Talphera(US:TLPH)2020-03-16 16:45Financial Data and Key Metrics Changes - The company ended 2019 with $66.1 million in cash and short-term investments, with a net cash outflow of $14.3 million in Q4 2019, primarily due to $12.6 million in cash operating expenses [50][51] - Revenues for Q4 2019 were $0.5 million, totaling $2.3 million for the full year 2019, indicating a focus on facilitating healthcare institutions' access to DSUVIA [52] - The gross to net sales percentage for Q4 2019 was 40%, compared to 35% expected for the year, driven by customer mix variances [53][56] Business Line Data and Key Metrics Changes - The acquisition of Tetraphase Pharmaceuticals is expected to enhance the product portfolio, adding XERAVA, which had 2019 net sales of $3.6 million, including $1.5 million in Q4 2019, a 49% increase from Q3 2019 [17][20] - The company anticipates significant revenue and cost synergies from the acquisition, targeting annual run rate savings of approximately $8 million due to the consolidation of over 40 positions [21][98] Market Data and Key Metrics Changes - The company is focused on increasing the acceptance of DSUVIA in formularies and REMS-certified facilities, targeting 465 by year-end 2020, having already achieved 218 REMS-certified facilities and 223 formulary approvals through March 15 [24][25] - The company expects to leverage the Department of Defense as a significant customer, with a gross to net sales percentage expected to increase to 40% in 2020 [56] Company Strategy and Development Direction - The acquisition of Tetraphase aligns with the company's strategy to expand and diversify its product offerings, aiming to create a growth platform for innovative treatments in healthcare institutions [12][59] - The company is committed to responsibly managing cash while expanding the use of DSUVIA in various hospital settings, including emergency departments and oncology clinics [45][59] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the COVID-19 pandemic but remains optimistic about the continued demand for DSUVIA, especially in light of an IV fentanyl shortage [78][80] - The company is confident in the long-term success of DSUVIA and its ability to change the standard of care for acute pain management in medically supervised settings [58][59] Other Important Information - The company is in discussions with a potential European partner for out-licensing DZUVEO and is awaiting clarity on FDA policies regarding ZALVISO [48] - The company plans to provide updated guidance following the consummation of the Tetraphase acquisition, which is expected to close in Q2 2020 [56] Q&A Session Summary Question: Where in the hospital is DSUVIA being used, and how does it compare to ASCs? - Management noted that DSUVIA is primarily used in fast-paced environments like same-day surgery, with increasing interest in inpatient wards to avoid IV opioids [63][64] Question: What impact does the Coronavirus have on DSUVIA utilization and formulary wins? - Management indicated that while some hospitals are temporarily closing access to vendors, they have not seen significant disruptions in ASCs, allowing for continued sales and education efforts [78][80] Question: Can you clarify the co-promotion agreement and its immediate effects? - The co-promotion agreement is effective immediately, with cross-training of sales teams expected to begin soon, allowing for immediate synergies [92][98] Question: What are the expected tax implications from the merger? - The merger is not a tax-free reorganization, but there are no significant tax implications for the companies due to their NOL situations [124]