Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) Q1 2018 Earnings Conference Call - Final Transcript
May 10, 2018 • 08:30 am ET
our revenue from royalties on the sale of BENDEKA, our RTD 50 ml short infusion time formulation. We have now decided to launch our 500 ml solution which I'll refer to as big bag from now on.
If you recall, in our agreement with Teva we retained the rights to this product. It is a liquid form of bendamustine that does not require reconstitution. We will provide a more detailed view of the timing for launch shortly. I'd like to point out that although earnings were lighter this quarter, starting during the second half of the year we expect to see earnings estimates go up due to the anticipated launch of big bag, if approved. We decided to launch big bag for a few reasons. First, we feel that there is a segment of the population that requires an alternative to TREANDA, but a reduced price point to BENDEKA. Second, this will provide us with more control over our revenue growth and help us manage our business better. We expect big bag to be very profitable for Eagle generating 2 times to 3 times the EBITDA per vial compared to BENDEKA. We continue to believe in BENDEKA and that is a tremendous product with many patient and caregiver benefits. Teva is doing a very good job for us and we are pleased with their accomplishments.
We view the launch of big bag as being complementary, enabling us to provide additional value to a cost-conscious segment of the market, while at the same time allowing Eagle to increase profitability. We will pay Teva a 20% royalty on gross profit for each big bag vial and continue receiving a 25% royalty on net sales of BENDEKA. And while we are on the subject of bendamustine, if you recall several years ago, BENDEKA was awarded orphan drug designation. Surprisingly, however, we did not receive seven years of exclusivity that typically goes along with it. We sued FDA over this and had our oral arguments in court last week. It is possible the litigation results will be available shortly, perhaps two weeks to two months from now. Our view has always been that BENDEKA is entitled to the exclusivity based on the orphan drug designation.
Moreover, we believe there is a reasonable likelihood that such exclusivity would mean that TREANDA generic product should not enter the market prior to December 22 rather than November 2019. We will have to wait for the outcome of the litigation but believe that the exclusivity is warranted and we are hopeful for a positive outcome. In addition to protecting our bendamustine franchise, we focused on pursuing label expansion and additional drug delivery opportunities for RYANODEX. We'll be returning to the Hajj in Saudi Arabia from August 17th to the 23rd to conduct an additional study for exertional heat stroke. Our previous study in 2015 was shortened due to unfortunate stampede that occurred as we began our study. At that time, we selected data for 34 patients over the