Elite Pharmaceuticals, Inc. (ELTP) Q1 2020 Earnings Call Transcript
Published at 2019-08-12 17:30:51
Good morning, ladies and gentlemen. And welcome to Elite Pharmaceuticals Conference Call. At this time, all lines have been placed on listen-only mode. Before management begins, the Company has the following statements. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to the effects, if any, on future results, performance or other expectations that may have some correlation to the subject matter of this conference call. Listeners are cautioned that such forward-looking statements involve risks and uncertainties including, without limitations, Elite's ability to obtain FDA approval of the transfers of the ANDAs or the timings of such approval processes, delays, uncertainties, inability to obtain necessary ingredients and other factors not under the control of Elite, which may cause actual results, performance or achievements of Elite to be materially different from the results, performance or other expectations that may be implied by these forward-looking statements. These forward-looking statements may include statements regarding the expected timing of approval, if at all, of SequestOx by the FDA, the steps Elite may take as a result of the CRL, and the actions of the FDA require of Elite in order to obtain approval of the NDA. These forward-looking statements may include statements regarding the expected timing of approval, if at all, of SequestOx by the FDA and the actions the FDA require of Elite in order to obtain approval of the NDA. These forward-looking statements are not guarantees of future action or performance. These risks and other factors, including without limitation, Elite's ability to obtain sufficient funding under the LPC Agreement, or from other sources, the timing or results of pending and future clinical trials, regulatory reviews, and approvals by the Food and Drug Administration and other regulatory authorities and intellectual property protections and defenses, are discussed in Elite's filings with the Securities and Exchange Commission, including its reports on Forms 10-K, 10-Q, and 8-K. Elite is under no obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. With that covered, it is now my pleasure to turn the floor over to your host, Mr. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.
Thank you, Paul and good morning, ladies and gentlemen. My name is Nasrat Hakim. I am Elite's President and CEO. This is our earnings call so our Chief Financial Officer Mr. Carter Ward will walk us through the finances after which I'll come back with some comments and Q&A. Mr. Ward, you have the floor.
Thank you, Nasrat. Thanks everyone calling in today. Last Friday, we filed our 10-Q for the quarter ended June 30th, 2019. 10-Q's are due 40 days after the close of the quarter, so Friday was the 40th day. The due date we're on a March 31st fiscal year, so the June quarter is actually the first quarter of our fiscal year ending March 31st, 2020. That's our 2020 fiscal year. The Q is available on the Investor Section of our website, which is elitepharma.com. It's also available at sec.gov and many other websites that provide links to our filings. If you haven't gone through the Q yet, please get a copy from elitepharma.com or any of the other sites that you use. I'm going to briefly take you through some of the key parts of the financials, providing some analysis, context and insight into the numbers. As always, we've received questions and comments from shareholders and Elite followers. And I'll do my best to address those that our financials related as well. So these financials they're quite interesting. So let's start with the P&L where the revenues are most interesting. Revenues for the quarter ended June 30th, 2019 were $3.4 million. That's compared to $2.2 million for the June quarter of 2018. So it's a 55% year-on-year increase. You look at the revenues from quarter-to-quarter this June quarter is more than double the March 2019 quarter. Those -- March 2019 we did $1.3 million. So we had a 55% increase in revenues year-on-year. We also had a 160% increased quarter-to-quarter. So it's strong performance no matter how you look at it. I've been with Elite for 10 years and this is clearly the strongest quarter that I've seen. It was, I checked. There were a quarter in 2016 with higher revenues but that was due to a one-time milestone and this quarter is very different. Drilling down into the numbers shows that a large part of these revenues were earned from newly launched products and revenue streams, namely generic immediate-release Adderall and dantrolene capsules which were launched during this quarter -- the June 2019 quarter. These products -- they're being marketed by our alliance partner Lynette who is doing a great job with them. They're at their earliest stage of commercialization. They've just been launched and they're already making significant contributions to revenues. Expectations are that this contribution will increase over time as Lynette gains market share. So far forecasts and confirmed orders in hand support these growth expectations. Just remember that generic Adderall and Dantrolene capsules, they are two products that are squarely in the critical path of our strategic plan. So launching both products during this quarter, well that was what we were planning on doing it, it was a significant milestone, but that's not the end points. Now that the products have achieved commercialization, growth and performance are the focus and Lynette has been tremendous with orders and volumes exceeding initial forecasts. Also remember, there's a profit split component to these products marketed by Lynette. Initial revenues so far they've been mostly from manufacturing. The way the profits splits works, there's a three to nine month lag in profit split revenues as compared to manufacturing. So having this level of product slowing into the pipeline is a strong positive indicator of additional future revenues from profit splits as the volumes are sold into the end-user market. Takeaway here is that the new products they've done well and they've positively impacted our financials. But they are new products and expectations are that they will continue to grow as they become more established in the market. In addition to the new products just launched, the rest of our product lines for the most part are performing well. With a strong June quarter being followed by continued steady orders at increased levels. Orders for Naltrexone and Phentermine marketed by TAGI are at their highest levels and they're continuing. Similarly, we have Isradipine, Phendimetrazine and Trimipramine sold by Glenmark. Those sales are also exceeding forecast and continuing. All of this adds up to what was clearly the strongest revenue for Adderall with factors pointing to Elite maintaining and increasing these levels in the future. So moving down to P&L, let's talk about research and development expenses which were $1.4 million this quarter, as compared to $1.3 million for the June 2018 quarter. So it's $100,000 increase just under 8%. So the amounts, they are relatively unchanged but as always with R&D it's what the amount was spent on that's important just as important as the amount that was spent. Last year the $1.3 million was primarily spent on generic Adderall and Dantrolene. Those are the products we just launched and they are now making major contributions this year the $1.4 million wasn't spent on those. It was primarily spent on three products which are close to approval and a fourth product which is in an earlier stage of development. Nasrat will have more to say on the product pipeline, but of the three products nearing approval, there's one in particular with a GDUFA date later this year. That if approved is expected to provide a contribution significantly above the contribution from the two products launched this quarter. Everyone in this say that R&D is a pharma company's lifeblood and that's true. But it's important to go deeper than that and consider the actual products in the pipeline, the stage of their development, the time to approval and commercialization and the impact each product will have on the company and shareholder values. So the takeaway on our financials is that the R&D spend this quarter was focused in large part on products that are near commercialization with a substantial contribution possible within the next 12-months. So to sum our quarter up, we had our strongest quarter with near record revenues earned from a solid foundation of diversified revenue streams, and newly launched products. Indicating a likelihood of maintained revenues at this level, and with a strong potential for increased revenues as well. In addition, we have an R&D spend that's focused on products that are near commercialization and the potential for significant contribution within the next 12-months. So now Mr. Nasrat Hakim, our Chairman and Chief Executive Officer and President would like to give an update and his comments.
Thank you, Carter. And good morning, again, ladies and gentlemen. Thank you for joining us. I'll start the updates with the sales and marketing and the product launches. We just had a conference call seven weeks ago so not whole heck of a lot has changed. I discussed our new products and the growth of these products and the expectations of our sales and marketing, partners for the sales of this product. We are executing on that growth plan and obviously, we are on track starting with the $3.4 million revenues that we have achieved this quarter. I said before, we expected the Elite' revenues to double this quarter from $1.3 million last quarter. And obviously, we exceeded that very easily. Our $3.4 million revenue as Carter just described is a lot higher than it was last quarter and 50% over when it was last year in the same quarter. I continue to expect based on projections and sales figures firm orders issued by our partners for this current quarter ending in September of 2019 to be exactly what I forecasted to you. Definitely as strong as this quarter and a lot better than the quarter before. As a matter of fact, I would like to amend the statement that I gave during our last meeting, where I said we're going to double and then triple our revenues compared to the first quarter of $1.3 million. We'll change that we obviously doubled and the next one is going to be triple. And then the one after it's going to be in north of that as well. The sales have just begun with Lynette for the products that Carter just described and Lynette is a very solid company that is given us firm orders for the next three months. So we have clear visibility for what can happen for three months. And that's why we are comfortable sharing with you now more of predictions of what's going to happen. They have given us projections for the entire year, but the first three months of it are always firm orders, so regardless of what happened they will take these at the very least. To put things in perspective, our revenues in the last two fiscal years have been $7.5 million and $7.6 million. This current quarter we made $3.4 million. I am projecting that we're going to hit the $4 million plus in the next one. So if you think about it in the first two quarters of Elite fiscal year, we are almost making as much money as we made the entire year before or the year before that. And it is my prediction from all the data we're getting from sales and marketing that Elite's Q3 which is the one that ends in December of 29 is going to be even bigger than Elite's Q2 which ends in September of 2019. Where is all this coming from? Well, it's coming from the Elite's plan to develop, file and approve new products. We have been focusing on that and working very hard on that for the past two to three years, and spending a lot of money on that. To ensure that our sales and marketing partners have something to sell. Without all the investments, we'll be making for the last three years this would not materialize. So as you know, we have three sales and marketing partners as of today, the oldest is TAGI. We've been working with TAGI for a very long time. More recently Glenmark and the most recent is Lynette. TAGI sells three products today. Naltrexone tablets which is used in the treatment of addiction. TAGI has increased and improved the sales of that product over the past couple of years to a point where we're comfortable with them. And we are working with an API supplier that is more competitive. So this way we can hold our grounds in that market and possibly have even a little better profit. Phentermine and Phentermine capsules, again TAGI has been selling these products for many years now. And they have been effective in defending their market share. It is my understanding from partner TAGI that they are the number two in the sale of Bariatrics of these two products. Glenmark, our Glenmark partnership was signed last year. We have four products with Glenmark, Isradipine. Glenmark has effectively transitioned this product from our previous partner and done a very good job at obtaining multi penetration. Phendimetrazine, this is a product that Elite has been selling to distributors who distribute to bariatric clinics, but also the Glenmark has been selling it to larger distributors and doing a very good job of that. Trimipramine was just transitioned from our previous partner to Lynette and methadone. Glenmark methadone sales continue interestingly enough methadone is now becoming in a weird category it is used to help addiction at methadone clinics, but they are starting in some states to combine it with opioids such as oxy and we are going to be monitoring very closely what happened with that. We would like it to stay separate because it is used for breaking addictions, but if some states decide to add it to lawsuits then our partner also sit down and reevaluate. Nothing's going to happen short-term this quarter or maybe even early next quarter. But if it does we'll definitely keep you updated. Lynette, the Lynette partnership has been a very successful partnership and we have signed three products with them. Two are active and one we are waiting for FDA approval. Amphetamine tablets, the sales began this quarter for mixed and Amphetamine. This was a product co-developed with our partners SunGen. This product is expected to be an important contributor to our revenue growth in the next few quarters. Dantrolene capsules, dantrolene has launched recently. The market has two other generic players just to pause here for a second and remind everybody, this is one of the products that we signed with Epic, Epic had it for five years and did not get it to the market. We took it back in October. We filed not only site transfer but also a change of API, which makes it file approval supplement, got all of that done, found the partner and launched it already. Okay and we would be looking closely at the revenues generated from that over the next couple quarters. An extended release CNS product. This is a very important product for us. This is filed with the FDA and it's under review by the FDA. I updated you on that the last time. This is the second product co-developed with SunGen. The GDUFA date is December and being moved to December of this year. This is a key product for us and is expected to provide continuous growth for Elite. This is the product that will stabilize the company and that we will become profitable. ANDA approvals on filings, Elite have been very busy recently with the commercial launch of the mix and Amphetamine, as well as with the site transfer of dantrolene. As Carter mentioned, both of these have made a good contribution to our revenues, and will continue to do that in the foreseeable future. The extended-release CNS, ANDA is under review with FDA as I mentioned. This was developed or co-developed with our partner SunGen and it is licensed to Lynette for commercialization. We are hoping the FDA will approve it in December. We have not heard anything to the contrary; they have not asked any other questions since we've updated them on their last questions. And we await their approval in December and launch shortly after. Antibiotic tablets, ANDA is also co-developed with our SunGen partner and it is under review by FDA. Once we hear from the FDA, we will let. Tylenol with Codeine, this product is also under review by FDA. We were expecting GDUFA date was recently and that the FDA will give us a favorable response. The FDA did not say anything about the application except to ask us to go back and amend our labeling. So anytime they ask you to change the labeling. They give themselves a three extra month for approval. So we're hoping within the next couple of months they'll say it's ago. There was no comments on the substance of the application whatsoever except go back and amend the labeling. Development, the development work at Elite continues. We have numerous generic products under consideration. The next product to be filed is a combination product with SunGen. It's an extended race product and it has about $1.5 billion in sales in IMS data. We continue to work on other differentiating generics and we will update you on those developments and projects upon achievements of specific milestones. Any time there is a triggering event or something that is material, we will definitely update you. Since we spoke just about seven weeks ago, I don't have any more update for you. So I'm just going to summarize. Our pipeline includes three Adderall, Dantrium under review by FDA including the extended release CNS CR product. The antibiotic tablets and the genetic Tylenol with Codeine. We also filed with the FDA, Loxapine for a site transfer and a change of an API supplier and that review is pending right now. And we're hoping for a favorable outcome very soon and releasing this product as well. The most important of all of the products I just listed is the central nervous system ER which we await the FDA's date, GDUFA date in December. We've improved our marketing reach obviously by going with giants like Lynette and Glenmark and that obviously shows in the sales that we are reporting now and will continue the next quarter, the quarter after and hopefully for the life of the company. We expect positive quarterly growth to continue. Don't want to overemphasize this. I know everybody's excited that we hit $3.4 million. My hope is that we do not see that number again. And we graduate to the four or five, six and seven and move forward. Okay. So I know this is exciting news that we hit $3.4 million. But this is really one step on the ladder that will get us to financial independence and success. Diane sent me a list of portions that were bigger than my presentation. So I've grouped them into categories. And I'll try to address as many as I can. Many of them are redundant, so you're all thinking the same which is really good because that's actually how we are thinking as well. So I'll take a category and try to read many of the questions. And if they sound redundant it is because this is the way you've been sent. I just want to make sure that I acknowledge the people who send them and read pretty much most of the questions that I received. So the first category that you guys have inquired about or sent questions about is financing and financials, okay. The first question is, I'm going to read the questions and then I'll answer them all together. If there is a question that's on our call then I'll answer a piece of that. And I will go back and do the totality of it, okay. So what is the current projection of cash needs for Elite and how long can Elite continue as a growing concern. The first part I'll answer with everybody else. The growing concern and Carter correct me if I'm wrong; the auditors issue one opinion a year. So it's going to be next March. Even if we're making a ton of money, even if the company changes, it doesn't matter. They always do it once a year, right.
The growing concern is an actual opinion. So we get an audit done at the end of our fiscal year and which the auditors issue an opinion. The quarterly, we get a review which there is no opinion. So after next March when we do our K in June, hopefully, the financials will be such that the auditors will remove the growing concern qualification from their opinion. But we have to wait for the next time an opinion is issued.
Good. Thank you, Carter. Are there any other financial-- financing options for Elite or that Elite is working on? And if so, what dilution will take place? Okay. I will address that but I want to talk about the point of dilution. We had a dilution in this company years before I joined the company actually when the series D was issued. We had the dilution with Epic. We issued them lots of stocks and warrants, okay. When we asked the stockholders for authorized shares, what you are doing is spending that money on R&D and on things that bring value to the company. So if you have 1,000 shares outstanding so we have 1,000 partners. And we're not earning any money. But if you generate another 400 or 500 shares or 400 - 500 partners and now you're earning $1 per share, wouldn't that be what you want to do? Or do you want to hold on to your share that produces nothing? Okay. So what we're doing really is changing the form of equity. We are bringing in more investors into the company that put in cash into the company that we put on into R&D just like we did with the products we are scrubbing now. That generates money for everybody. And they'll be partners of it because they're getting it as a good deal because the company's price per share is really low. Okay. So I hear a lot about the dilution but for Lincoln Park and issuing shares, we wouldn't be here today and we wouldn't be able to work on the central nervous system extended release that we're going to get approved and partnerships with SunGen and build the facility and create all of that? What is the Elite's plan to raise capital over to cover the short term operational cost? Okay. We'll cover that. Last CC and it said Elite would be belt-tightening with increased revenues this quarter and expected increase in the following quarter. Is it a clearer how their revenues may impact Elite's financial resources going forward? And is there a chance one of these quarters could surprise us? Okay. I want this is to surprises but the rest of it allows this in a second. What are we going to do for financing going forward? Okay. Can Lincoln Park agreement be amended? No. When it expires we can come up with another one, but you don't amend the current one. This is something that involves the SEC and FPC and you cannot change it. How close are we to maxing out the Lincoln Park agreement? Okay. We're not. The price of the share is so low that we are not tapping into that right now. The time probably will expire before we are able to max out on that unless the price per stock appreciates considerably. Is SunGen in a position to take on equity stake? No. Do we qualify for another New Jersey EDA bond? We're not interested in that. And we then have access to do that anyways. How about selling the rights to Norco and Percocet? I'm open-minded to anything that would generate money for relief. If somebody that wants to buy them just give me a call. Call Diane and we'll be happy to work with you. And on a serious note even though I do say that our opioids are on the back burner because of the lawsuits that doesn't mean we're not working on them. That doesn't mean that this is not going out soliciting business. That we're not meeting with companies to explore options. But when we hear from our partner and that, hey, there is high liability then we say, okay, let's find a different path. But every single resource we have we always explored. You lose nothing by exploring except potentially getting a good hit and something possible for the company. Does the company plan to keep the amount of approved drug under the limit to be considered as a large size company once ER CNS product is approved and becomes cash flow positive? Actually this is a very good question. Yes, we do. And we will do our best to stay under 2019 and if it comes to it we will evaluate the risk of potentially if we're going to go to 2020 and we're going to have to pay an extra million dollar does this new product generate that much revenue? And if not we could sacrifice a lesser product by selling it or divesting somebody else or putting it in partner's name? Okay. We think about all of this stuff which was just something that we discussing the conference call because things change. All right. So the plans to raise capital. Now the [Indiscernible] solve few questions about that. I discussed the potential need for capital loss during the last call. Even though we are approaching being cash flow positive with our increased revenues and with the approval of the CNSC are becoming profitable, once that's approved, we still need capital for multitude of reasons. Okay. There is an immediate need. The immediate need is for cash flow. We need the product in order for us to make the product for ourselves and marketing team, we need the API. We need the raw materials. Okay, win higher HR cost for employees to work on this. That we first buy then we make the product and then we deliver it to our sales and marketing team. And after that a certain period of time 30 days they pay us. So there is always that lag time where you need immediate cash for cash flow because that is tied up money that you can do nothing about, okay. Second, there is the intermediate need. Anytime you have this need problem where now you have a lot of folders and oh my god I need more cards. It's a need problem you have, but you need to deal with it, you also may need equipment or upgrade to the facility, a faster packaging line, okay, a second tablet press definitely your electric bill and HR cost are going higher. And third there is R&D and the product pipeline. As Carter described, our R&D pipeline is our lifeline. That is the only way for us to continue increasing revenues, increasing profits and creates what I keep talking about the fundamentals in order for us to have a much higher price where in case if a rumor start or we delayed and filing something that start doesn't crash. When you have fundamentals and you have earnings per share then that doesn't happen. And you can only achieve that if you keep on top of R&D and the pipeline in order for us to get to that level. So as the immediate needs, it's going to be really stuff. We have to work with our partners to help with the working capital burden and somehow good at it and some is not as good at it. And we're doing that already. We need to be very wise and managing the money that we have. And at the end of the day, we're still going to need to borrow probably $ million to $2 million. To be realistic, as I said, it's a need problem to have. We need to buy API and in case if we need to, we have the resources to be able to tap into borrowing some money to get us through any hump that you may have. The intermediate need for capital, there are a lot of creative things you can do. You can finance equipment, okay. Not only we -- I don't like to get in debt and borrow money, but there are certain things you can do well at least if anything happened, it will be limited to that piece of equipment in case if they want to repossess it . It's not going to happen, but we're saying that this is an option is to finance. The ongoing projects, R&D, I don't want to call it long-term because it's happening every single day even though the effect of it is long-term, it takes two to three years that's where we need our shares, that's where the proxy come in. And we will be proceeding with a proxy with the share and shareholder meeting in December. We covered this in the 10-Q. We initially thought we're going to go for September. There are regulatory dates and timelines that you have to meet and things that you have to do that take a long time. It's not something that use over night and it happens, it takes months to do this. And therefore we decided to push the date a little further. The second, it's not free. It cost up to $75,000 to be able to do all of this and gets the proxy going. So because of all of that we pushed it down to December. So we're asked for increasing the authorized and the proxy. We should have these shares when and if we need them. A capital is used to support R&D and continuing growth. If capital is needed my first choice will be Lincoln Park Capital. As I said many times, it really is the cheapest and best way for us to raise money. And the least hurtful financially. As long as the list continues to grow and assuming our stock price reacts favorably to the growth then Lincoln Park is the least expensive alternative to use when capital is needed to support growth. And all the money we are raising is to support the growth and new products. I don't want to go to Wall Street and do a high cost capital raised. That is way too expensive. That would be my extreme least favorite. It would be only out of desperation and we're not going to get there. It is -- so we explored it. We've talked to several banks, it's very expensive. Lincoln Park remains a very good source and is the preferred alternative. There are other creative ways that we could raise money by involving the stockholders. We could propose a rights offering to all existing stockholders of Elite. So the shareholders would receive the opportunity and advantage of an offering. It would avoid outside dilution of the shares and offer shareholders the potential to profit from the continuing growth of the company. It is something that we are thinking about. And we may propose as a part of the proxy and definitely we won't move forward with it without proposing it first to the stockholders. That's the financial part. Some comments about SunGen. Any comments on SunGen partnership and what it may look like in the future? SunGen is a good entity. The US-based part obviously the CEO was one of my colleagues from Actavis but the financing is 100% from China. The owner of the company is a billionaire from China and his interests are not clear to me. I know that he's a smart guy who started several companies in China and took them to publically there. He may want to continue relationships in US. He may decide that he must expand often his own company. He may just have reached a point where he said, good, I made an investment. I made enough and I made enough money I'm going to sell it and get out. So I do not know what the future holds for the two companies. But I know that we are partners on two products that are superior that are coming down the pipeline. One is the central nervous system product and another one that I will discuss once we have a triggering event or a material event regarding that product. Okay, so our partnership and relationship with them is very, very positive, but the decisions come from China. So I don't want to tell you in the future what's going to happen because I honestly don't know. What's the status of the second antibiotic drug developed with the SunGen? That test is by equivalency on 10/23/18. When can we expect filing? The filing fee for this product is one $171,000 or $176,000 and SunGen and us decided to hit the brakes on that because we have other more important products that we are working on. Once we get to the point where we're raising more capital, we'll go back and revisit this. The PR CNS product has the alcohol dumping. Those dumping tests request by the FDA already been completed. That was completed within about a week from the time requested it and the filing took place within two weeks from the time that FDA requested it. The issue wasn't that it's tough test and we could do it, the issue is that the FDA told us we don't need to do it, that's why we didn't do it. So as soon as they said we wanted done, we immediately did it and that was filed a long time ago. Is there a chance that this test could further delay a response from the FDA for this ANDA approval? This specific test, no, because the results were equivalent or better than the brand. That's what they look for, are you equivalent or bottomland brand and we met those criteria. Now the FDA want to come back and ask a different question is within shock me, but I cannot predict that but as far as this one specific example is given, I have no worries that the FDA is going to come back and ask us questions about that. How soon after approval do you expect to launch the ER CNS product? Lightning speed. We're going to get approval around the Christmas. I don't know New Year maybe around the corner celebrating with that. No, this will be the most important product we have. As soon as we get approval, Lannett is ready, we are ready, we'll move forward with it. So the question is this is going to take weeks or months, I would go on the week side and I hopefully it's in the single digit. We are going to do it ourselves because this is in the best interest of the company, okay. Some questions on opioids. On your previous call you talked about opioids. Okay. Same answer again. Ladies and gentlemen, the landscape for opioids is treacherous. It is really in a least best interest through our [Indiscernible] and be a part of lawsuit. We can barely afford the legal defense which costs millions of dollars. Just few days ago, Teva had another settlement of $640 million or so in addition to the first $85 million and that's only like couple of state, okay. So we can't afford that. We need to be smart and we are talking to a lot of partners. We really would like to sell these products. In my opinion, we got the strong as a nation, we are focusing on few people who abuse drugs and forgetting about the 9.999 that needed because they are in pain. That's different political discussion. And we would love to be part of that and we have the product. But till we find the right partner who is convinced that we are not going to be sued or till we get a hint from regulatories and see that we are not going to be sued, we must rather stay on the sideline and survive. The last question is about the facility. What is the pill capacity of the facility as it is currently configured? And when it is fully utilized? When would a large facility be required? For example, any drug approval after ER CNF? Very good question. Think about it all the time but short term we are fine. So let me explain that to you without going into ton of the details. I'll give you a flavor of what we have so you'll understand that we can take on a lot more. Today at Elite, we are only one shift a week, one shift a day, five days a week. We only run five days week and one shift a day. Okay, we can easily go to two shifts a day, five days a week, off leaving three and have done that before in other companies, and also you can work on the weekend. When there is a product and there is money to be made, you can fire up the facilities 24x7. So we are running at really low capacity. Now when people are here, we are generating things like crazy. Because we are a small company and we need people to be very efficient. So the fixed cost will go down and the revenues translate to profit. Okay. So we do have the capacity at Elite. And that's why I mentioned earlier equipment. Okay, we can go to multiple shifts. We can have multiple people here. So we have lots of capacity beyond the ER for the central nervous system, okay. Eventually, once we have several more products then we'll discuss it because by then we'll have enough revenues, we can either buy another facility, build something, we'll do that but now for the short foreseeable future, short term and foreseeable future, we are in a very good shape. There is no issue from receiving the material, warehouse space, manufacturing it or packaging it. Right. Well, that concludes our conference call. Thank you all for attending and thank you all.
Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time. And have a wonderful day. Thank you for your participation.