Flexion Therapeutics, Inc. (NASDAQ:FLXN) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 04:30 pm ET


Flexion Therapeutics, Inc. (NASDAQ:FLXN) Q3 2018 Earnings Conference Call Transcript


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Good afternoon, ladies and gentlemen, and welcome to the Flexion Therapeutics Third Quarter Financial Results Conference Call. My name is Daniel, and I will be your coordinator today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session at the end of today's call. (Operator Instructions)

I'll now turn the call over to the company.

Scott Young

Thanks, Daniel. Good afternoon. This is Scott Young, VP for Corporate Communications and IR. Both the earnings release we issued this afternoon and an archive of this conference call can be found on the company's website at flexiontherapeutics.com. Today's call will be led by Flexion's CEO, Dr. Michael Clayman; and he is joined by Dan Deardorf, SVP of Commercial Operations; and David Arkowitz, Flexion's CFO.

(Forward-Looking Cautionary Statements)

I will now turn the call over to Flexion's CEO, Mike Clayman.

Michael Clayman

Thanks, Scott, and thank you all for joining our third quarter earnings call. Today, we'll provide an update on ZILRETTA's launch, review the progress of our clinical programs and discuss our third quarter financial performance. Following that, we will open the call for Q&A. To begin, we remain very pleased with ZILRETTA's performance in the market and its continued growth momentum. In the third quarter, we recorded net ZILRETTA sales of $7 million, which is an 84% increase in sales over Q2. To provide some additional perspective, our Q3 sales have more than tripled as compared to the sales we recorded in Q1. And while we have consistently stated that 2018 is a foundational year, everything we are seeing at this stage of the launch aligns with our expectations for the full year, and it further bolsters our confidence in ZILRETTA's near and long-term potential.

One of the key drivers for ZILRETTA's adoption will be the introduction of a product-specific J code. And as we announced earlier this week, we are very pleased that CMS issued J3304 for ZILRETTA. This dedicated reimbursement code will take effect on January 1, 2019, and it will supersede the current Q code. While Q9993 has provided more consistent and predictable reimbursement for ZILRETTA than the miscellaneous J code we had for the first half of the year, J3304 is the most meaningful reimbursement code for our prescriber base. They have great familiarity and comfort with product-specific J codes, and we believe that J3304 will serve as an important catalyst for increased uptake of ZILRETTA in the years ahead.

Dan will provide more color on the excellent progress our commercial team is making, but I can say that my personal interactions with physicians at the recent meetings of the American Association of Hip and Knee Surgeons and the American College of Rheumatology were tremendously gratifying as I had the opportunity to hear directly from treating orthopedic surgeons and rheumatologists about how beneficial ZILRETTA has been for their patients. While anecdotal, spontaneous feedback from physicians and patients continues to grow, mirroring the clinical adoption that we are seeing in the field and further bolstering our confidence