Esperion Therapeutics, Inc. (NASDAQ:ESPR) Q1 2021 Earnings Conference Call May 4, 2021 4:30 PM ET
Benjamin Church - Head, Corporate Communications & IR
Timothy Mayleben - President and Chief Executive Officer
Sheldon Koenig - Chief Operating Officer
Richard Bartram - Chief Financial Officer
Conference Call Participants
Michael Yee - Jefferies
Jason Butler - JMP Securities
Geoff Meacham - Bank of America
Joe Thome - Cowen and Company
Derek Archila - Stifel
Jeff Hung - Morgan Stanley
Ladies and gentlemen, thank you for standing by, and welcome. At this time, all participants are in a listen-only mode. Following the presentation, there will be a question-and-answer session. Please be advised that today's conference call may be recorded.
I would now like to hand the conference call over to Ben Church, Investor Relations and Corporate Communications at Esperion. Please go ahead, sir.
Thank you, operator. Good afternoon, and welcome to Esperion's First Quarter 2021 Financial Results and Company Update Conference Call. I am Ben Church, and I am responsible for Investor Relations and Corporate Communications here at Esperion.
With me on today's call are Tim Mayleben, President and Chief Executive Officer; Sheldon Koenig, Chief Operating Officer; and Rick Bartram, Chief Financial Officer. I want to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by their cautionary statements contained in today's press release and SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 4, 2021.
We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast.
As a reminder, this conference call and webcast are being recorded and archived. We issued a press release this afternoon detailing the content of today's call. A copy can be found at www.esperion.com within the Investors and Media section. We will begin with prepared comments and then open the call for your questions.
Following today's call, the team will be available for follow-up questions. Please e-mail email@example.com to schedule 20 minutes to speak with the team.
I'd now like to turn the call over to our President and CEO, Tim Mayleben. Tim?
Thank you, Ben. Good afternoon, everyone. Thank you for joining us today as we review the progress made across our global business during the first quarter. I’ll start today’s call with a brief overview of our progress touching on the highlights from the quarter. Sheldon will review our recent U.S. commercial initiatives in greater detail and finally, Rick will provide additional color on our financial performance.
For this stage of our U.S. launch, our priority is to ensure that as many patients as possible have a positive experience with our medicines. From the start, we have purposefully positioned our medicines to minimize barriers around price and access to enable that experience. We have been unwavering in this commitment to patients following our mission of lipid management for everyone.
We entered the year with new commercial leadership who quickly identified and implemented a refined strategy to position our medicines for both near-term and longer term success. Today, we will highlight the great things happening across the business, but we’ll also provide you insights into the U.S. net revenue results for the quarter.
As you saw in our press release, our commercial team continued to drive strong prescription demand growth for NEXLETOL and NEXLIZET in the U.S. during the first quarter. In fact, almost 50% demand growth, but net U.S. revenue was negatively impacted by first quarter net pricing. Rick will provide more detail on the factors influencing this result and their impact on this quarter’s U.S. net revenue.
He and Sheldon will also provide you insights into the moderating impact of these factors on future quarters. We continue to be optimistic that there is an easing commercial environment as we see statin new-to-brand prescriptions recovering and patients taking their first steps to reprioritize cardiovascular health by returning to their physicians’ offices.
This reprioritization combined with our newly implemented refined commercial strategy provides us increasing confidence for a shift in demand growth in the second half of the year.
I want to turn now to a couple of announcements we recently made to advance our global strategic priorities to expand the reach of our medicines through strong and experienced ex-U.S. partners, while simultaneously strengthening our balance sheet.
Last week, we announced an expanded partnership with Daiichi Sankyo providing Daiichi exclusive rights to commercialize our medicines in select territories across the ASCA region, which includes countries across Asia, the Middle East and Latin America. The agreement builds upon an already highly productive relationship and reinforces both companies’ commitment to bringing novel, cardiovascular medicines to patients globally.
The $30 million upfront tied to the expansion of the Daiichi relationship came simultaneously with the announcement of Esperion securing the remaining $50 million from Oberland Capital under our existing revenue-based funding agreement. As a result, our pro forma cash at the end of the first quarter is around $300 million.
Turning now to Europe. The depth of Daiichi’s global cardiovascular expertise is evidenced by the success of their ongoing launch of our medicines in Germany, which will be followed by launches in other European countries later this year and into next year. The number of patients treated with our medicines in Germany during the first quarter increased significantly, already reaching near 14,000 patients by the end of the first quarter. Great progress continues in Japan as well.
I am pleased to report that Otsuka which owns rights to the bempedoic acid franchise in Japan continues to advance the clinical development of our medicines. Otsuka initiated Phase 2 development in April enrolling their first patient in a clinical study. More to come on this in future quarters.
Finally, I want to highlight that Esperion still retains full rights to China among many other ex-U.S. territories and of course, 100% commercial rights in the U.S. Now that the expanded partnership with Daiichi is in place, recall that we’ve already recognized approximately $400 million from our ex-U.S. partnerships.
We’ll be exploring all avenues to accelerate the speed and reach of our medicines to patients, physicians and payers in the U.S. Importantly, we will do this in ways that are in the best interest of our long-term shareholders.
I would like to end with this. Esperion, like most companies launching new medicines in the U.S. during the pandemic has experienced both expected and unexpected commercial challenges since FDA approval of our medicines in the U.S. last February. More broadly, Esperion has also experienced a number of important successes during this time both in the U.S. and abroad.
In our industry, there has been too little focus on the plight of people suffering from cardiovascular disease, still the number one killer worldwide. And as a lipid management company, we will continue pursuing our mission to provide these people with convenient, oral, LDL cholesterol lowering medicines. I am confident that our new commercial team is advancing Esperion in the right direction here in the U.S.
As a team we are absolutely committed to taking the necessary steps to elevate the U.S. commercialization of NEXLETOL and NEXLIZET and as I said a few moments ago, to do so in ways that are in the best interest of our long-term shareholders.
And with that, I’ll turn the call over to Sheldon. Sheldon?
Thank you, Tim, and good afternoon, everyone. Last quarter, I outlined several operational and commercial initiatives related to our Medicare Part D market access approach, enhanced product positioning and health economics and outcomes research and scientific platform that would result in a more competitive go to market strategy.
I am happy to say that as of today, the majority of those initiatives are in place or in the final stages of implementation, our new market access strategy has given improved onboarding and pull-through of payer contracts. There is an opportunity to present a refined clinical profile to payers, combined with our new strategy to improve the formulary status of our medicines with the top Medicare Part D providers that account for approximately 80% of lives.
Just this past quarter, two of our biggest commercial planned elevated NEXLETOL and NEXLIZET to preferred tiers. We anticipate a full reengagement with these top providers by the end of this year with potential adds throughout 2022 and possibly sooner.
In addition, I’d like to highlight that as of May 1, both NEXLETOL and NEXLIZET will be included on one of the largest U.S. payer formularies adding roughly 8.5 million Medicare Part D lives and bringing our Part D coverage to near 60%. A great success for Esperion and these patients.
Turning next to our enhanced product positioning. Throughout the first quarter, the team revitalized with great precision and simplicity, the market positioning and messaging of NEXLETOL and NEXLIZET to ensure physicians are provided the clear guide on the appropriate patient population that will benefit from our therapies. This new package was rolled out to physicians mid-April.
We also spoke about driving awareness of NEXLETOL and NEXLIZET to bring physician attention back to the unmet need in cardiovascular disease and the benefits of our non-statin oral medicines within a few short months our newly added health economics and outcomes research team paired with our world-class development and medical affairs teams launched a real-world evidence study in partnership with UT Southwestern Medical Center and Cerner Real-World Data to complement our clinical work and strengthen our scientific platforms.
We expect this study to conclude in the first half of 2022 ahead of our CVOT. I am very proud with the headway made during the first quarter and putting the pieces in place to improve our commercial strategy, which we expect will demonstrate increased traction in the months ahead.
In terms of our first quarter results, NEXLETOL and NEXLIZET averaged weekly growth of 3% outperforming that of ezetimibe, statin and PCSK9 on a unit volume basis during the period. Overall, prescriptions grew 46% quarter-over-quarter in spite of seasonal headwinds adverse weather in select regions and the apex of COVID cases in the first two months of the quarter.
Some metrics that are encouraging from a broader market perspective are new brand statins prescriptions, which are now down approximately 4% year-to-date, compared to last year’s pre-COVID levels or January to Early March 2020.
By comparison, during most of last year, new-to-brand statin prescriptions were down 30%. Similarly, in-office patient visits to cardiologists and general practitioners have improved modestly relative to the late March to early May trough in 2020. We continue to hear in our conversations with leaders in the cardiovascular space such as Dr. Peter Toth, the current President of the American Society for Preventive Cardiology.
The patients who have returned to physician offices have lifted panels suggesting a time very soon where patients will be forced to address long-term cardiovascular health. While it is clear, a gap in cardiology and general practitioner office visits and diagnoses still remain, we are encouraged that patients are beginning to take the first steps to reprioritize their cardiovascular health.
NEXLETOL and NEXLIZET new-to-brand prescriptions grew 8% for the quarter, driven by 24% month-over-month growth in March alone. This is a very important metric for the launch as these prescriptions compound over the life of the product. This has been more challenging during the pandemic, hence, our generous $10 prescription in co-pay cards.
Studies have shown nearly 25% of all new-to-brand prescriptions are abandoned when patients were asked to pay more than $20. This quarter, we saw an increased reliance on that co-pay program, more than expected reliance actually. The majority of this is due to the fact, our co-pay card supported patients during the time of increased economic card chips along with seasonal first quarter insurance deductible resets and other insurance dynamics.
As the economy continues to improve, we’ve adjusted and we’ll continue to adjust the co-pay card program to align with more traditional measures. At this early stage of the launch, the importance of patients having positive experiences at every step of the process and remaining on therapy is key to establishing patient goodwill and building momentum.
Having a co-pay assistance program was deeply valued by physicians and patients especially during these difficult times. And while adversely impacted net revenue for the first quarter, the underlying prescription demand growth of almost 50% was very strong and it is a good indication for patients on therapy and future scrip volumes.
I’d remind you that while patients have begun to return to physician offices, there is a natural lag from an office visit to a written NEXLETOL and NEXLIZET prescription dependent on step-throughs, prior authorizations and a number of other factors such as the number of necessary lipid panel, patient history and so forth. But it typically requires a few months from initial office visit to a filled prescription.
However, as we progress into the second half of this year, based on current trends, we have an opportunity to make an accelerated impact with our strategic commercial initiatives as we all emerge from this pandemic here in the U.S.
With that, I’ll now turn the call over to Rick for remarks on our financial performance.
Thanks, Sheldon. I’ll now provide some commentary on our first quarter financial results that was highlighted in our press release from earlier today. As Tim and Sheldon touched upon, our U.S. net product revenues during the quarter were adversely impacted by lower net price driven by higher co-pay card utilization and increases in managed care rebates.
Co-pay card usage was a contributing factor as a high number of patients remained on therapy and utilized co-pay cards as insurance deductibles reset. Last year, we designed our co-pay card program to prioritize patient access and affordability during the pandemic.
In addition, there was also an impact from additional formulary coverage that came into effect during the first quarter.
Based on the timing of the various payer contract started, Esperion has the original launch strategy buy down design of the co-pay cards in place as a bridge to ensure that patients under these plans could get on treatment with ease and stay on therapy reinforcing our commitment to ensuring patients have a positive experience in accessing our medicines.
Managed care rebate also increased during the quarter based on the timing of the various start dates of the payer contracts and again as Sheldon noted, two of our biggest commercial plans elevated NEXLETOL and NEXLIZET to preferred tiers.
We do not provide our gross to net discount rates for competitive reasons, but as I’ve stated previously, gross to net for our medicines will fluctuate due to seasonality as additional Medicare Part D contracts are implemented, coverage expands, and prescription volumes increase.
Over time, as we complete our contracting, plans fully implement coverage and volume scales up, we anticipate our gross to net for our medicines will normalize and net price will improve.
Accordingly, in the first quarter, U.S. net product revenue was $6.4 million, and total revenue amounted to approximately $8 million. This includes approximately $600,000 of royalty revenue from our collaborations.
On expenses, R&D expense for the first quarter totaled approximately $28 million, down 33% sequentially and 19% year-over-year. SG&A expense was approximately $61 million for the first quarter, which included a one-time charge of $13.3 million related to the settlement of a 2016 lawsuit.
Adjusting for the one-time settlement cost, SG&A expense was approximately $48 million for the first quarter. Up 15% year-over-year due to the commercialization of NEXLETOL and NEXLIZET and down 22% from the fourth quarter of 2020.
We continue to expect full year 2021 R&D expense to fall between $120 million to $130 million, and SG&A expenses to be between $200 million to $210 million. Note that these amounts are inclusive of approximately $30 million in non-cash expense for the full year associated with stock-based compensation.
Our pro forma cash balance as of March 31 is approximately $300 million including the funds to be received from the expanded Daiichi Sankyo partnership and the third tranche of our agreement with Oberland Capital.
With the additional milestones associated with the expanded Daiichi Sankyo relationship, Esperion now has over $1.2 billion in future milestone payments from our collaboration that we expect will feed our balance sheet with continued execution by our partners. We remain committed to prudently managing expenses and ensuring the organization is adequately funded to expand for the business.
In the second quarter, we once again demonstrated our ability to fund our company in an advantageous manner. Going forward, you should expect us to continue to balance cash spend against growth potential and cash needs to ensure that the business is adequately resourced for future growth.
With that, I will turn it back over to Tim for closing remarks.
Thank you, Rick. The first quarter was one of implementation and execution by our new commercial leadership team. We remain optimistic for a shifting tide in the U.S. with these new initiatives gain traction and the conditions for improved uptake of our medicines continues to improve. I want to thank our colleagues, and partners for their unwavering dedication and hard work week in and week out and especially to our shareholders for their continued support and fortitude, especially over the past year.
With that, operator, please poll for questions.
[Operator Instructions] Our first question comes from Michael Yee of Jefferies. Your line is open.
Hi guys. Thanks for the question and congrats on the recent capital additions. That’s great. I had two questions. One was, can you better explain the difference of net price change on the impact of total revenues?
In other words, as you take your scrip growth and look at the consensus numbers, I think you would have been around $11 million or $12 million, but you reported $6.4 million. Is the difference there essentially all rebating and I should think about net price going forward as 30%, 40%, 50% lower. Can you just talk about that and if we think about right?
Question two is for Tim, you mentioned many times you would love to do everything that are in the best ways of long-term shareholders. Can you just shed some light on what that means? Are there scenarios or options or things you are thinking about and help point us in the right direction. Thank you.
Sure. Thanks, Mike. I will answer your second question first and then, provide some commentary. So, on your first question I think, with the recent expansion of the relationship with Daiichi, that is another ex-U.S. deal that as you know it has a fortified balance sheet and also expanded its partnership with Daiichi Sankyo who has amazing strength in commercializing cardiovascular therapies.
We’ve already seen that in Europe and we will see it in the ASCA region as they get traction there. I think – as I think I emphasized and you certainly caught as well. Our focus now is on this improving U.S. environment. We see it, I think we all see it with the vaccination rates and other things that are developing here. Patients, as Sheldon said, returning to their physicians.
And so, we need to accelerate the speed and reach of our medicines to patients, physicians and payers, but again, we have to do that in ways that are in the best interest of our shareholders. So, I don’t think we can be more specific than that. But we absolutely have an interest in expanding the reach and speed of our medicines, but again, balancing that with doing what’s best for our long-term shareholders.
With respect to the comment about net pricing, maybe I’ll just highlight again something that both I said and Sheldon said, as well which is the very best indicator of the health of our franchise here in the U.S. is that prescription demand growth. Best indicator of our progress and health of the franchise. We are going to – as you correctly highlighted, we are going to see some variation in net pricing. But it will normalize.
So, I don’t think you should think of this as what we saw here in the first quarter as continuing, but I’ll tip it to Sheldon and Rick for a bit more detail on that, Mike.
Yes. Thanks, Tim. Thanks, Mike. So, I’ll start. As we highlighted in the prepared remarks, the impact on net price was really two-fold. Increases in rebates and utilization of the co-pay card. So, again, first on rebates, and again, specifically going back to comparisons of prior quarter, it’s – not necessarily apples-to-apples.
There is a seasonality impact, but there is additional coverage coming online naturally increased rebate expense. And that’s a good thing that it’s indicating pull-through on the payer contracts and as Sheldon mentioned, two of our biggest plans just elevated our medicines to preferred tiers. So that had a increase in rebate expense, as well.
On co-pay, I’ll start, but I’ll ask Sheldon to provide a little bit of commentary there. But during the quarter, we did see some seasonality in the first quarter. Increased benefits on the co-pay card really reinforcing our commitment to making sure that patients remain on therapy and have a good experience with our medicines.
So, with that backdrop, as Tim mentioned, as we complete all of our contracting, plans have fully implemented coverage, net prices for our medicines will normalize and improve. But there is a variability aspect given some seasonality. Sheldon anything to add on the co-pay card?
Yes. So, great, thanks Rick. And hi, Michael. Thank you for the question. First of all, again I think one thing that we are very encouraged by was, as Tim mentioned, the 46% growth that we saw quarter-over-quarter and that was – even keeping in mind that both January and February were two months where COVID was spiking. So we are pleased to see that.
The co-pay card program was designed really from the start of the launch and just to ensure that that pricing and access will not return and patients taking their medicines nor physicians prescribing. Due to COVID-19, we actually extended the program. It included additional benefits to support patients during, what we thought were generally economic hardship.
So, it’s extended from months beyond was normally it will be typically planned. And as Rick mentioned, even with commercial coverage in place, as we know first quarter, so it’s a tricky quarter. The co-pay card was a priority. We know that with managed care programs. They are adjudicating. They are going to prior authorizations, et cetera and we don’t want patients to wait for their medication.
So as a way to bridge patients over to the medication while waiting for insurance coverage to be pulled through. So, although it negatively impacted revenues for the first quarter, it’s a good indication of future prescription volume. Moving forward, we are adjusting our co-pay cards to better align with industry standards now that the market and the economy are improving.
Just yesterday, we heard of a 100 million people in the United States are now vaccinated and as we’ve said in the past, we always thought that we’d be moving more to normalcy as we got to the second half of the year.
So, let me just summarize as we gave you a lot of information, but highlighting that prescription demand growth which was almost 50% best indicator of the health of the franchise. We expect net pricing to normalize though.
And what that means is that we are going to see some of these effects to moderate going forward, the better economy, Q1 seasonality behind us and then, as you just heard, Sheldon say, over utilization of the co-pay card.
Got it. Thank you guys very much.
Thank you. Our next question comes from Jason Butler of JMP Securities. Your line is open.
Thanks for taking the questions. I had two also. Sheldon, you talked about the enhanced product positioning. Can you give us anymore granularity there about what your message now is? And was this a case of a lack of a win and so do you think there was any confusion with prescribers or potential prescribers that needed to be fixed?
And then, second question, it looks like that the prescription growth in the last few weeks of the first quarter, first couple weeks of the second quarter has come down somewhat. Any color there and in anyway tied to the rollout of the new commercial strategies and for example, as that works through, you’d hope to see a return to the growth rate you saw earlier in the first quarter? Thanks.
Great. Yes. Hi, Jason. Thank you for the question. Let me start first with your first question regarding positioning. I won’t go into all the specifics of the positioning , but the two areas that you mentioned, one being awareness, two being confusion. And in light of the company actually launching in a COVID environment, amplified both of those as issues.
What we’ve done now is, we truly have simplified our message and we are really having the ability now to tell physicians and what the appropriate patient is for both NEXLIZET or NEXLETOL can be used. There is many patients out there that are taking a statin and they are taking ezetimibe and they are still at LDL goal.
There is a significant opportunity there for NEXLETOL and NEXLIZET to play a role and with our favorable commercial coverage and also now with our improving Medicare Part D coverage with over 60% of Medicare patients covered, we feel that we have a significant opportunity. As it relates to prescription volume, in the first quarter, so, what we have seen is that, in the first few weeks of April, when you looked across the market, all products were relatively flat.
We were actually exhibiting approximately a 3% week-over-week growth and our hypothesis there was that it was flat due to Easter and many vacations et cetera that were taking place. That was actually – the hypothesis was actually proven via some IQVIA data that we received, which essentially showed that. I would say, in the later weeks of April, we’ve actually seen momentum continue as it relates to growth of NEXLIZET and NEXLETOL.
As a matter of fact, in the week ending April 23, we actually were surpassing most other products that you would compare us in the lipid market. And actually some products even in the diabetes market as well. And so, we have seen momentum starting to pick up and we’ll continue to monitor as the months go by.
Okay. That’s great. Thanks for the color. Thanks for the questions.
Thank you. Our next question comes from Geoff Meacham of Bank of America. Your line is open.
Hey guys. Thanks for taking the question. I just had a couple. So, when you think about the pricing environment, I mean, what would give you more leverage with payers aside from higher volume with the outcomes data next year for example have an impact, I am just trying to think about the pricing picture in the next year or two.
And then, just from a competitive standpoint, just wanted to know if on inclisiran, is there any kind of warehousing effects on any sort of pause, you think ahead of that launch? And maybe just help us with kind of how that you would expect that to shake up competitively. Thank you very much.
Yes. Thanks, Geoff. I’ll answer the second question first on inclisiran and then, ask Sheldon to comment on pricing. So, I think, like many of you we are following development in this space. We – I guess, like most folks don’t know, when the other injectible PCSK9 will launch. I think for the longest time we’ve been suggesting that that will be a competitive factor in the injectible PCSK9 space.
But as we’ve talked about previously the positioning of our medicines is as oral, once-daily therapies that are far more affordable than the injectible therapy is more convenient, more traditional therapies. If you think about the LDL cholesterol lowering space, and again, thinking about how other medications in not only in our therapeutic categories, and – categories, the philosophy is exhaust all oral options before going to injectibles.
So, we think that is a – it could be a potentially wonderful medicine for patients. It’s another win there, but we think it is in that category of injectible, PCSK9 and our medicines are clearly positioned as efficacious, tolerable medicines that are oral, convenient and used before injectible therapies. Sheldon?
Thanks, Tim. Geoff, let me speak to our payer perspective and messaging to payers and also your question related to CVOT, all this related to pricing. So, the first thing I would say is, from a pricing perspective, in all my years in commercializing products this is the first time that nobody has ever come to us to say you are priced too high.
I think for us, we have a impeccable market access team, combined with a HEOR team where we have been able to successfully position NEXLIZET and NEXLETOL, not only based upon the price, but the value that that product brings to not only the payers, and the patients. This is really also the last oral therapy before you have to go to an injectible PCSK9 and there is advantages to that as well.
Of course, CVOT will be an additional benefit in the future. But, something that we’ve actually have done. We’ve gone back to payers and the strategy that I talked about in the last question and that I talked about also when we did our announcement, that strategy is a clear strategy that payers understand and they now have a better appreciation of the fit of where NEXLIZET and NEXLETOL falls.
So, that is a combination with, as I mentioned, our health economic outcomes research story really helps solidify the positioning of this product. It’s the reason why Humana added it to their formulary, as well. As we mentioned that increases our Medicare lives to – by 9 million, almost 60%. So, that message is really resonated.
Okay. Great. Thanks guys. I appreciate it.
Thank you, Geoff.
Thank you. Our next question comes from Joe Thome of Cowen and Company. Your line is open.
Hi there. Thank you for taking my question. First one, just on any additional ex-U.S. partnership deals, how big of a priority is getting your partnership deal for China in reference to kind of balancing out the U.S. landscape first? Are you prioritizing that? And then, the second one was just on, sort of the cadence of the co-pay card.
If you can give us any additional details in terms of how many patients are using the co-pay card? And you did mention that $20 co-pay amount, 25% of new-to-brand prescriptions were abandoned. In-patients that do have full insurance coverage, is there still going to be some sticker shocks here if the co-pay card program is removed? Just how should we think about that cadence? Thank you.
Thanks. Thanks, Joe. I’ll take your first question. Again, I think the expanded partnership with Daiichi outside the U.S., the so-called ASCA region rather provides a story on other ex-U.S. geographies as you highlighted. And that gives [Technical Difficulty] leading companies in those geographies.
But I think as we highlighted [Technical Difficulty] really an emphasis here on this improving U.S. market [Technical Difficulty] and our real focus is going to be on [Technical Difficulty] our medicines to patients, healthcare providers and payers in [Technical Difficulty] I think where, that’s the focus, but I think as you highlighted, there is certainly [Technical Difficulty] focus has to be now on the U.S. Sheldon?
Thank you. [Technical Difficulty] to the co-pay card and with those adjustments have any effect on [Technical Difficulty] simply saying, no, we do not believe so. The co-pay card, what we are [Technical Difficulty] in the past it included additional months of benefit and what we want to do now [Technical Difficulty] to normalize the co-pay card, put less reliance on the co-pay card [Technical Difficulty] contracts. Again, we have over 90% coverage.
We are past that aspect of [Technical Difficulty] and have to go through prior authorizations and they are delayed. So, we see minimal [Technical Difficulty] and the co-pay card will still be available and to the question of how many patients were using it, again, it was mostly due to the fact of these patients not having [Technical Difficulty]
Great. Thank you.
Thank you, Joe.
Thank you. Our next question comes from Derek Archila of Stifel. Your line is open.
Hey guys. Good evening. Thanks for taking the questions and congrats on the progress here. So, just couple questions from us. Maybe the first one for Sheldon. As you think about, kind of easing of COVID restrictions and more people kind of going into the offices, do you have any specific commercial initiatives planned as you kind of move into that timeframe and certainly into the second half?
And the second question is probably for Rick. You talked about the milestones that you probe up here through some of these transactions and deals that you’ve done. Any color on when we could see another milestone? It would be more commercially driven or would it be something regulatory-driven around the outcomes data? Thanks.
Great. Yes. So, what we’d be doing as we emerge from COVID, obviously, the [Technical Difficulty] on pulling through our new strategy and also going to position [Technical Difficulty] redefined our charging list based upon our new positioning. The [Technical Difficulty] effective May the 1st a few days ago. So really making that a priority [Technical Difficulty] are really within our demographic.
We are also amplifying our medical science liaisons. We are rolling out a new scientific platform. [Technical Difficulty] education at two major meetings, both ACC and AAC [Technical Difficulty] NEXLIZET and NEXLETOL. So, really creating that surround sound and the awareness that [Technical Difficulty] that was launched and we are excited about these programs.
I mentioned the real world [Technical Difficulty] southwest with Dr. Eric Peterson, formerly a [Technical Difficulty] physicians will be involved in the study, touching the product, et cetera. So that’s [Technical Difficulty]
And Derek, to cover off the question on the collaboration milestone [Technical Difficulty] The completion of this expanded relationship with Daiichi over $1.2 billion [Technical Difficulty] to expect in the future.
In terms of context, there is a mix between [Technical Difficulty] base, but then there is also a healthy portion related to sales-based milestones. [Technical Difficulty] We’ll continue to come in and feed our balance sheet as one, [Technical Difficulty] completion, finalization of the cardiovascular outcomes trial [Technical Difficulty] execute commercially in their respective territories. [Technical Difficulty] on the timing of when those will be or expected to be received, but obviously [Technical Difficulty] everyone as we report quarterly.
Got it. Thank you.
Thank you. Our next question comes from Jeff Hung of Morgan Stanley. Your line is open.
Thanks for taking the questions. Sorry if part of this is the repeat. Part that was breaking out. So I am not sure if this is my line. You mentioned plans to adjust the co-pay card going forward. Would that decision point be triggered by some metric like time on market or a number of scrips or is there something else? And then I have a follow-up.
Yes. We just heard - I just got a message as well that [Technical Difficulty] I apologize for that. I am just going to check to see if you can hear me clearly for just a second. Can you?
Yes. It faded out a little bit. But I can hear you.
Okay, great. Maybe I’ll – I am going to switch positions here, sorry. Okay. [Technical Difficulty]We are in a room here and really my boss’ glasses. Okay. So [Technical Difficulty] your question, as it relates to the co-pay card program, the program [Technical Speech] really to provide access to patients. We kept it going [Technical Speech] there is economic pressures hardship, et cetera.
Typically, the co-pay card is [Technical Speech] extended months beyond that, months beyond what was typically planned. I think what [Technical Speech] with the commercial coverage that we have in place, we can rely more on [Technical Speech] receiving the coverage through their insurance companies [Technical Speech] if you will, as we went into the first quarter, I should say the first quarter [Technical Speech] and prior authorizations to get their prescriptions.
So we want to make sure they had a bridge to get [Technical Difficulty] now we feel that based upon our coverage as it relates to [Technical Difficulty] that we are going to be focusing more on utilizing our contracts [Technical Difficulty] and hence we better adjusted our co-pay card to align with essentially industry [Technical Difficulty] improving as well. We will not have to rely on that benefit as much.
Okay. I think I got that. Thanks. And then, can you talk about how the DTC campaign has gone relative to your expectations? And what kind of decision factors remain to determine if you might run a traditional consumer TV campaign, if that's even something you are considering? Thanks.
Sure. Yes. [Technical Difficulty]And I think there is a time in a place for DTC but now [Technical Difficulty] active DTC campaign currently ongoing or planned. We are really just focusing on our [Technical Difficulty] and thought leaders to pull through our products.
Thank you. [Operator Instructions] One moment. Thank you. It looks like our next question comes from Paul Choi of Goldman Sachs. Your line is open.
Paul. Are you there?
Yes. I am here. Can you hear me?
Okay. Great, thanks. So, first question is, just on the prescription side, can you update us on what the current refill rate is? And just how it's been trending over the prior quarters? And then I had a follow-up.
Yes, hi, Paul. Our refill rate actually looks comparable to other products. We've benchmarked it to products such as Entresto, Jardiance, Rebastinib, et cetera. And it's in the high 50s. Of course, you're never going to get a 100% from a refill perspective. But we are encouraged by our refill rates.
Okay. Thanks for that detail. Then, as a follow-up on the co-pay program, given the sort of pay out framework you've laid out with 90% commercial and the 60% in growing Medicare, just in terms of the timeframe for the first sort of the phasing or transition of the co-pay program, is that over the course of 2021 really the right timeframe that you are trying to guide the street to? Or it will just continue to be still a factor or a driver in the 2022 timeframe, as well? Thank you very much.
Sure. Let me just speak to the co-pay card itself and I'll ask Rick, if he has any additional questions. But as it relates to the co-pay card and what we're doing to essentially better align it with industry standards that's happening immediately. We are doing that right now. We are working on that and that's something that we should have completed – will be completed in the next few weeks or so.
Yes, Paul, and this is Rick, just to follow-up on the question on the co-pay card, gross to net. Again, just kind of coming back, we don't provide gross to net estimates or rates obviously for competitive purposes. Those will continue to vary. So, we are not providing guidance on that topic. And then, obviously, as it relates to revenue, no revenue guidance this year, but you should expect it – you should expect that next year.
Okay. Thank you.
Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating and have a great day. You may all disconnect.
You're welcome. Have great day.