THIS IS A MUST READ - IMHO THIS IS AN AMAZING COMPANY WITH HUGE GROWTH POTENTIAL. WORTH TO HAVE PART OF YOUR PORTFOLIO.
I went through the document and highlighted/bolded certain areas to focus on key points to note and see why it is worth investing in.
When you read this document you will know why this medications was approved. It truly is a gem, a game changer. This is going to be a huge success. I truly wonder where the PPS will be in a year or two. I have a feeling over $100.
AcelRx Pharmaceuticals Inc Corporate Analyst Meeting
Dec 11, 2018 PM UTC Read more
ACRX - AcelRx Pharmaceuticals Inc
AcelRx Pharmaceuticals Inc Corporate Analyst Meeting
Dec 11, 2018 / 01:30PM GMT
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Corporate Participants
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* Pamela Pierce Palmer
AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director
* Vincent J. Angotti
AcelRx Pharmaceuticals, Inc. - CEO & Director
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Conference Call Participants
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* Antonio Eduardo Arce
H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst
* Brandon Richard Folkes
Cantor Fitzgerald & Co., Research Division - Analyst
* Christopher Lawrence Howerton
Jefferies LLC, Research Division - Equity Analyst
* Daniel James Busby
RBC Capital Markets, LLC, Research Division - Senior Associate
* David George Buck
B. Riley FBR, Inc., Research Division - Analyst
* Eric Landry
BML Capital Management, LLC - Senior Analyst
* Leland James Gershell
Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst
* Michael John Higgins
Ladenburg Thalmann & Co. Inc., Research Division - MD & Senior Biopharmaceuticals Equity Research Analyst
* Michael John Higgins
Roth Capital Partners, LLC, Research Division - Former MD & Senior Research Analyst
* Eugene Viscusi
* Jasmine Jones
* Jean Tersteeg
* Louis Guzzi
* Michael Ritter
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Presentation
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [1]
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Good morning. First, let me start by thanking all of you for joining us this morning. My name is Vince Angotti, I'm the CEO of AcelRx and have been with the company since March of 2017. And on behalf of AcelRx, we again want to thank you for joining our Analyst and Investor Day. We know your time is very valuable and the fact that you've chosen to spend it with us this morning certainly is flattering, and we appreciate your interest in our company.
Before we begin, I'll remind you that I'll be making some forward-looking statements today. And there will be forward-looking statements throughout the discussion today with the panel, experts, et cetera, and it may involve risks and uncertainties of our business, and I would certainly encourage you to refer to our filings with the SEC as it relates to those matters.
So since DSUVIA's approval in early November of this year and the AdCom about a month prior to that in October, we've been having a lot of questions around DSUVIA's fit in the treatment for the management of acute pain, everything from efficacy to adverse event profile, to the ultimate end user of the product. And from a patient HCP perspective, how would it be used and administered.
So as a result, we've put this morning's agenda together with those questions in mind to be answered. And importantly, while you'll hear from some members of the AcelRx management team, even more importantly is the fact that we have assembled an excellent group of expert advisers from different disciplines of training in the healthcare practice world that can give you their real-world experiences and perspectives related to DSUVIA in the hospital pain space moving forward. And that'll be the real value of this morning.
So when we look at the agenda relative to those concepts and ideas for the day, I'll start with an introduction, just to help reset the facts around DSUVIA. There's been a lot of noise since its approval, and we think we can help clarify some of those questions. And then, we're fortunate enough to have with us today Dr. Eugene Viscusi, who will talk about multimodal approaches to acute pain management. Beyond that, Dr. Pamela Palmer, our founder, current Chief Medical Officer and member of the board will talk about the clinical data, in particular, relative to the label and the PK data around DSUVIA and what makes it different. And then she'll moderate the expert panel for close to an hour. And that's really an opportunity for her to trigger some questions you may want to be aware of and receive answers to in addition to the opportunity for the analysts in the room to ask questions of that expert panel as well.
Then we'll wrap it up beyond the expert panel with a summary of our DSUVIA commercialization to date and what you can expect from us moving forward. So I hope that'll meet your needs and be well worth your investment of time this morning.
So when we think about DSUVIA and its approval in November of this year, its indication is important. I'll remind you that it's indicated for the treatment in adults for acute pain in medically supervised settings, such as, according to the label, hospitals, surgical centers and emergency departments. And with that approval, have been a lot of questions relative to the potency in particular of sufentanil. And sufentanil is a potent opioid, but it's important to understand that we dose adjust it based off its potency in micrograms versus traditional milligrams in order to give less of it to have the proper effect. Microgram is about a 1,000-fold difference per milligrams. And as a matter of fact, you may or may not be aware that the company conducted a head-to-head study with IV morphine with sufentanil sublingual tablets throughout its development in order to understand its relative efficacy in these acute pain patients and found that about 30 micrograms of sublingual sufentanil tablets is equivalent in pain reduction to 5 milligrams of IV morphine, which is a very common dose of IV morphine delivered in these acute pain in-hospital settings.
Beyond the potency or relative efficacy in dosing of DSUVIA or sublingual sufentanil tablets is the continuous question of where is it going to be administered and how will the distribution occur. And it's important in light of the fact that we are acutely aware of an IV opioid crisis in the United States, in particular opioids in general in the United States and their potential for abuse. And we'd like to reiterate again that DSUVIA will only be administered by a health care practitioner in medically supervised settings. And related to its distribution, you will never find it, at least via our distribution via retail outlets such as CVS, Rite Aid or Walgreens, only in the institutions.
And why that's important to understand is if you look at the federal survey data from SAMHSA just as recent as 2017 putting the opioid crisis into light, less than 1% or only about 0.5% of misused opioids are actually stolen from the healthcare setting. And again, we'll reiterate that the healthcare setting in the hospitals, in particular, is where DSUVIA will be distributed and utilized with patients moving forward.
And even though the risk of diversion and misuse is limited as a result of this setting, opioids still have challenges in their administration within this setting by healthcare practitioners for the patients. In particular, if you would pay attention to the challenges with opioids over the years, in 2005 in particular, morphine was ranked as the #1 drug most associated with medication errors in the acute pain or hospital space, #1. And unfortunately, over time, over the course of the last 12 or 13 years, those opioids rankings relative to medication errors hasn't changed. In 2017, 12 years later, opioids ranked #2 as the medication class, again, most associated with medication errors in the acute hospital setting. So whether it's the wrong drug given, hydromorphone versus morphine, whether it's the wrong dose, whether it's the wrong rate or frequency of doses, it continues to happen. And we're hopeful that with DSUVIA, over time, and its education can help alleviate some of those challenges associated with the dosing and medication errors associated with opioids in that hospital setting.
And many people ask, well, aren't there easy alternatives to these IV opioids? Aren't there other transmucosal opioids that I can use in this particular environment for patients as well? And according to FDA labels, there actually are not. As a matter of fact, DSUVIA is the only transmucosal opioid, the only one, indicated for acute pain in settings such as hospitals, surgical centers and emergency departments.
The balance of the transmucosal opioids are actually indicated for the management of breakthrough pain in cancer patients, typically adult cancer patients, who are already receiving and who are tolerant to around-the-clock opioid therapy. And even more enlightening is the fact that it looks like in 2016, it was a class adjustment to these transmucosal labels. To the tune of contraindications where they are contraindicated in acute or postoperative pain, including headache, migraine and dental pain or acute pain in the emergency department, actually, in the label, listed as a contraindication. So in fact, according to the FDA and the labeling of current transmucosal opioids available in the market, they do not have similar indications to DSUVIA. As a matter of fact, they have contraindications limiting them from use where DSUVIA would be most appropriately utilized.
And beyond the transmucosals, the most common are obviously in the acute pain settings, IV opioids for the administration of pain for these patients in the hospital or medically supervised setting. And there is another opioid crisis in the United States apart from that of abuse, misuse and diversion and that is an IV opioid shortage throughout the United States, which started earlier in 2017. And it's the result of one of the major manufacturers that controls about 60% of the market having quality and manufacturing issues. And it has had significant reach throughout the United States for our healthcare practitioners trying to treat these patients in acute pain in these settings.
As a matter of fact, in April of this year, ASHP, the American Society of Healthcare Pharmacists conducted a survey to find the impact and the reach of this throughout the United States, and they found through 343 respondents that over 98% of them had been affected in a moderate or severe way. And as a matter of fact, the majority, about 70%, classified it as a severe effect on their practice, and they defined severe as affecting daily operations and daily patient care.
So that's according to the ASHP earlier this year. And unfortunately, supply challenge looks like it's going to continue. The manufacturer just recently commented that while they were hoping to have this alleviated towards the beginning of 2019, it now looks like at the earliest in the fourth quarter of next year that the IV opioid shortage is going to continue. And we certainly hope that with DSUVIA's approval, it can provide a meaningful alternative for the appropriate patients and the physicians caring for those patients moving forward in the absence of these IV opioids.
So when we talk about DSUVIA and we think about the IV opioid marketplace, we believe DSUVIA's effective pain relief through efficient delivery and a discrete dose in a single-dose applicator can have meaningful potential upside and impact on this marketplace in a medically supervised setting.
And why is that? Why is that so important? Why do we continue to emphasize efficiency? Well, the most recent data published shows that over the last 22 years, through 2016 as represented in the bars on the chart in front of you, the number of emergency departments, in particular, one of the places where DSUVIA may be most often utilized, has continued to consistently decline the number of these departments in the United States.
However, as these facilities have continued to decline either through budget impact, closures, et cetera, the number of patients actually going to the emergency department has increased. In over those 22 years, it's actually increased significantly by over 50%. So with the decline in facilities and a continuous increase in patient visits, efficiency becomes a center of attention for these facilities moving forward. Without efficiency, there's potential for chaos and loss of patients for these emergency departments.
As a matter of fact, during the same period of time, there was a study conducted asking 250 hospital administrators what their #1 strategic challenge was, strategic challenge in emergency departments today. And they didn't list #1 as reimbursement. They didn't list #1 as physician staffing or nurse staffing. What they did list as #1 was patient throughput or patient flow, again, defined as efficiency moving forward. And why did they list that, because overcrowding in the emergency department results in patients leaving often without being seen, so there is a concern for the patient. But that often also translates into, in addition, diversion of ambulances to other facilities, ultimately affecting revenue for these facilities.
And the data suggests that annual lost revenue for every 1 hour emergency department delay multiplied through 50,000 annual emergency department visits a year can equate to anywhere between $4.1 million and $10 million in lost revenue for that facility. So one concern, obviously, patient care. The second concern, obviously, the revenue for these facilities trying to treat these patients.
And a component that may continue to contribute to this lack of efficiency moving forward is really IV access. With an elderly population, the population continue to age or obesity, IV access continues to get more and more difficult.
And in a study published in 2017 by Witting, et al, a prospective study, it shows that time from triage to IV access -- triage meaning they've already been to the waiting room, they've already talked about the reimbursement, they've gotten through the desk at the ER, but now they're in triage. Time from triage to uncomplicated IV access can be at a median time of about 64 minutes. But if it's a challenging IV access, that time can increase threefold, up to 199 minutes. Tough IV access, we have to use ultrasound, maybe to have peripheral vein access. Moving forward, these techniques significantly increase the time and the lack of efficiency in these particular institutions. So it creates a real challenge for them moving forward.
And while throughput is a consideration and efficiency is a consideration, we also know that 12% to 26% of the time the first IV stick is a failure. Now if you happen to have the techniques and the ability to get that first IV stick in, it's not inexpensive. And the components around that IV initial access and administration of an IV opioid can cost towards $145, if, again, you get the initial stick in and can administer that opioid.
So the components significantly add up and that gives us pricing flexibility moving forward or a band of opportunity to price with DSUVIA. Now we would certainly not price DSUVIA at $145. We would consider potential for 2 DSUVIAs. And with some recent pricing research that we've conducted with the approved label and the understanding of the efficiency this may be able to provide to these institutions, we have tested bands for $40 to $50, $50 to $60, $60 to $70, all with acceptable responses. It's likely for us we would not go towards a $70 range. We would head towards the middle of the $50 to $70 range, maybe between $55 and $60, potentially moving forward. And of course, they would get their account discounts beyond that. But it gives us the opportunity to efficiently price it to benefit these institutions versus what they're accustomed to paying in this particular situation for the first IV administration of an opioid. And when we talk about the efficiency of DSUVIA, many of you have seen the pictures of it, but you may not have seen the demonstration. So what we have for you here is just a quick short clip that we've taken from our educational video that will be provided to institutions that will be utilizing it to show you the administration of it moving forward.
(presentation)
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [2]
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So what that gives you an idea if you haven't seen it before, the efficiency with which DSUVIA can be delivered versus what you could imagine may happen with difficult IV intravenous access and the data surrounding that historically. So hopefully, efficiency can play a significant part of DSUVIA's contribution moving forward. So I hope that helps reset some of the facts around DSUVIA this morning. Again, its potency, its route administration, where it'll be utilized and the impact it may have on certain healthcare facilities moving forward.
So with that, we're going to transition over to a discussion on multimodal approaches to acute pain management. And we're privileged to have with us this morning Dr. Eugene Viscusi, the Chief of Pain Medicine at Thomas Jefferson University. He currently serves as the Director of Acute Pain Management Service in the Department of Anesthesiology at Jefferson Medical College in Thomas Jefferson University in Philadelphia, just down the road from us here. Dr. Viscusi is the president-elect of the American Society of Regional Anesthesia and Pain Medicine. His research interests include development of new pain management techniques, outcome studies with pain management and the development of novel agents and delivery systems for pain management. So Dr. Viscusi, thank you for joining us this morning.
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Eugene Viscusi, [3]
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Thank you. That was actually an outstanding discussion of a lot of the clinical challenges. So I really applaud your discussion of IV access and a lot of the things we deal with on a regular basis that become the cost of doing business until you have an alternative, but they are core issues that we deal with. So thank you for the introduction. I am Chief of Pain Medicine at Jefferson. Just a side comment, ASRA is a dual society with the largest pain society in America and fastest growing, but we are also the only society dedicated to acute pain management in the hospital space. So these conversations are very near and dear to our heart. I do a tremendous amount of work with industry in the development of novel products. In the last 2.5 decades, I've probably touched every drug in this space. So just be aware in terms of my conflicts.
I do want to say that while I'm at Jefferson and president-elect of ASRA, what I'm going to say today are my opinions. They're my opinions alone. They don't reflect AcelRx, they don't reflect Jefferson, they don't reflect ASRA, but they are referenced and they are based on the evidence that we have today about the challenges in the clinical space and the way we deliver care. My -- this is my son's hot sauce. My son is a former American ninja warrior. I was looking at this hot sauce across the table and it reminds me of one of the common myths we still have in the area that pain is good. I still can't tell you how many times I'll hear a surgeon say I like my patient to know they had an operation. And I kind of want to say at the beginning that this is a real challenge. And this concept of sort of standardized approaches to pain management to prevent pain, not that we want patients to feel pain, but rather we're approaching this in a very proactive manner. So pain is not good and that's myth #1 in this space.
A couple of the concepts we're going to talk today. The platform, that's really what I'm here to talk about, not product specific, but the platform for how we deliver acute pain management. We talk about multimodal. I'm sure you've heard the term, it is not pickling a patient. It's not just giving all these different drugs to try to get a common endpoint. It's very targeted. And every drug fits and has a place. It's definitely the combination of opioids and nonopioids, but targeted and it's based on evidence-based pathways. So it is very much targeted care, targeted therapy. A term you're going to hear or you haven't heard is ERAS or enhanced recovery. This is definitely the hot topic in the surgical arena, but it's entering emergency medicine, the critical care unit. The concept is we create pathways based on the best available evidence, certainly for pain, but also for enhanced recovery, early feeding, early mobilization, just everything that can be involved in those aspects of what gets a patient from here to a good outcome. So it's evidence-based, it's a pathway from the beginning to the end of care and discharge, but very much standardized to assure everybody has access to the best evidence-based care.
The other side of this is the perioperative home or this new emphasis on perioperative medicine that recognizes that not every patient is the same. And that we do have to have somebody there coordinating this. And it's often in the perioperative space and anesthesiologist. I always like to quote Woody Allen in Annie Hall. He said, "80% of life is just showing up." It's not the protocol and it's not just the drug, it's the person who helps customize the specific patient needs. So -- well, that's interesting. Okay. Let me just build this all at once. I know there's a lot of content there that reflects the outcomes that we're looking for as a consequence of enhanced recovery.
One of the most important of these is early mobilization of the patient. The sooner I can get my patient up moving, the less likely he's going to develop complications, thromboembolic events, PEs, DVTs, pulmonary complications. Anything that involves a catheter and a needle delivery system, a pump, is going to burden that patient. It's going to make it more difficult for that patient to get around and to do the things they need to recover. So early mobilization and everything that feeds into the ability to do that is a key part of what we're trying to accomplish with early recovery. And I don't have it in this slide deck, but I often show a picture of patient in bed with all these multiple pumps and say it's -- for us as clinicians, this is what we're accustomed to seeing, but it's not compatible with where we are going in healthcare. We need to get patients up and unencumbered. The more lines, the more catheters, also the greater the chance of medication errors, which Vince really, I think, made a great point about. Medicine used to be simple and effective and relatively safe. Now it's complex, effective and potentially dangerous. And that is true. The numbers of complications that come from the delivery of care, lines, catheters, pumps is really incredibly disturbing. And it is a major source of morbidity and mortality for patients today.
IV catheter complications. Dislodged or blocked infiltrated catheters can result in analgesic gaps and failures. I like the term analgesic gap. I actually coined that term about 20 years ago. It has gotten into the literature. I should have trademarked it because it's now there and it's used, but I think it crystallizes this concept that if you have a line and you're delivering your analgesia by that line and it fails, you will have a gap. And the problem is we often don't know when that line fails. It's not uncommon that you call to see a patient with IV PCA in pain and to only upon exam see that the line is infiltrated. It happens far more commonly than we would like to see it happen. Infection and phlebitis from IV lines is relatively common, and it results in significant morbidity and mortality. Every time you have to start a line or give an intravenous medication, there is that risk of a needlestick and that's an expensive concern and it adds to this burden of care from the viewpoint of the nurses and the care providers. The financial cost of infection, phlebitis, needlestick injuries is about $110 per patient, based on one publication. So these are not insignificant costs, but they get swept into the general care that we don't think about because we have not had alternatives to think differently.
A couple of basic guidelines that address the way we do care, one is the American Society of Anesthesiologists guidelines on perioperative pain management. These date back to 2012. The original document was 2004. So we have been preaching multimodal analgesia for a very long time. The concept is, whenever possible, you provide a multimodal approach, typically with a foundation of acetaminophen, a nonsteroidal, maybe local anesthetics, gabapentin oints. But generally, those first 2 agents which most patients will tolerate are your foundation around the clock. And then opioids are layered on top of that. We add them p.r.n. So the idea of using continuous opioids, that's passed. But the idea of titrating opioids on top of that multimodal, that's where we are currently using opioids. And you want opioids that work quickly because they are the rescue drugs in that setting, you are trying to get rapid control beyond what you already have. These guidelines were a joint venture. I was part of this process, and it involved multiple pain societies ASA, ASRA, the VA, the Department of Defense. And if you're looking for good evidence-based, these really have a lot of information and we looked at key points and evaluated the evidence. Certainly, they support the idea of multimodal, but I think one of the things back at the time we reviewed the data was the clear signal that you want the least cumbersome delivery method. If you can give your medications orally, sublingually, that certainly beats IV, IV PCA. And very clearly, basal infusions were regarded as dangerous and no longer appropriate.
So again, that signal that the least complicated, that's the way you want to go. If you can avoid an IV, that's the way you're going to go. So we're not pickling. We're actually targeting specific pain signals. So nociceptive pain is by far the signal we think of most commonly with acute injury, surgery. That's the sharp pain that you get as a result of tissue trauma. Opioids work well for that. Visceral pain, crampy visceral pain, kidney stones, sort of the abdominal sensations after major belly surgery, NSAIDs often work well there. Neuropathic pain, burning signaling, which we do get after things like knee replacements and chest surgery, it might be appropriate to add a neuropathic agent like gabapentin, Pregabalin. The nonsteroidals are good anti-inflammatory agents. Some patients get muscle spasms. So just as an aside, while we think about pain numbers, I'm very interested in the pain descriptors. I want to hear what that patient is experiencing. So I can get the right combination of agents to provide the best quality pain control.
Pain is multifactorial and the treatment rationally should include more than one drug. The original concept of multimodal went back to a Danish GI surgeon, Henrik Kehlet back in 1993. Again, these are not new ideas, but the ideas that I can reduce the reliance on any single drug get better, more pristine analgesia with a lower side effect profile and lower risks. This was in that original paper. And it really shows the mechanistic approach of all these different agents that work on many places. But again, you see a variety of drugs. Opioids are part of that. They are here. They are going to likely remain in the multimodal pathways for the foreseeable future. Another way of thinking about it is the WHO ladder, the World Health Organization that speaks of these levels of pain. So for mild pain, sometimes acetaminophen, a nonsteroidal is adequate. But as you move to moderate pain, then you're going to start to think about adding that p.r.n. opioid, so you can get that pristine rapid control of pain. And again, as you move to the most severe forms of pain, you will again continue all of those things. You will continue the opioids and you might pick a more aggressive technique with a regional or a local anesthetic. So opioids are included in the multimodal pathways for treating moderate-to-severe pain. That's the real takeaway. And they are layered on. They are on top of these other agents. The nonsteroidals and acetaminophen that we consider the foundations, we'll still use local anesthetics, nerve blocks, epidurals, things like that, but an important takeaway is that the whole world of perioperative pain medicine and a lot of healthcare is moving to these enhanced recovery pathways. We're likely to see them in every area of healthcare because it standardizes, it allows you to look at your results. When everybody is getting kind of the same things, it's easier to see what's working and what isn't. So that's really, I think, the future of where we're going.
So my takeaway, my last slide is we have to think beyond the pain scores. We really have to think about those pain descriptors. We really have to think about the analgesic gaps because a lot of our therapies now, especially related to pumps, IV technology, there are these inherent unfortunate gaps that are completely technically related. Multimodal is the way we are going. We should not be thinking about single-drug therapy because pain is actually a multidimensional experience with many descriptors. Always the simplest delivery is the best. The least complicated, oral, sublingual. It reduces pump errors. It reduces drug swaps. It reduces programming errors. It reduces all of the line complications. So we definitely are moving away from any kind of pump or intravenous technology whenever possible. And we are moving to pathways. That's definitely the way we're going to go in the future and probably every new drug is going to find its way into some sort of pathway where its use can be evaluated. And that I think is all I got, and I actually finished on time. I got us back. All right. It looks like it doesn't want to -- okay, I'm going to leave it at that. Okay. Thank you so much.
Pam, I hope I didn't break it. You're going to be stuck on that slide.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [4]
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All right. Oh, they advanced it for me. Terrific. Thank you so much. I'm so excited to be able to show this slide. It's been a while, but -- in fact, I'm so excited, I'm going to read to you word for word what our indication is.
DSUVIA is indicated for use in adults in a certified medically supervised healthcare setting, such as hospitals, surgical centers and emergency departments for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. So in our indication are 3 areas of use where acute rapid treatment of pain is critical and you've just heard from Dr. Viscusi how important it is to have a noninvasive administration. And you heard earlier from Vince Angotti that those specific areas are in fact contraindicated for the other transmucosal opioids. So we really feel like DSUVIA is for the first time going to be addressing a very important part of the way that we're now treating pain going forward in these medically supervised settings. But as important as our indication is our limitations of use we take very seriously. Not for home use or for use in children.
We will be starting our pediatric studies later on after we get some experience with adult patients. But currently, we are not for use at home or with children. Discontinue treatment of DSUVIA before patients leave the certified medically supervised healthcare setting. We are not for outpatient use. We are not going to add to that outpatient opioid crisis.
Not for use for more than 72 hours. All of our studies we're evaluating use between 48 and 72 hours, some are even -- studies were as short as 5 or 12 hours duration. So we're focusing on short-term use in medically supervised settings.
Only to be administered by health care provider. This is very important. It is not a patient-administered drug. And again, you will not find it in outpatient retail pharmacies. Because of the risks of addiction abuse and misuse of opioids, even at recommended doses, DSUVIA for use with patients for whom alternative treatment options have either not been tolerated or not expected to be tolerated or have not provided adequate analgesia or not expected to provide adequate analgesia. So again, you don't have to first try a drug and have failed it. But if you have somebody coming in and they've got a long bone fracture in the emergency room, you are not going to hand that patient acetaminophen. You know that won't be enough, and you'll have to move on to an opioid. We really are focusing on appropriate use of DSUVIA in patients with moderate-to-severe pain.
And as an opioid, we do have a black box warning that we take very seriously as well. The first part of that is talking about our REMS program. In fact, the goal of our REMS program is to avoid accidental exposure, which can lead to respiratory depression. So the critical part of that is making sure that our REMS keeps DSUVIA in those medically supervised settings.
Of course, with all opioids, you have to be concerned about life-threatening respiratory depression, addiction abuse and misuse as well. Sufentanil is metabolized by cytochrome P453A4. And therefore, any inhibitors or inducers of that agent, you want to make sure you're monitoring the patient closely when you're using DSUVIA. And the same goes for any other drugs, which depress the CNS. When using opioids along with those drugs, you just want to make sure you're monitoring the patient closely.
Now sufentanil has been around for 34 years. It's been IV injected and used epidurally. That was the previous indications. We, for the first time, are providing it sublingually. And the exciting thing about delivering sufentanil sublingually is its PK profile. And sufentanil is extremely what we call a lipophilic. So fat-loving, it literally mean fat-loving. When you have very lipophilic, fat-loving drugs, they like to run into fatty places. And what your brain is, is a big fat noodle on the top of your cranium. So the plasma-brain equilibration of sufentanil from the literature is 6 minutes. So what does that mean? It means that the pharmacokinetics equal the pharmacodynamics. So what you see in the blood or what we like to say, what you see in the vein is in the brain, all right? A very rapid transit time, very different from nonlipophilic opioids such as morphine, where it can take hours to equilibrate between the vein and the brain. It takes 6 minutes for IV sufentanil. And therefore, when you deliver it sublingually, we've actually had a PK specialist model what the plasma and brain look like. And as you can see, you can't even distinguish them, the equilibration is so quick.
But what we're excited about is with a single dose of DSUVIA, this is what you're seeing in the vein and the brain. The therapeutic published threshold for sufentanil is 24 picograms per ml as a median in postoperative patients. We cross that line about 15 to 20 minutes after dosing sublingually. That is why we are seeing, in fact, in our pain intensity measurements in our clinical trials, a statistically significant drop from baseline and differentiation from the placebo group as early as 15 minutes.
What we're also seeing is that it takes about 3 hours for that plasma level to drop below the threshold for analgesia. And what we see pharmacodynamically in our clinical trials, that the average duration of analgesia as measured by the intradosing interval because, again, the patient requests when they'd like another dose, that is 3 hours as well. So we are now showing that our pharmacokinetics match our pharmacodynamics that we're seeing in our clinical trials.
This is a graph from our label and what it's showing is a single dose of DSUVIA and maximal dosing. So the maximal dosing of DSUVIA is 12 tablets in a day. And if you dose every hour, as rapid as you can dose the frequency, you can't dose more frequently than every hour. So it would be a tablet every hour for the first 12 hours. This is the PK that you see. So with a single dose, you're reaching Cmaxs of anywhere from 50 to 60 picograms per ml. With multiple dosing, you're actually reaching steady state after about the seventh dose and you're maintaining a plasma level of about 120 picograms per ml. We know that is a very well tolerated plasma level, not only from our clinical trials but from the published literature. You're not getting into some serious respiratory depression issues in many patients until you get to these higher picograms per ml. So we are very happy with the fact that whether it's a single dose or it's maximal daily dosing, you've got very tolerable plasma levels of sufentanil. What's also exciting is that although sufentanil is very, very lipophilic, which allows that rapid onset, one of the concerns people have with very lipophilic drugs is that they can actually build up over time and you can have sort of a delayed half-life with them, if you will. And so what we've shown here is, in fact, we've looked at the time for plasma decay, which is called plasma halftime, the time from the peak plasma level or Cmax to the time where the plasma level has dropped to 50% of that Cmax. And what you see here is that whether it's with the very first dose or whether it's the 12th of 12 doses in a row, you have the exact same 2.5 hours that it takes to drop from Cmax to 50% of Cmax. So you're not seeing that buildup even with maximal repeated dosing for the day.
Another exciting thing about sufentanil is it has no active metabolites, very different from morphine, which has morphine-3-glucuronide, morphine-6-glucuronide and hydromorphone, which is known as Dilaudid also has those active glucuronide metabolites. Sufentanil has no active metabolites. And in fact, when we did our population PK analysis and looked at over 1,000 patients treated with sublingual sufentanil, we saw, in fact, no effect of clearance, whether the patient had none, mild, moderate or severe renal impairment. In our label, we have the statement, DSUVIA clearance is not significantly affected by mild or moderate renal impairment, race or gender. The severe was left out of that statement because the end was only 7 that we evaluated there, but we feel very confident that that emergency room doctor, that emergency room nurse, when they're dosing with DSUVIA, does not need to be nearly as worried about the renal impairment that patient has, which, of course, they won't know but when they walk into the door, then they will be using other opioids that are cleared -- have active metabolites that are cleared renally.
This is a -- this is also a graph from our label, and this is looking at the pain intensity difference to baseline. That's called a PID. And what it means is if your pain intensity drops from baseline, you actually have a positive PID. So going up is good, it means you're having pain intensity decrease. And going down means you've actually had a pain intensity increase.
So this is the active group and this is the placebo group. And what we looked at was adding up the PIDs over the first 12 hours here, adding all of these up and comparing it to placebo and what we saw was with a P value of less than 0.001 that the SPID 12 was better for the active versus placebo. But importantly, that pain intensity difference was observed at the very first time point measured, which was at 15 minutes. You can see that here. So we feel that the lipophilic nature of sublingual sufentanil is allowing rapid penetration from the sublingual tissues into the plasma and then, again, from the plasma into the brain. So we are able to see that rapid reduction in pain intensity that both Jean and Vince were talking about that is so important in clinical medicine.
So the adverse reactions from our label against looking at our pivotal study SAP301, active versus placebo, you're seeing very common side effects after surgery as well as with opioids. You can see where even the placebo group had these same similar side effects. They did -- all patients had access to IV morphine rescue, which is -- so this wasn't pure placebo, but very common nausea, headache, vomiting, dizziness and hypotension were the adverse events that you see here that were greater than or equal to 2% and very similar, in fact, between active and placebo groups. But importantly, our label talks about the fact that we looked at a total of 646 patients for safety overall, not just in the SAP301 study. And in those 646 patients, 1/3 of them were elderly, such that 20% were aged 65 to 74 and 11% were greater than or equal to the age of 75. So we have absolutely studied DSUVIA in the most vulnerable people population and shown that it is both effective and tolerable in those patients.
Our REMS, we take very seriously. And again, I mentioned the goal of our REMS is to mitigate the risk of respiratory depression resulting from accidental exposure. So the key thing is keeping DSUVIA in the medically supervised settings. Healthcare settings must be able to manage acute opioid overdose, establish processes and procedures so that DSUVIA is not dispensed outside of certified healthcare settings and train relevant staff that DSUVIA is not to be dispensed outside these settings and they should refer to the directions for use prior to administration. We will be auditing these clinical sites, looking to make sure they've got documentation of this appropriate use and appropriate training. Importantly, also the wholesalers must establish processes and procedures and ensure that DSUVIA is distributed only to certified healthcare settings. We will be certifying the healthcare settings and we will be uploading that certification list nightly to the wholesalers so that we know we've got the checks and balances there.
It's important to make signing up straightforward and simple. This is our REMS website. You can either download the form. You have 3 different ways, e-mail, fax or snail mail that you can actually get that form to us or which will be live later this week, we'll actually have an enrollment available online where you can DocuSign to make it simple for these sites to be able to enroll in our program. So enough about us talking to you all.
What we're really here today is to have the expert opinion of 4 esteemed guests who have agreed to take time out of their day to come join us and talk about DSUVIA. So I will invite you all up, to come up right now.
So Dr. Louis Guzzi, sitting closest to me here, is an anesthesiologist and Director of Intensive Care Unit at Florida Hospital Medical Group. Dr. Guzzi is quadruple board-certified in critical care medicine, anesthesiology, internal medicine and neocritical care. He cares for patients at Florida Hospital, Orlando and has more than 32 years of experience in these specialties. Dr. Jasmine Jones, 3 over from me here, is clinical pharmacy pain specialist at WellStar Kennestone Hospital. She is a clinical pharmacist pain specialist in Marietta, Georgia. Her focus is on opioid stewardship, and she serves as a pain management subject matter expert for the WellStar Health System Pharmacy and therapeutics committee. She developed and maintains WellStar Kennestone Hospital's pharmacy-based pain management consult service. And Dr. Michael Ritter, there at the end, is Medical Director, Emergency Department at St. Joseph Mission Hospital and Children's Hospital. And that's in Southern California. Dr. Ritter is an emergency medicine physician at Mission Hospital Regional Medical Center. Dr. Ritter has over 25 years of experience in emergency medicine and has published multiple articles on emergency and pain management. He has had -- he has held several senior positions at Mission Hospital, including Medical Director of Emergency Services and Chairman of the EMS oversight committee. And Jean Tersteeg here is a Nurse Team Lead at Hennepin County Medical Center. Jean is the Nurse Team Lead at the Hennepin County Medical Center in Minneapolis, Minnesota. She has been with HCMC for 23 years in the emergency department. She has been involved in clinical research trials, evaluating pain control, airway management, sedation and the clinical impact of electronic medical records. This experience in clinical studies include her involvement in the DSUVIA emergency department study SAP302.
So I'm very thrilled to have all 4 of you here. And what we will do is if you could hold your corporate questions towards the end, I will start off with a few questions for the panel here, and then I'll ask some of the analysts to also ask any additional questions they might have.
So I would like to first start out with a discussion around emergency room. And Dr. Ritter, maybe I'll start with you and then move to Jean on this one. What is your experience with crowding in the emergency room and patient flow impacting time to patient analgesia?
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Michael Ritter, [5]
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Sure. Good morning, and thank you for having me today. So throughput and time is a big deal in the emergency department. Emergency department visits are increasing every year. Our volume continues to go up and up. It's a good problem to have, but we have limited number of beds. It's difficult to add additional beds. And I work in California, where the regulatory headaches are something like New York City where trying to add a hospital bed takes a team of 100 people. So we are looking at how can we be more efficient with our throughput. Currently, in our emergency department, we put about 8 patients in the 24-hour period per bed. If I can shave 15 minutes off their visit, I can get a ninth patient in that bed. Our labor is our biggest expense, probably about 70% of all our expense in the emergency department is labor, it's either physician or nursing or other staff labor. We've cut all the other pain points for prices that we can. We're not using pacemakers and super expensive equipment in the emergency department. So labor is a big deal. So if we can save time, we can save money and we can also improve patient satisfaction because when people get in and out quicker, they're happier. If you look at the top 5 conditions that people come to the emergency department for in the 18 to 64-year-old group, they're all pain-related conditions, strains and sprains, abdominal pain, chest pain, wounds and fractures and headaches. And then if you go into the senior, so the 65 and above, the only thing that changes in that list is that chest pain goes up higher on the list. But still, the top 5 conditions represent pain conditions. So if we can get their pain under control faster, we can get them happier and get them through the system better.
Our reimbursement that we get from CMS is changing and customer satisfaction is going to be a function of that as well in the future. And so we've got to do everything we can to keep people happy and happy patients are patients that get their pain under control and get out of the ER quicker. So I think with a medication like this if we can shave off time, we can have happier patients. If you look at Zofran, oral disintegrating tablet, those are one of the medications that really changed my practice as an emergency physician because we reduce the number of IVs that we start on patients dramatically. I estimate about 30% fewer IVs with Zofran oral disintegrating tablet for patients that come in with vomiting. Zofran is for nausea and vomiting. We can do oral rehydration. We can get them feeling better. And so I have the same sort of vision for this as well that we've got a medication that someone comes in with a sprained ankle or broken leg or what have you. If we can give them a pain medication that has a rapid onset because it absorbs right under your tongue, it gets into your bloodstream quickly, then we can get their pain under control and perhaps save them an IV. And if we can reduce IVs by 30%, that's a big time savings. Every step and test or thing we do in the ER is incremental time. It's hard to do multiple things at the same time. In other words, if somebody needs a CAT scan for their kidney stone, I've got to put an IV in first, give them intravenous pain medication, then you transport and then send them off to CT. We can't do all those simultaneously. So if I can cut that IV piece out of it, perhaps we could save 15 minutes to an hour of time off their visit for that one part of it.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [6]
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Great. And Jean, you're distinguished amongst these 4 here, but you actually worked in a clinical trial with sublingual sufentanil in the emergency room settings. So how would you see DSUVIA changing your practice with the particular patients that you could see DSUVIA being an advantage for?
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Jean Tersteeg, [7]
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So I think the patients that would benefit the most from this would be the patients that come in -- the patient that comes in that has popped his shoulder out of place. It's a quick and easy, let's put it back in place. But if he doesn't have pain medication, we're not going to be able to get that in very quickly. Me putting in an IV is going to take 15 to 20 minutes to get that in, get him some pain medication, then it's going to take longer for it to take effect. If I can give him sublingual DSUVIA, it's going to be in 5 minutes, he'll be in and out of that ER within half an hour as opposed to probably sitting there for 2 to 3 hours. The other patients it's going to affect are the elderly patients, the little old lady who has no veins or she's got the rolling veins that you have to go after and try to catch in order to get your IV in. That's not going to be easy. It's going to be a delay in her care and her pain. Or the obese patients. Most obese people are extremely difficult to get IVs into. And you're digging around, you're digging around, you're not able to get any longer catheter, you don't have the supplies you need. So those would also be patients that would benefit from it. Or the patients -- the difficult stick is going to take -- they said 199 minutes, I would say it's even longer, a lot longer because the other thing is not everyone is specialized in doing the difficult sticks. So then you've got to find someone who actually can do it and that causes the delay also.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [8]
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Okay, great. And Dr. Ritter, any additional patient population do you see benefiting specifically from DSUVIA?
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Michael Ritter, [9]
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Well, I work for a trauma center for both children and adults. And in our adult traumas, geriatric trauma is actually making up a large part of our trauma these days. As our population ages, more people fall, they get head injuries. People that are on blood thinners are all now taken to trauma centers. And the number of people that take Xarelto and Coumadin and all these other blood thinners are going up and up and up. So we have these patients come in, they are elderly, they have poor IV access, many of them do not have an IV when the paramedics bring them in. And they may have a broken femur or a broken hip or a head injury or something where we need to give them pain medication, yet they don't have an IV. And if they're on blood thinners, we can't do an intramuscular injection because if we do that, they're going to get a hematoma or a blood collection underneath the skin or in the muscle from that shot. And so we have to wait till an IV is actually established before we give them any pain medication. So that's a huge population right there that we can dramatically improve the pain control.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [10]
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Terrific. Well, moving on from the emergency room, I then like to start with Dr. Guzzi, on your experience and understanding of DSUVIA and how it could benefit patients in the postoperative setting?
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Louis Guzzi, [11]
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Well, thanks Pam, and thank you, again, for having me here as well. I appreciated Dr. Viscusi's discussion this morning. I felt like I was back at the PGA, again. PGA is going on up the street. But in the postoperative setting, some of the biggest challenges are is how to manage pain acutely, efficiently, with lack of side effects, lack of errors, lack of medication errors. We are facing an increasing short dollar in terms of health care, fewer staff, tighter PACU bed. We bring a lot of patients out 1 to 2 hours after surgery and we need something to acutely manage them. So if I would write for something like IV Dilaudid, always on shortage; IV fentanyl, they have to hang out in the PACU for at least 1.5 hours afterward, therefore increasing costs, increasing delay to getting to the floor, and maybe even a delay in discharge if it's an outpatient surgery center. Having a rapidly available tablet that you could easily guarantee that you have a therapeutic level on board, an almost guaranteed half-life which we know the patient will receive analgesia and lack of side effects makes it very beneficial for us across the board, specifically, as more and more places look to alleviate the IV burden. And I always call it how many IV drugs do we give, the IV burden. So it does fit very nicely into that process line. The other thing that Dr. Viscusi mentioned is this whole ERAS protocol, enhanced recovery after surgery. Every society, cardiac, OB/GYN, thoracics, spine surgery are now having -- heading toward ERAS protocols. We manage volume, we immobilize our patients the night of surgery, up ambulating, all my hearts are ambulating out of surgery these days, but the secret of that is to get medicines on board that can keep them comfortable, but not oversedated so that when you give an IV injection of something, 20 minutes later they are so sleepy, they can't participate in their physical therapy, their rehab. Having a medicine on board that let you be able to participate in that rehab really enhances healthcare and people don't realize the most important thing we've done in critical care and anesthesia is ambulation, ambulation, getting them up, getting them out of bed. I mean I'm old enough to remember, and I hate to say this, when we do a Whipple, which is a big pancreas operation, you would lay in bed for 7 days and you wouldn't move. Catheters, needles sticking out of you, 5 IV pumps, now my Whipple's are almost required to do a lap around the bed the night after surgery and that changes the game dramatically because you feel better and get better. Think about where this drug would fit there is that I now have a drug which has a known PK protocol, which Pam nicely demonstrated, has a known therapeutic onset, 15 to 20 minutes, a nontherapeutic offset. Whether I give the maximum number of doses or the minimum number of doses, the PK doesn't change at all, very similar to what we noted with propofol years ago and I have the ability now to almost guarantee that my patient can have analgesia as part of a multimodal bundle with almost everything being given p.o. and can ambulate and care for themselves. So the benefit to us is absolutely huge.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [12]
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Dr. Jones, being a pharmacist who specializes in pain management. You've now heard from both the ER perspective and from a postop perspective. How do you see DSUVIA benefiting patients in the hospital?
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Jasmine Jones, [13]
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I would echo what the other panelists have stated, specifically coming from an opioid stewardship perspective, our goal, again, is to use the most -- the least invasive point of opioid administration, and so this is going to provide something we've never had. We have several oral opioids. We have oxycodone, we have Vicodin. We would love to initiate those sooner postoperatively, but often they don't take effect quick enough. So that to me is one thing that really stands out with this product. That 15-minute time period to getting relief for that patient is huge, especially in a postop patient where we want them. They're often working or walking with a physical therapist. And that time frame on when the physical therapist gets to their room is always unpredictable. So having an analgesic that we can administer literally when they walk to the door, and within 10 to 15 minutes as they're prepping the patient on what's going to happen that medication begins to work, and now they can early mobilize with that physical therapist is going to make a huge difference. And then from the cost avoidance, I think it's important like you've mentioned with intravenous opioids, we do see a significant number of medication errors, and it's due quite often to the manipulation required to administer it. So this takes away the requirement for the nurse to calculate how many milliliters of morphine to give, to then draw it up properly out of the vial, this is a single unit dose product that doesn't require as much manipulation and potential for an error to occur. So I think the cost avoidance is something we certainly want to make sure that we emphasize too.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [14]
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Well, that's great. And you've -- one thing that's interesting when I talk about, you can tell we're in New York City because we're competing with the sirens that are occurring outside, one of the things that's interesting is medication errors as it relates to clear liquid opioids. I know when I was developing DSUVIA and Zalviso, and the idea of having a discrete dosage form, such that you are not dealing with these liquids that have to be run through pumps and programmed and aligned, but realizing that morphine comes and -- which is the most commonly used opioid. And inherently back in 2005 when I started, AcelRx was linked to the highest number of in-hospital opioid medication errors. Morphine comes in 10 different concentration strengths from 0.5 milligrams per mL all the way to 50 milligrams per mL, it's 100-fold delta. And so when you talk about these clear liquid opioids, which all look the same, by the way. They look like saline and water once they're in a syringe. And now with the opioid shortage, Dr. Jones, I'm wondering when you're having now to switch back and forth and worry about what's on -- what's being shorted today, what opioid I'm going to use, the manipulation you talked about with these liquids that you're having to do. Do you see that more errors could possibly occur?
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Jasmine Jones, [15]
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Certainly, and we've actually experienced some error, unfortunately, not many, but we have. Because as you stated, as one formulation, let's say it's a 2 milligrams per milliliter is no longer available now we have to stock a 4 milligram per milliliter. And we do as best we can to put signage. We have nursing huddles and education, but sometimes we are doing things out of habit, and that calculation and amount administered might have been what you would've used if it was a 2 milligram, but they got the 4 milligram per milliliter concentration now that person has gotten twice the dose. So that can occur and that has been one of the hazards of the opioid shortage that we've not only have we had to switch from concentrations within the same drug, but sometimes we no longer have morphine at all and now we have Dilaudid, which in itself is inherently more potent. So that has been something that we've really had to manage cautiously. And having this product as an alternative may have offered a potentially safer alternatives. That would be -- yet to be seen once we begin to use it, but I think we have all said, it would be lovely to have something else available.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [16]
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Right, because we're stuck with those clear liquids because they have fast onset. You can give them through IV, but if you have a single dosage strength, a single tablet that has more rapid -- equivalent rapid onset as you can see with some of the IV opioids than you could possibly...
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Jasmine Jones, [17]
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And another thing with the clear liquids obviously there is -- the other issue is diversion. And so typically, with an IV opioid, you are most often not using the entire vial. So now the remainder needs to be properly disposed, which in most institutions the protocol requirement is that 2 nurses together would witness how much fluid is remaining, and it would be disposed of properly down a drain or what have you. When you have these unit dose products like yours there's essentially no need to do any waste. So there is no opportunity for me and my buddy here, Jean, to waste "together", but one of us to continue to keep that vial in our pocket. So you begin to limit or decrease the potential for mass amounts of diversion through your hospital.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [18]
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Great. And Jean, you're in the front lines of dealing with wastage. So maybe you could mention in the emergency department how you waste opioids and what is entailed with that?
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Jean Tersteeg, [19]
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It's a long process. In order to get, like say I have 2 milligram morphine. And I'm only going to give 1 to the patient. Before I can actually go into the patient's room and give that, I have to waste that other milligram. In order to do that I have to find an available nurse, who is able to go into the medication room with me. And at our facility, you have to do fingerprint. Everything is fingerprint access. So not only do I have to access with my fingerprint into the Omnicell system to take the medication out, but that other nurse has to use their fingerprint on the Omnicell system to waste that medication. And if we don't do it at that time, the Omnicell will not let either one of us into that machine again until we have wasted the medication that was not given. So it can cause not only a delay on this one particular patient but every patient after that until we have completed the process.
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Michael Ritter, [20]
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Can I piggyback on to something you have talked about? That is you talked about using the least invasive strategy for pain management, right? So if we can give something orally by mouth rather than giving an injection or IV, we do that. One of the problems that I face in the emergency department is the unknown status of what's ultimately going to happen to the patient when they come in. So if you fall and you've got a wrist injury and your wrist is swollen, and I look at it and say, yes, it's probably broken, let's get an x-ray. If I gave them a Percocet or a Vicodin or a pain pill like that with a glass of water, and we get the x-ray and it turns out their fracture needs emergency surgery. Now they have just drank a glass of water and they have got medication that's been given orally and then my anesthesia colleagues say, well, we've got to delay the surgery for a couple of hours till that clears through their stomach, so they don't aspirate when we do the operation, they like people to have an empty stomach. This medication doesn't have that problem. Pop it under the tongue, it dissolves, it doesn't require a glass of water to drink to absorb it. And so it's going to fix a problem that I currently face when we have unknown disposition for patients who come in with an acute injury.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [21]
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Great. And so far we've been talking about postoperative and emergency room, but Dr. Guzzi, with your multiple board specialties, you're all over the hospital. So how do you see DSUVIA being used may be outside of the emergency room and ambulatory surgery centers?
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Louis Guzzi, [22]
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It's kind of a fun question to ask because as we explore more opportunities for places we're going to practice, we're seeing more and more business occurring across the board. So I would see that -- we get asked quite frequently to put central lines in patients because patients need IV access. Patients need lines for pressers, antibiotics, various other things, long-term treatment. Nowadays you have to go find a nurse, you've got to get a monitor hooked up to the patient, you give them some -- potentially midazolam or something else and a little bit of fentanyl to make them comfortable before we stick a line in them. I would see being able to tell the nurse, just go ahead, give the DSUVIA, I'll be up in about 15 minutes, we'll get the line in so their pain will be nice and anesthetized and patients will feel very comfortable. It would be a very nice way to use it. And I think that's a huge component of it. In the intensive care unit, we run a very aggressive fast track-heart program. We give very little intraoperative narcotics. I was saying last night at dinner that I'm old enough to remember and heard somebody speak at the recent PGA that we used to give 25 to 20 mcg of fentanyl on Tuesday, we'd wake up next Tuesday, and we were okay with that. Nowadays a patient has to be awake in 2 hours, extubated and sitting in their chair or we fall behind our STS guideline. So we give very little narcotics, but pain is still very real. We do things like infuse dexmedetomidine, Precedex. We do more regional blocks, but the ability to give something sublingual that has a nice uptake, very quick uptake and keep patient comfortable, I would see being a very big component of our ICU practice. And then I think to myself that as we age, and granted everybody in this room will age at some point in their life, one of our biggest business models now is the whole palliative care and inpatient palliative care. Under a composed health care setting, you have the ability now to make people comfortable. Families don't like seeing their family members with IVs.
They like seeing them in a natural state, being comfortable. I would say in our inpatient palliative care, which is a huge business for us in Florida, using something like DSUVIA, which we already use some sublingual morphine, which are lousy, to be able to keep patients comfortable, pain free and actually more importantly cognitive, being able to interact with their family, which is absolutely huge and a big deal. So I just keep running through my mind all the places that fits in our practice and people say, well don't you have an IV in place, well you do have an IV in place. I mean, in the intensive care unit everybody has an IV, but the role of central given narcotics is interesting. As you give them, you get a very quick peak, you have a very delayed response. That peak tends to be when the patient tends not to be cognitive, may not breathe well, may not ambulate well, may be a challenge for somebody to manage. We need to get away from that model. Because the whole purpose of the ERAS, the whole purpose of acute care management these days is engaging the patient, engaging the patient to recover. When somebody is unresponsive in the bed they're not recovering, they're just being snowed at that point. So I think DSUVIA fits very nicely in the model, in the operating room, in the ICU, in the emergency room and then just exploring anyplace there is a need for acute pain management that you want to try to stay away from IV medications, I think DSUVIA fits that beautifully.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [23]
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Well, that's interesting you brought up the cognitive impact. And I know with all of the opioids, whenever we're trying to treat pain, one of the biggest issues is having that negative impact on their cognition when you're trying to wean them from a ventilator in the ICU or trying to discharge them from ambulatory surgery center. And what was important to us is to actually look at the cognitive impact of DSUVIA, in fact, we did that in our emergency room study. The military specifically asked for us to look at that because it's important for them to know for their soldiers, how they're impacting cognition when they're using DSUVIA in the battlefield. And in fact we looked at the 6-item screener and saw that there was essentially no impact on cognition before and 1 hour following DSUVIA treatment. So with that knowledge, do you see that DSUVIA could then be beneficial in your ICU, weaning patients?
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Louis Guzzi, [24]
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I think just like we put patients on dexmedetomidine or Precedex, DSUVIA would become part of our process because I always think to myself when you're trying to extubate somebody, when you're trying to wean somebody whether off a BiPAP, whether off intubation after a prolonged surgical care, the biggest thing is if you give them something that keeps them totally asleep and not functional you really can't wean them. Giving them something that doesn't change their cognition is absolutely huge. And if you've never experienced it, when you see families with somebody with a breathing tube in place, the pictures you see on TV where they're looking at you, smiling and joking like in ER and all these other shows, that's not realistic at all. But what families want to do is be able to engage their family member. Are you okay? Are you feeling okay and we hear it all the time and being in a place that's busy you see that. So we use things like Precedex or dexmedetomidine keeping them comfortable, but sleepy, I would see DSUVIA with its lack of cognitive change, being able to be incorporated in that, and potentially in that last 24 to 48 hours of weaning becoming part of our process and protocol. By the same token, we know in anesthesia that we are very much trying to stay away from anything that causes cognitive delays. In fact, one of the biggest issues in anesthesia right now is the elderly patient with cognitive delays. One of the study shows that 11% of your patients, I think, were over 75, over 75 with no cognitive delay. If you live in Florida that's called a juvenile. So that's not a big deal for us. And I jokingly don't say this, last week I had two 90-year-old, one 98-year old, one 96-year old, all have bypass surgery. It's funny, they do very well if you absolutely run everything meticulously almost like an ERAS. I think this drug would fit the population perfectly, patients like cognition and it's really important.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [25]
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All right. At that point I think I might open it up to -- analysts have any specific questions they'd like to ask the panel? We've got a microphone that will be handed around.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [26]
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Good morning. Antonio Arce with H.C. Wainwright. This question is open to any and all of the experts on the panel. First question is just given, as both Pam and Vince pointed out, given the recent approval since then and well before that in fact. A lot of the discussion and noise around this drug has been the potential for diversion and then abuse, given the opioid crisis. So I'm wondering if you could in the light of the REMS and the limitations in the sites of use, and all the other restrictions and the way that the hospitals operate today, discuss how credible that concern is, especially in terms of probabilities? That'd be very helpful.
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Louis Guzzi, [27]
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I'll comment because being an anesthesiologist, we're heavily into diversion programs. We handle drugs nobody else in the world can actually touch. So the REMS program for most hospitals is already ingrained. There is going to be no magic to this. There's going to be no huge jump -- leap of faith, in fact, I applaud the company for taking it so much upon themselves and I think Pam said something, they'll be uploading it nightly. So they're going to remind us what the REMS program is, remind our nurses what the REMS program is, and the physicians who use this drug. In a busy ambulatory surgery center, I'm probably the one going to be dispensing this because that's what a busy ambulatory surgery center is. So the REMS program is already heavily ingrained in our process, and I think we're all very comfortable with REMS.
The second part of your question was about diversion, do I see this see this drug being diverted. It's funny because when I saw this drug I thought to myself how hard would this drug be to divert. You'd have to rip it off of somebody's tongue, which trust me, an addict will do. You would have to do it in my watching you which would be hard to do. And running an ICU where I've seen people bring in narcotics in places you wouldn't imagine putting narcotics to their loved ones, it is absolutely staggering. But I don't see how you could do that. There's no syringe, so there's no waste or any possible clear liquid going out of here. It's a single-dispensed tablet with no residual left in the dispenser at all, which is absolutely huge. The dispenser, I'm assuming, will go into our lockbox or sharps box or it'll disappear with the rest of our equipment. And again, once that tablet probably ends up on your tongue, probably trying to tear it apart, would give you such a very low dose of a narcotic that you would probably not get much effect from it at all. Plus Sufenta of all our drugs, and those of us who have been doing anesthesia 30-plus years, remember old days when we say always use Sufenta, it's the safest. We always thought it was the best drug. It doesn't give you as much of a high as some of the other drugs. And that tends to lead to less diversion. And if you think our addicts aren't experts at narcotics, you should sit with one and discuss narcotics, they put Pam and I to shame, probably put Dr. Viscusi to shame because they know absolutely -- and you know this, every drug known to man. I just don't see the diversion happening here. I mean, you can always find a smart kid, they boil alcohol -- hand washes now to get alcohol. But again, there's not much chance of that happening. In the REMS program, we're entirely engaged in that. Everything we do is REMS-based these days.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [28]
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Anyone else in the front?
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Jasmine Jones, [29]
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I was just going to include, remember all of these agents like other controlled substances in the hospitals or institutions are going to be within an automated dispensing cabinet, which, like she said, either requires the clinician to put in a unique code to their self or use their thumbprint. So these would always be under the highest lock-in monitoring of any medication that would be in an institution.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [30]
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And Jean, do you feel the same thing, I mean, do you think DSUVIA relative to any other opioid that you are using would be any more or less divertible in the hospital?
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Jean Tersteeg, [31]
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I would see it as being less divertible and for the same reasons he said. There's nothing to waste. So there's no way you can -- you're not cutting it in half. You're not doing anything like that. And it's one per container. So I couldn't take the second one out of the container because there's only one.
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Jasmine Jones, [32]
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Quite often with bulk containers it was the count would be off. And so it's less likely to have your count off with a product like this.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [33]
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All right.
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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [34]
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Just 1 follow-up if I may. The other question that has come up consistently is the rapid onset of action. And Pamela, you spoke earlier about the threshold for analgesia being reached in as soon as 15 minutes. The question is, given that there is question surrounding how rapid that onset actually is, how do you view it -- again, this is open to all experts on the panel. How do you view the clinical meaningfulness of that threshold?
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Louis Guzzi, [35]
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I think it's huge. Most patients, I know, people understand that we, in medicine, now get what we call an HCAHPS core. Often times how much patients like you is better than how much they survive, I hear that all the time, which fascinates me beyond anything. But an HCAHPS score is what patients fill. Patients recognize 2 things, management of my pain, whether you talk to me or whether you explain something to me and what's going to happen today. So if I can manage your pain and get that under control in 10 to 15 minutes, I tend to be the hero in the hospital. So in the emergency department, absolutely huge because patients come in, in pain, the most common reason patients seek emergency care. In the postoperative period, they've just had a huge operation, the last thing they want to experience is his pain. I think Dr. Viscusi's statement is best, patient shouldn't experience pain these days. We have so many tools at our advantage in anesthesia, critical care and in the emergency department that can -- experiencing pain is very poor. I know if I came in with a fractured shoulder or if I came in with a fractured ankle, I want my pain managed because everything else is downstream from there. So I think that 15 minutes is key. What's also key is the ability to stay above that level for 3 hours. So I don't have to worry about redosing, I know I have now time to make my decision making process. And I have patients who're going to have comfort for that window. And that makes it a really easy thing for us to actually decide surgery, no surgery, what's going to happen next with the patient's disposition. So I think, it's really important.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [36]
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Dr. Ritter, do you have anything to add regarding the onset?
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Michael Ritter, [37]
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So if you look at the onset, let's say a patient comes in and they've got a broken leg and we've got to give the pain medication. If I'm going to give it intravenously, you've got to remember that there's a time factor for starting that IV. Patient gets in a room, the nurse has got to put an IV in, and then once the IV is in and taped down and the blood is drawn or they've done what they're going to do. Now they've got to leave and go over to the medication room, get the medication out, bring it back and give it to the patient. And so there is -- that all takes time, as opposed to being able to just give the medication right up-front. So don't think that given IV pain medicine in an ER setting is going to be that much faster because there -- you get your time delays with starting the IV and getting the medication.
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David George Buck, B. Riley FBR, Inc., Research Division - Analyst [38]
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So a couple of quick questions. David Buck from B. Riley FBR. And for anyone on the panel who chooses to answer. First question, I guess is how prevalent or how aware is the thinking with doctors and ER nurses of the actual cost of an IV versus DSUVIA. And obviously, it'll be competing with generically available very cheap medications, so I guess how prevalent and how knowledgeable is the acute care community and -- aware of just the expense of what it takes for an IV. And secondly, where would you be cautious on using DSUVIA and preferring an IV? That's it.
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Michael Ritter, [39]
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So I'll address the question there. So the first piece of this is when we look in the emergency department at improving throughput, time is a very important element for us. So we've really changed our whole thought process about management of our patients going through the ER. When we get -- as we get busier and busier and busier and overcrowded, we have to worry about paramedic diversion, meaning that we close our ER and ambulances go to the next hospital down the road. The paramedic patients that come in are sicker, they need a lot more resources, and they also generate a lot more revenue for the hospital. So hospital does not want to lose those patients. So whatever I can do to improve the throughput of patients through the emergency department is really important. So that timepiece is huge. Remember that in my ER, I've got 3 ERs that I oversee with about 90,000 visits total. About 80% of those patients go home. Only about 20% get admitted to the hospital. So those 80% that go home if I can get them through their ER experience faster, treated, get their pain under control and their problem fixed and discharged, I get to put another patient in that bed, we're going to increase revenue for the hospital. And so it's a real thing. In my health system that's the #1 thing we're looking at, is how can we improve throughput in the ER so that we can get more patients into that bed in a 24 period. There's also the cost piece of it with labor. So if you look at all my expenses in the ER, about 70% of our cost is labor costs. So if I can reduce labor, the amount of time that it takes for all these individual tasks that is also more revenue as well for the hospital.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [40]
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And who would you not use DSUVIA? And I guess that was the second part of his question. Who would you not use DSUVIA...
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Michael Ritter, [41]
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Who would I not use it in? So we try to use the least invasive pain medication we can. So if I can get away with something that's simple like Tylenol or Motrin, acetaminophen or anti-inflammatory, we will do that. So I don't see this as a replacement in that category at all. But there are plenty of people that have severe acute pain problems that I need to give them something strong. Probably the other group we would want to be careful with are the druggies that come in that are working us for pain medication. It's a real issue that I have to deal with. We do have in California the CURES system which is a database for all the prescriptions that are provided to a patient. So when you put in their demographic information, we can, through our electronic medical record, get a sort of dossier on them, sort of their hit sheet of all the prescriptions they've had. And so if I see that yesterday they got a prescription for 50 Percocet and they are asking me, hey, I need some DSUVIA for my headache, I'm going to say no. Or whatever they ask for. So we're watching that for diversion. So those -- that'd be a group of patients we do not want this because I suspect that they would probably like this medication.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [42]
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Dr. Guzzi do you have anything to add about?
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Louis Guzzi, [43]
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I -- this whole pain diversion thing, I mean, we have [MP Med] in Florida, and we got about 16 alerts this morning before it was down this morning, which happens. But if I have something somebody who was on a chronic pain medicines or somebody who is actively seeking medications or potentially under the treatment of a pain clinic, I may be less likely to give them the medication so I wouldn't screw up their pain plan. But still, with a fractured ankle, fractured leg, fractured arm, acute pain from fractured ribs, I would still treat them because they're still going to need acute pain management, and then we can address it later on. But we have a lot of processes in place now to very much watch -- safeguard our chronic abusers. And we put in their social security number, demographics, we can find out what medicines they have gotten within the past 24 hours these days in Florida, 100% across-the-board. So those would be the ones I wouldn't use it on. I think one of the big questions is, would you use it on elderly people because that is the biggest segment of our population we see growing, especially as they become more active, they break bones, they have fractures. You have a drug here that has a safe uptake. You have a drug that has a safe PK profile. And you have a drug that doesn't have a lot of respiratory depressant effect, and I applaud the company when they did their study that they didn't throw out the old people because it's easy to throw out the old people and say they may be too dangerous, 11%. It's a big difference. And that's something that you can really say wow, this is something that really works on these patients.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [44]
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I think there's another question.
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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [45]
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Brandon Folkes from Cantor Fitzgerald. Maybe 1 for the whole panel just -- so we've heard this morning about the difficulty of getting a first stick in. And given that we're potentially changing the standard of care here. Initially, during the launch phase do you see using DSUVIA as a first-line treatment or after trying the first stick and battling?
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Michael Ritter, [46]
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So as an ER doctor, I would see this as a first-line treatment, right? So again, we want to stay as least invasive as possible. So you've got a broken leg, which orthopedic injuries are a huge percentage of what I see in the ER, you need to have something for your pain. If I can give you something orally rather than putting an IV in and giving you a shot, and then get your pain under control, get your x-ray, put your splint on and discharge you to follow-up with the orthopedic specialist as an outpatient, we've saved time, we've saved money. And your pain is under control and you've had a good experience while you've been in the ER.
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Louis Guzzi, [47]
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I would think it being adjunct therapy. I think that even with an IV in place in the ICU, in the OR we're looking for better ways of controlling pain. IV is not the guarantee. I mean, you have a therapeutic dose, you give a dose, you have a patient who is sleepy, now you've got to delay their discharge from the PACU. This all cost money. So I see DSUVIA fitting as an adjunct to what we do already. And providing a better way of delivering it. I think a comment was made about Zofran and being heavily involved with Zofran for the military for years when I was active duty, it really changed the way we treated nausea and vomiting across the board giving this sublingual tablet. For the first time, I have a sublingual tablet with a very good PK profile and I can't emphasize that enough, that gets therapeutic blood levels, maintains them on dose 1 through dose 12, still maintains them the same way, therefore, I have a very safe, effective drug that decreases my risk to my patient.
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Jean Tersteeg, [48]
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And you have to remember there's not a lot of complications with a sublingual medication, as opposed to if I put an IV in a patient, it can infiltrate and they won't get that medication. I could cause them phlebitis and they could have complications for years because of it. With something under their tongue that's not going to happen.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [49]
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And Jean, Dr. Ritter was mentioning the folks coming in who are on blood thinners. What's your experience with trying to start an IV with someone who's anti-coagulated?
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Jean Tersteeg, [50]
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First try it's never going to happen. Third, fourth try maybe and it depends on your level of experience too. The newer nurses, they won't even try. Because they know it's not going to happen in that patient and that patient's -- the more veins you blow, the less chance the next person is going to have of getting an IV in also. So you need to make sure that an experienced person is the one going in and doing that.
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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [51]
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So just one follow-up. Sorry, Jean, perhaps having participated in a clinical trial, I'd love to get your opinion. During the AdCom, the nursing representative raised a potential administrative concern of having to administer a patient potentially every hour and monitoring them. I have my opinion on that, but I'd love to get your opinion just having participated in a clinical trial whether that is a valid concern from a nursing perspective.
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Jean Tersteeg, [52]
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In my opinion, no. And part of my opinion is, as a nurse, you should be checking that patient every hour anyway. So it's not going to add anything to your job to have to go into that room and reassess them and remedicate if necessary. So I don't see that as a concern at all.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [53]
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From a policy perspective, that's actually the policy in most institutions that nurses are required to go into the room.
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Unidentified Company Representative, [54]
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Every 30 minutes.
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Jean Tersteeg, [55]
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And they reassess at peak time. So on this instance, where oral is 60 to 90 minutes and actually in every other IV morphine, IV Dilaudid they're required to go in within 15 to 30 minutes after administration, so I don't see any difference there. We would probably add this, although it's going to be interesting for the nurse because I'm giving something orally but their follow-up and monitoring will look like an IV medication, but that won't be any, like she said, any difference than what they should already be doing.
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Michael John Higgins, Ladenburg Thalmann & Co. Inc., Research Division - MD & Senior Biopharmaceuticals Equity Research Analyst [56]
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Thank you. Michael Higgins, Ladenburg Thalmann. I'll just follow-up on that one. Management knows my views on the role of nurses in this product's adoption and use, so I won't give a lot of color on that, I don't want to lead you, but just want to know your takes as the role of the nurse with the DSUVIA adoption.
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Jean Tersteeg, [57]
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As far as...
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Michael John Higgins, Ladenburg Thalmann & Co. Inc., Research Division - MD & Senior Biopharmaceuticals Equity Research Analyst [58]
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Might they like it might they not?
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Jean Tersteeg, [59]
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Nurses are going to love it. It's going to save them time. It's going to make their patients happier. I know earlier something was mentioned about overcrowded ERs. If I have -- on a typical night, I'm supposed to have 3 to 4 patients. On a Saturday night, I probably have 8 to 10 patients. If I'm supposed to be doing IVs on 8 to 10 of those patients, that tenth patient is going to be very delayed on what they're getting. But I can do DSUVIA on some of these patients, it's going to make it go a lot faster. I'm not going be spending the time trying to gather all the supplies, get everything going. So I can expedite every one of my 10 patients instead of only satisfying only one of them.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [60]
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And out of curiosity, just as an anesthesiologist, and Dr. Guzzi and anyone who places IVs will know. When someone's coming to the door and you don't know if they're Hep C positive, you don't know if they're HIV positive. How -- what is that feeling about starting these IVs. So it is a risky issue, I mean, and anesthesiologists, we've all been stuck with a needle.
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Louis Guzzi, [61]
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Well, I'm lucky, I've never been stuck. So I feel very lucky, and now I'm probably jinxed. Anyway, no. So it's always a risk. I mean, there's costs associated, I mean, one of the interesting things to bear is you don't even have waste cost. Waste costs to hospitals are some of the biggest expenses, getting rid of dirty gloves, bloody syringes, bloody everything. So you never know if you're going to put an IV in and you use universal precautions, but the point being taken is that even as an anesthesiologist, and when I was a young resident 30 years ago, your job at night was to go stick all the little old people and get IVs in 6 hours after they got admitted to the hospital. So it was really a problem. But it's still a problem and Dr. Ritter brings up good point that advanced IV techniques, you got to find somebody to do it. On an average day, I get called to the ER twice because there is a 300, 400 pound patient with severe pain, they can't get access on, and they need a central line and they've exhausted all other options so they call us down to put the central line in. People don't realize the risk and burden associated with that. You're usually sticking a big vein under the clavicle. There is a risk of pneumothorax, there is a risk of bleeding, there is a risk of eclampsia later on, a bloodstream infection. There's just a risk of management of the procedure. Yet I still have the same patient that they may have tried some IM medications for pain, which you have no idea of the absorption. And all of a sudden the patient is sonorous and now the central line becomes an intubation because they got too much pain medicines. I can tell you that the advantage to me of DSUVIA fits several places, steady uptake, steady dose pattern. I don't care about your renal insufficiency to at least stage 4, not enough patients, but that is huge because all of us when we hit 70 have about 30% of our GFR, that's just the way God made us. So we're going to be less. And the reality is, the ability to control that pain until, I will say, the cavalry arrives to get your access for other reasons, is really, really, really big for patients and it's really big for patients long-term. When you feel pain, when I feel, when any of us feel pain, we have something happen. We increase our catecholamine, your epinephrine, your norepinephrine. Everything goes up, it's why you get tachycardic. That's why you get short of breath, it's why your heart races because you're trying to get through the painful episode. None of that's good for you. These small paroxysms of tachycardia and things are not good you. They are definitely not good for you when you get to be about 60, 70 years old. And they have their own deficits associated with them. You won't be the first person to break your ankle and because you got tachycardic and had pain, now you have your MI to go along with it. I see it all the time, especially with these old folks playing golf and tennis in Florida. So being able to control that pain in a better fashion, being able to control that pain in a steady fashion. And I cannot agree with Jean more, nurses are going to love it because when I write for 4 of Dilaudid or 4 of morphine or something for a patient in ED, I get the eye roll. Because now they got to go find another nurse, they got to take the drug out, they got to put their thumbprint on there to make sure of their things. And then they got to waste the drug, which means you got to find another nurse to come waste it with you, and then God forbid, should there be an error in the Pyxis system because now you got to wait after work until Jasmine shows up and says, there was an error in our Pyxis system and you got to wait and clear all that. And then if you're a physician you get more angry because your patient didn't get treated. So the advantage here is that I have a drug, which I can take in a single package, open it, dispense it under a healthcare provider's practice, under the tongue, get steady-state pharmacokinetics and now hopefully I the pain controlled, maybe even redose it an hour later if there's still some more pain, I have the pain controlled until I can make my decision and take care of my patient. So I think nurses are going to love it. But I really think physicians are going to love it because we're not going to get the eye roll and know that our patients are being delayed 20 to 30 minutes. And if any of you have ever -- never tried to start an IV on a 300 or 400-pounder who's been dehydrated for a while, it is quite a challenging experience, yet they're still screaming in pain and you still have to manage them.
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Jean Tersteeg, [62]
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And something stood out to me in reading the early literature with this product. It seemed to me 70% or so of the patients never required a second dose, which -- so that in itself is going to be huge, we probably won't need to redose these patients, especially the ones that he's talking about, these patients that they get the dose, they get splinted and they leave.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [63]
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In the emergency room study, absolutely. Postoperatively, they did require...
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Jean Tersteeg, [64]
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First is, what I see and understand, because I'm seeing all the orders, patients who get morphine for -- quite often need a redose, that just seems to be one of the most common patterns.
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Louis Guzzi, [65]
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I would see this drug, and I think a question was asked earlier, and I think it was a real question about, do we worry about it with nurses in terms of rechecking the patient? This drug is going to be protocolized. It's going to be clinically best practicized, for want of a better word. It's just going to go on our pain protocol, and the pain protocol says, when you give any acute pain medicine, whether you give a pill, a tablet, an injectable, an IM injectable, sublingual, Fentanyl patches, whatever we choose to give, there is a time period where the patient has to be checked after that initiation, and usually it's Q 15 minutes for the first hour and then Q 30 minutes after that until you give the next dose, and then it just restarts itself. But these protocols are already in place. I mean we've been giving IV fentanyl, IV Dilaudid, IV morphine forever. So we're very comfortable with those protocols. I suspect this will just slip right into that protocol and already be built right in your clinical pain best practice.
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Unidentified Company Representative, [66]
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I think one other thing to piggyback on that. Based on one of the slides that you presented was. There are a lot of other noninvasive narcotic pain medicines, say, for example, Fentanyl patch, and you say, well why don't you just slap one of those on. Well, the reason they're contraindicated in the ER, let's take Fentanyl patch, for example, is that if you are sweating or diaphoretic, the absorption goes way up. If you have a fever, the absorption goes way up. And it's not predictable, and so you can actually get narcotic overdoses. So we don't use Fentanyl patches at all ever in the ER. We played around with the lollipops and the sprays. The problem was that the dosing was really variable and some people put a lollipop in their mouth and then they keep taking it and they're novice, they've had narcotics before and next thing you know they're heavily over sedated. They've gotten way too much. So the FDA has actually put out a black box warning that these are not to be used for acute pain, these are for chronic pain. For the novice pain patient, you do not want to give these medications. So they're not really an option for us.
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Unidentified Analyst, [67]
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And I just want to follow up, if I can on that question. So nurses, I think, beyond yourself, Jean will gravitate to the drug. Question for the 4 of you is, would your hospital limit, in one way, the use of the drug during peak times, number of patients? Is there any way that this would be a limited, I guess, that the nurses couldn't continue to use this to save their own schedule and save their own time and use this more than they really should?
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [68]
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In my experience, I don't think the doctors will be ordering it unless they felt it was appropriate for the patient no matter how busy the nurse is. I just see it as it's going to be very helpful for the nurses and the physicians and the patients. Yes, I just don't see it as a problem.
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Unidentified Company Representative, [69]
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So if we were to go under a drug utilization review like we do for every drug. We just put an incredibly expensive drug on our formularies, it's only controlled by the intensivists right now, nobody else should touch it. But this drug will go under the use of DUR, and then they'll put how you should and shouldn't use it in place and that will probably be right, actually part of our protocol on how to use the drug, it's part of every protocol for drug. I don't think it being limited because benefit to the patient is huge. Hospitals have the same satisfaction scores. I suspect you won't see it limited. This is one of those rare drugs I see crossing over to a lot of places where there is acute pain. Acute pain is still one of the most common things we see in a hospital, you chronically get called for it. So I just don't think this is going to be limited to very many places. Education will be absolutely essential. And I think the company has taken a big chunk of that on themselves just like we educate with every drug these days, having people in the hospital educate our nurses, our physicians and staff and I think they've taken that on board, plus I think adding the REMS component to this makes it a little bit more educational for us. I mean, most of us know about the process but I suspect by actually having us sign up for the process is going to make a much better process overall.
As a pharmacist, I think there will be discussion regarding restriction. I can't say that every institution will implement it, but that's not uncommon when you have a new agent come into practice, it's something that -- we need to understand how to use it; we need to see how it will be handled. There may be, I could consider -- I could think of people wanting to only have it in the emergency department, let's say and not throughout the hospital initially or perhaps, only in a surgical center to begin with. And like you said, you would do a DUR, which is drug utilization review, and you have certain metrics. So for instance, if we're certainly looking for a shorter length of stay, then we would be able to monitor that over the first 3 to 6 months and make sure we're seeing that. And if we see that in the surgical services, ambulatory, then maybe we perhaps then want to bring it into our inpatient surgical area. So I think they -- I can't say that will happen, but I think that those are certainly going to be things that will be considered with pharmacy and therapeutics committee.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [70]
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Eric Landry from BML Capital. My question is for nurse Tersteeg. Roughly how many doses of DSUVIA have you gave -- given?
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Jean Tersteeg, [71]
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Gosh. I don't remember how many people we had. When we did the study, I would say, didn't we have like 2 or 3 that we...
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [72]
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No, well there was -- they were the largest enroller. So there was 76 patients. I think you did about 40 of them. I think you had about 40 patients so they had 1 to 2 doses.
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Jean Tersteeg, [73]
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Okay. I'm sorry. It's been a while.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [74]
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That's -- so you have considerable experience with the drug? What -- just in layman's terms, do you have an opinion as to the patient satisfaction from the drug?
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Jean Tersteeg, [75]
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From what I saw, I think the patients liked it for a lot of different reasons. One was, it acted a lot faster than some of the other medications that were given to them.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [76]
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Than morphine?
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Jean Tersteeg, [77]
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Yes. Because they were getting the DSUVIA right away as opposed to the morphine that you have to delay because you're either giving it subcu, IM or IV, so there is a delay there. And patients want that quick satisfaction of -- I don't want to have to sit here, have the orders done, wait while the doctor orders it, wait for the nurse to come with all the supplies. The DSUVIA is like a quick -- I can pull it out of the Omnicell, I can give it right away. Depictions like that. And a lot of -- the ones that we used it on didn't get redosed because it was -- the patients that were getting it for reasons like, they only needed a one-time dose. They were getting an ankle splint or they were getting a shoulder reduced or something simple like that, that didn't need the longer acting.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [78]
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So just to be clear, the majority of the dosage that you gave were one shot and that's it? Okay. And as a practitioner, what is your opinion of the effectiveness of DSUVIA relative to the standard of care?
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Jean Tersteeg, [79]
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I think it was very effective. I think Jasmine mentioned earlier, when we are doing things like IV morphine, we're redosing constantly. And I think patients are expecting to be redosed when they have an IV in because they know how easy it is to be redosed when you've got an IV in, whereas when you're giving an oral medication, they're not expecting to get another one either. So I think -- and this is my opinion. A lot of pain is psychological also after the fact where, I know I've got pain, but if I can get a medication that I know is going to work for me, all of a sudden, my mind is telling me my pain is better. So I think that's a lot of it with DSUVIA too is they know I'm better because I've gotten my medication. And the ironic thing is when you're coming into emergency room, you already have pain and the idea that you have to now be inflicted with more pain in order to get relief by sticking IV. If you think about it, it's kind of counterintuitive to what we should be doing.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [80]
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Right. So I have another one. What -- just ballpark, what percent of patients would you estimate are difficult sticks, difficult to start an IV? Is it a 1/3, 1/4, 1/10?
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Jean Tersteeg, [81]
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I would say, at least 1/4.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [82]
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1/4?
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Jean Tersteeg, [83]
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Probably 1 in 4 patients are probably difficult to stick.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [84]
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I assume you've been this for a while. What is that -- is it so maybe, 10 years ago, was it a quarter or was it less or more?
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Jean Tersteeg, [85]
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I would say it was less. And the reason being, the more IVs you put in people, the harder it is because you're developing scar tissue and your -- so we damage veins by putting an IV into them. So the more IVs I put into you -- and people are getting bigger, the more obese people become, the harder it is to get an IV in them. The older the person gets, the harder it is to get an IV into them. And the other thing is that a lot of the patients that come into the emergency department are not well hydrated. So their veins are collapsed. So getting an IV into a collapsed vein is not the easiest thing in the world either. So you -- there's 4 factors against you right there.
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Eric Landry, BML Capital Management, LLC - Senior Analyst [86]
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Okay. So just to wrap it up. From a practitioner standpoint, the practitioner's satisfaction of DSUVIA is adequate. The patient's satisfaction is adequate and at the same time, it's getting harder to give an IV injection?
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Jean Tersteeg, [87]
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Yes.
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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [88]
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Chris Howerton from Jefferies. The -- I was intrigued about a lot of the discussion relative to the pharmacokinetics and how consistent and comfortable you were. And so I guess my primary question really is around, there is a data set that's available with the clinical studies and then there is a real world comfort level with the PK and how patients will respond. And so I guess, I'm just curious in terms of the commentary of how use might evolve over time in terms of the comfort that U.S. practitioners might have with DSUVIA.
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Eugene Viscusi, [89]
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It's a good question because everything we give from antibiotics through antiseizure medications through painkillers, everything we give, is based on PK. I mean, there is no drug we don't give based on a PK value and if you're an anesthesiologist, you're the ultimate pharmacist, she gives you the drug and then you figure out how to use the drug because that's what we do for living is balance things and hence, we must balance things all day. I base 90% of what I do mostly on PK values. Because I got to know the therapeutic level. When does it get to peak therapeutic level? When does the decay curve to curve to half because when can I redose, can I redose? And is the drug I give creating a side effect that I have to deal with. So when I see things -- and having used Sufenta 25 years ago to do -- the old Sufenta, the hearts we used to do in the operating room before we decided there was a better drug to do that, it has a very nice safe decay profile. It's very lipophilic so it goes on very quickly but it also comes out very quickly, which makes it a unique drug in our business. It doesn't tend to hang around. The study showing that whether you give 1 through 12 doses, it has the decay curve tells me it doesn't have a cumulative effect. So you're asking for safety margin, it's all about safety margin. If you give a small dose of a drug that only works 50% of the time. That's got a great safety margin, but a terrible efficacy, right? Who would want that drug? If I have a drug that has an 80% effective rate, but only has a 5% risk factor, now we're talking a better business. When I start getting to 95% efficacy and less than 2% risk factors and I think Eugene's slide was the best slide showing all the multimodal pathways of pain, what we're really affecting is the mu-receptor. We're actually covering the mu-receptor without covering the Kappa receptor, really is what we're doing. So if we can control pain based upon PK and delivery, especially in the central nervous system and at the same time stay away from respiratory depression, that's really the bulk of narcotics in a whole. So I always have liked -- and people don't understand, when you give an IV bolus dose of a drug, it's immediately uptake. So you have a huge P concentration. Then you have a slow delay curve, right? That huge P concentration after 5 to 10 minutes is where you get into trouble because the patient now has this big bolus of drug in there, they're not ready for it, they still have a hangover from something else and then suddenly you have apnea or respiratory depression or you have a cumulative effect. I believe you said something we all know, we don't do basal rates of PCA anymore because it accumulates in people. And drugs that accumulate, tend to need to lead to a risk. There is no accumulation here. There is a steady decay concentration. So I can say that if I give DSUVIA at 2:00 this afternoon by 5:00, 5:30 if my patient is sleepy, it should not be the DSUVIA, there might be something else going on with this patient. The safety factor to clinicians whether it's a nurse, whether it's the pharmacy, or whether it's the ER is huge because now if they've declined, maybe they have had something change. Maybe there is a difference, but it's not my drug causing that. So I think that the ability and understand those PK -- P concentration effects, delay curves, lipophilicity of the drug are huge and I think it gives us -- to me, it gives me a huge confidence role that I know my drug is gone. So it's not my drug causing the problem. I have to look for another reason. That's safety and efficacy of a drug while at the same time providing therapeutic benefit because you can give a decent dose, get analgesic effect, but not get rid of all your side effects i.e. because you don't have to worry about them. It's a huge safety margin.
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Jean Tersteeg, [90]
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And we haven't had a good oral agent that we can use in renal patients. So that's huge from the pharmacodynamic standpoint with the lack of active metabolites. Like she stated, in both morphine and hydromorphone are the 2 most commonly opioids used in our hospitals and both of them are significantly hazardous in renal patients and we have more and more patients on dialysis. So I think that if what this study show occurs in real life as you've stated, I definitely think our nephrologists are going to want to use this in more of their patients definitely. And that will occur in other specialty lines too if they see, wow, this really is better tolerated, more and more physicians are going to order it.
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Eugene Viscusi, [91]
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And in the ER side, you don't know. So someone comes in, I don't know what your kidney function is when you roll in the door and I've got to give you something and I don't to worry -- it's one less thing I have to worry about when I'm selecting medication.
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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [92]
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So just to clarify the data that's available from the clinical trials or the label is sufficient to give you comfort to prescribe it freely in the ways that you're kind of opining about today?
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Eugene Viscusi, [93]
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I think that most of us are comfortable with PK. The PK information is very nice. I actually applaud them for the 12-hour data -- the 12-dose data because that's the information people are going to really want. What happens if I give more? Is it the same therapeutic curve? Or does it accumulate because we do have drugs that -- you give Ativan it accumulates, it just -- people eventually fall asleep. But here I have, showing me the same curve across the board, that was the success story behind propofol. You could run it for 3 days and a day -- 72 hours, it looked the exact same. So that -- decay curve never changed so you didn't actually accumulate drug. That's big. That's bigger than we think it is.
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Daniel James Busby, RBC Capital Markets, LLC, Research Division - Senior Associate [94]
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Daniel Busby with RBC. So you all seem fairly bullish on the drug, but if we take a step back and look at the P&T committees and the people who'll be approving this, how big are the hurdles there? Is there a need for real-world evidence from any of these hospitals given that it is an opioid and there is a need for education?
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Jean Tersteeg, [95]
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There are going to be those hurdles from an education standpoint, this is something that no one's ever used before. Some nurses are uncomfortable with fentanyl and this drug sounds like fentanyl, so we'll have to get over those hurdles and help them understand the safety related to it. So there's certainly an educational competent, but we can very well do that. It's not an impossible hurdle to get over. Obviously, the initial impact on a pharmacy and therapeutics committee is always going to look at safety, efficacy and then cost. So cost will come into play here. And that's where I think sometimes there will be discussions on restriction. Everyone is going to look at what's currently available and it's been around for years and it's very cheap. And so what will have to be a strategic in discussing, the ability for the throughput to be better and for us to save costs there, the ability to avoid medication errors and the cost avoidance of what that means, what that means for safety in general for our patient. So that's what I think will -- some of those difficult conversations are going to be about. Yes, it is more expensive, but this is where we save. We save in lives. We save in throughput and more beds available. So the conversations are going to occur, I'm not going to say they won't. But I think we -- they have given us a lot of information that we can use in those conversations to try to build the case for this agent.
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [96]
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And I think the P&T committees -- I'm a former Chair of our P&T committee years ago and I know the -- the way the process goes. And we have a multimodal pain management pathway. And so the question is going to be where does this fit into that pathway? So there will be -- it's not restricted, but you're going to use some logic in terms of when you use this medication. Just like any medicine that we use, right? There is other medicines that are better in some situations and those -- this medicine is better in certain situations. So it's got to fit into that pathway. So I think on the -- at least speaking from the emergency department side, I don't really see any limitations there, but it's got to be appropriate patient selection just like with any medicine.
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Eugene Viscusi, [97]
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In terms of P&T, one of the big things these days is, you've got to replace something. So if I'm bringing in a new cephalosporin, something's got to go. If I'm bringing in a new antifungal, something's got to go because you can't have 2 antifungals and everybody wants to have one box on the shelf. This isn't replacing anything. Just like we've added new pressors in critical care, it didn't replace anything, it's an entirely new brand. This is a new brand. So if I'm bringing this in and I'm doing by multimodal pain pathway, which is an EMR-driven, electronic medical record-driven, what it says, called multimodal pain management. You click and check the box you want. I will check the box for this being one of my treatment choices, whether it be in anesthesia, critical care, postop, AM surg center, it will be my checkbox and then it'll have the caveats that go underneath it for risk, but it's not replacing anything. So a lot easier getting new onboard, that it actually supplies a need, than old onboard that gets rid of another drug that we're comfortable with. This is new onboard that we've not tried before. I agree with your comment, we're going to have to get comfortable with it, but we have to get comfortable with everything. I remember putting Precedex for the first time in a hospital in the United States in 1999 and everybody thought we were charlatans. 4 weeks later, we saw our protocol in 5 major medical centers for alcohol withdrawal because everybody said, "Oh my God, this stuff works." But the reality is, it's going to take that little bit of level, but it's a safety drug. It has physicians and pharmacists that are comfortable with that and nurses. And I think the nurses, just like we do with Precedex in the ICU, I think they're going to jump on board because they hate going and getting narcotics. It's -- I mean, I would think that they hate it. I know mine hate it. So if I can give them a better tool, they're going to be all on board, but P&T is not as hard as it used to be as long as you can make a good story, good clinical data, good background and you don't increase risk to your patients. That's really the big thing these days.
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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [98]
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Leland Gershell with Oppenheimer. So this is a very elegant preparation, sublingual formulation in small, easily deliverable tablet with an opioid with very appropriate decay. It seems to me that this is an obvious product for many applications in the hospital. And I know that there are other questions really about what the barriers and hurdles would be to have this getting appropriate uptake. But I guess what are we -- is there anything that we're missing in terms of what the appeal of this product could be for use in centers, whether it's from having to show definitively that there's a cost advantage. Will it be required to show, kind of, advantages to using it versus the cheap generic opioids? How long would this process possibly take? Would there have to be publications, studies? Just want to get a sense from each member of the panel with respect to their own experience at their own centers, what it's like for our newer products to come on board, which may over time be more effective on a cost basis and clinically appealing? But have an initial upfront cost that you don't face with the current products that are being used. Vis-Ã -vis, just thinking of OFIRMEV, for example, and there are others. So just wanted to hear from each of you about that?
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Eugene Viscusi, [99]
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I can address 2 points that you brought up. So the first is, the biggest thing that my health system is looking at is labor costs. How can we reduce labor? That's a big, big expense in the emergency department is labor. So anything we can do to get people through the system faster, reduces labor costs, we can get more people in, in the 24-hour period. So that is a big sales point. The other interesting thing is, I am the Chair of the Executive Committee for our whole paramedic EMS System. So when we started using Zofran oral disintegrating tablets, within a couple of years, our paramedics were saying, why can't we use that? We have the same patients. We have difficulty getting an IV started. They're vomiting, and lo and behold, went through the approval process, now the paramedics give Zofran oral disintegrating tablet. Right now that's not an option unless the hospital owns their ambulances because of the REMS mitigation strategy. Many hospitals in the United States do own their own ambulances and so there would be a possibility to do that. But paramedics, I think, are going to be the next group that's going to look at this and say, this is great. We have people that are acutely injured and they're in severe pain. We've got to transport them to the hospital, try starting an IV when you're on the freeway going on a bumpy road. That's very difficult. I have to go and do ride-alongs with the paramedics and I have put IVs into people going down the road and it's dangerous and it's difficult. So it would be extremely appealing and I think -- so I think there's a broader market that could potentially appeal to.
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Jean Tersteeg, [100]
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So as a pharmacist, my role on a P&T committee would be to work with providers on identifying how would we monitor the agent. If we take it on, and we're going to do an MUE, medication use evaluation. So some of the things I wrote down we would probably look at; what is the total MME, or morphine milliequivalent that the patients are requiring because perhaps, if they're not requiring repeated doses, they may ultimately be receiving a total of less morphine equivalent opioid, which is always, again from opioid stewardship principal, ideal. We can control their pain with the least amount of opioid. We would love to say that we don't need opioids, but we still need them, but can we be opioid light. So that would be a metric. We may look at their tolerability. So we would look at all patients who received this, were there any opioid respiratory depression requiring naloxone. Maybe, we would find a way to be able to measure their cognition. So having that as a part of our MUE, early mobility. We've all talked about how important it is. It's important in the ED as well as important with postop. So in the case of OFIRMEV, when we did our MUE, these were some of the things that were there. We wanted to know if patient left the PACU sooner. If we're going to be using this postop, was the patient at our pain -- at their pain goal and their cognition and respiratory status well enough for them to be discharged up to the destination unit. So these would be the things that we would be monitoring over the first couple of months to make sure that we are getting that real benefit that we think will come from the drug. And then also, we would then look at other things like key things from operational standpoint. Does -- the labor costs and such as well. Another thing is we might even look there -- we would have the opportunity to see of the patients who received it, how many of them met that criteria for being a hard stick. Were they obese? Were they elderly? Were there clinical signs of dehydration. Those are all things that can be built into what we call an MUE that we would do over the first couple of months of bringing a new agent on board.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [101]
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I think, there is going to be pushback from some facilities because of, like you said, the costs of bringing a new item in. It's always difficult to get a new item into some places. But I think when you weigh it against the benefits and the actual amount of money that you're going to save in the long run, I think most facilities are going to have a pretty easy time with getting it in.
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Eugene Viscusi, [102]
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I think you asked a key question. And I think you asked compared it to a comparator drug, OFIRMEV. Being an anesthesiologist, OFIRMEV have had an interesting story. It came out. We loved it. It had a cost, then they increased the cost. And about 50% of the hospitals dropped it immediately, but we still knew it was efficacious. We weren't one of the ones that dropped it. We just put a -- more restriction on it. We actually said, OR, postop period. If you can give p.o., oral or rectal, go ahead and do that, the best way to do it. But it still treated pain and it still was an alternative. It comes down to 3 things, safety, efficacy and satisfaction. That's really what it comes down to. Safety, nobody ever wants to see their hospital on the front page of newspaper for having a respiratory arrest or respiratory death or deal with the legal ramifications of it, which are very heavy.
Efficacy, does it work? Putting drugs on board that have low safety efficacy profiles, they're very safe but don't work very well, that's kind of silly. Why even do that. And then patient satisfaction. I can't sit and I go to med exec every Thursday, this coming Thursday is med exec. The first slide we're going to see is our physician satisfaction scores. And we see who's good and who's bad. And I can tell you if you look at why you're bad, you're bad because you don't treat pain most of the time or you don't talk to your patients. I have a drug that can actually acutely manage your pain and make you feel better with a low-risk benefit, cognitive ability to manage the patient and patients who can communicate, I think it's a win-win for everybody and when you think of cost, I always remind myself that the cost of one respiratory arrest in a hospital with an anoxic CNS injury, isn't measured in 6 figures, it's measured in well, in the 7 figures, depending on their age because you own them for the rest of your life. The reality is, I have a safer drug because of efficacy. I think that's going to be the big win for this product and I think it is going to take a little bit of time to get used to. The other comment is that as we build models and as we see drugs exposed out there, and I think of some of the drugs we've gained in anesthesia and pain management, when Duke uses the drug, the 7 surrounding hospitals have to look like Duke eventually. Because if you don't then the guy comes in and says, "Well, over at Duke, they gave me this, you don't have that drug? I'm going to go back to Duke." Because that's what happens is is this medication creep, I always call it, because everybody wants to look like the guys doing it the best and it's not hard to find the best anymore. Go online, you'll see my picture. You can find my satisfaction score right now. I don't know what it is today, it could be bad. But the reality is you can go and see everybody's satisfaction score. You can also see an institution satisfaction score. And believe me, it is a competitive world. If you drove down I-4 in Orlando, there are 9 best hospitals within 3 miles of you. Nine best hospitals. The problem is I only work at one of them and I think that's the best hospital. So it's best clinical practice.
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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [103]
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Okay.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [104]
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Do any of you see the current inpatient IV opioid shortage as affecting P&T discussions or adoption?
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Jean Tersteeg, [105]
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I do. I certainly do. I think it may make this drug have a higher priority because you've got a docket of medications that are coming out. And so I think this one is one that a lot of institutions are probably going to consider. Physicians are going to bring it forward. Me and my colleagues have already been talking about it. So I know that every -- it's on everyone's radar. We were hoping that the IV opioid shortage would end the first quarter, but it doesn't look like it's going to. So I mean, we at our institution have spent lots of money and resources on trying to manage our opioids to the point that we've had to contract in additional help in the pharmacy to take larger vials of morphine that come in a 60 cc vial which would ordinarily go into a PCA machine, to have them individually draw up smaller units that we can basically batch and create our own smaller units. I mean, that is a lot of labor costs. So I think institutions are going to look at that. Will there be the trade-off of hiring all these extra temp staff or being able to have an alternative? So I do think that this agent is probably going to be reviewed by all of the larger institutions. They're just going -- they're going to take a look at it. I don't think anyone is going to ignore this product.
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Pamela Pierce Palmer, AcelRx Pharmaceuticals, Inc. - Co-Founder, Chief Medical Officer & Director [106]
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All right. Well, if we don't have any more questions then, we're beyond our time limit, so I'd like to wrap up this panel section and thank you all very, very much for taking your time out to come answer these questions. So I'll invite Vince back on up.
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [107]
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I wanted to thank Pam for moderating that session and our panel of experts. We've been living DZUVEO. I've been living it since March of 2017 and living it meaning daily, learning as much you can about it, but every time you hear the real world experts, you learn more. So it's fascinating to listen to their perspectives on where, and importantly, where it might not be used, where it is appropriate and importantly, where it might not be appropriate because we certainly don't anticipate it's for everyone and want to support its proper use moving forward. We're a little bit behind so I'm going to move fairly rapidly through this and give you some insight into where we are on the commercialization of DSUVIA moving forward. And some of this you've seen before, but some of it is newer information. As we've previously mentioned, concerning the market, the applicable market for DSUVIA, it's roughly 92 million adult patients a year in medically supervised settings associated with moderate-to-severe acute pain with the majority of them, as you can imagine and heard today, are running through the emergency department, but also running through other sectors of the hospital whether it be outpatient surgery, inpatient or other procedures. And when we look at the emergency room in particular, yes, it's a large market and patient throughput matters, but what is interesting to us is that in this particular segment of the 51 million patient visits a year associated with moderate to severe acute pain, the majority of them in one way, shape or form are being exposed to an opioid. And even more interesting to us when we talk about efficiency are fundamental application potentially of entry for DSUVIA to the marketplace is that roughly 18 million of them, based on our research, are getting an IV-only for the administration of that pain medication, not for the fluids, not for antibiotics but simply to administer that medication. So certainly, an entry point that makes sense fundamentally for DSUVIA's profile. And the other opportunity, a little bit less appreciated. Again, is the same-day surgery or outpatient surgery patients and those are the 2 areas where we'll spend most of our time at launch would be the emergency room and the ambulatory surgical centers or same-day surgery arenas. And there's roughly 11 million patient visits on an annual basis in this particular setting associated with moderate-to-severe acute pain. So when we think about these markets, how do we think from a commercial standpoint and infrastructure standpoint about deploying resources in order to help educate on DSUVIA and its proper utilization moving forward. And there's roughly 5,500 hospitals in the country but when we look at specific criteria relative to the application of our drug products, in particular, DSUVIA, and we apply certain criteria, for instance, annual emergency department visits, annual outpatient or same-day surgery visits, whether they're early adopters of medications are not, often, as we look at the data from time of a new medication approval in the hospital area to time to first-order is how we'll measure early adopters. And finally, access to the hospital. Is there an opportunity to help provide education and materials in the hospital to better educate them on the proper use of the product? When we apply those particular criteria, we whittle those 5,500 hospitals down to about 3,000. But even of those 3,000 hospitals, they're not all created equal and there're certain of those that represent much higher potential than others.
So when we think about a tight infrastructure and responsible use of resources, we believe that there's about 1,200 hospitals that we will really spend our time resourcing and they represent around 70% of the potential opportunity in the United States relative to DSUVIA moving forward. So how will we deploy resources in order to help with that education? Well, we're going to start with a methodical approach. As opposed to blasting at the all 1,200 hospitals at the beginning, we'll start with a methodical step-wise approach with like 15 hospital account managers deployed in the first quarter of 2019 along with 4 medical science liaisons. Now today, we already have 9 of those hospital account managers employed. They have an average of 8 years hospital sales experience and 20 years in pharma and all of them have experience in the existing region by which they'll be employed and deployed for AcelRx meaning they have relationships and understand the system. Beyond those 9, we have an additional 5 hospital account manager positions that have already accepted their offers and are slotted to start January the 2. They have even more hospital experience, roughly 16 years and again, with about 20 years in pharma and again part of our criteria, all have experience within the geographies and accounts within which they will be deployed. And when we take this methodical approach, what are we talking about. Now we have said over time that we'll gradually expand this to about 60 representatives to handle those 1,200 hospitals over the course of 6 quarters from the start of launch. So what does that potentially look like in growth moving forward? I want to be sure you saw that effect there. So by the end of 2019, we'll expand that to about 40 sales representatives and move the MSL team up from 4 to about 7 and by the second quarter or the middle of 2020, we'll get to our full deployment of 60 account managers holding tight at the 7 MSLs NASH-D. So, again, tight infrastructure to help penetrate and educate within this market moving forward. And what is the membership of the leadership team we have in the commercial operation? And I've alluded to this in several discussions in the past but I think it's worth further mention. So you're familiar with my experience, I've been in the industry about 27 years. I actually was a military sales representative for Sandoz Pharmaceutical starting out in my career, calling on all the military installations around the D.C. area, so first-hand experience calling on those units as well as a hospital sales representative beyond the military installations in the D.C. area and Maryland area as well. But I'm fortunate and humbled and really pleased that we have such an experienced team with us, most of whom I've all worked before. So our head of sales has over 29 years of healthcare experience. She actually started as a healthcare administrator with long-term care facilities but Paul has launched 19 products over the course of his career and 2 startups related to commercial operations and Paul and I have worked together at 2 previous companies, both Reliant as well as XenoPort. We've launched hospital teams and pain products and this would be the third start-up I've worked on with him. In addition, we have complimentary experienced, actually in the room, Bill Soucie who is our Vice President of Market Access, 22 years of Market Access specific experience, multiple product launches and 6 startups, 3 of which I've worked with him as well and Paul and those 3 include the one commercial operation we're starting here at AcelRx. Beyond Market Access, our MSL team is led by a very talented woman who spent 11 years in hospital pharmacy. She actually worked on the P&T committees in hospitals in the Maryland area. And before joining the industry or subsequent to that she has 22 years in medical affairs, 3 startup MSL teams, 2 of which I've worked on with her and then finally, our head of marketing -- well it doesn't say here, he has 2 startups, 1 at our last company and currently at this company with experience in pain management and 11 years in pharma and 7 years in the (inaudible). So it's important to understand that the team has significant experience. They've got experience in launching pain products. They got experience in launching commercial operations and they know each other. And it's always important to understand when you're dealing with commercial operations the value of a buck and how that dollar is deployed and they're certainly sensitive to that moving forward so that they put their best foot forward with our investor's resources. Just a brief sneak peek at the campaign moving forward. So we all understand what DSUVIA is, but part of the campaign we'll utilize moving forward is what DSUVIA isn't. Not a needle, not a line, not a vial, no dosing calculations and no frequent redosing. So as important as what it is, part of the campaign moving forward will be the importance of what it isn't and again, efficient effective pain relief for the adult patients who require an opioid. So that's a glimpse of a segment of the campaign moving forward. And beyond what it isn't, we will certainly discuss patient profiles. And it's interesting, unrehearsed I heard all the patient profiles I would present to you today from these physicians that we're considering putting in the campaign moving forward. Patient profiles, they aren't surprising to you, and we heard earlier today a patient with a dislocated shoulder with acute pain and they need an IV only for the analgesia. What's the profile of this patient. Potentially a 43-year-old female, normal weight and a BMI of 20, no relevant medical history with the pain score that's relatively high, a 9/10. And for this patient the physician attempts a reduction of that shoulder separation without analgesia. The patient experience is increased pain and muscle contraction and attempts fails. So eventually, the physician orders an IV placement for procedural analgesia. We think this is a good opportunity to potentially consider DSUVIA for this type of patient, in particular, in this emergency department setting. Beyond that patient, also in the emergency department setting, we just heard descriptors from, again, our esteemed panel. You've probably seen a patient like this, it's a woman maybe 65 years of age, obese, 190 pounds with a BMI of 35, suffering from a hip fracture with acute pain and has difficult to access veins. So for this patient, the nurse attempts the IV cannulation for fluids and analgesia. After 2 failed attempts she calls another nurse for assistance. The patient's blood pressure rises rapidly as they wait for the second nurse to arrive and place the IV. So again, as we paint the pictures where this potentially might be utilized moving forward, certainly in the emergency department and then beyond that postop for same-day surgeries, maybe a patient with an abdominal laparoscopy, physically relatively healthy, age 48, BMI 21 with a moderate-to-severe pain score of 6/10. This patient receives IV fentanyl. Following surgery, the IV is then removed in the anticipation of discharge. Now the patient is complaining of worsening pain and wants an IV put back in place to handle that pain. The number 1 reason for delayed discharges out of ambulatory surgical centers across the country is uncontrolled pain. So potentially, this is another patient profile that might be appropriate for DSUVIA moving forward and these are the types of patients and education we'll be discussing with our customers moving forward.
Now from a reimbursement perspective, how do we believe this product will be utilized or reimbursed moving forward? We're fairly confident it will be in the packaged world. What is a potential timeline for that look like regarding its reimbursement status? So we'll be launching this product in late February as it relates to the ability for it to be ordered. For the first 90 to 150 days REMS certified institutions will be able to submit their billing for DSUVIA as either part of the package bundle or separately payable. CMS after that creative time will then conduct their evaluation to DSUVIA's pass through application, will apply for it fully expecting it to really remain in the package status. And we expect it to be considered part of the package simply because it must be administered by a healthcare practitioner. It's incident to physician's services and it's below the per diem threshold, typically for non-packaged product. So we believe, it's not a perfect estimate, but we believe that we'll likely receive a written notification from CMS on a DSUVIA J-code later in the year but with an end modifier simply meaning while it has a J-code, it'll still be considered a packaged status as part of that total DRG reimbursement program. So I hope that gives you a little light on the reimbursement status and what we expect regrading its package status moving forward. And where are we in the supply chain as we're preparing to launch. Just as I mentioned just a couple of minutes ago, we're preparing to launch it in the second half of February 2019, launch being defined as it'll be ready for shipment. And today, in our production, we have outsourced production contracted in running. It's part manual, part automated. Over the course of the year, and what you may not be aware of is the course of the last year and little bit prior to that, we've been investing in a fully automated packaging machine, which will end up dramatically reducing our COGS over time. We expect that fully automated machine to be in full production in 2020. Beyond the production, we have our 3PL ready to go in outsourced third party logistics organization for distribution to the wholesalers and the hospitals contracted for delivery for DSUVIA. Beyond the 3PL, our wholesalers, we're launching with 3 wholesalers, 2 have already been contracted, the third is under final red line review and we feel that that will be completed by the end of the year. And then beyond the wholesalers, the final, kind of leg of the supply chain prior to the accounts would be the group purchasing organizations. We'll focus on 9 at launch and really a little bit fewer than 9. When you look at our list of the 1,200 hospitals there's 4 GPO's that represent greater than 90% of all the AcelRx targeted accounts, and we expect to complete those GPO negotiation's discussions here very early in the year prior to launch, that being the January timeframe. So I hope that gives you some enlightenment as to where we are on the production schedule and the shipment readiness schedule. You might ask why not till late February. Well as the product's currently being packaged today, in January that should be cartoned. So you have 10 packs to a carton and then it's serialized as well so you can track each particular product as it's shipped out so we know who has ordered it and where it'll be. And that'll lead us into shipments starting in the second half of February. Beyond the supply chain, we often get asked, "Well what's the status of the Department of Defense and how you are going to deploy your resources for that." In phase I, for the Department of Defense, understanding that they've been waiting for this as long as Pam has for 9 years in the development of this product to its final approval. We'll be focusing early on in 2019 and into 20 with the MTFs, the military treatment facilities and what are -- some examples to that might be your Walter Reed Army Medical Center, your Bethesda National Naval or your Andrews Air Force Base and things of that nature. And interestingly, they're highly concentrated regarding patient volume. 10 of the 63 MTFs around the country account for about 70% branded pain medications in 2016. We have a single resource gentleman who has also worked with us in the past, fully dedicated to the Department of Defense. He actually served his country in the military as well and certainly has access to these key decision makers as they respect his time in his unit. Beyond the military treatment facilities would be how many people have thought about it from military deployment integration of DSUVIA into the Army, Navy and Air Force deployment sets. You may say, well where's marines. It falls under Navy. So as they are being deployed either overseas, et cetera, we'll be working with them to have it packed in the medics kits and just importantly, so you understand the military, it has to go through the same REMS any civilian operation does. So there's controls in place, attestation in place, it'll only be utilized where it can satisfy the REMS moving forward.
Beyond that early investment in time, as we progress into probably late 2020 into 2021, we'll start moving to other aspects of the federal and Department of Defense units whether it be the Veterans Administration or other government agencies. So what are some early launch metrics we'll look at, and I think this will be important to understand our perspective on this. In year one, we expect roughly 100 formulary approvals for DSUVIA. And remember, we're only starting with 15 sales representatives and gradually building to about 40 over time in that first year. And from our perspective, formulary is only one aspect, and we heard a lot today from the expert panel and it's where our minds are on education. So we're not as concerned about getting 200, 300 formulary approvals. What we're concerned about is getting a base level of approvals and then spending time on education for proper adoption of the product within the system. We want to be sure that we provide them all of the education materials whether it's the ER, the PACU, same-day surgery so they understand the proper utilization of it. So it's only one metric to formularies. What we'll be looking at beyond the formularies internally will we time to 1st order, the size of those 1st orders, time to reorder, so we know whether we're integrated in the system or not and adoption has occurred. So while most people or many in the hospital space view it on formulary approvals, we think that's one small segment but certainly a leading indicator of potential adoption moving forward. And our gross to net so we expect in the range of about 35%. In year 1 it'll vary quarter-to-quarter. A little bit high at the beginning likely because the military will be a larger percentage of the business at the start since they can order from day 1 and get a mandatory rebate in excess of what typically commercial might get. So it might lend itself to a higher gross net at the beginning and potentially come down over time. But it at least gives you a framework of some metrics we're thinking about moving forward as we launch this product and track its potential success.
Now beyond those commercialization milestones and metrics, we just want to reiterate that, look, in 2018 it was a busy year. But importantly, all the objectives we laid out at the beginning of the year we achieved whether it was the completion. If you recall, it seems like it was years ago. We had to run another HF study based on the Directions For Use for DSUVIA. We completed that. We resubmitted DSUVIA. It was accepted by the FDA and eventually approved. We got a positive CHMP opinion for DZUVEO in Europe and received an MA approval for that in the third quarter of this year and then, of course, the balance of the regulatory. So the objectives we laid out and spent our time on and really invested and resourced, we feel provide a great foundation for value for the company moving forward. And as we look forward realizing that we had the approval of DSUVIA in November this year, we're excited about the commercialization, the potential impact it's going to have on the quality of healthcare in the United States and abroad moving forward. Related to the European approval received in June, we remain in discussions with potential partners. We're not going to just settle for any deal. When it's the right deal, we'll make that deal and close that deal and keep you apprised of where that lands. Beyond DSUVIA, Zalviso -- I know there's questions when do you feel you'll resubmit that. We have ushered all our resources today around DSUVIA in preparation for the launch but beyond that in the background, we have continued to update the regulatory reapplication and expect that to be resubmitted in the first half of 2019. As a reminder, we have close to 70 issued patents through at least 2027. 29 are pending. We finished the third quarter with $63.0 million in cash. We did do an additional raise of roughly $40 million that put us on a pro forma basis ending in the third quarter with about $116 million in cash on our balance sheet, and we expect at least for the fourth quarter to burn in the neighborhood of $12 million to $13 million as we ramp-up our commercial operations. So hope that gave you a good sense of where are on our commercial progress today. The panel I thought was extraordinary in their views, completely unrehearsed. It was interesting to hear and learn today where they may or may not use DSUVIA in the process by which they'll evaluate it moving forward. We came right on the nose ending on time, but we have time for maybe a couple of questions if there's any for management in the audience. Michael?
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Unidentified Analyst, [108]
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Just a question on the partnership for Europe and the U.S. -- and you wanted to wait until you had better manufacturing economics with the U.S. approval, so that's kind of the next thing though. Can you give us an update on that, obviously, (inaudible) is the big elephant in the room. But might you look at individual countries ex-U. S, et cetera?
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [109]
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Yes, it's a good question. We're evaluating all options at this time. Look, just to be very transparent, the pricing model in Europe is very different than the United States. So of course, manufacturing is a key component of that moving forward and how low we can get to COGS. So we're exploring everything from pan-European dealers to maybe isolated countries moving forward and all the above. So again, we're in multiple different conversations but when the right deal occurs, we will be sure that you are notified.
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Unidentified Analyst, [110]
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And just a follow-up on Zalviso. We were looking for initially the NDA resubmission early November and then because of the discussions on REMS, it got pushed back and I think I had heard you mention first half '19. What are the gating steps that you're looking for before you can file that?
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [111]
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Yes, well the one of the gating steps is being sure we're completed on our launch readiness for DSUVIA first and foremost. But bar none, that is the single-largest value driver for this organization moving forward. And as much as we love Zalviso, we have to be sure we execute flawlessly on that DSUVIA launch, everything from commercialization to production and distribution. But for Zalviso, we're working on it as we speak. It's part of the strategic discussion and a little bit delay in time will allow us to have more patients from European use. Right now, we've got about 31,000 patients that use Zalviso in Europe. Hopefully, that will be to 35,000-plus by the time we resubmit. And Zalviso will be a Type 2 or Class 2 resubmission, meaning only do a 6-month review. So time from acceptance with the FDA, it will take a 6-month review likely with an AdCom between them. So if you're looking at some time in the first or second quarter, that puts us in the second half of the year for review, which also allows us to have data on the REMS and proper distribution of DSUVIA during that time. So we feel all that data can only enhance the Zalviso resubmission moving forward.
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Unidentified Analyst, [112]
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If I can squeeze one last one in here. The DoD you've mentioned, I don't know that it's a contractual obligation that they have to buy 100,000 units anymore. We had heard that for some time, maybe it was a different quantity, but it's not my model. Is it something that's potential upside? Can you give us any update on the timing for potential shipment to any of the military training facilities?
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Unidentified Company Representative, [113]
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Yes, we believe that that'll be one of the earliest ordering patterns for DSUVIA, likely probably one of the first 4 or 5 orders coming in the second half of the first quarter. Look, they've been waiting a long time, they're ready. So they're waiting for its proper deployment within their units. Michael, you have another?
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Michael John Higgins, Ladenburg Thalmann & Co. Inc., Research Division - MD & Senior Biopharmaceuticals Equity Research Analyst [114]
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And Vince, just in your one, how do you see the uptake between the emergency room and the postsurgical setting.
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Vincent J. Angotti, AcelRx Pharmaceuticals, Inc. - CEO & Director [115]
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Yes, it's a great question. So we haven't provided any guidance on percent of business from one segment to the next. But our belief is the emergency room will be the earliest uptake in the hospital simply because fundamentally it makes so much sense for patient throughput there. As doctors become more comfortable with it we believe it'll continue to bleed into the ambulatory surgical centers and same-day surgery. But we certainly believe that emergency rooms will be one of the most early adopters of it moving forward for all the reasons mentioned today. I want to thank everybody for your attendance. Again, we don't take your time for granted or your interest in our company for granted. And the fact that you chose to be with us here this morning is certainly flattering, and we hope to meet all of your goals for our company moving forward. To our esteemed panel, thank you very much for your opinions and your time. Dr. Viscusi, thank you for your information, very helpful to put it all in perspective and I hope you all have a great rest of the day and again, thank you for your time and attention this morning.
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