KIN - Earnings call transcript Q3 2018 | Kindred Biosciences Inc

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Operator

Welcome to the Third Quarter 2018 Financial Results Conference Call and Webcast for Kindred Biosciences. [Operator Instructions] Please note that the remarks today will include forward-looking statements and that actual results could differ materially from those projected or implied in our forward-looking statements.

For a description of important factors that could cause actual results to differ, we refer you to the forward-looking statements in today's press release and the note on forward-looking statements in the company's SEC filings. It is now my pleasure to turn the call over to KindredBio's CEO, Richard Chin. Dr. proceed. please Chin,

Richard Chin

Good XXXX operator. welcome our to Thank Results afternoon, Call. Quarter Financial Third you, and

Joining from Wee, quarter. Bevers, Development that our Katja me we are our and President KindredBio today Buhrer, very pleased and the Investor management had Relations. COO; to of a Wendy VP our I'm and of CFO; Corporate team announce Denise third successful

on our from are Furthermore, are Our expectations. results the recognize antibody within pet momentum revenues is as in track. the market. positive well veterinary our QX other study building and Mirataz announced We IL-XX attractiveness space of programs investors there the more

molecule. been distributors. have FDA Denise caution API reorders and inspection, based additional Zimeta, be including plans including the it's its has too for As successful with will upside, announce that pleased we but believe are cycle early to are drug. a we manufacturer. this Mirataz from contract launch have the there We re-inspecting and draw additional the a initial this detail, that of we believe expansions, management for promising further penetration, fixed Because on approval that. we discuss timeline on life work label of is will conclusions, have informed and towards XXXX. initiated no that that We still And Mirataz our On in we stages way I will the from is expect things, QX clinics, we being number sales. in that orders to in early

Atopic dermatitis for itching study indications our allergic are key on the announced we dermatitis Turning and to dermatitis, from results like pilot canine associated dermatitis. and areas us. atopic impressive

assumptions to like of some I'd So and strategies. our highlight

iceberg. a the diseases penetrated need. The that by conditions also of the current very the dogs. can this represent subset of the is that sales may medical let's means in feline market evolution should First, is at only any we There yet in fully beginning and an still amount as that only keep and market. unmet well. I tip mind that believe of enormous that note We itching is we not only of atopic market the of is dermatitis are attractive believe the cause

mixing the for namely and last Second, profile favorable the sector biologics more the benefit individual the be grow will we by optimize but dominated could tick outlined be veterinarians economic the veterinarians, potential to seen markets the with alignment will that market, reasons remains even and animals. that for biologics on matching believe to call, the and safety We we and that the therapeutics certainly, perhaps there. believe itching rival to be flea dermatitis is and generally although

is Approaching only the the in we is right finding tighter candidates. positioned well IL-XX is broadest particularly difficult, is believe biologics one is We manufacturing KindredBio dermatitis difficult, broadest, difficult. antibody and line the cell the high of Third, extraordinarily engineering now, Developing and of field. expensive. difficult development if first. pipeline have not spots is

we IL-X/XX other antibody, molecule, that, Beyond multiple IL-XX have SINK and the candidates.

human only of for be believe competitors KindredBio cost will companion to are to develop therapies it very and of some in So challenging the area technologically the and become industry. We the comparable attractive importance of of companies we a one for goods. edge a leader in most can advantage we development, the of biologics, in and believe cutting very the substantial competitive pets. in difficult very experts even the of may our will is have most revenues. one this market. given cost These CMOs. In experienced of we handful that human see nearly This largest animal catch our for most products The biologics. dermatitis, that approved responsible are believe other a provides sector the some companies approach many product of drugs in teams up. with We other small multiple sector evolving using we pharmaceutical beyond successful But capabilities technologies human the exceeds one see markets we of atopic biologics of capabilities of end-to-end companion size. like and speed, think been animal rapidly be we has

the said to see range, I $XX when year. dollar as that hundred believe to we $XXX we to multiple the diseases. company before, biologics, the expect started So in We molecules we industry in million our that sell multiple said going between million million especially we're products several across sell per

to now revising $X forget, million drugs And $XX several that don't are only our million year. per $X to to our develop to hundred million. average dollars is cost million We

companion molecules animal Our field, the biologics. the positioned best-in-class believe goal is strongly in biologics multiple to be to have and we're in leader we

validated the believe business to with to Denise. very other and have success over our I we you. call success now our Mirataz, excited will model our turn with Thank Given we're the continue we products.

Denise Bevers

Thank you, launch manufacturing. on of our by will overview and the key pipeline I Mirataz, Richard. followed an commercial update start of candidates with an

is transdermal ointment companion Mirataz for As distributors as a shipment KindredBio in all launch. were feline toward able pleased X. manage After historic acceptance loss with to the our Mirataz in its customer first to on approved on indicators bring the we market, May, first early to quickly and July for a high report awareness and successful FDA In market of pointing product, to approval first our first sector. receiving to and a I'm level with product quarter as the weight animal well cats, only

have in are X of are of with Mirataz that U.S. research of expectations. loss. market X believe veterinarians infancy order and on based new Already, to unintended the feline to to the safe penetration, accounts, approximately well we a around orders we on and medication to were transdermal the continue I'm partial X/X placed sales pleased of goal our clinic distribution Keeping indicator. an Based uptake which remains partners quarter. at out of by reordering our expected. U.S. add date initial initial with launch earlier allowed from half response to a quarter, the of clinics reorders, during us the having nearly in in ordered mind veterinary U.S. our expect this rate recognize encouraged within is Mirataz' pre-approval strong X/X its all clinics we promising results are that the mid-August, than This While year-end veterinary quarter the appeal sent through weight achieve is say it stocking third Alongside for and to in a XX,XX management rate which the effective the that quarter. this in uniformly of The early consistent Mirataz been customers X,XXX the revenues aware of we're approximately have this and positive likewise Mirataz underscores of early in clinic clinics.

out the noted that last I'm smaller distributors' our product, initial report regional stocking our move distributor already partners observed reordered quarter, I And underlying with have to accurately pleased were judicious we orders all trends. and we've reflect of positive As demand. national initial and that customer orders, preferring

in and such selling to reps, standpoint, increase expect of From onboard and our XX our an per also in have to research that rates, come with their Consistent to field research and will by a has equating before specialists clinic. been are efforts continue to initial dictate. keep than market our and VCA a week with the our penetration of commercial year. sales accounts, this with cats additional set loss, force, regarding per distributor lockstep key corporate year-end. We weight strategy expansion the cats XX We sales believe affiliates, latest actively sales year-end. reorder our to size, as paired specialists with more demand per average encouraging expand We XXX staffing approximately Based unintended million have been as our sales accounts penetration our team currently see expanding of of total on and that force. of preapproval veterinarians X confirms we post-launch sales with X

together VMX really products, new the So and sales so WVC over as XX,XXX quarter batting where we which year, Because Conferences attendees. about force attract can the most accounts move expect team these looking in full are additional conferences into XXXX, when the of of a ahead, the on through be with we ramp our to you drive up corporate adoption. information we'll first that and bring get this veterinarians end is

While also process approval European topic on of the moving along. the Mirataz, is

Mirataz currently responding with activities advancing Agency's European continued conferences XXXX. in Medicine are to and the to market the prepare around European questions for scheduled education We

in me let start control products, our our to for fever Zimeta turning key the of product Now, pipeline with IV, horses.

approval IV and active has indicated disclosed, to previously indicated that safety an review took CMC dependent FDA's FDA manufacturer section. the IV ingredient, have the timeline or The that the of and and responses successful. on manufacturer. in will or inspection be requests in manufacturer approved for effectiveness As to XXXX. of during API FDA the questions given preapproval does Zimeta was of dipyrone, has a the is the technical technical Zimeta regarding API, the are and have additional it likely not The any KindredBio contract we conduct inspection fixed, at The not been contract the have pharmaceutical from April approval it submitted identified at timelines FDA. sections re-inspection will The now in place July findings re-inspection

of to Regarding Zimeta FDA success Zimeta for commercial expected remain process and manufacturer. expand the we're build IV, the and we transferring proprietary that product the use with the discussions in data submission required in Oral, the is the regarding gel our to upon of

positive for positive recap findings, to statistically itching weeks antibody a does have study with field our mentioned, effectiveness in our biologics of too results, the Richard to discussed clear milestone announcement. in on much year. call and last we during atopic response. significant as of pivotal XX.X%. our this assuming we treatment IL-XX in for dermatitis from into The for pilot go week, Tuesday, was was X of will these study major in be the our all on our move commenced study the detail X high a announced will and positive, detail the sustained IL-XX for we which pilot pruritus we I score antibody pipeline. results IL-XX resulted insurance a the key groups IL-XX the study, is October Based achieved As antibody XX, day reduction On dose dogs. next on the effectiveness won't results as reduction But pilot a of into across

anti-ILXX caninized antibody of We other SINK a several are initiating the molecules canine for in for anti-ILX/ILXX and also a studies effectiveness dermatitis, atopic process pilot molecule. including

Another the I'm anemia is epoCat to next promising report nearly candidate data in in of for we quarter topline near in which the for plan pilot pleased year. first version with report the cats. that of to biologic the expected enhanced non-regenerative term effectiveness completed of data field study is our control

in regarding also discussions assuming positive. study pilot the are FDA We with are data pivotal the design

that cause a the which anemia, develop opportunity. has another epoCat address is of to the can disease, Given half elderly that cats kidney large market candidate potential biologic

suggests version been to of with TK half-life erythropoietin long compared data endogenous a molecule prolonged dosing. epoCat allow sufficiently may the for monthly once enhanced have to and Our half-life engineered especially has the feline

positive foals our pilot has septic study efficacy of monoclonal the results. reported, antibody field with or targeting anti-TNF been completed As sick

are cause with in up therapy. important foals pivotal now to is the with We regarding Sepsis an FDA mortality discussions can unmet need and XX% no approved in design. study medical FDA

has and monoclonal studies efficacy season an a foaling XXXX IBD anti-TNF our optimized of during canine We FDA enrolling. is be the have currently believe anti-equine dogs with very in plan. the We could regarding following initiated antibody bowel antibody field pilot disease market. inflammatory field and development for to attractive continue anti-TNF The discussions that study intend been

are of As to when we've it discussed in biologics. goods comes and cost manufacturing access paramount to the past,

completed to our building the on in lines, foot first believe mid-XXXX. we are Construction expect to manufacturing such, plant which support the be time square the continue is competitive biologics on state key Kansas advantage. pipeline our XXX,XXX to phase, manufacturing product represents initial budget, and a will of lines and As art on support by the we we progressing

now of our over company. I'm deep marked leader third So of will that, this biologics. update by transition a first and long-term with KindredBio, our provide With our Wendy the are the the the product rollout to quarter across by financials. our for a product's pilot milestone call to XXXX study, potential. progress results of remain the to as companion we IL-XX validates stage pleased I to Mirataz confident results from pipeline make position the an time, to recap, and encouraged continue of turn launch At commercial our the same was so and in quarter animal on which initial

Wendy Wee

Thank reporting our we like that to very first revenues. quarter to are of you, reiterate would Denise. I be pleased

be are position time. We and over by Mirataz our to will enthusiasm product contributor revenues a the initial cash encouraged believe for that meaningful

For ended net KindredBio the reported for period $X.XX loss million share same per or of as compared the to quarter million XXXX. XXXX, XX, or loss a per September $X.XX net of a $XX $X.X share in

Mirataz. the Selling, month and the development veterinarians expense periods regional field initial partners, through to compensation network and corporate compared three commercially million the SG&A the compensation for recognized in share compared was nine quarter direct nine expense same the three a research for distributors ago four XXXX product stock-based quarter, quarter the September to duration distributors, same the in Mirataz $X.X nine a due we and and in delivery cost our higher trial R&D the of $X.X XX, revenues inventory increase the net compensation gross included million resulting distributors date as totaled $X.X loss costs, all other the three associated with delivery costs veterinarians million expenses and net million net from of general, and commercial non-home to as therapy ago to was the placed U.S. third frequency Stock-based we pipeline, was the million related and million three through of and to stage totals month in was period. expenses to in clinical as as periods per for $XX.X same XX% and periods million transitioned expenses. $X.X orders and $X.XX in $XX.X compared of two development and and of increase advancement million and and nine Total month for and higher year $XX.X September with three of as $X.X in by periods In and per which in included The XXXX. million periods to sales $X.X comfortable the or as the ended revenues compared nine use material $X.X available expense in months XXXX, million million for margin R&D was home of operating million for expenses share For to $XX.X to loss well due Mirataz administrative and and revenues well expenses. year our the stocking we as were of $X.X itself as The XX%. formulation company with In well $X.X $X.XX practice. higher establishes XX, were million periods. and is organization. of as quarters, building line our coming the for expense or the million Approximately consulting year SG&A headcount national and that increasingly including $X.X other The expense million a in periods $XX.X therapeutic reorders for XXXX. Stock-based increase become and respectively, million expect periods in $X.X expenses million product as is month third million to $X.X in $X.X for ended end. XXXX.

underwritten approximately of of of our by the million at had of $XX.X equity-offering months offering XXXX $XX.X and cash, investments and $XX.X used compared KindredBio cash was market net Net XX, equivalents, million, $XX.X cash activities XX, XXXX. nine as million million an operating to in the first cash September offset a of total of for common from proceeds stock December program. in As public

approximately our buildout invested manufacturing the $X.X of for capital Elwood, Kansas facility. also in expenditures We million

stock-based calendar and million, expense to if impact to impact operating XXXX excluding any. compensation of of the the $XX be year, the For we expenses expect closer acquisitions,

on programs. are We up the core pipeline continuing focus and of development to the and commercial team our scaling candidates

pipeline, million plan construction $XX with which buildout stage of million our our development $XX you back In animal our that, companion to and launch to call XXXX industry of from of to of advances a balance is will the robust biologics to on at pleased the and in quarter. With programs, of Mirataz look transition is the the our drug with We over the facility Richard. pipeline. on results Kansas $XX model, capital next an and we be the over we commercial are across initial expansive invest million by With biologics forward closing, Additionally, updating company turn for progress million continued leading expenditures our forefront we expect complemented to XXXX. the lead $XX to competition, expansion to Elwood, sector. efficient in expected I the our in

Richard Chin

Operator, Thank are you, we ready questions. for Wendy.

Operator

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

may You begin.

Brandon Folkes

Hi, thanks like questions, for on seems my launch taking great what to-date. a congratulations and

reorders any wait two wholesalers? of to perhaps it on long-term margin, Firstly, very Mirataz some provide at any is end much you. there be? the Could color post-the Thank margin or the terms us I'll of but And And in gross sitting the them quarter. follow-ups color the that gross that. just could on what I've you color you in anything the around give impressive up after Then is got looked how secondly, follow expected is quarter? the inventory and

Wendy Wee

going XPL also to price expect around product variances. do margins be percentage cost, consist of and costs, some some purchase the of XX We forward. revenues cost Our product

Denise Bevers

one in have Brandon, orders we reorders, we usage that we've well. we but our reorders the were as our was within team, clinic that the of world question times, on same initial purpose pleased tremendously with mighty things, stocking been on so to really continue. a patterns. real so And upsizes about and and sales of And said of area on wanted see orders been terrific. number We're small and because seeing that's we're this I've And judicious that seeing focused the then

sitting much can manage So are not we're time. distributors a on product I given of say at to able the lot they at very inventory any and

Brandon Folkes

you a position lastly, you're I be, then about I open talk acquisitions, may potential in the to guess what you up? then the probably And So could mentioned think mention label us of any. not but about that expansion. magnitude you if could secondly, opportunity that exactly heard that to help

So could so deep development? thoughts just you've a you are interesting know thought got I perhaps quite was us you comment. just where on I your pipeline give with business that an

Denise Bevers

about the that indication So when indications attractive the the place initiatives much hope. but obviously, Mirataz to for We say the some pretty some interesting. those. expansion looked we're of we but do we expansion, hard impact were most think It's label at that we how we're will in label have pretty sales, we obviously, to at targeted X we excited looking are and Phase

Richard Chin

as have acquisition some we well I have And attractive discussions not acquisitions, any a say with acquisitions. imminent continue will opportunities. on that would But products we we divulging as be targets at we are potential identified and where the point to potential

Operator

CL Our King. comes David Westenberg with from question next

proceed. may You

David Westenberg

question. taking for the Thanks

was really that saw impressed you already I $XXX,XXX in So revenue.

any sales distributor sort be So they on were you able maybe would of driven? whether driven sales if as that a were or they force composition just granularity to of give

Denise Bevers

Sure.

sales think small to closely, to very say sales distribution will distributor So and reps we obviously on our but outreach clinics. our compared initial field distribution. was our I and force focus what wanted I largely, force penetration to really work relatively is

some lot sophisticated very we I of obviously, that reorders. very first a is mention, internally. And we're those the analytics and So should targeting have orders then much

the dicing at effective most slicing use are team looking and way not way can in sales we only so we a our nimble So in are data, possible. we weekly pivot really and

David Westenberg

without that was a That much terms in … of way revealing great too to answer

Denise Bevers

Dave, been practicing. we've

David Westenberg

of, differentiation Zoetis you in IL-XX? potential would too terms In give to? any If label here, you your if terms want able to I'm think you but label, be give to tries color on don't maybe answer on can they do anything of match sure you can't, competitive you could

Richard Chin

a don't sub-category I data, even any lot head-to-head make in we have for room antibodies. premature the and it's products this category within will given we of IL-XX think that that any two. comparisons say there's I probably to between So multiple the of think

until that So have we little I would on more a defer action data.

David Westenberg

Zoetis finally, just scale. pretty biological have then And does production good

to match an there or then You any you, invested and out or other in scale of is sort Zoetis? the companies you that was biologics partner what's did of match so try to gross resemble they produce there get maybe to pricing-to-pricing your Kansas facility. opportunity scale If other a kind would them? margin And have ability for would

Richard Chin

So few is said very sector what companies we've our can match veterinary in capabilities.

that Zoetis can orders for our the ones of to lead I is think and with else, price. anyone don't think we want I one

Our on on deliver to to I'm Having if including price. that, products us, product I undercut to on Zoetis think comes said that, better it price. compete differentiated is don't anybody develop not can competing goal profiles, that and

Operator

comes from Our Haynor Global question Ben next Partners. Alliance with

Ben Haynor

kind Gastrogard me, more stomach EGUS, issue acidic I'll KIND-XXX potential of that for yours omeprazole hindgut a ulcers. does that the can pipeline. cause a Is focus On be that the all? is that the from off, could differentiated or or lead at Ulcergard? to of for molecule alter something pH colonic First and on know that with I

Richard Chin

think want that of that point, at I don't this to discuss aspect we molecule.

Denise Bevers

heck was of That ask a Ben. a way good, to But question. you're a

Ben Haynor

try I I'd anyway. thought

stepping little bit back then. maybe a So

efficacy on completed into studies a out we anti-TNF? pilots you're the on KIND-XXX going data going then before kind also I moving should of mean pivotal? already And in terms Just Are or field you release question being pilot data with where same efficacy of ongoing having epoCat? being next about at on. either to think studies having the field

Denise Bevers

Sure.

be we epoCat quarter. the yes, So forward first data in on that to can that, will and releasing you look

For KIND-XXX, in we intend XXXX. to be moving into pivotal

any pilot certainly that. we that release. then and release IBD, will And you about think I we need work these to things that, seeing see if would be of the the a pipeline We yes, do data catalysts really for to pilot would So lot before caliber anticipate is of this that's excited one way. pilot studies. of biologics can the exciting we're and along about there's But

Ben Haynor

about in compounds the You've in the that on aren't past that having ongoing year some talked see disclosed. those with data coming Are might XXXX? there pilots compounds any we

Denise Bevers

well could There very be.

Richard Chin

about right. compounds, We molecule talked the small

Ben Haynor

that Or as Listen biologics you to haven't disclosed. those well.

Denise Bevers

some Yes, I haven't something you'll XXXX, be hearing say about at about you would before heard likely point.

Ben Haynor

me, royalties. had I or amazing, for dramatically your was would a be of have awfully to incoming opinion, at you the of guess IL-XX terms week which firms call any on my your ask out-license least there? as could and would interest last lastly there? gone potential Then for it up? partners And think lot that conference having go data, in much how Do you have in I upfront you color potential

Richard Chin

to upfront details. inbound into to if what that's deal, on before wanted substantially data. we have would we get upfront, And expect much would do too So yes, we were inquiries want higher don't had pilot I But have the yes, than an molecule. a the we the

Operator

Riley B. Our FBR. next question Andrew with from D'Silva comes

Andrew D’Silva

ones. been got of but I've my a questions have couple of Most answered quick

product know you just margin, me be that your or have if relates sort a as need that So of thinking variable be liability could included to about? you we return let might that it nature to any in there of a anything gross

Wendy Wee

do. we Yes,

is returns into X% gross netted have which We revenue. reserve,

number the is net I it million. $XXX,XXX. which but was is $XXX So it's revenue [indiscernible] wish we presented, that

Andrew D’Silva

update I've my to got models.

X/X understand Sorry to orders recognition was to to placing placing you the here, for those dollar the what in I'm bit clinics XXX explain revenue then get the and quarter? X,XXX reorders X-day the quarter. Were how me reorders. of worked a item revenue granular just partial kind X/X first-time this little could million in placing line but trying

Denise Bevers

on Of the actual orders, distribution. were the reorders

So go ahead.

Wendy Wee

Right.

So like the the said in distributors reordered. non-home that call all I delivery

are that's why recognize reason we the So able revenue. to

Andrew D’Silva

way, distributors that was it product moment the is a the revenue So they guess is ship actually your or you - asking another when door there place to I you the out when reorder? it at recognize

Wendy Wee

moment they place Well, a reorder. the

the a QX. shipments our did defer distributors place distributors. we reorders, to -- not will reorder, based placed if So But is revenue And we all they that because the on to probably delivery our non-home

Denise Bevers

Right, drive and clinics the drives from reorders that the sales into obviously I mean distribution. that.

I've with from as said, we've rate distribution. our So move out happy been

Andrew D’Silva

of have Is something would the been know that if you can what not, of of have this don't idea have envelope? revenue? question I is shipped actually a you that you rough in everything assuming back front the figure during as a the do you you or but that sales have would quarter recognized been

Richard Chin

point is the clinics is the that X/X distributors. I think the confusion to here of by a reorder,

all distributors essentially, did the reorder. So a put in

So correct me wrong, I'm if but we recognize, --

Denise Bevers

home but delivery. Everything

Andrew D’Silva

it. Got

discussed any a products couple sense. hitting of Now, the so about we new previously next And disappointing, be it in Do then give three, and time, in an four understand. then approval. if you've That is two the products getting makes idea be to the have you it should expect we every I perhaps to through whether And year should timeline calls, XXXX or one get the market through XXXX? be in you that amount years get process very early a of less? but approval with certain obviously, IL-XX, it didn't would thinking and it's what should past or be there date, the exact to regulatory

Richard Chin

first. second Okay, question take let me the

timeline. are than a put to years it that on little six up What We IL-XX. through takes we not that is to a probably out product and develop us a have have we said halfway more

we in near in USDA give some discussions we'll seed the future on the timeline. of approvals working other as the a expect to position have we EU are minimum and process the have Zimeta better the guidance other With We be Mirataz with at quickly regard they clarity to once will on oral, products some and things, then and on master are IV, Zimeta how of some to the the we in a and well. launches,

Operator

next from Street Our O'Neil question comes Lake Capital. with Brooks

Brooks O’Neil

start been I a some feedback just Mirataz. ask collecting Denise, for basic to level any more of to at you've the key wanted as of it relates somewhat and characteristics you

So might there perhaps what that And been are of Any have it about of the for interestingly compare effects? historically. drug? out price about you hearing point, how alternatives the application the with example, side method the

Denise Bevers

Sure.

I think it picked you positives. we the of lot to So that cherry a take hear a with grain have of to salt tend

So heard application the we like are cats with you typically have that having who weight not unintended important. really because veterinarians especially eating is it owners compliance these Don't really are or pleased loss. so forget, and have

treatment And important initial knowing really that do our took some be. sure Because And a we So to really they delivery have cat was application is lot can that these veterinarians. what a to price make them. be not into for pushback. think product. using without would barrier for that, much painstaking decide effort perspective, a launch we of would from I to to would sick cats wanted that are we what the from price garnered price add point And their the the price we've

So that's positive. been a

beyond effects, anything As side or anything certainly the I'm not unexpected. far all, of aware unusual label as at

really FDA anything approved heard other regard. So because compared to in we we're loss And weight for nothing product then cats. only products the in haven't that

we're other thing cats. the may be products So off-label only approved but used for

Brooks O’Neil

is and people from kind you continue a hearing that pattern of hear use kind to what -- from people. superior for just just they was I curious have My is sense are Is usage as of was your In off-label well-established or regard, off-label curious. are far there mirtazapine inclined you I just historically? they're they pretty some to

Denise Bevers

no what Definitely pilling certainly those change is something be the concerned. we've and or for cutting the a cases certainly you're is tried but decide are may owner. they about saying. that as the that that up to far change have heard may see them prefer feel that much to -- and may for There's nothing I the they that as transdermal, like works pill There veterinarian where question for too there who not positive cat. some

chronic we've some what been while using, there's and in had and a certainly the So stick will particularly with situation. conversion, they've that true great tried

Brooks O’Neil

you And development just development normal a then be of the would stages a about know of the would IL-XX. but what dermatitis, sequence biologic speaking for I Richard, for of some atopic an approval were the events timetable is to And the to have as FDA? relates get general, And to what the you look expect the let's just check you like like? say are would boxes from to things, what timetable candidate in uncertain it need to

Richard Chin

Sure.

So product. a USDA this is

X are So drive components process let about USDA clinical that first. the part. and process The the me talk manufacturing the

often you make then by your approved to the USDA your to you we internally, of to is the called all part, the do your be critical it made can all And of master company but you can That's And manufacturing the will source it's that's do. do challenging batches. a is on are for not path So seed, have can use it take the every study. to set on you batches which what clinical batches what's have have able a and up while. that of technically -- you where get which fairly before actually

the is part part. clinical other The

studies need be study, which And smaller USDA, For the you to a you tends animals. an need FDA. tends safety field be efficacy of the then study, generally, to for the hundred a than couple which efficacy

steps So see, let's are USDA. for required those the

the and There's which toxicology is similar clinical. approve cell the the study. to There, have bank, your FDA, X again of a study, target manufacturing a third part, to is master main animal FDA seed. which are doesn't For a a master is safety once equivalent components which

a that. So we of on little bit can time save

However, the are requirements the requirements, higher. CGMP manufacturing

little that longer So bit FDA side. can on the a take

a the study. the On It's clinical couple you combine which efficacy hundred called is and patients. side, safety study, generally into efficacy an one

So those required terms, are are in broad X things the regulatory agencies. for the that

Brooks O’Neil

talked Francisco, thinking in the to or in are about you some San as That's your manufacture the very manufacturer? about or outsourced these Kansas just then with helpful. And you ability manufacturing, facility, products

Richard Chin

manufacturing And a we low at because are anybody outsourcing. of quite can by and than price manufacturing And be there price point we of capable a we manufacturers X, margins in-house outsource biologics. do contract a outsourcing manufacture goods we is contract very, So who because manufacturers could right manufacturing, can else there molecule high small it cost lower difficult no keeping the the believe veterinary at we number it's of are lot of can X, biologics for by do all could biologics, are on now, at or do important narrower. the very to quality, while planning because

volumes most So out expect be we the will be Kansas the of to fairly antibodies of plant commercialized because the high.

require example, smaller, out the smaller products doses much where facility. our that are for of we San epoCat, Francisco to plan manufacture volumes, For

Operator

Wainwright. Our next question with H.C. comes from Swayampakula Ramakanth

Swayampakula Ramakanth

but try questions if and this if Most it that of couple have will a see answer would my things been you I way. answered I ask

that have aware call the at products, far XX% ordered of least about once. the been XX% so on said of You vets have

So in force, not do required is but with that and your they're missing the is of who aware what your analytics sales with come have other up anything been have to you the What ordered. could script? it talking your for XX%

Denise Bevers

different question the good a as awareness as the That's is penetration. certainly far than

very launches, is So we to they're penetration. be there important veterinary thing note, we're awareness significant that because get that one with human to will than side. the hoping such the And on able different that's

side, human obviously, formulary. the on got you've So

whereas it's that You've got veterinary, clinic these flip sort for by of clinic. switches

So it's really a penetration.

Richard Chin

be aware the the but benefits. I of would not they aware efficacy may safety may of profile, And they it be add,

awareness, prescription between step intent prescribe, a there's and and itself. to So

Denise Bevers

of that all the of be we're And X/X penetration year. veterinary penetrated increase. clinics the seeing by will anticipating end We're

Swayampakula Ramakanth

question form, until sure recognized but you a element. not you been is some would remember you not I'm there this that as reorder this also in $XXX,XXX a saying recognize least asked whether has revenue I at quarter, given that revenue

multiple many figure out or again So there that you folks of single reorders of and back to are provide? how again? unique can those $XXX,XXX, coming that, are granularity within that Is reorders? any I'm on percentage just what and trying

Denise Bevers

came on point. orders because this every a obviously time much So quarter on point. lot at the initial -- all that yes, we was different won't detail at was and a distributors probably But it first this of provide partial

the -- lot a typically orders. it then per X So of reorders depending so were by initial and was And reorders or clinic X distributor.

Swayampakula Ramakanth

on would that that should you something this what The could that this last you can one -- question [indiscernible] was XX% on from that think or quarter. Then improve achieve be is we Mirataz. Is for product?

Wendy Wee

Well, margins expect the we low in be consistent the to XXs.

Denise Bevers

We leading our margins. really up worked manufacturing those with to hard really attractive it to get

really well pretty we're baked and it's pleased. in So

Swayampakula Ramakanth

done, completed And then to of on the FDA re-inspection approval? can be to before be IV, requirements thing additional one that FDA that the is is Or any a left that needs decision? Zimeta make outside there before last

Richard Chin

That's else Everything thing done. we're is the waiting only on.

Swayampakula Ramakanth

just a So strategy, question. this a high-level kind is of

for you're is playing Is companies So facilities into a a [indiscernible] of BD Richard, remarks core thing where your strength get in utilize you they them, in incoming of that opening completely so or on such were some especially integrated your either to saying has R&D of that X-on-X. inquiries, biological and that kind manufacturing a you your one that a Kindred that situation? development of a run your any the the whole want hands molecule to front

Richard Chin

partners? question the I might Is of the question part question. Is we around work missed the around -- I how with think potential

Swayampakula Ramakanth

How believe of you better there? for are what's ballast strength than is inquiries that what that you you or getting your kind out much makes might

Richard Chin

absolutely. see. I Yes,

has coming quite that market became every to license going So we large. other company other very we virtually apparent that had that and every potential to that license the stage we we wouldn't there atopic It were drew people on over that the that the have do would value other previously, it. the And be term. anti-ILXX of have a we to because all because nobody conclusion why part else the any take it essentially when out-licensed molecule, we was early partners the are us continue at know given wanted discussions chain development. an out company, if work IL-XX it the discussing to even to clear mainly of none to they antibody have dermatitis want was of to that ability And the

the that's quite believing of for bit a that are ahead So potential competitors. basis we

Operator

have a follow-up next Ben from Our question, Partners. Global Haynor Instructions] [Operator we with Alliance

Ben Haynor

I would have in canines. I path the felinizing of you fully was done and think seek to assume there do you them that had at I real you atopic molecules you Is Just the down just if go correct? said were like wondering you work that felinize if in quickly, looking in to decide done dermatitis as you that well. cats that similar

Richard Chin

I certainly I felinized, be we said didn't quite the if So we dermatitis to a is feline the affinity. and be what say do had molecule, is have would And we that. quite fully capability would atopic market did, attractive. it it high but

think all say. I I that's this want at So point to

Operator

I Chin. and Dr. would Q&A the Ladies this concludes now to of conference. portion like back now today's gentlemen, our call to turn

Richard Chin

this want you. continue exciting shareholders as support on we for I our to operator. Thank you, thank very Thank your journey.

Operator

you Everyone a and gentlemen, may program This for all does thank day. great and you conference. have attending today's Ladies conclude the disconnect.

Richard Chin	Chief Executive Officer
Denise Bevers	President and Chief Operating Officer
Wendy Wee	Chief Financial Officer
Katja Buhrer	Vice President-Corporate Development-Investor Relations.
Brandon Folkes	Cantor Fitzgerald
David Westenberg	CL King
Ben Haynor	Alliance Global Partners
Andrew D'Silva	B. Riley FBR
Brooks O'Neil	Lake Street Capital
Swayampakula Ramakanth	H.C. Wainwright
Ben Haynor	Alliance Global Partners

Kindred Biosciences (KIN) 11 Nov 182018 Q3 Earnings call transcript