Collegium Pharmaceutical Inc (COLL) 2017 Q3 法說會逐字稿

Welcome to the Collegium Pharmaceutical's Third Quarter 2017 Earnings Conference Call.

Before we begin today's call, we wish to inform participants that the forward-looking statements made today are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation the risk that will not be able to successfully commercialize Xtampza. Furthermore, we are subject to patent infringement litigation and many -- and may in the future be subject to additional litigation relating to our other product candidates, which may be expensive to defend and delay commercialization.

These risks and other risks of the company are detailed from time-to-time in the company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our current expectations discussed today.

I would now turn the call over Collegium CEO, Mike Heffernan. You may begin, sir.

Thank you. Good afternoon, and welcome to the third quarter Collegium earnings call. This is Mike Heffernan. And today, I'm joined by Paul Brannelly, our CFO; and Joe Ciaffoni, our Chief Operating Officer. We will provide insight into our recent progress and our third quarter financial results.

Overall, we had an excellent quarter. The Xtampza ER momentum that began at the end of the second quarter has continued. And we finished the quarter with 27,713 prescriptions written by 3,900 health care professionals. Prescriptions grew 49% from the prior quarter, which is up from 34% growth for the -- from the first to the second quarter. Through the third quarter, there has been 60,000 prescriptions written for Xtampza ER this year. The continued growth is fueled by improved operational execution. And Joe will provide additional insights in the commercial progress in a few minutes.

After a short 1-day delay, we're very pleased to announce yesterday that the FDA approved our sNDA for Xtampza ER. There are 3 components to the approved label enhancement, including comparative study data demonstrating that Xtampza's pharmacokinetic profile stays intact after crushing as opposed crushing OxyContin, which results in the loss of extended-release properties, and it becomes bioequivalent to an immediate-release oxycodone.

This has potentially important implications for patient safety as well as abuse, misuse and diversion. In addition, new data from an oral abuse potential study that was completed after the initial approval of Xtampza ER was added to the label. This data demonstrates that there is little to no increase in drug liking or the desire to take drug again, the 2 key study endpoints, when Xtampza ER is chewed by recreational drug abusers versus taking the drug as it is intended.

The abuse-deterrent summary section now also includes labeling that states that Xtampza ER has the physiochemical properties that are expected to reduce abuse by the oral route. Xtampza ER is the only single agent oxycodone with this labeling regarding oral abuse in addition to IV and intranasal abuse claims.

During the past few months, we have also strengthened our balance sheet, with the addition of $32 million raised using our -- utilizing our ATM. This additional capital will serve to strengthen our balance sheet and add flexibility as we move into 2018 and beyond.

I would also like to address the ongoing dual epidemic in the U.S. with the needs of the chronic pain patients on one side and the prescription opioid abuse on the other. At Collegium, we're intensely focused on advocating for balanced and comprehensive pain management, which means that opioids should only be prescribed for chronic pain patients that have had adequate trials of all appropriate nonopioid options. If a patient is prescribed an opioid, it should be at the lowest dose for the lowest duration possible. Should a prescriber and patient decide that an extended-release opioid is the appropriate treatment, an abuse-deterrent opioid should be used in all patients, not just those perceived to be at high risk for abuse. This ensures the safest possible opioid exposure.

Drug diversion of legitimately prescribed prescription opioids is the precursor to much of the abuse in the U.S., and abuse-deterrent opioids provide the best protection that is currently available to address this issue.

We are proud of the contribution that Xtampza ER has made to addressing this dual epidemic and are pleased that the uniqueness of the product is being increasingly recognized by payers, as evidenced by the recent announcements by Cigna and Florida Blue regarding Xtampza ER replacing OxyContin on their commercial formularies beginning in January of 2018.

FDA Commissioner Dr. Scott Gottlieb was recently quoted as stating that the FDA strongly supports the transition from the current market, dominated by conventional opioids, to one in which the majority of opioids have meaningful abuse-deterrent properties. We expect that the market will continue to evolve in this direction through regulatory initiatives as well as market forces such as state-based policies, payer formularies and policies and a growing prescriber recognition that abuse-deterrent opioids are an important component of the overall solution to stem the epidemic of prescription opioid abuse.

A recently completed market research study found that 73% of our target pain physicians agreed that abuse-deterrent opioids should always be used if all things were equal. This is very encouraging evolution of the acknowledgment of the value of abuse-deterrent opioids, and we expect this will continue.

I'll now turn it over to Joe to provide a commercial update.

Thanks, Mike. In Q3, the Collegium team generated momentum with Xtampza ER through improved operational execution. Key drivers included a focus on quality message delivery and resource utilization, better coverage of our target audience of approximately 10,000, predominantly pain management specialists. As a reminder, our target audience covers approximately 60% of the branded ER opioid market and their prescribing has remained relatively stable throughout 2017.

Pull-through of our broad managed care access, inclusive of strong positions at United Healthcare commercial and Humana D, conversion of appropriate OPANA ER patients forced to find a replacement therapy.

Noteworthy accomplishments for the quarter included total prescriptions up 49% Q3 versus Q2. Xtampza ER continues to be the fastest growing branded -- established branded ER opioid. Unaided awareness of Xtampza ER improved 27% amongst our target audience. Over 1,200 HCPs prescribed Xtampza ER for the first time in the third quarter. Launch to date, approximately 5,300 HCPs have prescribed Xtampza ER. The number of prescriptions per prescriber has continued to increase every quarter since launch.

Xtampza ER is now the #1 prescribed branded ER opioid at United Healthcare commercial with a 30% market share, and market share at Humana D grew to 8.8%, up 8 percentage point since being added to formulary in June.

On a weekly basis, Xtampza ER captured approximately 7% of patients being forced to convert from OPANA ER. Progress was made in removing nonclinical barriers as paid rates in commercial and Part D improved to 86% and 84%, respectively, and pharmacy availability continues to improve too.

I want to take a moment to thank and recognize my colleagues at Collegium for the efforts that they put forth every day and for their commitment to making a positive difference in the lives of people living with chronic pain and the communities that we serve.

In Q4, the team will remain focused on generating momentum with Xtampza ER through stronger operational execution. We are encouraged, but not satisfied with the progress that we've made in Q3. A strong finish to 2017 will fuel a strong start to 2018.

We're making progress in key areas as we strive to set the foundation, upon which we will accelerate Xtampza ER in 2018. Specifically, in January, we will launch a new promotional campaign that frames the issues of abuse, misuse and diversion, focuses on our novel DETERx technology and differentiates Xtampza ER from the other ER oxycodones.

We will make a significant investment in nonpersonnel promotion to help drive awareness of Xtampza ER. And we will start the year with stronger formulary positions at Cigna, Humana D and United Healthcare commercial. In addition, we have secured new exclusive ER oxycodone formulary wins at Florida Blue, Humana commercial, Navitus and UPMC commercial and Part D. Our payer team remains focused on strengthening existing formulary positions and securing new exclusive ER oxycodone opportunities.

Finally, we're improving key processes and systems to enable stronger execution. Together, the Collegium team is striving everyday to get better and to get stronger. We believe that we can generate momentum with Xtampza ER the remainder of 2017 for a stronger operational execution while simultaneously taking focused actions to be positioned to accelerate in 2018.

I will now turn the call over to Paul to discuss our third quarter financial results.

Thanks, Joe. Good afternoon, everyone. In the third quarter, we recorded net product revenue of $12 million. In prior quarters, we recognized revenue based on the sell-through method.

Beginning in the third quarter, we determined that we had the sufficient experience with Xtampza to use the sell-in method. Therefore, we now recognize revenue based upon shipments to wholesalers.

Net product revenue for the quarter included onetime pickup of $4.4 million related to amounts that were previously recorded as deferred revenue as of June 30.

During the third quarter, wholesalers average days of inventory on hand decreased from approximately 20 days to only 16 days as of September 30. With the change to sell-in method, our gross-to-net discount now includes an additional reserve for estimated product returns. As a result of the inclusion of a reserve for estimated returns, which was not included in prior period gross-to-net calculations under the sell-through method, our gross-to-net discount increased to 54.1% for the third quarter from 52.2% for the second quarter.

With the switch to the sell-in method, for the 9 months ended September 30, our gross-to-net discount was 54.4%. For the full year 2017, we estimate that the gross-to-net discount will be in the range of 55%, as improvements in our gross-to-net discount throughout the first half of 2017 are partially offset by the effects of our change to the sell-in method. Under the sell-in method, our gross-to-net discount includes a reserve for estimated returns as well as earlier recognition of other gross-to-net adjustments.

For the third quarter of 2017, our net loss was $13.3 million compared to $26.4 million for the third quarter of 2016, resulting in a net loss per share of $0.45 per share and $1.13 per share for the 2017 and '16 quarters, respectively. The decrease in our net loss is primarily due to an increase in net product revenue for Xtampza.

As of September 30, our cash balance was $107.6 million, down from $111.2 million on June 30. During the third quarter, cash used by operating activities was $12.6 million compared to $17.5 million in the second quarter and $23.7 million in the first quarter.

As Mike mentioned in his comments, we used our ATM facility during Q3 and early in the fourth quarter. In total, we raised gross proceeds of $32.2 million at an average price per share of $10.95. Gross proceeds of $9.8 million were received prior to the end of the third quarter.

Based on our current operating plans, we believe that our existing cash resources, including ATM proceeds received in October 2017, together with expected cash inflows from the commercialization of Xtampza, are sufficient to fund our operations into mid-2019.

I will now turn the call back over to Mike.

Thanks, Bob. I'll now open it up to questions.

(Operator Instructions) Our first question comes from David Amsellem with Piper Jaffray.

So just have a couple. First regarding the Cigna contract that you negotiated, can you talk about how that may have an impact on gross-to-nets in 2018, given that there's lower pricing at certain higher doses or beyond a certain dosing threshold? Just help us understand the mechanics of that. And secondly, do you think that, that's a potential template for other contracts that you're looking to negotiate? I wanted to get a sense of how influential that might be in terms of contracts going forward? And then last question is just on the OPANA switch. Can you give us a sense of how much more in the way of patients and volumes you can capture? There still seems to be sizable volumes being written for OPANA. So maybe talk about how much more of an impact we could see from that as we move through the end of the year?

Great. Thanks, David. This is Paul. I'll take the first part of the question and then hand it over to Joe or Mike. So as far as gross-to-net, the Cigna contract fits in with our prior guidance with -- and our current guidance on gross-to-net. So it's an innovative contracting strategy for us, but it doesn't change anything in the overall mix of our gross-to-net.

All right. And David, this is Joe. With regards to your question as to whether or not it is a template that we think about utilizing with other customers, the way I would respond to that is the first thing is that became public, that it did is it kind of flipped the table, in that it invoked the interest. A lot of payers reached out to us, because as you know, that's something that all of them are interested in, to have a discussion around a value-based contract. Now as of right now, the only one that we have in place is with Cigna. The other thing that I think is important, and this was even in the Cigna press release and we see this happening in our discussions with the payers, is that people are starting to recognize the value that Xtampza ER and the potential of the DETERx technology. And what we're finding is the more that they learn about it, the more that we're able to talk about and I think the approval of our sNDA only strengthens the message, the more interested they are in Xtampza ER overall. So as I said in my comments, we continue to work and stay engaged with payers to both strengthen existing formulary positions and also to secure new exclusive oxycodone ER wins. With regards to OPANA ER, we see that winding down. Right now, on a weekly basis, I think prescriptions are under 2,000. And what we've seen consistently on a weekly basis is we're capturing about 7% to 10% of the patients that are converting, which I would say we're encouraged by, but certainly not satisfied from that perspective. We're encouraged, because it's about 3x -- 3x to 5x our overall market share on a weekly basis. So we're punching above our weight, but we certainly, as it continues to wind down through operational execution, want to capture a higher percentage. And then the final point I would make on OPANA ER that we believe that is really important is it certainly sense -- it serves as a dramatic example to the marketplace that all abuse-deterrent formulations are not the same. And the second thing that it does is it creates a positioning opportunity for us, because a lot of patients that transition from IR oxycodone in particular that we're looking at a product potentially with abuse-deterrent attributes transition to OPANA ER. And we believe for the appropriate patients, that presents a mid- to longer-term opportunity for Xtampza ER. Thanks for the question.

David, this is Mike. I'll add one other thing to that. And that's -- there are still 30,000 prescriptions a month for oxymorphone ER generic, which as most people know, have no abuse-deterrent qualities at all. There has been recent discussion that's been written about from the FDA and others, who are going to look at whether that product should come off the market as well. At the FDA AdCom on OPANA ER, it was actually admitted by the FDA that there's more abuse with the oxymorphone ER generic than there is OPANA ER. So we could have another opportunity to go after the oxymorphone ER patients, but that's yet to be seen.

Mike, if I may, just a follow-up just on that point. It's a good point you raised about the nonsubstitutable generic. Is there anything in your own intel that suggest that there could be another AdCom focused squarely on that product or anything at all that would lead you to believe that, that -- we're going to see an outcome similar to what happened to Endo?

Yes. I mean -- I'm not sure about an AdCom. But I think just this past week, the FDA commented. I believe it was -- Scott Gottlieb commented on the need to review oxymorphone ER and the abuse potential of that product. So I think it's on the radar screen of the FDA, but I think it's too early to tell and predict of when and where and how any action will be taken against it.

Our next question comes from Ken Trbovich with Janney.

I'm trying to better understand, in the context of the quarter, sort of the difference here between the increase in the gross-to-net discount and the higher revenues. Can you maybe give us a sense to what those prescriptions are looking like and how it is that, that's translated into the revenues that you reported for the current quarter?

Yes. I mean, I think the increase in revenue -- basically gross revenue is driven by the fact that we had a 49% increase in prescriptions quarter-over-quarter. I mean, that's really what drives performance. I mean, we had a onetime effect, as Paul mentioned, of $4.4 million. But the fact of -- the real key news of the quarter was the increase in prescriptions, which drove increase in gross sales, which then, even with a slightly higher gross-to-net, came in at a net sales number that was significantly higher than the prior quarter.

And Ken, one thing to add. But average days on hand at wholesalers being down at 16, that's probably a little bit lower than we'd like as well. So it's definitely not a lot of inventory out in the channel.

Yes. And I guess, that's the reason for my question, right, because the reduction in channel inventory would have argued for perhaps a slightly lower number. And I'm trying to figure out if we're seeing higher number of pills per prescription or what might account for some of that difference. That obviously wasn't negative. It was a positive in the quarter.

Yes. So doses and pills per prescription are relatively flat. It's really driven by increased volume and prescriptions.

Okay. And then just with regard to the improvement on the United Healthcare plan and being able to be on Tier 2, is that something that came at a cost? Back to that discussion again about how we should be looking at '18? And can you give us a sense as to whether or not you think you might be able to see similar things with other payers next year, maybe mid-year on those cycles?

Yes, Ken, this is Joe. We obviously don't comment on anything that is competitive associated with our contracts. What we feel good about is we've essentially replaced OPANA in that Tier 2 position. And we believe that, that in 2018 will enable us to continue to grow and capture patients that are appropriate, that are transitioning from the IR market over to an ER -- to an extended-release opioid.

Yes, Ken, I'll add one thing to that. I mean, one of the things that you see is an evolution of payer relationships, as Joe talked about before. We started our relationship with Cigna by getting added to their list in January of '17. By January of '18, we're moving to exclusive. With United, we started exclusive in January '17, and now we're moving to Tier 2 in '18. And in Florida Blue, where we got added in July, we became exclusive in January. So what you're seeing, to Joe's point that he made earlier, is an improvement in our formulary position as payers get more aware of the uniqueness of the product.

Yes. And Ken, one last point on United and Tier 2. So we've a very generous Co-pay Card program for commercial -- for patients and under commercial plans. So if we're paying for improved access and get to Tier 2 or 3, there's on offset there with the Co-pay Card program as well. So it would fit in with whatever guidance we've given in the past.

Okay. And then, Joe, just one last quick question for you on the ability to get new health care prescriber -- health care providers to prescribe for the first time. Obviously, you highlighted that there were 1,200, I guess, on top of the 40 -- I guess, 4,100 you had previously. Can you give us a sense for the history of the prescribing patterns for the 4,100? How long after they've written for the first time before they start to write? And how many of those sort of become true believers and start to exclusively write or at least write on a higher proportion going forward?

Yes. So Ken, it's a great question. We actually just did a fair amount of work on this. So what we've learned is, on average, it takes about 8 calls to convert somebody to be a prescriber. And what's interesting, and I'll put it in the context people should understand, this is still a brand at this point in the launch that has relatively low awareness. So although we've improved the awareness to 27% -- by 27%, our overall unaided awareness with our target audience is 47%. The reason I make that comment is when somebody prescribes, it is important, and we can see it in our analysis and segmentation, that we continue to maintain a high level of frequency on those prescribers. So there's are lot of work to do to continue to build brand equity and loyalty with people who have converted. And that's a big focus of ours as we move forward, while at the same time, we need to continue to add new prescribers to Xtampza ER. And I could tell you a couple of things that we know that are really important. If you look at awareness, unaided awareness overall was 47%. With our prescribers, it's 61%. With physicians who haven't prescribed in our target audience, it's 32%. The other thing that is really important for us and is really a big part of our focus is physicians who have a concern. All physicians recognize to some degree that abuse, misuse and diversion are an issue. It's the magnitude of that concern that determines who it is that's likely to write Xtampza ER or for that matter any abuse-deterrent product. And then the second thing that really matters, which gets to our focus on execution from a message delivery perspective, is those physicians who believe that Xtampza ER and the DETERx technology is comparable or that all ADFs are the same are less likely to adopt Xtampza ER versus those prescribers that truly understand the DETERx technology and believe in its potential. They are more likely to prescribe for the first time and continue to prescribe. So that's our focus from an execution perspective along with continuing to remove the nonclinical barriers. And it's the combination of those factors that drive people to prescribe the first time and to keep them on track.

Our next question comes from Serge Belanger with Needham & Company.

I have a couple of questions, first on the 3Q results. Can you just talk about maybe the impact of the hurricanes? I know you have significant business via Florida Blue that may have been impacted.

Yes. Okay. Thanks for the question, Serge. And you're right on both fronts. Florida is a significant driver of our business. What we saw with the hurricanes is basically the weak proceeding. And for about 2 weeks after the hurricane, as the state of Florida was recovering, we saw a negative impact on prescriptions. But then it bounced back to where it was, and we're actually continuing to grow and progress our business in Florida. So we're very encouraged by what we're seeing. So we didn't see any sustainable impact, and it's now back in total probably about a 3-week effect.

Okay. And then in terms of formulary wins, obviously, you've knocked some pretty key wins over the last months -- in the last weeks. Can you just give us an overview of where you are in terms of the percentage of lives covered on both commercial and Medicare plans and what additional work needs to be done there, I guess, into '18?

Yes. So to answer your question, Serge, I think right now for us, we're very encouraged about the lives that we have covered and the new opportunities that we've added. If you look in terms of lives of the positions that we've strengthened, it's approximately 30 million lives. And the additional lives we've added is probably about another 5 million lives overall within the space. So our focus is twofold. One, we feel good about where we are, and we have plenty of work to do from a pull-through perspective. The second comment I would make is we believe that the wins that we have also have spillover impact and they also are driving additional interest in the conversations about putting Xtampza ER on other formulary. So we work continue to work it on all fronts.

Okay. One last one, and I'll get into queue. On ONSOLIS, is that still on track for a mid-'18 launch and maybe if you can give a little more color on some recent developments in that market?

Yes, Serge, this is Mike. ONSOLIS is still -- the key challenge for ONSOLIS is the tech transfer of ONSOLIS, and we continue to work on that process. The next step will be the following of a prior approval supplement with the FDA, and that is -- remains on track. Our plans for specific launch plans and so on are still being worked on. And we are going to be launch-ready by mid-next year. The product should be launch-ready by mid-next year. Clearly, the TIRF market has faced its challenges, but we do think that there is still an interesting opportunity for patients who have breakthrough cancer pain. So we continue to work on the product, and as of this point, no change.

Our next question comes from David Steinberg with Jefferies.

I have a couple of questions. The first is with the deferred -- your gross margin was far higher than in previous quarters, I think, like mid-90s. I assume it's because the deferred revenue had no cost against it. If that's was the case, what would have been your gross margin? And then secondly, there's been lots of discussion and publicity about the opioid commission and Chris Christie and all the things that are going on in Washington, D.C., I'm just curious, does Collegium have a seat at the table? If so, how involved are you, given your abuse-deterrent formulation? And do you think there'll be any results coming out of this commission that would be beneficial to the company?

This is Paul. I'll take the first part about COGS. I don't think Mike wants to answer that one. So for COGS, in the long run, our COGS is going to be about 3% or 4% of gross sales. So the switch to the sell-in method did not have a specific effect related to COGS. It's just the COGS has been figured out on a higher base of business. In the first half of this year, a high percentage of our COGS are fixed costs that are related to things like stability testing and other things that aren't dependent on our volume of how much we sell. So as we spread that -- those costs over a bigger base of business, COGS will come down significantly to the 3% or 4% that I mentioned a moment ago. So that's the reason you see a big change in COGS this quarter.

And Dave, this is Mike. And this is in regards to the Chris Christie commission. I'll make a few comments. We've obviously read the report. We haven't analyzed it completely in terms of all the effects. I'll just give you a few top line thoughts. Really to focus when you look at it is on the treatment of opioid abuse and the prevention of overdose with naloxone and the development of new opioids and figuring out how to educate folks on current opioid therapy. It was not a lot of focus on how do we evolve the current opioid treatment, which as we all know, there is 100 million chronic pain patients in the United States who remain and need to get treatment. The commission did not spend a lot of time talking about how chronic pain patients are going to be treated in this world of prescription opioid abuse, which meant that there wasn't a lot of discussion in there around ADF opioids. In terms of the seat at the table, we belong to the Abuse Deterrent Coalition. It's a group of companies that work together. And the Abuse Deterrent Coalition has a voice at the table, sat into the meetings. Now voice at the table does not mean a lot. It meant that, you've got a 2- to 3-minute opportunity to tell your story. So I'm not sure a lot of people individually or any companies have a seat at the table as much as they may think they do. But our perspective is, this is really being driven by policymakers and regulators and not necessarily clinicians and industry.

Sure, that's helpful. One follow-up. So I'm sure you may have seen it yesterday, Nektar Therapeutics reported that -- in a surprising move that they no longer host an FDA meeting, no longer need to do a Phase III study on their less-abusable opioid. Obviously, it had some positive liking scores and strong efficacy in the first Phase III. But they were planning on doing a second Phase III study. I was just curious what you thought of that? And secondly, how do you see that product if it gets approved as a potential competitor? Or do you see it as a competitor to Collegium?

David, thanks for the question. We're obviously aware of the statements made by Nektar on their earnings call, and we closely track all products that are in development. And we won't comment or make any critical comments on another company's program. What we're really excited about is Xtampza is already approved, it has a strong label, it's been recognized by the market as an important innovation that effectively treats chronic pain whether you're opioid-naïve or opioid-experienced and it has a comprehensive abuse-deterrent attributes. That's really what we're excited about. If anything else comes along that we think competes with that at the time it competes, we'll be ready to deal with it then.

Our next question comes from Kevin Kedra with Gabelli.

Most of mine have been asked and answered, but I did want to ask if you guys have a sense of what percentage of your target prescribing base thinks that all ADF formulations are equal. I would imagine that having that head-to-head data with OxyContin would create an interesting conversation with those prescribers. And then just a couple of housekeeping questions. One, can you just give us what your share count is outstanding after the ATM that went to Q4? And then want to ask you about SG&A expenses. You've kept SG&A pretty consistent since the launch of Xtampza. Is that something we should expect to continue with the 2018 or will we see a bit more expense with some of the additional work that you want to do around that product?

Okay, Kevin, this is Joe. I'll take the first one. I don't have a specific percentage to give you, but I'll give you a little flavor of what we see in the marketplace and in the research that we do. Number one, it's a pretty easy hurdle for us to overcome when we're talking to physicians to get them to see the potential of the DETERx technology relative to other abuse-deterrent products. That being said, it's the magnitude of the belief of, if they see it as better, that will result in them dabbling or not prescribing versus if they see it as significantly better -- and it's a magic threshold of magnitude that we continue to push on and that is very important for us to ensure that physicians fully understand the story. When they do fully understand the DETERx technology and platform and the potential of Xtampza ER, they will prescribe the product. And that gets back to my previous comments of our work is twofold, driving awareness. Right now, even with all the progress we've made, overall awareness of Xtampza ER is relatively low. And that's why we're focused as we come down the stretch here through operational execution driving it. And then we need to make sure -- and this is where our -- the discipline within our sales and marketing organization is so important that in every discussion, even though we've been on the market now for over a year, that we're continuing to educate and inform them on the DETERx technology. And a final comment, that's why we're excited about the sNDA and how it strengthens the label, enables us to continue to have conversations around Xtampza ER and the DETERx platform.

And Kevin, on your other 2 questions, with the fact that we had the change in -- to the sell-in method as well as the ATM, we did get our 10-Q filed right at the same time is issuing our press release today. So you can get additional details there. But shares outstanding is 30.8 million. And as far as SG&A, as we've said on prior calls, we're sort of at a run rate now for SG&A and we haven't completed our budget process for next year. But I think it's fair to assume that it'll be fairly flat.

Our next question comes from Tim Lugo with William Blair.

This is Ashiq Mubarack on for Tim. First, can you -- are you able to quantify at all what the price reduction might be related to your contract with Cigna if you miss their daily dosing thresholds? Any comments on the impact there? Are you also able to comment on how institutional buy-ins might have helped you during the quarter, any thoughts?

Yes, this is Joe. With regards to Cigna, as I had said, we won't comment on any of the particulars with regards to the contract other than to say that it is anchored to an average dose of Xtampza, and Cigna would get additional rebates if they were to exceed a certain threshold.

As it relates -- this is Mike. As it relates to institutional buy-ins, we did not have any institutional buy-ins the quarter. It was just normal course buying. And as Paul mentioned, days outstanding in the wholesale went down from 20 to 16.

Okay. Yes, that's helpful. And then, if I may, I think you gave a specific market share percentage you're taking with regards to the OPANA switches. If the same thing were to happen to oxymorphone ER, what steps would you be able to take to maybe increase that percentage? And then with regards to your new label, what's the turnaround to get that into your sales force's hands and to your marketing materials? Is that more or less immediate? Can we expect to see an impact from that in the fourth quarter?

Yes, so with regards to oxymorphone, I would bring you back to my overall comments. it really comes down to us continuing to get stronger and better at operational execution. The biggest opportunity that we have to continue to drive Xtampza ER is anchored to driving awareness of the product itself and the technology. So whether it's OPANA ER, whether it would be any other event in the marketplace, the more that physicians are aware, understand the technology and have a concern around abuse, misuse and diversion, Xtampza ER will do better as we move forward. So as I said, with OPANA ER, we're overclubbing or overcapturing relative to our share. But I believe, as does the team, that as we continue to get stronger execution, even coming down the fourth quarter with what's left of OPANA ER, we expect to do better than 7% to 10% on a weekly basis.

And the other question?

The other question was about your new label. What's the turnaround to get that into your sales team's hands and your marketing materials? Is that more or less immediate?

With regards to the turnaround, we're going to take a more disciplined approach in the sense of right now, we're working on a new promotional campaign that we'll launch in January. And we're actually taking the new label now that we have, it's currently in research, to ensure that we understand the most efficient way to create awareness and help physicians understand the impact of that label change. So that's how we'll approach it. And I think that any potential impact associated with the sNDA will be felt more in 2018 than in the immediacy of what's left in 2017.

Our next question is a follow-up question from Ken Trbovich with Janney.

Mike, I guess, I'm maybe trying to connect the dots here with regard to Gottlieb's comments about morphine -- I'm sorry, about oxymorphone extended-release and the new label. In the past, historically, the agency has suggested that they would be willing to move to remove an inferior product from the market. Clearly, OPANA was removed for safety concerns. Is there any thought around an initiative here with regard to the citizens petition to connect the dots for the agency, or is that something you feel they're prepared to do on their own?

Yes, it's a good question, Ken. And we're not going to comment on that specifically due to the strategic and competitive nature of it. But we will look at all opportunities to differentiate the products. And if that strategy fits into that, we will pursue it.

Okay. And then just last question on morphine sulfate equivalent dosing limits. Can you kind of give us an update on where you think payers are with that and how that plays into some of those efforts with regard to value-based pricing on the contracting?

Yes, I mean, the one contract that I'm aware of, and others may be aware of others, that had a hard limit on morphine sulfate equivalence was the United contract in January of 2017. We are not aware of any other contract. We have not entered into any contracts that require a specific morphine sulfate equivalent number. From our perspective, and I think the key opinion leaders have spoke, I think clinicians have spoke, is very, very difficult to peg a morphine sulfate equivalent when people have different metabolism, they're different sizes, they require different levels of opioid treatment, their pain levels are different. So I think there's such an individualism to how you treat pain, that MSEs become very difficult to manage. And I think payers are starting to understand that.

And Ken, this is Joe. The only other thing I would add is I think the thinking around it varies by payer. And the one thing that I think is important to recognize with Xtampza ER, and it's been consistent since launch, and that is that about 70% of our TRx's 18 milligrams and lower.

And I guess, that's the reason for the question. So when we think about Cigna, right, how is it that you or they got comfortable with what that limit is?

Yes. So, again, I think as it pertains to Cigna or any of our contracts, we won't get into the details of those discussions. But I would just reinforce that from our perspective, one, it's us taking an innovative approach and communicating in the case of Cigna and to the market that we're willing to partner with the payers. It reinforces our commitment, and Mike talked about it in his opening comments, to appropriate and responsible use of opioids. And what we will learn in the real world post January 1 is how it is that it plays out. But I would just come back to the point from our perspective and what we see in prescription data, it has been steady in terms of dose utilization per prescription since launch.

And I'm not showing any further question at this time. I'd like to turn the call back over to Mike.

Thank you. I'd like to thank everybody for joining the call today, and we look forward to continue to keep you updated.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.