BioDelivery Sciences International, Inc.
Q1 2019 Earnings Call Transcript

Published: 7 May 2019

[Operator:]

Greetings. Welcome to BioDelivery Sciences First Quarter 2019 earnings call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Terry Coelho, Chief Financial Officer for BioDelivery Sciences. Please go ahead.

[Terry Coelho:]

Thank you and good afternoon, everyone. Welcome to our first quarter 2019 earnings conference call. Leading the call today is Herm Cukier, Chief Executive Officer. We are joined by Scott Plesha, President and Chief Commercial Officer. Following our prepared remarks, we will conduct a question-and-answer session. Earlier today, BioDelivery Sciences issued a press release announcing its financial results for the first quarter 2019. A copy of the release can be found on the Investor Relations page of the company's website. Before we begin, I would like to remind everyone that certain statements may be made during this call, which may contain forward-looking statements. Such forward-looking statements are based upon current expectations and there can be no assurances that the results contemplated in these statements will be realized. Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and our annual, quarterly and other reports filed with the SEC. These forward-looking statements are based on information available to BDSI today, May 6, 2019, and the company assumes no obligation to update statements as circumstances change. An audio recording and broadcast replay for today's conference call will also be available online in the Investors section for the company's website. With that, I'd like to turn the call over to Herm Cukier. Herm?

[Herm Cukier:]

Thank you very much, Terry. And it's my pleasure to welcome everyone to BDSI's Q1 2019 earnings call. We had a very successful start of the year, highlighted by a record growth performance of our core strategic asset, BELBUCA, and the acquisition of Symproic, further expanding our commercial portfolio of leading and differentiated brands. The ability of our team to make such a significant acquisition through a competitive process, while continue to achieve record level growth on BELBUCA, is truly admirable and a testament of the hard work and dedication of all employees across the organization. I would like to thank each and every one of them for their efforts and contribution to the continued success of BDSI as a leading, rapidly growing commercial stage company. We are dedicated to patients suffering from chronic pain and associated conditions and proud to bring important and leading treatment options to that community. And even since closing the Symproic deal, I have been thrilled by the energy and enthusiasm of my colleagues to quickly prepare for the commercialization efforts of the new product. In fact, Scott will go into more detail but we have already trained the sales force and have them in front of customers as of last week. While this is exciting and important, we all recognize that continue to drive growth for BELBUCA is and remains our #1 priority and core strategic focus. I am highly confident we are well positioned for sustained growth on these two leading brands throughout 2019 and beyond. For BELBUCA during the first quarter, I was very pleased to see that the record growth on a year-over-year basis was once again accomplished with substantial breadth and depth at this stage of the product launch. The product experienced significant script growth over prior year during each of the three months and even saw a considerable acceleration of growth during March versus February. In fact, that trend has continued since with April thus far showing substantial further growth momentum. As we have previously mentioned and it is important during these early stages of the launch cycle, to see growth coming universally across the entire landscape. To that end, BELBUCA once again experienced growth across all 7 dosage strengths, across all physician [decile], across all regions of the country from both contracted and noncontracted accounts, et cetera. No matter what aspect of the launch we analyze, we continue to see a positive trend. This gives me great confidence that this growth momentum is indeed sustainable. In particular, I was very excited to see that a record number of healthcare providers wrote scripts of BELBUCA, and that we experienced the greatest quarter-over-quarter growth for this important metric several years into the launch. Scott and the entire sales team continued to do an outstanding job of bringing value to clinicians and helping them understand how BELBUCA can be a prudent consideration in treating their chronic pain patients. Having said that, and while we are pleased by the growth seen to date, we recognized that we have just over 2% TRx share. Meaning, there are substantially many more potential patients that can benefit from BELBUCA. There is still a lot of hard work day in and day out in front of us, and we will remain focused and diligent on our efforts. While we weren't necessarily in need of adding other product, we had said that if something came along that made operational, strategic and financial sense, we would be opportunistic and strike from a position of strength. With Symproic, we believe we found the right complimentary asset to promote alongside BELBUCA. To begin with, the operational synergy is extremely strong as approximately 90% of future scripts are expected to come from the same physicians we call on today for BELBUCA. Scott will go into more details but that means no need to expand the sales team any further. From a strategic perspective, opioid-induced constipation, or OIC, is a persistent reality for more than 40% of chronic pain patients taking a C2 opioid that can interfere with the effective management of [underlying] [ph] disease. Symproic has many clinically relevant differentiating features, enabling it to potentially become the leading drug of choice by pain specialists for this condition. And finally, from the financial point of view, we are able to extensively leverage our existing organization to achieve the expected growth of Symproic. Meaning, it becomes financially accretive beginning early next year. We are very pleased to be adding such a clinically differentiated product that has exclusivity until 2031 to our portfolio and with it, look forward bringing even more value to the chronic pain community. In all, the start of the year has been a very exciting and successful time for our company. We continue to deliver very strong growth results and are poised for sustained momentum and success. With that, I will turn the call over to Scott to provide more details to the BELBUCA performance and Symproic commercial readiness. Scott?

[Scott Plesha:]

Thank you, Herm. As Herm noted, we experienced a very strong first quarter 2019 with BELBUCA continuing to deliver record levels of prescriptions and revenue. BELBUCA strong growth resulted in our reaching an all-time high during the quarter at over 65,000 prescriptions. We have continued to reach an all-time consecutive quarterly highs ever since we relaunched BELBUCA and due to our consistent growth, prescriptions in Q1 2019 were up 38,000 or 141% over Q1 of 2018. This represents the largest year-over-year growth BELBUCA has ever experienced. Per our previous guidance, January, February prescriptions grew at slower rate, but we once again saw accelerated growth as the first quarter closed. In March TRxs increased over 3,000 from February to just under 24,000 TRxs. The strong finish to the quarter has continued into April, and we -- as we have seen BELBUCA prescriptions surpassed 6,000 per week multiple times during the month. We continue to be encouraged by our strong execution and believe there are key drivers supporting the growth of BELBUCA. Since early 2018, we've seen a consistent increase in our new prescribers as well as number of total prescribers each quarter. During the first quarter, we saw that trend continue and even accelerate. During the quarter, there were nearly 6,000 unique BELBUCA prescribers and over 1,260 new prescribers. Both metrics represent meaningful increases over Q4 2018 and surpass the previous all-time highs that were set during that quarter. We believe that these record increases in prescribing our base are due to our expanded sales force as we've seen an increase in prescribers and prescriptions in every new territory. This gives us confidence that the size and structure of expansion we completed at the end of 2018 was effective and appropriate. In addition to increasing our prescriber base, we saw TRX share growth across every decile [indiscernible] which demonstrates a growing acceptance of BELBUCA. Also, all of BELBUCA [indiscernible] strength exhibited growth during the first quarter with an average growth of over 19%. This not only demonstrates that the comfort HCP have in prescribing BELBUCA across all dosage strengths but also how having 7 dosage strengths importantly allow the patient's care to be tailored to the lowest efficacious dose. During the first quarter, we greatly increased the number of patients that received BELBUCA for the first time. As we exited 2018, there were just under 4,000 chronic pain patients per month being prescribed BELBUCA for the first time. By March, the number of new BELBUCA patients had increased over 4,900. This resulted in BELBUCA new-to-brand market share increasing significantly from 5.2% in December to 6.3% in March. This increase in patients receiving BELBUCA for the first time demonstrates that the rate by which healthcare providers are identifying patients that are appropriate to receive BELBUCA, is increasing and this is critical to the continued growth for the brand. During the quarter, we improved our market access when BELBUCA was moved from not covered to preferred formulary of Cigna health care. This win went into effect in February and provides an improved access to BELBUCA for over 7.3 million lives. With this recent win BELBUCA is now covered or better in 92% of commercial lives. Importantly, the BDSI commercial team has done an excellent job of executing against these wins and has driven consistent prescription growth in each PBM or plan since the contracts were executed. We continue to see strong interest and acceptance by the government and commercial payers of BELBUCA. And the differentiating [indiscernible] we are very optimistic about adding more wins. While it's difficult to predict when these wins will occur, we are confident that over time, the number of lives having access to BELBUCA will continue to rise. We're excited about the progress we continue to make with BELBUCA and are confident that we can continue to build upon our current growth. I'm also excited to share that due to strong planning and execution, the majority of our commercial team completed Symproic training and certification last week and actively promoting and sampling Symproic. We feel Symproic provides the complementary product to BELBUCA and allows us to leverage our high-performing sales force within our target audience. Importantly, the addition of Symproic will not require further expansion to the sales force or a change in our target audience. While we're extremely early in our promotion of Symproic, we are encouraged by the reception we're receiving to our promotion of it. We are finding that HCPs that have experienced Symproic appreciate the predictable efficacy Symproic provides. We also believe that there is an opportunity to educate our targets on significant improvement and market access that has occurred in recent months and that our proven ability to pull through market access will be important for the growth of Symproic. We had strong first quarter with BELBUCA and are encouraged that BELBUCA growth has continued in Q2, resulting in weekly all-time TRx highs in April. As we go forward into 2019, we'll continue to focus on improving market access, growing the number of patients receiving BELBUCA for the first time and expanding our prescriber base. We're also confident that our commercial expertise and execution will have a positive impact on Symproic sales and look forward to updating everyone on our progress with it in subsequent calls. With that, I'll turn the call over to Terry to cover the financials in more detail. Terry?

[Terry Coelho:]

Thank you, Scott. First quarter financial results exceeded both fourth quarter 2018 and prior year quarterly results as well as exceeding the high end of the expectation that we recently provided. Total net revenue for the first quarter ended March 31, 2019, was $19.8 million, an increase of 10% compared to $18 million in the fourth quarter of 2019 and an increase of 75% compared to $11.3 million in the first quarter of 2018. The total net revenue growth was primarily driven by BELBUCA, which comprise 95% of our total net revenue in the quarter. BELBUCA net revenue in the first quarter ended March 31, 2019, was $18.7 million, an increase of 17.6% compared to $15.9 million in the fourth quarter of 2018 and an increase of 134% compared to $8 million in the first quarter of 2018. BUNAVAIL net sales in the quarter were $1.1 million, a reduction of $700,000 in the first quarter of 2018 driven by market factors in our prioritization of BELBUCA. Additionally, they were $1.5 million of ex U.S. royalties in the first quarter of 2018, while there were no ex U.S. royalty revenues in the first quarter of 2019. Gross to net deductions in the first quarter were 48.7% for BELBUCA, in line with our expectations and slightly above the fourth quarter 2018 deductions of 47.9%, primarily reflecting additional coverage and utilization mix across plans. Gross profit for BELBUCA was 85% in the first quarter, also in line with expectations, while total gross margin from both commercial products was 81% in the first quarter, in line with fourth quarter of 2018. Total operating expenses in the quarter reflect our continued investment in our commercialization efforts, balanced with remaining fiscally prudent. For the first quarter ended March 31, 2019, total operating expenses were $17 million compared to $16 million in the first quarter of 2018 and $18.5 million in the fourth quarter of 2018. The reduction in spend as compared to the fourth quarter relates primarily to timing of expenditures. The net loss for the first quarter was $3.8 million or $0.05 per share, an improvement when compared to a loss of $7 million or $0.10 per share in the fourth quarter of 2018 and a net loss of $10.7 million or $0.18 per share in the first quarter of 2018. At March 31, 2019, BDSI had cash and cash equivalents of approximately $41.3 million. This compares to cash and cash equivalents of approximately $43.8 million at December 31, 2018. The quarter-over-quarter reduction in cash usage from $5.7 million in the fourth quarter to $2.5 million this quarter, is consistent with the trend we expected to see and as a result of the continued revenue growth, coupled with lower operating expenses in the quarter. In April, as previously announced, we concluded the acquisition of exclusive commercialization rights of Symproic in United States and Puerto Rico effective April 4. Under the terms of the agreement, BDSI paid Shionogi incorporated an initial payment of $20 million at closing and will pay an additional $10 million in 6 months. In addition, Shionogi is eligible to receive tiered royalty payments based on net sales of Symproic. Additionally, on April 15, BDSI closed an underwritten public offering of 12 million shares of common stock together with a selling stockholder at a public offering price of $5 per share. BDSI sold 10 million shares with gross proceeds from the offering of $50 million and approximately $47.5 million in net proceeds after deducting the underwriter discounts and commissions as well as other offering expenses. BDSI will not receive any of the proceeds from the sale of the shares of common stock by the selling stockholder. We intend to use the net proceeds from the public offering for working capital and other corporate purposes. In the coming months, I will continue focusing on identifying opportunities to further improve our cash position and profitability as well as driving improvements in our business processes and our finance capabilities to ensure we are well positioned to invest in and fully capitalize on the growth potential of both BELBUCA and Symproic. Finally, looking ahead to 2019 and based on the strong momentum with which we entered the year, we see 2019 BELBUCA net revenue to be in the range of $83 million to $88 million and total company net revenue to be in the range of $92 million to $100 million, including $7 million to $9 million of Symproic sales. As we communicated recently, as a result of the higher net revenues, along with our ability to leverage our SG&A expenses as we grow, we continue to expect that we will be operating cash flow positive by the end of 2019, including the impact of Symproic product acquisition and associated startup costs. In the longer term, we believe our sustained momentum will allow us to achieve annual sales in the range of $325 million to $400 million as BELBUCA continues to evolve into the therapy of choice for the management of chronic pain and including the impact of Symproic in the range of $75 million to $100 million. At this point, I'd like to turn the call back over to Herm for some concluding remarks before we open the call for Q&A. Herm?

[Herm Cukier:]

Thank you, Terry. To summarize, the start of the year has been a very successful and exciting time for our organization. The first quarter was highlighted by the record growth of BELBUCA and adding a great complimentary asset to our portfolio in Symproic. Our momentum has continued since with a seamless commercial integration of Symproic and further strengthening in BELBUCA performance. We have the utmost confidence for continued success throughout 2019, including having raised our expectations for BELBUCA net sales and becoming operationally cash flow positive. Our trajectory as a rapidly growing commercial stage pharmaceutical company continues, and we look forward to sharing more successful updates throughout the year. I will now turn the call back to the operator for Q&A. Operator?

[Operator:]

[Operator Instructions]. Our first question is from Brandon Folkes with Cantor Fitzgerald.

[Brandon Folkes:]

Congratulations once again on a great quarter. And in terms of growth going forward for BELBUCA. How should we think about adding additional prescribers increasing the number of prescriptions written by the current prescriber base? I know you talked about unique prescribers, but it looks like you also increased the number of prescriptions in the quarter.

[Scott Plesha:]

Brandon, this is Scott. Thank you for the question. We think it will continue to build a satisfaction like we're seeing right now. There's really -- if anything we saw an acceleration in new prescribers as we went into Q1 so, we averaged for 418 new prescribers per month in Q1, up from 226 last year in Q1 as an average each month. So we just finished the sales force expansion in Q4. So they're up and running, and I think that's points to that expansion. Actually Q4 was 364 an average. So really nice increase in prescriber base, and we saw work to do so. So we'll keep adding new prescribers, and we did see growth across our prescriber base as well and the number of prescribers. I mean that’s our number of prescriptions per prescriber. Combination of both.

[Brandon Folkes:]

Maybe 1 additional question if I may. Can you talk about the persistency you were seeing with patients on BELBUCA? And I know in the past, you've talked about the growth in high-strength potentially coming from patients who have been on the product longer and being titrated up. So is this something you're seeing an increase in persistency?

[Scott Plesha:]

Yes, we are over time, a slight increase in persistency. It's been in line with the market, so there's nothing that's remarkable about it. But just as we look to the higher strength and the growth there, that does point to patients being titrated up over time. But we saw our clinical trials. It really hasn't neared that.

[Operator:]

Our next question is from Matt Kaplan with Kalman.

[Matthew Kaplan:]

Congrats on the progress in the quarter. Just wanted to drill in a little bit more down little more deeper into Symproic. Can you help us understand the competitive landscape there, for that product? And how that looks like?

[Herm Cukier:]

Sure, Matt. It's Scott, again. Appreciate the question. So the market itself has been relatively flat, slight growth to it year-over-year. Really Movantik is a market leader there with just under 80% of the market. And then also if you bundles their oral tablet and their injection together, it's a little bit over 10% and Symproic's been around 10% as well. So it's really about taking share from -- largely from Movantik and then obviously, we'll take share from our stores as well.

[Matthew Kaplan:]

Okay. That's helpful. And just with respect to your guidance for the year, in terms of updated guidance of, I guess, now -- what is it, $92 million to $100 million for the full year. And you gave detail on BELBUCA and also Symproic. How should we think about [indiscernible] and the other part of the business that comes up with your guidance of that $2 million? Does that make sense?

[Terry Coelho:]

Yes, I mean, if you look at -- and I've looked at what everyone seems to be estimating from the analysts perspective, but it is our estimate as well. I would say using that kind of number, $2 million, is probably a good number to use. The reality is that it does fluctuate. It's not a steady stream every single month. So you might see one quarter and up another quarter down but that range is probably realistic.

[Herm Cukier:]

And I think -- Matt, it's Herm. Just maybe add on to Terry's commentary, I think referring to TRx royalties. I think we stood along with regard to Bunavail that BELBUCA was, is and will remain our core strategic focus. It's where Scott dedicated all of their time, and I think we've seen the fruits of investment decision that we made about a year ago, and that market has changed a lot. And so at this point, we've reduced our expectations for Bunavail. And so together with the that we expect, we'd soon be in the mid-single digits combined, but it will vary quarter by quarter depending on the performance of Bunavail. And [indiscernible] pointed out, when we actually will have shipments outside the United States to recognize the royalties. But if you look at it aggregate for the year, it remains a nice complementary royalty streams to our business. But now -- specially the performance of BELBUCA and now Symproic, it will be less and less dimension of our company going forward.

[Matthew Kaplan:]

Okay. Yes. That's helpful. And then 1 or 2 more questions. In terms of the R&D for the quarter, the lowest R&D I've seen you have. And how should we think about that kind of going forward as you continue to do to work or not?

[Terry Coelho:]

Yes, so starting this year, Matt, where we basically said, we're not an R&D organization. We're commercially focused organization. We don't have tur R&D spend. So beginning in Q1 2019, any spend that would be in some places could be classified as R&D, post marketing requirement studies, those kind of things, will just be rolled into the G&A. So you would see an embedded in those numbers.

[Matthew Kaplan:]

Okay. Got it. And then last question, just to make sure fully understand the capital structure right now following the offering. I guess at the end of March, you had about 71 million shares, and then it looks like there are another remaining 17.2 million shares from the Series B Preferred Stock convert, and then the 10 million shares that were just issued. And then another 2 million shares as well for options and stuff. Does that make sense?

[Terry Coelho:]

Yes, your $71 million is more of our Q4 2018. I think we ended Q1 with $75 million, and then you could add the $10 million on top, and then -- so fully diluted is going to be 100 110

[Operator:]

Our next question is from Esther Hong with Janney.

[Esther Hong:]

So my first question is on BELBUCA. So the patients new to BELBUCA, are these larger patients -- physicians are switching from opioids? Or are they opioid naive patients? And then on Symproic, can you just discuss how you see the OST market over the long term given the shift away from C2 opioids that are prescribed for chronic pain and responsible for OST?

[Scott Plesha:]

Scott. I'm happy to help you for this. So the new-to-brand BELBUCA brand over 80% of the prescriptions are coming from patients that are currently on C2s, but they are short-acting C2s. And sometimes they are being added and sometimes we are being switched from them. So -- and honestly, it's been consistent and it comes across from all the different C2x. So it's really not a switch campaign finance it's really about us being used prior to other long-acting C2s. Hopeful that helpful on that. And then OIC market, actually it's -- we're actually encouraged when we're looking at the product that the market actually is had a little bit of growth in 2018 and in early 2019. And I think if you think about it, the markets down but they're still well over $ million prescriptions being written for long-acting opioids. And patients that are on short-acting opioids, chronically, are also candidates. So the long-acting opioid only make up about 10% of the prescription, actually less than that. So there's a huge amount of patients out there and I do think our competitors have raised awareness over the last 3 to 4 years around this problem. So I -- we anticipate it staying relatively flat going forward. So again, they'll be a lot of about getting market share from the current market win.

[Esther Hong:]

Great. And then just a follow-up. Though it's still early days, how has that position in response been to Symproic?

[Scott Plesha:]

Yes, so again, limited. Full promotion really for all three days, but we're out talking -- at least letting them know that we had it, and we're able to provide an example. Just been positive. I think they view us complementary to BELBUCA, not competing with our message there. It is nice to have samples. That's a nice resource for them to have for their patients. And I do think that those that have experience with that have been impressed by the efficacy and the durable efficacy that it provides compared to other some of the other products and permit...

[Herm Cukier:]

Yes. I would just add to what, Scott, you just commented on by when you take a look at that, we have been mindful about promotion sensitive the market was positive then. We saw that mineralized. It gained a very rapid and appreciated amount of new brand share. And then when it was turbulence in the amount of promotion behind the product, that dropped but when there will be put more resources behind it, we saw that actually climb back up again. So that gives us a lot of confidence that once our team is really after the product as they are now, we're expecting it to respond quite favorably to the promotional efforts of our organization.

[Operator:]

Our next question is from Scott Henry with Roth Capital.

[Scott Henry:]

A couple of questions on Symproic. A lot of times when a product transitions from 1 company to another, share may differ for a little bit just during the transitional period. It looks like you're kind of flowing right through that based on the weekly trends. Just curious, you take on that? Do you expect to see any kind of transitional dip? Or do you think you can continue to grow trajectory?

[Herm Cukier:]

Scott, you're right. It's early. And we are encouraged by the early prescriptions. We have seen some growth there in the early weeks. We just getting started. I think we need to get a couple of weeks to months even under our belt to be able to speak to that. But again, we think it provides value in the space. We have -- we've proving our ability to execute. It looks like very much like BELBUCA when we brought it back in house. We have accelerated the growth there, so we'll work towards doing that going forward.

[Scott Henry:]

Okay. Great. And then from an accounting perspective, I believe you make that payment. Is it the first six months of the transition from marketing efforts for the prior holder? Is that going to be contrarian revenue booking? I mean should we just assume kind of a lower revenue per script for the first perhaps two quarters? How should we account for that?

[Terry Coelho:]

Okay. So we have an agreement in place for the first 90 days, basically a distribution agreement where we have affixed gross to net and cost level. So I don't think you need to consider anything as a contrary. We will actually reflect the revenue. It will be at affixed gross to net and then obviously our growth and it will be probably different once we take on the product that it will be reflected normally.

[Scott Henry:]

Okay. But should it be a lower kind of revenue per script for the first quarter and then increasing their afters? Is that how we think about it?

[Terry Coelho:]

I think it might even be slightly higher.

[Scott Henry:]

Okay. All right. And then just looking quickly at the income statement, I saw some contract revenues, very small number in there. Just curious what that's related to? And if that's just a onetime event?

[Terry Coelho:]

I think they are very, very small number, right? And yes, I think that was just the prior period adjustment on something. I think it was 10,000 or and something, yes.

[Operator:]

[Operator Instructions]. Our next question is from Tim Lugo with William Blair.

[Timothy Lugo:]

Congratulations on the growth we're seeing from BELBUCA. I know it's early on with Symproic but how should we think about the growth opportunity around contracting? Obviously, you're very successful BELBUCA contracting and this is also a comfortable space and things like there's plenty of market share again in this area. And what's -- what are your initial thoughts around contracting?

[Scott Plesha:]

Hi, Tim. It's Scott. Thanks for the question. So, you're right. It's probably is a little bit more competitive marketplace. So we need to be thoughtful about the contracts we write. We don't want to really hurt our gross to net long-term. So we're going to be thoughtful. It's more by providing access with step through other products versus being preferred. We actually were really encouraged by some of the was that generally had them on the backend just for be some color as last year kind of wrapped up, really they only had about 12% of Medicare lives covered. As we sit here today, it's actually 42%. So access is changed greatly on the Medicare side just recently, and we look to capitalize there. Again we prudently need to do that with BELBUCA so we will do that here and then the same on commercial that is dramatic of the change but over 74% of lives were covered. And again, preferred on the commercial side as BELBUCA, but it's high on Medicare side. So work that through. We need to go out on the left around the environment there a little bit more. Actually start having meeting -- clinical meetings with payers, but we're committed to opening up access in a thoughtful manner.

[Timothy Lugo:]

Understood. And you mentioned 90% of future scripts should come from BELBUCA, prescribers already. Can you give us a flavor of what those BELBUCA subscribers are currently using are they using momentum using OTC is it how much is Symproic kind of embedded within that base already?

[Scott Plesha:]

Yes, so Tim, so the -- over the counter, it's really a standard-of-care and peers are actually demand that patients try and fail OTC. I think what's interesting about Symproic and differentiates is that they actually generated a daily job with the clinical package and the PI, you can actually add Symproic right to an OTC product. Other products are actually bilingual required to come off the prior so in fact, it's an advantage to us going forward.

[Operator:]

Our next question is from Greg Gilbert with SunTrust.

[Gregory Gilbert:]

Scott, also you could help us break down of payers types for BELBUCA people consider certain proposals being floated around Washington? And then secondly, it seems that physicians, the many physicians buprenorphine is less efficacious than the safe use of the growth in your prescriptions, which is evident, of course that could be helped by safety and abuse potential too. Is your team making inroads on the efficacy message that specific to your preparation of buprenorphine versus historical -- historically available ones? Thanks.

[Scott Plesha:]

That's a great question and good insight around the historically available ones. So one of our key initiatives, Greg, really in 1.5 year, 2 years and has been to try to shore up efficacy message. On the other attributes are great but it if it doesn't work treat chronic pain, then it is better. I think we are overcoming that over time and what we found over and over again is HCPs is actually used the product enough and get clinical enough clinical experience with it. They don't see it differently. And I do think that their experience with Butrans I guess we're getting at is has -- had affected their belief about buprenorphine in general previously and obviously there's a lot low risk of buprenorphine. And then our first question, could you give a little more detail around and government? Are you saying like the regulations that are affecting that or...?

[Gregory Gilbert:]

Actual question about the mix that's Medicare, Medicaid, commercial or...? However you break down the different buckets of payer as a starting point?

[Scott Plesha:]

Yes, we're still skewed towards commercials as follow the prescriptions going through. But we have seen as our Medicaid coverage has been approved we have seen additional share of our business going through Medicare has improved. And actually, as we sign commercial contracts, the Medicare side is also improved in the same book of business. So it's still like 35% Medicare, about 55% commercial and then about 10% Medicaid. The Medicaid really pressed between 10% and 11% depending on the month.

[Operator:]

And that does conclude our conference today. You may disconnect your lines at this time and thank you for your participation.