Jaguar Health Inc. (NASDAQ:JAGX) Q3 2022 Earnings Conference Call November 14, 2022 8:30 AM ET
Company Participants
Lisa Conte – President, Chief Executive Officer
Carol Lizak – Chief Financial Officer
Ian Wendt – Chief Commercial Officer
Conference Call Participants
Operator
Before I turn the call over to management, I’d like to remind you that management may make forward-looking statements relating to the matters as contained growth prospects for the company. Uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product initiatives, including products in the development stage which may not achieve scientific objectives or meet stringent regulatory requirements, thus forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management’s current assumptions, expectations and projections about future events.
While management believes its assumptions, expectations and projections are reasonable in the view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company’s actual results may differ materially from those discussed during this webcast for a variety of reasons, including those described in the Forward-Looking Statements and the Risk Factors sections of the company’s Form 10-K for the year 2021, which was filed March 11, 2022, and in other filings with the SEC which are available on the Investor Relations section of Jaguar’s website.
Except as required by law, Jaguar undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise. Additionally, please note that the company’s supplement, its condensed unconsolidated financial statements presented on the GAAP basis by providing non-GAAP EBITDA and non-GAAP recurring EBITDA, Jaguar believes that the disclosure items of these non-GAAP measures provides investors will additional information that reflects the basis upon which the company management assesses and operates the business. These non-GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sale and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP.
Today’s conference is being recorded, and at this time, it is my pleasure to turn the call over to Lisa Conte, Jaguar Health Founder, President and Chief Executive Officer. Lisa, the floor is yours.
Lisa Conte
Thank you very much, and thank you for those comprehensive forward-looking statements. Welcome all. As you just heard, my name is Lisa Conte, and I am the Founder, President and CEO of Jaguar Health and our wholly owned subsidiary in the United States, Napo Pharmaceuticals.
For those of you who can only participate for a short time, here are the key takeaway messages from this webcast regarding upcoming potential momentum drivers. Combined net revenue for our prescription products increased in the third quarter of 2022 for the fifth quarter in a row, growing 8.2% in Q3 versus Q2 of 2022 and increasing approximately 412% over Q3 2021.
Next, we expect the successful completion of our ongoing Phase III OnTarget clinical trial of Crofelemer for cancer therapy-related diarrhea to potentially expand the indication of Mytesi with enrollment in the trial targeted for completion in the second quarter of 2023, with an analogous market opportunity in chemotherapy-induced nausea and vomiting of approximately $3 billion for comparison purposes.
As we recently announced, the full results of the investigator-initiated trial named HALT-D evaluating Crofelemer for preventing chemotherapy-induced diarrhea in breast cancer patients was published last month in the peer review journal, Breast Cancer Research and Treatment, the principal investigator and author of that was Dr. Sandy Swain, who is the former president of AASCO.
Next point, Dr. Mohamad Miqdady, Division Chief of the Pediatric Gastroenterology Division at the Sheikh Khalifa Medical City in Abu Dhabi in the UAE is leading an investigator-initiated proof of concept trial of Crofelemer for short bowel syndrome, which you may hear us refer to in this discussion as SBS, and also congenital diarrheal disorders which we may refer to as CDD, publication of proof of concept data from this and other expected investigator-initiated trials could support early patient access to Crofelemer for SBS and/or CDD with intestinal failure within 2023 through programs in Europe. These early patient access programs which do not exist in the United States are revenue generating and reimbursable for participating patients and focused on rare diseases where there are no good alternative treatments.
Next, we expect that a business development deal will be executed in the next couple of months that will bring in non-dilutive funding in support of our mental health Entheogen Therapeutics initiative program and our extensive proprietary library of plants and plant extracts, which is an asset we are looking to mobilize.
Finally, a second conditional approval for Canalevia for exercise-induced diarrhea, which we refer to as EID, in dogs is targeted for the first quarter of 2023, complementing Canalevia which is currently conditionally approved for chemotherapy-induced diarrhea in dogs.
Now I’ll go into greater detail on these bullet point items. I’m going to begin today with the key top line results for the third quarter, the financial results for the third quarter of 2022.
Prescription product net revenue totaled approximately $3.1 million – this is in the third quarter of 2022, and as I mentioned, this represents an 8.2% increase over the second quarter of 2022 and an increase of approximately 412% over the third quarter of last year, 2021. This is the fifth consecutive quarter of growth in Mytesi net revenue. We are quite pleased with the growth trajectory of our current prescription drug business and, as you’ll hear, quite excited about the late stage pipeline opportunities that we feel will be transformative in value recognition and value creation for all our stakeholders, including of course patients and our shareholders.
I’ll continue with a few other updates and then Carol Lizak, our Chief Financial Officer will provide a recap of the key financial results for the third quarter of 2022, and after Carol speaks, we’ll hear from Ian Wendt, Jaguar’s Chief Commercial Officer. Ian will speak to updates on Mytesi-related commercial initiatives to continue to educate and serve the HIV community, and about ongoing commercial efforts underway for Canalevia CA1, our prescription product for the treatment of chemotherapy-induced diarrhea in dogs – we call that sometimes CID. This product has been conditionally approved by the FDA and became commercially available just this year to veterinarians in April of 2022, and for dog owners to provide comfort and relief to their family members and to the canine patients.
As a reminder, our commercialized drug product is named Mytesi, the generic name is Crofelemer. It is a first-in-class antisecretory agent approved initially in the United States for the specialty indication of systematic relief of non-infectious diarrhea in adult patients with HIV AIDS on anti-retroviral therapy – a mouthful. As the term specialty implies, this is a relatively small market, an important market but the HIV market is relatively small. The indication was fast tracked by the FDA, and that’s why it’s the first approved indication for Crofelemer.
As I frequently state, what is really powerful about Crofelemer is that it is a pipeline within a product, and what I’m going to focus on today are the two late stage clinical milestones, what we believe are potentially transformative events in the next approximately six to nine months in support of the company taking Crofelemer from pipeline opportunities to, with the potential of important and significant clinical trial results, tangible revenue-generating patient benefiting product indications.
The core human follow-on indications on which we are focused are cancer therapy-related diarrhea – CTD in the United States, and through Napo Therapeutic’s rare disease business model, a company that we established in Italy, the orphan indications of SBS – short bowel syndrome, and CDD – congenital diarrheal disorders, initially for commercialization in Europe, however with clinical data both generated in the U.S. and available for U.S. filings as well.
First, what exactly are these indications? Each year, according to the CDC, there’s more than a million cancer patients in the United States receiving chemotherapy or radiation in an outpatient oncology clinic in the United States and as many as 50 to 100% of these patients experience diarrhea, depending the treatment regimen. Most of us have had lives of our close community touched by cancer in some way. There have been amazing advances to treat survivors, to make survivors. Not managing diarrhea negatively impacts patients outcomes of their cancer therapy as approximately 40% of cancer treatment patients who experience diarrhea either discontinue their life saving cancer therapy or move to or even start with a sub-therapeutic dose of their cancer treatment regimen. This is at best highly distressing and impacts the comfort and dignity of the patient, and at its worst it impacts the outcome of the patient’s chemotherapy and drives cost to the healthcare system from immense dehydration and potential infections, compromised outcomes for the cancer treatment.
Enrolling is continuing for the OnTarget study – that is the name of our pivotal Phase III trial of Crofelemer for cancer therapy-related diarrhea in humans. We’re aiming to complete this enrollment with a total of 256 patients by the second quarter of 2023, just around the corner. This is a prophylaxis study, which tells you a lot about how important it is to get in front of the impact of diarrhea during cancer treatment. CTD is not the mild loss of control that we’ve all invariably experienced with perhaps some minor flu or a bad meal. This is diarrhea that can put patients in the hospital, can cause organ shutdown, and has even contributed to death in some patients who have been in targeted cancer agent manufacturers’ clinical trials.
With the new targeted cancer therapies that are used chronically both in metastatic and incurative cancer situations, therapies are used for months or years. The incidence of diarrhea is sometimes as high as 100%. To project the potential market opportunity for CTD, since Crofelemer would be the first drug to be approved for this indication, we’re looking at an analogous market – chemotherapy-induced nausea and vomiting, CINV is how it’s often referred to, which is projected to be close to a $3 billion global market this year according to a report published by [indiscernible] Market Research. CINV agents are typically only used for about the first three to five days in traditional cytotoxic chemotherapy, and there are many generic entries in this market. With CTD – cancer therapy-related diarrhea, we are talking about diarrhea that can persist on a chronic basis for months or years.
The enrollment criteria for our Phase III trial includes all patients with solid tumors, so a basket approval, a broad approval including a label for prophylaxis for patients on targeted therapy with or without cytotoxic chemotherapy in all solid tumors is the label expansion we are seeking for Mytesi. Let me point out this trial is being done with the exact formulation of Mytesi which is already approved, which obviously has a full GMP compliant supply chain in place and is approved for a chronic indication, so has chronic safety completed as well. The two most common reasons safety manufacturing line in new drug applications fail are already taken care of with Mytesi.
We’re very excited about this program. With Crofelemer’s strong safety profile, we expect cancer patients to be able to tolerate and benefit from Crofelemer chronically. The successful completion of enrollment in our OnTarget pivotal trial, again just around the corner, targeted for the second quarter of 2023 will, we expect, lead to a supplemental new drug application filing for Mytesi, as I mentioned, the same formulation of Crofelemer that is currently approved. We spent much care and engaged in extensive communication with the FDA in the design and the execution of this final clinical and regulatory step to support bringing Crofelemer to cancer patients suffering from diarrhea and/or the risk of diarrhea from their prescribed therapy.
I’ll now discuss our prioritized short bowel syndrome pipeline indication for Crofelemer. I am Chairman of the Board of Napo Therapeutics, the corporation we established in Milan, Italy last year to which we granted an exclusive license to Crofelemer in Europe. Specifically, Napo Thera is initially pursuing a rare disease business model based on the orphan drug designation of Crofelemer for SBS and CDD with intestinal failure. Jaguar is majority shareholder of Napo Therapeutics as well as the licensor of the technology, which therefore provides equity interest value to Jaguar as well as typical license terms.
Let me describe the catastrophic medical situation for people with SBS – short bowel syndrome. A normal gut is 20, 25 feet in length; in SBS, the patient’s gut could be less than five feet for congenital reasons or as a result of surgery due to cancer, inflammation, or an accident. As you can imagine, with a very short gut, it’s like a sieve – what does in comes right out. The bottom line is that there’s not intestinal real estate, surface area for the SBS patient to absorb the nutrients of life – carbohydrates, proteins, fats, vitamins and minerals, so what happens is that these patients often end up on parenteral nutrition, the intravenous feeding of liquid nutrients for up to 20 hours a day, seven days a week, obviously a significant negative impact on the patient’s quality of life, and there are multiple negative health impacts – infections, complications associated with parenteral nutrition. It’s expensive – it costs hundreds of thousands to a million dollars a year to manage an individual patient, including not only parenteral nutrition but also the myriad of complications with very high morbidity and mortality.
The global market for SBS is projected by third parties to reach $5 billion by 2027 – this is a report from Vision Research Reports. Although parenteral nutrition is considered the standard of care, there is a drug product approved for SBS called teduglutide – very hard to pronounce, teduglutide, which is a GLP-2 analog. It’s essentially a growth hormone intended to grow the surface area, the real estate of the gut slightly so that there is a little bit more time for absorption. It’s administered as an injection and its estimated to be utilized in less than 10% of the SBS patient population. It’s not considered standard of care.
GLP-2 analogs have a range of side effects, including cardiovascular risk, endocrine risk, and it’s not used chronically. The primary end point in the trial for the approval of teduglutide was the reduction in the time required to be on parenteral nutrition by about 20%. What we’re looking to do with Crofelemer for a primary end point is to reduce the time on parenteral nutrition as well and provide better stool formation and a quality of life measurement which the reimbursement organizations have indicated is important to them.
As I mentioned, SBS development of Crofelemer is being pursued through Napo Therapeutics in Europe, which holds an exclusive license to Crofelemer for the European marketplace from Jaguar – Jaguar is the licensor, Napo Therapeutics is the licensee. It’s a classic license agreement incorporating upfront payment milestones and royalties. We based the new company in Europe because key countries in the European Union and Europe – U.K., which is not in the European Union, have early access programs for orphan indications with unmet medical needs, like SBS, because of the impact on patients. Early patient access programs of this type do not exist currently in the United States, hence with published proof of concept data, patients in specific major markets in Europe can get access to a product through these early access programs while the full approval trials are still being pursued. Early access programs are revenue generating and for participating patients the product is reimbursed.
We have approved an investigator-initiated proof of concept trial for Crofelemer for SBS and CDD. The third party investigator is targeting a presentation of this trial at next month’s, December 2022, next month’s World Congress of Gastroenterology. This is a global GI conference in Dubai. Additional investigator-initiated requests and trials and clinical data are expected to come throughout 2023 from key opinion leaders with whom we’ve been in touch, and in accordance with the guidelines of specific EU countries, as I mentioned, publications of such data could support early patient access to Crofelemer for SBS or CDD with intestinal failure within 2023.
As Jaguar and Napo Therapeutics were pleased to announce last month, the European Medicines Agency, which is the equivalent of the FDA in the United States, EMA is in Europe, they granted orphan drug designation for Crofelemer for the indication of microvillous inclusion disease – MVID. This is a rare congenital disorder that’s a form of CDD, and this was granted in the European Union. This is a very welcome development of Crofelemer because now it is a new molecular entity that has been granted two orphan designations by the EMA in less than one year. The orphan designation for SBS was received from the EMA in December of 2021.
This regulatory progress for the molecule is absolutely remarkable. Crofelemer already holds orphan drug designation in the United States for SBS, and this is a classic rare disease, estimated about 40,000 people around the world. Again, remember third party market research put the market opportunity at $5 billion for rare disease of about 40,000, given the way reimbursement works for rare disease business models. NVID, which as I said is a component of CDD, is ultra rare with maybe only a couple of hundred of incidence around the world. The orphan drug designation application for Crofelemer for NVID was also submitted to the FDA in the United States, and we’re standing by waiting for that designation.
Financially, important key advantage of Napo Therapeutics’ effort to Jaguar is that Napo Thera is well over majority owned by Jaguar, providing potential equity value accretion to Jaguar shareholders and stakeholders, value that we believe is unrecognized at this time. Jaguar also receives the value of any clinical data generated by Napo Thera and reciprocally Napo Thera receives the value and ability to utilize, for example, the CTD, the cancer Phase III data Jaguar is developing for their licensed territory in Europe. Hence, the parallel complementary and geographically focused efforts of Crofelemer for these three core indications – CTD, SBS and CDD, are progressing simultaneously and collaboratively with two dedicated, focused and extremely experienced and talented teams for the relevant pursuits on each side of the ocean.
To recap, in approximately six to nine months, we expect to have completion of enrollment in our Phase III trial of cancer therapy-related diarrhea, called the OnTarget trial, and published proof of concept data in support of potential early access program participation in mid-2023 in Europe for SBS and/or CDD, which could bring in meaningful revenues while Crofelemer continues to go through the process for full approval in Europe, two expected transformative events on the near term horizon supporting value recognition, potentially moving initiatives from a pipeline opportunity to ultimately tangible revenues, further tangible revenues in hand for Crofelemer.
An additional team milestone for 2022 on the human front, for which we completed in the third quarter of this year, was the filing of an investigational new drug application with the FDA for our NP-300 drug candidate for the symptomatic relief of diarrhea from cholera. We were very pleased to hear from the FDA in September that they completed their review of our IND and concluded that Jaguar may proceed with its proposed Phase I clinical trial for the drug. We are grateful for the partial financial support we received from the National Institute of Allergy and Infectious Diseases to support the NP-300 pre-clinical program.
Following the completion of the Phase I trial, we are positioned to initiate the next stage of clinical development program for cholera when Jaguar has the requisite resources and bandwidth to initiate these additional trials. We intend to pursue a tropical disease priority review [indiscernible] to develop NP-300 for the cholera indication under the FDA’s financial incentive program. Priority review vouchers are transferrable and in past transactions by other companies have sold for values ranging from $67 million to $350 million, which provides for a potential immediate return on investment upon approval of NP-300 for the cholera related diarrhea indication and receipt of a priority review voucher.
Now if we move onto our animal health side of the business, which is a relatively small side of our business but very important and meaningful, Crofelemer is also the active ingredient in Canalevia-CA1, our product for chemotherapy induced diarrhea in dogs, for which commercial launch activities have already been initiated and ongoing throughout 2022. The entire cancer situation in dogs is remarkably analogous to the human situation and, as with humans, it’s estimated that dogs discontinue their disease modifying chemotherapy or move to a sub-therapeutic dose nearly 40% of the time due to diarrhea, meaning that these dogs cannot complete their therapeutic dose of chemotherapy because of diarrhea.
The comfort of the dog is one of the most important, if not the most important consideration of dog owners when they decide whether or not to put their dog through cancer treatment – as you can imagine, you can’t speak to the dog, and also the entire household is compromised when the dog has lost control.
There are a couple of really important factors in the dog market. The incidence of cancer in dogs is reported to be five times what we see in humans, and the total number of dogs in the U.S. is about 108 million post-pandemic. Unfortunately and heartbreakingly, about 50% of the dogs over the age of 10 are going to be diagnosed with cancer at some point, so in addition to this really important conditionally approved indication of CID – chemotherapy induced diarrhea in dogs, Crofelemer is expected to be conditionally approved for the treatment of exercise induced diarrhea in dogs in the first quarter of 2023.
Jaguar also is proud to say that we launched the first ever canine cancer registry in the United States in May of this year at an event in New York. We couldn’t believe a registry did not exist in the United States. The project is called the Jaguar Health Take C.H.A.R.G.E. – that’s an acronym, initiative. The goal in establishing Take C.H.A.R.G.E. is to assess the prevalence and incidence of cancer in dogs, and most importantly how you can keep the dog and the entire family situation comfortable during what is often a very siloed and tragic event for families and help create a community of support and education with the information that comes from the registry.
The Take C.H.A.R.G.E. campaign was developed by TogoRun, which is Jaguar’s amazing PR firm and one of the financial co-sponsors of Take C.H.A.R.G.E. Togo’s efforts have led to more than 80 million media impressions generated for Take C.H.A.R.G.E., with more to come of course, and I’m happy to report that just this month, the MarCom Awards program, which celebrates excellence in marketing and communications, honored Take C.H.A.R.G.E. with two platinum awards and one gold award, which drives awareness and therefore the value of the registry. We’re quite proud of TogoRun’s capabilities and efforts there.
In the next 12 months, there is the potential for a lot of other news, and in particular on the business development front, we have global rights to Crofelemer for all indications. What I’m going to focus on though, beyond our GI efforts, is Jaguar’s mental health focused development effort, which is called Entheogen Therapeutics Initiative – ETI, and this initiative aims to discover and develop groundbreaking novel natural medicines derived from the psychedelic and psychoactive plants for the potential treatment and potentially cure of mental health disorders. This effort has been designed to mobilize a key Jaguar asset, our proprietary library of 2,300 plants and 3,500 plant extracts that was generated over three decades.
In June of this year, Jaguar and Filament Health signed a letter of intent to enter a collaboration agreement to develop botanical prescription drugs for specific psychoactive target indications in the United States. Filament has the laboratories, manufacturing, manufacturing IP capability for natural and plant-based products that Jaguar, as a company now focused on later stage clinical development, no longer has. We bring to the table the ethnobotany expertise, the expertise of how to do drug development under FDA botanical guidance, which is the approval that we have for Mytesi, and our two companies together are seeking partnerships with well funded entities to pursue regulatory approval and ultimately commercialization for novel pharmaceutical prescription grade plant-based standardized drug candidates in the mental health space.
Jaguar and Filament together are far along in discussions, and within the next several months I believe you can expect to see a formalized business development collaboration that involves bringing in non-dilutive funding to help mobilize and leverage Jaguar’s plant library for the very important initial targets – we’re thinking of ADHD and social anxiety disorder, to markets that have understandably expanded because of the pandemic. I believe you can also expect to see other business development deals on the horizon because we are committed. It is our mission to bring Crofelemer to all patient populations in need in all geographies around the world.
Finally, I’d like to let all you participating today know that we will have a brief Q&A segment at the end of the webcast to address any questions if they are submitted in writing. Questions can be submitted via the webcast link for today’s event that appears on the Events and Presentations page of the Investor Relations section of Jaguar’s website, and the URL for Jaguar’s website is jaguar.health.
We’ll now move along to the key financial results for the third quarter of 2022. Carol, our CFO, I’ll turn it over to you.
Carol Lizak
Thank you Lisa, and thank you all for joining our webcast today. I’ll begin my review of our financials for the third quarter of 2022.
Prescription product net revenues during the third quarter of 2022 was approximately $3.1 million and $2.9 million in the second quarter of 2022, an increase of about $200,000 or 8.2% quarter over quarter, and an increase of approximately 412% over prescription product net revenue in the third quarter of 2021.
Mytesi prescription volumes increased approximately 3% in the third quarter of 2022 over the third quarter of 2021. Prescription volume differs from invoiced sales volume, which reflects, among other factors, varying product buying patterns among specialty pharmacies in the closed network as they manage their inventory levels.
For the third quarter of 2022, the loss from operations increased by $400,000 from $9.5 million in the third quarter ended September 30, 2021 to $9.9 million during the same period in 2022. Non-GAAP EBITDA for the third quarter of 2022 and the third quarter of 2021 were a net loss of $8.5 million each respectively.
For the third quarter of 2022, the net loss attributable to common shareholders increased by approximately $300,000 from $12.2 million in the quarter ended September 30, 2021 to $12.5 million in the same period in 2022. In addition to the loss from operations, interest expense increased by $600,000 from $2.1 million in the quarter ended September 30, 2021 to $2.7 million for the same period in 2022, primarily due to interest from the royalty and [indiscernible]. Another one is the change in fair value of financial instruments and hybrid instruments designated as fair value options, or FVO, increased by $700,000 from a loss of approximately $600,000 in the three months ended September 30, 2021 to a gain of about $200,000 for the same period in 2022, primarily due to fair value adjustments in liability classified warrants and notes payable designated as FVO.
Other expenses also increased by about $100,000 from $20,000 in the quarter ended September 30, 2021 to approximately $200,000 for the same period in 2022, and that’s largely due to foreign currency transactions.
That concludes my recap of high level financials for the third quarter of 2022. I will now hand the discussion over to Ian Wendt, Jaguar’s Chief Commercial Officer.
Ian Wendt
Thank you Carol and good morning to all. As Carol stated, Mytesi total prescription volume, a metric we believe to be the best indicator of patient demand, increased approximately 3% in the third quarter of 2022 over the second quarter of 2022. As previously announced, the transition we completed throughout the end of 2021 and into the beginning of 2022 to a limited distribution network of specialty pharmacies resulted in a meaningful reduction in Mytesi distribution costs as well as a higher average net price.
I’m very pleased to report that we significantly outperformed the industry gross to net average in the third quarter of 2022 as we did in the three previous quarters as well for sales of our human prescription product. This improvement in our gross to net was largely a result of the efficiencies realized by the transition to a closed network of specialty pharmacies. This transition assists in the preparation of the company’s U.S. commercial distribution network for potential future indication expansion of Crofelemer to other populations of patients with complex medical needs, such as CTD, inflammatory bowel disease, SBS and CDD. As Lisa mentioned, Q3 2022 is the fifth consecutive quarter of growth in Mytesi net revenue, which we’re also very pleased about.
I’m also pleased to report that our innovative, recently launched programs that further support patients connecting to care and medication access services are continuing as planned. The first program is our telehealth initiative, which went live in May. This enables patients seeking help with their HIV-related diarrhea to be linked immediately to a provider for assistance with their medical needs. This new capability prevents patients from having to wait until their next scheduled doctor visit to get help with what is a really urgent problem.
Our second recently launched program delivers digital Mytesi and disease state education directly into a provider’s EHR – that’s the electronic health record system, so that the provider can learn about Mytesi at the moment they are seeing their HIV patients. This technology allows us to intelligently deliver ads to a provider based on the profile of the patient they are seeing in their examine room. This is strictly a one-way communication – we do not receive any protected health information.
Turning to the animal health side of our business, Canalevia-CA1, our FDA conditionally approved drug for the treatment of chemotherapy-induced diarrhea, or CID in dogs, became commercially available to veterinarians across the United States at the end of April 2022, as Lisa mentioned. Since that time, we have succeeded in pushing Canalevia-CA1 into broad distribution with the leading veterinary distribution centers. Approximately 40% of the 280 veterinary specialty clinics in the U.S. have already ordered at least one bottle of Canalevia CA-1. This is a great indicator that veterinarians are seeing the clinical benefits of a product among their patients.
Commercial launch activities for the drug remain underway and reception of Canalevia-CA1 among general practice vets and veterinarian colleges continues to be extremely positive. For example, under our Jaguar Animal Health trade name for the veterinary market, we sponsored the October 26, 2022 episode of DVM 360 Live. This is a web-based, magazine-style talk show for veterinary professionals hosted by veterinarian, Dr. Adam Christman, which drives awareness of Canalevia-CA1 and encourages veterinary clinics to contribute canine cancer records to Jaguar’s Take C.H.A.R.G.E. canine cancer registry initiative. Veterinary oncologist, Dr. Sue Ettinger, who is also known as Dr. Sue, Cancer Vet, appeared on the DVM 360 Live episode to discuss Canalevia-CA1. She was joined on the show by one of her canine patients, a Labrador mix undergoing chemotherapy for sarcoma, and the dog’s owner who discussed his pet’s experience with Canalevia-CA1.
Additionally, Jaguar Animal Health launched on on-demand webinar for veterinarians on October 27, 2022, titled Chemotherapy-Induced Diarrhea in Dogs: Effectively Treating this Therapy Limiting Side Effect. U.S. veterinarians who participate in the webinar, which was hosted by veterinarian oncologist, Dr. Craig Clifford, are eligible to receive one hour of American Association of Veterinary State Boards RACE, which stands for Registry of Approved Continuing Education. This gives them an approved continuing education credit. This effort represents another way that we are actively engaging with providers one-on-one and are excited to report that attendance for the live version of the webcast, both the 2022 record for clinicians [indiscernible] – that’s who hosted the CE training, the continuing education provider that hosted the event, we had well over 500 participants and there were a lot of excellent questions, all of which shows the great level of interest among veterinarians about managing and treating chemotherapy-induced diarrhea in dogs.
As Lisa mentioned, we expect Canalevia-CA1 could additionally receive FDA conditional approval under the name Canalevia-CA2 for the treatment of exercise-induced diarrhea, or EID, in dogs in the first quarter of 2023.
That concludes my comments. Thank you all for your time today, and I’ll pass the conversation back to Lisa.
Lisa Conte
Great. Hopefully I did go off mute here, and thank you Ian and Carol. We are all energized about all these important initiatives underway, proud of what we achieved in 2022, very excited about what’s coming up really just around the corner in pharmaceutical terms, six to nine months in 2023.
A few questions have come in, and I will take a look at those – okay. One question is the current ATM – at the market that is in use, how much is left to sell? Let me tell you something about a company like ours having the gift of qualifying and having an ATM in place. We have about $10.7 million, approximately $11 million in cash reported at the end of this Q, and to be sure that we have sufficient funds to get to the end of, for example, our cancer trial, there may be a need to bring in more funds. Right now if you look at the financings for companies that are in our range and our market cap, they’re terrible – they are structured, there are warrants, they really are highly toxic to current investors.
What the ATM gives us the opportunity to do is bring in cash at the market, no warrants no bells or whistles down the road when necessary, so we’re pleased that we qualify for one and we do have about $50 million capacity on the ATM. That doesn’t mean we’re using $50 million of the ATM, but we do have capacity for $50 million on our ATM.
What are the key catalysts you are focused on in the upcoming year? Which of these catalysts do you think are most underappreciated by the street? How do you think the macro environment may affect your business? Okay. I think so much is underappreciated by the street. I think just about everything is underappreciated by the street when we have a market cap that is hovering around $20 million or so. This is a company that just reported the fifth straight growth in net revenue and is in late stage clinical development for this very same product, this very same formulation that’s already approved and on the market for a blockbuster opportunity in terms of unmet medical need for the patients, the impact to move from simply supportive care, which is very important, the comfort of the patient, but to also potentially have an impact on cost of treatment and outcome of the cancer patient.
When we move to Napo Thera, I think that it is way under-recognized in value. Not only is it an opportunity for meaningful revenue generation in 2023 from meaningful patient impact with short bowel syndrome, but there’s also the equity piece of that – we own well over the majority of Napo Therapeutics, which has its own valuation which can be recognized at the end of the year from the Italian filings.
We have another product approval coming up, Canalevia-CA2 for exercise-induced diarrhea. That would be our third prescription product approved. We have business development deals that could pop at any time. We did the mid-east license in February of 2022, we obviously have the license to Crofelemer in Europe, but we have other Asian countries available, other rest-of-world territories, and a commitment to bring this product to all these different patient populations, so I’m not sure which one is under–I’m not sure which one is valued. There seems to be nothing valued. I think we’re all under-appreciated by the street and I think part of it is the macro environment, and in particular the macro environment for biotech in healthcare, so looking forward to events in all companies in our space to help bring greater recognition to this important industry.
Okay. When do you expect the trial to be completed so you can pursue the vouchers? This is for cholera. Cholera is–we have, as I mentioned, the next clinical trials for that indication are going to be timed for when we have resources to do so without unnecessary or very expensive dilution to our shareholders. As we get some more events under our belt that are recognized by our shareholders, I think that would be the time to put some resources to the cholera program, because it will be a couple of years before the completion and approval of that program, which is then what allows you to have the voucher. We are very focused on near term momentum drivers, near term six to nine months or less to really bring value recognition to the undervalued situation at Jaguar now.
Are there plans for mergers and acquisitions in the not-too-distant future? There are no specific plans for mergers or acquisitions; however, there are no terms in any deals that we have cut or anticipate to be cut that would prevent a merger or acquisition, and certainly we wouldn’t want that to occur at this horrendous valuation at the moment. Thank you for the compliment.
What was the third quarter revenue in dog-related therapy? The third quarter revenue specifically for the dog-related therapy, Carol, I don’t think we broke that out. Did we break that out in the Q?
Carol Lizak
On the-yes, it’s on the 10-Q, yes – the Canalevia, because we have human health and animal health.
Lisa Conte
And do you know what that number is?
Carol Lizak
The revenue–yes, I’m looking at the moment. Just a second.
Lisa Conte
And remember, this product was launched in the end of the second quarter, and that’s when the load-in occurs to the distributors.
Carol Lizak
About $150,000 for Canalevia.
Lisa Conte
Great, thank you.
That is all the questions, so thank you all very much for listening. We’ll look forward to 2023 and we will look forward to speaking to you again when our K results come out, and that will be in 2023 as well.
Bye bye.
Question-and-Answer Session
End of Q&A
Thank you. That will conclude today’s conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.
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