Paratek Pharmaceuticals, Inc.
Q3 2019 Earnings Call Transcript

Published: 13 Nov 2019

[Operator:]

Thank you for standing by. This is the conference operator. Welcome to the Paratek Pharmaceuticals' Third Quarter 2019 Earnings Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. [Operator Instructions]I would now like to turn the conference over to Ben Strain, Vice President of Investor Relations and Corporate Communications. Please go ahead, sir.

[Ben Strain:]

Good afternoon and welcome to Paratek's third quarter 2019 earnings and corporate update conference call. A press release with the company's third quarter results was issued earlier today and we've also posted slides in 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; and Michael Bigham, Executive Chairman; and Sarah Higgins, Vice President of Finance, Controller and Principal Accounting Officer will also be available for questions. I would like to note that Adam will be participating in the call from a separate location.Before I hand 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 the risk factors discussed in our SEC filings for additional detail.Evan?

[Evan Loh:]

Thank you, Ben. Good afternoon and thank you all for joining our third quarter 2019 earnings call and corporate update. It has been extremely busy and productive past three months with a number of important events for Paratek.We generated 3.9 million in net revenues in the third quarter, primarily driven by the U.S. launch of NUZYRA. Net sales for NUZYRA increased 82% to 3.1 million in the third quarter over the previous quarter. And we also earned royalty revenues of approximately 900,000, primarily from SEYSARA sales in the U.S.We're encouraged by the performance of NUZYRA's launch so far this year, characterized by significant quarter-over-quarter increases in demand, particularly driven by the oral formulation, as well as continued progress in securing institutional and payer access. As of the end of the quarter, over 75% of commercial lives in the U.S. now have access to NUZYRA.We've also continued to increase the size of our sales force in a disciplined manner with geographic expansion as we target opportunities in locations where we are seeing the greatest level of success in trial and access. We believe that these launch achievements so far this year are setting the foundation for future growth.Early this month, we released top line exploratory Phase 2 results in two urinary tract infection studies, which Randy will cover in greater detail. We are pleased that the innovative design and high quality conduct of these exploratory and adaptive Phase 2 studies provided us data that has both identified a potential dose regimen for further investigation and ruled out in effective ones. This is exactly what drug development is designed to accomplish, provide driven data driven guidance to facilitate sound decisions. While both studies may have identified a potential dose that could warrant further exploratory investigation, we currently are not planning for any additional clinical development activities and UTI. As always, we remain committed to sharing our findings with the medical community at an upcoming scientific congress. That all said, we see more compelling investments and other lifecycle operations for NUZYRA.One of the most important of these other opportunities is our pursuit of an oral only indication for community acquired bacterial pneumonia or CABP. As we mentioned last quarter, we have agreed on a path forward with the FDA to evaluate an oral only dosing regimen for NUZYRA and CABP. This pharmacokinetics study is designed to show that an oral only dosing regimen will have a comparable pharmacokinetic profile to the approved IV to oral dosing regimen in patients with CABP that was established in the Phase 3 OPTIC study.We are pleased to report that we have initiated sites and plan to begin dosing patients in the fourth quarter of this year. Based upon the small size of this study, once completed, we anticipate a supplemental NDA submission followed by potential approval for this dosing regimen in time for the 2020 pneumonia season.We've identified another promising lifecycle opportunity for NUZYRA with significant potential. It's called or referred to as nontuberculous mycobacteria or NTM. NTM lung disease is a rare type of infection caused by several naturally occurring mycobacterium species, including mycobacterium abscesses. And patients that are susceptible to developing NTM, such as patients with underlying pulmonary diseases, including COPD, bronchiectasis and cystic fibrosis. NTM infections can become resident in these damage lungs, often becoming chronic, debilitating, and requiring prolonged treatment courses with antibiotics for periods ranging from six months to several years. Pulmonary NTM carries a five year mortality rate of approximately 40%.Today, there are no FDA approved therapies to treat NTM when caused by mycobacterium abscesses. In these cases, antibiotics are used off label in various combinations of oral and intravenous antibiotics with their attendant and myriad safety concerns, tolerability limitations, and low rates of treatment success. Intravenous antibiotic regimens also come with complications such as a poor quality of life, requiring daily clinic visits for infusions, risks of IV catheter infections, and risk of upper extremity deep venous thrombosis. Safety, tolerability, quality of life issues, combined with poor clinical outcomes speak to important unmet needs that well tolerated oral antibiotics could potentially address when treating NTM infections caused by mycobacteria abscesses.We are pleased that many of our key opinion leaders have offered to work with Paratek to study NUZYRA in this disease. Randy will provide more details during his prepared remarks.Before I hand the call over to Adam, I would like to provide some financial highlights for the third quarter and an update to our guidance.We generated revenues of 3.9 million, of which 3.1 million was attributable to NUZYRA net sales. Our partner Almirall also continues to see success in their U.S. launch of SEYSARA. We recorded royalty revenues of approximately 900,000, consisting primarily of royalties earned from SEYSARA sales in the United States.SG&A expenses were 23.6 million for the third quarter of 2019, compared to 13.6 million for the same period in 2018. The increase was primary the results of the cost of our contracts sales force and other commercialization costs in support of the U.S. launch of NUZYRA.R&D expenses were 8.4 million for the third quarter of 2019, compared to 16 million for the same period in 2018. The decrease was primarily the result of the capitalization of NUZYRA, commercial supply costs, which were classified as research and development costs until FDA approval of NUZYRA. This decrease was partially offset by higher clinical study costs associated with our Phase 2 UTI program.We continue to remain disciplined from an OpEx perspective, balanced against potential investments in areas we believe will create long term shareholder value.We enter the quarter with 225.6 million in cash, cash equivalents and marketable securities. We expect our cash position will fund the company's operating expenses, capital expenditures and debt service beyond the first quarter of 2021.Now turning to our revenue guidance. We now anticipate 2019 NUZYRA U.S. net product sales will come in within the previously communicated range of 10 million to 13 million, likely at the lower end of the range.We anticipate that continued revenue growth in the fourth quarter will be partially driven by recent initiatives that include an increase in the size of the deal force in time for the fall pneumonia season, and further expansion of institutional access within the group of approximately 600 targeted hospitals.With that, I will now turn the call over to Adam. Adam?

[Adam Woodrow:]

Thanks, Evan. The U.S. launch of NUZYRA continues to progress well, and we encouraged by the continued growth seen in the third quarter, particularly the strong demand and our once daily oral formulation. We believe many of the successes and leading indicators seem to date as well for the future.As the first broad spectrum once daily oral and IV antibiotic approved for both pneumonia and skin nearly 20 years, we believe that NUZYRA has begun to address important unmet medical needs in a serious community acquired infections, whilst also combating antibiotic resistant pathogens that are resulting in clinical failures and poor outcomes with older generic antibiotics.NUZYRA convenient once daily oral and IV dosing option is providing flexibility in prescribing, resulting in minimizing hospital stays, and in some cases, allowing patients to avoid hospital admissions altogether. In addition, we believe that NUZYRA's safety and tolerability profile provides a much needed alternative to many existing antibiotics, such as the quinolones that have expanding safety concerns, as highlighted in their black box warnings.History tells us that it takes a sustained effort in education and patients to establish momentum for new IV antibiotics in the hospital setting, after which adoption in the community setting for a companion once daily oral like NUZYRA can accelerate. So that's end, NUZYRA's key attributes are resonating with the medical community and provide support for our commercial strategy, which is tracking favorably in recent market research.In the market research, the physicians that are aware of NUZYRA, approximately 95% of them have stated and intend to use NUZYRA and this is significantly more HCPs now that consider themselves regular NUZYRA users compared to the research that was conducted earlier in the launch.As Evan mentioned, NUZYRA generated 3.1 million in net sales in the U.S. in the third quarter, compared to 1.7 million seen in the second quarter, an increase of 82%. Accounting for inventory, NUZYRA gross demand nearly doubled from approximately 1.7 million in the second quarter of 2019 for approximately 3.3 million in the third quarter of 2019, representing a significant increase quarter-over-quarter.Our initial outreach continues to be directed towards early adopting hospital specialists, including IV doctors, pulmonologist, hospitalist, and ER physicians within the nearly 600 key accounts we target.During the quarter, we expanded the sales force size to approximately 50 representatives, and will continue to judiciously add representatives throughout the balance of the year toward our target a 60 by year end. We've taken a measured approach with our hiring process as we balance our return on investment to ensure we have the right representatives in place to drive further value creation. Accordingly, these additional representatives have been added both to regions showing trial and adoption, as well as to newly established regions where we have received inbound clinical interest or significant access wins.In our key targeting hospitals and integrated delivery networks, we've been focused on gaining institutional access to NUZYRA, while making steady progress in raising awareness. We have achieved institutional access in approximately 60% of the 600 targeted hospitals, and have several significant IV former decisions in the coming months, which, if successful, will continue to provide further adoption momentum.We also continue to make progress with commercial payers. Over 75% of commercial lives in the U.S. now have access NUZYRA. We've also started to observe strong improvements with the government sector, such that the majority of the state Medicaid programs cover NUZYRA, including many of the biggest states, such as New York, New Jersey, Texas, Florida and Illinois. We are energized by our progress to date. We believe we're on the right path with NUZYRA and we also well positioned for long term commercial success. We look forward to reporting on our progress in the quarters ahead.And with that, I'll now turn the call over to Randy.

[Randy Brenner:]

Thanks, Adam. As we look towards the balance of this year, we have several important potential value drivers, which we believe should enhance value for shareholders. We continue to pursue several compelling life cycle opportunities for NUZYRA, including initiation of the oral only CABP PK study, and taking steps to explore a path forward in NTM caused by Mycobacterium obsesses. We believe that these opportunities will broaden the potential NUZYRA to reach into new and clinically important patient populations.As Evan mentioned, we released top line results for our Phase 2 studies in acute pyelonephritis and uncomplicated urinary tract infections. Both studies were adaptive studies, which included multiple dose regimens of the omadacycline with the objective to identify dose regimen for further investigation that would be clinically and microbiologically effective in the indication.The first Phase 2 study enrolled 225 subjects and was designed to evaluate the efficacy, safety, tolerability and pharmacokinetics of oral only regimens of omadacycline, compared to an oral only regimen of nitrofurantoin and female patients with cystitis or uncomplicated urinary tract infections. In this study, we also evaluated the impact of a light meal two hours prior to dosing on day one only. We did see a modest improvement in GI tolerability with generally lower rates than what we have seen in prior studies at similar doses. In this study, omadacycline showed generally comparable levels of clinical success. However, the microbiological responses in thus to composite clinical and micro biologic endpoints are generally lower than competitor. The 450 milligram BID dose demonstrated numerically higher outcomes. But due to the small numbers of patients in this group, this dose regimen would require significant further clinical investment.The second Phase 2 study were designed to evaluate the efficacy, safety, tolerability and pharmacokinetics of one's daily IV or IV-to-oral omadacycline, compared to once daily regimen of IV-to-oral levofloxacin in patients with acute pyelonephritis, a common clinical subset of complicated UTI. In this study, 201 patients were randomized into one of four omadacycline dosing regimens or levofloxacin.In the study, omadacycline again show generally comparable levels of clinical success to levofloxacin, however, the microbiological responses and thus the composite clinical and micro biologic endpoint were generally lower than competitor. In both studies, omadacycline was generally safe and well tolerated and consistent with faith results from previously completed pivotal Phase 3.Additional analysis of the Phase 2 studies are ongoing, including pathogen specific level efficacy and relationships of both clinical had microbiological responses to urinary pharmacokinetics data. We will present data from both the studies at a future medical conference. Our both studies may have identified a potential dose that could warrant further exploratory investigation. We currently are not planning for any additional clinical development activities in urinary tract infections.As we previously noted, we've agreed on a path forward with the FDA to evaluate an oral only dosing regimen for NUZYRA, a community acquired bacterial pneumonia or CABP. Previously mentioned, the FDA has requested PK profiles from approximately 20 CABP patients to support the approval of this labeling language. We've initiated sites for this study and anticipate dosing to initiate by the end of this year. Based upon the small size of the required trial, we anticipate a submission and potential approval for this pathology in time for the 2020 pneumonia season.We're also exploring additional indications to further augment the value for omadacycline and address critical unmet clinical needs. Specifically, we're exploring a path forward in nontuberculous Mycobacterium lung disease, also known as NTM lung disease. In the United States, the incidence of pulmonary NTM is rising. The annual frequency of NTM is approximately 70,000-80,000 cases, with recent research indicating a yearly increase of about 5% to 10%.NTM is broken into two major groups, slowly growing – slow growing Mycobacteria such as Mycobacterium AVM complex, also known as MAC, and rapidly growing Mycobacterium, which includes Mycobacterium obsessive. Omadacycline has demonstrated potent in vitro activity against Mycobacterium obsesses and as we have published also achieved very high pulmonary penetration levels in humans.Mycobacterium abscesses infection is an orphan disease and accounts for approximately 10% of all NTM cases here in the U.S. There are currently no FDA approved therapies for NTM caused by Mycobacterium obsesses. These patients are treated with complex two to four drug combination regimens that have tolerability challenges and often require patients to return for daily IV infusions for months of treatment which can significantly impact quality of life. An effective oral option would be a clinically important and welcome addition to the limited list of therapeutic options being used today. We're currently considering options for the appropriate development pathway for the treatment of NTM with omadacycline.This summer, we submitted a response to an RFP issued from project BioShield from BARDA. The intent of Project BioShield is to provide government funding to support the required late stage development activities needed for FDA approval of a bio threat indication and for the purchase of the selected therapeutic for the Strategic National Stockpile in advance of achieving that indication.Based upon the approved label for NUZYRA and pneumonia, including both oral and IV formulations, combined with the promising in-vitro and in-vivo animal data against select bio threat pathogens already in hand, we believe the NUZYRA is well positioned to compete for funding from this program. We continue to expect a decision regarding any such award will be made by the end of this year.With that, we will open the floor to questions.

[Operator:]

Thank you, Sir. We will now begin the question-and-answer session. [Operator instructions] Our first question comes from Robert Hazlett with BTIG. Please go ahead.

[Unidentified Analyst:]

Hi, guys, this is Jake [ph] on the line for Bert. Thanks for the question. So, I guess maybe just to start off, if you could just kind of talk about the qualification on guidance for the lower end, as the pneumonia season is just getting started and maybe some of the trends you’re seeing?

[Evan Loh:]

So, as you look at what we’ve been seeing over the last several quarters, we continue to see, I think progressive growth in our overall utilization, specifically in the trial and – trial phase. And what we’ve been pleased about is actually we’ve been seeing more and more repeat prescribers. As we said before, also that the majority of our prescriptions today are in the oral form more than the IV and we think that this trend will continue over the pneumonia season.That being said, given the fact that this pneumonia season is just getting started, plus I think some other changes in our overall reimbursement profile, including obtaining the J-code and the beginning of October, I think portends, I think, for potential positive acceleration in our overall uptake in the upcoming pneumonia season.

[Unidentified Analyst:]

Okay, thank you. And I guess if I can just follow-up on the CABP PK study. Are you looking at multiple doses there? Are you looking at the loading dose we saw for skin or some of the other dosing regimens that maybe were looked at in UTI and any learnings from the UTI study in terms of an oral dosing regimen for CABP? Thank you.

[Randy Brenner:]

Sure. So, this is Randy. So, this study is really designed to show comparable PK from an oral start pathology compared to an IV-to-oral pathology in pneumonia population. So, it’s not a typical study where we’re evaluating multiple doses to try and see one that works. So, the design is really quite simple. We’re looking at a loading pathology that will match the first two days from a PKIUC perspective compared to our IV-to-oral study.

[Unidentified Analyst:]

Got it. Thank you.

[Operator:]

Our next question is from Ami Fadia with SVB Leerink. Please go ahead.

[Ami Fadia:]

Hi. Thank you for the questions. Can you talk to just sort of your latest expectations for the peak revenue potential for NUZYRA, has that changed at all? You’ve obviously made progress in growing the product, but I was just curious if your thoughts on sort of the big sales potential of change at all?Secondly, just on the BARDA. What gives you confidence that we will, in fact to get a decision before the end of the calendar year? And last time you had indicated that once you receive kind of the allotment, it might take a couple of months to finalize some of the terms of the RFP, and then so it may be some time before you can actually publicly announced that since you’ve not sounds like you’ve not received a decision from them yet. Could we anticipate still getting that decision by the year-end, you did say that but I just wanted to understand sort of some of the details around that? Thank you.

[Evan Loh:]

Sure, yeah. So, hi, Ami, it’s Evan. Thank you for your questions. In terms of our expectations, currently, I think we continue to be positively, to continue to see positive signals in terms of patient experiences as well as feedback from our physicians. It’s still relatively early and – but at this point in time, we don’t see any changes in terms of the way we look at the peak potential for this product. And for the BARDA question, I’ll let Randy address that question.

[Randy Brenner:]

Yeah, thanks, Evan. So, we’ve been continually assuming that a decision from BARDA would be made by the end of this year. We don’t really have any new information from what we’ve had in the past. Other than there been a number of recent meetings that have taken place in Washington DC, from IDWeek, there was a BARDA industry day and then the World MR Conference that took place in Washington last week as well. But all those meetings part of representative spoke and had a consistent message around the ports of project BioShield to them as well as to the sector. And that their expectations were that award would be coming shortly. So, so we feel comfortable that by the end of the year seems reasonable. Of course, it’s a government project. It’s totally out of anybody’s industries control but we will be continued watching any of the public statements around any further updates for timing.

[Operator:]

Our next question comes from Jason Gerberry with Bank of America. Please go ahead.

[Ash Verma:]

Hi, this is Ash Verma on for Jason. So, couple of questions. So on NUZYRA, can you help us understand the impact that you saw from the October implementation of J-code? And just as a follow-up as you go towards 2020, do you expect to see any kind of meaningful step up in coverage than the current 75% lies, and what is the typical coverage policy required to get NUZYRA in terms of prior step at it?

[Evan Loh:]

Thank you for the question. I’ll have Adam actually handle those three questions.

[Adam Woodrow:]

Thanks, Evan. Look, we got J-code at the beginning of October. What I say that, we are still very early in terms of the observing an impact. But we do anticipate that we’re going to see seamless reimbursement when individuals prescribe the IV in the outpatient setting. So, it is part of the consideration from acceleration perspective with regard to our growth in the last quarter. You asked the question, also about, do we expect to see some additional coverage. The answer to that is, yes, we continue to work on gaining additional coverage with the payers, some just taking longer than others and it’s just a fact. And every time we work with them on a one-by-one basis, they genuinely are very, very favorable, which leads me to the last part of your question, which is, what type of hurdles are in place from a prior authorization perspective. And the answer is, we’re not seeing a great deal of prior authorization or step that it’s involved. In fact, we’re seeing little to no step that it’s where they required to move to a different generic drug before they receive NUZYRA. We do see it occasionally prior authorizations. And those prior authorizations really just ask the question, is these are being prescribed on the label, or sometimes there’s a quantity limit where the prior authorization requires of the prescription is limited to no more than the 14 days that were licensed. And even then, depending on what the indication is, sometimes physicians will speak directly to the payers and change that ruling. But we’re very, very pleased with the reception that we’ve got from the payers so far in terms of the coverage of NUZYRA. And we do anticipate to continue to see really good coverage. In fact, the type of coverage sometimes one can only hope for by the end of the year.

[Ash Verma:]

Great. Thanks. And I just had a quick follow-up. Do you have any metrics for what proportion of CABP treatment occurs during the pneumonia season versus offseason?

[Adam Woodrow:]

I didn’t catch that question. Could you repeat it, please?

[Ash Verma:]

Do you have any metrics for what proportion of CABP treatment occurs during the pneumonia season versus offseason?

[Adam Woodrow:]

Well, both skin and pneumonia are seasonal and we’ve got both of those indications. So, we change our promotional focus from skin to pneumonia as we move into the winter season and back to skin into the summer season. Remember, one of the challenges we are faced with and we’re working on through Randy and the team is to get the overall only indication. The reason for that is because the vast majority of our use is clearly coming in the oral formulation and that’s where we expect to see the growth, which is one of the reasons we’re focused on the oral only indication in pneumonia. The fact is that, from our perspective, we’re seeing, still seeing the majority of our utilization on label between skin and pneumonia, but we obviously like most of them antibiotics see a significant part of our business which is an off label utilization.

[Evan Loh:]

The other thing I would just add to Adam’s response that’s really important. As we think about the world, we’ve received consistent feedback is, one is the once a day oral formulation, it’s a companion to the IV. It has a safety profile that mimics the more than eight decades of tetracycline safety. And when you put that all together in the absence of cardiovascular risk and the unmet needs with regards to the broadening safety concerns with quinolones, we continue to feel very, very positive about some of the reflections that we’re getting back from both patients and physicians.

[Operator:]

Our next question comes from Ed Arce with HC Wainwright & Company. Please go ahead.

[Ed Arce:]

Hi. Thanks for taking my questions. So, first, on the PK study for the oral CABP. I know you just you just recently announced the initiation start before the end of the year, but what are the – what’s the timeline you’re thinking? When do you think ultimately you could get this study wrapped up submitted and the change to the label?Second, is on the NTM study. Clearly, it’s still early days you’re looking at a regulatory past meeting with the agency, but what specifically about this indication is attractive to you given the profile of omadacycline?And then lastly, the 3.3 million in growth demand that you mentioned in the quarter. What exactly is involved with the 2.2 million delta there from the sales? Is that stocking or something else and if you could just help explain that to us? Thanks.

[Randy Brenner:]

Okay. Hi. This is this is Randy, I’ll start with your question around the CABP study. So, our expectation is the CABP study will initiate enrollment in the – as we’ve stated in the fourth quarter of this year. Due to the small number of patients, we expect enrollment will complete in the first quarter of next year and give us some time to get the data together and have a regulatory submission in the second quarter of next year with approximately a six month review, which would get approval late third quarter, early fourth quarter just in time for the 2020 pneumonia season.With regards to NTM, in the profile for omadacycline, there’s a couple of clear things. First off is the data that we’ve seen with regards to the in-vitro potency. We know that omadacycline has very potent MICs against Mycobacterium obsesses. The community is in huge need for an oral well-tolerated once daily formulation. These patients are on therapies, 6, 12, 18 months. So, the ability to minimize IV therapies for these patients and their impact on quality of life is quite meaningful and impactful to patients and providers. So, we think the profile the product is well fit for the needs of the NTM community, particularly around Mycobacterium obsesses.

[Evan Loh:]

As long as your third question, could you just clarify that question for me? It’s Evan.

[Ed Arce:]

Yeah, just the difference between the net sales in NUZYRA and the net gross demand of 3.3 in the quarter. What’s driving that?

[Evan Loh:]

So it’s really a difference in inventory. The 3.1 in net sales is actually what ultimately goes to our customers in terms of our specialty providers, et cetera. So, it’s really a small difference in terms of demand, in terms of inventory.

[Adam Woodrow:]

Hi, Ed, it’s Adam, I think the quick easiest way to explain it is we tried to give you the gross demand so that you can pair quarter-on-quarter. It takes out inventory and it takes out gross to net.

[Ed Arce:]

Oh, I see. Okay. And then perhaps squeeze one last question in here. Given that we have three quarters in the year, just want to make sure I’ve got the numbers straight here. Looks like about 6.1 or 6.2 so far this year in terms of net sales. So, you’re looking at – if you do hit the low end of your guidance about 3.8 or 3.9 for the fourth quarter, is that right?

[Evan Loh:]

Yeah, I think that to get us to $10 million, which is the exact bottom of our range, Ed. But as we’ve said, I think we’re going to fall within our previously provided guidance of 10 to 13 likely in the low end of the range.

[Ed Arce:]

Understood. Thanks, Evan. Appreciated it.

[Evan Loh:]

All right. Thank you, Ed.

[Operator:]

[Operator Instructions] Our next question comes from Kevin Kedra with GE Research. Please go ahead.

[Kevin Kedra:]

Thanks for taking my questions. On the NTM opportunity, first, just wanted to ask if you’ve been seeing anecdotally any use often off label for that indication and what you’ve been hearing back on that?And then secondly on that indication, and the FDA haven’t notoriously tough on new indications where they don’t already have guidelines kind of set up for approval. So, what gives you confidence that you’ll be able to find a path forward with the FDA, and that’s something that we should think about falling under kind of the LPAD pathway?And then finally, if you could just give us a sense of what is current therapy look like in that indication now. Is it a combination therapy used, is it single agent therapy and would you look at kind of mono or combo therapy in a sort of study?

[Evan Loh:]

Yeah. Hi, Kevin. It’s Evan. Thank you for your questions. I think when we think about the NTM opportunity, I think that we have had some anecdotal inbound from clinicians in terms of the market asking for whether we would consider it because our oral. They have agents, multiple agents, intravenous as well as a few orals that are relatively poorly tolerated some involve quinolones, some involve other agents that have bone marrow suppressive effects that you can’t take for the long term and some of the IV’s are, as you know, just not practical from a daily infusion perspective. And so, as we think about the path forward, I do think we’re exploring multiple different development pathways.And maybe I’ll let Randy talk a little bit more about those.

[Randy Brenner:]

Sure. So yeah, so as you know that we have not had discussions with FDA yet on this pathway, although it’s part of our thinking process and will certainly would be part of our plans to due early part of next year. The LPAD is certainly out there and something that we are thinking very heavily about with regards to how best to use that. It really is designed specifically for this type of situation where you have a rare disease, particularly around Mycobacterium abscesses where you have, in the bar ballpark of 5,000 to 7,000 cases in the U.S. So, thinking about the orphan status and the rare disease potential pathways, LPAD certainly falls into one of those.So, we’ll be working closely over the next couple of months internally and with our KOLs to design a study that we think makes sense, following many of the pathways that have been previously established through the rare disease activities, many of which I participated quite closely in my previous roles. And I think with the right discussions and the right KOL support that will come – we would be able to come to some agree with FDA that was such a small patient population in the U.S. that his study wouldn’t be overly cumbersome, but those discussions are yet to be had.

[Evan Loh:]

Yeah, I would just add to that, Kevin, that, as we think about the potential development pathways as well, the most important focus for us is providing information that clinicians can use and today they are clamoring for. They are asking us for as well. We want to be in a time efficient as well as capital efficient process in order to actually provide that data. And there are other pathways that are available to us that we are also exploring outside of a strict FDA approval process.

[Kevin Kedra:]

Great, thanks for the color. And then if I could just ask about the UTI indication and may sound like that you guys aren’t going to pursue that any further? I know that wasn’t part of your long term guidance, but it was certainly a significant opportunity in differentiation factor for NUZYRA. So, when you think about the company and the structure of having a single product company, does that change at all when you take UTI out of the equation?

[Evan Loh:]

When we consider NUZYRA, one of the reasons that we’re excited about NUZYRA and continue to be is the fact that it is a franchise product. And how do we define a franchise product? Well, we define a franchise product by, first of all having a once daily companion IV, an oral product that is safe and well tolerated and we’ve clearly established that through our broad based safety database. And from what we’re hearing from clinicians, I think the high levels of efficacy that we have seen in our clinical trials today are being seen and replicated in the clinical setting.In addition to that tetracyclines have historically known to have a very broad based opportunity in terms of exploring other indications from a lifecycle management perspective. That from a DoD perspective that we’ve initiated early animal PK studies to look at bioterrorism organisms, so we’ve applied for the RFP for BioShield. As Randy said in his prepared commentary in addition to us having an approved mnemonic indication with both in oral and IV indication. We also have in-vivo and in-vitro animal data, which I think physicians as well competitively for that particular award. And as we look at NTM, we have microbiological preliminary data that looks very favorable with regards to nontuberculous Mycobacterium as it relates to those rare cases treated, I mean, precipitated by Mycobacterium abscesses.And at the end of the day, we realize that a single product affords more risk than we would like to take as a single product company. And so, as we said before, in addition to the multiple indications we keep a start with a franchise product, but after that, I think, once we continue to build further forward momentum that we were always open to adding other products at the right terms to expand our portfolio.

[Operator:]

Our next question comes from Robert Driscoll with Wedbush Securities. Please go ahead.

[Ashok Mubarak:]

Hi, this is Ashok Mubarak on for Rob. Thanks for taking my question. I’m sorry, if I missed this in the prepared remarks, but did you mention any thoughts on a timeline for Europe for NUZYRA and given them a withdrawal? And I was also curious about how the oral only labeling in the U.S. might affect your clinical program going forward for Europe? Thanks.

[Evan Loh:]

Randy, you want to take that?

[Randy Brenner:]

Sure. So, for Europe, our plan is to go back to Europe following the completion of our secondIV-to-oral pneumonia study that we’re required to do as part of the approval in the U.S. We currently have timelines laid out. With that study with FDA, which is essentially a study completion and data submitted to FDA in April of 2023. So, shortly after that, we will just turn around and update our European MAA and submit the product in Europe around the same timeline. So, sometime around the first half of 2023 and we would assume a one year review process again for that application, which gets us at approval somewhere around the middle of 2024. Just remember, in Europe, we went through the application intentionally to maintain our market exclusivity. Instead of market exclusivity provisions in Europe wouldn’t begin until the approval in 2024. So, that exclusivity has been preserved.With regards to the oral only study, the PK study, and the impact on that study or our plans for Europe, they’re really very separate studies. The oral only pneumonia study, as we said is a small study, looking to get about 20 or so patients from a PK perspective to compare the PK of an oral initiation, compared to the IV-to-oral initiation. So, the studies are really too very independent and one will have no effect on the other.

[Evan Loh:]

Yeah. And I would also add one other thought here to consider as well. I think that given the broad base broad spectrum nature of tetracycline, and as we continue to explore lifecycle opportunities like nontuberculous Mycobacteria, nontuberculous Mycobacteria caused by abscesses is not a disease that just limited to the United States. And so depending on what that path looks like, and the data that we generate, I can imagine that from an orphan disease and rare disease perspective that that might be pathway that could further be considered in parallel to the pneumonia indication for Europe. Yeah.

[Ashok Mubarak:]

Okay. That makes sense. Thanks.

[Operator:]

This concludes the question-and-answer session. I would like to turn the conference back over to Evan Loh for any closing remarks.

[Evan Loh:]

As there are no more questions, we will conclude today’s call. And in closing, I’d like to thank you all for your time and attention today. Your continued interest in NUZYRA and Paratek are important to us. The journey of making NUZYRA commercial success is underway. The unique profile of NUZYRA specifically are once daily well tolerated oral position well for long term commercial success. As a wealth of data on a mass I think continues to grow. We are increasingly confident in the potential of omadacycline to be an effective and much needed addition to the armamentarium of antibiotics available to physicians to save lives, particularly when resistance is of concern to remain committed, to the continued professional development of NUZYRA through its life cycle. These opportunities motivate us all at Paratek and we would like to thank the patients and our employees who have worked together to make us all a reality for patients. We very much appreciate your support and interest. We look forward to keeping you apprised of our continued progress. Goodbye for now.

[Operator:]

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.