Jaguar Health Inc (JAGX) 2021 Q3 法說會逐字稿

Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product and technology initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management's current assumptions, expectations and projections about future events.

While management believes that its assumptions, expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the forward-looking statements and Risk Factors section of the company's Form 10-K for the year ending December 31, 2020, which was filed March 31, 2021, and its other filings with the SEC, which are available on the Investor Relations section of Jaguar's website.

Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.

Additionally, please note that the company supplements its condensed consolidated financial statements presented on a GAAP basis by providing gross sales, non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which company management assesses and operates the business.

These non-GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP. As a reminder, today's conference is being recorded. At this time, it is my pleasure to turn the call over to Lisa Conte, Jaguar Health's Founder, President and Chief Executive Officer. Lisa, the floor is yours.

Thank you very much, and thank you for that comprehensive disclosure here. Welcome, all. As you just heard, my name is Lisa Conte. I am the Founder, President and CEO of Jaguar Health and our wholly owned subsidiary, Napo Pharmaceuticals. And I am a Board member, Chairman of the Board of our majority-owned subsidiary in Italy, Napo EU.

And I'm going to begin today with a brief recap of key clinical and product development updates. December is a key month of product development activity for Jaguar. We're so pleased that the results from our Phase II or from the Phase II -- it's not our study. Investigator initiated the whole study of crofelemer have been accepted for presentation at the prestigious San Antonio Breast Cancer Symposium, and that takes place from December 7 to December 10 of this year, just next month in San Antonio, Texas.

The HAL study was sponsored by Georgetown University, and it was funded by Genentech. It was a controlled study of the prevention of diarrhea in breast cancer patients on targeted therapy and a taxane chemotherapy drug. The study is independent from our pivotal Phase III On Target. That's the name of our study, On Target, which is crofelemer for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy with or without cycle chemotherapy. We initiated our On Target study in October 2020 and patient enrollment is ongoing.

So back to the investigator-initiated HALT study. The poster will be presented at San Antonio by lead author Dr. Paula Polman, who had moved from Georgetown and is now a leading oncologist and associate professor at the University of Texas MD Anderson Cancer Center. And it also includes senior author Dr. Sandy Swing, who is at Georgetown University. And the poster presentation will take place on Friday, December 10 from 7 to 8:30 a.m. Central time, and the poster will also be available for virtual participants starting on December 7.

In other important December news, Jaguar is planning for conditional approval and launch of crofelemer for the treatment of chemotherapy-induced diarrhea in dogs. The drug is called Canalevia -- Canalevia CA1 and will be our first prescription veterinary products. We anticipate conditional approval in late December 2021, likely December 27. According to the National Cancer Institute, there's roughly 6 million new cancer diagnoses in dogs each year among the approximately 80 million dogs in the U.S. now.

And for the most part, dogs received human chemotherapeutic agents during treatment and suffer the same side effect as human, and dogs really are predictive of the human experience. For example, approximately 40% of treated dogs may have their chemotherapy reduced or changed or discontinued due to diarrhea, which can compromise the full benefit of the chemotherapy agent and is a remarkably similar percentage to what's seen in human patient treatment as well.

Chemotherapy is evolving to become the most widely used oncology treatment modality in veterinary medicine, and there are currently no FDA-approved medications for the symptomatic treatment of CID in dogs, same thing in humans. Moreover, the most prevalent and used targeted chemotherapy tyrosine kinase inhibitors, often referred to as TKI, which have substantial rates of diarrhea, are widely becoming adopted by small animal practitioners. There are approximately 50 targeted therapies often utilized for chronic management of cancer that has been approved for human use in the past 20 years. Canalevia is a prescription drug product and will be commercialized through the company's -- at Jaguar Animal Health Business Unit.

So turning now to Jaguar's Italian subsidiary, Napo EU. The merger of Napo EU and Dragon SPAC has closed as we announced on November 1 and is currently effective. Jaguar maintains -- the parent company maintains a meaningful majority equity interest in the combined entity and the combined entity has retained the name Napo EU. With highly experienced key management for Napo EU in place now, we look forward to collaborating with and growing the Napo EU team in Italy.

In support of Napo EU's very important mission to expand access to crofelemer in Europe, the entire European territory, excluding Russia, for multiple pipeline indications and beginning with Napo EU's initial focus on short fall syndrome with intestinal failure, a rare disease representing another important potential indication for crofelemer and the patient community.

Napo EU operates under an exclusive license to crofelemer from Jaguar with typical license terms, including upfront fees, milestone payments, royalties and collaborative clinical work, including sharing of clinical and regulatory data generated by each organization. Napo EU is laser focused initially on orphan indications. Short bowel syndrome is a catastrophic event where patients got normally 20 to 25 feet may be as short as less than 5 feet, perhaps as short as 30 centimeters.

These patients often require TPN, Total Parenteral Nutrition, which can be for a 20, 22 hours a day and at a cost to the health care system of potentially over and typically over $0.5 million a year, and that's without complications. And these patients often have complications, serious complications as well.

In Europe, with typically single-payer health care systems where diseases provide an opportunity for business model for crofelemer that represents a different value parameter. Specifically, we believe crofelemer will reduce the time and quantity need for parenteral nutrition and hence increase the opportunity for enteral nutrition -- enteral directly into the stomach, directly into the intestinal tract.

To that end, Napo EU submitted an orphan drug designation application for crofelemer for the indication of short bowel syndrome for review by the European Medicines Agency, EMA. And EMA is equivalent to the FDA in the U.S. We submitted this in or Napo EU submitted it in September. Acceptance of the submission by EMA started the formal review process of the application. So they did accept the submission and the formal review process is by EMA's committee for orphan medicinal products. I'm very pleased to report today here that on November 5, the Committee for Orphan Medical Products provided us with a positive opinion for the orphan drug designation of crofelemer in the EU for this indication for short bowel syndrome.

The formal decision and designation for crofelemer for short bowel syndrome with orphan designation should be received within the next 30 days, and this is a key benchmark in achievement for the Napo EU business plan. As a reminder, crofelemer previously received orphan drug designation in the United States from the Food and Drug Administration for short bowel syndrome.

In Europe, however, the orphan designation provides a pathway for accelerated pre-approval patient access because of the catastrophic health situation of many short bowel syndrome patients and is part of the reason why it's the initial strategic focus of Napo EU.

Massimo Mineo, the General Manager of Napo EU has extensive -- and who was announced yesterday, has extensive experience with orphan and rare disease business management in Europe and is very exciting right now. I am speaking from a hotel in Boston and the Napo EU's management team is over here from Italy.

Travel was permitted. And they are meeting, and we are meeting with the Jaguar drug development team, as I speak, providing a download of all things to crofelemer. The sharing of data between the 2 organization augments the opportunity for multiple clinical shots on goal of crofelemer for each organization and in particular, allows Jaguar to benefit from another shot on goal with non-dilutive financing, and that's specifically for a crofelemer in pursuit of short bowel syndrome indications.

Before I hand the discussion over to Carol Lizak, Jaguar's Chief Financial Officer, who will provide a recap of key financial results for the third quarter of 2021, I want to highlight the fact that Mytesi prescription volume, the metric we believe to be the best indicator of patient demand, increased 7.6% in the third quarter of 2021 over the second quarter of 2021, and new Mytesi prescriptions increased 9% during the same comparison period.

Mytesi total prescription volume remain the same in the third quarter of 2021 over the third quarter of the year ago 2020, and new Mytesi prescriptions increased by 10.5% during the same comparison period. We're all aware, of course, that this has been the pandemic period. What's very important, and I want to address head on, the fact that we are still in the midst of the process of transitioning a substantial amount of Mytesi volume to a closed network of specialty pharmacies rather than the wholesalers that resell the product to retail pharmacies.

This transition results in an underrepresentation of Mytesi utilization as revenue related to wholesaler inventory has already been recognized by Jaguar as required and in accordance with GAAP, and that inventory is now being bought down. This inventory buydown is painful to our financial measurements and is expected to be completed in the fourth quarter of this year.

So why do we do this? A key component of the company's market access strategy this initiative to transition to a closed network with specialty pharmacies is intended and is, in fact, helping to remove access barriers for patients receiving Mytesi prescriptions, and includes services such as a higher level of support for prior authorizations, appeals, adherence, counseling, home delivery options, all of which have become even more important during the pandemic.

And while patients often visit retail pharmacies for short term or uncomplicated medical needs, specialty pharmacy focus and specialty pharmacies themselves focus on servicing patients with complex and chronic medical conditions. Financially, the transition to a closed network with specialty pharmacies is expected to result in a meaningful reduction in Mytesi distribution costs and strategically prepares the company's U.S. commercial distribution network for future indication expansion of crofelemer to other populations of patients with complex medical needs.

We'll get through this transition, and we believe, and that's why we did this transition for the good of the business to be in a better place in 2022 and beyond with a focus on prescription growth, payer mix, net revenue growth and getting our reps back into promotional face-to-face post-pandemic office visits.

Lastly, I'd like to let all of you participating now that we will have a brief Q&A segment at the end of the webcast to address questions some have already come in, and they can be submitted in writing. Questions can be submitted via the webcast for today's event that appears on the Events and Presentations page of the Investor Relations section of Jaguar's website. The URL for Jaguar's website is jaguar.health.

Okay. We'll now move along to the key financial results for the third quarter of 2021. I'm going to hand this over to you, Carol, please.

Thank you, Lisa, and thank you all for joining our webcast today. Key financial highlights for the quarter ended September 30, 2021, are as follows: as Lisa stated, Mytesi prescription volume increased 7.6% in the third quarter of 2021 over the second quarter of 2021, and new Mytesi prescriptions increased 9% during the same period. Mytesi total prescription volume remained the same in the third quarter of 2021 over the third quarter of 2020, and new Mytesi prescriptions increased by 10.5% during the same period.

Mytesi net revenue during the third quarter of 2021 was approximately $600,000 and approximately $400,000 in the second quarter of 2021, an increase of $200,000 quarter-over-quarter. Mytesi net revenue decreased by $2.2 million in the third quarter of 2021 versus the third quarter of 2020. As part of the process of transitioning to the close specialty pharmacy network, the third quarter of 2021 was significantly impacted by the onetime inventory drawdown of approximately 1,300 bottles of Mytesi across the company's third-party logistics warehouse, wholesalers, distributors and retail stores.

The company expects essentially a full transition to Mytesi prescription being dispensed through specialty pharmacies by the end of the fourth quarter of 2021. Mytesi gross revenue, a non-GAAP measure, was approximately $3.2 million during the third quarter of 2021, and approximately $4.9 million in the second quarter of 2021, a decrease of $1.7 million quarter-over-quarter.

Mytesi gross revenue decreased by $3.1 million in the third quarter of 2021 versus the third quarter of 2020. As mentioned, the third quarter of 2021 was significantly impacted by the onetime inventory drawdown of approximately 1,300 bottles of Mytesi across the company's third-party logistics warehouse, wholesalers, distributors and retail stores.

Sales volume distributed through the company's recently established and expanding pool of third parties specialty pharmacies, through which Mytesi is distributed, was approximately 38% of total sales volume in the third quarter of 2021 compared to approximately 17% in the second quarter of 2021. For the third quarter of 2021, the net loss was $12.2 million compared to a net loss of $7.9 million in the third quarter of 2020, an increase of $4.3 million quarter-over-quarter.

That concludes my recap of high-level financials for the third quarter of 2021. I will now hand the discussion back to Lisa.

Thank you, Carol. Okay. So we have some written questions. And this time, I've got them. And we also have on the phone, Ian Wendt, who is our Chief Commercial Officer. And so I'm just going to take this first question and send it right over to Ian here. The question is, why have you office core strategy, which delivers you less sales year-on-year? And so we have not opting for strategy for less sales.

I'm going to turn this over to Ian, but I just want to repeat what I said and add, first and foremost, we're patient community focused, and we focus on the patient and everything else will fall into place here. But Ian, why don't you talk about what the key financial and strategic catalysts are for the movement to the specialty pharmacy network, please?

Yes. Thank you, Lisa. I'm happy to do that, and good morning. Great question and one, I think, gets right to the point of what we're trying to communicate on this call. So I'll try to address this in a couple of different ways, but first, this is really part of this overarching strategy that we've been implementing for about 1.5 years, which internally we call our market access strategy, really designed to better support patients in their ability to start and stay on Mytesi.

And we've already seen evidence that this is working significantly. Part of that strategy is the transition of Mytesi patients to receive their prescriptions in specialty pharmacies. And we've known for a while now that patients do better, if they're serviced by a specialty pharmacy that just have the capacity and capabilities to provide these enhanced set of services for these patients.

So when we look at some of these key metrics that we believe are important from an outcomes perspective and are important from patients, we've known for a while that they do better. So we always had a subset of our patients that were in the specialty space. The vast majority of the patients were in the retail space, and so we could see that difference.

Just as an example, patients in specialty pharmacies tend to stay on the drug longer, significantly longer, which is great. That has to do with the adherence counseling, fighting for the PAs and appeals with payers that the specialty pharmacies do. The days between fills is significantly lower. So ideally, the patient should be filling their script every 30 days.

And those that are in the SP environment get closer to that number than those in the retail number. The prescription to fill ratio, which is really critical that basically measures out of 100 prescriptions that are written, what percentage of them are actually filled that tells you how good of a job you're doing in managing through the PA and appeals process and other barriers that payers put in place. And that's higher in the SP environment.

So we know, in the long run, patients do better in this environment. So it's really important for us to have all patients benefit from what the SPs can offer, not just today, and it's certainly important for Mytesi in the current indication, but becomes critically important in the future for potential future indications with much larger market opportunities. So the long-term strategy is to set us up to better support these patients and that will result in greater year-on-year sales growth and our belief, and we're already seeing those key metrics represent that.

Ultimately, this will help support a more favorable payer mix and higher net price for the -- for Mytesi, which is something we watch quite closely. Getting through this period, as Lisa talked about earlier and Carol mentioned earlier as well, we really had to get through this inventory buydown that sat out in the retail channel, and there were about 1,300 bottles out there. So on a gross sales basis, that's about $2.8 million.

We had to let that flow through the inventory channel and be dispensed out to patients. And then once the inventory pipeline essentially is empty, once the wholesalers don't have any more product, once the retailers don't have any more product then those patients have been moving over to the SP channel and buying directly, which has resulted in the benefits we've talked about, including the dramatic reduction in distribution fees associated with those pharmacies buying directly from us.

Thanks, Ian. And I do want to say to everyone, we own this, and we recognize that this is a painful transition for everyone financially, and hopefully, we've explained the benefits to the company, to the patients of doing that. And remember, Mytesi for HIV is the first commercialized indication, and it is a gift in setting up the strategy and the distribution for the product for what we believe is going to be really important follow-on indications for Mytesi and for crofelemer.

And that will have the benefit of having this network already set up. So we do acknowledge that this has been painful for everyone. Okay. Next question. I'm going to get to all the questions, but I'm going to just skip to a third question right now because it's sort of relevant. And what is the market potential for chemotherapy-induced diarrhea and exercise-induced diarrhea. This is Canalevia.

So this is the dog product -- of the dog prescription product of crofelemer. And also after the potential launches of Canalevia in chemotherapy-induced diarrhea, exercise-induced diarrhea, do you see any other potential usage of Canalevia in dogs?

So Ian, again, get ready to comment on this, but I'm going to put in a few comments first. First of all, we don't give out financial guidance, as you know, but we do think that the dog indications first are certainly chemotherapy-induced diarrhea is remarkably predictive health situation of the human situation -- in dogs is predictive of how the humans react to these drugs and the diarrhea that result from that and therefore, of course, the benefit that we are expecting from crofelemer.

We do think that this will be about as important a specialty market opportunity as Mytesi and HIV. But what's also quite interesting, in the United States, it's a self-pay situation for veterinary medicine. And so therefore, the difference between the gross and the net is much more predictive than we've had in the human situation. And so, for example, the strategy of moving to specialty pharmacy to address patients, to address the net, to address the health of the business is a different situation and much more straightforward in dogs.

We will expect the approval and the launch, as I said, at the very end of December. Specifically, we're looking at a date of December 27 for chemotherapy-induced diarrhea approval and launch. Exercise-induced diarrhea is a conditional approval that is probably about 6 months away, so in the midst of 2022. Other potential uses of Canalevia, we'd obviously like to have the products studied and approved in all diarrhea in dogs.

And that is a strategy that is being discussed internally right now, weighing the resources and the attention that we give to our human pipeline versus our animal pipeline because that's not in the initial label targeted indications.

And Ian, is there anything you would like to add about the plans for the launch for Canalevia?

Yes. Just a couple of points, I think, that might be interesting for folks to understand. We did do the market research on assessing the market potential for CID, and I can't give specific numbers, but what I can say is that our baseline assumptions were more conservative than what the market research returned to us in terms of how we size this market.

That was really encouraging for us to see as we continue to engage in conversations with key opinion leaders and potential prescribers as part of that market research effort. We get a lot of great questions around the CID indication, and then one of the questions that comes up quite often is, what future indications might crofelemer potentially have an -- where it might have an application for a variety of different populations.

And I think where that comes from -- and I think this is a good thing to understand about the market is, there's no currently approved any diarrheal for dogs, not just within CID, but in broader diarrhea diagnoses outside of CID. So there is this unmet medical need. There is a sense of certainly enthusiasm among KOLs, looking for a new solution, a new tool to use for these patients.

So we're quite excited about the launch. As Lisa indicated, we anticipate our approval letter coming back on December 27, and we are certainly preparing for -- to really get the word out there to pet owners and to providers. We have a rather large event planned at BMX, which is veterinary conference that takes place in the middle of January, as kind of a kickoff for a lot of our launch activities. So we have a lot planned around that and more to come on execution as we get through that conference.

Thanks, Ian. And I will add, it's very exciting to have a drug approval. The patient happens to be a dog versus a human. It's very exciting, and it's a big deal to have a product approval. And in this particular patient population, obviously, the patient is the dog, the decision-maker is the dog owner, is a human.

And so there will be -- the launch will be augmented by a consumer outreach effort as well. And the factors that a dog owner thinks about when they are deciding to give their dog chemotherapy or not and try to extend their life are -- first of all, it's going to be out of pocket. It's going to be expensive. It could be $10,000, $12,000, $15,000. Secondly, you want to manage the side effects that if you're going to do this, that you're, in fact, going to be able to keep the dog on the therapeutic dose as we talked about, about 40% have to go on a subtherapeutic dose to therapy because of diarrhea.

Also then the patient's comfort, the dog's comfort. This is consistently come back and is such an important factor in the decision process because you can't talk to the dog and say, just tuck it up, you're going to feel terrible. It's going to be awful for 2, 3 months, but things will be better. So the patient comfort is very important in this decision process. And then the last thing is the practicality of really the home and the quality of life for everybody.

If a dog has lost control and what that means for your rug, your carpet, your household, really the experience for the whole family. So it's really interesting dynamics. It's a situation where I certainly have found over the 30 years of working with crofelemer in diarrhea, there's always a bit of human reticence to talking about human bowel functional diarrhea. The dog owners have no problem. It's all about poop. They have -- anybody who has a dog in apartment has no problem talking about poop.

So we really think there can be some halo effect in terms of education into the human situation as well. So there will be some consumer outreach that you will see, which will be very exciting.

Okay. An easy question. When do you expect completion of enrollment in the Phase III cancer indication?

This is cancer therapy-related diarrhea. This is the human indication. Cancer therapy-related diarrhea, the prophylaxis study that is ongoing right now with targeted therapy with or without underlying chemotherapy, and we are planning on the last patient enrollment by the end of 2022. This is Mytesi. This is the exact formulation of Mytesi that is currently commercialized. So supply chain is in place.

FDA-approved GMP supply chain. Mytesi for HIV is a chronic indication. So chronic safety has been completed, for example, a 2-year carcinogenicity studies. And just as an aside, the 2 most common reasons why new drug applications fail are safety and manufacturing. So those have been completed. When we file the data from the pivotal Phase III trial, it should be a 6-month supplemental review for the approval, and we're planning for the launch at some point in 2023 in terms of manufacturing supply.

Okay. When is the merge? I assume this is the Napo EU merger with SPAC. The long painstaking process completed, it's over. It completed in November. I believe we announced it on November 1. It is effective. Napo EU is merged with Dragon SPAC. The resulting name is Napo EU. So you will no longer hear Dragon SPAC. The combined organization is Napo EU and has the resources that came from the investment that went into Dragon SPAC.

And as I said, it's allowing that company to operate under license from Jaguar and is providing another clinical shot on goal in the pipeline of crofelemer development with non-dilutive resources from Jaguar Health. And that's why I am in Boston right now, meeting with that team and making those plans.

Let's see. What countries do you believe are the biggest markets for crofelemer in Europe? I can answer that very effectively. The biggest markets and the markets that provide the earliest preapproval. Those are key words, preapproval, expanded patient access in Europe for an orphan designation, that causes the catastrophic nature of these patients and different than the U.S. I assume, I believe, because of the single-payer health care system and anything that can be done -- that can reduce the cost of taking care of these situations as well as provide benefit to them.

Our -- Italy and that happens to be where Napo EU is located in Milano, Italy, France and Germany. But there are -- all the European countries with the exception of Russia, we call Russia in Europe, are part of the license. But those 3 countries, in particular, are not only very large markets, but provide the opportunity for pre-approval, accelerated patient access for an orphan products. This means revenue generation, which is very exciting.

Could you talk about -- let's see, I'm going to -- Ian, I'm going to give this to you again. Are you noticing additional patient stickiness through the specialty pharmacies. Do you want to take that, Ian?

Yes, happy to. And yes, the short answer is, yes, we are. And I mentioned, I think some of those key metrics a little bit earlier, but just to review them really quickly because these are things we watch quite closely as we look at persistency. So that's how long the patient remains on drug. We look at a metric called MPR, which is Medication Possession Ratio.

So out of those x number of days that they're on the drug, how many of those days that they have drug in hand. And so that kind of gets that some patients fill every 30 days. Some patients fill every 40, 45 days. Patients don't always fill exactly when they're supposed to. So the idea is that we want to get the days between fills lower, closer to 30, and we're seeing improvements in that metric as well.

We also look at the time that takes from a patient when they receive their prescription from the doctor to when they actually get the fill dispensed, and that can be longer than you might expect sometimes, right? Patients, they have to get to the pharmacy. There has to be a PA. Maybe that has to be managed by the pharmacy and provider. Sometimes in the retail sector, that doesn't happen at all. Unfortunately, people just don't have time to do it. Maybe the follow-up isn't there.

In the specialty space, they're much better at doing that, and they can get through that in just a handful of days versus weeks. So those are some of the key metrics we look at. And really, we see it's a pretty stark difference between what the retail pharmacies, the type of support and outcomes that they deliver. And remember, the retail pharmacy space is just volume driven. I mean they're filling prescriptions all day, every day, and they're checking folks out with some of their groceries, in the front store purchases the patient makes, and they have a lot of things going on.

They can't really devote extra time nor is it very cost effective for them to do that, the extra time needed for some of these specialty products that just require more support. The specialty pharmacies can do that and the metrics really support the idea that we're getting better outcomes there.

Great. And Ian, I'm going to give you another one.

Yes.

Let me see. Hang on. How do you see Mytesi revenues being impacted further as greater specialty pharmacies continue to offer the product?

Well, once we get through the transition period, we know that the patients that we've already have already been on Mytesi, I guess let's start there, are going to do better for the reasons that I just mentioned, right? They'll stay on the -- we expect them to stay on the product longer, fewer days between refills, all those great things that really demonstrates the patients just getting better support in general.

The metric that we were really suffering from -- and really this isn't unique to Mytesi, a lot of brands struggle with this, is the ratio between -- is the prescription to fill ratio. Again, just to review that, it's for every 100 prescriptions written, what percentage of them actually get filled because different plans have them tiered. There's co-pays. There's step edits. There's different things that the payers put in place that can make it difficult for the medication that the prescriber wants that patient to be on to actually to get filled.

So we see that we're going to -- we already see that we're improving that metric quite significantly for the reasons I mentioned earlier. So that bodes well for new patients. I mean it bodes well for the existing patients, but it bodes well for new patients, too. We're going to have a higher ratio of those folks that the physician would like to have start Mytesi and stay on Mytesi to be able to successfully do that.

And really, that supports the underlying long-range vision of the strategy, right, better support those patients, allow more patients to benefit -- appropriate patients to benefit from Mytesi.

Great. Thank you. Okay. So there's a question here about veterinarians. And so -- and just so that everybody has the same basis of understanding here, so prescriptions in veterinarian offices for the most part, are profit centers. So anybody who has an animal, you go to the vet, often you just walk out right with your prescription there, and they do a markup from the price that they get from the veterinary wholesalers.

And as we've also said and I'll just underscore this again, because of the self-pay situation, one of the strategies -- financial strategies of moving to specialty pharmacy in addition to the better patient service is to just have a more predictive situation on that gross-to-net ratio, whereas it's quite predictive in the animal health area.

So there was a question about pricing of Canalevia, and we are finalizing that right now and being -- and have done a great bit of research looking at other situations where there is a human active ingredient and an animal active ingredient and what is the typical pricing ratio right there.

So that's how we're going about that situation. So there's a question about the amount of things that I'm juggling between Jaguar and Napo EU and would you give over the word to another CEO for Napo EU?

Let me tell you the nomenclature is different in Italy. So a general manager, Massimo Mineo, is the CEO responsibility. He is essentially the President and CEO in terms of the activities, the responsibilities, what he is managing, and I am a Board member of Napo EU. So my full attention and responsibility, of course, is on the business of Jaguar.

However, remember that Napo EU's providing another clinical shot on goal for crofelemer, all that clinical data, which will likely -- that clinical trial will likely be conducted on a global basis, which is typically done for rare diseases because you have a small number of patients that will be available for the United States for regulatory filings in the United States. And we are a very large shareholder of Napo EU and the financial benefit that we would expect to come from that.

As Napo EU achieved its shot on goal follow-on indications, will it eventually file for an IPO at AIM Italia in the future? Napo EU absolutely has its eyes on a public offering. And a key transformative event in value enhancement is, of course, proof-of-concept data in humans first revenue generation. And remember, as I've said, for an orphan designation in Europe, there can be reimbursed pre-approval patient access for an orphan designation, and that would be a strong value-enhancing moment to speak a public listing. I can also tell you that quite likely it would not be an aimless thing in Italy, it would be a larger exchange.

Let's see. Are you working on any new business deals? What we haven't spoken about is our early-stage discovery program, which takes very little resources. It's mobilizing assets that we have in the company for Entheogen Therapeutics Initiative. That's an initiative within the company looking at psychoactive and psychedelic agents, plants all the way to some pure compounds that are already in our 2,300 plant library.

Some first-hand field investigations that this company has conducted with western train physicians, Novanta and Shamans and he was in the field over a 32-year period of time. So fascinating field of research, looking at ways of curing and treating mood disorders, all sorts of mental health disorders. There's a great deal of funding that has gone into this area in general, but almost all of it is focused on the same 7 compounds solacibin, MD&A, ketamine and what we're providing is an opportunity for what is the next generation of the psychoactive and psychedelic agents that can prevent new ways not constrained by known mechanisms of action to treat and potentially cure these mental disorders.

And it's exactly the pathway of what we successfully did with crofelemer. So followed a plan has been utilized by Shamans for its symptoms in the field, bringing it back home, finding a totally new mechanism of action because what we were watching was the symptoms in a whole organism not doing high throughput screening against a known target or a known mechanism of action that likely already has candidates that are on the market or in clinical development, taking it through as the first oral product approved by the FDA as a drug, drug approval by the FDA under botanical guidance, which provides a very, very important exclusivity advantage since there is no pathway by which a generic can be produced.

So these are all skill sets that are -- have been proven on within this company, take very, very little resources for us to mobilize. And then what we're looking to do, as I said before, is collaborate with a company that is focused on the regulatory, the clinical development and commercialization of these new potential agents. And we're having really, really exciting discussions.

We have an amazing scientific strategy team that is almost identical to the scientific strategy team of world-class ethnobotanists, ethnopharmacologists who study -- health plans are being used as medicines in tropical areas that was in place when we started the company 32 years ago and has been brought back together in the past year to specifically focus now on our library and new plant collections in this area.

The other area where we would -- and I've said this publicly as well, we have a sales force. We have our first product. It's -- can you put another product in the bag? And so we're always on the lookout for something that could fully utilize the resource that we have up and out there, our sales force, our commercial effort, while we are waiting for the pipeline indications of Mytesi to get developed and approved. And it's got to be the right fit and not take resources the way it has to be something that's additive to the company. So that's something that we're always looking for.

And let's see if I've nailed all the questions here. I think I have gotten to -- well, where do you see the company in 3 years? In 3 years, it will be very exciting. We believe that we will have completed the pivotal clinical investigation and the approvals for 2 more indications. That's where I would expect it to be. Remember, all the forward-looking statements that were previously discussed here, but that would be the timing for CTD, cancer therapy-related diarrhea.

That's Mytesi indication in the United States and then short bowel syndrome, a full approval in -- or a conditional approval, full access to all patients in multiple European countries. And again, that data is available in the United States. So we're already looking at would there need to be any additional work to support the approval in the United States, where we already have orphan designation, that's crofelemer, in a highly concentrated liquid formulation.

So that's not Mytesi. A different product, different value proposition, different business model of very, very high valued chronic medicine for a small population that's very expensive to take care of with very, very large mortality and morbidity situation. So that's a very exciting business. And then, of course, Canalevia and thinking about ways to get Canalevia to all animals that are dealing with diarrhea.

And then the last piece is, the whole crofelemer story is, how do we get crofelemer. So all patients who need all channels, all countries, and that's the business development efforts that we have going on right now. So we recently brought on an Executive VP of Business Development, with whom we've been -- who has been consulting with the company for the past 6 months. So based on her work and how discussions have been progressing on the business development side, specifically focused on getting crofelemer out-licensed to all the countries in the world, we would expect to have those deals cut in the next year or so, which lays the groundwork then for where will the product be in terms of bringing in licensed compensation to the company, royalties, et cetera.

Profit sharing in other parts of the world, and that certainly would be done our expectation in a 3-year period of time. And then hopefully, of course, the collaboration will have been completed, and there will be some novel molecules coming out in the psychoactive and the psychedelic area.

And I believe that concludes all the questions that I see here. Let me just go down one more time, yes. So thank you very much for your attention, and we got you off 5 minutes before the market opens, and glad I was able to access the questions at this time. And this was fun and we'll be doing that in the future. Thank you very much.

Thank you. Ladies and gentlemen, that will now conclude today's conference call. Thank you for your participation. You may now disconnect.