Eagle Pharmaceuticals Inc (EGRX) Q4 2020 Earnings Call Transcript

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Eagle Pharmaceuticals Inc (EGRX -1.89%)
Q4 2020 Earnings Call
Mar 2, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, everyone. My name is Leo and I'll be your conference operator. At this time, I'd like to welcome everyone to Eagle Pharmaceuticals Fourth Quarter and Full-Year 2020 Financial Results and Pipeline Review Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]

It is now my pleasure to turn the floor over to Ms. Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. Please go ahead.

Lisa M. Wilson -- Investor Relations

Thank you, operator. Welcome to Eagle Pharmaceuticals fourth quarter 2020 earnings and pipeline review call. This is Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. With me on today's call are Eagle's Chief Executive Officer, Scott Tarriff; Chief Financial Officer, Brian Cahill; President and Chief Operating Officer, David Pernock; and Chief Medical Officer, Dr. Judith Ng-Cashin.

This morning, the company issued a press release detailing financial results for the three months ended December 31, 2020. This press release and a webcast of this call, can be accessed through the Investors section of the Eagle website, at eagleus.com.

Before we get started, I would like to remind everyone that any statements made on today's conference call, that express a belief, expectation, projection, forecast, anticipation or intent, regarding future events and the company's future performance, may be considered forward-looking statements, as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Eagle Pharmaceuticals' management as of today, and involve risks and uncertainties, including those noted in this morning's press release, and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. Eagle Pharmaceuticals specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law. A telephone replay will be available shortly after conclusion of this call. You'll find the dial-in information in today's press release. The archived webcast will be available for one year on our website at eagleus.com.

For the benefit of those who may be listening to the replay or archived webcast. This call was held and recorded on March 2nd, 2021. Since then Eagle may have made announcements related to the topics discussed. So please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to Eagle's CEO, Scott Tarriff.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Thank you, Lisa. Good morning, everyone, and welcome to our conference call today. In addition to discussing our fourth quarter and full-year 2020 earnings, we will also give updates on our products, including a review of vasopressin, fulvestrant, Pemfexy and Ryanodex for nerve agent medical countermeasure. David Pernock, Eagle's President and Chief Operating Officer will provide an overview of the SymBio opportunity in Japan and discuss our agreement with Tyme Technologies. For vasopressin, fulvestrant, Pemfexy and Ryanodex, we'll hear from Eagle's Chief Medical Officer, Dr. Judith Ng-Cashin, who will walk you through our approach here. Our goal is that this expanded presentation will provide clarity on the status and path forward for each of these products.

Before we get to all that, let me begin by saying that 2020 was a great earnings year for Eagle, and one of our strongest. [Technical Issues] $0.96 per share in the fourth quarter and $3.54 per share for the year, which is a significant 36% increase over 2019 levels. We outperformed expectations and this performance is especially impressive given the headwinds presented by COVID-19. As we reflect, our commercial products are hospital related and to our chemotherapy products. For most of the year, our sales reps had no direct access to their customers within the hospitals. And chemotherapy visits fell substantially due to the various constraints imposed. Many customers were destocking during the year using their inventory capabilities to stock up on COVID-related products.

Our earnings were driven by strong sales, which would have been even stronger without these challenges. We did however have some lower R&D expense that was deferred into '21, so we did have some pandemic-related reductions in travel expense. But all in all, we believe that we would have had an even better earnings year had it not been for COVID. As we continue to discuss the impact of COVID on the company vasopressin is the clear example to negative impact. The patent trial against Endo was scheduled for last May and have data -- and that occurred, we believe we would have had a favorable decision by now, which in turn could have generated more investor confidence. The trials now set to begin on July 7th 2021 about 14-month delay from the original date.

Extremely important to note, as we stated previously and those asserted patents claim a formulation with a ph range of 3.7 to 3.9. Our proposed ANDA products specifies a ph outside of that range. We are confident that our ANDA, which has been prioritized by FDA and also flagged with the COVID priority will be approved in a reasonable timeframe and we still anticipate being on the market this year. We will obviously have loved the legal decision to been -- have been delivered by, but unfortunately we just have to wait, but July 7th will be here quickly, yet this delay has affected people's perceptions about our stock and about our company.

Considering all the challenges brought on by the pandemic Eagle has done remarkably well. Our focus now is ensuring that the growth we experienced in '20 or over '19 continues this year, next year and beyond. A key component to our planning for the future is to proactively position being ourselves to withstand the impact of losing some revenue, due to trended generics starting in December of '22. We plan to accomplish this through a combination of organic lows, including Vasopressin, Pemfexy, bendamustine in Japan as we advance our pipeline including fulvestrant nerve agent medical countermeasures and by looking for product opportunities to in-license or acquire; such as our co-promotion agreement with Tyme or it's SM-88 product. We are in the middle of our growth curve, we just had a big earnings year, it's very likely that we will continue this growth in 2021, as we expect to have the approval of vasopressin in time to do so. And the Pemfexy launch -- to add the Pemfexy launch of that and 2022 will follow on as a strong growth year as well.

So what can we expect in '23 and beyond? It is clear that this is with the timelines of our investors that we speak to. I want to make it very clear that our Board and Management Teams have every expectation that Eagle will continue to grow in '23, in '24 and '25, not only do we have a pipeline with the potential to deliver long sustainable growth, but we also had managed our P&L and our cash extremely well in the last several years. Our company is in excellent financial shape, we have been diligent in managing expenses, our balance sheet is strong with more than $103 million of cash and cash equivalents at year-end. We now bought back approximately $207 million of stock as of December 31st 2020 at a price a bit more than where we are today. But we think that will take care of itself once we launch Vasopressin, Pemfexy and other products.

The cash we expect to generate combined with our clean balance sheet and our ability to use equity as we have never done before provides us with the capability to augment our pipeline or replacement, if it did not pan out through in-licensing or acquisitions, whether it's organic or inorganic means, we will still grow this company beyond '23. We have built a strong foundation for growth that starts with Vasopressin continues with our February 2022 exclusive Pemfexy launch supported by royalties from SymBio and beyond that to opportunities such as fulvestrant, nerve agent for countermeasure and our stake in Tyme to SM-88 candidate for pancreatic cancer.

What this all means is that we have the commitment and the financial flexibility to capitalize on strategic opportunities as they arise. We feel confident that we have the visibility on our earnings capability and that we will be successful on extending the growth pattern of 2020 well into the future.

Let me talk about these programs in general now and then in a few minutes, you'll get a more detailed [Technical Issues] overview. I mentioned the delay of Vasopressin trial earlier, but there is another piece here, we had our post-CRL meeting with FDA just late last week, it was a very productive meeting and we have clear agreement on how to proceed. We've already done quite a bit of work since the CRL and we have some more to do here. We hope to have all the data we need to submit by mid-year. Vasopressin is a large and important program for us and one that we will -- that we believe will drive growth. We are first to file for this polypeptide, where brand sales of the product totaled more than $785 million annually. This is a difficult product to get approval for, but our goal remains to do so before the end of the year and then bring this lower price high quality product to the market as soon as possible.

Looking to 2022 and just 11 months from now, we will be launching Pemfexy with the unique J-code and four months of exclusivity. As a reference for the size of this opportunity US sales Olympia in 2020 were nearly $1.3 billion and since we are also approved for the multi-use vial we have an even larger opportunity here. If you look at Vasopressin and Pemfexy together Eagle should be launching into about $2 billion of exclusivity. Add to that the ramping up the bendamustine sales in Japan, through our partner SymBio, which we anticipate will eventually bring royalties and milestones of $10 million to $25 million per year. Together Vasopressin, Pemfexy and SymBio will represent a consistent revenue stream, all of which should contribute to meaningful growth and the stockpiling of our already strong cash position.

Turning now to pull the strength. We have now followed 750 subjects for 140 to 280 days. Our intention is to commence a clinical trial in cancer patients that could lead to improved outcomes in specific breast cancer patients. We have continued productive engagement with FDA and now have agreement for the clinical design and study endpoints. Our goal is to develop a differentiated product with meaningful benefits to patients and physicians. In consultation with FDA, we have agreed to continue the formulation work and on completion of that work we'll commence the study. We believe the new formulation work will provide a more efficient path to approval.

Together these assets make for a strong lineup of programs to support growth and to fill the gap as the bendamustine franchise diminishes. We truly believe our best years are ahead of us. I think our speakers today are going to offer a lot of important context that will shed light on the complexities and the opportunities ahead.With that, I'll turn the call over to Brian Cahill to discuss our fourth quarter and full-year financials. Brian?

Brian Cahill -- Chief Financial Officer

Thank you, Scott, and good morning. In the fourth quarter of 2020, total revenue was $49.9 million, compared to $48.3 million in Q4 of 2019. Full-year 2020 revenue was $187.8 million, compared to $195.9 million in 2019 and included a $5 million milestone payment from SymBio on Treakisym.

Product sales for the fourth quarter decreased by $7.5 million year-over-year, totaling $22.9 million, compared to $15.4 million in Q4 of 2019. This was primarily driven by a $4.4 million increase in RYANODEX sales and a $2.6 million increase in BELRAPZO sales. For the full-year 2020 product sales decreased $1.7 million from 2019, primarily driven by a decrease in sales of BENDEKA and BELRAPZO offset by an increase in sales of RYANODEX. BELRAPZO product sales were $10.2 million in the fourth quarter, compared to $7.6 million in Q4 of 2019.

Eagle recognizes BELRAPZO revenue on shipments by Eagle to wholesalers. The increase in sales was the result of an increase in market share, as well as the normalization of wholesaler inventory levels following compression earlier in the year. For the full-year BELRAPZO sales totaled $27.5 million, as compared to $29.7 million in 2019.

Based on IMS data, Eagle's market share of the US bendamustine sales was 9% for the fourth quarter and 7% for the year. Fourth quarter RYANODEX product sales were $7.9 million, compared to $3.5 million in Q4 of 2019. Orders for RYANODEX are cyclical, driven primarily by product that's free with few customers acquiring dantrolene unless their stock is expiring. For the full-year RYANODEX sales totaled $28.3 million, as compared to only $30 million in 2019.

Q4 2020 royalty revenue was $27 million, compared to $32.8 million in the prior year quarter. For the year 2020, royalty revenue totaled $110.5 million, compared to $112.9 million in 2019. Royalty revenue in each of the periods discussed is primarily comprised of BENDEKA royalties. As we've discussed in the past beginning on October 1st 2019 Eagles royalty rate on BENDEKA increased from 25% to 30% and on October 1st 2020 the rate increased again to 31%. On October 1st 2021, they will increase for the final times of 32%. Future royalty revenue will include royalties earned on sales of Treakisym by SymBio.

Gross margin was 75% during the fourth quarter of 2020, as compared to 76% in the fourth quarter of 2019. Gross margin was 76% during the full-year 2020, as compared to 69% in 2019. The increase in gross margin in 2020 was primarily related to an increase in product sales of RYANODEX and a decrease in product sales of BENDEKA.

On the expense front. R&D expenses were $9.4 million for the fourth quarter, compared to $11.3 million in the prior year quarter. Excluding stock-based compensation and other cash and non-recurring items, R&D expense [Technical Issues] quarter was $8.7 million. The year-over-year decrease is largely attributable to lower spending for RYANODEX for EHS, partially offset by increased spend related to Vasopressin.

Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense in 2020 was $27.8 million. We expect R&D spend in 2021 on a non-GAAP basis will be $26 million to $30 million. The anticipated 2021 R&D spend includes, EA-114, CMC initiatives, the RYANODEX trials for the treatment of nerve agent exposure and acute radiation syndrome, EA-111, IND enabling toxicology studies and CMC scale-up activities, and CMC and analytics initiatives and launch preparedness for Vasopressin. We may adjust guidance higher as we gain more clarity on initiating a clinical trial on fulvestrant in the second half of 2021.

SG&A expenses in the fourth quarter of 2020, totaled $18.2 million, compared to $22.5 million in the fourth quarter of 2019. External legal spend associated with litigation on pemetrexed, a decrease of travel and entertainment and other expenses, due to COVID-19, as well as differences in incentive pay account for most of year-over-year decrease. Excluding stock-based compensation and other non-cash and non-recurring items fourth quarter 2020 SG&A expense was $11.2 million.

Full-year SG&A expenses increased by $2.2 million to $78.6 million in 2020, compared to $76.4 million in 2019, the increase primarily reflects costs related to the collaboration with Tyme and increases in stock compensation, partially offset by G&A expenses, which decreased due to COVID-19 restrictions, coupled with lower external legal fees. Excluding stock-based compensation and other non-cash and non-recurring items, SG&A expense in 2020 was $50.9 million.

We expect our SG&A spend in 2021 on a non-GAAP basis will be $56 to $60 million. The year-over-year increase is largely attributable to external legal expenses related to the Vasopressin before litigation and a normalization of expenses impacted by COVID-19.

Net income for the fourth quarter was $8.1 million or $0.62 per basic and $0.60 per diluted share, compared to net income of $1 million or $0.07 per basic and per diluted share in the prior year period. Net income for year ended 2020 was $12 million or $0.89 per basic and $0.87 per diluted share, as compared to net income of $14.3 million or $1.04 per basic and $1.01 per diluted share for 2019.

Adjusted non-GAAP net income for the fourth quarter of 2020 was $12.8 million or $0.98 per basic and $0.96 per diluted share, compared to adjusted non-GAAP net income of $6.7 million or $0.49 per basic and $0.48 per diluted share in the prior year quarter. Adjusted non-GAAP net income for 2020 was $48.7 million or $3.62 per basic and $3.54 per diluted share, compared to adjusted non-GAAP net income of $36.9 million or $2.68 per basic and $2.61 per diluted share in 2019.

For a full reconciliation of non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of our press release. 2020 cash flow from operations was $49.5 million for the year ended 2020. While we hope the distribution of vaccines and falling infection rates signal the coming end of the COVID-19 pandemic. We wanted to take the opportunity to discuss how we feel the crisis has impacted our business and may influence our plans and guidance for 2021.

Our supply chain for RYANODEX, BELRAPZO and BENDEKA was uninterrupted full-year as we continue to provide patients access to these important drugs. While we believe that some of the year-over-year compression of the bendamustine market as a result of reduced patient visits and while we are seeing this trend continue today, we are hopeful that it will abate 2021.

Remote work and travel restrictions resulted in changes to our expense structure. But we have included an expectation of a near-term return to normal in our 2021 expense guidance. We continue to be optimistic about both a near-term and the pandemic and our ability to continue to provide supply and access to patients for our approved products and to advance our pipeline, despite these current challenges.

As of December 31st, 2020, the Company had $103.2 million in cash and cash equivalents and $34 million in outstanding debt. So we had $69.2 million of net cash. We had $51.1 million in net accounts receivable, $29.9 million of which was due from Teva. In the fourth quarter of 2020, we purchased an additional $4 million of Eagle's common stock for a total of $35 million of Eagle's common stock in 2020 as part of our $160 million share repurchase program. From August 2016 through December 31, 2020, we have repurchased $206.9 million of our common stock.I'll now turn the call over to David Pernock, who will review our external partnership opportunities.

David Pernock -- President and Chief Operating Officer

Thank you, Brian, and good morning everyone. I'd like to briefly share with you how we seek to pursue external partnerships to help create value. SymBio is a great example of how we monetized our bendamustine franchise by licensing the Japanese rights for our ready-to-dilute and Rapid Infusion Injection products. Initially received a $5 million upfront milestone payment with royalties on future net sales of the license bendamustine products. SymBio received approval for attract some ready-to-dilute formulation and they launched it in January of 2021. We received a $5 million payment for this products approval.

SymBio, the company is also currently conducting clinical trial for the Rapid Infusion Product, it has a line extension strategy including new indications. We receive royalties and milestones based on sales and future indications building to $10 million to $25 million annually. Our co-promotion agreement with Tyme for its oral SM-88 is another great example of the way we create additional value for Eagle shareholders through strategic collaborations. In this case, we don't have an opportunity to monetize an asset that Tyme is developing to treat pancreatic cancer. The way they deal restructured Eagle will take on 25% of the sales calls in exchange for which we are entitled to 15% of all net sales in United States. We have a great deal of expertise in the oncology space and this collaboration has the potential to contribute to Eagle's revenue stream, if SM-88 receives FDA approval.

It's also worth noting that we have an equity stake in the Company and the client has the right to buyback our US rates at any time for $200 million. So as you can see we have multiple opportunities here to generate revenue for Eagle. I'll echo here, what Scott has indicated in his remarks earlier that we have the resources and are committed to identify and capitalize on important strategic alliances that makes sense for our long-term growth.

Now I'll turn the call over to Judi.

Judith Ng-Cashin -- Executive Vice President and Chief Medical Officer

Thank you, David and good morning everyone. Starting with Pemfexy, Pemetrexed. In the United States lung cancer is the second most common cancer behind skin cancer. There are two main types of lung cancer, the more common type is non-squamous, non-small cell lung cancer, which accounts for 84% of all lung cancer diagnoses according to cancer.net and the American Society of Clinical Oncology website. This year more than 228,000 adults in the US will be diagnosed with this disease.

Slide 14, Pemetrexed is FDA approved for the treatment of non-squamous, non-small cell lung cancer, as well as for Mesothelioma, Pemetrexed can be administered in an inpatient or an ambulatory care setting.

Slide 15, let's look at the marketplace today Pemetrexed is currently marketed by Lilly under the name ALIMTA and is available in 100 milligram and 500 milligram powder single dose vials. If US sales totaled roughly $1.3 billion in 2020. Eagle was the first to receive approval for this product using the 505(b)(2) regulatory pathway and we see a sizable opportunity for our Pemetrexed, Pemfexy presented in a 500 milligram liquid multi-dose vial. We were granted a unique J-code and have an initial period of exclusivity from February 1st through May 24th 2022.

Slide 16. Our Pemfexy formulation has some key attributes that differentiated from other available formulations, which are single-dose powder formulations that require reconstitution. For patients who may need two to three vials for their dose, this can be very time consuming for pharmacists or nurse. And wastage occurs because they are not multi-dose vial. By contrast our formulation has a critical advantage, it is available in a 500 milligram liquid ready to be diluted multi-dose vial, making it more convenient. Pemfexy eliminates the reconstitution process wastage and the vial can be reused, while under refrigeration for 28 days.

Slide 17. We believe the medical community is eager to have access to our improved product in a survey of key opinion leaders performed by an outside research firm 90% of respondents indicated they would prefer a liquid multi-dose over a powder and 44% indicated that they have encountered moderate wastage with the current -- currently available formulation. Our Pemfexy product is designed to address these issues.

Moving to Vasopressin Slide 19, let me add to what Scott said earlier and share some context about Vasopressin and what the market looks like today. Vasopressin injection is FDA approved to increase blood pressure in adult patients with vasodilatory

Shock and can occur following open-heart surgery or sepsis, who remain hypertensive despite fluids and catecholamines. Vasopressin is used in the hospital setting typically in intensive care. Today Endo/Par markets VASOSTRICT, and in 2020 annual sales in the US were roughly $786 million. Eagle is the first to file an ANDA referencing VASOSTRICT. As Scott discussed earlier we had our post CRL meeting with the FDA last week, it was very productive and we have clear agreement on how to proceed. We recognize that we have more work to do and we have a plan in place and are diligently moving along. This is an important product for us and for critically ill patients, and we look forward to resubmitting to the agency.

Turning to Slide 21, to understand why we believe that our Fulvestrant product EA-114 has so much potential. I'd like to start with a brief overview of the therapeutic area, focusing on the subtype of estrogen receptor positive, human at the dermal growth factor receptor-2 negative or HR positive HER2-negative advanced breast cancer for which Fulvestrant is indicated. Breast cancer can be broken down into three biologics subgroups, which has a direct bearing on treatment choice: one, those that express the estrogen receptor or ER-positive; two, those that express the human epidermal growth factor receptor-2 HER2-positive; and three, those that are ER-negative and HER2-negative and also do not express the progesterone receptor PR-negative referred to as triple-negative breast cancer.

As you can see on this slide, there are a number of treatment strategies for hormone-sensitive breast cancer. At Eagle, we are focusing specifically on selective estrogen receptor down regulators or SERDs, which work to block estrogens effects. SERDs our anti-estrogens that are pure receptor antagonist. Fulvestrant is the only available SERD that down regulates the estrogen receptor.

Slide 22. Fulvestrant is an estrogen receptor antagonist with no agonist properties, it is FDA approved for the treatment of advanced hormone-related breast cancer. Therapeutic effect of Fulvestrant relies on its ability to inhibit the estrogen receptors in cancer cell by causing degradation and down-regulation of the receptor itself. As you know, Eagle has done an enormous amount of rigorous scientific discovery work on Fulvestrant over the past several years with the goal of improving patient outcomes. To-date, we have conducted two clinical trials following 750 subjects over 140 to 280 days, comparing our formulation to Faslodex and we have analyzed 1,000 of collected data points. We further sort out numerous experts and obtained feedback on our proposed approach to Fulvestrant delivery.

Based on Eagles internal work and clinical insight, we see an opportunity to provide benefit to a significant population of patients by taking a new approach to Fulvestrant delivery. Following some additional formulation work, we believe Eagle's new distinctive delivery system will address treatment challenges uncovered through Eagle's research. We have also reached agreement with FDA on the clinical study design and endpoints and planned to begin a clinical trial in patients harnessing the lessons learned from our in-depth work and clinical insights. We are very excited and proud of this creative development pathway and look forward to updating you on our continued progress.

Now moving to nerve agent medical countermeasure. Slide 24, nerve agents are the most toxic of the known chemical warfare agents and the US military continues to be concerned about the potential for a nerve agent attack on our military or civilian populations. Eagle sees this as an important opportunity to contribute. We believe this has the potential to be a first of its kind neuro protective treatment to combat neurological damage, due to nerve agent exposure, while rapid treatment with the currently available agents decreases the risk of mortality, it does not ameliorate the risk of brain damage. In 2018 Eagle entered into a Cooperative Research and Development Agreement with the US Army Medical Research Institute of Chemical Defense to conduct an animal study to evaluate the neuroprotective effects of RYANODEX in an accepted nerve agent model, the soman model, which is a nerve agent poisoning challenge model.

The results of this study demonstrated a statistically significant reduction in brain damage secondary to nerve agent exposure in RYANODEX treated animals, compared with control. Encouraged by this positive data, we see the potential to provide this product not only for military personnel, but also for the Strategic National Stockpile for civilian use and for our allies broad. Currently, we are initiating dose ranging animal studies investigating RYANODEX administered intravenously, as well as a new prodrug formulation EA-111 delivered intramuscularly.

Slide 25. We view the development of the next generation of Ryanodine receptor modulators that allow intramuscular or IM administration as critical. IM administration has several important benefits, including easier and more rapid administration in emergency situations, both for military and civilian scenario; point-of-care administration to patients in critical condition and the elimination for the need for IV infusion, all of which would make the product even more relevant for the treatment of this life-threatening indication that demands quick action and countermeasure administration. Ultimately, we believe an IM formulation is a better clinical approach.

Slide 26. Eagle believed in this program and has invested a great deal of effort in developing RYANODEX for this indication. Two separate rat soman model study the proof-of-concept study at MRIGlobal and the GLP study conducted at the Research Laboratory of the US Army Medical Research Institute of Chemical Defense, demonstrated that animals treated with RYANODEX exhibited lower neuronal necrosis in brain cortical areas, compared to animals treated with standard therapy alone. These findings are very encouraging and will inform our work going forward.

Let's take a closer look at each of these study. Slide 27, the proof-of-concept study was done with MRIGlobal, the histogram on the left indicates Necrosis scores, which are measured on a four-point scale with one, being the lowest level of Necrosis. The Fronto-Parietal Cortex, which is located in the front region of the brain was examined in this study. There were five, three in groups including our control group. DANTROLENE IB was administered at a low and the high dose at two different time intervals, 20 minutes and 50 minutes. These results indicate that the timing of treatment is critical and sooner is better than later relative to the poisoning event. In the two 20 minute groups both the high and the low dose group shows a significant decrease in the amount of neural necrosis, compared with the other groups as reflected by their lower Necrosis scores. The greatest impact we've seen at the higher dose at 20 minute.

Looking at the right-hand side of the slide, the histopathology shows that there are more healthy neurons and less Necrosis in the group that we see Dantrolene at 20 minutes, versus the control group.

Slide 28, following the proof-of-concept rat study, we conducted a GLP study in the rat soman model. Group B received 30 milligrams per kilogram of Dantrolene intravenously, while groups E and F received vehicle or saline respectively as vehicle in negative control. What we found illustrated here by histopathology from the Fronto-Parietal Cortex of the brain was that in the Dantrolene group, Group B minimal dead neurons were present depicted by the black arrows, while in Group E, the vehicle control group exhibited varying degrees of necrotic neurons with only a few unaffected neurons shown by the white arrows. Group F, the negative control group showed a majority of unaffected neurons. Based on these data, we are in the process of studying the soman model in larger species that might be more translatable to humans physiology.

Slide 29, we are continuing to engage the FDA to refine our regulatory path forward. To demonstrate the efficacy of RYANODEX in the treatment of neuronal damage due to nerve agent toxicity, we are planning further studies in soman models using the cynomolgus monkey, as well as BEGIN ITAL. The FDA agrees with our model selection and has requested that we submit our pivotal non-human primate study for a Special Protocol Assessment or SPA prior to its conduct. We are working with MRIGlobal to developing characterize the non-human primate soman model and we'll conduct preliminary pharmacokinetic and pharmacodynamic studies in this model to better understand the efficacy and dose range of RYANODEX in nerve agent poisoning. Potentially our pivotal GLP study will be a PK-PD evaluation of RYANODEX in the characterized non-human primate soman model to demonstrate efficacy and to predict human dosing. In parallel, we will continue developing our prodrug EA-111 for an intramuscular route of administration prevention.

We will now open the call for questions. Operator, please go ahead.

Questions and Answers:

Operator

[Operator Instructions] We'll take a question from Randall Stanicky of RBC Capital Markets.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great, thanks guys. And thanks for all the extra detail this morning, it's helpful. Couple of questions for me. Just -- first start off on VASOSTRICT, a lot of focus here do -- does -- and those formulation changes or new patent issue impact at all. Scott, the way you're thinking about the generic opportunity? And specifically, do you expect approval to come before the July trial, and then if you can get a deal done with Endo, it sounds like you're prepared to launch at risk based on your prepared comments around launch preparedness spend. But what would that look like, that's the first question.

And then the second question, I had is bigger picture that feeds into some of the pipeline detailing commentary that you provided. I want to go back just thinking about the growth of the business over the next three to five years. When you look -- we should deal with the Board and you talked about the most effective way to create value. What does that entail? You're clearly excited about the pipeline, but you've also got net cash in the balance sheet? How should we think about your capital deployment goals over the next one to two years? And what is Eagle look like in three years? Is it critical care oncology, diversified maybe just provide some commentary around that would be helpful, I know that's a lot, but...

Scott Tarriff -- Founder, Chief Executive Officer and Director

Thank you, Randall. Appreciate it, good morning, everyone. So when we -- let's start out Randall with Vasopressin. So the new patents that were issued as of today, we don't see to be an impediment in any way to our plans. And so that does not impact how we think about the launch and the opportunity. As far as timing goes, nothing has changed significantly since our last communication we had this meeting with the FDA last week, we have this additional study we need to run. The exact timing of it is not exactly known, but it's near-term, and so it will be said in our comments today would be that we would have the data most likely completed prior to the first half of the year, we'll see exactly what that data is, maybe we'll have an update in a couple of weeks when we know more.

But we should certainly have the submission filed here in reasonable time. The review time let's see, but we have priority review, we have the COVID priority and FDA has been great. We really commend them, they've been very communicative the back and forth, it's been wonderful, reiterated the priority and so the expectation is that we'll get through this last study and we'll have the product approved by the end of the year. And that will give us the opportunity to launch. Does that answer the vaso questions as well.

Randall Stanicky -- RBC Capital Markets -- Analyst

Yes. I mean, I guess, the other part of that what would -- you're prepared to launch at risk, what would that look like?

Scott Tarriff -- Founder, Chief Executive Officer and Director

Well, we would have if we need the approval in order to launch and when we have that approval in hand, we have the opportunity to launch the product and that's what we are considering. Now we have to trial in July. We won't have the approval before July 7th, I can see that happening, that's going to be tight. I mean, it's possible right? Depends on how quickly the FDA works with us. It could be right around that time, right? We'll have to see exactly when it is. It would be nice to see the trial before we make the decision and go to the market.

But I guess the best we can continue to explain it is that we have the expectation that we're going to be victorious in that trial. We're not extremely concerned about that. We need to get the approval once we have that in hand, we can go to the market. I know people ask us about settlement, our obligation is to optimize the value of the asset for our shareholders. We think the way to do that is to bring value into the company, the time value of money and bring it -- bring a value to the company in the near-term. If it winds up being that a settlement gets us to that place, we'll, so be it, but our goal is to optimize the asset and bring value into the company as soon as we can.

Randall Stanicky -- RBC Capital Markets -- Analyst

Okay.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Does that -- any further color, Randall?

Randall Stanicky -- RBC Capital Markets -- Analyst

Yes, no, that's helpful. And then on the -- strategic outlook for the platform. How are you thinking about that for Eagle?

Scott Tarriff -- Founder, Chief Executive Officer and Director

Yes. Look, we are very excited about our ability to grow. I think we will -- we and our shareholders will be rewarded for the way we managed our cash and our balance sheet. Especially when you look at the cash flow that we expect to have from Vasopressin, the launch in Japan and Pemfexy, that's about $2 billion of exclusivity that we'll be launching into the cash generation from these launches are pretty significant. And I believe we continue to do a really good job managing our expenses and being prudent in the way we spend and invest. That leaves us with a lot of opportunity to use equity debt, cash and so we believe that we have all the capability in the world between the pipeline and external opportunities to continue to grow.

Maybe at this point, I'll turn it over to David, who's on the line with us, who is heading up this function for us. But before I do that, how you look going forward is we still consider ourselves a hospital company we have this great sales force, we have -- we can drop in products. So I think you'll continue to see us as an oncology and critical care company unless something major happens that we find an opportunity along the way. But David, do you have any comments you'd like to make on the transition as we look to acquire?

David Pernock -- President and Chief Operating Officer

Yes. Sure, Scott. And hello Randall, how are you? Yes, Scott said basically our major focus is on oncology and acute care. We think that's where we have great deal of expertise and a lot of synergy. So we believe that with our infrastructure with very little addition in infrastructure, we'll be able to add on other product or so to complement each one of those businesses, so that's our major focus. Obviously, we look at market attractiveness, uniqueness of the opportunity, timing of the opportunity. And how risky is it to kind of get through the regulatory pathway etc. So all those are really careful considerations and we'll do it, we're looking at things to be very prudent looking to add-on to our pipeline.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great. I appreciate guys. Thanks.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Yes. I think the summary there is that, as I stated, we are quite focused on making sure we continue to grow. And we do believe that between the pipeline and the cash and the balance sheet and everything we've done to manage the company to this point that we find ourselves in a really great position to have the capability, the fire power to go and make the moves that we need to. In addition to the pipeline if we bid, and we're very aggressively looking, and we're very focused on making sure we grow. I -- that's the message we need to deliver.

Randall Stanicky -- RBC Capital Markets -- Analyst

Yes.

Operator

Our next question comes from Tim Lugo of William Blair. Your line is open.

Tim Lugo -- William Blair -- Analyst

Thanks for taking the question. Scott, if you took a step back, would you still use the ANDA pathway for vaso, given the Px differences, it seems like a 505(b)(2) route. Would also have been available. And there still is risk around those, both from the litigation as well as, we need another iteration of work and filing. So how -- I guess, how do we become confident that, that kind of, total adjustable market you layout is available to the company in 2022? It still seems to me with the plenty of growth for next year?

Scott Tarriff -- Founder, Chief Executive Officer and Director

Good question, Tim. So let me try to take it, maybe let me take the second point first. We're in three years into the development of Vasopressin ANDA. And we have done a remarkable amount of work with our product. Fortunately our product appears to be rather robust and the standing up really very well. I don't believe the days of issues that we're facing per se are an issue with our product, I think it's an issue about how FDA looks, peptides and polypeptides. Having gone through now I guess two CRLs and just had a meeting with them last week, we are rather confident that there is an agreement with the agency of what we need to do to clean up the last work.

There is a study we need to run, hopefully we'll be running it really soon. We'll know more in the next couple of weeks, but we have high confidence that we are at the end of the road, we need to run a study that's the post CRL meeting we just had a few days ago, and that will be able to file that drug by mid-year and we also think the review time is relatively short, based on the priorities that we have with the ANDA. And so nothing is definite and nothing is perfect. We have confidence today that we will have the approval prior to year's end.

As far as the trial goes, which is the other hurdle we would need to ultimately get over. We just don't view this is an overly complicated trial, it's relatively simple. The claims are pretty specific about the PH range. We knew about those that situation and we have a product that we don't think is within the range that would cause us any trouble. That's why we've been aggressive in our view about launching. And so from our standpoint with the knowledge that we have from three years of working on the litigation and on the ANDA. It's our belief that these two things are marrying up now, and that our internal expectation is that we'll prevail in the litigation and approval here soon. And once we get through those two, that it's our obligation to maximize and to optimize the value of that asset for shareholder. So as we sit here, Tim, we feel pretty confident.

In terms of ANDA or NDA, I will tell you it's interesting point you raised, it feels a lot more like we've already developed a 505(b)(2) in NDA. We've performed as much work on this ANDAs we do typically on our 505(b)(2)s, we've been asked to a lot, which is fine. We have the expertise of the Company, I don't think we would have done it differently, but I don't believe we realized what we filed, the amount of work that would be required. But we've dug in, we've done it. It looks like we're at the end here and we expect to get the product to the market, hopefully before the year is over.

Tim Lugo -- William Blair -- Analyst

Okay, fair enough. And for Scott, you are obviously very extremely familiar with the generic industry? How would you, kind of, model? Or how would you project the generic bendamustine impact on BENDEKA and BELRAPZO? What kind of degradation do you expect and understanding that you've sat on both side of that issue, and we typically hear from an analyst perspective developers discuss how much tail their product have, yet generic seemed to always degrade the product more than developers expect?

Scott Tarriff -- Founder, Chief Executive Officer and Director

Very good point, Tim. Obviously, we're cautiously optimistic. We are still consistent with what we've been saying for the last couple of years and that is that we expect to lose about 30% to 40% of the value of the product. The unique aspect here is that each product is deemed to be a different product. There is three different CMs codes for one for TREANDA and one for BELRAPZO and one for BENDEKA. And so when we analyze the opportunity going forward, we analyze each of those three products separately. And that's how we get to this 30% to 40% decline. Having said that -- that's where the approval in Japan helps, let's see where we wind up in '23, but if we start to get to that $20 million-ish amount of revenue coming out of Japan, we've now picked up half with a loss in the United States through the Japanese royalties. And so that does not seem what's left to be a critical gap that we need to make up. We think everything else we have going on more than picks up and allow us to grow.

Now, in fairness as well Bendamustine is an entity isn't growing any longer and we recognize that. And our point is let's get vaso to the market and Pemfexy and let's move the pipeline along. Let's use the capabilities that we have to bring additional products into the company, and we don't see any reason why we shouldn't be able to overcome that steady decline of Bendamustine. It seems like we should be able to do it, but you're right. If it ones a thing more than we're projecting, we just need to be more aggressive in the pipeline and how we build the company externally as well. But we're very confident that we'll get through all of it.

David is there anything else you wanted to add to the -- to how we view the decline after '22?

David Pernock -- President and Chief Operating Officer

Yes, I think you covered the points there, Scott very well. Essentially, we do have unique codes, which is very important. And the ten minute infusion that will continue to be important. And as Scott said basically continue to diversify with the internal products and potentially some external opportunities as well. So we're confident in our believes to do both.

Tim Lugo -- William Blair -- Analyst

Thank you for the details. And maybe just one last one. Obviously, business development becomes more of a focus as we approach 2022. When should we expect to see, kind of, fruition of the BD discussion, we've obviously had a clean balance sheet for many years. But we are still approaching 2022. And it does seem like you -- there's still plenty of opportunities?

Scott Tarriff -- Founder, Chief Executive Officer and Director

Yes, we agree, Tim. There is still plenty of opportunity. I mean, clearly as you get closer to the end of next year we need to be more focused. And so we are doing quite a bit of work. David has a great team. We have our R&D team very focused on getting these products to the market through the clinic, and we have another team working aggressively and looking at other opportunities to build the company, we're doing both. And my suspicion is things will start to happen before too long.

Tim Lugo -- William Blair -- Analyst

Alright, thank you.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Thank you, Tim.

Operator

Our next question comes from David Amsellem of Piper Sandler.

Zachary Sachar -- Piper Jaffray -- Analyst

Hey, everyone. This is Zach on for David. Thanks for taking my questions. I know you've already talked about this a little bit, but just a couple of more for me on VASOSTRICT. Can you just provide any additional color on the latest CRL? And what do you qualitatively think the FDA might be looking for in this latest study that you have to do? And I know you briefly mentioned before that a settlement could be on the table, but given the latest CRL, does that sort of like push you in the direction toward a settlement at all a little bit further in that direction, especially given that Endo has already mentioned that their open for settling and has already sold with a number of other filers.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Thanks, Zach. So how can I describe this? So we really can't give any more color on the CRL. These peptides, these polypeptides are just complicated products to move through FDA, and it's likely that the filers behind us are going to need to do the same work that we're doing. So it doesn't make any sense for us to give other people a roadmap about the agreement that we have with the FDA and what we're doing. But let's be clear, we've already had our post-CRL meeting. And what we're trying to project here is that we are confident that we are going to be able to run these last test here quickly, shortly. And that, again, that we expect to have the data that we need to resubmit and we just believe that we'll have the -- a good likelihood, strong likelihood of having the product approved this year.

And I don't think it's more difficult than that as far as we can see right now. Unless something comes up our expectations is that we're going to get this responded to and approved here on a reasonably short timeframe. Let's see how that unfolds and so now it doesn't push us any further to settlement, we think we're going to get through this, but we feel more confident obviously having just had the post-CRL meeting and then only took place a few days ago.

Zachary Sachar -- Piper Jaffray -- Analyst

[Technical Issues] yes, thank you.

Operator

[Operator Instructions] We'll move next to Brandon Folkes of Cantor Fitzgerald.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Hi. Thanks for taking my questions and yes thank you very much for [Technical Issues]. So I know we at length and base today, but I just want to -- look, I think it comes across are very confident in getting this approved. Everything I've picked up and maybe it's just semantics, but you were a little bit more hedged in your timing today, saying sort of midyear versus the Fed press release, which you sort of talked about responding shortly. I mean, did anything new come up in the FDA meeting that sort of drove that hedging in terms of timing? Or is it really just a function of when you got to sit down with the FDA?

And then maybe, secondly, on pemetrexed, you talked about what you did and some other points of differentiation. Anything you can say at this stage how you're thinking about pricing strategy for pemetrexed when it comes to market? Is it sort of going to be potential life cycle extension as we may have seen with BENDEKA is a generic pricing premium generic. Anything you can say at this stage would be helpful? Thank you.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Thanks, Brandon. So let me take the first one in terms of pemetrexed question over to David. But in terms of the timing, no I mean it's not semantics, I didn't mean to in any way change the way we view it. The work that we do on this particular topic is done external to the company. And so our ability to be able to determine exactly when the test is going to be run. And when we get results is up to somebody else's timing in their labs, it's an outside vendor that does this for us. And since the details we're just determined late last week with the meeting with the FDA. We don't have an exact timeline and commitment with our vendor when the study could be done. That's the only reason I'm not being a specific as to when we'll run the study and then we'll get the results that work is being done this week.

We'll have firm timelines, the next week or so at that point, we'll be able to be more specific as to when we think we'll be able to refile. And so when we say by mid-year, we're trying to give ourselves enough of a hedge without having full understanding exactly when we'll be able to run the work that we need to be -- to finish up more than one to get those final reports to be able to out into the submission to the CRL, that's all. But we'll be meeting with the team here over the next couple of days and we should get much clearer timelines from our outside labs at that point.

Yes. Okay, so I think that sums that up. David, you want to take the Pemetrexed question?

David Pernock -- President and Chief Operating Officer

Yes, yes, sure, Brandon, thanks for the question. Brandon, we feel like we have a very strong competitive profile right between ready to use and the multi-dose trial unique J-code, those are two major benefits, right? And the other thing that we're really good at under the leadership of Mike Brand is our access to basically the channels that will be most interested in our product. And we think we have really good strategies laid out, really good solid plan, and I think is going to be a very, very nice launch for us, right? The product is doing $1.3 billion roughly per year, so it's a huge brand. We don't see -- so we know we're delivering something that the customers really want, that the three advantages that we have. And we just know that space really well. So yes, talk about pricing for competitive reasons as you know, but we don't want to get the job done in that particular segment of the market.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Great, thank you very much both of you. That's very helpful.

David Pernock -- President and Chief Operating Officer

Okay.

Operator

And at this time, I'd be happy to return the call to Scott Tarriff for any concluding remarks.

Scott Tarriff -- Founder, Chief Executive Officer and Director

Well, thank you. First I want to thank the management team, who's on the call today. So pleased that everyone on the call had the time and the opportunity here from our key executives, very experienced detailed people, I think we're well on our way to get the job done. And to sum up, look, I just want to reiterate that the Board and the management team are extremely focused on making sure that this company grows and grows consistently in '23 and beyond.

We will use the strength of our balance sheet to capitalize on opportunities that we believe will benefit shareholders, and I'm proud of the performance in the face of the COVID challenges and we will continue to put our energy and advancing our pipeline to create the next generation of Eagle products and we're looking forward to getting Vasopressin to the market, we're obviously working pretty hard at that, that's job number one right now. And we'll see how it goes, but we're pretty confident. And with that, I'd just like to thank everybody for being on the call today. Thank you.

Operator

[Operator Closing Remarks]

Duration: 69 minutes

Call participants:

Lisa M. Wilson -- Investor Relations

Scott Tarriff -- Founder, Chief Executive Officer and Director

Brian Cahill -- Chief Financial Officer

David Pernock -- President and Chief Operating Officer

Judith Ng-Cashin -- Executive Vice President and Chief Medical Officer

Randall Stanicky -- RBC Capital Markets -- Analyst

Tim Lugo -- William Blair -- Analyst

Zachary Sachar -- Piper Jaffray -- Analyst

Brandon Folkes -- Cantor Fitzgerald -- Analyst

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