Paratek Pharmaceuticals, Inc.
Q2 2020 Earnings Call Transcript

Published: 10 Aug 2020

[Operator:]

Good day, and welcome to the Paratek's Pharmaceuticals Second Quarter 2020 Earnings Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Ben Strain. Please go ahead sir.

[Ben Strain:]

Good morning, and welcome to Paratek's second quarter 2020 earnings and corporate update conference call. A press release with the Company's second quarter results was issued earlier today and we have also posted slides on our website that will be referred to on this call. Both can be found at www.paratekpharma.com. Participants on today's call are, Evan Loh, CEO; Adam Woodrow, President and Chief Commercial Officer; Randy Brenner, Chief Development and Regulatory Officer; Michael Bigham, Executive Chairman; and Sarah Higgins, Vice President Vice President, Finance & Controller and Principal Accounting Officer will also be available for questions. Before I turn the call over to Evan, I would like to point out that we'll be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult our risk factors discussed in our SEC filings for additional detail. Evan?

[Evan Loh:]

Thank you, Ben. Good morning, and thank you all for joining our 2020 second quarter earnings call and corporate update. We continue to execute successfully against our objectives and we are pleased to report today on a very productive first half of the year. Despite these uniquely challenging times due to the COVID-19 pandemic, we've remained unwavering in our commitment to delivering on our mission to help patients in need while executing from a position of strength. Despite the volatile and rapidly evolving healthcare environment due to the massive shift in resources towards battling the COVID-19 pandemic, we have continued to see strong demand and sales growth for NUZYRA. NUZYRA is once-daily, oral and intravenous formulations, combined with its broad spectrum antibiotic profile offers a much needed new life saving antibiotic for patients with serious community acquired infections. We believe that these attributes represents a cornerstone foundation the utility of desire in multiple settings of care. We're also pleased to report on the significant progress achieved to-date in our broad based Project BioShield public private partnership with the Biomedical Advanced Research and Development Authority or BARDA. With earlier than projected activations of the post-marketing requirements and U.S. supply chain onshore and contracting modules. With both of these activations initiated at the beginning of the second quarter. We're also pleased to report that last month, we completed the regulatory submission of the supplemental NDA to FDA intended to expand the NUZYRA dosing [indiscernible] to support an oral only dosing label for pneumonia. Finally, we are pleased to report that we have further strengthened our long-term cash position with the recent amendments to our loan agreement with Hercules. We believe that all of these value drivers will continue to build significant future long-term shareholder value. Paratek generated $9.3 million in net revenue in the second quarter primarily driven by the continued strong demand and growth in the net revenue of NUZYRA of $8.1 million, representing an 11% increase in NUZYRA net revenue versus the first quarter of 2020 and a nearly three-fold increase versus the same quarter in 2019. We are encouraged by the performance of NUZYRA as we continue to see significant increase in demand in the hospital and adjacent sites of care settings, driven primarily by our oral formulation. As of June 30, 2020, we ended the quarter with $186.8 million in cash, cash equivalents and marketable securities, which we anticipate will provide for a cash runway through the end of 2023 with a pathway to cash flow breakeven. In this next slide, you can see that the U.S. commercial launch of NUZYRA’s beginning to materially differentiate itself from other antibiotic launches over the past five years driven by strong operational execution and NUZYRA’s many product attributes that include broad-spectrum efficacy across two common indications, a favorable safety profile consistent with the tetracycline heritage and convenience once-daily oral and intravenous formulations that enable utility in multiple settings of care. Accordingly, these factors coupled to strong demand continues to validate Paratek’s commercial launch strategy which has focused on hospitals and adjacent sites of care. These segments are driving over 90% of NUZYRA’s business with infectious disease doctors comprising the dominant prescriber base. We believe that the continued commercial success in these hospital institutional settings of care will translate into future success in the community settings. Importantly, the quarter-over-quarter growth in the first half of 2020 has been achieved despite the myriad access challenges created by the COVID-19 pandemic including the near elimination of face-to-face interactions between our medical and commercial teams and positions at the bedside. We believe that the strong and consistent growth in NUZYRA sales highlight NUZYRA’s ability to continue to grow despite the challenges of the COVID-19 environment. We believe this to be in a significant achievement in a volatile and rapidly evolving healthcare center. Adam will provide more details that underpin our confidence in the continued commercial success of NUZYRA. Late last year, we also now have a significant milestone for Paratek specifically that we entered into a broad based Project BioShield contract with BARDA, which is part of United States Department of Health and Human Services and the Office of the Assistant Secretary for Preparedness and Response. This contract represents a total potential value come into Paratek of up to $285 million. We continue to be energized by and appreciate for this unwavering competence in Paratek and their significant investment in this innovative long-term public private partnership for the development of NUZYRA in the fight against bioterrorism and antimicrobial resistance in order to save lives and protect Americans. I would like to comment on one of the many unique project undertakings within this BARDA partnership with Paratek, specifically, the U.S. on-shoring of NUZYRA manufacturing. In the setting of the COVID-19 pandemic, we believe the pull forward initiation of this contract option by approximately three months is consistent with the stated national security importance of a fully U.S. based antibiotic supply chain as articulated by the current White House Administration, and which was the focus of an executive order signed by the President last week required the government purchases of critical and essential medicines from U.S. based manufacturing sources. This on-shoring initiative will further secure Paratek’s overall supply chain for NUZYRA by adding an additional comprehensive and fully integrated API through drug products supply chain based in the U.S. to our already well established all European based manufacturing infrastructure. We believe that Paratek is the only pharmaceutical company in the world, which is currently and actively working towards establishing antibiotic supply chain in the United States. There are many deliverable this year from our BARDA Paratek public private partnership in the initial procurement of NUZYRA for the strategic national stockpile or SNS. For our knowledge, NUZYRA will be the first newly FDA approved broad-spectrum oral and intravenous antibiotic added to the SNS, since ciprofloxacin and doxycycline were added nearly two decades ago. As we've shared with you, the initial BARDA procurement has always been contingent upon the completion of the review of the pre-EUA application by FDA, which as of today remains ongoing. Based upon the interactions with FDA, we now anticipate that the initial BARDA procurement will occur by the end of this year. We believe that the FDA review was delayed due to internal resourcing at FDA, caused by the COVID-19 pandemic and other review priorities unrelated to NUZYRA. FDA had a single question that was received in late June as part of the pre-EUA review. We are currently collecting data to respond to this request, which is anticipated to take approximately 8 to 10 weeks. Randy will provide a more detailed update on our interactions with BARDA and FDA regarding the pre-EUA status later in this call. Before I hand the call over to Adam, I would like to provide Paratek second quarter 2020 financial highlights and review our updated 2020 financial guidance. As noted earlier, in the second quarter of 2020, we generated total revenue of $9.3 million of which $8.1 million was attributable to NUZYRA net revenue. We also earned other revenue of approximately $1.2 million, which consisted principally of government contract service and grant revenue from BARDA of $0.9 million and royalty and collaboration revenue of $0.3 million. R&D expense was $4.6 million for the second quarter of 2020 compared to $10.7 million for the second quarter of 2019. The $6 million decrease is primarily the result of lower personnel-related costs, lower clinical study costs associated with the completion of our Phase 2 UTI program and other operational efficiencies. SG&A expenses were $21 million for the second quarter of 2020 compared to $20.9 million for the second quarter of 2019. This performance is consistent with our commitment to operation discipline. We also recently renegotiated and executed an amendment to our existing loan agreement with Hercules Capital, which we believe further strengthens our long-term cash position. Under the terms of the updated agreement, we have repaid $10 million of the principal $70 million loan balance reducing the outstanding loan to $60 million. The interest-only period under the new loan agreement is now extended through December of 2021 with the potential for the further extension of the interest-only period by an additional 12 months through December of 2022, contingent on Paratek achieving certain performance based milestones. Now turning to our 2020 financial guidance. We are raising our full year 2020 revenue guidance primarily based on the stronger than anticipated U.S. NUZYRA net product sales offset modestly by lower than anticipated royalty revenue from SEYSARA. Our revised revenue forecast reflects our strong first half results balanced against the forecasting challenges related to the market uncertainties of the unabating healthcare challenges of the COVID-19 pandemic. Paratek now estimates 2020 total revenue to be between $78 million and $83 million, an increase from our prior revenue guidance range of between $75 million and $80 million. Total revenue includes NUZYRA net sales, the initial BARDA procurement of NUZYRA are for the SNS government contract revenue earned under the BARDA contract and royalty and collaboration revenue. As noted earlier, we now anticipate the initial BARDA procurement valued at approximately $38 million will occur by the end of this year contingent upon the completion of the pre-EUA review by FDA. Excluding the R&D and onshoring manufacturing expenses reimbursed by BARDA, our R&D and SG&A expense combined are expected to be modestly lower when compared to 2019, highlighting our commitment to remain disciplined from an OpEx perspective, plus full year 2020 R&D and SG&A expense combined is now expected to be approximately $135 million compared to our previous guidance of approximately $140 million. This favorability is driven by a continued focus on operational efficiencies and other favorability driven by the COVID-19 pandemic. R&D and SG&A expense includes continued investment in our commercial infrastructure, while pursuing potential strategic lifecycle investments in areas that will create long-term shareholder value, such as non-tuberculous mycobacteria or NTM program. Based upon our current operating plan, which includes estimated NUZYRA’s U.S. product revenue and cost reimbursement under the BARDA contract, we anticipate that are existing cash, cash equivalents and marketable securities of $186.8 million as of June 30, 2020 provide for a cash runway through the end of 2023 with a pathway to cash flow breakeven. This anticipated pathway assumes the company will be able to fund all company operating expenses, anticipated capital expenditures and debt service including repayment in full of the Hercules loan and securities agreements. Our planned lifecycle investments, including NTM are also factored into our current cash runway guidance. I would now like to turn over the call to Adam.

[Adam Woodrow:]

Thanks, Evan. The U.S. launch of NUZYRA continues to progress well, and we are encouraged by the continued quarter-over-quarter growth seems since launch in early 2019. Our strong 2020 second quarter results were executed in an environment where the unprecedented global pandemic temporarily closed a number of healthcare centers and essentially eliminated all face-to-face access across the healthcare systems for both our sales representatives and medical teams. Despite these challenges, we have not wavered from our strategic focus on enabling institutional access, while establishing trust and confidence with physicians who are at the bedside saving lives and treating serious community acquired infections. The impact of COVID-19 cannot be underestimated. IQVIA data for broad-spectrum antibiotics from Q1 to Q2, 2020 shows an over 40% decline in utilization mainly within the older classes of generic antibiotics. Nevertheless, in Q2, 2020 NUZYRA grew 11% over the prior quarter and over three-fold versus the same quarter in the prior year. Entering this challenging second quarter, we were able to very quickly shift our sales and marketing model to a virtual one during the lockdown, and have remained focused on building the awareness and profile of NUZYRA in the minds of all healthcare prescribers including infectious disease doctors, ER, pulmonary, and hospital physicians. Paratek’s ability to effectively pivot to this virtual marketing and sales model, despite the rapidly evolving healthcare environment letting NUZYRA generating $8.1 million in net revenue in the U.S. in the second quarter compared to $7.3 million seen in the first quarter of 2020 driven by an increased demand. Accounting for inventory, NUZYRA gross demand increased from approximately $8.4 million in the first quarter of 2020 to approximately $9.5 million in the second quarter of 2020, suggesting that growth in the second quarter was driven by demand as inventor in the channel remained essentially flat. Important to note, our commercial success to-date has been achieved without any notable expansion of our sales force and related marketing efforts. As the first broad-spectrum once-daily oral and IV antibiotic approved for both pneumonia and skin in nearly 20 years, we believe that NUZYRA is well on its way to addressing important unmet needs in these serious community acquired infections, while combating antibiotic resistant pathogens that arise from clinical failures and poor outcomes with older generic antibiotics. We believe NUZYRA’s convenient once-daily oral and IV dosing provides flexibility in prescribing reductions in hospital stays, and in some cases avoidance of hospital admissions altogether. The ability of NUZYRA to potentially minimize hospital stays has always been an important feature for many of our prescribers and a meaningful benefit to our patients. But in today's COVID-19 environment, this message has taken on even more significance when one considers the secondary bacterial pneumonia is not an uncommon occurrence associated with COVID-19 infections. We believe these important and meaningful product attributes are differentiating NUZYRA’s launch curve from the other IV or IV and oral antibiotic launches seen over the past five years as shown in Slide 17. The monthly gross sales revenue of NUZYRA in the orange line represents the strong demand consistent with positive clinical outcomes for patients. The next slide illustrates the value of oral NUZYRA prescriptions, since launch compared to the two other IV and oral antibiotics launched in the last five years. We believe, as we have noted in the past, that a once-daily broad-spectrum oral antibiotic with more than one indication will over time demonstrate more rapid adoption by commissions, the launch trajectories seen in this and the prior slide increase our belief and confidence in the continued success of the ongoing launch to-date and NUZYRA’s future blockbuster potential. As you know, since launch, we have focused our efforts on institutional access with a team of approximately 60 representatives targeting 600 hospitals and their adjacent sites of care. Currently, 90% of the NUZYRA sales are generated by physicians with infectious disease doctors being the largest prescribing specialty within these institutions. We believe success in the hospital setting will translate into success in the community. We're currently formulating a strategy for entrance into the community setting and look forward to providing additional details in the quarters ahead. We're extremely pleased with our performance to-date. We believe we're on the right commercial path with NUZYRA and are well positioned for long-term commercial success. We look forward to reporting on our continued progress in the quarters ahead and our plans for addressing the community opportunity in the future. And with that, I’d now like to turn the call over to Randy.

[Randall Brenner:]

Thank you, Adam. We continue to focus on several important value drivers which we believe have the potential to add significant value for physicians, patients and shareholders. As Evan noted earlier, our BARDA partnership is off to a great start with the significant progress continuing to the second quarter. We were thrilled to be the sole recipient of this first ever BARDA BioShield contract for both the development of an antibiotic for the treatment and prophylaxis of the biothreat pathogen and the procurement of NUZYRA the strategic national stockpile. This unique public private partnership with BARDA is a recognition of our jointly shared commitment to advancing NUZYRA in the fight against antimicrobial resistance and for bioterrorism pathogens including anthrax. As we had communicated in early April, BARDA initiated the two time-based contract options plan for this year. Most of these options provides cost reimbursement funding for all of the FDA post-market requirements associated with the initial approval of NUZYRA. This includes the pneumonia and pediatric clinical studies, as well as the five-year post-marketing bacterial surveillance study required for all newly approved antibiotics. As for these post-marketing requirements is projected to be approximately $77 million. BARDA also activated three months ahead of schedule the U.S. supply chain onshoring activities and manufacturing security requirements. This onshoring initiative is important to secure NUZYRA’s overall supply chain by adding a comprehensive and additional U.S. based supply chain to our already well established all European based manufacturing infrastructure. The cost reimbursement for these U.S. onshoring manufacturing and security requirements is projected to total approximately $20 million. As Evan had noted earlier in this call, the initial procurement of the 2,500 anthrax treatment courses of NUZYRA designated for the strategic national stockpile for approximately $38 billion us now anticipated by the end of this year. The timing of the FDA review of the pre-EUA but taken longer than we initially anticipated. FDA single question as part of their initial review process on the application was not received until the very end of June. We believe this longer than anticipated timing was due to internal resourcing at FDA impacted by demands related to COVID-19 and other review priorities at FDA unrelated to NUZYRA. FDA has asked Paratek and BARDA to help them with ensuring that's a pretty EUA preclinical data package is significant and ready to move forward to a whole EUA status should have anthrax outbreak and occur immediately. Specifically, FDA wants to have enhanced confidence on the final agreement dose recommendation based upon the preclinical data that a company [indiscernible] EUA application. In order to accomplish this, FDA has requested supplemental mouse pharmacokinetic data in the same mouse strain that was used in the animal anthrax efficacy studies. In order to be able to complete its modeling for the projected human exposure correlations for the final human dose recommendations for the use against pulmonary anthrax. Paratek to collect this PK data has already been initiated, and we plan to provide this data to FDA in the next 8 to 10 weeks. While it's difficult to predict how long FDA will take to complete its final review, based on multiple discussions with FDA, we believe they understand the importance of an efficient review. This is in a timely review that will enable the initial procurement to occur by the end of this year. Accordingly, based upon feedback from BARDA, this modest delay in the first procurement will have no impact on timing of future procurements. Beyond the work with BARDA, we also continue to pursue a number of compelling lifecycle opportunities for NUZYRA. The first of these is have recently completed oral-only community acquired bacterial pneumonia PK study and will support an oral-only dosing regimen for pneumonia. This study has agreed upon with FDA, but designed to show that an oral-only dosage regimen will have a comparable PK profile to the approved IV to oral dosing regimen in patients with pneumonia that was established with the optic study. We submitted this supplement to NDA last month and believe an approval for this oral-only dosing regimen is possible during the upcoming 2020, 2021 pneumonia season. As we noted in the Q1 earnings call, as a result of significant inbound interest, we're also continue to explore non-tuberculous mycobacteria or NTM, another promising lifecycle opportunity for NUZYRA with significant potential to address important unmet clinical needs. As a reminder non-tuberculous mycobacteria obsesses is an orphan disease with no FDA approved therapies. Inbound feedback from the KOL community has continued to highlight the clinical unmet need for a highly efficacious and well-tolerated oral antibiotics to treat infections caused by mycobacterium obsesses. Currently clinicians have a limited armamentarium of drugs to pick from and are faced with multiple treatment complexities, including a lack of compelling efficacy data along with safety and tolerability concerns associated with the prolong course of IV therapies required to treat these infections. In addition to NUZYRA’s favorable safety and tolerability profile, clinicians also appreciate the consistently potent in vitro activity against mycobacterium obsesses that NUZYRA is now demonstrating across multiple studies. Further, as we have published, NUZYRA achieves very high pulmonary penetration levels at humans. For all these reasons, we believe that additional clinical investigation in this indication is warranted. In the first half of 2020 Paratek held two productive meetings with FDA to determine the best pass-forward for NTM. Alignment was achieved with FDA on key study elements including a symptom based primary endpoint, which is centrally important to patients versus a microbiological endpoint which will now be a secondary measure. In light of the FDA recommendations, we considered the balance between the time of registration program may take to complete and its associated costs versus other approaches to generate meaningful clinical data. Balancing all the factors involved in determining the best approach forward. Paratek has decided to initiate an NTM study aligned with the FDA design, but with fewer patients and with a primary endpoint that can be executed in a timely and capital efficient manner. It's important to note this is a significantly lower cost approach with the potential for robust data generation and peer reviewed publications several years sooner, while still retaining the potential to support regulatory needs that the efficacy and safety data is robust enough to support a regulatory filing in this rare orphan disease setting. We remain excited about this opportunity for NUZYRA to address this significant unmet medical need. Startup activities will occur later this year with initiation of enrollment plan for early next year. Data generation also continues to be important commitment by the Paratek medical of [Phase 2]. Paratek has identified areas of interest for the Investigator-Initiated Research or IIR programs, which include in vitro studies it gets important pathogens of interest, such as acinetobacter and enterococcus strains. Clinical studies that studied [indiscernible] utility and patients at increased risk for pneumonia, skin and secondary infections as well as registry trials designed to generate more real world clinical use experiences and opportunities to address the important unmet health needs, such as C. difficile, other acute and chronic infections and high risk patient groups such as cystic prognosis patients. To-date there are seven active non-clinical and clinical studies in our IIR program, the three additional and the contracting phase expected to start this year. The data from these programs will be ultimately published by the research is conducting them. Through the IIR studies about abstract which have been accepted for IV [read]. Regarding our publications plans, there are currently over 30 publications in process that addressed the use of NUZYRA in special pathogens of populations and further define its unique therapeutic profile. In addition, independent case reports continue to be published in peer reviewed journals and patients with challenging infections receiving medi cycling , including non tuberculous mycobacteria. We believe that the additional data generations with the oral-only CABP at NTM lifecycle opportunities will further broaden the potential of NUZYRA to reach into new clinically important patients and populations. At this point, we would like to open the line for questions.

[Operator:]

Thank you. [Operator Instructions]. And we'll take our first question from Ami Fadia with SVB Leerink. Please go ahead.

[Unidentified Analyst:]

Hi, this is Sheldon Fan on for Ami. Thanks for taking our questions. So, first question is about the manufacturer onshoring, it's very well aligned to the region's activities of domestication of API and drug manufacturing. But over the longer term, how do you deal with long-term impacts on your operation on the expense side and also the impact on the antibiotic industry landscape? Thanks.

[Evan Loh:]

This is Evan. Hi, thank you for the question. And Randy, please add-in on to my responses. If you think there's need. As we look at the current antibiotic landscape, I think it's important to remember that in the context of the pandemic preparedness needs of this country as amplified and I think put in stark relief from the COVID-19 pandemic, having onshoring manufacturing supply chain that is robust and complete from API all the way through final drug product, we believe aligns very well with what's been articulated by the needs of the White House and as well as what's been articulated by BARDA in the way that they've actually designed this unique public private partnership. And we believe that our ability to move from a technology standpoint, the learnings that we have from our FDA expected it’s all European infrastructure to the U.S. it gives us confidence that we will be able to have that supply chain. I think in addition to that, as you think about the increased additional capacity that we'll be able to have, we believe that the second pandemic that's here right in front of us, is the pandemic of antimicrobial resistance. And having the ability to supply NUZYRA to patients in need will be very consistent with the long-term growth strategy for Paratek.

[Unidentified Analyst:]

Thank you so much. And I have another question on the long-term growth trajectory of NUZYRA. And it's nice to see that there's a continued growth -- growing in the COVID-19 environment, over the next couple of years, when do we anticipate an inflection point for the growth trajectory, what could be the trigger?

[Evan Loh:]

Adam, you want to take that one?

[Adam Woodrow:]

Yes, I think the -- one of the things that we've spoken about over the years is it takes a couple of years to establish yourselves within the institutional side. We've got as you know early next year we're looking for a new extension to our cap label, and our plan is to see how we can capitalize on that -- capitalize that with the community side of the business. I think that's probably where you're going to start to see the inflection as we build into the broader market space. We know that the community side of the business is a large addressable patient opportunity, it’s worth up to $2.6 billion in terms of the overall opportunity that's out there for skin and pneumonia, we just got to work out exactly how we're going to address that. And we'll come forward with more details on that as we go through the year.

[Unidentified Analyst:]

Could you clarify about the current market size split between institutional and community setting?

[Evan Loh:]

Yes, the community size is about $2.6 billion, I think the hospital one is about $1.9 billion in terms of overall opportunity for scaling pneumonia in terms of the addressable patient population specifically for NUZYRA.

[Unidentified Analyst:]

Thank you very much. That’s all my questions.

[Operator:]

Next we move to Ed Arce with HC Wainwright.

[Ed Arce:]

Hi, everyone. Thanks for taking my questions and congrats on another strong quarter. First couple of questions on NUZYRA sales with your second really strong quarter here, quarter-over-quarter growth. I was wondering how much activity do you believe is actually coming from temporary perhaps transient use for COVID, if you could address that. And in terms of the guidance, I believe with the next product sales for NUZYRA of the portion of the overall guidance previously was $28 million, are you believe -- are you prepared to update that for us for 2020?

[Adam Woodrow:]

So I'll take those questions. Clearly, we've obviously updated the guidance because we do believe that we're going to do more than the $28 million that we had previously guided and it's a mix between an expansion of NUZYRA sales beyond what we were originally predicting, offset by a modest decline in SEYSARA royalties as Evan mentioned. You asked the question specifically about COVID. One of the challenges for us is, we're still relatively small in the overall marketplace as you know, we have -- we don't have tons and tons of -- we don't have hundreds of thousands of data points. And so it's very difficult for us to [tease out] specifically the impact of COVID-19 on ourselves. But what I can tell you is that, the overall market for antibiotics in general broad-spectrum antibiotics declined quite dramatically in the lockdown quarter, which is Q2. And, of course that was about a 40% decline overall from one quarter to the next, and we continue to grow. And that's predominantly due to the fact that most of our prescriptions are generated out of the institutional environment. Most of ourselves come either directly from the hospital or as a result of a hospital prescription going out into the community. And that was less affected during that period of time, because, of course, people are still going into hospitals, and some of those undoubtedly will have been people that potentially could have been patients that had COVID or they were patients, they were trying to get out of the hospital as quickly as they possibly could to prevent them from getting COVID during their visit. So unfortunately, I can't give you a definitive answer to the COVID-19 impact. But there's clearly some sort of influence in terms of what's happening and one of the reasons why we continue on our growth trajectory, despite what was quite a severe lockdown and inability to see physicians and in some cases a dramatic drop-off in overall patients. We still continue to see our product grow 11% quarter-on-quarter, which we're very, very pleased with as you can imagine.

[Ed Arce:]

That's great. Thanks Adam, for that clarification. And then turning to [account]. Obviously, you're still in line for looking for the label update for all overall by later this fall in time for the next flu season. And you did mention you're actively formulating a strategy for the community. I wonder if you could expand a little on how that plays into that strategy. And when exactly would you anticipate sometime next year, I would imagine executing on that transition to the community?

[Evan Loh:]

So as you -- as I think --

[Adam Woodrow:]

Yes, I think as you know, and a follow of the story for us, I've always said that it's a couple of years focused on institutions. And we’ll never ever stop doing that. And we will continue to be focused predominantly on the hospital, but we do need to look at that community space, the timing for that would coincide with us gaining the community acquired pneumonia indication. So that would be an ideal time for us to sort of look at expanding into the community. And we're assessing as you can imagine, the obvious options for trying to do that which includes partnerships, going out alone expansion over time, and we're working through those numbers. And when we're done that will come back to the group with exactly how we're going to do it. And we'll talk about the timing of that which is likely the first half of next year in time for taking advantage of what will be left to the community acquired pneumonia season.

[Ed Arce:]

Great, thank you. And then one last question, if I may, just turning to your nascent program in NTM, you had described the pursuit of a sort of lower cost more rapid approach to a trial with initiation early next year. I missed what you had discussed around the primary endpoint. And if you could just elaborate a bit on what you know at this point in terms of the trial design? Thanks so much.

[Evan Loh:]

Randy, you want to take that one?

[Randall Brenner:]

Yes, sure. Thanks, Evan. Yes, so as we noted, we did have two very productive meetings with FDA in the first half of this year and this is a carryover from workshops and many discussions they've had in the year prior to that as well that FDA is really focusing in on and primary endpoint that is mostly meaningful to patients, which is the symptom endpoint. So for these long chronic infections where the microbiologic response may take a very, very long time to show any improvement, the symptom and [quite] allows you to really measure a faster period of time how the antibiotic is actually impacting the patient's lives. So both remain important to our KOLs, but clearly a symptom response endpoint is the primary endpoint that FDA is looking for sponsors to move forward with and in their NTM programs microbiologic endpoints and clearance will also be an endpoint for the secondary one. So that's the -- I think the most important outcome that came from our discussions with FDA. As far as the timing goes endpoints, we're still working through the design of the study. Be to determine how best and when to measure those symptom improvements along the way of their past. So I think give us a little bit more time just to work through those details and we'll share them as the study gets up and running and ready to go.

[Evan Loh:]

I think importantly, we just add to what Randy said at that, this endpoint that we've chosen as a primary endpoint is very consistent with where FDA is moving towards in terms of a primary endpoint. And so we think that there is a -- not only a time and cost value to conducting the trial, as Randy has suggested in terms of being able to get out clinical data that's meaningful for clinicians as well as publications much, much sooner than a longer assessed similar type of endpoint. But we believe that there's an opportunity here, depending on the robustness of the data, we go back to FDA and continue a conversation about whether those data codes fulfill a pathway for a potential registration.

[Ed Arce:]

Great. That's very helpful. Thank you.

[Operator:]

And next we move to Kevin Kedra with G Research.

[Kevin Kedra:]

Thanks for taking the questions maybe to follow up on the idea of moving into the community [selling]. I think COVID can teaching everyone a new way to get in front of doctors with remote access, digital technologies, are there learnings that you can take into the community setting from how you guys have been interacting with physicians during COVID that might allow you to be more efficient and targeted without really taking on the expense of what you would traditionally expect for a community focus sales force?

[Evan Loh:]

Hi, Kevin. Yes, absolutely, we've rapidly moved to a remote setting and right now as we sit here today. I’d say we're working in more of a hybrid model, we have some face-to-face interactions depending on where you are in the country and still quite a considerable amount of remote selling, it's clear to us that there are certain aspects of the remote side that will stay, physicians like some of the remote meetings that we've put in place. We had this sort of [indiscernible] group, zoom type calls where we educate the physicians through a group event. And that's something that's proven to be very popular. And, in fact, we've run many, many of those and we will continue to do that. But an answer to your question, yes, the fact that we've got that type of technology available, we are geared up to do it across the broader organization is definitely something that we will consider. But I have to tell you that that typical face-to-face interaction will probably never go away. And the reason for that is that we've seen that whilst you can be successful in the remote setting the original initiation, the initial trial is often quicker when you have face-to-face interaction than in a purely remote setting. If you go down that remote route completely, you'll find that things just take a little bit longer. So what you've got to do is find the right balance between the two.

[Kevin Kedra:]

Great that's helpful. Secondly, I'm going to ask on the use authorization. How long does it typically take the FDA to review something for an EUA once they resubmitted or there set timelines or the guidelines or that there's a kind of a more of a black box of when the FDA might get back to you on something like that?

[Evan Loh:]

Yes, so good question. Thanks for asking that Kevin. I mean, unlike NDAs, sNDA INDs et cetera, that has to do with related milestones, pre-EUAs and EUAs actually have no review clock. So that that does make a little bit more challenging to fully predict timelines along the way. In our particular case, obviously, we submitted the pre-EUA in February there is a question and answer component of the update. And as we said that there are questions that come until the end of June, which was really a lot longer than we had anticipated. The pandemic clearly had an impact on that -- based on some feedback and discussions we've had so. So yes, so there is no real lockdown in due time, communication channels are open regarding this one. And, we anticipate, as I said in my prepared remarks, so a timely review from FDA once we make the submission to the answer to their question, but there's no way to fully predict it.

[Kevin Kedra:]

Great, that's helpful. And then finally, Adam may be for you. We saw some action from your larger colleagues in the big pharma world on the AMR Action Fund. Just wondering if you could speak to what that might mean in terms of investment within the antibiotic sector going forward, and possibly gaining some political and regulatory support for some of the initiatives I know you've been championing.

[Adam Woodrow:]

Yes, Kevin, thank you for the question. I think the AMR Action Fund is I think, an exciting endeavor put together by -- that coalition of primarily large pharma to invest in the development space. And I think that that is a great effort. I think it shines a light on the -- like continuing referred to as the second ongoing pandemic that we're living through, which is antimicrobial resistance and to get two to four antibiotics to patients by the end of the decade. I actually think that it isn't -- it does not actually speak to as you've already referenced, I think what I think is really important for stabilization of the current marketplace, which is reimbursement reform, and it doesn't -- and so therefore, I think the AMR Action Fund does not probably have an immediate direct impact on where we are from a Paratek and NUZYRA commercial phase of growth But we continue to be heartened by the unified commitment to the inbox sector and its overall renewed interest and as a parenthetical we're hoping that steps up here and really continues to heed all of the education that we've been doing on Capitol Hill, both the House and the Senate side and in the White House specifically about the importance of disarm and reverse and reform here in the near-term.

[Kevin Kedra:]

Great. Thank you.

[Operator:]

And next we'll move on to Chi Fong with Bank of America.

[Chi Fong:]

Good morning. This is Chi Fong on for Jason, thanks for taking my question. I guess it’s a quick follow from me -- can you elaborate on the mouse pharmacokinetic study that the FDA require for the pre-emergency decentralization? And, what's your confidence level that you're going to generate the data that the FDA asked for? And did you say that this study has been initiated, and it's going to be completed in the 8 to 10 weeks ahead? Thanks.

[Randall Brenner:]

Sure. This was Randy, I'll take that. So the -- as I mentioned in my prepared remarks, what FDA is trying to ensure is that [indiscernible] anthrax outbreak occurred tomorrow. They want to have enhanced confidence that they have the right dose to recommend to patients who would be a need and have to potentially take this in that situation. So what they've asked for is the -- we've talked in the past about the in-vivo mouse data that we generated to support the anthrax program. So what FDA is asked for is they want PK data in the exact same mouse [strain]. So the exact same mouse strain that we use in our anthrax in-vivo efficacy study. We do have PK data and several other mouse strains. We've seen consistent behavior across not only strains, but also different species with regards to the pharmacokinetics of a [meta] cycling. So FDA wants this last data point just to complete their PK modeling to ensure the dose -- the human dose recommended for the pre-EUA against it and outbreak the curve. So yes, so we have a high level of confidence based on all we know about the way the pharmacokinetics is performed in mice as well as other species. And yes, the study has started. It's a several part study, obviously of dosing mice, collecting PK and then analyzing samples and we expect that we'll have that wrapped up and data submitted to FDA in the next 8 to 10 weeks.

[Chi Fong:]

Thank you.

[Operator:]

And that will conclude today's question and answer session. At this time, I'd like to turn the call back over to Evan Loh for any additional or closing remarks.

[Evan Loh:]

Thank you, operator. As there are no more questions, we will conclude today's call. In closing, I'd like to thank you all for your time and attention today. Your continued interest and desire in Paratek are important to us. As the wealth of microbiological and medical use data on NUZYRA continues to expand. We are increasingly confident in the potential NUZYRA to be an effective and a much needed addition to the armamentarium of antibiotics available to physicians to save lives, particularly where and when resistance is a concern. The journey of making NUZYRA a commercial success is well underway. The unique profile of NUZYRA is specifically are once-daily, well tolerated oral is positioned well for long-term growth and broad based commercial success in patients with serious community-acquired infections. We’ve remain committed to the continued lifecycle development NUZYRA through the oral-only pneumonia and NTM lifecycle opportunities. BARDA collaboration also positions Paratek as a leader not only with the potential to provide NUZYRA for bioterrorism pathogens, but as a leader in innovation to the broader IV sector in the battle against antimicrobial resistance. In addition NUZYRA, being the first broad-spectrum oral and intravenous antibiotic added to the strategic national stockpile since ciprofloxacin and doxycycline were added nearly two decades ago, we fully expect to deliver an important new treatment option for pulmonary anthrax, that has the potential to save lives and protect Americans. These opportunities motivate us or the Paratek and we'd like to thank the patients for participating in our clinical studies and our employees who have worked tirelessly to provide desire for patients in need, and those selfless and dedicated healthcare professionals who are at the bedside each and every day. We very much appreciate your continued support and interest. We look forward to keeping you apprised of our continued progress. Goodbye for now.

[Operator:]

And that will conclude today's call. Thank you for your participation.