Supernus Pharmaceuticals, Inc. (SUPN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Supernus Pharmaceuticals Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Peter Vozzo of Westwicke, Investor Relations representative for Supernus Pharmaceuticals. You may begin.

Thank you, Chris. Good morning, everyone, and thank you for joining us today for Supernus Pharmaceuticals conference call to discuss the acquisition of the CNS products of US WorldMeds, which was announced last night. On the call with me today are Supernus' Chief Executive Officer, Jack Khattar; Chief Financial Officer, Greg Patrick; and Vice President, Corporate Development, Bryan Roecklein. Today's call and associated slides are being made available via the Investor Relations section of the company's website at ir.supernus.com. Following remarks by management, we will open the call to questions. During the course of this call, management may make certain forward-looking statements regarding future events and the company's future performance. These forward-looking statements reflect Supernus' current perspective on existing trends and information and can be identified by such words as expect, plan, will, may, anticipate, believe, should, intend and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the Risk Factors section of the company's 2019 annual report on Form 10-K. Actual results may differ materially from those projected in these forward-looking statements. For the benefit of those of you who may be listening to the replay, this call is being held and recorded on April 29, 2020, at approximately 8:30 a.m. Eastern. Since then, the company may have made additional announcements related to the topics discussed. Please reference the company's most recent press releases and current filings with the SEC. Supernus declines any obligation to update these forward-looking statements, except as required by applicable securities laws. I will now turn the call over to Jack.

Thank you, Peter, and good morning, everyone, and thanks for joining us. We're very excited about the transaction we announced yesterday, and we would like to take this opportunity this morning to walk you through the strategic rationale behind it, what it brings to Supernus, and how it will contribute to our future growth. And then provide you the opportunity to ask any questions you may have after our prepared remarks. So what I will be doing this morning is going through the slides, and I'll try to reference each slides as I talk about each one of them. So starting with Slide 4, which was titled Overview of the Transaction. This is the acquisition of U.S. CNS portfolio of US WorldMeds for the total consideration, as we announced yesterday, of $530 million. It includes an upfront payment of $300 million and regulatory and commercial milestones up to $230 million. The transaction will be funded through our existing cash on the balance sheet, and it is expected to close in the second quarter of this year. Moving on to the next slide. Basically, this transaction brings to Supernus a robust portfolio in neurology that is very synergistic to the current existence and to our leadership presence in the neurology space. First, starting with APOKYN pen. This is an apomorphine hydrochloride injection for acute intermittent treatment of the off episodes in advanced Parkinson's disease. Apomorphine is very well-known to be a very effective molecule for the treatment of off episodes, and this product has been doing extremely well in that space and has a leadership position in that space. Right next to it -- to the right to it is the apomorphine subcutaneous infusion pump. So extending this franchise even further and building it in the future, we look forward to hopefully include the apomorphine continuous infusion. So this will be a continuous infusion of apomorphine versus the APOKYN pen, which is an instantaneous injection for acute treatment. The NDA is expected to be filed in the second half of this year, and we would be looking forward to hopefully launch the product, if approved, in the second half of 2021. Next to the franchise in apomorphine, we have MYOBLOC, which is an injectable neurotoxin. It's type B neurotoxin. It is indicated for the treatment of adults with cervical dystonia. And recently, about the fall of 2019, it was approved in an additional indication, which is chronic sialorrhea in adults. We also know that a majority and a lot of patients in Parkinson's disease do have sialorrhea and therefore, another point of synergy clearly across the portfolio here that you're looking at. And at the end of the slide, you'll see XADAGO, which is another Parkinson product as well. It's a monoamine oxidase type B inhibitor. And it is indicated for adjunctive treatment with the levodopa treatment of adults with also Parkinson's disease to limit the off episodes. In total, the current 3 products that are on the market had net sales approximately $150 million, with a healthy operating earnings of approximately $45 million. Moving on to the next slide. So basically, what is the strategic fit in this scenario and why did we move forward with this transaction. This acquisition fits exactly with a lot of the criteria we've been looking for in a deal for quite a while right now, starting first by helping us creating a leading CNS portfolio. With this acquisition, Supernus will end up with 5 marketed products and hopefully, by year-end, with 6 marketed products, if we account for SPN-812 if it is approved. So that will be a very strong portfolio in CNS with a strong strategic fit and synergies between the different products given the common neurology space that we have, and it also helps us build our late-stage pipeline. Specifically, it adds new growth catalysts for us in the future. As I mentioned earlier, with the apomorphine infusion pump, we're very excited about this opportunity. This could be a significant growth opportunity for the company. And as we mentioned earlier, we're looking at potentially launching it in the second half of 2021. And then with MYOBLOC, which is the toxin that I mentioned earlier as well, has the potential to be developed in additional neurological disorders in addition to cervical dystonia and the sialorrhea indication that it currently has. On the next slide, from a financial perspective, clearly, this transaction with the 3 marketed products and its revenue base of about $150 million, strongly diversifies our revenue base as a company and increases it by about 39%. This is on a pro forma basis for 2019. And it is cash flow positive generator and, therefore, it does diversify and increase our free cash flow. And the deal structure is a very reasonable and fair structure that has the upfront money for the existing business but also with significant milestones that are aligned with the future upside for this business and the infusion pump. So moving on to the Parkinson's disease market. I will now give it to Bryan Roecklein, who will walk you through the market -- a little bit more details about the product, and then I'll come back to sum up the transaction.

Thank you, Jack, and good morning, everyone. We move down on to Slide 8 titled Parkinson's Disease Market. I'll tell you a little bit about the marketplace. The first bullet point based on a global data drug forecast market analysis up through 2026. U.S. Parkinson's disease market is anticipated to grow from $1.5 billion to $6.2 billion by 2026. This is driven through a combination of more patients due to the aging population in the United States, but also due to a number of recent product launches as well as several in the impending future. It is considered the second most common chronic progressive neurodegenerative disorder affecting 1% to 2% of individuals, 65 years and older. The number of U.S. Parkinson's patients in 2020 is estimated to be approximately 1 million with an annual growth rate of 2.5%. Parkinson's occurs when cells in the brain, which produce dopamine as well as those that respond to dopamine, become impaired or die. The mainstay or gold standard therapy for Parkinson's disease is levodopa, which, unfortunately, as the disease advances, becomes less effective and less predictable, resulting in what are called off periods. On Slide 9, I'll talk about what is off in Parkinson's disease. As the disease advances, patients experience more off periods. It affects the mobility and motor symptoms. Tremor, balance, slowness, dystonias and stillness are all types of symptoms that appear. It can also have an adverse effect on everyday life. Things that are simple, such as eating, riding and getting dressed, things that we take for granted, are always a challenge for Parkinson's patients, particularly in the off state. And it creates a stigma for patients, that of fear, they avoid activities that have increased reliance on others, particularly caregivers. And so it's a challenging period for patients. Based on a Michael J. Fox Foundation survey, it's very frequent and very impactful. [ 79% ] of patients have at least one-off episode per day. And 65% of patients were off for greater than 2 hours per day. And based on the survey, more than half of patients avoid activities because of these off episodes, in particular because of lack of predictability. On the next slide, Slide 10. It's a nice slide that really outlines the acquired portfolio relative to the different stages of Parkinson's disease. On the top of the slide, you see stage 1 through stage 5. In the middle, you can see we have XADAGO, which is the MAO-B inhibitor, and that's positioned really for more mild to moderate patients, and it's evident adjunctive therapy of levodopa. As the disease advances, APOKYN pen becomes the product to try, particularly for patients who have more off episodes and more severe off episodes. And then the product under development, hopefully soon to be launched next year, we have the apomorphine subcu infusion pump. And that provides an option for patients, particularly advanced stage patients, prior to resorting to surgical intervention, such as the use of Duopa for deep brain stimulation. On Slide 11, I'll drill down a little bit more into the APOKYN pen. The APOKYN pen delivers apomorphine through a subcutaneous injection. Apomorphine is a non-narcotic D1-D2 receptor agonist and is considered one of the most potent dopamine agonist. It's a well-established product -- or APOKYN is a well-established product with $118.9 million in sales in 2019. It's considered the best-in-class therapy for acute, rapid and reliable treatment of off episodes in Parkinson's disease. It successfully treats 95% of off episodes within 20 minutes. And as I mentioned previously, there's a significant unmet need. It has a significant market opportunity for Supernus. On Slide 12, drill down a little bit more on the clinical data and demonstrating the impacts of APOKYN on the Unified Parkinson's Disease Rating Scale, particularly for the motor score. On average, peak response was seen after 20 minutes with a meaningful clinical effect seen from 4 minutes. At peak effect, the mean decreases from baseline in UPDRS motor scores for 24.2 points for the apomorphine group and 7.4 points for the placebo group with a p-value less than 0.001 and a delta between active and placebo of minus 16.8 points. The response to apomorphine was significantly better than placebo as represented by the p-value of less than 0.001. As I mentioned earlier, this clinical trial has successfully demonstrated that it treated 95% of off episodes within 20 minutes. On Slide 13, we move on to the new product candidates, apomorphine continuous subcutaneous infusion. This product is expected to launch in the second half of 2021. It is eligible for orphan drug designation and possibly orphan drug -- 7 years of orphan drug exclusivity. Based on the clinical profile, this drug can be uniquely positioned as the only noninvasive continuous dopaminergic stimulation therapy to reduce off and maximize on time in Parkinson's patients. It is less invasive and currently available options such as the gastrointestinal surgically implanted levodopa-carbidopa infusion, or Duopa, and deep brain stimulation, and is anticipated to have potential peak revenue of $100 million to $175 million. On Slide 14, this next slide contains some of the data that will be used to support approval. The data is from the TOLEDO Phase III study that was conducted by our partners in the U.K., Britannia Pharmaceuticals. The primary endpoint was the reduction of off time. If you look at the graph on the Y-axis, you can see the change in off time from baseline as well as a change in on time baseline. The left-hand side demonstrates the primary endpoint that apomorphine demonstrated a 2.47 hour per day reduction in off time compared to placebo of 0.58 or a p-value of 0.0025. On the right-hand side of the graph, you see the concomitant increase in on time, which was a prespecified secondary endpoint in the study. On Slide 15, it's another secondary endpoint in the TOLEDO study. Now it's the patient global impression of change. The apomorphine group does represent responses from patients represented in the blue histogram bars, whereas placebo in the green. And what you can see is that more patients in the apomorphine group rated themselves as improved as compared to placebo. When I look at the next slide, which is Slide 16, I look at the 2 products in the apomorphine franchise. There are significant challenges for development and commercialization of these types of products, providing some market protection for both assets. Both are combination products and devices. They will have significant development requirements such as human factor studies for registration, and as I mentioned before, the infusion pump has a potential for orphan drug exclusivity. To commercialize these type of products, additional support is needed to initiate and maintain patients on therapy, and you need to utilize a specialty pharmacy for distribution, a fulfillment hub for reimbursement and a nurse network for initiation and maintenance of therapy. They're quite challenging both from a development and commercialization perspective. On Slide 17, a little bit about MYOBLOC, which is a botulin-type butoxin B. It's approved in the U.S. for adults with cervical dystonia. And in late last year in November 2019, US WorldMeds successfully expanded the indication to chronic sialorrhea adults. It's estimated based on epidemiology data that up 600,000 adult patients in the U.S. suffer from chronic sialorrhea and where it's a nice fit with the apomorphine franchise that I just mentioned. Up to 74% of Parkinson's patient have sialorrhea. So it's a nice synergistic complementary product to the apomorphine franchise. We have acquired global rights, except in Japan, where it's part of the Eisai, as the only type B toxin that demonstrated efficacy in multiple clinical trials. On Slide 18, we'll talk a little bit about XADAGO or safinamide, the oral treatment of Parkinson's in adults who are having off episodes. It's a monoamine oxidase type B inhibitor that is adjunctive to levodopa-carbidopa, and it helps block the MAO-B enzyme, prevents it from breaking down dopamine in the brain. We have an exclusive license from Zambon in U.S. territories, who's launched by US WorldMeds in 2017 and there's patent protection through at least 2027. So at this time, I would like to transfer the call back to Jack.

Thanks, Bryan. On the next couple of slides, starting with Slide 19, I would like to elucidate a little bit more of the strategic rationale here and the benefits that this transaction brings to Supernus. So on the first slide, Slide 19, titled Comprehensive Commercial Platform. This acquisition clearly augments significantly our capabilities in the commercial area and is very synergistic. Starting first with the sales force. As you all know, the sales force for Supernus is over 200 representatives, and we primarily focus on neurologists supporting our epilepsy and migraine franchise. On the right side, the acquired portfolio would bring to us a very high-quality sales force of about 46 representatives, who have done extremely well in building the company to where it is today and the portfolio and supporting its growth over the years. And they primarily target movement disorder specialists with selective coverage of neurologists. On the marketed products side on the slide, clearly, Trokendi XR and Oxtellar XR, we have significant capabilities in retail distribution, health care provider, consumer media and so forth. The newly acquired portfolio upon completion of this transaction will bring to us also additional capabilities on the marketing side, such as orphan drug capabilities, specialty pharmacy capabilities, buy and bill, the nurse network and the fulfillment hub that Bryan mentioned to you. And we look forward to -- in the future to hopefully build on these capabilities and augmenting our portfolio even further with additional products that would fit very nicely with this new commercial platform. So in summation, Supernus will have a very full comprehensive commercial platform across many areas with significant synergies between the brands that we're acquiring and the existing brands that we have now. The next slide, which is Slide 20, looking at the same transaction but from the R&D perspective. Clearly, the company Supernus, after the acquisition, will have a robust R&D pipeline. And from a platform perspective and capabilities, we also would augment significantly our capabilities by bringing additional expertise in biologics. Example is MYOBLOC. We'll bring expertise in device development and, clearly, that augments our capabilities in the small molecule and drug delivery core competencies. So when you look at the pipeline in totality, you look at SPN-812, which we're all still very excited about potentially launching it before year-end. And then the other products, SPN-604, 820, which we announced last week or this week, I don't remember now. And then SPN-817, which is also in epilepsy. And then, of course, the apomorphine infusion pump, which again, we're very excited about that we could be launching in the second half of 2021. And potential expansion of indications in neurological disorders for MYOBLOC, indications such as spasticity and so forth. So on the last slide, 21, in summation, we believe this transaction will continue to position us for long-term growth. Starting first with our neurology portfolio. After the completion of this transaction, we will have a very diversified neurology portfolio that diversifies our revenue base, our earnings and cash flow generation. And then in addition to that, this transaction brings a late-stage product that potentially could be launched in 2021, which will be tremendous after our potential launch in 2020 for SPN-812. And we will have also potential expansion opportunities in MYOBLOC in addition to all the other pipeline of products that we currently have in Supernus. I will now turn the call back to the operator for questions.

[Operator Instructions] And our first question comes from the line of Ken Cacciatore with Cowen & Company.

Congratulations, guys, on the transaction. Just a couple of questions. Just wondering if you could frame for us a little bit the -- what's been happening with APOKYN over the last couple of years, so we just can understand its growth profile. And then it is a pen. I think that's different than the first generation, at least I'm guessing if you want to talk a little bit about the evolution of the product. Can you talk about potential generic filings or maybe even through the portfolio of the 3 products, the -- what we should be anticipating in terms of duration of these assets before we get to the potential apomorphine continuous use? And then lastly, on the apomorphine continuous use, can you just describe the device, give us a -- it sounds like this would be something that really has to be patient-friendly. And I know you're talking about very late-stage patients, but can you describe a little bit the device and the ease of use? Is it something you just would wear around a belt? Maybe bring it to life for us as we understand the opportunity.

Yes, sure. Ken, starting with the APOKYN pen, what I can say at this point is that the franchise has really been growing over the years, and US WorldMeds has done a phenomenal job in getting it to the point where it is right now. It's a very strong business. It's been very nice and steady over the years. And as far as the potential generic filings, yes, the product doesn't have specifically any patents that are listed in the orange book or anything like this, but these products tend to be fairly complicated. And as I -- as Bryan mentioned earlier, there's a lot of support around these products in addition to the fact they are a device as well. So we expect the pen to continue to be in the marketplace for quite a while. And clearly, the addition of the infusion pump as well becomes a major portion of that franchise and the growth aspect of the franchise. Just by reference, the infusion pump actually is available in a different -- slightly variant form in Europe, and it's been doing about 3x the amount of the pen business in Europe. So we have great aspirations for the infusion pump, and we hope to be even more successful than some of the estimates we just mentioned today. If everything lines up very well, we could really do extremely well with that product. Regarding the other products and the potential protection here or longevity of these assets. Similarly, MYOBLOC, as you all know, is a biologic. It's a toxin. It's a very complicated manufacturing process, and it's a very complicated product to administer as well. And therefore, it has its own protections by the nature of it as a product on its own. And XADAGO has a protection patent that doesn't expire, nothing earlier than 2027. So overall, we feel very good about the longevity of this portfolio. In addition to that, of course, as you would expect us, we would be potentially investing in improving these products or adding new aspects and features to them. That hopefully, in the future, could provide even further protection. Of course, the pump also, in addition to the fact that it is a device, it is complicated and so forth, it has the potential as well of having the orphan drug designation with 7-year exclusivity on top of all that.

And our next question comes from the line of Annabel Samimy with Stifel.

So I just was wondering if you can comment maybe on the development landscape for the off period in Parkinson's? I know there have been quite a bit -- I'm not sure, including a pump, I believe, and not sure where these products have gone. I think there was also a recent one -- inhaled one that was approved. So maybe you can talk about that development landscape and what we should expect in terms of the changing dynamics going forward, if there are any? And then maybe you can just come out in MYOBLOC as well. I guess the toxin space does have a number of options on the therapeutic side. Where does MYOBLOC fit into this relative to, say, the Botox and Dysport that are also approved in cervical dystonia?

Yes. Let me see if I can take a shot at this. I will start by -- actually, if you refer back to Slide 10, which Bryan -- where Bryan walks you through the different stages for the patients and where a lot of these products fit and where they are designed actually to treat what kind of patients, that is really a very important slide to try to explain where do these products fit on the treatment algorithm. So some of the products that you mentioned that have been recently, obviously, introduced. And it's been a very busy space with products like GOCOVRI, INBRIJA and other products that are lined up to treat off episodes. A lot of them really fit in the mild to moderate space in the stages of like 2 to 3 kind of stages as far as the treatment paradigm. And when you look at the APOKYN pen and where we have it as well as the potential apomorphine infusion pump, we're clearly looking at people who have a little bit more moderate and potentially more severe, especially with the apomorphine pump. So we see the products that we are acquiring have a very nice, clean positioning in the marketplace, despite the fact that, yes, there might be a little bit more crowded space today than it was 2 or 3 years ago. In addition to that, APOKYN is the only apomorphine product at this point that is in the marketplace, and apomorphine as a molecule is actually a very effective drug if administered in the right device and the right product. As Bryan mentioned and walked you through some of the data, actually, you can see -- I mean, extending the on-time by 2.5 hours there is really significant for these patients. If you can try to relate to it where they can't do anything, they can't go on with their daily activities if they are frozen for such a long time, that is devastating. So to extend their daily activities, to extend even what is normal for them by 2.5 hours is very significant. So we think that the APOKYN pen, the apomorphine pump, will have a very clear, strong positioning in the marketplace despite the fact that the space is getting a little bit more crowded. And we certainly also plan on investing behind these brands and putting more resources into it to continue to grow them and make them a significant franchise for Supernus. As far as MYOBLOC versus BOTOX, it's hard to make really comparisons as far as head-to-head trials or anything like this. The difference clearly is that MYOBLOC is toxin B and BOTOX is toxin A. There are some slight differences between the 2, but at this point, nothing really that we can significantly point to. It is a franchise that could potentially benefit from extra investment, extra expansions of other indications and additional promotional effort. So it is a franchise that has been very stable over the years. And we look forward to looking at every potential advantage that it could bring in and every potential new indication and new use that we could also put some extra resources behind.

And our next question comes from the line of David Amsellem with Piper Sandler.

Just had a few questions. So first, on the reimbursement landscape for APOKYN and also XADAGO. Can you just give us a lay of the land in terms of what that looks like, the extent to which patients have hassle-free access, and how you're thinking about any changes in your payer strategy once you take over the assets? So that's number one. And number two, regarding the continuous infusion pump, can you give us some thoughts on pricing and how we should think about that?

Yes, sure. Regarding the first question on reimbursements of the current products, they are a little bit different kind of products, so to speak, and that's what I was referring to on the commercial platform. APOKYN is basically a specialty pharmacy driven product, so it doesn't go through the typical distribution channel that you would have for a retail, so to speak, product. XADAGO is more like a retail distribution like our products, Oxtellar XR and Trokendi XR. And MYOBLOC is more of a buy-and-bill type of situation where the product is shipped directly to the physician. So we have different dynamics there as far as the reimbursement in general and gross to net and so forth. I will tell you definitely that they are much lower gross to net deduction than Oxtellar XR and Trokendi XR, that I can tell you for sure. XADAGO was introduced in 2017. Again, it has a very similar distribution channel as Oxtellar XR and Trokendi XR. And we certainly would be looking for any improvements we can bring into the table here from a reimbursement, if possible. If it is possible, we'll be working hard to improve the setting for it. Regarding the pump and the pricing, it is really premature for me, David, to make a comment specifically about the pricing at this point. We will have to do a lot of work to look at the product and relationship to the other alternatives, which, as Bryan mentioned earlier, are fairly invasive to patients. So we're really exciting about the potential of the pump, not just from an efficacy point of view, but also the convenience and the noninvasive nature of this pump versus the deep brain stimulation or gastrointestinal tube that is surgically put into the patients. So clearly, we see a major advantage for this product moving forward. But again, as far as the pricing, it will be a pure guess if I even mention anything at this point. So I will reserve that maybe for later on as we get closer to the marketplace.

Okay. And if I may just ask a quick clarification question, you do not expect the pump to cannibalize the conventional injectable sales of APOKYN in any meaningful way. Is that a fair characterization?

In a pure sense, that will look to us exactly what -- how we look at it because as we mentioned, the pen is for acute intermittent quick for an off episode use. The pump, we see it, it could potentially go more towards the more -- slightly more severe patients. Is there going to be some overlap? Absolutely, there will be some overlap. So the degree of cannibalization, we can't put our finger on it today and say it's going to be x percent clearly. There will be some overlap between some of the patients, but the pump is really designed for those who really want to have a much longer continuous on time during the day versus the ones who are not as severe. They may experience 2, 3 off episodes, and they may be happy with just using the pen, which works so quickly for them and is very effective.

[Operator Instructions] And our next question comes from the line of Esther Hong with Janney.

So for the apomorphine pump, NDA submissions expected back half of this year, launch next year. What factors remain to be completed with that submission? And then previously, you had mentioned that the pump is used in Europe. Can you speak more about that? What's the indication? How is the drug administered? Any additional details on that? And then separately, are there any synergies, particularly on the sales force side, that could increase the $45 million EBIT contribution?

Yes, sure. Regarding the pump, it is currently in NDA preparation stage. So we're very excited about that and our partner, US WorldMeds, has done a tremendous job in progressing the dossier and putting the application together. So that's all I can say at this point from that perspective. So it is in the NDA preparation stage right now. As far as the European product, which is marketed by our partner, Britannia, in Europe, who have been in this market for a long, long time. They're really true experts and pioneers in the apomorphine treatment. They've done a very good job on the pump. And as I mentioned earlier, it is about 2x to 3x the sales in -- versus the pen. I don't have the numbers right in front of me. We can share that with you if it is public information. We'll need to check on that, if it is public information or not, given that it is revenue of one of our partners. As far as the synergies in the sales force, clearly, we will be calling on some common neurologists. But I have to say the US WorldMeds sales force, which is true experts and specialists in movement disorders, that is a slightly different physician audience, obviously, than epileptologists. There would clearly be some overlap as far as general neurologists who might be treating both Parkinson's and epilepsy. And we know that there is some overlap there. And clearly, we will be exploring how can we augment each other's -- the 2 different sales forces and how can they augment each other's effort with the hope of increasing sales of both sides of the Parkinson's franchise as well as the epilepsy side. So there is tremendous synergies there from the effectiveness of the sales force. This is not a transaction for cost synergies. I would like to emphasize that. This is an area -- this is a transaction about expanding our capabilities. We need all these sales forces to be intact. So we will continue to have a movement disorder, Parkinson's disease driven sales force. We will have the sales force for epilepsy and migraine and, hopefully, sales force for ADHD and psychiatry very soon. So this is a complete augmentation to our capabilities, and we see tremendous additional firepower that we can put behind any of these areas.

Can I just follow-up on the sales in Britannia? So 2x to 3x sales versus pen. What's the -- what are the key underlying factors for that? And then how do we think about that in terms of U.S.? I think there was a potential estimate of peak sales in the U.S. And then today, we heard about sales of the pen in the U.S. in 2019. So how do we put that all together?

Yes, the infusion pump in Europe was launched -- I don't remember the exact year, but it's been out there for a while. So historically, it's a very well-established franchise. And you have to understand, obviously, the dynamics there in Europe are very different than in the U.S. I just mentioned it more like a benchmark. Does that mean we will have 3x the sales of the pen in the U.S.? These comparisons are always very hard to come up with, obviously. And again, I really don't want to say anything I shouldn't be saying because of our partner, Britannia, and what they have said publicly or they don't want to say publicly. So I really would like to leave it at this point that way. As we get more clarity on it, and we talk to our partner, Britannia, as to what we can say publicly, we're more than happy to be able to share with you what they allow us to.

And ladies and gentlemen, this does conclude today's question-and-answer session. I would now like to turn the call back to Jack Khattar for closing remarks.

Again, thank you all for joining us this morning. We are extremely excited about this transaction. It really fulfills many of the strategic criteria we have been looking for in a deal. As we mentioned, it diversifies our revenue. It diversifies our earnings base. It generates free cash flow. It brings 3 additional marketed products. And in addition to all that, it also brings to us a very exciting late-stage product with the potential of launch in 2021 that could bring us and will enhance our future growth. So finally, I would like to also say that after this transaction, we will continue to have a good cash balance on the balance sheet, and we will continue to have a healthy balance sheet, especially in today's environment. Again, thank you so much for joining us this morning, and we look forward to giving you further updates as the year progress.

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