Q1 2020 Earnings Call
Please standby work.
Hi, good afternoon.
Right.
Oh.
At this time.
No.
Formal remarks.
Answer session.
I'd like to ask a question.
The Starkey.
Number one on your telephone keypad.
I'd like to withdraw your question Please press star.
Sure require.
During the conference.
Sorry.
As a reminder, this call is being.
I'd now like turn the conference call.
<unk>.
<unk>.
No I O technology.
Thank you Paula.
Thank you Paula.
Good afternoon, and welcome to <unk> conference call to discuss our financials until.
First quarter 2020.
Joining me on the call today articulate our bought Chief Executive Officer, President and Chairman of the board when the biotechnology and that's among the guests Chief Financial Officer.
After market close today.
It is really due to holdings first quarter 2020 financial themselves.
Yeah, It's really it's lucky to Alan will be searches and a webcast of this call are accessible via the home page.
Mr sections of our website at Puma Biotechnology Dot com.
The webcast presentation slides will be archived on our website and available for me. Please for the next 90 day.
Today's conference call will include statements about the company's future expectations plans and prospects.
Constitute forward looking statements for purposes of federal Securities laws.
Statements are subject to risks and uncertainties and actually gets results may differ from those expressed in these forward looking statement.
A number of factors, which includes the risks factors is closed in the periodic and current report.
But from a with the Securities Exchange Commission from time to time.
You are cautioned not to place undue reliance on these forward looking statement.
He called me as at the Gate last conference call May 7th 2020.
The company undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this call except as required by law.
During todays call. We May also include certain non-GAAP financial measures to dissolve adjustments to like yeah.
I mean does not get metrics.
Be useful to investors just supplements you, but not as substitutes for our GAAP financial measures.
Please refer to our first quarter 2020 treatments for a reconciliation of GAAP and non-GAAP themselves.
I'll now turn the call over to Alan.
Thank you Marianne then thank you all for joining our call today.
Today Premier reported total revenue for the first quarter of 2020.
51.2 million.
Total revenue consisted of license revenue of 2 million.
All T. revenue of zero point, Sixmillion and net sales of nearly 48.6 million.
Net sales of 48.6 million in the first quarter of 2020 refers that didn't decline from the 58.7 million in net sales reported in the fourth quarter 2019.
An increase of 6.7% from the 45.6 billion reported in Q1 or 2019.
I will begin with a review of some of the highlights of the quarter and then provide more details on New Orleans commercial activities in the U.S. Maximo to guess it will follow with highlights of the key components of our financial statements for the first quarter of 2020.
[noise] have investors hardware in the second quarter of 2019, we presented results from our phase three trial of drop in third line Hertwo positive metastatic breast cancer also known as the no trial at the American Society of clinical oncology annual meeting in June.
Based on the results of the NOL trial promote filed a supplemental new drug application or Sndk border right.
Well the treatment of those like her two positive metastatic breast cancer in June of 2019.
You have 28 was accepted by the FDA September 2019, and nearly one approved in this indication in February 2022 months before our anticipated PDUFA date.
As investors are also where well my husband ongoing basket trial, you're right. It hurt your mutated cancers referred to as the summit trial. The summit trial modified in early 2020, such that you are positive hertwo negative breast cancer patients Webrtc virtu mutation well be randomized.
To receive either focused around the world Fulvestrant Pulse trust truth to that all the combination of underwriting it possible desperate plus trust fusion that.
Each arm of human study will initially enroll seven patients during stage one.
No patient in a given all of response that arm will be codes for further role.
That all will be closed affordable.
It more than four patients response, yarmuth expanded and for their patients will be minimal.
The amendment to the summit protocol has been approved but many of the clinical sites that are participating in the study.
Enrollment into the ERP plugs. It hurts you negative cohort in Q1 of 2020, what's slightly higher than enrollment to this cohort in the fourth quarter of 2019 and did not appear to be impacted during the month of March due to the coping very gene pandemic.
Enrollment in the bulk of April however, did decline to a level that is toward the lower range of the range of mostly in <unk> that was seen in this cohort during 2019.
We believe that this decline maybe due to the impact of the called it very gene pendant.
Based on this we anticipate that we will receive the initial results from this assignment to stage trial in Q1 2021.
Once we receive these initial results we plan to schedule a pre NDA meeting with the FDA to discuss the potential for accelerated approval.
Over the past six to 12 lunch whoever has been making a number of key additional hires in order to strengthen our commercial presence with nearly six.
Most recently in late March we announced that Jeff Ludwig Joint Puma as the Chief Commercial officer, Jeff brings with him extensive experience in commercial sales and marketing in oncology, including predispositions Astellas and Andrew.
Jeff is what multiple sales teams across several successful launches of oncology therapeutics.
We're pleased to welcome Jeff to cool and look forward to working with him.
Growth in New Orleans commercial franchise.
I will now review, our U.S. commercialization progress for nearly.
Just a reminder, I was making forward looking statements.
As you May recall, we have two channel that for like near links to patients we refer to be as our specialty pharmacy channel and our specialty distributor channel.
We're also refer to it as argued office dispensing show.
In the first quarter bottle sold in the specialty distributor channel represented approximately 23% of the total bottle sold and of course.
This represents a slight increase from the 22% we reported in the fourth quarter.
During the fourth quarter. We also noted increased in the number of new physicians in the specialty pharmacy that was writing prescriptions for the airlines.
The total number of nearly as prescribers increased approximately 6.8% in the first quarter of 2020 compared to the total number of drillings prescribers in the fourth quarter of 2019.
Later in the call Massimo will review the full financial results, but I will nine now provide you with the current sales results.
Slide four shows our quarterly net sales up nearly since after FDA approval.
As I previously stated our net product sales revenue.
It's $48.6 million into first quarter compared to 58.7 million in that sales reported in the fourth quarter of 2009 cheap.
During 2019 at the American Society clinical oncology annual meeting in San Antonio Breast cancer Symposium, we presented data from our control trial.
Joining that using dose escalation during the first month nearly street.
Reduces the grade three diarrhea associated with yearlings and improved Tolerability.
As you can see on slide five the percent of new patient prescriptions that appear to be using this dose escalation affecting continues to increase in fact increased from 28.7% in Q4, 2019% to 40.4% in Q1 of 2020.
Slide six shows the total bottles of nearly sold by quarter.
You will notice that the number of bottle sold in Q1 that declined sequentially from 4935 in the fourth quarter of 2019 to 4035 in the first quarter of 2020.
As we noted in our Q4 call in February during the fourth quarter. There was an increase in inventory purchased by the specialty pharmacies, which accounted for about $5 million an increase inventory.
During Q1 of 2020 and specialty pharmacy drew down some of this excess inventory to meet demand, which may have negatively impacted our bottle sold during the quarter.
In addition, as we also mentioned on our call in February we saw a decline in and Rx in the fourth quarter of 2019 that occurred mostly during the Thanksgiving Christmas and new year's holidays, which we believe may have been due to patient delaying starting your legs until after the holidays. This.
Maybe due to patients wanting to avoid potential G.I. side effects, which tend to occur the greatest frequency in the first month or so after initiation.
As we also discussed on our call in February.
We didn't do you see a large increase the number of new patients are signing up for the specialty pharmacy in January.
As we've discussed with investors in prior earnings calls when these mutations sign up through specialty pharmacy. It takes approximately two weeks for the patient to actually received no prescription and for pool, but it's easy interacts. Although therefore, although there was a sharp increase in a number of patient signing up through the specialty pharmacies.
In January due to this delay actual interactions started out lighter than expected and they have negatively impacted our total bottle sold in the quarter. We didn't see this trend moving to more positive direction in late January early February.
And our rights in the first quarter of 2020 increased 7.9% from the fourth quarter of 2019, Walt cheer actually the first quarter declined 6.3% from the fourth quarter of 2019.
We believe that previously mentioned trends involving delays and interactions in January.
Negatively impacted refills in the first two months of the quarter, resulting in a cure actually decline quarter over quarter.
We still did pick up in March leading to a 12% Trx increase in March versus February.
In April the number of new patient signing up for the specialty pharmacy was essentially flat with the number signing up in March.
However, we are remaining conservative in our outlook for whether or not copel like gene will have a negative impact on sales.
Due to the current 19 pandemic, our commercial teams have experienced a decline in our access to physicians and health care providers are achieved have worked hard to adapt to this new environments, where they increased non personal promotion and virtual interactions with that said there still remains a significant amount of.
Certainty as to when states will open up and what access restrictions will be when will we will be lifted.
Given this level of uncertainty, we're taking a conservative outlook work with regard to future sales trends. We will continue to monitor these trends closely and look forward to updating our investors in future earnings calls.
We are formed partnerships with companies that have commercial and regulatory expertise outside the United States in order to make nearly scalable to patients across the world During 2019 village with a crude in several countries outside the U. Western Europe at the scene on the slide.
This morning, we were pleased to announce the approval of your leaks in China.
During the remainder of 2020, we look forward to the potential approval yearlings in additional countries, including parts of Latin America in South America as shown on the slide.
In Europe during the fourth quarter, our partner peer far large near links in Germany, the United Kingdom, and Australia. Although it is still early we're very pleased with their initial success.
Thanks was launched in the first quarter in Sweden, and we anticipate that pure far launched and your legs.
Approximately eight to 10 additional countries in Europe throughout 2020.
We look forward to updating investors on the European launch in the future.
Most recently on April Thirtyth.
We reported the signing of a license agreement with fixing therapeutics, a south Korean company focused on anti cancer drugs and therapeutics that will commercialize new Orleans throughout the country.
Ill now turn the call overturned action lager guests for review of our financial results.
Thanks Alan.
Let me talk with a quick summary, it's almost I know solutions first quarter of 20 Twond.
You should note I wouldn't make comparisons to Q4 acutely 20 Nike.
We believe a better indication our progress that's a commercial company and yet but the year comparisons.
For more information.
The comment, but you listen to all the 10-Q.
Which will be filed today well into each other consolidated solar system.
Oh.
The first quarter of 2020.
We reported a net loss based on the topic of $16.9 million.43 per share.
Our GAAP net losses from Q4 Q3 2018.
$11.2 million $16.9 million respectively.
Non-GAAP basis.
She said adjusted to remove the bulk of stock based compensation.
Reported net loss of $8 million.
When you sets person for the first quarter of 2020.
Gross revenue from known excels was 58 million bullish in Q1 2020.
There's some $68.5 million in Q4 two Nike.
So I didn't mention it.
Revenue from that like social was $48.6 million, a decrease from Nick Joseph $58.7 million for the fourth quarter was 29.
Q1.
2020, we recognize 2 million bullishness license revenue related to I would never study to pool.
Well I'm sure point $6 million royalty revenue from all of little partners.
Our gross to net adjustment in Q1 was above 16%.
Increased 14% gross to net adjustment in Q4.
The increase was driven mostly by severe cold they called US GAAP expenses to reimburse just wanted to keep.
Cost of sales for the first quarter was $9.1 million, which included amortization of Muslim payments to the elections, so they're not they're up and if that's approximately $1 million.
Going forward.
Did you to recognize most decision another milestone payments to the election, so well by $1 million per quarter of coastal cells.
Well, the fish globally or Tony Tony.
Continues clunky she'd bait and never leaching itself will be in the range of 215 to 20 and $35 million.
We also want you should be double gross to net in 22 and they will be.
Between 16% 17%.
Furthermore, we have tissue paper machine or what else do supplement with partners London wall in the range of $3 million to $5 million <unk>.
Slippage.
Like when the guidance of five to 10 million voters.
I'm flipping through licensing fees.
In the range.
On slide $22 million.
[music].
We recognize the reset great deal of uncertainty with regards to me, but difficult to 19.
Let me all the negative impact on those shows.
Additionally, I will not only <unk> net revenue expectation for Q2 are in the range of 48 $50 million.
We anticipate that the gross to net in Q2 will be approximately 15.5% to 16.5%.
As Ginny expenses were $30.9 million into first quarter 2020.
Compared to $31.3 million $31.4 million for Q4, Q3 2019, respectively.
It's urinary expenses, including non cash charges for stock based compensation $4.7 million, but the first quarter of 2020.
But to $5 million I'm typos fictional books for Q4, Q3 2019, respectively.
Research and development expenses were 25 to fly minimum bullish into first quarter.
Compared to $30.2 million.
$30 million for Q4, Q3, two and uniting respectively.
R&D expenses, including lung breast charges.
Rich compensation of $4.2 million in Q1.
<unk> for a minimum dollars $6.6 billion for Q4 Q3, two in the United team respectively.
Into first quarter of 2020.
No reported cash burn with approximately $11.6 million.
Compared to past spent approximately 1.2 million.
In Q4, 2019 touched burn of $7.3 million in acute.
We ended the first quarter two need to any $100.6 million in cash cash equivalents a marketable securities.
Accounts receivable sponsor at March 30 to those was $31.5 million.
Our accounts receivable stamps range between 10 and 68 days.
Well I will they sell sell standings are about 26. Thanks.
Hello distribution, there might things approximately four weeks old inventory.
Overall, we continue to be deployed our financial resources to focus on Bill Bumpiness, Neurokinin, one going clinical jaws and become or something similar mailings.
Thanks Baxendale.
We continue to recognize that we need to improve near link sales growth.
Whom at senior management in cooperation with the commercial committee of the Board of Directors continues to remain focused on near links revenues and sales growth 2020 and beyond.
We have made a number of new hires in our commercial team and we are hopeful that these new team members will make it a positive contribution to nearly sales growth and we look forward to updating investors on this in the future.
The remains a significant unmet need for women battling breast cancer.
We had puma are committed and passionate about finding more effective ways at helping these patients during their journey and we will continue to strive to achieve that goal.
This concludes today's presentation. They will now turn the floor back to the operator for questions operator.
[noise] well now begin the question answer session.
Asking question.
Sorry.
[noise] <unk>.
When your line is open in the question.
<unk>.
Please press star.
Participants.
Before pressing the star.
Please.
First question.
Our first question.
Oh, Hey, great. Thanks for taking the question are you said a few Alan can you comment at all.
Yes.
How much metastatic revenue generated in the first quarter I know, you've just got the approval, but I'm just curious if you could provide any comments on that.
Yeah.
Yeah, Hi, golf, Thanks for the questions.
To give kind of a comparison in Q4 of 2009 cheap or 8.9% of our bottle sold learned the metastatic setting.
Some of that you didn't see and the quote you amplified and some of that is in the hurts you mutated.
In Q1.
The toward it was 9.3%.
Okay got it that's very helpful.
And then just I want to get a better understanding with such as the the guidance I know you mentioned that you're going to take a conservative approach with respect to.
So the sales trend this year and let me.
You mentioned the Q2, you what's that 48 50 million. So you know that.
Maintaining the guidance of 215 to 25 suggest you are still expecting some some growth in the back half of the year I just wondered if you could comment on that note in view of the situation with Covidien and where you're you're comfortable maintaining that but you didn't seem to to 25 range next.
Yes. So again, we are taking a conservative outlook, it's a large global blakey, because I think that you know there's a lot of uncertainty in terms of when the country opens up what that looks like do we see a second surge et cetera, we do feel obviously want more comfortable that toward the second half of 2000.
The 19, you know access will be higher.
That's where that guidance is coming from this kind of being you know conservative now and recognizing that you know as acceptances later in the year that should obviously helped sales go up as well.
All right and I appreciate it thank you.
Well.
[music].
<unk>.
Hi, guys. All this is mark downs. According thanks for answering my question Paul I just wanted to follow up on the question around 20 from you guys and does that factor and another price increase beyond what was taken in March.
I don't remember if there was one that was planned for later this year I don't have that information in front of me.
I don't I don't remember the answer that.
Okay, and then I guess just for the metal Sabic opportunity curious on your sell anything so and I guess my question is do you expect a few patients undergoing multiple treatment regimen to keep side to be more cycling through she can give them off there.
Multiple to cans approved in combination with exciting.
Ah that is a good question.
I would say that in terms of the use of nearly as in the metastatic setting.
We do you again anecdotally, we hear from physicians that they use their legs, sometimes just as a single agent because it's very well published the drug works as monotherapy.
And sometimes they use it in combination with chemo, sometimes escape side have been sometimes it's not as.
We also here quite frequently but they're using it for her to mutated patients as well because there's a tremendous amount of data published and hurt your mutated breast cancer.
You've obviously had you know.
<unk> said Gee prefer oral prescriptions.
I don't know the answer to that I don't have to date in front of me. So I I can't answer that one out the data in terms of any impact from the approval of two cat did I I, though it was very very recently, so I I don't know if we have seen any I don't remember if we've seen any obviously that something will will be looking.
<unk>, but I don't know that we've seen any to date, yet and I think we'll have to take a wait and see approach.
<unk> last question in terms of the outperformance in Q1, yes, you're correct regarded to I believe it was 40 to 43 million wasn't guidance for Q1, and we came in at 48 that was definitely driven by sales inexpensive <unk> and we are definitely continuing to.
New prescribers, you know being a very big driver of sales and you know I think.
Alright are actually is in Q1, if I had the ballpark it I would say you know.
40% to 50% of them are coming from new prescribers.
So you know I know in the past we had shown a metric that ones you know how many prescribers. We had you know the reach if you will and again you know that was just defined as having contact with the doctor once.
As I'm sure you can appreciate just contracting it after ones often doesn't make them prescribed drugs. They often have questions and you don't have to take four or five or six calls to do that so I think with time and you know with the increased efforts of the team to increase the outreach and increase their calls, especially too.
People, who have not written a prescription I think that's likely what we're seeing that execution or from that perspective, if I had to estimate of the entire.
Population of which is probably you know ballpark somewhere the range of eight to 9000 physicians I would you know ballpark estimate probably half of them if not more have yet to write a prescription for the drugs. So there is clearly a continued opportunity to grill <unk> certainly prescribe <unk>.
And that's something that the commercial team is gonna be focusing on.
Maybe just a follow up on that.
Given some of these new prescriptions, especially in the extended argument of starting that really bases and I didn't they tend not even makita, hi, Toni and plans to live in such a difference tablet that could be priced between them on a monthly basis to <unk> talking about revenue recognition.
Yes. Thank you you ask that question I believe in the last call. It also thank you for asking it again, we are looking into that we we are they looking into that canon.
Understand the idea on on matter all disagreeing with you. It's a good idea we are looking into that I, just think there's little there'll be time to get that done.
Thank you.
<unk>.
Sure.
Okay.
Pretty much the features off on for Chris Tonight, Thanks for the <unk> quarterly updates.
I was wondering if a following up on that last question getting into in our actions with the kinda ongoing situation and hospitals <unk> not seeing their positions as much perhaps.
Is there any expectation for or whatever it's our ongoing.
Well you two kind of keep that momentum going in terms of growing new prescribers to keep your exercise and then perhaps.
Movements this earlier, but with respect to see patients starting on lower doses you since you know of but the average duration of treatment might be by the end of the year I was more and more prescribers adopted next.
Yeah <unk>. So to your first question you know in terms of you know what's happening with Coven 19, and and you know how we're addressing that you are correct that you do you have a lot of patients who are not going to do their doctor because of the <unk> the team and.
You know I roll again state as we get in our our prepare comments that you know the commercial team is you know definitely working hard to try to adapt to this new environment and and doing a lot of you know nonpersonal interactions you know, we're more virtual ones and things like that.
And add stage start to open up you know, obviously that helps them as well because it opens up access as well. So now they can kind of do more face to face meetings or you know rather than doing a a big you know what x. call or something like that actually you know meet the physical location, a restaurant or something like that so as the state's open up.
That will obviously help that tremendously.
Your second question.
Do not have I don't have in front of me what the estimate is in terms of.
People, who are those escalating leading to a longer duration or or or not.
Don't have that information in front of me I think we have to wait wait a longer through that.
Right next to much.
Oh Oh.
Yeah.
[noise] Hi aren't good afternoon, Allen and thanks for taking our questions. My first question is just as we've gone you know partway through the second quarter here could you maybe just comment on any behavioral changes that you're observing of patients whether it's a with regard to <unk> or and or.
Ability or are you follow through in terms of <unk>, we felt like restrictions.
Mm.
Yeah, Paul say so the question in terms of that here is I I don't know if we you know I I get a question from investors quite a lot.
Which is you know because people are stuck at home and therefore the side effects of the drugs you know may not be as bothers them, because they're not working and doing their daily activities are you, saying better compliance due to that and I get that question quite frequently from investors I don't know that we have enough data yet to be like I didn't understand the thesis.
I don't know if we have enough data yet to be able to say, yes, or no on that so I I need a little more data to be able to to say that.
Terms of patients refilling their prescriptions et cetera, you know the through the special P. Pharmacy. You know this is a specialty pharmacy. This is not a you know C.B.S. are doing read that you just walk into there's there's something where it's physically delivered to the patients.
So I I would envision that most of these are doing like hands off deliveries, where they can just reading the doorbell leaves on the front doorstep or I would imagine it probably showing up in a mask and gloves and all these things as well too you know I'll make the patients were comfortable so there isn't the need for the patient to physically go to a pharmacy, it's physically delivered to them. So I.
He doesn't know that that you know the questionnaire asking which is.
Our patients refilling less frequently because they're not able to going to pharmacy or something they don't think we'd go to a pharmacy, if it's brought to them.
[noise] out in front of maybe more to any macro driven impact where patients are potentially dropping off to do I've been unemployed or insurance you know versus first of all the delivery mechanism yeah, sorry, if I'm correct. Yeah. That's that's that's that's a good question you know when there's like an appointment <unk> not not to my knowledge.
I'm not aware that we have seen any dropping insurance coverage or anything like that I would go and talk about that went ahead here but.
If I remember correctly.
Usually if you're unemployed you can do.
Oh, Yeah colder. Thank you you can do kroeber to keep your benefits going for a certain period of time. So I would imagine you know a lot of these patients would have that opportunity again I I just haven't seen any data that says that we've seen do the unemployment rides any drop off in in insured patients.
Got it. Thank you for that and then maybe just you know looking down the road and little next year as you think about the cervical opportunity and post you're working or discussions with the F.D.A. for potential accelerated Ruby or approve of here can you. Maybe just comments on you know where you think you are currently with regards to the <unk>.
<unk> market development and up market research and just you know how do you think <unk> hops the expansion of of the field force over the course of of 21 and beyond.
Thank you.
Yeah. So it's actually that question for you know, we do have an opportunity with the summit trial.
Both been hurt you mutated breast cancer, and and hurt you mutated cervical cancer, you know hurts you need to address the is a much larger indication that is what you would get its cervical because we already have the commercial infrastructure and the sales out leads to breast cancer of positions.
I don't anticipate we're going to need any additional bill to do that we do have a very strong marketing team market access team you know medical affairs team et cetera, who has been very involved in our work in in you know her to mutated breast cancer. So I I anticipate that were.
You know at this juncture quite well positions Ah you know for 2021.
Yeah.
Or a question and answer session.
<unk>.
Closing remarks.
Thank you for your interests in from the biotechnology.
Reminder, this call maybe accents fire needs needs the web cast and biotechnology Dot com beginning later today.
Evening.
Ladies and gentlemen, thank you for participating in today's conference call.
Our program.
Right.
Mmm.
Mmm.
And.
Yeah.
[laughter].