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Portola Pharmaceuticals Inc (NASDAQ:PTLA)
Q1 2019 Earnings Call
May. 8, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to Portola Pharmaceuticals First Quarter 2019 Financial Results Conference Call. This call is being recorded. At the end of the company's prepared remarks we will open the call for questions and provide specific instructions.

I would now like to turn the call over to Cara Miller, Portola's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Cara Miller -- Vice President of Investor Relations and Corporate Communications

Thank you, operator and good morning, everyone. Earlier today, we released our financial results for the first quarter 2019. The press release and accompanying slides, which you can advance through the webcast, are available on the Investor Relations section of the Portola website.

In a room with me this morning are Scott Garland, President and CEO; Mardi Dier, Chief Financial and Chief Business Officer; and Dr. John Curnutte, Head of Research and Development and Sheldon Koenig, our Chief Commercial Officer; also with us this morning for the Q&A portion of the call is Jeet Mahal, Vice President of Strategic Marketing.

Before we begin, I would like to remind you that remarks on this call will contain forward-looking statements. For a more detailed description of important risk factors that could cause our actual results to differ materially, please refer to our Annual report on Form 10-K .

With that, I will turn the call over to Scott Garland.

J. Scott Garland -- President & Chief Executive Officer

Good morning and thank you for joining us on our first quarter 2019 financial results call. As you know January marked the launch of our full-scale commercial efforts for Andexxa, we've been very pleased to report that first quarter 2019 AndexXa net revenues were $20.3 million. Total revenues for the quarter were $22.2 million. This is our fourth consecutive quarter of strong revenue growth and a terrific first quarter for the launch of Gen 2. We're excited about the progress we've made to-date and continue to be pleased with the uptake of Andexxa. We're also very excited to have formal regulatory approval for Ondexxya in Europe and we're moving forward with our plans to launch in a select group of high potential countries in the EU. We call these are waived one countries. We estimate that the number of eligible patients in these wave 1 countries is equal to or even greater than the number of patients in the United States. Over the coming months we'll continue building out the team in Europe are simultaneously progressing country level reimbursement discussions. With the goal of launching late in the second half of 2019. Sheldon will share more details in a moment.

The approval of on Ondexxya significantly expands the potential global market opportunity, and we expect this growth to continue over the coming years due to a number of factors. First, the use of Factor Xa Inhibitors in the U.S. and Europe. Therefore, the number of patients who need index that continues to grow at a significant rate each year. Second, our label expansion plans for index include the addition of the enoxaparin and edoxaban as well as the study in urgent surgery. And third the market could span even further, but the genericization of Factor Xa inhibitors starting in Europe in 2023 and in the United States in 2024. Taken together, you can see that we have the potential to impact hundreds of thousands of patients lives in the next 5 to 10 years.

We also continue to make progress with our Syk/JAK inhibitor cerdulatinib. As discussed on the last call, the end of Phase II meeting with the FDA was positive, and we believe we have an agreed upon plan forward. We have submitted additional data regarding proposed dose for registrational trial, and John will talk more about next steps in a moment. Finally, we believe that the potential patient benefit for Bevyxxa remains. While we're focusing our current commercial efforts on Andexxa. We are working in parallel to identify the best path forward for Bevyxxa. A little update you on our progress in the second half of the year.

In closing, 2019 is off to a great start with several key accomplishments already under our belt, as we continue to execute on our objectives. We're focused on the successful launch of index in the United States and now in Europe, as we work to expand patient access to this important medicine in these major markets.

Before I turn the call over to Sheldon, I going to take a moment and acknowledge and thank our dear friend and colleague Dr. John Curnutte, for his innumerable contributions over the last eight years. We are grateful for his dense fast determination in advancing the portfolio of medicines discovered at Portola and for his unwavering commitment to patients. We are fortunate to have him continuing on in a consulting role providing guidance to me and engaging with key academic and scientific part leaders.

As discussed in the release we issued in April, Portola's, Senior Vice President and Research, Dr. Pam Conley who lead the Company's research efforts, while Dr. Jeff Meyers, our Vice President, Medical Affairs will serve as an Interim Chief Medical Officer until the search for a permanent CMO is complete, something we expect to occur within the next several months.

And with that, I'll turn the call over to Sheldon.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thank you, Scott, and good morning everyone. I'm excited to share our plans for building on momentum we have established over the last few quarters. Today I will provide you with updated launch metrics for Andexxa, details on our full commercial efforts and an overview of our launch plans in Europe. As Scott mentioned, net revenues for Andexxa were $20.3 million for the quarter, which is right in line with our expectations and in my view impressive for this stage in the hospital product launch. As you know, we moved to a specialty distributor model for the Lonza Gen 2 and we have been working with our distributors throughout the quarter to understand and provide more context around the individual hospital ordering and reordering patterns.

In January, specialty distributors ordered approximately $2 million of initial inventory based on subsequent reorders from the specialty distributors, the amount of inventory with our distributors remained relatively constant throughout the quarter and is in line with industry norms. We also are beginning to see a consistent pattern in the order and reorder rate. At the end of the first quarter we estimate that approximately 300 hospitals were stocking AndexXa with our reorder rate of about 55%. This increase is in line with our overall trajectory thus far and we are seeing daily demand continue to grow.

Access and reimbursement is another critical component to our ongoing success and we were very pleased to have received our C-code in the first quarter. This reimbursement pathway for the outpatient setting, which went into effect on April 1 will be an important tool for expanding patient access to Andexxa as smaller community hospitals.

Additionally, CMS recently issued a proposal to increase the NTAP payment for innovative therapies like Andexxa from 50% to 65%, if approved this new percentage will go into effect on October 1, 2019 together with consignment for our specialty distributors we now have three important pathways to enhance access for Andexxa.

Our full-scale commercial marketing and education efforts are also well under way, including print advertisements in major medical journals, reprints of the full ANNEXA-4 results published in the New England Journal of Medicine and the continued expansion of our robust speakers' bureau. With the full sales force now trained in the field, we expect our reps will be able to initiate conversations with all of our target hospitals this year and we predict hospitals will continue to come online at a rate that is approximately consistent with what we have seen in the last few quarters.

Let's turn it out Europe, where we already have the support of European medical society guidelines, such as the European Society of Cardiology with the European Commission approval for Ondexxya in hand we will begin a stage launch in our wave 1 countries. These include the UK, Germany, Austria, the Netherlands and some of the Nordics. As Scott mentioned, we estimate that the number of eligible patients in these wave 1 countries is equal to or potentially even greater than the number of patients in the U.S. Additionally, these are countries where we believe we can obtain appropriate access or reimbursement for highly innovative biologic such as Ondexxya. Germany, is the key example given the significant number of ANNEXA-4 sites that have already gained experience with Ondexxya and the designated stroke in trauma centers that are part of a hospital infrastructure. We have already begun establishing our footprint in Europe over the last few months. We hired a Head of Europe with significant experience in these markets is continuing to build out the team with talented and tenured General Managers, sales and medical fair staff from leading biotech and pharmaceutical companies, all of them will be focused on education and awareness activities.

Simultaneously, we are also developing the dossiers that are critical for our pricing negotiations with Nice and AMNOG, the key reimbursement authorities in the UK and Germany, respectively. These country by country discussions are ongoing and based on our progress and the underlying demand. We expect to record our first European sales late in the second half of the year.

I will now turn the call over to John, with another thank you for all you have contributed to improving patient care and advancing Portola's vision.

John T. Curnutte -- Executive Vice President and Head of Research & Development

Good. Thank you, Sheldon and good morning everyone. I would like to start by echoing Scott and Sheldon's excitement over the European approval for Ondexxya and less than one year we have achieved both U.S. approval and EU approval of this potentially lifesaving medicines and we're working as quickly as we can to expand patient access in these countries and beyond.

As a clinician, I'm also very pleased with the data we have generated in our efforts to continue to characterize safety and efficacy profile of Andexxa. First, as you know the full ANNEXA-4 data set was presented at the International Stroke Conference in February to an overwhelmingly positive reception. We have two additional abstracts that have been accepted for oral presentation this month. First is an encore presentation of the ANNEXA-4 data which will be presented on May 20th at the World Intracranial Hemorrhage Conference in Granada, Spain. Then on May 22, we will present additional detail on the efficacy of Andexxa in ICH patients and the European Stroke Organization Conference in Milan.

In July we will present new data exploring the question of whether PCCs have clinical activity in the reversal of direct Factor Xa inhibitors during the International Society of Thrombosis and Hemostasis meeting in Melbourne. This is an important question and one that we look forward to discussing in a scientific forum look for more details next month when the abstracts also online. We are also pleased to continue seeing Andexxa added to a key clinical guidelines. The most recent addition was in the National Comprehensive Cancer Network guidelines, which now recommended andexanet for using cancer patients experiencing in life-threatening Factor Xa Inhibitor or related to bleeding.

Finally, turning to our Syk/JAK inhibitor cerdulatinib. We talk briefly on the last call about our positive inter Phase II meeting with the FDA and their request for additional data regarding the proposed dose for the registrational trial. We have submitted the requested information and we look forward to working with the FDA to advance cerdulatinib PTCL, while also present a new data on other potential therapeutic areas we're cerdulatinib could be impactful including cutaneous T-cell lymphoma and follicular lymphoma. We expect to share our initial data detailing the safety and efficacy of cerdulatinib and relapsed/refractory follicular lymphoma, either alone or in combination with rituximab at both the International Conference on Malignant Lymphoma in Lugano Switzerland and another major International medical meetings this summer.

Before I turn the call over to Mardi. I want to thank all of my Portola colleagues over the past eight years for their extraordinary perseverance and the development of our lifesaving medicines that will help hundreds of thousands of patients and we'll save many of their lives. I am deeply proud of Portola and look forward to continuing as an advisor to help the team and our patients.

And with that, I'll turn the call over to Mardi.

Mardi C. Dier -- Chief Financial Officer

Thank you, John. Good morning, everyone. I would just like to say that it's been an honor and a pleasure to work alongside deal all these years. I'm pleased to share our first quarter financial results, which reflect not only strong Andexxa revenue, but also the launch of our full-scale commercial and marketing efforts. Continued growth of Andexxa in the U.S. and ongoing launch preparations for our wave 1 countries in Europe. Please refer to our press release issued this morning for a summary of our financial results for the first quarter and I will touch on the highlights.

Let me start with our cash balance. Cash, cash equivalents and investments at March 31, 2019 totaled $322.8 million, compared to $317 million at December 31, 2018. This increase as a result of the received as the first $62.5 million tranche of our senior secured debt from Healthcare Royalty Partners and Athyrium. We call that as part of this loan agreement, we have the option to take the second tranche of $62.5 million at the end of the third quarter, which will help on the ongoing commercialization of Andexxa and launch preparations in Europe and will extend our cash runway to the end of 2020.

Moving to revenues. Total revenues were $22.2 million for the first quarter, including $1.8 million in license and collaboration revenue. As Scott mentioned, net sales of Andexxa grew to $20.3 million, our fourth consecutive quarter of solid revenue growth. Total GAAP operating expenses for the first quarter were $95.8 million, up from $91.9 for the same period in the prior year. This increase is driven by launch activities for Andexxa and the U.S. European launch preparations as well as two charges outlined in our press release, which reflect the second part of the same charges we took in the first quarter. In manufacturing site charge and the Gen 1 supply charge. This increase is partially offset by our Gen 2 manufacturing cost now being capitalized (inaudible).

So our non-GAAP operating expenses for the quarter, which exclude the two charges I just discussed were $86 million. Research and development expenses for the first quarter were $35.6 million compared to $60.1 million for the same period in 2018. The decrease that is mainly due to the Gen 2 manufacturing costs being capitalized and now longer flowing through R&D. SG&A expenses for the first quarter were $53 million compared to $31.5 million for the same period in 2018. This expected increase is mainly due to the expansion of our sales force and other commercial related activities were launched Andexxa. It had a strong first quarter with Andexxa revenues growing 45% of its fourth quarter and expenses in line with our guidance for the full year. With cash to fund our business to 2020 we're in a solid position to successfully executed on our top priorities. The launch of Andexxa the U.S. and then Ondexxya in Europe.

With that, I'll turn the call back over to Scott for closing remarks.

J. Scott Garland -- President & Chief Executive Officer

Thank you, Mardi. In closing 2019 is out with fantastic start our near-term priorities of the successful launches of Andexxa and Ondexxya in the U.S. and in Europe and advancing cerdulatinib to registrational study. And the longer term, we are also working toward label expansion plans for Andexxa, exploring strategies for expanding access in Europe. We have sent ambitious goals for ourselves and are focused on the continuing execution of these goals and look forward to updating you on our progress throughout the year. I want to thank you for your continued interest in Portola.

And with that, I will turn the call over to your questions. Operator.

Questions and Answers:

Operator

(Operator Instruction) And our first question comes from the line of Yigal Nochomovitz from Citigroup. You may begin.

Yigal Nochomovitz -- Citigroup -- Analyst

Hi guys. Thank you very much for taking the question. I appreciate the details on the market dynamics. If I could dig in a little bit more there. Could you provide a little more commentary with respect to the reorder rate, specifically for the 200 hospitals that you launched in by the end of last year and then additionally the incremental reorder rate for the additional approximately 100 data that have come online since the beginning of the year. Thanks.

J. Scott Garland -- President & Chief Executive Officer

Turning that question over to Sheldon.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Great. Thank you, Scott, and good morning, Yigal. Thank you for your question. So let me discuss to your question, the reorder rate, so obviously, we're still very early in launch, but we've been very happy with what we've been seeing so far with the reorder rate. We believe that the reorder rates are really reflecting through pull through and underline demand again, we've seen this increase of 50% to 55%. We do believe this number will continue to fluctuate is both time from launch increases and number of hospitals coming onboard grows, but we're excited about the trajectory that we're seeing and the rate at which we're adding these institutions, as well as the reorder rate.

J. Scott Garland -- President & Chief Executive Officer

And Yigal maybe just to add something there as we've said before, the that reorder is obviously influenced by the denominator. If you look back at hospitals that came on earlier in the launch of Andexxa that reorder rate is significantly higher than the percentage for all hospitals so far. So as Sheldon mentioned, we're very happy with where the reorder rate and is -- and as hospitals maturities to that reorder rate continue to increase.

Yigal Nochomovitz -- Citigroup -- Analyst

Okay. Thanks. Could you comment a little bit on the timelines to go through the hospital protocol review for Gen 2 relative to Gen 1?

J. Scott Garland -- President & Chief Executive Officer

Yes, Sheldon will take that sure?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thank you. So the review as it relates to P&G committees booking at the product regardless of that whether it's Gen 1 or Gen 2 is technically a six to nine month process with hospital pharmacies this is inline with normal hospital products, this has been my experience as well in the experience I've had in launching hospital products. And this is certain industry norms. And you go I know we get questions about sort of rate of hospital uptake and one of the things we've said all along is that we expect that rate to continue at a pretty linear rates to exactly what we're saying and totally in line with our expectations. So I think that's important to it's a point out as well.

Yigal Nochomovitz -- Citigroup -- Analyst

Okay. And it sounds like at this point you're not prepared to talk about the details in terms of utilization rate on a hospital for month basis? Or can you provide any initial commentary there?

J. Scott Garland -- President & Chief Executive Officer

Yes, Yigal, so as we've said before what we provided so far we're going to continue providing going forward, which is the number of hospitals, both reorder rate because we're still pretty early launch because we going to get a sense of what the dynamics are, which tend to, we're not providing that now, of course we'll look at that an ongoing basis and it to be spent that will be meaningful and helpful, we'll provide that to you.

Yigal Nochomovitz -- Citigroup -- Analyst

Okay. Do you have any data with respect to the time to restarting anticoagulation in the commercial setting, maybe that's a question for John?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

John, do you understand the question.

John T. Curnutte -- Executive Vice President and Head of Research & Development

Yes, and we don't have any data on that at this point although I would just say regard that the number of patients that were in the study that we saw was really quite impressive as you saw in the New England Journal paper sub. We don't have any new deal. I've been out talking to quite a few physicians and what I'm hearing from them is that they understand the importance and the potential benefits to patients to restart the anticoagulation as soon as medically feasible. So I think we're moving in the right direct .

Yigal Nochomovitz -- Citigroup -- Analyst

Okay. Thank you very much.

John T. Curnutte -- Executive Vice President and Head of Research & Development

Thanks, Yigal.

Operator

Thank you. And our next question comes from the line of Philip Nadeau from Cowen and Company. You may begin.

Philip Nadeau -- Cowen and Company -- Analyst

Good morning, thanks for taking my questions. And John, congratulations on the well-earned retirement. Few more questions actually on commercial, so I guess first on Andexxa and hospitals stocking versus reorders. Could you break out the revenue that you recognized by initial orders versus reorders in the quarter.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

We haven't done that we won't be doing that on this call. We've obviously giving you the reorder rate.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Okay. And over the last couple of quarters. The revenue per stocked hospital has been relatively consistent around $70,000. Is that what we should expect going forward through the rest of this year? Or is there any reason to think the revenue per stocked hospitals should either increase or decrease as the year progresses?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Starting to say, obviously, we haven't provided any forward-looking guidance on revenues going forward, as we said we've expected that the current trajectory should continue at your rate. I do expect over time the utilization on a per hospital level will deepen. All this physicians get used to the product and as hospitals continue to go through their protocol development, etc, but at this time, we haven't really give any guidance on how to think about it going forward.

Philip Nadeau -- Cowen and Company -- Analyst

And do you have a sense of what proportionate hospitals or what number of the 300 start hospitals have the protocols in place today versus which ones don't need to still need to evolve them over time.

J. Scott Garland -- President & Chief Executive Officer

The majority of hospitals have made P&T decisions. And so the majority of them have the product on the protocol and are using the product as we mentioned earlier, happy with the rate or the reorder rates that we are currently seeing?

John T. Curnutte -- Executive Vice President and Head of Research & Development

One of the things that we have seen Phil, some of the hospitals in the early supply program at Citluk (ph) we're going to wait till you actually have product in a continuous supply capacity before we even start our P&T a protocol development. So there are a fair number of hospitals that we're basically at time zero when we launched for Gen 2. And as we said all along we expect those hospitals to go through the normal process which Sheldon mentioned to take six to nine months. So I think that's the dynamic that we're experiencing right now is that some of these hospitals just coming on live.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Okay. One last question, tumor sense of the type of leads being treated is it mostly intracranial hemorrhage similar Ondexxya ANNEXA-4 or is there anything different going on in the commercial setting versus the next four trial?

J. Scott Garland -- President & Chief Executive Officer

Sheldon.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Yes, so thank you. So we're actually, and as it relates to normally what type of bleed is -- this is typically we get reports from the field and we're seeing that the utilization of Andexxa is both in ICH bleeds and also in other bleeds that outside of ICH. So we're seeing a mix of all types of bleeds that are currently being treated.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. And John one last question for you. Before you head off tend to retirement can you talk about the next steps for sort of cerdulatinib defining the pivot of protocol and the FDA has the dosing information what happens there?

John T. Curnutte -- Executive Vice President and Head of Research & Development

Well the improvement in Phase -- Phil the -- and thank for your kind words. The protocol has been written we have the sites many of the sites already identified all of the background work is pretty much in place the manufacturing for the clinical supply for the drug is set. So really what we are waiting for is really that just a last bit of feedback from the FDA, I think we made a very compelling argument provided substantially more in data to help them understand how we arrived at the particular dose that we did. And so, what will happen then once we hear back from them is, we'll have to then finalize the protocol that is locking that dose if they agree with this, if they don't, we may have another hit the ball over the net one more time, but then get that out to the IRBs and whatnot so. By later this summer, early fourth quarter will be up and running with the statics. So it's just a matter now waiting to hear back from the FDA.

Philip Nadeau -- Cowen and Company -- Analyst

Perfect. Thanks for taking my questions.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thank you.

Operator

And our next question comes from the line of Jay Olson from Oppenheimer. You may begin.

Jay Olson -- Oppenheimer -- Analyst

Okay, guys. Thanks for taking the questions and congratulations to John. I had a question about the cadence of adding new hospitals you're adding 100 a quarter. Is that an increment that you think should continue throughout the course of the year. And then maybe could you just remind us how many total hospitals you eventually hope to supply with Andexxa?

J. Scott Garland -- President & Chief Executive Officer

Let me take the first one on the cadence and I'll turn the second one over to Sheldon. So as we said, I think on pretty much every call that we've, as -- this is the launch, we really do expect this cadence to continue going forward. I think we've mentioned that we think it's a linear rate, which obviously going to be some variability over time. But so far what we're saying is exactly what we expected and we're actually very, very pleased with the uptake of Andexxa so far. Shel, do you want to answer the second question.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Could you repeat the second question that you had?

Jay Olson -- Oppenheimer -- Analyst

(Multiple Speakers) number of hospitals, you'd like to get into?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Sure. So let me first start with, we have the ability to add 40 additional representatives we talked about this in the first quarter and all of these representatives have been trained and I'm happy to say that they have started in the field as I mean April the 1st. And so far what we're looking at is, we're looking at approximately 1500 targets that we are going to discuss Andexxa and our reports back have been very positive. As we mentioned earlier institutions takes six to nine months to review the product. It also takes representatives, especially the new ones that we have three to six months to really have an impact on their territory. So thank you for the question.

Jay Olson -- Oppenheimer -- Analyst

And then I had a follow-up question, if I may on the end tab, you mentioned that CMS had proposed an increase from 50% to 65%. Can you just comment on what the process would be for putting that increase into place and the timeline for doing that and also on the slides you mentioned that the reimbursement, the entire reimbursement was for up to $14,000 per patient. Is that independent of whether or not that patient is on low dose or high dose index or do they get a percentage of the total cost?

J. Scott Garland -- President & Chief Executive Officer

So first of all, thank you for the question regarding NTAP. And let me just give a little brief history again of what qualifies for an NTAP, is I think that really speaks for Andexxa. This NTAP is something that represents breakthrough technology, this is definitely something that where there is no clear alternative it offers a significant advantage and that's the best interest of the patient. So we're pleased to have the NPAT as it relates to the timeline of the increase of 50% to 65% that would be a decision that we made by CMS and October of 2019. Regardless of the dose, whether it be low dose or high dose of application (ph) of the NPAT, it's the amount of the 14,000 regardless of the dose.

Jay Olson -- Oppenheimer -- Analyst

Okay, Great. Thanks for taking the questions.

J. Scott Garland -- President & Chief Executive Officer

Thank you.

Operator

Thank you. And our next question comes from line of Vamil Divan with Credit Suisse. may begin great,

Vamil Divan -- Credit Suisse -- Analyst

Thanks for taking the questions. So maybe just couple of following up on some rules already out. So, you mentioned the mix of use across all bleeds I think. Before I ask you quite a bit toward intracranial, if that still the case -- majority or I think maybe more than 60% the core was ICH, just trying to quantify that little more if you can. And then it sounded like you are saying households work their way through the approval process and then start ordering the drug if you can just confirm I caught that correctly and, if so, do you have a sense of how many hospitals are currently going through the approval process. So just what the backlog is right now that could come through the coming months.

J. Scott Garland -- President & Chief Executive Officer

Yes, let me just the bleed type one we actually have a quantitative charcoal where we've looked at and that's usage by bleed type and as Sheldon mentioned we're actually seeing broad usage across all bleed types not necessarily focused on intracranial hemorrhage. I'm not sure where you got the 60% from Vamil, but I know in the past, what we said is that we thought early on we will see a prominence of use in the intracranial hemorrhage actually, I have said, and pleasantly surprised by the Brexit drug is being used broadly to the label obviously, but it's definitely not being missed again a specific type bleed type like intracranial hemorrhage.

And then, your second question was -- we're working to the P&T how many shareholder was in that share. So as it relates to how many hospitals are working through the P&T. As I mentioned before we now have 118 representatives fully out in the field, we added an additional 40, which we're very excited about. We don't have an exact numbers of exactly what the backlog is of how many are going through P&T. But I can say a large majority of them are going through P&T reviews with established field force that we have, now we'll continue to update you as we go through the quarters.

Vamil Divan -- Credit Suisse -- Analyst

Okay. Thanks. And I could just get one more follow-up just on the urgent surgery. I know it's obviously part of the -- talk to the FDA, but just a sense of cerdulatinib how big the trial I think you need to have -- how long that sort of trial would, last just would help as you think about how much spend there might be. And when you might actually be able to see some take advantage in that opportunity. Thanks so much.

John T. Curnutte -- Executive Vice President and Head of Research & Development

Yeah, all right. This is John. In terms of the design of the study. We're still working through that, we haven't really discuss them publicly at this point, clearly we're looking at other surgery studies where reversal of anticoagulation was examined looking at those as possible models, the size of the study with would be not on the order of thousands beyond the order of hundreds and the amount of time it would take to enroll that really will depend upon ultimate discussions with the FDA and the cost that would come with that obviously will be directly related to the number of patients, so again it little early to talk about it, but a lot of brainstorming is taking place your Portola and with surgical experts around the United States.

Vamil Divan -- Credit Suisse -- Analyst

Okay. Thanks and congrats to you as well. Thanks.

John T. Curnutte -- Executive Vice President and Head of Research & Development

Thank you, sir.

Operator

Thank you. And our next question comes from the line of Matt Phipps from William Blair. You may begin.

Matt Phipps -- William Blair -- Analyst

Got it. Thanks for taking my questions. So of the 300 hospitals that you mentioned now have Andexxa, how many of those are in that 1500 target Tier 1, Tier 2 versus maybe some of the community hospitals that I know you guys have also talked about getting Andexxa?

J. Scott Garland -- President & Chief Executive Officer

Sheldon, do you want to take that?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thank you. So Matt, it's -- it varies but the majority of these institutions are in the Tier 1 and Tier 2 category that we currently have.

Matt Phipps -- William Blair -- Analyst

Got it. And then with the Gen 2 launch and switching to the 200 mg/vial side, is there any kind of feedback on how the reconstitution of that maybe better and do you think about maybe during the larger of all size and then also, do you had any returns of Gen 1 material?

J. Scott Garland -- President & Chief Executive Officer

Yes, well I take the first question about reconstitution time you can take returns actually yeah, we are getting a lot of positive feedback on the 200 milligram/vial in terms of improving the constitution time. So that's been a real plus with the launch of Gen 2. And actually one of the reasons why we're seeing some of the Gen 1 hospitals transition over to Gen 2 , because it's an easier reconstitution time it speeds up the door to needle time. In terms of return, Sheldon you want to take that, Shel?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

So today, we've seen limited product returns this obviously could always very in the future, but right now we have limited returns.

Mardi C. Dier -- Chief Financial Officer

Yes, I just going to add on that Matt with Gen 1 versus Gen 2 obviously you see another charge coming through COGS for Gen 1. And what the sales team has done and what the customer has done and you've seen some -- we are seeing them transition from Gen 1 to Gen 2, which is exactly what we want and we're hoping in the next several months that we complete that transition. So we took a small charge at last quarter and this quarter just an anticipation of that extra Gen 1 supply that we have manufacturing in case there was a regulatory delay we clean that up from an accounting standpoint but for operationally, we're going to see that transition partly (ph) complete in the next few months.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

And then maybe just one more comment about your earlier question around some of the non-target hospitals ordering that has been a pleasant surprise at least from my perspective in the launch, it is the enthusiasm and the desire from what we might call it non-target hospitals just on this drug. I think it speaks both to the significant value of the drug as well as the desire to use price as quickly as possible. So that's been something that I've been quite pleased to see.

Matt Phipps -- William Blair -- Analyst

And I guess following up on that, the -- these hospitals more likely to use the maybe specialty consignment model. Have you guys got enough experience with that, here we can comment and then obviously I know the C-code just kicked in, but is that obviously helpful for kind of building that do you think this can still be, I think you kind of mentioned before the active base, sales breakdown of what you call it, drift and shift. Is that something you think is still relevant here?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Definitely, I think that is a real opportunity for some of the satellite hospitals to use it in that particular fashion. That being said, we still think the majority of the usage will be in the inpatient setting and that's direct basis well, but we really do think that getting this drug to patients as quickly as possible is going to be an important attribute in terms of optimizing patient care and in some cases that will be using it in a community setting and that potentially transferring that patient over.

John T. Curnutte -- Executive Vice President and Head of Research & Development

I can just further add to from a consignment perspective. So this is something that obviously the specialty distributors are there really kind of taking control that we have no insight to that, I would say, just from an overall perspective, if you look at how many institutions are using consignment again it's, at this point it's represents really a small portion of our overall sales.

Matt Phipps -- William Blair -- Analyst

Great. Thank you.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thanks, Matt.

Operator

Thank you. And our next question comes from line of Matthew Harrison from Morgan Stanley. You may begin.

Vikram Purohit -- Morgan Stanley -- Analyst

Good morning. Thank you. This is Vikram on for Matthew. So we want to expand a bit on your expectations for the new launch for Ondexxya. So what do you think cadence is going to be for the wave 1 launch countries. Do you expect all of those countries to launch in second half of '19 or shortly after? Or do you think it's going to be a bit of a lengthier process than that. And then also any context, you could provide on the reimbursement or partners or discussions you've been having. And how those combinations are been going. That would be helpful. Thanks.

J. Scott Garland -- President & Chief Executive Officer

Sheldon, why don't you take that?

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Yeah. So thank you for your question. So it relates to the EU and our wave 1 countries I mentioned as I spoke. So the reason why we take these markets has wave 1 is because these are markets have large opportunity is where we can actually get reimbursement from a quicker perspective and it's also, as I mentioned just of greatest potential for us. So our hope is that in the late part of 2019 that yes, all of these markets would have the availability for Andexxa, that would be available to patients. As it relates to reimbursement we are currently under way right now working with those nights for the UK, as I mentioned earlier, the AMNOG process for Germany and the preparation for those dossiers are well under way. I'm really excited about what we've been able to do in a short amount of time to prepare to be ready for launch Andexxa and get to patients in these wave 1 market.

Vikram Purohit -- Morgan Stanley -- Analyst

Thank you.

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

Thank you.

Operator

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back to Scott Garland for closing remarks.

J. Scott Garland -- President & Chief Executive Officer

Great. Thank you operator, and thanks for all of you who joined us on our call today. In reflecting back on my time here as well as, but this company has been able to accomplish Andexxa over the last three years, get truly is remarkable we are seeing significant growth of Andexxa very important drug for customers and we look forward to continuing to update you on our success in 2019 and beyond. So with that thanks for your attention and take care.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.

Duration: 39 minutes

Call participants:

Cara Miller -- Vice President of Investor Relations and Corporate Communications

J. Scott Garland -- President & Chief Executive Officer

Sheldon L. Koenig -- Executive Vice President & Chief Commercial Officer

John T. Curnutte -- Executive Vice President and Head of Research & Development

Mardi C. Dier -- Chief Financial Officer

Yigal Nochomovitz -- Citigroup -- Analyst

Philip Nadeau -- Cowen and Company -- Analyst

Jay Olson -- Oppenheimer -- Analyst

Vamil Divan -- Credit Suisse -- Analyst

Matt Phipps -- William Blair -- Analyst

Vikram Purohit -- Morgan Stanley -- Analyst

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