Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)

Antares Pharma Inc. (NASDAQ:ATRS)

Q4 2013 Earnings Conference Call

March 13, 2014 08:30 AM ET

Executives

John J. Howarth – VP, Corporate Affairs

Paul K. Wotton – CEO and President

LeRoux Jooste – SVP and General Manager, Pharmaceuticals

Robert F. Apple – CFO, CAO, EVP and President, Parenteral Products Division

Analysts

Louise Chen – Guggenheim Securities

Akiva Felt – Oppenheimer & Co. Inc.

Corey Davis – National Alliance Capital Markets

Operator

Ladies and gentlemen, welcome to the Antares Fourth Quarter and Full Year 2013 Operating and Financial Results Conference Call. (Operator instructions) I will now hand the conference over to Jack Howarth, Antares Vice President of Corporate Affairs. Please go ahead, sir.

John J. Howarth

Thanks, Grace, and good morning, everyone. Thank you for joining us on today's call. We announced fourth quarter 2013 operating results and recent achievements earlier this morning, and the press release can be found on the Antares website at www.antarespharma.com under the Investor Relations tab. Before we begin, please be advised that during the course of this call, we may make forward-looking statements concerning the company that are not historical facts. These forward-looking statements may include, but are not limited to, statements concerning the timing of product sales, market estimates, market potential and growth prospects, technology platforms and working capital needs.

Forward-looking statements provide Antares' current expectation or forecast of future events. Actual results could differ materially from those reflected in these forward-looking statements due to decisions of regulatory authorities and Antares' ability to execute on its development plans, capital needs and general financial, economic, regulatory and political conditions affecting the pharmaceutical industry generally.

Additional information concerning these risks and uncertainties are contained in the Risk Factors section of Antares' annual report on Form 10-K and in Antares' periodic filings and other filings made with the Securities and Exchange Commission.

Antares is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this earnings call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements.

Joining me on the call today are Dr. Paul Wotton, President and Chief Executive Officer; Robert Apple, Chief Financial Officer and President of the Parenteral Products Group; and LeRoux Jooste, Senior Vice President and General Manager of Pharmaceuticals. After the presentation, we will open the lines for Q&A. I'll now turn the call over to Paul Wotton. Paul?

Paul K. Wotton

Thanks, Jack, and good morning, everyone. We have had a busy couple of months since our last call, and although we have made recent presentations with new information at the JP Morgan and Cowen healthcare conferences, I would like to take some time this morning to give you an update on two of our near-term internal growth drivers, the Otrexup launch, and the progress we have made in the QuickShot testosterone study, before turning the call to Bob for the financial results. And LeRoux will be joining us for the Q&A session later on in the call.

Now many of you have recently heard me use the term transformational in describing our company. Well, the approval and launch of Otrexup was truly a transformational moment in our history as we transition to a specialty pharmaceutical company. The significance of this approval was that in addition to obtaining our first approved injectable 505(b)(2) NDA for Otrexup we also succeeded in obtaining an approval for our device platform, and this has paved the way for additional product opportunities in the future.

I’m happy to report to you that this morning we are delighted with the progress of the launch because it relates to the leading indicators we are using to measure success. Through the first 20 days of the launch, our 25 reps saw 90% of the targeted 2500 rheumatologists, and this tells us that our sales force has been able to gain access to the rheumatologist office successfully, and our geographic targeting was spot on and our call plan was accurate.

When we speak to the sales reps on a weekly basis, we are hearing about positive experiences in the rheumatologist’s office, and in the majority of visits commitments to prescribe Otrexup based on its unique value proposition. There has been high demand for our step up starter kits, which allow patients to be educated, as well as trained on how to properly administer Otrexup. And the feedback we have received thus far also tells us that our insurance verification hotline and Co-Pay business card utilization is popular and increasing.

Our goal from the start of the launch was to make this as an easy process as possible for both patients and physicians, and to give reps every tool necessary in their bags to make the physician visit successful. We have also made tremendous progress on managed care coverage. It is interesting to note that LeRoux has been involved in more than 20 product launches and personally led the launch of Enbrel, and he tells me that he has been impressed by the level of third-party payer coverage that has already been obtained within the first month after launch.

The majority of commercial plans now cover Otrexup with a tier 3 benefit, which we believe is reflective of Otrexup’s value proposition to payers, and has had a big impact on the number of clients covering Otrexup right from the launch. While we don’t want to put too much emphasis on early weekly prescription trends, we are monitoring them, as well as shipments from distributors to pharmacies. And based on these data, we know that Otrexup is being prescribed to patients by rheumatologists, and that the weekly scripts have increased week over week since the launch.

So I would say that in less than a month into the launch, it is looking good and we are on track with that plan as we expected. This is a tremendous opportunity for us because methotrexate is the anchor drug for rheumatoid arthritis. It has been the go to DMARD of choice for the past 20 years, and we hope that it will remain the go to DMARD for many more years to come.

For the rheumatologists and their patients they can expand and enhance the benefits of methotrexate and keep their patients in low disease control. It is also worth noting that our job is to optimize the use of Otrexup in the treatment paradigm, and it is worth remembering that we’re not competing directly with oral methotrexate and we are not trying to compete directly with the biologics. We are creating a space in the middle of the two by expanding the bioavailability and tolerability of methotrexate through subcutaneous administration using a proprietary high-tech engineered device to provide precise dosing of methotrexate.

Before I move on to talk about our QuickShot testosterone program, earlier this week we announced that our sales and marketing partner, LEO, has launched Otrexup on March 3 to dermatologists for the psoriasis indication. And yesterday we announced the receipt of a second $5 million milestone payment from them.

Otrexup’s psoriasis indication has strong possibilities for us. There are approximately 7 million psoriasis patients in the US, and up to 10% of these may have severe recalcitrant or debilitating psoriasis which is that current label. LEO has a large database with 50,000 psoriasis patients, and we will be using 75 sales reps to target approximately 7000 dermatologists.

We ultimately chose to partner with LEO because of their competence and expertise in psoriasis, and their established relationships with dermatologists and patients. I anticipate that the launch of the product to dermatologists by LEO will soon begin to drive meaningful revenues for our company.

Before moving on, I would like to make a brief statement about recent events regarding litigation that has recently been initiated by Antares, and which has subsequently been initiated against Antares. As a policy, Antares doesn’t discuss any ongoing litigation or litigation strategies, and I do not intend to say too much on the topic now. But just to be clear, we fully intend to protect the proprietary technology that we have invested in and worked so diligently to create over the five or six years that we are working together here. And we will vigorously defend any claims made by others about their alleged intellectual property to the extent that such claims speak to undermine Antares.

Now moving on to the QuickShot testosterone program. Last month we announced positive results from a multi-centered Phase II clinical study evaluating the pharmacokinetic profile of testosterone administered once weekly by subcutaneous injection of doses of 50 mg and 10 mg using the VIBEX QuickShot auto-injector in testosterone deficient adults males.

29 adults, males with hypogonadism or low T and testosterone blood levels less than 300 nanograms per deciliter, were randomized into two groups. The first group received 50 mg of testosterone administered subcutaneously with the QuickShot device once weekly for six weeks, and the second group received 100 mg of testosterone using the same device and time sequence.

The clinical study also followed patients for four weeks after the last dose. The mean testosterone baseline for the 50 mg group was 214 nanograms per deciliter and 201 in the 100 mg group. At week one, both doses 50 mg and 100 mg produced normal mean testosterone concentrations at 24 hours post dose, at 434 nanograms per deciliter in the 50 mg group and 572 nanograms per deciliter in the 100 mg group.

During week six of the study, when patients were already in steady state pharmacokinetic conditions, the 50 mg and 100 mg groups had average plasma testosterone values within the normal range of 422 and 895 nanograms per deciliter respectively. But the study demonstrated rapid restoration, consistent maintenance of normal testosterone levels, and dose proportionality of the 50 mg and 100 mg strength. The once weekly injection was generally well tolerated. No injection site pain was reported by 28 of 29 patients, and only 17 patients reported mild to moderate adverse events, which according to the investigators were unrelated to either the drug or the device. There were no deaths and no treatment emergent serious adverse events or discontinuation due to any adverse events in the study.

We are very optimistic about the potential for self-administered, once weekly subcutaneous dose of testosterone based on the outcome of this study. It is clear to us that the administration of testosterone using our proprietary QuickShot device show that normal testosterone levels can be rapidly restored, and then reliably maintained with reduced peak to trough fluctuations, relative to those associated with intramuscular injections, which we also studied as part of this trial.

We believe that the testosterone market will continue to grow due to the current under penetration, a growing awareness of the benefits of treating testosterone deficiency, and the FDA’s willingness to continue to look for and approve new therapies for treatment, such as the most recent approval for the product Aveed.

It is of interest that the injectable space has grown over the past five years at a compound annual prescription growth rate of around 40%, outstripping gel prescription growth of 14% for the same period. The injectable testosterone currently accounts for one third of the total testosterone prescriptions written annually, and given the current focus of injectable testosterone, we believe that a once weekly convenient, precise five second subcutaneous administered dose for testosterone through a fine gauge needle will become the choice route of administration.

I’m now going to turn the call over to Bob for a review of the fourth quarter and full year results. Bob.

Robert F. Apple

Thanks Paul. I want to echo Paul’s comments, 2013 was truly an exceptional year for the company, and in addition to getting our first in-house combination drug device product the [First-in-Class] approval in 10 months. We also made big strides in our next product candidate QuickShot testosterone.

Our fourth quarter and year-end 2013 financials reflect the significant investment we made in the launch of Otrexup. We spent nearly $9 million in 2013 on sales and marketing, prelaunch product positioning, branding, third-party payer positioning and new personnel. We also invested over $6 million in Otrexup inventory, which is on the balance sheet at year-end in anticipation of 2014 product sales.

Additionally, we also completed a Phase II program for QuickShot testosterone. Our legacy business of product sales and royalty, and development revenue from our partners contributed significantly towards this investment, where we had nearly $21 million of revenue. Our cash position remained strong at $69 million at the end of 2013.

So, now moving on to the fourth quarter and full year results. Total revenue was $4.7 million and $20.6 million for the three months and year ended December 31, 2013 compared to $5.5 million and $22.6 million for the comparable periods in 2012.

Product revenue was $900,000 and $11 million for the three months and years ended December 31, 2013, compared to $1.4 million and $9.1 million for the comparable periods in 2012. The decrease in product revenues in the fourth quarter was primarily due to a decrease in sales of our oxybutynin gel 3%, Gelnique to Actavis, as Actavis assumed all manufacturing of Gelnique in the third quarter of 2013, as contracted. The product revenue increase of almost 20% for the full year was primarily due to $6.2 million of initial sales to Teva of our Vibex auto injector for Teva’s generic epinephrine auto injector product. 2013 product revenue contained no Otrexup sales, as the product launched in 2014.

Development revenue was $1.5 million and $4.1 million for the three months and year ended December 31, 2013, compared to $1.1 million and $7.4 million during the same periods of 2012. The decrease for the full year was due to a reduction of $2.7 million in development revenue earned under the Actavis license agreement. The remaining development revenue in each year was generated primarily from auto injector and pen injector development work for Teva.

Licensing revenue was $600,000 and $800,000 for the three months and year ended December 31, 2013, compared to $1.3 million and $2.1 million during the same periods of 2012. Revenue for the fourth quarter of 2013 was primarily related to revenue recognized under our promotion and license agreement with LEO Pharma. Revenue for the fourth quarter of 2012 was primarily related to a non-recurring payment of $1,250,000 received from a pharmaceutical partner and licensing revenue for the full year of 2012 also included an upfront fee received in connection with our licensing agreement with Daewoong Pharmaceuticals for our oxybutynin gel product for South Korea, along with license revenue recognized in connection with our license agreement with Actavis.

With respect to the $5 million milestone payment received in the fourth quarter from LEO Pharma, accounting revenue recognition rules dictated that the payment be amortized over the term and period of time, in this case over approximately a three-year period. The same revenue recognition will apply to the second $5 million milestone payment we just received.

Revenue from royalties was $1.7 million and $4.7 million for the three months and year ended December 31, compared to $1.7 million and $3.9 million for the comparable periods in 2012. We received royalties from Teva and Ferring related to needle-free injector device sales and/or hGH sales and from Meda Pharmaceuticals on sales of Elestrin. We also received royalty payments from Actavis on sales of Gelnique 3%, which began in the third quarter of 2012 and was the primary reason for the increase in royalties in the year-to-date period.

Total gross profit increased in the fourth quarter of 2013 to $4.1 million compared to $3.8 million in 2012, and decreased for the year to $11.4 million in 2013 compared to $13.1 million in 2012. The decrease for the full year was primarily attributable to decreases in development and licensing revenue.

Total operating expenses were approximately $10 million and $8.8 million for the fourth quarters of 2013 and 2012, and approximately $32.3 million and $24.5 million for the years ended December 31, 2013 and 2012, respectively. The increases in 2013 were primarily due to expenses related to sales and marketing activities in connection with preparation for the commercial launch of Otrexup. Also contributing to the increase in operating expenses was an overall increase in personnel as the company added employees in 2013 in areas such as sales and marketing and quality assurance.

Net loss was approximately $5.6 million and $5.0 million for the fourth quarters of 2013 and 2012, and $20.5 million and $11.4 million for the years ended December 31, 2013 and 2012.

Net loss per share increased for the year to $0.16 in 2013 from $0.10 in 2012, primarily due to an increase in operating expenses in connection with Otrexup pre-commercialization activities. Net loss per share was $0.04 for the fourth quarters of both 2013 and 2012.

At December 31, 2013, cash and investments totaled approximately $69 million compared to approximately $85 million at December 31, 2012.

Lastly our policy has been not to offer specific financial guidance. In regards to 2014, given that Otrexup just launched five weeks ago, and monthly prescription trends are not available, we believe it would be premature to directionally guide the Street on Otrexup revenue. Our legacy business of royalty development revenue and device sales through our partners will remain stable or potentially grow depending on new business development and further progress of our Teva programs. We will look to revisit our broad directional guidance for Otrexup prescription trends.

And with that I will turn the call back to Paul.

Paul K. Wotton

Yeah. Thanks Bob. 2013 was really an exciting year for Antares and our shareholders, and in the last four months alone we announced the approval of Otrexup injection by the US FDA, and was launched to rheumatologists three months later. We have also announced an exclusive promotion and marketing agreement with LEO Pharma for detailing Otrexup to dermatologists for symptomatic control of severe psoriasis in adults, and under the terms of this agreement we have already received $10 million, and may receive a total of $10 million more in additional milestone payments as we make progress. And LEO Pharma have already launched the product to dermatologists the past week as I mentioned.

We also had positive results from a multicenter clinical study evaluating the pharmacokinetic profile of testosterone administered once-weekly by subcu injection at doses of 50 mg and 100 mg using the VIBEX QuickShot device in testosterone deficient adult males. And in October, data from our three Otrexup clinical studies were presented at the ACR Meeting in San Diego, and the clinical study data comparing the systemic availability of methotrexate using Otrexup compared to methotrexate taken orally was actually selected for a prestigious podium presentation.

We have continued to grow our IP. A new U.S. patent number 8,562,564 entitled “Prefilled Syringe Jet Injector” was issued, and this patent is designed to protect the use of medicament containing prefilled syringe based auto injectors such as those used in Otrexup and QuickShot testosterone.

We also announced the receipt of received a Notice of Allowance from the U.S. PTO for application, along with U.S. Patent 8,251,947 granted in August of 2012, related to the use of our injector technology for wet-dry injectable drugs such as lyophilized biologicals or peptides that require dry storage to assure stability.

I believe that our progress in 2013 is really only the beginning now. We set a path forward that will continue to reload our pipeline every time a product is approved. We have got state-of-the-art device technology based on robust engineering, and we intend to add at least three new pipeline projects to our portfolio this year. Our move [Indiscernible] in a rapid fashion towards the goal of launching at least one product per year on average going forward.

On the partnership side of the business, we expect our Teva relationship will continue to flourish, and we expect to reveal the identity of Pen one as it has been submitted to the FDA. Teva will of course control the announcement. We are one-year closer to the potential launch of a generic Epi-pen in 2015 pending FDA approval. And we expect the Pen two will be filed in Europe somewhere between the next 12 to 18 months.

So it is an exciting time here at Antares. In five short years, since we implemented the focus, fix and grow program we have been able to transform this organization into a specialty pharma company. We are now in the growth phase and we are launching a product using our technology platform as the base for a whole pipeline of opportunities.

I know that going forward we expect to exhibit high levels of productivity and results than ever before. We have built a culture here that is attracting great people to join our organization. We have a novel and sustainable business built on solid science, strong intellectual property, disciplined marketing and good strategic planning.

With that I would like to thank everyone for their attention and hand this over back to the operator for the Q&A session.

Question-and-Answer Session

Operator

(Operator instructions) The first question comes from Louise Chen from Guggenheim. Please state your question.

Louise Chen - Guggenheim Securities

Hi, thanks for taking my questions. I had a few. So first question I had was how do your actual sales for Otrexup look relative to the IMS data, and is IMS data even a good proxy for your sales. Second question I had, you know, is something that people have been asking me, which is can you explain how your Otrexup product compares to the Medac product, I know that is not approved yet, but just curious what you think there, and then, another question people have asked me is what percent of generic methotrexate products are given by injection currently and then last one is what is LEO’s estimate of the market opportunity for psoriasis and maybe for Otrexup in general, if they had any validation of your product? Thank you.

Paul K. Wotton

Thanks Louise. This is Paul. I will ask LeRoux to comment in a few minutes because he is actually on the line as well. With respect to the actual sales relative to the IMS data we are tracking, I think it is fair to say that from the data I’ve seen, the IMS numbers are lower than the shipments we are making to pharmacies. And on the other comment regarding Medac that is a subject that is under litigation. I can’t really comment on how our product compares to theirs, because I have not yet seen their product, and it is not yet approved in this country, but I think that what we have with our Otrexup product is the best auto-injector on the market, and clearly we have got a market opportunity that’s large, and it is not surprising other people would choose to copy us, but our intent here is to continue to progress with the commercialization plans for Otrexup based on the unique value proposition that we have already brought to the market, and I know we are going to be successful.

I would like to now just hand this over to LeRoux, to answer the question about percentage of generics of prescriptions that are currently given by injection for methotrexate.

And with respect to the LEO sales numbers, they haven’t given any guidance on those, but I think if you look to the biologicals market, just as a rough guide, the biological segment of the market for psoriasis is about $5 billion to $6 billion compared to about $17 billion for the rheumatoid arthritis market. And if you prorated those numbers you will be looking at a product with sales estimate somewhere in the $50 million to $75 million range.

So let me just hand over this out to LeRoux, just to talk about the percentage of prescriptions that are available for injection today. LeRoux can you just comment on that? Apparently can’t. Hi, Leroux.

Okay. But maybe Louise, I will tell you what I know, which is there is plenty of injections today, a fraction of the total prescriptions for methotrexate is about 5% or 6% given by injectable today. All the market research we have done has shown that the injection market base, auto injector available at home, would probably grow to somewhere between 15% and 20% of the injections that are available. So there is obviously a lot of growth to go there with respect to the injectable space.

Louise Chen - Guggenheim Securities

Okay. Thank you.

Paul K. Wotton

Thanks.

Operator

The next question comes from Akiva Felt from Oppenheimer. Please state your question.

Akiva Felt - Oppenheimer & Co. Inc.

Hi, good morning. Thanks for taking the questions and providing the update. If LeRoux is not on the line, maybe Paul you might have some insight here, but I believe you mentioned that the sales force has hit 90% of target offices so far. I was just wondering how many visits does it take to convey the full sales message for Otrexup, and potentially start to see scripts being written?

Paul K. Wotton

Yeah, that is a good question, and we are a new company coming into this market. But in general, with any new pharmaceutical products that goes out to the market for a company like Antares, it probably would take between six and seven visits to be able to sort of be there front in mind of the prescriber. So, we have made more than one call to some of the rheumatologists now, particularly the ones that have highest prescribing potential, we’re continuing to focus based on data our sales force on hitting the right target.

Akiva Felt - Oppenheimer & Co. Inc.

Okay, thanks. That is helpful, and then just a quick question for Bob, and so with LEO now launched in [derm] [ph], can you just remind us again the accounting treatment for recognizing revenues in and then paying LEO their sales share?

Robert F. Apple

Sure. I mean, you know, as far as the first answer for milestones, like I said in my speech, the milestone will be recognized over approximately a three-year period pretty much equally, and then when we receive the – if we receive the milestone on sales based numbers that will be recognized over the remaining period. From a revenue recognition standpoint on the product sales, we book all the product sales and so we will be booking them as they come in, initially based on prescription data.

Obviously we don’t have a history of Otrexup sales and so accounting literature dictates that you have to use pull through and so we will be booking them off the net sales of prescription data, and then what we pay LEO will be a sales and marketing expense. So we book the total revenue of the product in the marketplace, and then we – we will then pay them, it just goes into sales and marketing expense.

Akiva Felt - Oppenheimer & Co. Inc.

Great. All right. Thanks guys.

Paul K. Wotton

Thanks Akiva.

Operator

The next question comes from Corey Davis from National Alliance. Please state your question.

Corey Davis - National Alliance Capital Markets

Thanks very much. First question is I think you said that Otrexup is not really going to compete with oral not the biologics, so the question would be where would you anticipate the sources of new business are mostly going to come from?

Paul K. Wotton

Yeah, Corey that is a good question, and what we are trying to do here, as we mentioned during the prepared remarks is that a lot of patients will start on oral methotrexate. What happens then usually is that they become what is known as the methotrexate failure where they become intolerant to or they get an inadequate response to methotrexate orally.

And the reason for this is because of the plateau effect, when you get above 15 mg of the dose, actually 15 mg and above, any additional oral methotrexate that you take does not get absorbed. So a patient might get 20 mg of oral methotrexate then they get no benefit from that additional 5 mg dose of methotrexate in terms of therapeutic efficacy. But they get the side-effects associated with it, particularly the GI ones.

Where we believe methotrexate is going to be really helpful to patients is allowing patients to continue using methotrexate and titrating up to higher doses like 20 mg and 25 mg using injectable, where you don’t get as many sort of GI disturbances, and being able to keep a patient on the product longer before they have to move into a biological prescription. And then, once patients are on biologicals, they continue to take methotrexate as well. So they can continue to take Otrexup. There is evidence also that I have seen from studies that the use of methotrexate with biological agents actually prolongs their utility in patients who have rheumatoid arthritis.

So I think what we’re trying to do here is bridge that gap between the oral DMARDs and the biologicals, and then keep those patients on that bridge with Otrexup, because this is a chronic disease. These patients could be on these drugs for decades, and our intent is to try and keep them on Otrexup as long as possible.

Corey Davis - National Alliance Capital Markets

And now that it has been out there for a couple of weeks, how are you feeling about how you priced the product?

Paul K. Wotton

We are pretty – actually we are doing pretty damn good. Thank you very much. I think we actually got the marketing of this one dead on. We have had good receptivity. Managed care has embraced this product. We have more than 63% of lives covered now. We continue to get additional lives covers. They get the value proposition, and I think we priced the product at a fair price and one that give us a good margin.

Robert F. Apple

I think Corey, what is important is what it ultimately will cost the patient, and you know, most patients are seeing like a $40 to $60 co-pay and then we do have co-pay assistance that bring them down to approximately $10, and so for a patient it is no different than using a generic tablet. From a third party payer standpoint they are happy, because if we can delay or delay the use of a biologic, or extend the use of methotrexate, it saves them tremendous amount of money in the long run on that patient that is on therapy basically their whole life. And so I think the pricing has been -- I think where we priced it is spot on.

Paul K. Wotton

We are very happy with the response we have had Corey.

LeRoux Jooste

So, this is LeRoux and you -- I don’t know whether anybody heard my response to the Louise’s question earlier. I think I lost contact there for a few minutes. But the other thing that I would like to add to that question Corey is that the value proposition is actually appreciated not only by the payers, but also by rheumatologists, and potentially by patients because we are not competing against oral methotrexate. We are not trying to replace oral methotrexate.

So they can continue to use their anchor product, their first go to DMARD that they want to use in the treatment of rheumatoid arthritis, and then as the disease progresses their treatment needs to progress but now they have the option to use subcutaneous methotrexate and expand and enhance that methotrexate pharmacology and efficacy, that they have used as their first choice before they need to consider other options like the expensive biologic. So we are not actually competing against oral methotrexate, which is cheap and generic, which is what the payers like and we are not actually competing against biologics, they can still use biologics, and they will as the disease progresses many patients will still need to go on to the biologic, but many patients can do quite adequately and satisfactory [Indiscernible].

Corey Davis - National Alliance Capital Markets

Okay.

Paul K. Wotton

Thanks Corey.

Corey Davis - National Alliance Capital Markets

The last question would be without commenting on litigation, have you ever bumped into Medac before and other pens, other areas and if so why not and if you have what is the outcome then?

Paul K. Wotton

The answer to the question is Corey, no, we haven’t. We have never come across Medac before in any of the markets we work in for auto-injectors certainly. I believe they are an oncology company.

Corey Davis - National Alliance Capital Markets

So is the pen their own invention [Indiscernible] answer to that question? _

Paul K. Wotton

I can't comment on that Corey. I just don’t know.

Corey Davis - National Alliance Capital Markets

Okay, I will leave it at that. Thanks for the answers.

Paul K. Wotton

Thanks very much Corey.

Operator

The next question comes from [Wang Ji Li] [ph] from Ladenburg. Please state your question.

Unidentified Analyst

Good morning, and thanks for taking my questions. My new [Indiscernible] so I have two questions. Can everybody hear me?

Paul K. Wotton

Yes, we have got you.

Unidentified Analyst

Great. Thank you. So my first question is if I could get some more color on the Otrexup launch, specifically I want to see what kind of specific feedback and reception you got from the rheumatologist. You mentioned you received lot of positive feedbacks, so I wanted to hear a little bit more details and are there also do we hear any kind of negative or concerns from the rheumatologists?

Paul K. Wotton

Thank you. We will now hand that back to LeRoux who is right on top of this one. LeRoux?

LeRoux Jooste

Yes, thank you Paul, and a great question. One of the key things that we do is sort of a plan due check act policy here at Antares. So we continuously monitor and get feedback from rheumatologists directly through sales representatives, but also through market research. In fact we just completed our first ATU with over 100 rheumatologists [Indiscernible] so to speak, and to be more specific what I can tell you without a doubt is that there is a very high intent to prescribe, a willingness to prescribe and understanding of the clinical utility and the benefit that Otrexup can provide to these patients as their disease progresses.

I can tell you that there is an appreciation of support services that we provide and especially the samples that we make available to initiate treatment and more importantly the training material, the step up, start up kit, which includes the video, a patient brochure, a trainer devices, a useable trainer devices that the nurse -- office nurse or even the rheumatologist can use to demonstrate to the patient how to self administer and then they can in fact administer themselves the first dose in the office if they so choose to do.

And so the feedback is positive on the support material, the services and the intent to prescribe, the willingness to use is high and we have had a positive response from -- in fact, we haven’t had a negative response -- we haven’t had any rheumatologist say that they do not see any place for Otrexup, so I will leave it at that unless you have more specific questions.

Unidentified Analyst

Okay. Thanks very much. So just related to that you said training device, I was just wondering usually how long or how many rounds training that it takes to you get the patient comfortable and -- to inject themselves?

Paul K. Wotton

Well, I am going to speculate, which I probably shouldn’t do but I am going to speculate based on the actual human use study, and the trainer validation studies that we did where most patients, I believe, 98% of patients found this device easy to use and were able to use it by simply following the instructions without any specific training provided by a healthcare professional. In fact as you can see on the device itself, on the product itself, on the label, it's an easy three step process.

You simply remove the cap, remove the safety and then gently but firmly push down on the area where you are going to inject, which is usually the belly or the thigh, you hold it down, count ten and the injection is done. So it's not a very complex process. I think the single biggest factor that we now get feedback from is despite the fact that you don’t see a needle or feel a needle, patients still know there is a needle and needle phobia is something that is very common. So there is still a hesitancy to, am I really going to do this and again going back to our studies, we found that patients who actually successfully injected themselves, then said, is it done, have I actually -- is it really done, have I injected myself. So that very first attempt there maybe some apprehension, some concern, some fear as they do something which they have never done before, but again as we saw in the studies once they have done it, it's like, oh my gosh, it's amazing to see the response that they have actually done something, which they thought was going to be difficult or painful or whatever.

Unidentified Analyst

Okay. That’s great. So now I have additionally two questions. Another question is you mentioned the use of co-pay card to reduce the co-payer from $40 to about $10 by the patient itself. So I just wonder how this co-pay card program works. So you pay the extra money like $30 to $50 or [Indiscernible] into something.

Paul K. Wotton

LeRoux?

LeRoux Jooste

Yeah again, good question. As Paul had said earlier our goal is to make it as easy as possible. So simply a credit card type or debit card, this is a card that you receive from your physician office when you receive your training or you can download it from the web as a piece of paper and you simply take this to the pharmacy where you want your Otrexup prescription filled. You hand that card, or piece of paper to the pharmacist and from that point on it's all automatic.

The card number is a unique identification for that patient in that patient’s payer plan, and it stays valid for 12 refills or a 12-month period, whichever is over first. And it pays the co-pay up to $50. So let's say the co-pay was $70, the co-pay card would pay them $50 and the patient would pay $20. If the co-pay was $30, the co-pay card would buy down $20 and the patient would pay $10. There is always going to be a minimum $10 co-payment required for the patient. So there is no, you know, as far as the patient is concerned there is nothing else to do. They just simply hand that card over to the pharmacist and everything else is automatic. Does that answer the question?

Unidentified Analyst

Yeah. But does the patient need to pay back $50 like a year later or something?

LeRoux Jooste

No, no, no. It's the -- the patient doesn't pay -- the only financial obligation the patient has is to pay their insurance co-payments to the pharmacist when the prescription is filled and so for the tier 3 branded products that normally between $40 and $70. So if you took that prescription to the pharmacy, the pharmacist would say that is $50 please. In this case, they have given them the card, and the card is now worth if it's a $50 co-pay, the card would buy down $40 that's charged to us [Indiscernible] we pay that $40 and the patient pays $10. And this is administered by a third-party co-pay assistance vendor that does this pharmaceutical companies and it's a very easy process. We get billed once a month for all of the co-pay assistance cards that were processed.

Paul K. Wotton

Yeah. So the answer to the question is basically the patient just pays $10, that’s it.

Unidentified Analyst

Okay, great. Very helpful, thank you very much. So the last question turn to little bit direction, so for the QuickShot testosterone for the [Indiscernible] I just want to get some additional quantitative details. So basically I wonder do you get – are you able to get 75% of the patients into the [Indiscernible] range, because the [Indiscernible] so there I assume like a mean average concentration I just try to get it some more color on the

[Indiscernible] to specifically can you get over 75% of patients to use the enormity range without FDA dedicated team parameters?

Paul K. Wotton

Yeah actually the answer to the question is definitely yes. The data we got from that trial was phenomenally good. We had very nice flat blood level curves on the administration of the drug. As you probably saw or heard from the data we just described, we were able to with the doses we had to get to the upper range of the normal, as well as the lower range of the normal. So we have now got a dosing range there within that window that you need to hit in order to make sure the patients are actually within that range therapeutically.

We have got a meeting coming up with the agency, we are going to be planning out Phase III clinical pharmacokinetic study with them, but we believe we have the right product right now for testosterone replacement. It's an easy to use, once weekly injection, gives you phenomenal blood level control, and also with very low variability. We haven’t shown this in any of the data we put out so far, but we did run a comparison on with an intramuscular injection, and the data we saw on that was much more variable than we had seen with the subcutaneous shot.

So I am very comfortable about where we are with Otrexup. I am very comfortable where we are with testosterone. The other thing that I think I would say is that with all of this back -- behind us now, our goal in the company is to continue to develop these pipeline projects like testosterone. We are going to be adding another three this year so we have half a dozen pipeline projects by the end of the year, and if we can continue to have [Indiscernible] right we have with Otrexup and now with testosterone, I think that the value we are adding in creating this company is quite significant. The other thing on testosterone I would just say I don’t know if anyone has been following the news events recently, but I think the approval of Aveed is actually a good thing for entire Antares.

It paves the way for new branded injectable products into the market, and there was more good news this week from the -- actually it was published in The Journal of the American Medical Association on March the 5th of this month, where [Indiscernible] actually we are looking at the positive benefits of testosterone particularly actually on the cardiovascular system and I would urge anyone who is interested in this field to try to get hold of that JAMA article. It is on page 961 and review that because it actually revalidates everything we believe about testosterone as a product. There is a very exciting future here.

Unidentified Analyst

Great, very helpful. Thank you.

Paul K. Wotton

Thank you very much.

Operator

(Operator instructions) There appears to be no further questions. I will now turn the call -- conference back to Jack Howarth for any closing remarks.

John J. Howarth - Vice President of Corporate Affairs

Thanks Grace, and thanks again for joining us on today's conference call. If you have any follow-up questions you can reach me at (609) 359-3016. This completes today's call.

Operator

This concludes the Antares Pharma fourth quarter and full year financial results conference call. Thank you for participating. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Antares Pharma's CEO Discusses Q4 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts