Lisa Conte - President and CEO Pravin Chaturvedi - CSO Karen Wright - CFO Robert Griffing - Chief Commercialization Officer.

Jason Kolbert - H.C. Wainwright Jon Glaser - JMP Capital.

Good day and welcome to the Jaguar Health Company Updates Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to [indiscernible]. Please go ahead, sir..

Thank you, Simon.

Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impacts of competitive products and pricing, industry trends and product and technology initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements.

Forward-looking statements are subjects to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management current assumptions, expectations and projections about future events.

While management believes that it’s a function of expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements.

The company's actual results may differ materially from those discussed in this call for a variety of reasons including those described in the forward-looking statements and Risk Factors sections of the company's Form 10-K for the year ending December 31, 2017, which was filed April 9, 2018 and its other filings with the SEC which are available on the Investor relations section of Jaguar's website.

Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise. After the prepared remarks, we will be opening the call to a question-and-answer period.

On the call today, we have Lisa Conte, President and Chief Executive Officer; Karen Wright, Chief Financial Officer and Treasurer; Dr. Steven King, Executive Vice President, Sustainable Supply, Ethnobotanical Research and Intellectual Property; Dr.

Pravin Chaturvedi, Chief Scientific Officer and Chair of Napo Scientific Advisory Board and Robert Griffing, Chief Commercialization Officer. At this time, it's my pleasure to turn the call over to Lisa Conte, President and Chief Executive Officer of Jaguar Health. Lisa, the floor is yours..

Thanks a lot, [indiscernible]. Thank you all for joining us. I appreciate this opportunity to update the Jaguar Health Napo Pharmaceuticals community today. To clarify, Napo is a wholly-owned subsidiary of Jaguar and I therefore may use the terms Jaguar, Napo and the company interchangeably during my comments on this call.

We had the extraordinary opportunity to be commercializing and when I say commercializing, I mean Napo reps directly marketing and selling. Our first in class FDA approved anti-secretory, anti-diarrheal agent, crofelemer, trade name Mytesi for a specialty market in people living with HIV AIDS.

Our near term focus is to become a stable cash flow positive business, supported primarily by growth in Mytesi sales for its current approved indications. Longer term, we have a remarkable risk mitigated product crofelemer is our pipeline within a product.

Crofelemer is the source of multiple novel important potential follow-on indications for an FDA approved drug, Mytesi, approved for chronic indications and therefore supported by a chronic safety package, with GMP commercial manufacturing in place and proof of concept clinical data for most of the follow-on indications.

The depths of the pipeline provide supportive care solutions for large patient populations across multiple disease indications, it will fuel long-term value creation for investors and it provides non-dilutive funding opportunities for partner collaborations around the globe.

In addition to informing you this morning about our financial and operational progress, a key goal of today's call is to share with you what makes Mytesi a unique treatment option. Dr.

Pravin Chaturvedi, our Chief Scientific Officer and the Chair of Napo Scientific Advisory Board who designed the successful pivotal program that resulted in Mytesi’s FDA approval will shortly provide more background on Mytesi’s novel mechanism of action and broad application across multiple conditions.

Moving on to review our latest financial results, we're quite pleased with the healthy growth we're experiencing.

Mytesi gross sales in the third quarter of 2018 were approximately $1.6 million and Mytesi net sales were approximately $1.1 million, growth of 36% and 28% in gross and net sales respectively compared to the second quarter, the previous quarter of 2018 and an increase of 242% and 154% of gross and net sales respectively over the third quarter of 2017 a year ago.

This important growth has continued in October 2018 with unaudited results of more than 700,000 in Mytesi gross sales and anticipated October Mytesi net sales of approximately $475,000.

Mytesi gross sales are reduced by Medicare ADAP 340B chargebacks, returns and wholesale distribution fees based on historical trends to determine the estimated net sales. In 2018, our animal product research and development efforts have been intentionally minimal and our animal related sales are expected to stay minimal and flat.

Total Mytesi prescription volume, which is a combination of new prescriptions and refills grew 36% in the third quarter this year versus the second quarter, and increased 122% in the third quarter versus the same period last year.

This strong growth in both sales and prescription volume can be attributed to increased tenure of our sales representatives coupled with improvements in effectiveness and productivity in communicating Mytesi’s key distinguishing benefits.

It's worth mentioning we've only had resources to fully support commercialization of Mytesi at Napo since April of this year with the hiring of our final wave of sales representatives to cover the 18 key metropolitan areas.

And prior to the merger of Jaguar Napo on July 31, 2017, there were no sales attributable to Mytesi, included in the Jaguar financials. Napo’s sales reps primarily target high anti-retroviral therapy prescribing and what we call high-decile HIV doctors.

In addition, in June of this year, we signed a US co-promotion agreement with RedHill Biopharma, whereby RedHill’s 36 field representatives promote Mytesi, primarily to GI docs who have meaningful HIV patient populations. The RedHill reps have been promoting Mytesi in the field for about 3 months now.

The consistent growth we see in their performance based on the two months of currently available IQVIA data is encouraging and we anticipate their activity will enhance Mytesi’s sales and awareness in the GI community, in particular in 2019, beyond Napo’s own planning and internal guidance.

We continue to make investments in medical education programs for healthcare practitioners and patients.

The goal of our ongoing Napo Speakers Bureau program is to educate both target audiences, not only about Mytesi’s unique mechanism of action and strong clinical results, it's also to better enable a productive conversation between patients and their physician, as diarrhea is a neglected co-morbidity in people living with HIV AIDS.

Even in this modern anti-retroviral therapy era, a significant portion of patients still experience diarrhea. There has been no doubt a reduction in the incidence and severity of anti-retroviral therapy induced diarrhea.

However even in patients with maximally suppressed viral loads and with well reconstituted T-cell counts in the blood, typically been living with HIV for more than 10 years, their T-cells often do not reconstitute in their gut, triggering enteropathy and chronic inflammation, causing effects such as leaky gut and diarrhea.

This is the growing demographic, approximately 50% of people living with HIV in the US are now over the age of 50 and have had the virus in their gut for over 10 years.

Our quest each day or more importantly our sales reps’ daily quest is to get HIV treating physicians to recognize the patient need and bring diarrhea into the patient physician dialog as well as of course the solution, Mytesi. There should not be an acceptance of the new normal. There should be a return to normal.

A key factor to successful commercialization is the insurance coverage and reimbursement of Mytesi. Within HIV, Mytesi is well reimbursed. Napo is continuing to pursue inclusion of Mytesi on the formularies of state AIDS drug assistance programs, which are referred to as ADAP.

In the third quarter of 2018, Mytesi was added to the ADAP formularies in New York, Tennessee, Mississippi and DC with the anticipated addition of Mytesi to the ADAP formularies in two more key states that had a delay due to various natural disasters, for example, Florida.

We expect Mytesi access will soon be available to greater than 85% of ADAP lives nationally and ADAP is basically insurance of last resort for AIDS patients.

Mytesi is also covered by all top 10 commercial insurers, representing more than 245 million lives, our all top 10 managed Medicare plans, representing more than 2.4 million lives and Mytesi is covered by Medicaid in all 50 states. The HIV community is well networked. In late August of this year, Napo launched its first integrated digital campaign.

The campaign represents a strategic shift in messaging employing content intended to convey an upbeat and motivational message to both patients and healthcare professional practitioners.

Although the campaign has only been in the market less than three months, results have exceeded expectations with approximately 100,000 visitors to Mytesi.com versus the 7900 in the first 8 months of the year and perhaps more importantly, an approximate 1100% increase in returning visitors, indicating that our target audience is finding the site of value.

In other financial news, on October 4 of this year, we closed our follow-on public offering with gross proceeds totaling approximately 9 million before deducting estimated fees and expenses payable by Jaguar in connection with the offerings.

The company intends to use most of the net proceeds from this offering for the ongoing commercialization of Mytesi as well as for working capital and other general corporate purposes.

With the important cash infusion stemming from this financing, we’re positioned to continue supporting the commercial, educational and promotional activities, underpinning the ongoing launch of our Mytesi asset.

I'm going to transition now to our very exciting human development pipeline, approximately $1.2 million to $1.6 million stemming from our recent follow-on public offering is being devoted to clinical pipeline and business development activities. Our lead pipeline indication is cancer therapy related diarrhea, I may refer to it sometimes as CTD.

Diarrhea continues to be a significant co-morbidity for patients undergoing cancer treatment and has been reported as the most common side effect of novel targeted agents used in adjutant therapy such as tyrosine kinase inhibitors, often referred to as TKIs and a TKI pathway, which includes epidermal growth factor receptor antibodies, such as Herceptin.

These agents increase ion and fluid secretion in the gastrointestinal mucosa leading to secretory diarrhea, which is Crofelemer’s treatment mechanism of action. The diarrhea from this drug class is often associated with extreme patient discomfort, which can lead to dose reduction or even termination of life saving cancer therapy.

Following my comments, Dr.

Chaturvedi will also discuss the clinical and planning progress we are engaged in for this potential indication, including most significantly the filing with the FDA for a discussion by the end of 2018, or the beginning of 2019 basically in the next month or so on the anticipated pivotal protocol for this cancer therapy related diarrhea indications.

This program is analogous to the successful pivotal program we ran for the currently approved HIV indication and in fact as part of risk mitigation, we're using the same formulation and dosing as the current commercialized Mytesi.

Separately, there are two investigator initiated trials ongoing, utilizing Mytesi to address cancer therapy related diarrhea, one funded by Genentech Roche in breast cancer patients on treatment with Herceptin, which should read out interim results in the first half of 2019, another funded by Puma in patients on neratinib, which has extremely high rates of diarrhea.

We recognize the importance of supportive care for patients being treated with all of these cancer related therapies, which is analogous to the supportive care of managing diarrhea and people living with HIV AIDS. Our efforts in this area are being supported by guidance from the members of Napo’s CTD Scientific Advisory Board, Dr.

Pablo Okhuysen who is a prominent infectious disease specialist; Dr. Herbert DuPont, Professor, Infectious Diseases, both at the University of Texas, Houston, in addition to thought leaders from other participating major cancer treating institutions.

A novel anti-diarrhea like Mytesi may hold promise for treating secretory diarrhea in this population and therefore also support long-term cancer treatment adherence in this group.

In fact, results from a third-party non-clinical study looking to mitigate diarrhea, resulting from treatment with a targeted cancer therapy, Neratinib, a recently approved TKI for adjuvant therapy indicates that crofelemer works in Neratinib induced diarrhea, superior to loperamide and budesonide, which do not show a benefit in this model.

The supportive care pathway has precedent as regulatory agencies have approved several drugs to treat chemotherapy induced nausea and vomiting, which is an important component of care for patients undergoing cancer treatment as is supportive care for diarrhea.

While TKIs are our initial focus, assessing the impact of crofelemer on diarrhea related to traditional chemo radiation and even new immunotherapy such as checkpoint inhibitors is also a focus of our pipeline development.

The crofelemer pipeline also includes other indications such as orphan drug designation for congenital diarrheal disease and short bowel syndrome, supportive care for inflammatory bowel disease, diarrhea predominant irritable bowel syndrome, idiopathic functional diarrhea and a second generation anti-secretory agent lechlemer, also a natural agent targeted specifically for cholera and the return opportunity based on a tropical disease priority review voucher.

We've got to prioritize our activities and use of proceeds and have therefore prioritized in the pipeline those indications, which we believe are closest to approval and of greatest partner interest.

In addition to cancer therapy related diarrhea, we're supporting an investigator initiated trial for congenital diarrheal disease and short bowel syndrome, for which we've received orphan drug status at the Sheikh Khalifa Medical City in Abu Dhabi.

The incidence of congenital diarrheal disease is much more prevalent in this region, where consanguineous marriages, marriages related by blood, marrying cousins are part of the culture and therefore, we have access to meaningful number of patients to study for these rare disorders in the United States.

Our final prioritized pipeline activity involves an investigated new drug application for our second generation anti-secretory botanical drug product, lechlemer for the targeted indication of cholera along with efforts to pursue a tropical disease priority review voucher from the FDA for this possible indication.

Priority review vouchers are granted by the FDA to drug developers and as an incentive to develop treatments for neglected diseases and rare pediatric diseases.

These vouchers are transferable and is sold in the range of $67 million to $350 million, because they provide the third party purchasers a 6-month priority review with the FDA for any product candidate in development. And in fact just this month, Siga Technologies sold a priority review voucher to Eli Lilly for $80 million.

The voucher is awarded upon NDA approval for the first approved indication for a drug. Hence, crofelemer is not a candidate. Crofelemer is already approved as Mytesi for HIV. With lechlemer, a cholera approval and priority review voucher award will provide an immediate return on investment, removing commercial risk from that return equation.

Cholera is an acute diarrheal illness that kills thousands of people worldwide each year due to rapid dehydration in the first 2 to 18 hours after infection, sometimes, called the [indiscernible].

According to Reuters, the cholera outbreak in Yemen, the worst in recorded history, is accelerating again with roughly 10,000 suspected cases now reported per week and a total of 1.2 million suspected cholera cases and over 2500 deaths reported in Yemen since this epidemic began in April of 2017.

We have presented Phase 2 data on crofelemer from the highly regarded International Center for Diarrheal Disease Research, ICDDR in Bangladesh affectionately known as the cholera hospital for both cholera and severe watery diarrhea patients and we plan to follow the same study design for a trial conducted in association with ICDDR to support development of lechlemer for the same anti-secretory mechanism of action for the potential cholera indication.

Our planned next steps involve developing a dispersible tablet formulation of lechlemer, which would be relevant for children and adults and infants and the filing of the IND in the second half of 2019.

Across our pipeline, our goal is to progress to clinical work with non-dilutive support from potential corporate partners, which we are actively pursuing globally.

As an example, we announced on September 24 of this year, Jaguar and Knight Therapeutics, a Canadian specialty pharmaceutical company has entered into a distribution license and supply agreement that grants Knight the exclusive right to commercialize Mytesi and related Napo products in Canada and Israel along with the right of first negotiation to commercialize Mytesi and related products in specified Latin American countries.

This collaboration is an important step towards the marking values and making our products available in global markets. Lastly, at Jaguar Napo, we are committed to ensuring a long exclusive life of crofelemer, Mytesi and lechlemer.

We have over 120 issued patents and continue to file more as we test additional indications, more relevant to our exclusivity. Mytesi is the first oral drug, approved under FDA botanical guidance, which does not provide for a generic product pathway.

Lechlemer is also a drug candidate under botanical guidance, potentially enjoying the same exclusivity opportunity.

To wrap up, we believe we're in an extraordinary position of possessing this pipeline within a first in class anti-secretory product where pipeline risk is mitigated, because crofelemer, Mytesi is already approved for chronic administration, we hold global rights, we have proof of concept clinical data for most of our targeted follow-on indications and outside corporate interest exists, as demonstrated by a recently enacted partnership with Knight.

At the same time, our near-term focus is to become a stable cash flow positive operational business, supported primarily by continuing the growth we're witnessing in Mytesi sales for its current approved indication. That's about as rewarding and risk mitigated an opportunity that an emerging pharma company could represent.

With that, I conclude my comment. Thank you all for listening and for your interest and support of Jaguar, Napo and Mytesi. And we’ll now hear Dr. Chaturvedi talk about our first in class mechanism of action and clinical applicability before holding our Q&A session. Pravin, I'll turn it over to you at this time..

Thank you, Lisa. Good morning, everybody. I'm Pravin Chaturvedi. I’ll talk about mechanism of action for crofelemer. So crofelemer is a novel and first in class, which means first in kind drug approved by the FDA to provide symptomatic relief of non-infectious diarrhea in people living with HIV and AIDS that receive anti-retroviral therapy.

It is actually the first anti-diarrheal drug that was approved by the FDA, because it is not a constipating agent and it does not alter any normal gut habits. Just so you know, the other drugs from the past that have been grandfathered for the treatment of diarrhea are from the opiate family and they cause constipation.

Examples that you would be familiar with are Imodium, over-the-counter drug, which has a generic name Loperamide [indiscernible] which are available by prescription only.

These agents are actually referred to as anti-motility agents, because they reduce gut motility and resulting constipation and that's how they produce a reduction in bowel movement, but they do not affect diarrhea itself.

Furthermore, these drugs, these anti-motility agents are approved for acute use, which is less than 3 days and are not indicated for chronic diarrhea and they pose various clinical risks for the patients with chronic usage.

The anti-motility drugs do not address the physiological cause of diarrhea, the physiological cause, the loss of electrolytes and fluids and by not ameliorating diarrhea, they simply reduce the bowel movements and cause constipation.

The consequences of constipation include abdominal pain, distension and bloating and many patients get rebound diarrhea from the breakthrough to gut motility changes. For explanation, diarrhea of the clinical condition, which is defined as the passage of unformed watery bowel movements.

Even the passage of one watery bowel movement constitutes diarrhea and there is risk for significant electrolyte and fluid loss in these patients that have moderate to severe diarrhea, which is defined as 3 or more watery bowel movements within a 24 hour period.

Acute watery diarrhea is generally of less than 7 gut duration whereas chronic diarrhea has a passage of at least one watery bowel movement for at least 28 days consecutively. Crofelemer is the only approved anti-diarrheal drug for chronic diarrhea as well. Lisa pointed out that Crofelemer has a unique and novel physiological mechanism of action.

The technical term for that physiological mechanism is called ion channel modulation after cystic fibrosis trance membrane conductance regulator or CFTR chloride channel as well as another chloride channel called calcium activated chloride channel in the small intestine.

Simply put, Crofelemer regulates the amount of chloride and water that is in the gut to ensure the formation of form stools and reduce the watery content of stools. Physiologically, an adult human being has somewhere between 8 to 10 liters of fluid in their gut.

And form stools only allow passage of between 100 to 150 ml of fluids in their stools and most of the water is reabsorbed in the large intestine.

By increasing secretion of chlorides and electrolytes and fluid into the small intestine, there is an accompanying increase in the watery content of the stools and the body is unable to reabsorb the adequate amount of water and that results in watery stools.

This physiology is so tightly regulated that even a difference of just 50 to 100 ml either way is the difference between having diarrhea or constipation. So for instance, if you have 100 ml or more passing through, then you will have 250 ml or so of watery stools that you will diarrhea.

If you have 50 or 100 ml less passing through, you will have 50 ml or less going through, which means you'll have hard stools, which is constipation. Crofelemer’s novel mechanism was to act as -- it will act as a regulator of the CFTR chloride channel that ensures normalization of fluid and electrolyte content in the gut.

So if a patient has too much chloride being secreted in the gut, that is accompanied with water, Crofelemer just regulates the hyperactivity of the CFTR channel without shutting it down to ensure that the right amount of chloride passes through.

Depending on the intensity of chloride and fluid secretion in the gut, Crofelemer effects will require a commensurate period of time to show its best effect. So to envision the activity of the function of Crofelemer, I would like you to picture an aquarium tank and a movement of fish kills in a tank.

If you picture the fish moving around a good deal movement in a normal rhythmic movement, that's exactly how the channel functions in the gut in a normal, healthy gut. And that ensures appropriate balance of secretion of chloride and fluid and absorption and re-absorption of the appropriate electrolytes and nutrients.

But if you notice in the aquarium tank, if the fish get excited, hyperactive, their gill movement becomes faster.

The same thing happens in the gut to these intestinal chloride channels when there is an insult to the gastric mucosa and these chloride channels get hyperactive and start to secrete more chloride and associated electrolytes in response to the insult to the gut.

Crofelemer simply regulates the channel function and brings it back to an appropriate rhythm. Since crofelemer is neither absorbed nor is it disease modifying, other agents that address the disease condition itself are required to correct the insult that is causing the dysrhythmia in the gut.

So for instance, in HIV patients, they continue to receive the anti-retroviral therapy to ensure that their HIV is being treated and chronic non-infectious diarrhea patients due to HIV infection of the intestine is addressed by crofelemer to normalize their stool formation. Crofelemer is not a constipating agent, does not cause any stool hardening.

So if a patient has actually formed stools and the CFTR or calcium activity to chloride channels are functioning appropriately, Crofelemer simply passes through the gut as an inert substance.

It does not have any food or drug interactions and so it does not alter the effects of other medications and does not do any changes to the gastric mortality unlike the opiates. As Lisa pointed out, we have demonstrated safety and efficacy of Crofelemer in HIV associated chronic diarrhea in a pivotal Phase 3 trial, which is called ADVENT.

That trial was designed to demonstrate reduction in number of weekly and daily watery stools in people living with HIV, receiving anti-retroviral therapy.

In the ADVENT trial, we demonstrated that compared to placebo treatment, Crofelemer treatment arm had more than 2x the number of responders and it was a very significant finding, p value was much less than 0.001 -- 0.01 that led to the FDA granting a priority review and approval of this drug.

Crofelemer in that trial did not have any interactions with any of the concomitant medications and was administered thrice daily with or without food with no dose adjustments needed for any other medications that the HIV patients were receiving.

We intend to use our experience from ADVENT for developing Crofelemer for the symptomatic relief of diarrhea in cancer patients receiving treatment regimens that contain tyrosine kinase inhibitors or EGFR inhibitors.

It is known that tyrosine kinase inhibitors have shown significant diarrhea as an adverse event in a significant proportion of patients that receive such targeted therapies for the cancer.

The collateral damage from diarrheal episodes range from dose reductions to drug holidays to discontinuation of the cancer therapies due to the intolerability of their regimens.

So in consultation with our clinical key opinion leaders and SAB members, we have drafted a clinical study protocol that will evaluate the safety and effectiveness of Crofelemer, introducing diarrhea severity in cancer patients, receiving tyrosine kinase inhibitor containing regimens.

We plan to use a similar responder analysis that we did in ADVENT and we have requested a discussion with the FDA division of GI products.

We will incorporate the guidance and feedback from a discussion with the FDA into designing an appropriate protocol that will allow us to evaluate the symptomatic relief of diarrhea in cancer patients receiving Crofelemer when we're getting the tyrosine kinase inhibitor containing regimens.

Since crofelemer is neither absorbed nor showed any significant drug interactions in HIV patients, we expect a similar outcome in a cancer therapy related diarrhea trial. Please note that crofelemer is neither an opiate nor an antibiotic.

It has an excellent safety profile in thousands of patients that have received the drug to date in a chronic setting and we will leverage that safety database for the chronic safety of crofelemer in cancer therapy related diarrhea indication as well. I'll turn it back over to Lisa now and thank you very much for listening.

Lisa?.

At this point, we will open up to Q&A.

[indiscernible], can I turn it over to you to monitor that please?.

Sure. Thank you very much, Lisa and Pravin. So Simon, please queue for questions and answer..

[Operator Instructions] We’ll now take our first question from Jason Kolbert from H.C. Wainwright..

Thank you for the very comprehensive update. I'd like to start with a couple of financial questions. So maybe Karen can help out.

Can you, Karen, can you just let me know for housekeeping purposes, what is the current share count, what's the fully diluted share count, what's the cash balance remaining at the company today?.

The total common and preferred stock outstanding is 30,279,809. Of that, we have common stock voting shares 24,278,104. We have non-convertible non-voting common stock of 2,686,749 and preferred stock as converted 3,314,956..

Okay.

And the cash balance, Karen?.

Our cash balance is, as will be reported in the Q, I can't give that out yet. We have not issued that. But I can tell you it’s approximately -- that we raised the 9 million October 4 and our net proceeds of that were 7.2 million..

And I see that the Q was delayed.

When can we expect the Q to file?.

The Q has been approved by our auditors. They were doing a final national review of a debt extinguishment analysis that we did that was fairly complicated. So that should be filed within the next day or two..

Okay. Let me just go through a few other things. Lisa, can you talk a little bit about how we should be dealing with the gross Mytesi sales versus net and you did talk a little bit about what some of the adjustments are.

On a going forward basis, how should we be looking at those adjustments? And I know it's early to talk about guidance, but do you have any kind of thoughts about what the guidance would look like in HIV for 2019? And can you talk a little bit about what the contribution was from RedHill in terms of the percent of revenues that are recorded?.

Thanks for being on the call. I'll answer the questions I can here. So, we're not giving out guidance for 2019 at this time, but I can say we are getting more confidence in the track record in there for predicting the future with more certainty, since we have had a full commercialization on board now for a little over six months or about six months.

So, look at the growth that we’ve had quarter-on-quarter, look at the growth that we’ll continue to have based on what we've seen in October and you can start to connect dots where we think we'll end up in 2019. RedHill, it’s very early because you get your data about a month late.

So we have two months of data on RedHill, but they couldn't be more enthusiastic and encouraged and there is growth. So again since I'm not giving out guidance, I can't say where I think they’ll contribute, but it is meaningful enough that we would fully expect to continue with them in 2019. As far as the mix, I may have vowed here a comment.

As we get on more ADAP formularies, which is very important because it's a large number of the HIV patients, insurance of last resort. ADAP 340B, we get hit with pretty high discounts from gross to net, yet, we're increasing our prescriptions, we're increasing the noise, the awareness, the utilization in the patient population.

So our gross to net OCR -- our net to gross has been decreasing. We think that the right way – we’re having more discounts, has to go forward..

Yes. As we add additional ADAP and meet the needs of the HIV patients, we are increasing our charge docs and discounts, meeting the population needs..

Rob, do you want to comment on mix that you see going forward?.

Sure. I think you've addressed it nicely. Jason, nice to meet you over the phone here.

What we currently see and this comes from decision resource group and there hasn't been much change in the mix, but as Lisa mentioned, as we see additional states come on board, some of the bigger ones that were mentioned like New York and hopefully Florida in the coming weeks, there will be -- we expect a little bit of a shift, but right now, it's been about 38% of our business is commercially insured and 60% are your government programs, such as Medicaid, Medicare, ADAP and we do expect that to stay fairly consistent, some minor tweaks going forward, as I said, because of the additional states that are putting it on formulary for ADAP..

And Lisa, can you talk a little bit in terms of your experience with the docs, how many -- what percentage of those revenues represent new doctors, first time prescriptions versus repeat or refills business? Are you seeing refill starting to pick up?.

I'm going to pass that one over to Bob as well, because he’s data at his fingertips..

Yeah. So really good question. We are seeing additional doctors prescribe.

In fact, one of the metrics we look at is the breadth and depth of prescribing, not only month over month, but quarter over quarter and we are seeing very strong growth in those that are prescribing two or more prescriptions, but we're also -- so that's your depth of prescribing.

We're also seeing the breadth in terms of just those first time prescribe that have prescribed one prescription.

So we're very encouraged, which tells us that our representatives are in fact being affected and one of the new metrics that we just started to receive data on is the Nuta [ph] brand and Jason, I'm not sure how familiar you are with the Nuta brand versus new RX, but Nuta where IQVIA breaks it out are those patients that are actually first time prescribed your brand as opposed to a new RX which could be a patient who receives a prescription, they may take a drug holiday or once they're 3 or 4 refills, whatever the number is expires they have to get a new piece of paper and that's counted as a new RX, but it isn't necessarily a new patient.

So looking at Nuta brand share, we're actually seeing the ratio of NBRX to TRX, about 21%. And that's twice the rate of what IQVIA expects for a chronic brand like Mytesi. They see an average of 10%.

So we're coming in around 21%, which is a really nice positive that physicians are better identifying patients within their practice that are continuing to suffer with diarrhea..

And Lisa, last, can we talk a little bit about catalysts and I'd like to talk about the CTD investigator driven studies, the HALT-D study and the UCSF study and can you tell me a little bit about when I might see data coming from those events and/or the start of the second trial?.

Sure. So for cancer related diarrhea, what you just mentioned to everybody else on the phone, HALT is the investigator initiated trial that is being funded by Genentech Roche. They are just about at interim number of patients enrolled, so they have to be treated for a couple of months.

So we’re quite confident that that interim results will be read out in the first half of 2019. So we're just around the corner from that. The UCSF study has just started enrolling, so I don't even know if they have their first patient in yet.

There are potentially going to be some modifications to that protocol, which will be even more important for crofelemer treatment and that is the study that is being funded by Puma with neratinib and adjuvant therapy.

Neither of those trials, let’s make it clear, neither of those trials is going to be a pivotal trial that will give us the indication in cancer related diarrhea, but it does give us experience in this patient population and awareness in the physician, in the treating community, in the cancer community.

So the pivotal trial that we're targeting is the basis of the discussion with the FDA literally now. Within the next month or two, we'll have that discussion. We've already filed for that. Actually starting that trial will require at this point pulling in funding from a non-dilutive source.

So, as you know, we have been working on corporate partnering activities. We did pull off first one before the end of the year. That's not sufficient funding for us to be able to start the cancer trial.

So once we have that funding in place, we'll be able to start that trial, but we are moving -- we're not moving any time here, because to have the greatest probability of success of a clinical trial, particularly, a pivotal program, you want to have met with KOLs, you want to be realistic and practical about enrollment criteria endpoint definition.

Put that in front of the FDA to the extent that it's necessary or useful to get a spot agreement, we want to do that. So get as much regulatory risk out of the way, those early implementations out of the way, so when that funding comes in, we’re immediately hitting the ground to start the clinical trials.

And we're not only doing any cancer related diabetes, but we're moving down the pipeline one by one, getting ready to go into clinical the trials when we have something to do so..

[Operator Instructions] We'll now take our next question from Jon Glaser from JMP Capital..

A question, you referred to the month of October briefly, can you just tell us about the trends in the last time or relative to the same trajectory as in the months before? And then with regard to RedHill, if you were to sort of guestimate 6 to 9 months from now, what percentage of your sales might be coming from RedHill’s sales force versus your own?.

So the first question and you were just low for a little bit. I didn't quite hear the first question. I'm sorry..

I'm sorry. You’ve briefly mentioned the month of October.

Can you confirm that the trends in October are basically on the same trajectory as you saw in the months before?.

I definitely can confirm that and you can plot out the numbers that we gave you. So, yeah, we are highly encouraged with the growth in October, the growth we're continuing to see. And as far as RedHill, I don't want to put any numbers or expectations out there for RedHill. It's early. As I said, we only have two months of data for them.

So we know how long it took us to feel confident in our own forecasting and projections from our sales force. And part of that is because, they're, for the most part, in a different medical discipline. So we're dealing with, for the most part, with the infectious disease docs to high decile, the high prescribing anti-retroviral diarrheal docs.

So their patient population is HIV patients and our challenge is start talking about diarrhea and I think you've heard me say, it can be 6, 7, 8 details before you get the physician to start talking about diarrhea in their patient population and then the floodgates do open.

So there, right now, we have two months experience with them in a GI office where there is a meaningful population of HIV. So it's on label to target them, but that by no means is the majority of their patients.

So we have to learn what it’s taking to get the prescriptions to happen there, before we have confidence about projecting and forecasting what they may be able to do. And that's the primary reason for holding back on this point. But I can tell you, they -- in two months, it went up. They grew..

We’ll now take our next question from Ed Jeffrey [ph] from Aegis Capital..

I think you just touched on this, but I just wanted to clarify, so I have an understanding of your funding going forward. You have a lot going on, how are your funding partnerships, cash on hand, all your activities going forward..

Our clinical activities for the pipeline, going into clinical trials, we would expect to fund from non-dilutive sources from corporate partnering. So that is to come in, as an example, we've said, our Knight partnership, that's about 3% of the global marketplace in Canada and Israel and we saw how meaningful that was.

So as we get to larger populations of the global partnership, in the corporate partnerships that we are pursuing, we would expect to have sufficient non-dilutive dollars to pursue some of these clinical trials.

We take a small portion of the funds that we just raised in the financing in October, about $1.5 million max, that is being devoted to the pipeline to get ready for this clinical trial. So as I discussed, all the preparatory activities with KOLs, protocol, regulatory activities, you have to do that anyway, so we're getting that, we have time now.

We're getting those activities done and that mitigates the risk even further for a drug that's already approved now, taken as much as the regulatory and planning risk out of the way as possible. For Mytesi, the goal -- selling Mytesi right now for the chronic indication, the goal is to have a solid financial foundation.

So we're selling and receiving revenue within our means. We're not sure if the current funding is going to allow us to get there and we are always looking at the same way we’ve funded ourselves historically. There's always an equity opportunity and equity line of credit now, because we do have revenue stream. We still have royalty opportunities.

None of that is currently planned. What is planned is to get ourselves to a breakeven position from Mytesi and we do feel confident that we can project sales to plan for that purpose..

[Operator Instructions] It appears there are no further questions on the telephone at this time. I would like to turn the conference back over to our host for any additional or closing remarks..

Thank you all for the time this morning. We appreciate it and we're going to get back to work here. Our mantra here is Mytesi, Mytesi, Mytesi. So that's where we're going to march. I appreciate your interest in the story and the company..

Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect..