David Arrington - Vice President, Investor Relations and Corporate Affairs Denny Lanfear - President, CEO and Chairman Jean Viret - Chief Financial Officer Vince Anicetti - Chief Operating Officer Paula O'Connor - Executive Vice President, Clinical Development and Medical Affairs Jim Hassard - Senior Vice President, Marketing and Market Access Chris Thompson - Senior Vice President of Sales Michael Chen - Senior Vice President, Commercial Analytics and Trade.

Ken Cacciatore - Cowen and Company Mohit Bansal - Citigroup Mike Old - Baird Jason Kolbert - H.C. Wainwright Chris Schott - JPMorgan.

Ladies and gentlemen, thank you for standing by. And welcome to the Coherus BioSciences Third Quarter Earnings Conference Call. My name is Michelle, and I will be your conference operator for the call today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded.

I would now like to turn the call over to David Arrington, Vice President, Investor Relations and Corporate Affairs. Please go ahead..

Thank you, Michelle and good afternoon everyone. After close of market today, we issued first quarter financial press release. This release can be found on the Coherus BioSciences' Web site. Joining me for today's call will be Denny Lanfear, President, CEO and Chairman; Dr.

Jean Viret, Chief Financial Officer; Vince Anicetti, Chief Operating Officer; Dr. Paula O'Connor, Executive Vice President, Clinical Development and Medical Affairs; Jim Hassard, Senior Vice President, Marketing and Market Access; Chris Thompson, Senior Vice President of Sales; Michael Chen, Senior Vice President, Commercial Analytics and Trade.

Before we begin our formal remarks, I would like to remind you that we will be making forward looking statements with respect to product development plan, all of which involve certain assumption, risks and uncertainties that are beyond our control, and could cause actual results to differ from this statement.

A description of these risks can be found on our most recent Form 10-Q, which we filed this afternoon aftermarket closed. In addition, Coherus BioSciences does not undertake any obligation to update any forward-looking statements made during this call. I will now turn the call over to Denny Lanfear, President, CEO and Chairmen of Coherus..

Thank you, David and thank you all for joining us today. As announced last Friday, we are excited that on November 2, 2018, the FDA granted approval to UDENYCA, the first pegfilgrastim and biosimilar approved in both the United States and Europe.

We'd like to thank the FDA for the official review of the submission, and I would like to thank my entire our team at Coherus, as well as our strategic partners for working tirelessly to bring UDENYCA to patient.

As we previously guided to the market, Company was confident that the resubmitted immunogenicity and comparability package would support approval in the U.S. just as it did in Europe. I would also note that UDENYCA was approved with full label and with full three year dating.

We believe UDENYCA's approval will enable Coherus to deliver significant value to all stakeholders in the intelligent marketplace, which we'll provide more color on little later in the call. Now, let me discuss pricing and availability of UDENYCA in the United States.

UDENYCA's list price will be $4,175, which represents a discount of 33% over Neulasta's list price and is also below Neulasta's current average selling price of $4,422. We will discuss the price rationale in more detail in just a moment.

But I would note that most importantly, we believe this price will deliver long term economic benefit to patients and savings to the health care system. This price also reflects long term value that UDENYCA is poised to deliver in terms of quality of services in oncology marketplace, including to patients.

Beyond list price, we also have contracting plans that we believe will deliver additional value to payers, providers and patients in the long term, facilitating uptake and market conversion. Now with respect to the launch timing, UDENYCA will be available for patients on January 3, 2019.

We believe this is the best date for our product launch for a few reasons. First of all, there's a lead time for product approval to completing packaging and labeling for our final product, which is now well underway. Vince Anicetti, our Chief Operating Officer, will discuss this a little further later on the call.

Moreover, our Medicare acute code is expected to be available on January 1st. This is important timing to consider as acute code is a key requirement to support seamless reimbursement to our Medicare patients, which constitute about 50% of the market. We do not want our customers to experience any reimbursement missteps upon starting utilization.

Lastly, commercial payer formularies typically reset in January, which will allow us to align their decision timing with our launch, allowing us to synchronize timing with these essential market entities. On today's call, we'd like to provide some additional color and detail with respect to the value proposition in the market.

So I've invited three members of our commercial team to join me, and they will expand on some of the market dynamics in the different segments and how UDENYCA's value proposition will deliver underneath of each. First, Mr. Jimmy Hazzard is our Senior Vice President of market and market access.

And Jim will expand on our value proposition in each of those places. Mr. Michael Chen is with us and he’s our Senior Vice President Commercial Analytics and Trade. And Mike will provide initial details on market structure, segments and the opportunity in each. Mr. Chris Thompson is with us, he's our Senior Vice President of sales. Mr.

Thompson will discuss our organizational structure, as well as our strategic plan for approaching our customers. Mr. Vince Anicetti is with us, our Chief Operating Officer. As I indicated, he will discuss the product launch, preparation status of the supply. And of course our Chief Financial Officer, Dr.

Jean Viret will discuss with you our quarter three financial results. Finally, let me now introduce you to Dr. Paul O'Connor, our Executive Vice President of Clinical Development and Medical Affairs. Today, Dr. O'Connor will be discussing with you our approval and our medical affairs support plans for launch. Paula.

Thank you for the introduction, Denny. With the approval of UDENYCA, the team at Coherus has delivered on our promise to bring high quality biosimilar products to the market and thereby improve access to important biologic drugs for patients, delivering choice without compromise.

In getting UDENYCA approved, we at Coherus, have demonstrated our leadership in biosimilar drug development and clinical science. The team has delivered a clinical trial program that is supported U.S. and EU approval, while adding to the understanding of the immunogenicity of pegfilgrastim product.

Getting approved was the first step in delivering our promise. The medical affairs team will extend our leadership position in biosimilar development by providing patients and other customers with the information needed to confidently utilize UDENYCA.

The medical affairs team will focus on educating patients and caregivers about UDENYCA, the biosimilar development, pathway and the potential for biosimilars to ease the burden in cost and healthcare. The team will also work to understand the issues faced by our customers and choosing to utilize UDENYCA.

Our medical affair field team is staffed with advanced practice nurses fund the PhDsand MDs, all with more than 60 years of industry experience. The team is being deployed throughout the nation to support the successful launch of UDENYCA. We look forward to the success of this launch.

I will now turn the call over to Jim Hassard, VP of Marketing and Market Access, to discuss UDENYCA value proposition..

Thank you, Paul. Needless to say the Coherus commercial team is excited to have FDA approval of UDENYCA. As discussed on our last call, our overall launch strategy is to provide a holistic value proposition to all stakeholders that goes beyond pricing and includes patient and reimbursement services, high quality staff and reliable high quality supply.

Choice without compromise is not a slogan it is a promise to deliver value to patients, providers and payers in a customer friendly manner. We are committed to world class execution in terms of access and reimbursement, sales force effectiveness, brand planning and scientific support.

In September of this year, we began advertising our coming soon patient and reimbursement services under the corporate brand of Coherus Complete. We've received good feedback from providers regarding the breadth of the service offering aimed to rival services offered for Neulasta.

Coheruscomplete.com has been launched and will serve as the portal where patients and providers will access various reimbursement related information and services. These services will include co-pay support for eligible UDENYCA patients. With the FDA approval of UDENYCA, we've also launched UDENYCA.com.

As we proceed towards product availability, we'll continue to build out UDENYCA.com as a resource and reference center for providers. You should also note that with Coherus first product approval, we have updated Coherus.com to include UDENYCA and additional resources regarding biosimilars.

An additional component of the UDENYCA value proposition is obviously pricing and contracting. As Denny mentioned, our list price or wholesaler acquisition cost of $4,175 per unit is 33% lower than the list price for Neulasta. This price is attractive to payers without diminishing the value proposition of UDENYCA.

Many commercial payers continue to base their payment of drugs on a schedule involving list price. This means that the list price of UDENYCA has the potential of delivering significant savings to commercial payers compared to Neulasta.

I should also note, as Denny noted that UDENYCA list price is lower than the average selling price or ASP for Neulasta, which will deliver immediate savings to Medicare and patients as well. Starting tomorrow, we will begin communication of the UDENYCA list price to providers, payers and pricing compendia.

The FDA approval of UDENYCA also allows us to complete and submit our application for various reimbursement codes to the center or Medicare services or CMS. We expect to have a CMS Q code for UDENYCA by early January, coinciding with product launch.

For more detail on the launch opportunity, I'd like to turn it over to my colleague Michael Chen, Senior Vice President Commercial Analytics and Trade.

Michael?.

Thanks Jim. I'd like to add a few comments about how we see the pegfilgrastim biosimilar market and opportunity. Neulasta and historically has been one of the largest oncology biologics in the U.S., representing roughly $4 billion in sales annually. It is backbone support of care to myelosuppressive chemotherapy.

Generally, pegfilgrastim therapy is episodic with a high degree of patient turnover and with many new patients. Thus, lower barriers to adoption versus smart therapy with many stable patients. The market has several segments, which have varying economic drivers.

We believe that we have opportunity to bring value to the various market segments, especially those which are disadvantaged on pricing. There is still need for biosimilar. However, the oncology market has had experience with more successful U.S. biosimilar entry and believe success in the short acting G-CSF market.

We have done considerable market research and have had many discussions with key stakeholders to understand the main value drivers and best practices.

The key market stakeholders are composed of group purchase organizations for GPOs, which facilitate pricing and contracting for community policy clinics 340B and non 340B hospitals and of course the payers.

The current Neulasta pricing structure creates economic winners and losers, generally with larger clinic customers benefiting and hospitals being more disadvantaged on pricing.

We believe that we have built the proper value drivers and customer support to bring value to the different stakeholders and maintain critical services to support patients and providers. Finally, UDENYCA will be able to bring immediate cost savings, lower out of pocket patient costs and long term aggregate savings to the healthcare system.

We have studied, planned and ready for launching UDENYCA into the market. And I would like to introduce, Chris Thompson, Senior Vice President of Sales, to talk more about our launch. .

Thank you, Michael. Good afternoon, everyone. I'm very excited to provide you with an update on our plans for a robust and successful launch of UDENYCA. In terms of our field ramp up, we are pleased to announce that all of our field sales and support physicians are fully staffed, trained and deployed.

Our field team is comprised of seven regional sales directors and 67 oncology account managers, which are our frontline customers facing team; seven key account directors aligned to our regions, which call on large IDNs and oncology clinics; three group purchasing organization National Account Directors who cover accounts like Vivian, Premier, ION, McKesson, Vital Source and Apexus; four Payer National Account Directors who focus on national, regional and government payers; seven medical science liaisons who align to our sales regions and can engage in deeper clinical discussions with providers; and seven field reimbursement specialists whose focus will be on oncology provider billing and reimbursement employees.

I'm truly excited about the caliber of people that we've been able to attract and their excitement for bringing UDENYCA to market. This team has over 1,700 years of combined pharmaceutical experience and over 800 years of oncology experience.

They are an extremely talented in the areas of contracting and the buy and bill oncology business model, as well as being knowledgeable of their targeted customers. In terms of sales force size, the Coherus field team is a size consistent with a traditional branded biologic launch, and supports our branding of choice without compromise.

As a sales organization, we intend to be front in center in supporting our customers as they choose UDENYCA for better patient access, support and value. Additionally, I'm confident this team will be able to deliver sales and support to ensure significant market penetration.

As Mike Chen previously discussed, we'll be focused on segments of the business that have pent up demand and desire to derive true cost savings for their patients, and want to achieve that savings without sacrificing critical patient support services, which we will provide. One such segment is hospitals.

As a matter of fact, the largest GPO, representing hospital providers, Vivian, recently issued a press release entitled Vivian's applaud FDA approval of biosimilar UDENYCA. This truly represents what I hear from customers on a routine basis as they attempt to balance the high cost of important medicines with delivering high value care.

During the tie between now and launch, the team is focused on sharing the clinical and economic benefits of UDENYCA with providers; helping customers understand our patient support services, branded under Coherus Complete; securing dates for hospital P&C review and approval of UDENYCA; securing GPO contracts and gaining commitments for first orders in January.

In summary, let me end where I started. We have a very talented sales organization that's excited and prepared to compete and we have the right tools and strategies necessary to deliver on the promise. With a robust supply at hand, my team and I are able to focus on executing on a comprehensive launch across all segments.

Now, let me turn it over to our Chief Operating Officer, Vince Anicetti, who will further elaborate on our abundance of supply to satisfy the market demand.

Vince?.

Thank you, Chris. I'm happy to review our production plans and progress towards or January launch. First, I'm pleased to say that we remain on track with our production operations to support a vigorous launch. We are proud to say that all UDENYCA manufacturing operations performed in USA.

Our 2018 drug substance and drug product launch campaigns have been successfully completed. We have abundant market supply capacity and we are prepared to meet our highest expected demand for an extended period of time. With the FDA approval, we have begun our product label and packaging operations.

Our first batch has begun to arrive at the main distribution site later this month, and will be available for our January 3, 2019 launch. In addition to our production status, which is going very well, I would like to add a few positive notes from our FDA review that was completed recently with the approval.

First, as Denny mentioned, the UDENYCA drug product was approved at the shelf life of 36 months. This reflects excellent product quality results and a robust stability program, and will provide us additional supply chain flexibility in the future.

In addition, subsequent to our last earnings call, we received and successfully completed two additional FDA inspections at our production and testing sites. These inspections included KBI Biopharma, a drug substance manufacturer and a contract microbiology testing laboratories.

All UDENYCA production sites have successfully completed FDA inspections during the course of the FDA review, and our production networks has achieved a consistently positive inspection record with U.S. and EU regulators, and our quality organization is working with all of our sites to ensure that we maintain this record in the future.

With that, I'll now turn over the call to Dr. Jean Viret, our Chief Financial Officer. .

Thank you, Vince. I will now walk you through the main aspects of this quarter's financial performance. Research and development expense decreased this quarter over the same quarter last year by $11 million.

The decrease in R&D expenses period-over-period was mainly due to a reduction in manufacturing, clinical and analytical costs associated with our anti-TNF programs, CHS-0214 and CHS-1420. These cost decreases were partially offset by the costs associated by the manufacturing of UDENYCA.

Again, this quarter just like it is the case or previous recent quarters, we are expensing all costs related to the production of UDENYCA. Now that UDENYCA is approved for commercialization in the U.S., we will capitalize those costs into inventory, going forward.

General and administrative expenses increased by $11.4 million this quarter over the same quarter of last year. This increase was mainly attributable to the costs associated with hiring a sales force and completing the commercial infrastructure to launch and sale UDENYCA in the United States.

Net loss attributable to Coherus over the third quarter of 2018 was $58.8 million, or $0.87 per share compared to a net loss of $60 million or $1.09 per share for the same period in 2017. Our cash, cash equivalents and marketable securities totaled $117.2 million as of September 30, 2018 compared to $159.8 million as of June 30, 2018.

Our use of cash in operations during the third quarter of 2018 was $42.8 million, below our guidance of $48 million to $53 million for third quarter. I will turn over the call back to David Arrington..

Thank you, John. We will now open up the line for questions.

Operator, could you please put through the first question?.

Our first question comes from Ken Cacciatore of Cowen and Company. Your line is open. .

Just question as you're describing the market that you want to approach in hospitals.

Can you frame the percentage of Neulasta sales directly into the category that it seems like you want to go to first? And then wanted to get your perspective, if you could, I know it's a competitor, but on Mylan's launch and a little bit of slower ramp, some of the learnings from that.

Why it's maybe a little bit lower? What you might be doing a little bit differently? And then just lastly, since you've been approved, any thoughts on actions that Amgen has been taking to try to maneuver ahead of your positioning into the segment -- into the hospital segment? Thank you..

So let me hand off the question regarding the size of the hospital segments at the 340Bs and the large hospital segments to Michael Chen who'll address that.

Mike, can you give Ken colon on that?.

Thanks Ken, nice to meet you. Basically the way we see the hospital segment we would estimate probably about 60% Neulasta sales goes through the hospital segment. 340D we would estimate about half of the units.

So if 340D there's going to be some significance or some more price concessions based on the way that that works but the hospital overall is pretty large. Most of the business is going through the outpatient clinics of those systems. .

With respect to -- thank you Michael. With respect to the Mylan question, perhaps Jim Hassard has some additional insights, some comments on Mylan. Jim do you have any comment there and Ken's point. .

Yeah, Ken I don't want to speak specifically as you said it's our competitor. One thing I will say is as we've evaluated our strategy we really focus on four areas of the value proposition kind of four basic components. They are obviously price and contracting and we've talked a lot about that today.

Obviously services as well so the services that we've described in terms of patient and provider services reimbursement services those are obviously very important and we've seen you know not everybody is able to come to market with those services.

And lastly the fourth is supply and we are very proud to say that we do have ample supply to enter the broad marketplace. And again some competitors that have entered the market maybe haven't had that same luxury..

That about answer it for you Ken, for a follow up or you fine..

That's great thank you. .

Okay terrific. So, we’ll now take the next question. Operator, could you put that one through. .

Our next question comes from Mohit Bansal of Citigroup. Your line is open..

Great, thanks and congratulations on getting here after a lot of hard work. Kudos to entire team. Can you help me understand the dynamics between the payers and GPOs in the context of Neulasta end market.

If you get into contract with the large oncology centers what could be the role of patients here who are paying for the drug and how much of the road block or support they could create. And I have a follow after that. .

So your question is the dynamics between the -- I am sorry the PBMs and the GPOs, Mohit. .

Yes. So I mean PBMs would be so like so you get into context with the GPOs but the payer not PBM, but the payers are actually paying for the drug. So how does this work here is you get into contract with the hospitals who decides and who could create [indiscernible]. .

Okay and thank you for that clarification. So Jim Hassard's group is responsible for relationships with the payers. I'll let Jim talk a little bit about that, the progress we're making there and some of the other things. And in terms of contracting, I’ll let Mr. Chen makes some additional remarks about our progress with contracting with the GPOs.

Jim, do you want to go first. .

Yes, absolutely. So Mohit just to clarify, one, this marketplace is primarily medical benefit. So this is you mentioned PBMs or pharmacy benefit managers they're typically not as involved with in this space. Again about 95% of the sales go through providers and thus it is a medical benefit primarily.

Needless to say though we have had discussions with all of the payers that are responsible for medical benefit and we have a contracting plan in place ready to roll. .

Jim can you just comment a little further on our objectives as far as the payers regional. .

Yeah absolutely. Great question Denny and great trigger for me. The other thing Mohit is our objective with the payers is actually for parity coverage. We believe that again, the value proposition for UDENYCA will be competitive within the marketplace, we want parity coverage and we also want providers to have that that decision point and that choice. .

Thank you. And as a follow-up, Mr. Chen will make some remarks about that group person organizations and our progress there? Michael..

So the GPO's really act as consolidating the members under contracts to get preferential pricing. So there's different GPOs that will service the clinic side, the community based clinics, there's different set of GPOs that will historically service kind of the hospital side.

So it makes a nice concentrated roof of contracting entities that we can go and deploy and speak to about contracting and we'll be doing that over the next few weeks. .

Okay. I think it's also fair to say, Mohit, we don't see any apparent conflict between the objectives of the GPOs and the objectives of the pair with which would create some dynamic tension as you point out, not in this marketplace for the reasons that Mr.

Hassard outlined?.

This is helpful. So if I can just squeeze one more in, your competitor talks in terms of pre-filled syringe market being the target markets. In terms of your discussion, with the GPOs do you see differently and what Coherus as a company needs to do to overcome an obstacle named RANPRO here? Thank you..

I think that's a good topic for Chris Thompson, our VP of Sales. Chris you want to take that one for Mohit..

So Mohit thanks for your question. Actually, we look at the whole market as potential for us not just the pre-fill market. The primary, the first thing I'd say is that if you look at the on body product right now, it stopped growing, it's flattened out and it continues to be flat in that market.

And as you look at the sales trends of on body what you see is that it was primarily driven by economics, when they had a contract in place that rewarded the utilization of on pro the utilization was going up and now it's diminished and it's flat.

We believe that through our economic value proposition as well as the services that we're going to provide to patients and to our oncology offices that we're going to be able to sell through the on body system. So that's why we look at the whole market basket as our opportunity. .

And just remind you Mohit, we have previously said we said 10% to 15% of the patients in that general zip code actually had a need for such a product to have that benefit.

So we think that the significant amount of the market here is approachable, we and our strategy is to approach the market very, very broadly and comprehensively and not at all in this selected or targeted fashion..

Great. Thank you very much..

Our next question comes from Mike Old of Baird. Your line is open..

Hey guys, thanks for taking a question and congrats on all the progress as well. I just had a question with respect to pricing and maybe you helped put in the context of new last year but maybe you can also put in the context of Mylan biosimilar and then maybe talk a little bit about your strategy behind that..

Thanks. Thanks a lot for the call. I'll let Mr. Hassard address the issue of the pricing.

Jim?.

Yes. So Mike again, thank you and you are correct the pricing for UDENYCA is similar to Mylan's product. And the reason that we did that we wanted a price that was attractive to payers without diminishing the overall value proposition of UDENYCA. We've recognized that we need to be attractive to the payer market.

But there again as I mentioned to you, there are other value components that really drive this. It's not just price, we believe that contracting as Chris Thompson has talked about, we believe that the services that we outlined and more so we do believe that we've got a competitive advantage when it comes to supply. .

Got you. And then just maybe in terms of adoption. It sounds to me that you're probably targeting the hospitals at least initially. Maybe you can talk about longer term in terms of the clinics and how you drive adoption there. And maybe it's some of these other services et cetera that you're talking about, but any comments there would be helpful. Thanks.

.

Yeah. We like to be clear. We are going to approach all segments of the market. We're not going to selectively approach simply the clinics or just the hospitals or whatever. That being said, there is an adoption cycle with each of the segments which is unique.

However, our view is that we are best served by moving forward very comprehensively and very broadly in the market. Lastly, I would say that we will be in a better position to talk about uptick in few other things after we get the first quarter to sales under our belts and we see how the market is developing. .

Got it. Thanks guys and congrats again. .

Thanks Michael. .

Our next question comes from Jason Kolbert of H.C. Wainwright. Your line is open..

Hi Denny thanks guys. Congratulations on the progress. One of the questions that was asked earlier. And I'd like to follow up is what is Amgen doing to protect their market share. And I have to tell you on Saturday I turned on the TV. And I saw the first on pro commercial.

And so I just wondered what kind of advertising or other types of marketing are you planning on doing as you gear up for launch. Thanks. .

Thanks Jason. Actually those ads have been out for quite some time, I've seen them at the gym in the morning sometimes. Jim Hassard will be happy to address some of those issues for you. Jim. .

Yeah Jason. Thanks again for the question. On the marketing side as Chris had mentioned, we're going to have a marketing materials programs, we're going to sell the clinical benefits and the clinical details of UDENYCA in addition to the services the patient services that we plan to offer.

We are aware of some of the moves that Amgen have made in addition to advertising. We're aware of those. And again for competitive reasons we don’t want to give details. But again there have been no surprises to date I think that again they have done what we thought that they would do..

And can you talk just a little bit about the strategy in terms of making sure you have all of the managed care fomularies accessed and ready to go in January?.

I think Jason a big piece of this is just having the coding. And we talked about that having that two code in place and then I think it is executing our contracting strategy across all segments of the marketing GPOs and also with the payers that manage the medical benefit. .

Okay thanks guys.

If I was going to ask one follow it would be any progress towards partnering in Europe?.

We haven't had too much to say about partnering in Europe Jason for the time being as we indicated earlier we had been approached by some parties in Europe. We continue to chat with some folks but I think that the company's best focus is in the US market. .

Terrific. Thanks so much guys. .

Thanks Jason. .

Our next question comes from Chris Schott of JPMorgan. Your line is open. .

Great. Thanks for the questions and congrats again on the approval. First one I had was on pricing. I guess with a lower gross price you're coming out with. How should we think about net price here.

Is this something that should be close to that list price or could there be a decent discount on top of the gross price? Than I have a couple follow ups after that..

Chris Thompson will come in. Chris you want to talk a little about... .

First of all Chris thanks for the congratulations. Appreciate that. As it relates to the actual net pricing we have a comprehensive contracting strategy that we're going to be rolling out with our GPO customers in the coming probably next week. We're not going to obviously divulge what that strategy is.

Suffice to say that it's going to be competitive and it's designed to win..

Okay. And then just some couple other ones. Second, in terms of the ramp in SG&A to support the launch, is there any color you could provide there just so we're thinking about our models in both as the sales force comes on board and some of these support services.

How should we be thinking about the SG&A trends from here?.

Thanks for the question Chris. Jean do you want to take that one. .

Yes. Thank you for your question Chris. Well we've just published our SG&A results and that reflects the full hiring of a sales force.

So well personally I've not put guidance out there but you can imagine that we've put out just for Q3 is likely to be similar and similar in the future so it is a form of guidance with I think specifically we don't expect great additional costs going forward in SG&A and you should see something that would be somewhere in line you will have a full version of the salesforce that salesforce came towards the later part of the quarter so it's going to be certainly higher.

But if you thinking about it 70 employees at some 200 fully loaded [indiscernible] a lot in a year. Hope [indiscernible]. .

Yeah that’s helpful. And then last, I just had a bigger picture question. What do you think about this market longer term. Is there a sense like how high do you think biosimilar penetration could reach in this market.

Is it something you can kind of top out at 30% or 40% or do you think you can get penetration with all the players involved here that could be something that converts a majority of this market over to the biosimilars, to answering the kind of updated thoughts or latest thoughts if when we look out three to five years where we could get with penetration?.

I would let my teammates on the commercial side jump in but generally speaking I believe that we're bullish on the overall penetration of the market. In Europe you've seen 75% 80% in the short acting market. The short acting market here in the US has done very very well of course with Granix and [indiscernible] products out there.

We think that the overall biosimilar penetration can readily get above 70ish percent and so on. So I think that this particular market with the importance of [indiscernible] I think will convert perhaps more rapidly than one would expect. So I think that we'll see a robust conversion and so on. And I think most people believe that's the truth. Mr.

Hassard do you have any additional comment with respect to the market?.

No, I think, again, you mentioned the timeframe of three years. I think, if you look. It's been about three to four years that Zarzio Granix have been in the marketplace. And you see that that short acting marketplaces now, as Denny mentioned, is worth about 30% or a third, a third, a third.

So biosimilar or at least competitors have at least taken about 65% in that market. .

I think we'd be very happy if we had 35% of the market after a couple years. I think that'd be good. .

Absolutely. Well, thanks for the questions and congrats again. .

Thanks Chris. Thank you for your questions..

There are no further questions. I'd like to turn the call back over to Denny Lanfear for a final comment. .

Thank you. Thank you all for joining us on our quarterly call this afternoon. Certainly the company has a significant milestone here with the approval in the U.S. I would say you'll have some additional color at the follow on investment conferences. There's a few we're going to through November and December.

Look forward to seeing you all there and thank you all for your ongoing support. Bye-bye..

Ladies and Gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day..