Correvio Pharma Corp. (NASDAQ:CORV) Q4 2018 Results Earnings Conference Call March 13, 2019 8:00 AM ET
Justin Renz - Chief Financial Officer
Dr. Bill Hunter - President and CEO
Dr. Mark Corrigan - Incoming CEO
David Dean - Chief Business Development Officer
Conference Call Participants
Dewey Steadman - Canaccord
Swayampakula Ramakanth - H.C. Wainwright
PJ Solit - Potomac Capital
Good afternoon, ladies and gentlemen, and welcome to Correvio's Fourth Quarter and Year-End 2018 Financial Results Conference Call. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company's request.
I would now like to turn the call over to Mr. Justin Renz, President and Chief Financial Officer of Correvio. Please go ahead, sir.
Thank you, Jessica, and good morning. And welcome to our fourth quarter and year-end 2018 earnings call. On the call with me today are Dr. Bill Hunter, our current Chief Executive Officer; and Dr. Mark Corrigan who'll be succeeding Bill as CEO tomorrow; and Mr. David Dean, our Chief Business Development Officer.
On today's call, Bill will provide an overview of important recent developments, then I will discuss highlights of our fourth quarter and full year 2018 financial results. Bill will then introduce Mark and then provide some summary remarks. We will then open the call up for your questions for which Mark and David will also be available.
Earlier this morning, we issued a press release detailing Correvio's results for the fourth quarter and year-end 2018. The release is also available on our website at www.correvio.com.
Before we begin our formal comments, I'll remind you that various statements contained during this conference call relate to future results, events and expectations, and are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, or forward-looking information under the applicable Canadian Securities Legislation.
Forward-looking statements or forward-looking information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company or industry results to be materially different from any future results, performance or achievements expressed or implied by such statements.
A detailed discussion of the risks and uncertainties facing Correvio are discussed in the recent annual and quarterly reports of our former parent company, Cardiome Pharma Corp. and the recent quarterly reports of Correvio; the Short Form Base Shelf Prospectus we filed on July 5, 2018; the Prospectus Supplement filed on July 10, 2018 by Correvio; and those risks and uncertainties detailed from time-to-time in our other filings with the SEC and Canadian securities regulators.
With that, I will now turn the call over to Bill.
Dr. Bill Hunter
Thank you, Justin, and thank you everyone for joining us on today's call. As we initially announced in January 2019 and confirmed in this morning's press release, I'll be transitioning out of my current role as Chief Executive Officer tomorrow and Mark Corrigan has been named Correvio's new Chief Executive Officer. We'll talk more about Mark in just a few minutes, but I would first like to provide an overview of the company and then I'll be handing off to Mark.
Over the past six years my tenure at Correvio has evolved from a research and development organization to a fully integrated commercial specialty pharmaceutical company. We now have a broad portfolio of five marketed hospital products and a rapidly growing anti-infective franchise, which successfully generated revenues of US$28.7 million in 2018. We also have two product candidates advancing towards regulatory approval: Brinavess an NDA stage acute care product for atrial fibrillation in the United States; and Trevyent an MAA stage drug device combo that delivers treprostinil for the orphan indication of pulmonary artery hypertension in Europe.
The past several months at Correvio have been marked by significant achievements across a number of our ongoing programs and initiatives.
Turning to the next slide, I’d like to bring your attention to the five highly significant developments. Following productive pre-NDA discussions with the US Food and Drug Administration we plan to resubmit Brinavess, a new drug application during the second quarter of 2019. The FDA's decision to allow this resubmission was partially driven by the positive data generated from SPECTRUM a post authorization safety study conducted in the EU evaluating Brinavess in over 2,000 treatment episodes of atrial fibrillation which I will go into more detail about in a few minutes.
The original licenser of Trevyent, SteadyMed was successfully acquired by United Therapeutics during the third quarter of 2019, a deal we believe will be beneficial to the overall Trevyent program.
We also continued 2018’s strong performance in our proprietary product portfolio with 49% year-over-year growth achieved by our direct sales team in Europe.
And finally, during 2018, we completed an important strategic corporate transaction, the sale of our Canadian commercial business and product portfolio to Cipher, which will bring in a total of CAD$25.5 million in non-dilutive capital.
Moving to the next slide. We have an overview of Brinavess, which is currently approved in Europe, Canada, and in a total of over 40 other countries worldwide, marketed in 30 countries and we have now treated over 55,000 patients to-date. It works through a combination effect on cardiac potassium and sodium channels resulting in substantial antiarrhythmic effects that are mainly concentrated in the atrial. The key benefits of Brinavess include ease of administration, its rapid action, high conversion rate, and superior tolerability when compared to other approved pharmacotherapies.
Turning now to the next slide. As previously mentioned, following our discussions with the FDA in October, we intend to resubmit the Brinavess NDA during the second quarter of 2019. As you know, Brinavess or vernakalant is an intravenous antiarrhythmic indicated for the rapid conversion of recent onset atrial fibrillation in patients without significant heart failure.
Importantly, the FDA did not request any additional studies in order to resubmit the NDA. We expect that the regulatory review period for Brinavess will be approximately six months, so it is possible we could receive an FDA approval decision during the fourth quarter of 2019.
I'd also like to highlight that in support of our NDA application, we are now in a position to share with the FDA over eight years of real-world experience from the aforementioned 55,000 treated patients. Preliminary post-marketing surveillance data from the SPECTRUM study was made available to the FDA as part of our pre-NDA discussions.
Regarding our US intellectual property state for Brinavess, we’ve received independent regulatory and legal opinions that Brinavess may qualify for the maximum five-year patent extension in the US, significantly lengthening Brinavess' exclusive commercial rights into March 2031. If Brinavess is approved by the FDA, we anticipate working with the US Patent and Trademark Office to secure this formal extension, which we believe will have substantial positive implications for Brinavess' commercial potential. The recent advancement towards a resubmission of the Brinavess NDA has also opened up the potential for a strategic transaction around this asset.
And I’d just like to pause here and say that really as people outside of the company look at this asset and look at this opportunity, it really does diligence well, it really does present an interesting opportunity. The drug of course has this long clinical history. It’s been used in multiple countries. And I think that's really important because there are differences in the practice of medicine around the world. And despite the fact that this is used by different people and in many of the parts of the world, the drug continues to have very high efficacy rates routinely over 70%, sometimes higher. And the drug just doesn't seem to show any safety signal whatsoever. Meaning that not only is it -- it seems to be very effective, but we and others are successful in marketing this drug in a way that seems to make it really quite safe and quite consistent with what we've seen in the SPECTRUM data. I believe this will open up an incredible opportunity for the company one way or another as to how we manage the product going forward.
Turning to the next slide, we have a summary of the preliminary data from the SPECTRUM study. SPECTRUM was conducted as part of a follow-up measures agreed to with the European Medicines Agency in 2010. In this prospective and retrospective observational study, 1,778 unique patients receiving a total of 2009 treatment episodes were enrolled to evaluate and obtain data on patients administered with Brinavess.
The data for SPECTRUM was provided by 53 participating hospitals in EU and demonstrated that treatment with Brinavess successfully converted 70.2% of all treated AF patients into normal sinus rhythm. Treatment with Brinavess showed a median time to conversion of 11 minutes and we started the first infusion among patients who successfully converted. With respect to safety results, the cumulative incidence of health outcomes of interest defined as significant hypotension, ventricular arrhythmia, atrial flutter or bradycardia were reported in only 0.8% of patients. 28 serious adverse events were reported for 26 patients and no deaths were reported in the study.
We look forward to providing the full dataset from SPECTRUM which we will set will be published in 2019. The exact timing is dependent on which specific journal the study is published.
Another compelling data point that I'd like to highlight was collected from a clinical survey in Belgium looking at the effective Brinavess treatment on hospitalization in the acute AF patients. The data demonstrated that treatment with Brinavess successfully avoided hospitalization for 85% of all treated patients. Treatment with Brinavess also significantly decreased the use of electrocardioversion with 84% of patients avoiding the need for a DC electrocardioversion in any adverse events or costs related to this procedure. As a result of this impressive real world data, Brinavess received reimbursement approval from the National Institute of Health and Disability Insurance in Belgium. We believe the fast conversion times and the avoidance of additional procedures and hospitalization will be important to physicians and patients in other countries, particularly in United States.
We believe vernakalant is also very well positioned from a US pharmacoeconomic perspective. A real world experience in Europe and elsewhere suggests that Brinavess is often capable of converting a patient back to normal sinus rhythm in the emergency room setting, where they can then often be discharged directly home. Using Brinavess in this manner has potential to avoid costly hospital admissions, increasing efficiency and decreasing cost within adopting hospitals.
On this slide, we have a quick overview of the positive sales trends we're seeing in our anti-infective franchise. As you can see Zevtera and Xydalba continued to perform well. The fourth quarter of 2018 was our best quarter ever. January 2019 was our best month on record and we are already on target for a record first quarter in 2019 with respect to quarterly anti-infective sales.
I'd like to just pause here and have an overview of Aggrastat, not just as a drug and a key part of our portfolio but as an example of our business development and corporate finance creativity. We acquired this asset in 2013 through a merger transaction for the equivalent of approximately $20 million. This turned out to be a great move for the company. Today, Aggrastat has generated over $140 million in revenue for us and has helped keep the company funded in a non-dilutive manner which has enabled us to keep the share count low. Between Aggrastat, the safer transaction, our ATM and increased CRG loan, we now have sufficient capital to get us through to an approval decision from the FDA for Brinavess, an important financial flexibility to allow us to pursue strategic options for the overall Brinavess opportunity.
Aggrastat is just one example of the thoughtful and strategic transactions that we've executed in recent years and is a good model for the type of transaction we will continue to look for in the future.
Before I turn the call over to Justin to review financials, I'll just take a moment to review some of our upcoming milestones. We remain on track to resubmit the Brinavess NDA during the second quarter of 2019 which we expect will be subject to a six month review period for a potential approval decision during the fourth quarter of 2019. For Brinavess in China, there is a potential for us to be able to submit an NDA for the Chinese FDA this year, which could also be an accelerated review period. And we also can have approval in China this year as well.
Assuming all goes well with the FDA, we anticipate launching Brinavess in the US during the first half of 2020. With Trevyent, we still expect to filing the MAA in Europe once our new partner United Therapeutics submits their NDA to the FDA. They haven't provided any updating around the timing to the NDA submission other than to say they're preparing it. But we're still planning for the MAA to be filed some time during 2019 with the European launch to follow on approximately 12 months later.
With that, I'll turn the call over to Justin.
Thank you, Bill. First, I'll provide an overview of the fourth quarter 2018 financial results and amounts unless specified otherwise are expressed in US dollars and are in accordance with Generally Accepted Accounting Principles used in the United States. Revenue for the fourth quarter was $8.9 million, a 27% increase year-over-year compared to the $7.0 million generated in the fourth quarter of 2017.
Our direct market sales in the fourth quarter year-over-year increased by roughly 29% from approximately $3.1 million to approximately $4.0 million. Our fourth quarter distributed sales were also up by approximately 26% from $4 million to approximately $5 million. Cost of goods sold for the fourth quarter of 2018 was $1.9 million with gross margin in the fourth quarter coming in at 79%. Selling, general and administrative expenses for the fourth quarter was $9.9 million compared to $10.4 million for the same period last year. This decrease in SG&A expense was primarily due to lower contract labor and regulatory expenses along the way, along with lower stock-based compensation expense in the fourth.
Interest expense for the fourth quarter was $1.6 million compared to $1.9 million for the same prior period. For the fourth quarter of 2018, we recorded net loss of $6.4 million or $0.18 per share, compared to a net loss of $8.3 million or $0.24 per share for the same period in 2017.
Turning now to the next slide for our full year 2018 financial results. Revenue for the full year 2018 was approximately $28.7 million, compared to $24 million for the full year 2017, an approximately 20% increase.
For the full year of 2018, our direct market sales increased by approximately 49% year-over-year from around $9.7 million in 2017 to approximately $14.4 million in 2018. Our gross margin for the full year 2018 was 71.1%, compared to 71.8% for the full year 2017, again very close and this small fluctuation of gross margin was due to changes in the product mix as we had a higher percentage of revenue from our antibiotic franchise during the full year of 2018.
For the full year of 2018, our SG&A expense was approximately $42.6 million, compared to $36.7 million for the full year 2017. The increase in SG&A expense was primarily due to business development and transaction costs in connection with the Cipher agreement we did in May of 2018 as well as the extension of our direct sales force in Europe as we continue to watch and grow our antibiotic franchise led by Xydalba and Zevtera/Mabelio.
Interest expense for the full year 2018 was $6.0 million, compared to $5.7 million for the same prior year period. This slight increase was due to interest fee accrued on the higher long-term debt principal amount in 2018.
For the full year of 2018, we recorded a net loss of approximately $16.6 million or $0.47 per share, compared to $29.8 million or $0.90 per share for the full year 2017. This decrease in net loss was due primarily to the gain that we recognized on the disposition of our Canadian business portfolio to Cipher that Bill alluded to earlier in our May 2018 agreement.
As of December 31, 2018, had have cash, cash equivalents and restricted cash of approximately $17.6 million. As of March 12, 2019, we had approximately 39.2 million common shares issued and outstanding, approximately 3.5 million common shares issuable on the exercise of outstanding stock options, of which approximately 2.5 million are exercisable at a weighted average exercise price of CAD$5.02 per share and we also had approximately 59,000 restricted shares units outstanding.
Our cash used in operations for the full year 2018 increased to approximately $25.8 million compared to a use of cash of $24.8 million for the same period last year.
Just a few updates related to our corporate finances. We completed $11.7 million worth of common share sales under our B. Riley FBR ATM in January 2019. We recently terminated this ATM earlier this month. We expect to enter into a new sales agreement with -- as a Prospectus Supplement later this week with a different bank. We secured up to an additional $10 million from CRG earlier this week. Subject to certain conditions, these additional funds may be drawn one-time at our discretion an incremental $2.5 million between April 1st and September 30th of this year. There would be prepayment premium should be drawn with additional funds to be repaid early. And independent any possible transaction with Brinavess in US, the potential CRG fund provided for the financial flexibility could get us through US Brinavess decision and cash resources into 2020. As a reminder, our first principal debt payment is not due to CRG until June of 2020.
With that, I am now going to turn the call back over to Bill to introduce Mark.
Dr. Bill Hunter
Thanks, Justin. It is with great pleasure that I introduce Mark Corrigan, who has been named Correvio's next Chief Executive Officer and to whom I will be handing over the reins at the end of today actually.
Mark brings nearly 30 years of pharmaceutical research, development and regulatory experience in both US and global markets and he has been a Member of the Board at Correvio since 2015. You can see from this slide he has held executive leadership roles at several life science and pharmaceutical companies and he has been involved in the successful development and approval of numerous branded drugs during his career.
There came a point in time during our development that it just made absolute sense for Mark to take over the leadership of the company. And Mark was recruited to the Board for those skills that you're looking at right now. And in fact Mark and Bob Meyer have been instrumental in the interaction with the FDA. We've formed a special committee at the Board and those two have taken over a large part of the strategy and correspondence in interaction with the agency. And I think it's no small coincidence that we made such great progress last year on the Brinavess US follow as a result of that.
Looking forward, the most important thing this company will do is file that NDA, have that NDA accepted and ideally move on to approval before the end of the year. And it only makes sense that the most qualified person I know will be doing that.
So with that, I'd like to hand it over to Mark to say a few words.
Dr. Mark Corrigan
Thank you, Bill. This really is an exciting time for Correvio. Bill has built an incredibly strong management team and has guided the company from literally the access to where we are here in terms of a number of strategic opportunities.
The US Brinavess story has become a major value inflection point for the company. And I think we're well positioned to become a great hospital focused specialty company. One of the things that we aren't going to allow Bill to do is leave the company entirely and it's a great pleasure that he will continue to have his skill set and avail his capabilities as a board member going forward. I look forward to working with management team as we continue pursuing our goal and mission of bringing the new medicines to physicians and patients who need them. Bill?
Dr. Bill Hunter
Thank you. Big surprise, but I think I'll go off script here for my last few time. First, there's a lot of people I want to thank, the Board of Directors has been very patient and very understanding as we had to course correct many, many times over the last 6.5 years. The management team at the company I think is really, really highly skilled and perhaps even underappreciated by those outside these walls in terms of what they've been able to do. And most of all I would like to thank a core of really loyal and patient shareholders, who allowed us to steer this ship through many a rough sea on our way to where we are.
And I do want to just stop and think about that, how much has actually changed in six years. Six years ago we had actually more debt and less access to cash, a market cap of almost $15 million, less than $20 million and only eight employees. We now have 130 odd people and we sell drugs all over the world. That actually is not a simple thing to create. And it is not without value, independent of our markets or investors, value companies, there is real value to creating that type of franchise.
And in fact, the business plan when we started out was really quite straightforward. We all believed in Brinavess, we all believed that the drug should be approved. We all believed that it very well could be and in fact should be a very important treatment for atrial fibrillation that will bring benefits to clinicians and the patients that they get the drug, it will be a way to treat the disease that isn't really currently available. That's what we all want him to do.
Unfortunately, we had a broken asset and we had just been giving it back from a corporate partner. The only thing we could do, because we were on clinical hold meaning that we could not do clinical studies in the United States, is the only thing we could do is complete the SPECTRUM study that we had in Europe, which was a post marketing surveillance ready, one can’t do a post marketing surveillance study without marketing a drug.
So from scratch, we built an entire sales force in Europe. We did a number of transactions to keep the share account low and to finance this business in the least dilutive way possible. I alluded already to the Aggrastat transaction. But the Cipher transaction was another one of those. CRG has stepped up in a huge way to help us finance this turnaround. All of those were non-dilutive financings that amount to I don't and know, Justin, $230 million, $249 somewhere around there?
Dr. Bill Hunter
And so that has allowed us to get a huge study done in Europe that was very, very positive and the SPECTRUM study is a really nice study.
We got efficacy results that were better than could have been anticipated from the Phase 3 studies. There was no safety signal in that. There has been no safety signal in 14 or 15 other publications that have been put together that are another 1,400 patients. And there's no safety signal in 55,000 people treated in multiple countries around the world. So that plan all came together. It may seem like small things that have happened in the last quarter but they aren't, completing that ATM at the market, low fees, no warrants, no overhang, simple and effective financing followed by CRG once again stepping up to back our business. We are now in a position where not only have we got the drive to the NDA stage, not only will be submitted to the FDA but we have the cash resources to get through to that decision point and beyond and allow us to do what is right or prudent at that point in time. And fortunately I think we'll probably have a number of choices and a number of opportunities to do something with Brinavess because it is such a unique opportunity.
And in the process, while we're doing something else, I think we’ve built a really interesting business in Europe. It's growing direct sales wise close to 50%. European business is growing at 50% are actually not all that common. So the execution I think has been really incredible. Things don’t always happen on the timeline that you expect, but I think really the business plan has come together in a great way. And I couldn't feel better about the fact that Mark is taking over to shepherd the most important next step in the business, which of course is the filing and acceptance and hopefully approval of that NDA.
So with that, I'll just say it's been a true privilege to lead Correvio these past few years, and I look forward to continuing my engagement with the company as a Member of the Board and a significant shareholder, and with Mark and the leadership team in the coming weeks to ensure a smooth transition and a really great future. Thanks, guys.
Thank you. We'll now open the call for questions. Operator?
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Your first question comes from Dewey Steadman of Canaccord. Please go ahead.
Hey guys. It's tough to follow up on Bill's farewell speech but I'll give it try. Bill thank you so much for your service at Correvio and Mark congratulations on joining the great team. I guess my first question would be on Xydalba and Zevtera. It was great to see some progression in the fourth quarter. How should we look at that in 2019 and what steps can you take with EU hospital systems to either accelerate that or continue the growth trajectory there? And sort any impact from Brexit that we should be thinking about in 2019 especially for those two products? Thanks.
Dr. Mark Corrigan
Hi, Dewey. It's Mark. I think these battles are fought hospital-by-hospital. And it's really about gaining access. As you know, antibiotic sales are lumpy and due to seasonality. So I do have the benefit coming in after a great quarter that we have. And I probably think it’s again the steps that we're taking are we continue to identify basically hospitals within our territories that we can get on formulary and make the pharmacoeconomic argument particularly with Xydalba that resonates with regard to the type of patient that -- can get those to the emergency room and don't have to be hospitalized and receive retracted course of intravenous treatment.
Dr. Bill Hunter
I think one of the things that we track -- as you know Dewey we track the numbers of hospitals who are on formulary with and we track our depth and breadth within those. And what we believe when the data is imperfect, but I think, it’s close enough, is that we have somewhere between 2% and 3% market share right now. So not surprisingly, the first year has been about getting on formulary. Last year, we started to see the growth. But what really encourages me, if you look at that growth slide and you look at that bar chart and the accelerating growth, and in fact, February was in its own way, just as good as January it’s just isn’t shorter month in terms of sales. That means we've got a lot of room to go here.
And so do I think that's sustainable for years to come? Absolutely. We're doing well. We've got a foothold. We've gone from non-existent to a player in the market. But even for us to go from 2% to 10%, you can always appreciate how much that would mean in terms of sales and revenue. So I think we’ve just scratched the surface and we just came back from the European sales meeting and it's a really good team and enthusiasm is high and people are making money, because these are good drugs and there's high growth rate and that 50% is not accidental. So it's working quite good.
Excellent. And then you may not be able to answer this. But how should we approach revenue and expense progression in 2019? Obviously you're saying that, it could be a record quarter really for the anti-infective franchise in 1Q, but do you expect to build on that throughout the year? And then also with expenses are there sort of one-time key things that we should be thinking about for the Brinavess program that may hit in the first half as opposed to the second half?
Good morning, Dewey, this is Justin. So on the operating expense front, we were in that $42 million range in 2018. And we should be slightly higher than that when you corporate our expectations for the Brinavess NDA filing fees, as well as potential planning for an advisory committee meeting. So that ranges between $1.5 million to $3 million depending on what is expected from the agency trust to deliver. So we look for expenses to be in a range of $42 million to $45 million all-in for 2019.
From a revenue front, we're projecting growth in the 30s, we'll give specific guidance after the first quarter, when it get to more visibility into what our distributor projections are for 2019. That fluctuation in distributor revenue can move us a couple of million dollars either way, and so we’ll provide that feedback guidance in May.
Your next question comes from Swayampakula Ramakanth of H.C. Wainwright. Please go ahead.
Bill, you’ll be suddenly missed and congratulations on getting Correvio to this stage of growth and financial health. And Mark congratulations on coming on Board and I'm sure will be conversation quite a bit from here onwards. Just in terms of Brinavess, the poster that’s then be presented on next Monday, what -- could you folks give us some color as to what we should be expecting on that presentation?
Dr. Mark Corrigan
The -- we're willing to be -- I can't speak to the exact nature of the bubble poster, it’s going to be one of the European studies. There are about 11 studies that are being conducted post marketing. It’s going to be one of them that's down there. And I'll be there obviously at the ECC. Are you going to be in Sydney?
No, I'm not planning to be there, but I was just. Okay.
Dr. Mark Corrigan
I can send you the poster abstract too.
Dr. Bill Hunter
We'll be providing additional information next week. This was done by a collaborative, so we have an equal access to it yet.
Yes I just wanted to make sure that it’ beyond what has been presented so far, from the SPECTRUM and also from the other studies, some of the Belgium studies, so that’s what I was trying to get at. Okay. And then regarding the -- your statement in the press release regarding patent extension. So what is required of you folks to make sure that you fuel that five year extension up to 2031?
Dr. Bill Hunter
Well you can't file for it until you actually have approval. Obviously that US PTO doesn't want to spend time passing judgments on non-commercial opportunities. So to be clear, the only thing we can say right now is that we’ve had it looked at by people who file hundreds of these for a living and then evaluate those opportunities and they feel it is a very high probability that will get the five year extension. The composition matter patent on the drug is actually still valid, but the dosing patent was filed later, probably not surprisingly during that development of the drug it was then determined what the appropriate dosing was. And the drug has actually never been given any other way clinically in those 50,000 people or even many of the studies that were conducted from the earlier stage. But that dosing patent has a longer life to it. And so applying the five years to the dosing patent gets you to that March 2031, point to enhance. We can't say with certainty that we have dialed until we get approved and then we file and get that ruling from the patent office. But as I said we've had several people look at it, and in fact our General Counsel in-house is a patent attorney. And it is our sincere belief that we will get that extension.
And then in terms of the BD activities, you're projecting to have one additional molecule ready for much realization in 2020, so of the different therapeutic categories you work with, which ones would you be able to fair with and what sort of things are you looking for at this time?
Okay. It's David. Might not surprise you but higher in the list is antibiotics for additional products. There is of course we could commercialize anything within an acute care setting, but we’ve built that a really strong franchise of infectious disease. If you look at our sales force make up, we have a large proportion of it, is focused on antibiotics. So makes most sense to put another one of those into the bag, we get the greatest synergies of assuming that.
Your next question comes from PJ Solit of Potomac Capital. Please go ahead.
Hi. It's PJ Solit. First wanted to reiterate I guess what many people have said and what you said Bill that the -- you guys came into a tough situation and really creatively financed without much dilution. And -- but the shareholders are in position to have a nice reward before too long here. Thanks for that. I guess is there anything you can tell us, give us some sense of how discussions are going with potential partners for Brinavess at this point?
Dr. Bill Hunter
Yes. If you think about deluging assets probably no different than how you would do it. I would say what's nice is, does the drug work, is the drug safe and effective? I think most people believe once you've got 55,000 people, I think you have a pretty good idea of what's going on, and even events that are 1 in 10,000 events, you have an idea of what that rate is. So, that turns out really well. I think the other thing that's good about the drug is its diligence as well with respect to the market opportunity. Particularly in the United States, there hasn't been anything new on ACIP in a long, long time. And while DC cardioversion is broadly used and clinicians are comfortable with it, and I don't want to imply anything else, it still would be really nice to treat patient in 11 minutes that otherwise you would take hours and hours and have multiple consults and multiple procedures performed on. And when you think about managed care, when you think about this being covered by a DRG for Medicare, Medicaid patients and we're talking about the average patient here being definitely over 70, that -- the economic story around the drug is really quite good too. So when big pharma and others look at this, I think they have a real belief that this is a real market and that this could be a significant game changer with respect to how you would manage a really common patient in atrial fibrillation.
The biggest issue of course is the drug has complicated regulatory history. And it is we believe a shutter to the FDA, we think the FDA has done a really nice job in shepherding us along this pathway. The interactions we have had with them recently have been very directive and helpful and visual and that's something that you can only really understand if you're a part of the discussion.
If you just look at the minuted history of the drug, it goes back many, many years, as you can probably appreciate. And it's got a lot of history and nuance and elements to it. And so that's probably the biggest issue, it's probably the reason our stock isn't a lot higher than it is or probably should be, quite frankly. So that's it. And I believe, as we continue to de-risk the regulatory pathway, and last year it was a huge step in doing that. I mean SPECTRUM getting us to the NDA, the pre-NDA meeting, getting the go ahead to file in the NDA. That was --
I think create immense out of you. I think once that NDA is filed. I think once that NDA is accepted and now you're into the final stretch and review that will de-risk asset an awful lot.
So that's what we're focused on, that's where I think the money is in 2019 that's in the smart part why Mark is taking over. But -- and I think as that happens people will start to recognize that this really could be a transformational cardiovascular asset.
[Operator Instructions]. At this time -- excuse me. Please proceed.
Dr. Bill Hunter
No, thank you. Well with that, I actually will simply say goodbye on this one, and I will leave it to Dr. Corrigan to a say couple of words at the end here.
Dr. Mark Corrigan
Thanks, Bill. I think the last question really landed on the note that’s got us all very excited about 2019 as a year. This is a transformational opportunity for all small companies to be in possession of an asset that could fundamentally transform I think the entire treatment of atrial fibrillation and for an opportunity for US patients to receive the drug that’s approved in 30 countries and including most recently in Canada is a wonderful opportunity, and I look forward to sharing our progress with you as we go forward. Thanks.
Dr. Bill Hunter
Thank you. Justin, thank you.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.