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Athenex, Inc. (NASDAQ:ATNX)
Q3 2020 Earnings Call
Nov 7, 2020, 8:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2020 Athenex Earnings Conference Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions]. I would now like to hand the conference over to Mr. Steve Rubis of Athenex. Sir, please go ahead.

Steven Rubis -- Senior Director, Investor Relations

Good morning, and thank you for joining our conference call. Today, we will provide an update on Athenex's business as well as a review of financial results for the third quarter of 2020. The news release detailing the results crossed the wire earlier this morning and is available on the Company's website.

A replay of this call will also be archived on the Company website. During the conference call, the Company will make projections or forward-looking statements regarding future events, including statements about financial, business and clinical milestones, anticipated in fiscal year 2020 and beyond. We encourage you to review the Company's past and future filings with the SEC, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements.

You can find our SEC filings in the EDGAR database at www.sec.gov or in the Investor Relations section at our website at www.athenex.com. This morning, we are joined by Dr. Johnson Lau, Chief Executive Officer; Mr. Jeff Yordon, Chief Operating Officer; Dr. Rudolf Kwan, Chief Medical Officer; Mr. Randoll Sze, Chief Financial Officer and Mr. Timothy Cook, Senior Vice President, Global Commercial Oncology.

I will now turn the call over to Johnson for introductory comments.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you, Steve. I will provide a high level overview of the progress Athenex made during the quarter and our future opportunities before turning the call over to Dr. Rudolf Kwan to discuss the clinical programs.

In September, the FDA accepted our NDA for Oral Paclitaxel under priority review with a target action date of February 28, 2021. The acceptance of Oral Paclitaxel for FDA review puts Athenex in a strong position of having two NDAs under review at the FDA at the same time. The excellent progress made this year is that we are now closer to our goal of becoming a leading commercial stage oncology Company.

Within the context of COVID-19, both medical and patient communities continue experiencing greater demand for oral therapy options. We currently, for all chemotherapy, highlights the value of convenience around oral formulations. As discussed on previous calls, recent NCCN guidelines encourage switching patients from infusion based therapies to an oral formulation when an equivalent is available.

Traditionally, the FDA appears supportive of therapies that can help keep patients on the therapy in the current pandemic environment. In addition to our clinical efforts, our commercial team is now completely focused on putting all the key elements in place for a successful Oral Paclitaxel launch.

Mr. Jeff Yordon and Mr. Timothy Cook will provide further details on the buildup of our infrastructure and commercial initiatives. The market opportunity in metastatic breast cancer is significant. Market research shows that Oral Paclitaxel will initially be prescribed mostly for breast cancer patients who are hormone positive HER2- or who are triple negative. These settings represent roughly 70,000 patients annually in the U.S.

Several pathways exist to expand the total addressable market. This expansion opportunities include additional combination trials, other settings where Oral Paclitaxe represent standard of care and additional cancer indications. For example, the I-SPY 2 TRIAL is evaluating Oral Paclitaxel in early stage breast cancer. If successful in these areas, the total addressable market can expand over time to more than 0.5 million patients. We also continue to work with our partners to get the regulatory strategy in place for China, Europe, and other high-value geographic areas.

Tirbanibulin ointment represent our first product to undergo FDA review. The PDUFA date for the review of tirbanibulin ointment is December 30, 2020. Almirall is our partner for tirbanibulin in the U.S. and European markets and we are working closely with them on launch preparation.

In September, Athenex reached another important milestone of having its ten IND accepted by the U.S. FDA as the agency allow the IND application for TCRT-ESO-A2, a TCR-T cell therapy, targeting NY-ESO-1 positive solid tumors. The technology is still developed by Axis Therapeutics, a joint venture between Athenex and Xiangxue Life Sciences Limited. The existing commercial business continues to perform well and beat the expectations. Product sales revenue totaled $24.8 million in third quarter, up 29% year-over-year.

As a result, we are raising our full-year product sales guidance from mid teen to low 20s percentage growth. During the quarter, we further strengthened the balance sheet with a successful equity financing in September raising net proceeds of $119 million. This one [Phonetic] funds provides us with additional resources to expand and strengthen our commercial infrastructure. It will also allow us to undertake label expansion initiatives for Oral Paclitaxel and further develop our pipeline. The pilot commercial launch of Oral Paclitaxel is funded by the nondilutive financings we recently announced with Oaktree and Sagard Healthcare Royalty Partners, which provide a combined total of $275 million.

I will now turn the call over to our Chief Medical Officer, Dr. Rudolf Kwan to provide an overview of our clinical programs. Rudolf?

Rudolf Kwan -- Chief Medical Officer

Good morning, everyone. During the quarter, there were two important developments regarding Oral Paclitaxel. First, the NDA for Oral Paclitaxel was accepted by the FDA and assigned a PDUFA target action date of February 28th, 2021. Ongoing dialog with the FDA is encouraging and we are pleased with our progress to date. Second, the Company announced Oral Paclitaxel's inclusion as a study drug in the I-SPY 2 TRIAL.

The I-SPY 2 TRIAL provides the opportunity to demonstrate the benefit of Oral Paclitaxel in early stage breast cancer in combination with GSK's dostarlimab and anti-PD-1. The objective with I-SPY 2 is targeting a cure for breast cancer. The study arms inclusion of Oral Paclitaxel presents an opportunity for it to become the backbone taxane of choice for combination treatment approaches. The trial design lead us to believe there is a good chance for the combination to work as IV Paclitaxel in combination with pembrolizumab which is also an anti-PD1 drug has already been shown to be efficacious in this setting.

Sites are actively dosing patients with the study drug. Regarding timing, other I-SPY TRIAL arms have readout after roughly 18 months, which suggests the possibility of a data readout within this time frame. I-SPY2 represents an important clinical trial in the context of the broader oncology arena. Quantum Leap's I-SPY clinical trials have been around for several years and several agents evaluated in the trial eventually went on to receive approval.

The inclusion of Oral Paclitaxel in I-SPY 2 elevates the credibility of our program. Athenex is excited to collaborate with Quantum Leap and GSK. We have four Oral Paclitaxel abstracts accepted for poster presentation at San Antonio Breast Cancer Virtual Symposium taking place December 8th to 11th. These abstracts include a PFS and OS update from our pivotal Phase III trial in metastatic breast cancer, which will be presented in a spotlight poster discussion.

The PFS and OS update presentation will be embargoed until actual presentation time. There are also posters on neuropathy and on the management of GI side effects. A further poster will present updated data from our Oral Paclitaxel angiosarcoma trial for the subset of patients who develop angiosarcoma of the breast. Currently, the primary focus for the Company is on the pending approval of Oral Paclitaxel and tirbanibulin ointment. Our life cycle management strategy for Oral Paclitaxel is our next important focus around label expansion studies, combination therapies and new indications. Our goal is to provide additional updates about our pipeline in the coming months.

The FDA review of tirbanibulin ointment remains on track and we expect to receive a response from the FDA by the December 30th PDUFA date. Almirall will be commercializing the product in the U.S. and EU upon approval. I will now turn the call over to Tim Cook for the commercial update.

Timothy Cook -- Senior Vice President, Global Oncology

Thank you, Rudolf. The final stages of the commercial planning for Oral Paclitaxel are under way. The Company is prepared to launch immediately upon the FDA action date of February 28th, 2021 or earlier. Let me recap our progress. Our medical science liaison team is in place and is engaging in scientific discussions with key opinion leaders. Our nurse oncology educators are on board and will provide information on dosing and managing side effects to the oncology treatment teams upon launch.

In the meantime, the team will begin co-filing its local territories and start having unbranded discussions around the disease state and patient care. We have hired two national account directors to engage with the payer community during the third quarter. Based on the Pre-approval Information Exchange Act or PIE, the account managers may target payers establishing policy at a national level ahead of drug approval.

Activities focused on educating these customers about healthcare economic information pertaining to Oral Paclitaxel in order to facilitate coverage decisions and budget allocations. Athenex is in the process of hiring five corporate account directors to cover smaller regional payers and large integrated delivery networks like Kaiser. Our last step involves onboarding our sales representatives in the December, January timeframe ahead of our expected launch.

In parallel, we are ramping up our work on the value proposition of Oral Paclitaxel to the payer community and finalizing our pricing and contracting strategy. Feedback has been overwhelmingly positive as payers view our drug as innovative, which is in line with our prior pricing assumptions. Contract were in place with all key distributors and specialty pharmacies and our distribution model is finalized. Developing patient outreach initiatives remain a key focus. Our patient support program is near completion and additional point of contact was created in the specialty pharmacy hub to help manage both treatment and reimbursement as well as to provide a financial assistant system for patients.

October was Breast Cancer Awareness month. Athenex has been very active and focused on amplifying its share of voice and visibility around breast cancer through the month. The Company launched a guide to facing metastatic breast cancer on October 9th, and held a virtual media tour featuring Dr. Beth DuPree which consisted of TV and radio interviews accompanied by social media posts across multiple platforms.

Core marketing messages to be used by our sales force are in the final stages of development. Our market research shows that our messages around efficacy and the first oral taxane resonate well. Physicians are responding positively to the safety language around neuropathy, no need to premedicate patients and a lack of infusion reactions.

We will have a presence at the San Antonio Breast Cancer Symposium. In addition to the four abstracts that Rudolf mentioned, we will also have a virtual exhibit. Lastly, we finalized a brand campaign for Oral Paclitaxel that will roll out after launch. To summarize, we are ready to launch Oral Paclitaxel upon approval. Payer outreach has begun and we have prepared Initiatives targeting physicians, office staff and patients.

Additionally, we are planning several virtual physician outreach events that can be rapidly deployed upon approval to promote the drug. Now I'll turn the call over to Jeff Yordon, our COO.

Jeffrey Yordon -- Chief Operating Officer, President-Athenex Pharmaceutical Division

Thank you, Tim. Our strategy at Athenex focuses on building a company for the clinical, regulatory, sales and marketing and manufacturing functions are vertically integrated and having all these elements in place well ahead of a planned commercial launch. Doing so provides the ability to hit the ground running once we have our first approval.

It also means we can capture value across the entire supply chain. In terms of production, our current API facility in Chongqing is ready to supply product for launch, as well as for planned clinical trials.

A leading manufacturer in Europe has been placed as a second source of high quality supply for our launch. The expectation remains that Polymed's new China based API facility will be operational later this year and can begin commercial production from the second half of 2021. Construction of our facility in Dunkirk, New York is almost complete, as all interior and exterior work is nearly finished.

The essential equipment for the Dunkirk facility is on order which should be delivered in 12 months to 14 months. The facility is large with more than 400,000 square feet, which will serve our commercial needs and those with the specialty pharmaceutical business as well. The plan is to dedicate a portion of the facility to manufacturing 503B products as well as injectable products and eventually manufacture our proprietary products as well. APD currently markets 30 products, and 54 SKUs, and APS markets six products and 18 SKUs.

I will now turn the call over to Randoll to discuss the financials.

Randoll Sze -- Chief Financial Officer

Thank you, Jeff. Revenues from product sales totaled $24.8 million for the third quarter compared to $19.2 million a year ago, an increase of 29%. Growth was primarily driven in by specialty product sales as the impact of the global health pandemic led to increased demand for COVID-19 related drug. Within product sales, revenue from the specialty pharmaceutical business for the quarter totaled $24.5 million, which once again beat our forecast. The increase was partially offset by the decline in API and 503B product set, as we suspended production of commercial flagships at our API facility and discontinued vasopressin sales.

In the third quarter, pursuant to the 2019 Xiangxue License Agreement and an out-licensing agreement with PharmaEssentia, we recognized $9.4 million in license revenue, net of $0.6 million VAT, and $1.0 million in license revenue, respectively. Cost of sales totaled $24.5 million compared to $17.1 million a year ago. Cost of specialty product sales increased in line with revenue growth. We continue to incur fixed cost despite decreased production at our API and APS facility.

Out of the $24.5 million costs of sales, approximately $2.4 million was attributable to the sublicense fees payable to Hanmi, in relation to the license revenue recognized associated with the 2019 Xiangxue License Agreement. R&D expenses totaled $18.4 million compared to $19.6 million a year ago. The decrease in R&D expenses was the result of all Phase III studies winding down as well as decreases in drug licensing costs, regulatory costs, and preclinical operation costs. The decline in R&D expenses were partially offset by an increase in medical affairs and API development costs, in compensation expenses.

SG&A expenses totaled $22.2 million compared to $16.3 million a year ago. Commercial preparations associated with our proprietary drug drove the increase in cost. Operating loss for the quarter was $29.6 million compared to $33.6 million a year ago. Of note, below the EBIT line, we recognized a $3 million loss related to the assignment of a portion of the senior secured loan from Oaktree's co-investors to Sagard. We did not incur expenses of similar nature in the same period last year.

As a result of the foregoing, net loss attributable to Athenex was $36.8 million or $0.44 per diluted share in Q3 2020 compared with $34.8 million or $0.45 per share in Q3 2019. Excluding the one-time debt extinguishment expenses of $3 million, the net loss attributable to Athenex in Q3 2020 was $33.8 million, or $0.40 per diluted share.

In terms of our product sales guidance, we are raising our guidance again for the full year 2020. We now expect a year-over-year growth rate of at least in low 20, versus the mid teen percentage growth that we communicated in August. This takes into account our sales performance year-to-date, as well as our outlook for the remainder of the year.

Our product mix may continue to include products that are used to treat COVID patients, though we do not view these revenues as recurring in nature. As a reminder, our guidance only includes product sales. We don't provide guidance on partnership revenue or milestone payments. As of September 30, 2020, we had cash and cash equivalents of $143.6 million, restricted cash of $13.8 million and short-term investments of $84.8 million.

In September, Athenex completed an underwritten public offering of 10 million shares of common stock priced at $11 per share. The Company granted underwriters, a 30-day option to purchase up to an additional 1.5 million shares which was exercised in full. Net proceeds were a $118.7 million. Based on our current operating plans, we expect our cash and cash equivalents, restricted cash and structure investments as of September 30, 2020 together with the cash to be generated from our operating activities and the non-dilutive capital made available through the milestones associated with the debt agreement signed with Oaktree Capital and Sagard will fund operations into 2023.

I will now turn the call over to Johnson for closing remarks.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you, Randoll. I'm delighted to see the Company evolving from development stage to a commercial Company focusing on the registration and planned launch of two proprietary products. I want to thank my colleagues for their hard work and for their successful execution across the business throughout the year.

We will now open the call for questions.

Questions and Answers:

Operator

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Robyn Karnauskas with Truist Securities. Please proceed with your question.

Robyn Karnauskas -- Truist Securities -- Analyst

Hi guys. Thank you. So, I just had a question regarding Oral Pac and checkpoint inhibitor combo. So for I-SPY 2, I just want to clarify, you talked about 18 months, that we're still on track for year end '21 or could it go into 2022? And then the follow up would be for oral -- the the Oral Pac Mayo trial, the tirbanibulin trial. Can you walk us through what you think your timelines are and how we should think about data coming out from that trial and the reads to I-SPY 2 potentially or maybe just a bigger picture opportunity for your drug from that trial next year. Thank you.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you for the question. Rudolf?

Rudolf Kwan -- Chief Medical Officer

Hi, Robyn. The I-SPY 2 is one of the combination studies we are conducting. So in that setting it was a combination with the GSK's dostarlimab in neoadjuvant setting in metastatic breast cancer. The readout, as we keep saying is based on really -- will be based on enrollment. The enrollment has start and is moving along very well, but we cannot project the timing.

Just looking at the previous timelines from I-SPY 2 programs, the readout generally occurs around 18 months after they start. So that's the timeline that we have been using as a guidance not really projection everything will depend on the actual enrollment rate. And we will know a lot more as we progress.

We do have other anti-PD1 programs already under way. The study 011 with pembrolizumab is progressing well and we will be talking about it when the timing is right and we do have plans in our life cycle management to include checkpoint inhibitor or immunotherapy combination as an important area. I hope that answer your question.

Robyn Karnauskas -- Truist Securities -- Analyst

Thanks.

Operator

Thank you. Our next question comes from the line of Kennen MacKay with RBC Capital Markets. Please proceed with your question.

Kennen MacKay -- RBC Capital Markets -- Analyst

Hi, thanks so much for taking the question and congrats on a very impressive year of execution so far despite the COVID-19 pandemic. First, one quick question on manufacturing and then I had another question on the combination of Oraxol with checkpoints that I was hoping Johnson or Rudy could speak to.

So first, for manufacturing of tirbanibulin and Oraxol, the FDA is obviously very busy these days. Maybe you see there a more certain [Phonetic] figure, but wondering if you could inform us as to whether the plants, the manufacturing plants had been inspected by the FDA yet or whether this had been pushed and there you initially plan to manufacture commercial drug supply for each product.

And then the second question on the Oraxol checkpoint combo, maybe I was hoping you could talk a little bit to some of the data that we've seen so far around paclitaxel and checkpoints, specifically in breast cancer, I'm referring to the IMpassion131 and IMpassion130 trial and some of the differences that we're seeing there between Abraxane plus a checkpoint versus IV paclitaxel plus a checkpoint obviously some of the biggest differences being the need for steroid pre-treatment and obviously some of the immunologic effects there.

Thanks so much and congrats again.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you, Kennen for the first question on the manufacturing, Jeff, do you want to make a comment?

Jeffrey Yordon -- Chief Operating Officer, President-Athenex Pharmaceutical Division

Yes. Okay. First of all Kennen, the oral paclitaxel is being developed by a partner who has been inspected on a regular basis. So that facility is ready to go. Where we make the tirbanibulin ointment in Clarence, we have had several inspections with very, very good results. So, the quick answer is, there is no issue with FDA inspections that will not slow down anything, we're ready to go.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Just to add a little bit more, Kennen, we did communicate before that for the tirbanibulin ointment manufacturing in our own facility, the FDA inspection yield [Phonetic] no 483 Citations, basically no issue at all. Now with regard to your second question on the combo therapy with IO and also, in particular the study 131 and 130 contrast between Abraxane and also the IV paclitaxel. Rudolf, do you want to address this question?

Rudolf Kwan -- Chief Medical Officer

Absolutely. It's interesting observation, I think probably a lot of question will have to be addressed before one can definitively understand the difference. But on the surface, clearly, the difference between the two study as you suggest, the Abraxane did not use steroid and the IV paclitaxel arm, presumably used steroid before each dose. So that is one difference.

The -- our Oral Paclitaxel combination is very interesting. So first of all it's different from the HER2 [Phonetic] in it being oral, OK. And along the way, we certainly like Abraxane do not take steroid, nor anti-histamine. And our PK profile is interesting because there is a lot to talk about whether in the combination setting, what kind of dosing regimen will be the best dosing regimen in combination with immunotherapy.

And that question has not been addressed thoroughly yet. So there is obviously, with our PK profile showing benefit in neuropathy and efficacy would be very interesting to look into. So we eagerly await our data from our study to see whether we can differentiate even better in the arena of combination Paclitaxel versus with the checkpoint inhibitor. So Kennen, I hope I answered your question.

Kennen MacKay -- RBC Capital Markets -- Analyst

That's very helpful. Thank you very much.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Yeah, Kennen to add a little bit more color is that remember that for IV paclitaxel, there is something incredible [Phonetic] used in formulation, toxicity [Phonetic] used for steroid which you know is a immunosuppressive agent and anti-histamines. There were publication in the literature suggesting that histamine on its own is also very important in the coordination of the Tcell immune response against tumor.

So therefore if you -- all this together and assuming that is observation can confirm in clinical studies, I mean, then the combination of both subtype [Phonetic] pre-medications with IV paclitaxel because of [Indecipherable] will not be present by [Indecipherable] for our Oral Paclitaxel, we do not need, won't see antihistamine as part of premedication. Just want to highlight to you this interesting observation.

Operator

Thank you. Our next question comes from the line of Jonathan Chang with SVB Leerink. Please proceed with your question.

John Barrett -- SVB Leerink -- Analyst

Hello team, this is John Barrett on for Jonathan, congrats on the progress. Regarding your upcoming SABCS presentation, can you help set investor expectations regarding the update?

Timothy Cook -- Senior Vice President, Global Oncology

Sure. We have four abstracts directly on the data and two on the [Indecipherable], the usual management strategy highlights. Now for the four abstracts on the data, Rudolf, do you want to provide more details with regard to these abstracts?

Rudolf Kwan -- Chief Medical Officer

Absolutely. The first poster on the spotlight presentation, titled PD1-08, Oral Paclitaxel and Encequidar versus IV paclitaxel in the treatment of MBC patients progression-free survival and overall survival. That data is embargo and it basically include an update analysis of the 001 data following the guidance with the FDA discussion on how to best further present the data and analysis. And this represent a new data cut from the last presentation in San Antonio a year ago.

So certainly, I would encourage you to follow that presentation, that data is embargo, so I cannot talk about more about that. The poster presentation, the PS1305 is on the treatment of cutaneous angiosarcoma and that cutaneous angiosarcoma, one common group subgroup is breast cancer patients who had surgery and irradiation and years later present with angiosarcoma. And that's a very difficult to treat patient population and certainly we see very encouraging results coming up those data and that poster will be presented with data. Then the PS-1306 is a lower rate of neuropathy with Oral Paclitaxel and Encequidar and again we'll further present the data focusing on the neuropathy.

And PS1311 Oral Paclitaxel and Encequidar in the management of GI side effects will present additional data regarding how those are managed in study 001 and how prophylaxis premedication has a positive influence in how we manage that. So I think those are the four posters that I encourage you will read to attend the virtual Symposium and see the data yourself.

John Barrett -- SVB Leerink -- Analyst

Great, thank you. And just one more. Can you provide the progress update on your other oral chemotherapies, and when we might see data for those programs?

Rudolf Kwan -- Chief Medical Officer

Certainly, I can provide that. In a nutshell, we have been very busy focusing on two submissions. So the whole team when you've got to NDA review with the FDA and especially with the Oraxol being a priority review the interaction with the FDA is really very constant and interactive and really focusing on netting [Phonetic] down those two approvals from our perspective. And certainly also the COVID-19 environment do slow down the sites enrolling patients.

But we don't -- we haven't lost any focus on that. Our team has continued to look at that and we are busily developing when we do life cycle management it's not only the Oral Paclitaxel, but all the other program that include even as you can see the TCRT IND approval recently are all testament that all those will be moving along, but certainly COVID-19 did slow down enrollment in some of the program.

So we will communicate that as soon as we can and we are thinking of communication, once we have decisions on the two PDUFA dates sometime in 2021.

John Barrett -- SVB Leerink -- Analyst

Okay. Thank you and congrats on the update.

Operator

Thank you. Our next question comes from the line of Kevin DeGeeter with Oppenheimer & Company. Please proceed with your question.

Kevin DeGeeter -- Oppenheimer & Co. -- Analyst

Hey guys, thanks for taking my questions. Maybe just following up on San Antonio, with regard to the angiosarcoma update, should we expect an update on duration of benefit across the enrolled cohort or should we think about this update as being more narrowly construed to the breast cancer population described. And just more generally on angiosarcoma, can you provide us an updates on how you're thinking about your regulatory strategies and next steps for that program.

It is a smaller indication, but just you're showing some really interesting data, how does angiosarcoma fit into the overall expansion of the addressable market for Oral Paclitaxel? Thanks.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Rudolf?

Rudolf Kwan -- Chief Medical Officer

Yeah, sure. It's very, very interesting indication, it's a small indication, but it is generating very intriguing data as we have present some already. The angiosarcoma program, what we will be presenting is really the subset of the -- I think I believe the seven patients in the angiosarcoma of the breast. And the study is progressing really well, and we do have an orphan drug designation from the FDA and we do intend to explore the approval in the U.S. based on the orphan drug designation and bear in mind we also received the orphan drug designation in EU as well.

So that is an interesting indication and -- but as we speak, our priority is really netting down the metastatic breast cancer and the data in the poster, I cannot remember exactly will be focusing on the seven patients. I don't believe we put in the -- all the study because that is more relevant for later presentation. I hope I gave you enough color on that one.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Yeah. Kevin, Johnson here, before I ask Mr. Tim Cook to also provide you his opinion on the market potential, how [Indecipherable] position ourselves with regard to the [Indecipherable] is that our study in angiosarcoma generate a lot of reverse inquiry among the oncologists, the clinical oncologists that are very interested in sarcoma, angiosarcoma and tumors alike. So in a way this represent a very good opportunity for us to also create the momentum that we have seen with the clinical oncologists already.

Now with regard to the marketing strategy and whether it has any market sort of contribution to our launch, Tim, you want to make a comment?

Timothy Cook -- Senior Vice President, Global Oncology

Sure, happy to Johnson. Thank you. [Technical Issues] of angiosarcoma is really two-fold. Number one, it really improves the overall perception of Oral Paclitaxel as an effective drug. This is a difficult disease to treat and we're seeing rapid and meaningful responses and so when you think about your drug, you want to make sure that you're creating a very positive perception of efficacy first. And so, this certainly builds on the perception. I think we're creating with Oral Paclitaxel in the metastatic breast cancer setting. And here we have a second disease setting that is difficult to treat that's showing really strong responses and rapid responses.

Secondly, I would just say that while it may be a limited patient opportunity, they're very focused in where they're treated, mainly in major academic centers, so the ability to capture these patients once diagnosed is pretty high. And so this again while it may be a smaller niche orphan disease, it's very important to the overall perception and opportunity for the drug.

Kevin DeGeeter -- Oppenheimer & Co. -- Analyst

Thanks for taking my questions and congratulation.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you.

Operator

Thank you. [Operator Instructions]. Our next question comes from the line of Yale Jen with Laidlaw & Company. Please proceed with your question.

Yale Jen -- Laidlaw & Company -- Analyst

Good morning and thanks for taking the questions. I've got two here. The first one is for Jeff that if you look into the fourth quarter, you have the dynamics between the COVID-19 medication as well as the API and the 503B drugs. So do you see that mostly for the COVID-19 still be a major part of that or you see that dynamic being changed. And then I have a quick follow-up.

Jeffrey Yordon -- Chief Operating Officer, President-Athenex Pharmaceutical Division

Yeah, Yale. We see it rising and falling, the hospital patients with COVID, we saw a significant decline and now in the last week or two, we've seen an uptick again. So overall, I think that we will have a quarter that will least be on track and by raising the expectations for revenue, tells you that we feel pretty, pretty confident that the year-end will be fine. And the fourth quarter will come in about as we expected.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, great, that's helpful. The follow-up here is actually for the marketing side, you mentioned a lot of activity the pre-marketing activities and potentials for value proposition. Have you guys done any pharmacoeconomic studies on the Oral Paclitaxel and if so, would you guys be able to maybe publish that in the future?

Timothy Cook -- Senior Vice President, Global Oncology

Hi, Yale. Hi, thanks for the question. We have -- we haven't done any on Oral Paclitaxel yet because we're not approved. Once we get on the market we absolutely have pharmacoeconomic studies planned and would certainly publish those. I will tell you though that we have done some important pharmacoeconomic looking at, for example, the overall cost of hospital treatment versus at home treatment and showing that treating patients outside of the hospital in their home is much more cost effective that's data that we will be presenting at future conferences.

We've also done a pharmacoeconomic study looking at the overall cost due to neuropathy associated with IV paclitaxel that is something payers are very interested in and we will also be publishing in the near future in managed care focus journals. So while we don't have anything on Oral Paclitaxel yet, it is planned, but we have done significant pharmacoeconomics looking at again the difference between IV infusion and oral at home and the overall cost of neuropathy to society.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, great. Again congrats on the progress.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you.

Operator

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I will turn the floor back to Dr. Lau for any final comments.

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Thank you everyone for joining us today. This is an exciting time for Athenex, and we appreciate your interest. By the time we have our full year results call in late February 2021, we will hopefully have evolved into a commercial stage biotech Company with proprietary drugs approved. And again, thank you for your time.

Operator

[Operator Closing Remarks].

Duration: 46 minutes

Call participants:

Steven Rubis -- Senior Director, Investor Relations

Johnson Y.N. Lau -- Chief Executive Officer and Board Chairman

Rudolf Kwan -- Chief Medical Officer

Timothy Cook -- Senior Vice President, Global Oncology

Jeffrey Yordon -- Chief Operating Officer, President-Athenex Pharmaceutical Division

Randoll Sze -- Chief Financial Officer

Robyn Karnauskas -- Truist Securities -- Analyst

Kennen MacKay -- RBC Capital Markets -- Analyst

John Barrett -- SVB Leerink -- Analyst

Kevin DeGeeter -- Oppenheimer & Co. -- Analyst

Yale Jen -- Laidlaw & Company -- Analyst

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