PULLED TRANSCRIPT FROM LATEST ELTP CONFERENCE CALL:
Sales and distribution is what's really leading our increase in revenues. Elite's transition to direct sales with our Elite label has been a great success. The revenue and profit growth demonstrates that success. A testament to our great team, especially Doug Plassche in the operation team, and Kirko Kirkov and his sales organization and the rest of my senior staff. Everybody is doing an excellent job coming together to get us to where we're at.
The highest revenue generating products for Elite label continue to be the mixed Amphetamines, IR (390 Million) , and ER ($1.56 Billion) We see strong market demand for these products. The sales are limited only by how much quota we can get. Managing the quota for these products is very important and our team has done an excellent job managing the quarter. Our other products, Phendimetrazine, Isradipine, Trimipramine have achieved smaller revenues than Amphetamine, but they have strong market shares and they are contributing to their revenues substantially.
In addition, to sales for the Elite label, we also have two licensees, Prasco. Prasco has a non-exclusive license for the Amphetamine ER and sells under the Burel label. This product was launched the first quarter of this year and is doing well. Precision Dose has a license for Naltrexone and Phentermine tablets and capsules and they sell under the Taggy name label and Precision Dose label.
Naltrexone continues to be on the FDA shortage list. Elite has other products that will enhance our pipeline, substantially increase our revenues that will be launched soon.
1. The first product is generic Methotrexate $63.4 Million - DONE . Methotrexate was recently approved by the FDA and will be launched this quarter.
2. The second product is generic APAP with Codeine $45 Million. The brand name is Tylenol and Codeine. APAP with Codeine was approved a few years ago, but we waited until we saw a market need before launching it. We believe the time is now. We expect the launch of APAP with Codeine to be shortly after Methotrexate, six to eight weeks.
3. The third product is Oxy APAP $500 Million, which is Generic Percocet. We expect to launch Oxy APAP six to eight weeks after APAP with codeine.
4. The fourth product is Hydro APAP $477 Million which is the generic for Norco and that will follow Oxy APAP.
5. The fifth product is Methadone $30 Million and we will launch that after Oxy, Hydro APAP. Of the five products that I mentioned, Elite would launch at least three within the next four months.
6. The sixth product to be launched is the central nervous system attention deficit disorder product (GENERIC VYVANSE, pending FDA approval 5.1 Billion. This is the most important of all the products I spoke of. This product will have launch priority over all other products once approved. Now we can only plan for what’s in the queue and what we have. We have everything we need to launch the central nervous system attention deficit disorder medication. Once the FDA gives us approval, we reprioritize everybody else and this will go next.
Elite maintained a strong cash position during our transition to sales. We have supported working capital needs as well as R&D pipeline cost, while maintaining our cash levels. The new product launches will substantially increase our profits and revenues. We will see incremental increases over the next two to three quarters.
Nothing’s going to happen overnight. You launch the first product, you’re going to go through the growing pains that Carter described and then starts to become viable. You launch the second, you go through the same thing. So it’s all coming, and it’s coming quarter-after-quarter.
Regarding the research and development pipeline, Elite has three ANDA filed that are under review by FDA. Generic dopamine agonist ANDA for the treatment of Parkinson’s, and ANDA for the treatment of pain management OxyContin ($720 Million), and the central nervous system stimulus ANDA (Vyvance) $5.1 Billion used for ADHD FDA reviews continue for these products and Elite continues to provide support to any FDA request. Elite will issue a PR upon approval.
Now, two of the three products that I mentioned are needle movers. So let me say a few more words about that. Regarding the CMS application, the FDA asked us to make a couple of minor adjustment. Tighten the spec, move this over here and there, nothing of relevance. But the FDA did request an extra month to review the DMF for the API supplier.
So our PDUFA date is November. That was very nice of FDA to do that, because they found that our application itself doesn’t have any issues or all the issues we had, we resolved them over the past year. They had a question to the DMF supplier, and instead of saying, take this back and call us back in a year or in six months or whatever, they actually said, we need another month to resolve some issues, which is really very promising. And we will update you in November once we hear – if we hear from FDA and what their verdict is.
Regarding second needle mover the pain management and generic OxyContin ($720 Million), it’s one of the common outcomes of a paragraph IV ANDA filing is a lawsuit by the brand company, and we have updated you on that. We’re going through that right now. We agreed with Purdue to renew the litigation hold for six more months. It does not make any sense for us to get engaged with lawsuits with Purdue at this time, because they have enough people suing them and trying to invalidate their patents. So we stepped back and agreed that we will take six months where we don't go through discovery, we don't have to spend the money, they don't have to come after us till we see what's happening in the landscape. If a judge says patents are invalidated, will move in. If they say they are not, we're in the same boat as everybody else.
Elite has other products in the formulation development stage that have not reached a reportable milestone yet. Elite continues to make R&D a priority……... Regarding the facility and infrastructure, as you know, to keep up with our growth, we needed additional space. So we have taken on an additional 34,000 square feet to support expanding packaging, inventory and warehouse holding.
We closed the deal and took possession of the facility last January. The permits were obtained for construction because it's a part, 34,000 square feet is a part of a building that's about 85,000 square feet. We have to seal it and close it to make it into pharmaceutical. We build the IT infrastructure, the servers, the cameras, ADT security, all of them are ready. A state of the art packaging line that's already been qualified and ready. Department of Health got approval, then the CDS approval. The two remaining things were DEA and FDA.
The vault and all the security already. We invited the FDA last week. They showed up Monday, and I am happy to report that the inspection went very well. In my opinion, the DEA takes, usually regulatory agencies in general take 45 days to write the report. I expect approval by the DEA within that time. Before we meet in November for sure, but I believe within 45 days we'll receive approval from the DEA.
The next step is FDA – next and final step is the FDA approval. To get the FDA approval, we have to manufacture or package lots at the facility, put them on three months stability, and then file with the FDA for them to come in and inspect and give us approval. The lots are being packaged right now. The lines are qualified, including serialization, all of that. They are being made right now placed on stability by next week or the week after. Three months should be about November, I expect that we’ll file towards the end of November, and then it’s a matter of when the FDA can approve it and we’ll update you on that once we know. At the end of the day, once this facility is approved, we should have and be covered from the expansion standpoint for at least five years for manufacturing and longer than that for packaging.
In summary, Elite has shown strong growth this quarter. We are executing the company’s strategies for commercial, sales and distribution and research and development. Elite has the best commercial product line it has ever had an excellent pipeline of approved and soon-to-be approved products, and the best financial position in the company’s history.
This puts Elite in a strong position for an M&A or a move to NASDAQ when the time is right..
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