Trevena, Inc. (NASDAQ:TRVN) Q4 2021 Earnings Conference Call March 31, 2022 8:00 AM ET
Company Participants
Barry Shin – Senior Vice President and Chief Financial Officer
Carrie Bourdow – President and Chief Executive Officer
Patricia Drake – Senior Vice President and Chief Commercial Officer
Mark Demitrack – Senior Vice President and Chief Medical Officer
Conference Call Participants
Brandon Folkes – Cantor Fitzgerald
Jason Butler – JMP Securities
Douglas Tsao – H.C. Wainwright & Co.
Jeff Jones – Oppenheimer
Operator
Greetings, and welcome to the Trevena Fourth Quarter and Full Year 2021 Earnings Conference Call. Currently, all participants are on listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce Barry Shin, Senior Vice President and Chief Financial Officer. Please go ahead.
Barry Shin
Good morning, and welcome, everyone. With me today are Carrie Bourdow, our President and CEO; Patty Drake, our Chief Commercial Officer; and our Chief Medical Officer, Mark Demitrack.
As a reminder, OLINVYK was approved by the FDA in August 2020, and is indicated in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. The important safety information, including the box warning and full prescribing information are all available on olinvyk.com.
We’ll also be making forward-looking statements within the meaning of federal securities law. These statements are subject to risks and uncertainties related to our business, including those covered in our filings with the SEC. We undertake no obligation to update these statements beyond today.
I’ll now turn the call over to Carrie for an overview of our 2021 and recent business accomplishment. Carrie?
Carrie Bourdow
Thank you, Barry. Good morning, everyone, and thanks for joining us today. 2021 was a year of progress and growth for Trevena. While we launched our novel product OLINVYK during a time that our hospital customers were navigating the changing environment of the pandemic, the lessons learned from this past year of launch have enabled us to refine our commercial strategy to drive more rapid adoption of OLINVYK in 2022.
And although we’ve experienced launch challenges, our confidence has grown in the potential for OLINVYK in our core markets. We’ve also been adding to the clinical database for OLINVYK. As you may have seen in our press release this morning, we now have positive top line data in a new respiratory physiology study in complex subjects versus IV morphine. And we’re expecting data from two other ongoing studies later this year that may further demonstrate clinical outcomes, not only in respiratory depression, but also in nausea, vomiting, and in cognitive function, all important areas that matter to healthcare providers and formulary decision makers.
We continue to advance our novel pipelines as well. Two programs I’ll highlight. For TRV045, our novel S1P receptor modulator, we began Phase 1 clinical development to support the indication in diabetic neuropathic pain patients. We expect to complete Phase 1 in the second half of this year.
For TRV027, currently being studied in COVID patients, the NIH active team led by Vanderbilt University Medical Center has continued to add sides and enroll hospitalized patients and they expect top line data from this study mid this year. Importantly, the NIH team has now expanded the trial internationally, and will begin enrolling patients outside the U.S. in the coming months.
While this study will certainly be important for COVID patients, we believe the study may also support the utility of TRV027 in other disease areas such as non-COVID acute lung injury or acute respiratory distress syndrome. Lastly, our partner in China, Nhwa, recently announced the submission of their NDA for OLINVYK. Building on this progress, we were able to unlock immediate and significant value by completing the financing we announced earlier today.
We will receive up to $40 million, backed by the ex-U.S. royalty and a small cap royalty on U.S. OLINVYK sales. This transaction strengthens our balance sheet and provides value for an asset that was very clearly not reflected in our share price. Let me now turn the call over to Patty to talk more about our U.S. OLINVYK launch activities. Patty?
Patricia Drake
Thanks, Carrie, and hello to everyone joining us today. There is no doubt that the year one launch experience of OLINVYK has come with many challenges, not least of which is navigating a novel drug launch in the middle of a global pandemic. Today, I’ll walk you through the progress that we’ve made in our commercial strategy to accelerate the launch. And importantly, I’ll share with you some early indicators that demonstrate it’s working.
There are three key actions that support the foundation of our strategy to drive even greater adoption for OLINVYK. We are focusing on core patients, we are evolving our customer-facing team, and we’re broadening our market access. Let me provide more detail on each of these.
First, in terms of focusing on core patients, we are fortunate to have a very broad indication statement. And based on growing dataset of real world evidence and our expanding clinical data profile, our research suggests that OLINVYK is a particularly compelling option for difficult to treat patients, like the elderly, obese and renally impaired. We believe this is mainly due to OLINVYK’s core attributes of rapid onset of action, no active metabolites, thus a predictable analgesic with no dose stacking, and a well-characterized safety and tolerability profile. This is a very large cohort of patients in the United States.
So we have made strategic choices in where to focus. This includes the critical care healthcare providers who focus on burn, colorectal, and open heart surgeries. The ability to segment out this population of physicians and patients who are most likely to value the profile of OLINVYK can greatly help our sales team in their commercial execution. We’ve already received feedback in the burn unit setting of the success that they’ve had, since they switched to OLINVYK due to a lack of tolerability with other agents.
The next action that we’ve taken is that we have evolved the customer-facing team shifting our strategy beyond a purely contract sales organization. We have achieved the logistical and speed to market benefits of a contract sales force, and are now ready to further strengthen our execution by advancing a Trevena key account management team.
We have two outstanding sales leaders with experience in pain management and burn to lead this team. We also have experienced hospital key account managers with existing relationships in the market. We are confident this 40-person strong team will increase our productivity and momentum for ultimate success with OLINVYK.
Finally, we broadened our market access. Now that we have meaningful awareness and interest from physicians, it’s time to drive OLINVYK utilization from the top down as well. Our Vice President of Market Access has expertise in this area. And we’re currently in discussions with some of the largest group purchasing organizations. These organizations have both the ability and interest to implement OLINVYK into their membership healthcare systems in order to improve patient outcomes. And it’s our excellent health economic data that demonstrates substantial overall cost savings for hospitals when they use OLINVYK, that is the catalyst for these conversations. Contract negotiations are ongoing, and we look forward to partnering with these organizations soon.
Last year was certainly difficult for our hospital customers. But even with delays and formulary meetings due to COVID, we still saw OLINVYK added 48 formularies and our field and medical team met with over 700 target accounts, presenting OLINVYK in depth clinical and overall value proposition. And importantly, we’re beginning to see an emergence of non-formulary clinical use evaluations as well as requests for over 200 in-service educational trainings over the past year.
This is an important signal to us. These activities are historically held after formulary acceptance. But in the slowdown or absence of formulary reviews, we’re being asked to proceed with non-formulary utilization and in-service education, demonstrating an interest and need for OLINVYK in the hospital setting.
We are also at various stages of formulary review in over 150 institutions or accounts. We’re confident the execution of these three actions of focusing on core patient, evolving the customer-facing organization and broadening our market access by a new talented team of dedicated individuals will continue to build the momentum for OLINVYK. This strategy is well aligned with our changing environment and we’re excited about the early indicators of success from our customers. We’ll continue to update you as the year progresses.
Let me turn the call over to Mark for an update on our clinical program.
Mark Demitrack
Thank you, Patty. I’d like to begin by highlighting our progress on several of our OLINVYK clinical studies that build on our strong legacy of peer-reviewed scientific literature. First, this morning, I’m pleased to report positive top line results from the respiratory physiology study led by Dr. Albert Dahan at Leiden University Medical Center. Dr. Dahan’s team used well validated methodologies to compare OLINVYK and IV morphine’s effect on respiratory function and pain thresholds. Using two different doses of either oliceridine or morphine administered in a crossover design.
Dr. Dahan’s group demonstrated that at equal levels of pain relief, OLINVYK showed statistically significant lower levels of respiratory depression versus IV morphine. These data are important for several reasons. First, it is clear that respiratory depression is the most serious adverse event related to opioid use. So reducing this potentially fatal event, even modestly, is a significant aspect of OLINVYK’s potential profile.
Second, these results replicated the findings of our previous study conducted in young healthy volunteers.
And finally, this study extends those observations in a population of elderly and overweight people, the very subset of people who are known to be at higher risk of respiratory depression, with the use of opioid medications in the post operative setting.
Overall, we believe these data provide additional evidence supporting a potentially more favorable impact on respiratory function with OLINVYK compared to IV morphine. As with all opioids, serious life threatening or fatal respiratory depression may occur in patients treated with OLINVYK. Dr. Dahan’s team will continue to analyze this study, and we look forward to working with him to see these results reported to the wider scientific community and submitted for publication in the near future.
Another study already underway is aimed at comparing the potential effects of OLINVYK and IV morphine on a broad array of cognitive outcomes, including motor performance, attention, reaction time, memory and higher order executive function. This study is being conducted in partnership with the Netherlands-based Center for Human Drug Research. And we expect initial data from this study to be reported by the middle of this year.
The second major OLINVYK study currently in progress is the outcomes study led by Cleveland Clinic’s Outcomes Research Department. This study, also known as the VOLITION trial, builds on our earlier data, and is evaluating OLINVYK’s profile on three important clinical outcomes in the post-operative setting, namely, respiratory depression, nausea and vomiting, and cognitive function. This project has begun enrolling patients and we continue to expect top line data from this study in the second half of 2022.
I’d now like to turn to our pipeline, which saw several exciting developments in 2021 and we’ll have some important catalysts coming up this year. In the ongoing study of TRV027 in COVID patients, we expect top line data in the second half of this year from the NIH funded active trial, led by Vanderbilt University Medical Center in the U.S. Enrollment in that study has been proceeding well with patient recruitment open at 46 participating hospitals in the U.S.
Recently, the active study has also begun plans to expand enrollment to international sites in the coming months. As a result of these significant accomplishments of the active study team over this past year, and in part due to the need to support their expansion to global study locations, we have elected to discontinue our participation with the international REMAP-CAP study.
This will allow us to focus our allocated resources for this opportunity in the most efficient manner possible. If results from the ongoing active study are positive, these data will help to provide insights to inform our understanding of whether TRV027 may have even broader applications well beyond COVID-19 infection alone to treat other forms of acute lung injury or acute respiratory distress.
Finally, at the start of this year, we initiated enrollment in our Phase 1 development program for TRV045, our selective S1P modulator being studied for the treatment of diabetic neuropathic pain. We believe TRV045’s unique profile differentiates it from currently available treatments in this pharmacologic class, in both its subtype selectivity, and because of the absence of effects to reduce circulating levels of peripheral lymphocytes, and animal data suggesting a potentially improved safety profile. The enrollment of our first few study cohorts is going well. And we expect to have the Phase 1 study program completed in the second half of this year.
Let me now turn the call over to Barry to discuss our financials before we open it up for Q&A. Barry?
Barry Shin
Thanks, Mark. While we continue to see OLINVYK usage at hospitals and ASCs with adjustments, we reported effectively no net sales in the fourth quarter and $498,000 for the year. Our net loss was $14 million for the quarter compared to $11.9 million for the same period last year.
For the full year 2021, our net loss was $51.6 million, compared to $29.4 million for 2020. These changes were mainly due to costs associated with our OLINVYK launch. We finished the year with $66.9 million in cash and equivalent. In addition, today, we announced a $40 million financing based mainly on our ex-U.S. royalty. We’ll receive $15 million of that upfront and the remainder on first commercial sale of OLINVYK in China and other future milestones, all with limited dilution.
Repayment is highly flexible, and based on a royalty from Nhwa, as well as a small-cap royalty on U.S. net sale. We’re very happy to welcome R-Bridge Healthcare Fund, an affiliate of CBC Group as an investor in Trevena. R-Bridge has a deep understanding of global healthcare markets, and we’re pleased that we’re able to recognize the potential of OLINVYK in China.
We’ll now open the call for question. Afterwards Carrie will provide some closing remark. Operator?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question is from Brandon Folkes with Cantor Fitzgerald. Your line is open.
Brandon Folkes
Hi, thanks for taking my questions and congratulations on the announcement this morning. Maybe just firstly, excluding adjustments, what was the OLINVYK’s sales in the quarter? And then secondly, you do seem to be generating some pretty good data, but we’ve not seen that revenue pull-through. What do you think decision makers are missing here? And then maybe lastly, can you just help us frame the review timeline of OLINVYK in China? Thank you.
Carrie Bourdow
Great. Thank you, Brandon. I appreciate it. So let me start actually with the review timeline and the data, and I’ll turn it over to Mark and then I’ll ask Barry to close on the revenue question on the adjustments.
So our partner in China, Nhwa, they’ve not announced the actual timing. But if you look at a standard review time for a product like OLINVYK in China, we’re anticipating that it will be somewhere in the second half of 2023. And Mark can provide some of the triggers. It’s not quite like in the U.S., where you’re meeting with the FDA frequently, that’s not how it’s done over there. So that’s what we’re anticipating right now.
And then as far as the new data that we’re generating for OLINVYK, we have already spoken with formulary decision makers, and we think this new data is going to be very well received. We’ve announced the respiratory physiology data this morning. We’re already starting to train our medical science liaison, that the data will be part of the hospital dossier. We’ll go back to formulary review meetings with that data as part of the dossier. And then of course, we’ll be putting it out at publications and scientific meetings.
Mark, anything you want to add around that or the comment I made around Nhwa and timing?
Mark Demitrack
Yeah, sure. Just to build on the general timing of review in China, the – upon initial filing different from the U.S., there is a period of 10 months of initial first round review, and then a company typically receives a series of questions at that point. So it’s not interactive in an ongoing way as it is in the U.S., the company then has an opportunity to respond to those questions. There’s a shorter second round review that typically is on the order of six months.
And then the scheduling of a controlled substance generally occurs concurrent with the review, again, slightly different from here in the U.S. So all told, again, although our partner has not announced their specific timing, anticipation, judging from what we know of the regulatory process, as Carrie was saying, in the latter half of next year would be a reasonable projection.
Carrie Bourdow
Great, thank you. And Barry, you want to talk a little bit about the adjustments and your comment may be?
Barry Shin
Sounds good. Thanks, Brandon. We don’t disclose gross sales figures. But I can say that the adjustments were very small and related to accruals versus actual discounts. I think that we’ve all witnessed the Omicron headwinds prevalent in the fourth quarter that continued on into the first quarter here, but we think that they are abating as we close out the first quarter. Did that answer your questions, Brandon?
Brandon Folkes
Did. Thank you very much, everyone.
Carrie Bourdow
Thank you.
Operator
Our next question comes from Jim Butler with JMP Securities. Your line is open.
Jason Butler
Hi, thanks for taking the questions. Just one, I guess another one on the commercial dynamics. Can you maybe speak to and I guess it’s going to depend based on the institution. But in institutions where you’ve been where the products being used for at least a couple of quarters, are you seeing positive trends? Are you seeing more use of the drug, more users of the drug in institutions where it can be used?
Carrie Bourdow
Yes, Jason. Hi. So I’ll start and then I’ll ask Patty to talk a lot about it, because she’s been out in the field and talking with customers, who we are, and that’s one of the things that we’re looking for. It’s why you’ve heard Patty talking about how she’s excited about the opportunities in institutions that that sort of jumped on early on right around the launch, we’re seeing expanded use sort of starts in one physician specialty colorectal, for instance, and then expands into other physician groups. So I think that’s a really good sign. In term – we look at a couple of things. As you’re describing, we look at new customers, but we also look at reorder rates. And so we’re seeing positive trends in that area.
Patty, any color that you want to provide from the conversations you’re having with customers?
Patricia Drake
Yeah, thanks, Carrie. I think what I find very interesting is that the different specialty types really have an appreciation for different attributes in the product. Obviously, in the burn space, these patients have severe pain. And they appreciate so much the efficacy of the product as well as the rapid onset and no renal adjustment. But in, for example, an ASC setting, they really are giving us feedback that they feel that they’re getting more PACU efficiencies. And they’re sharing their experience then with other healthcare providers, either in the institution or by specialty type. And so very, very well received by our early adopters, absolutely.
Jason Butler
Okay, great. And then just a couple on the respiratory physiology study. Can you just remind us how you defined and measured respiratory depression in the study? And then I get that you’re not disclosing any more data here, but any color on what kind of magnitude of benefit you would view as meaningful, what a physician would want to see? And then just lastly, can you just speak to how respiratory depression in this study compares to how you’re measuring respiratory depression in the outcome study? Thanks.
Carrie Bourdow
Yeah. Great questions, Mark. I’ll let you kick off.
Mark Demitrack
So, Jason, experimentally in this study, we induce respiratory depression by having the subject breathe the concentrated gas of CO2. So it’s done at an ISO with hypercapnic manner. So we adjust the gas to gradually increase the CO2levels. Now, the impact of that is, that is a direct way of essentially manipulating the control of the respiratory centers in the brain.
As you do that in a human being and as CO2 levels rise in the blood, respiratory rate will go up or ventilatory rate. We measure that as minute ventilation at a particular measured amount of CO2, then we administer drug in this case, two different doses of OLINVYK, two different doses of IV morphine in a crossover manner on separate occasions. And we measure the impact of the drug to inhibit or reduce that ventilatory drive.
And so what we see in this study is that there’s a statistically significant difference over time in the influence of morphine relative to OLINVYK. OLINVYK has a much reduced level of impact at equivalent levels of analgesia, because we’ve established the analgesia by also testing pain threshold responses in the subject. So we can match not only effect site concentration in the plasma of the circulating drug, but also the clinical consequence of analgesic effect.
So it’s really the most direct way of measuring the impact of a drug on the regulatory centers for respiration in the brain. Now what we look for in a clinical setting, in a patient setting, obviously, you can’t do that kind of process. You can’t take somebody in the aftermath of surgery and have them artificially inhale CO2 to induce an increased respiration.
What we look for are more downstream indicators of respiratory compromise things like SPO2 levels, or end-tidal CO2 levels or respiratory rate. And those are the very indices that we’re looking at. Then in the clinical studies, we did that in our early generation of studies and showed meaningful – clinically and economically meaningful gains relative to the contemporaneous morphine that was used. And it’s those same kind of indicators that are being measured in a more granular way in the outcome study that we’re doing with Cleveland Clinic.
Carrie Bourdow
Let me just add, Jason, I think another question you’re asking is, so why, right? So as Mark said, when you talk to anesthesiologists, and they’ll tell you that this methodology, this, what we call the VRH model, is one of the purest ways to measure respiratory depression.
And then the second thing that I think is really important for us from a commercial perspective, from a medical affairs perspective is that this was done in obese and elderly subjects. So what – what’s considered higher risk subjects, and we’re seeing that same magnitude that we’ve seen in our other studies, OLINVYK versus IV morphine. So it’s another indicator that what we’ve been seeing in normal subjects or in healthy patient populations, we’re seeing now in this this elderly obese population. So I think it’s going to be really insightful for our medical science team when they’re out talking about this data.
Jason Butler
Okay, great. Thank you. I appreciate the color.
Carrie Bourdow
Yeah, thank you.
Operator
Our next question comes from Douglas Tsao with H.C. Wainwright. Your line is open.
Douglas Tsao
Hi, good morning. Thanks for taking the questions. Just I know, I think you’ve indicated in the press release that you finished the year with 48 accounts or 48 formulary wins. And obviously, COVID sort of disrupted the progress that you were making and where you wanted to be at the end of the year. Your things have seemed to be sort of reopening knock on wood that A2 [ph] doesn’t cause another significant way. But sort of how far out or maybe some perspective on where you – when you think you might hit that targeted 100 accounts just sort of given some of the realities that we’re facing today. Thank you.
Carrie Bourdow
Yeah, thanks, Doug. It’s a great question. And so let me – one of the things that I think Patty talked about is that the dynamic has changed, to some extent in hospitals. What we used to see is that reps would go in and they present the data to a formulary committee or medical science liaisons would, they’d have formulary committees would get together, they’d have the meeting and they’d have standard meetings throughout the year.
With COVID, as you said, things were so disrupted, their staffing shortages, headspace issues, frankly, despite all the things that were going on for physicians and nurses sort of trying to think about patient outcomes. And so what we’re seeing now is formulary meetings are still getting delay, they’re starting to get back on track. But what’s happening is that physicians are still interested in using OLINVYK. And so they’re approaching their formulary committee with what we’re seeing is sort of non-formulary use in selected areas.
So colorectal surgeons are saying, “Hey, let us use it in our patient population.” And that’s getting approved. And I’ve been in the hospital arena for a long time, it’s really, fairly different from what we’ve seen in the past. And then as Patty referenced, where our reps are getting invited in to train physicians and nurses in these educational meetings. So I want to see a few more months of how things are opening up before I’ll provide guidance on formularies. But as you heard me talk about earlier, there’ll be other things like new customers reorder rates that we can provide guidance on in the out months. Does that helpful, Doug? Does it give you a sense of what happened.
Douglas Tsao
Yes, that’s helpful.
Carrie Bourdow
Yeah, thank you.
Douglas Tsao
And then for both 045 and 027, I mean, I know you’re sort of waiting data and 027, obviously, if it shows a significant benefit in COVID, that would sort of be a direct path. But I’m just curious in 027, what is your sort of interest level in pursuing other indications? And how quickly after getting data from the ACTIV study, would you look to do that? And in terms of 045, I’m just curious how quickly if the Phase 1 study shows what you – what we think it will show? How quickly do you think you can be in a patient study or Phase 2 study? Thank you.
Carrie Bourdow
Yeah, great question. So I’ll start with 027, 045, and then I’ll ask Mark to provide any additional color. So on 027, we’re already starting to map out market opportunities and the non-COVID-related acute respiratory distress syndrome or acute lung injury. Some of it just depends, and to some extent, really what the data looks like, in some of the areas that that we’ve talked about, right, some of the pulmonary areas, anti-infective areas, it’s actually more of a rare disease space, which is interesting to us, right?
So depending on what the data looks like, we potentially could move relatively quickly. And that involves a whole host of conversations that we’re starting to think about internally. In terms of 045, and you’ve heard us talk a little bit about this, our intent would be to move into a proof-of-concept study as quickly as we could, after, again, after we see the Phase 1 data. And as we get a little bit closer to the end date around Phase 1, we’ll talk a little bit more about our sense of what that Phase – that proof-of-concept setting might look like.
But Mark, let me turn it over to you and see if you have any additional comments you want to make.
Mark Demitrack
Yeah, just to sort of build on what Carrie was saying. It’s clear, if you look at the literature, the renin-angiotensin system and the angiotensin 1 receptor, in particular, there’s ongoing data constantly emerging in the scientific literature, underscoring the importance of that system in modulating the inflammatory response to acute lung injury, infectious and non-infectious acute lung injury.
So we continue to believe that the promise for that target is considerable. And there’s a variety of potential options, some that are in the rare disease arena that are of interest in thinking about it. And as Carrie said, we’re sort of constantly inspecting the literature.
Obviously, the results from the 027 study, given that that’s clearly a population that’s undergone an acute infectious insult to the lung. And also with a variety of illness, comorbidities should give us insight not only into its role with COVID, but broader understanding of the potential impact on other targets outside of COVID.
And I just echo what Carrie saying about 045. We’re pleased with the progress that we’re making so far in the initial cohorts in the Phase 1 study. And as soon as we have sufficient insight and understanding to prepare for our proof-of-concept study, we’ll be proceeding with that. So more to come on that in the coming months.
Carrie Bourdow
Yeah, and we expect to have the Phase 1 program complete the – by the end of this year. That’s, I think, what was part of your question, I think you asked.
Douglas Tsao
Okay, great.
Carrie Bourdow
Great. Thank you.
Operator
Thank you. Our next question comes from Jeff Jones with Oppenheimer. Your line is open.
Jeff Jones
Thank you. Thank you very much for taking the question, guys, and congratulations on the multiple announcements today. I think folks have done a pretty good job of asking sort of a battery of questions, I guess one detail that around for the financing announced this morning. Is there any detail you can provide around that definition of financing or commercial milestone for the final $10 million tranche? And also any detail around the REMAP-CAP program? Have that actually started enrolling? And I’ll just stop there for the moment?
Carrie Bourdow
Yeah, great. Thanks. Thanks, Jeff. REMAP-CAP had not started enrolling patients for TRV027 that the overarching study had started and is ongoing. But for 027, they had not yet begun adding patients. And so sort of that coupled with honestly, it’s more the acceleration on the NIH – in the NIH study, and then now NIH ACTIV expanding into international sites is going to allow us to focus our efforts there.
And the studies were sort of different. The NIH ACTIV studies, placebo controlled, is sort of more of the typical study that the FDA would be looking for. So it just made sense for us to sort of partner with them. And in terms of supply, we’re not paying for the study. We’re not paying for the international expansion, but we are providing drug. And so focusing our efforts there made a lot of sense.
Barry, any comments you want to make on the financing and the milestone?
Barry Shin
Yeah. Thanks, Jeff. And a lot of comments I’d like to make on the financing, I’m absolutely thrilled to be able to announce the deal. $40 million is a very meaningful amount for us, and even the $15 million upfront when you compare that against our enterprise value, you can see that it was clearly not built into our stock price from my perspective, very flexible repayment based on royalties, no financial covenants. So again, I think it’s a very solid addition to our balance sheet.
You specifically asked about the milestones. So one of the milestones first commercial sale in China, it’s pretty straightforward. That $15 million we’ll receive news of that. And then with respect to the $10 million that we receive on commercial or financing milestones, we haven’t filed the agreement yet and we’re looking at CTRs.
But I can say that on the commercial front, it’s a combination of commercial progress, both with respect to accounts and net sales or on the financing front, it’s a combination, or it can be one of either a financing transaction or a partnering transaction with an upfront amount. So I hope that does provide a little bit of color as you look to model this out.
Jeff Jones
Yeah, I appreciate that, Barry. And I guess the last question is, just since we are effectively at the end of Q1, if there’s any color you can provide on what you’re seeing in Q1 versus the end of the year. I know you’re not providing reorder rates or things of that sort, but any color into what you’re seeing into Q1 versus the end of the year? Thanks.
Carrie Bourdow
Barry, do you want to continue?
Barry Shin
And Carrie, do I want to continue?
Carrie Bourdow
Yeah.
Barry Shin
Yeah, as we mentioned, the headwinds that we saw in Q4 of last year continued into Q1. But we believe that they are abating as we close out Q1. So we will see the impact of that in Q1, but we expect – we hope that things normalize as we go into 2022 here.
Carrie Bourdow
And then Jeff, as I mentioned earlier, things like formulary wins, reorder rates, customer rates, those are things that that we’ll be providing additional information around. And we expect to be reporting 1Q here relatively soon. But we’re waiting on a few things here before we close out the quarter.
Jeff Jones
Okay, appreciate it. Thanks, guys.
Carrie Bourdow
Thank you.
Operator
Thank you. And I’m showing no further questions at this time. I’d like to turn the call back over to Carrie Bourdow for closing remarks.
Carrie Bourdow
Great, thanks. Thank you all for your questions. And as you heard on the call, while the pandemic presented unique challenges to our OLINVYK U.S. launch activities, we made adjustments where needed, we’re well positioned in 2022 for success, and I’m excited about the new clinical data we’ll have for OLINVYK, the commercial strategy that Patty outlined to accelerate our performance and the important advancements that we’ve made in our pipeline. So as you can hear, we have multiple catalysts coming up. I look forward to providing you with additional updates throughout the year. Thank you, everyone. I appreciate the time this morning.
Operator
This concludes today’s conference call. Thank you for participating. You may now disconnect.
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