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BioDelivery Sciences International, inc (NASDAQ:BDSI)
Q3 2021 Earnings Call
Nov 3, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings. Welcome to the BioDelivery Sciences Third Quarter 2021 Earnings Call. [Operator Instructions] I will now turn the conference over to your host, Terry Coelho, Executive Vice President and chief financial officer. You may begin.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Thank you, and good morning, everyone. Welcome to our third 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 a press releases announcing its financial results for the third quarter of 2021. 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, November 3, 2021, and the company assumes no obligation to update statements as circumstances change. An audio recording and a presentation that a Chief Credit Office mpanies 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 Chief Executive Office. Jeff?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Thank you very much, Terry, and welcome, everyone, to our company's third quarter 2021 earnings call. It gives me great pleasure to speak to you again today, following closely after our recent ELYXYB Investor Day. I hope that we were able to convey our excitement about our new neurology vertical, as well as our overall outlook for the future of BDSI. Before we delve into the details of our earnings call, I want to thank, Terry Coelho for her dedication and service to our company as chief financial officer over the past three years and wish her well in her next role. She is behind a strong balance sheet and a well-managed financial organization. At the same time, we are pleased to welcome John Golubieski as our new chief financial officer, a former colleague who has served as chief financial officer at three of my prior companies and who brings over 30 years of financial and operational expertise to BDSI. John and I are well calibrated to each other, and we are fortunate to have him on the team. There are three main takeaways I want to cover with you today. Number one, strong business growth. Our business continued to reach new highs in the third quarter, with product net sales growing 7.5 percent year-over-year, including BELBUCA TRx volume growing close to 8 percent year-over-year. I am particularly proud of this growth despite the unexpected and unfortunate situation with Alvogen, which was described in an 8-K, which we submitted to the SEC on September 21, 2021. More on that will follow.

We are incredibly proud of our nimble team responding to action immediately to stem losses to our business. We are just now beginning to see a rebound of BELBUCA prescriptions as a result. We provided guidance on September 21, of an estimated total company net sales range of $38 million to $42 million for the quarter in connection with the average situation. I am confident that the quarter's performance would have been even stronger but for the issue with Alvogen. Despite these unexpected headwinds, BELBUCA reached an all-time high TRx market share in the third quarter of 4.9 percent, complemented by an all-time high in unique BELBUCA prescribers of 8,639 which is an increase of 11 percent year-over-year. We are really seeing this broadening of the base of prescribers of BELBUCA as such an important driver for continued future growth. We're also seeing signals of stabilization in the long-acting opioid market. And Scott will walk you through what you're seeing that gives us this optimism. Number 2, as far as takeaways go, operational strategic efficiency. We've been prudently managing our expenses in the quarter and continue to generate healthy operating cash flow. In the third quarter, we generated $11.1 million in EBITDA with an attractive 27 percent EBITDA margin and GAAP EPS of $0.07, ahead of market consensus of $0.05.

This resulted in generating approximately $7 million in operating cash flow, which enables us to continue to invest in the future growth of our business and to maximize shareholder value. This quarter, we repaid $20 million of debt, thereby saving $4.4 million in future interest expense payments. We also made a $6 million upfront payment to Dr. Reddy's ELYXYB. And we ended the quarter with approximately $101 million in cash. Additionally, we strengthened our supply chain by moving to a new logistics distribution partner, and we expanded from one to two distribution centers for our products in order to derisk our business by reducing the lines on a single location. This is an important move to support our continued growth. Moreover, we have started to invest behind the ELYXYB launch while also keeping our finger on the pulse with respect to other business development opportunities and remain opportunistic about identifying additional neurology products if they are good fit with our existing portfolio. The final key takeaway, ELYXYB provides product diversity and is a third growth driver with and estimated peak year revenue in a range of $350 million to $400 million.

We are incredibly excited for the future of BDSI. We are poised for the growth of an established pain franchise and are anticipating strong momentum with the addition of ELYXYB to our neurology franchise, a logical adjacency to our current product portfolio in pain. The ELYXYB acquisition diversifies our portfolio beyond pain. By establishing a dedicated neurology sales force and allowing us to leverage our current infrastructure to manage the addition of ELYXYB in a very efficient way. It's also important to note that we have a strong team that has significant launch experience, including experience in neurology and migraine. We've been energized by the positive feedback from clinicians and the opportunity to get further integrated into the neurology community. We held a successful key opinion leader Advisory Board meeting in Chicago last month and heard their thoughts about the clinical profile, ELYXYB's place in the market and the potential to prescribe ELYXYB as the only ready-to-use oral solution for migraine approved by the FDA. This has only increased our enthusiasm of ELYXYB that we'll be launching in the first quarter of 2022. I also wanted to mention to you that we were pleased that ELYXYB was nominated for the prestigious Prix Galien Award, which recognizes innovation to improve human condition in the best pharmaceutical product category.

On the legal front, we remain confident in the validity and strength of BELBUCA's intellectual property. We can neither predict the decision the court will reach regarding the people of patent litigation or the timing of the court's decision and are not able to comment further regarding the ongoing litigation. Separately, I wanted to call your attention to an 8-K submitted to the SEC on September 21, 2021. BDSI disclosed that it had filed a motion for order to show cause of the United States District court, the District of Delaware, why Alvogen should not be held in contempt for violating the court's order of June 28, 2021. The court ordered Alvogen, not to launch its generic product until it could reach a final decision on the merits and the pending P4 case. We contend that Alvogen violated the order in or about August 2021, by among other things, offering its generic product for sale through five compendia price reporting services. As alleged in the motion after Alvogen's product launch, certain payers began declining choice coverage for BELBUCA in directing use of Alvogen's, generic substitute and/or making it more difficult for patients to obtain insurance coverage for BELBUCA. Alvogen withdrew its compendia product listings on or about September 9, 2021. The company's motion to hold Alvogen and content for launches generic product remains pending before the court. With that, I'll turn the call over to Scott to provide more details of our performance during the third quarter. Scott?

Scott M. Plesha -- President & Chief Commercial Officer

Thank you, Jeff. As Jeff mentioned, during Q3 BELBUCA prescriptions grew by almost 8,700 TRxs year-over-year to a new high of over 121,100 retail, mail order and long-term TRxs combined. This represents a solid 7.7 percent increase in BELBUCA TRxs compared to the third quarter of 2020 and sequential growth of 2 percent compared to the second quarter of 2021. BELBUCA prescriptions grew year-over-year and quarter-over-quarter. We remain pleased with BELBUCA's continued revenue and script growth and its improvement in Q3 to a new TRx market share record high of 4.9 percent, up from 4.1 percent in Q3 of 2020 and 4.7 percent in Q2, 2021. During the third quarter, BELBUCA's new-to-brand market share of 7.6 percent was generally flat relative to 7.7 percent in the second quarter and remained significantly above of its TRx share of 4.9 percent, which means there's still a meaningful opportunity to grow total prescription share as these metrics historically converge. NBRx count was similarly flat in Q3 year-over-year, while the NBRx count for the entire market was down by 6.3 percent. We believe that the NBRx numbers this quarter were negatively impacted by formulary changes resulting from Alvogen's compendia listings, which have now been withdrawn. Continuing to build BELBUCA's prescriber base is important to the brand's growth trajectory, and we're pleased to report that BELBUCA prescribers increased since third quarter by 11 percent year-over-year to 8,639 unique prescribers, a new high for the brand. Sequentially, our prescribers grew by 3.5 percent from the second quarter. We view this as extremely encouraging and expect the prescriber growth to have an increased impact as face-to-face patient visits improve over time within pain practices. Now, moving on to Symproic. Q3 2021 Symproic prescriptions also grew to a record high of approximately 19,200 TRxs, where an increase of 7.6 percent year-over-year compared to Q3 2020, with a 7 percent sequential improvement from Q2 2021.

We expect continued growth for Symproic as our NRx count increased 9.8 percent from Q3 2020, to 11,163, a new NRx count high for the brand. This significant increase in NRx count led to a new record Symproic NRx share of 14.3 percent in the third quarter as compared to a TRx share of just over 13.3 percent. This difference between NRx share and TRx share should lead to continued momentum in Q4 and beyond. Like BELBUCA, Symproic is well positioned with covered status for 89 percent of commercial lives, with 61 percent at preferred status. The ability of the commercial team to consistently pull-through the 2020 formulary wins with CVS and Prime Therapeutics, where we've seen a 26 percent increase in TRxs from the Q1 to Q3 this year has been an important part of our growth. The growth in these plants, as well as a new formulary win effective Q4 2021, where Symproic coverage improved from nonpreferred, noncovered was a step through Movantik to preferred status with no step through required, providing access to approximately 800,000 lives, gives us confidence in attaining new TRx count and share highs as we finished 2021. As we discussed on our October 14, ELYXYB Investor Call, we've been actively preparing for Q1 2022, launch. We're planning to leverage an efficient structure in our commercial organization that will allow for ELYXYB promotion within our current BELBUCA sales force, as well as with the highest potential prescribers in a dedicated ELYXYB sales force.

During the fourth quarter, the BDSI team is busy preparing for the planned first quarter launch, including supply chain preparedness, hiring for the expanded sales force, conducting training, and preparing market materials. In addition, we are focused on establishing relationships with migraine key opinion leaders, and we will be attending the American Headache Society conference this month. We are incredibly excited to be adding a differentiated and high potential products like ELYXYB to our portfolio in a large market with over $2 billion of annual sales, which represents a logical adjacency to our pain franchise. As Jeff mentioned, that leverages our commercial expertise, much of our existing infrastructure and our team's extensive experience with over 40 product launches. I am confident based on our team's proven track record that we'll be able to execute a successful launch in the first quarter of '22 and look forward to sharing additional information in the future. With that, I'll turn the call over to Terry to provide an update on the financials. Terry?

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Thank you, Scott. Total net revenue for the third quarter was $41.1 million, an increase of 4 percent compared to $39.4 million in the third quarter of 2020, and generally in line with the net revenue generated in the second quarter of 2021. This was at the upper end of the $38 million to $42 million guidance range recently provided for this quarter. Total net revenue growth year-over-year for the third quarter was 29 percent when excluding the beneficial impact of the Q3 2020, channel refresh and BUNAVAIL net revenue. Total product net revenue growth for BELBUCA and Symproic combined was 7.5 percent year-over-year or growth of 32 percent, excluding the Q3, 2020 gross to net accruals related to the channel estimates refresh in that period. It is important to note that there was a favorable impact to our product net revenue associated with the transition to our new logistics distribution partner as certain wholesalers increased their short-term inventory position to ensure supply continuity. BELBUCA net sales in the third quarter of 2021 set an all-time record of $36.9 million, an increase of 6 percent compared to $34.8 million in the third quarter of 2020 or 33 percent growth when excluding the beneficial impact in Q3, 2020 of the channel refresh.

As expected, BELBUCA gross to net deductions increased in the third quarter of 2021 as compared to the second quarter of 2021, primarily due to typical increases seen for the Medicare coverage gap. Net sales for Symproic in the third quarter of 2021 were $4.1 million, which reflects 20 percent growth year-over-year. As expected, Symproic gross to net deductions also increased in the third quarter due to the typical increases seen for the Medicare coverage donut hole. In the third quarter of 2021, we had $20,000 of royalty revenue, whereas in the third quarter of 2020, royalty revenue was $658,000. And in the second quarter of 2021, royalty revenue was $916,000. Additionally, third quarter 2020 net revenue included $574,000 for BUNAVAIL sales. Total gross margin for the third quarter was 85 percent compared to the 86 percent margin during the third quarter of 2020 and 89.7 percent in the second quarter of 2021. As a reminder, the second quarter of 2021, gross profit included approximately $1.4 million in recovery of inventory related costs, which helped to increase gross margins in the second quarter.

We expect gross margins to be in the mid-80s range going forward. Total operating expenses in the third quarter of 2021 were $25.5 million compared to $22.5 million in the third quarter of 2020 and $25.8 million in Q2 of 2021. Year-to-date 2021 operating expenses of $79 million compared to $77.4 million for the third quarter year-to-date 2020 period, include higher sales and marketing costs and higher litigation costs associated with the P4 case, partially offset by reduced G&A spend in 2021 compared to the prior year, which included costs associated with the Chief Executive Office transition in the second quarter of 2020. As always, we continue to closely manage and prioritize operating expenses. EBITDA in Q3 2021 was $11.1 million or 27 percent of net sales compared with $13.4 million or 34 percent of net sales in Q3, 2020. Year-to-date through Q3, 2021 EBITDA is $33.4 million or 27 percent of net sales compared to $26.2 million or 23 percent of net sales year-to-date through Q3 of 2020. GAAP net income for the third quarter was $6.7 million or $0.07 per share compared to the GAAP net income of $9.4 million or $0.09 per share in the third quarter of 2020. The $0.07 per share EPS for the third quarter was $0.02 per share, ahead of market consensus of $0.05 per share.

Non-GAAP net income for the third quarter of 2021 was $10.3 million or $0.10 per share and reflects GAAP net income, excluding stock-based compensation and non-cash amortization of intangible assets as compared to non-GAAP net income of $12.7 million or $0.12 per share in the third quarter of 2020, excluding the same items. Year-to-date non-GAAP net income through September 30, 2021, is $31.3 million or $0.30 per share, excluding stock-based compensation and non-cash amortization of intangible assets as compared to non-GAAP net income through September 30, 2020, of $30.6 million or $0.29 per share, excluding the same items, as well as excluding the financial impact of certain one-time items that are nonrecurring, including the discontinuation of BUNAVAIL and costs associated with the Chief Executive Office transition in the second quarter of 2020. The company has a strong balance sheet with cash and cash equivalents as of September 30, 2021 of $100.7 million as compared to $111.6 million at year-end 2020. Year-to-date operating cash flow through Q3, 2021 was $27.3 million compared to $14 million for the same period in 2020, an increase of $13.3 million.

For the third quarter, total cash on hand decreased by $19.1 million from $119.9 million on June 30, 2021, with operating cash flow generation of $7 million being partially offset by $20 million used toward an early penalty free debt prepayment of our term loan and a $6 million upfront payment to Dr. Reddy's for ELYXYB. As Jeff mentioned earlier, the $20 million prepayment will result in approximately $4.4 million of interest savings over the course of the remaining loan period. Turning to full year 2021 guidance, the company is lowering its full year 2021 total net revenue guidance range to $162 million to $167 million from $170 million to $180 million previously. The situation with Alvogen, which Jeff discussed, is a meaningful factor contributing to our amended guidance. We expect net sales in 2021 for BELBUCA to be in the range of $144 million to $148 million as compared to the range of $155 million to $165 million previously. We continue to estimate our total operating expenses to be in the range of $115 million to $120 million, including prelaunch investments to support the Q1, 2022 launch of ELYXYB.

We expect EBITDA to be at the lower end of the range of $40 million to $50 million for our ongoing base business. However, EBITDA is expected to come in below $40 million when including the ELYXYB investments. Finally, the company continues to expect that it will deliver positive operating cash flow in 2021. Now let's turn to some of our expectations for ELYXYB. Our projected long-term outlook for ELYXYB net sales is in the range of $350 million to $400 million, including preliminary estimates for the potential pediatric label expansion. As most of you know, today marks my last day with BDSI. It has been exciting to be a part of the leadership team that has driven tremendous growth in the transformation of BDSI over the past three years. It has truly been a pleasure working with this team and a Chief Credit Office mplishing as much as we have. I'm also very proud to be leaving BDSI with a strong balance sheet based on profitability and solid cash flow generation and thoughtful financings at the right times. It has been a pleasure interacting with the equity research analysts and so many of our investors. I will now turn the call back to Jeff for some concluding remarks before we open up the call for Q&A. Jeff?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Thank you, Terry. This has been a transformative quarter for BDSI for a few different perspectives. First, our growth continues, and we hit new record highs in market share and script volume for BELBUCA and Symproic and record net sales for BELBUCA. Second, with the acquisition of ELYXYB, we expanded and diversified our product portfolio into the exciting neurology sector, focused on the multibillion-dollar market for acute migraine products. The strategic fit between pain and neurology allows us to leverage our current structure and adds ELYXYB in a very efficient way. That gives us greater breadth of business development opportunities going forward. And third, our employees [answered] the call to maintain operational excellence and build further growth. I want to take a moment to thank our employees for their continued commitment and strong execution. We are very optimistic about the company's next chapter for patients, providers, employees and our shareholders. We'll now take your questions. Operator?

Questions and Answers:

Operator

Thank you.

[Operator Instructions]

One moment please before we pull four questions. And our first question is from Brandon Folkes with Cantor Fitzgerald please proceed with your question.

Brandon Richard Folkes -- Cantor Fitzgerald & Co., Research Division -- Analyst

Hi, thanks for taking up my question. And congratulations on good results, obviously, with the backdrop. So I guess, maybe just firstly, I just wanted to delve a little bit into the, I guess, Alvogen actions in the market and 8-K that you did file earlier in the year. I mean, do you believe you are seeing a continued disruption in the BELBUCA market from those -- the disruption or do you think we've moved past that disruption now and we sort of back to a bit of a closer to a normal environment? And then secondly, maybe just sort of -- it goes hand-in-hand, so I'll ask it.

Can you just pass out the impact that you're seeing in the chronic pain space in general and descriptions across the board, do you seem to be a little bit depressed. Are patients just staying on their current therapy? Is there a hesitancy to change therapies in the current environment? And if so, is this kind of from a patient side, the physician side or is it really just -- just a lower patient flow into the office? Any color there would be helpful. Thank you.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Well, first of all, good morning Brandon, and thanks for the questions as always, hope you are doing well. Yes, let me take the first part. This is Jeff, and then I'll turn it over to Scott for talking about just the long-acting opioid market. On the Alvogen front, yes, we still see some effect. We see it dissipating at this point, with our team, I could not be more proud of that. You know, when the issue came up and we became aware of the Alvogen action in the marketplace, we jumped on that immediately back in the middle of August. And you know just to remedy that is quickly as possible. And then eventually, of course, Alvogen removed their pricing from the compendia. So our team has been all over that. So that was really helpful. I mean that created the divot a bit in the quarter, but we've really made great progress since then.

We do see some residual effect, but it's -- we believe it's on the lower end at this particular point. We're on the good side of all that. So that's really important. Now we're seeing -- return to growth and all-time high product market share, stuff like that coming to play. So that's been managed really well. I really -- I'm so proud of our team as far as the execution and what's played through there with a real curveball. That's just something that's very unusual in the marketplace and also reflect on just part of that -- all the different players when it comes to like the electronic medical records folks, the payers, et cetera. They've never seen anything like that before. So our team really had to break some new ground as far as being able to remedy that. So some really good stuff based on the execution by Scott's team as far as to be able to manage that. So that -- I hope that answered your first part of your question as far as -- right now, there is some effect that's ongoing, but it's -- it has been on the minor end based on the work so far. So let me turn it over to Scott to answer the second part of your question about the overall market question. Scott, all yours.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Thanks, Jeff. Good morning Brandon. So first of all, I think what we see as a positive in the LAO market right now, is that it seems to have really stabilized on the TRx side of the market. So for example, I think if you recall, Q1, there was a very large decline in the marketplace itself, almost down 6 percent quarter-over-quarter. And then what was encouraging to see was actually a bounce back in Q2, almost up 1 percent, only down about 1.3 percent quarter-over-quarter in Q3. So when you look at those three quarters sequentially, it's pretty flat. So that's stabilized. And that's encouraging because even in past years, we've seen larger declines in that quarter-over-quarter. So that's a positive. I think the one thing, though, that's still a headwind is patient visits, face-to-face patient visits. Based on IQVIA data, recent data, the pain market still really trails dramatically a lot of the other therapeutic areas.

So if you look at, for example, September was down over 40 percent face-to-face visits versus pre-COVID levels, baseline levels. And then there are tele-visits also, telemedicine visits as well, but those haven't compensated for that fully. So that is a little bit of a headwind. I think mid-year, we started to see things trend back up where we felt like it was improving. Then I think COVID spiked again and it's probably had another impact on it. And so because there's a decline in face-to-face visit, pain physicians tend to want to make changes in therapy face-to-face a lot of times. So we do think that face-to-face visit are critical. And as that goes up, we should start seeing our -- the market reflect that as well. The positive we brought up in our script was the all-time high end prescribers. And we saw a pretty nice jump in prescribers for the quarter, one of the largest ones we've seen in the last six to eight quarters. And I think that's important. So as the patients go back into these offices for face-to-face visits, that should play well for our script growth. Brandon, did I cover what you're looking for there?

Brandon Richard Folkes -- Cantor Fitzgerald & Co., Research Division -- Analyst

You did, very well. Thank you. I appreciate the color.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Alright, thanks Brandon.

Operator

And our next question is from Scott Henry with ROTH Capital. Please proceed with your question.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Thank you and good morningAnd Terry, good luck. It's been a pleasure working with you these past couple of years. A couple of questions, the first is, do you have any color on how we should think about the ELYXYB ramp? The initial quarter be very minor, just trying to get a sense, and I did miss the first couple of minutes of the call if you commented on that.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

So Scott, good morning. This is Jeff. Yes, we did not comment on that specific. So that back to the analyst call, of course, we gave our view of the long-term picture as far as peak year sales into the 2030s as far as peak year sales of $350 million to $400 million. We've not given guidance for next year yet. I think when you take a look at, we're at unique situation we're able to watch a couple of recent launches into the market. And you can imagine our algorithm as far as being able to look at that. And we have the payer piece critical here we know that. And of course, we have all the marketing tactics and the experience on the team as far as not only just many launches by the team in neurology, but also specific to migraine previously.

So we have some really good experience here about the execution plan in place and really a spec pharma targeting plan, very similar to the playbook that's worked well for us with BELBUCA. So it's just very targeted and efficient is our approach. So when it comes to the ramp next year, I think it's what you would expect. So in the first quarter, when we do launch is going to be -- it's going to be a lot about just getting the payers on board, and we see it as a steady climb next year to be able to get through that the fourth quarter by then. I think that's where we really see that we'll be getting some traction in the marketplace. So we're not giving specific numbers yet, Scott.

You'll get that from us early next year. But it's one where it's also something that really gets us really exciting here. The ongoing market research, when it comes to our confidence in this only continues to grow. We have just done, as Scott highlighted, a major venue with a few sessions with key opinion leaders in Chicago, and it was really, really -- just got to see more excited about where this thing is going overall. So we're not in a position to give you the specifics yet, but it's one where we're really feeling good about where we get as time goes on with ELYXYB. So I hope that was helpful, Scott.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

That was helpful. Thank you. And then, just shifting on to the model, I guess the one thing that jumps out at me, the most is the operating expense guidance of $115 million to $120 million, would seem to imply a significant boost in fourth quarter. Is that the case or maybe I'm misinterpreting the guidance in some way?

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

So, hi Scott. So, it's inline, that's the range we've been guiding toward all year. I think we've been able to very effectively manage our spend, even as the revenue has been a little bit softer than we had expected. But we are preparing for launch. We're -- there's -- you'll see a slide in there where we're talking about a number of things. We're hiring for the expanded sales force. We're getting all the marketing materials ready, training materials for the -- all the sales force to take on. I think, supply chain preparedness. So there's a number of different areas that we're getting -- spending to get ready for the launch.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Okay, thank you for that color. And Terry, I guess it would only be appropriate that my last question for you be, when you would expect to report as a fully taxed company. We've got two years of positive quarterly numbers. Typically, one would take a gain for the tax and start taxing fully. I just want to get a sense. Would you expect that to happen in 2022? And I promise I won't ask you this question again.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

You won't be able to --

Jeffrey Allen Bailey -- Chief Executive Officer & Director

I'll be asking John that question, [Indecipherable] is in the room as well.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

But Scott, look, we're looking at it for sure, it's a consideration. It could be this year, it could be next year, but it is something that we are keeping a close eye on.

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Okay, thank you for taking the question.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Absolutely.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Thank you, Scott.

Operator

Our next question is from the line of Tim Lugo with William Blair. Please proceed with your question.

Unidentified Participant -- Analyst

This is [Indecipherable] on for Tim. Thanks for taking my question. I guess, first of all, Terry, I think you mentioned that there were some inventory build at wholesalers in the quarter ahead of the -- sort of transition of distributors. Can you maybe quantify that or just help us think how much sort of pull-forward that was from fourth quarter potentially? And then on the topic of ELYXYB launch, and I think, Jeff, you mentioned you're getting payers on board in the first quarter and so on. How much is -- on the topic of payers, how much can you get done ahead of this first quarter? I mean, will you be on formularies by the time you launch? Or is that really not going to start happening until you're actually launching the first quarter?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Terry you want to go first, and then -- take the second -- Scott, will take the second please.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Yes, so just on the -- your voice had cracked out a little bit. So I think I captured your full question. But we did have some of the -- a couple of the wholesalers buy in a little bit, just wanted to make sure they've been through transitions like this in the past where companies have had glitches, and they wanted to make sure it was not very large the impact. We're not giving exactly how much it is. But a few of them bought into the first week of October, just to be -- actually not even a few, a couple of them to just be sure they'd have enough to bridge any glitches that could happen. Does that address -- you said something about the fourth quarter, but OK, all right.

Unidentified Participant -- Analyst

Yes, that is all. Thanks.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

And then the second part of your question, I believe it was tied to, what do we expect as far as formulary when it comes to ELYXYB and the uptick there. And so, a lot of great work has been going into that by Scott's team. If you imagine with the major players, I think -- we've also had this really interesting seat to be able to see data and see how some other players have approached it in the migraine space. So it's kind of -- you see the kind of a framework, a playbook in front of us about how to sequence it, so I want to make sure everybody is really well aware of that, that we're really in tune on that end. And also our leadership on the managed market end is really top-notched and very experienced. And so, I'm going -- let Scott go ahead and weigh in about timing and things like that. But it's also -- we do see some impact potentially in the first quarter. But as the year goes on, that's where -- just as you would expect, more leering in. Scott, do you want to go and just expand on that.

Scott M. Plesha -- President & Chief Commercial Officer

So we've been working hard since the deal closed unfortunately, there's a short timeframe to -- a window that we have to launch. So what's been very positive as we've already had clinical reviews at two large PBMS actually, one of them just did a second review also on that side, and we're actually getting an expedited review at one of the payers that literally, a lot of times won't even review you for the first six to 12 months. So that's been pulled forward. Our goal is to bring them on as -- fast as their system can, while making sure we have a contract that makes sense for us. We are very encouraged. We feel like we're going to be able to contract with the three largest commercial payers. And it will probably be staged over time. So one could possibly be near at or near to launch, very near launch, probably a little bit more later in the year and then possibly 2023, the last one come on board. But we're going to do everything we can to pull this forward. I think the way to look at this, though, is we're going to have a very robust patient services program in place.

We wanted to assure that a commercial patient that gets prescribed, ELYXYB receives it. So early in our launch, even if do not have all the commercial coverage lined up, it's going to be about -- patient trials, building prescriber bases and making it as seamless as possible. So that they don't even feel that there may not be covered yet. So that will require us having some robust programs in place. But over time, as we add the formulary coverage, those will get pulled back. But in a way that again, the patient or the healthcare providers don't feel or see that. So that's the way to work for us.

Unidentified Participant -- Analyst

Okay, thanks.

Scott M. Plesha -- President & Chief Commercial Officer

Thank you.

Operator

And our next question is from Tim Chiang with Northland Capital. Please proceed with your question.

Timothy Chiang -- Northland Capital Markets, Research Division -- Analyst

Hi, thanks. Jeff, I think you mentioned -- or maybe with Scott, you mentioned that face-to-face physician visits are down 40 percent. Where do you see that figure next year, I mean do you see it still being down considerably in 2022?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Yes, I'll let Scott reflect more in detail on that. But I think it's something that -- it's quite unique about the pain market compared to other specialties. So as far as that goes. And it comes back to some things we've seen like during COVID, where some of the capacity has been reduced with some satellite offices that were closed. But also some of the mid-levels, like the worst practitioners, the physicians systems that transition from pain to some other spaces. So there's less capacity there. So we think that, that's in play. We do see that there's some things in the market that will bring back more capacity to that world. But it's also one where I think we need to make sure that we're doing everything possible to maximize what we have there. So I think going forward, that it seems that it's trailing other specialties.

But I want to bring it back to this point about what we are seeing, which is really encouraging at our end is the base of prescribers that are using BELBUCA is growing so nicely. You probably saw from the one slide during the presentation that we are doing in spite of the patient face-to-face business being down, we're getting a broader base there. So that's really, I think, helping drive us to move volume highs and market share highs, the fact that we're getting a much better, stronger breadth of prescribers that are coming into play. So growing the BELBUCA prescribers by 11 percent over a one year is -- based on my past experience, is quite remarkable. And the trend is consistent that we're seeing that's coming into play. So getting more prescribers than that.

So what we're doing also within the framework to say, look, it's a market dynamic that we don't control. But what do we control is getting more prescribers using our products. So this is also the combination of not just what our reps are doing in the field, which are doing outstanding job. But on the marketing unit, our CRN data bases are growing so nicely. What we're doing with prescribers and also with patients that's really helping us kind of behind the scene. So it doesn't get back to -- hopefully, you see where our team, we just don't report like what's going on. It's like, what are you doing about it? And so we're growing both share and volume despite the fact that those visits are down. Scott, do you want to -- anything else you want to add to that?

Scott M. Plesha -- President & Chief Commercial Officer

Yes, I just think, Jeff touched on a little bit, but we do feel like some of the capacity, for example, satellite offices and some of the practices have scaled back a little bit, especially on their mid-levels, the nurse practitioners and physicians assistants. So I do believe that the patients are still out there and that over time, especially as COVID cases continue to decline, that -- they'll get busier again in the offices. And I think if patients are stable right now, they're less likely to go into the office based on current COVID dynamic. But I think we're confident, again, as Jeff said, we're building prescriber base. The market starts coming back, with that will have a nice impact, positive impact on our business going forward.

Timothy Chiang -- Northland Capital Markets, Research Division -- Analyst

And maybe just one follow-up. I mean, obviously, there's been this boom in telemedicine. I mean what sort of leverage might you have next year for the ELYXYB launch, I mean, is it possible to partially launch ELYXYB through a telemedicine channel?

Scott M. Plesha -- President & Chief Commercial Officer

That's a great question. And we're not giving all the specifics on our tactics and strategies. But what I will share with you is that we are looking to actively partner with different telemedicine platforms, specifically those that are working in the migraine space. So you'll see us actively pursuing those channels.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

We really think the current profile fits nicely to your question. So yeah, we're excited about that. That's an important part of our world.

Scott M. Plesha -- President & Chief Commercial Officer

Yeah. The only thing lacking on telemedicine in the space is if you don't have samples -- we think samples will be crucial, which we'll be sampling very generously. So -- but there is a lot of telemedicine use in the space, and we're aware of that. And again, we'll be partnering there.

Timothy Chiang -- Northland Capital Markets, Research Division -- Analyst

Okay, great. Thanks!

Scott M. Plesha -- President & Chief Commercial Officer

Okay, thanks Tim.

Operator

[Operator Instructions] Our next question is from David Amsellem with Piper Sandler. Please proceed with your question.

David A. Amsellem -- Piper Sandler & Co., Research Division -- Analyst

Hey everyone this is Zack on for David. Thanks for taking my question. So just another one from me following up on the chronic pain market discussion. Do you guys see telemedicine having a meaningful role in this market even once we get past the pandemic? And if you do, how do you -- how does that impact your commercial and promotional efforts for BELBUCA going forward?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

So Zack, thanks for the question. Yes, it's interesting in this space. I mean, market research keeps on playing back that for patient switches to new medication that for most prescribers, it requires a face-to-face. They want to see the patient face-to-face. And telemedicine here is I think is what we're learning since [Indecipherable] touch point. But the real changes to new medication actually really could play off the patient business. So going forward, being telemedicine plays a role in this market, but it's not one that's the primary driver because keep on coming back to those face-to-face venues being so much and especially with BELBUCA, where it's not only just the switch, but it's also like the demo that takes place.

These offices have really got good. Our reps have really done a great job as far as training the staff about how to go ahead and use the product, and all that stuff It's very simple to use, but it needs to be demonstrated for like a new patient. So the face-to-face needs a lot to us specifically. So in telemedicine in general, in this marketplace, it's just different than some other therapeutic areas where it's a touch point telemedicine in this but not really where the switches take place. Scott, anything else you want to add to that?

Scott M. Plesha -- President & Chief Commercial Officer

Yes, I do think it's valuable for a patient that's stable, doing well on therapy already. It's a good touch point to follow-up. All the data suggests that the NBRx productivity of the telemedicine call is nowhere near a face-to-face, not just our product, but others and all markets for the most part are that way. So as far as like driving growth, it's still going to be that face-to-face visit majority of the time.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

And just reiterate, prior to I mentioned before Zach, our tactic within that, the fact that they will switch necessarily on telemedicine in a face-to-faces are down. But we are still excited about the fact that our strategy has been to broaden and the breadth of our prescribers, and that's growing so nicely, and that really helps us as far as to counter that part of our visits which been going on. So it's working for us as far as we take a look at our share of volume growth that continues despite that market dynamic.

Scott M. Plesha -- President & Chief Commercial Officer

The one thing I'll add on the telemedicine side, while we haven't partnered with any platforms there. One of the things we've done over time here are marketing, our digital marketing has become quite sophisticated. And we actually know where the pain management prescribers where they go digitally. And we're actually advertising in those locations to impact those that might be doing more telemedicine. So it's not like we're not in the area, but we actually do focus some non-personal and basically digital promotion in those spaces where -- doctors are on telemedicine platforms actually go for their information.

David A. Amsellem -- Piper Sandler & Co., Research Division -- Analyst

That makes sense. And then just one quick follow-up on that. What is the current mix of the sales force -- and sales force detailing that is being done in person versus virtual as of now? Is that still down versus pre-pandemic levels?

Scott M. Plesha -- President & Chief Commercial Officer

Yes, so we're still seeing face-to-face business down anywhere from like 12 percent to 15 percent over where we were before. But probably 95 percent to 97 percent of our interaction is face-to-face, very little virtual detailing going on our part right now.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

I think during the early part of COVID, the offices are super receptive to virtually because they got it to say look, this a different interaction to take place. I think what we've learned from the field is that the offices have become fatigued by that sort of approach. And now that they have the patient flow and certain practices coming through, it's back to face-to-face so it's kind of game on from that perspective. Face-to-face are down a bit for a rep to prescriber, but it's a very high percentage, it's almost 100 percent, as Scott said, for being face-to-face now.

Scott M. Plesha -- President & Chief Commercial Officer

Not a lot of offices closed down to us access wise, but maybe frequency has impacted a little bit. Maybe you can't go in there quite as often, and that's an office-by-office basis -- at the territory managers have to decipher and work through.

David A. Amsellem -- Piper Sandler & Co., Research Division -- Analyst

Thank you so much.

Scott M. Plesha -- President & Chief Commercial Officer

Great, appreciate it.

Operator

And our next question comes from the line of Oren Livnat with H.C. Wainwright. Please proceed with your question.

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Thanks, can you hear me? First, I just want to say, so long to Terry it's been grand. Good luck in your next endeavor.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Thanks Oren.

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

So just to talk about the dynamics. You've touched a couple of times on how telemedicine isn't really sufficient to drive therapeutic switches and new starts, which totally makes sense. But that reminds me, like a couple of years ago, we were talking when you had Investor Day and you were so earlier in the launch, you were talking a lot about what the process is to switch a patient from, let's say, another long-acting opioid or from IR to ER? I'm just curious, what is the current state-of-the-art with regards to necessary down titration and up titration of existing opioid treatment. I'm just curious how easy is it to switch now? How hands on does the process need to be and I have a follow-up?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Scott, do you want to take that one?

Scott M. Plesha -- President & Chief Commercial Officer

Yes, thanks for the question, Oren. So we obviously -- we have our label or prescribing information so that has not changed one bit. So depending on the level of opioids are on prior to switching to us, they get tapered down to an appropriate dose and then basically, they'll be transitioned over to BELBUCA. And they can either come off their other opioid or they may be on a low dose of it, and then they will titrate up over time. And a lot of times, what they'll do is get down to 30 MSC, be placed on BELBUCA and then with the goal of even further lowering their short-acting opioids as they titrate up. So it's definitely different than we see with other products.

If you're switching from a like molecule to a like molecule from short-acting to long acting, it isn't always as complex as that. So that's why the face-to-face visit I think is important. And also, if you remember obviously, the delivery system here using a film versus taking a tablet is quite different. So it's making sure the patient knows how to apply it and whatnot. Offices have gotten very skilled. I think the new launch you're sharing here, maybe the question behind the question is, there are a lot of physicians that are very comfortable now in transitioning patients it's easy. But when they have a new patient who's not had BELBUCA before and had a film product, they want to be able to demonstrate that for them or have some of their office do that. So that's where it becomes important on these cases.

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Okay, and just a follow-up on the ELYXYB launch, so it sounds like you guys will be quite focused on minimizing friction, so to speak, and making sure whoever writes this sampling it even aside, whoever writes this, drug will hopefully get to the appropriate patients. So should we just assume -- I don't know if we even no pricing yet, I could have missed it. But should we assume that gross to nets in the early days, sort of regardless of where we see the scripts going that we should assume sort of realized net value per script will be quite depressed early on?

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Terry, do you want to take that one. Yes I'll go ahead and take that one. Yes, so just as you would expect again, we're pulling the playbook, it's amazing the data there to watch some of the other players that are out there that just launched over the last couple of years. And as you would expect, I think that if you take a look at some of their numbers, we feel we're really making that. So yes, the gross nets will be high in the early innings of this. As we get deeper into the year next year, we see that dissipating eventually normalizing to about what we're used to as a company over time. But it's one where in the early innings it will be -- I guess, if you take a look at some of the other products recently launched, that we see something very similar on the gross to nets as far as that goes. So I think you have it right, Oren as far as the way to think about that so anything else, Scott, Terry?

Scott M. Plesha -- President & Chief Commercial Officer

No, just Jeff spot on, and it's exactly what I stated earlier, we'll see probably as we pull back our -- we're able to pull back our services as we bring formularies online, then the gross to nets will improve based on that. And we're really going to be focused on, again, patient trials, getting exposure to the product to patients, appropriate patients and adding prescribers in the short run here. That's really what it's all about.

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

And I haven't missed any pricing announcement, that hasn't happened yet, correct?

Scott M. Plesha -- President & Chief Commercial Officer

No, we have not. We haven't provided that externally to anybody yet.

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

Great great, alright thanks! Appreciate it.

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Thanks Oren.

Operator

And we have reached the end of our question-and-answer session. I'll now turn the call back over to Jeff Bailey for any closing remarks.

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Well, thanks, everybody, for participating today. And hopefully, you saw there's a lot of good stuff that we were able to a Chief Credit Office mplish in the third quarter with some interesting things happening in the marketplace. But just really proud of our team about what's playing through. And just the fact that our products are hitting new volume and market share highs, just something really special I think you will take that away. The other one is ELYXYB that you could see we're really setting up for a really outstanding launch with really using the experience of the team to play through.

So really, the next chapter of our company we're so excited about this, about where we are, where we're going in so many ways. And as we wrap up, just once again, thank Terry for all the impact that she's had and also welcome to John, who's also in the room here, it's a smooth transition between the two team members there. And just thank you so much for your participation today. Everybody, have a great rest of the day. Thank you.

Operator

[Operator Closing Remarks]

Duration: 55 minutes

Call participants:

Mary Theresa Coelho -- Former Executive Vice President , chief financial officer & Treasurer

Jeffrey Allen Bailey -- Chief Executive Officer & Director

Scott M. Plesha -- President & Chief Commercial Officer

Brandon Richard Folkes -- Cantor Fitzgerald & Co., Research Division -- Analyst

Scott Robert Henry -- ROTH Capital Partners, LLC, Research Division -- Analyst

Unidentified Participant -- Analyst

Timothy Chiang -- Northland Capital Markets, Research Division -- Analyst

David A. Amsellem -- Piper Sandler & Co., Research Division -- Analyst

Oren Gabriel Livnat -- H.C. Wainwright & Co, LLC, Research Division -- Analyst

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