Quantcast

OptiNose, Inc. (OPTN) Q4 2018 Earnings Conference Call Transcript


Logo of jester cap with thought bubble.

Image source: The Motley Fool.

OptiNose, Inc. (NASDAQ: OPTN)
Q4 2018 Earnings Conference Call
March 06, 2019 , 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the OptiNose Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Jonathan Neely, Vice President of Investor Relations. Sir, you may begin.

Jonathan Neely -- Vice President of Investor Relations

Good morning, and thank you for joining us today as we review OptiNose's fourth quarter 2018 performance and our plans for 2019. I'm joined today by our CEO, Peter Miller; our President and Chief Operating Officer, Ramy Mahmoud; our CFO, Keith Goldan; and our Chief Commercial Officer, Tom Gibbs.

The slides that will be presented on this call can be viewed on our website, optinose.com, in the Investors section.

Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements. All statements that are not historical facts are hereby identified as forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements. Additional information regarding these factors is discussed under the Cautionary Note on Forward-Looking Statements section of the earnings release that we issued this morning, as well as under the Risk Factors section of OptiNose's most recent annual report on Form 10-K that is filed with the SEC and available at their website, sec.gov, and on our website at optinose.com. You are cautioned not to place undue reliance on forward-looking statements.

The forward-looking statements during this conference call speak only as of the original date of this call or any earlier date indicated in such statement, and we undertake no obligation to update or revise any of these statements.

We will now make prepared remarks, and then we will move to a question-and-answer session.

With that, I will now turn the call over to Peter Miller. Peter?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Thanks, Jonathan, and good morning, everybody. We appreciate you joining us this morning. We continue to feel very good about our progress, especially the recent strong trends we are seeing in the launch of XHANCE.

Starting on slide three. I'd like to begin by highlighting our key priorities. Our primary focus remains on continuing to drive XHANCE prescription growth. In the fourth quarter, we saw a significant increase in prescriptions, that growth has continued in the first part of 2019. I will review these results in a few minutes.

Our second key priority is to stand up the clinical trial program necessary to pursue a first-in-class indication for the treatment of Chronic Sinusitis in the United States. Currently, we are aware of no drug in the United States or the world, which has succeeded in receiving this indication. We view this development program as an important long-term value driver, because we believe it will enable us to significantly expand the potential audience for the product. In the fourth quarter, we enrolled the first patient in the first of two expected trials.

Finally, with approximately $200 million of cash available at the end of 2018, the strength of our balance sheet enables us to focus our 2019 efforts on the execution of our commercialization and development plans for XHANCE.

Turning to slide five. Before reviewing fourth quarter results, I would like to take a few moments to highlight the key levers that we believe will help us to continue to drive strong XHANCE growth in 2019 and support continued growth in the longer term.

Based on our recent results, we feel confident we are implementing the right core strategy to drive continued physician adoption of XHANCE. Utilizing enhanced messaging to communicate the efficacy of our product, our market research shows that we have been succeeding in strengthening physician perception of the effectiveness of the product.

The continued positive feedback we are receiving from physicians, who are reporting improvement in their own patients suggest that both our promotional efforts and expanding personal experience, are contributing to this improved perception. Our quantitative market research also suggest a growing physician appreciation of appropriate patient types and increasing physician understanding of the product consistent with a differentiated product profile. In addition, the combination of broad market access and the patient affordability programs we implemented in September, have created an environment, where many commercial patients can fill and refill XHANCE for low out-of-pocket costs.

We believe we have an attractive patient access and affordability offering for XHANCE, however, we are finding that our offering is not yet fully appreciated by many target physicians.

We view this positively, as it provides potential for additional growth as we continue our outreach and educational efforts for target physicians about our access and affordability programs.

Importantly, I'd like to point out, we have implemented our current patient access and affordability programs around September 2018, while growing volume and increasing average net revenue per prescription. In addition to driving growth by continuing to execute against our core strategy and our current commercial footprint, in April of this year, we expect to expand our sales force and increased our physician target reach by approximately 25%. This is a clear opportunity to directly engage in expanded audience of target physicians and to create a new source of prescription growth for XHANCE, with our new territory managers, primarily detailing previously on -- called-on physicians.

Next, we expect to make our 7-day sample product available to physicians and patients in the second quarter of 2019. The 7-day sample will provide physicians with the opportunity to get patients started right away on XHANCE, at the time of an office visit. We will also allow a patient to receive treatment during the time it may take per prescription be filled through a variety of available channels, including by mail. We believe this may help increase initial fill rates and increase patient and physician satisfaction with the process of starting treatment. This offering is obviously different from the current 30-day sample, which has comparatively limited distribution and has potential to help drive additional new prescriptions.

We continue to engage with payers with an objective to increase the number of commercial lives that are in a plan that covers XHANCE. This is a driver that has two benefits. First, coverage increases the probability that patients who filled their prescription in retail, will be able to do so for a reasonable out-of-pocket cost.

Second, coverage improves our profitability, by reducing the dollar amount of co-pay assistance that we provide through our patient access and affordability programs.

Finally, and this is more of a long-term driver, I continue to be excited by the potential growth that could result from direct to consumer marketing of XHANCE. This chronically suffering patient population is large with high unmet need. The symptoms are such that patients have a good chance of recognizing them and many patients who are not currently being treated had been previously diagnosed. Given all of this, we believe DTC has the potential to unlock future growth for XHANCE and we will field test pilots in 2019.

Turning to slide six. I'm encouraged by fourth quarter prescription volume growth. Total XHANCE prescription volume for the fourth quarter was just over 14,000 representing 50% growth over third quarter.

Turning to slide seven. We are also pleased with prescription volume trends continuing into early 2019. In the left panel, you can see total XHANCE prescription volume for January 2019 of approximately 6,300, which represents growth of approximately 38% over December 2018. We don't have results for the full month of February yet, however, in the right panel, you can see the total XHANCE prescription volume for the 4 weeks ending February 22, was nearly 7,200, which represents growth of approximately 39% compared to the previous four weeks ended January 25.

Encouragingly, this growth is being driven by not only new prescription growth, but also an acceleration of refills with both areas demonstrating strong double-digit growth.

Slide eight. Before turning the call over to Keith, for his review of the financials, I will briefly review some additional commercial updates. On the market access front, nationally, based upon third-party syndicated data and internal analysis, we believe that greater than 75% of commercial lives are currently in a plan that covers XHANCE. This includes all commercial lives that may be covered with Tier 3 formulary status. In 2019, we are focused on increasing this measure of market access.

In 2018, we recognize that not all coverage is equal and we pursued limited hassle coverage, which we defined as Tier 3 formulary status with unrestricted access a single step edit or a simple prior authorization that may require, for example, only a confirmation of prior intranasal steroid use. We estimate that approximately 60% of all commercially insured lives have formulary access that involve limited hassle. And while we will not have a formal goal for this measure in 2019, it will remain an important concept for us as we seek to expand overall coverage for XHANCE .

In addition to the lives covered by commercial plans, we're making progress and creating opportunities for XHANCE to benefit patients covered by Medicare and Medicaid plans. As mentioned earlier, we are working to hire and train new territory managers to start calling on approximately 1,800 previously uncalled ENT and allergy specialist physicians, which is an addition to the approximately 7,600 physicians that we're calling on now.

As mentioned, we view DTC as a key commercial initiative for the Company and believe it has potential to drive future XHANCE growth. Therefore, we expect to field DTC pilots including broadcast television in three markets this year. In a few moments, I'll update you on our pipeline and provide some closing remarks.

And now, I'll turn the call over to our CFO , Keith Goldan for comments regarding fourth quarter results and perspectives regarding first quarter and full year 2019.

Keith Goldan -- Chief Financial Officer

Thanks, Peter, and thank you to everybody who has joined this morning. Turning to slide 10, as we reported earlier this morning, OptiNose recognized $3 million of revenue in the fourth quarter of 2018. Based on available XHANCE prescription data purchased from third-parties and data from preferred pharmacy network partners, our average net revenue per prescription for the fourth quarter of 2018 was approximately $214, which is favorable compared to the average net revenue per prescription of approximately $202 in the third quarter of 2018.

Average net revenue per prescription is calculated by dividing net revenue for the quarter by the estimated number of XHANCE prescriptions dispensed during that quarter. As a result, this metric is subject to variability, that variability is impacted by factors that do not necessarily reflect the change in the price that is paid for an individual unit of XHANCE including ordering patterns and inventory levels for our wholesale customers and preferred pharmacy network partners, patient utilization rates of affordability programs, the proportion of patients acquiring XHANCE through an insurance benefit and other factors.

In addition, there is also the potential to third parties providing prescription data to change their estimation methodology and revise historical estimates of prescription volumes. One such change occurred at a third party IQVIA, that affected not just XHANCE, but nearly all prescription products dispense in retail pharmacies.

If you listen to our last call, we referenced third quarter 2018 average net revenue per prescription of $192. When we account for the backward looking revision in prescription volume estimates for the third quarter from IQVIA that figure is now $202 per prescription.

With respect to fourth quarter 2018 average net revenue per prescription, the favorability was driven primarily by lower rates of utilization of patient affordability programs than occurred in the third quarter of 2018.

We had anticipated our fourth quarter average net revenue per prescription to be lower than our third quarter average net revenue per prescription due to increased utilization of our patient affordability program. Better than expected reimbursement, which reduces the burden on co-pay assistance resulted in improvement.

In the final three quarters of 2018, average quarterly net revenue per prescription ranged from a low of $148(ph)in the second quarter to high of $214 in the fourth quarter with an average of $193 for the three quarters ended December 31st.

In a moment, I'll review our expectations for the first quarter and full year 2019. But first, I'll review our 2018 operating expenses.

Moving to slide 11. Operating expenses defined as sales, general and administrative expenses plus research and development expenses were $27 million for the fourth quarter and $105.7 million for the full year 2018. For the full year 2018, operating expenses were favorable compared to our guided range of $112 million to $115 million.

Moving to slide 12. Our initial guidance for 2019 operating expenses includes increases associated with key commercial and development activities. These include expansion of our sales force and the conduct of chronic sinusitis clinical trials, as Peter just described earlier on the call today.

For the full year 2019, we expect total operating expenses to be in the range from $135 million to $142 million, of which $10 million to $12 million is expected to be stock-based compensation. Total operating expenses excluding non-cash stock based compensation are expected to be in the range of $125 million to $130 million.

Based on data available to date, we expect first quarter 2019 net revenue per prescription to be between $155 to $175. This decrease from the fourth quarter 2018 is a consequence of the reset of many patient insurance deductibles in January. As a result of this annual reset, we expect greater co-pay support to be provided by us under our assistance programs, which are designed to support continued volume growth.

For the remainder of 2019, we believe average net revenue per prescription will improve and we expect that the full year 2019 average net revenue per prescription will be between $185 and $205. Factors supporting this expected growth include patients meeting their out-of-pocket expense thresholds, expected improvements in insurance coverage, and an increase in the proportion of prescription refills.

I will now turn the call back over to Peter to give a brief pipeline update and closing remarks.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Thank you, Keith. Turning to slide 14. In addition to the launch of XHANCE, we believe significant additional long-term value could be created by the pursuit of a follow-on indication for the treatment of chronic sinusitis or CS. This is an indication for which we are aware of no previous FDA approved drugs and a condition with a prevalence estimated to be approximately twice the size of the nasal polyp population that XHANCE is indicated to treat today.

In the fourth quarter of 2018, we announced the start of the first trial necessary to pursue this first-in-class indication. In the first quarter of 2019, our primary focus for the trial is activation of clinical trial sites. In addition, we continue to expect to start a second CS trial in 2019.

Turning to slide 16. In conclusion, we are encouraged by the sustained rate of growth in prescription volume that we are reporting today. We are also pleased that we are making progress toward our other strategic objectives. Based on our progress, I feel stronger than ever that XHANCE has potential to be a successful product that we can build a Company around and which can empowers to achieve our long-term goal of creating a leading ENT allergy and specialty Company.

I feel exceptionally good about the talented group of colleagues, who have joined us at OptiNose and cannot be prouder of the great work we have done and continue to do so together.

Thank you. Now, I'd like to open up for Q&A.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Brandon Folkes with Cantor Fitzgerald. Your line is now open.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Hi. Thanks for taking my question and congratulations on all the progress. I just want to dig into a few things. So -- as we look out to 2019 versus what you've seen, what do you think is resonating with physicians that is driving XHANCE's growth here. Is it awareness of XHANCE data? Or is it just increased access? And then with that, how should we think about the increased access in 2019? I know you touched on the call, but are you prioritizing hassle-free access or just access in general? Thank you.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Yes, Brandon. Thanks for the question, this is Peter. I'll take it, and Tom and others can jump in, if you'd like to add additional color. But, if you look at the growth we've been experiencing, we all know based on our clinical trial results we have a product that works. We then -- as most people are aware from survey work that we did in the market based on actual use in the market, the product really works. So I think the acceleration that you're seeing in physician and sort of understanding of the product has to do with two things. Number one, our territory managers in my view, have done a very strong job of educating doctors on the efficacy profile of the product. But in addition to that, as we said in our remarks, doctors are getting their own experience with the patients -- with their own patients and many of them are reporting to us results that they've just not seen in patients historically with the use of medical therapies.

So I think it's those two factors that we're going to continue to drive. So therefore, job one is we say all the time is making people believe the product really is differentiated especially from an efficacy perspective and not in my view, the data suggests market research, we're achieving that, based on the two things that I mentioned.

The other key single brand, and as you know, is making sure that doctors believe that patients can get it filled at a reasonable cost. And this is where we really believe, we got the strategy completely right with the introduction of our patient affordability program in September, because that allows our territory managers to tell physicians that have patients still through the specialty channel that we've created, the maximum out-of-pocket they're going to pay is $50 and most patients will pay $30, with the first prescription being free.

So it really is the combination of both those things. And as I said, earlier in the call, we consider it candidly, little bit of good news that not all physicians completely understand our patient affordability program, because, as we continue to make them aware of it, that can provide continued upside in the business.

Tom, I don't know if you have anything to add?

Tom Gibbs -- Chief Commercial Officer

Yeah. Just a couple of other things to add that I think may support what Peter is saying, and thanks for the question, Brandon. I think there's three things that really drive physician interest in trying XHANCE, the first is making sure that we're defining the appropriate patient type for XHANCE for the patient -- for the physician to begin using XHANCE.

Second is, we've really been able to magnify our efficacy message with not just clinical trials, but also videos to show the impact that XHANCE is having -- for real patients using endoscopy videos. And, third is the patient affordability program, so that's really what drives the interest.

And I think second, what's really driving the conviction of physicians, and we're seeing more and more prescribers in terms of breadth and depth, is what they're seeing in their own patients and it's that conviction and they see it, the efficacy they're seeing in their own patients, which is what is driving that -- I think what's driving the uptake that we're seeing.

And then, your second question was about access. And our focus is to continue to drive what we call hassle-free access, we always try to go in to get a single step or better, and if we can't get the single step, a very, very simple prior authorization.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Thank you, very much . And maybe one follow-up if I may. Next month in April, you're bringing on the territory managers and internalizing the contract sales force. Should we expect any selling disruption, while you do this or will it be a seamless transition? Thank you.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Tom, I'll let you answer that.

Tom Gibbs -- Chief Commercial Officer

Thanks, Brandon. I think you bring up a very important question and that's something that we've been very thoughtful about. We want to minimize disruption wherever and whenever we -- as possible. And I would say that we should not expect any disruption in April, because the physicians that we are adding are going to be what we call XHANCE naive patients, they have -- XHANCE naive physicians, they have not been called on before. So based upon that, we're really not disrupting any relationships at the territory level for our sales team.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Great. Thank you very much.

Operator

Thank you. And our next question comes from David Amsellem with Piper Jaffray. Your line is now open.

David Amsellem -- Piper Jaffray -- Analyst

Thanks. So just a couple. So first on the ASPs, I wanted to drill down on the range that you provided. Is it -- one safe to say that you will be at the lower end of the range in 1Q, just because of the seasonal factors that are prevalent in the industry like annual deductible resets. But then, secondly, as we get later into the year, you mentioned that there was lower than expected utilization of patient affordability programs in the fourth quarter.

So I'm wondering, if given the color that you've provided qualitatively, if that ASP range particularly in 2Q through 4Q maybe somewhat conservative and help us understand, what your thinking is there? In other words, the step down from the $214 to going to back to lower 2s and even below that. So just help us understand that.

And then just lastly, quickly on the cash position, can you just help us understand your runway and the extent to which you may look to access capital down the road? Thanks.

Keith Goldan -- Chief Financial Officer

Sure, David. Thanks for the question. This is Keith. I'll take your second question first, and then I'll comment on the average net revenue per prescriptions. So from a cash perspective, we ended the year with -- about $200 million on the balance sheet, and we did -- although, we didn't include included in our prepared remarks, we did include a statement in the 10-K that we filed earlier this morning, that we expect that cash to last us into the fourth quarter of 2020.

I did want to point out that, that does not contemplate the additional $25 million that maybe available to us from Athyrium.

Moving to your first question, you referenced ASPs and it's a little nuance, but we are -- when we report the price per prescription, we talk about that in terms of average net revenue per prescription, which I described as, taking the net revenue for the period the quarter in this case, and then dividing by the number of prescriptions dispensed during that quarter. So I bring that up because ASP is a more -- I'll say in internal in depth calculation that contemplates a lot of other factors. And we don't disclose the ASP publicly.

But for the average net revenue per prescription just to reground everybody, we gave guidance, a range of $155 to $175 average net revenue per prescription in the first quarter and then expanded that to $185 to $205 average net revenue per prescription for the full year.

So with respect to your question about conservatism, David, those are the ranges that we expect. This is our first Q1 on the market. So I will say that we did expect the negative impact of the annual co-pay insurance deductible resets, I don't think that's unique to OptiNose or to XHANCE, that's commonly seen throughout the industry. So that was fully expected. But as those deductible thresholds are met, and as we increased coverage throughout the year, and average -- and as the proportionality of refill to total prescriptions increases, we do expect that to continue to rise through 2019 -- I'm sorry -- yeah 2019 to achieve that full year range of $185 to $205 average net revenue per prescription.

Peter K. Miller -- Chief Executive Officer, Board of Directors

David, the thing I would add just on the -- helping better understand the first quarter, because of our patient affordability program, we obviously -- where a lot of brand see potential volume decrease and price decrease because of co-pay resets. Because of affordability program, we obviously saw significant volume increase through this timeframe. And so therefore, the effect on the average revenue prescribed was a little bit more pronounced and maybe you would have expected, but the key point that Keith emphasized, we feel very confident about the ranges that we're talking about for full year.

David Amsellem -- Piper Jaffray -- Analyst

Okay. And if I may just sneak in a follow-up regarding persistence rates and I don't know if you have specific quantitative metrics here. But if you don't, maybe talk about qualitatively, what you're seeing in terms of patient churn? And do you have a sort of average portion of patients, who are -- what I don't know it's kind of early, but who are consistently remaining on therapy. Just help us understand how you're thinking about persistence, not just in '18, but as we move more into 2019?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Yeah. And David, I'll start with sort of what you alluded to, but we'd like to remind people that because we really started a new patient affordability program in September. We sort of believe the right time to really looking -- start thinking about persistence and refill, it's really on that timeframe where we had the zero, $30, $50 program in place. So we sort of say the starting point to really understand is September. And as we've said on prior calls, we really believe it's going to take a full-year of data to really understand use of the product because, as we've said many times, based on our understanding the market, patients will sort of cycle in and out of products in the category, based on relief they're getting from the symptom standpoint, they will use the product, symptoms will get better, symptoms will return, though -- still though titrate down or they go potentially go off the product, and then they return when their symptoms come back, and we know patients are highly symptomatic, six months of the year minimally. So I'm given you all background information that's probably -- I know you understand, David. But that sort of sets the table, so it candidly is still a little bit too early to be able to predict what -- it's going to be for the full year.

I will tell you based on the data that we're seeing, we're feeling really good about refill. And as I said in my prepared remarks, we saw a nice acceleration of refill in the first part of this year, and we obviously can't predict that's going to continue to happen. But I go back to based on how well patients are doing on the product when they actually use it. We continue to feel that refill rate should be strong on this product.

David Amsellem -- Piper Jaffray -- Analyst

Okay. Thanks, Peter.

Operator

Thank you. And our next question comes from Gary Nachman with BMO Capital Markets. Your line is now open.

Gary Nachman -- BMO Capital Markets -- Analyst

Good morning, guys. Nice progress. In terms of recent acceleration to prescriptions, where specifically is most of that additional penetration coming from? Polyps versus non-polyps, pre or post surgery, ENT or allergy? And it sounds like you're pretty comfortable with where the patient assistance program is right now. Do you plan on making any changes to that at all this year in terms of the max co-pays and is that same plan. So what's factored in your net revenue guidance for the year?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Gary, I'll take the second, and I'll let Tom take the first one. But relative to our patient affordability program, we really believe we have it right. It's generating the -- as I said earlier, job one is to make sure physicians believe in efficacy, but second is to make sure that it's reasonably easy and affordable for patients to fill. And we just believe we got the program right.

So in -- for the near-term, near-term defined as -- we don't have necessarily an end date to our patient affordability program right now. So for right now, we're very confident, it's driving volume. And as I -- and I said in my prepared remarks, we feel really pretty good about the average net revenue per prescription that we generate in the back half of the year, and with that program in place. So we believe we're going to get some nice tailwind by the way on average revenue prescription as Keith said in his remarks, based on continued increase in coverage that we expect to achieve this year along with more of our volume shift going into refill. And we obviously make more money on refill, because the first prescription being free in -- and versus patients paying 30 or 50 for the second script.

So I'll let Tom answer the first one.

Tom Gibbs -- Chief Commercial Officer

Thanks for the question, Gary. I think it's an important one to understand. First and foremost, before I go into how the products use by indication. I do want to just reemphasize the fact that our sales team and all promotional efforts are focused on promoting XHANCE with the nasal polyps, but however physicians will prescribe the product as they see fit. The data that outside(ph)is from the monthly IQVIA NDTI audit survey data, which ask physicians when they prescribe a product, how or what indication they are prescribing it for.

So if you look at the chronic sinusitis umbrella, about 60% to 65% of the prescriptions -- I'm sorry, 60% to 65% of the prescriptions that physician state they are writing are within that chronic sinusitis umbrella, about half is under nasal polyps and about half falls within the chronic sinusitis umbrella. And the other 35% to 40% is all other, which would include indication such as allergic rhinitis.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Gary, I would say two, and Tom you may want to add some color that, the really encouraging thing about our business right now is we're seeing growth everywhere. We're seeing across virtually -- every single region of our country. Our region -- business development team, I feel exceptionally good about that team. And we're seeing growth across the country, we're seeing growth across virtually every territory manager at this point in time, we're seeing growth both in ENT and in allergy. So it's -- that's why I made the statement of our confidence in the strategy being right. So it's very encouraging, where the growth is coming from.

Tom Gibbs -- Chief Commercial Officer

Yeah. The other thing I was going to add Gary, which I think is important is looking at sort of contribution by indication. And if you remember back in the second quarter when we were launching, we would say that ENT and allergists represent about an equal proportion. We're seeing accelerated growth within the ENT, specialty right now about 51% of our prescriptions are written by ENTs and about 33% for allergists and that's really important and good progress, because that's really how the distribution of our target audience as well. So we've made really good progress with ENTs. And I like that because they're durable prescriptions.

Gary Nachman -- BMO Capital Markets -- Analyst

Okay. What about the last point on just pre or post surgery, and maybe how you guys you think are stacking up versus some of the competitors like the stents that are out there?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Well, I mean, I'd say, relative to that question Gary, is we view ourselves as completely not competitive with the implants. And the reason for that is those products are used in conjunction with an intranasal spray. So many doctors tell us who are using an implant, they say actually we're using you guys with the implant. So we believe we are the best option relative to topical treatment using application via something administered through the nose. So as I've said many times, we do not view ourselves as competitive with the stents. But I'll make the same -- by the implants Sanova. I'll make the same comment by the way, relative to the biologics.

If you look at how those products are studied. If you talk to physicians how they intend to use those products, they intend to use it with -- in conjunction with an intranasal spray. So there again, we view it as absolutely complementary. And by the way some of the attention that nasal polyps are getting from the development by these other products we view is a positive, because they're just increasing awareness among the population of nasal polyps.

Gary Nachman -- BMO Capital Markets -- Analyst

Okay. And last really quick one, just, when do you expect that we could see the chronic sinusitis data from the first Phase 3?

Keith Goldan -- Chief Financial Officer

Gary, this is Keith. We're early -- it's early days in terms of enrollment. So we expect to be able to give better guidance on that once we get further into enrollment in the first trial and initiate the second trial later this year.

David Amsellem -- Piper Jaffray -- Analyst

Okay. Thank you, guys.

Operator

Thank you. And our next question comes from Randall Stanicky with RBC Capital Markets. Your line is now open.

Randall Stanicky -- RBC Capital Markets -- Analyst

Great. Thanks guys. And sticking with the theme of growth, if we look at slide seven, you're close to 40% month-over-month. If we look at back of the envelope on your average net price, call it a $195 a year. In order to hit consensus, it's roughly 15% month-over-month, obviously, it's not going to be a linear trajectory. But as you think about upcoming seasonality sales force expansion and other initiatives, how do you think about that progression over the next, call it, several months just to set the stage for that? And then I have one follow-up?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Well, I'll first talk about sales force expansion Randall, because that really could be an accelerator for growth, especially in the back half of the year. It's like getting as someone new in territory. It takes some time for those territory managers to really be productive. But based on new territories we're starting now, we started a few territories. It's been a sort of a bellwether, if you will, an indication of how we can get territories going. And we're feeling pretty good. We'll be able to get those territories up and really contributing in the back half of the year.

So that's truly potentially what we said in the call, 25% pretty much new targets from the standpoint of potential generate new growth. So that's -- relative to seasonality, Randall we not lived through a full season. So it's really hard for us to completely comment on it, but we do know looking at the category data, and Tom jump in, that this season by the way really has not started yet. So if you look at category growth of intranasal sprays it's reasonably flat, right Tom? Across January, February. So the growth trends that you're seeing to date, year-to-date are not due to seasonality. As we head into the March, April, May, that is the height of the season.

So I think there is potential for some real nice tailwind there. As you know from last year, July, August, starting sort of middle of June, July, August tends to be the trough, if you will, from a seasonality standpoint. One of the things that we're feeling a little bit differently this year versus last year is we are getting a higher proportion of our business in refill and that potentially becomes a way that you can sort of whether a downturn in seasonality, where you're not relying on a new scripts being written by patients being present in the office.

Tom, I don't know if you have anything to add?

Keith Goldan -- Chief Financial Officer

This is Keith. Just one point to highlight, a comment that Peter made. In the December '18 to January '19 TRx

growth of 38% that we reported on the slide seven, that you referenced Randall. In that same period, the INS market increased 5% and in the four weeks ended February 22, '19 compared to the four weeks ended January 25, '19, we reported 39% growth. In that same period, the INS class actually decreased 1%. So, as Peter said, the growth that we're seeing, we feel is not linked to seasonality.

Randall Stanicky -- RBC Capital Markets -- Analyst

Got it. And Peter, it's fair to say that you guys are investing into that foot traffic volume pickup in the next couple of months via DTC other factors to try to capture some new patients. Is that fair?

Peter K. Miller -- Chief Executive Officer, Board of Directors

I would say it's not really fair Randall. I mean, we do have a social media program going on right now, from a targeted direct-to-patient. But I want to make sure I'm clear on the direct-to-consumer program that I'm describing, that will be a pilot this year. So you guys, who know us know that we like to learn before we jump fully into anything. So we have three markets that will start doing DTC, and we pair those markets, so we can understand the incremental value of DTC. And that's -- so what we're doing this year will not have broad impact on prescriptions this year. However, if we learn -- what we hope to learn, which is, it could be a real accelerator for growth, it could have real impact in 2020.

Randall Stanicky -- RBC Capital Markets -- Analyst

Got it. And I have one completely unrelated question, that I was hoping to get to ask you. As you step back and look at the launch, I assume this priorities number one through 11 are going to be getting this launch right. But at what point you step back and say, OK it's fine to start thinking about leveraging the platform bringing in licensing in a second product as you look to build out the Company?

Peter K. Miller -- Chief Executive Officer, Board of Directors

I'll say we're already thinking about it Randall. I mean, as you said earlier -- and by the way, I agree completely with your point that jobs one through 10 are making sure XHANCE is successful. And we know that we understand that, that's primarily -- that's the huge focus of our Company. And -- but relative to bringing stuff in, we -- it's absolutely things that we're working on, and we obviously aren't going to comment too much on it, but we have the benefit of Ramy Mahmoud and his team. I think we have an exceptional team of not only developing products, but understanding market opportunity in different spaces. And I'll just say that we're in the midst of evaluation of a number of things.

As you also are aware, we did do a deal of out-licensing, and that's not directly related to your question relative to leveraging the ENT allergy infrastructure. But we were successful in and out-licensing of areas that we've said we're going to defocus in terms of use of capital and use of our resources via the deal with Inexia. We're very excited about that, by the way, because that they're a great partner. Medicxi, who is helping fund that transaction along within Inexia. So we're excited about that, it's not going to be a focus of our -- of the Company, but it is a way to create some additional value.

Randall Stanicky -- RBC Capital Markets -- Analyst

That's great. Thanks, guys.

Operator

Thank you. And our next question comes from David Steinberg with Jefferies. Your line is now open.

David Steinberg -- Jefferies -- Analyst

Thank you. Couple of questions. The first one is, does your ASPs for the year include any annual price increases. And do you have any information on -- are patients actually using the full script for a month or maybe they're not using it twice a day, and therefore, is the script actually lasting longer than 30 days, do you have any information on that?

Peter K. Miller -- Chief Executive Officer, Board of Directors

Keith, I'll let you take the first one. I'll take the second one.

Keith Goldan -- Chief Financial Officer

Yeah. David, I appreciate your question on annual price increases, but we don't -- as a practice, we don't comment on our expectation of any price increases.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Your second question David relative to patient usage, this is mostly anecdotal David, that just based on our interactions with patients. As I said earlier in the answer of one of the questions. The way patients have historically used products in this category is they tend to treat more heavily, if you will, when they're symptomatic. And for a variety of reasons, cost being one of them, and the second being just the -- they having to take a product every day.

So, nothing has really changed in our view that we're probably going to have the same kind of treatment. And I'll let Ramy potentially jump in, if you have other comments Ramy. But we don't really have any data relative to our product being more or less frankly than the category at this point. So Ramy, I don't know if you have other comments?

Ramy A. Mahmoud -- President and Chief Operating Officer

Nothing to add.

Peter K. Miller -- Chief Executive Officer, Board of Directors

But we'll certainly get -- we'll continue to get that data, David. But as I said earlier, the one thing I do really feel good about right now is the acceleration in our refills, which obviously is an indicator of people using it with a reasonable frequency.

David Steinberg -- Jefferies -- Analyst

Right. And then a couple more. You may have gone through it, but obviously every week, we can see the IQVIA data, but the bulk of the scripts go through the specialty pharmacy. Could you remind us what percent of the scripts go through specialty pharmacy. And is that ratio retail to specialty change? And do you expect it to change throughout the year further?

And then finally, I think Randall is asking a question about sort of monthly sequential growth in consensus. So if you work through the math, you've been growing the first two months, I think almost 30% or more, if you work through the math to get to consensus, I think if every month scripts grow sequentially 10% to 15%, you can get there. I'm assuming you think the allergy season will be pretty strong. So even if there is low this summer, it sounds like you think you can at least get the consensus on(ph)this. And based on what we're seeing so far this year and month-to-month growth, albeit from the low base and then track it throughout the year, is that a correct assumption?

Keith Goldan -- Chief Financial Officer

I'm not -- So this is Keith, Dave, we were not going to comment if that's a correct assumption or not, but I'll give you some anecdotal thoughts that perhaps will help you with your modeling. The -- we're -- as Peter remarked and I commented, we're excited by the sustained growth that we're seeing. This summer, with respect to your question on seasonality. We expect similar to last year that there maybe a -- you called it a low, that maybe due to the foot traffic, docs were on vacation, patients were on vacation. But I will say that in a business that is in the early phases of launch, that is driven by new to brand prescriptions, that requires a physician, patient interaction of physical interaction to get that initial prescription.

As the business matures and begins to move -- proportionality of the business begins to move more to refills, you -- I think it's reasonable to expect that the low as you called it, would decrease over time or as the brand matures and that proportionality moves more toward refills and rely upon the new to brand prescriptions. Your..

Peter K. Miller -- Chief Executive Officer, Board of Directors

Got question on the year.

Keith Goldan -- Chief Financial Officer

A question on the year, I mean, yeah, we're not going to comment specifically on TRxs or on revenue guidance, we're not going to give that at this time, although, we will say or emphasize that we expect to see increased growth in our average net revenue per prescription as the year progresses.

Operator

Thank you.

Keith Goldan -- Chief Financial Officer

You asked about the proportionality of our business also. So -- and this is -- I think your question was with respect to -- what's captured in IQVIA versus what we see through our -- through the preferred pharmacy network partners?

I think the best way to answer that question, David, is that, the direction of the growth that we're seeing is consistent in the two channels. It's impossible to really bifurcate one versus the other, because in the IQVIA data that you're purchasing, you are actually seeing some of the preferred pharmacy network partner data reflected in that IQVIA purchase. So they are picking up. IQVIA is picking up some data from some of the preferred pharmacy network partners, although, not all.

So the exercise that we go through again bifurcates that, pulls the number out of IQVIA for the pharmacies that are reporting, and then, we obviously, have perfect data with respect to what our pharmacy partners are dispensing. So I think -- again, the best way to answer the question is directionally, the growth of the -- the direction that you're seeing the IQVIA scripts has generally historically been indicative of the direction of the what we're seeing through our pharmacy partners.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Hey, Dave. The only thing I would add is that, it's -- the split which you asked about, it's high 40s in terms of currently -- in terms of the percent of business that's represented by IQVIA of the total business. And it's candidly(ph)hard for us to predict what that -- whether that proportionality is going to remain or not. So it's something that's hard for us to comment on.

Operator

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Peter Miller for closing remark.

Peter K. Miller -- Chief Executive Officer, Board of Directors

Well, I'd just like to thank everybody for joining us for the call, and we look forward to hopefully you joining us on our 1Q call. Thank you very much.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. And you may all disconnect. Everyone have a wonderful day.

Duration: 50 minutes

Call participants:

Jonathan Neely -- Vice President of Investor Relations

Peter K. Miller -- Chief Executive Officer, Board of Directors

Keith Goldan -- Chief Financial Officer

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Tom Gibbs -- Chief Commercial Officer

David Amsellem -- Piper Jaffray -- Analyst

Gary Nachman -- BMO Capital Markets -- Analyst

Randall Stanicky -- RBC Capital Markets -- Analyst

David Steinberg -- Jefferies -- Analyst

Ramy A. Mahmoud -- President and Chief Operating Officer

More OPTN analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

10 stocks we like better than OptiNose, Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and OptiNose, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Motley Fool Transcribers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Personal Finance , Stocks
Referenced Symbols: OPTN




More from Motley Fool

Subscribe






Motley Fool
Contributor:

Motley Fool

Market News, Investing












Research Brokers before you trade

Want to trade FX?