Antares Pharma Inc (ATRS) Q4 2018 Earnings Conference Call Transcript

ATRS earnings call for the period ending December 31, 2018.

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Antares Pharma Inc  (NASDAQ:ATRS)
Q4 2018 Earnings Conference Call
Feb. 28, 2019, 8:30 a.m. ET

Contents:

Prepared Remarks:

Operator

Ladies and gentlemen, welcome to the Antares Pharma Fourth Quarter and Full-Year 2018 Operating and Financial Results Conference. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

(Operator Instructions)

I would now like to turn the conference over to Jack Howarth, Antares' Vice President of Corporate Affairs. Sir, please go ahead.

Jack Howarth -- Vice President of Corporate Affairs

Thank you, Katie, and good morning, everyone. This morning, we announced our fourth quarter and full-year 2018 financial results and recent operating achievements, and a copy of the press release can be found on the Antares website at www.antarespharma.com under the For Investors section.

In addition, this morning's teleconference also contains an interactive slide presentation. If you've dialed into the audio-only teleconference, you can follow along with the slides, which can be found on our website, under the Investor Information section. The conference call and slide presentation will be simultaneously webcast on the For Investors section of the Antares website, under the Webcast & Presentations tab. If you're currently unable to access our website, the slide presentation will be archived under the Webcast & Presentations tab at the conclusion of today's call.

Before we begin, I'd like to remind you that some of our statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties, and actual results could differ materially from those projected in any forward-looking statements. Forward-looking statements provide Antares' current expectation or forecast of future events. Factors that could cause actual results to differ include, but are not limited to, market acceptance, adequate reimbursement, successful launch and future revenue from XYOSTED and Teva's generic EpiPen, market acceptance and future revenue from Makena, sumatriptan and OTREXUP, the timing and results of proprietary and partnered research, development and clinical trials, including ATRS-1701 and development projects with Teva and Pfizer, statements about new product approvals and FDA action, and the Company's financial performance, including achievement of the 2019 revenue guidance and other factors, which are also identified in today's presentation and from time-to-time in the Company's filings with the SEC on Form 10-K and as updated in Antares' recent periodic filings on Form 10-Q and 8-K and other filings made with Securities and Exchange Commission.

Links to these documents are available on the Investor Information section of our website, and we encourage you to review these materials. Antares is providing this information as of the date of today's conference call, and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements.

Joining me on the call today are Bob Apple, President and Chief Executive Officer and Fred Powell, Executive Vice President and Chief Financial Officer. Let's review the agenda for today's call on slide number three. Bob will begin with a high-level review of the fourth quarter of 2018 significant achievements. Fred will present the detailed fourth quarter and full-year financial results and review our previously announced 2019 revenue guidance, and then Bob will give you a commercial business update and review our future catalysts. After our presentation, we will open the lines for your questions.

Please turn to slide number four. I'll now turn the call over to Bob. Bob?

Robert F. Apple -- President and Chief Executive Officer

Thanks, Jack. And good morning to everyone on today's conference call and webcast. This morning, we announced record revenue of $63.6 million, a 17% increase over last year and we also highlighted a significant number of operational goals achieved throughout the quarter. But first, let's get started with a summary review of the achievements in 2018 as we are proud of the progress we made last year. Two key potential drivers of value for Antares emerged. First, strong development and regulatory success of three total product approvals, one for ourself and two for our partners. And second, the continuing and expanding diversified commercial growth of our business.

Our year began with an announcement that our partner AMAG Pharmaceuticals had received FDA approval of their Makena subcutaneous auto injector product. The product was launched at the end of the first quarter and we recorded just over $18 million of revenue from finished product sales and royalties in 2018. The Makena subcutaneous auto injector product has been well received by healthcare professionals and patients, and AMAG believes the value proposition of the product could meaningfully extend the life of the Makena brand. I will cover more of this later in the call.

In August, we were excited to hear that Teva had received FDA approval for the generic EpiPen. Late November, they announced the limited commercial availability of their fully substitutable generic product. Teva had indicated on their fourth quarter earnings call that they are continuing to manufacture drug and build supply, and they believe inventory will normalize by the end of the first quarter or the beginning of the second quarter of 2019. Teva also expects to launch a generic EpiPen Jr. late in the second quarter of this year.

We've already received purchase orders for restocking auto injector devices and we were excited to hear that Teva believes they can capture a significant portion of the EpiPen market by the end of this year and continue to grow market share into 2020. On October 1, we announced the FDA's approval of XYOSTED, the first novel testosterone product to be approved in four years. Our XYOSTED approval expands our branded portfolio of drug device combination products.

During the weeks following this milestone announcement, we completed the hiring of a highly experienced sales team to detail XYOSTED to top prescribers of testosterone products. By the middle of December, they were ready to start calling on urologists, endocrinologists and primary care physicians that specialize in testosterone replacement therapy. It is still extremely early in the launch phase of XYOSTED, but initial feedback from physicians and patients have been positive. I will provide more detail on the launch later in the call.

Next I'd like to discuss our exciting new business alliance transaction with Pfizer. Through this important collaboration, we plan to develop a rescue pen using the Antares QuickShot platform and Pfizer's undisclosed drug. Pfizer will pay for the design and development costs, and assuming FDA approval, we will be responsible for providing fully packaged commercial product to them at cost plus margin. Upon commercialization, we will also receive royalties on in-market sales of the product. We believe this could potentially be a very large and expanding market and look forward to working closely with Pfizer on the development of this rescue pen.

Let's now turn to slide number five for a quick look at historical revenue trends, which is the second driver of potential value I mentioned earlier in the call. Today's announcement of a record $63.6 million in total revenue was the fifth consecutive year of topline growth driven in large part by our strategic move away from development revenue toward product revenue. The compounded annual growth rate of total reported revenue for the full-year period ending December 31, 2018 was 24.5%. When you look at the midpoint of our 2019 revenue guidance, our compounded annual growth rate potentially increases to 30.4%. We believe these positive trends in revenue growth are impressive and our plan is to continue a strategy of developing both proprietary and partnered products in order to potentially drive continued topline diversified growth.

In summary, we believe it was a very successful year for Antares with record revenue, three new combination product approvals and the announcement of a very important business alliance transaction with Pfizer.

I'd now like to turn the call over to Fred, who will discuss the excellent fourth quarter and full-year 2018 financial results, as well as our 2019 revenue guidance. Fred?

Fred Powell -- Executive Vice President and Chief Financial Officer

Thanks, Bob. Please turn to slide number six. As Bob mentioned earlier on today's call, 2018 was a tremendous year for Antares, and our 2018 revenues reflect the success. During 2018, we issued revenue guidance for the first time in Antares' history and our net revenue of $63.6 million was within the upper end of the guidance range of $60 million to $65 million. Total revenues were $18.8 million for the three months ended December 31, 2018 compared to $14 million in the fourth quarter of 2017, an increase of 34%. Total revenue for the year ended December 31, 2018 grew to $63.6 million as compared to $54.5 million for the year ended December 31, 2017, an increase of $9.1 million or 17% on a year-over-year basis.

Product sales in the fourth quarter of 2018 increased by 30% to $14.2 million compared to $11 million in the comparable period of 2017 and were $47.9 million for the full year of 2018, compared to $41.7 million in 2017, a 15% increase. For the fourth quarter and full year of 2018, product sales accounted for approximately 75% of total revenue. Product sales represent sales of our proprietary products and commercial product or device components to our partners. The increase in product revenue for the three-month period was primarily attributable to OTREXUP, Makena, sumatriptan injection and XYOSTED, offset by a decrease in orders from Teva for epinephrine auto injectors, as we had supplied Teva with pre-launch quantities in 2017. The increase in product sales for the 12-month period was primarily driven by sales of Makena auto injectors to AMAG.

Licensing and development revenue was $1.1 million and $2.2 million for the three months ended December 31, 2018 and 2017 respectively, and $6.8 million and $11.2 million for the years ended December 31, 2018 and 2017 respectively. The decrease in licensing and development revenue for the three and 12-month periods was primarily the result of a reduction in development activities with AMAG for the Makena subcutaneous auto injector product, which was approved by the FDA in February 2018 and is now a commercial product.

Royalty revenue was $3.5 million for the three months ended December 31, 2018 compared to $800,000 the same period of 2017, and totaled $8.9 million for the year ended December 31, 2018 compared to $1.6 million in the same period of 2017. The majority of the increase in royalty revenue for the three and 12-month periods of 2018 was driven by in-market sales of the Makena auto injector product by our partner AMAG Pharmaceuticals. We also received a modest royalty payment in the fourth quarter for the generic EpiPen sales related to the limited commercial launch in late November 2018.

Operating expenses were $14.9 million for the fourth quarter of 2018 compared to $11 million in comparable period of 2017. Total operating expenses for the year ended December 31, 2018 were $49.1 million as compared to $43.5 million in the same period of 2017. The increase in operating expenses for the three months and year ended 2018 compared to 2017, was principally attributable to the incremental sales and marketing costs associated with our preparation for the launch of XYOSTED. In connection with the launch of XYOSTED, we hired approximately 50 additional sales representatives and cross-trained the combined sales force to leverage our existing resources and enhance our commercial organization. The increase in operating expenses was also attributable to an increase in compensation and benefit expense, primarily related to annual salary increase and non-cash stock-based compensation.

Net income was $6.1 million for the fourth quarter of 2018 compared to a net loss of $3.7 million in the same period of 2017 and a net loss of $6.5 million for the year ended December 31, 2018 compared to $16.7 million in the same period of 2017. In the fourth quarter of 2018, we recognized a $12.5 million gain in connection with the sale of our needle free product line to Ferring Pharmaceuticals, resulting in net income per share of $0.04 for the fourth quarter of 2018, compared to net loss per share of $0.02 for the same period of 2017. Net loss per share was $0.04 for the year ended December 31, 2018 as compared to a net loss per share of $0.11 in 2017.

At December 31, 2018, cash, cash equivalents and investments were $27.9 million compared to $31.6 million at December 31, 2017. During the fourth quarter of 2018, we generated $7.5 million in gross proceeds from the sale of common stock at an average price of $3.53 per share through our At-the-Market or ATM equity offering program. This past January we communicated for the first time full-year 2019 revenue guidance for Antares. We continue to believe 2019 full-year revenue should be in the range of $95 million to $105 million, which is potentially a 50% to 65% increase over 2018 reported revenue.

Finally, I'd like to note that we typically issue our earnings release and file our 10-K in mid-March. However, this year, we decided to move up the announcement of our financial results by approximately two weeks to better align with the timing of presentations at upcoming investor conferences. We still expect to file our 10-K in the middle of March, which is consistent with prior years.

I'll now turn the call back to Bob. Bob?

Robert F. Apple -- President and Chief Executive Officer

Thanks, Fred. Please turn to slide seven for a brief update on the XYOSTED launch. We launched XYOSTED in December 2018 and our reps have been detailing the product in the field for a little over two months. Our plan is to initially target high prescribers of testosterone products. With respect to managed care coverage, we believe we are making steady progress toward our goal of having two-thirds of all insured lives covered for XYOSTED by the end of 2019. The comprehensive commercial launch strategy includes an initial XYOSTED trial where the patient receives his first injection in the physician's office via sample. So they're comfortable with XYOSTED, it's easy-to-use, an innovative auto injector.

After treatment, the patient leaves with a prescription and a co-pay assistance card. Our team has created a program to help the commercially insured patient get their first script filled even if it's not initially covered by insurance. We also limited -- initiated several pre-launch programs, including an unbranded social media campaign, which targets dissatisfied TRT patients. The information gathered from this engaging and unique consumer program, will support our soon-to-be launched branded consumer program, which will aid in growing our brand awareness and reach. During 2019, we have plans to attend numerous scientific and medical conferences in order to engage urologists, endocrinologists and other physicians in a meaningful medical exchange.

Turning now to slide number eight. According to the most recent testosterone prescription data, the market grew 6% in 2018 with approximately 7.2 million prescriptions filled. The injectable market grew 12% and now represents approximately 70% of all TRT prescriptions written monthly. The overall topical market is declining. We believe XYOSTED offers several compelling reasons to switch from existing therapies, and therefore, our sales representatives will be targeting both injectable and topical prescribers. Although very early in the launch progress, we have seen week-over-week growth in our total prescriptions or TRxs. And more recently, we have seen good trends in our prescription refill data. Additionally, over 400 unique prescribers have written XYOSTED scripts, and that number continues to grow as well.

Moving now to slide nine, and results for our other two commercial products, OTREXUP and sumatriptan. Both of Antares' legacy products continue to be steady topline contributors, with a combined revenue of $7.8 million in the fourth quarter and $29 million for the full-year 2018. Based upon our 2019 forecast for OTREXUP and purchase orders received from Teva for sumatriptan, we expect both products will grow in 2019.

And now -- I'd now like to talk about the commercial progress on the Makena auto injector product on slide number 10. AMAG continues to be very pleased with the uptake on the Makena auto injector product. In the fourth quarter, we recorded $6.1 million in revenue, and as I mentioned earlier, for the full year of 2018, we recorded $18.1 million of revenues, which includes product revenues and royalties for the first eight months the product was commercially available. According to AMAG, the auto injector captured a 46% market share of all FDA-approved hydroxyprogesterone prescription volume in the fourth quarter of 2018. AMAG continues to work hard to do a great job of defending the Makena against the generics and maintain a significant share of this market with the novel auto injector.

Moving now to slide number 11, and an update on our internal development pipeline. We continue development work on our next potential proprietary product, a combination drug device product in the neurology space, which we are now identifying as ATRS-1701. We proceeded with two formulations of 1701 (inaudible) in the fourth quarter of 2018. It did not achieve the optimal PK levels we expect to see with our products. We are now in the process of reformulating the drug with a new data in hand and look to move this product to a clinical trial.

We've also commenced an initial development work for another proprietary product, which we hope to announce either later this year or in early 2020. With respect to our Pfizer collaboration, we have initiated development work on modifying the QuickShot device for Pfizer's rescue pen. We've also begun feasibility testing, as well as human factor studies. And although the drug is undisclosed, we remain excited about the potential for this rescue pen.

Wrapping up on slide number 12, with some potential catalysts for 2019. In the two months since XYOSTED was officially launched, our sales reps have seen 60% of the target and for those physicians who seem most responsive to our core messaging, reps visit them weekly. Most importantly, we're continuing to make inroads in the managed care environment, which is critical for any new product to be successful. The second product launch we are focused on is Teva's generic as Mylan's EpiPen. Part of our product revenue growth over the past two years was the shipment of pre-launch Epi devices for Teva's commercial launch. Our 2019 revenue guidance assumes a full commercial launch in the second half of the year.

We expect to receive larger quarterly royalty payments on Teva's in-market sales of the generic EpiPen, as well as significant auto injector product revenue associated with shipping additional devices. Given Teva's recent comments on market share, this could potentially be a solid revenue driver in 2019. AMAG continues to believe their ability to be successful in maintaining market share with the subcu (ph) auto injector, as highlighted by the 2019 revenue guidance of $40 million to $50 million in quarterly Makena auto injector sales.

And finally, the next big catalyst potentially coming out of our pipeline is Teva's ANDA for a substitutable generic to Forteo. Teva's litigation with Lilly has been settled, and Lilly continues to expect generic competition in the back half of this year. What recently reported in our 2018 10-K, Forteo's global revenue of $1.58 billion was $758 million in revenue reported in the US. According to Teva, this ANDA remains a high priority and earlier this month on their earnings call, they mentioned the ANDA is moving along and proceeding as anticipated.

Teva has indicated their 2019 launch and the second half of this year has been factored into the forecast on a risk-adjusted basis. We've received purchase orders for commercial devices for the potential launch. As a reminder, we received cost plus on the devices we spot with Teva and a high-single digit to mid-teen royalty on in-market sales of the product, assuming FDA approval and launch. We believe it's a potentially big opportunity for both Antares and Teva.

In closing, 2018 was a great year for Antares as we made tremendous progress in development and regulatory, as well as operationally. We are looking forward to growing the business through the XYOSTED and generic EpiPen launches, continued growth of the Makena subcu product and the potential for a second half 2019 launch of generic Forteo. With the Pfizer development collaboration and the continuation of the ATRS-1701 program, we are filling the pipeline. We expect to continue to have an active business development and business alliance effort, pursuing both, out-licensing our device platform to partners as well as out-licensing opportunities for our proprietary products in ex-US territories. We work hard to meet our aggressive guidance of 50% or better revenue growth, and we believe we are well positioned to become a leading drug device combination products company.

We look forward to a successful 2019 and appreciate the support of our shareholders. That concludes our prepared remarks for today. Operator, you now can open the lines for the question-and-answer session.

Questions and Answers:

Operator

Thank you, sir. (Operator Instruction) Our first question will come from Bill Maughan with Cowen & Company.

William Maughan -- Cowen and Company -- Analyst

Good morning, and thanks -- congrats on all the progress. I was just wondering if you could give us some -- some sense of how the net price on XYOSTED might progress throughout the year as payers sequentially come onboard and start covering the product? And then on generic Forteo, as you mentioned, it's factored in on a risk-adjusted basis. How have your discussions with the FDA progressed and what's your sense on where the FDA stands in terms of what they want to see for a generic Forteo approval? Thanks.

Robert F. Apple -- President and Chief Executive Officer

Thanks, Bill. I'll take the second question first, and then hand the other question over to Fred. So with Forteo, we are not the ANDA holder, it's Teva. So they're the ones who deal with the FDA on a regular basis, and they're the ones who actually came up with the guidance that the launch was risk-adjusted in their models. From our standpoint, we are producing devices for the potential launch, and we overall feel pretty good about where we are from a production standpoint and from a device standpoint. As far as the approval, all we can go by is what Teva said on their earnings call, which is they are potentially expecting a launch in the second half of 2019, which lines up with their settlement with Lilly. So other than that, we're doing everything we can to make sure we support the launch.

Fred Powell -- Executive Vice President and Chief Financial Officer

Hey Bill, this is Fred. Regarding your question with the gross to net and the progression that we should for XYOSTED in 2019, I think it's a fair assumption that we will see an improvement in the net price as we go throughout the year. At the beginning of the year, in our efforts to ensure that patients actually receive the product, we have a first-fill free program, which allows our patients to actually get a first prescription free at the -- it's not covered at the time. We expect that program will slow down and stop during 2019. At the same time, we would expect that we would get additional coverage and contracted PBMs in place that provide the coverage for those products. The combination of those products should see us improve our gross to net calculation, as we continue into the second quarter, into the third, and finally, through the end of the year. So yes, it should be an improvement as we see different programs take place during the year.

William Maughan -- Cowen and Company -- Analyst

And are there any specific dates where we might see sort of large chunks of covered lives coming onboard?

Robert F. Apple -- President and Chief Executive Officer

Yes. So I think that you know, right now, we are ahead of where we're expected to be as far as coverage. I think that the way that most plans or the larger plans follow is, there's usually a six-month review. So we anticipate that in the second half of 2019, we'll see an acceleration of the covered lives. I think that's -- I'm not sure that's the way it works for all new products that are in the market. So I think we'll follow that same -- that same course. I think what's been -- what's been interesting and positive for us there is, there is a good level of support from the payer standpoint for this product. I think they see the value of the need for testosterone products and the value potentially what XYOSTED brings to the patients. And so, we'll continue to work on that and reach our target of two-thirds of all lives being covered by the end of the year.

William Maughan -- Cowen and Company -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Anthony Petrone with Jefferies.

Anthony Petrone -- Jefferies -- Analyst

Hi, good morning and congratulations on a great year. Maybe Fred, just for the guidance $95 million to $105 million, just kind of going through what Teva announced on their call, so the late 1Q launch of EpiPen, they announced EpiPen Jr. as well, and then also obviously as you discussed the risk-adjusted potential for generic Forteo, I'm just trying to get a sense of how much of that is actually baked into $95 million to $105 million, just given that, that was announced after you issued this guidance. And then I have a few follow-ups on XYOSTED.

Fred Powell -- Executive Vice President and Chief Financial Officer

Sure. With our guidance of $95 million to $105 million, it's first time beginning of the year, we've actually issued guidance. And being as large of an increase year-over-year, we've not broken it down by individual products. With the launch of XYOSTED taking place, as well as the full launch of Epi, we didn't think that would be prudent. However, I can tell you with the Epi becoming fully available and based upon (inaudible) comments regarding how much of the market they expect to have, we have built in epinephrine's revenue into our number for the $95 million to $105 million. And did you also ask about PTH? In there what we have would be the -- just the orders we have from them to manufacture devices in our number as well.

Anthony Petrone -- Jefferies -- Analyst

So for -- specifically for teriparatide, so just devices, but no royalties?

Fred Powell -- Executive Vice President and Chief Financial Officer

That's right, that's right.

Robert F. Apple -- President and Chief Executive Officer

That's not to be -- you don't want to look into that as far as any indication of our belief in the approval or anything. It's just that when we look out, our -- what we do internally is really just focus on what we know we have in hand. So POs, products that are approved and launched, we don't put in -- we don't factor in any kind of unapproved royalties, because we run -- we want to run our business on what we know we're going to be bringing in.

Anthony Petrone -- Jefferies -- Analyst

Right. Helpful. Fair, fair. And then maybe just to shift over to XYOSTED. So obviously, there is some activity out there in the marketplace. Symphony and others are picking up some activity. So maybe just some feedback from physicians and patients, what they're saying about XYOSTED. And just really the reps as well, so 55 reps, are they actually all out there at this point and fully trained in doing this thing, or is there still a little bit of a ramp phase for them as well?

Robert F. Apple -- President and Chief Executive Officer

So I can answer all those questions for you Anthony. On the rep side, we -- our sales force is fully engaged and fully up and running. And they basically were for the most part, and probably 90% of them were out there at December 15. But by -- as we speak today, every position is filled. And so, we feel really good about where we are from the launch standpoint. From a -- from a product standpoint, with the patients and their physicians, anecdotally what I can tell you is that it's been received extremely well. The physicians give our reps a good bit of time, which is unusual. They're interested in what the value proposition is, they are interested in the product, they understand -- they like the PK and obviously, with any new product launch, the key question for them is coverage, or is it going to be -- if I write it, is it going to be covered. And that's why we really instituted a couple of programs to try to ease that, that transition into being a covered product.

We believe we've done everything we can to help smooth that and I think that any product that launches, particularly in January, has to deal with the high deductible plans, high co-pay plans in the beginning. And we're -- there is no exception for that to us. But overall, the doctors had been very engaged. The patient feedback we've received has been positive as well. It really is winding up with what we saw in the clinical trials, no pain to speak of at all in the injection site. I think that one of the biggest value propositions for us is that steady PK. It takes some time for patients to understand and feel the value of that, get rid of those swings that they see on the testosterone levels on the IM product. But overall, it's easy to use, it's painless, and they like the product. And that's what we're -- that's what we're getting back from our sales reps.

Anthony Petrone -- Jefferies -- Analyst

(multiple speakers) Sure, go ahead.

Robert F. Apple -- President and Chief Executive Officer

And then you were asking about the script trends. I mentioned that in my script. We had solid week-over-week growth. We're pleased with how that's going. And just recently, because we're really only six weeks into roughly when the first patient started to get our drug, the refill data is actually starting to show up really nicely, which is important, right. I mean, maintaining a patient on the drug for an extended period of time is important and we think it's one of the attributes that XYOSTED brings for patients to be able to -- having that consistent testosterone level will hopefully translate to that patient being able to stay on the product longer.

Anthony Petrone -- Jefferies -- Analyst

And Fred, just the spend level, was this what we should be modeling quarterly, or any uptick should we be factoring in the next couple of quarters? Thanks again.

Fred Powell -- Executive Vice President and Chief Financial Officer

Sure. I think -- as we mentioned, I think on the last call, with the increase in sales and marketing, adding in the additional sales reps as well as the launch expenses, we saw a bit of that take place in the fourth quarter of 2018. We'll see more of that hit since -- in 2019. So the sales reps did not come on until the second half of the quarter in mid-November. So assume that we -- with the additional 50 plus sales reps, as well as sales and marketing dollars, that indeed should be added in for the full year for the sales and marketing line.

Anthony Petrone -- Jefferies -- Analyst

Thanks.

Operator

Thank you. Our next question comes from Elliot Wilbur with Raymond James.

Lucas Lee -- Raymond James -- Analyst

Hi, good morning. This is Lucas Lee in for Elliot.

Robert F. Apple -- President and Chief Executive Officer

Hi, Lucas.

Lucas Lee -- Raymond James -- Analyst

Hey, how are you? Few questions though. When do you think we can expect an update on progress points related to the Pfizer partner's product?

Robert F. Apple -- President and Chief Executive Officer

Yes, so -- on the -- I mentioned what progress we had in my script. We have initiated or completed a couple of human factor studies, we've done quite a bit of development on -- development work on the device. So I'd say the program is moving along quite well, and Pfizer's position hasn't changed. They want to aggressively try to move this product through development as fast as possible. But it is an undisclosed product based on Pfizer's desires and they feel that eliminating the exposure of what it is and the timing is the best for the competitive advantage of the ultimate, hopefully approved product. And so I would say that we will give as much update on that program as possible. But knowing that it's really Pfizer's call as to what information gets shared with the marketplace and I would tell you that most likely they're not going to share a whole lot in 2019 until they have moved that product significantly along and feel it's the time to -- time to disclose any additional information.

Lucas Lee -- Raymond James -- Analyst

Got it. And on XYOSTED, excuse me, do you think you could provide us with some -- total number of physician targets that you were expecting? I know you mentioned you're expecting to cover two-thirds of the prescribers, but what is the total number of actual physicians, if you don't mind sharing? Thank you.

Robert F. Apple -- President and Chief Executive Officer

Yes, I think that our target is about 10,000 to 12,000 physicians. Each territory has in excess of a 100 key targets, about 120 I think, which is pretty standard for the industry. And obviously, with the higher decile docs, like I mentioned, we are trying to get to them on a much more frequent basis. What you find in testosterone is at the decile 8 to 10 or a 7 to 10, write a substantial piece of the business. They write a lot of testosterone and they are the ones we really want to focus on, on an ongoing basis. But then there's also a very large breadth of doctors who write, but they're not going to see us on a regular basis. And that's why we are using the social media campaign to bring patients in to those physicians to try to get them to ask for XYOSTED and I think as well as with the work we'll do with the conferences and so forth at Uro in Endo and so forth, reach the lower-decile docs through those means. And so -- but on average our reps are targeting about 120 to 140 docs in their territories.

Lucas Lee -- Raymond James -- Analyst

Got it. Moving on to 2019 revenue guidance, is there any additional color that you guys could provide in terms of product breakdown within that guidance range? Thank you.

Fred Powell -- Executive Vice President and Chief Financial Officer

Now this is Fred, sorry about that, but we are not able to provide that. Obviously, we have our own internal targets and goals for the various line items. But this time, we're just providing the topline total number of $95 million to $105 million for revenues.

Robert F. Apple -- President and Chief Executive Officer

And I think that a part of the nice piece of our business is, as I mentioned again in the script, is our -- our business is very diversified. And so it gives us the ability to -- if one product is -- a particular quarter is a little bit behind because of the shipment or because of some trade issues or whatever, we can always see an upside of another product. So we have five products that are approved on the market and so it gives us -- between us and our partners, and it gives us the ability to feel comfortable in providing a range without having to be narrowed down to an individual product, some --say like sumatriptan or Makena or so forth. I think if you look at some of the parts, some of the guidance that our partners gave, we can give you a sense as to what those products can do, but we're not go to sit here and lay out every single product on a line-by-line basis, because it really doesn't add any value, I don't think for the overall value of the company. I think that as we continue to build that revenue over the next coming years, I think it -- just the top side is more important than an individual basis.

Lucas Lee -- Raymond James -- Analyst

Got it. And lastly on Teva's generic EpiPen, they recently indicated that they're targeting peak share of the epinephrine market by 50%. Is there any supply limitations on your side that would limit Teva's ability to achieve their share? That will be it. Thank you.

Robert F. Apple -- President and Chief Executive Officer

As far as that, so Teva has mentioned that in public forums in which, obviously, we're pretty excited about. But there is no supply constraints on our end. We and Teva have been very wise knowing the size of the market from the very beginning. And we have two very large manufacturers that manufacture the Epi devices. And so we have the capacity we need to supply the market. I think that was one of the big value drivers for us and for Teva when we were in -- when they were trying to get the product approved and so forth, with the shortages that are out there. I think having a robust supply chain was key, and I think that once Teva gets their drug supply up and running in an order, I think that's why they have that comfort to give that kind of guidance. Again, that's not our guidance, that's their guidance and go knock it out of the park. Please, that would be great for us and them.

Lucas Lee -- Raymond James -- Analyst

Thank you.

Operator

Thank you. (Operator Instructions) Our next question comes from David Amsellem with Piper Jaffray.

Michael Ingerman -- Piper Jaffray -- Analyst

Hi, good morning. This is Mickey Ingerman on for David. Thanks for taking the questions. Just a couple of quick ones. First, can you guys remind us on the economics with Teva on your Forteo product? And then secondly, I know it's still early in the launch, but can you guys discuss early patient access results that aside from demonstrating prior use of other testosterone treatments, are there any other mitigating factors to patients getting access to the drug?

Robert F. Apple -- President and Chief Executive Officer

I didn't get your second part of the question, I'm sorry. Could you repeat that again? I'll answer your first one, but I -- your second part?

Michael Ingerman -- Piper Jaffray -- Analyst

Yes, basically just on patient access (inaudible), I mean aside from demonstrating prior use of other testosterone therapy, are there any other mitigating factors for patients getting access to the drug?

Robert F. Apple -- President and Chief Executive Officer

Okay, great. Okay. Now I understand. So on XYOSTED, that's pretty easy question. We have -- from a payer standpoint, it's pretty straightforward. We have the same prior authorizations as every other testosterone product and that you have to have two blood draws on two different days and show you have low testosterone. And it follows exactly what we did in our clinical trials. A patient has to have below 300 nanograms per deciliter. So that has not been an issue whatsoever. From plan-to-plan basis, it really can vary. But in general, the only step we have seen on high -- kind of high cost plans, mean like they try to keep your cost as low as possible or they try to pass on as much as possible to the patient, they may have needed to be on a generic testosterone first before they get our product. And fortunately for us, the market is really -- is all generic. And -- for the most part it's generic and so almost all the patients have -- will have already had that if they're naive patients, meaning if they're new. They might need to step through generic first, like a generic gel or a generic injectable. But we don't see that as a barrier as the churn on the generic gels or the gels is pretty quick. It's less than six months and the same thing with the topic. With the IM injections, patients tend to roll off and pretty quickly because of the issues they see with those. And so -- but I would say that the plans that we are talking to obviously, about contracting with the large PBMs and so forth, then there will be no step-through generic. But again, we don't see that as a huge obstacle.

The second question...

Michael Ingerman -- Piper Jaffray -- Analyst

PTH economics.

Robert F. Apple -- President and Chief Executive Officer

Yes, so the PTH economics are pretty straightforward. It's a -- we sell in a device at a cost plus a margin and then we get a high-single digit to mid-teen royalty on the end sale of their generic. And -- the reason why that I think is important is that, the Forteo product is a very expensive product. So the volumes aren't high, but the dollar value is extremely high. And so we got much higher royalty than we typically do -- did with Teva product because all the value is in the selling price as opposed to number of units. And so, we'll see a -- likely a higher proportion of royalty versus device sales for that particular product. With Epi, it's a mid-to-high single-digit royalty, but a lot of volume on devices, and then again on those devices, we get a cost plus as well,. So that's more of a mix, more of a equal mix probably from a revenue standpoint. So -- but Forteo, assuming they get an approval when we launch, I think the big value driver for us will be the royalty.

Michael Ingerman -- Piper Jaffray -- Analyst

Got it. That's helpful. And then one last one and I apologize if I missed it in the prepared remarks, but on your proprietary neurologic rescue pen, when should I see (ph) this will enter the clinic and what's the best-case scenario for eventual commercialization? Thanks.

Robert F. Apple -- President and Chief Executive Officer

Yes, we really don't give guidance on as far as the timings. Obviously, we're looking to bring the product to market as soon as possible. We feel that we are very -- we have a lot of experience and capabilities in rescue pens. Obviously, the Epi product is rescue pen, our product -- our program with Pfizer is a rescue pen. So we feel confident in our abilities to get a device developed the appropriate way. We have to really work our way through the clinical program and get in front of the FDA to see what type of -- what type of clinical program they're going to want to see. Is it going to be more of a OTREXUP kind of PK-type study or they want to see some patients in that population to be treated? And so as we get more clarity around that, we'll give more guidance. But right now, we're working on the formulation, and we feel pretty good that we will be able to move forward with that program given the data that we've already generated. And we'll give more updates as we get more clarity around the FDA pathway.

Michael Ingerman -- Piper Jaffray -- Analyst

Great, thanks again.

Operator

Thank you. At this time, I would now like to turn the call back over to Jack Howard for closing remarks.

Jack Howarth -- Vice President of Corporate Affairs

Thanks, Katie. Thanks again for joining us on today's conference call webcast. If you have any follow-up questions, you can call Investor Relations at 609-359-3016. That concludes today's call.

Operator

Thank you, ladies and gentlemen, this concludes today's teleconference. You may now disconnect.

Duration: 47 minutes

Call participants:

Jack Howarth -- Vice President of Corporate Affairs

Robert F. Apple -- President and Chief Executive Officer

Fred Powell -- Executive Vice President and Chief Financial Officer

William Maughan -- Cowen and Company -- Analyst

Anthony Petrone -- Jefferies -- Analyst

Lucas Lee -- Raymond James -- Analyst

Michael Ingerman -- Piper Jaffray -- Analyst

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