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Intersect ENT (NASDAQ:XENT)
Q3 2018 Earnings Conference Call
Nov. 5, 2018 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Intersect ENT third-quarter 2018 earnings conference call. [Operator instructions] Please note, this event is being recorded. I now would like to turn the conference over to Jeri Hilleman, chief financial officer. Please, go ahead.

Jeri Hilleman -- Chief Financial Officer

Thank you, Keith, and thank you all for participating on today's call. Joining me today is Lisa Earnhardt, president and CEO. Before we begin, I'd like to remind you that we will make forward-looking statements within the meaning of federal securities laws. Actual results and timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitations, our outlook for financial performance, sales force growth, clinical studies, approval of new products and indications, and procurement of reimbursement codes and coverage, which are based upon our current estimates and assumptions, as well as other risks detailed from time to time in the reports we file with the SEC.

We disclaim any obligation or undertaking to update or revise any following statements contained herein. I'll now turn the call over to Lisa Earnhardt, Lisa?

Lisa Earnhardt -- President and Chief Executive Officer

Good morning. I'm pleased to report a solid Q3, including positive results and strong execution on the initiatives that we outlined on our last call. We have made significant progress on improving Sinuva product access and growing our field reimbursement and sales teams. The feedback from physicians and patients on their Sinuva experience continues to be enthusiastic and gratifying, and we are proud of the strides we are making on access.

Before we dive into our Q3 results, I would like to first address the status of the Sinuva J-Code. This past Friday, CMS issued their HOPPS Final Rule, which listed many new J-Codes, but did not include one for Sinuva. The final decision will be reflected in CMS's 2019 HCPC file, which is yet to be posted. However, based on the lack of the specific code within the HOPPS Rule, we do not expect to receive a product-specific J-Code in this round.

To interpret what this means, we refer back to the preliminary decision issued by CMS in May. In this communication, CMS listed up to individual payers to determine the appropriate code for submission including a miscellaneous code. Today, commercial payers have accepted use of the unassigned J-Code for prior authorization and payment and payers that have described coding in their policies have recommended use of the unassigned J-Code. All in all, while use of an unassigned J-Code adds some inefficiency to both the prior authorization and claims processes, it has served effectively for both.

We therefore expect to continue our plans to ramp Sinuva meaningfully next year. This view is supported by the significant progress we have made with payers and with the favorable experience to date in both the rate of prior authorization and payment. Sinuva has recently received positive coverage decisions by Aetna and HCFC, the largest of the Blues behind Anthem, and has also been added a formulary by both Anthem and by OptumRx. Overall, Sinuva is now covered by five out of the six largest commercial payers, representing 90% of covered lives among this large group, or 140 million lives.

We are now also starting to gain experience and realize positive coverage from regional payers as well. Finally, we do plan to submit a new code application for a J-Code to CMS for the 2019 cycle. There is precedent for success with second applications, and we feel the picture will be clear without the soon-to-be-sunset CPT codes on the register. In short, we foresee a clear path forward for Sinuva in 2019, with or without a product-specific J-Code.

Now let's switch gears to our targeted Sinuva launch. The clinical feedback, as many of you know from your firsthand conversations, has been very positive. The results are consistent with the strong outcomes in our clinical trials. Each and every patient's story reminds us of the meaningful impact this technology has on patients' quality of life.

During the quarter, we enrolled about 1,000 patients for prior authorization via our reimbursement hub. As you may recall, we had targeted 50% to 75% approval of completed prior authorizations for our early quarter to launch. I'm pleased to report that we were at the top of that range in Q3 at approximately 75%, and we expect to see that level continue to climb with experience and with expanded payer coverage. On the treatment side, 400 physicians have now treated 700 patients with Sinuva with 350 of those in Q3.

This represents solid growth in line with our expectations for our targeted launch, doubling the number of both physicians and patients from the first four months of launch. We are also pleased with the progress we have made on improving product access. We increased staffing at a reimbursement hub to reliably process prior authorization in line with our performance metrics. Including the time for a payer review, we are now consistently processing submissions in under a month.

We expect this timeline to continue to shorten as physician offices and payers gain familiarity with Sinuva. As we gain greater visibility into payer requirements, we are now better positioned to educate physicians that how to navigate both specialty pharmacy and buy-and-bill access. The number of physician offices doing buy-and-bill rose to 80 by the end of Q3, a 100% increased gain in August and September. We expect more and more physicians will be willing to include buy-and-bill access in their practice as we gain payment experience.

To support this, we are collecting data on payment history. And while still early, we observe that the vast majority of commercial claims are being paid with the remaining few in the appeals process pending additional information. Importantly, assuming physicians bill appropriately per their contracts, their payment rates are consistent with what we would expect from a physician-administered drug. That is the cost of the implant is covered along with an appropriate markup.

In addition to improving product access and payer coverage, we expanded our field reimbursement and sales teams, which will help with both Sinuva and Propel. Turning to Propel, our Q3 year-over-year growth was similar to Q2 consistent with our stated expectations. Contour continues to be a strong element in our mix at 29% of Propel family sales, and we continue to add about 50 new Propel family accounts a quarter. As discussed previously, we are expanding our sales teams to enable more with -- time with current physician users including attending cases to encourage broader usage of Propel.

We communicated in our last call that we would be adding approximately 20 sales consultants and contract reps by year end. We were pleased that we brought the majority of those reps onboard during Q3, raising our total field force to 132 field reps, an increase of 13% from the end of Q2 and 20% from the start of the year. Our focus in Q4 is to train and integrate these new team members to support 2019 growth. We believe we will continue to improve the growth of both Propel and Sinuva and are, therefore, maintaining our 2018 guidance of $106 million to $109 million.

We expect Sinuva to contribute about 4% of fourth-quarter revenue as we continue to work with physicians to establish a strong base of buy-and-bill. We are also continuing our outlook for sustained growth of approximately 20% as we expressed on our last call. Let me now turn the call over to Jeri to take you through our financial results and outlook, and I will conclude the call with a discussion of our product pipeline.

Jeri Hilleman -- Chief Financial Officer

Thank you, Lisa. Our third-quarter Sinuva revenue was just over $800,000, an increase of 59% over Q2. Our list price remains $1,275 and our net price, after adjusting for channel fees and government-mandated discounts, continues to be about $1,000 a unit. As Lisa noted, our outlook for the year remains constant.

Moving to gross margin. Our Q3 margin of 79% is in line with our continuing guidance of approximately 80% for the year, and we continue to expect gross margins to rise as we ramp volume against overhead and increase efficiencies with our new products. Our operating expenses for the quarter were $27.6 million, or $78.8 million year to date. We are growing headcount this year by about 30% to over 400 employees, and headcount comprises about three-fourths of our operating expenses.

This headcount growth is primarily in sales, manufacturing, and reimbursement. Based on timing of hires and other factors, we are now able to fine-tune our outlook for expenses to approximately $110 million to $111 million from our previous [Inaudible] of $113 million to $115 million. We believe, this growth has been impactful toward addressing our challenges, and we feel that we have a very strong and complete team in place as we look to 2019. I'll now turn the call back to you, Lisa.

Lisa Earnhardt -- President and Chief Executive Officer

Thank you, Jeri. Innovation is core to Intersect ENT. We remain committed to delivering solutions across the continuous care for chronic sinusitis sufferers. To that end, we will soon be initiating the ASCEND trial, a clinical study of a new platform product, a drug-coated balloon.

This product leverages our core competencies and proprietary technologies in both polymer science and drug delivery and enables us to address what we believe is an underserved opportunity. While current balloons are effective in opening the peripheral sinuses at the time of dilation, they do not address the underlying inflammatory process. As a result, our market research indicates that physicians prescribe steroids in over 80% of balloon procedures to manage inflammation stemming from both the disease and the procedure itself. We believe that our product, if successful, would change this treatment paradigm through local delivery of mometasone furoate at the time of dilation improving sinus patency rates and reducing the need for adjunct steroid interventions.

Further, as evidenced by the successful adoption of Propel, physicians have welcomed the combination of drug delivery with surgical interventions. We will commence a clinical study soon to assess safety and efficacy of our drug-coated balloon. The ASCEND study will be a 70-patient, randomized, blinded trial that will assess sinus patency at multiple time points. We will discuss more specifics of the trial design once this study commences in early 2019.

We anticipate completion of the study and results by the end of 2019. Depending on study outcomes in our ongoing interactions with the FDA, this study may be sufficient for a regulatory submission. If successful, ASCEND would be submitted to the FDA under the PMA pathway with an overall outlook for potential approval in two to three years. Finally, we believe that the ASCEND drug-coated balloon is highly complementary to our current offerings.

We envision the majority of the use in the office, where less severe cases are typically treated versus in surgery, where Propel implants may be used in both the ethmoid and peripheral sinuses. Sinuva is used in the ethmoid sinus, so we see no treatment overlap. There is little use of the Propel family of products in the office, so we view this pipeline product as accretive to our current product portfolio. Further, because this device focuses on sinus procedures and fits under well-established reimbursement, it would be a straightforward addition to our sales bag and, most importantly, will provide physicians an additional option for treatment of their sinus sufferers.

In closing, I'd like to reiterate that we've executed on the key objectives we laid out on our last call. We have improved product access for Sinuva, including straight lining the prior authorization process coupled with making huge strides on the national payer front. We are brick by brick establishing the foundation for buy and bill. And finally, we have significantly expanded our sales and reimbursement teams, which will help support our growth in 2019.

The team has been executing at a high level, fueled by our collective belief and the potential for localized drug delivery to become the standard of care for sinus sufferers. We are fortunate to hear patient stories each and every day that keep us focused on delivering on the potential for both Sinuva and Propel. And finally, we are pleased to advance the ASCEND drug-coated balloon as we work to offer solutions across the continuum of care for the treatment of chronic sinusitis. We remain greatly appreciative of your attention and interest.

And now Jeri and I will remain on the line to address your questions. Keith, would you please open up the lines?

Questions and  Answers:

Operator

Yes, certainly. Thank you. [Operator instructions] And the first question comes from Robbie Marcus with J.P.Morgan.

Robbie Marcus -- J.P.Morgan -- Analyst

Great. Thanks for taking the question. You've given us a lot to process on the call, almost all of it good from my sense. Maybe, Lisa and Jeri, you can start with talking about your recent improvement in reimbursement.

And give us a sense of how that affects both your sales rep productivity for the base business? And going forward, how much time is going to be needed to spend there? Because it seems like now with 75% of claims getting out, probably higher end of that, exiting the quarter, more reps are being hired, more docs are getting experience. It sounds like it's getting a lot more positive. So help us understand how we think about that heading into 2019?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. We're definitely encouraged, Robbie, about the current snapshot as it relates to coverage. Certainly, encouraged that the majority of national payers have -- are at this point covering Sinuva. So that certainly bodes well for us as we head into 2019.

That combined with the growth of both our sales and reimbursement teams just to provide further conviction around our ability to continue to drive growth in next year and beyond. I don't know if there's any specific question from -- I know you'd mentioned productivity and I think it's probably premature for us to comment on that. But we do believe those -- in particular, those two initiatives, as well as to see overall streamlining of product access will help enable our sales team to focus on what they do best, which is discussing the clinical benefits, our technology and let some of the more administrative parts of getting product access happen in more streamlined fashion.

Robbie Marcus -- J.P.Morgan -- Analyst

Yes. Maybe just to get a little more specific. If I think about last year's productivity versus this year's productivity, the reps in the base Propel business, a lot of the time was spent dealing with Sinuva reimbursement. It seems like that's improving a whole lot.

So do you want The Street to think about going into 2019 that productivity can start to improve as reimbursement becomes less of the headwind? Or should we assume that they still have to spend a significant amount of time dealing with reimbursement, now that it's still a miscellaneous code, most likely?

Jeri Hilleman -- Chief Financial Officer

Yes. Robbie, you're right. We have definitely expanded our sales team. We've also expanded the sales reimbursement team and the goal was that the sales team spends less time having to track down product access questions that could over time and should over time improve productivity.

Our most pointed focus, though, is really, as Lisa mentioned, continuing to grow the business of -- in the range of 20%, and that would really include a higher level of growth for Propel and what we've seen since the launch of Sinuva. So we're really very much focused on going into next year driving top-line growth, which over time will, of course, improve productivity.

Robbie Marcus -- J.P.Morgan -- Analyst

OK. Great. And then just lastly on the product pipeline. Have you run any trials yet to date with the drug-coated balloon that gives you confidence that you could just submit with one trial here? And I'll leave it at that.

Appreciate the questions.

Lisa Earnhardt -- President and Chief Executive Officer

Yes, Robbie. We've run a small clinical cohort, in particular, around the pharmacokinetics of the drug-coated balloon itself. I think what gives us great confidence is just our vast experience in delivering drug to the sinuses. So the work that we've done with all of our Propel and Sinuva products in combination with a lot of the work we've done in bench and animal testing gives us the confidence as we head into the ASCEND trial.

Jeri Hilleman -- Chief Financial Officer

Yes. And just to clarify, we're not sure if this will or won't be the pivotal. That's really going to depend on results. There is a potential for this to be a pivotal.

But when Lisa talked about the timelines, we said two to three years to allow flexibility there.

Robbie Marcus -- J.P.Morgan -- Analyst

Great. Thank you very much.

Operator

Thank you. And the next question comes from Bob Hopkins with Bank of America Merrill Lynch.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Hello, thanks, and good morning.

Lisa Earnhardt -- President and Chief Executive Officer

Good morning, Bob.

Jeri Hilleman -- Chief Financial Officer

Good morning.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

So – good morning. Just for the first question, I was just wondering if you could go back to the product-specific J-Code commentary that you made and maybe help us understand just from your perspective, what are the reasons why it sort of played out the way it did?

Lisa Earnhardt -- President and Chief Executive Officer

Yes, Bob. I think, the – we sort of reflect back on the May decision or the preliminary decision that CMS put forth that referenced the Category III CPT code for the placement of a steroid-releasing implant. And they asserted at that time that those codes were most appropriate and, therefore, a separate Sinuva J-Code was not necessary. As you well know and as CMS knows at this point, those codes will be sunset at the end of this year.

So we really -- we don't, at this point, have additional feedback from CMS, but that's -- our understanding would be that they just let their preliminary decision lie and that we would then reapply as of January of 2019, and at that point, those codes would no longer be active.

Jeri Hilleman -- Chief Financial Officer

Yes. Just to clarify, we don't have any further insight from CMS at this point than that, which is publicly available.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

And then in terms of the challenges that this presents to you as you look to next year, maybe you could just talk about that either in terms of challenges or lack thereof. Does this really change anything? And then in that context, I just also, while we're on the topic of next year, appreciate you guys mentioning the 20% again. But should we assume that that means that you're comfortable with the base business growing 10%? And then Sinuva revenues somewhere in the sort of $11 million to $13 million. Is that's what implied by that 20%? Are you comfortable the base business can still grow double digits next year?

Lisa Earnhardt -- President and Chief Executive Officer

Jeri will handle the second part of that question, and then I'll refer back to the first.

Jeri Hilleman -- Chief Financial Officer

Yes. Just overall, we haven't really parsed the detail and so below the 20%, we'll certainly do that when we give specific guidance. But we have said that we'd expect Propel to grow low double digits at a preliminary view, and we do expect to see continuing growth in that franchise.

Lisa Earnhardt -- President and Chief Executive Officer

Yes. Bob, then you asked earlier on about the J-Code and like headwinds might just present. And we think about reimbursement and coverage for a product we think of it as coding coverage and payments. Coding is just one piece of it.

I think we've always been very consistent that the most important part is coverage, i.e., will payers pay for the product and at what rate? And we feel like, at this point, based on our experience, in particular, in the last month or four to six weeks, where we've had a number of national payers either publish a positive policy and/or put us in formulary, we believe we're in good stead there. That said, there are some inefficiencies that we've described at NZI and previously with needing to use an unassigned J-Code. It's becoming easier for us as we flex those muscles, and it's something we believe we can get through just with group force. And we will assess our resources as needed to make sure we're doing all that we can to support physician practices in their submissions and ultimately their claims.

But we think we've always surmised all along that it's coverage that really is the most important element of driving success for Sinuva.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

OK. Great. Thank you.

Operator

Thank you. And the third question comes from Richard Newitter with Leerink Partners.

Richard Newitter -- Leerink Partners -- Analyst

Hi. Thanks for taking the questions. I wanted to start just with the Anthem and Aetna, the changes in coverage policy decisions. I know that Anthem was kind of a little bit different then Aetna, one is specifically a medical policy positive coverage.

I think Anthem was just adding it to drug formulary. Can you just describe, one, what you've seen happen, specifically, with those types of insurance prior authorization submissions and how the process has changed respectively within those two types of insurance carrier submissions?

Lisa Earnhardt -- President and Chief Executive Officer

Go ahead, Jeri.

Jeri Hilleman -- Chief Financial Officer

Lisa and I are preparing some answers, and so we are so excited. But you are right, the medical benefit is one where there's a little bit more hands-on processing and is up to the medical needs of a specific patient under pharmacy, it's a little bit more straightforward based more on product, and we have been tracking down both. It's going to be -- as we get more and more coverage, we'll get a better sense of how the product is best the more commonly processed, we have had success with both. And we can't speak specifically to Aetna, Anthem or OptumRx until we gain more experience with that coverage, but being on formulary certainly does provide additional great potential for the product coverage.

Robbie Marcus -- J.P.Morgan -- Analyst

Let me maybe just follow-up on that. So can you give us a sense, just as an example, Anthem being on formulary, does that specifically help with the specialty pharmacy submission process, maybe decrease the reliance as much on buy-and-bill for those patients or is this something that helps more with buy-and-bill? And same question for Aetna.

Jeri Hilleman -- Chief Financial Officer

Yes. It's a big question. I think it's important that we gain experience with those payer putting patients through before we comment on that and something we'll probably be in a better position to speak to next call.

Richard Newitter -- Leerink Partners -- Analyst

OK. Just -- is there some recent leadership changes in the last couple of weeks there. I'd just love to hear if there are any that you'd specifically like to call out that you think are going to -- that seem to be potential given your increased confidence either on the Sinuva launch or the base business acceleration prospects, would love to hear kind of any new people that are at the firm, that would be helpful I think.

Lisa Earnhardt -- President and Chief Executive Officer

Yes, happy to, Rich. And I think most importantly, as you may remember from our May earnings call, we shared that Rich Kaufman, who has been our longtime chief operating officer and one of our first employees, would be retiring early 2019. So we did begin a search for his placement. And as you might imagine, it's big shoes to fill.

The great news is that a lot has changed since Rich joined the company years ago. And so as we look forward, we're really able to identify and recruit some talent that can really take us to that next level from an operational-excellence standpoint. And we're thrilled to welcome, Christine Kowalski, to our organization. Her area of focus will be in operation, supply chain, manufacturing quality, information technology.

So really making the trains run on time. And so she has done similar roles at emerging growth companies as well as had executive positions at both J&J and then Guidant/Boston Scientific. So that one, in particular, is an exciting move for us, as we think about taking on our next chapter of growth. Richard is still with us and is focused on driving innovation, which is core to Richard's passions and certainly, core to us at Intersect ENT.

So we're thrilled to have him still onboard and having the innovation part -- portion of our organization, in particular, with the ASCEND product trial getting up and running, he will be with us until the first quarter.

Richard Newitter -- Leerink Partners -- Analyst

OK. And one last one just on the drug-coated balloon initiative. Is there any reimbursement consideration. I know balloons are well covered and paid for, but I'm just curious if there would be any other reimbursement type considerations, additional types of codes that would be required to have a drug-coated balloon and specifically the drug on top of the balloon part?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. We believe the existing codes in reimbursement is sufficient and will cover our drug-coated balloon offering, once we -- if and once we get to market.

Richard Newitter -- Leerink Partners -- Analyst

Thank you.

Operator

Thank you. And the next question comes from Matthew O'Brien with Piper Jaffray.

Matthew OBrien -- Piper Jaffray -- Analyst

Good morning, and thanks so much taking my questions. Just with respect to the treatment landscape, for recurrent polyps, obviously, Sinuva has got a place there, but you've got OptiNose in the space, you've got a new pharmaceutical product that's supposed to be out within the next year, which has shown pretty good data so far. So can you just talk about the landscape for Sinuva with those competitive products in the market, where it fits and how durable it will be as those products hit the market?

Lisa Earnhardt -- President and Chief Executive Officer

That's a good umbrella question, Matt. And I think I'll start with the fact that we see Sinuva as a very unique mode of therapy within there that has a very strong resonance with patients, who are looking for immediate opening and very safe local drug delivery profile and also certain cost profile. So if you compare that with the benefits Sinuva delivers to patients with other therapies that certainly will find a home in the continuum of care, intranasal steroid sprays have been used for a long time, intranasal Nasonex was actually the control arm of Sinuva. And while -- and so Sinuva really can be used alongside of intranasal steroid sprays.

I will not speak specifically to OptiNose, but I'm just speaking to the category of intranasal steroid sprays we see as complementary to the use of Sinuva. With regard to monoclonal antibodies, as a category, they have a very different mode of action, working systematically against specific molecules involved in the inflammatory cascades blocking those molecules. It's a very high commitment for patients to do sometimes biweekly injections either themselves or going to doctors' offices, there's a very different cost profile. So between the systemic, the compliance and the cost, it's a different treatment modality and will probably find its place among certain patients.

But again, we see Sinuva as having a unique broad market opportunity and continue to look to the same address of the market as we always have.

Matthew OBrien -- Piper Jaffray -- Analyst

OK. That's fair. At then as far as the drug-coated balloon opportunity, can you talk, and I may have missed this, as far as the drug that is going to be on there, the polymer that you're going to be using and then just a general market size, because you're going to be going into a category where there actually is some competition versus what you're doing today? How you're going to try to position that product versus the other balloons that are in the marketplace and from a cost perspective, etc.?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. I'll start with the question and then ask Jeri to comment a little bit on the market type and how we view that. From a technology standpoint, the drug we will be using is the same anti-inflammatory we've used on our Propel and Sinuva products, which is mometasone furoate. At this point, we're declining to talk about specifics around the drug coating, it's deliberately viewed at as a proprietary piece of the technology at this point.

So we're -- we do believe it's a unique -- very much a unique offering to be able to have a two-in-one device that could be used for these patients, in particular, in the office setting.

Jeri Hilleman -- Chief Financial Officer

Yes. And to think about market size, I mean, we've long put forth that we believe there's about 800,000 patients with early stage [Inaudible] disease who've not had sinus surgery that could be treated as a subsegment of that with growing potential is the balloon market, which we estimate to be around 200,000 procedures today with office being the largest growing segment of that. And we think that with the drug-coated balloon, there is certainly the potential to offer very different treatment and a very different profile for balloon usage than what is currently available today with the drug being available to treat local inflammation associated with the disease and the procedure.

Matthew OBrien -- Piper Jaffray -- Analyst

Very helpful. Thank you.

Operator

Thank you. And the next question comes from Chris Pasquale with Guggenheim.

Chris Pasquale -- Guggenheim Partners -- Analyst

Thanks. Lisa and Jeri, how far along are you in the process of building out the evidence to support payment under that buy-and-bill model? It sounds like you're relatively pleased with the early success. What do you think you're ultimately going to need there to make that case to physicians, kind of, across the country and across different payer groups? Is that something that requires 500 cases, 1,000 cases, can you help us there?

Lisa Earnhardt -- President and Chief Executive Officer

Yes, Chris. It's a good question. We are early on in collecting payment. Because as you might imagine, there is a natural delay that comes with the treatment and that is usually a couple of months before the physicians receive payments.

We are pleased with the fact that the vast majority of claims that we've had an opportunity to see have been paid. There's just a little handful that have gone -- needed to go through the appeals process. We have about 50 or so EOBs or explanation of benefits that we have that we're starting to be able to use with physicians, in particular, reimbursement team, as we talk to them about buy and bill and what they might be able to expect. So it still is early.

What that number is, in terms of the ideal number, obviously, this is a situation where more truly is more. And I do think we're getting to the part where we have sort of a representative fail as in terms of the types of payers, as well as across the country and those are the things that are probably most important, is making sure we have that evidence that can be used and believed by physicians across the country.

Jeri Hilleman -- Chief Financial Officer

Also as we continue to get coverage, it just creates a very different environment where physicians can look to a lot of paid positive policies. I mean, you put the policy growth coupled with the emergent picture on payment, we think that hat will help doctors make that decision to go ahead and buy the product.

Chris Pasquale -- Guggenheim Partners -- Analyst

And then I wanted to revisit the question around ASCEND. Your portfolio up until now has been built around extended-release products. How confident are you that one-time drug delivery at the time the procedure will actually be sufficient to meaningfully impact the prognosis for these balloon patients? And can you share anything from the pharmacokinetic study about how long drug sticks around in the tissue at therapeutic levels?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. We believe, there will be a therapeutic benefit during that postoperative period or the post-dilation period based on, in particular, our preclinical research. It's important to note that while the drug is delivered at one time, i.e., during dilation, there is a sort of relief over a period of time. And at this point, I'm not going to talk about how we're able to do that, but we believe based on our preclinical experience and early clinical experience and bench testing that will be able to deliver therapeutic levels of mometasone furoate.

Chris Pasquale -- Guggenheim Partners -- Analyst

Can you share what you're randomizing against? Is it commercially available balloons or is it something else?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. It's a non-drug-coated balloon.

Chris Pasquale -- Guggenheim Partners -- Analyst

Great. Thank you.

Operator

Thank you. And the next question comes from Brian Weinstein with William Blair.

Brian Weinstein -- William Blair & Company -- Analyst

Hey, guys. Thanks for taking my questions. I just want to ask about the 20% guidance for next year. You said it on the last call and you said it today.

But then I just want to see, I think, Jeri, you said in that 20% range. I don't want to get too cute on this, but I just want to clarify kind of is the guidance for next year 20%? Or is it kind of in the 20% range?

Jeri Hilleman -- Chief Financial Officer

Yes. We have been consistent to say approximately 20%, which I would feel is synonymous with -- in the 20% range. And the intent is to give more precise guidance as we complete the fourth quarter and get into the conferences at the beginning of the year. So it's not changing anything.

It's just we've always said approximately 20%. Really with the intent to paint a ZIP Code or a picture for what we expect from growth without giving pinpoint guidance prematurely.

Brian Weinstein -- William Blair & Company -- Analyst

OK. Great. And then I don't know if it's too early to talk about this or not, but can you just talk about any additional investments that you think you may need next year? It sounds like the investments that you made have started to bear some fruit, but can you talk about what you think you might need to add for next year?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. We're working through our plans, but our focus will continue to be on making sure we have the right field support, both in reimbursement and sales and that we continue to do everything we can to build up the reimbursement picture. But I think we've put a lot of headcount in place this year and we'll probably be leveraging our headcount as we go into next year, but continue to add support for Sinuva and then, of course, clinical trial spending for the ASCEND program, which is in line with our rate of historic R&D spending.

Brian Weinstein -- William Blair & Company -- Analyst

OK. Thank you.

Operator

Thank you. And the next question is from Ravi Misra with Berenberg Capital Markets.

Ravi Misra -- Berenberg Capital Markets -- Analyst

Hi, great. Thanks. Good morning. Thanks for taking the question.

So just one on the buy and bill, can you just remind us how long it's taking doctors to get paid when they actually do the -- perform the procedure after the authorization has come? And then secondly, for the ASCEND trial, you gave us, kind of, the market size there, but what gives you confidence that this technology is -- that you have Type E protection around it that -- and the competition won't be able to do a similar type of design there?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. With your first question, Ravi, the first one was with regards to the time it takes from the time that that physician gets the prior authorization to actual payment, it's important to note that, once they get prior authorization then they are treating that patient and that can -- could happen the next day or could -- usually happens a couple of weeks later, and then once they treat the patient till the time they actually get payment, it's usually about six to eight weeks. It does vary based on the patient's plan and their payer, as well as the completeness of the materials that the physicians' offices submit. But that's pretty typical.

So that's why there has been a delay in actually getting the proof, because, as you know, the majority -- we've had a ramp with Sinuva and we didn't get any sort of meaningful clinical case volumes until the summer time frame. And the second question was with regards to the ASCEND program. It's hard for us to comment on what other companies are doing in the space. We believe and we have been and continue to be the leader in localized drug delivery and that's really where this product is unique.

It was something that was built from the ground up here. And so we believe we're in a strong position both from a differentiation standpoint as well as an intellectual-property standpoint.

Operator

OK. Thank you. And the next question comes from Suraj Kalia with Northland Securities.

Suraj Kalia -- Northland Securities -- Analyst

Good morning, Lisa, and good morning, Jeri. Can you hear me all right?

Lisa Earnhardt -- President and Chief Executive Officer

We can.

Suraj Kalia -- Northland Securities -- Analyst

OK. So two quick questions. Lisa, I know you haven't given many details on ASCEND, I do respect that. What should we focus on as you guys give more details, should it be balloon design inflation pressures or timed exhibition for MS.

What's the -- I'm trying to understand what's the differentiating factor here? And the second thing, Lisa, is my math tells me you have a little over 2,800 accounts on Propel. Please correct me if I'm wrong. Can you give us an idea of how many of these sites are doing these procedures independently? And can you help us correct the needle with the 10% or close thereof growth rate for Propel? Any color would be great.

Lisa Earnhardt -- President and Chief Executive Officer

Yes. So the first question -- I'm having a little hard time hearing you, Siraj, but the first question with regards to ASCEND, it really is our proprietary drug formulation that allows us to believe we're going to be in a unique position in this marketplace. We likely won't share a lot of the details around there, but certainly we'll share more specifics around the product itself, the dose, etc., in the future as our clinical trial proceeds and we move toward commercialization. I'm not sure I caught that second question, Jeri, did you?

Jeri Hilleman -- Chief Financial Officer

No.

Lisa Earnhardt -- President and Chief Executive Officer

OK.

Jeri Hilleman -- Chief Financial Officer

I am afraid, I didn't. Siraj, would you mind reasking the question.

Suraj Kalia -- Northland Securities -- Analyst

Sure. Lisa, what I was trying to understand is Propel. The math indicates growth rate, let's say, in the 10% or low double digits. How many sites doing these cases independently of the 2,800-or-so that you have? I'm just trying to connect the dots as -- is there a fundamental change? Or is it just resources being diverted to Sinuva? Any color would be great.

Lisa Earnhardt -- President and Chief Executive Officer

Yes. There really was no a fundamental change in our perspective for Propel this year outside of the Sinuva launch, which, as you know, has been, I hate to use the word destruction, because it's a labor of love and there's a lot of enthusiasm with Sinuva, but it certainly has taken some of our sales team's time in the last quarter or two and we'd expect the same thing in the fourth quarter. But we do believe the additional resources we brought onboard in the third quarter, once they're up to speed and trained, we'll start having a more immediate impact, in particular, as it relates to the Propel franchise.

Jeri Hilleman -- Chief Financial Officer

Yes. The other thing to note, though, is that we are comparing our growth now to how we grew immediately after the Contour launch and I think that that has some effect just on the rate of growth we're experiencing at present, because, as you know, Contour really took off very quickly and very strongly. We are continuing to drive growth with all of the products and I think the way we've characterized it thus far, is in line with the additional sales resources we're putting through, through the product alignment and product access for Sinuva and all of the current factors will wane.

Suraj Kalia -- Northland Securities -- Analyst

Thank you.

Operator

Thank you. [Operator instructions] And the next question comes from Kyle Rose with Canaccord.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. Thank you very much for putting me in. Can you hear me all right?

Lisa Earnhardt -- President and Chief Executive Officer

Yes. Hi, Kyle.

Kyle Rose -- Canaccord Genuity -- Analyst

Hi. So I wanted to -- a lot has been asked, but I just wanted to talk about the sales force expansion a little bit. Maybe just kind of help us understand the type of reps you've been bringing on for the sales consultants? And then historically, as you've added the sales consultants to existing territories, what the productivity has trended like? I am just trying to get an understanding of how we should think about the contribution and over what time period they become more productive?

Jeri Hilleman -- Chief Financial Officer

Yes. Kyle, this is Jeri. I'll take that question initially. And if you think about sales consultants, they really fill a role of working more closely with doctors as they evaluate patients and go with -- think about how they evaluate patients to understand procedures.

So it's much more of a Propel-focused role and it's one that we've historically used to be a strong complement to the territory manager that really owns all the products and is fully responsible for achievements within the territory. So we've focused on bringing on those sales consultants and it's a world that we've had great success with the leveraging. Up till now, we think it fits very well with the needs we have for how we see growing Propel in the future. And then -- I am sorry, what was the second part of your question?

Kyle Rose -- Canaccord Genuity -- Analyst

Just historical productivity levels when you've added those consultants into those territories.

Jeri Hilleman -- Chief Financial Officer

Well, I think, anything to anyone, who is new in the role, is going to take some time to get up to speed. We've completed training of these sales consultants at the end of the third quarter and I think as we get into the fourth quarter, they'll be gaining experience and we would expect to see good productivity from them probably as we get into next year with some benefits this quarter.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. And then I -- just one quick question on Sinuva. I think you mentioned that you've had 400 physicians use it thus far and can you just give us a range or a little more color just to frame the physician interest. I mean, are there another 400 who are waiting for more clarity on buy and bill? Or specific, better coverage in their geographies, how do we think about that 400 in relation to the momentum and, kind of, the trajectory entry in 2019?

Lisa Earnhardt -- President and Chief Executive Officer

Yes, Kyle. We definitely are focused on those 400 physicians that was our -- goal of ours in the third quarter and will continue in the fourth quarter as we really establish the pathway to a more full commercial launch in 2019. We do think this targeted approach has served us well. We are aware of many more physicians who are interested in using the product and we look forward to serving their needs.

I think, one of the biggest hurdles at this point, and Kyle you've called it out, as just -- as we gain more experience with buy and bill as there are more positive payer coverage decisions that will help us have more confidence going more broadly to the -- we have, I don't know, around 2,500 ENTs today, who have found a role for Propel in their practice. We certainly want to walk before we run and, we believe that is the right course of action as we move forward with the Sinuva launch in the near term.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. Thank you very much for taking the questions.

Lisa Earnhardt -- President and Chief Executive Officer

Thanks, Kyle.

Operator

Thank you. This concludes our question-and-answer session. I would like to turn the conference back to Lisa Earnhardt for any closing remarks.

Lisa Earnhardt -- President and Chief Executive Officer

Great. Thanks so much, Keith. And thank you all for joining us this morning. We certainly appreciate your interest and support.

Have a great day.

Operator

[Operator signoff]

Duration: 47 minutes

Call Participants:

Jeri Hilleman -- Chief Financial Officer

Lisa Earnhardt -- President and Chief Executive Officer

Robbie Marcus -- J.P.Morgan -- Analyst

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Richard Newitter -- Leerink Partners -- Analyst

Matthew OBrien -- Piper Jaffray -- Analyst

Chris Pasquale -- Guggenheim Partners -- Analyst

Brian Weinstein -- William Blair & Company -- Analyst

Ravi Misra -- Berenberg Capital Markets -- Analyst

Suraj Kalia -- Northland Securities -- Analyst

Kyle Rose -- Canaccord Genuity -- Analyst

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