BioDelivery Sciences International, Inc.
Q2 2018 Earnings Call Transcript

Published: 10 Aug 2018

[Operator:]

Please standby. Good day, ladies and gentlemen. And welcome to the BioDelivery Sciences Second Quarter 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to hand the conference over to Ms. Mary Coleman, VP of IR. Please go ahead, ma'am.

[Mary Coleman:]

Thank you, Operator. Thank you, and good afternoon, everyone. And welcome to our second quarter 2018 earnings conference call. Leading the call today will be Herm Cukier, our Chief Executive Officer. He is joined by Scott Plesha, President; and Ernie De Paolantonio, Chief Financial Officer. Our new Chief Medical Officer, Dr. Thomas Smith is also in the room with us today. Following our prepared remarks, we will conduct a question-and-answer session. This afternoon, BioDelivery Sciences issued a press release announcing the financial results for the second quarter 2018. 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 made during this conference call may contain forward-looking statements. Such statements are based upon current expectations and there can be no assurance that the results of the – that the results contemplated in these statements can be realized. Actual results may differ materially due to a number of factors and risks, and some of which are identified in our press release or annual, quarterly and other reports filed with the SEC. These forward-looking statements are based on information available to BDSI today, and the company assumes no obligation to update statements as circumstances change. An audio recording webcast replay for today's conference call will be available online in the Investor section of the company's website. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on August 9, 2018. With that I'd like to turn the call over to Herm. Herm?

[Herm Cukier:]

Thank you, Mary. And thank you everyone for joining us for our second quarter 2018 financial results conference call. It has been three months since I joined the company as CEO and first introduced myself to you. It is a pleasure to speak with you again today to share the strong second quarter results and our plans to further grow the business. Following my remarks Scott will provide an overview of our operating performance in the second quarter and Ernie will review our second quarter financial results. Let me begin with an update of my first three months at BDSI. First and foremost it is abundantly clear that BELBUCA is an important product for patients suffering from chronic pain, especially in today's market where healthcare providers and patients are actively seeking efficacy with both less side effects and less risk than historical treatments. BELBUCA’s unique profile presents a substantial and compelling growth opportunity for BDSI. As a leading commercial company dedicated to these patients and customers, our core focus will remain on further capitalizing on the growth potential of BELBUCA. I've spent a significant amount of my initial time here out in the field meeting with many of our customers who are on the frontlines of treating these patients, after seeing firsthand the needs of these customers, I am even more convinced of the tremendous opportunity we have ahead of us. Fully capitalizing on the opportunity long-term requires a strong foundation to build upon and I am pleased by the progress we have made on many important fronts during the second quarter. First we accelerated the growth of BELBUCA reaching an all-time high in prescriptions and achieving an 80% year-over-year and a 31% quarter-over-quarter growth rate. This is a testament to the outstanding dedication of our sales organization and capabilities of our leadership team. It provides me with confidence in our collective ability to drive sustained growth for this important asset moving forward. Second we continue to build a highly experienced and capable organization including reconstituting the board with the addition of three exceptionally qualified Independent Directors and selection of a new Chairman, as well as expanding our leadership team with the addition of a new Chief Medical Officer. Third, we continue to effectively focus across the organization on ensuring operational excellence, highlighted by meaningful improvement in the manufacturing efficiency of BELBUCA. Finally, we successfully completed a $50 million capital raise, which together with disciplined expense control positions us well to invest and fully capitalize on the growth potential of BELBUCA. Scott, will walk you through specific drivers of the business shortly, but allow me to share my excitement for the operational performance we achieved during the second quarter. BELBUCA operating revenue of $10.3 million was a 29% increase over the first quarter. On a reported basis revenue for the quarter was $9.7 million reflecting onetime events which Ernie will further elaborate upon. These revenues were driven by significant growth in BELBUCA prescriptions which totaled over 35,000 in the second quarter, an increase of 31% over the prior quarter and 80% over the second quarter of 2017 as I previously stated. This was truly an exceptional performance by organization and it gives confidence that we will continue to see BELBUCA prescriptions grow moving forward. Based on this current momentum and the possibility for further growth, we now believe the long-term opportunity for BELBUCA may well be more than $200 million annually. To help achieve that level of performance and fully capitalize on the opportunity, I and the management team have developed a strategic plan to drive sustained growth of the product over the long-term. This plan, which we will begin implementing by the end of this year includes further expansion of the sales team, building out the market access in medical affairs teams, and reaching consumers directly via social media platforms. Some components of the new plan build upon success as we have seen to date. As you know, earlier this year, we expanded our sales force by approximately 30% and we are already seeing the positive impact of this investment. We expect further momentum from this expansion throughout the second half of the year. In conjunction with an additional sales team expansion, we recognize the need to expand our market access team. As we've said in the past expanding market access is a top priority and an important driver of growth as evidenced by the results that we are seeing from a recent successes with several major national plans. Continuing to further expand patient access to BELBUCA is pivotal to achieving our long-term view. With regard to the building of the medical team, I am committed to complementing the talent in place today by recruiting the most experienced and qualified candidates in the industry. As part of this ongoing effort, I am pleased to introduce Dr. Thomas Smith, our new Chief Medical Officer. Dr. Smith brings a deep industry knowledge to BDSI with over 25 years of pharmaceutical experience and significant expertise in pain. His extensive and wide ranging roles include having been Chief Medical Officer at various leading pain companies, Head of Medical Affairs at a top tier pharma and CRO companies as well as running his own private practice. As you know, next month is pain awareness month and Dr. Smith will hit the ground running at both the 12th Annual Meeting of Pain Week in Las Vegas and the 17th World Congress on Pain in Boston. Already has a full agenda at both Congresses meeting with thought leaders, advocacy organizations, educators and other industry executives focusing on ways to increase awareness and access for BELBUCA. With that, I would like to welcome Tom who is with us here today. Tom?

[Thomas Smith:]

Thanks for the kind introduction, Herm. I am very excited to be here and I am looking forward to working with you, the BDSI team and healthcare providers to effectively address the medical management of people who are living with chronic pain. Thank you, Herm.

[Herm Cukier:]

Thanks, Tom. There is much more to share on these and other aspects of our strategic plan to try and sustain growth for BELBUCA. I and the team look forward to sharing details at an Analyst Day which will be scheduled for later this year. In summary, the second quarter was highlighted by strong prescription growth, organization development and execution across the company that has resulted in significant progress towards our 2018 goals. We have had a very successful first half of the year and are confident our ability to continue the momentum of growth. With that, I will now turn the call over to Scott. Scott?

[Scott Plesha:]

Thank you, Herm. As Herm noted, we delivered a very strong second quarter of BELBUCA, achieving both significant prescription and revenue growth. To reiterate BELBUCA prescriptions grew 80% year-over-year and 31% quarter-over-quarter. I'd like to take a few moments to review with you the key prescribing trend behind these impressive results, which were due in large part to our expanded sales force and our execution and pulling through recent market access wins. First looking at BELBUCA weekly prescriptions, we continue to see an accelerated upward trend, which has been the case since early in the year. We started the second quarter in the 2,400 weekly prescriptions range and I am pleased to report at the end of June we attained a new high in and total prescriptions as we surpassed 3,100 TRxs. In terms of monthly prescriptions, we achieved a new all-time high in June with just under 13,000 prescriptions. This is particularly encouraging as it is a jump of nearly 57% since the start of 2018. We have now reached consecutive all time monthly highs since March. Moreover at the end of June BELBUCA’s market share of buprenorphine products for chronic pain had grown to 22.5%. Importantly, we believe that our prescription growth is due to a significant number of patients being switched from other long acting opioids and not just other buprenorphine products. As we assess the impact of our expanded sales force, we are encouraged by the effect they are having on two key metrics, the number of unique and new BELBUCA prescribers. During the second quarter there were more than 4,300 unique BELBUCA prescribers, which is up 14% from the first quarter. There were also nearly 900 new prescribers of BELBUCA in the second quarter, which is up 28% from the number added in the first quarter of this year. These results confirm the commercial teams’ ability to build upon a prescriber base as we increase our activity against our more than 10,000 targets. It's important to note that the prescriptions for all our doses strengths grew more than 23% during the quarter. We continue to be encouraged by the growth we are seeing across all dosed strengths as this, may be indicative of prescribers becoming more experienced and confident with managing chronic pain patients with BELBUCA. These compelling trends are a testament to the focus and strong execution of our commercial team, and importantly, as Herm said, we expect this momentum to continue. Let's move on to market access where our recent formulary wins have provided new or improved access and have had a meaningful impact on our prescription growth trajectory. I'd like to take this opportunity to review the results from our Humana contract became effective March 1st. BELBUCA was added as a preferred agent for both their commercial and Medicare books of business. It can also be prescribed without the requirement of a prior authorization, which is a meaningful advantage for BELBUCA in this category. While this contract just began in March, we are already seeing – we've already seeing this impact on prescriptions in the second quarter. Since the start of the Humana contract that we’ve seen a monthly TRx increase of over 230%. Going forward, we are excited about the future, the further prescription growth potential from this contract and look forward to additional formulary wins. Importantly, the growth we have seen across all our market access wins gives us confidence that additional contracts will have a meaningful impact on BELBUCA TRxs. We also believe our improved formulary positioning and new contract wins reflect the solid progress we achieved in highlighting the payers, the value and well differentiated benefits of BELBUCA. In summary payer coverage for BELBUCA is strong and improving – improving and significant and meaningful ways. We are very pleased with our strong second quarter results and as Herm laid out, we have a number of key near-term initiatives and progress, and planned in order to sustain our forward momentum. We are confident that BELBUCA is well-positioned for continued strong growth in 2018 and beyond, and we look forward to the opportunities that lie ahead of us. With that, I will turn things over to Ernie to cover the financials in more detail before opening things up to Q&A. Ernie?

[Ernie De Paolantonio:]

Thanks, Scott, and good afternoon, everyone. In the second quarter BDSI recorded total net revenue of $12.2 million or a 39% increase versus $8.7 million on a comparable basis to the second quarter of 2017. BELBUCA operational revenue or revenue on an ongoing basis in Q2 totaled $10.3 million, up 29% over prior quarter revenue of $8 million and 57% over prior year revenue of $6.6 million. During the second quarter there was a one-time $572,000 true-up around the Endo transaction related to rebate charges that were invoiced to us at a higher rate than accrued. The effect reduced our reported net revenue to $9.7 million. Gross to net deductions increased in the second quarter to 43% driven by higher co-pay card utilization, payer mix and new contracts. We expect our gross to net to rise into the high 40s, based on the expected increase of market access contracts and pull through. Gross profit percentage for BELBUCA was 78% in the second quarter reflecting both the Endo accrual adjustment, as well as the 4,000, I am sorry, as well as a 400,000 onetime write-off a product inventory related to the validation of our high-speed packaging equipment. In addition, we also took a one-time $200,000 write-off of obsolete the all inventory. Gross profit without these two onetime adjustments would have been 83%. We expect additional cost and yield improvements in the third quarter and beyond with the migration of BELBUCA to our newly approved high speed packaging equipment. Total gross profit for both commercial products was slightly over 66% reflecting the one-time adjustments and would have been 72% without them. Total operating expenses for the second quarter ended June 30th was $14.9 million and 15% less when compared to $17.6 million in the second quarter of 2017. Managing our expenses during a second quarter allows us to invest in the future commercialization of BELBUCA. Sales and marketing expenses during the second quarter were $7.6 million, G&A expenses were $6.4 million and R&D expenses were $900,000. Net loss in the second quarter was $9.8 million or $0.16 per diluted share compared to $14.9 million or $0.27 per diluted share in year-over-year reflecting both the increase in BELBUCA revenue and expense control in the quarter. As of June 30th our cash balance was $55.7 million with a cash burn rate of $5.3 million in the second quarter. That reflects our expense control and ability to further invest in the future of BELBUCA. Based on our current operating plan and estimated quarterly burn rate of $6 million to $8 million, we believe we have sufficient cash runway into 2020. Finally, I want to reiterate that due to our strong company performance during the second half – the first half of 2018 and effective execution total financial expectation for BELBUCA is expected to be in the range of $41 million to $43 million, and total revenue in the range of $50 million to $52 million. Thank you. And I will now turn it back to the Operator for the question-and-answer session.

[Operator:]

Thank you. [Operator Instructions] We will go first to Tim Lugo with William Blair.

[Tim Lugo:]

Thanks for taking my questions. Just to make sure I get the one-time items correct. It was $750,000 for true-up with Endo, which dragged down BELBUCA, and also a one-time $200,000 BUNAVAIL write-off, which impacted gross margin?

[Ernie De Paolantonio:]

Yeah. Actually it's $572,000, Tim. Hi, it’s Ernie…

[Tim Lugo:]

Okay.

[Ernie De Paolantonio:]

And there was a BUNAVAIL charge of $200,000 and a BELBUCA inventory charge of $400,000 that had to do with the validation lots of the new PMK machine, high speed equipment.

[Tim Lugo:]

Okay. And for the $41 million to $43 million BELBUCA guidance, what's the growth in that assumption we should be using for the remainder of the year?

[Ernie De Paolantonio:]

Well, for this quarter we were 43% and as we get additional market access contracts and pull through, you'll see that rise up into the higher 40% range.

[Tim Lugo:]

Okay. Thank you for that. And just going back to Herm your plans to expand the sales force, you already expanded 30% earlier in the year. What's the right-size in your opinion these days?

[Herm Cukier:]

Hi, Tim. How are you? Thank you very much for the question. Again we look forward to sharing a lot more of the details when we have the Analysts Day later in the year, Tim. But I think we certainly feel, as Scott pointed out that there with the 10,000 targets and given the fact that we have roughly 40% to 45% of doctors who are unique prescribers are in second quarter there is certainly an opportunity to further capitalize on the market potential for the product and so we will come back with a lot more details during our Analyst call. But suffice to say that we feel there is still quite, quite a bit of room to add more reps into the field. But we are working through the finalizing the details now. We look forward to sharing more of that later in the year.

[Tim Lugo:]

Understood. Thank you and congratulations on this script growth during the quarter.

[Herm Cukier:]

Thanks so much, Tim.

[Ernie De Paolantonio:]

Thanks, Tim.

[Operator:]

Our next question today will come from Brandon Folkes with Cantor Fitzgerald.

[Louise Chen:]

Hi. This is Louise on for Brandon. I had a few questions. So first question I had was if you could update us on the feedback you're getting from physicians who are prescribing BELBUCA, what did they like about the product, what did they still need to be convinced about? And then second question I had on BELBUCA, do you continue to see patients who have started on a lower dose being titrated up over time. And then my last question is, what do you think you will get the insurers or when do you think you will get them to [remove this step that is] [ph] facing BELBUCA. And does this have to be driven by the FDA or the government or do you think this could happen over time without intervention? Thank you.

[Scott Plesha:]

Great. So, this is Scott. I will take those questions and if Herm has anything to add he can do. So but we are very encouraged by the reception we are seeing in the field both from patients and physicians, we are really focused on, obviously, impacting lives in a positive way. I think what they see is a Schedule III product versus a Schedule II. And in today's world, there is a lot of concern about overuse of opioids but also some of the dangerous side effects associated with them. So, I think, those are important to them. I think they also are concerned about morphine sulphate equivalents. They see a product that has great efficacy. I think that's first and foremost the most important thing. And then as far as titrating up doses, in our clinical trials we did see a migration over time to higher doses and we are, as I spoken in the script, we were encouraged by the fact that the lowest any of our strengths grew is 23% quarter-over-quarter. So we were in the 23% to 35%, 36% range in strength and growth. So we are seeing it across all strengths and that does show us that the eventually patients are moving up. As a reminder starting doses are 75 micrograms, 150 micrograms and 300 micrograms and then there is fourth dose is higher. And then as far as [removing step out it's] [ph], now we don't believe that the government has to impact – have an input into that. As a matter of fact we are very encouraged by the -- just the changes in the increase in lives that we have or where we don't have to step through other products that occur -- have occurred this year. So we basically went to 19%. We are at 3% in Medicare, 3% in commercial before we started the year and now we are at 19%, basically 20% and 25% for those different books of business. So we've seen some really nice progress there. We continue to be very encouraged by discussions we are having right now as well with other providers and look forward to updating you guys in the future on other potential positive changes.

[Louise Chen:]

Okay. Thank you.

[Operator:]

And our next question is coming from Oren Livnat, H.C. Wainwright.

[Oren Livnat:]

Hi. Thanks for taking the question. Firstly you mentioned building out this market access or patient access team. It sounds like maybe you're talking about a hub. Can you talk about what you have now if anything and aside from new managed care contracts just putting in these kinds of -- this kind of hub or program what increased pull-through do you think you could have like now that was fully implemented, new contracts aside?

[Scott Plesha:]

Actually – Oren, thanks for the question. This is Scott again, regarding market access we were more so referring to making sure that we are staffed properly. We believe that we've seen a nice return on our market access wins; we have an opportunity to start pulling through more regional level plans and even have a more concerted effort against some of the larger plans nationally and that's what we are going to build behind. And we believe if we had more personnel we are not talking about a huge increase, but something that's responsible and it would make sense and we will look to be doing that here. And again we've seen the growth. I think we have great confidence you can see in the numbers we – when we get the market access when we are able to pull through that business. So right now we use some very basic hub services not even a hub service, it’s CoverMyMeds. So it's very basic and we will continue to evaluate those services.

[Oren Livnat:]

Okay. Sorry. So I guess I misunderstood. Thanks for the clarification. And also I guess, Tom, welcome to the team. I noticed R&D was extremely low this quarter and I am just wondering as the Chief Medical Officer do you look at your sort of near-term plans as less on any R&D side and more just a cohesive medical affairs effort. And if there wasn't anything to do on the research side, would maybe switching or dosing study come in handy, because as Louise already mentioned I guess there is still a question about whether patients need to be titrated down before they can switch to your drug and then back up which seems like if you didn't have to do that that would make for a much easier transition?

[Thomas Smith:]

Right. So thank you, Oren. It's great to be here at BDSI and I was very enthusiastic when I started talking with Herm and the team and from an outsider looking in I just really and talking to my peers and colleagues out there in the field and my physician colleagues and friends. There is a lot of enthusiasm around using a Schedule III now before going to a Schedule II where there may be more adverse events or certainly more possibility of addiction or dependence, right. So, I think most of my initiatives will be around medical affairs, will be around to finding what is a good medical affairs plan or medical communications plan, it will be around publication, it will be around perhaps field scientists and things like that to really help educate, right. And just ensure that patients are receiving a medication like BELBUCA which is safe and effective. But I will let Herm ask to add anything if he has anything on the R&D front?

[Herm Cukier:]

Well, thanks very much, Tom. And again, we are thrilled to have you as a member of our leadership team and we are confident you are going to add significant amount of value not only to our organization but really to the patients who can benefit immensely from the product with a profile like BELBUCA. And Oren to your question, we are going to let Tom, this is I think is his fourth or fifth day or we are going to let him kind of get his feet wet here and really take a look and then come back with a recommendation of how we can really compliment all the great work that Scott and the commercial organization are doing and getting the message about BELBUCA out there in terms of how we can complement that as Tom already expressed with an appropriate medical affairs plan. With regard to our investment in R&D, I think one of the things that is imperative for us to share is our commitment to utilizing our resources as efficiently and effectively as possible on the customer facing part of our organization. Right now, for us BELBUCA is very much in launch mode and I think it's in the early stages of its trajectory. And so, there is a wonderful opportunity for us to continue to invest ambitiously in the kinds of infrastructure that we've been discussing here to help doctors learn more about, raise their awareness and get more experience, and therefore, more confidence in treating patients with BELBUCA for chronic pain. Some of the R&D investments that we have are our post-approval commitments and we are committed to ensuring that we work diligently with the FDA on what are the appropriate responses that we need to on an ongoing basis to fulfill the requirements, but ensuring that we do what is required and as efficiently as possible. And I think we've been able to very successfully navigate that and therefore we've been able to invest more into the commercial arm and in customer the facing part of the organization.

[Oren Livnat:]

All right. Thank you.

[Herm Cukier:]

Thank you, Oren.

[Operator:]

[Operator Instructions] Next up we will go to Matt Kaplan, Ladenburg Thalmann.

[Matt Kaplan:]

Hi, guys. Congrats on the quarter results. I want to ask, I guess, Scott, a question in terms of BELBUCA, it seems like you're successful in terms of expanding the number of prescribers. Could you talk about, let's call it, rather than the breath of prescribers that depth of prescriptions in terms of driving prescribers that are currently using to use the product more. How did – how was that performance during the quarter?

[Scott Plesha:]

Yeah. I mean, I think for that question actually obviously that is something we track and we are very encouraged that we did increase our prescription for prescriber was up almost 16% the amount that they wrote, so anyway they wrote in Q1, wrote up close to 16% more in Q2, as aggregate group. So you layer that on top of group of new prescribers and you get the rapid growth that saw during the quarter.

[Herm Cukier:]

Yeah. I would only add – I would add to what Scott is saying, again, given where we are in launch mode, I think what is for encouraging is that we are seeing an expansion on both the depth and the breadth.

[Scott Plesha:]

Correct.

[Herm Cukier:]

So we are actually getting a significant number of new prescribers, but also increasing the number of unique prescribers, which shows that the base of current prescribers is still there, but also Scott pointed out that the number of prescribers are initially increasing the utilization within their offices as well.

[Scott Plesha:]

That's correct.

[Herm Cukier:]

And I think that as again as with time as practitioners gain more experience and more confidence and we certainly expect that the number of scripts per doctor will continue to rise.

[Matt Kaplan:]

And then, with respect to that, I guess, for the first time you're really giving some guidance for the long-term potential of the product of over $200 million. What gives you confidence that you can achieve that?

[Ernie De Paolantonio:]

I mean, couple of different things. So one is this is a very large market with tens of millions of patients that are suffering from chronic pain. Those patients will be there and they are going to need clinical therapy and with the profile and experience and the ability that we've demonstrated from an execution perspective so far we believe BELBUCA is the right product to really meet the needs of those patients over the long term. And so given the size of the market, the profile of the product and the runway that we have with patent extension all the way through 2027, it gives us the confidence that this is a product that has quite a bit of runway of growth over a long period of time.

[Matt Kaplan:]

Thank you. And then can you talk a little bit about the cost of the expansion of the sales team and the market access team?

[Herm Cukier:]

Well, I think, we are going to again come back to the details of that during our Analyst Meeting a little bit later on this year. But as Ernie pointed out we are very confident in moving forward that that's something that from a cost basis we've accounted for in the burn rate and in the cost structure that Ernie outlined. And as I mentioned earlier, we are very keen to investing our resources right now behind the growth of BELBUCA. And so we are very confident we are going to be able to manage that appropriately within the current plan.

[Matt Kaplan:]

Okay. Fair enough. And just shift gears a little bit, last question, how is BUNAVAIL performing and why the drop in revenues from first quarter?

[Scott Plesha:]

So, I will address the performance, prescription performance, and then, I guess, Ernie can maybe add a little bit of our revenue. But we actually are encouraged that it's stabilized over the last few quarters. Minimal drop from Q1 to Q2 and I think that reflects our focus on – appropriate focus on BELBUCA and ship we made back in early 2017. And so, we've seen TRxs stabilize and then even our prescribers have as well so we are working to assure that we keep supporting that product that obviously is important to a lot of patients and physician.

[Herm Cukier:]

And I would just add, Scott, is just a really good point and I would add as we said in a press release that we remain confident that BUNAVAIL is a very important asset for patients and opioid use disorder. We remain committed to finding ways to improve access for the product and finding ways to raise awareness and utilization of the product moving forward. It’s a very difficult market. That's going through a lot of change at the moment. So, well, I've been here for three months and we've been able to really focus very intensely on BELBUCA and we are confident of where we are and we have a plan moving forward. I think we are also going to take a little time to really roll up our sleeves and investigate how to ensure that the opportunity with BUNAVAIL continues to materialize for the organization. So more to come on that. But we recognize it's an important asset for patients.

[Matt Kaplan:]

Thanks for taking the questions.

[Herm Cukier:]

Thank you for the question.

[Operator:]

We will take our next question from Ken Trbovich, Janney.

[Ken Trbovich:]

Thanks for taking the question. I know that research and development is necessarily a core focus going forward but I am still curious as to whether or not there are particular studies that you think might be advantageous with regard to trying to further differentiate either buprenorphine as a molecule or BELBUCA obviously is a product and they ask this in the context of knowing that there is a drug interaction between gabapentin and opioids and wondering sort of out loud whether or not that interaction is the same with buprenorphine as it is with sort of the new opioids that classically would prescribe.

[Herm Cukier:]

Thanks so much for the question Ken. I know Tom is eager to dive into the data and come back with a recommendation on how to your point and we are really continue to provide the right guidance and the right information the right education to clinicians on how to optimize the utilization of BELBUCA in the treatment of patients and we do think that there is a lot of opportunity to further enhance the awareness and the education. And Tom, we are going give some little bit of time to really investigate that and come back as he said a little bit earlier with a full medical affairs plan which might include a couple of different pathways and perhaps some of that could be a generation of new data but I think we are going to take a little bit of time. Again we remain extremely confident to your point in the differentiation of the profile of the product. We are seeing tremendous receptivity and universally very positive feedback on the successes that clinicians are having with patients. One of the parameters that I think is well known of buprenorphine as a molecule is, its safety profile and I think we have an opportunity to help physicians understand how to optimize the utilization of buprenorphine with the BELBUCA as the delivery vehicle of that for patients with chronic pain. And we are already off to a great start and we are very confident moving forward with the additional work that Scott and the commercial team are doing and then Tom with the medical affairs team, which may or may not include generation of some additional data in some way shape or form. But I think all of that is on the table and we are going to do whatever it takes to really ensure that we optimize this tremendous opportunity that we have.

[Ken Trbovich:]

Sure. And I guess, I guess, maybe put a different way, can get back into, what gives you confidence on the $200 million sort of peak figure given the sort of conservative guidance we are hearing for the current year?

[Scott Plesha:]

Well first for me, just if I may, it's a great question Ken. But so the $200 million is really a directional aspirational ambition that we have, and the direction that we are going to be moving towards rather than peak sales number. But I think when we see the momentum that we are generating and I am not sure that I would find that our current trajectory is conservative. I think it's a very exciting, very positive movement forward and with all the success that we are already having with the commercial infrastructure that we have in place today. And the number of national plants that we've been able to secure in the very rapid productivity within the plans, as they open up, as we gain more plans on both a national level and regional level as we expand the sales force, and as we put into play some other important levers like medical affairs opportunities to again compliment the awareness and education via communication channels, and reach out to consumers directly, we are confident that this momentum, this trajectory will move forward for quite a period of time. And that – all of that together and again as I said earlier the significant market opportunity, the number of patients, the medical need and the very positive receptivity that we are seeing to this asset. All of that together is really what gives us the confidence now to declare that we really think long-term that this could be a $200 million or more product.

[Ken Trbovich:]

Okay. Thank you.

[Scott Plesha:]

Thank you, Ken.

[Herm Cukier:]

Thanks Ken.

[Operator:]

And at this time, there are no further questions. I will hand the call back to CEO; Herm Cukier. Please go ahead, sir.

[Herm Cukier:]

Thank you, Operator. Our goals for 2018 remained steadfast as we execute our plans in the coming months. We expect to make meaningful progress with our strategic programs. In closing, I'd like to thank you all for participating in today's call and for your interest in BDSI. I'd also like to thank all of our employees for their dedication and support of physicians and patients. We look forward to providing everyone with an update on our further progress at our next corporate update. Thank you and have a wonderful evening.

[Operator:]

Once again that does conclude today's conference. Thank you all for your participation. You may now disconnect.