BioDelivery Sciences International, inc (BDSI) Q2 2021 Earnings Call Transcript

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BioDelivery Sciences International, inc (BDSI)
Q2 2021 Earnings Call
Aug 4, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings. Welcome to BioDelivery Sciences' Second Quarter 2021 Earnings Call. [Operator Instructions]

I will now turn the conference over to Terry Coelho, Executive Vice President and Chief Financial Officer. Thank you. You may begin.

Terry Coelho -- Executive Vice President And Chief Financial Officer

Thank you, and good morning, everyone. Welcome to our second quarter 2021 earnings conference call. Leading the call today is Jeff Bailey, Chief Executive Officer. We are joined by Scott Plesha, President and Chief Commercial Officer. Following our prepared remarks, we will conduct a question-and-answer session. Earlier today, BioDelivery Sciences issued two press releases announcing its financial results for the second quarter 2021 and the acquisition of ELYXYB. A copy of the releases can be found on the Investor Relations page of the company's website. Before we begin, I would like to remind everyone that certain statements may be made during this call, which may contain forward-looking statements. Such forward-looking statements are based upon current expectations, and there can be no assurances that the results contemplated in these statements will be realized.

Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and our annual, quarterly and other reports filed with the SEC. These forward-looking statements are based on information available to BDSI today, August 4, 2021, and the company assumes no obligation to update statements as circumstances change. An audio recording and a presentation that accompanies our prepared remarks and broadcast replay for today's conference call will also be available online in the Investors section of the company's website.

With that, I'd like to turn the call over to Jeff Bailey, our CEO. Jeff?

Jeffrey A. Bailey -- Chief Executive Officer

Thank you very much, Terry, and welcome, everyone, to our company's second quarter 2021 earnings call. Our business remains strong as our team continues to manage the business very well, and our brands remain on a strong trajectory for growth. There are three main takeaways I want to cover today: number one, our overall business remained robust in the second quarter, with net sales growing 13% year-over-year, including BELBUCA total prescription volume growth growing 11% year-over-year.

The net sales growth was aided by increasing face-to-face interactions between sales representatives and prescribers that resulted in an all-time high BELBUCA total prescription market share in the second quarter of 4.7%, complemented by an all-time high in unique BELBUCA prescribers of 8,345, which is an increase of 11% year-over-year. This increase in BELBUCA prescribers will serve us very well to drive continued strong growth as the long-acting opioid market normalizes with an expected improvement of in-person patient visits. Despite the softness of the long-acting opioid market during COVID, we remain encouraged that the LAO market grew slightly by 19,000 prescriptions quarter-over-quarter in the second quarter of 2021.

The first time the LAO market grew in quite some time, which gives us optimism going forward. Key takeaway number two, through a combination of solid execution and prudent management and prioritization of operating expenses, we continue to strengthen our balance sheet, ending the quarter with approximately $120 million in cash. In the second quarter, we generated $13.1 million in EBITDA with an attractive 32% EBITDA margin. This was accompanied by approximately $9.2 million in operating cash flow generation or $12 million, excluding litigation costs, which enables us to invest in the future growth of our business and to maximize shareholder value through careful and strategic business development.

The third and final key takeaway, I am pleased to announce the acquisition of the U.S. and Canadian rights to ELYXYB. The first and what we see as a series of steps to build a growth platform in neurology. ELYXYB represents an excellent strategic fit for BDSI and an attractive opportunity to diversify our product portfolio by expanding into the dynamic migraine market, deepening our presence in neurology, a logical adjacency to our pain franchise. ELYXYB is the only ready-to-use oral solution approved by the FDA for the treatment of acute migraine with or without aura in adults. It has intellectual property protection into 2036.

With a planned first quarter 2022 launch, ELYXYB will participate in a substantial, growing and evolving migraine market. It is anticipated to drive the company's revenue growth and shareholder value while leveraging much of our existing infrastructure. A few other highlights I want to share with you. The molecule, celecoxib, is well-known and ELYXYB is in a differentiated formulation that delivered meaningful speed of onset in clinical trials with Tmax achieved in approximately 60 minutes. Additionally, in the two pivotal studies conducted, the percentage of patients achieving MBS or most bothersome symptom freedom at two hours post dose was significantly greater among patients receiving ELYXYB compared to those receiving placebo. In Study 2, the percentage of patients achieving headache pain freedom, two hours post dose was significantly greater among patients receiving ELYXYB compared to those receiving placebo. The acquisition of ELYXYB leverages our existing infrastructure and will benefit from our team's strong track record of commercial launch success as well as our medical affairs team's expertise in the migraine space.

The agreement has attractive terms and is estimated to be accretive within approximately 24 months from commercial launch, which is anticipated to be in the first quarter of 2022. Importantly, we will be working on various ELYXYB expansion opportunities, including a potential label expansion for the treatment of acute migraine in pediatric patients. An additional potential indication for the treatment of acute pain and commercialization in Canada. We anticipate the deal will close in late Q3 or early Q4. Much more to follow at a BDSI ELYXYB Investor Day, which we expect to take place early in the fourth quarter. Before I turn it over to Scott, I want to provide you with a brief legal update. As we shared at our first quarter earnings call, our 3-day Bench trial with Alvogen related to their BELBUCA Paragraph IV patent challenge concluded on March 3.

Post-trial briefs from the parties were completed on May 26. BDSI subsequently requested that the court strike three patent invalidity defenses raised for the first time by Alvogen in his post-trial briefs as well as two documents that Alvogen improperly cited. On June 28, the court agreed with our arguments and granted the company's motion to strike in his entirety and moreover, enjoyed Alvogen from launching its generic product pending the trial court's decision on its merits. We are pleased with the latest developments in the litigation and remain very confident in the strength of our IP. In spite of these directionally positive rulings, we can neither predict the decision, the court will reach nor the timing of the court's decision. We are not able to comment further regarding the ongoing litigation.

With that, I will turn the call over to Scott to provide more details of our performance during the second quarter. Scott?

Scott Plesha -- President and Chief Commercial Officer

Thank you, Jeff. As Jeff mentioned, during Q2, BELBUCA prescriptions grew by almost 12,000 TRxs year-over-year to over 118,700 retail, mail order and long-term care TRxs combined. This represents a solid 11.1% increase in BELBUCA TRxs compared to the second quarter of 2020 and sequential growth of 5.3% compared to the first quarter of 2021. BELBUCA prescriptions grew year-over-year and quarter-over-quarter despite a relatively flat, long-acting opioid market in the second quarter. The LAO market has been pressured by lower clinic staffing and fewer in-person patient visits, which in Q2, according to IQVIA, were down 36% in pain practices compared to pre-COVID levels in contrast to visits for all other specialties, which have recovered to near pre-pandemic levels. We remain pleased with BELBUCA's continued revenue and script growth and its rebound in Q2 to a new TRx market share high of 4.7%, up from 3.8% in Q2 2020 and 4.5% in Q1 2021. During the second quarter, BELBUCA is new-to-brand market share of 7.7% grew by 1% from 6.7% in the first quarter and remained significantly above its TRx share of 4.7%, which means there is still a meaningful opportunity to grow total prescription share as these metrics historically converge.

Importantly, BELBUCA saw an NBRx count increase of 9.3% from Q2 2020 for the most recent quarter and an increase of 4.4% from Q1 to Q2 of 2021, while the NBRx count for the entire market was down 8.2%. It is now our third consecutive quarter since we implemented the first start NBRx program. This program was intended to enable healthcare providers to efficiently prescribe BELBUCA to appropriate commercial patients for the first time by providing convenient access to BELBUCA while the HCP staff is securing prior authorization approval. First Start has been an extremely useful tool, generating a 29% lift in NBRx and a 16% lift in TRxs in those HCPs participating in the program. We continue to monitor the impact of this initiative and anticipate keeping it in place through the end of 2021.

Continuing to build BELBUCA's prescriber base is important to the brand's growth trajectory, and we are pleased to report that BELBUCA prescribers increased in the second quarter by 11% year-over-year to 8,345 unique prescribers, a new high for the brand. Sequentially, our prescribers also grew by 4.5% from the first quarter. We view this growth as extremely encouraging and expect our prescriber growth to have an increased impact as face-to-face patient visits improve over time within pain practices. Our market access with BELBUCA has reached attractive levels. BELBUCA currently enjoys strong commercial coverage with 90% of lives covered, of which 60% are covered at a preferred level, while in Medicare, BELBUCA is covered in 33% of lives. This level of coverage provides a significant opportunity for growth, which is supported by our consistent year-over-year TRx growth across all payer types and new Q2 TRx highs for both commercial and Medicaid payers.

We remain committed to improving access to BELBUCA while balancing payer coverage and rebate levels, especially in Medicare. Symproic Q2 2021 prescriptions grew to approximately 18,000 or an increase of 3% year-over-year compared to Q2 2020 with a 7% sequential rebound from Q1 2021. We expect continued growth for Symproic as our NRx count increased 7.6% to 10,715 during Q2, a new NRX count high for the brand. Symproic enteric share increased to 13.8% in second quarter. Like BELBUCA, Symproic is well positioned with covered status for 89% of commercial lives to 60% at preferred status. As we stated during our Q1 call, the PAMORA market historically declines in Q1 before rebounding the remainder of the year. The PAMORA markets rebound during Q2 played a role in Symproic's renewed growth in the quarter as well as the brand's 26% quarter-over-quarter increase in prime therapeutics, a plan that improves Symproic coverage during 2020.

The BDSI sales force has done an outstanding job pulling through formulary wins, and we expect to reach new TRx count and share highs throughout the year. As Jeff mentioned, we are very excited to be adding a clinically important product like ELYXYB to our portfolio. The acquisition of this commercially ready product provides another avenue for growth and is a logical adjacency to our pain franchise. Moreover, it leverages our commercial expertise, much of our existing infrastructure and our team's extensive experience with product launches. I'm confident based on our team's proven track record that we'll be able to execute a successful launch in Q1 of 2022. Certainly, we remain focused on our current portfolio, we are well positioned for a strong second half of 2021 and beyond.

With that, I'll turn the call over to Terry to provide an update on the financials. Terry?

Terry Coelho -- Executive Vice President And Chief Financial Officer

Hank you, Scott. Total net revenue for the second quarter was $41.4 million, an increase of 13% compared to $36.6 million in the second quarter of 2020 and modestly above the net revenue generated in Q1 of 2021. BELBUCA net sales in the second quarter of 2021 were an all-time high of $36.5 million, an increase of 13% compared to $32.3 million in the second quarter of 2020 and modestly above the first quarter of 2021. As expected, BELBUCA gross to net deductions increased in the second quarter as compared to the first quarter of 2021, primarily due to typical increases seen from Medicare coverage gap as well as Q1 having included a onetime gross to net benefit related to Medicaid accruals. Net sales for Symproic in the second quarter of 2021 were $4 million, which reflects 18% growth year-over-year and a decrease of 9% compared to the first quarter of 2021. As expected, Symproic gross to net deductions increased in the second quarter due to the typical increases seen for Medicare coverage gap as well as Q1 having included the benefit of a onetime update to our gross to net channel estimates.

Total gross margin for the second quarter was 90% compared to 85% margin during the second quarter of 2020 and 86% margin during the first quarter of 2021. Gross margin in the quarter benefited from reduced cost of goods due to the impact of a $1.4 million recovery associated with previously reserved inventory. We expect to return to our more typical gross margin range in the mid-80s going forward. Total operating expenses in the second quarter of 2021 were $25.8 million compared to $28.2 million in the second quarter of 2020 and $27.8 million in Q1 of 2021. Year-to-date 2021 operating expenses include higher litigation costs associated with the P4 case. As always, we continue to closely manage and prioritize operating expenses. GAAP net income for the second quarter was $9.1 million or $0.09 per share, an increase of $7.9 million when compared to the GAAP net income of $1.2 million in the second quarter of 2020 and an increase of $3.8 million when compared to GAAP net income of $5.2 million or $0.04 per share in the first quarter of 2021. EBITDA in Q2 2021 was $13.1 million or 32% of net sales compared with $5.1 million or 14% of net sales in Q2 2020 and $9.2 million or 22% of net sales in the first quarter of 2021.

Non-GAAP net income for the second quarter of 2021 was $12.5 million or $0.12 per share and reflects GAAP net income, excluding stock-based compensation and noncash amortization of intangible assets as compared to non-GAAP net income of $9.6 million or $0.09 per share in the second quarter of 2020, excluding the same items as well as excluding the onetime impact of the CEO transition in that period and certain costs associated with the discontinuation of BUNAVAIL. Year-to-date non-GAAP net income through June 30, 2021, is $21 million or $0.20 per share. The company has a strong balance sheet with cash and cash equivalents as of June 30, 2021 of $119.9 million as compared to $111.6 million at year-end 2020.

Operating cash flow generation of $9.2 million in the second quarter was partially offset by $5.8 million used to repurchase shares, resulting in a net increase in cash on hand of $3.4 million over the first quarter of 2021. Our share buyback program was initiated late in the fourth quarter of 2020, and we have repurchased approximately 3.3 million shares through Q2 2021 at an average price of $3.7. The $12.1 million in share repurchases to date represents 48% of the total authorized amount of $25 million. This reflects the continued confidence of the Board and the management team in the strength and value of our business. While we are maintaining our full year 2021 total net revenue guidance range of $170 million to $180 million.

After our observation of the slower-than-expected normalization of the commercial environment in the LAO market this past quarter, we expect net sales in 2021 for BELBUCA to be at the lower end of the revenue guidance range of $155 million to $165 million. As previously discussed, these estimates incorporate the impact in Q1 from the winter storms. We continue to estimate our total operating expenses for the ongoing business to be in the range of $115 million to $120 million. Additionally, EBITDA remains on track to be in the $40 million to $50 million range in 2021 for the ongoing business. The company expects to deliver positive operating cash flow in 2021.

ELYXYB will be acquired from Dr. Reddy's for an upfront payment of $6 million, along with an additional $9 million on August 3, 2022, and modest onetime sales milestones ranging from $4 million upon achievement of $50 million in net sales of ELYXYB, up to $100 million upon achievement of $1 billion in net sales. BDSI will make tiered quarterly earn-out payments on net sales, with rates ranging from the high single digits to the low double digits. The closing of the transaction is subject to satisfactory completion of customary closing conditions, including the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, or the HSR Act. With these attractive terms for the acquisition of ELYXYB, this transaction allows the company to maintain its strong cash position and retain financial and strategic flexibility going forward. The company will share any updates to its guidance as a result of the ELYXYB acquisition at a future date.

I will now turn the call back to Jeff for some concluding remarks before we open up the call for Q&A. Jeff?

Jeffrey A. Bailey -- Chief Executive Officer

Thank you, Terry. I want to take a moment to thank our employees for their continued dedication in driving results. As a result, the entire team's contributions and our continued success with BELBUCA and Symproic, we've been able to take this important next step to establish a growth platform within neurology. ELYXYB is the ideal asset to form the foundation for future growth and diversification. We are very excited about this next chapter for patients, healthcare providers, BDSI and our shareholders.

We will now take your questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] Our first question is from Brandon Folkes with Cantor Fitzgerald. Please proceed.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Hi. Thanks for taking my question. Congratulations on the quarter and acquisition. Maybe firstly, going to the ELYXYB acquisition has been closed. But I heard that you're going to be working on a label expansion there. It's very encouraging to hear. So just maybe on a high level, is this a shift in your view toward R&D at all? And then maybe secondly, I'll just ask both questions, I frame, if you don't mind. In terms of patient demand and panel for both BELBUCA and Symproic, are you assuming the recovery happens in some sort of kind of bolus rebound later in the year in terms of your guidance? Or do you think it's a more measured return of these patients maybe over a longer sort of 12 to 18 months contract? Thank you very much.

Jeffrey A. Bailey -- Chief Executive Officer

Hi Brandon, it's Jeff. How are you today?

Brandon Folkes -- Cantor Fitzgerald -- Analyst

I'm Okay. Thanks Jeff.

Jeffrey A. Bailey -- Chief Executive Officer

Okay. So when you take a look at ELYXYB -- sorry, I need to take your second question first here. Let me just tackle that one. So when you take a look at the growth coming back with the markets and what we see happening, we do see this as a measured growth. So I just want to make sure that just put that out there, that we see this as a gradual growth coming back for both BELBUCA and Symproic. The LAO market has been slowed during the pandemic and that's something that really came to the play. But we do see this as a gradual improvement. We're really encouraged by the second quarter as far as what happened in the LAO market. So the gradual, and yes, we have good optimism of that in. The first question, could you repeat the first part of your question. You are cut out on my end a bit when it came to ELYXYB, so I apologize for asking that part of it.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Sure. No problem. I think you mentioned you're going to pursue label expansion work on ELYXYB. Just historically, BDSI has been a commercial execution company with almost no R&D. So just in terms of this label expansion, is that sort of the first glimpse to maybe a changing view on R&D longer-term for the company strategically? Just any color around your longer-term view R&D would be great. Thank you.

Jeffrey A. Bailey -- Chief Executive Officer

That's a great question. So the label expansion, we're primarily focused on is certainly about pediatrics well sunwear. That's an unmet need, and it's something that -- it also is required as part of this as well. So it goes perfectly hand-in-hand. So it's one where -- it's an FDA requirement, but it's also one where you're basically looking at the data and the need for the pediatric -- the community to really be observed, it's a great opportunity. I wouldn't view it necessarily as that we're getting deep into the development end of the world now that end. It's Sunwear. This is a next logical step for ELYXYB and making sure that we really nail this part of it. So it's really about a great market opportunity. As far as down the road goes, it's Sunwear.

This is really a great next step for us, deepening our focus into neurology, which we're really excited about. This really aligns to the strategy that we have laid out over time here. But as far as right now, just really focusing on executing ELYXYB, this additional label with pediatric. And we also had some optionality as far as it goes also for acute pain down the road, but that's something that we'll just assess as we keep going with the mix a bit because we have so much market potential to go after here with ELYXYB with migraine in adults as our first step. And then next step, obviously, we want to make sure that we do our work on pediatrics because we see that as really a great unmet need. The ELYXYB profile fits very, very nicely. So I hope I answered your question, Brandon.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Yes. You did. Thank you very much Jeff. And congratulations again.

Jeffrey A. Bailey -- Chief Executive Officer

Thank you.

Operator

Our next question is from Greg Fraser with Truist Securities. Please proceed.

Greg Fraser -- Truist Securities -- Analyst

Thanks. So, thanks for taking my question. On the chronic pain market recovery, you think the slower-than-expected rebound is tied into the delta variance and cases picking up in certain areas? Or are there other factors at work?

Jeffrey A. Bailey -- Chief Executive Officer

Scott, do you want to go ahead and take that one?

Scott Plesha -- President and Chief Commercial Officer

Yes. Great. Thanks, Greg, for the question. Just a little bit of what we're seeing out in the marketplace, I guess, to give you a background, is kind of at the peak of COVID, there was a lot of downsizings that occurred in the pain practices, a lot of staffing reductions. And specifically, we saw a lot of satellite offices closing as well. And as you can imagine, we're constantly pulling our team and getting qualitative feedback from them on this. And we see that and then when we go back and triangulate that feedback with the data that we shared with IQVIA in my prepared comments, where their patient business are down quite a bit in pain still. We see in the mid-30s, where the face-to-face patient visits are down within pain, and that's with mid- levels and HCP doctors. And while there is a little bit more telemedicine occurring right now, it still leaves a gap of about 20% in mid-20s. So what we know in the pain space also is that doctors and mid levels are less likely to make changes to patient's treatment regimens, unless they're in front of them. But that it bears out across all specialties that NBRxs are not as productive via tele medicine. So it's really about,

I think, about staffing, trying to staff up. I think we're hearing across a lot of sectors, challenges in hiring. And I think that's bearing out in the space. They're just not able to open up these satellites as readily as possible. We're encouraged. We're starting to see them open up, and we're getting access in some offices we haven't seen maybe in the year sometimes. So we feel like things are going improving. And the market itself is up 0.8%, which was the first time in many, many quarters that the market was up, the LAO market. But I think even with that being stabilized without patient visits kind of coming back completely, I think it leaves a little bit of a divot. Hopefully, that's helpful.

Greg Fraser -- Truist Securities -- Analyst

Got it. Yes, that's very helpful. On the new asset, can you help us understand where you see the oral solution fitting into acute migraine toward a treatment paradigm and how you're thinking about sales potential?

Jeffrey A. Bailey -- Chief Executive Officer

We see it's really fitting well. Obviously, it's a key part of our diligence as far as it's something to make really super clear to everybody that we go in highs line open into this market. It's a very big market, over 13 million migraine patients, growing 5% annually. But there's a lot of noise with the CGRPs out there, direct-to-consumer advertising, all that noise, which actually, in many ways, benefits us because there's just a lot of activity as far as when it comes to patient with physicians making decisions on patients playing through. But the fact that we are truly -- if we have this point of differentiation, the statement is a really important one. We're the only FDA approved, ready-to-use oral solution for the treatment of acute migraine in adults.

That it really positions us quite now because what we do see is that from our market research that physicians are looking for different mechanisms of action, being a cost to differentiates us in that way and also our delivery being oral solution with the bioavailability of the clinical profile that we see playing out. Really makes a big difference on that end. I also just want to share a great to your question a little bit further. The part of that the experience of our team. And I think that helping to really -- for us to be able to put our head around where this fits into the marketplace that I'd be [renestat] I didn't talk about the experience of the team.

If you take a look at the leadership team here, we have experienced with 22 product launches, eight on neuro and five at migraine. A couple of examples that we have leadership on the commercial team that has experience in migraine. Also our Chief Medical Officer, Tom Smith. He's a headache, a migraine physician, a key opinion leader in migraine. He has developed many products and also launched products in this space, including the triptans. So we know the market well. It's a key part of our diligence about getting back to your question as far as how this fits in, in so many different ways, but also the part with -- when you take a look at the ability to really note the key opinion leaders that are in the space, super important to be able to really play all that out, that Tom has relationships with a few opinion leaders, which we tapped into about getting back to answer your question again about how it fits into the marketplace.

So we really see this a really great fit as far as on many fronts. And I want to take it a step further again, but it's also that we really see the opportunity here to feed off our existing infrastructure, which makes it super efficient, a very targeted effort that's in play, focusing on high decile prescribers. And we really fit in also with our expertise as far as when it comes to using digital tools, our CRM capabilities. We've proven that with BELBUCA with the uptake of BELBUCA and what's been playing through on that end.

So some really good things there. So hopefully, great to takeaway is that. It's been a very thoughtful aspect about how we see the product, fit into the marketplace based on really extensive market research that we both quantitative and qualitative. We see that it fits in quite well all the way through on that end. And I just see that the market opportunity is when we're looking, we're not a tuck-in product. This is something significantly bigger than the Symproic. We'll come back with more refined aspect of that. I mean, we have our -- we're going to have an ELYXYB, as we mentioned before, ELYXYB BDSI day that will be in the early fourth quarter.

We really go deeper on something. So more refined on some things from a number standpoint for you to answer your question. But I think we just kind of put this in perspective that the migraine market is one that is about 30 times bigger than the PAMORA market. So certainly, this is no tuck-in on that end. And just regard -- if you garner low single-digit market share in this market, again, I still wide open about this this competitive landscape here to have this perspective. But it's a significant amount of dollars that it carter low single-digit market share, your ballpark around $100 million of net revenue. So pretty good situation. So [Indecipherable] pretty excited about it, Greg.

Greg Fraser -- Truist Securities -- Analyst

Got it. And do you plan to add sales reps to reach a broader group of neurologists than you're calling on now. I guess how should we think about the incremental sales and marketing spend tied to the product as well as R&D for the pediatric study?

Jeffrey A. Bailey -- Chief Executive Officer

Yes when you think about it. Well, first all, for this year, it's modest spend. So I think that's an important thing. And Terry, you can elaborate on that even more so. But yes, I think one of the great things about this deal was that our current footprint really serves us well that you take a look at -- right now, as far as the total number of sales reps that we need, I'll get to that in just a second. But the current sales footprint, it's very much focused on -- we cannot lose the focus on BELBUCA. BELBUCA is the mother shift to growth. And really, we have a lot of experience about keeping the eye on the growth engine of BELBUCA, especially that we want to maintain the critical relationships that we have there. So that's really huge to us on S-1. And so these same relationships will serve us very well because it's interesting to see the data, and Scott's really done a great job in the team as far as digging up the data. But there's really nice potential for migraine within our current called on universe.

So that's really good. So our approximately 118 or so sales territory that's an important place to start. We do plan on a smaller dedicated ELYXYB sales team that will focus on neurology with the highest decile migraine prescribers. So the absolute highest potential, super focused. And these are people that just get up every day and they just eat previously celecoxib. So we have a good experience with this. We also see within that sales force that targeted effort that there's some BELBUCA potential also. So we like that also. So they will be able to promote BELBUCA in a second position, the certain targets paid on what type of patient population you have as well. So that's where we are right now as far as that goes. And you take a look at, like I said, this year, modest spend, really, we're talking about with the launch of the first quarter. That's where we're bringing on the additional sales resources that I just described.

Greg Fraser -- Truist Securities -- Analyst

Thank you.

Jeffrey A. Bailey -- Chief Executive Officer

That's fine.

Operator

Our next question is from David Amsellem with Piper Sandler. Please proceed.

Zach Sachar -- Piper Sandler -- Analyst

Hi thanks. This is Zach on for David. Congrats on the acquisition in the quarter. Just in light of the ELYXYB acquisition, does this transaction kind of fit the mold in terms of the types of other assets you might be looking at. So are you generally passing, I guess, a wide net in terms of what you're looking for within neurology?

Jeffrey A. Bailey -- Chief Executive Officer

So when you take a look at where we are right now, that -- so the neurology is what we've been talking about for quite some time as far as the next logical adjacency to pain. It's like we've described in the past, it's a great situation you do like a vain Venn diagram as far as the overlay between pain and neurology, going back to my J&J experience as far as with the Topamax and Altran as far as those two products. So it's very similar in that way. So we really see that as a really important reason that this fits so well. And we know that, that is a formula for success as far as what's happened in the past. As far as what we see down the road, right now, from the standpoint with ELYXYB, we have enough to chew on right now that, of course, are always going to be open-minded as far as other things that might come up.

But as far as the -- so much of the potential that we see in ELYXYB really cares a day because it stands on its own, very much so based on what we've seen. But it comes back to shareholder value. It's something the only thing we're going to look at that really brings shareholder value as far as if there are other assets that we come across, and we'll continue scanning the world there. That's something that we've had really quite a process that played through. But it's also we want to make sure that it's something that anything that we do look at brings value. So I wouldn't anticipate that there's something else that's going to drop in here any time soon, but we will keep on scanning the universe on that end, but just we're -- we have enough right now just to say the value of ELYXYB and what we execute from here. It's certainly something that's got very excited and ready to access on that and for share.

Zach Sachar -- Piper Sandler -- Analyst

Yes. That makes sense. Thanks. And then if I could sneak in one more quick one on BELBUCA. Just on the payer front and on Part D, in particular, has anything sort of changed to look topically in your -- in terms of how aggressively you plan to contract here?

Jeffrey A. Bailey -- Chief Executive Officer

Scott, do you want to go ahead and take that one?

Scott Plesha -- President and Chief Commercial Officer

Yes, sure. Thanks for the question, Zach. I think as I mentioned in my -- again, my prepared comments, we're always trying to balance, maintaining appropriate gross to nets with access. And when we look at Medicare, one of the things that's encouraging is we do see over a 90% approval rate. So it's actually -- if you look at our coverage where 90% covered lives and commercial, 33% in Medicare Part D, we actually have a better approval rate in Medicare. So patients still have access to it. And it's affordable access as well. So I think that's important. It would open some doors if we were able to get Medicare coverage, but we're trying to balance, making sure that we're not providing rebates, but literally, we could not make up over time in prescription growth. So we're being thoughtful about that. And so that's where it is. We haven't closed the door. We're still working very hard and trying to find different avenues to getting approval -- I'm sorry, to getting wider coverage, but nothing to report at this time. As you know, I believe you probably know a lot of Medicare wins are announced in Q4 is when you kind of learn about those things and usually take effect in the beginning of the year, typically. So -- but as I said, nothing at this time.

Zach Sachar -- Piper Sandler -- Analyst

Yes. So, thank you.

Jeffrey A. Bailey -- Chief Executive Officer

So Zach, thanks a lot for the question. I'll just expand on what Scott said is that our team has regular venues for doing the [Indecipherable]. What really brings impact and results of the company. So we're very careful that the team has a lot of good experience with that. So it's one where your question is a really good one. And we do the math all the time. So it's only ones that really make business sense. So it's a very prudent process. But thanks for the question.

Zach Sachar -- Piper Sandler -- Analyst

Yes. [Indecipherable].

Operator

Our next question is from Scott Henry with Roth Capital. Please proceed.

Scott Henry -- Roth Capital -- Analyst

Thank you and good morning. A couple of questions. I guess, first, I'd like to give Terry a chance to participate. Could you talk about SG&A in the quarter? It was down notably. And the question is, should we think about -- first, why was it down? And then how should we think about it going forward?

Terry Coelho -- Executive Vice President And Chief Financial Officer

Yes. So thanks, Scott, for the question and the opportunity to answer something. So the quarter was down. I mean, it's a combination of things. We've talked about early in the year, you have that kind of investment and marketing spends as you kick up every year. And also, we've spoken about legal spend with the P4 trial being higher as in the early part of the year as well. So I think those would have been two drivers when you look at last second quarter compared to, let's say, the first quarter. Going forward, we've given the guidance, where we're still holding the guidance the same in terms of our SG&A spend. I think what you -- yes, I mean we're still considering that. We spend -- I think we're very prudent. We make sure we're prioritizing spend, keeping it in line with how the revenue is tracking as well. And you can expect us to continue doing that.

Scott Henry -- Roth Capital -- Analyst

Okay. Thank you for that calker. And then shifting gears, kind of a tough question, but obviously, the BELBUCA patent is a significant event for the company. And it seems to be going well, but you never know. And the question is, you're doing a share buyback in front of that event is perhaps a little unusual. Should we view that as confidence in front of that case? Or how should we think about that decision to buy back shares in front of such an event?

Terry Coelho -- Executive Vice President And Chief Financial Officer

Yes. I'll start. Maybe.

Jeffrey A. Bailey -- Chief Executive Officer

Oh, you go first, Terry, please.

Terry Coelho -- Executive Vice President And Chief Financial Officer

No, I was just going to say, I mean, absolutely. This does reflect our confidence in the business. So go ahead, Jeff.

Jeffrey A. Bailey -- Chief Executive Officer

It's very much the case. It's the confidence of the business. It goes beyond just the legal aspect of it just really viewing what stock has been and just you take a look at the road in front of us that just the part about this confidence and a legal standpoint, also confidence in the growth that's in front of us as well. So we just think that it was a very prudent move. It has been a very prudent move to take that, and it was something we'll calculate on our end. But I think you're thinking about the right way, Scott.

Scott Henry -- Roth Capital -- Analyst

Okay. Great. And just a couple small questions. When I look at BELBUCA, when the script data in the market share, it kind of slowed down a little bit in kind of March and April, but then picked up in May and June. Is that noise? Or should we think about progress in accelerating perhaps penetration there?

Jeffrey A. Bailey -- Chief Executive Officer

Yes. Terry, I'll go first, Scott, and maybe you build on it. But yes, I mean, it's something we're really paying close attention to is very much patients getting back into the office. That's huge to us in pain. And Scott talked a bit about the capacity challenges that some of the offices have run into. But it's really the combination that we see this improving, which is really huge and our optimist about the future that patient is getting back into the offices, but also that really ties back into our representatives getting their face-to-face time. That this is something that is huge to BELBUCA to be able to have that face-to-face time to sell, also when new patients getting on. So there's a good demonstration about how to use the product and all that stuff, but that takes the office staff and the face-to-face to play through. So what we did was we really have seen that that toward the back end of the quarter, the months you described, you described it very well.

I'll start is that -- it's something that we see the ball moving in the right direction there. So I think that's probably something key, that Scott and I spend a lot of time talking about, and we closely monitor that because they go hand-in-hand. It's something where it's nothing too complicated here that this is really the face-to-face sell that's so key that with our representatives who are really good when they get time in front of the customer and able to -- be able to connect the dots on that, and that makes a big difference. And so with -- that's making some positive moves relative to where we were through the pandemic, we really see that as an encouraging sign going forward. Scott, is there anything else you want to add to that as well?

Scott Plesha -- President and Chief Commercial Officer

I agree with everything Jeff said. We do monitor it closely. Actually on a weekly basis, the activity we're seeing. And we did see a lift in face-to-face activity by our reps during Q2 versus Q1, actually, a substantial amount. And I think that's carried into July as well, Scott. We didn't share many numbers. I don't know if this is public, but the week of July 23, actually, according to IQVIA, we had our -- is our second highest week, but I view it as our highest because the week that was higher was the week after all the weather and kind of outages at the end of February. So the first week in March kind of stands at all-time high, but it was kind of artificially inflated. And then even recently, we've seen a TRx share of 4.9%, which we have reported 4.7% in Q2. And then I think even more important, our NBRx share the last couple of weeks has averaged 8%. And that's a really nice spread between NBRx and TRx share. So we believe that's pointing toward nice growth going forward. Okay. Great.

Scott Henry -- Roth Capital -- Analyst

Okay. Great. Final question, just for clarification. I think with ELYXYB, you mentioned a smaller sales force, potentially a targeted smaller sales force. Should we be thinking about 10 to 20 reps? Just curious how kind of you define small.

Jeffrey A. Bailey -- Chief Executive Officer

Scott, think about just a bit bigger than that at this point. I think that's probably the right way to think about it. It's -- yes, very targeted to the highest deciles. And that more refined number, we'll get to you as far as at the ELYXYB Day that will happen in the early fourth quarter. But I would say, just think about it being a bit bigger than what you just described, but that's a good way to think about it. So hopefully I gave you enough for now, Scott, to give you a perspective.

Scott Henry -- Roth Capital -- Analyst

Fair enough. Thank you for taking the question.

Jeffrey A. Bailey -- Chief Executive Officer

Thanks for your question, Scott.

Operator

Our next question is from Tim Lugo with William Blair. Please proceed.

John Kreger -- Analyst

Hi guys. This is John on for Tim. Congrats on the strong execution during the quarter. And congrats on the deal, especially impressive that you were able to get it done while maintaining such strong execution. So just two questions from us. First, as others have mentioned, the pain market appears to be returning a little slower than some other pharma markets with the pandemic. Do you have any insight as to why that is or what's holding back the overall rebound? And second, I was just wondering if you can give us some update on the mix of the sales team that's out in the field versus virtual? And how you might be planning to manage that as delta potentially ramps up? Thanks.

Jeffrey A. Bailey -- Chief Executive Officer

How about I'll take the first part, Scott, and you take the second part. But it's something about -- yes, we've been really paying very much attention about what's going on with the different therapeutic areas as far as coming back from -- we really did a good baseline and straight data out there, obviously, that we pay close attention to. But the patient visits a pre-COVID versus where it is now. And pain is the laggard. It was rheumatology and pain with the two that were the lagers before rheumatology seemed to be coming back. But compared to all other specialties that paid is the laggard that side as far as patient visits going back. And we did a deep dive on this. It's really important to us to make sure we understood this that we brought our sales leadership team together and Terry, Scott and I have met with them for several hours. And really went deep into the geography about what's going on with the patient visits all the way through.

And it's something that Scott alluded to before is that, but they're in COVID, there's some scale down and some staffing in some different offices, also some satellite offices for pain that were closed down just because of really managing through COVID. And so they really narrowed their focus in a lot of ways. So it's something that we certainly see that those are starting to come back a bit. And we see that as being gradual. That capacity part about the workload versus capacity, workload being patients wanting to get into to see the position and the limited capacity in some areas. And some of the key systems of care out there. We do see this starting to come back, but that's really, John, as far as being really one of the key drivers we've seen with what's going on behind the scenes here. But we're very encouraged about where some things are going to go from there. So I hope I answered that part of the question. I'll be just checking with you before I turn it to Scott talking about the mix on promotion. But John, did I answer your question OK?

John Kreger -- Analyst

Yes, that was very helpful. Thank you very much.

Jeffrey A. Bailey -- Chief Executive Officer

Good. All right. Scott, over to you.

Scott Plesha -- President and Chief Commercial Officer

Yes. Thanks, Jeff. So John, on the promotional mix, I think that's actually the other part of this that we've seen an improvement in trends is that as things open back up and we have better access, we saw our virtual interaction go down and more face-to-face. So really, every rep in our sales force now is out making live presentations and they have really since last year, but the percentage of interactions that have gone to face-to-face, having direct conversations with individuals has really improved, and it's up to over 95% of our interactions are now done that way. And we always -- we have a system in place where we can send follow-up emails and things like that. That's part of that mix even. So that's -- so you can see a big portion of our interactions are now live interactions.

John Kreger -- Analyst

Thank you so much.

Scott Plesha -- President and Chief Commercial Officer

You're welcome. Thank you.

Operator

Our next question is from Tim Chang with Northland Capital. Please proceed.

Tim Chang -- Northland Capital -- Analyst

Thanks. Jeff, maybe you could just talk a little bit about what work you think you'll need to do on ELYXYB just to get managed care access. Obviously, this product will play in a much more sizable market, but there are a lot of competitors. And obviously, you have a well-known molecule here in celecoxib. But I'm just sort of wondering, have you guys done quite a bit of work on the managed care side just so that when you launch this in early 2022, you'll have good coverage.

Jeffrey A. Bailey -- Chief Executive Officer

Tim, good question. We did a ton of work on this. You can imagine due diligence. And I guess, I want to stress to everybody that this is a very comprehensive due diligence process, and the team has a lot of experience as far as all different functional areas, supply chain, the medical to sales marketing, also the payer environment. So we did a deep dive, we did our own research on this and really reached out to key contacts to really make sure that we were gain ready for this. And as far as the way that we're looking at the world going forward is that -- we see that there's a way to appropriately position us well in the payer space. It's a product that has differentiation. It's one where the key thing that we're all the FDA approved, ready-to-use oral solution really makes a big difference for us.

And so that differentiation is there. Payers see that, and that's something really key with us. But also I bring it back to our team as far as the relationships is something where again gets back to part of the reason that this is so attractive to us. So we're able to up our existing infrastructure, the expertise of our team and really be able to set us up well there. But it's been a very thoughtful piece on the access on the payer standpoint. And we know that you could have the greatest product in the world, but if you're not able to get that payer access, it's a challenge. But we've learned through our due diligence. We think we're well positioned there. It's one of the ones it like every product that's launching. It's one step at a time as far as being able to just keep building more access as you keep going here, but we think we're well positioned. Also when it comes to anything else, Scott, that you want to add, please go ahead.

Scott Plesha -- President and Chief Commercial Officer

Thanks for the question, Tim. We're excited to launch this. One of the things that was exciting about the asset was the price structure and the rebate platform hadn't been put in place yet, so we can kind of control that. And I think if you look also at what we've done over time with our BELBUCA franchise. It's the market -- that's also a very large market with a lot of players, generics and branded and we've been highly successful in getting access, affordable access for patients and also at a rebate level that's reasonable. So I think we're really confident, like Jeff said and the team, and we did a lot of work, not only with physicians but also with payers, quantitative work, and then we have a consultant who's operated at a VP level in some of the largest payers in the country that helped us work through this and make sure that we understood going in, what it would take on pricing structure and probably the rebate structure as well. So it was very...

Tim Chang -- Northland Capital -- Analyst

And maybe just a quick follow-up, Jeff. I mean, you kind of highlighted that you'll have a small sales force to market ELYXYB. But I guess your existing sales territories that you cover, those will be complementary, right, with what you're already selling in BELBUCA and Symproic?

Jeffrey A. Bailey -- Chief Executive Officer

Absolutely. It's something that's really made this thing so special as for us is sort of efficient, effective approach that we could have here. We cannot afford to have disruption with BELBUCA. And we're not going to allow that to happen. That's why we're keeping the current territories very much intact. Those relationships, our reps are worked hard to build those and just to make sure that, that connects very well. And also the fact that, look, we see some potential with ELYXYB and our current footprint and also with neurology. They've been going deeper into neurology, some BELBUCA potential on that end as well. So it's really a good fit to go both ways, but it's where we are very, very focused on. We've been down the store before, but Scott and I both have a lot of experience with this as far as doing something exactly like what we're about to do. We've been down this road before, which is something that I think really helps us just to make sure we keep the focus and execute on everything, the ELYXYB. But really, the big one, of course, felt you got to keep the momentum going and really grow this thing.

Tim Chang -- Northland Capital -- Analyst

Okay. Great. Congrats.

Jeffrey A. Bailey -- Chief Executive Officer

All right. Great. Thanks, Tim.

Operator

Our final question is from Oren Livnat with H.C. Wainwright. Please proceed.

Oren Livnat -- H.C. Wainwright -- Analyst

Hi thanks. You've obviously addressed to some extent, this LAO market dynamic. But I was hoping I could toss to you a little bit more about that. What do you think is different, if anything, about that population potentially that might be driving a differential rebound versus most other therapeutic areas. Would it be fair to speculate that population would maybe hit harder by COVID with regards to unemployment and loss of insurance. I'm just trying to tease out if you think there's really an underlying demand change versus just capacity and logistical issue that you've mentioned a couple of times. For example, do you see anything in the IR opioid volume that suggests that some of this LAO volume is temporarily been displaced or shuttled off to something more accessible? And I do have a follow-up there.

Jeffrey A. Bailey -- Chief Executive Officer

Great. So Oren, really good question because that's actually why we pulled everybody into the sales leadership team and together to really go deep on that topic. And it's such an important part of the thinking. So really, we were asking the same questions as far as is it insurance or other underlying issues beyond that. It really came back to primarily, it was just -- it's a lot about their capacity in their offices really to handle some volume coming out there that -- in the back of our minds that going into COVID, you think, boy, when people are paying, they're going to find a way to get it treated one way or another. And it's something where the business is being down is one where we do see it coming back because of the primary driver, let's put it this way. In some cases, some of the things you mentioned,

I'm sure are in play, but it's also one where the primary driver is that we've learned from just going to you to stay very close with weekly calls with our sales leadership team about the whether the market what's going in your geography, other geographies. There's some capacity challenges there that are impacting some things on that. And so that's important thing really to highlight at this point. We do see some encouraging signs about where we go from here. Your point about IR. Actually, Scott and I did a deep dive, Scott went back into the data because we were wondering about the same thing as far as we see a change in IR that maybe is happening and the interest now in on where IR is seen a similar situation as far as the trend goes. So that was just -- we try to speculate on everything we possibly could on that end. And so that's where we landed, Oren. So hoping that's helpful. Scott, do you want to go ahead and take that one as far as what we're hearing from the field team?

Scott Plesha -- President and Chief Commercial Officer

Yes. So Oren, when you look at the feedback we've got from our team as well as the data, there's really not a large discrepancy across the country. And we did see a very large decline in the first quarter, to your point, in Texas, Oklahoma area. But when I look at Q2 now, those areas have really revalued for us as well. So it's come back in Q2 as the market has. So as you know, the market has declined every year. I think the thing that's different right now is that it's -- the patient is way down in the offices, which, again, changes on the curve to therapy, even if somebody is on short-acting, needs the long-acting, maybe they're just staying on a short-acting right now because they're not getting back into an office capacity wise. So I think that's the challenge is there reluctance to make large changes. And if you think about if you're switching molecules or delivery systems, they're off likely to change if they're not kind of [Technical Issues].

Oren Livnat -- H.C. Wainwright -- Analyst

Okay. And if I may, I'm sorry to drag on here. But real quickly on ELYXYB. I think Tim kind of touched on it with regards to your current business, and it sounds like, obviously, you're keeping your eye on the pride with BELBUCA, but what sort of overlap with the migraine market is there now in your footprint? Are you calling on some neurologists, obviously, pain centers treat migraine as well. If you had to ballpark what percentage of the migraine scripts or lives that are out there now? Do you think are even tangentially covered by your current footprint even if promoted in a second position.

Jeffrey A. Bailey -- Chief Executive Officer

...

Oren Livnat -- H.C. Wainwright -- Analyst

Sorry, are you there?

Scott Plesha -- President and Chief Commercial Officer

Yes. I think, Jeff you are on mute.

Jeffrey A. Bailey -- Chief Executive Officer

Sorry about that. That was terrify. No, we definitely see the potential there. Scott has a few numbers you can share. But Scott, why don't you go ahead and just highlight that with our current audience with potential for migraine?

Scott Plesha -- President and Chief Commercial Officer

Yes. Happy to do so. So Oren, this is high level data yet, and we haven't finalized infrastructure yet or anything like that. That will be a fine-tuned here. But you're looking at over 6% of the market is captured in our current targets within the current infrastructure. And that's a predominantly kind of mid- decile migraine subscribers in that space. And if you look even -- if you go back and look at even in training, a lot of times pains, lump with headache and migraine. So there's a lot of experience within the pain market, pain practices with treating migraine.

Oren Livnat -- H.C. Wainwright -- Analyst

You said 6% of the market, sorry?

Scott Plesha -- President and Chief Commercial Officer

About 6%.

Oren Livnat -- H.C. Wainwright -- Analyst

6%. Got it. Yes, And that's where we would very focused team that would focus on the highest of the prescribers. I think if you look at the way we built out BELBUCA over time, it was very thoughtful. We didn't try to build things too fast, make sure we have the right market access to support the size of our sales team and what not to. All right. Look forward to your Investor Day.

Jeffrey A. Bailey -- Chief Executive Officer

Thanks, Oren. And just to add to that is that with those relationships, with those mid decile migraine, with that to help us so much that these are relationships that were established over the years. So that's kind of us excited about something to get us out of the gate strong. Okay. So any other questions? So we -- I think we need to wrap up, we're at the bottom of the hour, correct?

Oren Livnat -- H.C. Wainwright -- Analyst

It's alright. Well, thank you for tha caller. Looking forward to you. That's for today.

Jeffrey A. Bailey -- Chief Executive Officer

Yes. Thanks Oren. And yet I'll just add to that--with those relationships, with those middle file, migraine, with that very helpful--these are the relationships that were establish --[Indecipherable]. Okay so any other questions? If we need to wrap up in the bottom of the hour.

Operator

Yes. The Q&A is concluded. You may do your closing remarks.

Jeffrey A. Bailey -- Chief Executive Officer

Okay. Excellent. So I just want to thank everybody for participating today. As you could tell, our team is really excited about the road that's in front of us that what we have right now with the addition of ELYXYB is that a diversified portfolio that includes the growth engines of BELBUCA and Symproic. And you could tell that we're very focused on keeping that momentum going, and we have a strategy in front of us just to make sure that, that happens, but also just a great differentiated asset in ELYXYB that's in front of us. More to follow as far as in the early fourth quarter as far as about the ELYXYB Day, I think that you'll find that very helpful. But thank you for participating today, and there are good questions, and we look forward to speaking to you soon. Everybody, have a great rest of the day.

Operator

[Operator Closing Remarks].

Duration: 62 minutes

Call participants:

Terry Coelho -- Executive Vice President And Chief Financial Officer

Jeffrey A. Bailey -- Chief Executive Officer

Scott Plesha -- President and Chief Commercial Officer

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Greg Fraser -- Truist Securities -- Analyst

Zach Sachar -- Piper Sandler -- Analyst

Scott Henry -- Roth Capital -- Analyst

John Kreger -- Analyst

Tim Chang -- Northland Capital -- Analyst

Oren Livnat -- H.C. Wainwright -- Analyst

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