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Esperion Therapeutics Inc (ESPR -3.67%)
Q3Â 2020 Earnings Call
Nov 2, 2020, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome. At this time, all participants are in a listen-only mode. Following the presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to Ben Church, Investor Relations and Corporate Communications at Esperion. Please go ahead sir.
Ben Church -- Corporate Communications
Thank you, Patricia. Good afternoon, and welcome to Esperion's Third Quarter 2020 Financial Results and Company Update Conference Call and Webcast. I'm Ben Church. I'm responsible for Investor Relations and Corporate Communications here at Esperion. With me on today's call are Tim Mayleben, President and Chief Executive Officer; Mark Glickman, Chief Commercial Officer; and Rick Bartram, Chief Financial Officer. I'd like to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the business.
These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and SEC filings. The content of this conference call contains time-sensitive information that is accurate as of the date of the slide broadcast November 2, 2020. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded and archived. We issued a press release this afternoon detailing the content of today's call. A copy can be found at www.esperion.com within the Investors and Media section. We will begin with prepared comments and then open the call for your questions. Following today's call, the team will be available for follow-up questions. Please email [email protected] to schedule 15 minutes to speak with the team.
I'd now like to turn the call over to our President and CEO, Tim Mayleben. Tim?
Tim Mayleben -- President and Chief Executive Officer
Thank you, Ben, and good afternoon, everyone. We appreciate you joining our third quarter conference call and thank you for your continued interest in Esperion. We know it is an incredibly busy and historic week, and we will be watching the election results closely, along with the rest of you. And in case you need one final nudge, I want to encourage everyone to go vote, if you haven't already. Today, I'll share our progress on our mission to bring new and innovative oral medicines to patients with uncontrolled high cholesterol. Our commitment is to lipid management for everyone. And at a high level, we are seeing an increasing need for our medicines. Report after report, highlights the everwidening need to refocus and reeducate about cholesterol, as patients are increasingly neglecting their long-term health for a myriad of reasons. We're seeing significantly fewer visits to primary care physicians and increased reliance on telemedicine, which has limitations in assessing cardiovascular risk factors like bad cholesterol, all while we are often more sedentary than ever. This long-term opportunity to improve cardiovascular health of millions of patients continues to energize and motivate us, as we navigate through a dynamic environment for companies, healthcare, providers and patients.
The go-to approaches of commercial launches past are just no longer relevant. With this backdrop in mind, we believe Esperion is very well positioned as the only commercialized public company with a singular focus on lowering bad cholesterol. We have an entire company, waking up every morning to do whatever we can to help patients and their healthcare providers with bad cholesterol. A key element to building, a strong foundation for any commercial launch is educating healthcare providers and patients, about our medicines and our company. And when we have this opportunity with HCPs, we find that we have an interested audience that recognizes the need for our non-statin easy accessible once-daily pills and appreciates our focus on battling bad cholesterol. This was confirmed by a survey, we recently conducted with cardiologists and primary care physicians regarding the types of interactions with companies they prefer, when asked, if they would rather see a specialist in a disease area with a new medicine or a big pharma rep that carries a bigger bag. They overwhelmingly prefer specialists right now. It's a small sample, but it gives us tremendous optimism in our near and long-term plans to build our company around both innovation and a focus on cholesterol. Cardiovascular disease remains the number one killer in the world. And as the only company, truly focused on LDL cholesterol, the bad cholesterol, we have much to contribute to changing this tragic course. The scary reality is that cardiovascular disease is increasing. In fact, in 2017, even before the pandemic the U.S. CDC said, they expected deaths from cardiovascular disease to increase 25% by 2030.
Despite this, there has been a serious lack of innovation in addressing the need for cholesterol lowering, especially convenient oral, non-statin medicines. So each new medicine that comes to market has the potential to really make a major impact. We're building a company that knows our focus on bad cholesterol and non-statin medicines will deliver tremendous societal and financial value, a company that overcomes adversity a company that partners with like-minded companies at times, but also confidently takes the road alone at other times. We embarked on this journey over 10 years ago by disrupting the neglected area of non-statin oral LDL cholesterol-lowering medicines, our goal is to fulfill unmet patient needs, not conform to a traditional well-worn path. So with that in mind, I'd ask you to consider what short-term and long-term success look like in this environment. In an industry with countless examples of historical launches and launch metrics, how do we measure success when all bets are off? As one of the few, very few companies truly launching new medicines in this environment, we simply do not have the luxury to keep our customer-facing teams at home. And a little later in the call we'll provide you our insights into what short-term and long-term success looks like.
Right now, I'd ask you to consider the power of momentum. While we are hyper-focused on getting our medicines into the hands of all who need them in the short-term, we are facing some temporary obstacles in accomplishing that. However, there's a broader story of progress that demonstrates our team's ability to influence key stakeholders. And I'd like to highlight a few additional proof points on our progress as a company. So first, today marked the European launch of our medicines. This is an incredible milestone that expands, in fact significantly expands the number of patients that will benefit from our medicines and opens a new revenue stream for us. We've been working very closely with our partner Daiichi Sankyo Europe to prepare and share best practices for launching in this unprecedented environment. Our medicines are now available in Germany, the biggest country in the region. The U.K. launch is planned for early next year, followed by a staggered launch to the rest of Europe in line with the country-by-country process for access and reimbursement. We participated in their virtual prelaunch meetings, which were attended by their more than 1000-person European cardiovascular team and one thing is certain; DSE is highly optimistic about the need for our medicines in the EU and extremely well-prepared for the launch there.
Next, I'd like to share some more news that shows the progress our team is making in the U.S. The AACE or the American Association of Clinical Endocrinologists recently published their updated lipid guidelines which now include bempedoic acid. As many of you know the incorporation of new medicines like ours in professional guidelines provides a key and enduring source of validation for any new medicine. This is the first lipid guideline from a major medical society to include bempedoic acid, which is an important step in coalition building. I'm also pleased to report that across the board, we are hearing from healthcare providers that our medicines are meeting or even exceeding their expectations. Third, I'm incredibly proud of how we are partnering with patient groups to establish Esperion as a patient centric organization with value and access, value and access as core values. All companies say this, but how many get to start from initial launch like we do? This is something big pharma is backing into after years of reputation degradation. We are literally rallying around it from the start. Our purpose as I said earlier is lipid management for everyone. And that means we don't stop until everyone has achieved their recommended LDL levels. Just a couple of examples of our patient group partnerships are our work with both HealthyWomen and the FH Foundation. We are generating joint content to reach distinct patients together. And these patient groups echo the need for additional non-statin medicines to fight bad cholesterol, which is a powerful surround sound approach to reaching patients.
And finally, I want to highlight that last week the American Heart Journal published, the CLEAR Outcomes, CVOT Study design paper. This article underscored the importance of demonstrating cardiovascular risk reduction for patients who are considered statin-intolerant. And you heard us say for years, nearly 10 million patients in the U.S. with high LDL cholesterol levels are not taking statins due to tolerability issues. In fact never before have patients unable or unwilling to take statins been the focus of a cardiovascular outcome study despite the clear need for non-statin treatment options. And we believe the CLEAR Outcomes study will provide added confidence in bempedoic acid's potential for patients and their physicians whose ultimate objective is to reduce the risk of cardiovascular events in this underserved patient population. Our team, which has a proven record of executing continues to create momentum around our singular purpose. We're building a company for the long-term and have laid the critical foundation on which we can continue to grow. We can't deny however, that we are facing headwinds in this environment, but we're keenly aware of the patient need. We understand the urgency, we're listening to stakeholders and adapting to the environment and we are confident in our path ahead.
So with that I'll turn the call over to Mark to share more color on our commercial efforts. Mark?
Mark Glickman -- Chief Commercial Officer
Thanks, Tim, and good afternoon everyone. There are many perspectives about how our launch is going. And I'm looking forward to sharing mine. Our experienced commercial team, while new is overcoming daily obstacles to deliver double-digit monthly growth. Is it slower than we'd expect pre-COVID? Yes. Are we building a steadily growing sustainable business that can quickly accelerate when conditions improve? Absolutely. And I know this. Our team is out there every day doing absolutely everything they can while many of their peers stay at home along with many of us. That's true grit and dedication. Our team's tenacity and sense of urgency is paying off. Last quarter, we highlighted the three pillars we are building on to drive a successful launch: managed care coverage, pricing and positioning, and healthcare provider engagement. We are in a strong position on all three pillars. We have established broad high-quality managed care coverage. Our medicines have low list prices aligning with our mission to provide affordable, convenient, oral once-daily medicines to patients. Regarding healthcare practitioner engagement, there are push and pull factors to getting a prescription ready. The push can be equated as our rep walk into an HCP's office to promote our medicines. The pull can be represented by a patient not at goal and going to their doctor for a new approach. The key intersection of this push-pull is the healthcare provider. And this slide highlights how COVID has hampered both sides of this dynamic.
As you'll see on the left, we have the old normal. A full waiting room where a representative was able to break through a known environment and sees an opportunity in the clinic where healthcare providers were seeing dozens of patients a day. On the video looping by the side, you can see the new normal showing what has become all too familiar to us. Near empty waiting rooms with reduced capacity to allow for social distancing and primary care visits down overall. Additionally, many in-person visits are being replaced by telemedicine, which has limitations in the management of cardiovascular health. This trend was highlighted recently in a JAMA study, which showed that cholesterol levels and blood pressure are falling through the cracks in virtual interactions. In fact, blood pressure monitoring was down approximately 15% in this patient population. I'll also note that while we saw physician offices reopening in some regions this quarter this was often for patient visits and not for industry reps. As a result, average weekly interactions were flat from Q2 at about 70% of what we would expect for pre-COVID levels. The good news is despite these dynamics, we are growing demand. Throughout the third quarter, we saw growth in scripts for both NEXLETOL and NEXLIZET, as we encouraged our representatives to engage with HCPs where and how they can. We have seen consistent double-digit prescription growth month after month, which was over 40% for both August and September.
You can see here that in fact quarter 3 script volume in terms of RPEs is up over 500%, despite significant headwinds impacting every aspect of the promotion of our products including our own commitment to launch during Q2 in a conscientious manner at the start of the pandemic in the U.S. For comparison, year-to-date in 2020, the entire LDL-cholesterol new-to-brand prescription market, a critical driver of new drug launches are down approximately 30%. As we think about the launch more broadly, there are no analogs what we are doing that will accurately capture our opportunity, but we remain confident in the long-term success of NEXLETOL and NEXLIZET based on the following. For starters, our managed care coverage continues to impress. We have now the majority of payer contracts in place covering 90% plus of the commercial and 50% of Medicare Part D plans. We are confident that within a year our initial launch will have nearly all relevant lives will be covered. The vast majority of preferred brand tiers with the lowest patient out-of-pocket costs. As the last bit of coverage comes online, especially on the Part D side, we expect to see continued improvements in prescription volume and elimination of any friction from prescribing and accessing our medicines.
Second, feedback on our medicines continue to be very positive. As we shared last quarter, we are hearing of results exceeding label expectations as well as positive comments on ease of access and use by patients. Encouragingly, early adopting physicians have increased the number of written prescriptions over time, which we believe reflect the positive results achieved by the initial patient they started on therapy. Third, our field force continues to expand the breadth and frequency of their healthcare practitioner interactions. We are committed to reaching HCPs on their terms as we outlined when we launched conscientiously a few months back. Now as you would expect we are especially focused on healthcare providers in the higher deciles who represent the most significant opportunity in volume of prescriptions and likelihoods prescribed, and we believe we are likely one of the leaders in terms of in-person visits right now. I want to emphasize again though that our representatives are doing this responsibly and following all safety protocols. I wanted to share a couple of additional highlights that give us confidence in our future growth. In October, we introduced an important element to our U.S. launch strategy, our DTC or direct-to-consumer campaign which is named Break the Cycle. The campaign intends to increase awareness of the never-ending cycle patients experience with lowering bad cholesterol and how NEXLETOL provides an innovative solution to help break the cycle.
We are very pleased with the responses to the DTC campaign so far and we'll take an adaptive approach to managing that campaign listening to the market to inform strategic decisions on how to advance the program. As Tim mentioned, another highlight is the AACE's published update to the lipid guidelines giving further credibility and validation to bempedoic acid's inclusion in the cholesterol treatment paradigm. We believe this guideline update will not be less. Overall, this patient population needs convenient non-statin oral once-daily medicines such as NEXLETOL and NEXLIZET now more than ever. If the pandemic has done anything, it has brought a heightened sense of focus on the individual's health and as the country and world recover so too will Esperion. We look forward to providing you with additional updates on commercial progress in the months to come.
With that I will now turn the call over to Rick.
Rick Bartram -- Chief Financial Officer
Thanks, Mark. I'll now provide some comments on our financial results for the third quarter ended September 30, 2020 as highlighted in our press release from earlier today. Total revenue for the third quarter was $3.8 million. That includes $3.3 million of net product revenue, which is five times that of the second quarter and approximately $0.5 million in collaboration revenue. As Tim mentioned, our partner Daiichi Sankyo Europe initiated their launch of NILEMDO and NUSTENDI in Germany this week. Going forward, we expect to recognize increasing royalty revenues, tiered sales milestones from the execution of our European partner that we do not doubt will be very successful.We chose DSE as our commercial partner in Europe, due to their long and strong track record in growing cardiovascular medicines and their ability to drive impact with physicians and patients across Europe in the cardiovascular space, exemplified by their continuing success with LIXIANA. We look forward to continuing our successful partnership with them for years to come.
Continuing on, R&D expenses for the third quarter totaled $35 million flat when compared to the second quarter of 2020. We expect R&D expenses to remain at a steady-state level for the remainder of 2020 and into 2021, as a result of CLEAR Outcomes becoming fully enrolled in August of last year.SG&A expenses were about $49 million for the third quarter. This was up slightly from the $48 million in the second quarter reflecting a small increase in selling and promotional activity expenses related to the U.S. launch of NEXLETOL and NEXLIZET. Net loss for the third quarter of 2020 was approximately $85 million or a basic and diluted net loss per share of $3.07. When we look ahead to the full year, we continue to expect R&D expenses will be between the $135 million to $145 million as well as SG&A expenses will be between $200 million to $210 million, which will incorporate costs related to our recently launched DTC campaign. Additionally, we still expect $30 million of non-cash stock-based compensation for the full year on top of the previously mentioned amounts. As a topic, I know you're all very interested in, it's worth noting that generally it is atypical for a company to provide revenue guidance this early in the launch. Further compounded by the ongoing COVID-19 pandemic and the resulting uncertainty, predictability is limited at this stage. And therefore, we do not plan to provide revenue guidance prior to 2022.
On cash resources, we ended the third quarter with about $216 million in cash on hand and continue to be very confident in our financial strength given the multiple funding sources we have at our disposal. As a reminder, we have an existing revenue-based funding agreement with our partner Oberland Capital. As part of that agreement, there is an incremental $50 million, we expect to become available to us next year. As we've also over-delivered on past ex-U.S. collaboration agreements, you should have great confidence in our ability to deliver on the final rest-of-world agreement or agreements which remains on track for the end of this year. As a reminder, the upfront payments from a rest-of-world deal and the Otsuka agreement put in place in the second quarter are expected to total nine figures. Similarly, I want to highlight for all of you that Esperion has over $1 billion in future milestone payments from our existing collaborations that will continue to feed our balance sheet as our partners continue to execute over time. Of course, there's also the potential to monetize these substantial future milestones over time as well.
We've demonstrated our ability to fund the company in a very advantageous manner over the last eight years in particular as evidenced by the non-equity dilutive funding solutions we've implemented over the past couple of years. We will continue to ensure the organization is adequately funded to advance and create value with a clear and continued preference for non-equity dilutive financing sources. We are fully committed to maintaining appropriate cash balances through profitability and for the long-term business opportunities.
With that I will turn it back over to Tim for closing comments.
Tim Mayleben -- President and Chief Executive Officer
Thank you, Rick. So I would just like to close with this. You've heard us stress a number of times the importance for medicines such as ours. Our mission is to ensure patients. The center of what we do are not forgotten. Those who either cannot tolerate a statin or require additional non-statin LDL-cholesterol lowering should be a priority. And they are with us. They deserve to have an easy once-daily oral non-statin medicine that's priced appropriately and available to them. We're driving toward this mission every day. And third quarter was a continuation of that. And we made several steps forward positioning Esperion for long-term success on our way to becoming the lipid management company.
Before we turn to Q&A, I just want to say again stay safe, stay healthy and go vote. With that Patricia, if you would please pool for questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Your first question comes from the line of Jessica Fye from JPMorgan. Your line is open.
Daniel -- J.P. Morgan -- Analyst
This is Daniel [Phonetic] for Jessica Fye. Last quarter, you stated that the current cash coupled with revenue are sufficient to fund continued operations through profitability. Today's press release just states sufficient to fund continued operations without qualifying until when. So first do cash and revenue fund Esperion to profitability? And second if so does that assume you'll have access to the next $50 million milestone from Oberland?
Tim Mayleben -- President and Chief Executive Officer
Thanks Daniel. Rick, can you take that one?
Rick Bartram -- Chief Financial Officer
Sure. Yes. Thanks Daniel for the question. So as we stated in the prepared remarks, we ended the quarter with over $215 million. We also stated that we expect that we're going to have access to the additional $50 million under the Oberland agreement next year. And I just want to bring you back to we are highly conscious of the burn rate. And as we've stated before we have a midwest conservative mentality. And we've always managed the burn appropriately for the organization. And we've demonstrated our ability to fund the company in a very advantageous manner over the last eight years. And then it's most recently evidenced by the non-equity dilutive solutions. So as of the quarter very strong cash balance, the additional $50 million from Oberland. We have the rest of world deal proceeding very well where that will yield an upfront payment.
And then as I stated just as a reminder, we've already received over $360 million in payments from our collaborations. And we have another $1 billion remaining of those milestones that are due to us. And that's again, before any double-digit royalty payments that we'll receive. So we're going to continue to ensure the organization is adequately funded to create value with a clear preference for non-equity dilutive sources. And we're committed to maintaining the appropriate cash balances.
Daniel -- J.P. Morgan -- Analyst
Thank you. And if I can sneak one more. You mentioned, how should we think about for R&D next year. But in terms of SG&A how should we think about the run rate into 2021?
Tim Mayleben -- President and Chief Executive Officer
Yes. Rick, do you want to keep going?
Rick Bartram -- Chief Financial Officer
Yes sure. So Daniel, I think on the SG&A side, as you've seen this year SG&A has steadily increased. Some of the spend has been decelerated due to the pandemic. But in terms of spend next year, you can look at quarterly builds for our full year guidance to give you estimates for next year at this time. And then next year on the annual report, we'll be providing full year burn guidance as we usually do at that time frame.
Daniel -- J.P. Morgan -- Analyst
Great. Thanks for taking our questions.
Tim Mayleben -- President and Chief Executive Officer
Thanks, Daniel.
Operator
Your next question comes from Michael Yee from Jefferies. Your line is open.
Michael Yee -- Jefferies -- Analyst
Hi, guys. Thanks for the question. Maybe following along that, you could appreciate Tim and Rick that there is a focus on the balance sheet. And I think what everyone is doing is they're looking at the opex run rate and they're looking at the cash balance and they're suggesting that with consensus revenues next year that you're going to at least dip below one year of cash even with all the milestones and the things you've talked about. So. given that there is sort of a change in wording about the cash sources to profitability or just on operations can you just clarify that equity financing is available to you that you would consider doing that? And maybe just talk a little bit about that that that's not ruled out. That's question one.
And then question two is maybe more strategic Tim because as we think about 2021 and who knows what happens with COVID it's definitely possible that this could go on for a while into 2021 and the general trend of things is the same. I mean are you willing to say that you will -- our guys are considering everything on the table whether that's a strategic U.S. help or a strategic acquisition or just anything in the best interest of shareholders? Because I think the financing thing is a question for people as you could see. And I think people wonder how this changes in 2021. Thank you so much.
Tim Mayleben -- President and Chief Executive Officer
Sure. Mike maybe I'll take the first -- or I'm sorry the second question first. So, I'll say what we've said before. And again I'll highlight as well that the management team here owns close to 20% of the company. So, if anybody doesn't think that we're feeling the same pain as every other shareholder let's put that aside. And so we have an interest as I've I think said repeatedly not just on our most recent call, but earlier in the year as well that we've been running this business for the better part of 10 years now. Two, I think I'll highlight what Rick just said which is we've always funded the company well early on obviously in our development through Mike as you said equity financings. Over the last couple of years brought in I think Rick said $360-plus million of non-equity dilutive cash. Actually it's including the Oberland partnership well over $500 million.
So, I think we're surprised a little bit that folks seemingly in the investment community are focused on equity financing as the only source of capital available to a company at our stage of development. I think as Rick said we have over $1 billion of future milestones not counting royalties obviously that are available to us. So, I think we have a lot of optionality here and certainly understand that we have different timelines perhaps than the investment community and we'll continue to -- that gap will continue until it closes. And again -- but I think as Rick said earlier, we're being very thoughtful about how we approach that. With respect to strategic optionality of course I think we've always looked whether it's ex-U.S. or U.S. we've always looked at alternatives for whether it's partnering here in the U.S. or whether it's partnering ex-U.S. those are certainly things that we will consider we have considered.
And so I think enough said about that I will turn to Rick to provide any additional commentary that he'd like to.
Rick Bartram -- Chief Financial Officer
Yes, Tim. Just to add Mike as Tim mentioned there's optionality. We're conservatively managing the business making sure that we have the appropriate cash balances on the balance sheet and we're going to continue to do that like we always have over the last eight years or so.
Michael Yee -- Jefferies -- Analyst
Thanks.
Operator
The next question is from Geoff Meacham from Bank of America. Your line is open.
Geoff Meacham -- Bank of America -- Analyst
Hey guys. Thanks a lot for the question. Just had a couple. Just commercially can you talk a little bit about the NEXLIZET versus NEXLETOL split? I think if you look at the scripts NEXLIZET has been outpacing. I just wanted to kind of just view it from the ground up in terms of a demand perspective. And then to follow-on a previous question when we see the COVID case accelerations of late, just help us with kind of how that informs your investments commercial investments in 2021? Do you feel like it's going to be more of the same? Is there any leverage that you could get from brand awareness etc in 2021 that you don't kind of have to fight the sort of the virtual launch, if you will, and the investments you have to make there today? I just want to know kind of what that picture looks like commercially in 2021. Thank you.
Tim Mayleben -- President and Chief Executive Officer
Yes. Sure. So, maybe I'll take the second question first. And then Mark if you would take the first question. So, with respect to the -- your question, the way that we're thinking about the future is I think as both Rick and Mark highlighted is COVID-19 this pandemic that we're all living with no one is working like they did before COVID. And I think we would expect that like perhaps many of you that COVID will continue to have an impact. I think like many of you though we're also expecting that we've all gotten a little bit smarter about how to adapt to this pandemic.
And what's safe, what are safety protocols, and what are safe activities to pursue and which ones aren't. And so I think we're all smarter about those kinds of things. So I think that as we think about the future, we think there's certainly a degree of uncertainty about the future, but as 2021 unfolds and I think you've heard Mark refer to when conditions improve, this is really going to be a very strong recovery story, because the early indications from physicians, our healthcare providers that are prescribing our product is it's easy to use, easy to get approved by payers. The efficacy that they're seeing is, as I think both Mark and I highlighted, as good or better often than they expected. And of course, some of the things that we've been talking about for years, it's oral, it's once daily, it's non-statin, and it doesn't have the muscle aches and pains associated with -- frequently associated with statins. So, all of those things are coming into reality. And as the effects of the pandemic dissipate, and I think it's reasonable to expect some time in 2020 when they will, then this is really a strong recovery. Patients will start to go back to their physicians. They will as we've been saying pay attention to their cardiovascular health, which they're not doing as much today.
I think you heard Mark say that when you look at script volumes for -- new script volumes for statins even they're down 30%, 30% since the beginning of the year. If you look at PCSK9 volumes, they're down 40% since pre-COVID. So obviously a lot of folks are practicing medical distancing in this area, but it also implies that as this dissipates, it's an incredibly strong recovery as patients and their physicians return to addressing their cardiovascular health. So with that, I'll turn it Mark to you to answer the first question.
Mark Glickman -- Chief Commercial Officer
Sure. Thanks Tim, and yes. So, NEXLIZET, just to remind everyone, we launched approximately two months after NEXLETOL hit the market despite that slight delay. And really that delay also led to managed care. We didn't go for the managed care contracts about two months later as well. Despite that NEXLIZET on a weekly basis is approaching 50% of the business and we continue to anticipate by year-end NEXLIZET will be the predominant prescribed product.
I'm not sure there's more that you want from that question. So it's -- right now it's approaching 50%. It's consistently in the mid-40s each week. We went over 50% once or twice. It clearly is going to be the workhorse. And as managed care catches up to NEXLETOL we can expect it to accelerate from there.
Geoff Meacham -- Bank of America -- Analyst
Okay. Now that's helpful. Thanks guys.
Tim Mayleben -- President and Chief Executive Officer
Yeah. You're welcome.
Mark Glickman -- Chief Commercial Officer
Thanks, Geoff.
Operator
Your next question is from Joseph Thome from Cowen and Company. Your line is open.
Joseph Thome -- Cowen and company -- Analyst
Hi, there. Thank you for taking my questions. The first one is just sort of on the initial patient response in the patients that have received therapy. Is the initial population those that want or need additional treatment on top of statin versus stat-intolerant, how is that mix playing out? And then in terms of providers in the primary care setting versus specialists, are you seeing some that are more early adopters than others? And then one more just on reimbursement, are there any hurdles that you hadn't anticipated prior to launch that have come up? Or is -- or are most patients that want the therapy able to get it reimbursed? Thanks.
Tim Mayleben -- President and Chief Executive Officer
Yes. Thanks Joseph. Mark, do you want to take all three of those?
Mark Glickman -- Chief Commercial Officer
I will thanks. Yeah. So first on patient response, it really is a split between physicians who are putting patients on very high doses of statin. We've heard great responsiveness on top of even 80 of atorvastatin. Those come in fairly regularly from physicians. And we hear again just really incredible results from statin-naive patients who just failed or can't tolerate a statin at all. We're even hearing anecdotes on top of even PCSK. So we're actually hearing strong efficacy regardless of the background of the patient. And it's been very consistent throughout the entire country since launch, especially now that patient labs are coming back. Regarding early adopters, I think, cardiologists -- I think this is COVID-driven; the cardiologists are definitely earlier adopters right now than primary care. We would expect typically the higher decile primary care to be slightly earlier adopters. And by early adopters, I'm referring to how many calls to adoption.
We are seeing the cardiologists throughout each of the deciles adopting quicker than primary care. It was starting to catch up there. But I would say, clearly, that the cardiologists are the early adopters and moving quickly and putting patients on with primary care coming on board a little bit later. And then, finally, your question was regarding coverage. There's no -- patients can and do readily receive the medicines on the commercial side, both in our coverage and with our $10 maximum co-pay card. Everything is working according to plan. No real surprises there. I'd say, in Part D, it's not really a surprise, but in the COVID environment, it's definitely a little slower coming on board. The negotiations are pretty much exactly what we would have expected. And I would say the results are very close to what we expected. It's just the time of the execution and loading the contracts that's been a little bit of a -- I wouldn't say a surprise, a disappointment, but it's absolutely tied to COVID and the fact that folks are not working in their offices at this point. I think I addressed all three, any additional questions there?
Joseph Thome -- Cowen and company -- Analyst
No. That's perfect. Thank you very much.
Mark Glickman -- Chief Commercial Officer
You're welcome.
Tim Mayleben -- President and Chief Executive Officer
Thanks, Joseph. Thanks, Mark.
Operator
Your next question is from the line of Marty Auster from Credit Suisse. Your line is open.
Martin Auster -- Credit Suisse -- Analyst
Thank you, operator. Thanks for taking the call. Most of my questions have been asked. I might try a different angle on them a little bit. Tim, first of all, thanks for the shoutout to remind everyone to vote. I voted early. So I appreciate you doing that. I guess -- like several of the questions, like I'm thinking back to Mike Yee's question, I guess, on kind of the path forward view and whether you're ruling anything out. It sounds like you're not ruling anything out. But from -- the best what I can tell from this conversation, you're thinking about the potential of equity financing, of strategic partnerships in the U.S., of pulling forward future milestones or royalties from other territories. Maybe could you talk about what the time frame is, where you need to make a decision about what to do to ensure adequate capital to kind of achieve breakeven results in the future? And then, among those, I just -- I guess, preferentially, I don't know if I have a great feeling for how you're thinking about what the kind of better outcomes versus other outcomes or what you're more sensitive to, if it's losing some of the longer-term value from one of the existing partnerships by pulling forward some royalty or milestone payments. Or if it's strategically, maybe sharing the U.S. part of this opportunity. Where are your sensitive points? And where do you think -- I guess, what do you think creates the best long-term outcome for investors, if that's where your focus is, it sounds like? Thanks.
Tim Mayleben -- President and Chief Executive Officer
Yes. Yes. Thanks. Thanks, Marty. Rick, maybe I'll ask you to start on this and then I will end my comments as well.
Rick Bartram -- Chief Financial Officer
Yes. So thanks, Marty. So, I think, you rattled off a good set of items. As we said, our preference is for non-equity dilutive solutions. We've been focused on those in the past and we will continue to be focused on those. I do want to bring everybody back to, I think, the long-term view. We are confident that the 1.8 million patients that we stated will be treated at peak with our medicines. That remains intact. And while near-term revenue expectations have been adjusted as a result of COVID, the long-term potential of our medicines still holds true. And as Mark mentioned, ready to strike when the environment returns.
So we're going to continue to maintain appropriate cash balances. We're actively monitoring those balances on a day-to-day basis. I'm not going to comment in terms of timing of when things would happen. But just reminding back, we are on track for a rest of world deal by the end of the year. That's going to bring additional funding into the organization, just added to the other already in place funding solutions that we have. So we have a high degree of confidence in the cash runway as well as our ability to execute.
Tim Mayleben -- President and Chief Executive Officer
Yes. Thanks, Rick. I think that was well said. And Marty, I think, on the strategic front, again, I think in a -- over time, of course. Folks will look back on this time and say, "Gee, what was all the fuss about?" Because, again, I think, as Rick highlighted, the track record that we have of, not only executing on milestones, saying what we're going to do and doing those and then keeping the company adequately funded is as good as anybody out there. Again, reasonable people can disagree on how that should be done and when it should be done. But I think again, our track record is such that we've demonstrated the ability to do that, and to do it consistently. So, I think, we feel confident as Rick said that, we'll be able to continue to do that. The pandemic has certainly shifted our plans as it has plans for almost every business and views of businesses, but we will certainly overcome this just like the rest of the country is going to overcome the effects of the pandemic over time.
Martin Auster -- Credit Suisse -- Analyst
Tim, I mean, again I agree. You couldn't imagine a more challenging scenario to be launching sort of a drug into. Just I'll try one. Just in terms of the... I understand you can't predict the timeline of making important strategic decisions, but do you have any sort of guidance you can offer investors in terms of like what... how you're thinking about kind of quarters of capital on hand to kind of buttress against kind of COVID laying your plan just under further? Or you're not seeing the kind of ramp up you might expect to see next year in revenue? Is there any guidance you can provide around that?
Tim Mayleben -- President and Chief Executive Officer
Rick, any thoughts on how you'd like to respond to that?
Rick Bartram -- Chief Financial Officer
I'm sorry Marty my phone was chopping out. Can you just restate the question?
Martin Auster -- Credit Suisse -- Analyst
Yeah. Rick, just trying to ask, while I appreciate that you can't necessarily put a timeline on an important strategic decision when you have a few options available for you think about. I understand that, you've got projections going forward about, how your revenue is going to... and what your burn rate looks like? How are you thinking internally about how many... in terms of trying to fine-tune the timeline how are you thinking internally about how many quarters of capital you're willing to kind of run down to? And I think that it goes back to one of the questions asked earlier about it looks like you're kind of coming up on your capital or less and trying to understand the urgency with which you're trying to make these decisions?
Rick Bartram -- Chief Financial Officer
Yeah. So yeah, there's lots of precision on quarters of capital on the balance sheet to try to identify when additional sources would come in. Again, I just want to bring everybody back. We had over $215 million of cash on the balance sheet. We have multiple funding sources in front of us. Timelines of harvesting those funding sources, some of them are very transparent on the timelines. Others are available to us. So we're going to continue to make sure the organization is adequately funded. We're not going to run the cash balance down to low levels, and we're going to continue to ensure that we have the ability to execute on the business plan.
Martin Auster -- Credit Suisse -- Analyst
Great. Thanks so much for your color guys. Appreciate it.
Tim Mayleben -- President and Chief Executive Officer
Okay. Thanks, Marty.
Operator
Your next question is from Jason Butler from JMP Securities. Your line is open.
Roy Buchanan -- JMP Securities -- Analyst
Hey. It's Roy in for Jason. Thanks for taking the question. I just had a couple of quick ones. Just curious, if you guys have added TV into the direct-to-consumer initiative yet? Or is that coming later this quarter? And then, I guess, I was a little bit maybe puzzled but the... if you expect NEXLIZET to become a front-runner looks like the DTC is emphasizing NEXLETOL. Does that become confusing later? I know we discussed this a little bit before the launch but any thoughts around that? Thanks.
Tim Mayleben -- President and Chief Executive Officer
Yeah, sure. Mark can I tip those to you?
Mark Glickman -- Chief Commercial Officer
Sure. Yeah. So we are not -- we have not introduced not traditional TV into this. We're taking a very smart approach with the DTC and there's other aspects where we get on localized TV through different aspects, but not full-scale consumer TV, like you would expect like watching TBS at night. And it's not -- it may not be next quarter either. We're still evaluating the right time to come into this, and we're looking at how other brands are performing. Regarding confusion in the market no, in fact, I think starting the DTC and the campaign the NEXLETOL, we do think that physicians still need to become comfortable with NEXLETOL, the innovative product. But as they get more comfortable with NEXLETOL, and start with NEXLETOL, they will quickly move to NEXLIZET for those patients that aren't at goal.
And then eventually as the comfort grows, they'll continue to just start on NEXLIZET. So I don't think there's any confusion at all. We always knew that anytime you have a new product launch, and it's an innovative product, they do need to become comfortable with that. The transition to NEXLIZET is happening rapidly. And we did anticipate that would happen. So I don't think, there's any chance of confusion at all.
Roy Buchanan -- JMP Securities -- Analyst
Okay. That makes sense.
Tim Mayleben -- President and Chief Executive Officer
We're seeing NEXLIZET at about 45%. So almost half of prescriptions are for NEXLIZET now and we've been saying for a couple of quarters now that by the end of the year we would expect that to be about 50%. So about half by the end of the year will be NEXLIZET, the other half will be NEXLETOL. All the while, we're continuing to grow. So I think that's important. And then long-term as Mark was saying, we expect NEXLIZET to be the dominant medicine on the franchise perhaps as much as two of every three prescriptions written for the products will be for NEXLIZET because of the greater LDL cholesterol lowering efficacy with that medicine.And then the only other thing that I'll leave you with and then we'll take the next question is that if you recall on our last quarterly call in August, we mentioned that we were -- the NEXLETOL franchise was about 10% of new-to-brand prescriptions for the non-statin LDL cholesterol-lowering medicine class and that has increased now.
In fact it's doubled to 20% of new-to-brand prescriptions. So I think Mark spoke in his prepared comments about the green shoots that we're seeing. I spoke about the momentum that we're seeing. Even in the midst of launching in a pandemic, we are seeing this really nice growth in physicians prescribing our medicines in really increasing numbers.
So with that Patricia if you would go to our next question?
Operator
Your next question is from Derek Archila from Stifel. Your line is open.
Derek Archila -- Stifel -- Analyst
Hey, thanks for taking a question, and good evening guys. Just two from us. Can you just remind us on the Oberland, $50 million? Are there requirements around revenue thresholds associated with that next tranche? And then I might have missed this but the step-up in SG&A in 4Q is that the best way to think about the run rate for 2021? Thanks.
Tim Mayleben -- President and Chief Executive Officer
Rick that sounds like two questions made for you.
Rick Bartram -- Chief Financial Officer
Yeah. So thanks Derek. So on the Oberland, you're correct there is sales requirements, $100 million of worldwide sales six months trailing, so not just those associated with the United States. And now that Europe is launching those revenues will start to continue to count toward that $50 million, which we're confident we'll have access to next year. And then SG&A-wise, I think I had mentioned SG&A is building. Using the full year closing run rates should be generally good estimates for you for next year. But, obviously, next year when we report year-end results we'll be giving firm expense guidance like we always have on both R&D as well as SG&A.
Derek Archila -- Stifel -- Analyst
Okay, great. Thank you.
Operator
The next question is from Chad Messer from Needham & Company. Your line is open.
Gil Blum -- Needham and Company -- Analyst
Hello. This is Gil on for Chad. And again congratulations on all the progress. Maybe a slightly different tack about the COVID-19 effect. Do you guys expect some patient warehousing, maybe a bolus of patients appearing when things improve? Is that the kind of dynamic we're thinking of, or would it be more gradual?
Tim Mayleben -- President and Chief Executive Officer
Gil interesting that you asked that. And Mark do you want to take a first crack at that?
Mark Glickman -- Chief Commercial Officer
I do. Thanks Tim. It's interesting and it's a great timely question, my Head of Analytics and I were just going through this a little earlier today. When you see where page eight we have office visits were, you see this dramatic drop coming exactly into COVID. And this is from the Symphony Health COVID update recently. So we do -- while we have seen this heavy, heavy bit down -- office visits down to about 25% across some specialties, you see this movement to try to get back to normal but what was not taken into account is all those visits that were lost. So I actually do believe that all those visits lost will create a bolus of people coming back into the office. And I think it's going to happen either after there's some comfort that this spike is done and completed or a vaccine is something else. But these are lost visits and these patients do have to come back in. It was a dramatic loss and we do anticipate there'll be some type of bolus. The question is when. But those -- I do believe those visits do have to come back at some point.
Gil Blum -- Needham and Company -- Analyst
Thank you. That makes a lot of sense. A bit of a housekeeping question. So there is a non-cash spend of about $30 million. Is most of that expected in the third -- sorry in the fourth quarter? And how should I think of the split between SG&A and R&D there?
Tim Mayleben -- President and Chief Executive Officer
Rick?
Rick Bartram -- Chief Financial Officer
Yes. So those are full year estimates, generally straight-lined for the full year. And the general allocation is about one-third of that expense hits R&D two-thirds of that expense hits SG&A.
Gil Blum -- Needham and Company -- Analyst
Thanks. Very helpful, and good luck with the rest of the launch.
Tim Mayleben -- President and Chief Executive Officer
Hey. Thanks, Gil.
Operator
The next question is from Tom Shrader from BTIG. Your line is open.
Julian Harrison -- BTIG -- Analyst
Hi. This is Julian on for Tom. Thank you for taking my question. I'm curious, how much visibility you have on geographic trends regarding in-person versus virtual patient visits? And how informative is this to your sales efforts over the next couple of months?
Tim Mayleben -- President and Chief Executive Officer
Thanks, Julian. Mark, will you take that one?
Mark Glickman -- Chief Commercial Officer
Sure. I think -- to answer the second part of the question first, it's not really -- we're not dependent necessarily on the physician-patient telehealth aspect. As long as that office could see a rep and our rep gets in there, the chances of a physician prescribing are much, much higher. So our focus really is on having our representatives focused on the right targets and gain access regardless of what the physician's practice is looking like at that time. As far as geographic reach, I wouldn't say we have great visibility, because it's changing so rapidly. And much of the virtual versus in-person healthcare is actually being driven by healthcare systems and IDNs not by geographic location. So it's not quite 100% tied to hotspots or spikes, it's really about the governance of the healthcare systems. But as far as we're concerned, really the most important interaction is between the representative and the physician and that's where our focus is. And there's no doubt when we have access and we can gain access on a regular basis that's where the prescriptions are coming from.
Julian Harrison -- BTIG -- Analyst
Okay. Great. Thank you. That's very helpful.
Operator
The next question is from Paul Choi from Goldman Sachs. Your line is open.
Paul Choi -- Goldman Sachs -- Analyst
Good evening, and thanks for taking our questions. I have 2. First for Rick, just on the opex. With regard to your guidance and thinking about next year, what percentage of your opex right now is fixed versus variable? Is it 80-20? 75-25? And just how much of that could you -- discretionary spending could you potentially push off to help the cash position? And then my second question is for Mark. Just with regard to insurance and coverage. Can you maybe just provide some color as to what are the insurance approval versus rejection rates? And how -- what the progress has been there over the course of the quarter and looking into this quarter as well? Thank you very much for taking our questions.
Tim Mayleben -- President and Chief Executive Officer
Thanks, Paul. Rick, Mark?
Rick Bartram -- Chief Financial Officer
Yes. So I'll take that SG&A one first, Paul. So to get a good gauge of generally what's fixed in SG&A, you could just generally look back at prior quarterly reports, prior to the launch to get a sense of generally their fixed numbers. But overall, the vast majority of costs in SG&A have some variable component to it. But we always manage the business pretty conservatively and making sure that we're very prudent in the spend and we have a lot of optionality in ensuring that the spend is appropriately modulated. Mark?
Tim Mayleben -- President and Chief Executive Officer
Mark do you want...
Mark Glickman -- Chief Commercial Officer
Yes. So Paul, what I would -- so our approval rate is it's exactly where we would expect to be right now and very much in line, if not better than other recent launches regardless of industry. So we're seeing improvement week by week both in commercial and Part D. And again, Paul, it's a -- well over a majority of all prescriptions are being approved. And it's pretty much exactly where we would expect to be at this point of coverage and prescriptions being generated.
Paul Choi -- Goldman Sachs -- Analyst
Great. Thanks for taking our questions.
Tim Mayleben -- President and Chief Executive Officer
Thanks, Paul.
Operator
I'm showing no further questions at this time. I would like to turn back to the speakers for any further comments.
Tim Mayleben -- President and Chief Executive Officer
Patricia, thank you for helping us facilitate the call this evening. To everybody listening, thanks very much for spending some of your Monday before Election Day with us. As I suggested earlier, please go vote if you haven't already. Stay safe through all of this and we'll certainly be in touch with you again soon with our Q4 results. Thanks so much. Stay safe.
Operator
[Operator Closing Remarks]
Duration: 66 minutes
Call participants:
Ben Church -- Corporate Communications
Tim Mayleben -- President and Chief Executive Officer
Mark Glickman -- Chief Commercial Officer
Rick Bartram -- Chief Financial Officer
Daniel -- J.P. Morgan -- Analyst
Michael Yee -- Jefferies -- Analyst
Geoff Meacham -- Bank of America -- Analyst
Joseph Thome -- Cowen and company -- Analyst
Martin Auster -- Credit Suisse -- Analyst
Roy Buchanan -- JMP Securities -- Analyst
Derek Archila -- Stifel -- Analyst
Gil Blum -- Needham and Company -- Analyst
Julian Harrison -- BTIG -- Analyst
Paul Choi -- Goldman Sachs -- Analyst
