OptiNose Inc (OPTN) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the OptiNose Q4 2020 Earnings Call. (Operator Instructions) Please be advised that today's call is being recorded. (Operator Instructions)

I would now like to hand the call over to Jonathan Neely, Vice President of Investor Relations. Please go ahead.

Good morning and thank you for joining us today as we review OptiNose's fourth quarter and full year 2020 performance and our plans for the remainder for the year ahead.

I'm joined today by our CEO, Peter Miller; our President and Chief Operating Officer, Ramy Mahmoud; our Chief Commercial Officer, Vic Clavelli; and our CFO, Keith Goldan. The slides that will be presented on this call can be viewed on our website, optinose.com, in the Investors section.

Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements. All statements that are not historical facts are hereby identified as forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements. Additional information regarding these factors and forward-looking statements is discussed under the Cautionary Note on Forward-Looking Statements section and the Risk Factors section and elsewhere in OptiNose's Form 10-K that was filed today with the SEC and available at their website, sec.gov, and on our website at optinose.com. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements during this conference call speak only as of the original date of this call or any earlier date indicated in such statement, and we undertake no obligation to update or revise any of these statements.

We will now make prepared remarks, and then we will move to a question-and-answer session. With that, I will now turn the call over to Peter Miller. Peter?

Thanks, Jonathan, and good morning, everybody. We appreciate you joining us this morning.

Starting on Slide 3. I'd like to begin by reviewing our 2020 full year results. I'm not sure any of us would have predicted the pandemic at the start of the year. And in the face of significant pandemic-related headwinds, I'm very proud of the strong growth our team delivered.

Though our results were not as strong as we expected when 2020 began, they reflect continued progress towards our commercial and clinical development objectives. For the full year 2020 versus 2019, XHANCE net revenues increased 59% to $48.4 million, XHANCE total prescriptions increased by 70% and XHANCE new prescriptions increased by 31%.

It's useful to have some context for each of these results. The pandemic environment had 2 adverse impacts on our ability to grow the business. First, patient visits to physician offices were suppressed due to stay-at-home orders and patient discomfort with going into medical offices. And second, the ability of our territory managers to broadly (inaudible) person with our targeted physicians was constrained due to offices not allowing any sales representatives to meet in person due to the pandemic. Thus, our growth in total prescriptions of 70% was against a category decline of 7%, and new prescription growth of 31% was achieved in a category that declined 13%.

Note also that our revenue growth lagged prescription volume growth largely due to a temporary patient assistance program that was put in place early in the pandemic. This program has since been retired, and we expect revenue per prescription in 2021 to be more consistent with levels in 2019.

In addition, we were disciplined with respect to our expenses. For full year 2020, we had $129 million of operating expense, inclusive of chronic sinusitis clinical trial cost. This is aligned with our last guidance range and represents just a 3% increase compared to full year 2019.

Turning to Slide 4. We'll go into more detail in a moment, but I would like to highlight 5 key takeaways from today's presentation.

First, new prescriptions of XHANCE achieved another all-time high in the fourth quarter despite continuation of the pandemic-related market challenges I already alluded to. New prescriptions increased 7% over third quarter 2020 and are up 16% compared to fourth quarter 2019. It's worthy to note that market NRx increased 21% from fourth quarter 2019 to fourth quarter 2020 -- I'm sorry, market NRx decreased 21%.

Second, after making certain adjustments for the effects of the COVID-19 pandemic, our full year 2020 financial performance was aligned with our company guidance.

Third, we are providing some initial company guidance related to first quarter and full year 2021 performance. We hope that our ability to drive performance in 2020 lends confidence in our projections for the year ahead.

Fourth, and I'll take a moment to dive in here, we believe there are multiple opportunities that will continue to drive revenue growth in 2021.

I will highlight 5 important factors supporting revenue growth in 2021. But first, to begin with the market environment. As summarized in third-party data reports, the pandemic reduced the number of diagnostic visits by patients to physician offices and limited the ability of sales representatives to meet in-person with physicians. And importantly, these effects were not limited to the second quarter of 2020. Broadly speaking, the effects on the business environment followed the course of the pandemic. There was an initial shock in second quarter, improvement in the third quarter and then softening late in the year and into early '21 as the wave of infections and deaths attributable to the coronavirus surged again.

The fact that we were able to continue to grow new prescriptions in this environment fuels our confidence that XHANCE new prescription growth will further strengthen in 2021 as we expect both our access to health care offices and patient volumes in those offices to improve throughout 2021. We think these 2 factors alone could provide strong support for growth in XHANCE prescriptions in 2021.

Third, we believe there's an opportunity to get more benefit from our partnership with kaléo as the pandemic environment improves. Since launch in fourth quarter 2020, kaléo's impact on our business has not been significant as the pandemic has limited their ability to reach many of their XHANCE targets. Early signs of success in places where kaléo has been able to reach our customers leaves us optimistic about the potential for this partnership as vaccination progress serves to both ease physician access and make patients more comfortable resuming office visits.

Fourth, and very encouragingly, there is increasing recognition by thought leaders and specialty societies that XHANCE plays a distinct and important role in treatment of patients with chronic rhinosinusitis with nasal polyps after they try and fail conventional nasal steroid sprays. For example, a recent peer-reviewed publication in the journal of the American Rhinologic Society, the International Forum of Allergy & Rhinology from lead author, Dr. Brent Senior, Chief of Rhinology at the University of North Carolina at Chapel Hill, encourages health care providers to consider prescribing XHANCE in chronic rhinosinusitis patients with nasal polyps who remain inadequately controlled by conventional nasal steroid sprays.

Additionally, several medical societies, including the American College of Allergy, Asthma and Immunology and the American Rhinologic Society, have made available patient-centric materials also illustrating the growing recognition of the differentiated role XHANCE can play in treatment.

We think that this kind of expert specialty recognition of XHANCE both reflects growing appreciation for the role of the product in treating the inflammation of chronic rhinosinusitis with nasal polyps and offers potential to support broader adoption by making it clear that XHANCE is an important option for maximizing medical therapy for patients with inadequate response to standard nasal sprays.

And fifth, as I alluded to earlier, we also expect 2021 revenue to benefit from a stronger XHANCE average net revenue per prescription compared to full year 2020 because we do not have -- we expect to not field the assistance program this year compared to last year's program.

Finally, our last major takeaway for today's presentation is that we expect top line data from at least 1 of our 2 pivotal clinical trials evaluating XHANCE for the treatment of patients with chronic sinusitis by the end of 2021. Note that pandemic-related issues, including temporary research site closures and decreased patient flows in many countries during 2020, slowed enrollment in our trials.

This is the reason we now expect top line results from 1 of our 2 trials to be delayed in the first half 2020 instead of being available by the end of 2021, as previously guided. As you are aware, XHANCE could be the first drug ever approved and promoted for the treatment of the 30 million U.S. patients who suffer from chronic sinusitis. We believe this data could lead to a multifold expansion of our target patient population, driving significant additional value for the company, potential primary care partnerships and opportunities for approval of XHANCE ex U.S.

Turning to Slide 6. In fourth quarter 2020, there were 24,600 new prescriptions for XHANCE, a 7% increase in new prescriptions compared to the third quarter 2020, a 16% compared to the fourth quarter 2019 and the highest number of new quarterly prescriptions for XHANCE since launch. While the pandemic interrupted our new prescription growth trend in the second quarter 2020, we returned to setting record highs in third and fourth quarter.

As previously mentioned, the magnitude of our full year 2020 growth was constrained by factors related to the pandemic environment, which we expect to improve through the course of 2021. The return to growth in new prescriptions, even during the second half of 2020 when the overall market was still substantially down, is a reminder of the high unmet need in the marketplace. We anticipate the continued new prescription growth leveraged through the high refill rates that result from high patient satisfaction with XHANCE will lead to strong total prescription growth in 2021.

Turning to Slide 7. Refill prescriptions continued to increase year-over-year and quarter-over-quarter to 49,300 in fourth quarter 2020, and now compromise approximately 2/3 of the XHANCE business. Note that the slower flow of new prescriptions into the business in Q2 during the peak of the pandemic temporarily slowed refill growth in subsequent months. However, we see this impact washing out as new prescriptions return to growth. Pulling together the new and refill prescriptions, the total number of XHANCE prescriptions in the fourth quarter of 2020 was approximately 73,900. This represents 36% growth over the fourth quarter of 2019 in a market environment which declined 13% over the same time period.

Turning to Slide 8. As we discussed on our third quarter 2020 earnings call, we've historically defined market share as a proportion of all intranasal steroid prescriptions written by the approximately 10,000 physicians that were targeted by our territory managers. Our co-promotion with kaléo gives us potential to reach up to approximately 3,000 physicians who were not in the call-on universe of our own territory managers. Given that significant change, we are taking the opportunity to update the target physician audience we use to track market share.

Going forward, we will include approximately 18,000 physicians in our target audience for calculation of market share. This target audience includes all ENT and allergy specialist physicians who based on third-party data write intranasal steroid spray prescriptions. In addition, our current target audience includes specialty like primary care physicians called on by our territory managers or kaléo sales representatives. Note that all displayed historical numbers on Slide 8 have been restated based on this expanded universe.

XHANCE market share continued to increase in fourth quarter 2020 and has increased from 3.4% in fourth quarter of 2019 to 5.1% in fourth quarter of 2020, an increase earned despite the previously mentioned disruption to both patient flow through doctors offices and territory manager access to physician offices during the pandemic period.

Turning to Slide 9. Breadth and depth of physician prescribing is measured by the total number of physicians who have patients filling XHANCE prescriptions also continued to grow through the fourth quarter and 2020 as a whole.

Regarding breadth, in fourth quarter 2020, approximately 6,700 physicians had a patient fill at least 1 prescription of XHANCE, an increase of 14% compared to fourth quarter 2019. Regarding depth, the number of physicians who had more than 15 XHANCE prescriptions filled by the patients in the quarter has grown even faster with that number increasing by 54% from fourth quarter 2019 to fourth quarter 2020 with more than 1,200 physicians now in this segment.

While increasing depth drove more growth than increasing breadth during the pandemic, we see the continuing growth trend for both depth and breadth as encouraging markers of product uptake and continue to believe that driving growth in both depth and breadth is important in focus promotional efforts against this objective.

In a few moments, I'll provide some closing remarks. But I will first turn the call over to our CFO, Keith Goldan, for comments regarding fourth quarter 2020 results and perspectives regarding our corporate guidance. Keith?

Thank you, Peter, and thanks to everybody for joining us this morning.

Turning to Slide 11. As we reported, OptiNose recognized $15.6 million of XHANCE net revenue in the fourth quarter of 2020. As noted on prior calls, one of the metrics that we track is XHANCE average net revenue per prescription, which is calculated by dividing net revenue for the quarter by the estimated number of XHANCE prescriptions dispensed in that quarter. We continue to believe this is a useful metric to evaluate the net revenues generated per prescription. However, we remind you that this metric is subject to variability that does not necessarily reflect a change in the price that is paid for an individual unit of XHANCE.

Based on available prescription data purchased from third parties and also on data that we received from our preferred pharmacy network, XHANCE average net revenue per prescription for the fourth quarter of 2020 was $211. For the full year of 2020, XHANCE average net revenue per prescription was $185. This is a decrease of 6% compared to the full year 2019 average of $198.

The year-over-year decrease can largely be attributed to the Assist Co-Pay Program. That was an important initiative in the second quarter of 2020 and is helping patients during the early stages of the pandemic when other treatment options, such as elective surgeries, were severely limited in number or not -- or simply not available. While this initiative did not -- I'm sorry. While this initiative did support new prescription share growth amid unprecedented disruption in our customers' practices, the termination of Assist is one factor supporting our projection of higher XHANCE net revenue per prescription in 2021.

Moving to Slide 12. Our full year operating expenses, defined as sales, general and administrative expenses plus research and development, increased by just 3%, from $125 million in 2019 to $129 million in 2020. In the same period, XHANCE net revenue increased nearly 60%. The disparity between these 2 growth rates illustrates that XHANCE net revenues -- as XHANCE net revenues increase, we can generate operating leverage, in particular, from our commercial infrastructure and corporate overhead.

Full year 2020 research and development expenses increased $2.6 million or 12% compared to full year 2019 and drove most of the 2020 total operating expense increase. The increase in R&D was primarily driven by ongoing conduct of our CS clinical trials.

Full year 2020 sales, general and administrative expenses increased $1.3 million or 1% compared to full year 2019. The increase in SG&A was driven primarily by increased fees paid to PPNs as a result of increased XHANCE volumes and by increased expenses associated with the annualization of the April 2019 expansion of our sales force. These increased expenses were largely offset by expense reductions and delays in response to the COVID-19 pandemic.

Moving to Slide 13. Today, we announced our first quarter and full year 2021 financial guidance.

First, we expect XHANCE net revenues to exceed $80 million for the full year of 2021. Earlier, Peter described several factors that we believe have the potential to accelerate XHANCE net revenue growth in 2021. However, we are providing a floor for revenue guidance to start the year to reflect uncertainty regarding the return of business conditions to pre-pandemic norms.

Second, as part of our expectation for full year 2021, we anticipate that first quarter 2021 XHANCE net revenue will decrease compared to fourth quarter 2020 XHANCE net revenues of $15.6 million. This reflects the same pattern of calendar effect on XHANCE revenue as we reported last year. The primary driver for the sequential decrease for revenues in the first quarter of 2021 is our expectation that Q1 2021 average XHANCE net revenue per prescription will be between $120 and $140.

Third, as we've seen in prior years, we expect XHANCE net revenue per prescription to improve substantially for the remaining 3 quarters of 2021 over the first quarter. The cadence for XHANCE net revenue per prescription is driven by 2 effects that we believe are common for chronic treatments in our industry and that we highlighted last year as well. The first factor relates to patient insurance deductible resets that occur in January. A second factor contributing to this decrease is the delay or loss of refill prescriptions by patients whose insurance coverage changed with the new year.

What is important to note is that the major factors that influence our gross to net deductions have not experienced substantial changes relative to 2020. Overall market access, which drive rebates, is generally consistent, and the terms of our Co-Pay Assistance Program will result in similar levels of patient support in 2021.

Fourth, with respect to XHANCE net revenue per prescription, we expect full year 2021 to increase compared to full year 2020. As discussed earlier, we do not expect to repeat the pandemic response Assist program this year, and its termination is expected to increase XHANCE 2021 net revenue per prescription compared to full year 2020 results.

Moving on to operating expenses. Our initial guidance for 2021 includes increases associated with key commercial and development initiatives. These include fees paid to preferred pharmacy network partners and other distribution fees that are linked to increased XHANCE prescription volumes as well as the conduct of our chronic sinusitis clinical trials as we push towards completion of enrollment.

For the full year of 2021, we expect total operating expenses to be in the range from $137 million to $142 million, of which approximately $11 million is stock-based compensation. Total operating expenses, excluding stock-based compensation, are expected to be in the range from $126 million to $131 million.

I will now turn the call over to Ramy to discuss our development programs.

Great. Thank you, Keith.

Turning to Slide 15. We believe our chronic sinusitis program is a potential driver of significant growth for 3 reasons.

First, chronic sinusitis is a high-prevalence, high-morbidity disease, affecting over 10% of the U.S. adult population and for which there are no approved drug treatments. Second, the limitations of current treatment have left high levels of patients suffering, as measured by loss of quality of life, despite society investing up to $13 billion in direct health care costs and suffering over $20 billion in lost work productivity according to a 2017 study of health care economics in chronic rhinosinusitis. Third, we believe chronic sinusitis affects not only many more patients than nasal polyps alone, but CS is also recognized and treated by a much larger universe of physicians, creating greatly expanded potential for promotion to people who may benefit from the product.

Within our current specialty physician target audience, this new indication could triple the number of patients for whom we can ask for business promotionally from approximately 1.2 million to 3.5 million patients.

In addition, physicians outside our current specialty audience treat an incremental 6 million to 7 million patients, further increasing the potential patient pool such that it goes from approximately 1.2 million to as much as approximately 10 million.

Furthermore, evidence suggests that an additional 20 million people suffering from symptoms of chronic sinusitis have lapsed and no longer seek regular care for their disease. We believe this is often due to a belief that there are no new options or that physicians can offer little beyond what has already been tried for those patients. Our research suggests that many of these 20 million sufferers can be activated via consumer-directed promotion, if and when we are able to offer a prescription option that is approved for treatment of chronic sinusitis.

Lastly, regarding the business potential for this new indication, we believe that successful development in CS can create significant leverage of our existing commercial infrastructure and access to non-dilutive capital to a primary care partnership. We look forward to providing more updates regarding this program and the increased market potential it would facilitate as we close in on top line data.

Moving to Slide 16. Regarding that data, today, we announced that we expect top line results from one of the pivotal CS trials by the end of this year, 2021, with results of the second ongoing trial not expected until the first half of 2022. This is slower than our previously communicated expectation, and that is a result of the global pandemic, which has had a sustained negative effect on patient ability to visit and be enrolled at trial sites in many countries.

Our regulatory and development teams have performed admirably in the environment created by COVID-19, identifying and opening new trial sites in places where local pandemic conditions permitted and supporting changes to local clinical and regulatory situations as they evolved through the course of the year. We acknowledge that there is continued recruitment risk related to the COVID-19 influence on trial sites worldwide. However, we remain focused on producing top line data from at least one trial by the end of this year 2021, and we believe this objective is achievable.

As a reminder, both trials have co-primary end points. One is a measure of patient-reported symptom relief at week 4 and the other is a measure of effect inside the sinus cavities at week 24. Also, as a reminder, our development program for XHANCE as a treatment for nasal polyps produced open-label data measuring symptom relief in patients diagnosed with chronic rhinosinusitis both with and without nasal polyps. Numerically, the symptom improvements from baseline for both of those groups were similar.

Moving to Slide 17. Changing gears, I'd like to make a few comments about our development product, OPN-019. We believe that our OPN-019 product candidate could have utility in the current pandemic and also has potential to improve preparedness for the next pandemic. As a reminder, OPN-019 uses our proprietary exhalation delivery system device to thoroughly coat the deep nasal cavity, including the highest part where sense of smell was affected, with an antiseptic that kills the COVID-19 virus. This is intended to help prevent someone exposed to the virus from becoming sick, to reduce the spread of the virus from an infected person to other people and to reduce progression of disease in people with early symptoms who do not yet have symptoms or who do not yet have symptoms.

Previously, we reported developing a candidate broad spectrum antiseptic formulation intended to be effective against any coronavirus variant. We reported having performed in vitro testing against the SARS-CoV-2 with that candidate formulation and demonstrated a 4-log reduction in virus count. In addition, we found broad activity against multiple other viruses with that formulation. These results were expected based on previous knowledge, but were necessary to support moving ahead.

Today, we announced that we will conduct a pilot proof-of-concept clinical trial with OPN-019 to produce initial human data. The study will be a randomized, adaptive single-dose study to evaluate change in viral load after OPN-019 in adults with COVID-19. Assessments will include reduction in viral load by quantitative reverse transcription PCR and in the number of infectious viral particles determined by viral culture. Evidence suggests reduction in intranasal viral load, as we are measuring in this study, is a useful indicator of potential ability to both reduce transmission of the disease and to reduce progression of the disease. The study is expected to start in April and is short in duration. We therefore expect top line results within second quarter of 2021.

We believe the development of therapeutics for patients diagnosed with COVID-19 or at high risk of exposure to the virus remains a high priority. As a reminder, COVID-19 is the third pandemic potential coronavirus to make a breakout just since the year 2000. And everyone knows today that the coronavirus continues to mutate. Moreover, pandemic influenza has been and remains a threat. Vaccines are extremely important, but need to be supplemented by a range of therapeutics. And we believe that a virus-agnostic therapeutic, such as OPN-019, that is easy to use by simple outpatient prescription could be an important addition to the therapeutic arsenal for COVID-19 and for future pandemics.

As excited as we and others are by the potential value of OPN-019, our organizational focus remains on growing XHANCE and on building a leading ENT and allergy company. Accordingly, we are committed to supporting the less expensive initial stages of this development program within our current operating expense plan, but anticipate that grants, partnerships or other sources of capital will support further development of OPN-019.

I'd now like to turn the call back over to Peter for closing remarks. Peter?

Thanks, Ramy.

Turning to Slide 19. Before moving to Q&A, I'll take a moment to reiterate that I am incredibly proud of the effort and results the team produced in 2020. The global pandemic presented the challenges that are unique compared to what most of us have faced in our lifetime.

In our outlook for 2021, we have tried to present a balanced view. We assume that business conditions, while improving, will not immediately return to pre-pandemic norms with the availability of vaccines. At the same time, we are optimistic that 2021 has potential to include a substantial improvement in business conditions and there are several factors that can increase the growth of our business. We are laser focused on 2 very clear objectives: revenue growth for XHANCE and completion of our trials in chronic sinusitis. I look forward to providing updates on our progress in 2021.

And with that, we'll now open the call up for Q&A.

(Operator Instructions) And first question comes from Randall Stanicky from RBC Capital Markets.

Great. This is Steve on for Randall. Just two from me. I'll just ask them both upfront. But on the guide, I realize you guys are providing a floor of $80 million. And you have still pretty substantial growth over 2020, but it's still a little bit less than maybe what the street was kind of modeling for 2021. I was kind of curious if you can add some color as to what's giving you confidence that you're going to be able to achieve at least $80 million and maybe some of the tailwinds you're looking that can provide upside there.

And then just secondly, on the CS trials. Just maybe any updates on where you guys are in enrollment status and when you're expecting to have that fully enrolled? I appreciate the questions.

Yes. Steve, thanks very much for the question. And I'll take the first one, and then, Ramy, I'll let you or Keith handle the second one.

We decided to approach our revenue guidance with the concept of a floor. And the reason for that is just because of some of the uncertainty that still remains relative to the pandemic. So that was the approach relative to the concept of a floor.

So what's assumed in that $80 million about the market environment is that we have -- we obviously have an understanding of the current impact of the market environment currently. We expect some improvement through 2Q. And then for the back half of the year, we expect the market to be reasonably returning to pre-pandemic norms in terms of what is normally seen relative to patient volumes. Because obviously, the impact of the market environment has 2 impacts. It affects patient volumes in physician offices. It also affects our ability to access those offices. So I'm describing the market environment because that's what's embedded in the assumptions around our ability to achieve this floor of $80 million.

Now what creates optimism for us as we think about 2021 is we really do have, as I mentioned, a couple of drivers that could create an acceleration of our trend. And by the way, I should say that in the $80 million floor, we assume the market that I described. We also do not assume a dramatic acceleration in our ability to drive new prescription growth, which is clearly, obviously, our focus right now.

And relative to our ability to accelerate prescriptions, we think there are 2 things that have real possibility of driving acceleration. The first is kaléo, that I think everyone is very familiar with. And the second is, as I mentioned in my remarks, increasing recognition in the medical community of what we're calling a step care paradigm and importantly, recognition of XHANCE, that's playing an important role in that step care treatment paradigm. There's been some societies that have already introduced this concept of a step care paradigm. And then frankly, we expect more as we look to 2021.

So with that, Keith, I don't know if you have anything to add on -- or object relative to the $80 million.

No, Peter. I think you summarized it pretty well.

I'll comment on the second part of Steve's question with respect to the timing of CS. If you go back to, I think it was Slide 16, Steve, where we kind of lay out the -- what a patient journey looks like in the trial from randomization to [visits of] 24 weeks. So you can back up. If we're announcing -- if we're setting the expectation of having top line data by year-end, you could expect us to be enrolling kind of last patient first visit around the middle of the year.

So that's all we're going to say on that right now. But you can expect us to probably report out once we have that last patient first visit to set the more definitive expectation of when we expect that -- to have that top line data.

Steve, I don't know if it's helpful to you, but I can tell you that we've gone to great lengths to add additional trial sites. And we've tried to predict which countries we'll be able to engage in patient enrollment, even some that were not able to do so previously. A lot of Commonwealth countries are vaccinating -- a lot of clinics that were not previously able to enroll because resources were diverted to COVID care are beginning to be able to divert resources.

So we expect an uptick in enrollment as the first half of the year goes on, as Keith was talking about. And so we are projecting to be able to complete the top line report as we guided.

Our next question comes from Gary Nachman from BMO Capital Markets.

First, just your share gains in the face of a declining category, where has most of that been coming from? And what do you think is a reasonable target off of the 5.1% of your target physicians that you're currently at I think in the fourth quarter?

And then for Ramy, what portion of RXs are currently off-label being used for CS? And any concerns with the quality of the data coming out of the clinical trial sites now that you've been adapting through the pandemic? And then I have one other follow-up.

Gary, thanks for the question. I'll let Vic Clavelli, our Chief Commercial Officer, take your question on share; and then Ramy can address your second question.

Sure, Peter. Gary, thanks for that question. I mean I think the key point is that we saw our share gains come from really 2 areas. One is increasing use from our existing prescribers. And I think Peter described that as the depth of prescribing. That was the biggest driver of our growth. It just reflects the difficulty of the market in getting in front of new potential customers during the pandemic. And the second is breadth. We continued to grow and bring new people into the franchise last year. And frankly, we expect the ability to reach even more prescribers as the pandemic kind of lift. But to the point you made, successfully saw in growing share last year, we do believe we [can continue on] as we head into 2021.

Vic, perhaps you can also comment on Gary's question about the proportion of prescriptions that are for CS versus NP.

Yes. We continue to see that -- nasal polyps represent I think about 1/3 of our business overall, and that's prescriptions that are specifically coated for nasal polyps. A lot of the times prescriptions aren't specifically coated, and so we pick up prescriptions from patients that have either a chronic rhinosinusitis, I mean, indication or an allergic rhinitis indication. Obviously, I should note that those are not -- that's not business that we're proactively pursuing. We do focus explicitly on nasal polyps. But we do see news outside of the nasal polyp indication.

Gary, by the way, I think I know this is well understood, but I still want to emphasize it, that the greatest value of the CS indication is not only potentially increasing the ability to drive the business in the ENT allergy segment. But the real benefit is expansion to a significantly broader physician audience treating reasonably double the number of patients currently being treated in ENT allergy segment. And I know that's reasonably well-known, but I want to continue to emphasize it relative to the value that the CS indication we think will provide to the business.

Ramy, I'll turn it to you on Gary's question on quality.

All right. Thank you. So Gary, one last comment on the CS versus NP, which is, it's the best data that we have available. But I personally -- I'm not sure that it's high-quality data about exactly which diagnosis underlies the prescribing of the product. I don't know that the incentives for accurate reporting are strong. And I'm also a little bit skeptical about whether sort of complete diagnostic maneuvers are completed for all the patients that receive this kind of prescription. So I think there's reason to be a little bit skeptical about the accuracy of the categorization of diagnosis in this category.

Your other question was about data quality in the trial. It's a good question. It's appropriate to ask in the COVID environment. There were a lot of changes. FDA and EMA, other regulatory authorities issued new guidance on how to manage patients who are unable to make visits. There was a lot of adaptation required. We have been -- our clinical team has been just extremely careful about implementation of those kinds of changes. We're highly focused on the quality of the data that's coming in. And we're very sensitive to the fact that this is not all just about completing the trial, but it's about a positive trial at the end and giving ourselves the best opportunity to have a positive trial should the product, in fact, be effective for this disease.

So we're very sensitive to it. We have many measures in place to try to assure the data quality and ensure the right kind of patients continue to be enrolled despite some of the changed sort of pressures on the trial sites and on patients.

Gary, by the way, I will add one comment on share. You asked us to project share, and we're not going to specifically give guidance relative to share for this year. But again, I want to remind the listeners that all of the work that we've done historically and we've just refreshed with physicians relative to the potential of the product in the market in the ENT and allergy segment alone, before I even talk about expansion into primary care, suggests that we believe, continue to believe very strongly that the peak share for this product is in the 20% to 30% range. And we're already achieving that.

The confidence of why we have confidence in that number is we've achieved that in this believer segment that we're currently calling on. So once we turn someone into understanding the efficacy of the product, understanding that our market access and coverage really is very strong, we achieve shares in excess of 30%.

So I just wanted to remind, as we said, well, we're not giving specific guidance for this year. We remain very confident in our ability to build a substantial business.

Okay. That's helpful. And then just one quick follow-up. The increase in the target physician audience to 18,000 from 10,000, that's all in ENT allergy. And just how much of that is coming from kaléo versus your own sales reps? And just remind us how many reps you have and how many kaléo have going after that target audience.

Yes. The -- I'll let Vic take that. Vic, go ahead.

Yes. Thanks for that, Gary. I mean so we have kaléo calling on up to about another 3,000 additional targets. And so that 3,000 is included in that revised number. And the rest of the number comes from the expansion of our targets to the rest of the ENT and allergy universe that are using INSs. We basically learned that those are opportunities for us to grow the business and are focused there as well. So we think this new expanded denominator, if you will, gives us a better representation of how broadly we can move the business in the segment.

So as -- perhaps a little bit beyond the question you asked, Gary, is -- so roughly half of the kaléo effort is coming from targets that we don't reach. The other half increases our frequency of activity against targets we do reach, but simply not as often as we would like to or believe we can productively reach them. And so that gives us a chance to use the benefit of their relationship both to extend the breadth and the depth of our engagement with customers.

Our sales teams are roughly about the same size. We have about 100 people in the OptiNose sales team and we have about 100 within the kaléo team as well.

And Gary, just to make sure it's really clear. I think Vic answered that very well. But so our 100 reps call on about 10,000 physicians, largely ENT and allergy with some primary care specialists, like primary care. kaléo has about 100 reps. They're targeting 6,000 physicians, 3,000 that are overlapped with our 10,000, roughly 3,000 that are not in our universe.

Our next question comes from Brandon Folkes from Cantor Fitzgerald.

And appreciate the guidance as well in this current environment. Maybe just starting there. And yes, I heard -- well, I appreciate the commentary on 1Q guidance. I heard the comment about 2Q being -- seeing some improvement.

But can you just maybe talk about what do you sort of envision or are assuming as we exit the year-end? I just want to make sure kind of -- we're thinking about 2021, that ramp properly, just given that it seems to be -- what we're implying here with a strong second half of the year, we're exiting a pretty solid growth rate as well. So I just don't want to get ahead of ourselves there.

And then secondly, can we just talk a little bit more about the net price per script? It seems kind of down from 3Q to 4Q. So maybe can you just -- one, any inventory in the channel at year-end we should consider for 1Q? And then secondly, can you remind us of the dynamic with kaléo? And how we should think about net price per script in 2021 with kaléo? Is that going to be -- is there a small dilution there we should think about in terms of what you're going to realize?

Keith, I'll let you take all three of those.

So the guidance with respect to exiting the year and the velocity at the end of Q4 -- expected Q4, say, velocity, I think Peter summarized in his comments to the first question about the assumptions around what drove our -- what drove us to guide to an $80 million floor for this year and when he spoke about the potential upsides, I think that kind of summarized our thinking.

We -- the second surge of the virus late last year definitely lasted into the first part of this year. We're obviously seeing that recede today. But our assumptions drove a -- or our assumptions were that the first part of this year, we were going to see significant adverse effect with respect to, a, the patient volume that's going into the physician offices; and b, our reps' abilities to access those offices. I think our reps are doing a phenomenal job in the field in terms of the face-to-face interactions that they're getting on a daily basis. But the fact remains that they are not able to access a large percentage of their target customers. We see that easing or we see those limitations easing as we move throughout the year. So we definitely see an uptick or an increase in velocity as we progress throughout the year.

And then I'll kind of tie that in with average net revenue per prescription, Brandon. Similar to other years, you heard in my remarks, we expect to begin the year at a lower average net revenue per prescription and then accelerate that as we progress throughout the year. And as we've discussed, that's really driven largely by a good commercial coverage. The good commercial coverage that we have today now enables us to offer a pretty generous coupon program to buy down patients out-of-pocket expenses.

In the beginning of the year, as patients have deductibles reset, whether they're in a traditional PPO plan or a high deductible plan, they have out-of-pocket maximums or high deductibles. In the beginning of the year, our contribution to those patients is larger, and that affects our average net revenue per prescription in a negative way. And we guided today that we believe that the first quarter would be similar to the first quarter we saw last year, in the range of $120 to $140 per prescription.

Again, throughout the year, as patients meet those out-of-pocket deductibles, we contribute less to the coupon program. We don't have to buy down as much out-of-pocket expense, and that positively impacts our net -- our average net revenue per prescription.

For kaléo, Vic just kind of bifurcated for you the 2 different segments of our customers that kaléo is calling on. And we have a different model to pay for the work, the effort that we're getting from kaléo. In segment 1, those are the physicians that we do not call on. So kaléo has clearly given us additional breadth on targets that we think have the ability to drive XHANCE volume.

On those segment 1 targets, we are paying kaléo a -- or it's an (inaudible) kill model, if you will. We're paying them on a per prescription generated basis. It's very easy to tell. We can identify prescriptions and link them directly to a physician. So in those physicians that they're calling on that we do not call on write a script, kaléo gets remunerated for that.

In segment 2, where we have our reps calling on a physician and kaléo also calls on that physician, as Vic said earlier, we're getting additional depth or additional reach -- I'm sorry, additional frequency on those targets. There, it's almost like a CSO model. We're paying for activity, so we're paying for a second position detail. We have an agreed upon rate that I would say was -- is market for CSO. But the quality of the relationships that the kaléo reps have with these physicians is much, much deeper than we would expect to see from a typical CSO type of relationship. These kaléo reps have been calling on these physicians in many instances for many years, and we're getting a very high-quality second detail based on those deep relationships for what we would pay for a typical CSO contract.

And Brandon, just to circle all the way back to your question of impact on our average net revenue per prescription. The second piece of what Keith just talked about is a marketing expense. So it doesn't even show up at all, the fee that we're paying for the CSO-type arrangement. And the first segment that Keith described where we are paying a fee per prescription, it's just not going to be material to affect our ASP, or average...

It doesn't -- it won't affect. Correct.

Yes. So we just -- we remain very confident, as we've guided, that the 2021 average net revenue per prescription will look a lot more like 2019 than 2020.

Okay. No. That's very helpful. And I appreciate the color. Can I just squeeze in one more from that? I don't want to hog this, but...

Shoot.

Is there quite an awareness in the prescribing community you call on right now about this CS data? Granted, you're obviously not going to be able to promote off-label. But I'm just trying to get a concept. When it comes out, when we see the one trial come out this year, do you think there's enough of an awareness that these physicians may increase their off-label usage should that data be positive?

Vic, I'll let you take that.

Yes. Happy to comment on that. So we would expect there to be increasing awareness of the data as it goes out into the public use. To your point, obviously, we won't be promoting it. But we expect, given that there are no approved drugs in this space, that there will be attention and awareness of it leaking into the community, if you will, as soon as that data becomes publicly available.

To your point, physicians are already aware that nasal polyps occurs in chronic rhinosinusitis patients. So certainly, they're aware that they're treating with an anti-inflammatory drug a subset of patients who already have CRS. We think this new data is going to add confidence for the increased use.

Our next question comes from David Amsellem from Piper Sandler.

So I wanted to ask a hypothetical here regarding the CS data. To the extent that you show a benefit versus placebo on symptoms but do not on the objective measure, which is sort of I guess uncharted territory in terms of the big randomized trial in terms of that end point, do you still envision that kind of result to -- with that kind of result, do you still envision significant expansion of the overall XHANCE opportunity in that scenario? That's number one.

And then number two. To the extent that you don't find a co-promotion partner here and to the extent that you go it alone in terms of sales force expansion, how should we think about the extent of that sales force expansion in terms of headcount? How much larger would you go, in other words?

Maybe I'll start, and Ramy, you can add some color commentary on David's first hypothetical.

And obviously, David, we've done -- and Ramy sort of mentioned this, the team did a lot of work to understand what's necessary to define how we measure the objective criteria of mucosal thickening in the sinuses, designed the trial to make sure we were sort of getting the right population. And I think you know, we have evidence already that if we have the right population that has enough disease, we have evidence that we can improve scan. So while it is unchartered territory, I just want to make the point that we feel really pretty good about our ability to have success there. I'm going to always give the caveat that with the trial, you never necessarily know the outcome.

Relative to your question, though, on -- and by the way, I'll just reiterate. I think what's implicit in your question, David, is that because we studied a large population of patients who have chronic rhinosinusitis without polyps, which is the -- obviously, the population we're studying in the CS trials in our open-label trials, and we did look at improvement in symptoms. We really have pretty good evidence that it's really likely that we are going to see improvement in symptoms.

So relative to your question in that hypothetical scenario, we still think there's benefit for the business because this would be the first product ever to show improvement in symptoms in a chronic sinusitis broad population. So there's value purely in the fact that we would be the first product to show that benefit on symptoms.

The ability to -- and whether or not we could turn that into a label is not clear. But I'll emphasize a point that we make a fair amount, which is there is no product approved in the CS population at all.

So while it's not clear at all whether we would be able to get an indication that was based on a symptom-only improvement, there certainly is the potential of that. So I'll sort of start by describing that. And that therefore could then lead to the same kind of expansion that we expect if we have positive outcomes in both end points.

So I'll stop there. And Ramy, I'll let you add any additional color before I take David's second question.

Right. So David, we did contemplate this possibility in the design of the trial. There are 2 co-primary end points, as we've mentioned before. But they're designed in a step-down procedure, and we have chosen symptoms as the first step, which means that if symptoms are positive, the trial is positive. And then the full -- the sort of p value space gets passed on to the CT scan data.

So it is conceivable that we will have positive trials on the basis of symptoms even if they don't turn out to be positive on the basis of that CT scan measure. It's uncertain whether or not trials of that type could result in an FDA approval for an indication. That's something that we would have to take up with FDA. And so I can't guess how that might come out.

But as Peter said, we're not aware that any other product has had that kind of large sort of regulatory quality, sort of confirmed trial support for efficacy in this population. And given the desire to practice evidence-based medicine and the potential for adoption of the product in treatment guidelines and other sort of places that help to direct medical practice, I think it's reasonable to suspect that there could be substantial adoption for that use on the basis of that kind of evidence.

So David, I'll take your second question on what if the product does not get partnered in. I know that's a hypothetical. But again, I'm going to sort of emphasize why we think there is really reasonable probability of a partner being interested in this product.

Vic Clavelli just refreshed research that we've done historically on the value of the CS indication in the sort of broader universe of primary care providers. And the full opportunity is expansion to roughly 60,000 primary care providers. So we just refreshed the market research that we've done historically. And there really is a very substantial opportunity in that population. And that's probably just the patients who are currently being treated in physician offices.

So when you put that concept together with the idea of enabling a direct-to-consumer campaign to address the roughly 20 million people who are lapsed, so as a reminder, 30 million people have chronic rhinosinusitis, 10 million being actively treated, we believe this indication will enable expansion from roughly 2.5 million to 3 million patients that are in the ENT allergy universe to roughly 7 million who are in the primary care universe. But potentially, the greatest lever of the CS indication is the direct-to-consumer. And it's very clear from the work we've done that while patients have lapsed from physician care, it's not because of they're no longer suffering. They've just sort of given up relative to options that are available. We think our messaging is very simple.

So I just want to emphasize, you put that all together, and we really do believe the opportunity is very substantial in the primary care space. We think that's going to be attractive to a number of partners in the space.

But now to specifically -- and by the way, I'll say -- the last thing I'll say is this emergence of this step care paradigm, and I think we're clear on what we mean by step care, the idea of the experts in the treatment of this disease continuing to put out guidance, if you will, on an algorithm that says, start with an intranasal spray. If you fail on an intranasal spray before going to surgery or other more invasive and types of things to potentially help with the disease, exhalation delivery system or XHANCE should be considered. And potentially the greatest opportunity for that is in primary care because it gives the primary care doctor the option of trying XHANCE before referring into a specialist. So is that paradigm -- and we're seeing already the emergence of it. We're going to continue to believe it's going to get broader and broader adopted, which we think, again, makes the opportunity very substantial.

So now to answer your question, if we are in a go-it-alone scenario, we would not go to 60,000 physicians out of the gate with 500 additional primary care physicians -- or primary -- with sales reps, excuse me. But we would target at the most interesting part of that segment in a go-it-alone strategy. And I'm not going to give specific numbers, David. But we would not go to somewhere in between where we are today, in the 60,000, we think would make sense. And we do think it would make sense for the go-it-alone strategy to be broad enough in the coverage in our go-it-alone strategy to be able to do DTC.

And I want to be clear, DTC doesn't necessarily mean expensive broadcast. We've learned a lot about how to do very smart targeted digital.

Vic, I don't know if you have anything to add or Keith or others?

I think that's a great summary. I mean the only thing I'll add is we know that primary care physicians are the first stop for patients with CRS. And so we do think reaching them is going to be important. And we know from our research that they are very interested in having a product that they know can help this patient population. So we're going to find the ones that have sufficient volumes of these patients and make them aware and confident as to how to integrate it into their practice.

Our next question comes from Georgi Yordanov from Cowen and Company.

I just have a few. I guess, first, can you talk about the current patient assistance program and how that has changed? And I guess related to that, where do you stand with managed care coverage for XHANCE? And what is the average out-of-pocket cost to patients? And can you describe the step through requirements? Is it just a simple failure of intranasal steroids? Or do patients need to fill multiple therapies? And based on your market research, what percentage of patients fail these therapies?

Vic, how about you take all of those?

Yes. Happy to do that. So Georgi, I'm going to start with your questions about the coverage. We have about 77% commercial coverage today. We're really pleased with that coverage. And in fact, the payers who have added XHANCE into their formularies are, in fact, seeing the benefit in terms of their ability to improve the management of these patients and, frankly, improve their expenses, too, as they're able to be thoughtful about which patients are then referred on to a later line, the more expensive therapeutic solution or even surgical solutions as well. And we see that creating pressure and an opportunity for other payers to continue to add XHANCE in their formulary. So we're really pleased with that formulary coverage.

Your second question is around the changes to the co-pay affordability program that we have. And in effect, traditionally, what we had is we had a $0 first prescription for commercially covered patient. And if the patient was uncovered, they received the first prescription for $0, the second prescription for $50 and all subsequent prescriptions for $50. And in effect, what we changed is -- the first prescription payment from a patient is now $25 if they have no commercial insurance coverage. So if you think about the percentage of our commercial lives that are uncovered, they now pay $25 for that first prescription and $50 for subsequent prescriptions after that.

And that's important for 2 reasons. One, it effectively changes the jump in their co-pay, from their first prescription to the refills. Instead of going from $0 to $50, we found it's just easier for them if they pay $25 for the first prescription to move to $50 for the second prescription. And frankly, it makes sure that we're effectively getting as many profitable prescriptions as we can from that pool of patient.

You had a third question there, and I'm sorry, I could use a reminder on it.

I'll jump in. I think it was about the average out of pocket, and we have a lot of data on this. And nationally, approaching 80% of patients pay 0 out-of-pocket for our product. About roughly 5% to 6% pay the $25 or $30. And the balance pay the $50 that Vic was describing in the commercial population, which is the huge majority of patients in the product. So by the way, it's indicative of the coverage we have. We really do have good market access coverage.

And the last point I'll make in our access, by the way, it's -- we do a lot of research among our believer segment and our dabbler segment. And it's very interesting, if you ask the believers, not only do they believe in the efficacy of the product to a high degree, they also say that the product is actually reasonably easy to write in terms of everything that's required on the back end, prescribing it, any prior authorizations, any step therapy that's required. And it's interesting because that group is writing a substantial number of prescriptions. So if it were, in fact, hard, that group arguably would be the group that would be believing it's -- the coverage may not be that good. But that group believes our coverage is good.

Interestingly, in the dabbler segment, we learn one of the key things we have to get them to understand is our coverage in addition to having more of a belief in the efficacy of the product. And the reason I just continue to have high confidence in the 20% to 30% share for this business is the product really works and we do have good market access coverage. We just have to continue to convince the dabblers, if you will, of the program.

So Vic, I'll let you finish.

Yes. Thanks for that, Peter. The last part, Georgi, as you asked about specifically what the access looks like, the vast majority of that commercial coverage that we do have is step through and inhaled nasal steroids. So either there's a history of an inhaled nasal steroid used or the physician documents, there's an inhaled nasal steroid that's been used in about 15%. So that's a 1-5% they're -- the payers are asking for diagnosis codes. So they want to know that it's nasal polyps. But for the most part, they have to show that they've used an inhaled nasal steroid before they get to XHANCE.

No. That's really helpful. And I guess just very quick on the net revenue per Rx. I guess if we -- you kind of alluded to that. But if we just ignore the 2020 in the pandemic, do you expect net revenue per Rx growth or I guess levels in 2021 to increase over the 2019 levels?

So Georgi, we're not being specific as to what the growth looks like. I think the 2000 -- if you recall, in 2019, we achieved average net revenue per prescription for the full year of $198. I don't think -- returning to those levels is certainly not out of the question. We did take a small price increase this year, about 5.5%. We don't retain all of that. Obviously, a lot of that goes to channel partners. But the termination or the facts that we don't expect to be repeating the Assist program should certainly give us some tailwinds from the 2020 level of $185.

Keith, the last thing I'll add is the -- Vic did mention some changes in our Co-Pay Assistance Program, and that's also a tailwind because we are -- those are benefits in the profitability per script that we're receiving. And we have pretty good confidence it's not going to impact prescribing or volume.

And our last question comes from David Steinberg from Jefferies.

You showed us, Peter, some slides with target universe of prescribers and breakdown of how many prescriptions written by doctors who wrote. And so I had some additional questions on physician prescribing behavior, particularly since the product has now been in the market for about 3 years.

The first question is the 10,000 physicians that you've been targeting, have all of them actually been called on at least once? Or are you still waiting to call on some of them?

And secondly, what does the data show in terms of, typically, how many calls need to be made before a physician actually write a script?

And then third and perhaps more importantly, it looks like of the 13,000 physicians that you clear are targeting, about half have written 1 prescription. So I was just curious, given it's been on the market for 3 years, why -- what are the reasons why half of the doctors that you called on have not yet written a single script? I mean you've talked about some of them don't realize the coverage or they don't believe in the efficacy. But after 3 years, don't most of them really know that you do have good coverage? And are there any other reasons why half of them have still not written a prescription yet?

Vic, I'll let you take those.

Okay. Sounds great. So on your first question, they have all been called on. We're able to reach, at least in the pre-pandemic world, about 80% to 90% of all the target physicians. Obviously, we would like to be able to reach more of them. And certainly, that could get more challenging over the last year. But we are able to reach them at least once.

We do know, to your second question, that we -- obviously reaching them once is not enough. We really believe we need to reach them between 7 to 10x before we begin to impact their prescribing potential. And we do try and reach them and support our reach with them with nonpersonal promotions. So we do try and reach them from a number of different angles. Obviously, reaching them through our territory managers is our most effective way to grow that prescription volume.

So your underlying question is, what is it that's holding some physicians back? And it really is 2 things. It's, first, they need to understand that, in fact, it is you have an underlying disease etiology that is characterized by inflammation that's out of reach of the other solutions that they're using. And secondly, we need -- they need to get very comfortable that they can get the prescription when they write it. They need to use the preferred pharmacy network that we've developed. And those are really the 2 key barriers. Once we can get them comfortable that, in fact, it's -- there's a problem that they need to solve by getting a topical treatment to the site of inflammation that's causing the growth of nasal polyps. And the second part of it is making sure that they understand the process for getting the prescription authorized. And it does take us 7 to 10x before we really begin to move the prescribing behavior.

The -- underneath it, in 2020, we really changed our focus, if you will, from a pre -- from a post-surgical patient, so we were identifying patients based on their surgical status to expand out to a broader audience of patients who are appropriate for nasal polyp treatment. And many of those patients don't have a formal nasal polyp diagnosis. And so we're helping clinicians recognize those symptomatically. And that's enabled us to then expand the target universe from about the 10,000 that we were calling on at launch to about 15,000 today plus, of course, the incremental ones that kaléo is allowing us to reach.

So you have a number of factors delivering it or, if you will, expanding our ability to activate those doctors. And that's why we look at those -- both of those metrics. Are we getting more prescriptions from the physicians that we have activated? And in fact, we do continue to grow that depth.

And the second part of it is, are we still seeing a consistent growth of adding new doctors into the franchise? And in fact, the fact that we're still growing our breadth makes us confident that we can continue to activate more doctors. Clearly, that's the part that got tougher in the pandemic.

David, the other point I was going to make is that in the market, 3 years, yes, but about a year now in pandemic environment. And pandemic environment just makes it hard to get to the physicians, these dabbler physicians. It's easier to get to doctors who know us, who know the product. So relative to call-on universe in a pandemic environment, it's frankly easy to get to the believers. It's harder to get to these dabbler doctors. So again, while, yes, in the market, 3 years, but 1 year with real constraints on our ability to reach physicians. And we believe as the pandemic eases, as we -- I -- hopefully, we all expect, our ability to get back to get doctors writing, we're going to be able to get that volume really moving because we do not see things in the way -- as I mentioned earlier, in this believer segment, we have in excess of a 30% share. These doctors are writing it very frequently. And our view is that we are going to be able to expand that segment to move people up, if you will, from that dabbler segment into the believer segment.

The last point I'll make, David, and this is true I think of any product in today's world is that the payers, frankly, have created some real sand in the gears. And we just got to work through that sand. And because we do have good coverage, and I remain confident we're going to be able to work through that sand.

Right. That's very helpful, Peter and Vic. And then just two quick follow-ups. First, where are you on refills? I think at last check, you're over 4 refills? And where do you think that will top out at? And then I know over the last year, you've mentioned a few times that you're considering or looking at bringing in other assets, so your salespeople have another product in the bag to detail the doctors. What's your current thinking about business development?

Yes. On refills, we remain very pleased with refill, David, and it's now over 4. And it's -- where could that top out? It's hard to predict. But I think there's still room on refill rate to continue to move up, principally be for one reason, the product works really well. We just continue to get very good feedback from patients who are using the product. And by the way, I think you'll recall that we did a program we called the Explorer program in 2020. It was hurt somewhat of our ability to reach doctors because of the pandemic, but we have approaching another 1,000 patients that we've put into this program when we got feedback from the patient on how well the product works. Not surprisingly, 80% to 90% of patients say the product works really well. We, by the way, are taking that data and feeding it back to doctors. So I continue to believe there's room on refill.

Relative to expansion of the product, we -- it's very clear that as a single-product company, we have to get leverage out of the organization we built. We feel we have a terrific sales team. And so certainly, in the next 12 to 18 months, our aspiration is to no longer be a single-product company.

And I'll sort of stop there.

And that does conclude our question-and-answer session for today's conference.

I'd now like to turn the call back over to Peter Miller for any closing remarks.

No. I just thank you all for joining us. We absolutely understand that we are in an environment where we got to continue to put up strong results, and that's our focus both in growing XHANCE revenue and completing our trials. We're laser focused on that. And we appreciate you joining us for the call.

So with that, we will end the call. Thanks very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect. Everyone, have a wonderful day.