Pfenex (PFNX) Q1 2020 Earnings Call Transcript

Pfenex (NYSEMKT: PFNX)
Q1 2020 Earnings Call
May 07, 2020, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greeting, ladies and gentlemen, welcome to the Pfenex first-quarter 2020 results and business update call. [Operator instructions] As a reminder this conference is being recorded. We'd like to remind you that some of the statements made during the call today are forward-looking statements, including statements with respect to our and our collaboration partners' development and commercialization plans for PF708, PF743 and PF745, CRM197 and our other product candidates; the expected regulatory pathways for our product candidates; and expectations to submit additional human factors dated to FDA and expectations with respect to a comparative use human factor study that addresses the FDA's views; the expected timing and phases of our and our collaboration partners; future clinical trials; the expected timing of our regulatory submissions and any potential future regulatory approval and commercial launch; potential partnering opportunities for our product candidates; the potential to receive future payments under our agreements with Jazz, Alvogen, Merck, SII, IPL, Arcellx and our other collaboration partners; potential milestones for our product candidates; potential growth opportunities and strategies, including market sizes, pursuant of biological targets and potential to solve supply challenges; our opportunity to drive shareholder value; expectations with respect to regulatory developments and the therapeutic equivalents; expectations with respect to the impact of the COVID-19 pandemic; and our future expectations with respect to sufficiency of our cash and cash equivalents. Actual results could differ materially from these contemplated by our forward-looking statements and reported results could be considered as an indication of future performance.

Please look at our filings with the SEC for a discussion of the factors that could cause our results to differ materially. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended March 31, 2020, to be filed with the SEC. The forward-looking statements on this call are based on information available to us, and we disclaim any obligation to update these forward-looking statements except as required by law. Earlier today, Pfenex released financial results for the first quarter ended March 31, 2020.

Pfenex's earnings release and corporate presentation are currently available in the investor relations section of our website. It is now my pleasure to introduce your host Pfenex president and chief executive officer, Mr. Eef Schimmelpennink. You may begin, sir.

Eef Schimmelpennink -- President and Chief Executive Officer

Thank you, Kelly, and good afternoon, everybody. Welcome to Pfenex's first-quarter 2020 financial results and business update conference call. Before moving into a review of our first-quarter results, I want to take a minute to address the ongoing COVID-19 dynamic, which has impacted nearly everyone in the U.S. and across much of the globe in one way or another.

The Pfenex leadership team and I have proactively taken appropriate steps, including social distancing, to protect the health and well-being of our team, and help flatten the curve. Since the stay-at-home order was put in place, we have maintained critical program work in the lab and staggered our shifts to minimize exposure. We additionally identified program initiatives that were able to be completed by our employees as they work from home. We have not seen any significant impact to program progression on our major programs as a result of these changes to date and feel, with our modified approach, has maintained focus and execution on these programs.

The team has been quick to adapt to this new normal, and we will continue to monitor for any such impacts on our business, on our programs. I want to thank the Pfenex team for their continued great work, and all of our investors for their continued support. I especially also want to thank the healthcare workers, first responders, ambulance staffing, essential businesses on the front line around the globe for their tireless and selfless efforts in dealing with this crisis. With that, I will now focus on the status of our three core programs, as well as, our portfolio of early stage development programs.

I will then provide a summary of our first-quarter 2020 financial results, before opening the call up for questions. I would like to start by highlighting that we've ended this year with our three core programs: PF708, our collaboration with Jazz Pharmaceuticals to develop PF743 and PF745 and our PRM197 based collaborations, all at a stage in which we believe they will not require material investments prior to achieving an inflection point, including moving toward the potential for milestone payments and royalty revenue. This has enabled us to proactively expand our strategy with two additional pillars to drive long-term value growth. The first pillar is focused on identifying opportunities to selectively expand our pipeline with a combination of wholly owned products and new royalty-bearing collaborations, the benefit from our proprietary Pfenex expression technology platform.

These activities include among others, advancing our wholly owned peptide products, PF810, [Inaudible] collaboration with PF753 and PF754. And we continue to evaluate opportunities for additional partnerships as we look to drive long-term shareholder value. The second pillar is focused on a tailored strategy to develop novel biopharmaceutical products that leverage our extensive experience in the space. After selecting both biological targets of interest and modality, last year, we have made significant progress and currently have the first novel program in the lead selection phase.

With that, setting the stage for where we are with our pipeline, let me move into updates on specific programs. To start, there were several updates during the quarter for PF708, our first FDA-approved products and a proposed therapeutic equivalent candidate to Forteo. As a reminder, therapeutic equivalents or A rating is primarily based on the FDA evaluating three distinct requirements that center around showing pharmaceutical equivalence, bioequivalence, and human factor equivalents. If achieved, the rating would permit PF708 to be automatically substituted for Forteo in many states in the U.S.

On April 14th, we announced that the FDA informed allergen, our commercialization partner for PF708, via a general advice letter that additional comparative use of effective data specifically from Forteo experience users would be required before PF708 therapeutic equivalents could be determined. While disappointing, we are pleased that the FDAs therapeutic equivalent evaluation is continuing and that the FDA's feedback provides guidance for what is needed to achieve A therapeutic equivalent designation. With the aim to confirm our understanding of the items outlined in the general advice letter, Alvogen has begun discussing next steps with the FDA, and together, we plan on submitting additional supportive information, as well as, clarifying questions in the near future. We believe these collaborative interactions with the FDA will guide the appropriate next steps and provide a path to a submission of additional data in support of the PF708 comparative use human scientific assessment.

In parallel, we have begun key activities required to generate the additional data suggested to help ensure that once we have completed our discussions with the FDA, we are ready to execute our plan. With the experienced gains from our five previous uninfected studies, combined with the FDA direction, we believe we can provide a comprehensive data package that allows for the final PF708 therapeutic equivalent determination. We look forward to working with the FDA and our collaboration partner, Alvogen, to complete these additional efforts. This brings me to the commercialization planning portion of the program.

As a reminder, since PF708 received FDA approval in October 2019, Alvogen has assumed responsibility for all of the commercial manufacturing, supply chain management, and commercialization activities and costs. Alvogen is well advanced with its commercial strategy planning in the U.S., which includes evaluating a potential launch ahead of a A therapeutic equivalent designation. This preparation has included negotiations with the payers in the U.S., including Medicare Part D plans and private payers. In support of these negotiations, during the first quarter, Alvogen announced the wholesale acquisition cost of PF708.

We expect to continue to support Alvogen with its commercial strategy planning in the U.S. We also continue to be impressed with Alvogen's efforts on PF708 in the EU. Certain countries in the Middle East and North Africa and the rest of world territories. As we've discussed previously, Alvogen has already established several regional commercialization agreements with our partners across several countries and regions and have swiftly engaged the regulatory agencies in these regions and countries, including the EMA in Europe and the Saudi FDA.

With all of our ongoing activities and future potential opportunities for PF708, we are very excited about the potential for expanding access to patients that this much needed therapy and the positive impact this could have on our business going forward. Turning to our collaboration with Jazz Pharmaceuticals, through which we are developing two products, PF743 or JZP458, as its main in a Jazz portfolio, a recombinant Erwinia Asparaginase with a potential launch as early as 2021, and PF745 or JZP241, a follow-on long-acting recombinant Erwinia Asparaginase. Starting with PF743, which has received fast track designation from the FDA as a potential treatment for pediatric and adult patients with ALL or LDL or hypersensitive to coli-derived asparaginase. Jazz is currently conducting a pivotal Phase 2, 3 clinical study in collaboration with the children's oncology group and enrollment is ongoing.

On its recent quarterly conference call, Jazz confirmed that it is continuing to work toward the goal of BLA submission as early as fourth quarter of this year. They indicated they are highly focused on mitigating potential delays and are continuing to activate it remotely, enroll patients, and utilize remote monitoring that are feasible. The [Inaudible] market has struggled with product supply challenges in the past. PF743 has the potential to solve for that and importantly, to reach more patients in need of this critical therapy.

In addition, we're developing the PF745 products and process, which has been technology transferred to Jazz manufacturer in the first quarter of 2020, and we look forward to Jazz progressing the product development. As a reminder, under our agreement with Jazz that covers both PF743 and PF745, we are eligible to receive an aggregate total of up to $224.5 million in development and sales milestone fees. Of this, we are still eligible to receive $162.5 million. This includes $34 million in regulatory milestones and $125 million in sales milestones.

We may also be eligible to receive mid-single-digit royalties based on worldwide sales of any products resulting from the collaboration. We are very pleased with the progress achieved to date for these two programs and look forward to continue -- to following Jazz continued progress. Looking ahead, we do not expect to incur any additional material expenses associated with the development of either PF743 of PF745. Most importantly, we are proud to be part of these programs that have the potential to bring significant benefit to these critically ill patients.

Moving to our carrier protein, CRM197, which is the third potential revenue driver in our advanced pipeline. We have development and commercial partnerships with both Merck and Serum Institute of India, or SII, among other partners. Regarding Merck, they are using our CRM197 and 3 vaccines in development, including V114. We are eligible to receive tiered royalty payments based on net sales for all products they develop that use CRM197 produced via the Pfenex expression technology-based on production stream licensed to them.

Merck's V114 is an investigational 15-valent conjugate vaccine for the prevention of pneumococcal disease and is currently being evaluated in 15 Phase 3 studies. In Merck's most recent earnings call, we indicated that the Phase 3 top-line data will be available very soon and the BLA filing would occur not long thereafter. V114 is expected to be positioned as a key product in the pneumococcal vaccine market and we look forward to seeing it progress in its development. In the first quarter, Serum Institute of India has begun preparations for launch of Pneumosil, a vaccine using Pfenex produced CRM197.

Serum developed this V114 pneumococcal vaccine, which utilizes CRM197 produced by a production strain license from Pfenex and achieved World Health Organization prequalification for Pneumosil. The second product being developed by SSI, which also utilizes CRM197 and is subject to the Pfenex expression technology license is a thermostable pentavalent meningococcal conjugate vaccine that is being evaluated in an ongoing Phase 3 study. This product is also targeting markets in the developing world. Pfenex is eligible to receive a tiered royalty payment based upon net sales for both products.

Turning to our development evaluation and license agreement with Arcellx, we are providing access to the Pfenex expression technology platform to advance Arcellx proprietary sparX proteins that activate, silence and reprogram antigen receptor complex T-cell-based therapies. In the fourth quarter of 2019 and the first quarter of 2020, we completed the development and transfer of Part 1 and Part 2, respectively. On both programs, Arcellx is up into the commercial license. Under this agreement, we're eligible to receive development funding in addition to development, regulatory, and commercial milestones ranging from $2.6 million to $18 million for each product incorporating, as sparX protein expressed under a production strain based on the Pfenex expression technology, as well as, royalties on worldwide sales of any such products.

Let me now take a minute to provide an update on our broader strategy, which we'll look at as being made up of three pillars. The first pillar of the strategy is focused on executing against our core portfolio, which includes the three core pipeline opportunities we just went over, including PF708, a collaboration with Jazz and our CRM-based collaborations. I believe the near-commercial and late-stage status of our current pipeline is testimony to the success and value that we have been able to create, as well as, the ability to use these successes to fuel further growth. The second pillar of our strategy is based on identifying opportunities to selectively expand our pipeline, with a combination of wholly owned products and new royalty-bearing collaborations, and our products for which our platform is highly enabling.

I've shared with you previously that we are in early development with a new poly owned program, PF810, a recombinant peptide aimed at improving a significant current therapy challenge. We look forward to sharing more details with you as we are progressing the program through its preclinical phase. Our programs within our partnership with Arcellx are examples of opportunities where we believe our platform is uniquely enabling and we are currently evaluating other potential partnering opportunities that match our strategy that will license our technology, and in return, we receive potential milestone payments and royalty revenue. Our third development pillar focuses on novel biopharmaceutical products.

We have almost two decades of experience in expressing natural and engineered proteins. I believe that our historical success rates of over 80% and expressing the desired active protein, a demonstrated success in achieving regulatory approval for our lead product, and our platform's team and infrastructure provides a competitive advantage in the development of novel peptide and protein-based therapeutics. Following an extensive research effort, we have identified a set of high-value validated biological targets that we intend to pursue. We believe the targets of interest are in disease areas of unmet medical needs, with a moderately sized patient population, which would allow Pfenex to potentially develop the products through Phase 3 clinical studies.

In the fourth quarter of 2019, we engaged a third-party collaborator to deploy their internal libraries of novel modalities to screen against the Pfenex targets of interest, in order to isolate binders that could potentially become Pfenex's wholly owned novel products. We have chosen these modalities, both because of their promise to become novel biopharmaceutical proteins, as well as, for their fit with the Pfenex platform, which will allow us to take the developments and CMC in-house. Together with our third-party collaborator, we generated a compound library and outperformed an initial molecule screen with it. This is related to the creation of a subset of hits that showed activity on our first target of choice.

These hit molecules now have been brought back into the Pfenex platform and are currently being expressed for lead selection and optimization with the aim to ultimately bring us our first novel clinical candidate. As we continue to progress our pipeline, it is important to mention that a significant element of our success over the last several years stems from being very diligent in how we deploy our capital. We intend to continue to run a company with the same financial discipline. I think it opens up a good segway to move to the financial update as of the first quarter of 2020.

Total revenue decreased by $7.2 million or 91% to $0.7 million in the three-month period ended March 31st, 2020, compared to $7.9 million in the same period in 2019. The decrease in revenue from -- for the quarter was primarily due to significant milestone upfront payments from Alvogen in the first quarter of last year, attributable to FDA acceptance of our NDA for PF708 and the granting of licensing -- licenses for additional geographies for PF708. In addition, revenue amortization related to our Jazz collaboration agreement was completed in the first half of 2019. Work continued to scale back on our Px563L product candidate under our government grants with Nevada and sales of our CRM197 products tend to fluctuate over the quarters.

Cost of revenue decreased by approximately $1.3 million or 78% to $0.2 million in the three-month period ended March 31st, 2020, compared to $1.6 million in the same period in 2019. The decrease was primarily due to fluctuation of sales on the CRM197 product in the quarter and declining activity related to the BARDA contracts. Research and development expenses decreased by approximately $2.1 million or 26% to $5.8 million in the three-month period ended March 31st, 2020 compared to $7.9 million in the same period in 2019. The decrease was primarily due to timing of expenses related to our lead product candidate PF708.

Significant activity occurred leading up to and shortly after submission of the NDA to the FDA, which occurred in December 2018. Selling, general, and administrative expenses increased by approximately $0.2 million or 4% to $4.7 million in the three-month period ended March 31st, 2020, compared to $4.5 million in the same period in 2019. This increase is primarily due to legal and consulting fees. Cash and cash equivalents as of March 31st, 2020, were $65.6 million, which includes two separate transactions in the first quarter of 2020, in which we utilized our ATM to place approximately 1.8 million shares for gross proceeds of $20 million.

We believe that our existing cash, cash equivalents, and cash inflow from operations will be sufficient to meet the company's anticipated cash needs for at least the next 12 months. This concludes our prepared remarks. I would now like to ask the operator to open the call for questions.

Questions & Answers:

Operator

[Operator instructions] We'll hear first today from Gregg Gilbert with SunTrust.

Gregg Gilbert -- SunTrust Robinson Humphrey

Thank you. Good afternoon, Eef. I was -- wanted to start on 708, if I could. Can you talk about potential time lines to get the info the FDA needs? I understand it requires some -- a discussion or a meeting first to identify the appropriate path forward, but hoping you could frame for us a fast case versus a longer case there? And then related to that, what is Alvogen's thinking as far as you can tell at this point about launching without an A designation, does their decision depend on how the FDA responds to? Or what are the other factors involved there? And then I have a follow-up.

Eef Schimmelpennink -- President and Chief Executive Officer

Good. Thanks, Gregg. As we are currently discussing with the FDA what the layout in the next steps need to be it's a little bit premature to guide on exact timing. It is important to highlight that the agency did not make any statements regarding the findings of the completed study in which we compare PF708 to Forteo in that general advice letter.

So, what they indicated is that the amount of Forteo experience users in our study was not adequate to conclude on therapeutic equivalence. And they indicated that they want additional comparative use on effective data from patients and caregivers that have previously used Forteo. But they've made no further statements regarding the subset of the population. And I think, it's important to highlight that when we review the data of the subgroup separately, we believe that the trend that we see suggests that they performed in a very similar manner to the overall population.

So as you -- as I've stated, we have been in contact with the agency and especially [Inaudible] and have had initial communications with them to discuss the best way to move forward. Our initial step, which is happening in the near future is to confirm our understanding of the items, outlines in the general advice letter, and provide additional clarifying data in the immediate near future, as I said. And then based on that, we will discuss what next steps need to be taken and the plan for resubmitting any additional information or data. So that's to the timing.

Your second question on Alvogen's evaluation on a potential launch that is indeed something that they are evaluating at the moment. Basically, two parts need to be in place and good progress being made on both. On the one hand, obviously, when you look at payers interested and -- on formulary as I've mentioned in our previous earnings calls, those discussions have been ongoing for a couple of quarters, and we feel that the feedback from the plans and the payers is very encouraging. And then on the other hand, obviously, make sure that we have the launch executed.

Also that's moving forward very well and that we are achieving actual pullthrough. So those are the elements that Alvogen is looking at to make -- to evaluate whether it makes sense to launch prior to [Inaudible].

Gregg Gilbert -- SunTrust Robinson Humphrey

OK. And then on the 810, when might we hear more about that? I realize it's preclinical, but are we likely to hear about a significant derisking or not during this calendar year? And is that the type of product you would want to keep for yourselves or partner?

Eef Schimmelpennink -- President and Chief Executive Officer

But as we're moving the program through preclinical phase, as you would expect, we're looking forward to see animal data that confirms that we're on the right pathway and that would allow us to move to pre-IND and ultimately, IND. I think what you often see is that that's a point in time where a company is in it and would definitely apply to us as well, start to share a little bit more around the program. On the one hand, as I've mentioned, it's derisk to a stage where we feel confident that we have a solid development. We also don't want to start sharing information too soon in light of the competitiveness of the market.

So that's how that progress will -- or how that program is progressing. And at this stage, I'm not ready to provide any guidance on when those milestones might be hit.

Gregg Gilbert -- SunTrust Robinson Humphrey

OK. And then lastly, it's good to hear from Jazz and from Merck that those programs are the lead programs with you are moving full speed ahead. Any color that you can provide about the follow-on products for both of those programs? Any movement there that you can disclose or that you're aware of?

Eef Schimmelpennink -- President and Chief Executive Officer

Yeah. We -- like you, we are pleased to hear in the earnings calls at both Jazz and Merck that both developments are moving forward. Finally, as for follow-on programs, let's tackle Jazz PF745 that we developed with Jazz first. I indicated in the prepared remarks that we've now, in the first quarter, completed the tech transfer of that half-life extending program to Jazz.

So that's in their hands now to move into the clinic. So they are continuing with the development of that program and we're looking forward to continue to see that progress. As for Merck, the focus obviously is on 114, as the first program to potentially be commercialized. They have indicated that they are expanding and working on the new [Inaudible] franchise with 116 and 117.

And again, as those programs progress, we look forward to see the updates that provides.

Gregg Gilbert -- SunTrust Robinson Humphrey

Thanks, Eef.

Eef Schimmelpennink -- President and Chief Executive Officer

Thank you, Gregg.

Operator

We'll hear next from Brandon Folkes, Cantor Fitzgerald.

Jennifer Kim -- Cantor Fitzgerald -- Analyst

Hi. Thank you for taking our questions. This is Jennifer Kim on for Brandon. As to -- just given the backdrop of COVID-19, if the past therapeutic equivalent rating on PF708 moves faster than you currently anticipate, can you talk a bit about your ability to supply a significant portion to the market? The new opportunity has to play on hand? And then my second question is, you touched on this a little before, but can you provide some more color on those ongoing commercial discussions with your payers? Given the delay in the therapeutic equivalent rating, do you expect payers discussions until you have better visibility on that? Or are they progressing on the assumptions that you'll get that rating? Thank you.

Eef Schimmelpennink -- President and Chief Executive Officer

Great question. Thank you. Let me tackle the study and the potential impacts of COVID-19 first. You're right, that's one of the aspects that we're obviously focused on is how to best mitigate any potential impact of COVID-19 to the potential enrollments.

And we're working with our team, Alvogen and our CRO to best define ways to minimize or even neutralize the COVID-19 factor. It's important to understand that if you look at the human factors, study, the nature of the testing actually allows for precautions to be put in place that will allow for individuals to participate in the study while maintaining social distancing. This study is usually -- and all our previous studies were done that way. Conducted with a single subject and a single procter in the room.

So it's quite feasible to practice appropriate social distancing. So we're scheduling -- that would really allow to have to the study move forward nicely. What we also see is that there are actually quite a few examples of human factor and other clinical studies being done with patient populations that are less mobile, MS Patient population groups would come to mind. So you could see -- and there's, again, ample examples out there where these studies have actually performed remotely in the private setting of our patients, and in our case, caregivers.

So we're evaluating all those options, again, with the aim to make sure that if and when we need to do a study, we can do that in a speedy way. I think you also had a question in there on whether given COVID-19 and assuming that Alvogen launched the product, we would be able to actually supply the market. And the short answer to that is yes. Both with the supply chain, as well as, the wholesalers that we're working with.

We are definitely in a position to supply the full market. Our full supply chain is U.S.-based, all those CMOs continue to operate. They are open. Same goes for wholesale.

So at the moment, as we see things, we do not impact any significance. We do not see any significant impact of COVID-19. And I believe your third question was around payer discussions and whether those are impacted by the TE rating. Clearly, the TE rating would allow for an automatic substitution of the product.

Payers, from the beginning, have been interested in our proposition because it does provide for a significant cost savings to the healthcare system. That is not changing. What we're working through potentially at the moment is how would you create that uptick. So those discussions, as I said, are continuing and we feel are continuing in a very supportive way.

Jennifer Kim -- Cantor Fitzgerald -- Analyst

Eef, thank you so much.

Eef Schimmelpennink -- President and Chief Executive Officer

Thank you.

Operator

From JMP Securities, we'll move to Jason Butler.

Roy Buchanan -- JMP Securities -- Analyst

Hi, it's Roy for Jason. Thanks for taking the questions. Just a couple of quick ones here. So for the SII program, the municipal program, what's the standard time line? Or is there one for a procurement decision from the WHO or GAVI? And then for PF708, what's the status of the Asia region, the collaboration with NT Pharma? Thanks.

Eef Schimmelpennink -- President and Chief Executive Officer

Right. Good questions, Roy. Thank you. So the first one on SII and the timing of feedback from GAVI and WHO, my understanding is that that usually goes relatively quickly.

Important also there to understand that this is not one tender that is written on an annual base. There's many different tenders that are ongoing and we know that the first proposals have gone in from SII. So we expect to hear back to SII shortly or in the next couple of months on what the feedback on those proposals are. So we'll keep everybody updated there.

And again, it's going to be one in one of a series of tenders that SII applies for. And then your second question, remind me again, was around the NT Pharma --

Roy Buchanan -- JMP Securities -- Analyst

Yes. That's around --

Eef Schimmelpennink -- President and Chief Executive Officer

Sorry. Just took a second here to get that -- to bring that back. So think of that transfer has been completed now nearly as an administrative transfer that allows NT Pharma to set up a JV which is going to take care of several Osteoporosis parts. So we feel that that's going to be very beneficial to us.

The combined company or the JV is significantly larger, and I would say, more powerful and [Inaudible] on its own with 708 in the -- we expect that that, again, is going to provide even more opportunity for success for that part.

Roy Buchanan -- JMP Securities -- Analyst

OK. Great. And then actually a follow-up on the SII. So what do the payment streams look like to SII? And what can you guys expect to see in terms of the royalties on that? Will it be a fairly steady stream or is it a bolus? How does that work?

Eef Schimmelpennink -- President and Chief Executive Officer

No, I think once you see several tenders, hopefully, being awarded that should be a relatively steady stream. I would assume that these are timed contracts. And as you -- again, hopefully, we'll see more contracts that will start to even out the revenue stream. I do also expect that this is something that will ramp up over time.

Obviously, what we will see in the next -- first quarter would not represent what we hope to see as the years go or as the quarters go on.

Roy Buchanan -- JMP Securities -- Analyst

Got it. Thank you.

Operator

[Operator instructions] We'll hear next from Andy Hsieh with William Blair.

Andy Hsieh -- William Blair and Company -- Analyst

Great. Thanks. I hope everybody in Pfenex is safe and healthy and doing well. So just a couple of questions on the human factor study.

So Eef, I don't know if you have publicly disclosed kind of the breakdown between the subgroup of Forteo experienced patients in naive patients from and that -- the latest 102 kind of head-to-head study?

Eef Schimmelpennink -- President and Chief Executive Officer

No. We've not broken that down yet. So think of this as sub 20 subjects of the total, and again, important there is we never set out to include those. So it's more or less by a [Inaudible], I don't want to use the word accident, but -- that we have done in the study population.

Andy Hsieh -- William Blair and Company -- Analyst

I see. OK. And in terms of the trial cost, how should we think about that timing-wise, is exactly the NDA? So would Alvogen be responsible for this or this is kind of considered as like pre-NDA? So help us understand this in terms of R&D modeling?

Eef Schimmelpennink -- President and Chief Executive Officer

Yeah. I think the important piece to start with is that these studies are not very costly. So our previous study with 102 subjects was sub 1 million and we shared that post with Alvogen. So that's why in my prepared remarks, I referred to actually all three of our core portfolio of programs, that were in 708.

That we do not anticipate any material costs to get our P&L to bring the products to the next inflection points.

Andy Hsieh -- William Blair and Company -- Analyst

Right, right. That makes sense. OK. And just one, I guess, strategic or philosophical question.

Obviously, some questions were asked before about potentially launching without two new rating. I think we just kind of heard from Tim Lowes, they're guiding down their revenue guidance for this year. So would that be a deterrent to do that and probably wiser to just wait for the TE rating, just given the fact that you can't really have effective sales force and reps out there visiting doctors, convincing into rights, scripts.

Eef Schimmelpennink -- President and Chief Executive Officer

Yeah. Good question. And let me start off again by saying that this is currently being evaluated, which means that there's not been made a decision to bring the product to the market. So I just want to be clear on that.

I think in the current climate, if anything, would actually would benefit from that. Alvogen and us, we've never been -- our intention has never been to put a sales force against this product and that is not likely to change. So if anything, I guess, we're in a more even playing field given where the current COVID situation is bringing us. So there's different ways to get a product under potential, obviously, the cost benefit of our products are significant compared to Forteo and that will continue to be our aim if and when we detail the product.

Andy Hsieh -- William Blair and Company -- Analyst

OK. Great. Thank you very much and congrats on the progress.

Eef Schimmelpennink -- President and Chief Executive Officer

Thank you, Andy.

Operator

And at this time, I would like to turn the things back to you, Eef, for any closing remarks.

Eef Schimmelpennink -- President and Chief Executive Officer

Thank you, Kelly. I want to close off by, again, thanking the Pfenex team for their continued great work, as well as, all our investors for their continued support. So thank you all for joining today's call. Have a great evening.

Operator

[Operator sign-off]

Duration: 44 minutes

Call participants:

Eef Schimmelpennink -- President and Chief Executive Officer

Gregg Gilbert -- SunTrust Robinson Humphrey

Jennifer Kim -- Cantor Fitzgerald -- Analyst

Roy Buchanan -- JMP Securities -- Analyst

Andy Hsieh -- William Blair and Company -- Analyst

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