Jaguar Health, Inc. (JAGX) Earnings Call Transcript & Summary

Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product and technology initiatives including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management's current assumptions, expectations and projections about the future events. While management believes that its assumptions, expectations and projects are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed on the call for a variety of reasons, including those described in the Forward-looking Statements and Risk Factors sections of the company's Form 10-K for the year ending December 31, 2019, which was filed on April 3, 2020, and its other filings with the SEC are available on the Investor Relations section of Jaguar's website. Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in the presentation to reflect new information, future events or otherwise. Additionally, please note that the company supplements its condensed consolidated financial statement presented on the GAAP basis by providing gross sale, non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar Health believes that the disclosure items of the non-GAAP measure provides investors with additional information that reflects the basis upon which the company management accesses to operate the business. These non-GAAP financial measures should not be viewed in isolation or a substitute for GAAP net sales and GAAP net loss and are not substitute for or superior to measure of financial performance in conformity with GAAP. After Lisa's presentation today, there will be an opportunity to ask questions. At this time, it is my pleasure to turn the call over to Lisa Conte, Jaguar Health's President and Chief Executive Officer. Lisa, the floor is yours.

Thank you very much, John. Thank you all who are on the phone, on the web here, and thank you very much for joining our call today. My name is Lisa Conte. I am the founder and the CEO of Jaguar Health and our wholly owned subsidiary, Napo Pharmaceuticals. Sometimes I use those terms interchangeably, Jaguar and Napo. As always, I want to begin today's call by giving my heartfelt thanks to our dedicated team, many of whom have been working with me for over 20 years with one goal in mind, providing responsibly and sustainably harvested plant-based prescription medicines to people in need around the world. As John stated, we will have a brief question-and-answer period at the end of the call, and we will do our best to get to as many questions as possible in the time available. As most of you joining us today are likely aware, Jaguar's special meeting of Stockholders, which was held on Wednesday of last week, was adjourned until December 22, next Tuesday. We decided to schedule today's investor call for 2 important reasons: one, to provide you with updates -- business updates since we sent out the proxy statement for the meeting, specifically, information related to our recently announced plans to develop and commercialize crofelemer, our proprietary drug, for an indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea initially to be studied in a long-hauler COVID-19 recovery patient population in Europe. To support this potential development project, as announced, Jaguar is forming an operational subsidiary in Europe, which we are currently calling Napo EU. More to come on this important topic. Our second reason for hosting today's call is to explain why Jaguar's Board of Directors and management, myself, here today, are strongly encouraging stockholders to vote in favor of the proposal to provide the Board of Directors with the discretion to implement a reverse stock split, not implement a reverse split, only the discretion to do so in the event it is necessary in the future to maintain the company's NASDAQ listing. Any action would be based on the premise that it is in the company's and stockholders' best interest to remain listed on NASDAQ. Quite specifically, the NASDAQ Review Board is considering giving us up to the full 6-month extension, which would be until March 10, 2021, to get our stock closing price over $1 a share for 10 trading days. This is an extension for which we qualify, though the full 6-month extension period has not been granted to us. At this time, there is no intention or rationale to implement any actions by the Board. Our desire is to achieve compliance with the NASDAQ bid price requirement organically, meaning company value recognition and stock price appreciation to over $1 a share. Peter, we have Slide 1 up, I believe, and we've had some nice volume and company value recognition coincident with the activities to establish Napo EU. However, this is important, this is very important. We need to demonstrate to NASDAQ that we have the capability to adhere to NASDAQ's bid price requirement or the NASDAQ Listing Qualifications panel is unlikely to grant Jaguar and extension to May 10, 2021, the 6-month extension date. Since we don't currently meet the dollar per share bid price requirement, we wouldn't qualify for NASDAQ listing without this extension. It's a bit of a chicken and egg here. The vote allows the best situation for the company to be granted until March 10, 2021, to get new compliance by having the stock over $1 for 10 trading days. Again, we will not implement the reverse split upon the successful completion of the vote. The bottom line is that we are committed to staying listed on NASDAQ and showing we have the capability to do that. To demonstrate to NASDAQ that we have the capability, we need to have the vote, so they give us the extension. It's also worth mentioning that the 2 largest proxy advisory firms in the U.S., Institutional Shareholder Services and Glass Lewis, both of which provide voting advice to large institutional investors, have issued guidance recommending that institutional investors vote in favor of Jaguar's proposal related to the possibility of a reverse split, the discretion of -- to do a reverse split. More importantly, all long-term large shareholders with whom I have contact have voted in favor of the split, including those who have invested in crofelemer for over 15 to 20 years. Only stockholders at the close of business on the record date, which was November 6, 2020, are entitled to, and are being requested to vote. Jaguar's stockholders who have already voted do not need to vote again unless you would like to change your vote if you voted against and you would like to vote for. So you may change and recast your vote. Please, please vote before Monday, December 21, at 11:59 p.m. Eastern Standard Time. And here is the instructions, and then we'll have it up on the slide at the end here. Stockholders of records may vote by Internet at www.voteproxy.com. You can vote by telephone 1-800-776-9437, and this is 24/7, or by returning the properly executed proxy cards. Stockholders who hold shares of Jaguar stock in Street name may vote through their broker. Street name stockholders requiring assistance with voting their shares are encouraged to contact Jaguar's proxy solicitation firm, [ Jordson ], and that number is 1 (866) 821-0284. And those hours for [ Jordson ] are Monday to Friday, 9 a.m. to 11 p.m. Eastern Standard Time, and Saturday from 12 noon to 6 p.m. again, Eastern Standard time, not on Sundays. Peter, if you can go to Slide 2, please. Okay. Now on to the exciting and important product and company developments since the proxy statement was filed and mailed out. This past Tuesday, we completed the initial European roadshow, virtually, I was especially distanced at home virtually, with Swiss Growth Forum, which was there in person. A sponsor of the European Special Purpose Acquisition Company, or SPAC, called the Post Pandemic Recovery Equity SPAC incorporated in Milan, Italy, which is the second most active market -- financial market for SPACs after the United States. We are quite pleased to have a European subsidiary of Napo, Napo EU, be the named target for a potential merger with this SPAC, which is seeking investment between EUR 20 million and EUR 50 million, which is about a little less than $25 million to a little over $60 million. Napo EU, which will be a private company, will have an exclusive license to crofelemer, our novel, proprietary drug for the indications of inflammatory diarrhea and the current approved indication of crofelemer, Mytesi in the United States HIV-related diarrhea, and this is the exclusive license in Europe, excluding Russia. And Napo EU will have obligations to develop crofelemer for the indications of inflammatory diarrhea. Initially tested in a long-haul post-COVID recovery patient population, the inflammatory diarrhea is broader than that in the number of patient populations that are affected. All right. What is long-hauler post-COVID recovery patient indication? COVID's only been around for about 10 months. So Peter, if you could go to Slide 3, please. The term long-hauler, like a term chronic COVID, refers to COVID-19 survivors who suffer with a constellation of symptoms which may include gastrointestinal distress, i.e., diarrhea, could also be nausea, pain, constipation, as well as fatigue, brain fog, forgetfulness, cardiovascular effects, arthritis, for an extended period after recovery. It's theorized that these symptoms may result when the immune system in COVID-19 survivors continues to overreact even though the infection has passed. And long-hauler syndrome, and this is so new, there's not longitudinal studies, what you have are reports that are popping up around the globe that are seeing the same thing. Long-hauler syndrome appears to be predominant in younger COVID recovery patients and those who experienced a mild or asymptomatic case, in some cases, those who didn't even know they had COVID. There are clinics that are popping up all over the place. There was a recent report of 40 clinics for this post -- this long-hauler recovery situation, clinics focused on that 40 throughout the U.K. Diarrhea is important because it's the first symptom that can be observed. So you could have chronic inflammation in your heart tissue and not know until you have a cardiovascular event, but you know when you have GI inflammation and you have diarrhea. That gets the patient in for early diagnosis and intervention in support of efforts to mitigate long-term chronic illness. So we're going to give you a point illustration here. And if those of you who on the web, Peter, can you now play the video? [Presentation]

Thank you Peter. So I hope many of you, probably not all of you, were able to see that. I'm not sure you're protected but it's pretty powerful, and there's cases like that all over the world. So Peter, if you go to the next slide. Our focus on this new potential indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea where crofelemer is driven primarily of the emergence of these long-hauler COVID recovery patients. As I said, there's reports that are popping up all over the world, at some point anecdotal reporting that is exactly the same or remarkably similar around the world becomes data, becomes evidentiary data. Enteropathy and inflammatory chronic syndrome typically affecting long-term HIV AIDS survivors brings on chronic diarrhea, leaky gut chronic diarrhea. And this is within, and is being prescribed within, our current approved indication for crofelemer, trade name Mytesi, in our HIV diarrhea indication. We believe this situation that is already being prescribed an inflammatory diarrhea in enteropathy patients in people in with HIV, is analogous to what we're seeing right now in COVID-19 recovery patients who are suffering from long-term diarrhea, chronic or chronic episodic and other gastrointestinal dysfunction. So the next slide here, how big is this market? How important is this market in terms of number of patients that can benefit? By way of example, it's estimated that up to 25% of people in the U.K. have already been infected with corona, okay, the virus that causes COVID. And it appears to be the general consensus that around 30% of COVID patients end up suffering from long-hauler syndrome. So now with infection rates growing the way they are, and this was a report from a couple -- about a month ago, we believe it's possible that 10% to 15% of the global population is at risk of experiencing long-hauler syndrome. It's our assessment that the market for crofelemer for a potential indication of an inflammatory diarrhea in Europe as well as elsewhere around the world initially be developed in Europe, but that data will then be expanded and studied elsewhere around the world is quite sizable with an addressable population possibly as large as 25 million people in Europe, over 40 million if you include the U.S., North America, and potentially more than 100 million people worldwide, more than 100 million people worldwide. Episodic chronic or episodically chronic. Next slide, Peter. Our intention is to focus the clinical exploration for this development project in Europe where, why Europe, single-payer health care systems focus and have a greater tradition on preventative measures to diagnose and treat symptoms that can be a precursor to potentially chronic illness. And therefore, to mitigate the enormous burden both financially and from a perspective of wellness and productivity of the patient population, which may, in fact, be a younger population with possibly decades of long-term disease management ahead of them. The endpoints being explored for clinical trials will be reminiscent of what we're doing, will be -- will remind you of what we've done in HIV and in cancer therapy related diarrhea. And they would include prophylaxis and/or symptomatic relief of diarrhea; reduction in inflammatory gut markers, gut biome restoration, which is similar to what we were doing in HIV patients right now in a study that just completed enrollment and reduction in viral fecal shedding, which can contain the contagion factor. So now, hope bit of education on SPACs, which I myself have been learning about very, very quickly here. The way a SPAC works is the corporation, the SPAC corporation, raises funds in a public offering with a theme such as post-pandemic Recovery Equity. And it's -- the theme is to be executed upon by the SPAC sponsors. So what does that mean, executed upon? There are no assets in the SPAC at the time the funds are raised. After the funds are raised, the SPAC sponsors have 2 years to merge with or acquire an entity within their team, which is typically a private company. When a SPAC fails, what's the risk here? When a SPAC fails, it's usually because they never find a suitable target with which to merge in a predetermined amount of time, which typically is around 2 years. In the United States, target companies, a target company is a company with which the SPAC will merge or acquire. They cannot be named with SPAC's information in seeking investors. These are big now, according to an article published this past Monday in Market Insider, SPAC initial public offerings this year accounted for 52% of the $124 billion raised in 356 U.S. public offerings. This is according to Goldman Sachs. And SPACs looking to merge with or acquire another company could drive $300 billion in M&A activity over the next 2 years. They are clearly quite popular and in vogue, in the financial marketplace. In Italy, which is, as I said, the second most common financial exchange for SPACs, a SPACs target company can be named while the SPAC is in formation and seeking investors, which mitigates the main risk of SPAC financing. The investors are investing in a SPAC with no assets, yet, they know what the target merger, they know what the target acquisition is going to be. That is why Napo EU, which is private, which is private and is a wholly owned subsidiary right now of Jaguar Napa in the United States as it is being formed, was presented on the roadshow hosted by the Post Pandemic Recovery Equity SPAC sponsors in Europe. The parent company, Napo Jaguar US, will enjoy a license fee from the merged entity Napo EU and the SPAC, the Post Pandemic Recovery Equity SPAC, and will also have equity ownership in the merged Napo EU SPAC upon successful funding of the SPAC. Remember, the range is from EUR 20 million to EUR 50 million. The road show was quite successful and remarkable. It reached more than 120 investors live. These were people who came out socially distanced within all the restrictions in their countries, in their region, in their hotels, primarily institutional investors, family offices in Europe. Typically, these are long-term investors really buying into the mission of the investment. 6 major cities in 4 European countries, Switzerland, Italy, of course, the U.K. and Monaco. The SPAC is planning to list on the AIM Italian stock market. Again, second most active market for SPACs, in the first quarter of 2021, and Banca Finnat, which specializes its investment in advisory services for private and institutional customers, 125-year-old family-run organization initially has been appointed as the escrow agent. Okay. So this is a lot of information. Before we move on to the question-and-answer of today's call, I'd like to reiterate that we at Jaguar Napo believe our efforts since the second quarter of 2020 to implement our Expanded Patient Access program for Mytesi, okay, that's crofelemer, trade name for crofelemer, and our focus on long-term investors and nondilutive financing, including our recent royalty-based capital infusion of $5 million, which allows us to fund our cancer therapy diarrhea related trial are improving our long-term financial prospects. We started the Phase III trial for the prophylaxis of diarrhea in adult cancer patients receiving targeted therapy. Again, this is the cancer therapy related diarrhea indication, sometimes you see it referred to as CTD. And our plans to develop and commercialize crofelemer for the possible indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea, broader than even the chronic COVID situation. We believe through these activities, the value generated in the company will be realized, is being realized, as we work to regain compliance with NASDAQ's bid price requirement, get to $1 per share price, get there for over 10 trading days. We are committed to our dual strategy of forging regional ex U.S. business development deals to bring in nondilutive dollars as well as the financial nondilutive dollars, the royalty financing, to fund efforts to move key potential crofelemer pipeline indications to clinical trials and around the world and with greater value now as we potentially bring on the second indication in Europe in the chronic COVID situation. So increasing the value associated with crofelemer out-licensed by the CTD progress in the United States, potentially the chronic COVID progress in Europe, and as well as the deep pipeline of future indications, most of which we have Phase II or proof-of-concept data in hand. Simultaneously, we are working to become a sustainable commercial business supported primarily by the growth in Mytesi sales for the approved indication and the expanded access program that we kicked off in the second quarter of this year, and you've seen the financial impact of that, the positive financial impact of that. There's no doubt that the pandemic, the travel restrictions, have elongated business discussions. And there's no doubt of the need for crofelemer and Mytesi globally. There's no doubt of a large blockbuster number of patients that can benefit from this product and, of course, the benefit comes to the stakeholders and the shareholders in this company. With that, I'll now open the floor for Q&A. Thank you.

[Operator Instructions] We will take our first question from Christopher [indiscernible]. .

Yes. So if the vote passes, there'll be a merger on Tuesday, is that what I was understanding?

I just want to -- you broke up a little bit. If the vote passes, there'll be a merger on Tuesday, is that what you said?

Yes.

Right. No, those are unrelated events. So the merger of Napo EU with the SPAC is the fundraising activity that's going on right now for the SPAC and the condition precedent for the merger to happen is at least EUR 20 million needs to be raised in the SPAC. And so the SPAC is targeting a very early first quarter, like the end of January completion of the fundraise. Separate from that is the vote. The vote is to allow the discretion for the Board of Directors to implement a reverse stock split, if that is necessary to maintain compliance for NASDAQ listing. When we get the successful vote, we will not be implementing a reverse split. But it's necessary for us to show to NASDAQ that we have the capability of staying in compliance for them to give us the extension. And the extension, the relationship between the 2, with the extension, all the business development activities, including the recent activities with long-hauler chronic COVID development in Napo EU, the potential development there, we believe gives us a good shot of getting the value recognized to over $1 a share.

[Operator Instructions] We will now go on to our next question from Christopher [indiscernible].

I just had a question regarding the longevity of the business per se, really just kind of a going conservative in the next 12 months is -- is there any issue or as far as operations wise, is the cash available for the actual operations of the company within the next 12 months, given that you're expected to have a reverse -- potentially not actually going to do the reverse stock split. But if you are able to get this year up to $1 per share, let's say, within the next 6 months, are there any concerns that there's enough cash on hand to keep operations funding for at least for the next 12 months going into the end of 2021?

Right. Thanks for that question. So we're really quite pleased with -- it all comes down to, right now, the sales of Mytesi. So while it's one pot of money, we think of it as 2 separate activities. One is selling Mytesi within the current indication needs to pay for itself. And so we're well on the way to financial sustainability with the Patient Access Program and what's occurred since the second quarter of this year, and you've seen the increase in the growth in gross in net sales. As far as funding -- we have a cancer trial going on right now, so we have expensive development, clinical development activities and fully in the public domain. Our intention is to fund that through royalty financing, which is not equity, nondilutive, no warrants, no shares. And that royalty financing is based also on the performance -- the financial performance of selling Mytesi for the current indication. So the first $5 million tranche came in, in October of this year. And as publicly stated, there's 2 additional tranches that are expected to come in, in the first quarter, in the third quarter of 2021. And there's no reason to believe those are not going to come in. I know the investor very well. They're quite happy. And I can tell you there is no intention of using equity to finance the company in 2021.

Okay. Great. Yes, that was probably the -- I was just trying to understand -- because I did read about the tranches and the timing of them. And so my -- I'm hoping that with the development and you guys making that dollar per share, I'm optimistic about it. So I just wanted to make sure that was clear.

We will now take our next question from Joe Moses.

Yes. Your statement about the SPAC needing to be at $1 per share at least for 10 days straight, how do you see that happening and when? And also, can you comment on that? And also, I see there's a price target of $5 per share. When do you foresee that happening?

So as all CEOs, but I think mine is genuine or has a reality based, I think we're undervalued, remarkably undervalued. If we look at comparable situations in the market, right, comparable situations that have a specialty market that actually have sales occurring, an FDA approved product, global unencumbered rights to that product. So a white piece of paper to bring in business development deals and then a pipeline like we have, which is blockbuster in terms of the number of patients that can benefit. And pipeline that's risk-mitigated because for the most part, it's crofelemer, it's Mytesi. So it's a product that already has chronic safety, already has a well-established supply chain that is FDA approved. The 2 most common reasons why NDAs, new NDAs that get filed fail. So I hope that -- and I think we are actually starting to see, that as we're focusing on longer-term investors, as we've cleaned up the balance sheet, what does cleaned up the balance sheet mean? We give incentives to get warrants exercise to get those warrants actually as shares outstanding, I believe we will start to get value recognition around key public announcements. And what are those achievements, what are those benchmarks that we have coming up? We have the biggest one, which is the newest one, I believe, right now and moving very quickly with this long-hauler chronic COVID situation and Napo EU. It's allowing us to put another important indication in clinical development. It brings in a license fee and financial benefit to the parent organization, which is the licensor of that indication. We also have clinical results coming up in a biome study, which is very important for a whole bunch of indications, but a biome study that has been done on label in an HIV population. That study is now over, and the data is being crunched. We will have likely an additional tranche of the royalty financing coming in, which is coincident with the progress of the Phase III trial for cancer therapy related diarrhea. We have a small program, but an important program for animal owners. We have our new drug applications, which are expected to be approved in the first half, late in the first half of 2021, that's Canalevia, crofelemer for dogs, chemotherapy-induced diarrhea and exercise induced diarrhea. And then there's always a bunch of other stuff that's going on. We have our new discovery initiative in the therapeutics initiative, which is psychoactive and psychedelic plant-based novel drugs for potential use in mental health disorders and mood disorders. So with a cleaned up balance sheet and a focus on long-term investors, we believe that these benchmark, these events, these announcements, can allow the valuation in the company to start to be recognized. Not to mention the continued commercial results and performance of Mytesi for the current HIV indication.

Okay. Okay. So that has to take place before sometime March of 2021 to be in the $1 range? Is that what I understand? Did I understand that correctly?

Yes, you're correct. If we get the extension from NASDAQ. So we don't currently have the extension from NASDAQ to give us -- so the 6 months and 6 months is more measured from, I think, in September. So the 6 months gives us until March 10. But NASDAQ -- if NASDAQ is, "What if you don't get to $1 a share, how can you stay in compliance?" We have to show them that we have the ability to stay in compliance. The only ability we would have if we're under $1 a share would be to do a reverse split. So that's why I said it's sort of a chicken and an egg to get the extension to allow us to get there. We have to show that we could get there even if we didn't get there organically. And it's a transformative time for the company that really kicked off in the second quarter of this year with the Patient Access and the financial performance of Mytesi. But that's the core asset upon which we have seen financial growth, we could bring in the nondilutive funding, the royalty funding to get the cancer program going. And then with all the trauma that COVID has brought the world, it's also brought us an important new opportunity to focus on for patients. So it's really a different time than we've had in the past, and that's what we are explaining to NASDAQ. And I will say also, this review to have the extension to March was unsolicited by us. So NASDAQ Review Board looked at the situation and thought, "We should consider giving this company a longer period of time." And now it's up to us to do everything we can to make sure we give that.

Okay. When will you know that, when the extension is approved?

They said it will be around -- they're little defined in when they can meet because of the pandemic. So they said likely the end of January or beginning of February.

Okay. Okay. Wonderful. Thank you for answering all those questions. I apologize that there were so many, but I appreciate your time.

Bring them on. I'm so pleased to be able to have as best as I could access to shareholders, because while we are -- there's 2 things that we are remarkably committed to in this company. We've been doing this for over 31 years. And first and foremost is crofelemer, because there's so many patients that can benefit from this product. And very hard to get a product approved. We did that. And we fought very hard to make sure that there were access to patients. So we had some partners that didn't have the right viewpoint, and we got the product back. The second thing is we take it very seriously when people invest in this company. So we work very hard to take care of shareholders and stakeholders.

We will now move on to our next question from Rod [indiscernible] .

Real quick, I know you mentioned and you alluded to it, but do you currently have the 3-month extension, you're looking for another 3 months before you make a decision?

So it's a bit complex. I'll explain the situation. So we were given -- there was something that I think it's called an Appeal Board. And they gave us the extension to December 23, 2020. And that was that. That happened maybe a month or so ago. And then the Review Board, which is above the Appeal Board, and I might be using those names wrong, I might not be Appeal Board. But anyway, a Review Board that's above the Board that we presented in front of. Unsolicited, looked at that decision and said, yes, I think the company qualifies for the 6 months. Let's look at that. And so that's -- so we have a stay, meaning we don't have to get in compliance by December 23. So now this is our shot with the Review Board to get the full 6 months, which would allow us until March 10. So that's why we're trying to put our best foot forward here. We really have a nice gift of the situation of not having to get there by December 23. So the full 6 months would be March 10, and it sort of came in bits and pieces here. Is that clarified?

Yes, yes. So the Board is deciding then on December 22 to have it exported.

No, the Board does not -- so the decision -- the next decision point is sometime at the end of January, beginning of February. The previous decision that was until December 23 has been stayed, has been removed. So there's no deadline anymore on December 23. So the new decision point will occur. So we're sort of in no man's land right now. We have no date upon which we have to achieve the $1 per share. We're going to find out what they're going to do at the end of January, beginning of February.

[Operator Instructions] We will now move on to our next question from [ Maurice Leoni. ]

Yes. You mentioned about that study for cancer is on Phase III right now. So what's the update on that?

So that's cancer therapy related diarrhea. It's prophylaxis in solid tumor patients on targeted therapy. This is adjuvant therapy like tyrosine kinase inhibitors, epidermal growth factor receptor antibodies that might be like Herceptin. These are agents that patients are on for a year or 2 and the #1 side effect is diarrhea. So we initiated -- we opened that study -- I'm not sure if it was October or November. It was publicly announced. And we have a couple of sites that are open now. Definitely, pandemic affects us, as you can imagine, right, with the way hospitals are dealing with pandemic right now, but we do have several sites open. We expect -- I forget exactly what the number is, but it's a large number. It will be more than 2 dozen sites eventually that will be open to bring in the approximate 250 patients. It's anticipated that it will take at least 18 months to fully enroll the trial. And we would expect to have data then and our planning in terms of inventory build and pre-launch pre-education activities, are planning for a launch sometime in 2023.

Okay. And how about the indication for the COVID, is that -- when are you going to approximately -- when that will start for the testing in the trial?

So that -- and that will be done. So the conditions precedent for that to happen, that will happen in Europe. So the SPAC needs to be funded, and then we are the named target, so we would then be merged into the SPAC, Napo EU and I say the Napo EU, private company now, wholly owned subsidiary of the parent company, will be merged into the SPAC and it has the financial resources. What we're preparing for now is to provide to Napo EU a package to take to the regulatory authorities in Europe. So that would include EMA, which covers the European Union, now with Brexit, you have a separate regulatory agency for the U.K. Swiss Medica is a separate one in Switzerland. So those are the main 3, what we call the Tier 1 regulatory agencies. And there's 3 pathways that we will -- or we will be prepared for and therefore will be explored with the regulatory agencies ranging from the full development program for the first time the product would be approved in Europe, which is like 1,600 patients in the safety database, a more accelerated development program in the EMA, for example, if you go to their website. They state that during the pandemic they are looking to and will consider real-world experience with the product. So for example, Mytesi is already commercialized, already has a full regulatory package, already has experience on the market with pharmacovigilance looking at safety, is already being utilized in HIV patients with enteropathy, which is on label, which is an inflammatory situation. So an accelerated development program is what we would propose based on leveraging real-world data already with the product. And then a third possibility, which will be discussed and explored, is within an emergency use authorization. So we don't know until we meet with the regulatory authorities. So the 2 conditions precedent are the funding of the SPAC, therefore, allowing the merger and the funding of Napo EU, and the discussions with the regulatory agencies there, and then we'll know the speed with which we can get the product on the market and develop for this new indication in Europe.

It appears we have no further questions over the audio at this time.

Terrific. Okay. And I just -- I wanted to give one clarifying statement, because I'm sure my compliance guy will be on me. So we have no plans to do public offerings. I can absolutely say that. I think I said that we have no plans to use equity to finance the company. As is well known, we do have an ATM out there and at the market, which we do not plan to use, it's an $8 million ATM. However, there are times when if the stock is in a good position and the volume is in a good position and something comes up like having to prepare something for a regulatory agency, something outside of our current budget, we may utilize the ATM. But there are no plans for a major equity public offering. So I wanted to make that clear. Thank you all for listening. Thank you for the questions. We're very excited -- very, very excited about everything that we have going on at Napo, Jaguar with Mytesi and crofelemer, and so pleased that we have an opportunity to participate in providing some relief in this crazy pandemic situation.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.