Aquestive Therapeutics, Inc. Q1 FY2024 Earnings Call

Good morning, and welcome to the Aquestive Therapeutics First Quarter 2024 Conference Call. As a reminder, this call will be recorded. I would now like to introduce your host for today's conference call, Bennett Watson of ICR Westwicke Investor Relations. You may begin.

Thank you, operator. Good morning, and welcome to today's call. On today's call, I'm joined by Dan Barber, Chief Executive Officer; and Ernie Toth, Chief Financial Officer, who are going to provide an overview of recent business developments and performance for the first quarter 2024, followed by a Q&A session. During the Q&A session, the team will be joined by Dr. Stephen Wargacki, Chief Science Officer. As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday. In addition, a recording of today's call will be made available on Aquestive's website within the Investors section shortly following the conclusion of this call. The Aquestive team will be discussing some non-GAAP financial measures this morning as part of its review of first quarter 2024 results. A description of these measures, along with a reconciliation to GAAP can be found in the earnings release issued yesterday, which is posted on the Investors section of Aquestive's website. During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release as well as the risks and uncertainties affecting the company as described in the Risk Factors section and other sections included in the company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2024. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. Actual results may differ materially from these statements. All forward-looking statements attributable to Aquestive or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. With that, I will now turn the line over to Dan.

Thank you, Bennett, and good morning, everyone. It has been only 64 days since our last earnings call. Yet the company has been largely transformed over those 64 days. To be specific, since our last call, we have announced positive Phase III results and a positive FDA interaction for our lead product candidate, Anaphylm epinephrine Sublingual Film, raised over $75 million in new capital from high-quality investors, and received FDA approval for Libervant diazepam Buccal Film for the treatment of seizure clusters in patients aged 2 to 5 years. We have realized these accomplishments while also progressing the company's long-term growth initiatives. This was truly a remarkable 64 days for the company. For me and for all of the members of the management team, it is gratifying to reach the other side of the transformation we have been planning for over the last 2 years. We continue to rapidly progress Anaphylm in the clinic. As we previously shared with you, we have 3 supportive studies to perform before our adult application is ready for filing with the FDA. We refer to these as our temperature/pH study, our self-administration study, and our allergen exposure study. I am pleased to say that our temperature/pH study is well underway and remains on track to complete dosing this quarter. We submitted our protocols for our self-administration and allergen exposure studies to the FDA with a request to receive responses within 45 days. We were pleased to receive positive feedback from the FDA in less than 30 days. We are now in the process of commencing both studies and currently expect to complete all 3 studies before the end of the third quarter. Our current guidance is that we will be able to provide clinical results from at least a portion of these studies by our second quarter earnings call in August. We have provided more details on each of these studies in our supplemental materials, which can be found on our website. We may seek to conduct our pre-NDA meeting with the FDA upon completion of these studies and before conducting our pediatric study. This may save us valuable time in the development process. Under this scenario, our pre-NDA meeting could occur around the end of the third quarter. As we progress towards our filing, we are also spending more time on identifying the optimal distribution model for Anaphylm. As we all know, distributing medication in the pharmaceutical industry is a complicated process and requires significant preparation. Unfortunately, for caregivers and patients, it is often complex to navigate and results in many unanswered questions. Will my medication be covered? How much will I owe? Can I afford it? What if I lose my medication and need to replace it? These are common questions that are faced by millions of Americans every day. Over the coming months, we will spend a significant amount of time with payers and market access experts so that we understand an optimal strategy to put Anaphylm where it belongs, in the hands of patients. This is an area of our industry that is ripe for innovation, and if practical, we will seek to help drive change. We have also begun to work on typical launch activities such as packaging design, marketing materials, and sales force planning. We have hired and engaged a variety of key commercial experts, and we will continue to build this part of our business throughout the year. Now let me turn to Libervant. As you heard me say last week, we were pleased to obtain FDA approval and market access for the 2- to 5-year-old patient population. We have already begun the process of obtaining commercial and government reimbursement, and we continue to fill non-Medicaid prescriptions as they are received. Similar to Anaphylm, we continue to examine our distribution model for Libervant. We have a very concentrated call point that can be managed through a small internal team. As time goes on, we expect to either expand our internal team or collaborate with other sales and marketing organizations to expand market access for these young patients. There are over 55,000 prescriptions filled every year within the 2- to 5-year-old population, and this number continues to grow. We are excited to finally provide the first and only FDA-approved oral medication for the rescue treatment of seizure clusters to this very important patient population. In fact, early feedback from health care providers and caregivers has been very positive. One health care provider told us that her families were going to be 'so happy' to no longer have to use the rectal gel. And another health care provider told us that she was extremely excited because many daycare centers were refusing to administer the rectal gel. We continue to progress our Adrenaverse platform with our AQST-108 program, our epinephrine prodrug topical gel. We completed our first human clinical study in the first quarter, and the data remains promising. This initial study measured the amount of epinephrine that remained on the skin or was found in circulation over time after application of the gel. While we are not releasing the data for competitive reasons, we found the results compelling enough to continue our product development efforts. We expect to be back in the clinic over the summer and continue to aim for providing more information on this program in the second half of the year. Our base business remains steady. First quarter shipments were significantly higher than the first quarter of last year. To sum it up, I have never been more excited about the prospects of the company. We have great technology, an experienced management team, and a growing track record. These are the basic building blocks necessary to be successful in our industry. I believe we will continue to progress from our transformation phase and into an emerging growth story. For the balance of the year, we expect to announce clinical data from the Anaphylm supportive studies on or before our second quarter earnings call in August, expand our distribution capabilities to ensure maximum on-label patient availability for Libervant, advance the clinical development of AQST-108 as rapidly as we can, and continue to efficiently manage our base business.

Thank you, Dan, and good morning, everyone. By now, you will have seen our financial results in our earnings release that was issued last evening. As we typically do, we will address most of the discussion related to the first quarter 2024 results in the Q&A. During the first quarter, we continued to execute on our financial strategy to strengthen our financial position by raising capital that extends our cash runway and supports the continued development of our lead product, Anaphylm, the first and only non-device-based orally delivered epinephrine product candidate. In March, we closed an underwritten public offering of 16.7 million shares of our common stock at the public offering price of $4.50 per share. The underwriters purchased approximately 600,000 shares of common stock to cover overallotments in the offering on April 22, 2024, bringing the total gross proceeds to the company from the offering to approximately $77.5 million before deducting underwriting commissions and other offering expenses payable by the company. All of the securities were sold by the company. We intend to use the net proceeds from this offering together with our existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline, including Anaphylm for the treatment of severe life-threatening allergic reactions, including anaphylaxis and Libervant for the treatment of seizure clusters in epilepsy patients aged 2 to 5, and for working capital, capital expenditures, and general corporate purposes. This capital will provide the company cash runway into 2026. We are pleased this offering included high-quality institutional health care investors. These investors' willingness to be part of our future represents another important step forward in the continued growth of Aquestive. Also, on April 3, 2024, the company filed a new prospective supplement to register the offer and sale of up to $250 million worth of shares of common stock pursuant to the amended equity distribution agreement under a shelf registration statement on Form S-3. The company also established a new ATM facility for $100 million as part of this shelf registration statement to replace the company's prior ATM facility, which expired in April 2024. We consider both the new shelf and the ATM facility as good corporate financial planning and have no current intentions to utilize either of these facilities in the foreseeable future. Now let's turn to the first quarter results. Total revenues increased from $11.1 million in the first quarter of 2023 to $12.1 million in the first quarter of 2024. This 8% increase in revenue was primarily driven by higher revenue from our out-licensed products. Excluding the one-time retroactive 2022 price increase of $1.7 million recognized in the 3 months ended March 31, 2023, manufacturing and supply revenue increased by 30% primarily due to an increase in Suboxone and Sympazan manufacturing revenues, offset by lower Ondif revenue. In addition, license and royalty revenue increased by 23%, primarily due to higher royalty revenue for Azstarys from Zevra and for Sympazan from Assertio. Co-development and research fees decreased by 11% for the first quarter 2024 versus the prior period. Research and development expenses increased from $3.5 million in the first quarter of 2023 to $5.9 million in the first quarter of 2024. The increase in research and development expenses was primarily due to the continued development of the Anaphylm program. As a reminder, the first 3 quarters of 2024 will contain expenses from multiple clinical studies being conducted to advance the Anaphylm program. Selling, general and administrative expenses increased from $7.5 million in the first quarter of 2023 to $10.7 million in the first quarter of 2024. This increase was composed of $1.7 million in one-time expenses related to severance and higher share-based compensation, as well as the effects of a year-over-year change in the allocation of expenses to manufacturing and supply costs. Given this year-over-year change, we expect to continue to see a positive benefit in gross margin offset by somewhat higher SG&A expenses. Excluding these items, there was a modest increase in SG&A compared to last year. Aquestive's net loss for the first quarter of 2024 was $12.8 million or $0.17 for both basic and diluted loss per share, compared to the net income for the first quarter of 2023 of $8.1 million or $0.15 basic earnings per share and $0.11 for diluted earnings per share. The change in net loss was primarily driven by the one-time $14.5 million of other income, which was recognized in the first quarter of 2023 and increases in selling, general and administrative expenses, research and development expenses, and noncash interest expense related to amortization of debt and royalty obligation discounts. Non-GAAP adjusted EBITDA loss was $7.2 million in the first quarter 2024 compared to a non-GAAP adjusted EBITDA loss of $3.9 million in the first quarter 2023. Non-GAAP adjusted EBITDA loss, excluding adjusted R&D expenses, was $1.4 million in the first quarter 2024 compared to a non-GAAP adjusted EBITDA loss excluding adjusted R&D expenses of $0.5 million in the first quarter 2023. Cash and cash equivalents were $95.2 million as of March 31, 2024. Under the company's ATM facility, we accessed approximately $12 million during the first quarter of 2024. We continue to be focused in 2024 on the advancement of our Anaphylm epinephrine program with a goal of filing the NDA for Anaphylm before the end of 2024. We are also in the process of reviewing our existing collaborations to prioritize our focus on the promising products from a long-term profitability perspective. We will have more to say on this after the second quarter of 2024. As outlined in the press release issued last night after market close, our outlook for 2024 is as follows: Total revenues of approximately $48 million to $51 million and non-GAAP adjusted EBITDA loss of approximately $22 million to $26 million. Our guidance for 2024 includes focused R&D investments related to the continued development of Anaphylm, the first and only non-device-based orally delivered epinephrine product candidate, but excludes any revenue or expenses for Libervant following the recent FDA approval for patients ages 2 to 5. With that, I will now turn the line back to the operator to open the line for questions.

Thank you. Our first question comes from David Amsellem with Piper Sandler.

So I wanted to pick your brain on the competitive landscape in the epi space. So there are a number of intranasal products, as you know, that are moving through development and wanted to get your thoughts on how you're thinking about not just the payer landscape in the context of a more crowded landscape, but also just patient and practitioner preferences for nasal spray modality versus an oral film modality. Then secondly, on Libervant, any more color on how you're thinking about the future of that product, whether you're looking at more fulsome commercialization down the road or partnering it out? Just help us better understand where your heads are at on that product. And then lastly, you mentioned the partnerships and you'll have more to say. I guess does that mean that you're looking to sort of monetize these income streams. So I'm just trying to get a better sense of what you meant by that.

David, good to hear your voice. So yes, in terms of the competitive landscape for epinephrine, I will admit I have lost count of how many intranasals are in development. But as far as I'm aware and what gets us excited and where we think we are unique is we are the only oral option. We believe we have a very portable product, and we're the only product that is bio comparable to the auto injectors for the first 30 minutes following administration. This is a rescue product designed to save someone from anaphylaxis. So I don't know how many nasal sprays are in development, but I do know I have a differentiated product that we're very excited about. So when I look at the market research and survey work that we conduct, there absolutely is a difference in how patients and caregivers view our product versus medical devices. Our portability clearly shines through as does our speed, the speed of being able to access the product, the speed of being able to give the product, the speed of the epinephrine concentration in your blood and getting to Tmax in 12 minutes. All of those things in our mind are major differentiators important as we go forward. In terms of the payer landscape, we are doing a lot of work on the payer front. Our findings to date, which match what we've said in the past, is that payers understand this is the rescue space typical to other rescue spaces. And as long as your pricing is within the envelope of existing pricing, we do not expect those dynamics to change. So if other branded intranasal products come into the market, we don't see those dynamics changing. And as I've said before, we would expect the market that the waters settle over the next few years to have a component that stays auto-injector for whatever reason, have a component that is intranasal that the intranasal products fight it out for, and then have a component for oral. In our particular view, we believe the oral part of the market will be a major if not the major part of the market. In terms of Libervant, I have to tell you, we couldn't be more delighted with where we are right now. To have Libervant finally in the hands of patients is just a great feeling for the management team here. And quite frankly, Libervant, which sometimes gets lost in the shuffle with Anaphylm, is really valuable. It's not only valuable to patients and caregivers who only have a rectal gel they can use right now, but it's valuable to us as the company who has created the product. Where we stand right now, nothing has changed from my prior view. The most important thing with Libervant is to get it in the hands of patients. We are happy to work with other sales and marketing organizations if they can help us get it in the hands of patients. But I will say the one spot we will not compromise on is performance. So if we do license Libervant to another company, we will expect them to convert the 55,000 scripts that are currently rectal gel users into film because that's what patients and caregivers need. If they're unable or unwilling to commit to that level of performance, we will do it ourselves. In terms of monetizing income streams, I think it's a little early for that. We have work to do in both cases. So with Libervant, there is a possibility we could out-license it, but I view that as more of finding someone to help us with the breadth of ability to bring the products to patients. In terms of Anaphylm, we are very focused on the next 90 days. We have an execution plan ahead of us, and that is where our focus will be.

So I was just wondering if you can comment on the allergen tests now that that seems to be the requirement and the cancellation of the angioedema test that you initially thought you would have to run. Is that helpful? Just can you help us contextualize what that means for the company, if it's easier or harder? And angioedema in the real world, how common do you see this with anaphylaxis here?

Frank, good to hear your voice. Yes, I'm glad you brought up this topic because there appears to be some confusion in the world around edema and what is experienced by someone going through the process of anaphylaxis. The onset of edema with anaphylaxis is a cascade, right? So it starts as a tingle, it starts as a change that an individual may feel. And of course, if you allow time to pass, it will progress and get worse. And that's not just in the oral cavity, that can manifest in other parts of the body, nasal cavity, and many areas. So when we think about angioedema, we think about the need to dose quickly, which is exactly what our study will allow us to show. In our allergen exposure study, we will expose individuals to whatever oral allergen syndrome they have. So cherry, mango, kiwi, whatever it may be, and the individual will work with the clinician to say what level of discomfort they are feeling. We will then dose our product and, of course, track the pharmacokinetic profile. So this is going to, in our minds, show what a real-world experience looks like. As we talked about in the past, you're sitting there, you think you may have had something, you're feeling this tingling, something is progressing, and then you take our product. What we don't believe is realistic or something that happens in the real world in any regular basis is the extreme edema that I know has been shared in other settings. That's just not the experience we hear from key opinion leaders and experts. We think the FDA did a very good job, and we're pleased with the way they worked to say, don't do an angioedema study where you're trying to create this false level of swelling; instead show people what it really looks like in the real world.

In terms of Anaphylm, there is clearly a huge market. How is your company approaching this? Can you discuss the commercial preparations and the sales representative side? What type of doctors are you targeting?

Yes. I think that's another. As we learn more and especially now our balance sheet is appropriately sized, I think size is a misnomer. We believe that a relatively modest sales force, somewhere between 80 and 100 reps, is a great place to launch this product. Not only that, while the entire market is spread across a lot of call points because there is a general GP component of this, if you target allergists and pediatricians, the top 5 deciles can be targeted with 80 to 100 reps. So when I look at our nasal spray competitors and how they're approaching the market, I think everyone has a similar approach.

Firstly, with respect to the timeline for the submission of the Anaphylm NDA, based on your current objectives with respect to the pre-NDA meeting, can you confirm whether you still expect to submit the NDA before the end of this year? Or if it's possible that it could slip into next year simply because of the lag between concluding the pre-NDA meeting and completing the final pediatric study?

Sure, I'm glad you mentioned that. In our prepared remarks and supplemental materials, we presented something a bit different from last time. We previously outlined a plan to conduct all our studies before having our pre-NDA meeting. However, given our rapid progress through the three supportive adult studies, we now believe it would be more efficient for both us and the FDA to hold the pre-NDA meeting right after those studies are completed. And why? Because we want to show that data to the FDA anyway before starting the pediatric study. So why not just turn it into your pre-NDA meeting, especially since the pediatric study is a very straightforward study. We are literally giving 1 dose to a child between the ages of 7 and 17 who is over 30 kilos and that's it. So is it possible that things change? Of course, that's our industry. But our guidance, our goal, our focus remains exactly as we said it was before: filing by the end of this year, and we'll do that by having a pre-NDA meeting at the end of our supportive studies and then doing a straightforward pediatric study.

That's helpful. Can you comment on two things regarding the commercialization of Anaphylm and the sales and marketing infrastructure needed? First, what kind of promotional efforts do you think would be most effective if Aquestive were to launch Anaphylm independently? Will it be driven by digital marketing or will there be any significant direct-to-consumer efforts through traditional channels? Secondly, does the financial guidance include both prelaunch and launch activities related to Anaphylm?

Of course. When you look at the launch of this product, we have done a considerable amount of effort over the last 90 days to start bringing in some commercial expertise and make some changes in our commercial organization to be ready for Anaphylm as well as bringing experts around us. So obviously, and I'm sure Ernie will at some point in the discussion here talk a little bit about expenses. But that's where we're spending our money, on R&D and commercial for Anaphylm. So having said that, when we spend all this money to build a commercial infrastructure, what are they going to do, right? In the first couple of years of launch, the very straightforward obvious place to focus are on these scripts that exist right now, the healthcare providers who are writing scripts to patients today. So I'm sure just like our competitors, that's where our focus will be, right? Converting those existing low-hanging prescriptions to Anaphylm. As time goes on and as our brand is established, yes, of course, there will be more of a digital direct-to-patient advertising component, but that is not what you do day one. Day one is about the existing base. The second phase is about market expansion. I'll let Ernie give you his thoughts on your expense question.

I believe you are referring to our remarks about our cash runway following the recent capital raise, which we expect will sustain us into 2026. While we haven't provided specific guidance for 2025, our guidance for 2024 and our anticipated spending for 2025 include expenses related to pre-commercial activities focused on the payer perspective this year, followed by an increased budget next year to prepare for the product launch.

So Ram, let me just add to what Ernie said, just put a finer point on that. We have plenty of money right now. We're very happy with our balance sheet right now. And as Ernie said in his prepared remarks, while we have an ATM in place, we're not using it. So we think we're well set up for what we need to execute on. And we think that fits us not just to our approval but past our approval and into the launch phase. And at that point, obviously, there are a lot of different parts of our business. We'll have to see how things go over the next 2 years.

If I could just sneak in one more thing. With respect to optimizing the value of Anaphylm as an asset, how do you see the picture changing outside of the United States, particularly given where you currently are with the product, all the clinical data that has already been generated? What are you seeing in terms of the potential partnering interest or other opportunities to potentially optimize the value of Anaphylm as an asset looking at ex U.S. territories?

We believe Anaphylm is a global product that can benefit anyone who has access to it. In examining markets outside of the U.S., we see different dynamics at play. For instance, China is currently not a favorable market for our industry overall. Therefore, we do not plan to focus our efforts there. Conversely, Europe presents a much more promising opportunity than we initially anticipated. We are actively engaging in business development activities in Europe, though the timing of those efforts is still uncertain. I will admit, I don't think our competitors have done us any favors in that regard because the products have struggled a little bit in Europe on the regulatory side. So I think we need to be clear with our story and make sure we've positioned ourselves correctly. But ultimately, I do believe Europe will be important to us.

This is Jose for Jason. Just a very quick one, a follow-up clarifying question. Is the pediatric trial needed for approval? Or do you plan to include the safety data from the study to the FDA during the NDA review? For the temperature and pH trials, we're just wondering what you're expecting to share? And lastly, on the topical product, do you also need to look at the potential of accidental exposure to another person, whether it's another subject, a healthcare provider, or a family member?

I apologize if I missed some of your questions. I think I caught some of your points, but not entirely. I heard you inquire about the temperature and pH study regarding our plans to share data. You also asked about the topical product and its potential opportunities. Did I overlook any other questions?

For the topical product, if you need to look at the potential exposure or accidental exposures to another subject or a healthcare provider?

Yes. So with any topical gel, transference is always something you have to manage, right? So we would be no different than any other topical gel that is on the market today. But we would expect to be no better, no worse than all of the other topical gels, which, as you know, is a substantial market.

So first on Anaphylm, and just a follow-up. I think it was just asked but not answered. So on the pre-NDA meeting and the pediatric study, is there a scenario where you would file for just adults without that pediatric study? Or is it just a question of confirming the design of that pediatric study that you laid out? I'm assuming 7 to 17 is a big portion of the market that you need in the filing.

Yes, and I will admit to being disappointed you didn't ask a Libervant question, since you've been with us on Libervant for quite some time. But I appreciate your asking that question so that I'm clear with everyone. Yes, we have no intention. I'll even repeat that. We have no intention of filing our NDA without the pediatric component. So we're not signaling in any way that we are going to do just an adult filing. This is just, in our view, the most efficient way of getting to a complete filing. So we would expect our label at launch to be the same as the EpiPen dose label, so 30 kilos and up in terms of ability to dose.

Okay. And just, again, how long would it take for you to run that study? And just when you break down the market, peds versus adults, can you quantify that a little bit just so we have a sense?

Yes. My memory of the difference between peds and adults is somewhere around the 50-50 mark. So about half the market is adults, half the market is kids. In terms of how long it will take to run the pediatric study, we don't believe this is a difficult study to run at all. It is a single dose, so there's no crossover. There's no having the pediatric patient come back and go again. So literally, the child comes in, they take a dose of our Anaphylm, and we track their pharmacokinetics for a period of time.

A few hours.

A few hours, and they leave. So we do not believe that is a long study in any fashion.

Okay. And then on Libervant, so congrats on getting that approval in 2 to 5. And I'm curious on the commercial side. So what you're doing now with Libervant currently, how much are you going to be able to leverage that for Anaphylm, setting up a distribution network? I know that Anaphylm is still a ways away, but how much of a consideration is that in terms of the investments that you're putting behind Libervant?

Yes, Gary, you know us well. The Libervant products are very exciting for us. If we were to retain it, we would be able to develop components of infrastructure and utilize it well before the Anaphylm launch. Consider aspects like distribution and payer access; you can think of it as clearing the system a bit before the Anaphylm launch. That is appealing. I don't know ultimately that that will drive the decision because I think we have to stay true to our mission statement, which is we want to help patients, and you need to maximize getting this product into patients' hands. But it is definitely a factor that we are aware of. In terms of ODE, yes, a really interesting situation on that front, as you noted. First, on our product, we're still in the waiting phase to get the determination from the FDA on our orphan drug exclusivity for the 2- to 5-year-old space. As I said in the prepared comments, we anticipate receiving ODE. There's no reason we shouldn't. When we look at analogs, they received ODE. So we think that's just a matter of waiting and seeing. Once we have that, obviously, for our product, we would have 7 years of the 2- to 5-year-old space for just our product and the existing products. In terms of challenges, while we don’t control our competitors’ actions regarding the approval and market access of our product, as of 8:50 Eastern Time on May 8, we are not aware of any complaints filed against the FDA by anyone. Pursuing legal action against the FDA is no small task, and you would think any such action would be initiated promptly. Therefore, I don’t have additional insights on what others may do in this area.

And then the partnership, yes.

Yes, I'm sorry. You did have one last part to that question. Yes, we absolutely do think it is possible to partner. We can license out the Libervant product at our discretion. I don't think that, from our interactions with various companies that are interested, this does not appear to be a roadblock at this time.

Just on that last point, Dan, I know you guys had backed off a little bit your engagement with the FDA around the 6-plus Libervant approval because you wanted to get the 2- to 5-year-old out. Now that that's been approved, how are you thinking about reengaging with FDA kind of on a major contribution to patient care basis to see if you can overturn the ODE that is in place in that space?

Yes, Thomas. And by the way, we noted you were the first one on the line this morning, so definitely impressed considering you're in a different time zone. But in terms of your question on that front, in terms of our engagement with the FDA, now that we've gotten this particular filing out of the way, we will pursue the adult again. As you know, while we think we have very good arguments to make for the wheels, I think the FDA moves at a certain pace, so we will just continue to follow that process and see where it leads.

And then you mentioned earlier that with a sales force of 80 to 100, you could hit the top 5 deciles. Was that based on specialty? Or was that just EpiPen prescribing period regardless of whether it's specialty or primary care?

My understanding from the deciling that we have seen is that is across the universe. So look, there are a couple of non-allergy, non-pediatric call points that would just be high prescribers that are baked in there to some degree, but very minor. But no, that's a decile world.

Thank you. I'm showing no further questions. I'd like to turn the call back over to Dan for closing remarks.

Thank you, Michelle, and thank you, everyone, for joining us today. I couldn't be happier with where we are in the company right now. We're in a great place, and we are focused on the execution of our business plan as we've shared with you. We have a variety of what we believe are important milestones between now and our Q2 earnings call in August, and we look forward to keeping you updated over the next several months. With that, I will close it off.

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.