Q4 2019 Earnings Call
Greetings and welcome to the key asthma, Inc. fourth quarter and year end 2019 financial results call.
This time, all participants are in listen only mode.
Next question answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now my pleasure to introduce your host Dawn, Scotland, VP IR and corporate communications.
Thank you Don you May now begun.
Thank you operator.
They will be making certain forward looking statements about events and circumstances included but not limited to statements regarding our development and potential commercialization of my cap that our expectations on timing of regulatory review every lease of clinical data our plans to be gardening regulatory approval in the United States.
And the European Union, our plans and expectations for U.S. commercial art.
Anticipated cash runway in capital needs and the size and composition of potential markets for my caps off if approved.
These statements are based on current expectations actual results may differ materially due to numerous risks and uncertainties, including those detailed and the risk factor section of our form 10-K filed with the FCC Jay for the year ended December 31st 2019.
As well as our subsequent filings with the FCC, except as required by law, yeah them, a disclaims any obligation to update information get heat and these forward looking statements whether as of the result of new information future events or otherwise.
Joining the call today is buys canon Chief Executive Officer.
They'll love them senior VP of clinical development, and medical Affairs, and Mark Fitzpatrick, Our President who will review our financial results.
And now I'd like to turn the call over to Cabinet, Chief Executive Officer, Bosh Kinda back.
Thank you Don.
Thank you everyone for joining our call. This afternoon to discuss our recent operating highlights 2020 anticipated milestones and the fourth quarter in full year 2019 financial results.
The highlight of this past quarter was the resubmission of the indeed for our lead product candidate for locked here Tonight capsules conditionally trade named Mike caps.
Well the maintenance treatment of adults with Docker, making me.
We resubmitted the India in late December and we were extremely pleased to be notified by the FDA.
Acceptance in early January.
This was a key milestones Ricky asthma and highlighted a year of significant progress with a company that included the positive results.
My optimal global Phase three trial and the completion of enrollment will be empowered see three trial, which as you know is designed to support an application for the marketing approval of my cap so in the European Union.
As I look at our anticipated milestones 2020 has the potential to be a transformational year for kiosk.
With the acceptance of the India Resubmission DFT assigned deep produce what target action date of June 26 2020.
We were scheduled to present additional clinical data from the key asthma Optima trial Endo 2020 that would offer relevant clinical insights to health care providers.
As you May know the Endo conference in San Francisco was canceled.
We're currently working with the endocrine society and expect to identify new ways to share our seven accepted abstracts, we'd be scientific and medical community in the near term.
Let me take a few minutes to provide a high level overview over plan commercial launch strategy and why we believe it has differentiated from most traditional rare disease commercial launches.
First.
We believe acromegaly patients treated with Injectables amount, it's gotten analogs are relatively readily identifiable.
Research indicates that 90% of our targeted population are treated by less than a thousand accounts, primarily composed endocrinologists.
We expect that this will enable us to efficiently you got resources in identifying target patients, while weve focused on developing a highly differentiated peach food services lots there.
Second the active ingredient in my cap, so octreotide, he's a well known standard of care that endocrinologists are familiar with and have prescribed in an injectable form for over three decades.
We believe this will allow us to focus our health care provider education on the potential benefits often daily oral therapy, rather than on education about octreotide itself.
Third we believe Payors may view my cap, so as an important and differentiated option that addresses many of the significant burdens faced by patients on SNC injectables, while minimally impacting that overall dropped budget.
And lastly, we believe that the U.S. market for mikasa, it's potentially addressable with especially will be small orphan drug customer facing team ranging between 30 and 50 people.
Overall, if approved we believe mycapssa has unique characteristics that gives us confidence on executing being successful launch.
As we noted before pending at the as approval.
Indeed, and one important to plan Apiay manufacturing supplements to secure commercial supply we plan to launch mikasa in the fourth quarter 2020.
Now turning to our plan for driving mid to long term growth Freaky asthma, we plan to announced in late 2020, our pipeline expansion plans to develop one or more.
Therapies utilizing our technology platform designed to improve the lives of patients suffering from other debilitating diseases that are currently being treated with injectable therapies.
At this point I would like to turn the call over to build ludlum discuss key highlights of our medical and clinical organizations.
Bill.
Thanks Raj I.
I'm excited to share with you as a substantive progress we've made so far this year.
We've completed the hiring of our MSL team began enrolling in our Alco make we registry and continued to progress on the publication plan for the key asthma optimal manuscript.
Let me start with our MSL team.
We made some great hires and were able to fill out this critical team early in New York.
Our MSR multiple player he wall and engaging the scientific and medical community.
The team will focus on educating healthcare professionals on the unmet need of acromegaly patients which includes.
A significant burden of existing treatments and engaging and appropriate scientific exchanges.
I believe we have hired great talent that gives us a talk to your MSL team.
Another highlight was the initiation of our registry study.
I'm pleased to report that we have initiated enrollment in a multi year U.S. disease State registry called the management Acromegaly registry or the macro registry.
The registry is actively enrolling acromegaly patients currently on existing maintenance therapy.
We expect this registry will involve over 40, U.S. clinical sites hundreds of patients and yield important real world data on the current standard of care and the treatment burden and effectiveness associated with various treatments.
Even though we are in the early days of enrollment I'm very pleased with the physician and patient interest that we have received thus far.
Turning to end up 2020, the conference was cancelled due to concerns over the spread of Mcrone a virus.
We expect to provide more details in the weeks ahead on some exciting presentation opportunities that are developing.
Plans to share the additional key asthma optimal trial data that was included in the seven accepted abstracts that were posted on the and the web site.
We believe it is important to share against relevant clinical data widely with the medical community and we are committed to doing so.
Our team is intently focused on completing the key asthma optimal trial manuscripts and submitting it for publication and a peer reviewed journal we expect to have that data published in mid 2020.
Turning briefly to our third global Phase three clinical trial empowered. This trial continues to progress as planned.
Randomization was completed in January with 63% of patients randomized following a six month run in phase I was responders per protocol to worked very hard capsules.
We remain on track to release topline data from the empowered trial during the fourth quarter of 2020.
We look forward to the empowered data read outs as this compared or study has the potential to provide us with incremental clinically relevant data such as.
Our head to head comparison between the efficacy and safety, if my caps or persist injectable assays.
As well as the assessment of patient reported outcome data in these two groups.
A reminder, empowered is designed to support a potential request for an email marketing application.
At this point I will turn the call over to Mark its Patrick to review the financials Mark.
Thank you Bill.
General and administrative expenses were $5.9 million for the fourth quarter ended December 31, 29 team.
Compared with $2.7 million for the same period of 28 team.
General and administrative expenses were $15.1 million for the year ended December 31, 2019, compared with $10 million for the year ended December 31 2018.
The increase for both periods was primarily driven by the initiation of pre commercial activities and compensation related expenses, which were primarily offset by a reduction in legal expenses.
Research and development expenses were $6.4 billion for the fourth quarter ended December 31, 29 team compared with $5.7 million for the same period of 2018.
The increase was primarily driven by increased regulatory and manufacturing costs and offset by decreased clinical trials costs.
Research and development expenses were $22.5 million for the year ended December 31, 2019, compared with $22.4 million for the year ended December 31 2018.
Oh, the change was immaterial, we observed an increase in regulatory and manufacturing costs offset by a decrease in clinical trials calls.
For the quarter ended December 31, 2019, net loss was $12 million or 29 cents per basic share compared with a net loss of $8.1 million worth 32 cents per basic share for the same period of 2018.
For the year ended December 31, 2019, net loss was $36.3 million or one dollar and six cents per basic share compared with a net loss of $31.3 million or $1.28 cents per basic share for the same period of 2018.
In 2019, Chiasma completed two public offerings of common stock that raised aggregate net proceeds of approximately $84.6 million.
Cash cash equivalents in marketable securities as of December 31, 29 team were $92.4 million compared with $41.7 million at December 31, 28 team.
We believe we have sufficient cash resources to fund our operations as currently plan through at least 2020, including key milestones such as the plan to FDA approval of my cap. So the anticipated U.S. commercial launch and the release of the topline and powered phase three results. However in order to fund.
Our operations beyond 2020, we will require additional capital.
We plan to continue to explore potential financing options that maybe available to us to meet our capital needs.
I will now turn the call back over to rush.
Thank you Mark before opening the call two questions I would like to make a couple of comments.
Yes, we realized the current macro environment is challenging and volatile with many uncertainties.
We are closely assessing and monitoring any impact this could have on our business and we plan to take appropriate actions, where we can ensure key osmar remain on track to achieve our milestones this year.
Despite the current Macroenvironment I continue to believe 2020 is going to be it potentially transformational year for Kazmer, we're keenly focused on executing on our goals, including the potential approval of mikasa into U S. Four acromegaly patients followed by a strong beginning.
To our plan to commercial launch.
This concludes our remarks, we will now open the call to your questions operator.
Thank you.
We will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question Q you May press star to if he would like to remove your question from the Q for participants using speaker equipment it may be necessary.
Carried a pick up your handset before pressing the star Keith.
One moment, please will be published for poll for questions.
Our first question comes from Brandon Folkes with Cantor Fitzgerald. Please go ahead.
[laughter].
Hi, Thanks, I got Crescent Valley, Congratulations on all the program and 29 cents.
Can you, perhaps just elaborate on the manufacturing approval I had I wish the June produce.
What we should know what we should think about quite simple as that you had a pretty well and he's.
Hi, stacked works I know your manufacturing Prequaled, just any additional color will be helpful. I mean, maybe just following on from that how should we think about commercial fold in 2020. I know you mentioned you had bought on some people like additional kinda there would be great. Thank you.
Brandon This is raj. Thanks for those questions could you just repeat that worried about commercial in 2020 commercial what youre at bode quota.
Okay.
Lets spend okay Yep Yep got it so let me have mark respond to the manufacturing.
Approval supplements and then I'll I'll take the commercial a question for 2020.
Yeah, Brian. Thanks, So following the anticipated approval, we expect to submit manufacturing supplements to provide for two additional apiay manufacturing sites that are not referenced in the resubmission.
Pat procured a pie from these two sites in the past and we're currently procuring a pie from both of these sites in anticipation of India approval.
We expect to have adequate product availability to support a plan commercial launch in the fourth quarter of 2020, albeit subject half da's timely approval ever in D.A. in either of these two manufacturing supplements.
And on the commercial spend Brandon as you know we are targeting or.
I would give you referenced before which is a we assume about 30 to 50 customer facing personnel in the organization that includes not only the sales reps, but also the case managers the M.S. old be account managers as well as any patient support a call center personnel that we had so anybody who faces a customer we.
Think it'll be 30 to 50 and yet as you know the endocrinology audience is quite small Andy Oh. We have also stated before that 90% of for patients are managed by less than a thousand accounts. So we will always be very efficient in how we go to market in this particular therapeutic area.
And hopefully our spend will be in line with the other small specialty orphan and rare disease launches.
Hope that helps Brendan.
Yeah, Thanks very much.
Our next question comes from Yasmeen Rahimi with Roth Capital. Please go ahead.
Hi team Paul on for Yasmeen, just thanks for taking my question today. Congrats on all the progress I'm just two questions first just to add a little more get a little more color regarding commercial rollout how many sales people haven't put in place so far and how many more can we expect and then a second question about.
Going back to your prior comment about Octreotide, the being well understood. Among current endocrinologist. If you could just talk about the key gaps in awareness that you see going forward and kind of what framework and we used to educate.
Prescribing physicians that together.
Yep, Thanks, Paul a great questions. So on the first one a in terms of these sealed strips. Obviously, we have gated that approval just as any other company would have done that we would certainly screen and look for qualified candidates for my fields perspective.
But they would be only coming onboard post approval.
That being said Oh, we do have and myself in the field are they're not sales reps in particular, but they are certainly customer facing in the sense that they would be engaging with the keep thought leaders, a and <unk> and have scientific engagements, especially on the current state of care and the potential needs in terms of.
What's needed a from from new options. So that's the first question be second question was Octreotide in terms of key gaps in awareness I don't believe octreotide in particular as a molecule has any gap in awareness.
Because remember this is a product that is sort of a standard of care and for the last three decades physicians have been very comfortable in going to that as the preferred agent in over eight to nine out of 10 patients who have failed surgery orbit surgery was not an option so to us I think where we're going to be focusing on its really putting the.
Oral octreotide and and where were focused on education is a significant treatment burden that patient phase with the current injectables. That's the part that we're focusing on we do not believe that we have to educate our health care providers on the m. away or get them comfortable that the efficacy and safety profile.
I'll talk to your tight itself.
Sure fault it.
Yeah, and just just a follow up so I guess, how should we think about how to educate endocrinologist about acromegaly sent them breakthrough and how will that understood and kind of going forward. How are you guys approaching that.
Yeah. So great question, Paul <unk>, the first I would say that be.
There is definitely an increasing awareness and recognition and acceptance of the breakthrough symptoms.
If you if we think about the patient advocacy community. It's I took the one that is run by Joe Cisco you can clearly see that'd be a patient voice is becoming more and more vocal.
Especially on the breakthrough symptoms. So it's clearly much more than what we had back in 2016, we certainly are engaging with the thought leaders to be able to put that in perspective, we have certainly publications at the last and those that we put out the two lane papers that speaks to the disconnect between a physician's perception and the patients.
Standing up the big <unk> I mean, we will continue to focus on that and that will become sort of the key to look at my capsize not a convenience option, but an option that offers a whole lot more than just be daily dose oral admitted route of administration.
Of course, thanks, so much for taking my questions.
Thanks, Paul.
Our next question is from Douglas Tsao with H.C. Wainwright. Please go ahead.
Well, thanks for taking my questions I'll, just first I'm.
Just curious if you can provide an update specifically Q and powered and potential impact of the krona virus in terms of patients being able to go in assurances around patients have been assets your drug supply and making sure that they're able to make it that's especially in Italy, where things are or obviously I'm having trouble.
If we locked out.
Yep, Great Great question Doug.
Let me, let me say overall at this time I do not believe the corner buyers has particularly impacted a empowered remember we had previously disclosed that we had completed enrollment, but I'll turn it over to build particularly to talk about Italy in particular and B patients.
We're still in the trial in the U.S. sites great. Thanks, Doug.
So.
The drug supply issue as it is not an issue we've got a clinical supply to finish out the trial. So we're in good shape there.
Only patients still in the ER RCT phase the randomized phase are in the U.S.. We do have some ex U.S. patients that are in the open label, but that was of course not impact the primary endpoint.
We've been working closely with the sites in the U.S. I'm, making sure that they have their needs mapped in terms of being able to see the patience.
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We are working towards being able where appropriate for the sites to do.
Remote.
Interactions are where the patients don't have the fear of going and that's really into the hospital they'll get their blood draws associated with that so we're able to do that in a way were most patients are able to come if there is for some reason a missed.
Data 0.1 of the advantages of the Tw away analysis is that if one of those point, where some of those points or mess, they simply get averaged out and so the twh simply taking the average of the idea if one's.
Throughout that nine months spacing and if there's one mess and simply though prior one would count for two months for example.
And we'll give you any comment I would add Doug AWS is on Italy, like we have one clinical site in Italy that have patients that have completed the 15 month a trial of empowered and are currently in the open label extension. So from a trial perspective, they've completed the core data that we need a from a submission perspective.
Okay.
That's fantastic and then.
Yes, it's a follow up on on on the same topic.
Obviously I think we're all hopeful that this will be you know have moved past this by the fourth quarter, but instead, except that it persist as an issue and we potentially if the situation where sales reps have limited access to doctors offices have you thought about sort of alternative detailing methodologies and explored that or do you think.
Well, it's still too premature.
I would say that you know digital has become sort of a centerpiece of any of our launch plans today compared to the years before in my past when I was launching products and I think you know we are continuing that type of situation and potentially even shore up inside.
Brington, our digital channels I'm, even more so because I think many of our customers, we'll probably end up wanting to receive messages and engage with our personnel in that manner not to mention that the face to face and in person interactions are still the most effective but we are planning for alternative means.
We did not know when this crisis will blow over but that's up to anybody's guess, but we're certainly shoring up our ways to engage our customers and it would be a different channels.
Okay, great. Thank you very much huh.
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Our next question is from Ted can tough with Piper Sandler. Please go ahead.
Thank you very much her prepared girlfriend through some wholesale appreciate the uptick older coal cars cotton business earlier, we're killing spectrum boat with a producer to scheduled.
What are the potential areas I could be delayed or the part of the yes, yes.
How would.
Delay or a a producer to be communicate it took over let's say starting case or they get shut down or the not able to do their review how should we be anticipating rheumatism about thank you guys.
Yeah, Hi, Ted Great question.
At this time, we do not have any communication from the FDA about a potential delay a as you know we are a class two resubmission, which is sort of a very focused in view of the efficacy and safety there could be a potential affair site inspection and with the try.
Hello ban we did not know at this point in time, if there's any evidence in our hands that tells us that there would be a delay we are still focused on achieving our milestones as we had planned and if we do get to learn of eight a a wider communication from the FDA that things are going to be delayed, we'll certainly make sure that our investor or something.
Formed immediately.
Great make sense, but hopefully were excursion is going to hopefully won't be too much. Thank you very much sort of comments I guess just one other quick one with the yes really anticipation of a panel meeting I mean as you said it just seems very comfortable very familiar with a tree attacked.
So to be an expectation or or not necessarily.
It Great question Ted at this time I do not believe we have any signals from the FDA that there would be a panel and from the panel I assumed as its an advisory committee, we do not know off one we did not have one at the last time when wouldn't be submitted our.
Jason So we did not anticipate one but that doesn't mean that the FDA does not have the right to organize one at the very last minute. So.
We are flat, we're not planning on one, but we're certainly ready for one if one happens.
Great I appreciate all the impersonal consensus intelligent does.
Thanks, Ted do.
Our next question is from Kumar Raj Shah with Brookline capital markets. Please go ahead.
Thanks for taking my quick kind of find the congratulations on all the program [noise].
With regard to the manufacturing softly mining.
Well what is going to be the difference between that walk them.
Past everything studies being complete third party or.
Both of the specificity.
And ladies expectation in South Florida site inspection do you think that could be an acquired arndale, how does that impact Q4 last time line.
Yeah. So let me just add an overarching comment I think mark had gone through this and thanks for the question. It's a great question.
Overall, I think the two supplements and from our estimation sort of definitely gives us a chance to mitigate the risk at one of them is not approved so we are submitting to look though it's supposed to people supplement but for the details around the stability studies and whether they are ready and whether the FDA will insist on a site inspection I'll turn that over to Mark sure. So.
So we had a manufacturer that we had not submitted in the NDA Resubmission Kumar in December as they had an outstanding regulatory observation.
We didn't want to risk the resubmission I'm, having a set back as a result of that so we have every reason to believe that once we submit the prior approval supplement following the end da which is what we plan to do that the FDA has a PDUFA date on prior approval manufacturing supplements.
Run four months.
If they choose to inspect they can add another two months to that as our understanding of the regulations. So we have a second apiay manufacturer, which has a a scaled up facility, which we'd always intended to supplement to our and D.A. Following the PDUFA date to in June we did not want to income.
Over the NDA Resubmission with a new site, which may have resulted in a 10 month review clock. So we believe that both of these suppliers are.
Completely ready for the supplementation process than any inspections that may result.
Oh and they make the part of that macro they just create a will this be so Mike ups I picked up based on solid work based on who this improved.
And then Tom talked to open label ex things and what is happening I any insight and standing Thats. All we know what's happening with the people went up thanks in part of the continue on the drug.
Yep.
Yes. Thanks Kumar so the macro registry is a disease state registry, there's nobody on oral Octreotide. We're simply at this time assessing a patient experience on standard of care and once the drug becomes available they all have.
The option like anyone else would to go onto the onto our oral Octreotide mikasa and this will give us an opportunity to.
Assess their experience.
Before they go on the drug after they go on the drug so a real world baseline control study and since not everybody, we'll we'll probably switch over it give us or an opportunity for a real world head to head comparison, so it'll be very data rich a very interesting to patients physicians to all parties and.
Involve how this new drugs that hopefully will become available will impact the treatment landscape in terms of the open label.
There is we have to ongoing studies now with patients in the open label or the our CASM optimal study has patients and open label as does the empowered study and always set to date on those is a those open label portions are progressing as planned a very consistent.
How are we set them up.
And maybe a final question with regard to the Liberty what are the expectation intones up the label.
Andy Thumbs up the labor discussion with after year, what will be the timeline for that.
Hey, Mark This is Raj great question in terms of the label, we expect the label to replicate sort of big speed and that we've had in our clinical trials. So it it will certainly be something that our clinical trial.
Like that which is patients who are on some out of Staten Island logs and who can tolerate them. So that would be the kind of language that we would go forward, which is in line with the clinical trial results that we demonstrated a in terms of the actual negotiations with the FDA. Those are usually a towards the latter part of the review period, there's no not specific.
Pick any timeline, usually the FDA engages with you on a on a label negotiations I would say anywhere between four to six weeks, but that that that is just a speculation on my part at this time.
But that's what we would estimate in terms of starting to get engaged with the 50 on the label.
Okay, great. Thank you so much.
You very welcome.
There are no further questions at this time I would like to turn the floor back over to rush cannon for closing remark.
[noise] [noise]. Thank you operator.
I just wanted to say thank you for joining all of US here a at at a time that as well we would call a disquieting macroenvironment, but Ah we continued to remain confident on the milestones that we have in front of us and we look forward to speaking with you again on our next quarterly update call. It may have a.
Good evening. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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