Q4 2019 Earnings Call
Hi, and welcome to strong bridge bio pharma plc, corporate update and fourth quarter 2019 earnings Conference call.
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It is now my pleasure to introduce Lindsay Rocco up elixir held public relations.
Thank you Andrew and good morning, everyone. We're pleased that you could join US today for strong bridge Biopharmas fourth quarter and full year 2019 earnings conference call.
Joining me from strong bridge. This morning are John Johnson Executive Chairman Dr., Fred Cohen, Chief Medical Officer, Scott Welcome White, Chief Commercial Officer, and Rob lot Chief Financial Officer.
Before we begin I would like to remind you that during this call. The company will be making forward looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward looking statements reference to these risks and uncertainties are made in today's press release undisclosed in detail in the company's periodic and.
Current event filings with the U.S. Securities and Exchange Commission.
Please note that during Scott's portion of the call there will be an accompanying set of flights highlighting an initial view of the market opportunity Cushing syndrome based upon company sponsored market research to access and download. Besides please go to the investor events, <unk> presentations and publications section of the Strongbridge website.
Slides will also be made available online as part of the company's corporate presentation. Following this call within the same section of the website I will now turn the call over to John Johnson.
Thanks, Lindsay good morning, everyone and thank you for joining us today.
For todays call I'd first like to begin by reviewing the strong 2019 performance of Kobe us and we'd like to think this team for their continued dedication disturbing the many unmet needs of the primary periodic.
Periodic paralysis community.
I've asked a cheap revenues of 5.6 million for the fourth quarter and 21.7 million for the full year exceeding the company's revenue guidance range of 18 to 20 million.
Presenting a 29% increase over the 16.8 million in total revenue in 2018.
We believe that this growth can be attributed to both the steady flow of referrals from positions that has resulted in new patient starts and improve retention rates. We're confident that we can continue this growth and 2020 and therefore today, we confirmed our preliminary revenue guidance of 26 to 27 million for.
This year, we also expect to realize a continued positive and a growing contribution margin and 2020 Bronco bass.
These results coupled with actions taken in the fourth quarter to strengthen the Companys overall financial position have allowed us to extend our cash runway to the third quarter of 2021, which is at least one of your beyond our anticipated timeframe for reporting topline logics results.
With regard to our clinical development program for record of and then Doggedness Cushing syndrome today, we announced enrollment in the phase three logics trial is approximately 85% complete compared to approximately 70% complete as reported on January night.
The company projects up all the remaining patients required to complete enrollment are currently in the tide creation and maintenance phase.
This progress over the past six weeks, we have been able to tighten our guidance to report top line data. We now anticipate any reporting the topline data from losses at the end of the second quarter or during the third quarter of this year.
I would like to reiterate that completing the lockett's study in preparing a quality new drug application for recall, Oh, among our top priorities and 2020.
I look forward to a continued work with his team as we planned for and execute upon a number of important milestones this year.
With that I'll now turn the call over to Fred.
Thank you John.
To begin with a quick update on today is development and lifecycle activities.
As we have previously noted to various data exclusivity in the United States is currently provided two orphan drug exclusivity, which expires in August of Twentytwenty too.
As we have previously stated we've been working towards the possibility of obtaining intellectual property protection for two days.
Based upon the research that we have conducted.
We're pleased to report that we're making progress towards that goal and we'd like to briefly describe some of our efforts.
We will fall 14 patent applications in the United States and three P.C.T. patent applications with all but two of these applications belonging to four primary families of patents.
We follow the first of these applications with the U.S.P.T. go into fourth quarter of 2018.
We're working closely with outside counsel to prosecute these patent applications.
The proposed claims relate to method took using the active ingredient incubate yes.
No matter consistent with the recently revised F.D.A. labeling for the product.
As we previously stated we have also been engaging in lifecycle development activities applicable to our base business.
Specifically, we have developed proprietary modified release formulation prototypes of the active ingredient into bias and are currently testing the performance of these prototypes in a phase one clinical study.
Although we are optimistic about the performance of these formulations.
It's time for competitive reasons, we will not be disclosing details of the formulations for our thinking regarding how one or more of that might be develop further.
We expect to provide further information in the second half with this year.
Now turning to record alive. This morning, we provided an update on the logics phase three study Evercore left for the treatment up and Dodge and its Cushing syndrome, we continue to advance patients through the logic trial as expected and are on track to deliver top line results at the end of the second quarter or during the third quarter of 2020. Please.
Recall that logic says a double blind placebo controlled randomized withdrawal study targeting approximately 46 to 54 subjects for enrollment which is comprised of four phases screening phase plus three therapeutic faces. The primary endpoint comes at the end of the third phase, which is the randomized withdrawal phase.
Our topline results will consist of data through the end of this phase.
As John mentioned earlier, we have now rolled it 85% of the patients required to complete the study and we believe that all the remaining patients needed to complete enrollment are currently antitrypsin maintenance.
When the last patient has been enrolled we will provide more precise guidance for the expected timing of the announcement of topline results.
As it relates to Andy a submission we continue to believe that we can submit an M.D.A. approximately six months after topline logics results our reported.
Stated previously we believe that if our idea is accepted for review, we can expect or if you cycle. A 10 months from the data submission, which is the standard producer cycle time for if you are they new active substance figure the fiber five be too and de pathway.
And with that I'll now turn the call over to Scott, who will provide a commercial update Scott.
Thank you Fred good morning, everyone and thanks for joining US as mentioned earlier. This portion of the call contains an accompanied set of slides.
To help illustrate our initial view of the market opportunity in Cushing syndrome.
Based upon company sponsored research.
To access and download the slides. Please go to the Investor events presentation publication section of the Strongbridge website.
Before we begin and as a reminder record live is currently being investigated for the potential treatment for endogenous Cushings syndrome before there's not been approved by the FDA, a safe and effective.
Turning to slide three we recently conducted an end up market assessment, which included landscape assessment and those qualitative and quantitative research with more than 160 Endocrinologist. In addition, we conducted qualitative research with 10 major payers combine comprised of both regional and national plants.
As you can see the healthcare provider qualitative research phase included 13, leading and community endocrinologists, we treated an average range of 12 to 60 to Cushing syndrome patients in the last six months.
In the quantitative research phase 153 respond it's treated an average of 25 to 68 endogenous cushings syndrome patients without malignant costs in the last six months. The primary purpose of this assessment was to evaluate perceptions of current and future products for treating Cushing syndrome patients.
On the following slides, we will discuss our key findings related to the market landscape unmet needs the potential world record of opportunity and payer access.
Our research here on slide four shows the diagnosed prevalence in Cushing syndrome in the U.S. and the range of approximately 25000 patients surgery is typically the first line treatment. However, our research indicated that approximately 8000 with these patients are pharmacological treatment importantly, those 8000 patients on.
Just reported that approximately 40% or about 3200 patients remain uncontrolled on current treatment.
As illustrated on slide five the current product market shares as reported in our research for both approved an unapproved products shown here illustrate that none of the current treatment options have a dominant share of the market and more than 80% of the prescription treated patients are using products that are approved for Cushing syndrome.
Pete economy remains to the market leader with 27% market share the patients treated.
As a reminder, course definitely got it to a 2020 revenue range 355.
375 million for portal.
Which is one of the only approved branded Cushing syndrome therapies.
We also ask and are now endocrinologist indicate their interest into treatment options. As you can see here on slide six more than 80% reported moderate to high interest level in new therapies for Cushing syndrome.
Endocrinologist satisfaction levels with current treated treatment options also underscore the need for potential new treatment options, particularly with unapproved products only 37% of key to console experience treaters are highly satisfied 36% of material phone experienced treaters for highly satisfied and only 29% of Cumberland experienced treaters are out.
We satisfied.
In general endocrinologist dedicate a higher satisfaction level with approved products. Furthermore, endocrinologists reported a considerable number of patients who are uncontrolled, which may further illustrate the need for new treatment options.
Here on slide seven we show the results pertaining to into crowd Analogist perceptions evercore.
After reviewing the clinical profile over Korlym, which was based upon results from our recently published phase three Sonics clinical trial, 86% of endocrinologist treating more than 40 patients in the last six months indicated they were likely to prescribed korlym and 81% believe recorder fulfills an unmet needs.
Turning to slide eight different Korlym is approved we believe that endocrinologists may recognize the potential advantages prescribing recorded on label with supporting clinical data.
Directions for use in Cushing syndrome.
Comprehensive provider provider patient support.
As a reminder, in the U.S. key design is always only an only indicated as a last line antifungal and is not well study prospectively in Cushing syndrome. Further the FDA label indicates weekly liver monitoring and warns that use a key to current is all in Cushing syndrome has not been approved.
Turning to pricing and reimbursement as you can see here on slide nine the current annual wholesale acquisition cost for FDA approved Cushing syndrome. There ranges from approximately 165000 to 755000, depending upon the product and corresponding dose.
Seeking to foreign seeking for Elie ours annual wholesale acquisition cost is approximately 165000.
Korlyms annual wholesale acquisition cost range is approximately 189000 to 755000, we believe that both products provide relevant potential and pause for correlative approved.
As you can see here on slide 10, Payors copper current branded Cushing syndrome products are non preferred formulary tier as is typical for treating products trading rare disease. Additionally, as expected all payers have prior authorizations to ensure medical necessity inappropriate use.
Some payers require step edits do other non approved products, but not the majority.
As I mentioned earlier, we conducted interviews with 10 national and regional payers, we tested both record of profile.
And price range.
As illustrated here on slide 11 Air respondents expressed an initial willingness and averages six out of nine rating to provide coverage for record lift.
We expect to use existing utilization management criteria to ensure appropriate patients only appropriate patients have access to record as expected.
Cases, more highly restrict the payers may require a step edits.
Turning to slide 12, as a reminder.
When we should more than 150 endocrinologist clinical profiles for all of the potential next generation products, including recorded.
In a future state of cushion center market. They expected those next generation products to capture the majority of the market share if approved a color as part of that next generation may offer endocrinologists useful new treatment option.
As you can see here on slide 13, we plan to fully leverage our existing infrastructure in rare disease experience over the last several years, we've built a commercial and medical affairs team that has a proven track record of success in the near term, we aim to maximize our relationships with key opinion leaders and continue to foster.
Relationships with leading patient advocacy groups.
In addition, we intend to fully utilize our core capabilities, such as marketing analytics as well as customer facing functions such as sales patient services and medical science liaisons to support our go to market strategy.
Turning to slide 14.
Which is the final slide for this portion of the call.
In terms of our initial targeting approach. We're currently planning to utilize approximately 25 to 45 customer facing field positions at launch. We believe this will provide us with the required resources to reach the approximately 1500 into 2000 community and neuro interpret specialist and approximately 125 to 150 to two at.
Gary centers and kill wells across the U.S.
In summary, we are truly energized about the potential opportunity for record live in Cushing syndrome. This research underscores the significant unmet needs and we believe record. It may address and we are eager to advance this product to market. So we get hopefully make meaningful improvement in the lives of patients which was in Cushing syndrome with.
I will turn the call over to reflect our CFO, who will review our financial highlights from the fourth quarter full here before we open up to call the call for questions.
Thank you Scott.
Our press release contains details of our financial results for the fourth quarter and full year 2019.
Rather than read through all of those details my comments today will provide some context on our cash spend and runway.
As we disclosed previously we ended 2019 with $78 million and cash cash equivalents and marketable securities.
Based on our projections for capacity and for operating expenditures.
In fact, our cash to laugh at least through Q3, 2021, which is at least one year past our expected announcement of topline data for logics.
Our cash burn in Q4, 2019 was $2 million.
Part because of a 6 million onetime benefit from the payment Novo Nordisk.
We expect cash burn to fluctuate due to variability in operating expenses and working capital.
Additionally, we expect average cash burn to be higher and the early quarters of 2020 and trend down starting later 2020, because we expect various will continue to grow.
And because R&D expenses will diminish as logics comes to an AG.
Until we achieve positive cash flow, we will regularly evaluate when and how to raise additional capital to fund our business.
With a revenue producing asset and a late stage asset.
Both with upcoming milestones.
We believe there are multiple ways, we can raise capital to fuel the growth bar business with the goal of increasing shareholder value.
And operator with that we're ready for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone.
So withdraw your question press the pound key.
Please standby, while we compile the Q and a roster.
Thanks.
And our first question comes from the line of Chris Howerton with Jefferies.
Hi, good morning, Thanks, so much for taking the questions say I guess.
Just real quick maybe this one for Fred.
I missed the you described the four patent families that you're.
Using or considering for lifecycle management for to this I think I just missed the concepts there before.
Thanks, Chris.
We actually are not going to go into any details around the families themselves.
I always said at today's call is that the patent applications are on the active ingredient in conveys and that they are consistent with the current product labeling for the truck. So further details to come later.
Okay, Okay, well thanks for that.
I guess.
Moving forward to the market reach research.
Scott kind of went over.
Couple of things.
That I'd be interested in is that.
On slide six when you ask endocrinologist why they are dissatisfied or whether or not there said is that I guess with current treatments what were the drivers of dissatisfaction with current treatments primarily.
Yeah. Chris. This is Scott. Good question I think we had them long list several but I think the ones that rose to the top were just a need for consistent and predictable quarters all control.
This was one of improve safety and Tolerability I think it's the balance of their risk benefit of that and then I think.
While it was a good stall I think the what rose to the top were improvements in CV related endpoints were meaningful to them. So I think if they if they were looking for products that we bring those three things among others to the market.
Got it Okay, and then you know I guess switching to the payer perspectives and I think this is frankly been a question of a lot of investors in terms of what's going to happen in the face of.
Recorded live approval with.
Off label Ketoconazole. So when you talk about step that its is a possibility for certainly more conservative payers.
What do you think that step that it will be will it be for us late booking economies over other approved therapies for Cushing syndrome.
Yes. Good another good question, Chris I think that the first point I'd make is that in the work that we did.
We clearly got a sense. Both you saw the the secondary research as well as the primary resorts with Korlym, we got the sense. When they were shown the profile that they had a positive inclination to cover record live.
Number one I think in terms that you mentioned more restrictive plants and there's always sets that restrict plans I think for those payers I think what you could see is the creepy criteria that you see on the bottom of that slide that you're referencing as well as some step through lower cost options and one of those could be key accountable.
The good news I guess in that regard is in earlier slides that we presented.
There is a fairly large set of patients who are on key to caught us off and we mentioned also that there's an uncontrolled population will have to do more work around the percentage of uncontrolled within Quito, but.
We believe there's opportunity there.
From that perspective, and I acreage Thats, John I do think the payers are going to find themselves in a pretty difficult position. When do you have a label for key though that.
Awards, you know against the use in.
And the Cushings in particular in calls out Cushings in the label so as as we look at it will be working with payers. This is not a huge category, there's not a lot of patients here.
And we expect that.
Dispositions.
Work with prepares to help them understand the potential risks of Quito and the body of scientific evidence that's been developed.
For recall of that.
We're not going to have.
Issues in terms of patients getting access it may require positions or do a little bit more work.
But certainly we think that they'll be.
Plenty of data for them to reference as they.
Work with the payers to get the patients access.
Sure, Okay and then.
Maybe just one quick quick one operationally.
Obviously, we're waiting for the logic three down and that'll be a very important event for your company and expected.
To move.
Moved past quarter live approval, but you know in anticipation of positive results what else tends to be done in order to get the end da submitted anything from the CMC or other kind of perspective that we should be aware of.
[noise] so.
What weve, what we said is that we're on track with our Andy preparation, we've been preparing for the submission for for a while now the logics data are expected to be the rate limit or in terms of assembly of the package.
And.
If we we learn anything else contrary to that in the future. We'll let you know, but right now thats, where we stand.
Thanks, Okay, well, thanks, so much for taking my questions and I'll hop back in the Q.
Thank you and our next question comes from the line of Annabel Samimy with Stifel.
Hi, This is avatar Jones on for Annabel, you guys present, some pretty compelling market research and on slide six specifically.
Mentioned that only 37% of your prescribers were highly satisfied with key to Canada can you give a little more granularity on how many of those prescribers were actually just moderately satisfied to highly satisfied and a second question as you prepare for the potential launch of Evercore.
Hello.
Do you anticipate any targeting high volume prescribers and just what is the.
The logistics around your approach to launch and engaging position. Thanks.
Yes. Good question, let me start with the last one first.
You see on the last slide slide 14 that we cover which this is preliminary kind of our initial view of how we would go about targeting and then potentially deploying resources against the targets, but you see will lose an approach of looking at the diagnostic claims data as well as as well.
Descriptions claim data.
We know that they're about 8000 endocrinologist.
In the us.
Likely around 1500 2000.
Indeed, neuroendocrine specialist and 100 to 150.
Military center, so we think about deploying against those.
We think that the range that we have in the 25 to 45 range.
That are customer facing.
Positions should should cover.
Those that range of targets.
Not really comes down to about 102 125 targets for territory in that range now we'll have to do additional work.
We get closer to launch to kind of refined and fine tune that but thats kind of our initial work in view of the target audiences, how we would approach it and the potential.
Size of the team their customer facing.
Yes, and I would just add that Scott in the team have have also done some behavioral and attitudinal segmentation.
Competitive reasons, you know, we're not going to be sharing that but.
That will continue to evolve that evolve as we see the the data from logics.
And that will determine how we.
Calls how frequently we get some of these folks.
Scott described the reach but our frequency and some of our.
Actual approaches with promotion will be based upon upon those factors, but I just want to make sure that everyone is aware that we've undertaken that work, but we're not going to share that work.
Okay and the the first question regarding the.
Physicians levels of satisfaction feeding on his own moderate levels of satisfaction.
Yes.
I'm going to have to look at the broader slide deck, we don't we didn't share that in this call.
And we have I don't have that data at my fingertips, but I can follow up.
But just one more.
Insight on how.
Physicians willing physicians are to complete prior authorizations in step edits.
In the space.
The concerns around the payer pushback.
Yes, I think in general terms I think prior authorizations in rare disease and in this category with two analog products are fairly common.
Doesn't mean that physicians like it I think it's just it's a common thing that has to take place.
And I think that especially.
The higher volume offices are probably very used to doing these types of prior authorizations. So.
As we get closer to launch, we'll learn more and as we launch in support physicians under our care connection program will provide the appropriate education for physicians to educate them on the requirements payers may have.
Thank you.
Okay.
Thank you.
Our next question comes from the line of Hartaj Singh with Oppenheimer.
Great. Thank you for my questions I.
I said, a couple of follow up questions from earlier ones.
Just specifically do you think you see on control patients.
You think will be more likely to sort of be candidates for core lab.
You mean.
Positive logics and a launch and then what do you think it'd be the patients or where there is there's low satisfaction with existing drugs like you to comes on some of the other one that you saw in your slides or a mix of both just any color there would really help.
And I just got a couple of follow.
Yes. Good question I think frankly, it's probably a little bit of both we've got as John mentioned, we've got some more work. So we can send some initial work on kind of the behavioral segments.
In particular, the key to kind of saw which were not going to share now, but I think it's both I think those that are uncontrolled.
That we believe and heard through the research that that that may indicate a number of potential switching that goes on in the category anyway, so that could be an opportunity irrespective of the reason that they're in controlled.
And I think from behavior perspective, there maybe opportunities to target.
Certain physicians that that utilize or don't utilize certain products.
Great. Thank you and then do.
Do you think you have.
You know fairly robust pharmaco economic database hosts logics.
So that.
This area, where there's a lot of generics and others repairs and probably require long form for economic modeling and then would you also consider consulting with Pfizer all prior to launching the product.
Yes. Thank you very good question I think given at this point is probably a little too early for us to make a call on that.
Clearly, we'll be discussing with payers.
In due course, the burden of the illness and how they how to how we view record of as a potential treatment option, but TBD on how we would engage ice or if we would engage or not and any any.
Okay.
Pharmacoeconomic data associated with the product in particular.
Great. Thank you last question just on commit I thought is fascinating.
Our unified you're talking about the long acting version.
Do you think that well.
I'm really looking forward to see well your thoughts on second half year, you think that with a long acting version could be asking an episodic disease like periodic paralysis, you could actually potentially.
Increase the number of patients because I imagine short acting drugs.
Our Harbin episodic disease like the Arctic Ralph just any thoughts there and again. Thank you for all the question.
So so by way of clarification Hartaj, we didn't say anything about long acting formulation, we said modified release.
I would also point out that in our current formulation of because I guess, although it is an immediate release formulation has a very long half life.
Approximately 36 hours or so so the.
Now I'd say, it's steady state basically the patients don't go through any substantial trough cycling as you might expect that with a very short acting drug. So they keep a fair amount of drug onboard even at the lower doses and and so yes. So hopefully that addresses your question but.
All I can say it in terms of the modified release is that although we are optimistic at this point, we're just not ready to disclose the details of our thinking around that.
But we promised when the time is right that will be much more forthcoming.
Great. Thank you for all the questions.
Thank you.
And our next question comes from the line of Esther Hong with Janney Montgomery Scott.
Hi, good morning.
So with phase three Sonic stayed at suit approaching indie submission expected later this year maybe early next year can you speak about the potential nexgen competitive landscape for crushing and specifically asked the largest stat and how you think recorded live and our largest that would fit in the treatment.
Thanks.
So thanks, yes, so just to clarify logic since this study that we're waiting for the phase three data.
Yes, no ours at the end of the second quarter or third quarter.
In terms of next generation, what the landscape Scott pointed out in his slides some of the drugs. We think are likely to be a part of that next generation, including.
It's a larger stat, which was recently approved.
By the European Medicines agency.
As a waiting approval by the FDA and then another drug in phase three Reliv correlate is the drug from core step which is the so called.
Next generation version of Metro pressed on so we think.
We have a pretty good handle on what the current profiles are of that those two drugs. Obviously, we're waiting for more details on both of them to emerge over a larger stat is the near or want.
It isn't adrenal cortisol synthesis inhibitor it acts varies.
Specifically with high potency against one of the enzymes responsible for the synthesis synthesis of cortisol as well as aldosterone and that enzyme is 11 beta hydroxylase.
Record up also blocks that enzyme the main difference between the two drugs in terms of mechanism, though is that require that block several different enzymes, along the path way the lead to cortisol synthesis. So in that way you get a basically a blockage.
Of activity.
Along the quarters on androgen synthesis pathways with record of that you don't get with us the largest that so that when.
Feedback not to get to tactical but when feedback. This inhibition occurs and you get AC th from the pituitary go up driving adrenal started production when you block only one of the enzymes all the other steroids that are under the control of AC th can be increasing synthesis. So with the drug thats a very specific blocker like it was the largest side are mature.
Upon you do tend to see things like.
Mineralocorticoid.
Weak mineralocorticoid production go up that is the precursors to aldosterone as well as androgens.
Those are considered unfavorable types of effects in a cortisol blocker you would prefer for a cortisol blocker to blocked cortisol, perhaps block androgen production in neutrino plan, but not do anything to increase.
Precursors or do very little and so that's the main point of differentiation. There I was the largest that you can pick up as a very potent and longer acting form of material costs on that in that regard.
Thank you.
Yes.
Thank you.
I'm showing no further questions at this time I will now turn the call back over to executive Chairman, John Johnson for any closing remarks.
Thank you in summary, 2019 was an important near for strong breads conveyance became contribution margin positive and heads into 2020 with solid momentum. The logics trial is approaching its conclusion.
I would like to take them all into thank all the patients who agreed to be part of the trial for their contribution to the Cushing scientific body of evidence.
The initial market research with physicians in this disease area were impressive. These findings combined with the interest expressed by endocrinologist and prescribing rate Carlos if approved provides increased confidence in a potential successful launch.
Finally, I would like to thank all of our employees for their continued dedication and support on behalf of the physicians and patients. We serve thank you for joining today's call and for your continued support.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating and you may now disconnect.
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