Adamas Pharmaceuticals, Inc.
Q4 2019 Earnings Call Transcript

Published: 26 Feb 2020

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the Adamas Fourth Quarter 2019 Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions]I would now like to hand the conference over to your speaker today, Peter Vozzo, Investor Relations. Thank you and please go ahead, sir.

[Peter Vozzo:]

Thank you, Chris, 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-K 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 thanks for joining us. I'm pleased to be here with Vijay Shreedhar, our Chief Commercial Officer; and Chris Prentiss, our Chief Financial Officer. Chris assumed the role of Chief Financial Officer.2019 was a productive year for Adamas. We continued to make progress, educating healthcare professionals, patients, and caregivers on the disruptive impact of dyskinesia and OFF time while differentiating recovery to drive adoption and reduce barriers to access. Due to the initiatives implemented in the latter half of the year, we have seen improved patients and physician demand as well as improved operational effectiveness.In addition, data from our open-label Phase 3 EASE LID 2 trial recently published in the Journal of Parkinson’s Disease shows that a wide cohort of patients taking GOCOVRI experienced long-term reductions in both dyskinesia and OFF time sustained for at least two years. This data not only expands our knowledge of the efficacy of GOCOVRI in the real-world setting, but also its long term safety in treating Parkinson’s disease patients.The confidence we have in our growth strategy for GOCOVRI is strengthened by the strong patient persistence we continue to observe positive physician feedback on the benefits of GOCOVRI and our ability to implement commercial strategies to improve access. In 2019 product sales increased 60% over the prior year creating a strong foundation to build upon in 2020. In a moment Vijay will offer additional perspectives on the current GOCOVRI market dynamics.Regarding ADS-5102, during the fourth quarter of 2019 we announced topline results from our INROADS Phase 3 trial for multiple sclerosis patients with walking impairment for whom there is a significant unmet need and limited treatment options. This well executed study hit its primary endpoint showing a statistically significant improvement in walking speeds and of potential benefit for these patients.As we stated previously, we will continue to assess the value and potential path forward for this program as we complete market research and further analyze the INROADS data. Our evaluation will also be informed by the ongoing open-label extension study utilizing the 274 mg dose of ADS-5102 and we expect to deliver our assessment in the first half of this year.As we move into our third year of commercialization we are building on our recent progress and remain focused on driving commercial success for GOCOVRI whilst determining the path forward for ADS-5102 in multiple sclerosis and walking impairment. Our ability to continue to invest strategically in GOCOVRI has been strengthened by the recent patent settlement with Sandoz. The agreement granted Sandoz with nonexclusive license to begin selling a generic version of GOCOVRI as of March 4, 2030 or earlier in certain circumstances and enables us to maximize the number of patients who may benefit from GOCOVRI and deliver sustainable value.I'll now turn the call over to Vijay.

[Vijay Shreedhar:]

Thank you, Neil, and good afternoon everyone. It is great to be speaking with you today. I will begin my comments with an overview of our performance in Q4, provide an update on the progress we've made in our key strategic priorities, and then outlined our plan to build on our momentum.Starting with performance, Q4 GOCOVRI total paid prescriptions that exclude product from the free trial program rose to 7160 scripts, representing an increase of 8% versus Q3 of 2019 and 25% versus Q4 of 2018. Total paid prescriptions for 2019 were 25,780, representing a 66% increase over the 15,500 total paid prescriptions in 2018. This continued quarter-over-quarter growth in total paid prescriptions is encouraging.There were 750 new patient starts in Q4 which included free trial patients and new paid prescriptions or NRX patients who did not receive free trial. This represented a 6% increase quarter-over-quarter which is generally in line with what we have seen in previous quarters. Persistence remains strong and steady at 55% to 60% at six months and 45% to 50% at 12 months, again highlighting the value GOCOVRI is bringing to patients. Conversion rates from the free to paid prescriptions registered an increase to between 50% and 55% in the quarter, a topic I will elaborate on in a moment.Moving forward, we will transition reporting from new patient starts to NRX given that this is the third year of launch and the free trial program is entering its second year as well. Our analyses show that Q4 demand was driven by two factors; first, a continued increase in new prescribers as we registered a similar number of new to brand healthcare practitioners trialing GOCOVRI in Q4 as we did in the previous quarter.Second, we saw a stabilization of demand from current prescribers. As discussed in our previous earnings call, we rolled out an action plan to optimize the activity of our sales force and to increase share of voice and high volume prescriber offices and we are encouraged to see early signs of the impact that this is having.Moving on to progress within our key strategic priorities, as Neil indicated we focused our efforts on three areas; educating physicians to increase urgency to treat, driving appropriate trial and adoption of GOCOVRI, and streamlining our fulfillment process. I'm pleased to report that in Q4 we continued to make substantial progress in each of these areas.First, we focused on increasing urgency to treat by educating healthcare practitioners to recognize the disruptive impact of dyskinesia and OFF time. Our multichannel disease state campaign specifically targeted physicians treating a high number of Parkinson's disease patients and generated over 1 million impressions in the quarter with a robust key action rate by those who viewed the content.Essentially, this means that we have our target audience viewing the content and following through with visits to our websites and downloading resources which is good. We supplemented this campaign with new materials and training to enable our sales force to have patient focused discussions to highlight the importance of systematically recognizing and diagnosing appropriate patients, and to articulate the GOCOVRI clinical profile more effectively.We also increased our investment and focus on peer-to-peer education and on physician delivered patient education programs. In Q4 we saw significant increase in both, the number of programs and attendees versus the previous quarter, reinforcing the clinical interest we see amongst physicians and patients. The majority of patients who attended the program indicated that it was likely that they would talk to their doctor about dyskinesia and/or GOCOVRI. Most physicians indicated that they were likely to prescribe GOCOVRI for clinically appropriate patients after attending our program.Second, we focused on increasing awareness of our four-week free trial program through digital marketing and through the new prescription form. We rolled out new reminder resources for physician offices to provide easier access to the program for clinically appropriate patients. We continue to evaluate all elements of the program to expand trial of the drug amongst non-adopters and to serve patients better.Lastly, we focused on improving the customer centricity of our fulfillment process to ensure that it is simple, reliable, and transparent. The new prescription form introduced in the quarter saw rapid uptake and early data suggests a 25% reduction in errors during submission with this new form, underlining the positive impact of this change. The GOCOVRI care coordinators, a dedicated single point of contact to streamline communication for clinics and patients received favorable feedback and preliminary surveys fielded so far.We believe that the impact of these changes contributed to an increase in the conversion rate from free trial to paid prescription with the new rate rising to 50% to 55%. We are highly encouraged by these early signs and will continue to focus on further enhancing our distribution processes.Moving on to our client to further build momentum, we are focused on increasing both breadth and depth of GOCOVRI prescriptions for appropriate patients. To expand our base of prescribers, we intend to continue to intensify peer-to-peer education and digital marketing efforts.To increase use amongst current prescribers, we intend to continue optimization of sales force activity and messaging, as well as enhancing the customer centricity of our fulfillment process from position prescription to patient receiving drug. We are pleased with the progress we've made thus far, and by the positive feedback we continue to receive from healthcare practitioners, including regional and national thought leaders.I will now turn it over to Chris to provide an overview of our financial performance and to highlight the metrics that we will be reporting on moving forward.

[Christopher 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 fourth quarter and full year 2019. As we highlighted in our preliminary sales announcement in early January, we are pleased with our first quarter the pulmonary sales announcement in early January we are pleased with our fourth-quarter GOCOVRI sales which reflect continued advancement of our commercialization efforts.Fourth quarter 2019 product sales were $16.3 million, a 17% increase over $13.9 million in the third quarter of 2019 and 23% increase over the same quarter last year. For the full year 2019 GOCOVRI product sales were $54.6 million compared to $34 million for the full year 2018, an increase of 60%. R&D expenses were $5.2 million for the fourth quarter of 2019 compared to $6 million in the prior quarter and $10.6 million for the fourth quarter of 2018.Full year R&D expenses were $30 million for 2019 compared to $39.3 million for 2018. The decrease was driven primarily by completion of enrollment for our INROADS trial in the second quarter of 2019 as well as deferral of the ADS-4101 program which was discussed on our Q1 2019 call.During the fourth quarter of 2019 SG&A expenses were $30.3 million compared to $31.2 million in the third quarter of 2019 and $27.6 million in the fourth quarter of the prior year. Full year SG&A expenses were $114.4 million for 2019 compared to $109.1 million for 2018. Our SG&A expenses primarily reflect our investment in driving the growth of GOCOVRI through patient and physician adoption and a better customer experience.Cash and investments as of December 31, 2019 were approximately $133 million. Overall cash burn for the fourth quarter was consistent with the prior quarter at approximately $18 million. We believe this is sufficient capital to continue our near-term strategy to increase the number of patients who can benefit from GOCOVRI.Now let me turn to our outlook for 2020. We anticipate there may be an impact on product sales as a result of typical first quarter factors, such as benefit plan year resets impacting the donut hole liability and commercial co-pay deductibles. For 2020 we expect the gross to net percentage in the low to mid 20s for the first half of the year and for the gross to net percentage to decline over the second half of the year to the mid teens.As we announced in our press release, we expect R&D expenses for 2020 to be in the range of $10 million to $15 million or approximately half of our R&D spend from 2019, as we focus on closing out our INROADS study as well as completing the open-label extension study by the end of the year. This R&D expense range includes 2 million of stock-based compensation. We expect SG&A expenses for 2020 to be $110 million to $120 million consistent with our SG&A spend in 2019. This range includes stock-based compensation of $9 million.We are making the appropriate investments in the business to position GOCOVRI for long-term success as we invested in additional capabilities and collateral to ensure GOCOVRI is able to those in need.In summary, we expect total operating expenses for 2020 to be in the range of $120 million $135 million with $11 million of the spend related to stock compensation. This compares to 2019 operating expenses of $144 million of which $13 million was stock compensation.As Vijay mentioned previously, beginning with our first quarter 2020 results call we will report NRX defined as new paid prescriptions as we believe that will be a more useful metric going forward. Consistent with our current practice, we will continue to report TRX defined as total paid prescriptions including both new and recurring, 12-month persistence rate defined as number of patients continuing to receive therapy, and conversion rate defined as a percentage of patients that transitioned from free trial to paid therapy.With that, I will now open the line for questions. Operator?

[Operator:]

Thank you. [Operator Instructions] And our first question comes from the line of Marc Goodman with SVB Leerink. Your line is now open.

[Unidentified Analyst:]

Hi, thanks for taking my question. This is Rudy on the line for Marc. So I have got two quick questions. First, can I talk about the payer access, like the trend you that you observed in the first two months in 2020? And the second, can you provide some updates on the epilepsy program that has been put on hold last year? Thanks.

[Neil McFarlane:]

Thanks Rudy, this is Neil. I will ask Vijay to touch on the first access question and then I'll take care of the 4101 question. Vijay?

[Vijay Shreedhar:]

Thank you, Rudy. We are committed to making GOCOVRI as broadly available to patients as possible. We continue to see that prescriptions are being paid through the prior auth mechanism coupled with medical necessity for both commercial and Medicare plans and so we see patients getting access to the drug. We saw that all through 2019 without any significant change in access and we, so far to your question, see the same in 2020.One thing I would add I think is from a peer aspect access perspective, we see current peer approval rate of 93% regardless of formulary status of prescriptions coming through from physicians. So we feel very encouraged about what we see from a peer access perspective.

[Neil McFarlane:]

Rudy, in regards to your question on our 4101 program, we've been actively evaluating the value that program both from an internal perspective and an external perspective, and we will announce on what the outcome of that is when we deliver on that.

[Unidentified Analyst:]

Thanks. That's very helpful.

[Operator:]

Thank you. And our next question comes from the line of Stacey Qu [ph] with Cowen and Company. Your line is now open.

[Unidentified Analyst:]

Congratulations on the progress and thanks for taking my questions, I have a few. First, can you provide guidance for what you expect to see in terms of persistence for 2020? And then more broadly can you help us understand what the sales force is focused on this year, remind us of the challenges that they are focused on for the current ongoing quarter and how should we be thinking about the cadence of GOCOVRI sales this year? And then I have one more.

[Neil McFarlane:]

Great, Vijay do you want to start with the first?

[Vijay Shreedhar:]

Yes, so guidance in terms of persistency rates, we've seen the persistency rates remain strong and stable since launch. We have analyzed them on every cohort that has joined in, in terms of patients every month and that has remained stable, and I would say that that we predict that it would remain the same for the rest of the year.So from a sales force perspective, here's what we are focused on. The three areas where we think we can accelerate momentum for GOCOVRI is, basically number one, increasing the urgency to treat. The sales force is focused on disease state education supplementing what we do from a disease awareness digital program that we have ongoing.So the sales force is out there talking about the disruptive impact of dyskinesia and OFF, how the two are interrelated, and the burden on patients and caregivers as they go through these motor complications. So that's one area they are focused on.And the other area is really articulating the unique clinical profile of GOCOVRI to drive adoption by ensuring both breadth in terms of number of prescribers jumping on as well as depth in terms of how many patients they identified within their practices to be appropriate, that they conclude to be appropriate for GOCOVRI.The sales force is also very actively focused on the fulfillment process education within offices and in ensuring that the practice has a very clear visibility into how to get access to GOCOVRI. So the sales force is busy with all of those things. And you said you had another question.

[Unidentified Analyst:]

Yes.

[Neil McFarlane:]

Stacey, just before we move to your second question, I want to point you also towards the data that was published this quarter actually on our EASE LID 2 data, that just as a reminder, that's a Phase 3 open-label extension study that provided the long-term reductions in both dyskinesia and OFF sustained for at least two years. And I think that's an important perspective as we think about persistence that continues to be also in the clinical data we just realized.

[Unidentified Analyst:]

Okay, that's really helpful and last question, I'm just wondering if you guys, when do you think that you guys will feel comfortable providing kind of production of revenues or any type of guidance for 2020?

[Neil McFarlane:]

We are going to get Chris into the call here.

[Unidentified Analyst:]

[Indiscernible]

[Neil McFarlane:]

Thanks Stacey, we'll get Chris into the call here.

[Christopher Prentiss:]

Yes, as we think about – Vijay has been on board now a couple of quarters and Neil is just entering in the full quarter number 2, I think we look at leading to and that's an important thing to think about it, we put so many of these new commercial tactics have come into the market in Q4 and even more recently even that. So we need to really see a little bit more time to go by and see what trajectory we are on and then we'll be in a position to give people a little more thoughts around peak and what revenue guidance might be.

[Unidentified Analyst:]

That’s really helpful. Thank you.

[Operator:]

Thank you. And our next question comes from the line of Jason Butler with JMP Securities. Your line is now open.

[Jason Butler:]

Hi, thanks for taking the questions. I just had two. Can you give us a sense of how penetrant you think you are among your longer term prescribers, say those that have been prescribing for more than a year, and how much more room you have to grow in those established prescribers?And then second question is, can you give us some insights into where it does occur? Why patients are not transferring from free prescriptions to paid? Is it just not getting coverage or are there other reasons for that to happen? Thanks.

[Neil McFarlane:]

I’ll ask Vijay to talk about our building on momentum here, moving forward.

[Vijay Shreedhar:]

So the first question was, essentially with regard to depth of prescription, as I understood it. From an established physician perspective, what is the headroom to grow in terms of numbers of patients? We think we have tremendous headroom in terms of number of patients in those established prescribers.We have had a lot of trial, but when we look at number of prescriptions, on a on a per capita basis, from an established prescriber we see tremendous opportunity to grow, which is why, where we're committed to is to optimize our sales force activity in identifying or helping physicians understand the urgency, so that they identify patients within those practices that they think are appropriate. And also ensuring that our fulfillment process is seen as simple and transparent and reliable, so that they feel the comfort in expanding utilization for appropriate patients within the practice, so that's the area that we're focused on.Your second question was with regard to, why do we see a fall off from free trial to paid prescriptions. We see it as a combination of a variety of factors. I think one group of factors was related to process. It involves between a free trial and the patient getting a paid prescription, it involves a set of activities by a physician's office. It involves a set of activities by the patient themselves.And so therefore, the process could be simplified further, which is why we have added in the GOCOVRI care coordinators to provide a very visible presence and a single point of contact presence for the physician's office and the patient in order to get that communication going. Why? Because there may be instances where the prior auth is not completed, the right paperwork is not submitted, or the patient doesn't answer the call and so on. Right? So the process is one we have focused on.The other area where we see an opportunity is to ensure that we continue the patients filling out and requesting when appropriate, raising their hand for resources to help them with their copay and out-of-pocket costs. Right? So when we see that happening well, we see that patients get on therapy. We do not see peer coverage as a reason why there's a drop off at this point.

[Jason Butler:]

Okay, great. Thanks for taking the questions.

[Operator:]

Thank you. And our next question comes from the line of David Amsellem of Piper Sandler. Your line is now open

[David Amsellem:]

Thanks, so just a couple. First, just a general sort of business development question and I know, Neil that you've alluded to wanting to bring in assets. I wanted to get your latest thoughts on how you're thinking about that, and what kind of bandwidth you have to add any assets. And then as part of that question, what is your appetite for taking on R&D risk going forward from an acquisition another company or an asset?And then secondly, this is sort of a longer term question on GOCOVRI, I wanted to get your thoughts on where you think gross to nets my trend over the long-term and I guess that's tied into contracting, so how should we think about, not so much really for this year, but as we think about the future of the product, beyond 2020? Thanks.

[Neil McFarlane:]

Thanks, David, I appreciate the questions. So let me maybe start by telling you a little bit about what we have, right? We have in my mind, a proven late stage development organization that knows how to do late stage trials and do them well, quality outcomes, as we've seen in our 5102 program, and in previous trials that have been run.In addition to that the commercial capabilities with a single asset in our organization experienced in neurology, and an infrastructure within our broader organization that allows us to be able to leverage it and bring in new assets. But when we think about that, we're thinking about that as a secondary mission because we don't have any undue pressure to be enabled to move forward in any activities in that nature from a BD perspective. We feel we're adequately capitalized and we feel like we've got the ability to continue to run without raising significant capital to get us to cash flow breakeven.Now with that, we want to be able to complement our portfolio and be disciplined in what we do with anything that we can actually leverage today, so that late stage development and commercial expertise in neurology. And maybe I'll stop there on the BD side, because you asked another question in regards to gross to net.

[Christopher Prentiss:]

Yes, David. So from a gross to net perspective, as we think about 2020, just to kind of recap what we alluded to on the call, we think about the first two quarters because we're so heavily Part D to be influenced by the donut holes. So it's somewhere in the range of the mid 20s, maybe in Q1 and Q2. And then we start to stair step down, as people go into catastrophic coverage and on the commercial side, people reach their deductibles. And so probably end the year in the mid teens from a gross to net standpoint. Maybe from a philosophy standpoint about contracting going forward, I'll point to Vijay.

[Vijay Shreedhar:]

Yes thanks, Chris. I will repeat, we are committed to making GOCOVRI as broadly available to patients as possible and committed to reducing barriers between the physician prescription and the patient getting drug as best as we can. So, we are looking at all options and exploring various options including contracting and that includes payers, that includes institutions such as IDNs and many other options. Right? So we will provide updates as needed, but we're committed to ensuring this access and reduction of barriers.

[David Amsellem:]

Okay, that's helpful. Thanks, guys.

[Operator:]

Thank you. And our next question comes from the line of Tim Lugo with William Blair. Your line is now open.

[Timothy Lugo:]

Thanks for taking the question. I believe a quarter or two ago you had to push into broadening the prescribing base. Could you give us a sense of maybe how many of the new starts are coming from new physicians? And is that an area of focus or is it really just deepening into the current prescriber base?

[Vijay Shreedhar:]

Yes, we have made increasing the breadth of prescription an important focus of ours. So we plan to build on momentum both by increasing depth and breadth. So to your question, we have seen in a couple of – a quarter ago, we reported pretty dramatic increase in terms of number of new prescribers coming on board to trial, the drug.We have seen similar numbers of physicians jump on in Q4 as well so we're very encouraged by that. We have a lot of headroom in that area. A lot of physicians have not yet trial the drug. So, we continue to keep that as one of our major areas of focus for growth. So let me leave it there.

[Timothy Lugo:]

Okay, maybe and could we talk a bit about spending incremental dollars in sales and marketing? Is that really the area of best investment as you see it, kind of broadening that? Or it sounds like there's also a lot of changes within the organization just around kind of general blocking or tackling that comes with prior authorization in new start forums and maintaining persistence?

[Neil McFarlane:]

Yes Tim, that's a great question. And we do think that the opportunity for us to dynamically allocate our resources towards go coverage commercialization makes a lot of sense for us. As Vijay mentioned, we have a lot of headroom in regards to growth opportunities for this product in GOCOVRI. We see that the product works with our persistency and now with the EASE LID 2 data and the long-term, clinical data after two years and reducing both dyskinesia and OFF.And, quite frankly, we feel like we're just on the tip of the iceberg at this point. So and that maybe I'll also say that we're even, we're further confident based on our Sandoz settlement, where we've now reached a really good outcome with Sandoz. And we've got room now for the next 10 years through 2030 to be able to continue to invest in growth of GOCOVRI.

[Timothy Lugo:]

That's good to hear. Thanks.

[Operator:]

Thank you. And our next question comes from the line of Serge Belanger with Needham & Company. Your line is now open.

[Unidentified Analyst:]

Hey, thanks. This is Tan on for Serge. I just had a question for the persistence rate for GOCOVRI which is a 40% to 50% right now. So do you have any data or plan to provide any data beyond the 12 months that you guys currently have? And then on this continuation rate I think it was 14% to 20%, that was included in the extension study. So is this I guess relatively in line to what you are seeing in the real-world?

[Neil McFarlane:]

Yes, from a perspective of persistency, I will tell you, we're very encouraged by the new data that was just published that we referred to, the EASE LID 2 data that show us the real-world evidence of GOCOVRI benefits for the patient over a span of two years improving both dyskinesia and OFF.From a reporting perspective, we remain pretty thoughtful in what we present to help monitor the business, and we're committed to providing the metric that is the most useful. So far from a cohort perspective, I think that 12-month persistency is the most useful to provide output. We will continue evaluating that and we'll keep you updated on that.

[Operator:]

Thank you. And our last question comes from the line of Ram Selvaraju with H.C. Wainwright. Your line is now open.

[Raghuram Selvaraju:]

Hi, thanks very much for taking my questions. So I just had a couple of quick housekeeping items. I was wondering if you could just give me clarification on the percentage of new patients who got on to GOCOVRI via the free trial program in the most recently reported quarter?

[Neil McFarlane:]

The vast majority of patients, who received GOCOVRI for the first time come through our free trial program, which is why we're so encouraged by how that program is continuing to help us drive both breadth of prescription and help physicians trial it for their patients exactly as the program was intended.

[Raghuram Selvaraju:]

But I mean, if we think about this from a percentage standpoint, is that like 80% or 95%. Can you give us a sense?

[Neil McFarlane:]

It's the vast majority. So let me leave it there.

[Raghuram Selvaraju:]

Okay. Do you expect to - do you have some kind of timeline in mind regarding potential winding down or ending of the free trial program? Is that something that you expect to persist for the next couple of years? Is that something we could potentially see you dial back prior to the end of this year? Just give us a sense of what your thinking is regarding that strategically as part of the overall recovery commercialization strategy?

[Vijay Shreedhar:]

It's a great question, right? So our overarching goal is to increase the momentum and accelerate the growth for the brand. And we do that when we look at breadth and depth. We look at the opportunity that is still unrealized out there from physicians, who have not yet filed the product perspective and the number of patients who are yet to benefit from the drug perspective. Where we look at those metrics, we have tremendous headroom in order to expand trial and utilization of the drug.So my simple answer would be, we continue to evaluate that on a monthly, if not quarterly basis. When we feel like we have driven breadth to as far as we can, using the free trial program is when we would start to just get it back. We don't see that on the horizon right now.

[Neil McFarlane:]

Ram, just quickly, this program as Vijay mentioned is working. But it was also the right thing for us to do from a patient perspective. Patients are able to get on product much sooner, physicians will be able to understand in utilizing this program, if the product is working for the patients, and also as they go through the prior off process and all of the other processes, medical necessity and so on and so forth to get patients on drug. This is the right thing to do for patients. So as we continue to utilize this to increase our patient experience and our patient centricity, we also see this as an opportunity to get a patient on the product with the right experience to begin with.

[Raghuram Selvaraju:]

Okay, just wanted to ask a question about the competitive landscape. How familiar are you with a drug called Dipraglurant and do you see that as a potential long-term competitive threat to GOCOVRI within the PD lead indication? What potential sustainable advantages do you expect the GOCOVRI to have versus this compound, which I believe is currently in sort of mid stage clinical development?

[Vijay Shreedhar:]

We're aware of the program and will continue to track it as it goes through from mid-stage to late-stage development.

[Raghuram Selvaraju:]

Okay, and then just very quickly, do you expect to see the typical kind of revenue dip that we have seen historically for this quarter versus the fourth quarter of 2019, or do you think that there could potentially be some sequential growth quarter-over-quarter 1Q 2020 versus 4Q 2019?

[Neil McFarlane:]

Yes, based on being such a high Part D, and then commercial, high part and two-thirds Part D, and a third commercial, we really mean that Q4 has a very low gross to net for us, and then with all the various typical first quarter resets, that the gross to net is high for us. And we would predict that it would be somewhere in the mid-20s in Q1. So we do expect to have a little bit of pressure on the revenue side, maybe Vijay I will point to you if you want to add anything there?

[Vijay Shreedhar:]

Yes, the only thing I would add is that we were very proactive and have learned in on this knowing this is a system-wide issue across all companies. In the beginning of Q4 in October, our GOCOVRI care coordinators started making calls to patients understanding that the benefit plan resets were underway, and have been reaching out to both offices as well as to patients to try to help us be ahead of the issue as best as we can. So we've made our effort by being proactive there. And we feel that we've done the best effort from our sides to navigate what happens generally system wide in Q1.

[Raghuram Selvaraju:]

Okay, and then last housekeeping question from me is, do you have any updates at this juncture regarding the status of the Qui Tam lawsuit?

[Neil McFarlane:]

I do not have any updates for you at this point, Ram.

[Raghuram Selvaraju:]

Thank you.

[Operator:]

Thank you. And this concludes today's question-and-answer session. I would now like to turn the call back to CEO Neil McFarlane for any closing remarks.

[Neil McFarlane:]

Thank you. So looking ahead through 2020 we remain focused on optimizing the opportunity for GOCOVRI and Parkinson's disease patients with dyskinesia and OFF time and determining a potential path forward for ADS-5102 and multiple sclerosis patients with walking impairment. We look forward to continuing the dialogue and providing updates on the upcoming quarterly results. Thank you.

[Operator:]

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