Lauren Stival - Senior Director, IR and Corporate Communications Michael Anderson - CEO & Director Michael Kanan - CFO & SVP Gregory Davis - EVP & COO.
François Brisebois - Laidlaw & Company John Boris - SunTrust Robinson Humphrey.
Good day, ladies and gentlemen, and welcome to the Avadel Pharmaceuticals First Quarter 2018 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference may be recorded. I would now like to turn the conference over to our host of today's call, Ms. Lauren Stival. You may begin..
Good morning. This is Lauren Stival, and I want to welcome you all to Avadel Pharmaceuticals' First Quarter 2018 Earnings Conference Call. Before we begin, I will start with some cautionary statements.
The following presentation regarding Avadel Pharmaceuticals' plc includes a number of matters that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements.
These risks include risks that products in development stage may not achieve scientific milestones or objectives or meet stringent regulatory requirements, uncertainties regarding market acceptance of products and the impact of competitive products and pricing.
These and other risks are described more fully in Avadel's public filings under the Exchange Act, including the Form 10-K for the year ended December 31, 2017, which was filed on March 16, 2018.
Except as required by law, Avadel undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise. We will be using a slide presentation for today's call, which can be accessed on the investor section of our website or via webcast.
After prepared remarks, we'll be opening the call to question-and-answer period. On the call today, we have Michael Anderson, our Chief Executive Officer; Mike Kanan, our Chief Financial Officer; and Greg Davis, our Chief Operating Officer. At this time, it's my pleasure to turn the call over to Mike Anderson.
Mike?.
Thank you, Lauren, and good morning, ladies and gentlemen. As always, we thank you for joining us today as we discuss our first quarter 2018 financial results.
The first quarter of 2018 has turned out to be a very productive time for the company as we've achieved Orphan Drug Designation for our once-nightly sodium oxybate FT218 - continued to ramp up the FT218 study, divested our pediatric products, prepared for the long-term Noctiva, which is now shipping end of the trade and executed and oversold convertible offering, putting us into a position to ensure we continue to invest in our strategic growth catalyst.
We're proud of our organization and what we've been able to accomplish not only over the last quarter, but really over the last few years, as we've substantially transformed the old to the new Avadel.
We've assembled a team of passionate highly-qualified and experienced professionals, who are aligned around our critical business and growth priorities, and we're all working with one goal in mind, that being to execute our plans, thus ensuring we can succeed in everything that we do.
In many ways, this past quarter continues to form the foundation on which we're building the company moving forward. Q1 is a of 2018, a quarter, a year, where we're investing in our future and will be measured by our ability to execute and deliver.
Let's not forget, we have two big shots on goal with Noctiva and FT218, supported by market-leading, cash-growing hospital franchise and are well positioned both financially and from an infrastructure standpoint to leverage and build around our focus and emerging expertise in both sleep and urology. Starting with FT218.
We obviously disappointed investors with our announcement earlier this year that we wouldn't be in the position to file the NDA in 2018. Unfortunately, we did seem to leave investors believing the study was either barely progressing or not progressing at all, which I can empathetically state is not the case.
Today, we continue to recruit and enroll patients in the REST-ON study for FT218. As we previously described, our recruitment rates have increased substantially, and we continue to make good progress. Within the past several weeks, we've seen nearly a 30% improvement in our enrollment trends.
What's more? We are advancing the initiation of our new Australian sites where sodium oxybate is not easily accessible. This is important as we do expect Australia to provide an additional boost in enrollment. Also, we are opening additional sites in the U.S., Canada and the U.K.
We are already have or will have Avadel employees working closely in those sites, supplementing the efforts of the CRAs and the clinical coordinators, working one patient identification and ensuring best practices are being implemented. Our effort from this point forward continues to be focused on patient enrollment.
As mentioned on our last call, within the second half of 2018, we expect to be able to provide clear and unchanging guidance as to when we estimate the last patient in might occur. From that point forward, you can reasonably project a potential submission date of our NDA.
As we've stated many times before, FT218 shows real potential, and we believe will add the real value to these narcolepsy patients, who are seeking a substantially improved treatment option from the twice-nightly formulation, which based on our initial research, is quite high.
While we work on completing enrollment for Phase III REST-ON study, we continue to work behind the scenes on the myriad of current and future plans studies that will support both our product as well as our patent and regulatory strategies. Another large potentially significant catalyst is the launch of Noctiva.
So let me review some of the key highlights during the first quarter as we are just now launching the product.
In January, we launched our nocturia condition education campaign with over 20,000 sales calls and over 600,000 print and digital engagement impressions, reaching over 90% of our target audience through our What's Keeping You up at Night campaign, both highlighting the significant health impact, consequences and costs of nocturia as a condition for both health care professionals and patients, respectively.
We entered into exclusive partnerships with the leading clinical and scientific educational platforms in urology and adjacent specialist, who treat nocturia as a condition, and of course, with a focus on Noctiva as the solution.
We secured a unique therapeutic category for Noctiva with three major pricing compendiums, and gold standard, which indicated there is no therapeutic equivalent for Noctiva. This has been one of the key factors to our above-average market access environment within the first 60 days of launch.
We began shipping to the trade in March, approximately four weeks ahead of schedule, as we finalized our two-pronged distribution and patient access strategy for commercial patients and retail and Part D patients via our Noctiva Care Plus program, respectively.
We executed the a PI only launch during the first three weeks of April, whereby we have seen such shipping to the trade, approximately 150 prescriptions captured in retail by IMS, which as you may know is now known as and over 250 prescriptions referrals into our Noctiva Care Plus program.
During these first few weeks, we have seen a myriad of coverage scenarios and positive indicators of coverage. And currently, through third-party analysis and customer insights, we estimate that approximately 100 million patients are covered and have access to Noctiva.
When comparing to an more recent OAB product launch or even a more recent retail specialty focused launch with a similar patient demographic, our data will tell us that we are outperforming these comps from an access perspective within the first 60 days of the launch.
Of these 100 million patients, over 20 million of the patients are in a preferred brand position with AETNA AND THE BA, the BA providing care over 9 million veterans and most in our target demographic, very recently, instituted a coverage policy decision of Noctiva, which is quite robust and have specifically documented that there is no substitutable product for Noctiva.
The other approximately 80 million patients, who have access to Noctiva as a nonpreferred brand, come from nearly all major payers, either by policy such as Cigna HVSE or by benefit design such as United Health Care, ESI and CVS Caremark.
Over the past few weeks, we have seen both Part D and commercial prescriptions get covered with an out-of-pocket for as little as $8 to as high as nearly our list price, clearly benefit design, deductible status and payer coverage, are all important when assessing our market access situation for Noctiva.
This is something we will continue to monitor as our patient pool gets more robust. Right now, we're focused on in investing and creating a positive access experience, while we navigate the payer waters, which we expect to become clear over the next 3 to 6 months.
We have contract offer submitted with nearly all of the top plans, have had or have planned, clinical presentations with all of the top plans and currently have a number of pending P&T reviews. We are pleased with the access to these important customers we've been granted, the activity to our product profile and our approach to pricing.
We will provide any meaningful updates on this key driver as progress continues to be made and as appropriate. While we continue to pursue a favorable contracting and preferred brand status, we have planned a bridge with our patient access programs designed to have patients pay no more than $40.
These are fully operational, being leveraged for patient acquisition, and we will continue to monitor this overall impact. Finally, as of May 1, we trained and deployed our sales teams as we officially launched our brand-new campaign that will also have full exposure through digital and channels.
As with most launches, it will take several quarters to fully gauge the impact an update. However, we remain very bullish on Noctiva and its potential to both impact millions of patients, who are waking up too many times a night to urinate and to create substantial value for our shareholders. Moving to our hospital franchise.
Bloxiverz, Akovaz and Vazculep continue to provide us with high-margin sales that once again exceeded the street's expectations with $33.3 million in revenue. There are many, who had written these products off long ago, but we continue to generate leading market share positions and significant cash to fund our more strategic initiatives.
While these generic life products are a bit more difficult to model and have seen some declines, they have an nevertheless provided us with the opportunity to fund our clinical work of our Noctiva and raise capital.
As you know, we are currently working on developing a fourth sterile product, injectable project, that we estimate will be somewhere in the range of $30 million to $40 million in revenue per year. We previously discussed that we uncovered some safety issues that we feel the FDA will find meaningful and are still working for our development plan.
At this point, we've been able to substantially improve the products profile compared to the other diversion and have shared our preliminary findings with the FDA.
Our next steps in the development process are to complete validation and stability testing, for which we are very confident based on the extra work that will demonstrate an improved safety profile. Given the extra work to be done, we now anticipate filing our NDA around the end of the year, as we have previously shared.
Given the approval time at FDA, we still expect this to be a 2020 revenue opportunity. We are evaluating all potential regulatory, legal and commercial options that we may have based upon the improvements we've identified and intend to present our case to the appropriate authorities, including the FDA.
In February, we netted about $138 million from an oversubscribed convertible debt offering, which will ensure our liquidity as we invest in our most important growth catalyst, the launch of Noctiva and the enrollment of our REST-ON clinical study.
Furthermore, we are well positioned to seek out accretive and strategically aligned opportunities that can leverage the infrastructure that we have and our building. Now lastly, before I turn the call over to Mike Kanan, our CFO, I'll quickly mention something a little bit out of the ordinary.
We've received a number of recent inquiries from investors about a small Phase I study that was done a number of years ago using our extended-release subcutaneous Medusa technology with IL2. While small, our Medusa XL showed stable PK NPD profile with a stable duration of action of around 96 hours.
It's no surprise given the recent interest in IL-2 programs that we received inquiries and while we cannot say at this point if there is a path forward here, we will be considering it.
Given the number of questions that we received, I wanted to mention on today's call that certainly don't want to lead anyone to believe that we're entering the clinic or that a partnership is imminent.
Now with that, I'm going to turn the call over to Mike Kanan to review our quarter's financial results before I wrap up with some final comments and our Q&A session.
Mike?.
Thanks, Mike, and good morning to everybody. As you've seen in this morning's release, our first quarter revenues from our hospital products were strong and exceeded our expectations. First quarter revenue was $33.3 million, which was above the street estimates. As Mike discussed, our launch of Noctiva is underway across the U.S.
and as part of the initial stocking of wholesalers, we recorded slightly less than $1 million in revenues. This is a where we thought we would be, and we are very pleased with our launch progress to date. As we announced in February, we completed the disposition of our pediatrics products to Cerecor.
This aligns with our strategic progress and ensures our resources are deployed to our growth catalyst. Also some of you may know during the quarter, we settled all of the warrants we issued as part of the acquisition. We received $2.9 million in cash and issued about 603,000 shares. We call both warrants totaled previously 3.3 million shares.
Our bottom line results in the first quarter included about $14 million in Noctiva launch spending and is in line with our expectations. R&D spending in the quarter was almost $10 million, most of which was spent on our sodium oxybate trial.
The spending also is in line with our expectations as we continue to initiate new clinical sites and recruiting initiatives.
Although our operating cash flow was negative in the first quarter, cash flow generated from our hospital sterile injectable business, as you heard Mike say, continues to be positive and is an excellent source of cash, which we expect will continue for the foreseeable future.
These products carry gross margins in excess of 85% and carry very little sales and marketing costs for other overhead. So they are very profitable for us. As a result, this business continues to play a significant role in our enterprise strategy.
Coming off the heels of our successful and oversubscribed $144 million convertible debt offering, our cash balance was nearly $200 million at March 31. We are well capitalized to complete full launch of Noctiva, complete our FT218 trial and better selective additional strategic development opportunities.
And as a note of interest, we, like many other companies, adopted a new revenue recognition accounting rules in the first quarter. The adoption of the new standard did not have a material effect on the overall tiny or of revenue we recognized in Q1 when compared to our prior revenue recognition policies.
Now let's talk more specifically in how we performed in the first quarter. Revenue from the quarter, as I said, was $33.3 million, down slightly from Q4's level and down from $52.5 million in the Q1 of last year. Avadel revenues declines from Q4 and Q1 of last year, primarily as a result of lower volumes and pricing declines due to new competition.
This decline, however, was somewhat offset by higher unit volumes in Vazculep given the timing of the 2017 year-end shipments and growth in certain accounts. Although revenue from our hospital sterile injectable business has declined over the last year, as I said, they're still very important to us.
We will continue to look for unapproved drivers for other previously approved products that can the marketplace and provide good cash flow after cost of development and higher profitability of approval. Cost of goods sold was about 20% of product sales in Q1, up from about 12% in Q4 and 7% in Q1 of 2017.
The increase in cost as a percentage of product sales was due to a few things, including about $2 million of the inventory write-offs, costs incurred for certain expedited freight and lower product pricing. Including these onetime issues, gross margin would have been about 85%.
Keep in mind that the 28% royalty on Noctiva net sales will be recorded in costs, not in revenues. Research and development expenses during the first quarter totaled about $10 million, relatively unchanged from Q4, but up from almost 40% from first quarter of last year.
The year-over-year increase is a result of higher spending on our REST-ON clinical trial, including the new patient enrollment initiatives, cost associated with the initiation and opening of additional clinical sites and increased spending associated with the testing and scale of contract manufacturing services for FT218.
SG&A was about $25 million in the first quarter, up slightly from Q4, but up almost $13 million from last year's first quarter. This increase as expected was primarily due to about $12 million in costs incurred during this quarter associated with the launch of Noctiva.
Also included in SG&A in Q1 is about $3 million of pediatric product sales marketing costs. As a result of the divestiture, these costs will not continue for the balance of the year. Moving to our non-GAAP results are about $6.6 million in related consideration royalty payments and a new cost of $963,000 associated with our convertible debt.
This is the cash interest expense we have accrued on our exchangeable notes. Most of these royalties are related to the 20% gross profit royalty we part of our acquisition of the [indiscernible]. On a non-GAAP basis, Q1 diluted loss per share was $0.34, which includes about $0.31 of Noctiva spending.
As a result of these losses, we recorded a tax benefit of 14% or approximately $2.1 million. We believe that a large portion of the future Noctiva spend will be eligible to offset our U.S. taxable income attributable to our hospital products. As a result, this may eliminate or substantially reduce our U.S. cash taxes in 2018 and create a tax benefit.
We also expect U.S. tax reform recently passed will help us achieve a more reasonable income tax rate in the future. Let's move onto the next slide, which covers our GAAP results.
The primary differences between our non-GAAP and our GAAP income statements relates to how we treat expenses associated with acquisition-related contingent consideration, amortization of the Noctiva intangibles and interest expense on our newly exchangeable notes.
Please refer to the appendix to today's slide presentation for a reconciliation of our non-GAAP results to our GAAP results. As we said in the past, the largest GAAP to non-GAAP difference is related to our contingent consideration.
During the first quarter of 2018, we slightly increased our contingent consideration liability for GAAP purposes and accordingly recorded a charge of about $3 million due to slightly changing market conditions in our three hospital products.
Additionally, we differences between our cash interest expense and our GAAP interest expense associated with our exchangeable notes. Some of you may know for GAAP purposes, we have to bifurcate the notes between the debt component and the equity component.
For GAAP purposes, we record interest expense on the debt component at an interest rate commensurate with our specific credit profile and then for the term debt. But for our non-GAAP purposes, we will report interest expense using the 4.5% coupon, which came with the convertible.
The difference between the GAAP and non-GAAP interest was not all that material in Q1 given that the notes were only outstanding for a portion of Q1, but it will be more material in future quarters.
Our GAAP net loss for the first quarter was $12.2 million or $0.32 per share net income of $25.9 million or $0.61 per diluted share in the same period last year. Moving on to our cash flow summary. We ended the quarter at $198 million in cash and marketable securities. That's up from $94.1 million at December 31.
In February, as you know, we completed our exchangeable notes offering and received net proceeds after expense about $138 million. Simultaneously with the notes offering, we repurchased $18 million of our shares. And recently, we announced another modest $7 million share buyback. This brings our total board-authorized buyback program to $50 million.
Over the last 12 months, we've reduced our outstanding share count by approximately 12% as a result of these programs. And finally, we are reiterating our 2018 guidance. Our revenue guidance is unchanged at $105 million to $125 million, and our guidance for Noctiva revenue remained at $10 million to $20 million.
R&D spending also remains unchanged at $40 million to $50 million. And our outlook for SG&A continues to be $80 million to $90 million. Included in our outlook is about $50 million to $55 million in Noctiva spend. That's also unchanged.
Because of our anticipated losses in 2018, our effective tax rate is expected to be a benefit and will range from 0% to 10%. With that, I'll turn the call back over to Mike to conclude our prepared remarks..
Thank you, Mike, and thank you again for joining us today. Our company has executed a strong quarter. We're going to continue to strive to continue executing our near- and long-term growth strategies in our mission to become a leader in the specialty business.
And with that, we'll turn the remaining time over to any questions that may - that people who would like to ask..
[Operator Instructions]. And our first question comes from François Brisebois from Laidlaw..
So I missed the first couple of minutes of the call. So if it was already talked about, but I was just wondering the launch is going on, the commercial launch since yesterday little early.
Is there anything that he was our planning around AUA that's coming mid-time this month?.
Yes. Frank, this is Greg. We will be at AUA with a fairly robust presence. There will be - there's a nocturia program. We have a large product theater. We will have our lead breaker publication of data on Sunday and the number of other events surrounding some of our advisers so, yes..
Okay, but the full launch is officially taken off?.
Yes. They are out today with the full campaign as of really yesterday..
Excellent. And there is probably more for Mike. I was just wondering tax reform has clearly been complicated for this company for a little while or just taxes in general. How do you think that reforms could help in the future you mentioned that? Best..
Yes so that reform corporate tax rate to 21%. And as you know, the significant portion of our profitability is in hospital business. And that was previously taxed at the old corporate tax rate of 35%. So all of this tax reform has helped us with respect to the hospital business that we have. So that should be helpful to us as we forward.
Additionally, as you know, Noctiva is in the U.S. as well. That's currently generating losses. So we will be able to offset - even at a 21% tax rate, it will be able to offset much, if not all of the hospital business profitability with the Noctiva spend.
So from a cash tax standpoint, we don't expect to pay any cash taxes, very little cash taxes in 2018, and we should be in 2019 to be able to carry back potentially fund when We will have carryforward losses roll forward to 2019. So we're pleased with what tax reform taxes has done for us. As most companies with significant U.S. operations are..
Got you. And then, can you guys give any more color on the early preferred brand wins.
And what contributed to it? And the effect down the road of this? And now this, of key really year?.
Yes, Frank, Greg again. To me - to us, it's really a reflection of the work that was done really early part of this calendar year at the end of last year.
First and foremost is establishing Noctiva in its own therapeutic category, in particular in these compendias where both and pharmacies go to the determining what would be our competitive basket so to speak. That was an important outcome for us, which we achieved, and Mike covered that highlights a little earlier on the call.
So that was the first one. And then, secondly, in these recent wins with the likes of and now other government like and what not, what you see is strong clinical presentations, high to the proper product and the decision to provide coverage nearly immediately. So in these cases, we've been very pleased with the outcome of those wins early on.
And generally, I would describe that nature of that receptivity has been consistent in a number of our meetings. And as we've really focused a lot on Part D and we would expect to see more decisions, more formal decisions like these recent ones, coming down over the next, let's call it, three-plus months..
Excellent. And just lastly, hereon in terms of the REST-ON trial. So an update. You said more of a definitive guidance update in the second half '18 on last patient enrolled.
Where you mentioned there is more trial sites, 30% growth in recruiting? You guys given any color on number of sites? How do you ensure remind us that there is no added variability between - as you add more sites to the trial?.
This is Mike, Frank. Obviously, the protocol, it's been utilized with clinical study is the same, irrespective of site. And we do a great deal of due diligence, so does our CRO, in selecting these sites and making sure that the site is prepared both from a resource perspective and process perspective to be able to do that.
We will provide you with an update in the second half. Our Australian sites, which we've talked a little bit about, over the last couple of months, with sodium oxybate is a really to patients, we've already done a lot of work with those sites.
We have very high expectations that they will be and enhanced number of patients in those sites for just that reason. And that, of course, is a result of the requirement that patients to be sodium oxybate naïve, but also at the same time, we have seen a pickup, a significant pickup, as we said, 30% enrollment increase in our U.S.
Canadian, European sites within the last several weeks. And so we feel really good about the progress. But again, we have, on 2 occasions, as you know, we've set dates there and been a real to meet them. And we're not going to set another date out there until we can set one with the full assurance it will never be moved again..
Okay.
And then, so the number of sites, you're not giving any exact color on that?.
Yes, I don't know the exact number today that we actually have enrolling. But we've already talked earlier about increasing to somewhere in the neighborhood of between 60 and 70 clinical sites..
And the next question comes from Jason Butler of JMP Securities..
It's Ray for Jason. I've few initial questions on REST-ON. I wondered described a little bit more detail that 30% improvement in enrollment trends.
Does that mean that 30% more patients have been added month-over-month or is it some other measure? How much of that is due to the new sites? And can you tell us broadly where enrollment stands now, is it about or below 50% say?.
We are not in a position to be able to offer you any further guidance on where the enrollment sits. But 30% is for sites in enrollment into the study on an existing sites basis. So we have yet to - and we haven't and won't at least at this point, point you to where exactly we sit in enrollment process.
Unfortunately,, I think that when we fail to do that, and that's what we're doing again, and as we did it earlier, we people the impression nowhere in actually nothing, again, can be further from the truth. We've had growth in enrollment. The picked up in the beginning of the year. Not quite to the extent of that point, but we thought they should.
And had expected. But we've seen margin improvements since then. And we feel a little bit better by giving you that kind of information sometime hopefully in early second half..
Okay, great. And then I had a question on generic for Vazculep that was approved.
Was that expected and do you have any expectations for the impact on Vazculep from that?.
Yes. We've always modeled the appearance of new entries into all of those markets actually. We've seen new entries into both Akovaz and Bloxiverz at the tail end of year. We've been for Vazculep, we had Vazculep approved, we've shared the 1 mL space with another vendor. And we've always expected an additional competitor in the other two vial sizes.
And we'll address that accordingly. We have business that we have reliably supplied for a lot of years. It will certainly have an impact, but it won't be as if our business goes away..
Okay, great. And then, guess you guys are reiterating guidance for $10 million to $20 million.
Just generally there is a 1Q number and what we've seen in April give you comfort in that guidance? Do you think there is a greater risk that approves conservative now?.
No, I think right now, it's too early to tell. And we're pleased with the work that's occurred during the first three months to get it this point and the early progress, and we'll certainly have more to talk about in the coming quarters for sure, in that regard..
I think you have to recognize that these scripts that we've seen today, the initial scripts that were done with this cutdown launch of just the PI and in that sort of thing. So really you haven't seen the impact of our full-fledged launch. It obviously just started this week. So we feel good about the a response that we've gotten.
And will have to make sure, that plays out. But you should rest assured that's of now we're counting prescriptions..
And our last question comes from John Boris of SunTrust..
Congrats on the results, especially the level of detail you provided here. Just back to the guidance of $105 million to $125 million, just your assumptions, I guess, around that guidance.
Obviously, you've given $10 million to $20 million on Noctiva, but just your thoughts around any other pushes and pulls that you expect maintain guidance here and have a guidance going forward?.
John, we hate to ask you this, we were having some difficulty getting hearing your question. I'm sorry.
Would you mind asking, again?.
Sure. On the $105 million to $125 million guide on the sales, can you possibly just discuss the pushes and pulls of that, meaning the variables will cause you to raise or the variables cause you to go below the lower end of your range? Second question on Noctiva. Awareness, Greg is obviously very important especially from your positions.
Do you have any early preliminary information about the percent of physicians who have a good awareness of the asset? It might be too early to have prescribed just any thoughts around that.
And then, on the fourth injectable asset, can you mention how many competitors there are for that asset in the market? And what the safety features are? And then have one last follow-up on IL-2..
So let me take the first one, if I may, John. Then I will turn it over to Greg for the remainder of them. And with respect to pushes and pulls on the guidance that we've given, I think pretty much hysteric push and pulls.
It depends upon obviously in a dramatic changes in that injectable business and specifically as it relates to a new competitor coming in with strengths of Vazculep as to what happens to the price. As you know, in this business, you're always in a better position to be able to defend your share then you are to gather it from somebody else.
So we'll have to just see how aggressive they are. And we don't - we won't know not actually get into the market with that when that will be. So I think that - I think people who - I think supply chain issues, which people may from time-to-time have. If those come into play, that would also serve to help to us to some degree.
We've seen are slowing, I think, recently, in the uptake of sugammadex expansion of the overall neostigmine market a little bit. How much place [indiscernible] so there are a lot of pushes and pulls there. And then, with respect to Noctiva, the push and pull would whether or not we got out of the blocks.
We think we will whether we're faster than that or whether it's a slower pickup. So all of those things are typically today the pushes and pulls will impact that guidance. So right now, we're very comfortable as Mike said where we are. Now, Greg, take on the rest of the questions. If that works..
Yes, John. Regarding kind of our where we're from an awareness standpoint, I would say that we've done our baseline work a little, while ago. So it certainly prior to, I would characterize, launch and we'll obviously seek over the coming quarters, and we'll something report on.
But certainly appreciate the need for awareness and moving physicians along, if you will, to prescribing continuing from awareness to trial to adopt the adopter, so on, and so forth. So it's something we'll be able to report on in the coming quarters from the standpoint.
Regarding number four, what we said, we haven't described historically what the safety advantage is other than that we clearly have identified one in now. We have shared those findings with the FDA. That new information that we provided today.
Regarding competition, in the marketplace, over the number of years, I would say that, it's moved a little bit. There's been some parties that have been in and out to the supply challenges or whatever may be. So I would say that it's been a bit inconsistent in terms of the number of competitors. But from a molecule standpoint, fairly stable..
Can you quantify the number of molecules in the market from different competitors?.
No, not right now..
Okay.
On Noctiva, on awareness, where was it, and where is it and where are you looking to take it?.
Well, the awareness baseline we did initially was much more around Noctiva as a condition and how - what they're using today since we hadn't launched yet. The awareness on nocturia is quite high in our target audience. And clearly, we'll want to - ultimately, we strive to get 100% awareness.
In our current audience, we think that is obviously achievable..
Okay. And then, just moving very quickly on the IL-2 Medusa XL. If you can I just want to you're thinking about doing with this asset? And how does that compare and contrast to asset? Any advantages that it may have? And again, if you look at the value or market cap of next target at $14 billion, majority of this is because of that IL-2 assets.
So you have a nice little diamond in the rough year.
Can you just, maybe, articulate differences between the two and what you're planning on doing with this developing internally outlicensing it or other options?.
That's a great question, John. And I think, frankly, a lot of detail, it would be pretty premature to address. As we mentioned, we're [indiscernible] it's kind of ironic.
It mean that overall these years, the company had Medusa that people, who came into the company always commented independent experts what a great phenomenal technology this is and yet we were really never able to make it work with anything - that could be a number of reasons for that.
And then, to have made the decision to kind of look at their technology whatever the case, and now to see the potentially there may be an application for this exciting to us. At this point in time, it is so early that we - I can't define for you, what our plans are.
I think our first plans are to make sure how to determine whether or not we think there is an application not unlike the product. If the principal differences, as you know, our that this is a subcu administration versus an IV. What differences that have if any, we think is still yet to be determined. But we are looking at the product.
We're looking at the work that's been done. We have a analysis going on now. And we'll try to provide you with some updates as soon as we possibly can.
The reason we brought that up today it was simply because we had out of the blue, in our view, a number of people expressing interest in it and causes us to go back and that reviews ongoing and since it's complete, will try to provide you a little more color. That's about the best I can do today though.
And why don't you believe that we're starting in the clinic or in the Phase III, we're not in that point yet..
And your next question is a follow-up from François Brisebois from Laidlaw..
Just a quick follow-up. This was probably touched on. But obviously, it's very early here in the launch.
But what are - what is most challenging do you think in terms of awareness? Is it the recognition of nocturia as a disease of its own or just to really understand that this is whole with hyponatremia issues? And then, I guess, how much is used off-label at the moment?.
Yes, Frank, I would answer your first question as yes. It's both. And I'll describe. I think regarding nocturia, establishing it as a condition on its own and establishing it as a condition botherness.
The as the condition begins at two awakenings or more and that's really patient centric is where we need to ultimately get to really fully capitalize on the entire market potential. Like it's really easy to understand the in this. If it's four, five, six awakenings at night, right.
And so moving that and establishing the challenge, the issues, the bothersomeness and the impact on quality of life at as low as two and three per night is important as well. And that data exist to support that.
Regarding this establishing the first when first seeing our product profile, without any context, it's easy to immediately characterize it comparably to older formulations of That's easily addressed because obviously, we are very different in that regard.
But that is important and it's not so important because they write a lot about desmopressin right because every doctors different, but different reports to tell you it's anywhere from 5%, maybe 5% to 8% of the patient population. At times, they can get some formulation of desmopressin.
It's not because they desmopressin for these patients, but differentiating it from - it goes beyond that. It goes beyond to make sure, that we position ourselves for a broader patient population than just that 5% to 8%, right. So it's twofold in that regard. So it's both from that standpoint..
I'm showing no further questions at this time. I would now like to turn the call back over to management for closing remarks..
Once again, we appreciate very much your spending that time with us this morning, and we look forward to future updates on our progress throughout the second quarter and the year beyond that. We appreciate it. And we thank you and hope that you have a great day..
Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day..