Radius Recycling Inc (RDUS) 2017 Q3 法說會逐字稿

Good morning, everyone, and welcome to Radius Health's Third Quarter 2017 Results and Business Update. Today's call is being recorded.

At this time, I would like to turn the call over to Alex Fudukidis of Radius Health's Investor and Media Relations team. Please begin.

Thank you, Brian. Good afternoon and thank you for joining us on the conference call and webcast for Radius' third quarter 2017 financial results and business update.

Joining me today are Jesper Høiland, President and Chief Executive Officer; David Snow, our Chief Commercial Officer, Gary Hattersley, our Chief Scientific Officer; and Pepe Carmona, our Chief Financial Officer. In addition, Bruce Mitlak, Radius' Vice President of Clinical Development, joins us for the Q&A portion of the call.

Before we begin, I would like to remind you that statements made during this call that are not historical facts are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed in the Risk Factors section of the quarterly report on Form 10-Q for the period ended June 30, 2017, and other reports filed with the Securities and Exchange Commission.

Any forward-looking statements represent our views as of today, November 2, 2017, only.

A replay of this call will be available on the company's website at www.radiuspharm.com and you can find the dial-in information for the conference call replay in today's press release as well as on the company's website.

Today's agenda is intended to provide you with a review of TYMLOS' launch and our third quarter 2017 financials, an update on the development plans for our pipeline and upcoming corporate milestones.

I would like to turn the call over to Jesper Høiland, Radius' President and Chief Executive Officer. Jesper?

Thank you, Alex. Welcome, everybody, and thank you for joining us today. As many of you recall, I joined Radius in July, shortly after the launch of TYMLOS. During this time, I've spoken with many of our stakeholders and concluded that Radius is on its way to successfully penetrating the osteoporosis anabolic market with TYMLOS in its launch. We are actively working on expanding our label and accelerating our pipeline, sports registration and commercialization with our other assets.

We have accomplished several important milestones in the third quarter, with this, the first full quarter of TYMLOS sales since launch. Today, we are happy to report to you that we have gained access to around 200 million lives in the U.S. and have started gaining market share. Capturing new patients on therapy is our focus as it will lead us to a steady sales growth and we have also seen a stabilization of the anabolic market.

The response to TYMLOS from physicians, payers and patients have been very positive. Throughout the launch process, we have kept focus on KOLs and top prescribers where we have gained market share. David will discuss this in more detail later.

We have also started focusing on expanding the TYMLOS product label through life cycle management activities. We met with the FDA and have agreed on a male osteoporosis critical trial design that, if successful, will break through our subcutaneous data through the bone marrow density primary endpoint. We expect to initiate this study in the first quarter of 2018.

In September, we presented additional positive data at the ASBMR meeting for TYMLOS with an ACTIVExtend trial and we are planning to submit a labeling supplement to the FDA in connection with these results before year-end.

I'm also very optimistic about our oncology franchise. For elacestrant, we have received fast track designation from the FDA. This is an important achievement by our R&D team as it supports our speed to market strategy in collaboration with the FDA.

We have initiated our RAD140 study and have enrolled our first patient in Phase I study. Gary will update you further on the TYMLOS male osteoporosis study, our progress in our oncology pipeline, as well as on our transdermal patch where we are now scheduled in meeting with the FDA to discuss the potential of regulatory pathway.

During the quarter, we have also strengthened our balance sheet with a $305 million convertible debt financing. Our cash position now provides the necessary funds to drive TYMLOS commercialization and to advance the pipeline assets. Pepe will provide an update on third quarter 2017 financials later in the presentation.

I can say with confidence that we are on track to execute our key strategic priorities supported by a strong balance sheet. Our #1 priority is to continue executing the launch of TYMLOS in the U.S. and to establish Radius as the market leader in the osteoporosis sector.

We are diligently working towards maximizing the TYMLOS opportunity for planned label, expansion activities including the potential transdermal patch in partnership with 3M. We are having an excellent partner with Teijin Pharma in Japan, which gives us access to the 2 largest anabolic markets which accounts for approximately 80% of worldwide markets.

We've continued to work with EMA to have an approval in Europe and will actively engage with the other regulatory agencies to expand the TYMLOS footprint in the pharma emerging markets. We will seek partnerships outside of the U.S. as we see this is the best way forward to maximize shareholder value.

The elacestrant's recent fast-track designation is a strong validation of our speed to market strategy. For this potential breast cancer treatment, we are looking forward to our poster presentation at the upcoming San Antonio Breast Cancer Symposium here in December, which Gary will speak more about.

We will further assess the opportunity for elacestrant to drive its peak sales potential. And finally, we will continue to strengthen the organization to ensure flawless execution in all priorities mentioned above. I believe success in these efforts will drive sustainable growth for the Radius, which in turn is beneficial for shareholders and, of course, for the patients we serve.

I will now turn the call over to David Snow, our Chief Commercial Officer.

Thanks, Jesper. I'm pleased to provide the third quarter TYMLOS performance update, covering the brand for the fifth month of market availability.

Our commercial teams remained focused on achieving market leadership in the anabolic category and today I'll share updates against the key drivers of adoption we've shared with you previously that you see here on Slide 8.

In creating strong market share of voice, our sales teams continued to drive significant coverage with the top anabolic-writing HCPs. The high reach in frequency coverage of this top 7,000 anabolic writers is translating into more than 80% of prescription volume flow today.

More recently, we've noted a substantial increase in volume coming from the highest quintile of top 200 prescribers. A key expectation across all prescribers is assuring broad reimbursement coverage and we are pleased to continue progress in this area. We have moved to around 200 million covered lives within the first 6 months of launch. That takes us to 87% coverage in commercial lives and 35% of total Medicare lives. We will continue to add to these totals, especially in near-term Medicare, as we fully engage in the annual decision process that's now underway.

I would also like to highlight the evolution of the anabolic payer market, as you can see on the chart to the right. While Medicare remains the largest and most important segment, it's becoming more balanced against the commercial segment. This represents near-term commercial opportunities for TYMLOS and sets us up well to maximize the exclusive status with Express Scripts that begins in January.

In reviewing HCP responses to that TYMLOS brand, we continue to see differentiation across a range of messages. Some of the most important messages being fast onset of action and the early effect on bone formation markers. There's also important class-related messages in building bone and providing a low incidence of serious side effects more often associated with other osteoporosis therapies. These messages are not only helping to drive share growth, but we see these as contributing to important changes in anabolic class dynamics.

This next slide shows quarterly volume changes in the overall anabolic class. As I've mentioned before, the class has been on a slow decline over the past 5 years. What we're seeing more recently is a stabilization of class volume, and more importantly, over the past couple of quarters, some actual growth quarter-over-quarter. Since anabolic therapies have traditionally represented just 1% to 2% of total osteoporosis treatment volume, continued class growth represents a meaningful TYMLOS strategic opportunity as we add new patients and prescribers.

Now on the next slide, to further support expanding use in anabolic appropriate patients, we're seeing some encouraging signs of adding anabolic prescribers. In reviewing the highest volume TYMLOS prescribers, we find 90% are existing top tier anabolic writers and represent high new prescription shares on average. What was encouraging was the remaining 10% are either new prescribers or returning prescribers who haven't written an anabolic in the past 2 years. More significantly, when we look across all TYMLOS prescribing, we found these new or returning writers account for 20% of total TYMLOS volume today. This is an encouraging early sign that TYMLOS can bring new prescribers and expand the number of anabolic patients.

We're looking at prescription data from October. TYMLOS has reached double digits in new prescriptions here and almost 5% in TRx. It's very encouraging to see the new to brand prescription share moving beyond 16%, an important leading indicator of the evolving HCP confidence. We expect to see continued share growth as we expand coverage and prescribers become increasingly familiar and comfortable with TYMLOS.

So in summary, we're focused on the key drivers of adoption with good progress to date across sales team productivity, market access, prescription trends and bringing new patients and prescribers to anabolic treatment. In the following quarters, we expect to grow share, especially in advantaged plans as well as accelerate access and prescribing in the Medicare segment.

Thank you. I would now like to turn the call over to Gary Hattersley for an update on our pipeline.

Thanks, David. I'd like to start by providing a short update on life-cycle management for TYMLOS, which include bridging studies for both male osteoporosis and our transdermal patch. I'll also provide an oncology development update on the elacestrant program and on our second clinical stage oncology program with RAD140.

So as part of life-cycle management to support TYMLOS, we are planning to initiate a male osteoporosis study and we can now report that we recently met with the FDA to gain alignment on the bridging study, which will be a randomized, double-blind, placebo-controlled study that will enroll approximately 225 men with osteoporosis.

The primary endpoint will be the change in lumbar spine BMD compared to placebo at 12 months. And this study will also include a subset of patients that will undergo high-resolution CT imaging to provide information on both trabecular and cortical bone structure. We expect the study to be initiated in the first quarter of 2018 and so that pending positive outcome from the study, this data would be the basis for a supplemental NDA submission to seek an expanded TYMLOS label.

We also intend to initiate a short-term clinical bone histomorphometry study in the first half of 2018, as we believe this will provide important information to enhance our understanding of the early anabolic effects of TYMLOS and the relative contribution of bone modeling and remodeling to its bone anabolic activity.

As outlined on Slide 18, we are continuing to make significant progress with our transdermal patch program, which is a key component to extend that TYMLOS franchise and expand globally. And importantly, we believe the patch can extend exclusivity to 2037.

Our strategy is to bridge the transdermal patch to our approved TYMLOS products. To support the strategy, we've continued to make significant progress. And while the core patch technology and formulation excipients remain unchanged, we've further optimized the release and delivery of abaloparatide through fine-tuning of both dose and formulation.

Additionally, we've made some important enhancements to delivery, consistency of delivery and patient experience through the introduction of a new patch applicator.

We are also continuing our focus on CMC-related activities that are needed to establish appropriate commercial scale manufacturing.

And finally, we have scheduled a meeting with the FDA in January to align on the pivotal and supportive studies that will be required to bridge the patch to our subcu products and we anticipate providing an update soon thereafter.

At this point, I'd like to share some highlights from our recent 5 presentations at the AMCP NEXUS conference in October on the need for awareness of osteoporosis as well as the cost effectiveness data on treatment with TYMLOS.

As expected from an aging population, the number of osteoporotic fractures continues to escalate with over 2 million occurring in 2015, costing the health care system over $50 billion. Of these, fractures in women account for almost 3/4 of the associated costs with nonvertebral fractures representing over 80% of all fractures. There continues to be a concerning lack of awareness in management where 96% of women with a first fracture did not recall being told by their physician that their fracture might be related to osteoporosis and over half were not aware that a fracture is a risk for future fractures. Notably, 1/3 of women are not referred for a follow-up visit after diagnosis of an osteoporotic fracture.

In a comparison of the cost effectiveness of TYMLOS for the treatment of postmenopausal osteoporosis compared to FORTEO, it was concluded that TYMLOS was more cost-effective by 72% compared with FORTEO. And when projected across a 10-year period, suggested that patients treated with TYMLOS expected lower incremental costs and provides evidence of better health outcomes.

As outlined on Slide 20, we are also making progress with our oncology pipeline. As we recently announced, we received fast-tracked designation for elacestrant. We believe this is significant because it means the agency agrees that elacestrant has the potential to fill an unmet medical need in a patient population with a serious condition. It also provides Radius an opportunity to have more frequent engagement with the agency to support and expedite review, including a rolling review of the NDA.

As a reminder, fast track designation is typically based on early clinical data, but does not preclude other programs which recognize and support expedited or accelerated approval.

As we updated you in our last quarterly call, we gained important alignment with the FDA in June on the development path for elacestrant. We plan to initiate the Phase II study in early 2018, which will be a single-arm monotherapy study in women with advanced or metastatic estrogen receptor positive HER2-negative breast cancer, which would enroll up to 200 patients, where the primary endpoint will be a response rate coupled with duration of response. And pending the results and review of the totality of the data by the agency, this Phase II study could be considered pivotal to support accelerated approval provided the confirmatory study is ongoing at the time of the NDA submission.

At the upcoming San Antonio Breast Cancer Symposium in December, there will be 5 elacestrant poster presentations. Two are clinical posters, which provide an update on our ongoing Phase I studies, which are the 005 dose escalation and expansion study; and the 106 FES-PET imaging study.

We will also be presenting 3 preclinical posters including new data on the mechanism of elacestrant action, activity in the context of endocrine resistance and the antitumor efficacy of elacestrant in combination with a PI3K inhibitor.

We continue to be very encouraged by the progress of the elacestrant development program and will provide more details on the Phase II study when it's initiated, which we expect to occur early in 2018.

I'd now like to provide an update on the second asset in our oncology pipeline, RAD140, for which we've recently initiated a Phase I clinical study in postmenopausal women with locally advanced metastatic hormone receptor positive breast cancer, which will enroll up to 40 patients. The objective of the study is to evaluate safety, the maximum tolerated dose, pharmacokinetics and a preliminary evaluation of tumor response.

We believe the significant potential for RAD140 based on its mechanism of action, which is differentiated from both SERDs and SERMs were it activates androgen receptor mediated signaling together with downstream suppression of estrogen receptor signaling. And based on encouraging preclinical data, we see potential in the context of endocrine resistance including in genetically defined subpopulations that are resistant to current therapies.

I'd now like to pass the call over to the Pepe to provide a financial update on the quarter.

Thank you, Gary. This is our first full quarter reporting TYMLOS sales. From the 3 months ended September 30, 2017, Radius reported net sales of $3.5 million and a loss of $58 million or $1.31 per share as compared to a net loss of $46 million or $1.07 per share for the 3 months ended September 30, 2016.

The $3.5 million sales figure represents 3 months of shipments discounted by gross to net adjustments. Our revenue recognition policy is in line with U.S. GAAP and it is described in our quarterly report on Form 10-Q that we filed today.

In the right side, we show the figures on non-U.S. GAAP basis, which excludes share-based compensation, intangible assets, amortization and noncash interest from the convertible note. You can see the reconciliation between GAAP and non-GAAP in the appendix.

Radius, on a non-U.S. GAAP basis, reported a net loss of $48 million or $1.09 per share as compared to a net loss of $38 million or $0.88 per share for the 3 months ended September 30, 2016.

I would like to highlight 3 points. First, the license revenue is related to the Teijin deal upfront milestone; second, our R&D expense decreased versus the third quarter in 2016, driven by a wind down of the elacestrant and TYMLOS SC programs; last, the SG&A increase is driven by the ramp-up of headcount report of TYMLOS commercialization. We are now a fully staffed commercial company with over 200 sales reps working in the field and approximately 20 MSLs all working to support TYMLOS. We're allocating resources in accordance with our study, which is to drive TYMLOS growth and continue advancing our pipeline.

On Slide 24, we show that our cash, cash equivalent and marketable securities balance as of September 30, 2017, was $468 million. In the third quarter, we increased cash by $253 million versus Q2 and in cash balance, driven by the $296 million net proceeds from our senior convertible note priced in August 2017.

We show $3 million cash inflows from the gross profit on TYMLOS sales, while we invested in support of the TYMLOS launch, advancing our pipeline and for general purposes. We had $15 million of cash inflow from employee options received and other changes in net working capital.

On Slide 25, Radius show that we have a -- that we continue to strengthen its value proposition. We operate in large and financially attractive categories. In osteoporosis, we have access to the 2 largest anabolic markets in the world. In oncology, elacestrant is an attractive opportunity in a large metastatic breast cancer market.

The TYMLOS ACTIVExtend program provides further differentiation for TYMLOS and, as you heard from David, the initial feedback from healthcare practitioners is encouraging, showing how the product attributes are motivating them to prescribe the product.

We're extremely excited about elacestrant and the recent Fast Track Designation from the FDA. We look forward to SABCS in December to show further progress in the program.

Finally, we have a strong financial structure. Our gross margin in TYMLOS is north of 90% and we have a lean and stable cost structure. Radius balance sheet is strong and has over $0.5 billion of operating loss carried forward to offset future taxable income.

After the expected CHMP opinion in mid-December and SABCS, we will assess strategic alternatives for abaloparatide outside of U.S. and the best approaches for developing elacestrant in earlier lines of therapy.

I will now turn the call over to Jesper to provide final remarks.

With one full commercial quarter behind us now, we have achieved many major value-creation infliction points that positions Radius for future growth. The TYMLOS U.S. commercial launch, coupled with the positive ACTIVExtend data presented at the ASBMR meeting, our deal in Japan with Teijin, the initiation of our Phase I RAD140 clinical trial in hormone receptor positive breast cancer, and the FDA fast-track designation for elacestrant are all critical milestones that Radius has delivered in 2017.

We expect to submit a labeling supplement seeking to update the TYMLOS label with the ACTIVExtend 43 months' data before the year-end. We also expect to have a CHMP opinion for our MMA (sic) [MAA] for abaloparatide subcutaneous named Eladynos in Europe by year-end. At which point of the time, we will focus on partnerships, opportunities outside of the U.S.

We have scheduled a meeting in January of 2018 with the FDA to discuss the regulatory pathway for the abalo patch. After the meeting and after aligning the commercial manufacturing discussions with 3M, we will share the potential regulatory pathway for this program. We expect to update the market on ongoing elacestrant clinical program at the San Antonio Breast Cancer Symposium and we plan to initiate our Phase II single-arm monotherapy trial for the elacestrant in early 2018.

We will focus on executing with excellence, investing in clinical programs in our pipeline and delivering results for the company shareholders.

We are also announcing today that Dr. Ansbert Gadicke has resigned from the Board of Directors of the company effective November 8, 2017, after having served the Board of Directors for the company and its predecessor since 2003. Following Dr. Gadicke's resignation, we expect to reduce the size of the board from 10 to 9 members. On behalf of Radius and its employees, I would like to take the opportunity to thank Dr. Gadicke for his many years of service, advice and support to the company as it progresses from an early start-up to a fully integrated commercial biopharmaceutical company that we are today.

Finally, I would like to thank you all for the support to Radius Health and I would like to ask that we open the call for questions now.

(Operator Instructions) Our first question will come from the line of Jessica Fye with JPMorgan.

First one is within the $3.5 million of third quarter TYMLOS revenue, how much, if any, of that was related to increases in wholesaler inventory? Also looks like you're making progress in government pay access. How should we think about the proportion of Part D lives that will have coverage for TYMLOS in 2018? So where can we go from that 35% today, next year? And then follow-up to that -- to these, I want to just clarify one of the comments you made in your prepared remarks around the patch. I think you said the PK profile of an optimized patch was successfully modified. Does that mean that you ran a subsequent PK study and that the near match that you presented at ASBMR last year is now a bioequivalent match? Or is that comment -- more about the PK being modified as of ASBMR relative to the old, old patch? And sort of related to that, I think in the past you talked about both the bioequivalent study and the BMD study perhaps. Could a BMD study for patch potentially bridge to the TYMLOS data similar to how you're doing with male osteoporosis or does it not work like that? I think you also mentioned something about pivotal and supportive studies, so I just want to make sure I understood whether BMD or bioequivalent is likely to be pivotal and which would be supportive.

Thank you very much, Jessica. I will send the questions a little around. I will ask David to respond to the inventory situation and what we are doing there. I would ask David Snow to comment on the market access for Part D. And then Gary is going to comment on the patch, maybe supported by Bruce Mitlak that we have with us here. So, Pepe, if you will be so kind to start out.

Hi, Jessica. Thanks for the question. So basically as we articulated, and thank you, we are recognizing sales based on shipments to wholesalers. And we're not giving any incentive to create inventories there. There's going to be a normal inventory buildup as demand increases. But there's nothing material that I could highlight from that angle. Obviously in Q2, when we first filled the pipe, there was a bigger portion of sales there because each wholesaler had to retain certain level of [management]. I'm going to ask now the second question related to Part D to David.

Sure. Thanks, Jessica, for the question. We are really pleased where we are from a payer standpoint, you see we've crossed over $200 million. 87% on the commercial side, 35% on the Med Part D, we spoke to build both of those. Obviously, we would expect to be north of 50% early in 2018 on the Med Part D side. These plans are now working through a lot of their 19 decisions and once they make those decisions and they'll think about revising their 2018 opportunities. So that's pretty much the way we're looking at it right now.

Hi, Jessica. Thank you for the questions. So I think I captured them all. So your first question, about the profile -- optimization of the profile. We see that the greatest technical hurdle that we've had with this program so far was that initial shift in the pharmacokinetic profile from a very pulsatile profile to one that was comparable to subcutaneous injection. And that was really the introduction of the excipient that we reported on the ASBMR in 2016. On that point, we've really been focusing on fine-tuning some of the characteristics, not just of the profile, but of the entire delivery system. So for example, we referred to the introduction of a new applicator. That's important for a number of different reasons. It's important from consistency of delivery, optimization of delivery, but also equally important is the patient's experience. We ought to be able to provide a delivery system that is easily used by our intended patient population. So that's really an important step. You are correct in terms of the -- there are several different -- there's a couple of different options for bridging for these types of studies, the FDA guidance does speak to both pharmacokinetic equivalents as well as pharmacodynamic equivalents. And I think you referred to the BMD study which would fall into the pharmacodynamic equivalents category. We -- with the male study as being an example, we can -- we believe that there is significant value in a pharmacodynamic bridging strategy that provides real-world information on the benefits the patients can achieve. In terms of a comment on our pivotal and supported studies, as with any development program, there are both pivotal studies as well as a series of supported studies that are required. I can give you some examples, an example based on guidance from the agency or this type of -- this route of administration. There is typically a requirement for dermal tolerability study. And so that's a study that we are anticipating to conduct to provide some dermal safety assessment of this delivery system. And so really our engagement with the FDA, which is coming up in January, is to talk about all of these components of the entire development program so that we have had an appropriate engagement with the FDA and conversation and alignment around their expectations of what an entire program would look like.

Okay, great. And just to make sure I understand. The improvements -- has there been a subsequent PK study after what we saw? I think it was you presented it at ASBMR?

So yes, there have been a series of PK studies. We have found that conducting human pharmacokinetic studies, single dose pharmacokinetic studies, is actually the best way to assess some of the modifications that have been made, both in terms of performance of the applicator, as well as some of those what we would consider to be incremental fine-tuning of the profile, particularly around the dose question. So that's really driven by our clinical data, which we think is the most relevant and really what should be guiding our program.

(Operator Instructions) Our next question will come from Salveen Richter of Goldman Sachs.

Just wondering if you can comment on the formulary positioning here? How is pricing playing a role and are any changes expected as we head into 2018?

Thank you, Salveen. David, will you take that?

I think, well, when we look at the commercial side of the equation, we're in pretty good shape at 87%. So I would assume there might be a few more that are out there, mostly a lot of the PBMs who have picked it up, there'll be downstream decisions that they'll have to make. And some of those independent decisions they make within that, we would expect to go our way and we'll see that flow through. I think that obviously there are many big players within the Medicare Part D side, I'd rather not get into some of the specifics there. But we've gotten a number of those in place. We expect to have more of those coming out as they make their 2019 decisions and we'll see that flow through. But again, we would expect to be north of 50% early in the year on the Medicare Part D side.

Great. And then as we think about the launch here, can you help us understand or help us think about how to take captured market share, payer coverage on where you stand and translate that to some kind of patient uptake trajectory. And how should we think about those 2 factors?

Yes, that's a great question. And I think we've spent a lot of time looking at that. But I think we've always talked about the fact that this is a new patient market that's really critical to follow patients that are coming in and so that's why we've shown you this NBRx. Physicians, these are specialty-type therapies, they're in higher risk patients. They have -- they want confidence that they can get reimbursement. So again, they must have reimbursement ahead of that. And then it's a question of, can you capture more of the patients who are coming on for therapy. And again, we were very encouraged by the fact that we're starting to see some prescribers who haven't really prescribed anabolics previously and we think some of that is due to the coverage that we've got with the payers, the responsible pricing strategy we have and basically bringing in a new product and talking about these patients who are at risk. So there are number of drivers there, but I'd say that NBRx is probably the best signal of the trajectory of the brand and where we can go.

And Salveen, if I may add, you should remind yourself that there is very little switches in this segment. That's one of the peculiarities of the osteoporosis market. So really, what should use the NBRx for is as an indicator for where market share was going to be in 12, 18 months from now.

Our next question will come from the line Ying Huang with Bank of America Merrill Lynch.

Just a follow-up on the last question. You have a preferred status with Express Scripts. Are you going to sign up with any other major PBM or large insurance company for 2018 to give you the preferred status over FORTEO? And then on the EMA process, I don't know if you guys were invited to this RO hearing, it sounds like you had a formal discussion. But any color you can provide to help us understand the outcome for the CHMP decision.

David is going to do the first and I'm going to take the latter question. Thank you for the question, Ying Huang.

Ying, I think we were pleased with the decision that ESI made. That was an independent decision on their part, looking at our clinical profile and where they felt was best for their downstreams and their clients. I think we certainly were pleased with that. I think that when you look at the specialty market and the prior authorization structure around it, it was not our expectation that we would see a lot of that. I think we're really pleased to get our placement and get it quickly. So I don't have a huge expectation out there. But clearly, there are going to be some other plans, and there have been, who will put us into our preferred position. And I expect to see a bit more of that going into 2018.

And this is Jesper here speaking. In respect to EMA, just to give you a little bit of historical background, we have had a chance to talk with the reporters on the basis of that. We are now reworking some of the statistics of what we have agreed to with them and then we are resubmitting, as you will recall, we had a [stop] meeting, we had a 180 days. So the time line looking forward is that we anticipate by mid-December to hear back from the CHMP and be on the agenda for that meeting. So that's when we anticipate you'll get news in that respect.

(Operator Instructions) Our next question will come from the line of Chris Shibutani with Cowen and Company.

I apologize if you had provided some of this information previously, but on elacestrant, could you tell us, in terms of incremental information that we'll get at San Antonio relative to ASCO and the timing by which you think we're going to get some results on the Phase II trial that you'll begin in 2018?

Thank you, Chris. We will pass it over to Gary who gladly will answer.

So yes, we have 5 presentations related to elacestrant at the upcoming SABCS meeting. Two of those are clinical, 3 of them are preclinical. As you may recall, during our last quarterly call, we talked about the update we provided at ASCO in June. At that point, the data cut was based upon an April 28 data cut. At that time we had 15 patients who remained on treatment. For San Antonio, one of the 2 clinical update posters will be reporting some additional data from that ongoing U.S. Phase I study. One of the other clinical process will report some further data from our European FES-PET imaging study. And as I mentioned, there will be 3 additional preclinical posters.

And then as far as the Phase II , I think you've identified 200 patients. What would be a fair range of time line for thinking how long that study would require to enroll?

Yes. So we expect that study to start early in 2018 and at this point we have not provided guidance on when we expect enrollment to be completed.

And our next question will come from the line of Kyung Yang with Jefferies.

Eli Lilly said they are expecting patent expiry of FORTEO in '19 in the U.S, EU and Japan. So I want to ask you with your potential generic entry how are you guys preparing to compete in the marketplace? And my second question is, now that TYMLOS is generating revenue, do you -- can you give us some guidance on when do you expect to reduce to be breakeven financially?

I think that's a good question for Pepe.

Yes, I'll throw in on the biosimilars real quick and status with Eli Lilly. We obviously have been following what's been going on with teriparatide for quite a while. But you need to recognize that while this is an injectable market, it's a specialty market, there's a lot of support that's required working through specialty pharmacies and patients who are on therapy. So first, it's not your traditional loss of exclusivity market. I think the second thing that I think Lilly was talking about some time in '19 perhaps. So there's quite a bit of time in terms of which we had to establish the profile, the unique profile, of TYMLOS and where we are in terms of the market. And finally, we have thought about this market quite deeply? And if you look at the responsible pricing that we've put out there, really I think that serves us well in terms of gaining both share and confidence on the part of patients and physicians that would set us up quite independently from anything that might happen with teriparatide. So I think we feel really good about where we are regardless of what happens to their exclusivity.

And if I may add, we think that it will not be interchangeable and as a consequence of that, I think the market that you should look for if you want to mimic what happens is really the growth hormone market where there are a number of different players, including biosimilars. And if you look at that market, they have had very little chance to penetrate the market. So overall, what we are doing is we are focusing ourselves of becoming market leader and keep focusing on that. And then we'll take it from there when it comes to the market. And in respect to the financing, Pepe?

Yes, so you'll be -- in the last offering, we were able to finance several programs that we have been discussing today. So where we have financed the transdermal patch program, some life cycle management for TYMLOS like the male study and elacestrant Phase II program, which are potentially a pivotal study, as well as the RAD140 Ia study. So we have our -- basically our pipeline fully funded. As we see TYMLOS to continue to have a strong penetration in the market, we have our view that we would have a good line of sight to catch breakeven with our current balance sheet.

But can you give us a timing when you expect to be breakeven?

No, we haven't provided a time line. But I think that if you see the cash burn, the cash in the bank and put a straight line to where sales are going, I think that you can probably get roughly where things are going to break even.

Our next question will come from the line of Mara Goldstein with Cantor Fitzgerald.

Can you just talk a little bit about the patient experience for actually receiving TYMLOS from the time the physician makes the decision to provide a prescription for TYMLOS -- for TYMLOS for a patient and what that process is like and how long and sort of what the goals are in terms of getting drug into patients hands?

Thank you, Mara. David will respond to that and I will also give a little color at the end.

Thanks, Mara. This is a really important topic for us because we've seen previously that it can take some months for patients to be able to get themselves on to our anabolic therapy. So what we've been really pleased with is our early results have been encouraging through our own call center that patients have been able to go through that transition process of the prescription, going through the reimbursement, getting the information about whether the drug will be approved and then being able to access it. As you know, we've got a network of specialty pharmacies so that time line will vary a bit that's going through there. But we are working diligently to try and reduce the time in which getting that reimbursement decision processed. And one of the things that our payer team has worked really hard on is trying to align the actual approval and reimbursement, the utilization management to our label which will make it more simplified for physicians to actually get that medical approval and that's something we're going to continue to work on. So instead of months, we'd be saying -- we're talking about weeks versus months in terms of being able to get that approval process.

And do you think that by the time we reach sort of the end of the first half of next year, you'll be in that position?

I would think that -- yes, I think we're -- we've got our strong network of specialty pharmacies in place right now. And as they gain experience and again as these plans and downstream plans get their listing in place, then it will become more routine. And doctors' offices will be more comfortable with that process as well. So, yes, I would think that in the next 2 or 3 months we'll start to get to a more positive equilibrium on what that should look like.

And how much -- when the product was approved, there was a discussion around funding of the foundations that help with patient assistance for copays and things like that. And I think the decision at the time was not to do that until there was greater clarification on what the rules might change to be. And so I'm curious as to what your thoughts are on that, particularly as we enter into a new period -- a new essentially copay starting back at 0, if you will, for all those individuals for 2018.

This is Jesper speaking. We now have our own patients' assistant program. And basically, its initial phase is now up and running and we, of course, anticipate that, that will gain momentum. So just to say that we are doing whatever we can to make TYMLOS available to the women for treatment.

The only thing I would add to that is, Mara, that we often -- we're always looking at that to see where patients are and it's really important to take a note of, you can see the mix changing a bit between the commercial side and the Med Part D side. So we always take that into consideration and make sure that we're trying to balance that and provide as much access to these patients as possible. So I think that program will evolve over time.

Our next question comes from the line of [Ashik] (inaudible) with Bloomberg Intelligence.

I had some technical difficulties earlier, so I apologize if it's already been answered. In the last quarter's call, you said it was a little bit too early to talk to us about the gross to net on TYMLOS. So I was wondering if you can give us a little bit of detail about that now. Then on marketing efforts, I was wondering if you could give me a little bit more detail on how sales reps are able to articulate the benefit of TYMLOS effectively, especially when the FORTEO data is not on the label, maybe some sort of -- some sense of how often reps, after engaging prescriber, does it connect them with the MSL? And then lastly, can you maybe give us some details on the -- on a DTC campaign, is there something on the cards? When are you able to do it and when do you plan on doing this?

So we will start off with Pepe, then David and then I will finish off with the DTC. So, Pepe, if you -- gross to net...

Yes, the gross to net adjustment is not something that we're providing a guidance or clarity right now. And the reason is very simple, it's going to be a bit volatile at the beginning like many new product launch. We expect to start providing guidance more in the second quarter of next year. And that's what we will -- start being -- more guidance, not only on gross to net, but in other metrics. What I can say is that with the pricing that we took, we have been able to get the access to formularies without having the need to make any major rebate strategy. So, so far it has been a pretty successful market access play.

David?

Yes, I think we've been really pleased with the initial response out of clinicians. Those that are familiar with anabolics, some of the feedback that they give us is they appreciate the early onset of effect that they see. The strong risk profile, in terms of reducing fractures, that they see across vertebral and nonvertebral. The fact that it's a shorter overall duration of treatment with TYMLOS, all of those have been really positive and feeding back to us. I think that, as you might expect early on, there's been over a 15 year experience with FORTEO. And so it does take multiple calls in terms of being able to work that through the process of reimbursement and understanding and the commitment, obviously physicians want to have confidence when they prescribe that, that they'll actually get that prescription filled. So I think there's been a component of this process over the first 6 months of getting confidence in terms of reimbursement first so that physicians don't have to go back multiple times to the patients. But as far as the clinical profile itself, we've gotten very positive responses or the intention to treat information that we've got has been very encouraging to us. We've seen that going up week over week. And I think we're in a really strong position in terms of where we're taking the brand.

And if I should just comment on direct to consumer. You should not anticipate that we will be in television advertising sort of thing. Because, of course, we remind ourself that we are looking at a target audience of less than 50,000 women. And therefore, that is certainly not beneficial. Of course, we are doing our job at the net and wherever we can in order to engage. And we feel that we have a very, very good interaction on Facebook homepage. Our Facebook site has really good interactions, more than 14,000 members, something to be very, very proud of. It's different dynamics that you're seeing here. If you're thinking at it from a cost point of view, think of marketing costs, where it is right now is also where we anticipate to see it going forward. We do not anticipate further spendings and increases in this respect. And then finally, we are very, very pleased with the takeoff in the performance that we've had in the marketplace. NBRx of 16.6%, 4 months into the launch, I think is really, really good. And then, of course, one should also keep in mind that for direct to consumer, there's the black box warning that we're having and that is also making it more complicated to do so. All in all we think the marketing mix that we are providing, and David's team is doing, is really bringing us in the right place and we are very pleased with the performance that we have seen for the first 4 months commercially.

And I'm showing no further questions at this time. So now it's my pleasure to hand the conference back over to Mr. Jesper Høiland, President and Chief Executive Officer, for closing comments and remarks. Sir?

Thank you very much. Thank you for everyone to listening in. I hope that you find it interesting. We really look forward to, see you next time around, I was about to say, but talk to you in 3 months from now. That's really going to be exciting because we feel that we are off to a very good start. And we will have a very good story also to tell next quarter. So thank you to everyone. Thanks for listening in.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program and we may all disconnect. Everybody, have a wonderful day.