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AMAG Pharmaceuticals Inc (NASDAQ:AMAG)
Q1 2019 Earnings Call
May. 7, 2019, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, my name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the AMAG Pharmaceuticals First Quarter 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session.

(Operator Instructions)

It is now my pleasure to turn today's call over to Ms. Linda Lennox, Vice President, Investor Relations. You may begin your conference.

Linda S. Lennox -- Vice President of Investor Relations & Corporate Communications

Thank you, Regina. Good morning and welcome to the AMAG Pharmaceuticals conference call to discuss our first quarter financial results. Earlier this morning, we issued a press release. For those of you who don't have a copy, you can access it in the Investors section of our website at amagpharma.com.

Please be reminded that remarks made during this call may include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Please refer to our 2018 Form 10-K for a full review of the risks and uncertainties associated with our business.

On today's call, we will discuss certain non-cash financial measures with respect to our performance. We use these non-cash measures for financial and operational decision making and as a means to evaluate our performance because we believe they better represent the ongoing economics of our business. The definitions of our non-GAAP measures are set forth in our earnings press release, which was filed with the SEC today. Copies may be obtained at SEC.gov and in the Investor section of our website.

With me on today's call are Bill Heiden, our President and Chief Executive Officer, Tony Casciano, our Chief Commercial Officer, Dr. Julie Krop, our Chief Medical Officer, and Ted Myles, our Chief Financial Officer. Let me quickly run through the agenda for this morning's call. Bill will review the first quarter highlights and some recent developments. Tony will provide an update on our commercial products and Julie will provide an update on our development pipeline. And then Ted will provide an overview of our first quarter financial results and full-year guidance Bill will close with our 2019 priorities and then we'll open up the call for Q&A.

With that, it's my pleasure to now turn the call over to Bill. Bill?

William K. Heiden -- Chief Executive Officer, President & Director

Thanks, Linda, and good morning to everyone. Thank you for joining us. So let's get started with the review of the first quarter highlights and some recent developments.

I'll start our highlights list with this past quarter's promotion of Tony Casciano to Chief Commercial Officer. Tony joined the Company three years ago and was responsible for the very successful launches of our Makena subcutaneous auto-injector, as well as our successful commercial efforts to launch the expanded Feraheme label last year. In addition, he is also now overseeing the commercial efforts on Intrarosa, as well as launch preparations for Vyleesi. Before joining AMAG, Tony spent 16 years at Sanofi where he worked across a number of therapeutic areas with a strong record of success. Tony has a great team under him and they had a strong start to 2019, and you'll hear directly from Tony in a few minutes.

The Feraheme team continues to execute very well, achieving record quarterly revenues of $40 million in the first quarter, 59% growth over the first quarter of last year and double-digit growth over the most recent fourth quarter of last year. The commercial team drove strong volume growth and market share for the Makena subcutaneous auto-injector, achieving over 50% market share in the quarter. However, as you'll hear more about in a few minutes, some supply issues on the Makena intramuscular product caused a disappointing financial impact to Makena revenues in the quarter. However, we expect to replace our previous primary supplier of Makena IM with new inventory from two suppliers in the second quarter.

Intrarosa revenue in the first quarter totaled $4.4 million, which is double last year's first quarter revenue, down slightly from Q4 of 2018. Tony will walk through the highlights of the quarter in a minute. Importantly, you'll see that both volume and market share are back on an upward growth trajectory. During the quarter, we also closed on the transaction to acquire Perosphere Pharmaceuticals, including ciraparantag. We're very excited about the prospects for this product.

Lastly, today, we are reaffirming our 2019 financial guidance, which Ted would touch on in the financial section of this presentation this morning. Before I turn it over to Tony for a review of our commercial performance, I wanted to anchor everyone on our two strong commercial platforms that we're building on. We have a 48-person sales force calling on hematologists and key hospitals in the US. And on the right, we have a newly consolidated 124-person sales force focusing on women's and maternal health calling on the US OB/GYNs. Today, those teams are promoting Feraheme, Intrarosa and Makena subcutaneous auto-injector. And as we look to the future, our development pipeline fits nicely across these commercial centers of excellence, and Julie Krop will give an update on how those programs are progressing a bit later on the call.

So now let me turn it over to Tony to provide a commercial update. Tony?

Tony Casciano -- Chief Commercial Officer

Thanks, Bill. I'm excited to now be leading this talented commercial organization. AMAG has some great products today that really make a difference in patients' lives. Let me start with our products for the treatment of iron deficiency anemia, Feraheme. As Bill mentioned, Feraheme continues to grow and has accelerated more recently with expanded label, achieving a record $40 million in sales in the first quarter, an increase of 59% over last year's first quarter. These results were driven by volume growth as the sales team continues to drive share through differentiating Feraheme's strong clinical data and expanded label.

Feraheme market share expanded 16.1%, an increase of 5% over last year's first quarter. In the hematology/oncology segment, Feraheme has achieved even higher market share of over 30%. The IV iron market also continued to show a positive trend with more than 9% year-over-year growth. To help support this growth, we modestly increased the size of our sales force in the first quarter, which will enable expanded selling efforts in additional segments, primarily in GI. So full steam (ph) ahead for Feraheme as we expect continued strong performance by the team, growing share and a growing market.

Turning to Intrarosa. On the left side of Slide 9, you can see that first quarter sales of Intrarosa were $4.4 million, which is double last year's first quarter sales, but down from Q4. The overall volumes in this market due tend to drop in the first quarter as insurance deductibles reset and patients delay or abandon prescriptions in the first few months of the year. There were a couple other items impacting Intrarosa in the first quarter listed on the right side of the slide. We modified the patient copay savings program which did improve our realized revenue per script by more than 30%, but also resulted in some volume loss.

We'll continue to fine-tune those adjustments throughout the year as we learn more about the elasticity of this market. We also combined the women's health and maternal health sales forces in February and we're excited about what we know this team can do. Those changes did result in a bit of anticipated disruption in the quarter, as we realigned and cross-trained that team on both Makena and Intrarosa. In the center chart, you can see the weekly new prescription market share in blue and total prescription share in red from the start of the year. It's nice to see the dotted trend lines that we grew new script market share through the quarter right through the most-recent last couple of weeks, and that we're covering nicely from the total script share dip, which is the red dotted trend line.

We experienced mid-quarter growth and we have returned to solid weekly total script market share growth in the last few weeks. Looking ahead, with a focused sales force promotion and positive impacts from our direct-to-consumer program, we would expect market share and revenues to grow as we progress through the year.

Turning to Makena. Before I tell you about the incredibly strong volume and market share performance of our team on the subcutaneous auto-injector, Ted is gonna walk through some of the financial headwinds that affected total Makena revenues in the quarter.

Ted?

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Thanks, Tony. Makena's performance during the first quarter of 2019 needs some unpacking. The team delivered incredible volume growth and share gains for the subcu auto-injector. However, there are a number of gross-to-net charges that impacted our financial results for the Makena franchise. I'll state that we're disappointed with our reported net revenues of $31.3 million, represented by the light pink bar on the far right of the bar chart. There is more to the story, and we want to spend a few minutes explaining the gross-to-net charges, so that investors can understand our bullish view of the underlying business fundamentals particularly, the subcu auto-injector.

Let us start in the far left of the bar chart, Q4 2018. In total, we reported nearly $47 million of revenue in that period comprised of approximately $11 million of intramuscular product shown in the hatched and grey sections of the bar chart, and $35 million and auto injector revenue represented by the pink bar.

Moving to the right, you can see the next stack bar labeled Q1 2019 pro forma. This bar chart represents what we believe the quarter would have looked like, absent these gross-to-net charges I am going to walk you through. The total of $45.8 million, includes an estimate of auto-injector revenue presented by the pink bar, plus $3 million of authorized generic revenue represented by the grey. Due to the temporary stock out of the IM product in the quarter, we incurred $3.5 million in failure to supply penalties that offset the authorized generic revenue recorded. The $42.8 million of pro forma auto-injector revenue was derived by multiplying actual volume for the quarter times an estimated net price that would have been recorded if not for a $5 million charge as shown in the next column labeled higher government rebates.

This gross-to-net charge was the result of an unfavorable increase in our estimated Medicaid liability on auto-injector sales during the quarter, directly related to the IM supply constraints. This increase relates to best price calculations and importantly the gap between best price and AMP or average manufacturer's price. Due to this estimated increase in Medicaid liability for sales in the current period, we booked $37.8 million in auto-injector revenues for Q1 2019. It is worth noting that this is still an increase as compared to the $35.1 million of auto-injector revenue recorded in the fourth quarter of 2018. The final item is more routine in nature and it relates to a change in estimate of prior-period Medicaid liability for branded IM sales.

Medicaid rebates often lag many quarters and arrears, and we therefore estimate our liability in a given period. We update our estimates as new information arrives. In some quarters, the change in liability is favorable and in this case it was unfavorable. We expect the IM supply issues to be resolved this quarter. Pending FDA approval of a new supplier, we have significant IM stock that will be available for sale in Q2. Additionally, we have been working with another supplier that is currently ramping up production for Q2. So we believe we will have ample supply to get revenues from the IM formulation back on track.

Specifically, we plan to resupply our authorized generic partner and this will allow us to avoid the issues that occurred in Q1. We wanted to provide this level of detail so you can understand the underlying dynamics of the business, specifically that the subcu auto-injector volume and share performance are strong, but to also be clear about the IM supply issues in the quarter and how they impacted reported revenue. Our belief is that many of these items particularly the failure-to-supply penalty and the higher government rebates will prove to be non-recurring in nature.

Now, I'll turn it back over to Tony.

Tony Casciano -- Chief Commercial Officer

Thank you, Ted. From a demand perspective, this was an excellent quarter for the subcu auto-injector, which continued to grow despite the availability of multiple IM generics. Bill already mentioned in his opening remarks that volume grew 40% over Q4 and that volume growth was driven by market share gains of 7 percentage points to 54% in Q1. Not only are we seeing strong physician support, but also continued favorable payer support.

In addition 66% of prescriptions received by Makena Care Connection, our patient hub, are arriving with dispense-as-written indicated on the prescription, further demonstrating growing physician and nurse preference for the subcu auto-injector, and greatly decreasing the potential of a script being switched to a generic IM.

We believe the subcu auto-injector's successful launch and sustained growth can be attributed to the product's differentiation, the continued strong execution of our highly skilled sales force and our best-in-class patient support services offered by Makena Care Connection. Four patients on the subcu auto-injector.

So some great commercial execution in the quarter maternal health team leading to continued demand growth and confidence on the durability of the franchise. During the first quarter, we also released top line results from the PROLONG trial. There hasn't been much noise from the sales force nor from prescribing physicians, but I'd like to ask Julie Krop to cover an update on those results. Julie?

Julie Krop -- Chief Medical Officer and Executive Vice President

Thanks, Tony. It sounds like news from the field is consistent with recent statements issued by the major medical societies, ACOG and SMFM, which reinforce our commitment to current practice guidelines related to the use of Makena and their intention to wait until the PROLONG data is published before making any further conclusions.

As a reminder, the PROLONG data did not replicate the efficacy results seen in the original news trial that served as the basis of Makena's FDA approval. But it did confirm Makena's favorable safety profile. It's important to note that the PROLONG study was comprised of a different patient population than Meis. It evaluated a primarily Caucasian patient population from Eastern Europe with a significantly lower background rate of preterm birth, compared to the patients in the Meis trial, which consisted of a more racially diverse US patient population with a higher background rate of preterm birth.

So what are the next steps? We've recently completed additional subset analysis on the data, which we will be submitting to the FDA along with the primary study results and our perspective of how to put this data into the correct context for the US patient population. We also plan to meet with the FDA to discuss next steps. In parallel, we are working with a group of key opinion leaders who sit on our Publications Committee to begin planning for the publication of the study results. I don't expect any of this is going to move quickly, as it's clear that all stakeholders want to carefully evaluate this new data in light of the previous positive trials in the US, the large unmet medical need and the Makena's favorable safety profile.

Now let's review our development activities. I'm going to keep my comments brief, since we will be covering all three of our development stage assets in much more detail at our upcoming Analyst Day in a couple of weeks. We had a strong presence at this year's American College of Obstetricians and Gynecologists recent annual meeting in Nashville. In addition to the many commercial activities from Makena and Intrarosa, we had an oral podium presentation as well as two poster presentations of the meeting. The oral presentation focused on a subset analysis of women taking contraceptives and the pivotal Phase 3 bremelanotide study. The analysis demonstrated improved sexual desire and related distress in women treated with bremelanotide compared to placebo regardless of the type of contraceptive used.

One of the poster presentation summarized data supporting the consistent efficacy of BMT treatment in patients with HSDD, irrespectable of their duration of disease. And the other poster presentation focused on data from a study in patients with abnormal uterine bleeding that demonstrated improvements in anemia and fatigue for up to six months after a single course of ferumoxytol.

So a lot of interesting data presented at ACOG and a lot of enthusiasm and interests in the potential near-term approval of bremelanotide for the treatment of premenopausal women with low sexual desire and related distress. Bremelanotide or its trade name Vyleesi is currently under review by the FDA with a June 23rd PDUFA date. As we previously disclosed, the FDA requested that we conduct a short-duration ambulatory blood pressure monitoring study in a small number of healthy volunteers.

And as previously disclosed, we've completed that study and have already submitted the data to the FDA for review. I won't be able to go into any detail today but I'm happy to report that we are currently in labeling discussions with FDA, and are looking forward to the agency's decision in about six weeks. In preparation for approval, we recently kicked off two new disease state awareness campaigns, one aimed at healthcare providers and the other a direct to consumer campaign. In March, we launched the healthcare provider campaign called It's Not About Sex at ISSWSH and reintroduced it this past week at ACOG.

We've also launched a broad digital awareness campaign directed at healthcare professionals, which has already been viewed over half a million times since March 25th. So really off to a great start. And just last month, we launched the direct-to-consumer campaign to increase HSDD awareness among premenopausal women. Unblush.com is intended to educate women about the condition, highlighting that it is treatable and encouraging them to seek appropriate diagnosis and treatment. We're also partnering with some HSDD experts, who can provide the consumer community with answers to their questions and are looking forward to this campaign further increasing awareness of HSDD prior to our potential approval next month.

Finally, I'll end with a quick update on the ciraparantag program. On the right side of this slide is a picture of the automated portable coagulometer device developed by Perosphere Technologies to more precisely and rapidly measure whole blood clotting time. Whole blood clotting time is an important laboratory measure of the time it takes to form a blood clot and will allow us to select the most effective dose of ciraparantag required to reverse the anti-coagulation effects of NOACs in our Phase 3a healthy volunteer study.

Before we initiate the Phase 3a study, we need to get clearance from the FDA to use the coagulometer to measure whole blood clotting time through a process called an investigational device exemption or IDE. We have a meeting scheduled with the FDA soon to discuss the Phase 3a protocol and what if any additional data on the device needs to be included in the application.

Based on that feedback, we plan to submit the IDE applications mid-year. The review process typically takes about 30 days. And as soon as we receive that approval, we will initiate the Phase 3a study. In parallel, we are preparing to apply for both breakthrough and orphan designations, which if granted will enable us to partner more closely with the FDA to expedite the overall development program. We anticipate that the end of Phase 2 meeting with the FDA will take place in the second half of this year and will allow us to gain alignment with the agency, on the design of the Phase 3b patient study.

Ted will now walk you through a review of our first quarter financial results and 2019 financial guidance. Ted?

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Thanks, Julie. As a quick reminder, all of the financial information that we're presenting this morning excludes the historical financial results of CBR. That divestiture was accounted for as discontinued operations in those operating results that appear in our separate section of our consolidated income statements. I won't walk through the revenue numbers, since those have already been covered.

Moving to reported operating expenses, year-over-year they increased by $25 million. This increase was primarily due to a $75 million acquired in-process research and development charge or IPR&D, related to the acquisition of Perosphere. The value of our Perosphere for acquisition was concentrated almost exclusively in the ciraparantag asset. Therefore, the acquisition qualifies as an asset acquisition for accounting purposes. Because the asset is still in clinical development, the appropriate accounting is to expense the amount to acquired IPR&D in the current period. Also contributing to the increase in operating expenses was a one-time restructuring charge of $7.5 million related to the combining of the Company's women's health and maternal health sales forces, and higher R&D costs of $7.3 million related to our ongoing clinical development programs.

These increases in operating expenses will partially offset by a $45 million reduction in costs of product sales, driven by lower intangible amortization expense, specifically the Makena intangible asset. The increased operating loss was due to a combination of lower revenues and higher expenses as described above. The shift from positive EBITDA in Q1 2018 to negative $26 million in EBITDA result in Q1 2019 is consistent with our expectations and our stated plan. We are investing for the future and have therefore shifted into a temporary EBITDA loss to support new product launches and the clinical development of the exciting assets Julie discussed earlier. Fortunately, we transformed our balance sheet over the past several years to support this evolution. We ended the quarter with $267 million of cash. The uses of cash included $71 million for the acquisition of Perosphere and $21 million to settle the remaining 2019 convertible notes. The Company also utilized approximately $13.7 million to repurchase 1.1 million shares of our common stock in the open market during the quarter. Our Board of Directors approved an additional $20 million to the existing stock buyback program, such that we now have approximately $27 million of authorized stock buyback remaining. Total debt as of March 31, 2019 was $320 million of our 2022 convertible notes.

We are reaffirming our financial guidance for 2019. We have a high degree of confidence in the underlying fundamentals of our subcu business, the Makena franchise as a whole and continued strong growth of Feraheme. To provide a bit more insight into our 2019 guidance, I want to note that our revenue guidance includes approximately $20 million of milestone payments that we expect to receive from our global pharmaceutical partner for the ciraparantag program. On a GAAP basis, our operating loss is increasing to include the accounting impact of the Perosphere acquisition. When we issued guidance in January, we had not yet closed the acquisition of Perosphere, so we indicated that the guidance excluded the accounting impact of the transaction.

Now I'll turn it back to Bill to present our key objectives for 2019. Bill?

William K. Heiden -- Chief Executive Officer, President & Director

Thank you, Ted. So another busy year where we are planning for continued commercial success under Tony's leadership and as well progress on the development stage programs that are shown here where we expect to initiate our Phase 3 program for ciraparantag, continue to focus on enrollment in our preeclampsia program with AMAG-423, and just a few weeks away, potentially receive approval and then launch of Vyleesi.

As we've shown previously, big picture, 2019 is a year where we'll use the cash flows from our commercial products to invest in the development and launch of new products that will drive future value at AMAG. In fact, we have our Analyst Day coming up in a couple of weeks, where we're gonna dig a bit deeper on these new products. And we've got a great lineup of key opinion leaders who'll give their expert opinions on the relevant medical conditions, current standards of care and potential role of each of our development products in these conditions.

And we've allocated plenty of time for Q-and-A with a goal of allowing people to share on our enthusiasm about the potential patient impact and value of these new products. I hope that you'll be able to join us live or through the webcast.

So with that, we will conclude our prepared remarks and we will open the call for questions. Operator?

Questions and Answers:

Operator

(Operator Instructions)

Our first question will come from the line of Ami Fadia with SVB Leerink. Please go ahead.

Ami Fadia -- SVB Leerink -- Analyst

Hi, good morning. Couple of questions. Firstly just with regards to Makena. Can you talk to the initial impact you may be seeing with the recent additional generic entry and as you've thought about your revised guidance, what impact are you expecting and are you also expecting additional generics to enter? And then I have a second question.

William K. Heiden -- Chief Executive Officer, President & Director

Okay. Ami, thanks for the questions. It's Bill. I'm going to ask Tony to take that first question.

Tony Casciano -- Chief Commercial Officer

Sure. So good morning. One of the remarkable things that we're seeing as generics enter the marketplace is we continue to see growth with the auto-injector despite those generics coming in. I think it's important to realize that. Some of the generic approvals have been listed for availability. Others have just been straight approvals and we haven't seen them available as of yet. But in general, I think we're pleased with what we're seeing as we continue to convert patients to auto-injector despite the increasing number of generics that we're seeing.

From a full year perspective, I think there's a couple that are out there. Our CI would indicate that there are few that are pursuing and as actively. Again I think it's important to remember that CI -- it's in nature, it's not perfect, it's not a perfect science. Competitive intelligence, the CI, for those of you that don't know. But we've been pretty accurate so far with what our estimates and we would assume that there'd be at least an additional generic throughout the year in 2019.

Edward H. Myles -- Executive Vice President & Chief Financial Officer

And Ami, just -- this is Ted, I'll jump in. You mentioned revised guidance. We are not revising guidance. So I just want to clarify that. Guidance is...

Ami Fadia -- SVB Leerink -- Analyst

Yes, that's what I meant. You sort of reiterate your guidance. I had a separate...

William K. Heiden -- Chief Executive Officer, President & Director

The other thing that I want to be clear on the quarter, because it really is playing out exactly the way we had forecasted, which we've had nice strong volume growth and $42.8 million pro forma that Ted spoke about earlier, includes strong volume but we've been aggressively contracting and so pricing is a little lower than it was in 2018 and so on a go forward basis, I think again what we'll see is that we'll continue to gain share for the subcu auto-injector. We may have to trade a bit of price as we go forward. But net-net, I think we're comfortable that the product is going to continue to perform very nicely. So I'll stop there and let you ask your second question.

Ami Fadia -- SVB Leerink -- Analyst

Okay, great, thank you. Just with regards to Intrarosa. What's your latest thinking with regards to some of the changes that you had made on the copay program, earlier in the year? And are you at a point where you would change some of those dynamics and what flexibility do you have in your P&L, if we do not see volumes pick up as we would have hoped to as the year progresses? Thank you.

William K. Heiden -- Chief Executive Officer, President & Director

Great. I'll ask Tony to...

Tony Casciano -- Chief Commercial Officer

Yeah sure. So from a flexibility perspective, we can make changes to the copay program and we have made a couple of changes as recent as last month, in response to what we're learning about this marketplace. And what we're learning is I think that you can improve GTMs and right, but it becomes a cost of volume. And there's a balance that we're trying to strike. Obviously, the idea is to grow revenue over time. If you increase GTMs but you lose too much volume, that's not a possible result.

So, one of the things that we see in this marketplace which does have generic competition as some other low priced competitors is that it's a little bit more difficult to improve GTMs without sacrificing some volume. We're learning a lot, we're flexing. I think we've seen positive signs so far to close the quarter since those changes have been made from a volume perspective. But we'll continue to monitor it, as I said in the opening remarks.

William K. Heiden -- Chief Executive Officer, President & Director

I'd also just add, Ami, that I think we're close to where we want to be in terms of our copay program and the gross-to-net. And as you saw in the chart that Tony presented, TRx's are bouncing back nicely. So I think we're on the right trajectory as we head into here in Q2 and the remainder of the year and maybe ask to Ted to about P&L flexibility when it comes to expenses.

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Sure. Thanks, Ami, for the question. Yeah Ami, you saw that we merged the sales forces in Q1. So, one sales force best-in-class promoting Makena and Intrarosa, and hopefully soon Vyleesi, that gives us a lot of P&L flexibility. It also sort of changed the mix of our total expenses to be a little bit more heavy weighted to external spend and those obviously are more adjustable up or down as the year progresses.

One of the things that gives us a lot of conviction to hold our guidance is the underlying strength of the business, the subcu, Feraheme and the trends we're seeing on Intrarosa.

Ami Fadia -- SVB Leerink -- Analyst

Got it. Thank you.

William K. Heiden -- Chief Executive Officer, President & Director

Thank you, Ami.

Operator

Your next question comes from the line of Stacy Ku with Cowen. Please go ahead.

Stacy Ku -- Cowen Inc. -- Analyst

Hi team, good morning and thank you for taking my questions. I have a few. First, could you help us understand how you view the Makena supply going forward? Just to clarify, can we consider the supply issues resolved with likely future supply outages. And this might have been asked before, but are other generics experiencing supply issues as well? And, I have a follow up.

William K. Heiden -- Chief Executive Officer, President & Director

Sure. So on the supply side, the supply issue was really unique, I think to us. We were moving from our original primary supplier to now two suppliers for the remainder of the year.

We have confidence because there are two suppliers teed up to supply in the second quarter, and in terms -- we've got significant volumes coming in from those two suppliers in the second quarter.

And that's why we have such confidence that this IM supply issue will be resolved. So, yes we are -- we have confidence.

Tony, I don't know about supply on the generics side, other than there are two generics, I believe that have been approved but still have not launched.

Tony Casciano -- Chief Commercial Officer

Yes, we can only speculate. We have no reports of supply issues from generic competition. As Bill mentioned, there are a couple that have received approvals on their end that have not yet commercialized. Maybe a reason for that is they don't have supply. We don't know that to be true definitively, but nothing that we know about as of today.

William K. Heiden -- Chief Executive Officer, President & Director

Okay. Go ahead, Stacy.

Stacy Ku -- Cowen Inc. -- Analyst

Okay. And a pipeline question. I understand that we might not have crystal clear clarity on the ciraparantag trial details, but is there any more specific timing on when the Phase 3a might begin after the FDA meeting?

And could you provide a quantitative measure on how long it might take to get results? Could we still anticipate potentially getting results by the end of this year?

William K. Heiden -- Chief Executive Officer, President & Director

On the 3a for ciraparantag.

Julie Krop -- Chief Medical Officer and Executive Vice President

Yes. So the 3a study, well again, we're dependent as I mentioned on getting the IDE approval which we're -- fairly confident that we'll definitely be able to in the near term. So, we're hoping to start in third quarter the 3a trial. As far as exactly when we'll finish it up, I think we're seeing by the end of the year, we should be able to complete that study. I think we're still pretty confident about that. So, I think that was...

William K. Heiden -- Chief Executive Officer, President & Director

Yes, the Phase 3a trial, Stacy, you're probably aware of this. These are healthy volunteers. And so, you work with a site that actually has them kind of lined up and so you can run that fairly quickly. And the results that you get are also fairly quick in that the reversal agent is studied over 24 hours. So I think what you're alluding to is we should get those results pretty quickly.

As Julie mentioned, we're targeting to have the three completed by end of year, which means results would probably be available as early '21, excuse me early '20.

Stacy Ku -- Cowen Inc. -- Analyst

Yes. Okay. Thank you very much.

William K. Heiden -- Chief Executive Officer, President & Director

Thank you.

Operator

Your next question comes from the line of Jessica Fye with JP Morgan. Please go ahead.

Jessica Fye -- JP Morgan -- Analyst

Hey, guys. Good morning. I was hoping you could just help us understand how you are maintaining your top line and adjusted EBITDA guidance in a little more detail beyond kind of the -- I realize you're confident in the business in general.

So, a couple specific questions on revenue. Are you reiterating that $40 million to $50 million quarterly run rate range for Makena for the rest of the year? And also you mentioned $20 million in expected ciraparantag development milestone payments. Is that guaranteed or pending some event?

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Hey Jess, it's Ted. Thanks for the questions. Yeah, we are still -- we are confident in the $40 million to $50 million quarterly run rate for the Makena franchise, and particularly subcu. We would have been there this quarter based on volumes. And some of that price impact, due to the generic competition, but really the some of these one-timers got us this time.

So, one thing that gives us a lot of conviction is the strong underlying demand and the confidence that with the IM supply issues resolved, while these one-time gross-to-net charges will prove about to be just that one time. We'll have it behind us as we get through Q2 and beyond.

The other component of your question, about the $20 million from our global pharmaceutical partner. It's not guaranteed. We've got our sights set on it. Achieving or receiving that $20 million is aligned with our clinical development plan. So, we have a high degree of confidence will receive that. It was originally based in our guidance, we didn't break it out because we hadn't closed the transaction yet.

William K. Heiden -- Chief Executive Officer, President & Director

Right. And these are -- from us from our perspective, there's not a tremendous -- scientific risk is really execution. So, we just got to get as we mentioned the 3a trial, which is a trial in healthy volunteers. We believe that's again just getting the trial up and running. And so it's just execution.

Jessica Fye -- JP Morgan -- Analyst

And I know you guys touched on this, can you just spend a little more time on the progress with ciraparantag and the coagulometer, and just recap at what time points you'll communicate things like feedback on the pre-submission meeting, the IDE submission itself, and the end of Phase 2?

Julie Krop -- Chief Medical Officer and Executive Vice President

Okay. Julie -- Jess, this is Julie Krop. Thanks for the question. As far as the pre-submission meeting is coming up with the FDA as you know in order to get an IDE on the device. There's a lot of analytics that have to be submitted. So, we're completing those analytic studies. We'll be sharing with the FDA, our plan on all the analytics as well as some of the data, and then hopefully quickly after that be able to submit the application.

As, I said it takes typically about 30 days to get. We as far as updating you on the progress with this pre-submission meaning, we don't -- we probably won't be updating on that meeting, but likely we'll be announcing when we submit the IDE application. And then obviously, the start of the Phase 3a study will be the trigger that we completed the IDE approval. So, I think that's where we are primarily with those timelines.

And then as far as the end of Phase 2, are you speaking about the end of Phase 2 meeting with the FDA?

Jessica Fye -- JP Morgan -- Analyst

Yes.

Julie Krop -- Chief Medical Officer and Executive Vice President

So that meeting will come -- we're planning for sometime third quarter, and somewhere in that time range. And usually we don't comment on end of Phase 2 meetings. We'll probably discuss upcoming plans for the 3b trial in terms of design that would come out of that meeting.

So, that's kind of like the plan.

Tony Casciano -- Chief Commercial Officer

The only other thing I would say, Jess, is you'll get a chance actually to see the coagulometer at the at the Analyst Day. So we're going to -- you'll see it there and we'll discuss it in a little more detail. We have done a lot of the validation work. And as you probably know, currently whole blood coagulation is a pretty primitive measure.

And so part of our -- a lot of our confidence relies on the fact that this coagulometer is faster, more accurate and based on the validation work, the results are reproducible. So I think we have a fairly high degree of confidence, but we want to have that FDA meeting so that we can speak confidently in terms of the feedback from the agency.

Jessica Fye -- JP Morgan -- Analyst

Okay. Great. And maybe just one last topic following up on one of the prior questions on Intrarosa. When you talk about growth in your revenue guidance, is that year-over-year revenue growth? What specifically was the average net price per script in the first quarter?

And just to make sure we understand the net price dynamics, should we expect stability in gross-to-net for the rest of 2019, now that you've had this improvement relative to last year, or should we look for continued improvement from here?

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Hey Jess, it's Ted. So, as you recall in back half of 2018, we're in the $77, $80 range. Used to report we approached $100 in Q1. And as Tony mentioned, we're still dialing in to try to find the right balance between a good healthy gross-to-net but also one that gets patients to fill their scripts and really that enables us to really grow this market.

And so that's the balance we're trying to find. Stay tuned as we continue to work through the copay program.

William K. Heiden -- Chief Executive Officer, President & Director

So, I think relatively stable gross-to-net for the remainder of the year with increasing volumes. That's really our goal.

Jessica Fye -- JP Morgan -- Analyst

Great. Thanks, guys.

William K. Heiden -- Chief Executive Officer, President & Director

Thank you, Jess.

Operator

(Operator Instructions)

Your next question comes from the line of Serge Belanger with Needham & Co. Please go ahead.

Serge Belanger -- Needham & Co. -- Analyst

Hi, good morning. A couple of questions on Makena. So we're now about five weeks into the second quarter. Can you give any indication if the supply issues have been addressed and if we should expect any of these offsetting charges to also impact second quarter Makena revenues?

William K. Heiden -- Chief Executive Officer, President & Director

I'll ask Ted to talk about subcu. Just to let you know, Prasco currently has inventory. So, Prasco currently has inventory of the intramuscular form of Makena. The two suppliers we expect to come online in Q2 should then give Prasco significant supply and that's really what we're shooting for. We want to make sure they have significant supply for Q2 and the remainder of this year and we are absolutely on track to achieve that. And that's our expectation.

In terms of subcu auto-injector volume, I'll let Ted.

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Sure. So, as we mentioned on the call and continue to reiterate, that subcu -- the underlying physician demand of this product so differentiated, is continuing to drive very, very good strong underlying demand and fundamentals. So, it gives us a lot of confidence. With the IM coming online and that expectation, we certainly feel that failure-to-supply penalties will not reoccur in Q2 or in the future.

And the other item, I talked about the higher government rebates, that $5 million item, we feel that we're going to get past that as well based on the mix between subcu and IM on the overall business.

Serge Belanger -- Needham & Co. -- Analyst

And following the announcement of the PROLONG trial results, it sounds like you haven't seen an impact yet, but once the study is published, what kind of potential impact do you envision from the FDA or payers or even physicians?

William K. Heiden -- Chief Executive Officer, President & Director

So, Julie, maybe I can ask you to -- ask in terms of what you're hearing from KOLs, and then, Tony, what you're hearing from the field.

Julie Krop -- Chief Medical Officer and Executive Vice President

This is -- I don't want to comment obviously before the FDA, but from a physician perspective, this is a product that has been used on the market for many, many years. Physicians have a lot of confidence in it. There's no other options for these patients. Obviously, a huge unmet medical need. The PROLONG trial confirmed the safety profile that we've seen with Makena, which is strong.

So, I think for all those reasons -- and then obviously the very different patient population that we study, gives people a lot of pause for making any -- certainly any quick decisions or really any drastic changes in sort of practice. So, we're seeing remaining confidence despite these results.

And then, Tony, do you want to comment on the...

Tony Casciano -- Chief Commercial Officer

Yeah. So, qualitatively, as we talk to the sales reps, they're not encountering much negative feedback if any from prescribing physicians. And I think it's a lot of what Julie had to say. These physicians are using the product a long time. They see the results, they know the result, they have patients on therapy today, and they're very comfortable with it.

I think the other thing that's super encouraging and this is more quantitative, is we continue to see enrollments grow. We continue to see dispenses written rates grow, which is a really strong indicator to me, to us, that physician preference for branded Makena isn't waning one bit.

Serge Belanger -- Needham & Co. -- Analyst

Okay. And one last one, maybe for Bill or Tony. Just give an overview of the recent changes in the commercial organizations. Obviously, there is a key promotion and some changes with the hematology sales forces.

William K. Heiden -- Chief Executive Officer, President & Director

Yeah. So, let me start with Tony, because he's blushing and I don't want... Look, Tony did an outstanding job leading the launch of the subcutaneous auto-injector, he was also responsible for the incredibly rapid and successful launch of the Feraheme broader label. And so I was really pleased to give Tony some broader responsibility to now include Intrarosa and the upcoming potential launch of Vyleesi. Tony is a talented guy, he's got a talented team under him. And so I feel very good about the state of our commercial business and the platforms that we have.

Tony, you may want to comment on the sales force, both the realignment on the maternal women's health as well as the expansion of the Feraheme sales team.

Tony Casciano -- Chief Commercial Officer

Yeah, sure. First, maybe just -- maybe that was overstated a little bit. My team is amazing. We have an outstanding commercial team and they really should be congratulate the results for both the Feraheme launch and the launch of the subcutaneous auto-injector. So I'm blessed to be working with a talented group of individuals.

From alignment perspective, so yeah. We have a combined sales force now roughly a 125. They're getting after it with OB/GYN. They've been cross-trained. We've got a very strong leadership team that oversees that team. And we're gearing up for Vyleesi launch that everyone's really, really excited about.

On the Feraheme side, again, I think we're looking for profitable growth on Feraheme. So, we took a responsible approach at expanding into additional segments, primarily GIs. We also have an effort in OB/GYNs, that's not going away, but this expansion was primarily about getting some broader reach into the GI marketplace. I say modest increase. We went from roughly 42 to roughly 48. We also have a very talented team out there of strategic account managers. They are almost solely dedicated to hematology/oncology space, doing some contracting with those groups and then also in the hospital setting.

So, again blessed to be working with this team. I'm very happy about the opportunity to work as Chief Commercial Officer and with executive team as well. So, thanks, Bill.

Serge Belanger -- Needham & Co. -- Analyst

Thank you.

William K. Heiden -- Chief Executive Officer, President & Director

Thanks, Serge.

Operator

Your next question comes from the line of Eun Yang with Jefferies. Please go ahead.

Eun Yang -- Jefferies & Company, Inc. -- Analyst

Thank you. So regarding Intrarosa, obviously, the product has underperformed compared to your original expectations. So, when you are preparing to launch Vyleesi, I'm kind of wondering what gives you confidence that this time to be different.

Secondly, I understand that with a decline in revenue and you are developing products for the future growth, but at the same time, can you comment on when do you expect or trying to be cash flow positive? Thank you.

William K. Heiden -- Chief Executive Officer, President & Director

Sure. So, a lot of this, we'll provide a bit more detail at the Analyst Day. We're going to try and give a longer-term view including return to cash flow positive. So, we'll provide some of that at the Analyst Day in a couple of weeks. So hope to see folks there.

In terms of Intrarosa and Vyleesi, these are two very different marketplaces. For Intrarosa, we obviously are competing in an existing market with a large number of estrogen competitors. There's safety issues that one might be concerned about with estrogen. Intrarosa has a very novel dual mechanism of action, which really differentiates the product.

There's an existing market. And so those markets tend to take a little longer to turn versus Vyleesi, which is entering a market where for all intents and purposes, there are no good treatment options. And so it's going to be a slightly different dynamic. I will tell you that in 2019, in terms of our own expectations for revenue, Vyleesi is a modest contributor. And so, part of what we are I think doing different in terms of Vyleesi is modest expectations, and our goal will be to beat those expectations. But we're trying to temper expectations initially for Vyleesi and then obviously beat those expectations.

But Tony, maybe you want to comment on...

Tony Casciano -- Chief Commercial Officer

Sure. So just one thing I would add is, in addition to the market being different and the different competitive sets, I agree with Bill. I think Vyleesi is one of a kind. I think, it's a unique product and that's going to be fairly disruptive. Absolutely.

However, the patients are also very different, right. So these are completely different patient types. We have more engaged patients on Vyleesi side with HSDD, the younger nature more active digitally. So there's a more efficient approach potentially activating those patients. So we think that will be different as well.

And then we also have time on our side this time, right. So, we've had this asset for a while. I commend the team that launched Intrarosa. They did so at breakneck speed. I think they beat most of the industry analogs with how long it takes to launch. This time, we have time, right. So, we have an approach that we're taking. I think Julie alluded to -- already out in front of us with some market development activities both from a medical side and from a commercial side. So we have time, and we're doing this I think in a much more kind of a prudent way, if you will.

So, I would say it couldn't be more different. The thing that's similar is it's AMAG launching it, as well. Right.

Eun Yang -- Jefferies & Company, Inc. -- Analyst

Thank you.

William K. Heiden -- Chief Executive Officer, President & Director

Thank you.

Operator

At this time, I will turn the conference back over to Bill Heiden for any further remarks.

William K. Heiden -- Chief Executive Officer, President & Director

Great. Thank you all for joining us here this morning. We look forward to providing more details on our development portfolio from our expert panel on May 22nd, as well as continue to update on our progress across the portfolio throughout the year.

And with that, that concludes our call today.

Operator

Ladies and gentlemen, this does conclude today's meeting. Thank you all for joining. And you may now disconnect.

Duration: 52 minutes

Call participants:

Linda S. Lennox -- Vice President of Investor Relations & Corporate Communications

William K. Heiden -- Chief Executive Officer, President & Director

Tony Casciano -- Chief Commercial Officer

Edward H. Myles -- Executive Vice President & Chief Financial Officer

Julie Krop -- Chief Medical Officer and Executive Vice President

Ami Fadia -- SVB Leerink -- Analyst

Stacy Ku -- Cowen Inc. -- Analyst

Jessica Fye -- JP Morgan -- Analyst

Serge Belanger -- Needham & Co. -- Analyst

Eun Yang -- Jefferies & Company, Inc. -- Analyst

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