FLXN - Earnings call transcript Q1 2020 | Flexion Therapeutics Inc

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Scott Young

Good afternoon. This is Scott Young, Vice President for Corporate Communications and Investor Relations.

Before we begin, I would call your attention to the metrics slide that we will discuss in today's presentation. Those slides can be viewed directly via the webcast, or under the Investors tab on flexiontherapeutics.com.

In addition, the press release we issued this afternoon and an archive of this conference call, can also be found there. be Flexion's will Dr. Executive call conference led Chief by Officer, Today's Clayman; by Layman, and Officer. joined he Flexion's Arkowitz, Commercial Michael is Officer; David and Chief Financial Chief Melissa

milestones include be Reform relating sales, Statements future operating forward-looking regarding clinical, the other financial are conditions utilization, forward-looking will business regulatory performance, to we regulatory business expenses, developments strategies Securities call, clinical and Private cash the today's Act. statements On and within and net that meaning or commercial, or matters, financial, projections. expectations anticipated making statements commercial and including of Litigation

Flexion change these statements over various to which cautions that are risks subject time. uncertainties, forward-looking and assumptions,

risks ended today and information filed Flexion's contained at Flexion's could SEC in affect conditions March with well XX-Q the which operations filings, Additional www.sec.gov and Flexion's business, the for XX, as are the as Form on XXXX, quarter that available are and factors other financial results of website.

only date such forward-looking statements. as update These of to call, speak of and assumes duty the statements no Flexion this

will over CEO, Clayman. to turn call I Mike Flexion's the now

Michael Clayman

and health and has Scott, a performance we've of future. been quarter ZILRETTA’s we'll It but our crisis, the begin in public talk COVID-XX. quarter joining color today's operationally and our since us enthusiastically with we unprecedented first remain what about focus the eight you, clear about as the that seeing and commercially on Thank you doing during bullish a on why both in provide all is only call, earnings we'll call, fourth changed weeks thank dramatically world for today. On result

and XXXX. quarter flat prior we indicated QX that would range deliver believed had sales million $XX.X million we roughly Today, we recorded previously were ZILRETTA on net outbreak. to for We this sales QX track $XX.X the be in the to sales of our COVID-XX first versus of of sales

outbreak the predict might on what effects was have point distancing would of simply patients the impossible social We more efforts how that it practices. that at containment said aggressive evolve or also to or other or

become result, activities. then, by Since suspend of these as get time all the by development to region, sales in will on and or and ZILRETTA recovery significantly. we call practice reduce vary the saw even in the by normal together. the our ZILRETTA visits practices QX, speak the clearer late substantially it person. new And and now much We the Beginning picture later we of effects pandemic a believe practice, has most to on drops patient utilization cadence region even person to of will and the take can

to over all non-opioid relate note whose them have of consider take in increase far, delay demand we seen a ZILRETTA demand do the to substantial and adversely year. need the believe ZILRETTA TKA That revenue have TKAs. These And the potential or intense external second cancellation rapid analgesia said, COVID-XX provide decreased medical time. of we postponement pain for knee total place. for that for circumstances the arthroplasties or durable first patients knee ZILRETTA for will of remainder Thus quarter the number in to drove the impact of to the

our Three these attention dynamic contribute all opinion and were leaders. factors this brought orthopedic to by key

be around and First, be further country, many cases, a capacity beginning return will the in happen TKAs to while full most surgeries will to elective gradual are there delayed.

infectious reluctance population. risk. to those confidence considered who our Medicare for may they vulnerable all until surgery patients have hospital the can enter be [indiscernible] to There these in age of greater Second have are COVID-XX avoid

sometime XX% to until surgeons many of than data XX normal will orthopedics procedure COVID-XX. expect rehab. expect and generation indicate that XX% their fear previously Recent were those may and income employed, almost for volume of survey and between of Finally prioritize over delay XX% that younger anywhere XXXX for are who continue and back XX% will surgery patients be to in their not surgery

instructing mid adapting work Of March. employees from to course, home in our since to Flexion is

on ZILRETTA prescribers see to experienced historically Our various have conversations provide Melissa what field, clinical their meaningful highly difficult time to technologies data with response have the very to in hands, seeing has more access the but their healthcare can our adopted engage the MBMs greater have MBMs and who physicians. since been been have encouraging. to practitioners in you're color prescribing more

OA that COVID-XX, The and even we undiminished. relief ZILRETTA confidence knee potential hear line with long-term And ZILRETTA’s to from continue unprecedented in performance is is have our bottom pain received who [indiscernible] stories clinical

CSBC, potential We exclusive license agreement biopharmaceutical are a with OA tremendous for not with into the millions In midst April, the company announced entered holds pandemic, knee ZILRETTA company. believe of that Chinese subsidiary Tainuo we an a of patients to pain. Jiangsu of leading that we Tainuo, the and in only HK

sales the upfront are agreement, and to of payment for receive commercial manufacturing will terms development, commercial million activities. the of to an Flexion payments. regulatory supply of ZILRETTA solely we be up and the and milestone for million and $XX Under in entitled all $XX.X clinical responsible

as predict and taken long we affect release press While will our for announced ZILRETTA reduce it is sales expenses have the our our is to to the confidence in actions resolute, we near impossible term. operating in afternoon, in how meaningful this us pandemic

a come are will David of but ensuring we pandemic these we to detail, in steps out the that financial discuss position. committed more strong in

of participants the patients that announced by recognizing clinical also therapy safety trial clinical consideration FXXXX, OA. shoulder issued early the in research X wanting many our guidance our down, efficacy ZILRETTA of intra-articular suspend In April, Regarding would and or capsulitis. with the temporarily the of X for evaluating shut clinical gene trial, of in tolerability Phase Phase And we trial evaluating FDA. candidate OA adhesive that our development sites we clinical and safety had ensure to our

shoulder adhesive capsulitis. our in Subsequently, trial ZILRETTA strategic we made to and and decision discontinue the investigating OA Phase X

the well required cost enrolled patients status, number the action that to uncertainty restart study believe be of most maintain in is the when of inactive the would trial, the responsible as this at we we Given in it trial time. terminating an able to small the as

our study Moving in to indications. forward, use to leverage designed and potentially these ZILRETTA from we refine will the these advance learnings look the trial to

aim to site patients. also dose We and of enrollment ascending trial trial at return our conditions FXXXX and permit reinitiate the staffing the single when safely recommencing

NaVX.X for Turning as our thermosensitive formulated a block postoperative peripheral within pain. nerve to administration FXXXX, of a for control inhibitor hydrogel

product a that controlled following to drug FXXXX at locally persistent can therapeutic body create release temperature continue candidate. concentrations at the advance a room provide liquid this is depot at and jells We nerve. to injection of selected temperature

Virtual to now and sustained Poster FXXXX Regional available unveiled new on liposomal that effect Anesthesia Society in Acute placebo, Medicine’s Pain show of recently in American provided preclinical post-operative the bupivacaine impairment We data a compared website. and no function. with Presentations data analgesic These motor

of ingredient addition, providing funapide, the duration the at drug for active In measured FXXXX, site release. depot consistent creation the controlled administration concentrations were high of of of in with study a local the the

substantial rehabilitation persistent pharmacology musculoskeletal following the that rapid program, potentially early of still local these and the deliver and function, relief support typical selective surgery which hospital. more it pain preserving potential the to for unlike while While discharge FXXXX leads our enable is has earlier from motor the anesthetics, days findings could

for GLP tox XXXX. FXXXX We to are we remain clinical completing initiate and trials track studies on in

I would turn I over final it a Before Melissa, few make just to to like comments.

is patients deferred key are about millions to need of COVID-XX can While of effective some they and at and least of have there the extended whatever pace from know pace substantial replacements now. We poised We for OA are recovery recovery, knee at or relief uncertainties it pain. there We that the ZILRETTA know shape facts wait been that that whom many for are tens pain those for the will know provide due knee right commercial shape of know our and surgery. takes. while many we thousands elective relief patients organization there

remain we face stands in and we to future Finally, our we everyone to adapt ready Flexion know any in that confident circumstances prospects.

commercial point, I this it over discuss like would turn to our operations. to At Melissa to

Melissa Layman

the effective day about two management dozens particularly enhanced yet by to OA in can our confirmed first work QX Flexion resulting I role members ZILRETTA play light before Flexion and field, the my meetings day has the sales from Mike. just along Despite durable to in I and Thank you, COVID-XX what perception our organization, second and My earnings having of the I've set directive all call for bolstered team believed of our home under for patients joining in the the my response pandemic. and now been from with the with pain treatment ZILRETTA of by marked knee COVID-XX virtually rise months. of organization. foot met pain Each of the know of I've these continuum. only physicians

discussed the there. during grow restores from Mike and emerge some during crisis how have what the I'll ZILRETTA how field prescribers color sales prior the of provide and experienced to plan recent with additional some weeks. been we in we've to continue from engaging we trajectory on crisis

now, Before are quarter. metrics commercial we what the start like the seeing about walking for I'd through I to first talk by

tracking our quarter believed the prior mentioned, expectations. progressing meet Mike and to COVID-XX pleased with the As were way was first of the was we onset ZILRETTA to

end first compared an net quarter, ZILRETTA impact XXX extended of the in to purchasing XXXX. the had XX, of list Slide million targeted sales and material pandemic in March accounts reflecting reach see quarter the quarter fourth we of $XX.X to We recorded March all which to And XXXX, X,XXX had on ZILRETTA by the of accounts that X,XXX of can the increase sale. of expanded by them. our our You X accounts almost was purchased fourth

end off light customer of in to XX% ZILRETTA. or continued increase March, grow in purchasers this even accounts the reordered pandemic. occurred that of As base Notably, of the had of X,XXX the

base to quarter sizes and of next line in hospitals guidance. consistent growing of how On the to clinics, pleased part The previous sales practices, Slide when reflect various account prior sales slides on our last with three you see of performance can have as the we've launch fourth progressed were of of and comprised potential. in we were onset year we COVID-XX purchasing with X, across QX deliver and ZILRETTA track with first the mentioned, our patterns since our

number to Slide units, category. purchasing XXX X and XX and account the or purchase of XX QX, ZILRETTA volumes to accounts the growth cumulative our distribution as that with across base. continued significant XX describes more quarterly have units purchase a within XX plus number XX to since well of as accounts launch with trends of units the across the the one purchased In accounts break of in growing

the at by account. of distribution looking perspective cumulative Slide ZILRETTA the X flips purchases

For purchased XX,XXX launch example, ZILRETTA previous shown slide move units the in those on the that purchased for been XXX continue This plus and XX in XXX,XXX more continuum from through accounts previous XXXX. total than roughly have were of purchase the purchasing illustrates group since described accounts purchase QX to calls. utilization clearly this volume group responsible on units

we've continue largest even to also to within previously there believe that each under increase across we highlighted, our and penetrated these remain and opportunity As groups. accounts ZILRETTA tremendous of utilization is

XX,XXX units March, exceed It middle on until well in or ZILRETTA purchases dropped we than quarter. of and purchase is approximately fourth and the were pleased our the COVID-XX we our of were to business track first impact important the to effects fourth lower XX,XXX began purchased total volume is that point quarter precipitously. slightly which to meet with in purchases ZILRETTA progress the the believe while out also Through were the units quarter

break onset across units, COVID-XX to Slide QX, ZILRETTA new we to In the number the purchased prior out which purchasing and further our accounts. accounts XXXX strong U.S. our final XX,XXX existing illustrates X, In by new start of

practice Mike significant COVID-XX customers. access limited, ZILRETTA impact had eligible the clinician variable on window, has Throughout mentioned, dependent. As patients and to COVID-XX overall been impacted our has

can with including pre-COVID-XX employed paradigm, engage the and reps social have has the implementing prescribers important visits have our while gaining denominator not some replacement discuss audio that technologies tenacity presence high various for altogether in or patients They to been patient in access open measures. of new exceeds the shut levels. to in to in practices vary. Well, decline lifted. visual those ZILRETTA effectively roles to are OA surgery COVID-XX or are to the common been well, exchanges, One detailing, circumstances acute critical a cases down accounts both existing and targeted who priority our distancing once have awaiting are successful salesforce, cases, restrictions opt others remote play treatment while for person, Some in-person

that and what like. held safety those of The support recovery a the new returning to normalized the practice To patient's our be requirements across doctor's requirements orthopedic focus COVID-XX series look social insight specialists on well groups in patient current flow nation. gradual to assumptions might as impact the their distancing driven from comfort by of better and return the practice with understand and will offices. from exchanges ongoing as We

options chose the However, and we scheduled ZILRETTA. for backlog potential new the for reasons ZILRETTA of defer to TKR manage a growing invasive treatment types like as favor both also those to of see increased of who including candidates in wider of surgical for various use previously variety prescribers less related existing in look COVID-XX patient

occurs or ensure there support shape commercial knee the prescribers managing or the OA even recovery, understand it they avoidance described, of actually as ZILRETTA timing of can role play we will team surgery. Mike their the be but pain and in more patients important cannot in to our prior predict As effectively to

now to that, I'll the financial turn updates. it David With for over

David Arkowitz

Melissa. you, Thank

and our some details provide to I'd economic financial on our fiscal COVID-XX. the business by overview of Before to first an in quarter, I response caused share disruption performance like the

we described press prudent liquidity. our Mike and the series undertook expenses enhance as our to flexibility quarter of release, disciplined we in earnings order As in financial to reduce organization mentioned and first and across steps a

savings these this and million steps In year. million total, $XX deliver believe in $XX between we will

development are our year result, full expenses cost operating million. XXXX selling, research total and include $XXX administrative $XXX expenses to range the be and the million of which sales, to and a general As expected in of

savings or trials, travel area clinical and of across and hiring active the savings termination the suspension cost realized majority through undertook will initiatives the We and but and select presence of industry business, in elimination and be reductions every the following, freezes, live research well of elimination as at programs reductions market expenses. operating in-person in non-essential and conferences, programs as medical materials of physician speaker marketing of

year excessive reduce addition, In suspending to and ZILRETTA the our of uncertainty we reinitiate activities typical us We inventory this agreements, given we production and at ZILRETTA model of finished contract up remainder be the believe the remainder avoid to be the through inventory for and goods market at manufacturing are least to sales will condominium needed, current surrounding of ZILRETTA of for demand this based ability buildup year, to on scale provides impact the determined costs. supply manufacturing dynamics COVID-XX meet temporarily we unlike with will for sufficient and manufacturing. our Patheon’s can once that additional

$XX.X a XXXX. reported for the million to of the financial With quarter we performance, first net loss net respect XXXX first quarter a our of $XX.X to compared of of period million loss same for

and three of $X.X months million ended million $X.X Net three sales March respectively. of XX, was million and XXXX, XX, XXXX and ZILRETTA Cost for respectively. were the the $XX.X XXXX, and months ended XXXX sales $XX.X million March for

net fees, net of the gross of and to is quarter, A to reduction reserve, reflect of and Defense. rebates Administration, health XXXX distributor comprised Department sales returns care and and rebates, and as primarily discounts mandatory gross reduction government such Veterans XX%. institutions, XXXB net Medicaid, service provider First

of X% gross volume and XX%. providers are The healthcare to based the reductions contribute of the product purchased of net to total quarter variable on rebates first

starting ZILRETTA mentioned, meaning and practices, Melissa materially March, dropped purchases to As of COVID-XX. hospitals in clinics due of account physician by middle the

our weeks. one level the higher inventory three to first levels were at of the of distributors result, end our than by a the As target quarter held

second take impact second we rate, their inventory. our distributor it have combination to a quarter will through account purchases the the to particularly by current upon distributors revenue by sales potential continue While the for our account revenue purchases of our than reduced normal work Since at negatively. recognize a ZILRETTA time inventory decreased higher and of to quarter distributors, in levels

expenses to decrease $X.X the first million the Research The development and additional including primarily expense, due ZILRETTA of million was related three in and to an the dosing expenses, patient $XX.X I Xenon FXXXX, human milestone in trial, increase an clinical salary Phase million for XXXX lower by in for clinical $X.X stock March and expenses in research for and of employee-related GeneQuine and to expenses $X.X an to other a and the other costs period. million increase due offset respectively. portfolio and increase the related months the during expenses $X.X million million increase Pharmaceuticals, development $X.X trial in primarily XX, to ended $XX.X compensation for in were development of to expenses XXXX million headcount

expenses million for Selling, XXXX, selling million $XX.X months respectively, and were ended and XXXX in months $XX.X expenses respectively. $X.X for a $XX.X million March due activities. year-over-year general physician patient million XX, the $XX.X in and General to million respectively. $X.X The was and marketing and represents and were ended the were three of three and three XX, which $X.X administrative XXXX, XX, and expenses March million. $X.X administrative primarily Selling expenses million March reduction XXXX decrease for and million XXXX, ended XXXX increase an months of the

was XX, three months million was for XX, March the and $X.X $X.X ended three million respectively. and expense $X.X months and XXXX, for XXXX, XXXX ended $X million million Interest XXXX respectively. income and March Interest the

million XX, marketable $XXX.X cash, securities March and had of with As cash compared in approximately $XXX.X December as million XXXX. XX, XXXX, equivalents we of

Therefore, to or ZILRETTA. our guidance it any us in the cash specific runway. with provide forecast of its utilization of sales patterns to respect ZILRETTA our pandemic on for impact future or cannot with imprudent would we time, full this duration of At the point or precision, purchasing be

provide our and color and We when assumptions to continue review will possible. additional reassess

Mike steps ZILRETTA As financial to post-COVID-XX confidence strong as is our perspective maximize the and well environment. ever from are positioned take necessary in to will mentioned, as a in a value we ensure we ZILRETTA’s

At questions. this open for point, I the would operator, line the please ask

Operator

from Randall Our comes [Operator or the of first Stanicky RBC comment question line Instructions] Markets. from Capital

line Your is open.

Randall Stanicky

a) to guys. for was physician ordering will re-opened a a thanks any channel were thinking around least have demand as like, on prospective their And of Great, practitioner they presumable procedure from from really because where to Do intend kind patterns large were aside. sense or inventory I give regions at that follow-up. and focus you have what up pent profit a

Michael Clayman

take you Can that?

Melissa Layman

Yes I can.

for We patient for the been is have which have believe has to correlate flow existing necessarily region, the return not seen by we've We to by that to re-opening And been empowering basis the persistent. going office by prevalent. to practices the geographically where and patient normal, even the practice and more been don't vary areas that is impacts patients. volume COVID-XX

Michael Clayman

I us pattern. We're Randall think having early accounts, quantities, patterns. Well, building far We it's but acquired minus, accounts to seeing too updated seeing just or an Melissa’s, [ph]. mean we're it's declare from on less other ordering just some MSA that I substantial us for ordering order

Randall Stanicky

your of to figured those I are bound pain. Let option regions, timing probably a home get follow-up to going out me in alter shutdown patients is you about been Have continue. ask ZILRETTA surgeries, some captive probably I patients able mean have to them? of as New have you Maybe which you are access way in outreach, York elective via this thinking who guys DTC? who period, a mean front like in regions the an to during

Melissa Layman

there this specifically haven't been asking healthcare our patients regard have during our with So They focused efforts period. with to focused been specifically, providers.

to users have that those surgeries have to equipped our nonusers wait home is been some working been with in very and canceled mounting. to remotely. surgeries March focused the and our altogether, that continue get around rescheduled, salesforce And audio having middle conversations fact their which physicians been of of point, the engage from Our are with postponed, to times since of fully many visual they has

being that to can are an offers put and bridging with schedule. these managing intractable surgical considered alternative use continuing patients suffer the until And therefore are they those by that the is tool our more able as to widely be that customers patients to pain back ZILRETTA onto

Randall Stanicky

great. Okay, guys. Thanks

Michael Clayman

Randall. Thanks

Operator

you. Thank

from Gary or BMO of question Nachman the Markets. line next comment Capital comes Our from

line open. Your is

Gary Nachman

Hi guys. afternoon. Good

in Just based term? able and you of following target and stratify in been terms variability maybe on previous practices to more near any practices way treat they're in the to those question on in differently aggressively go physician might be them these the sooner handling after have by willing how practices those the that then patients COVID,

Melissa Layman

seeing stratify we we And have, that shut some We've progresses. only exactly patients really groups down pandemic and might what we to are done as not that Others trauma seeing and into more those different patients cases the are that and necessarily altogether. to groups. describe would others than open fact, seeing to still practices are they But that as able that. be we've are moving cases been between but completely are In among practices trauma just trauma. critical, are considered

continuing And above any to our any of so customers are recognition three that those are to engage more into as trauma conversations we the ZILRETTA to guiding force cases. or around that our those as urgent would surgery describe of might patients use see stratifications, given with practices the one that sales one of bridge in that fall we

eligible of patients, all for in remotely will can to to more they not in those the for are we which suggesting seeing patients patients as that today, the as again. patients pre those anticipation will again, And ZILRETTA practices preparing role which ZILRETTA those they at and with that now and for they can coverage are as open where in begin a closed then time well work practices those to tool about down them play their For at that conversations start begin that see the the engaging patients to ZILRETTA. they are patients point similar ZILRETTA but manage they considering discussion a verify to with now

Gary Nachman

you I'm cutting, if that did part evolving, curious be the forward? cost specifically with efficient and maybe that's more to maybe frequently Okay. use think salesforce, mentioned you do this new could it telemedicine And going make in more you it's it'll the world sense of salesforce

Melissa Layman

on COVID emerge the sales of here outcomes salesforce a planning potential Zilretta on implications suggest. physicians to and this But But any time. we from commercial believe as interact make of to with and ensure to is analysis comment stay. currently telemedicine premature detailing we taken the our has not in-person currently would onset any we any as our reset be we're conducting to to footprint optimized a as footprint It might and Certainly, changes our the variety that trajectory. from that root they to these analyses patients and for footprint our at it’s are way commercial sales far of as revisions to

Gary Nachman

ahead. then David. Mike? And I'm a just want Okay. to Did you sorry. Go couple add for

Mike Clayman

when of unduly including collection reps not leave moving when it and of retailing, and appropriately. and can collection call, No anyone Having a still that, be I details and that is connections pretty in is this we nurse these done to was office, and just going total important so this efficient. also are recognize to think said want we that important, I it’s front are of say a safely to prescribing it's practitioners their sales back are that a if the wouldn't personal of staff office we're in actually our direction learning that physicians the we virtual

Gary Nachman

months is of impacted going Okay. David, in jumping for stopping a think a at last be bag, gross And could a issue. Zilretta that ones to you time? have an think second for inventories all now so margin mentioned be couple then you just I your of of period the in calls. on you sales mentioned much And down I couple just manufacturing the be quarter, would How of couple I'm a by the

Mike Clayman

answer us tickets question fluid still in second at that to playing can it's on not the this first. it's how of appreciate give juncture. the as decline Look, COVID going point. because We're that early so are middle Gary, Yes, resulted hit out the very March. material it's – things you And at days.

about manufacturing production margins. have Your certain the margin That's impacted. adversely suspended, have our And was costs. question during first yes, do because gross that and gross we manufacturing fixed will time we be

this to production condominium recall, costs model Patheon. those you inventory. a with production have charged with would is As And fixed been

need parts of recognized Now cost sales. of going they as are to to be

this that have the suspended occur we during manufacturing. time So will

Gary Nachman

nice. you actually a Okay I margin in high in first XXs. it’s have good so I the mean, think, the gross quarter, trending

of dramatic it don't but know, how I Does So, might that half, us give can cut in it a or be? you sense go? get where might

David Arkowitz

point fluid your pretty It's this at to in time point.

This quarter XX%. a we add gross margin by

going So this right just to production the on going gross clearly margins direction. heading it's during pause. guidance to a time look we bit in little suspension. But again, we're in were of are like too too the specific this early But a give take fluid of at point what to

Gary Nachman

thank Alright guys. understood. Okay, you

Michael Clayman

Garry. you, Thank

Operator

Thank you.

or comes line question the Raymond from next James from comment Our Wilbur and Associates. Elliot of

Your line is open.

Elliot Wilbur

I was make just afternoon. able to comments realize Good call. didn't I with questions. stick probably I Thanks. shouldn't, the I'll on

I'd asking But be a I'm nevertheless whip. a David, proceed thought never to couple questions going Flexion about question in And for direction. I so of that

balance divided by the the the $XX $X margin work the got you've million. that I million quarter got somebody in satisfy of process $X going sales inventory is conclude means around million for year. the to goods balance your finished And that looking on in hand Just of you've inventory sheet, through the $XX that on to look at think queue, of million goods is and finished around

So just wanted to off kind of idea you. bounce that

not and represent demand first and have process question. million inventory what satisfy my point in may of this converting I'm whip about under thinking you sure time XXXX. that in the you goods about That’s think terms in into of additional that If finished goods at I'm correctly, $X finished any whether to actually

David Arkowitz

Got it.

Okay.

time converted outside you thank be looking inventory incomplete may already that converted. of the Elliott. So Yes, were whip an first end the at appreciate a question. I of that be is quarter. picture little of even the will goods And I bit think just finished

looking just adequate supply three is ability meet our have partial I we again, we demand goods months think we back do least alone And part we finished to as I remarks remainder to ZILRETTA talked at to And, that of just prepared of up have of story. would Patheon the So for said on of notice. revert only the at at the about restart what XXXX.

So, about good but eye inventory feel our this close we'll are, levels and keep a on what juncture. obviously we

Elliot Wilbur

the term and as the question well XXXX yourself then which up the David, think want Okay. Pantheon loan And well. also for and around expenses, debt, I jump in ask the to as a I revolver

we're hoping respect or how you do of renegotiating issue expecting those possibility thinking that a not back Just things timeline don't Patheon expenses really and you along if an year, about this So those debt little but more? the bounce in to with potentially the are different maybe the next, amortization fact bit interest of rates all out. anything to push can obligations,

that in kind flexibility you you to think XXXX. concentrated of more have can in what and some of trying these about are terms obligations of Just – what fixed XXXX

David Arkowitz

favorably to constructive we're in look relates we discussions in Right, to term our that modify discussions with engaged currently lenders the will potentially productive select liquidity. loan, revolver, our terms believe so it and as our impact

yet. that of not on COVID-XX, We're Our come with relation mutually once an up provide the agreement lenders and a we result in But in agreeable update this, we'll us to as in they're very there forum. then the we working much un-precedent have appropriate solution. understand are

a optimistic to we're premature it little So, details. as relates

We've manufacturing to that a I shows have As for a paused months three manufacturing, talked the appreciate we've as to an about the it's contract. But time about the accounting long-term notice. that a being fact from it relates lease. and that really standpoint with partially Patheon production startup up opportunity

good year. and through a what things have XXXX, with We relationship with Patheon closely beyond sense be makes will working as we progress this

Elliot Wilbur

question fact specifically that of CSPC much generated approval. be of want assume remember sense and bulk goes with plan the but directed a those Okay. the if is would final trying ask of that tied milestones I Then to I according advance in everything correctly. Mike of respect to to to in approval, agreement $XX.X I million with to get the final associated to just could a a if how

Michael Clayman

this. and volumes is know that $XX.X can the downstream what million the might have Scott and heavily drawing in with work sales regular direction $XX. of weighted the don’t sales on My I milestones line Young sight of in that a is, are X million exactly better sales. recollection Yes, milestones

Elliot Wilbur

metrics, you Okay. still the have with opportunity XX% accounts one me, I and that then total that Melissa, to purchase, conversion of like units. excuse for at be table, question the that generate, or respect of the still And X% on looking to guess last latest seems to just X% roughly

salesforce time, that and that are volume. small of energy, of just attention So relatively effort, generate XX% how kind costs much wondering, at targeted sort

total terms volume? to on So those of their what's accounts, the strategy really prescribing still potential, be more efforts high under versus best accounts now convert focusing try Thanks. in maybe the right utilized and just may which

Melissa Layman

utilization the our function to midsized commercial to David continuum. there that continuing ZILRETTA regardless can see purchases, with on we move purchases getting own message volume room that to of evidence the their volume from be volume able purchases. midsized whether to a practice, initial of context higher are to we the being the small slides purchasers the of really of is get in from is comfortable be before, customers As larger And and think volume into believe purchases about that penetrated. customers said we physicians of has or the for experience use trial, patients physician we to that have move impacts volume all and customers purview to to clinical the on within other low that a volume small we patients, ZILRETTA more previous and and reimbursement expanding a calls talked the consider it that of number And of then you billing other within purchases number successful from small practice. accounts coding, can that

it. placed is volume that opportunity practices And we small is proportional within exists so of those as that purchases the to against degree effort understand the those

Operator

Thank you.

next from Serge Needham from of comes question line the Our comment & or Belanger Company.

is Your open. line

Unidentified Analyst

Hey few on Serge. a I this [ph] questions. just is had Dan for

this impact incorporate broadly sorry I So outreach speaking, your and that you worthwhile just I is program post environment? to, virtual a term? you've guess far, guess so seen COVID tech given virtual on I long you forward something pursuing is the guess, that think in just going plan do how positive technologies tools in

Melissa Layman

to we're remote for can time think, greater our through That that their patient is we all that been they drive sure use. hands for And physicians advertising. most remote know is sensitive promotionally the their it dynamic are getting now we ability product. degree highly, own, through I on more Absolutely, opportunity that person, now which And leverage benefited to to something an likewise are is everyday the promotion and clearly looking that is ZILRETTA We've a a counts into. us more access absolutely utilization. and towards the fact detailing. by ZILRETTA they the remote to regardless them creates equipped to effective whether telemedicine And in that or with have accessing of physician services patients

direct-to-physician of terms to today the through spending of In majority promotion our time that. detailing their addition people sales in doing remote

interactions. beginning terms across We their broader a on in of of, with physicians from programs much physicians position of panels of number remotely country speaker able experienced are remote also and use types engage including number to in peer-to-peer ZILRETTA a those national to being a of turn education of the

Unidentified Analyst

Great. Thank you.

Operator

line from comes Craig-Hallum you. Group. question Capital of next Brisebois [Operator Instructions] the Our Francois Thank from

Your line is open.

Francois Brisebois

the taking question. for Thanks Thanks.

on is get to waiting of giving now here Just that to that kind more cutting, given a you've related guidance that the quickly I impact, $XX or $XX million, was your there wondering guidance in any to way before clarity here, more cost there? you're on revenue million expectations just if little

David Arkowitz

David. Hi Frank, this is

I ensure So the and to COVIDXX. what as liquidity, flexibility dive this, we in experiencing we're organization expenses you to remarks, that said can as and appreciate throughout order reduce in a actual in was really given order prepared have this to my deep

the reduced, deferred sense. recovery. eliminated, we've worst in have for past, we We and made we most for the this the And things talked the the that being we about planning prepared thought

early to things days and As relatively changing as as we're are appreciate, pandemic revenues, it relates day. still every you

up and sit our the there. for because revenue financial our We didn't reductions expense sense those match flexibility we focused short – think the wide of and and revenue expense on term outcomes it's makes dispersion both business, with – and we had a long-term reductions based facing, liquidity. objective be is to on what our to think there to we what is there of So going

Francois Brisebois

a to Did Thanks start And did lot get here? of to were COVID. in that. No, like start, going the that or the then sense. for mid-March really seems starting quarters cutting cost really point, that it cutting with cost is this makes the sales in forward at come hit

Michael Clayman

really say progress. quarter, impact we'll on because related late in really on the already that We were late, minimis, things embarked in first well but first the late, activities de our those expenses is to quarter the the in

So just are in QX is really other the to what to QX, doing we incurred million And this operating way in first $XXX be QX the the range, given about we forward. it’s by through quarter. expense about expecting and expenses math think going QX our $XXX million QX aggregate to

Francois Brisebois

this related Patheon let going would would seems public that the on with lastly And something here terms is production like practice? be know would the of the it you or production what's in reengage you in then Understood. Patheon medical just when with Street it and let because

Michael Clayman

good question. a That's

disclosure would we out makes, think production. figure we initiate a standpoint, when what from I

we I would be a we let we in at everybody Pantheon premature kind when notice time point know give to – disclosed as Again let period. or think this point will know it'd say at of three-month that there's not.

Francois Brisebois

for it Thank Excellent, me. that's you.

Operator

Thank you.

from Jackson Next question or comment comes from Benchmark. Bruce

is open. Your line

Bruce Jackson

my for thanks taking Hi, question.

any trial, on that? able shoulder going the be to salvage of data to you quickly out Just are

Michael Clayman

Bruce, or Yes, will that potential and of the has study, its subsequent will question. data we course, too who limited Thanks enrolled themselves we jotting implement. the we study, I roles your [indiscernible]. to un-blind high, want write But We don’t we the we though is would we patients and this that to utility enrolled the larger there determine community in that will the patients will are of restart for that numbers in Mike. of expectations the but accumulated caution to be [ph] requirements trial protocol analyze the there. and owe certainly

Bruce Jackson

you’re do quickly opportunity? up And back with good. get be to Okay, pretty you going when able you FXXXX, think then search the to

Michael Clayman

to as we're as and going that [indiscernible] Only the ready are be patients operational as are soon [indiscernible] confident [indiscernible] exposing restarted. we soon not as feasible,

Bruce Jackson

Thank very great. Okay, much. you

Michael Clayman

Thank you Bruce.

Operator

the the queue Thank this in conference any Mr. no you. like I'd I'm to turn to remarks. additional for time. showing over comments Clayman back closing at Michael

Michael Clayman

the the future. predict thank much who I say come you who just could feel those I’d those that idea about good but just and Thanks in that that Yes we understand substantial by we'll people the for our Zilretta want call meet all we to day all can't day, asked of the that's will try to to need in questions. And for we be very leave we today. elements a demand outlined there’s and with

Operator

today's for thank This participating conference. gentlemen, and concludes program. in you Ladies the

have wonderful disconnect. now Everyone, a safe. day. may Stay You

Flexion Therapeutics (FLXN) 7 May 202020 Q1 Earnings call transcript