Imprimis Pharma CEO Talks Valeant Price 'Jacking,' Says His Co. Will Double Revenue This Quarter
Imprimis Pharmaceuticals (NASDAQ: IMMY) is a growing player in the ophthalmology eye drop market. Benzinga recently spoke with Imprimis CEO Mark Baum about what investors should expect going forward.
Benzinga: You had earnings last Thursday, and you mentioned that you see revenue growth doubling in Q1 of 2016, versus Q4. Where is that revenue going to come from? Maybe a couple catalysts for the next coming year?
Mark Baum: Our ophthalmology business is what I was specifically referring to. And what we do is, post-cataract surgery, we're talking about mainly cataract surgery, medicines, these are drugs for inflammation and infection. And, historically, you have cataract surgery, patients are prescribed three separate bottles of eye drops. So, 75, 80 year-old people have to put eye drops in their eyes 150 or 200 times.
We have two formulations that dramatically change the game in the post-cataract-surgery space. One is an injectable. So, we make a formulation that is a combination of the drugs that go into the eye drops, except we make it injectable. The doctor puts it in the patient's eye at the end of the surgery. It's a one-time injection. And in better than 9 out of 10 cases, physicians have said that patients no longer require these eye drops. So, instead of the three eye drops for the 75-year-old patient, it's a one-time injection, virtually eliminates the need for the eye drops.
Now, there are some doctors who don't want to do the injection for whatever reason, and we actually use our technology to take all of the bottles of eye drops, the three separate medicines, we combine them into one bottle. So, it reduces the number of eye drop applications by 50%, and it dramatically lowers the cost for the patient. So, the upshot is that patients save money. It reduces or eliminates these administration issues. And, physicians love it and the patients love it. And they have reported great outcomes.
So, we're offering this alternative, and it's really, really catching on. We're now approaching double-digit market share. And, what I said in the press release -- and, this is pretty remarkable -- between the end of December and now, our unit volumes have doubled. And they didn't start from a low number. We started from a fairly high number. But they've doubled, because the market is really catching fire for us, and we're really excited about this market opportunity.
Who are you taking this market share from? Who are the people who should have their eyes out for you?
Yeah, it's interesting. I've been a national advocate, I've been talking about this drug pricing issue, and one of the biggest offenders, really, to a great extent, really one company that basically invented the model of basically buying drugs that have no competition and jacking the price up, is Valeant Pharmaceuticals (NYSE: VRX).
And, Mike Pearson in Valeant owns Bausch and Lomb. And Bausch and Lomb is certainly one of our largest competitors...these are really, really big companies we're taking on. And, you know what? What's great is, a little tiny company like ours, we're approaching, and I think we've exceeded, double-digit market share.
Do you guys see yourselves reinvesting some of the money you get, the profits you get in the future, into more R&D?
Janet Woodcock [CDER director at the FDA] testified in Congress a couple weeks ago that about 12% of drugs don't face any competition. These are old drugs that are off-patent. They have not in the past and likely will not in the future face competition. So, what we intend to do is take the profits that we generate and invest in more lower-cost alternatives for that 12%. There's so many drugs, when you think of the thousands and thousands of drugs, that 12% of those drugs that don't face competition, we can make a huge impact and lower costs there.
We are not an R&D company. But at the same time, we would say, hey, companies like Horizon and Valeant, they do very little with any R&D in many parts of their business. The difference between us and them is we're up front about the fact that we just don't do a lot of R&D, because we're taking things that are old, that work really well, and we're selling them at an accessible and affordable price.
Have any other larger companies expressed interest in the way you guys are going about this, in terms of, maybe more partnerships, more contracts, or even an acquisition?
Well, we are growing rapidly. We reported that our revenues grew by 450% year over year. I think you'll see that our revenues will continue to grow. Our business is good. It's growing rapidly. And one of the things we're excited about is, the lightbulb has gone off, we believe, at these insurance companies, and the PBMs, the pharmacy benefit managers. They now, I think, some of them, realize that there is a way to control these out-of-control costs, and that is using our business model. So, we had a public announcement with Express Scripts Hldg (NASDAQ: ESRX), a few months back. We partnered with them on the daraprim alternative.
And we are now in-network and working with all of the major pharmacy benefit managers. We are working with many insurance companies directly on a formulary that would be an alternative too many of these out-of-control branded drugs. Our goal, to be clear, is to drive down costs. We think we can drive down costs better than 60%. And at the same time, we can generate margins in the 60-80% range, even after we've lowered the costs.
Are there any upcoming events investors should be looking for in the next couple months?
Well, one of the things I think is really exciting is, we are registering -- we have four facilities across the country. We ship into all 50 states. And we're taking two of our facilities and we're registering those facilities with the FDA. And we're going to make our formulations to the same standards that all FDA manufactured drugs are made out of. And when we do that, we're going to have new accounts that were waiting for us to register with the FDA, and I think that that shift alone is going to drive a lot.
That's No. 1. No. 2, I believe you're going to see additional relationships, I hope, with insurance companies and PBMs that want to use our model to drive down costs. And, obviously, we're a really small company. Many of these insurance companies and pharmacy benefit managers are very large, they control a lot of dollars. And we think, if we can get some of these relationships completed, it's going to drive a lot of value for our shareholders.
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