Collegium Pharmaceutical (NASDAQ:COLL) Q1 2021 Earnings Call

0:01 Greetings, and welcome to the Collegium Pharmaceutical first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Dasala. Please go ahead.

0:32 Welcome to Collegium Pharmaceuticals First Quarter 2021 Earnings Conference Call. This is Alex Dasalla, Head of Investor Relations for Collegium. I am joined today by Joe Schifoni, our Chief Executive Officer, Paul Brantley, our Chief Financial Officer, and Scott Dreyer, our Chief Commercial Officer. Before we begin today's call, we want to remind participants that none of the information presented today is intended to be promotional, and that any forward-looking statements made today are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including and without limitation, the risks that we may not be able to successfully commercialize Extanza ER and the Nusant franchise, and that we may incur significant expense and may not prevail in current or future opioid industry litigation and investigations, patent infringement litigation, or other litigation pertaining to our products.

1:31 These risks and other risks of the company are detailed in the company's periodic reports filed with the Securities and Exchange Commission. Our future results may differ materially from our current expectations discussed today. Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release including relevant non-GAAP reconciliations on our corporate website at collegiumpharma.com. I will now turn the call over to Collegium CEO, Joe Schifoni.

2:02 Thank you, Alex. Good afternoon and thank you everyone for joining the call. I'm pleased to be here today to discuss our Q1 performance and 2021 outlook. At Collegium, we are focused on our mission of being the leader in responsible pain management and have an unwavering commitment to people living with pain in the communities we serve. In the first quarter, we help life science care launched their second annual 1000 Laptop Challenge with the donation of more than 100 laptops which were distributed to students in underserved communities across Boston through the nonprofit Tech Goes Home. We continue to look for ways to make a meaningful difference where we live and work and are dedicated to acting in a socially responsible manner.

2:49 We believe we can deliver on our mission and create value for our shareholders by maximizing the value of our differentiated portfolio of pain products, achieving our near-term operational and financial goals, and strategically investing in our long-term growth. I'm pleased to report that in the first quarter, we made meaningful progress against the priorities and objectives for 2021 that we outlined for you in February. Our business is strong and our people are healthy. We are embarking upon a phase of growth and value creation for the organization and are on track to meet our objectives for 2021. Notable accomplishments in the first quarter include generated record quarterly revenue of $87.7 million and record quarterly adjusted EBITDA of $45.3 million.

3:42 We achieved all-time highs in market share and total prescriptions with Xtamsa ER, Bolstering our momentum towards branded market leadership in 2023. We grew Nuscenta franchise net revenue versus Q4 2020 to a level ahead of our expectations and not achieved since Q4 2018 as a direct result of the payer strategy we executed in 2020. We leveraged our cost structure, reducing core operating expenses defined as OpEx minus stock-based compensation by 5% versus Q1 2020. We transitioned commercial manufacturing for Xtamsa ER to a new state-of-the-art dedicated suite that will accommodate Xtamsa ER's continued growth, and we advanced the tech transfer of New Cynthia ER manufacturing from the legacy Janssen site to Thermo Fisher in Cincinnati.

4:37 As expected, Xtamsa ER share gains and prescription growth were strong in the quarter, driven primarily by growth in new exclusive formulary wins that took effect on January 1st, 2021 and progression in exclusive formulary wins achieved in 2020. Xtamsa ER share gains and prescription growth did skew heavily in Q1 to exclusive plans and within exclusives to Medicare Part D. This dynamic pressured gross to net in Q1 above our prior full year guidance. Although we did see positive growth in share gains across all books of business, we believe that performance in contracted non-exclusive and non-contracted plans continues to be adversely impacted by COVID-19.

5:25 As conditions associated with COVID-19 get better, we anticipate performance in these more profitable books of business to improve. Our commercial team increased their focus on these segments of the market when we kicked off the second quarter. Paul and Scott will provide more detail in their remarks. The NuSynta franchise exceeded our expectations in Q1, posting positive revenue growth. Our lifecycle management, including purposeful pruning of less attractive payer contracts, successfully resulted in a positive gross to net shift for the franchise, more than offsetting the decline in prescriptions. As a result of the strong performance in Q1, We are raising our new Cinta franchise revenue guidance for the year.

6:12 Overall, we are encouraged by our first quarter revenue performance and by the underlying trends in our differentiated paying portfolio. Operationally, we continue to focus on leveraging our cost structure, specifically our core expenses, which resulted in increased profitability and cash flow generation in the first quarter. As we generate cash, we remain committed to deploying our balance sheet in a disciplined manner with a focus on creating shareholder value and investing in our long-term growth. We also announced today a planned upcoming CFO transition. After six years at Collegium, Paul Branly will leave to pursue other opportunities effective May 24th. On behalf of the entire organization, I want to thank Paul for his many contributions to Collegium's success to date and for having built a strong finance team and function at the company which will ensure continuity going forward. On a personal note, I want to thank him for his partnership and friendship.

7:16 I wish him all the best in his future endeavors. We are also excited to announce the appointment of Colleen Tupper as our new Chief Financial Officer, also effective May 24th. Colleen brings over 20 years of finance experience at commercial stage pharmaceutical companies and most recently served as Senior Vice President and CFO of the U.S. Business Unit of Takeda. We believe she is a great fit for our organization as we move into a phase of growth and value creation. I will now hand the call over to Paul for a discussion of the financials.

7:52 Thanks, Joe. Good afternoon, everyone. Before I start with the details on the quarter, I want to thank Joe for his kind words and thank all of my colleagues at Collegium for their dedication and hard work during my time at the company. I feel privileged to have served as CFO over the past six years, during which time the company has undergone an enormous transformation. I'm happy that we are able to bring such a qualified individual as Colleen to succeed me in this role, and I look forward to a smooth transition. Now on to the quarter. Q1 was another solid quarter for Collegium, with record revenue and record adjusted EBITDA. This performance is supportive of our outlook, and we continue to expect Xtamza ER revenue growth and stable Nusenta franchise profit contributions to drive increased profitability and strong cash generation in 2021.

8:52 Total product revenue was a record 87.8% and many more. In the first quarter of 2020, an increase of 15% from the first quarter of 2020. The gross to net discount for Xtamze ER was 67.1% in the quarter. above the range we had communicated back in February for the full year. This is a result of mix of business in the quarter, as our new exclusive ER oxycodone formulary wins performed very strongly on a volume basis in the quarter, and our non-exclusive and non-contracted volumes continued to be impacted by COVID.

9:46 We now expect gross to net discount for the full year to be 66% to 68%, reflecting stronger volume contributions from our exclusive contracted business versus our prior expectations. As Joe mentioned, as conditions associated with COVID-19 get better, we anticipate performance in our more profitable books of business to improve over the course of the year. New Centinet revenue was $52.3 million in the first quarter, an increase of 16% from the first quarter of 2020 and a 15% increase from the fourth quarter of 2020, which was ahead of our expectations.

10:31 As you recall, in late 2020, we took payer actions to improve the profitability of the Nusenta franchise, which we had expected to pressure prescriptions. As expected in the first quarter, prescriptions declined, but gross to net discount was 42.7%, which was ahead of our expectations. Operating expenses excluding stock-based compensation expense were 27.5 million in the 2021 quarter compared to 29 million in the first quarter of 2020. This decrease of 1.5 million or 5% was primarily due to a continued commitment to leverage our existing cost structure.

11:19 Our non-GAAP adjusted EBITDA was $45.3 million for the first quarter versus $20.5 million in the first quarter of 2020 and $38.3 million in the fourth quarter of 2020, a notable improvement. Please see our press release issued earlier today for a reconciliation of GAAP to non-GAAP results. As of March 31, 2020, our net cash balance was $182.8 million, which is an $8.7 million increase from our December 31, 2020 balance. As a reminder, we expect the first quarter to be the lowest quarter from a cash flow generation perspective due to the payment of Grunenthal royalty, which is paid every six months, as well as a number of annual items that are due in the first quarter.

12:13 Like annual bonuses, as well as payroll and other taxes, which total approximately $10 million in the first quarter. Despite us having to pay these items in Q1, we still generated $20.6 million of cash from operating activities. Today, we are updating our previous guidance, which was initially provided on January 6 and reconfirmed on February 25. It is important to note that our annual guidance assumes that there is no substantial COVID-related normalization to our business until the second half of 2021. For 2021, we continue to expect XTAMSA ER revenues in the range of $155 to $165 million and total operating expenses, which includes stock-based compensation, in the range of $125 to $135 million.

13:11 For 2021, we now expect Nusenta franchise revenues in the range of $185 to $195 million, which is an increase of $10 million from our prior guidance, and adjusted EBITDA, which excludes stock-based compensation, in the range of $170 to $180 million, which is an increase of $10 million from our prior guidance. I'll now turn the call over to Scott.

13:41 Thanks, Paul. We're off to a strong start in 2021 as a direct result of the actions we took in 2020 to generate momentum for Xtamsa ER and to manage the Nucenta franchise for stable profit contributions. I'm encouraged that Xtamsa ER was the fastest-growing ER opioid and achieved all-time highs for total prescriptions, neuter brand and TRX market share, and total prescribers in the quarter. The actions we took in late 2020 enabled us to pull through our new exclusive ER oxycodone formulary positions and continue to grow share within our 2020 exclusive wins, building strong momentum for Xtamsa ER. To be specific, Xtamsa ER total prescriptions grew to greater than 161,000, up 18% year over year and 11% sequentially. Xtamsa ER exited the first quarter with a 30.6% share of the ER oxycodone market, up 5.5 share points from Q4, a really strong quarter.

14:43 There were 18,000 unique prescribers of Xtamsa ER, a 24% increase versus the first quarter of 2020, and a 22% increase versus the fourth quarter of 2020. This is the most new prescribers we've added in a quarter in three years. Xtamsa ER share performance within exclusive accounts was very strong in the first quarter. We saw immediate market share and volume acceleration within all new exclusive formulary wins, as well as continued share growth within the exclusive formulary wins we had achieved in 2020. Overall, Xtamsa ER OER market share within exclusive accounts is approaching 60%. Xtamsa ER growth skewed toward the exclusive accounts, and in particular Medicare Part D.

15:28 While we did see growth in the non-exclusive and non-contracted books of business, Thank you for joining us today. launching new non-personal promotional content and executing sales training programs to help our sales representatives increase their impact. Moving to the NuCinta franchise, we had anticipated NuCinta franchise total prescriptions and market share to be down in the first quarter following the execution of our payer strategy aimed at improving the profitability of the franchise.

16:25 While they did in fact decline, the positive impact on gross to net that we expected more than offset the decline in prescriptions. As a result, Net revenue was up 15% quarter over quarter, ahead of our expectations. Looking out further into 2021, the COVID pandemic remains a challenging dynamic in the marketplace. The biggest impact continues to be on in-office patient visits, which remain down about 20% since pre-COVID levels. This has a corresponding impact on the new-to-brand market. The difference between this year and last year is that we're leveraging key learnings, benefiting from adjustments in our commercial model, and have better visibility overall on the impacts of COVID. The productivity of our sales force is at pre-COVID levels, although the number of in-office visits are still down due to COVID. Our sales team continues to make progress, adapt and leverage digital capabilities to engage healthcare professionals remotely.

17:21 We just completed market research in March to understand physician perceptions related to our brands and the results were really encouraging. 65% of our targeted healthcare providers intend to prescribe more Xtamsa ER over the next 12 months. This is an increase in intent to prescribe from the surveys that were done prior to the emergence of the COVID pandemic. Conversely, 63% of our targeted healthcare providers intend to prescribe less OxyContin. We remain very enthusiastic about the outlook for Xtamsa ER and continue to expect that we will achieve branded market leadership in 2023. The commercial team is focused on continuing to drive broad-based growth for Xtamsa ER and ensuring stable contributions from the new Sinta franchise in 2021.

18:10 I look forward to updating you again on our progress on future calls. With that, I'll turn it back to Joe.

18:15 Thanks, Scott. I will now open the call up for questions. Ladies and gentlemen, you will now have our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may also press star two if you'd like to remove your question from the queue. One moment please while we now poll for questions. Our first question comes from Tim Lugo with William Blair. Please proceed with your question.

18:51 Yeah, thank you for taking the question and congratulations to Paul for his work over the past six years. You know, rare that companies are able to break into profitability in such a manner. So congratulations to all on the whole team. And Colleen, I look forward to working with you. I did have a question on Nucenta. You know, Nucenta is annualizing at over 200 million. And, you know, the top end of the guidance is still 195 million. Is there some sort of quarter-to-quarter lumpiness that we should expect throughout the year? And I know, obviously, the story of giving up some volume for higher-value prescriptions, which, of course, makes sense. But just wondering if there's anything one-time nature in the quarter or something we should watch out for?

19:42 Yeah, Tim. Well, first, thanks for the kind words. And so I really appreciate it. And I've really enjoyed my time here at Collegium. As far as Nucenta for the year, volume will continue to decline, but we think that the actions we took will just make it more profitable overall with a lower gross to net discount for the year. So our prior guidance on gross to net discount was in the low 50s. We now think it'll be more in the range of 46% to 48% for the year, so not quite as good of a gross to net discount as we had in the first quarter. So that'll bring revenue down on a quarterly basis as we go forward.

20:29 Okay, great. Thanks, Paul.

20:32 Great. Thanks, Tim. Thank you. Our next question comes from David Steinberg with Jefferies. Please proceed with your question.

20:44 Thanks, and good afternoon. And, Paul, best of luck to you in your new endeavors. Really appreciate your help over the years. Good luck to you. So a couple questions. First on NuSynta, so you mentioned that you now have, you're growing revenues because you've pruned out the less profitable scripts and other related actions. Just curious, is positive revenue growth sustainable going forward versus declines? as scripts continue to decline. And secondly, I know that when you did the transaction to get back more of the rights, you also mentioned that you were looking at some things over time via tech transfer and things to improve the margins on Nusenta.

21:34 And I know you said you've moved the manufacturing facility to TMO. Does that mean that we should be expecting better gross margins in the near term from Nusenta? Second question is, do you think there might be a chance for some off-cycle wins coming up soon with payers? And thirdly, on BD, you keep generating more and more cash, and I know you've been talking about looking at assets for a while. Obviously, you want to buy the right asset, but is the issue that the valuations are too high or you just can't really find anything that fits with your strategy? Thanks.

22:14 Great. So David, this is Joe. I'll start off with the Nusenta questions. I'll hand it off to Scott to talk about off-cycle with extamps and maybe come back with some thoughts on BD. So look, when you think about Nusenta, I think it's important that we continue to ground people. When we did the acquisition, we had communicated that we felt coming out of 2020, on a going forward annual basis, we could deliver sequentially stable revenues. And that continues to be our position. We're very encouraged by the impact of pruning some of the unfavorable contracts that it's having in 2021. And as Paul said, we expect to see continued pressure on prescriptions Although I would emphasize we do believe the remainder of this year, it will be at a moderated pace.

23:08 So it won't be to the degree we saw in the first quarter. As we emphasize with our guidance, we believe that we're going to do better than we had anticipated coming into 2021. But going forward, I would think about sequentially stable revenues based off of how we exited 2020 for the remainder of the life cycle of Nusenta. From a cost of production perspective, right now, the tech transfer that's underway to Thermo Fisher is an important step. We're also working across the value chain, both with Nusenta and Xtamsa. And I think at the end of this year, we'll be able to give some perspective on what we think we can accomplish over the next couple of years.

23:54 And Scott can talk about Xtamsa off-cycle.

23:56 Yeah, thanks for the question, David. Look, in the second quarter here, as we typically do, we come off the first quarter, we're really evaluating the impact of the new wins we've had and how we've shaped the market. Of course, we're always in conversations with payers. And right now, I have nothing to report from a mid-cycle win, but I will reinforce that our strategy hasn't changed. We always are looking to broaden access for the brand and really with a path of either exclusivity, parity, or in some situations, an exclusive run into parity. And so we'll keep talking. And when I have something to share, I'll be back in touch.

24:28 Yep.

24:29 David, from a BD perspective, what I would emphasize is, one, we feel we're coming at it from a position of strength because of the underlying business and the durability of our revenue from our differentiated pain portfolio. I would say the thing that's most important to emphasize is we're committed to being disciplined. as it pertains to our business development activities. So we're not looking to just do a deal. We're looking to do a deal that really makes sense for Collegium, and so we're not going to rush into anything. We're very focused. We remain active and engaged, and we continue to prioritize later stage non-opioid pain solutions, and we'll also maintain an opportunistic posture as it pertains to commercial stages.

25:19 Okay, thank you. You're welcome. Thank you. Our next question comes from David Anselm of Piper Sandler. Please proceed with your question.

25:34 Thanks. So, just a couple. So, first on X-Dams and the gross-to-nets, I understand the near-term dynamics in terms of driving that wider spread between gross and net. But I wanted to ask you, Joe, about your longer-term thinking about contracts. In particular, as you continue to gain share of the oxy market, I'm sorry, the ER oxycodone market, do you need to have exclusivity in place? And if you don't, does that mean there's potential for Nowhere were lower rebates over time. So help us understand how to think about that. And then secondly, on BD, you talk about pain. I'm just wondering out loud if you've brought in your focus more to CNS, not necessarily pain, maybe therapeutic adjacencies, maybe neurology more broadly speaking, but I'm just wondering how you're You know, over time, if you don't find something in pain, do you cast a wider net?

26:47 So how should we think about that? Thanks.

26:50 Yeah. So, David, thank you for the questions. First off, when you look at gross to net and I know your question was longer term, but I'm going to make a comment shorter term. We do believe when there's a return to normal and hopefully that will be the back half of this year. that will be able to have a greater impact in our parity and noncontracted books of business. One thing that encourages us from that perspective, even in a world of COVID, if you were just to look at our noncontracted books of business on a sequential growth basis, it grew 3% versus Q4 of 2020. So we're seeing movement there. And ultimately, when you think longer term about our strategy, Our goal has never been to get every life in an exclusive position, but rather to get enough critical mass that we can have a spillover impact into those other books of business. So that's something we'll continue to monitor.

27:52 And longer term, there's a couple things we'll be focused on. One, our effectiveness in those other books of business, which would have a positive impact on gross to net. Obviously, we'll also continue to, as we get further out with the brand, so think 2022 and beyond, look for opportunities to optimize existing contracts that we have in place when they expire. And that's how we think about it on a going forward basis. And look, from a BD perspective, Right now, our focus remains the same. That being said, as things evolve, if we find that there's nothing that really makes sense for the organization in either later stage non-opioid pain solutions or something commercial stage that directly leverages our infrastructure, we think we have optionality to the degree that it makes sense to explore adjacent areas.

28:48 And I think neurology would be one that would make sense for collegium.

28:56 Okay, thanks, Joe. You got it. Thank you. Our next question comes from Greg Gilbert with Truist Securities. Please proceed with your questions.

29:09 Thank you. I have a few. I'm going to start with the comments you made about COVID normalization in the second half, or you're not assuming it until the second half. I would assume that you're seeing pockets of improved activity and that this is kind of a continuum of activity, not a sort of toggle in a model. But I wonder how, since you made the comment, how does it affect your model specifically to say that there's normalization versus not normalization? Help me think about that, please.

29:38 Okay. So Greg, I'm going to ask Scott to share some thoughts on that one.

29:41 Yeah, thanks for the question, Greg. So it's very specifically how we think about it is anchored to two things. First, it's patient visits. And you're right, it's not, you know, peanut butter uniform across the country. But overall, patient visits are still down about 20% in pain specialty. And then what we look at to support that is the new-to-brand market. And what we see there is the new-to-brand kind of OER market volume is still where it's been during COVID. So there was a little spike that we drove through our new extams of contracts and exclusivity, but now it's settling closer to COVID level. So those are the two measures we look at, and that's what we look for to bounce back as things move later in the second half of the year.

30:22 And Greg, the only other color I would add to that is really where we believe the potential for impact there is in the other more profitable books of business, where you don't have the payer helping to drive disruption. And we think those two dynamics together will put us in a situation to be more effective there.

30:42 I understand that qualitatively. I was just trying to make sure that I wasn't missing something that you actually model as sort of tying to NBRXs and TRXs, etc. It sounds like it's more of a qualitative thing. Go ahead.

30:57 No, go ahead.

30:59 Did you guys notice any differences around the country in performance in Q1 specifically?

31:06 Yeah, thanks for the question. Yeah, the biggest thing I'd point out differentially is When you add a plan like Optum PDP, one of the largest Part D plans all over the country, we absolutely saw that had a differential effect in some regions that were lagging in market share where they've more aggressively accelerated market share. So that's the biggest thing I'd point out to you, Greg.

31:28 Okay. Just two more. One is, have you noticed anything about Purdue as a competitor changing ahead of an emergence from bankruptcy or is it status quo from your perspective?

31:42 Yeah, Greg, this is Joe. I don't think there's anything that we've noticed different as a result of those proceedings. And as you know, we stay laser focused on what it is that we're trying to accomplish.

31:54 Sure. And lastly, Joe, we've talked about just the overall long-acting opioid erosion rate and what you have built in, you know, longer term in a moderation, I think, to mid-single digit. Are you tracking sort of towards that as expected, or has there been anything interesting that's changed in that Thanks, Greg. Thank you. Our next question comes from Serge Belanger with Needham and Company.

32:44 Please proceed with your question.

32:48 Hey, thanks for taking my questions. First one, I guess, for Joe or Scott. This is usually the time of the year where we start seeing penetration in the newer exclusive formulary plans kind of stabilize. Are we reaching that same level this year? Should we expect anything different given the nature of the The newer plans and the expectations for COVID recovery in the second half.

33:15 Yeah, thanks for the question, Serge. So, yeah, I think when you think about the shape of the curve for this year, I would think of it similarly. We expect growth throughout the rest of the year skewed toward the first quarter. I think the one thing I point out that's different when we talk about this return to normal, we do believe as that happens and patient visits bounce back and new to brand bounces back a bit. that we can have greater growth in the third and fourth quarters of this year than we did in the past. And so that would be the one thing that I'd say could be different, but the shape overall should be similar.

33:46 Okay. And you've talked about the non-exclusive formularies being a much more profitable business. Can you just give us an idea of how much more profitable that really is?

33:59 Yeah, Serge, this is Joe. We probably won't get into specifics on that, but what I would say to you, is when you think about a continuum, Medicare exclusive would be the least profitable, commercial better, parity better than those two, and then obviously non-contracted is the most profitable prescription.

34:24 Okay, thank you, and good luck to Paul. Thank you. Thank you. And a reminder to our audience, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Brandon Folks with Cantor Fitzgerald. Please proceed with your question.

34:47 Hi, thanks for taking my questions. Maybe just following on from a previous question, you talked about patients with it being down, but how much of your sort of in-person reps, how contingent is sort of this These wins in the non-exclusive on those face-to-face interactions and maybe just sort of any context and kind of maybe what percentage of your sales force are back to face-to-face across the country in April. And then maybe on the guidance, on the Stamsa guidance in particular, obviously gross net went up a little bit. Did you perform a little bit better on a volume perspective, do you think, in the first quarter? Or, you know, Is it sort of in line and you kind of remain within that range? Just any context in terms of how well you've actually done in terms of a volume perspective as the scripts look pretty good.

35:43 Thank you.

35:46 Yeah, thanks for the question, Brandon. For the Salesforce, so yeah, so basically what we're seeing is our overall capacity is at 100%. All our reps are out there making calls. About 70% of those calls are live in office. So that's where we see improvement or increase as the country continues to open up and we move through COVID. So that's the context that I'd give to you there and why that's meaningful. The biggest reason that's meaningful is for the exclusive business, what we've learned even during a pandemic is because of the payer's influence, that business will grow as it did in the first quarter, but it's really our sales representatives being back and patient visits resuming to full capacity where we're able to really penetrate the non-exclusive books of business. So that's the focal point there.

36:31 Brandon, I would say at a high level when you look at Xtamsa uptake in the first quarter, it was expected from the perspective that we saw it immediate. The first day of the year, it was strong throughout the entire quarter, skewed to exclusive in particular, Medicare Part D. And so the commentary I would make is think about exclusive perhaps being a higher percentage of the mix than what we anticipated. but overall prescriptions in line to perhaps a bit favorable relative to what we were thinking.

37:08 Great, thank you both.

37:09 Maybe one quick follow-up. Medical exceptions in the beginning of this year and then maybe any from the beginning of last year, any impact there, anything material we should consider?

37:22 Yeah, so I think when you're asking about medical exceptions, you're probably talking about in Part D in the 12-month approval. What I would say is when you look across all of our exclusive books of business, inclusive of the 2020 and legacy wins, we saw progression across all exclusive. And I also want to emphasize that we saw growth in contracted non-exclusive and in non-contracted books of business on a sequential basis in the first quarter, which is encouraging to us.

37:59 Thanks very much, and all the best to Paul as well. Great. Thanks, Brian. Thanks a lot, Brian. Thank you. There are no further questions at this time. I'd like to turn the floor back over to Joseph Schifoni for any closing remarks.

38:16 Thank you all for your attention. Q1 was a strong start to the year, and I'm encouraged by our momentum and strong financial position. We believe that we are entering a phase of growth and value creation for the organization. and are on track to meet our objectives for 2021. I want to recognize my colleagues at Collegium for their hard work and dedication to our organization and thank them for their commitment to people living with pain and communities we serve. We will continue to focus our efforts on maximizing the value of our differentiated portfolio of pain products, achieving our near-term operational and financial goals, strategically investing in our long-term growth and delivering on our mission of being the leader in responsible pain management.

39:01 I look forward to updating you on our progress. Have a good evening. Ladies and gentlemen, this concludes today's web conference. You may now disconnect your lines at this time. Thank you for your participation and have a great day.