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Antares Pharma Inc. (NASDAQ:ATRS)

Q2 2014 Results Earnings Conference Call

August 7, 2014, 08:00 AM ET

Executives

John Howarth – VP, Corporate Affairs

Eamonn Hobbs – President and CEO

Robert Apple – CFO and President of Parenteral Products Group

Analysts

Matt Kaplan - Ladenburg Thalmann

Ladies and gentlemen, welcome to the Antares Pharma Second Quarter 2014 Operating and Financial Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

I'll now hand the conference over to Jack Howarth, Antares' Vice President of Corporate Affairs. Please go ahead, sir.

John Howarth

Thank you, Joe, and good morning, everyone. Thank you for joining us on today's call. We announced second quarter 2014 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 information 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 potential benefits of OTREXUP and products in development, clinical trial design and outcomes, time of launch of products in development, growth in product sales and timing thereof and future collaborations in our device platform.

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 Eamonn Hobbs, President and Chief Executive Officer and Robert Apple, Chief Financial Officer and President of the Parenteral Products Group. After the presentation, we will open the lines for Q&A.

I'll now turn the call over to Eamonn Hobbs. Eamonn?

Eamonn Hobbs

Thanks Jack and good morning, everyone. Thanks for joining us on today's call. I am very excited to have joined Antares in June as President and Chief Executive Officer. My background in marketing and operations at companies developing and selling combination drug device products appears to be a perfect fit for Antares at this point in the company's evolution.

Having served on the Antares Board of Directors since 2009, I truly believe in the company's potential to develop and successfully commercialize self administered parenteral medicines to really 505(b)(2) regulatory pathway that can optimize clinical benefits and produce enhanced cost effective health outcomes.

We've shown what we can do that with the development and recent commercial introduction of OTREXUP and we believe that the QuickShot testosterone program may offer patients clinical benefits similar to OTREXUP's. And as we indicated in our last conference call, we are working on additional programs to our pipeline.

Now before Bob provides an update on the launch of OTREXUP and the second quarter financial results, I would like to review the company's second quarter achievements.

In April, the Annals of the Rheumatic Diseases published results in open label head to head randomized study comparing the relative bioavailability, safety and tolerability of OTREXUP methotrexate for injection to oral methotrexate in adult patients with rheumatoid arthritis of RA.

In this multicenter cross-over study, adult patients with RA undergoing treatment with methotrexate were assigned to receive one or four dose levels of OTREXUP weekly in a random sequence of three treatments; oral methotrexate OTREXUP in five and OTREXUP in abdomen.

For 24 hours after the administration of each treatment, blood samples were collected to measure drug levels and injection sites were assessed. 47 patients completed the study and the results show that the systemic availability of methotrexate following oral dosing plateaus at 15 milligrams and greater.

Following administration of OTREXUP, the systemic availability increased proportionately at every dose and that each dose was higher than oral therapy. No unexpected adverse events were noted for either formulation in the short-term study and higher systemic MTX exposure was not associated with increases in adverse events.

A study published in arthritis and rheumatism late last year show that almost one-third of our inpatients with early poor prognosis who were treated with oral MTX monotherapy were maintained in low disease activity for two years without progression of bone erosion and joint disruption. This benefit of MTX can be optimized by switching patients who have had an inadequate response from oral to subcutaneous MTX.

Another study show that MTX treatment can be optimized. About 75% of inadequate responders to oral MTX had a significant, excuse me, a clinically meaningful response after switching to subcutaneous MTX and almost one-third achieved low disease activity.

These studies, recent publications and our current bioavailability and tolerability data have helped to agitate rheumatologist and other office professional about the benefits of prescribing OTREXUP before other treatment options including costly biologics.

Historically for annual MTX use has been limited in clinical practice for several reasons including the inconvenience and weekly injections by healthcare professional and the challenges associated with teaching patient safe, sterile and precise self injection techniques.

To address these issues Antares has developed OTREXUP to optimize the clinical benefit of subcutaneous MTX as an option before biologics that may lead to a less costly and effective treatment of RA and psoriasis.

We have shown in studies that OTREXUP provides RA patients with not only greater bioavailability but a more precise and greater dosing flexibility utilizing a convenient at-home administration with an easy to use auto-injector thereby providing the potential to extend the use of methotrexate to higher doses before moving on to move expensive treatment options.

We continue to believe the value proposition for OTREXUP is a compelling room for patients, rheumatologist and third-party payers and month-over-month growth of scripts and number of physicians writing OTREXUP reported by Symphony Health Solutions is proof of this.

In the second quarter, we advanced the development of our QuickShot testosterone product. In May, we announced that we met with the US Food and Drug Administration to discuss a registration study for our QuickShot auto-injector in testosterone deficient adult males.

The study is designed to determine whether once weekly self administration of testosterone with a QuickShot auto-injector can safely achieve normal blood levels of testosterone in men with low testosterone, sometimes referred to as low-T. We were pleased to announce last month that the first patient have been dosed in that studyl more that study in a minute.

In June, we announced the presentation of a scientific poster and abstract at the 16th International Congress of Endocrinology and the Endocrine Society’s 96th Annual Meeting in EXPO held in Chicago, Illinois. The poster presented the final pharmacokinetics and safety results from patients treated with a once-weekly injection of testosterone administered subcutaneously with the company’s QuickShot auto-injetor.

The company’s previously reported interim results from this multicenter Phase 2 clinical study were also presented as a scientific abstract at the same meeting.

The poster displayed results from 29 adult males ages 31 to 69 with testosterone deficiency systems and screening testosterone blood levels less than 300 nanograms per deciliter. These patients were randomized into two groups and followed for 10 weeks. The first group received weekly 50 milligram testosterone administered subcutaneously with the QuickShot auto-injector and the second group received 100 milligram of testosterone using the same device and same sequence.

The main testosterone baseline was 244 nanograms per deciliter in the 50 milligram group and 243.7 nanograms per deciliter in the 100 mg group. Testosterone levels normalized within hours of the first dose.

At week six of the study when patients were at study state pharmacokinetic conditions the 50 milligram and 100 milligram groups and an average plasma testosterone values within the normal range of 422 nanograms per deciliter and 896 nanograms per deciliter respectively.

These results demonstrated rapid restoration consistent maintenance of normal testosterone levels and dose for personality of the 50 milligram and with 100 milligram strengths. The once weekly virtually pain-free administrator through a fine gauge needle consistently provided a precise dose of 0.5 milliliters.

Current topical treatments for men with low-T required daily administration and carried a black box warning for risk of transfer of testosterone to women and children. Intramuscular injections do not have this risk, but typically can be painful, difficult to administer, and can be associated with wide variation between testosterone peak levels and troughs potentially leading to side effects including mood swings.

We believe the outcome of this study suggest that weekly subcutaneous administration of testosterone using the company’s QuickShot auto-injector achieves consistent testosterone levels within the normal physiologic range reduces the peak and trough variation and prevents transfer by contact thereby eliminating some of the adverse events the FDA has been reviewing over the past several years.

Finally, as I just mentioned, in late July we announced that the first patient has been dosed in a double-blind multiple dose study to evaluate the efficacy and safety of QuickShot testosterone or QST administered subcutaneously once a week to adult males with testosterone deficiency.

Patients enrolled in the study must have a documented diagnosis of testosterone deficiency. The study will include a screening phase, a treatment titration, and efficacy phase and an extended treatment phase for evaluation of safety and tolerability including laboratory assessment, adverse events and injection site monitoring.

Approximately 150 patients will be enrolled in this study to ensure an adequate number complete the full duration of the study. Patients meeting all eligibility criteria will receive QST once weekly for six weeks.

Adjustment to dose may be made at week seven based on the week six pre-dose blood level. The efficacy of QST and dose adjustment to regulate testosterone levels will be evaluated after 12 weeks of treatment. Upon completion of this phase patients will remain on their optimized QST dose and will be followed for an additional 40 weeks.

Approximately 100 patients will complete collection of 26 weeks of safety data and approximately 50 patients will complete a collection of 52 weeks of safety data. We planned to work closely with the FDA on the filing of the application and we still expect to launch this product either in late 2016 or early 2017.

While we are on the topic of treatment low testosterone, I want to share two pieces of news that were released in mid July. First the Annals of pharmacotherapy published to study on-line in which researchers at the University of Texas Medical branch used a National Medicare Sample and compared the records of 6,355 men who had at least one testosterone injection between 1997 and 2005, with the records of 19,065 non-testosterone users. Study result show that the testosterone users were no more likely to have a myocardial infraction than the nonusers.

The researchers also rank the subjects based on their predicted risk of heart attack for other reasons and found that for men in the quarter with the highest risk the use of testosterone cut that risk by roughly 30%. It's important to note that the study only looked at men receiving testosterone injections not those using pills, patches, or gels.

Second the FDA denies the citizen petition filed by the Public Citizens Group, which requested that FDA add a block box warning about increased risk of heart attacks and other cardiovascular dangers to the label of all testosterone products, asked manufactures to send get a doctor letter warning physicians of serious adverse events require that medication guide for testosterone updated to include these new warnings and delay FDA approval of Aveed, a longacting injectable testosterone.

After careful consideration and citing numerous examples, the FDA denied the petition in its entirety and stated that it will continue to assess the cardiovascular safety of testosterone products on a product-by-product basis.

I’ll now turn the call over to Bob for review of the second quarter financials and then return to make some closing remarks. Bob.

Robert Apple

Thanks Eamonn. Before I go through the second quarter results I would like to make some brief comments about the metrics we are using to evaluate the OTREXUP launch.

Like many of you buy prescription data from Symphony Health Solutions or IMS, we analyze your OTREXUP prescription data on a weekly and a four-week rolling total basis.

Looking back over to six months since launch in February, OTREXUP scripts have grown every week except holiday weeks and the recent week of our National Plan of Action Meeting. The rolling four-week totals have shown growth every week and that includes refills, which are continuing to increase as new prescriptions increase.

Looking at other leading data such as prescriber data, again we believe there is strong evidence of a successful launch. June 2014 data, which is the most recently available data showed an increase of prescribing writing OTREXUP. According to Symphony Health unique prescribers increased from approximately 500 in May to over 600 prescribers in June. We believe that continued education of healthcare providers and new initiatives such as 0 co-pay program for patients should continue the growth curve.

Further analysis have shown that when we overlay the script growth of OTREXUP for the first six months compared to recent launches of other RA products the trends are very similar.

It takes time and effort to change the prescribing habits of rheumatologist even if the product such as OTREXUP has a compelling medical and value proposition.

Demand for samples remains high and insurance coverage continues to be strong. Script data through June 2014, shows that 10% of all scripts have been prescribed for dermatology. Our partner for the dermatology indication LEO Pharma has recently developed and launched the [psoriasis] (ph) for its 70-plus sales representatives, which should have a positive impact on dermatology prescriptions going forward.

We have seen a nice distribution of usage among the various dosage strength of OTREXUP with the majority of prescription being written for the 15 milligram and 20 milligram strength product as we predicted.

Going forward we have increased the call frequency for high potential prescribers as well as those who have already prescribed OTREXUP. While we believe we have a very comprehensive product detailed plan, we are constantly looking for ways to improve and enhance it.

Now for the second quarter results. Total revenues were $6.3 million and $5.8 million for the three months ended June 30, 2014, and 2013 an increase of 8%. For the six months ended June 30, 2014, the company’s total revenue was $11.5 million compared to $10.4 million in the first six months of 2013, an increase of 11%.

Product sales were $3.4 million in the second quarter of 2014 compared to $4.5 million in 2013. For the six months ended June 30, 2014, product sales were $5.2 million compared to $7 million in the prior year.

In the three and six months ended June 30, 2014, the company recognized net product sales of $1.7 million and $1.9 million from sales of OTREXUP based on over 4,000 patient prescriptions dispensed through June 30, 2014.

OTREXUP revenue recognized is net of estimated wholesaler discounts, prompt-pay discounts, rebates, and patient co-pay assistant programs. In the first half of 2014, the company shipped $4.2 million of OTREXUP products to wholesales and had a deferred revenue balance of $1.7 million at June 30, 2014. Based on current weekly prescription trends, we have approximately eight weeks of inventory at the distributors.

The others were usable needle preinjected devices and disposable components primarily to Ferring and Teva in the second quarter of 2014 and 2013 were $1.7 million and $700,000 and in the first six months of 2014 and 2013 were $2.9 million and $1.8 million.

Products sales in the second quarter and first half of 2013 included $3.6 million and $4.1 million respectively of initial sales to Teva of our Vibex auto-injector for Teva’s generic epinephrine auto-injector products. We anticipate shipping additional auto-injectors to Teva for the generic epinephrine product in the later part of 2014.

The first half of 2013 also included $500,000 of sales of our topical oxybutynin gel 3% product to Actavis in connection with their marketing of only 3%. Product sales in the first half of 2014 and 2013 also included sales of pre commercial pen-injected devices to Teva.

Development revenues were $1.8 million in the three-month period ended June 30, 2014, compared to $600,000 in the five-year period. For the six months ended June 30, 2014, the company’s development revenue was $3.2 million compared to $1.4 million in the first six months of 2013. The development revenue in each year was primarily due to auto-injector and pen-injector development work for Teva.

Our development programs continue to progress with Teva as well as Pfizer. We believe our legacy business of partnered products will continue to help grow not only our revenue line, but our device platforms as well. We also believe we will continue to see new partnership emerge with our device platforms, which will continue to balance our growth of self commercialized products and partner commercialized products.

Licensing revenues were $900,000 and $100,000 in the three month period ended June 30, 2014 and 2013 and for the first half of 2014 licensing revenues were $1.9 million compared to $100,000 in the first half of 2013.

Licensing revenue in the first half of 2014 was primarily attributable to revenue recognized in connection with our license and promotion agreement with LEO Pharma executed in November of 2013. The licensing revenue in the second quarter and first six months of 2013 was primarily attributable to recognition of revenue under agreements with Ferring.

Royalty revenue were $300,000 in the three month period ended June 30, 2014, compared to $700,000 in the same period of the prior year. For the first six month periods ended June 30, 2014, and 2013, royalty revenues were $1.3 million and $1.8 million. We receive royalties from Teva and Ferring related to needle free injected devices sales and our hGH sales from Actavis from sales of Gelnique and from Meda Pharma on sales of Elestrin.

The decrease in royalties in 2014 was primarily due to recall initiated by Teva of certain batches of our hGH drug product Tev-Tropin in April 2014. Not our [jet] (ph) device was patients used to inject their Tev-Tropin. Our royalties from Teva are based on sales of Tev-Tropin.

Total gross profit was $4.2 million and $2.4 million in the second quarter of 2014 and 2013 and was $8.2 million for the first half of 2014 compared to $4.9 for the first half of 2013. The increases were primarily the results of increases in developmental and licensing of revenue.

Total operating expenses were $13.3 million and $7.5 million for the three months ended on June 30, 2014 and 2013 respectively and were $26.1 million and $13.4 million for the six months ended on June 30, 2014 and 2013. The increases were primarily due to increase sales and marketing costs in connection with the launch of OTREXUP along with an increase in legal fees in connection with patent litigation.

Net loss per share was $0.7 and $0.4 for second quarter of 2014 and 2013 and was $0.14 and $0.7 in the six month period ended June 30, 2014 and 2013. At June 30, 2014, Antares had approximately $56 million in cash and investments compared to approximately $69 million on December 31, 2013. Finally we had indicated on previous operating results conference calls that we may be prepared to offer some OTREXUP topline guidance on the second quarter results call.

However, we believe that it is appropriate to take more time to continue to assess prescriptions and prescribing trends as well as competitive landscape before offering any type of OTREXUP revenue guidance.

With that I’ll turn the call back to Eamonn. Eamonn?

Eamonn Hobbs

Thanks Bob. Earlier on today's call, I talked about continued progress on both the commercial and development sides of the business. We believe that we are prepared for the entry of a potential competitor to OTREXUP and to the market whenever that might occur.

We also intend to continue vigorously defend our intellectual property as it relates to OTREXUP and all of our developmental products. While we believe the launch has gotten off to a good start and are pleased with the additional growth over the past several weeks in both new and repeat prescriptions, we plan to constantly evaluate data to determine where we can improvements in our performance.

As Bob said we are still in the process of evaluating the 2014 sales rep for OTREXUP given the potential for a new entrant to the market. On the patient side we've done some additional analysis on the first five months of prescribing data and have decided to enhance our co-pay assistance program to $0 co-pay at the pharmacy to be similar to a co-pay for biologic.

We believe that this program will help reduce confusion at the pharmacy and will also help patients that have either co-pay amounts or co-insurance. These changes to our patient assistance program should enable more patients to access the benefits of OTREXUP. This is just one example of a change in tactics we’ve employed as a result of staying on top of the early stage of our launch.

Thank you for attention. Operator, could you now open the lines for a Q&A session.

Question-and-Answer Session

Operator

(Operator Instructions) We will take our first question from Louise Chen with Guggenheim Securities.

Unidentified Analyst

Hi, it’s actually [Ben] (ph) on for Louise. We’re just wondering if you could give us some feedback you’ve had from physicians regarding OTREXUP and the possibility of taking any price increases there. Thanks very much.

Eamonn Hobbs

Well, overall the response we've had to the OTREXUP product from physicians has been extremely positive. The value proposition is as we expected. The benefits of continuing patients on methotrexate when they are longer receiving benefit from oral from oral dose methotrexate resonates with the rheumatologists and the launch results so far have validated our original thesis that OTREXUP has a very bright future. The second part of your question?

Robert Apple

Price increases.

Unidentified Analyst

Yeah.

Eamonn Hobbs

At this point in time, we aren’t anticipating any price increases.

Unidentified Analyst

Okay, thanks and then just how many sales reps do you have detailing OTREXUP at the moment?

Eamonn Hobbs

Currently we have 25 sales territories in the United States.

Robert Apple

We also have six MSLs that talk to the physicians from a medical standpoint.

Unidentified Analyst

Okay, great and then on the Vibex QST, what is the market opportunity you are looking at today?

Eamonn Hobbs

Well, it’s -- clearly the current testosterone market is vibrant and growing. We have not offered guidance as to our anticipated penetration with our QST platform but one of the things to consider in the potential of a subcutaneous testosterone is that the fastest growing segment of the current testosterone market is the intramuscular injection segment.

So the benefits of subcutaneous over intramuscular injection are many and including much lower pain, ability to inject at home and potentially less peaks and trough excursions. So we're very excited about the prospects of our product.

Unidentified Analyst

Okay, thanks and then just one last one, on the generic EpiPen application, do you expect this to be AB-rated?

Robert Apple

This is Bob. Our expectation is that it will be AB-rated. It's filed as an ANDA and we are obviously all of our labeling is done with a side-by-side basis of the -- for the listed drug and so we anticipate that the FDA will give us an AB rating.

Unidentified Analyst

Good. Thanks so much.

Operator

We will move along to our next question from Matt Kaplan with Ladenburg Thalmann.

Matt Kaplan - Ladenburg Thalmann

Hi, good morning guys.

Eamonn Hobbs

Good morning, Matt.

Matt Kaplan - Ladenburg Thalmann

Can you give us a little bit of detail in terms of OTREXUP with respect to where you are with payers and payer coverage, with that and then also in terms of how are physicians thinking about this in terms of their treatment strategy for patients, how does it fit into that [indiscernible] of different products that they have at their disposal especially for RA and for psoriasis as well.

Eamonn Hobbs

Well, starting with the second part of your question, how we see subcutaneous methotrexate fitting into the treatment paradigm for RA patients is that virtually all RA patients start out on an oral dose methotrexate therapy with the majority getting benefit from that therapy, but due to various limitations of that therapy the benefits of that therapy wane and the current standard of the care is to progress the patient to a biologic.

We all know that biologics are extremely costly and have a duration of treatment, so what we’re trying to create is a step between oral methotrexate and biologics where patients can continue to derive the benefits of methotrexate before they have to progress to the more costly and time limited biologics.

The bioavailability that we demonstrated and secured in our labeling shows that one of the advantages of subcutaneous administration with OTREXUP is that we can provide a higher bioavailability then what we can obtained or via oral methotrexate and for patients that are benefiting from oral methotrexate have shown a benefit.

It stands to reason that continuing that benefit and postponing need to progress to a biologic can provide some significant benefits. With regard to payer coverage, currently we have secured 90% coverage and are continuing to work to expand that.

Matt Kaplan - Ladenburg Thalmann

Just shifting gears a little bit to the QST program, can you give us a sense in terms of timing, can you give us a sense in terms of timing of the Phase III and when we should expect a potential read-out from that?

Eamonn Hobbs

Yeah, our expectation is that we’ll have the efficacy portion of the study the PK is really what it is, in mid 2015 and then the safety will continue on and our expectation is that this study will take up a little bit over a year obviously with it being a total of 52 weeks.

Enrolment's going extremely well, and we anticipate that that’s going to continue to enroll quickly and fully enrolled and we feel really positive about that program.

Matt Kaplan - Ladenburg Thalmann

All right, and then in terms of that program and the upcoming -- any comments on the upcoming FDA ATCOM meeting on testosterones.

Eamonn Hobbs

We’ve been watching what the FDA doing there in and at this point it doesn’t seem very robust and so we’re just going to be active listeners and see where they go with it. We don’t see any major event happening out of that and we’ll be watching with everybody else. I think that the safety of testosterone is establishes over years of use and each product is looked at on an individual basis and that’s will continue on a going forward basis.

I think that the rejection of the citizen’s petition on a wholesale basis from the FDA indicates where the FDA’s position is but as you know again generally the FDA looks at it product by product basis and I think that’s what potentially will be the outcome of this committee meeting.

Matt Kaplan - Ladenburg Thalmann

And there’s a couple of more questions to that. The EpiPen program. When should we expect FDA approval on that of the NDA?

Eamonn Hobbs

That’s a question that Teva can answer. They are working with the FDA on that filling. It’s their ANDA and obviously we hope that the approval comes shortly and we will keep an eye on that. But that’s Teva’s responsibility and not ours.

Matt Kaplan - Ladenburg Thalmann

Okay. Fair enough. And then just final question, in terms of the products that you already -- that you have on the market, so to speak already, hGH, Gelnique and Elestrin, can you give us a sense in terms of -- a little bit of guidance how do you think about those as from royalty prospective in going forward. Obviously there is a dip this quarter, you’ve mentioned based on some of the recalls of the Teva Tev-Tropin, but can you help us understand that?

Eamonn Hobbs

Yeah, I think that if you look back historically last year, you are going to see that those levels continuing for an indefinite amount of time barring the issue that we had with Teva with their Tev-Tropin and when that comes back in to play and we do believe Teva will start shipping hGH in the next quarter or so, but I think it’s a steady cash generating piece of our business that will see normal growth over the next few years, but it helps us put our money into new development program and our partners continue to detail all the products and there’s no -- there doesn’t seem to be any near-term issues with the longevity of those and so again I think that if you look at last year’s level with slight growth is typically what we’re going to see over the next few years.

Matt Kaplan - Ladenburg Thalmann

Great. Thank you for the detail and congrats on the products.

Eamonn Hobbs

Thanks Matt.

Robert Apple

Thank you Matt.

Operator

(Operator Instructions) We will take our next question from Akiva Felt with Oppenheimer.

Unidentified Analyst

Hi guys, this is actually [indiscernible] on for Akiva. Good morning.

Eamonn Hobbs

Good morning.

Unidentified Analyst

I just had a quick question with regards to the Medac product, Rasuvo. It was approved in early July. I was wondering, I am not 100% sure if its hit the market or not but I guess how are you expecting the dynamic of the I guess of this space to change given the fact that there’s another oral subcutaneous product on the market with similar dosing profile.

Eamonn Hobbs

Well, to our knowledge, Rasuvo hasn’t been launched yet and we don’t have insights as to when it would be launched. Medac is a product company headquartered, parent company being in Germany. So that’s about the extent of our knowledge there.

With regard to a competitor entering the market, we have to wait and see how Rasuvo is positioned but what we do expect to happen is that the overall market will benefit in size from the addition of a new competitor that’s working on creating this new space between oral methotrexate and biologics.

So the feel for us that is associated with Rasuvo will be beating us the similar drum with regard to the benefits of subcutaneous methotrexate and we’ll expect the market to benefit from that.

Robert Apple

Yeah I think too if you look at Rasuvo and OTREXUP, the products both have to be detailed and as Eamonn said, I think the more reps out there educating physicians on the use of injectable methotrexate is going to increase the market size.

Rasuvo is not an ANDA. It’s not therapeutically equivalent and so therefore they’re going to have to -- Medac will have to go out and detail the physicians and basically encourage physicians to use injectable methotrexate just we’re doing and I think that it’s non usual to have competition in this pharmaceutical world and we’ll be prepared for it.

Unidentified Analyst

Great and I guess next question on methotrexate, as I spoke to the expansion of the unique prescriber base from 500 to over 600 in June, I was wondering do you have any numbers for July as of yet?

Eamonn Hobbs

Yeah, the prescriber data is only provided from a monthly standpoint and the July data would be really available at the end of August and so our expectation is that it is going to continue to grow.

I think that that’s a key statistics that over 600 prescribers have already prescribed OTREXUP and there are about 3000 to 3500 rheumatologists so I think that’s a very good penetration in a very short period of time and I think a lot of the physicians are looking at certain patients and seeing a lot of potential there and so once they get comfortable using it, we expect to see an increase in our script as well as the increase in the number of doctors using OTREXUP.

Unidentified Analyst

I am sorry Bob. Just to clarify, the 3,000 to 3,500, that’s the targeted rheumatologists base or that’s the total rheumatologist base.

Eamonn Hobbs

That’s the total rheumatologist base. Right now we target around 1,500 and a little bit less as we look at -- every month we look at our targets and decide if we need to expand it or keep it the same and that’s normal and a new area in product launch is particularly in one way you’re trying to change the prescribing habit of the physician. So it’s just takes time and lot of calls to get that physician to remember about OTREXUP or of any injectable methotrexate and we believe we’re having success in that area and we’ll continue to have success.

Unidentified Analyst

Okay and I guess continuing on that line of, talking of about the breadth of the base, I guess, can we go into the depths as in how you’re seeing frequency of prescribers as in how many like if you could speak to how many doctors are predominantly ordering or just concentrating in one -- like a group of those 500 patients or if it’s spread out evenly I guess, pretty much…

Eamonn Hobbs

Yeah, it’s spread out pretty evenly. Like I mentioned, they’ll try it with one patient or two patients or something. Our highest prescriber through that period has probably only wrote 50 prescriptions and so it’s a really nice distribution among physicians.

So I think that educating them and then seeing the benefits is showing up and as they get comfortable really to potentially rank more than one or two patients and so I think we’re really happy with how the distribution is looking right now.

Unidentified Analyst

Okay. Great.

Eamonn Hobbs

Yeah, last week’s scripts were very, very impressive so yeah, hoping that trajectory continues and best of luck. Thanks for answering the questions.

Eamonn Hobbs

Hey, thank you.

Operator

And that concludes today’s question and answer session. I would like turn the call back over to Mr. Jack Howarth for any closing or additional remarks.

John Howarth

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. That completes today's call. Thank you.

Operator

That concludes today's conference call. We appreciate your participation.

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