Novavax (NVAX) Q4 2018 Earnings Conference Call Transcript

Novavax (NVAX)
Q4 2018 Earnings Conference Call
March 18, 2019 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

See all our earnings call transcripts.

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Novavax fourth-quarter 2018 financial results conference call. [Operator instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Ms. Erika Trahan.

Ma'am, you may begin.

Erika Trahan -- Investor Relations

Thank you, operator. Good afternoon. I would like to thank everyone for joining today's call to discuss fourth-quarter and full-year 2018 operational highlights and financial results. A press release of our earnings is currently available on our website at novavax.com and an audio archive of this conference call will be available on our website later today.

Joining me on today's call are Stan Erck, president and CEO of Novavax; and John Trizzino, chief business officer and chief financial officer. Dr. Gregory Glenn, our president of research and development, will also be available for the Q&A portion of the call. Before we begin our prepared remarks, I need to remind you that we will be making forward-looking statements during the teleconference that could include financial, clinical or commercial projections.

Statements relating to future financial or business performance, conditions or strategies and other financial and business-related matters, including expectations regarding revenue, operating expenses, cash usage and clinical developments and anticipated milestones are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Novavax cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. I will now turn the call over to Stan to begin.

Stan Erck -- President and Chief Executive Officer

Thanks, Erika. Welcome to our fourth-quarter and full-year 2018 earnings call. Today's call will be relatively brief, because we provided you an update via a teleconference a few weeks ago concerning the Phase III results of ResVax. In 2018 and through the beginning of the first quarter of 2019, the Novavax team has focused on advancing our two lead programs: ResVax and NanoFlu.

I'm happy to say that we have achieved significant and important results for both programs. As we highlighted on our call at the end of February, ResVax is the first RSV vaccine to demonstrate efficacy, preventing RSV disease in a Phase III clinical trial. The successful Phase II result for NanoFlu that we delivered earlier this year provides the opportunity to discuss with the FDA the use of accelerated approval for licensure of our vaccine. We're now prepared to make meaningful advances in both programs during 2019.

I'll start today's call by providing an overview of our ResVax program, followed by an update on NanoFlu. John Trizzino will then provide a summary of our financial results. After that, we'll open up the line for questions. Let's get started with the ResVax overview.

As we've discussed with you at length before, it will be difficult to overstate a rationale for developing an RSV vaccine for infants. Statistics show that RSV is the leading cause of hospitalization in infants in the U.S., especially in the first six months of life. It is the second-leading cause of infant mortality globally in children under one year of age. Although we are disappointed to announce that the Prepare trial did not meet the prespecified criterion for the primary endpoint, ResVax did, however, demonstrate statistically significant efficacy against hospitalization associated with RSV lower respiratory tract infection at 44% with the lower band of confidence of nearly 20%.

Also, important results from prespecified exploratory endpoints, which address the more severe consequences of RSV highlight the potential of our vaccine to provide -- to improve global health against RSV disease. As expected, the safety profile of RSV appears benign in both mothers and infants. As we continue to review these data we found a geographic imbalance in that efficacy in children born in the United States was lower, compared to the rest of the world by most measures. This seems to be related to the timing of immunization in relation to where the babies were born, which may have influenced both immunity and exposure to RSV.

We expect to provide more details in future publications and presentations. Prevention of hospitalization and more severe RSV illness is a key finding that merits further discussion with regulators, key opinion leaders and healthcare policymakers. ResVax showed the very clear and robust effects of a 25% reduction in all-cause respiratory hospitalizations and a 39% reduction of all-cause severe hypoxemia in infants and immunized mothers through six months of life. In addition to the obvious health benefits for infants and their families, we believe, this could have a major impact on the overall economic burden of RSV disease globally.

Since completion of the trial, we have shared much of the available data with our clinical investigators and with other key opinion leaders. The unanimous feedback we get is that these results represent a material advance in pediatric health. We're also pleased that our partners at the Bill & Melinda Gates Foundation recognize the importance of reducing hospitalization in severe hypoxemia, which are risk factors for infant mortality, a key element of the foundation's commission of reducing infant mortality. Given these results, question on all of our minds is what can Novavax do to get ResVax licensed and on the market.

We believe the answer is, first, to complete our assessment of these data and put together detailed briefing documents for global regulatory authorities that demonstrate and support our findings. We intend to discuss these data with regulatory authorities with the goal of understanding whether these data could support licensure. Following discussions with the regulatory agencies and based on the recommendations made during these meetings, the following paths will be considered. First, the data could be sufficient for licensure and we will then submit marketing applications.

Second, the data could be sufficient for licensure and we will submit marketing applications with the commitment to conduct a post-licensure trial. Or third, we may need to conduct an additional trial and then include the result in confirmatory data within the marketing applications. While we hope for one of the first two responses, we are prepared for any of these responses and we'll timely develop plans based on feedback. As I said on our call in February, we're planning to have discussions with the FDA, the European Medicines Agency and other national regulatory authorities.

All of these discussions take time to set up, but we are pressing to have them as soon as reasonably possible, hopefully in the second quarter or early third quarter of this year. We will provide an update on our progress at the appropriate time. In parallel, we continue to assess the best partner for our ResVax program and perhaps multiple partners, with capabilities in different geographies. Partner includes a potential combination of large multinational vaccine companies, smaller regional vaccine companies, and hopefully one or more global health sponsors and foundations.

We're having new and ongoing discussions with all of these types of partners, and we'll keep you posted as these discussions progress. An important element for our potential partners is how our various regulatory discussions proceed. I believe that we will reach conclusions on partnering shortly after we get more regulatory clarity. So let me conclude my remarks on ResVax by summarizing a few key points.

Our ResVax vaccine works well at preventing more serious consequences of RSV infection. It's stable. The vaccine has an acceptable safety profile to date. We're focusing on addressing one or more regulatory pathways and we are continuing to execute on a global partner strategy.

Switching gears to our NanoFlu program. As a reminder, we started 2018 with very encouraging Phase I/II clinical results. Data from that trial demonstrates significantly improved NanoFlu hemagglutinin responses as compared to Fluzone High-Dose, the leading competitor vaccine in overdose. These data were published in the New England Journal of Medicine last June, a significant distinction for early stage clinical trial results.

In a subsequent 2018 meeting, the FDA acknowledged and agreed that the accelerated approval pathway could be available for NanoFlu. As many of you know, the accelerated approval pathway will allow Novavax to conduct a well-controlled Phase III trial designed to meet established immunogenicity endpoints against the licensed competitor with a commitment to conduct a confirmatory post-marketing trials to demonstrate clinical effectiveness. We conducted a Phase II clinical trial of NanoFlu in the fall 2018 in The United States, and a couple of months ago, we announced positive top-line results. This trial, compared the safety and immune responses of various quadrivalent formulations of NanoFlu with or without our Matrix-M adjuvant with two U.S.-licensed influenza vaccines in 1,375 healthy adults, 65 years of age or over.

All formulations of NanoFlu were well tolerated and elicited vigorous immune responses to the four strains included in the vaccine. NanoFlu also demonstrated significantly improved hemagglutinin inhibition or HAI antibody responses against wild-type H3N2 viruses, including drifted strains when compared to Fluzone High-Dose. As you may remember, H3N2 is currently the strain that causes the most morbidity and mortality in older adults in The United States. We will again meet with the FDA in the next couple of months to discuss these Phase II data, to propose Phase III trial design and the potential use of the accelerated approval pathway for licensure.

If FDA agrees with this approach, given our successes in Phase I and II, we believe we can confirm these results in a pivotal Phase III trial. With that update of our two key programs complete, I'll now turn the call over to John to present a financial overview of the quarter.

John Trizzino -- Chief Business Officer and Chief Financial Officer

Thank you, Stan. Today, we announced financial results for the fourth quarter and full year of 2018. For today's call, I will focus on the key results for this quarter. The 12-month financial results can be found in today's press release.

For the quarter, we recorded a net loss of $49.3 million or $0.13 per share, compared to a net loss of $50.8 million or $0.16 per share in the fourth quarter of 2017. Revenue in the quarter decreased 41% to $6.1 million, compared to $10.4 million for the same period of 2017. The Bill & Melinda Gates Foundation grant revenue is directly related to operating activities in the Prepare trial, and so therefore, this decrease in revenue is a result of completing enrollment of the Prepare trial in the second quarter of 2018. Related to our net loss for the quarter, R&D expenses decreased 13% to $43.4 million, primarily due to decreased development activities of ResVax and lower employee-related costs, partially offset by increased development activities of NanoFlu.

G&A expenses increased 8% to $9.2 million in the quarter, primarily due to higher professional fees. As of December 31, 2018, Novavax had $103.9 million in cash, cash equivalents, marketable securities and restricted cash. Net cash used in operating activities for the fourth quarter of 2018 was $45.3 million, compared to $43.4 million in the fourth quarter of 2017. One additional note is that we decided to utilize the ATM this quarter.

Even though our stock price is considerably below what we believe to be is fair value, we concluded that it was more important to add to our balance sheet as we negotiate with potential partners and regulators. As disclosed in the 10-K, we added $41 million to our cash position this quarter from our ATM and expect that this will give us more room to evaluate our options. This concludes my financial review. And I'll now turn the call back to Stan for closing remarks.

Stan Erck -- President and Chief Executive Officer

Thanks, John. To reiterate, 2018 and since the beginning of 2019, the Novavax team has remained focused on advancing our lead programs, ResVax and NanoFlu. I'm proud of the results we've achieved for both programs. I'd like to thank our current shareholders for their continued support.

We look forward to updating you on our progress throughout the year. Operator? 

Questions and Answers:

Operator

[Operator instructions] Our first question comes from Kevin DeGeeter with Oppenheimer. Your line is now open.

Kevin DeGeeter -- Oppenheimer and Company Inc. -- Analyst

Hey. Good afternoon, guys. Thanks for taking our questions. Just a few from me.

First, with regard to the potential Phase III study for NanoFlu. How are you guys thinking about the most likely comparator there? I guess, we're all sort of interested commercially in Fluzone and Fluzone High-Dose, but there may not necessarily be a quadrivalent comparator there. Do you think it's compared against another quadrivalent? Or do you have -- do you have discretion to choose the more commercially relevant comparator in Fluzone?

Stan Erck -- President and Chief Executive Officer

Yeah, I think, it's a great question. We haven't decided which one we're going to compare against. What we achieved, well, remember what we set out to do is show that our vaccine is better than the best-selling vaccine in a premium-price market, which we did. We've now done it in Phase I, Phase II.

Those results are in our pocket. So the Phase III could be any number of options. And so we'll talk with the FDA about it. You're right, Fluzone High-Dose might be a trivalent, and we might be encouraged to do it against a quadrivalent and there are choices to do it out there.

And so we'll decide that in discussions with the FDA.

Kevin DeGeeter -- Oppenheimer and Company Inc. -- Analyst

Two more housekeeping questions for me and then I'll get back in the queue. In terms of additional inflows under the agreement with the Gates Foundation, should we think of those continuing into the first half of 2019? Or from a cash standpoint, is that largely squared up now that Prepare study is done? And then, John, you mentioned there were $41 million raised on the ATM in the first quarter of '19 so far. Can you just give us a share count to correspond with that?

Stan Erck -- President and Chief Executive Officer

Yeah, Kevin, it's Stan. I'll do the Gates Foundation first. We remained tied in with the Gates Foundation. Their view of our data on this trial is that we delivered what we had promised to them.

And they like that, they're excited about the data. And I believe that they will work with us, not just through the rest of this year, but long beyond that to help us get licensure and product available for their countries. So I think, we're going to have a long-term relationship, which will probably, hopefully expand the investment they're making in this program. I think, with Gates and everybody else, Kevin, I think, the -- before the question comes out, all this -- everybody is interested in this program.

They like a lot of the parts of the data that came out with the Phase III trial and now the question is what's the pathway to licensure, and we're going to be pretty aggressive about trying to convince regulatory agencies that we have the data that supports licensure.

John Trizzino -- Chief Business Officer and Chief Financial Officer

Kevin, for the second part of your question on the $41 million raised off of the ATM in the first quarter of 2019, it was about 50 -- approximately 56 million shares associated with that $41 million.

Kevin DeGeeter -- Oppenheimer and Company Inc. -- Analyst

Great. Thanks for taking my questions, guys.

John Trizzino -- Chief Business Officer and Chief Financial Officer

You're welcome.

Operator

Our next question comes from Michael Higgins with Ladenburg Thalmann. Your line is now open.

Michael Higgins -- Ladenburg Thalmann -- Analyst

Thanks. Congrats, guys. Thanks for taking up our questions. One, if I could, on NanoFlu.

Regarding the Phase II, I believe, you mentioned that there may be an update coming on the later time points. So far you've provided Day 28. Are you still looking to give us an update on the continued efficacy safety profile of NanoFlu, and if so, what time point? Thanks.

Greg Glenn -- Chief Scientific Officer

Yeah. Hi, Michael. Greg here. We are going to provide an update.

It's not in the near future, but we do have Day 56 and Day 180, I believe. And so we'll measure the HAI and report on that. So it -- I don't think we have a date yet for presentation of that data and we will publish it as well.

Michael Higgins -- Ladenburg Thalmann -- Analyst

OK, so that's not something we should look for in press release, but something to be presented at the conference and if I might, I may have something coming in the fall then?

Greg Glenn -- Chief Scientific Officer

I think, it will be sooner than that. So maybe Q2.

Michael Higgins -- Ladenburg Thalmann -- Analyst

I'm sorry, you broke up there. Maybe when?

Greg Glenn -- Chief Scientific Officer

Q2.

Michael Higgins -- Ladenburg Thalmann -- Analyst

OK, great. And then also if the FDA agrees as we're looking at that they'd accept [Inaudible] as an approval endpoint for Phase III, would this be against particular strain, a couple of strains? And then how is the success against drifted strains get into play as you're looking at endpoints for the Phase III?

Greg Glenn -- Chief Scientific Officer

Yeah, so this is Greg. So the comparison would be obviously against a licensed comparator vaccine, and we look for noninferiority against each of the homologous strains. So assuming it will be quadrivalent vaccine, we would look to show noninferiority against all four of the strains. We, of course, are very interested in the drifted strain as we've talked about before, where antigenic drift and adaptation are big issues, and so we would also, as exploratory endpoint, demonstrate how our vaccine works against those other strains, especially with regard to H3N2, where this is a major problem.

Michael Higgins -- Ladenburg Thalmann -- Analyst

OK. And then just one on ResVax. It sounds like you've talked with KOLs, partners. Obviously, you're working toward regulatory discussions in at least two regions.

How would you say your outlook for the partnership global versus regional is since the results have come from Prepare, more or less likely do you think has a global partner for Q2?

Stan Erck -- President and Chief Executive Officer

Yeah, it's too early to say, actually. We've talked to everybody. Everybody likes the data and it just depends on what the regulatory agency would say, and it may depend upon what the regulatory authority agency say in Europe versus the U.S. or some other country.

We've got, really, two major customers for this program. One is in lower middle-income countries and the other one is in the high-income countries. And within the high-income countries, there are maybe two different pathways. So we don't know, but we're going to -- it's just -- it's a time issue and we'll know probably within the next, I don't know, 90 to 120 days is when we expect to have most of these meetings.

And so it's been a lot more. So we -- there's a lot to prepare. This is -- sorry, we're putting together all of the information that we have accumulated over the last four years and putting it into a way that's -- can be put into a briefing book, so it's understandable. So that takes a little bit of time.

And then they have to have anywhere from 30 to 45 days or more to review it, before you can have a meeting. So it's a little complicated, but we'll get there.

Michael Higgins -- Ladenburg Thalmann -- Analyst

Yeah, I'm sure. Just one quick follow-up. Would we have some feedback from you as to how those meetings go once you have the minutes back or after you had those meetings?

Stan Erck -- President and Chief Executive Officer

Well, we'll have to see. I can't predict until...

Michael Higgins -- Ladenburg Thalmann -- Analyst

OK, I'll get back in the queue. Thanks, guys.

Stan Erck -- President and Chief Executive Officer

Yep.

Operator

Our next question comes from George Zavoico with B. Riley FBR. Your line is now open.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

Hi. Good afternoon, everyone. Thanks for the update. Let's start with the FDA, EMA regulatory agency deliberations and potential outcomes.

The EMA had been a little bit more lenient in terms of what the lower band of the confidence interval would be for approval. So potentially, there may not be agreement between the FDA and the EMA. So if the FDA says you need to do post marketing or you need to do the trial, and EMA says go ahead and submit, are you going to look for consensus or you're going to take two different paths? Or is it too early to tell about that as well?

Stan Erck -- President and Chief Executive Officer

The answer is it's too early to tell. But, I think, taking two different paths is not -- we've planned on -- we've always planned on filing with both at around the same time. And so if we get two different answers, we'll file with the one that is looking for a BLA.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK. All right. And Greg, I thought I saw that you were scheduled to speak at the World Vaccine Congress in Washington or...

Greg Glenn -- Chief Scientific Officer

We are, yes.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

Is that going to be ResVax, NanoFlu or do you have -- what are you going to...

Greg Glenn -- Chief Scientific Officer

We haven't announced it yet. But I think it's going to be, we're very likely going to talk about the ResVax...

Stan Erck -- President and Chief Executive Officer

I think, we've got two presentations scheduled for ResVax there and the ESPID.

Greg Glenn -- Chief Scientific Officer

And the other presentation is plenary. So yes, World Vaccine Congress, I think, it's 24 April. And then the ESPID is 7th of May. ESPID is a plenary session for the European Society for Pediatric Infectious Diseases.

That won't be me. I don't think we've announced. It will be one of the KOLs who will present that.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK. And finally, I have a question about the all cause. A decline in hospitalizations are all-cause respiratory infections. I mean, that means that that's not necessarily RSV associated.

Is it that RSV may contribute since it may be present or prevalent? It may impact the severity of flu or other respiratory infections? I'm trying to understand how that is different from RSV-associated lower respiratory tract infections?

Greg Glenn -- Chief Scientific Officer

Yes, so it's a commonly assessed outcome for vaccines. And I think, we provided some information on the pneumococcal vaccine, which is a very, very good vaccine, where the -- so first of all, define all cause. That would be the case definition without a pathogen diagnosis. So in the case of our vaccine, we saw a 25.3% reduction in all-cause lower respiratory tract hospitalization.

That's a -- so that is the case definition of lower respiratory tract hospitalization, but no need for diagnosis using PCR for RSV. So it does not require RSV detection. So the analog to that, which, I think, we cited in our investor presentation was a pneumococcal vaccine, which, as you know, is a very, very good vaccine. And its all-cause effect is around 47%.

So to get to your question how do you explain this from a pathophysiology standpoint. So this -- the all-cause effect of our RSV vaccine has, we would say, three manifestations. One, is to prevent the RSV we can that we detected in the trial. The second is to prevent RSV that we are unable to detect or did not detect, which is expected.

And finally, there are instances where RSV is antecedent for a secondary bacterial pneumonia or bronchiolitis, et cetera. And so those, I'd say, people in our field of RSV vaccines are not surprised by the broad effect, because RSV, obviously, is a leading cause of infant hospitalization and ubiquitous. So that effect, of course, is very, very important from a public health standpoint, because it's affecting all all-cause. And we had the same effect for severe hypoxemia, a 40% all-cause reduction for hypoxemia over six months.

And so these are effects that are related to prevention of RSV and have those -- I'd say, those three explanations for the mechanism of action.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

And is that -- has this ever been primary endpoint of any infectious agent that's probably...

Greg Glenn -- Chief Scientific Officer

No, no, no. Where it comes up -- no, it's -- where it comes up is after vaccines are licensed, people look at these things in terms of overall reduction of disease burden. That's -- and so it's a major important factor for health economics, et cetera. So you hope your vaccine would have some broader effect.

And we, in fact, see, I think, very, very good -- these are very promising effects. So they tell you the vaccine is working and in a trial, you just can't conduct -- you can't detect all of the disease. But this is the broadest net for assessment of the vaccine efficacy.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK, all right. Thanks very much.

Greg Glenn -- Chief Scientific Officer

Thank you.

Stan Erck -- President and Chief Executive Officer

Thanks, George.

Operator

Our next question comes from Joel Beatty with Citi. Your line is now open.

Shawn Egan -- Citi -- Analyst

Hi. Good afternoon. This is Shawn Egan calling in for Joel. Thanks for taking my questions.

Two for me on ResVax. Just when you think about partnership and the talk that you've had with them following top line, what has been the general feedback from prospective partners? And have either or any expressed any interest to be involved in these upcoming regulatory interactions?

Stan Erck -- President and Chief Executive Officer

Well, you can't -- too much detail on these. We have virtually -- all of the companies know us well. All of those companies know our program well. All of the companies appreciate that our two secondary endpoints, hospitalization and severe hypoxemia are large healthcare concerns and are -- should be -- could be available for licensure based upon those endpoints.

And so the question is how you get there. I think they're relying upon us to set up, to begin to make the arguments. And they would very much like to participate with us once we get answers back. And so -- so that's about as much as I can say from their shoes.

Shawn Egan -- Citi -- Analyst

All right. Great. Thanks. And then the second question.

One of the themes that came out of the Data call was moving the potential administration timing earlier. When you think about moving that earlier, if a subsequent study is needed, are there any real or hypothetical safety risks to that earlier administration? And do you have any data that supports it being safe?

Greg Glenn -- Chief Scientific Officer

Well, yeah. I think -- so the current practice for influenza and pertussis is to immunize earlier. Influenza, at any time in the pregnancy. Pertussis is recommended for second-trimester immunization, globally used that way.

So I think, what we did here is establish a very strong and I would say, expected safety database around our vaccine. And we'd have to have discussions with regulatory authorities on how to extend that. We don't see that as a major hurdle if we were to move the administration to an earlier time point in pregnancy.

Shawn Egan -- Citi -- Analyst

Great. Thanks.

Operator

Our next question comes from Eric Joseph with JP Morgan. Your line is now open.

Eric Joseph -- J.P. Morgan -- Analyst

Yeah. Hey, guys. Thanks for taking the questions. Just a couple from us.

I'm wondering if you can -- how are you thinking about the strategic optionality around NanoFlu at this stage in development? And whether you're thinking differently about the potential to monetize it, perhaps in any way ahead of the start of the Phase III? And then on the regulatory front with ResVax, sounds like most of your focus is with the FDA and EMA here. I'm just wondering if you could talk a little bit about any potential plans to consult with individual national health authorities outside of those primary regulatory bodies and which countries you might be -- you might prioritize in that process or when they might take place? Thanks.

Stan Erck -- President and Chief Executive Officer

Yeah, this is Stan. So regulatory questions, regulatory authorities. Oh I know, you want to monetize flu. So let's start with flu.

Our -- once we have an answer from the FDA, which, we think, we're going to get relatively soon on accelerated approval, we'll know what the pivotal trial is and the commitment to do a post-licensure efficacy trial. Once we know that, we can -- we have choices then. And we can either do the pivotal trial, which by Phase III standards will be a modest investment, and then you come out with licensable data. And so the question is, when you monetize it, do you want to do it before that and/or you want to wait and have the data in hand.

And so we haven't made that decision yet. We will wait until we get -- hear back from the FDA and what type of trial the next trial is going to be. And then we'll make that decision. With respect to RSV, and yes, we will focus -- we're going to focus on -- well, we'll do FDA.

We will do EMA. We are planning on going to -- I think last fall, we went and spoke with five different national regulatory agencies and had great feedback from all five. We'll go back to those folks this -- in the next three to six months. And we're actually -- so we'll do all that, and we're actually exploring other countries in which we conducted the clinical trial like Australia and South Africa.

And so we've got lots of work to do, to talk to all these places and see where is the best place to get our first sales of RSV vaccine.

Eric Joseph -- J.P. Morgan -- Analyst

Got it. And maybe just coming back to the Bill & Melinda Gates relationship. You talked about having an ongoing relationship with them in the foreseeable future. Is there -- just wondering if you can talk about sort of any financial commitments or contributions, I guess, in addition to the agreement that's been in place up to date, whether they might be coming in, you know, with additional resources as these regulatory discussions are ongoing? Thanks.

Stan Erck -- President and Chief Executive Officer

Right, the discussions are ongoing. I think, we have another, well, $10 million or $15 million left on our original grant. Hang on, so we have another $16 million left, that will cover expenses over the coming couple of quarters to finish up the commitments in the first grant. But with data in hand, we're talking with them, and obviously, those discussions have to remain confidential until we reach agreement on it.

But as I say, they want to see the product get made, product released, product distributed in their countries. And so we have to figure out how to jointly do that and what the best way is. They're sitting on something that can go quickly into their countries, I think.

Eric Joseph -- J.P. Morgan -- Analyst

Got it. I appreciate the color. Thanks for taking the question.

Stan Erck -- President and Chief Executive Officer

OK, good. So I think, that's it on the questions. And we appreciate everybody listening and asking questions. And we'll talk to you, if not before, we'll talk to you at the second quarter -- first quarter call.

So thanks.

Operator

[Operator signoff]

Duration: 30 minutes

Call Participants:

Erika Trahan -- Investor Relations

Stan Erck -- President and Chief Executive Officer

John Trizzino -- Chief Business Officer and Chief Financial Officer

Kevin DeGeeter -- Oppenheimer and Company Inc. -- Analyst

Michael Higgins -- Ladenburg Thalmann -- Analyst

Greg Glenn -- Chief Scientific Officer

George Zavoico -- B. Riley FBR, Inc. -- Analyst

Shawn Egan -- Citi -- Analyst

Eric Joseph -- J.P. Morgan -- Analyst

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