Logo of jester cap with thought bubble.

Image source: The Motley Fool.

GW Pharmaceuticals Shs Sponsored American Deposit Share Repr 12 Shs  (NASDAQ:GWPH)
Q4 2018 Earnings Conference Call
Feb. 26, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, greetings and welcome to GW Pharmaceuticals Earnings Call for the Quarter Ended December 31st, 2018. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions)

Please note this conference is being recorded. I would now like to turn the conference over to your host, Stephen Schultz, Vice President of Investor Relations, Mr. Schultz, you may begin.

Stephen Schultz -- VP Investor Relations

Welcome all of you and thank you for joining us today for our fourth quarter results call. Again I'm Steve Schultz, Vice President of Investor Relations at GW. And today, I'm joined by Justin Gover, GW's Chief Executive Officer; Julian Gangolli, President of North America; Chris Tovey, our Chief Operating Officer; Dr. Volker Knappertz, our Chief Medical Officer; and Scott Giacobello, our Chief Financial Officer.

We hope you've had a chance to review our press release issued a short while ago and we expect to file our Form 10-KT tomorrow. As a reminder, during today's call, we'll be making certain forward-looking statements. These statements reflect GWS current expectations regarding future events including but not limited to statements regarding financial performance, clinical and regulatory activities, patent applications, timing of product launches and statements relating to market acceptance and commercial potential. Forward-looking statements involve risks and uncertainties and actual events could differ materially from those projected herein. A list and description of risks and uncertainties associated with an investment in GW can be found in the Company's filings with the US Securities and Exchange Commission. These forward-looking statements speak only as of today's date, February 26th, 2019. Finally, an archive of today's call will be posted to the GW website in the Investor Relations section.

I'll now turn the call over to Justin Gover, GW's Chief Executive Officer.

Justin Gover -- Chief Executive Officer

Thank you, Steve. And welcome to all those who are able to join us. With Epidiolex launch this past November, we are excited to report US sales for the first time. This initial two month selling period was primarily about setting the successful commercial wheels in motion for 2019, which is effectively the product's launch year. As we enter this year, we are pleased with the high level of awareness and the interest among physicians, strong demand from patients and a reimbursement landscape that is favorable. These factors are driving a prescription growth trajectory that is encouraging and one that we believe will result in the successful market introduction of this important new treatment option. In today's press release, we have chosen to provide you with specific prescriber and patient metrics to help investors develop a more accurate understanding of the product launch.

Beyond the two months of revenue in the quarter, we are also sharing patient start forms and prescriber numbers for those two months, which offer a view to early demand as well as prescription growth from December to January, which offers a view of prescription trends into the new year. I do want to note that we are providing these metrics to offer investors more color, specifically on the initial launch period and we are not committing to providing each of these metrics on an ongoing basis. In a moment, Julian will offer additional perspective on the early Epidiolex market dynamics.

Beyond the United States, we are now in the final stages of the European regulatory review of Epidiolex, with the CHMP recommendation expected in the second quarter of this year. In anticipation of a positive outcome, our European commercial preparations are in the final stages, for commercial launches in the first five countries later this year. Chris Tovey, our Chief Operating Officer, will provide more on these preparations later on this call. We also expect 2019, to be a year in which we continue to advance research efforts in several key programs including new indications for Epidiolex, Sativex US developments and other programs. Volker Knappertz, our our Chief Medical Officer, will provide an update on these pipeline developments later in the call.

Finally, on this call, Scott Giacobello, Chief Financial Officer, will review our financial results. Let me now hand the call to Julian for his update. Julian?

Julian Gangolli -- President, North America

Thank you, Justin. I wanted to begin by expressing how pleased we are to see the stronger level of support for Epidiolex in these first few months of commercial availability. We always believed that Epidiolex had the potential to become an important new treatment option within the epilepsy field and we are encouraged by the fact that early into the launch, we are seeing Epidiolex demand coming from both major academic epilepsy centers as well as private practice epilepsy clinics. Sales organization has to date interacted with about 70% of the target universe of 5,000 physicians.

In addition, 100% of all Level 3 and 4 epilepsy centers have been called on by our sales organization. These interactions have also been supported by an extensive series of educational broadcasts and speaker programs to support the launch with over 600 physicians attending these educational events. We have also hosted approximately 160 local events with patient advocacy organizations as they represent an important channel of communication and sharing within these patient communities.

Turning to demand. Just to remind everyone on the call, the commercial launch date for Epidiolex was November 1st of last year. Through the first two months of launch to December, over 4,500 Epidiolex new patient enrollment forms were received. In the same two-month period, over the 500 physicians, out of our target audience of 5,000 physicians generated dispensed prescriptions. We are highly encouraged by this level of new patient enrollment and prescriber activity in just the first two months.

In light of the short selling period from November 1st to December 31, we thought it would be helpful to provide investors with some color on activity in January in order to shine some light on initial trends beyond the two-month time period. Prescription growth in January 2019 over December 2018 was approximately 150%. We are encouraged by this month-on-month growth but we'd like to point to two important factors that have contributed to the strong growth in January.

The first is that the extent of demand in the first month of launch namely, November Limited our hubs ability to process new patient enrollments in a timely fashion, that coupled with the standard new to market block that some payers used to regulate and control new product introductions, created a bolus of commercial patients eligible for reimbursement in the January timeframe. In addition, many of the states, only made their coverage determination known in January of this year, again, causing another bolus of Medicaid patients to get prescriptions filled in January.

Building on the payer discussion, I'd like to update investors on our payor initiatives. Over the last 18 months, we have shared with you that one of our major priorities has been engaging with payors. As I mentioned earlier, both in the commercial and Medicaid channels, it is not unusual for plants or states to institute a new to market block before they make a coverage determination. This could make the process of getting prescriptions dispensed onerous during this time period.

We are very encouraged however that many payers early into the launch have understood the value proposition for Epidiolex and have made a coverage determination for the product. Turning first to the commercial payers, building on our early win in November with Express Scripts which placed Epidiolex as a preferred brand on their national formulary, we have seen a number of the major payors in December and January make favorable coverage determinations. If we look at all commercial lives covered in the United States, 80% of lives now have a coverage determination with 60% of all lives with either no PA or PA to label.

Turning to State Fee for Service Medicaid as of the end of January, 99% of states covered lives have made a coverage determination, with over 50% of them with either open access or a simple PA to label. And in Managed Medicaid, again as of the end of January, 90% of lives have a coverage determination, 10% are uncovered and some 30% with a PA to label. The balance have coverage, but many require a second requirement be met, such as a failure on another AED or some other requirement. Overall, we are happy thus far with our payor coverage and our goal for 2019 is to work on reducing the PA burden for the physician and work with those payors that have not made a coverage decision or where improvements can be made.

I did want to briefly touch on our distribution model enhancements. We launched Epidiolex in November with a closed in network set of providers, including a hub vendor, the triage's new patient enrollments to one of our five specialty pharmacies. As I mentioned earlier, due to the meaningful demand generated in the first month, it became clear that we needed to improve efficiency, both at the hub and the speed with which the specialty pharmacies needed to move through the PA process.

During the November, early December time frame, it was taking somewhat greater than four weeks in some cases to fill product. We instituted a number of enhancements, including significantly improving the hubs triage efficiency and also opening up a number of other specialty pharmacy sites including some 40 institutional based specialty pharmacies, i.e. SPs that reside within a key academic medical center, and in addition, we have opened up a number of CVS and Walgreen community-based specialty pharmacies, bringing our distribution network to about 130. The impact of these enhancements has been significant, with many dispensing locations now being close to key epilepsy centers, which is a major benefit for patients, caregivers and physicians.

In addition, the overall effect of these changes has been to meaningfully reduce the time it takes from presentation of the prescription to dispense or what is known as time to fill. We believe this retail light model will serve the needs of physicians, patients and caregivers over the coming years.

Looking qualitatively at the prescriber base feedback, we see that clinicians are focused on their young LGS and Dravet syndrome patients first. They have also indicated that due to the complex nature of the disease, and the number of concomitant drugs, they are likely to titrate Epidiolex with the label guidelines, titrating to 10 milligrams per kilogram and observing the efficacy effect before titrating up to higher doses. So these early months are also titration prescriptions which is informed as you model early revenue.

We are now actively migrating the approximately 900 expanded access and open label extension patients to commercial product. This transition is expected to be complete by end of the second quarter for most of these patients. I know that many of you have done physician course to gain a sense for early interest. We've been running our own waves of primary research since launch with over 200 healthcare providers or HCPs to assess their initial perspectives. What we found was that HCPs exhibited high awareness of Epidiolex FDA approval and recent commercial introduction. HCP characterized existing LGS and Dravet patients as being highly refractory and few are adequately controlled that's making the vast majority immediate candidates for Epidiolex.

55% of these respondents indicated that they already prescribed Epidiolex with 92% expecting to increase their prescribing in the next three months. 89% have been asked by patients or caregivers about Epidiolex specifically with 79% having being asked about Epidiolex on a weekly basis. I hope these observations are consistent with what you have heard in similar surveys. Our marketing and medical information teams continue to be very active in the marketplace, delivering an extensive array of resources and materials to support the sales team as they educate healthcare providers, caregivers and patients. Our medical information team hosts a dedicated in-house support center for both caregivers and HCPs with the objective of providing high quality, consistent and comprehensive information in an empathetic and caring manner. This resource is being widely utilized.

Finally and perhaps, most importantly we've been heartened by the number of spontaneous reports that we have received both from physicians and caregivers as to the meaningful difference, Epidiolex is making in patients' lives and the reduction in seizures that these particular patients are experiencing. Overall, I am encouraged by the high level of interest from physicians and patients, encouraged by the number of very important commercial and state payors that have made early and favorable coverage determinations and that our world-class US Epidiolex commercial team is executing the launch plan effectively. The metrics we share today are we believe positive and support our belief of a successful launch year for Epidiolex here in the US. In Europe, we are also making significant progress.

Let me now ask Chris Tovey, GW's COO, to provide an update on Europe commercialization. Chris?

Chris Tovey -- Chief Operating Officer

Thank you, Julian. In Europe, we look forward to the CHMP opinion in the next quarter. It is one quarter later than previously communicated for two reasons; first, we've been keen to update the file to include the results from the second positive Dravet trial reported to the awards the end of last year, which we believe will be very supportive and important for label discussions. Second, we've taken administrative steps related to Brexit, which has necessitated the transfer of the file from our UK affiliate to a Continental European affiliate. Subject to a positive CHMP recommendation, formal EU approval would occur two months after that opinion.

Turning to commercialization now, I wanted to start by reinforcing that we strongly believe that European commercialization will benefit from sharing a common brand name Epidiolex with the US market. One small point to note though is that the European brand name while sounding exactly the same as the US name is spelt slightly differently with letter of Y in place of the second letter I in the US brand name(ph)methodnics .

Moving on to preparations, we're now in the final stages of the Epidiolex European medical and commercial build out and are planning for launches in the five major European markets starting in 2019 with exact timing dependence on securing appropriate pricing and reimbursement. We are now trained sales force for the early launch markets of France and Germany. Additionally, EU country launches are expected to start in 2020 and our commercial leadership team is currently focused on completing necessary pricing and reimbursement pre-launch activities, which should been encouraged by strong engagement from the respective reimbursement authorities.

The extensive medical and pre-commercial activities required to deliver a successful European launch also continue and we're actively connecting with the key physician communities we plan to serve. We completed national advisory boards in all the major markets and we will continue to have a significant presence and data exposure at key national and International Congresses throughout this year to reinforce the successful activities over the last 18 months.

Based on recent primary research in the EU five countries, awareness is high among specialists and typically, they have patients in their clinics on a weekly basis asking for CBD. In addition, this market research, also showed that spontaneous awareness of Epidiolex was similar in the EU five countries compared with that recorded during the US pre-launch period. The GW European commercial organization is deploying a hub-and-spoke model for the initial EU five launch phase, comprising a centralized and very experienced GW team, working closely with a high quality country based contract customer-facing organization, and across the five major markets we plan a total of 17 sales professionals and 17 MSLs, a model that reflects the concentrated prescribing base in Europe, and the high science approach we plan.

Looking now at manufacturing, which also falls under my responsibility. Our commercial manufacturing supply chain is running very smoothly. We are confident that our capacity is more than sufficient to make sure launch requirements in both the US and Europe and our manufacturing expansion plans are on track to service what we expect to be robust, long-term demand.

Thank you and let me hand the call to Volker for his update.

Volker Knappertz -- Chief Medical Officer

Thank you, Chris and good day, everyone. I'm pleased to report to you today that all three core elements of our pipeline are progressing well. These are Epidiolex and its life cycle management, development of Sativex for the US market and our clinical pipeline programs with the time of primary focus on CBD.

Regarding Epidiolex lifecycle management, we are working on important clinical developments, as well as formulation enhancements. On the clinical front, we are currently focusing our efforts on tuberous sclerosis complex or TSC and Dravet syndrome. TSC affects approximately 50,000 individuals in the United States and 1 million individuals worldwide both children and adults. Epileptic seizures are the most common clinical manifestation of TSC affecting more than 70% of patients. Comorbidities include cognitive impairment, autism spectrum disorder and neuro behavioral disorders.

The results from the TSC field trial are expected in the second quarter of this year. In this trial, we are testing doses of 25 milligrams per kilogram per day and 50 milligrams per kilogram per day, which chosen based on open label experience in TSC patients from the expanded access program. These doses are higher than those tested in the Dravet and LGS trials and will provide useful additional information on both efficacy and safety at these different dose levels.

The primary endpoint of this trial is the change in frequency of seizures associated with TSC during the treatment period compared to baseline. This primary endpoint shared some similarities to that of the LGS and Dravet pivotal studies. But it also includes TSC associated seizures, which consist of focal but it also includes TSC associated seizures, which consist of focal seizures with and without impairment of consciousness or awareness, focal onset seizures with secondary generalized convulsive seizures and to generalize seizures that are accountable. In the previous Epidiolex epilepsy development program, several of these seizure types were responsive to Epidiolex. Subject to positive results, we expect to file a supplemental new drug application for the TSC indication in the fourth quarter of 2019.

Shifting to Rett syndrome, we have opened the IND for pivotal placebo-controlled trial in 252 patients and expect this to commence in the second quarter of 2019. Regarding Epidiolex formulation enhancements, we have developed a capsule formulation and an improved oral solution, both of which have promising intellectual property protection potential. Phase 1 work on both these formulations is under way and we believe that these initiatives will be valuable elements of our life cycle management strategy for Epidiolex. Beyond Epidiolex, Sativex represents an exciting late stage pipeline opportunity for GW.

We believe that the most rapid path to FDA approval for Sativex is for an indication of spasticity in multiple sclerosis. That reminds you that Sativex is currently approved in over 25 countries outside the United States in this indication. In December 2018, we held a highly constructive meeting with the neurology division of the FDA and believe that we now have a good understanding of the optimal regulatory pathway for this product in the US. This centers on conducting an additional pivotal clinical trial to buttress the wealth of existing clinical trial data. We expect to commence this trial toward the end of this year.

Importantly, Sativex also represents an exciting opportunity in the US beyond MS spasticity where CBD/THC botanical product is scientifically appropriate. But with over 10 placebo-controlled trials of Sativex completed in other indications, we believe there are numerous follow-on indications to explore. As an example of the breadth of opportunities that Sativex may present, you may have read recent media coverage regarding an investigator-led study that has recently commenced in the United Kingdom to evaluate Sativex for the treatment of patients experiencing symptoms of agitation or aggression associated with their dementia.

As many of you appreciate this can often be one of the most challenging aspects of the illness, both for the person with dementia and those caring for them. This study will evaluate whether it's feasible and safe to treat agitation in people with Alzheimer's disease with this medication. There has been no new dementia treatments in over 15 years and it is a vital that we develop and understand the contribution cannabinoids can make in improving the symptoms and lives of people, as well as their caregivers.

Regarding cannabidivarin or CBDV, we are pursuing development of this molecule in the field of autism spectrum related disorder. This program includes a Company-sponsored open-label study in autism, which we expect will include approximately 30 patients, an investigator-led 100 patient placebo-controlled trial in autism spectrum disorder to commence in the first half of 2019 and an open label study in Rett syndrome with seizures, which is due to commence in the first half of 2019, as well.

Finally, we expect to actively advance our IV CBD formulation in a condition called neonatal hypoxic-ischemic encephalopathy or NHIE by commencing a Phase 2 clinical trial in the second half of 2019. We also continue to evaluate the promising data from both the glioblastoma and schizophrenia Phase 2 studies with a view to advance these programs and we'll update you on our next steps during the course of this year. Thank you. And I look forward to updating you regarding our progress over the course of 2019.

And let me now hand the call to Scott Giacobello to provide the financial review.

Scott Giacobello -- Chief Financial Officer

Thank you, Volker and good afternoon. I'll now provide some high level comments on GW's financial results for the three months ended December 31st, 2018. Our results are presented in accordance with US Generally Accepted Accounting Principles in US dollars. As previously communicated, we changed our year-end from September 30th to a calendar year-end. As a result, we will file the requisite transition report on Form 10-KT shortly with the SEC and this filing will include a more detailed discussion of our results.

Starting with revenue. Total revenue for the quarter was $6.7 million, an increase of $2.7 million from the prior-year quarter. This increase is due primarily to Epidiolex net sales of $4.7 million in the quarter, following the November launch. Moving to R&D spend, total research and development expense for the quarter was in line with the previous quarter at $29.1 million. This result represents a decrease of $7.1 million from $36.2 million in the prior-year quarter. This decrease is mainly due to costs related to the scale up of Epidiolex growing and inventory build, which were expense that incurred in the prior-year quarter. Following approval, these costs are now capitalized in inventory.

Turning to SG&A. Selling, general and administrative expenses increased to $49.1 million in the quarter from $25.2 million in the prior-year quarter. This substantial increase is primarily the result of the build out of our commercial operations in both the US and Europe and costs related to the November launch of Epidiolex in the US. The current quarter spend represents a slight decrease from the previous quarter spend of $52.7 million, due to one-off US launch expenses incurred in the previous quarter. This has all resulted in a net loss for the quarter of $71.9 million compared to $61.8 million in the prior-year quarter.

Moving to cash flow. Net cash provided by financing activities was $324.5 million in the quarter, reflecting the equity financing completed in October. Capital expenditure for the quarter was $18.8 million, reflecting continued investments in the expansion of our cannabinoid production facilities. Net cash used in operating activities for the quarter amounted to $74.5 million compared to $51.6 million for the prior-year quarter due mainly to the increase in SG&A costs previously discussed. The resulting net increase in cash and cash equivalents for the quarter amounted to $236.6 million. At December 31st, we held closing cash of $591.5 million.

Turning to guidance. Operating expenses for the quarter ended December 31st, 2018 were $80 million. We expect operating expenses for the year ended December 31st, 2019 in the range of $395 million to $425 million, reflecting the ramp up of the Epidiolex launch in the US, launch preparations in Europe and continued investments in our R&D portfolio. We also anticipate capital expenditure in the range of $30 million to $40 million, related mainly to manufacturing expansion.

Thank you. And I'll now hand the call back to Justin.

Justin Gover -- Chief Executive Officer

Thank you, Scott. In closing, early indications give us confidence that the Epidiolex launch is on track to show strong and consistent growth. I remind you, though, that it is very early days and we have much to learn in the coming quarters in order to establish a clearer picture of the sales trajectory. Looking ahead, through 2019, we look forward, not only to continued commercial execution, but also to maximizing the Epidiolex opportunity by expanding into areas such as TSC and Rett syndrome, launching in Europe, enhancing formulations and continuing to broaden exclusivity protection.

We continue to believe that our Orange Book-listed patents and other approaches to the lifecycle management offer the very real prospect for exclusivity to extend beyond the orphan protection period. With the expected commencement of the US Phase 3 clinical program for Sativex, a product for which we already have a wealth of data, we believe that GW is already demonstrating that our platform has real value and that Epidiolex should be the first of many novel cannabinoid medicines for GW to commercialize. We are world leaders in cannabinoid science with a 20-year history of cannabinoid know-how, intellectual property, manufacturing expertise, basic science, as well as dozens of completed clinical trials. We firmly believe that GW is well positioned to leverage these trends to continue to create meaningful near-term and long-term value for investors.

Thank you for your time today and for your interest in GW. And I would now like to open the call for few questions.

Questions and Answers:

Operator

Thank you, ladies and gentlemen. We will now be conducting our Q&A session. (Operator Instructions) Our first question comes from the line of Salveen Richter from Goldman Sachs. You're now live.

Salveen Richter -- Goldman, Sachs & Co. -- Analyst

(technical difficulty)

Justin Gover -- Chief Executive Officer

Salveen, I'm sorry to interrupt you, but we can't hear. Your line is just -- coming out.

Salveen Richter -- Goldman, Sachs & Co. -- Analyst

Can you hear me now?

Justin Gover -- Chief Executive Officer

Yes, try again.

Salveen Richter -- Goldman, Sachs & Co. -- Analyst

(technical difficulty) Can you give us a sense of what it was in December?

Justin Gover -- Chief Executive Officer

Honestly, I'm afraid we can't hear. Can you -- if you could, email, Steve the question and we will be sure to respond on it during the call. I apologize, Salveen, but we just can't hear enough to make sure we've understood the question.

Salveen Richter -- Goldman, Sachs & Co. -- Analyst

All right.

Justin Gover -- Chief Executive Officer

All right, thank you. We'll come back to your question as soon as you email, Steve. So, operator, if we go to the next question please.

Operator

Certainly. Our next question comes from the line of Tazeen Ahmad from Bank of America Merrill Lynch. You're now live.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Hi, good afternoon guys. Thanks for the questions. And congratulations on the strong launch so far. Justin, I just wanted to get a little bit of color, if we cut on the metrics on the script. Can you give us some an idea of what percent of the scripts were written for Dravet versus LGS?

Justin Gover -- Chief Executive Officer

Yes, no we can't actually Tazeen. So we don't see information on the indication itself. So we're blind to that information. So what we're able to know is the script and the physician that writes the script, but we don't have identifies for the indication.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Would you know how many patients that received scripts are from your clinical trials versus completely naive to Epidiolex.

Julian Gangolli -- President, North America

Hi, Tazeen, this is Julian. Certainly in the first two months of launch, the vast majority of those patients are naive to Epidiolex, so they are brand new patients. I think we've consistently stated that the OAP and EL -- the extended -- the open label extension and open access group. We would be bringing on later in the launch and that's planned for beginning Q2 end of March, beginning of April. So a large proportion of the OLE and EAP patients will be coming over then. So all the patients, so the vast majority of patients that we are seeing are currently naive to treatment, Epidiolex treatment obviously.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Okay and then the last one from me and then I'll hop back on queue is, are you getting any color on how much of the scripts being written or other than for Dravet or LGS, obviously you're not promoting it that way, but are you able to see what those numbers look like?

Julian Gangolli -- President, North America

We're not. Obviously, when a prescription is written the indications for that prescription is not included on the prescription form, and we are very early on, this is two months into the launch of the product. It's very difficult to get any, what I'd call secondary metrics with regard to what's on and off-label. What I would say though is, it would appear that the physician universe have accepted and embraced our our strategy of please get your Dravet and LGS patients lined up, first, because those are the ones that are indicated for this product and we want to make sure that that journey for those patients is as quick as possible.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Okay, thanks guys.

Operator

Thank you. Our next question comes from the line of Phil Nadeau from Cowen & Company. You're now live.

Phil Nadeau -- Cowen & Company -- Analyst

Good evening. Congrats on the launch and thanks for taking my questions. First on the $4.7 million in revenue that you booked in Q4. Do you have a sense of how much of that revenue is due to prescriptions being filled versus how much is sold into the channel, whether it's the initial specialty pharmacies that are associated with the extension of the distribution network?

Julian Gangolli -- President, North America

Phil, this is Julian, in the first two months of launch, we don't see a lot of inventory build. We have a pretty fast distribution mechanism, so the amount of product that needs to be held at the specialty pharmacies is relatively light. We have a 24-hour ability to get product into those. We do use a specialty distributor that then provides onto some of the other distribution sites and there's nothing particularly out of hand there. So this isn't the typical inventory build model that you have for let's say a normally retail product, so there isn't a lot of inventory in the channel at this present moment.

Phil Nadeau -- Cowen & Company -- Analyst

Got it. That's very helpful. The second question is on the 4,500 patient enrollment forms that you cited. Do you have any early read on what proportion of those will eventually become patients or is it too early to know what proportion are going to be denied.

Julian Gangolli -- President, North America

We are tracking that, and as I said in our prepared remarks, a number of those patients, although enrolled, their plan may not have made a coverage decision either based on Medicaid or based on their commercial lives. So some of those are just coming good now. So what I think is important to realize is that demand from the physician and patient community is high and we're obviously working on making sure that a large proportion of those get translated into dispense scripts. But for the first two months, it is difficult to give a accurate fix on that.

Phil Nadeau -- Cowen & Company -- Analyst

Great. And then just one last question, clinical question. You noted in the prepared remarks, that GW supplemented the EU filing with its second Dravet trial. Just curious why was that filing supplemented, was is it something that the EU asked for or something you took upon yourself to do to make it that much stronger?

Volker Knappertz -- Chief Medical Officer

Yes, no, thank you. This is Volker Knappertz. We have been in close communications with the CHMP and their raptors. During the review process when the data became available, it was deemed very helpful from their side to add it and would help us labeling in the EU.

Chris Tovey -- Chief Operating Officer

Phil, hi, this Chris -- Phil, this is Chris Tovey. I think the other thing in the EU that's important is the label and the actual label that's approved is extremely important in pricing and reimbursement. So it's very beneficial to us to have that second Dravet study data in the label, so we could use it in pricing reimbursement discussions.

Phil Nadeau -- Cowen & Company -- Analyst

Perfect. Thanks for taking my questions and congrats again.

Operator

Thank you. Our next question comes from the line of Paul Matteis from Stifel. You're now live.

Paul Matteis -- Stifel -- Analyst

Great, thanks so much guys for taking the questions and congrats on the early progress. Curious if you help clarify, throughout the quarter you've talked about how the time to get drug shipped has significantly improved. Of the patient starts saw in the fourth quarter, what proportion of those were in December versus November? Where they heavily back-end weighted?

Julian Gangolli -- President, North America

Paul, I would say yes. And also meaningfully a number of those early starts both in November and December got fulfilled in January. And the reason for that is, as I mentioned in the prepared remarks, a number of the commercial plans only made coverage determinations based on a January presentation of the prescription and/or Medicaid. So we did have a number of plans that came live, if you will, in the January timeframe that we knew were coming live. So they were either triaged into January or held so that they could get fulfilled. So it's really, the month of December, back-end of December and early January is when we saw a large percentage of the bolus being released.

Paul Matteis -- Stifel -- Analyst

Okay, thanks. Julian. And then in the Expanded Access program, of the patients that are in there today, if I remember correctly that patient group was mostly afflicted by epilepsy outside of Dravet and LGS. I guess, is that the case and your expectation for these patients converting to commercial drug, is your expectation that these patients out of Dravet and LGS will broadly transition on to pay drug from payors in kind of, over say the next six weeks to eight weeks or maybe, not six weeks to eight weeks, maybe we got four months to five months? Thanks.

Julian Gangolli -- President, North America

And that's exactly, your observation is right on in terms of the split between what we've call the open label extension, which is part of the pivotal study group, which are a Dravet and LGS Group, as compared to the EAP. The EAP is a larger cohort of patients and they have various conditions in there. The reason exactly for us waiting until we got stabilization of payor coverage was to help ensure that those individuals who did not have Dravet and LGS that the payor community was in a position to at least make a determination as to whether or not they're going to supply product to those individuals. So that's why we started doing that transition in the February time period and we will continue that through until -- obviously, those patients successfully moved over to commercial product.

Paul Matteis -- Stifel -- Analyst

Okay, great. And if you don't mind, just one more quick clinical question. On TSC, can you just walk us through the data and the rationale supporting dosing up to 25 mg/kg and 50 mg/kg? Did you find that 10 mg/kg to 20 mg/kg weren't enough in this population? Any context, you can provide would be pretty helpful there. Thanks.

Chris Tovey -- Chief Operating Officer

Yes, hi. So these decisions on dosing were made quite a long time ago when the studies were initiated. So I think, dosing information was derived from what was experienced in the Expanded Access Program. But also it was informed by the Dravet decision to go and Dravet with 20 mg/kg and then 20 mg/kg and 10 mg/kg and in LGS to go with 10 mg/kg and(ph)20 20 mg/kg and 20 mg/kg . And I think at the time, there was an opportunity to see once it was understood that it was safely possible to dose to 25 milligrams and even up to 50 milligrams to systematically study this. And because TSC was the third indication that was initiated if the decision was made to do the dose escalation to higher doses in that study. So there is no specific reason or any reason from an efficacy perspective for that choice. I think, it's a purely a choice of exploring a full breadth of dose range within the clinical trial program in refractory childhood-onset epilepsies.

Paul Matteis -- Stifel -- Analyst

Okay. Got it. Thanks so much for taking the questions.

Operator

Thank you. Our next question comes from the line of Cory Kasimov from JP Morgan. You're now live.

Cory Kasimov -- JP Morgan -- Analyst

Hey, good afternoon guys. Thanks for taking the questions and all the commercial color. So you indicated in your prepared comments that the time to fill was four weeks or more to start. I am curious what that's come down to as you've made the process more efficient. You indicated it came down, but could you give any more color on just how much it's come in?

Julian Gangolli -- President, North America

We haven't provided color there because we are still working there. We're early into some of these coverage determinations. So, what we don't want to do is be held to a number that we can't replicate. But what I would say it's meaningfully come down to the point at which, it's within normal expectations from specialty pharmacy.

Cory Kasimov -- JP Morgan -- Analyst

Okay, that's helpful. And then can you provide any early view, I'm not sure if it's too soon or not into the dropout rates that you're seeing and how this might compare to your Phase 3 trials?

Julian Gangolli -- President, North America

No, that's very early Cory for us in terms of discontinuation of dropout rates. So I think, as we move forward, we may be able to have a better understanding of what that is. But at this present moment, just because of the coverage determinations, it's very difficult to tease apart what has been denied and what is a walk away. So that's, until that platform stabilizes, those numbers are not very particularly helpful.

Cory Kasimov -- JP Morgan -- Analyst

Okay, it makes sense. And then lastly, I'm curious if you have any comments on the recent noise on various social media platforms around supply constraints with Epidiolex?

Julian Gangolli -- President, North America

So, Cory, I'm actually very pleased that you brought up that specific question. Because we do want to make an absolute comment here that with regard to supply -- there are no issues with regard to supply into the United States and in fact when you read through that particular social media string what the issue was around payor coverage and not the ability to get product. And we've resolved that -- we haven't resolved, but that patient has resolved it with that particular payor. But with regard to supply into the United States, we can say with absolute confidence that we are in a very good place to supply the US marketplace.

Cory Kasimov -- JP Morgan -- Analyst

Okay. Terrific. Thanks again for taking the questions.

Operator

Thank you. Our next question comes from the line of Marc Goodman from SVB Leerink. You're now live.

Marc Goodman -- SVB Leerink -- Analyst

So just to be clear on a few things, you said that there were 130 distribution points now. Is this the same apples-to-apples from the 45, I think, you were referring to a month ago?

Julian Gangolli -- President, North America

That's correct, Marc. Yes.

Marc Goodman -- SVB Leerink -- Analyst

That's correct?

Julian Gangolli -- President, North America

Yes, so what we have done is in addition to the specialty pharmacies that exist within some of the major academic medical centers and networks, we have also increased, what are the CVS and Walgreens community-based specialty pharmacy locations which are -- some of them are actually co-located within these academic medical centers as well. So that 43 going to 130 is an apples-to-apples comparison.

Marc Goodman -- SVB Leerink -- Analyst

And when these prescriptions are being written, you don't get any information at all about whether they're being written on label or off-label at all?

Julian Gangolli -- President, North America

Correct.

Marc Goodman -- SVB Leerink -- Analyst

I mean, in order for the specialty -- I was just going to say, in order for the specialty pharmacy to fill, I would think that they would have to be a certain type right, in order to get filled. So how do you not get that information back through the hub?

Julian Gangolli -- President, North America

Well, because that -- all that information is protected under HIPAA. And so we are effectively not allowed to see that information, because it's HIPAA-protected. And what we see is what's on the prescription and that information is anonymized. So we don't obviously know the name. But what we know is who the prescriber is and for what it -- and the amount that was written. and the indication.

Marc Goodman -- SVB Leerink -- Analyst

I see. And when you talk about the 4,500 new patient forms for enrollment, that was just done November and December. Can you give us any sense of what January looked like or is there an apples-to-apples of 150% increase in Rxs. I mean, that's not what you were referring to, you referring to something different. So I'm just trying to rectify the --

Julian Gangolli -- President, North America

Yes, what I would say is the growth that we're seeing January over February and the numbers that I was quoting in new patient enrollments -- excuse me, November and December and the growth January over December there is a correlation between what we're seeing in terms of new patient enrollments. Is it exactly 150%, no, but certainly dispensed prescriptions grew 150% January over December of 2018.

Marc Goodman -- SVB Leerink -- Analyst

And I just want to -- last question, and just to be clear on something, you had said before about naive patients, but with the patients that Epidiolex is being used -- these are not patients who have not had any epilepsy medication before right? These are naive epilepsy patients, these are patients who have been taken other epilepsy drugs?

Julian Gangolli -- President, North America

Correct. Naive to Epidiolex. In other words, they are not involved in --

Marc Goodman -- SVB Leerink -- Analyst

Right. I just wanted to hear that. And so how many drugs -- do we have any anecdotal evidence about what kind of usage is going on here, is this on top of two drugs, one drug, is this starting to become first line or second-line therapy in Dravet and LGS, do we have any knowledge of that?

Julian Gangolli -- President, North America

No we don't Marc. It's way too early. And obviously, we are -- we have no information on what other drug medications these patients were on. Because typically they're not submitted at the same time, so --.

Marc Goodman -- SVB Leerink -- Analyst

I just figured, talking to some of the reps, talking to the doctors. Yes. Okay. Thanks --

Julian Gangolli -- President, North America

Yes, I think, anecdotally we can share information. But it -- two months into a launch anecdotal information can -- is not the most reliable.

Marc Goodman -- SVB Leerink -- Analyst

Thanks.

Operator

Thank you. Our next question comes from the line of Esther Rajavelu from Oppenheimer. You're now live.

Esther Rajavelu -- Oppenheimer -- Analyst

Thank you for taking my questions. I have a couple. Can you -- you talked about expanding manufacturing capacity during the prepared remarks. What is the timeframe for that expansion in about when do you think you will max out on much of capacity with the existing facility.

Stephen Schultz -- VP Investor Relations

Chris, would you like to take that.

Chris Tovey -- Chief Operating Officer

Yes, I think that, we've said on previous calls that we have expanded capacity to a point where we're very comfortable with supply certainly as far as we can see into the medium term. So the areas that we talked about there were constraints around extraction and we built new facilities and they were improving -- included in the in the NDA. So I think that what we're doing now is working on expansion for three plus years time away. And so, and those -- that program is moving along very smoothly. So I think -- as I said in my prepared remarks, I think from a manufacturing perspective, we're in an absolutely great place anticipating strong demand and we know, we have the capacity to meet that demand.

Esther Rajavelu -- Oppenheimer -- Analyst

Got it. And -- but you are investing for capacity expansion over the longer term two years out and what kind of CapEx should we be thinking about for that project?

Scott Giacobello -- Chief Financial Officer

So for that project -- yes, absolutely. So we've actually been spending on that project in the last year and also into this year, which will be included in the guidance of the $30 million to $40 million for this year and we would expect similar levels of capital investment moving forward.

Esther Rajavelu -- Oppenheimer -- Analyst

Got it. Thank you. And then really quickly on -- I think if I heard you correctly when you said that in France and Germany, you expect to have a hub-and-spoke distribution model.

Scott Giacobello -- Chief Financial Officer

No, I think, the hub and -- the hub-and-spoke -- sorry, the hub-and-spoke was actually in reference to the the organizational -- commercial organization model where we have a central team of GW employees. A lot of epilepsy experience in that team including myself, have launched a number of epilepsy drugs. But in the countries we have a high-quality contract organization and we talk to the fact that the early launch markets, particularly are France and Germany where we've already onboarded the neurology account managers, so the sales reps to add to the existing medical teams and we're preparing ourselves for reimburse launches in France and Germany early post European Commission approval.

Esther Rajavelu -- Oppenheimer -- Analyst

Got it. And how would that distribution of product worsen the yield spend?

Scott Giacobello -- Chief Financial Officer

It's work through -- it's a different model to the US, we work with a distribution partner, a wholesaler and that the product will be distributed to country hubs and we'll then -- we'll be taking on to bond by either hospitals or retail depending on how the particular country model works for a specialist epilepsy medicine like Epidiolex, it does vary country by country. But it's a fairly straightforward model in Europe and it's one that we're now ready to -- ready to deploy once we have the approval.

Esther Rajavelu -- Oppenheimer -- Analyst

Got it. And then my last question, are you able to help us think to adult versus child, over the course of the year what you've seen in the first month or so.

Julian Gangolli -- President, North America

In the US, what we're seeing is, as we had anticipated a meaningful skew to pediatric patients. So adult patient is very skewed to the pediatric side of the equation.

Esther Rajavelu -- Oppenheimer -- Analyst

And is there -- have you gotten any feedback from your physicians survey on whether that could potentially change.

Julian Gangolli -- President, North America

I think we've always been consistent that over time, we're likely to see the adult patients taken us a larger percentage, probably not the majority. But certainly probably more balanced to some of the other reference products that are used familiarly in this category. So but at launch, we were always of the mindset that children, were likely to get product in a disproportionate percentage.

Esther Rajavelu -- Oppenheimer -- Analyst

Alright, thank you so much for taking my questions.

Operator

Thank you. Our next question comes from the line of David Lebowitz from Morgan Stanley. You're now live.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you very much for taking my question. I apologize if this was asked earlier, but could you give us the breakdown of what percent of sales might have come from the original spec pharmacies versus those that might have come from the add-on distribution networks.

Julian Gangolli -- President, North America

David, no, we haven't shared that information and frankly through the month of December, that would be -- that percentage would be relatively small. We made those changes to make sure that for 2019, we're in a good place January going forward. So the large percentage of what was going through our in-network in November and December is primarily what we're seeing in sales.

David Lebowitz -- Morgan Stanley -- Analyst

And one last question, with respect to the 4,500 enrollment forms, how should we think about those patients going forward? At what point with those patients transition to being on therapy?

Julian Gangolli -- President, North America

So, as we mentioned in the prepared part of this presentation, a large percentage of those did go -- start to go onto product in the January timeframe, mid-December through and through till January and that's why we made the observation that a number of -- the reason why we saw quite substantial growth in January over December was because of coverage determinations and getting those new patients on product.

David Lebowitz -- Morgan Stanley -- Analyst

Thanks for taking the questions.

Operator

Thank you. Our next question comes from the line of Danielle Brill from Piper Jaffray. You're now live.

Unidentified Participant -- -- Analyst

Hi, everyone, this is (inaudible) for Danielle Brill. I just had a couple quick questions. The first one, I know we don't have much information about the breakdown by indication, but I was wondering if you could provide some information on the demographics. What sort of -- what the average patient age was or what the average weight was.

Julian Gangolli -- President, North America

No, I'm sorry, at this present moment that's not information that we're in a position to share. What I would say to sort of help describe where we are in this is, the prescriptions issued on written in November and December and into January primarily skew to the pediatric patient population. So obviously lighter milligram per kilogram consumption and they tend to be titration prescriptions as well. So, that tends to be -- again a lighter consumption number than a refill prescription. So these early prescriptions are lighter weight and titration in nature.

Unidentified Participant -- -- Analyst

So then, would you have any information on what proportion of the prescriptions were titration prescriptions.

Julian Gangolli -- President, North America

All I can tell you is the vast majority in November and December were titration prescription.

Unidentified Participant -- -- Analyst

I see. Okay, great. And then last question I had was just what was the gross to net for this Q and what should we be expecting down the road?

Scott Giacobello -- Chief Financial Officer

We're not sharing gross net for the quarter and then not providing guidance on gross to net at this time.

Unidentified Participant -- -- Analyst

Okay. I think that's it for me guys, thank you so much.

Operator

Thank you. Our next question comes from the line of David Kideckel from AltaCorp Capital. You're now live.

David Kideckel -- AltaCorp Capital -- Analyst

Hi, congratulations on your successful quarter here and thanks for taking my call. I think a lot of the questions have been addressed, but in particular with respect to your(ph)GBM program, and you mentioned just in the Phase 2 studies results sometime in 2019. Is there any more clarity on the GBM program in particular. And is there a possibility this could actually bypass Phase 3 altogether?

Julian Gangolli -- President, North America

Yes, Hi. So it's -- I think this is a program that we saw some interesting data, probably about a year ago, now we've been continuing to understand and follow that the trends with this indication, it would certainly require more work, and you will have noted in the prepared remarks, we didn't want to commit today to exactly the next steps for that program. So that's really, frankly a news item for later this year.

David Kideckel -- AltaCorp Capital -- Analyst

Got it. Thank you. So moving on back to Epidiolex, just so we're clear here too, so from my understanding of the Company's remarks, you're not prepared to comment on forget -- I mean, forget about for a second the percentage of prescriptions prescribed to LGS versus Dravet, but more the refractory epilepsy and what physicians uptake or receptivity to more refractory epilepsies, excuse me have been overall.

Julian Gangolli -- President, North America

David in the first two months of launch it is very difficult to get those numbers because those are not published by any audit group. And secondly, many of the payors we're in the process of making the coverage decision anyway, so any split would be purely anecdotal on our side based on if a physician managed -- a one-off physician managed to get a product approval and not approved for refractory indication. What we do know is from what we're hearing from physicians is that prescriptions for Dravet and LGS do appear to be getting dispensed and getting through the PA process. So, at this very early stage of the products launch, that's about all the information that we have.

David Kideckel -- AltaCorp Capital -- Analyst

Okay. Thanks for the information.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Yatin Suneja from Guggenheim. You're now live.

Derek Johnson -- Guggenheim -- Analyst

Hi guys, this is Derek on for Yatin. We also just wanted to offer our congratulations on the great launch, and thanks for taking the questions. Just a few for us. Real quick, I might have missed it, but with the EAP as it winds down, has anyone discontinued due to the liver tox issues or have there been any safety signals that have been picked up throughout the EAP?

Justin Gover -- Chief Executive Officer

No, exactly, not. We have no discontinuations or even clinically overt liver toxicity. All of the cases that have been identified were in essence laboratory indicators of elevation of transaminases. We've had no cases of Hy's Law and nobody was discontinued because of the clinical sign a symptom of hepatotoxicity. So I think that's really important to say. We've used the EAP safety reporting data in our filings, both with the Europeans and with the US and I think they are very much in line and keep on reassuring us that the longer-term safety profile is within the realm of what's in the label.

Derek Johnson -- Guggenheim -- Analyst

That is great. Thank you. And then real quick as low dose fenfluramine is poised to come on the market. Could you maybe comment on how you could see Epidiolex maybe, maybe not used in conjunction or combination therapy with that?

Julian Gangolli -- President, North America

Well, I mean, firstly, it's not on the market yet. So it's a little, I think -- for me less of the question for us and more of a question for that company. But I think in general we understand there is an unmet need in this patient population. It's a polypharmacy environment. And in the event that a physician deems that these two drugs that could be taken by a patient that's to be welcomed if it benefits the patient population.

Derek Johnson -- Guggenheim -- Analyst

Okay. You don't view anything that would be automatically disqualifying any kind of combination therapy?

Julian Gangolli -- President, North America

Not that we're aware of.

Derek Johnson -- Guggenheim -- Analyst

Great, thanks. And then just a last one real quick and I'll jump back in the queue. Could you maybe just expand a little bit, give a little bit of color on how these titration prescriptions work? It's you're starting a low dose on, I'm guessing young pediatric patients out of just an abundance of caution, and then how does those doses increase? Is it of certain seizure frequency severity, and then they bump up to a higher dose or just a little bit more on how that works and how rapidly one might scale up in dosage on something like that?

Julian Gangolli -- President, North America

So, Derek the titration schedule, basically is 5 milligrams per kg for one week titrating up to 10 milligrams per kg and then holding at 10 milligrams per kilogram until an evaluation, a thorough valuation of efficacy and safety takes place. After that they are at liberty to titrate up to 20 milligrams per kilogram, but all the research that we've done with epileptologist have indicated that because this is a polypharmacy environment, they are more than likely to sit at at 10 milligrams per kilogram for an extended period of time to see whether or not there should be an attenuation of other adjunctive meds or an increase in Epidiolex. And that's irrespective frankly, Derek, of whether or not this is a pediatric patient or an adult patient. So every patient who is naive to Epidiolex will be going through this titration phase and that's why I made the observation earlier that these early prescriptions are likely to be lighter in consumption, basically because they're titration prescriptions.

Derek Johnson -- Guggenheim -- Analyst

Great. That is very helpful. Thank you for the added color and congrats again on the great launch, so far.

Julian Gangolli -- President, North America

Thank you.

Operator

Ladies and gentlemen, we have no further questions in queue at this time, I'd like to turn the floor back over to management for closing.

Stephen Schultz -- VP Investor Relations

Great, well, thank you for all your questions. We appreciate the great level of interest in this launch, and we look forward to updating you on the Q1 quarter in May. So thanks very much for your time today.

Operator

Thank you, ladies and gentlemen, this does conclude our teleconference for today. You may now disconnect your line at this time. Thank you for your participation and have a wonderful day.

Duration: 70 minutes

Call participants:

Stephen Schultz -- VP Investor Relations

Justin Gover -- Chief Executive Officer

Julian Gangolli -- President, North America

Chris Tovey -- Chief Operating Officer

Volker Knappertz -- Chief Medical Officer

Scott Giacobello -- Chief Financial Officer

Salveen Richter -- Goldman, Sachs & Co. -- Analyst

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Phil Nadeau -- Cowen & Company -- Analyst

Paul Matteis -- Stifel -- Analyst

Cory Kasimov -- JP Morgan -- Analyst

Marc Goodman -- SVB Leerink -- Analyst

Esther Rajavelu -- Oppenheimer -- Analyst

David Lebowitz -- Morgan Stanley -- Analyst

Unidentified Participant -- -- Analyst

David Kideckel -- AltaCorp Capital -- Analyst

Derek Johnson -- Guggenheim -- Analyst

More GWPH analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.