Jaguar Health, Inc. (NASDAQ:JAGX) Q4 2022 Earnings Call Transcript

Jaguar Health, Inc. (NASDAQ:JAGX) Q4 2022 Earnings Call Transcript March 27, 2023

Operator: Good morning. Before I turn the call over to management, I would like to remind you that management may make forward-looking statements relating to such matters as contained growth prospects for the company, uncertainties regarding market acceptance of products and the impact of competitive products and pricing, industry trends and product initiatives, including projects in the development stage which may not achieve scientific objectives or be stringent regulatory requirements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially than those contemplating 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 view of currently available information, your question not to place undue reliance on these forward-looking statements. The company’s actual results may differ materially from those discussed in today’s — during this webcast for a variety of reasons, including those described in forward-looking statements and Risk Factors sections of the company’s Form 10-K for the year of 2022 which was filed, March 24, 2023 and its 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 and future events or otherwise.

Additionally, please note that the company supplements its condensed consolidated financial statements presented on a GAAP basis by providing non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosed items of those non-GAAP measures provide investors with 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 sales and GAAP net loss and are not substitutes for or superior to measures of financial performance and conformity with GAAP. Today’s conference is being recorded. At this time, it is now my pleasure to turn the conference over to Lisa Conte, Jaguar Health’s Founder, President and Chief Executive Officer.

Lisa, the floor is yours.

Lisa Conte: Thank you very much and welcome to all. As you just heard, my name is Lisa Conte and I’m the Founder, President and CEO of Jaguar Health and our wholly owned subsidiary in the United States Napo Pharmaceuticals. Sometimes we use Napo and Jaguar names interchangeably. I’m also a member of the Board of Napo Therapeutics, the corporation we established in 2021 in Milan, Italy which is focused on expanding access to Crofelemer in Europe, in particular for rare disorders. I’m going to begin today by letting you know we will highlight shortly the key events that we expect in 2023 will be transformative in terms of value generation for all our stakeholders including patients and shareholders. Moving late-stage pipeline opportunities towards revenue-generating reality, this is an important theme that you will hear infused throughout today’s call.

Right now, I will review the key top line results for the fourth quarter of 2022. Prescription product net revenue was approximately $11.9 million for the year ended December 31, 2022 versus approximately $4.3 million for the previous year ended December 31, 2021, an increase of 178.7%. We are quite pleased with the growth trajectory of our current prescription drug business which from Mytesi is currently limited to the approved specialty market indication of HIV-related diarrhea and, as I often say, specialty often typically means a relatively small market opportunity. Regarding the company’s cash position, the company had cash of approximately $15.3 million as of March 24, 2023, just a couple of days ago, the filing date of Jaguar’s annual report on Form 10-K for the year 2022.

I’m going to repeat that. Cash of approximately $15.3 million, as I speak this morning, an important and meaningful subsequent events in our 10-K filing that I’m often asked about. Following my update, Carol Lizak, Jaguar’s Chief Financial Officer, will provide a recap of the key financial results for 2022. And then 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 drug for the treatment of chemotherapy-induced diarrhea in dogs. As a reminder, our commercialized human drug product is named Mytesi. The generic name is Crofelemer. It’s a first-in-class antisecretory agent approved initially in the United States for the specialty indication of HIV-related diarrhea, very specifically the symptomatic relief of noninfectious diarrhea in adult patients with HIV AIDS on anti-retroviral therapy.

As I mentioned, it’s a relatively small market. This indication was fast-tracked by the FDA. And that’s why HIV diarrhea is 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 our key clinical milestones. Again, what we believe are potentially transformative events in 2023 in support of the company Crofelemer from pipeline opportunities; two, with the potential of important and significant clinical trial results this year, tangible revenue generating patient benefiting, shareholder, stakeholder benefiting product indications our ongoing pivotal Phase III trial, OnTarget trial, called the OnTarget trial of Crofelemer for cancer therapy-related diarrhea and I may refer to that as CTD is our flagship development program.

This trial is being conducted with the same dose and formulation of our Mytesi product, of course, already commercialized in the United States for HIV-related diarrhea, the same product, same dose, same formulation. The OnTarget trail is evaluating the effectiveness of Crofelemer’s novel mechanism of action, the modulation of two chloride ion channels in the gastrointestinal tract to mitigate or substantially reduce CTD in a prophylactic setting. It is a study that aims to expand the approved indication of Mytesi from the current limited HIV related Diarrhea to the potential blockbuster needs of prophylaxis in patients with cancer therapy-related diarrhea. Our efforts over the past year to expand the OnTarget trial to new U.S. and international sites with trial sites now active in Eastern Europe in both Georgia and the Republic of Serbia as well as in Argentina and Taiwan have significantly accelerated patient enrollment.

Enrollment is now at approximately essentially at over 80%. OnTarget trial enrollment of 256 patients is expected to complete early in the second quarter of 2023 which is literally just around the quarter. We do feel that the OnTarget trial will be transformative for value and value recognition at Jaguar. Diarrhea is the most common side effects associated with cancer therapy; as many as 52 of 100% of patients experienced diarrhea. In addition to addressing patient comfort and dignity which is so important, with approximately 40% of patients changing or stopping their life-saving cancer therapy due to diarrhea, there is a clear unmet medical need for a focused paradigm shifting biological approach. Our expectation is that the placebo-controlled OnTarget trial will provide evidence that diarrhea associated with targeted cancer therapies is chronic, impacts the patient’s ability to remain on their targeted cancer therapy regimens, at proven doses for better outcomes in their cancer treatment.

And that addressing CTD reduces overall health care costs, such as required hospitalization and rehydration from implications of chronic and/or severe diarrhea. Remember, Crofelemer has providing a potential opportunity for a paradigm shift for both prophylaxis and management of CTD. For which there are no current approved or tested antidiarrheal agents for which antimotility drugs such as Imodium and loperamide which are primarily opioids have constipating risks which is totally inappropriate and, again, untested and unapproved for chronic administration. Crofelemer is not an opioid and does not have that constipating risk associated with opioids. Each year, according to the CDC, more than 1 million cancer patients received chemotherapy or radiation in an outpatient oncology clinic in the United States.

Treatment can last for months to years in both the curative and metastatic situations. These targeted therapies, of which there about 70 now which are used on a chronic basis, often for the rest of the patient’s life, work for the most part by mechanism is that induces the type of secretory diarrhea that Crofelemer normalizes. Again, OnTarget is a prophylactic study which tells you a lot about how important it is to prevent the onset and the impact of diarrhea during cancer treatment with targeted therapy drugs. CTD is not the mile loss of bowel control that we’ve all invariably experienced with perhaps a mild flu, a bad meal. This is diarrhea that can put patients in the hospital, cause organ shutdown and has even contributed to death in some patients who have been studied in targeted cancer agent manufacturers clinical trials.

To project the potential global market opportunity for CTD, since Crofelemer would be the first drug to be approved for this indication, we’re looking at an analogous market. Well, we don’t put out financial — specific financial guidance and forecast, the value of the global chemotherapy-induced nausea and vomiting market, CINV is projected to reach to $3.9 billion by 2029, according to a report published by market research firm, Health Care Analyst. And CINV agents are typically only used for about the first 3 to 5 days in traditional cytotoxic chemotherapy and many of these agents are generic which somewhat lowers what the projections — financial projections can look like for proprietary drugs. With CTD, we are talking about diarrhea that can persist on a chronic basis for months or years.

That’s the paradigm shift. We are very excited about our CTD program, the successful completion of patient enrollment in the OnTarget pivotal trial which, as I mentioned, is targeted for early in the second quarter of 2023. Will — We expect lead to a primary endpoint readout in Q3 of this year and then to a supplemental new drug application filing for the same formulation of Crofelemer as the currently commercialized drug Mytesi. Mytesi is already approved for chronic use in people living with HIV AIDS and it has a full FDA compliant supply chain in place from the rain forest to our distribution network with specialty pharmacies across the United States. And as a reminder, safety and manufacturing are the 2 most common reasons that new drug applications fail and these activities are completed for Mytesi from a regulatory perspective.

Hence, we spent much care and engage in extensive communication with the FDA in the business line and execution of the final clinical and regulatory steps to support bringing Crofelemer to cancer patients suffering from diarrhea and/or the risk of on a prophylaxis basis from their prescribed therapy. In preparation for the expected commercial launch of Crofelemer for CTD, we’re increasing our focus on patient advocacy initiatives in the United States. In support of this goal, we’re very pleased by Dr. Kelly Shanahan, a former clinician herself and a metastatic breast cancer patient who is now a full-time independent patient advocate, has joined the Jaguar Scientific Advisory Board as both a health care provider in cancer patients, she shares our deep commitment to patient comfort and dignity, especially to the importance of preventing and ameliorating CTD on a chronic basis and in both accurative and metastatic settings.

And to supportive care in cancer patients in general. We are so pleased to hear Dr. Shanahan’s voice and perspective on how successful supportive care management is a key component to successful cancer treatment outcomes. She brings a unique and welcome perspective to the community, including industry that will augment our efforts to bring about a paradigm shift to address the very high unmet and neglected comorbidity of CTD as novel targeted agents and approaches are addressing long-term management and potential cures for cancer. We support a full community approach to holistic patient care and comfort to support life and support quality of life. I’ll now discuss our 2 prioritized rare disease target indications for Crofelemer. Short bowel syndrome which I refer to as SBS with intestinal failure in adults and microvillous inclusion disease, MVID, an ultrarare pediatric congenital diarrheal disorder.

This year, Jaguar and the company we established in Europe, Napo Therapeutics, are planning to support third party and we are supporting third-party investigator-initiated proof-of-concept studies of Crofelemer in patients with SBS with intestinal failure or pediatric patients with MVID focused on obtaining proof-of-concept data showing reduction of requirements of parenteral support, including parenteral nutrition and/or IV fluids. In accordance with the guidelines of specific European Union countries, publications of data from proof-of-concept trials could support early patient access programs to Crofelemer for SBS with intestinal failure or MVID potentially in 2024 through programs in these certain European countries, Italy, France, U.K., perhaps Spain as well.

Early access programs do not exist in the United States, are revenue generating and reimbursable for participating patients while the indicated product is continuing through clinical development for full approval in the EU. Let me describe for a moment the catastrophic medical situation for people with short bowel syndrome. Normal small intestine is 20 to 25 feet in length. In short bowel syndrome, the patient’s small bowel could be less than 5 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 SIV . What goes in comes right out; the bottom line is, there’s not enough intestinal real estate, enough surface area for the SBS patient to absorb the nutrients of life, carbohydrate, protein, fats, vitamins and minerals.

So what happens is that such SBS patients that have intestinal failure, often end up on parenteral nutrition, the intravenous feeding of liquid nutrients for up to 20 hours a day, 7 days a week. Obviously, this has a significant negative impact on patients’ quality of life and there are multiple adverse events, infections and other complications associated with parenteral nutrition quite common. And parenteral nutrition is expensive, costing hundreds of thousands to $1 million a year to manage an individual patient including the myriad of associated complications with high morbidity, high mortality. The global SBS market is projected to reach $5 billion by 2027, according to reports from Vision Research reports. And this, again, we’re an orphan indication of about 40,000 patients around the world but a classic orphan rare disease business model.

Although parental Nutrition is considered the standard of care, there is a drug product approved for SBS call Teduglutide and its GLP-2 analog. It’s essentially a growth hormone, intended to grow the real estate of the gut slightly, so there’s a little bit more time for absorption of the nutrient of life. It’s administered as an injection and is estimated to be utilized in less than 10% of the SBS population. Again, it is not standard care. Teduglutide which is hard to pronounce, Teduglutide has a range of side effects, including liver disorders and is not tolerated by many patients on a chronic situation. The primary endpoint 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 is to reduce the time on parenteral nutrition as the primary end point as well that pathway has already been utilized and provide better stool consistency and the quality of life measurement. We are working to design a global Phase II short bowel syndrome study of Crofelemer that harmonizes with the requirements of both the FDA and the European Medicines Agency, EMA which is the regulatory agency of the EU. Jaguar is also planning to submit an investigation of new drug application and IND to the FDA for MVID in the second quarter of 2023. Again, another milestone just around the corner. So to recap, early in Q2 2023, literally, just a couple of days away, to get into Q2, we expect to have completion of enrollment in our Phase III trial of prophylaxis of cancer therapy-related diarrhea.

That’s the OnTarget trial with a primary endpoint readout expected in Q3 of this year and within the same time frame, we’re targeting our first proof-of-concept evidence for patients with either SBS with intestinal failure and/or for MVID in support of potential early access program participation, revenue-generating participation in certain European countries. This pathway could bring in meaningful revenues while Crofelemer continues to go through the process for full approval, not only in the EU on a global basis for these 2 rare disease indications. I’m now going to discuss our other development stage programs at this time. We are prioritizing for 2023, these 2 late-stage clinical development programs with key near-term milestones with the potential to be transformative in value recognition for Jaguar, particularly with the current financial market conditions for emerging biotech companies which has not spared Jaguar either.

And a new one to recap, our current cash solution. $15.3 million, relevant to achieving these important clinical milestones. Before I hand the discussion over to our CFO, Carol Lizak. I want to let you know that anybody participating today that we will have a brief Q&A segment at the end of the webcast to address questions if there are any submitted in writing and that we have time for. 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. The URL for Jaguar’s website is jaguar.health. We will now move along to key financial results for the fourth quarter of 2022. And Carol Lizak, let me hand it over to you.

Carol Lizak: Well, thank you, Lisa and thank you all for joining our webcast today. I’ll begin our review of our 2022 financials. Prescription product net revenue was approximately $11.9 million for the year ended December 31, 2022 versus approximately $4.3 million for the year ended December 31, 2021, an increase of 178.7%. Prescription product net revenue of approximately $3.3 million in Q4 2022 increased 3.4% over the third quarter in 2022 and increased approximately 57% over Prescription product net revenue in the fourth quarter of 2021. Mytesi total prescription volume was approximately 5,947 in the year 2022. Due to the transition to a limited distribution specialty pharmacy model in 2022, the company cannot accurately compare prescription volume from 2021 to 2022, as there are significant differences in reporting methodology from these distribution models.

In the future, the company will be able to accurately reflect growth in prescription volume using 2022 as the new baseline. Mytesi total prescription volume decreased slightly by approximately 2% in the fourth quarter of 2022 over the third quarter of 2022. Prescription volume differs from invoiced sales volume which reflects, among other factors, varying buying patterns among specialty pharmacies in the closed network as they manage their inventory levels. The loss from operations decreased by $6.3 million from $40.7 million in the year 2021 to $34.4 million in 2022, largely due to the aggregate improvement in net revenue of $7.6 million, decreased cost of sales and marketing expenses of $400,000 and warrant inducement expenses of $1.6 million in 2021 and none recorded in 2022.

These were offset by the aggregate increase in R&D and G&A expenses of $3.3 million. Non-GAAP EBITDA for the year 2022 and the year 2021 were a net loss of $28.1 million and net loss of $37.5 million, respectively. Net loss attributable to common shareholders decreased by approximately $5.1 million from $52.6 million in the year 2021 to $47.5 million in 2022. In addition to the loss from operations, interest expense increased by $4.3 million from $8.4 million in the year 2021 to $12.7 million in 2022, primarily due to the additional interest expense incurred on royalty interest agreements as a result of the change in the timing of payments due to exchanges in the new royalty interest purchase agreement. The loss on the extinguishment of debt increased by $1.4 million from $800,000 for the year 2021 to $2.2 million in 2022 due to the extinguishment loss from the exchange of the outstanding balance of a royalty agreement for shares of the company’s common stock.

Change in fair value of financial instruments and hybrid instruments designated at fair value option or FVO, decreased by $1.9 million from a loss of approximately $2 million in the year 2021 to a loss of about $21,000 for the year 2022 primarily due to fair value adjustments in liability classified warrants and notes payable designated as FVO. Other income or expenses increased $1.7 million from approximately $800,000 and other expenses for the year 2021 to approximately $1 million and other income in 2022 due to write-off of extinguished liabilities as a result of legal release and reversal of long outstanding accruals with reasonable uncertainty to not be incurred. Well, that concludes my recap of high-level financials for the fourth quarter and the full year 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. Q4 2022 is the sixth consecutive quarter of growth in Mytesi net revenue which we’re quite pleased about. As previously announced, the transition we completed in January 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 fourth quarter of 2022 as we did in the 4 previous quarters for sales of our human prescription product. For comparison, according to prescription drug data and analytics firm SSR Health, the rolling 4-quarter average gross to net discount rate in Q3 2022 was 48.9% for all U.S. prescription branded products.

In 2022, the total gross to net discount for Mytesi was approximately 20%. The transition to specialty pharmacy distribution also assists in the preparation of the company’s U.S. commercial distribution network for a potential future indication expansion of Crofelemer to other populations of patients with complex medical needs, such as CTD, inflammatory bowel disease and SBS. I’m also pleased to report that our innovative recently launched programs that further support patients’ connection to care and medication and access services are continuing as planned. Our telehealth initiative which went live in May 2022, enables patients seeking help with their HIV-related diarrhea to be linked immediately to a provider for assistance with their medical needs.

This capability prevents patients from having to wait until their next scheduled doctor visit to get help with what is an urgent problem. Additionally, as announced on March 13, we are excited to be developing an artificial intelligence-powered web portal for U.S. health care professionals to support patient access to Mytesi. We remain committed to reducing access and reimbursement barriers for Mytesi patients and one key challenge we often hear from patients and their health care providers is that payers and insurance companies frequently require prior authorization to approve medication reimbursement. Artificial intelligence, AI, technology, like open AI’s, generative AI platform model ChatGPT is an innovative and powerful tool that allows providers to expeditiously communicate the professional judgment by significantly reducing the time and complexity of drafting letters of medical necessity.

We are working to create a user-friendly ChatGPT-enabled interface to help make this otherwise burdensome process easier and faster for health care providers to navigate in a compliant way. Leveraging AI technology in support of the prior authorization process is expected to help a significant number of Mytesi patients start on their medically appropriate and necessary medication quicker and be able to stay on their prescribed regimen helping ensure they spend fewer days suffering needlessly from HIV-related diarrhea. Turning to the Animal Health side of our business, Canalevia-CA1, our FDA initially 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.

Since that time, we have succeeded in pushing Canalevia-CA1 into broad distribution with the leading veterinary distribution centers. Canalevia-CA1 net revenue was approximately $24,000 in the fourth quarter of 2022 representing an increase of 100% over Canalevia-CA1 net revenue in the third quarter of 2022 which totaled approximately $12,000. Commercial activities for the drug remain underway and reception of Canalevia-CA1 among general practice vets and veterinary oncologists continues to be extremely positive. That concludes my comments. Thank you all for your time today. I’ll pass the conversation back to Lisa.

Lisa Conte: Thank you, Ian. Okay — and Carol, thank you, Ian and Carol. So we at Jaguar, Napo and Napo Therapeutics, we’re energized about all of our important activities underway in 2023 and beyond with a very, very sharp strategic focus on these key clinical milestones in 2023 which I just cannot say enough which we feel will be transformative for some value recognition for a company whose value and this industry has been hit hard in the past months and year. I do want to say in closing, uniquely about Jaguar, this past Tuesday was International Day of Ours and I want to take a moment to express how proud we are to be collaborating and interdependent with the people and tropical forest ecosystems of Peru from where we sustainably source the Latex and Dragon’s Blood Tree, the plant also known as Croton lechleri from which Crofelemer is isolated and purified.

It is clear that the cultural and ecological health of people and forests are intertwined at multiple levels and we wish to express our gratitude to our partners and communities in the rain forest who have been working with us and teaching us for several decades, how to sustainably manage this valuable medicinal plant within their ecosystem in support of our mission to expand Crofelemer access to all patient populations in need around the globe. And I do also want to remind everybody that Crofelemer, Mytesi is a natural product. It’s organic, as I mentioned, sustainably harvested fair trade and it is the only oral drug approved by the FDA under botanical guidance. And under botanical guidance, there’s no practical pathway to bring a generic to market.

And so while we have well over 100 patents issued and many more that are being filed on a regular basis as you do in the pharmaceutical industry. We essentially have exclusivity forever which is a valuable and additional valuable asset and characteristic of this product as we go into business development discussions and conversations and negotiations. So this concludes our formal webcast for today and I’m going to now look at some of the questions and we will do a few Q&A as we have a little bit of time left. So give me a moment here to pull those up.

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Q&A Session

A – Lisa Conte: It looks like there are a few questions in there. Okay. Is the primary completion date still this month, March 2023 for chemotherapy-induced diarrhea. So as I mentioned, I’m just going to recap timing here. We expect to complete enrollment early in the second quarter. So early in the second quarter is April, beginning of May. We are standing behind that. And then that’s completion of enrollment. The primary endpoint is after 3 months of treatment. So you can count forward, let’s say, April, May, June, July, so the end of July, beginning of August. And then typically, in the industry, you would have about 8 weeks, plus or minus, to freeze the database upon which you get the primary endpoint released. And so that’s the time frame that you can look at and give us — the — what we mentioned that we expect to and are targeting the primary endpoint in the third quarter of this year.

So you can see the cascade of events from completing patient enrollment. Again, what we’re looking for here is the statistical significance as negotiated with the FDA and there was a lot of discussion with the FDA on this trial in a positive sense. On that primary end point, because we are talking about the expansion of the indication for supplemental NDA for Mytesi already on the market, same dose, same formulation, literally the same bottle. Mytesi already on the market, already approved for chronic indications. So for example, chronic safety studies, carcinogenicity studies have already been completed and supported that chronic indication. And obviously, we have a full supply chain regulatory compliant in place to take the product from Peru to a bottle and essentially any specialty pharmacy that we’re working with in the United States.

So manufacturing is completed as well. To most common reasons why new drug applications get pushed back, safety manufacturing completed at Jaguar. And then there was another question about the primary endpoint. So I’ve just answered that as well. Are you planning any cash raises to support your trials this year? So I can tell you that we — what — I think the most important thing that I can tell you is what I did tell you already that are — and what’s in the public domain here, $15.3 million in the bank right now with those key clinical activities that we’re looking for which we feel can be transformative in value in targeted for the third quarter of this year. So I think that addresses the sentiment behind that question. Okay. Let’s see.

The question is with Phase III enrollment largely complete in the second quarter and the switch to specialty pharmacy for Mytesi complete. Should investors expect expenses to significantly decrease going forward? And Carol, why don’t you make any comments that would you like on that. But let me point out that the significant expenses in the company right now are associated with the clinical work to expand the indications and to get to new populations for Crofelemer. And those clinical trials are still ongoing. And in fact, as you come towards the end of clinical trials, you have additional activity from statisticians, quality operations to make sure that you clean up and you freeze those databases in an accurate way. But Carol, did you want to make any additional commentary?

Carol Lizak: Sure. We did save around the distribution costs compared to 2021 and 2022. So those were the big cost savings right there. And of course, the net revenue significantly increased. For R&D, yes, there will be some increases there because of the clinical trials surrounding our main indications focus which is CTD and the SBS group. So I think those are the key savings that we had for 2022 and 2021.

Lisa Conte: Thanks, Carol. So here’s a question that I appreciate to bring up this topic. Someone was wondering, if there still future plans of attaining fast-track voucher for Cholera. So the Cholera program, it’s very important and exciting program and it’s Cholera mechanism of diarrhea is the pure clinical manifestation of the mechanism by which Crofelemer works and our second antisecretory agent known affectionately right now is NP-300. So we do have an approved IND for NP-300. And that — so what this is referring to is that product is being developed with the financial return that is being targeted by us of a tropical disease priority review voucher. And what that is, is sort of a price that you get from the FDA that provides incentive to develop products for certain tropical diseases, certain rare diseases and Cholera is on that list.

And so you get this prize, this voucher when you have a successfully approved new drug application and that voucher is a voucher that if you can put it to any product and it requires the FDA to review that new drug application for another product that you put it towards in 6 months or less. So it provides certainty and in some sense, greater efficiency and speed in reviewing a new drug application. And that voucher is transferable in sales and you can sell them and there is a market for them. And they sell anywhere from the lowest ever was something like $67 million. I think the highest ever was $300-and-something million. Recently, they’ve sold for about over $100 million. It depends on who has the voucher and who needs the voucher at the time that you want to sell it.

So they’re not they are somewhat rare to come across, although you’ve seen more in recent years. So, we’re pursuing — the key is that, that voucher is only available for the first indication for which a product is approved. Crofelemer is already approved but our second-generation antisecretory NP-300 is also an antisecretory agent. We feel as a distinct product under botanical guidance and comes from the same planned Croton lechleri, Dragon’s blood and works by the same mechanism of action. In the earlier years, we had done clinical work in Cholera with Crofelemer that is published posters are published that showed statistical significance in a key endpoint for the reduction of dehydration. And what kills a cholera patient does not the Cholera infection.

It’s the dehydration that typically occurs between 6 and 18 hours after infection, so often consider the death zone. And that’s where we saw the significant reduction in the dehydration. So we’ll be following the same clinical pathway, in fact, the same principal investigator, the same clinical trial site with NP-300. Why did I not talk about it because again, with the industry and the valuation of Jaguar and other companies in the industry hit so hard this year, we are focusing on what I talked about those key what we feel are transformative clinical events that move us from pipeline to revenue generation. And the Cholera program wouldn’t do that in 2023. So it’s longer term before we get to that revenue-generating or voucher generating situation.

So it is on hold just for 2023. And as we get through these milestones and get some value recognition in this company, God bless, we will be able to turn that very, very important program on. And it’s not as long the program as CTD or even HIV was because these are acute clinical trials. So they are 2 to 3 days of drug administration. So the trials move much faster. So thank you for that question. Okay. Somebody asked about Canalevia for exercise-induced diarrhea in dogs. So Canalevia-CA1 is a conditionally approved product. And in the second, Ian, I’m going to let you talk about what that means specifically and how that affects our ability to educate and promote that product. But a second conditional approval exercise-induced diarrhea. I think like I did in discussions with the Center Of Veterinary Medicine at the FDA right now.

So what’s being discussed and negotiated is their desire for us to do some clinical work specifically in that patient population, though it is for a conditional approval which often gives you a lot lower bar for clinical work. And again, it falls in the same category as Cholera, where are we going to put our dollars and resources in 2023 to make a revenue-generating difference in the near term? So that’s still under discussion with the Center of Veterinary Medicine. Ian, do you want to talk about some of the limitations of a conditionally approved product but the excitement of what we’re seeing with chemotherapy-induced diarrhea in dogs. And by the way, chemotherapy-induced diarrhea in dogs is highly predictive and analogous to the situation in humans.

So it gives us, again, another reason to be highly confident about our OnTarget trial in humans the heading.