Adamas Pharmaceuticals, Inc.
Q1 2020 Earnings Call Transcript

Published: 10 May 2020

[Operator:]

Welcome to the Adamas Pharmaceuticals First Quarter 2020 Financial Results Corporate Update Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]I would now like to turn the call over to Peter Vozzo, Investor Relations Representative for Adamas Pharmaceuticals. Please, go ahead.

[Peter Vozzo:]

Thank you, Andy, and good afternoon, everyone. Before we begin, I would like to remind everyone that this call will contain forward-looking statements, which are subject to risks and uncertainties. Any statements regarding future events, results or expectations are forward-looking statements. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We undertake no obligation to revise or update these forward-looking statements in light of new information or future events, except as required by law. Information concerning factors that could cause actual results to differ materially from those contained in or implied by such forward-looking statements are discussed in greater detail in our Form 10-Q filed today with the SEC, especially under the caption Risk Factors.I'll now turn the call over to Neil McFarlane, Chief Executive Officer

[Neil McFarlane:]

Thank you, Peter. Good afternoon, everyone, and apologies for the delay. It's a busy earnings call day and we had a heavy volumes of callers. I'm pleased to be here with Vijay Shreedhar, our Chief Commercial Officer; and Chris Prentiss, our Chief Financial Officer.First, I'd like to acknowledge, today is not a routine earnings call. As a company, industry and country, our lives have all been impacted by the COVID-19 pandemic and we've collectively been pursuing new ways to deliver value in our everyday lives. I would also like to take the opportunity to express my sincere thanks to healthcare workers on the front lines, our extremely dedicated employees and our industry partners for their diligence over the past weeks as they stayed focus on our shared mission, to deliver innovative medicines that reduce the burden of neurologic diseases on patients, caregivers and society. Many of employees have been working under challenging circumstances and I'm grateful they have stepped up and continued to deliver in these conditions.Vijay and Chris will discuss the details of our Q1 performance in a moment. Before they do, I'd like to take a few minutes to highlight where Adamas stands today, how our operations may continue to evolve and how we will remain focused on delivering solutions to patients who rely on us.As an organization, we have been able to rapidly embrace new ways of working. I am very pleased that we were able to effectively support our employees, as they transition to working remotely, while protecting their well-being and the safety of our customers, as we continue to make GOCOVRI available to patients.During the first quarter of 2020, we continued to make progress on our strategic priorities and implemented several durable tactics in the latter part of the quarter in response to the pandemic. Moreover, we made a meaningful impact for patients, delivering the highest number of total prescriptions in a quarter since launch.As previously reported, the majority of our total prescriptions support patients who are refilling GOCOVRI. However, as the national shelter-at-home orders were implemented, we predictably observed early signs of a decrease in new patient prescriptions. Vijay will elaborate on that in a moment.Regarding product supply, we have adequate inventory of GOCOVRI to address patients' needs into late 2021 with our recently completed manufacturing campaign. And our specialty pharmacy partner continues to ensure consistent supply, delivering GOCOVRI directly to patients' homes.As we progress through 2020, we intend to build on the advances the company has made over the last few quarters. The confidence we have in our long-term growth strategy for GOCOVRI is strengthened by several factors, including the longevity of our intellectual property, positive feedback on the unique benefits of GOCOVRI, long-term data showing GOCOVRI's sustained efficacy and safety profile over a two-year period, along with a strong patient persistence we continue to observe.Regarding ADS-5102, we continue to make progress in assessing the overall value of the multiple sclerosis walking impairment program. As we communicated previously, we are conducting market research, further analyzing the INROADS Phase3 data along with the open-label extension study and engaging with the FDA to determine a path forward for this program. We'll remain on track to complete our assessment by the end of the second quarter of this year.The impact of COVID-19 is presenting unique challenges and we are monitoring the situation closely to understand the ongoing impact to our business. We intend to adjust how we operate, while keeping the welfare of patients, employees and the healthcare community at the heart of what we do. We will continue to be disciplined with operating expenses and dynamically reallocate resources, as future operating conditions warrant to support the growth of our business. I'm pleased with how we've adapted thus far and remain confident in the resiliency of our employees to continue to deliver in the future.I will now turn the call over to Vijay. Vijay?

[Vijay Shreedhar:]

Thank you, Neil, and good afternoon, everyone. I'm pleased to be speaking with you today. I will begin with an overview of our performance in Q1 and then briefly comment on the impact of the pandemic on our commercial activities and how we have responded to this challenge, while continuing to drive our business forward.Starting with performance, Q1 total GOCOVRI paid prescription, or TRx, that exclude product from the free trial program, were 7,210, our highest ever since launch and consistent with the strong results in Q4 2019, representing a 24% increase over Q1 last year. This TRx performance, despite the typical Q1 impact with insurance plan resets and the late quarter changes due to COVID-19, highlights the positive demand momentum built before the recent disruption. We see this momentum as strong validation of our strategic plan for growth, rooted in our diagnosis of the business in early Q3 last year.There were 500 new paid prescriptions, NRx, and 6,710 recurring paid prescriptions, RRx, in the quarter. As we've stated on our Q4 2019 call, we have transitioned from new patient starts, which was a patient's first dispense either free or paid to NRx, which is a patient's first paid dispense as a metric, which we believe is the most meaningful measure going forward. Persistence remains strong and steady at 45% to 50% at 12 months, continuing to highlight the value GOCOVRI is bringing to patients. Conversion rates from free trial to paid prescriptions remain steady at between 50% and 55% in the quarter.I'd also like to make you aware that the FDA recently updated the GOCOVRI prescribing information, to state that quote, GOCOVRI is not interchangeable, with other amantadine, immediate or extended release products end quote.We believe this addition, significantly strengthens GOCOVRI's clinical differentiation and value. Since the last two weeks of March, we have seen widespread closure of neurology clinics, cancellation or rescheduling of patient appointments, or the switching from routine to telemedicine visits, as a result of shelter-at-home orders.This has been combined with restriction of access to sales representatives in some institutions, and an abrupt transition to virtual details, resulting in disruption to the neurology market. As Neil mentioned, we have rapidly adapted to this scenario to minimize the impact, on prescribers' ability to get new patients started on GOCOVRI.Within three days of the first shelter-at-home orders, we fully transitioned our sales force to virtual interactions with health care providers. These include HCP engagements, as well as speaker programs delivered by the opinion leaders, on our speaker bureau. In the first few weeks of Q2, we have seen good execution of virtual details and participation in virtual speaker programs.We are pleased, that in April, we achieved approximately half of the pre-pandemic sales force activity level. To supplement this, we have increased our digital campaigns to ensure that we continue to provide brand information to prescribers. And have continued to provide them with resources, through the GOCOVRI care coordinators to ensure access issues are not intensified, during this difficult period.Our team, in collaboration with our specialty distribution partner, rapidly created new ways for HCPs to submit prescriptions for appropriate patients, such as, by phone and e-prescribing platforms given the logistical challenges of faxing prescription forms, in the telemedicine environment.We have enhanced communications from GOCOVRI on board the clinics, as well as to patients, carefully tracking the status of the refill shipments to ensure our current patients do not experience, any additional burden, in refilling their prescriptions. As previously stated, the majority of our business comes from refill prescriptions from current patients, with limited impact to-date.We are encouraged that patients on GOCOVRI stay, on GOCOVRI. Given the overall demographic of patients we serve. And the chronic non-life-threatening nature of Parkinson's disease, it is not surprising that we have seen a market decline in patient visits to clinics and consequently early signs of a decrease in new prescriptions for GOCOVRI.Despite this, we do continue to see new prescriptions coming in, with physicians utilizing the newly implemented ways of submitting prescriptions for GOCOVRI. While we are leaning into this uncertain situation and adapting rapidly, we are consciously creating flexible solutions and building tools that can be leveraged and scaled for success longer term, in a future which will no doubt continue to be shaped and changed by this pandemic. We are proud of our teams for adapting so quickly and creatively and continuing to execute with a focus on serving patients.I will now turn it over to, Chris to provide an overview of our financial performance.

[Chris Prentiss:]

Thanks, Vijay and good afternoon everyone. Please refer to our press release issued earlier today, for a summary of our financial results, for the first quarter 2020. First quarter 2020 product sales, were $14.5 million a 24% increase over the same quarter last year. Consistent with our historical experience and the comments we made last quarter, the gross-to-net in the first quarter is significantly higher than the fourth quarter, driven by our payer mix.We expect the gross-to-net percentage to follow a similar pattern as the prior year. And decline quarter-over-quarter and to end the year in the mid-teens. R&D expenses were $2.5 million for the first quarter of 2020, compared to $5.2 million in the prior quarter and $10.2 million in the first quarter 2019.Q1 2020 R&D expenses were focused on the closeout of our INROADS trial as well as the open-label extension study, which is planned to continue through the end of the year. During the first quarter 2020, SG&A expenses were $24.6 million, compared to $30.3 million in the fourth quarter of 2019 and $27.7 million in the first quarter of the prior year.Our SG&A expenses represent our continued investment in GOCOVRI, with fluctuations from prior quarters, primarily driven by the timing of administrative costs. Cash and investments as of March 31st 2020, were approximately $115 million. Overall cash burn for the first quarter was $17 million, consistent with the prior quarter, which was approximately $18 million.We continue to evaluate our planned investments in the business and reallocate resources as appropriate. As a result of this process, we have adjusted our 2020 SG&A expense guidance to be $105 million to $115 million, from our previous range of $110 million to $120 million. This range includes stock-based compensation of $9 million.Our guidance for 2020, R&D expenses is unchanged. We continue to expect R&D expenses for 2020 to be the range of $10 million to $15 million, which includes $1 million of stock-based compensation. In summary, we expect total operating expenses for 2020 to be in the range of $115 million to $130 million, compared to the previous range of $120 million to $135 million with $10 million of spend related to stock-based compensation.We believe we are making the appropriate investments in the business to position GOCOVRI for long-term success, as we take the appropriate cost containment steps to manage through the current uncertainty.This concludes our prepared remarks. With that, I will open the line for questions. And I'll ask you to be a little patient, as we take your questions from multiple locations, Operator?Question-and-Answer Session

[Operator:]

[Operator Instructions] And our first question is from Josh Schimmer with Evercore.

[Josh Schimmer:]

Hi. Thanks for taking the questions. I just want to maybe get a little bit better granularity on prescriptions, over the course of the quarter and into April. It looks like fairly modest growth. Sequentially, which I guess in theory, could be explained by the pandemic. But did the year start well and strong and then tail off? And to what extent have you been able to see some recovery? Any additional granularity on, that would be much appreciated. Thanks.

[Neil McFarlane:]

Thanks, Josh. You came over a little digitally. But I think we got the gist of your question. Let me start by saying that, we did have continued quarter-over-quarter growth going into the Q1 seasonality, along with the end of the quarter impact from the slowdown as we mentioned, in our prepared remarks. We feel pretty good that, it further strengthens our diagnosis of the business and the strategy moving forward. But to get into some of the details, I'll ask Vijay to comment a little bit more.

[Vijay Shreedhar:]

So that's exactly right Josh. We had a good start to the year. We had good momentum going in carried forward from Q4. We were tracking to ensure that patients on GOCOVRI in Q4 continued to remain on GOCOVRI in Q1 and we're proud of what we achieved there. As I mentioned, the majority of our scripts are refill and we don't see any impact on that as we transition from March into April in this pandemic season. But where we are seeing some impact is on the new patient scripts coming in. And I think it's early days right now for us to know what the trends there are likely to be. But what we are excited about is that we are evolving our tactics and we're making a lot of inroads with the new tactics especially with the activity, which is a leading indicator of what is to come. So that's where I will reiterate our optimism.

[Josh Schimmer:]

Maybe I can try to be a little bit more specific. So in the fourth quarter of last year, you grew prescriptions by about 500 and had been steadily increasing quarter-over-quarter. It looks like sequentially now the increase is only 50. So maybe you could address a little bit the cadence of new patient starts that led to such a dramatic quarter-over-quarter decline and whether there are other seasonal factors that might have driven that change? Thank you.

[Vijay Shreedhar:]

Yeah, Josh. So let me reiterate the metrics that were compared were slightly different right? So in Q4 we looked at new patient starts, which were a combination of free trial patients and those that received paid prescriptions for the first time in that quarter. We transitioned as we announced starting in this earnings call. We are talking about purely new paid scripts or NRx for patients. So we're comparing two different metrics a little bit. So I want to make sure that we're aware of that. We are continuing to add new patients at about the same pace, so we feel good about that.

[Josh Schimmer:]

Okay. Thanks.

[Operator:]

And our next question is from Marc Goodman with Leerink.

[Neil McFarlane:]

Operator, we're not hearing the question.

[Operator:]

One moment we’re having technical difficulty.

[Neil McFarlane:]

Operator?

[Marc Goodman:]

Hello? Can you hear me?

[Neil McFarlane:]

Yes, we can hear you?

[Marc Goodman:]

Good. So I have two quick questions. So can you provide more color around the free trial program and the current environment? And is there any impact from COVID-19 on the timing and execution of the program? Thanks.

[Vijay Shreedhar:]

Yeah. Thank you for the question. The pieces of feedback that we hear in the COVID environment from physicians is broadly that they appreciate the ability to get a patient started with a bottle of GOCOVRI being directly sent to their home and them being allowed to try the drug while the paperwork for payer access is worked out for them to get on the drug as paid patients, right. So the free trial program is being particularly celebrated at this time as one that allows patients quick access to the drug.The place where we have now had to make changes is as we create new vehicles for physicians to send their scripts in by phone and by e-scripts we have now made the free trial program available for access for patients whose scripts come in through that vehicle. Other than that, we believe that the free trial program is a great vehicle for allowing trial of the drug among physicians who have not had clinical trial yet of the drug for experience with their patients and for patients to get started on and experience the benefits as their prescriptions are being evaluated by payers. So we remain committed to the program.

[Neil McFarlane:]

Maybe I'll just add one quick thing to that. It's the right thing to do for patients, we're able to -- once a physician makes a commitment to put a patient on product, we're able to get that product to the patient within a few days and GOCOVRI within a few weeks, you'll have an understanding if it's making an impact for you in terms of your clinical impact. So we continue to utilize it as Vijay said to ease the burden of access for patients.

[Marc Goodman:]

And did you notice any change on the fulfillment process?

[Vijay Shreedhar:]

We have seen continued efficiency in the fulfillment process. If your question is particularly with relation to COVID, we have not seen a change or disruption to our fulfillment process as a result of COVID yet. I know, it's still early days yet, but we have not seen a change as a result of the pandemic. But overall before the pandemic, we were continuing to make good progress in terms of tightening the various aspects of our fulfillment process.

[Marc Goodman:]

Great. That’s very helpful. Thanks.

[Operator:]

And our next question is from the line of Raghuram Selvaraju with H.C. Wainwright.

[Unidentified Analyst:]

Hi. This is Bryan Tone [ph] on for Ram a couple questions for you. Have you observed specific impact to long-term patents retention due to the pandemic? If so to what extent?

[Vijay Shreedhar:]

I'm sorry. Could you repeat that question? Impact to long-term…

[Unidentified Analyst:]

Sure. Yeah, have you observed impact to long-term patents retention due to the pandemic and if so to what extent?

[Neil McFarlane:]

I'm sorry. Is your comment in regards to patents? It's coming across a little -- long-term patent, or are you thinking of -- or are we hearing persistency? Oh, patent?

[Unidentified Analyst:]

Patent, patent retention yes.

[Neil McFarlane:]

No. We have seen no issues with patent retentions as we may have mentioned previously. And I'm not sure, I'm answering your question. But as we mentioned previously, we settled our first filer with Sandoz earlier this year that gave us -- I should say gave them the opportunity to come in, in March of 2030 or sooner under certain circumstances.I'm going to stop there, and see if you can maybe ask your question again. Because we're having a hard time between the four locations that we're in seeing if that was regarding persistency for patients or intellectual property?

[Unidentified Analyst:]

No. That was sufficient. Thank you. Another question, are you planning to institute any internal cost-cutting measures?

[Chris Prentiss:]

Yeah, maybe I can take that one. So, we certainly did revise our SG&A guidance down and brought our range down by $5 million. So we are looking at both internal and external spend reductions as we think about the rest of the year. But we have not instituted any furloughs or layoffs at this point.

[Unidentified Analyst:]

And what about with regards to R&D?

[Chris Prentiss:]

We've not made any revisions. We're really focused on closing out our INROADS trial as well as the open-label trial that goes through the end of the year.

[Unidentified Analyst:]

Okay. Perfect. That’s all for me. Thank you.

[Neil McFarlane:]

Great. I'm going to jump in here. We're in a lot of different locations, so I appreciate everyone's patience. And I think that I want to add to that question in regards to internal and external comments. We've made the appropriate, and I think rightful determinations internally to be able to decrease our guidance both internally and externally to keep sufficient capital to deliver on our growth strategy for the business. So, maybe I'll stop there and see if we can move forward to the next question.

[Operator:]

And our next question is from David Amsellem with Piper Sandler.

[Unidentified Analyst:]

Hi, everyone. This is Zach [ph] on for David. Thank you for taking my question. Sort of building off of a previous question, we were wondering if you might be planning on maybe subsidizing patient out-of-pocket costs more aggressively or sampling more aggressively given the economic reverberations from the current pandemic. Thank you.

[Neil McFarlane:]

Thanks, Zach. I'll hand that one over to Vijay.

[Vijay Shreedhar:]

You know, we are committed to making GOCOVRI as broadly available to patients as possible and that is something that is very important to us, so appreciate the question. From a commercial side, we are able to ensure that our patients have an out-of-pocket cost of no greater than $20 a month and we have delivered on that consistently for our patients.As you know, from our Medicare side, we are limited in what we can do. But we do try to provide as much assistance as possible to patients. We do have a free trial program that we think is perfectly designed for serving patients, because it gives them four weeks of trial and our clinical trials have shown benefit can be seen within that period of time and it allows plenty of time for the physician to be able to process payer approvals for the patient.And we've now started to supplement that free trial program, which is shipped directly to the patient's home with a trial through physical sample bottles in select physician offices, in large volume Parkinson's treating centers to be able to offer them that option to get patients started as well. So we are doing everything possible to get patients started and make GOCOVRI as broadly available as possible.

[Unidentified Analyst:]

Okay. Thanks. That’s helpful.

[Operator:]

And our next question is from Ken Cacciatore with Cowen.

[Ken Cacciatore:]

It's definitely a tough name, and you did a good job with it. Hey guys. A couple quick questions. Just first just wondering, and I know it's early days with telemedicine for these clinicians. But how difficult are the clinicians telling you it is to diagnose or discuss LID via telemedicine? So what are you hearing from them in terms of being able to diagnose, and even get the process going?And then on the persistency rate, I'm still in my head having a hard time whether it's really good or not. So I was hoping if you could frame for us, what we see for other Parkinson's add-on therapies. How does this compare? When you get feedback, is it tolerability or is it just often the lack of efficacy when you're starting patients that they roll off.And then lastly, and Neil don't laugh at me at this question, because obviously you're talking about lowering spending. But it looks like we have a really good drug here that's helpful to patients. At what point does DTC make sense for you is just simply capital constraint?Or does this product not lend itself to start getting the word out a little bit broader or we just don't feel like we have enough clinicians trained to accept if we're kind of trying to drive patients in? And I know right now we're on a pause with the pandemic. But how do you feel about when we could turn on and really try to light up GOCOVRI a little bit more for folks? Thank you.

[Neil McFarlane:]

Thanks, Ken. And we're not laughing at your questions. I think they're all good ones. Let me start off a little bit in regards to the HCPs that are out there continuing to practice. And as we mentioned in the prepared remarks, there are a number of folks who are not seeing patients at all. There are some who are seeing still a very high volume of patients that we've heard as high as 85% of the patient volume of certain movement disorders.Specialists are still seeing those patients, and I think it's really early for us to understand what the impact is via tele-health. I can tell you that Vijay -- and I'll hand it over to Vijay here in a minute -- he and his team have seen a lot of creativity when it comes to taking care of patients.And there is an element, through telemedicine where patients who would normally pre-medicate themselves for a doctor's visit to be at their best, if you will, when they go to the doctor's office; that being seen in their natural environment or in their home environment actually allows a physician to see them potentially with dyskinesia and/or OFF and more a real-world setting if you will.So I think it's on both sides. One side is the fact that patients are not being able to be seen in their doctor's offices and the other is that it may be some benefit. So let me hand it over to Vijay, and he'll talk a little bit about the persistency and our continued persistency and the other topics including DTC.

[Vijay Shreedhar:]

Yeah. Thanks for the questions Ken. I think they're really good questions. I would say from a telemedicine perspective, the early signs of what we see are a range of responses among physicians. There are those who are still struggling with transforming their practices to adjust to telemedicine.And there are those that are already seeing 80% to 90% of their patients from a telemedicine platform either from home or from office. So I think it spans the gamut, but everybody is adapting rapidly and moving towards the latter part of seeing all their patients very effectively.The other aspect that spans the gamut is that there are physicians, who's "telemedicine appointments", represent telephone calls where it is very difficult to diagnose a patient. And it involves supplementation with a patient or caregiver sending them or emailing them videos of what they're experiencing.But that's few and far between all the way to the other end of the range, where there's a successful video call where somebody can actually watch. And the opinions there are all over the place in terms of how effective telemedicine can be.I know that some of the major physician organizations are now starting to offer movement disorder diagnosis training. So we are looking at those as well to see if we can partner with them in terms of providing that education. So we are excited about that from a telemedicine perspective.From a persistency perspective, you know, it's a great question. We've addressed this before, but our best example that we see from an add-on therapy is rasagiline well-tolerated. It provides symptomatic relief and there the persistency is comparable to where we are at the one-year mark. It's about the 50% range, which is where we are.So we're pretty satisfied and the feedback that we get from physicians and we track this cohort after cohort with the new patients starting the drug through our specialty pharmacy. And it's stunningly consistent of what we see all the way through in terms of patients who are there at the 6-month and the 12-month mark.Reasons for why they -- why 50% of the patients drop off vary widely. It depends of time of year where they start. It could be at the beginning of the year plan recess, which is why going back to the first question that was asked, we're excited about the momentum because with the plan recess moving from Q4 to Q1 the fact that the majority of the patients stayed on the drug is a good reason so that's usually the reason that we get for why patients attrition off after a while.In terms of your question about DTC and when would we double-down on communicating directly to patients. Let me expand that into more of when is our marketing starting to evolve more towards communicating with patients and their caregivers. And I would say that there is already different ranges of what we can do to communicate with patients. It does not always have to be a television commercial, which is expensive and capital intensive as you pointed out.We have ways of reaching social media networks where Parkinson's patients and their caregivers are quite active. We have ways of directly communicating with patients in DTP marketing initiatives that are happening within sites of care as well as what's happening digitally in platforms where they're quite interactive. So there's a lot of effort on to start reaching them there with the intention of expanding it out to DTC, as we see an inflection from that perspective. So I hope, we addressed your question on that.

[Ken Cacciatore:]

You did. Thank you.

[Operator:]

Our next question is from JMP Securities. His name is Jason Butler.

[Jason Butler:]

Hi. Thanks for taking the question. Just wondering obviously, with the slowdown in patient visits, we have heard that docs appear more willing than normal to engage in education activities including peer-to-peer activities. So just wondering, if you thought about ramping any of those efforts virtual peer-to-peer activities or any additional efforts to take in feedback on the marketing strategies you put in place over the last year or so? Thanks.

[Neil McFarlane:]

Yeah. Thanks, Jason. I'll ask Vijay to comment on some of the activities that have ramped up and we're really proud of how we've been able to pull that together. Vijay?

[Vijay Shreedhar:]

Yes, thanks Neil. I would say that's pretty astute that you've heard that already. That is exactly what we see here. Our salesforce has done a phenomenal job of executing virtual programs with physicians able to talk directly to their peers and take the GOCOVRI message to them. We have seen a successful transition to virtual speaker programs and also a good ramp week-over-week-over-week in terms of how many programs are being planned, executed and attended by physicians. So we're seeing very good momentum there.

[Jason Butler:]

Great. Helpful. Thank you.

[Operator:]

And our next question is from Jason Butler with JMP Securities.

[Neil McFarlane:]

Coming back for more, Jason? Operator that was Jason that spoke previously. I'm not sure if he has a follow-up question.

[Operator:]

Okay. I will go ahead release him then. Our next question is from – again, David Amsellem with Piper Sandler.

[Neil McFarlane:]

Operator, David may have already asked his questions.

[Operator:]

Okay. So now we have – again with H.C. Wainwright. May be it’s a duplication. I’m sorry,

[Neil McFarlane:]

Yeah, may be a duplication. I understand that Tim Lugo from William Blair may be trying to chime in. If we can find him that would be great.

[Operator:]

Okay. We will do.

[Neil McFarlane:]

Okay operator, we may be ready to rock and roll here. If there are no further questions let's get people back to their day and I can make some closing remarks.

[Chris Prentiss:]

Tim is trying to ask a question. Yeah, Andy if you could try to find Tim Lugo that would be great. Otherwise, we'll go to Neil's closing remarks

[Operator:]

And I am sorry. We do have Tim Lugo with William Blair. Open [ph].

[Tim Lugo:]

Thank you for squeezing me in there and digging me out the queue. And I apologize if this was covered earlier but with OpEx guidance down $5 million, how much of that represents the less expenses incurred due to COVID and with COVID kind of obviously, taking a larger portion of Q2, can we expect kind of further expense reductions or I guess what are the trends quarter-over-quarter?

[Neil McFarlane:]

Yes thanks, Tim. I'm going to ask Chris to dive in there on our disciplined investment approach.

[Christopher Prentiss:]

I appreciate your patience in getting the question in Tim. Thanks. It really is a combination of the two. So there's certainly some natural cost savings that occurring right now as, the team isn't traveling as we've moved speaker programs from live to virtual; there's natural savings that are occurring there.We're also looking at all of our investments throughout the remainder of the year and just making sure we're putting every dollar where we should. So it's really a combination of the two as we continue to examine and figure out the length of time that this pandemic impacts the business. Then obviously we'll continue to adjust further if we need to. But where we are right now, we think this is the appropriate place for us to still fully invest in GOCOVRI and its long-term success.

[Tim Lugo:]

Okay, fair enough. And I've heard from some other companies that they're expecting a return to normal sometime this summer. Is that the expectation for the Adamas team as well? And does a return to normal also suggest maybe a lot more new starts? I know obviously, Q1 was impacted and that's completely understandable.

[Neil McFarlane:]

Vijay?

[Vijay Shreedhar:]

Yes Tim. I would take us back to the mix of business that we have, right? So I think we have – the majority of our business coming from returning scripts. We feel good there. We are reaching out to our patients and we're keeping them on drug and we feel very good about that.In the new patients portion of our business we have seen a little dip and I think it's early days here. We're watching day after day, week after week in terms of bringing them back on board. We feel very good about the tactics we've put in place and the speed with which our team has adapted to them and is executing on them. And these are leading indicators of demand to come.I think it's a little early for us to comment on when we may see impacts to our overall business in the coming quarters Q2, Q3 or Q4. What we are doubling down on and are very confident about is the fact that the three strategic pillars we focused on, which is creating the urgency to talk about dyskinesia and OFF time and differentiating GOCOVRI to which the FDA just added a feather, as well as ensuring our fulfillment process is extremely robust and customer friendly is what we're confident in and we're doubling down on and we feel good about it.

[Tim Lugo:]

Okay. Thank you for the question.

[Neil McFarlane:]

Operator?

[Operator:]

[Operator Instructions] There are no further questions.

[Neil McFarlane:]

Thank you, Andy and I appreciate your patience as we've dealt with some of the technical difficulties. You know over the last few months of uncertainty, we've shown a great resilience as an organization. I am eternally grateful to our employees for adapting to new ways of working for them continuing to stay safe and continue to make an impact for patients.Looking ahead, we remain confident in the opportunity for GOCOVRI and the progress we've made to strategically position our business for long-term growth. We look forward to continuing the dialogue and providing updates on upcoming quarterly results calls. Be safe. Thank you.

[Operator:]

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