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Elite Pharmaceuticals, Inc. (OTCQB:ELTP) Q2 2018 Earnings Conference Call November 10, 2017 11:30 AM ET
Executives
Nasrat Hakim - President and CEO
Carter Ward - Chief Financial Officer
Analysts
Operator
Good morning, ladies and gentlemen. And welcome to the Elite Pharmaceuticals’ Conference Call. At this time, all lines have been placed on listen-only mode.
Before the management begins speaking, the company asked the following statement. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to the effect, if any, on future results, performance or other expectations that may have some correlation to the subject matter of this conference call.
Listeners are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, Elite’s ability to obtain FDA approval of the transfers of the ANDAs or the timing of such approval process, delays, uncertainties, inability to obtain necessary ingredients and other factors not under the control of Elite, which may result -- which may cause actual results, performance or achievements of Elite to be materially different from the results, performance or other expectations that may be implied by these forward-looking statements.
These forward-looking statements may include statements regarding the expected timing of approval, if at all, of SequestOx by the FDA, the steps Elite may take as a result of the CRL, and the action of the FDA require of Elite in order to obtain the approval of the NDA.
These forward-looking statements may include statements regarding the expected timing of approval, if at all, of the SequestOx by the FDA and the actions of the FDA require Elite in order to obtain the approval of NDAs.
These forward-looking statements are not guarantees of future action or performance. These risks and other factors, including, without limitation, Elite’s ability to obtain sufficient funding under the LPC Agreement or other sources, the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities and intellectual property, protections and defenses, are discussed in Elite’s filings and the Securities and Exchange Commission, including its reports on Forms 10-K, 10-Q and 8-K. Elite is under no obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
With that covered, it is now my pleasure to turn the floor over to your host, Mr. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.
Nasrat Hakim
Thank you, Myles, and good morning, ladies and gentlemen. My name is Nasrat Hakim. I am Elite’s President and CEO. This is Elite’s earnings call. So Mr. Carter Ward, our Chief Financial Officer will give us high summary of Elite’s financials. After which I will come back with an update on SequestOX, our technology, facility, abandoning ANDAs, R&D pipeline and sales and marketing and answer few questions if you already submitted to Dianne.
Carter, please go ahead and give us an update.
Carter Ward
Thank you, Nasrat, and thanks everyone for calling in today. Yesterday, we filed our 10-Q, for the quarter and the six months ended September 30, 2017. We’re on a March fiscal year. So the September quarter is the second quarter of our fiscal year ending March 31, 2018, half way through the year.
Q is available on the Investors section of our website, which is elitepharma.com, or wherever else you may get your SEC filings. If you haven’t seen our Q yet, please get your copy from elitepharma.com or one of those other sites.
I am going to briefly take you through some of the key parts of the financials and give some analysis and context on the numbers. Also, as always, we receive questions and comments from shareholders and others that follow Elite. Questions came in overnight and even some this morning, and I will do my best to address as many of those questions and comments that are financially related is okay.
So let start first with the P&L, revenues for the September 30, 2017 quarter were $1.6 million, that’s compared to $2.7 million for last year’s September of 2016 quarter, so it’s $1.1 million decrease and that’s around 40%.
Decrease comes from two profit centers, our contract manufacturing and Naltrexone. We contract manufacture product for one customer. Last year that customers significantly increased order volumes, which helped drive the increase in our revenues.
Earlier this year same customer informed us that they were in an overstocked situation and would not be ordering additional product until their stock levels were reduce. They stop ordering this product for most of the year while they sold off their existing stocks.
Now they have corrected their error that caused the overstock situation, our inventories aware they now want them to be and we are now receiving orders to manufacture this product for them. The orders came too late to have much effect on these quarterly revenues, but we have resumed manufacturing this product and it will be contributing to future financials.
Now I have mentioned in the past that contract manufacturing is not a segment that we are actively pursuing, that’s still the case, especially with our focus being as it is on pipeline development. But we do have a capacity and resources to service this line of business and as a finance guy, I’m happy anytime we can utilize capacity to generate revenues and profits, especially since it doesn’t take away from our other goals and operations. So I am naturally happy to see these contract manufacturing revenues or the revenues seeing coming back on line.
The other product related to decreased revenues is Naltrexone, which is a product that’s owned and manufactured by Elite and sold under our marketing agreement with TAGI. This isn’t an overstocked situation but rather just a few down ones this year due to market demand and competition, and being compared to a very strong month last year.
In addition, Naltrexone is an expensive product due to ingredient costs being high. The increases or decreases in Naltrexone volumes, therefore, would have a greater effect on topline revenues, as compared to some of our other less expensive products.
Now we have seen a pickup in orders for Naltrexone recently, we are making and selling more Naltrexone now and we expect this trend to continue. But, again, the upswing, this upswing was too late to affect the September quarter financials, but Naltrexone is contributing more since September. Now remember Naltrexone is an important product in the fight against opioid addiction. We are committed to this product as we are to the overall cost and opioid addiction.
Moving down the P&L, let’s look at the gross profit line. Remember gross profit which is equal to revenues minus cost of sales and it does not include R&D or operating expenses. So the gross profit was a $1 million for the September 2017 quarter, this year and it was $800,000 for the comparable quarter last year. So we earned a higher gross profit from lower revenues.
Once again Naltrexone plays a large role here. Like I said, Naltrexone is an expensive product, its ingredients are expensive and its sales prices naturally higher when compared to our other products. So a decline in Naltrexone sales also means decline in Naltrexone costs.
In addition to topline revenue taking hit, cost of goods sold also take just as bigger hit. Less Naltrexone sold means less revenue, but it also means that we are saving money by buying less Naltrexone materials.
Add that to the fact that are other less expensive products are performing well and that these products are more profitable and it becomes clear that our product mix while not optimal with regards to topline revenues was actually more profitable overall after manufacturing costs are taken into consideration.
Now moving down the P&L, we come to R&D expenses, which were $2.5 million this quarter, as compared to $1.3 million for the September 2016 quarter. Now the few questions on this as well. When it comes to R&D, I usually stressed that it’s more important to look at what is being done rather than just focusing on the numbers. For example, particular quarter may have an expensive clinical trial, while a different quarter could have less costly activities being conducted on many products, both are just as valuable but the timing and the composition of the activities result in different levels of expense, such is the case with these financials.
Better limiting my comments here as I have done in the past, I would like to briefly dive little deeper into this R&D cost center. First of all, R&D costs are either external or internal. External costs consist of raw materials used for R&D, clinical trials, regulatory fees, various other costs paid to third-parties. Internal costs are our own employees, our own lab resources and our own factor.
This quarter we have more chemist, we have more formulators, more technicians working on product development as compared to 2016. We are also dedicating more lab and factory resources to product development then we were in the September 2016 quarter.
This is an important takeaway. People should pay attention to this. We have the ability to quickly shift resources into product development as and when needed. Being nimble like this is a great strength we have and lot of time larger companies don’t have that same strength.
Last year we were turning out record and near record commercial volumes and had a certain level of product development in progress. This year with commercial volumes decreased we increased product development, hired additional R&D focused staff, we added formal products to the SunGen co-development agreement and made more badges of more product -- more development products with more lab studies and analysis and other internal activities.
We filed and ANDA for generic extended release Oxycodone this quarter. Just as important, we stepped up our product development activity level and have a greater mass of development now working its way through our pipeline. On our last call I mentioned that I’m seeing the most R&D activities since I joined Elite more than eight years ago and this is still the case.
Now onto the balance sheet, where I get some questions on inventory, the warrants and mezzanine equity, first, inventory, which was $5.7 million as of September 30, 2017, that compares with $6.4 million at the beginning of our fiscal year March 31st and $5.9 million at June 30, 2017, this year.
Our inventory which is decreasing includes, quite a bit of materials being used in current and future product development, not just commercial inventory. Some of these materials are expensive and we expect to consume most of it in our --in R&D activities before the end of our fiscal year. There is also no issue with shelf life all inventory have adequate expiration dates.
Next the warrant liabilities and the Series J preferred stock, which is recorded as mezzanine equity on our balance sheet. First of all, please note that neither the Series J or the warrants will ever require a cash payment by Elite. In fact the warrants that could even result in Elite receiving cash under certain circumstances.
Secondly, the recent drop in our price per share does not and cannot cause any ratchet in the Series J or the warrants and that sells of shares of Lincoln Park -- to Lincoln Park also do not cause a ratchet regardless of price. I want to get a technical in the Series J and in the warrants Lincoln Park transactions are defined as exempt transactions, meaning exempt from ratchet, no ratchet.
The number of shares and price at which they convert is not affected by decreases or increases in our ELTP price per share and is also, I just said, not affected by any shares which are sold to Lincoln Park.
The Series J preferred shares and the warrants are not convertible for another three years at a minimum and there are many factors and risks related to whether or not they can be converted. Please see Notes 11 and 12 of our financials for full details, but note that there are no ratchet caused by change in price per share or sell the shares to Lincoln Park, and Elite will never have to make a cash payment to retire or redeem these shares and warrants.
Finally, for the first time, I got questions on Sarbanes-Oxley compliance. I am happy to answer. In brief Section 404 of the Sarbanes-Oxley laws relate to the effectiveness of the company’s internal controls over financial reporting. It’s a really complex subject but last year we made significant improvements in our internal control systems which enabled us to successfully remediate material weaknesses in our internal controls, which had previously existed and were disclosed, and we were able to demonstrate that the current existing control environment over financial reporting was effective.
Once achieving this effectiveness, we must maintain and continually test our controls to ensure and to demonstrate that these controls are actually operating effectively and as intended. So it’s a never-ending project. We continually monitor and test our controls in order for management to make the assertion, which is included in this 10-Q filed yesterday, that our internal controls over financial reporting our effective.
So this Sarbanes compliance, this is an important component of future NASDAQ listing. We must have that for our listing. We worked hard on achieving initial compliance and we are vigilant in ensuring that our internal control environment keeps improving and absolutely remained compliance and that will happen. So all is well with regards to Sarbanes, Sarbanes compliance and it’s important to Elite and I do appreciate that someone noticed and then asked question.
Now our Chairman and Chief Executive Officer, Mr. Nasrat Hakim, would like to give an update and his comments.
Nasrat Hakim
Thank you, Carter. And thank you ladies and gentlemen. You sent I answer the questions via email and phone calls, we group them, because many of you have the same inquiries, the categories are SequestOx and the facility and the warning letter, status of the pending ANDAs, pending R&D projects and sales and marketing.
Let me first say a word about financials, we are basically before that due to our tax situation with one of our contract manufacturers, we expected lower revenues. Now I see signs of improving and believe that the current quarter financials which will be reported in February will contain better results.
Let’s talk of SequestOx and Elite’s R technology. Even though today we have several pending products, pending ANDAs that have larger IMS data and market potential and SequestOx, SequestOx remains a top priority for Elite, let me repeat SequestOx is a top priority for Elite.
We have spent countless hours on in vitro experimentation, with positive results. We will discuss SequestOx path forward and spend money on a BE Fed BE when we have high degree of confidence that we will have positive results in vitro. These are expensive. We are not rushing into another BE at this time. Once we conclude our in vitro experimentation we will move into the next step.
I would like to resolve the issue of SequestOx before June. If we can, we have other options we could go back to the FDA and ask them to reconsider the labeling decision and we may even appeal to the highest ranking person FDA in order to see if we can get some kind of labeling waiver. My preference is, resolve this issue scientifically and we are on the right track.
Elite technology is solid. Our technology was presented at pain management conferences in Texas and most recently in Vegas. Our anti-abuse properties are undeniable. The issue with FDA has never been our technology. It simply is labeling philosophy.
If we resolve the Fed issue we will get FDA to allow us to overcome it with labeling SequestOx then that will open the door for us to work on other IR products with our R technology, Hydrocodone, Oxymorphone and Hydromorphone are candidates. This is another reason why we are sticking with SequestOx.
Regarding anti-abuse extended release formulations, the most lucrative is Oxy ER. There is a tablet OxyCoton and capsule Pfizer’s product that have not been launched. We fight for the generic OxyCoton because we can. As for Pfizer’s product we cannot yet, because they have not launch, in addition they have freeze exclusivity and they are through one year of the street.
We can file the product while they have exclusivity, we cannot market it after that. However, we cannot file till they launch and they have not launched. We need Pfizer to launch in order for us to compare their profile to ours and conduct the BE study without that we cannot submit an application, we cannot create an application.
Facility and warning letter, as we updated our stockholders several times, we received a warning letter for pharmacovigilance in August of 2016. We took all the necessary corrective actions and submitted the response to FDA. Seven-month ago, in April of 2017, FDA conducted an onsite inspection to verify the adequacy of our corrective actions.
FDA inspectors concluded that we address all of their concerns adequately, and therefore, issued more observations regarding pharmacovigilance. The only thing left for FDA to do is to go through their appropriate steps and issue Elite the warning letter, closeout letter. The process of FDA is that they send an investigator, they evaluate the assessment, they get back to their office, they have 45 days to write their report, their bosses and compliance also have 45 days to review it, then it goes to the center, it’s in process.
Once the FDA have sent one of their inspector and they confirm that you are compliant and you have no issues and we don’t, I have not had Elite filing since 2014. This is unseasonable that they are going to send another inspector to check on the first one. It is just of time. They just need to go through the process. I hope to see FDA conclude this issue before our next meeting within three months or less.
Again, we cannot force them to expedite anything. We have communicated with them regularly. We have contacted them and ask is there anything else we can do in order to exploit this, write this and always the answer is no and weight.
One more thing regarding FDA, when the FDA inspected us in April, they have conducted a full GMP inspection. Followed by a follow-up to the last inspection and a follow-up to the warning letter and they also conducted a preapproval inspection for Oxy APAP and a preapproval inspection for Hydro APAP. They were here for awhile. At the conclusion of the inspection, they issued two items for free, that is it, two observations.
Our facility is and has been VAI, voluntary action indicated that are no holds on any applications or anything we file. We recently received several approvals for CBE-30s filed with FDA. We filed three CBE-30s in late June and we got approval in September. We received approval letters in September. Compare this to we filed facility site transfer for Isradipine in 2014 and we just got the CBE-30 letter in September of this year too, okay. But these were filed in June and within couple months we got approval. So there is no issue with the facility with FDA.
The pharmacovigilance inspection and the warning letter that is in progress of being resolve did not affect the GMP status of the site, if you look at the FDA website, we are VAI in their database.
Let me try this into our pending applications to-date. We have filed four ANDAs, Oxy APAP, Hydro APAP, non-disclosed and OXY ER. We received a complete response letter that defined exactly what more does the FDA want. The requirements range from, A, make a commitment that you can comply with elemental analysis which will become the law of the ANDA in 2018. We did. Provide the additional testing for certain things. We did. Do a micro on the specific things. We did. We just filed our response to FDA’s complete response letter for OXY APAP and we will file the response to Hydro APAP hopefully within the next couple of months.
FDA has hardly asked a single question about the undisclosed application the last night. Late p.m. yesterday they sent us the inquiry asking a host of questions and gave us 30 days to answer them. We have not received any inquiries yet on Oxy ER.
Just to put things in perspective for you. During Q4 of this year, in addition to having to prepare to file and we will file the SunGen application in December of this year. In addition to that, we have to response to the FDA for Oxy APAP. We are responding for Hydro APAP and we are responding for our undisclosed, all within couple of months, that’s a huge burden on the staff especially when the FDA give this specific time you get to respond in 30 days or you are in the back of the line, okay. So we are doing a lot of work in here and this is why it takes a little bit of time to put the response together and sent it to FDA.
R&D pipeline, our partnership with SunGen has been excellent. We have a lot of active products with them. We are very excited about filing our first common ANDA together this year, really next month and look forward to filing several more ANDAs next year.
Sales and marketing, our vision and strategy for sales and marketing is under development. There are three fast forward for sales and marketing. We can either go as it alone, okay. For that you pay all the cost but you keep all the profit. But the problem with going as it alone is that the working capital becomes an issue. When you are making large quantities of all of these products and sending them to [ph] Amicus or Cardinell (27:52) you don’t get paid immediately.
So after you spend a lot of money and making the products that don’t appeals, manufacturing and the cost of the employees and you finished, then you sent it to somebody and months later they tell you and during that several months you have to make more product.
At the end of the year it takes about nine-month to 12-month before you start seeing your money and that takes millions of dollars and that’s called working capital. That is the disadvantage of having your own sales and marketing team. Now for companies that have a lot of cash then it’s not a problem. For us we need to think about that stuff. So going it as alone has advantages but there are things that I really need to think about.
Second, we could launch one of our products since we get approval with a current partner, whether it is Dr. Reddy’s or Epic or TAGI. TAGI is a good partner and we have several products with them right now. That helps with the working capital, because TAGI as soon as we having a product they pay us transfer price within 30 days or so. So we don’t have to carry that burden. The disadvantage to this is you to get a share some of the profit with TAGI. So you get away both out.
And finally, it makes sense for us to discuss a joint venture with SunGen because we have a lot of products together, plus they have their own and we have our own. So that could also work. There is still the issue with working capital and maybe it can be divided over both.
All ideas are possible. We have not made the final decision yet. It needs to be study a little further. But definitely that’s the preliminary vision for sales and marketing the several you asked about.
We have received as I said several questions and we have, so I am going to cover five to 10 of them. But before I do that, Dianne, sent me an email from [ph] Mr. Doug Hugh (29:49) who is -- has been like it as Elite’s unofficial analyst and I actually read the email that you sent to Dianne and I am very impressed. Thank you very much for that. And in it something caught my eye regarding some allegations on some people making that Elite’s product or Elite stock will be $0.02, that’s belonging, okay. I have nothing else to say about that.
We are a solid company with company financial, the only reason we have to raise money is for R&D, if we wanted to be stagnant, we can lay out someone pleased and depend only on our revenues and actually be a viable company versus everything revenue, but that doesn’t make anybody excited because that’s not going to get us to dollar land, doesn’t going to expand us to NASDAQ, there will be settling for mediocrity. We will continue do what we are doing and we will get the NASDAQ in couple of years and we are going to get the dollar land around that time within couple of years.
All right, as I said, I will go through a few questions, some of them Dianne gave this morning and the print is extremely small, so be patience with me. Let me start with first one and actually I think has answer that, this is about is the exercise price Series J convertible series are still the initial price of $0.152 or has it been adjusted to subsequent activity. Go ahead, Carter.
Carter Ward
Okay. Right. I anything got another comment something similar to this so I am kind of playing that. There was a ratchet of 100 million shares. I think, Nasrat and none of that is correct. I think I have touched on this in my presentation as well.
There are the Series J conversion price is still the same. It was a $15.21 converted into just over 158 million shares, which by the way is the same number, the exact same number of shares that Nasrat returns to the company in exchange for these preferred shares. That has not change. That will not change.
Lincoln Park transactions are exempt from any ratchets. So if you are looking the documents there is a thing call an exempt issuance and Lincoln Park is specifically mentioned. So there would be no change in that. Same thing with the warrants is around 79 million warrants at that same price $50.21. They are unchanged.
Lincoln Park has no effect whatsoever because Lincoln Park is also an exempt issuance in the warrants. So it’s not possible, not permitted by the documents, so all of that says the same. So there is no ratchet. Everything is the same. And they will continue to be the same method.
Nasrat Hakim
Okay. Thank you, Carter. Carter saying start into buying this shares now and I am, okay. Next question is, one broker said if approved, what is the timeline from approval, to actually get the raw materials, to manufacturing, to packaging, to shipping, to revenues to the company?
Okay, so from the time we get approval to having the material and manufacturing and packaging, we pretty much have most of the material really successfully maybe one of the control substances, you need to submit for a quota, if we don’t have enough for product launch. The whole thing can be done within three months to three months, okay.
Now the revenues to the company really go back to what I talked about earlier, depends on which model we follow. If we go with a current established partner such as TAGI then you can see that faster. If we go it alone, it’s going to take longer than we have the issue with working capital.
And how will the product be promoted and what method of distribution, exactly, the same thing, that’s why I was talking about, which one of these three ways to be it will be distributed? What are your priorities for the selection of the -- of which product will you pursue first? I intent to pursue the first one that will get approve. They approve it regard it. So definitely the rating things stuff with FDA as soon as they give us green line there is no reason for us not to move forward with the -- with whatever product they approve first. I am thinking it’s going to be Oxy APAP, okay.
What is your plan for revisiting a path to approval for SequestOx? Exactly what I talked about, we have our people working on it, the last time we resolve the issue and vitro and vivo we saw improvement but it wasn’t enough, so we never submitted FDA. So this time I am more focus and demanding a substantial data before we move to the next step and it looks like we are very close.
Is SunGen paying currently for the expenses incur in the development of the joint product? The agreement is public. We published it already. So there is a part that they pay totally for which is the development of the formulation and the methods on all of their good stuff. And there is a product that we pay for which is our facility really and because of that and there is a part that two of our stake hold together, okay.
Carter Ward
Christopher?
Nasrat Hakim
Yes, Christopher, yeah, okay. Let see, is the warning letter from 2016 still in effect? It has been over one year. What needs to be done despite this warning letter, do you need outside consult to address this issue? The answer is, no. We don’t need anybody. It is still in its first year but it has no effect. As I mentioned earlier, we are getting approval. I am working the FDA that come here an auditors. It’s only a matter of time. If it was not, I would be very surprised.
I cannot think of anything else other than the FDA coming to our facility and conforming in personal and that you are complaint, okay. And telling us you are complaint and issuing us notice of vision. I am not sure what will be the next step other than to go through the -- some day they need to go through in order to get this done.
A warning letter to FDA is big deal, so a lot of people have sign up on it. If not, a simple 483 will go just distance, this involve the center and few other divisions and that’s what they give some time, at least in my opinion, okay.
And back in August we felt confident that the warning letter was addressed. I still have -- it was address and I have nothing else to add to the warning letter and the FDA has never come back and asked me for, hey, there is a decency, as I said, we got an inspection and the inspection show that we have no issues and we have had their peak instead of being late and filing pharmacovigilance since 2014, since I joined the company pretty much. The issues the FDA had with us were between 2011 and ‘13, okay.
Can we get the picture of renovated lab posted on the website? I will ask Dianne to do that, but also I will ask her to post the new manufacturing suite that are sensational and also the new warehouse. We have also very nice packaging line as well, the second packaging line state-of-the-art. So we need to do that. We definitely need to take some pictures and post them.
Carter Ward
Yes. They are taking pictures today as a matter fact.
Nasrat Hakim
Excellent.
Carter Ward
We have our cameraman been here today, so that should be up shortly I would imagine.
Nasrat Hakim
Excellent. Thank you. Let see, we will take couple more questions. First, why the formulation -- formulated SequestOX did not work given the transfer was extremely confident prior to this testing. I thought we knew it was if you spread it on applesauce prior to your second meal [inaudible] (38:33) issues goes away. What happened?
Actually, that’s not quite accurate, so let me elaborate. We did run a study where actual few studies, the first one was the fastest study and we were BE on Cmax and Tmax and everything. We ran a second study that we sprinkled it on applesauce where people ate cream cheese, yogurt and a bagel and orange juice. And we fed our a little better than and the bread. We have the 163 bunionectomy study, where they ate whatever they want to, okay. We -- anybody would tell the hospital experience, they just and that was fine.
The study will become in short is that whenever we fed patients high fat meal, our Tmax was longer than the brand. I don’t have notes in front of me, but Roxycodone was fed some hours and we report and it shows you the variation in the public, okay, because within Roxycodone and our product, you see that one person will take it and they will absorb in 20 minutes to 30 minutes and somebody else they will food affect or the side effect. Food effect is not accurate, it’s side effect, as when we fed them food there were final and fed them fatty food, they were not.
This is where historically the doctor would write prescription and tell the patient or the pharmaceutical patient take this food half an hour before a meal or an hour after a meal and that’s our problem with the current situation, even though we passed all attributes of anti-abuse and efficacy. So the FDA would like us to fix the Fed issue and we are working on it. So this is what happened before. This is what we are doing right now. And hopefully within the coming few months we will solve issue scientifically if not we will petitioned the FDA and see where we go from there.
Considering what’s happening in the country and how viable this product is due to our nation, from our President, to Congress, to FDA, everybody is talking about they need anti-abuse, we have a product for them, okay. You can label it but do not take without certain meal or if you take it you have certain meal, take ibuprofen or something else instead of this to get through, okay. And hopefully the FDA will work with us. Again my preference is we are going to solve this problem over the next few months and solve with science, okay.
All of the recent activities for the company aside from SequestOx have been focused on traditional abuse deterrent products. What do -- what did not even use -- that did not use present R formulations not for Carter said. Can you help me understand where Elite patented technology approach abuse deterrent fits into your company plan, does not -- and us is still believe in R platform?
Absolutely, when you think about it from business standpoint, I have Oxy IR SequestOx and I have Oxy ER. And these are the biggest market. I need to resolve the issue for Oxy IR for us to proceed to the other IRs, it is insane of me to go ahead and make the other formulations, we will make them as time goes, it will help me to go subjecting to clinical trial and then has same issue as what we did with SequestOx. We need to solve the SequestOx issue, this way we can go to other IRs and that’s our platform for the IR.
With respect to ER, Pfizer got an approval, they did this through bunch, okay, and yet, a year post [inaudible] (42:24), they still have not launched that. I need them to lunch for us to go after that formulation as well, okay. So we are not abandon or that is still the core of Elite, okay. We are just being smart. I am not putting our all eggs in one basket and this is what I talked about all alone.
We have three baskets. One, we are making products in order for us to stay alive, continue producing, making money, so later on we can fund our R technology. And second, partnering with SunGen where at least they didn’t have the bucket and we had have, but also somebody share this with us. And the third is the R technology that we are running to the FDA issue that described and Pfizer not launching. But all of them are in play.
OxyCoton extended release, we want after that, why, because we have formulation and even though they have patents we have patents, we want to have and filed and hopefully we can get to the markets with everybody else more before, okay.
Finally, following up on the above, this is -- what is the strategy behind the filing of these traditional ANDA. The strategy really is to try and get us to NASDAQ and file current product, okay, and also to be smart and diversify. These are good viable product and they will end up helping us not only survived but thrive and with all the three baskets I described, really I am hoping all of them will succeed, but only we need one of these basket to succeed for us to get to dollar land and go into NASDAQ, okay.
Well, this concludes the updates on this call. Thank you for your continuing interest and support, and we look forward to talking to you again in February. Thank you, Myles.
Question-and-Answer Session
End of Q&A
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