So we need to circle back and get more surgeons at these hospitals. So through late June, the decisions were; 30% to completely convert so RECOTHROM is the only approved product, 45% of the time to add, and 25% to decline at this time.
As of mid-July, a 130 hospitals have now purchased RECOTHROM, and we are pleased to say that approximately 60% have reordered, and a third are already doing so on a routine basis.
So to reiterate; RECOTHROM is being well received by surgeons consistent with our expectations, and I think this is evidenced by a 75% positive response from decisions made to-date. The selling process in this market is long, and in some cases it is taking longer than we anticipated. We have put GPO contracts covering a large portion of the marketing place, and we now have a full line of RECOTHROM product, which will help build sales in the second half of the year, and we are confident that RECOTHROM will become the market leader in the coming years, and that our commercialization strategy is sound."
Bruce also discussed Zymo’s interpretation of the hospitals consideration in terms of facing a coagulation issues and also the threat of possible complications due bovine thrombin. Discussing price sensitivity he asserted that while not fully aware of the cost involved with Thrombin JMI, Recothrom was unlikely to be produced as cheaply as King Pharmaceuticals bovine Thrombin JMI but Omrix manufactured (Ethicon distributed) human sourced Evithrom was likely to be associated with higher costs. Bruce said "I don’t know the precise cost associated with the production of bovine thrombin -- but I would guess that it would be difficult for us to match the cost of goods of bovine thrombin. However, the other, when it comes to human thrombin in collecting plasma from humans, then I think that's a different issue. That's going to much, much more expensive." I guess Ethicon negative publicity for King's bovine product will work to Zymo's advantage...........
Interestingly many of us expected hospitals to use bovine (King), human (ethicon/Omrix) or Zymo (Recothrom)............but when queried....by Kevin DeGeeter - Oppenheimer
"Okay. And maybe two more quick questions if I may. It looks like we continue to see about 45% of these P&T committees leaving bovine on formulary base, quite putting both products on formulary, which I think is very different than what everyone was expecting previous to launch. I think we expected hospital either be bovine, human, or recombinant. First, I guess, just answer that the way which you think about the overall market, or is there something different in these early adopters that may suggest they have a different attitude towards single product on formulary versus multiple? And if it's going to be half the market, give or take, it's going to have multiple products on formulary. How does that change the sales message here?"
"I think that what we believe, as you're seeing, is that some people fully convert. Others, and I don't think it's at all surprising, say, look, you guys are new. We'd like to put you on the formulary. We're going to try you out on the formulary. We want to make sure that you can consistently supply us, so we don't want to remove the other product. So we feel comfortable that you can consistently supply us. And we believe that over a matter of time, people will convert to just one, and we believe that will be RECOTHROM.
As we've said before, we see this as a ratchet mechanism. In addition, of course, remember that a number of these people are putting us on the formulation time when we didn't have the full complement, we didn't have the 20000-unit, we didn't have the spray. So they would feel that converting completely to RECOTHROM was not appropriate at that particular point in time. So we're not surprised. We would also, as I've said once before, expect full conversion eventually."