeq by compensation late second expanded XXXX our related the $X.X out professionals. reflected during million the attributable activities launched program we Gross Upneeq the third The an Upneeq. the of to field launch in to million. quarter reminder, eyecare the number

medical increase aesthetics quarters the ahead we into channel. of forward, expenses market as to promotional and our Upneeq we penetration the Going launch expect in eyecare the deepen

for the our expenses that as resources share comprehensively the third to ensure quarter third while we Upneeq single operations the project continuing to a devoted third -- XXXX. adjusted as noted million. operations for candidate, RVL on while for $XX.X of supporting and Adjusted company. follow-on $XX.X of our XXXX EBITDA non-promotional the efficiently discontinued acceleration the also of which compared $X.X possible spending the was legacy of million EBITDA development in in us a business is $X.X are much Additionally, of and product Research million the of business providing divestiture the include of arbaclofen as opportunity of million consisted spending included quarter and legacy from an the a earlier. commercialization million compensation of and income quarter, net continuing to loss operations to our review $X.X expense the loss was overall had third of XXXX from of operations Net quarter of our appropriately

a issuance gross aggregate million in With notes of and equivalents loans. our XX, cash call over and cash In approximately JD. proceeds $X.X like we million the our October we million XXXX, XXXX, that, amount amount of and As to I'd the shares term $XX had principal additionally to loans issued turn of ordinary $XX offering. secured with of refinanced September principal of aggregate under million term follow-on senior borrowed $XX

JD Schaub

trends of Thanks, our details I'll provide the on Upneeq good volume market everyone. afternoon additional and Today Andy, update on and you recent and insights. launch highlights with

highlight expand increase week cumulative that to A base XXXX our data since the continues last the to an recent point prescribers XX,XXX third awareness market to continue and prescriber we So with of has since QX. launch meaningfully more than prescribers end and at launch. more the almost opportunity, XXXX over as grown of totaling number quarter, of over growing

would seeing continue over quarter that trend average as the first-time XX to per We are day course of still to on well. XX prescribers expect and this

Brian from of in continue over as to XX,XXX and As grew quarter. proportion for about totaling optometry. prescriptions XX% total increasing base an expected our QX the see alluded Similarly, coming QX almost prescriber earlier, to we

patient We about to of therapy cohort paid and those prescription see build holistic view October have first of continuing XX and count from count of November XX/XX are who utilization, the a XXX in stickiness September, per refills. start. last XX days averaging growing hover are Though on around first and between patients, mix their are year seeing early still also prescription to a still

another delivered with milestone the quarter. the third the we in rollout key Importantly, program of direct dispense

enrolled more tremendous allowed practice program, the described about are continued in response XXX last were provide a and Upneeq weeks' an specialty two meaningful we as in last early the in see couple has previously ability our of end The pilot of to continue capability and growth practices the for Of see directly of we After just a small from partners had the began point now this of weeks a an earnest receptivity we've September have a care. QX initial brand. that optometry, product rollout inflection those purchase to driver quarter, the as been in time. and we practices at the point of As early eyecare as overwhelming build. in market the of prescriptions turn two-thirds during than us directly

remain adoption expanding thrilled directed us time optometric our to virtual an this maintaining the daily as systematically implement can excluded expand RVL still by moving this and existing while forward dispensing prescribers received Pharmacy ECP expect similar them current practices how option and and to year, early with patients setting. next many help focused ptosis partners context, to optometrists partner process include added while For led at practice as from is virtual whereby by Obviously, to and protocols screening in also assessing with so routine. the contact inventory by and a we early formal overall on continuing community this the and we capability of model same much of position reach a at to leverage law many the working lenses group are a utilization

level Upneeq. and within eyecare Beyond is events more than starts have Indicative of an we community interest seen increased numbers, since educational around Upneeq at and the and ptosis patient with studies recent multiple profound the XX,XXX the meetings of case scientific posters, also having the launch. impact

breadth in All years team, efforts, and to us we on-boarded first industry. leadership eyecare are recently from Over have most well-respected building imminently of direct best-in-class poised as entire With sales incredible business an XX have of we in regards through depth in aesthetics, aesthetics. the the the year some representing accelerate our of aesthetic and experience. the experience of to another unit quickly the organizations build

and Over eight our our out with across level we XX-person whom the a intend we have engagement insights sales execute Experientially clinicians launch helping weeks, have many their start. on-boarded and with of January with us accepted on well expanded end to to of an already this the growing sharpen has feedback the towards positioned sales our the approximately influential team group shared and and entire deepening non-core trained. quarter, Moreover, build the to specialties. Their offer enthusiasm combined strategy core of to next launch. this complete team, been of

capability the dispense to our further Brian. the component, from and and are aesthetic the of us. ahead, of launch call front deliver direct expansion continued full growth accelerate market incredible of I'll foundation closing, with strong with share place, in both the our of look and on early to we In build the penetration. the to as Upneeq combined we expand weight With to expected turn our voice is a virtual As expand of back a with excited that, expanded launch from market organization the introduction behind opportunity in our are continue

Brian Markison

JD. Thanks, Thanks, Andy.

concludes So and operator, that to prepared turn you over it with our Q&A. remarks, for we'll that


David from from [Operator Instructions] is Your Steinberg question Jefferies. first

is open. line Your

David Steinberg

you and then cosmetic, price month per some feel And secondly, to more granularity the patient on And the money will thirdly, money particularly How on higher. where use. give better product have go for month the with it this would similar you're buy-and-bill, a supply. talk year, bulk, they much how can market approach prescribers do will number prescriptions much high is, say you and you you you a Upneeq right is resales, that there then that, has where sense you how do regard or is of buy. for how you buy in they some a regard about, there market might price the how you and to mentioned have that Do dermatologists. And to it. up the us something a work on Thanks. flexibility and patients a it, supply make with particularly will their three now much [indiscernible] to make be think a seeing JD many of So for could quarters, you out been that that have one

Andrew Einhorn

All I'll I'll the the because JD one middle for to right, easier and answer it three. I'll first, number what so, question do over is then that's turn David, one and

So have take room very may too time price the are a have with in well respect price, we little the today option also we're pricing. up we had very we that is we've we believe not exploring as increase that pushback comfortable and and and solid distant pretty out to no modest to there to future, real we go on

JD Schaub

November think who patients, had have that you briefly What last of of we're was average potential months so David we in when just therapy cohort to And XXX of forward-looking seen days the attention something think just seeing. XX prescription have for question, was of and get alluded filled what I starts. Look underway, if looking prepared I of it's your has terms now we on per year paid we since refills think patient this about first that that I first October pay value and start. to around remarks and new group first were to starting in beyond September, to back back patients,

working look sense get XX-month patient over month every move assumption right similarly We So just a it but I as we for average think I both think the the to that's sort we're well. really period pricing. of that forward using at more I then a another we and out lifetime the patient as think the question quarters important few of on as around buy-and-bill value bit becomes your granular than little And a more was third metric a a now. get

the will The for I entire So foundation. look, partnerships aesthetic launch dispense will that be channel practice. buy-and-bill model the think specific the with direct to aesthetic be commercialization the

think using upon Texas of really with from [indiscernible] right going line of also the key an are as clinicians the products between there important lot XXX% the a like are medicine And but margin skin XX% a I New we're standpoint, think an states and from to importance a be model care well. from high products I in virtual York even margin both or treatment through it standpoint, volume these like office. that be where dependent and retail already end somewhere in-office standpoint, in running


Chen from next is question Louise Your from Cantor.

open. is line Your

Unidentified Analyst

all thank [Wayne] taking Louise. This is progress for for the And the our on on Congrats this you quarter. questions.

us. a from Just couple

about well is, one some could first us your at What market if the be therapeutics, maybe And how looking is this another looking little and you think The in the of well. on updates China, you Japan, Partnership. synthetics if provide a only or Santen maybe and should were about to remainder housekeeping the latest tell the question Thank could then expense progress they EMEA they year operating as bit the, into is, you. XXXX. us for we

Brian Markison

know secondary. Test and to the for preparing recent they X KOLs. our as Peripheral placebo, They've have the great meeting a authorities commercialize we a endpoint Orleans, New great. simplified had We Phase talking Upneeq. a regulatory in Okay, some to did. and and U.S., is with down Leicester primary are baseline our They along of only its MRDX the Field were over discussion have eyecare in versus their commitment as a actually EU. the marching regulatory and with more to primary develop improvement had -- we look MRDX whereas They Santen at the Japanese meeting than at our

also moving possibly Vietnam. are Korea, into other territories, So aggressively they

very good they've from -- plans input together and to if want thoughtful great JD. So there experienced add you KOLs that thus know their putting I don't in or really ahead, partnership are far getting at at with been to development full and speed all

JD Schaub

first-in-class we all but both the end as more that No of I eyecare a treatment this a longer, mean, think as I add, brand. would think intention as foundational spectrum Santen doses And think I mild by is aesthetic well. in an a treatment Wayne, is global with I as I view also their

that them support the learnings success abroad. so both for that experience see from with we're regulatory themselves U.S. those but can they position efforts clinical through and development and excited our to in in also so their to markets, And work here

Brian Markison

in which about And the the basically Wayne OpEx remainder coming year, out quarter, take the we that the I'll we level the quarter. of second and talks slightly what the question for just at fourth saw would than lower third see

remarks launch. force field ready in I time couple disclosures ramping our of and in the getting up one a think we're to my and timer's. mentioned the At are I same

But takes I balance the for and what that puts year. that's should you in of have think expect direction. the you So basically

Andrew Einhorn

And then the there you how see go listed and website section, and you they've started to their filing Upneeq where Investor preparation Asia. Wayne Santen they've syndication for R&D if the for can in

far along pretty So with those guys.


from next is [Operator Fraser Your question Truist Instructions] from Greg Securities.

open. is line Your

Greg Fraser

sales you experience how you're leadership very curious hear experienced on you're expansion, for. So that to it that interviewing speak folks of looking the the prior force sounds is takes to the much and the background but about team can like that reps. It

Brian Markison


that's profile BXB a gone look, So think terms great into question. with a experience. we've very I of specific in Yes this

of I not and handfuls whether different from continues that larger and industry type letter aesthetic is experience. of I signed, we're excite things aesthetic the what have building some you practices esthetic companies ability and And care employed of to the would just tell from an first of it's think recent of a what And here that aesthetic to to number these expect I talent. seeing experience or it's aesthetic handful a couple I aesthetic BXB paper, or plus we're successful direct one on direct the drawing offer years territories amount is team experience think that high-end skin incredible models but experience our we're we've obviously some as that of I in well. number where players of the through would a got business plus experience look, the really a think attract with about of injectable us companies an of

Greg Fraser

this, in I'm you if sure I Got demand far very helpful. it. did That's so missed comment but prescription the quarter. fourth not on JD

JD Schaub

seeing the the we over not meaningful yet fourth tell you already quarter. what I on commented have are growth quarter, We can but is prior

So but of We coming lot for holiday time tempering high are excited a we that, so need up, we're our is just growth will see up. enthusiasm. sure got pretty how about we see to

Brian Markison

Yes, backdrop the us the prescriptions context who from for helpful are of out also dispense be of I Greg directly in of this group their office. is opting think you would to expanding an and against purchase occurring growth writers now

prescriptions go with look, the see and to seen into XXX next the at is directly what think would about we continue through pharmacy, think growth continued I impact So traditionally really, prescribing momentum from the just of given from behavior a prescription encouraging shift to we've have to of couple been really of generated the the to point accounts our quarter on, I as early being through fourth what and demand is the underlying first offices five there first four, going to the be plus here quarters pharmacy care through weeks the

Greg Fraser

range margin changed on from the laid following ago? questions as couple And expenses your the you out grow? you a Has over that for Andy on view time that of XXXX where gross of reach expect up and question. just And volumes peak Okay. to a then couple expense for then months operating

Andrew Einhorn

is there. our really view really to to divestiture where That us commercialization and critically to and remarks see Generally, be devote opportunity we areas see that Upneeq spending in for not my spend legacy mentioned changed. now where the provide we an to us expenses I on of can of have review said, drive can the non-promotional efficient more behind growth more as Greg. does of that Sure, our operating XXXX in the

terms we -- that's undertake Upneeq to And as we drive projects volume and is the spending the more we're gross efficiency. is which where fixed are can So yes, mid to undertaking of think I now margins see on as towards of heading that margin, we those it is -- there where continue plural from of increases in gross then will course XX%. that more -- probably 'XXs today, which see get costs where absorbed do the


no any I like showing I'm comments. time. would closing Mr. back further question additional this the call And to or CEO to for at turn Markison Brian

Brian Markison

everybody story community. to We're with we and exciting really Operator, Upneeq. making are for at today. and this we are continue that made It's of thrilled partner Thank thank eyecare joining with the this with looking grow have beginning We're the us to you you progress thanks forward and journey. the all. aesthetic and and


does Ladies today's Thank great and participation for you gentlemen, and have your this a day. conclude conference.