Sound grabs from the CEO -JP Morgan conference

I wrote down some sound grabs from the CEO 3 weeks ago at the JP Morgan conference. These are not exhaustive and I hope I haven't misquoted him.

Window into CEO’s commentsJP Morgan Conference

Comments:

• ‘We’re moving this company from a high capital intense business to a high growth – high margin business’

  
  

• ‘Reasons for previous business model failure : CDMO business capital intense and we had no scale in the generic space, the dermatology business faced significant pricing pressures and WH relied on one product Nexstellis which was not launched effectively initially. All this coupled with debt of over A$300M’

• ‘In Dermatology we had to address the challenges we were seeing due to commercial practices with pricing and co-pay charges which resulted in the negative revenue we saw’

• ‘We have taken a conservative stance to capital management as we work through the large impact of these transactions and we work on a number of legacy issues’

• ‘The Nextstellis NSP(net selling price) has been restored and we see opportunities for that to expand’

• ‘In dermatology we have introduced co-pay monitoring in a business driven by cash payments and significant negative payer action’

• ‘50% of marketing costs are misspent. The challenge is to find them and not spend them’

• ‘The problem we’re trying to solve with disentermediation in Dermatology is the Dermatologist lifestyle, over the years payers have been making their lifestyles a lot tougher and we’re trying to solve that problem for the physician and the patient’

• ‘Payers don’t like the sticker shock (high prices) they receive at the pharmacy’

• ‘We have our own online pharmacy, Adelaide Apothecary and working with GoodRx patients know within a minute what it’s going to cost them and together patients are assured of getting what they need with the prescription the physician wrote’

• ‘We’re really excited with the dermatology business model we have here we have seen significant script growth in the last 3 months. Rhofade which we bought for US$8M has returned US$5.2M in the first 2 months.

• ‘60% of Dermatology contribution coming from Oracea and Rhofade’

• ‘We’re going to use this disintermediation strategy in WH and right across the business’

• ‘WH is where we see significant growth for the next 15 years’

• ‘In WH we had a significant missed step in the launch of Nextstellis where we went after Lo-Lo (lo Loestrin Fe) and we got pegged into one profile of low bleed and women with endometriosis or fibroid issues and that didn’t really work’

• ‘We’re positioning Nexstellis in the market as Yaz-plus. We have hired 8MSLs to educate the market on this’ (Best known oral contraceptive in USA)

• ‘We’re looking to enforce the ACA to ensure women do not have any out of pocket expenses (ref to state of Vermont)’

• ‘From this moment on Nexstellis is a profitable product’

• ‘The negative cash burn so far has been due to the businesses we have sold’

• ‘There’s huge organic growth opportunities in WH and dermatology and we also see opportunities to bring in new products in WH in the future’

• Comments from Daniel Moore EVP Commercial on dermatology ‘Insurance coverage has eroded over the last 10 years, patients needs haven’t changed but access to medication they need has’

• ‘Our model allows patients to have the medication their physicians prescribe at an affordable price’
  
  Cheers