Q1 2020 Earnings Call
Grading and welcome to the I can't find the critical that's caught at 2020 endings conference call. At this time all participants are in a <unk> a questionnaire lots of session will follow the formal presentation, if anyone should require upright or assistance during the <unk> <unk> <unk> <unk>.
I guess telephone keypad as her line does this cult Christmas being recorded I would now like to tend to called <unk> must have been at Cannes, Vice President of Communications and Investor Relations of I.P. and honestly the cold. Please go ahead.
Thank you operator, and thank you all for joining US. This afternoon I hope everyone is safe pen remaining healthy during these unprecedented times.
Meals days call, our Chief Executive Officer thought logic, Crystal and cheap financial officer, David a tool.
Afternoon Hope has issued a press release announcing financial results and providing a business update the first quarter ended March 31st 2020.
Please note that certain information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act, we caution listeners, but during this cool opium management will be making forward looking statements actual results could just the materially from those states is or implied.
By these forward looking statements due to risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in Prince news releases and SCC filings, including in our annual report on form 10 K. The ended December 31st 2019, and subsequent filings. This conference call also contains time sensitive information.
It is accurate.
The data for this life broad cost may 12th Twentytwenty.
Opium does it takes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
Now I'd like to turn the call over the Roger.
Thank you bad but afternoon.
Let me start by first acknowledging the challenging situation. The global posted 19 pandemic has created to so many people.
I'll have to go out to everyone has been impacted on week send our deep appreciation and thanks to the many first responders and health care workers saving our communities each and every day.
While our society's focus is necessarily on play with 19.
Corona virus little found that threatens a high to waive.
Abuse.
The kind of it 19 pandemic.
A new wait how we hope people vulnerable too I'm suffering with addiction and substance use disorders, I'm, particularly those at risk of opioid overdose.
So many people deal with the impact of part of it 19 on their own health unemployment.
Family and friends, we also unfortunately observing an increase in <unk>.
In fact, this has been reported <unk>, which let the nation overdoses in 2017, almost <unk> seen a 50% in overdoses as compared to last year.
In addition, or authority didn't count Cheesecloth costs, Florida, Texas, Pennsylvania, and New York are also response in rice isn't overdoses don't because it 19 crisis.
It says a Stark reminder, <unk> continues to put a significant strain on the U.S.
Even as we now face another emergency.
As we have said before I hope you as well positioned to address this challenge.
We believe PMT 003 nasal number theme.
Well suited to treat opioid overdoses, and particularly those involving fun to know, which is 50 times more powerful than heroin and accounts for more overdose deaths any other opioid.
Oh provide you with an update of all leave program in a moment.
However, I'd like to begin a highlighting the strength of our company because we operated in involving health care environment.
Oh, David will review off financials in greater detail. Let me just say that we are in a strong financial position to support all keep business objectives on the merging pipeline.
As of the end of the first quarter, you have $30 million to $40 million in cash in cash equivalent.
No debt.
We also benefits from a royalty stream from sales of Mark a nasal spray.
Importantly, all licensee emerging my solutions recently reiterated its twentytwenty guidance on sales of Malcolm in the range of 285 $315 million.
Moreover, we had the financial support collaboration has multiple government agencies, including the National Institute on drug abuse either.
The National Center for advancing translational Sciences and.
And the biomedical advance research and development authority odd that.
Collectively B. is unique attributes of our company have allowed us to continue investing in and advancing a broad pipeline across multiple compelling therapy areas in addiction and overdose.
With that let's now 10 12 pipeline.
I'm pleased to confirm that the F.B. has lifted it clinical hold on Opn T. 003 throat pure David this rehearsal.
How's he previously reported in January Yes da placed all developments of Opn T. 003 on hold it reviewed certain characteristics if the intranasally delivery device.
To review after reviewing our response, yes, yes lifted its hold based on our agreement to amend slightly off of the protocol, which means we can now move forward with this study.
I want to take this off being the seats you. Thanks to diligent with with my European colleagues and helping us compile on some odd details response.
Separately, we have also agreed with the S.T.H. conducts a pharmacogenomic study and healthy volunteers, but we believe will enhance the clinical profile of both P.M.T. 003.
As we progress towards our regulates refiling three P.M.T. 003.
We also having to factor into what timeline impact a prolonged.
Belongs posted 19 related travel restrictions on our equipment engineers in Europe.
Based on these collective modifications to all development program or and the a filing is now lighting to.
30 2021.
Aiming for commercial lawn later next yeah.
With respect to Opn T., there is there a tooth alcohol use disorder.
Previously communicated you have posted initiation of the buttons to the phase to study.
Our decision follows the coded 19 related state of emergency class Declaration in the United Kingdom, and the cross the European Union for our study is to be conducted.
We will continue to monitor the situation closely and commence recruitment is conditions allow.
You will recall that we had previously aimed to complete enrollment this year.
Once we have for the clarity around when recruitment and begin you will provide an update on this time line.
As a reminder, this trial is a randomized to double blind placebo controlled study and features a sequential parallel comparison study design aiming to reduce placebo response.
The study will become does it in a number of countries in Europe with enrollments targeting eight but pocketing 300 patients.
Moving on to Opn T. zero zero for Britain for the treatment of acute cannabinoid overdose.
Signed a corpus of research and development agreement on started all collaboration with an cats formulate opn teams. There is there for a human studies.
And cuts is providing is development resources in support of all I envy filing I'm to reformulate Opn T. 004, as an injection well planned clinical study.
Turning to our employees have transitions to remotes work environment.
Our team is <unk> is performing extraordinarily well quickly adjusting to work from home arrangements.
Connected with our partners on supplies.
Disability to adopt working practices quickly and effectively will remain especially important as he would like be faced restrictions on travel I'm disruptions of business operations for many months to come.
Meanwhile, we have donated funds to support Oh programs committed to support for programs.
Committed to helping those most vulnerable to addiction.
Yeah organizations included the International Association of firefighters Foundation.
Yeah Association of recovery in higher education.
Harm reduction coalition.
K.'s action on addiction.
These actions reflect our continued purposes opn supports our community the best we can.
Indeed this experience also undisclosed to me the essential need broken spirit innovation and investment and the development of new medicines prediction and overdose.
Eventually we will move past 719, however, addiction and says well Unfortunately remain significant devastating conditions for many years to Tom.
But that I will now a favorite to discuss all financials in more detail save it.
Thank you Roger prior to beginning my comments on our first quarter financial performance I want to highlight that we entered 2020 with a strong cash position and no doubt.
Momentum continued through Q1 2020.
In addition, we have had no need to see any form of us federal state or United Kingdom made and we have no intention of implementing any covert 19 related layoffs at this time.
We believe our business model and meaningful stream of revenue from sales Mark can nasal spray is a unique strength in a time like this.
Well now review our financial performance highlighting various factors to provide you with a sense of our performance and then wrap up with a commentary on her outlook.
We recognize 4.3 million in revenue in the three months ended March 31st 2020, compared to 5.4 million then the corresponding period of 2019.
The revenue for the first quarter 2019 included 1.7 million then revenue from the night at brand and the contract from Florida.
Revenue in the current your quarter included approximately 4.2 million from the licensing agreement between also need B.S. as compared to 3.7 million in the corresponding period of 2019.
Increase up a half a million enrolled p. revenue represented an increase of 12 per cent year over year and was driven by not nor can sales of approximately 72.2 million in the first quarter 2020 as reported by you'd be us.
Yeah, an air expenses were 2.6 million for the three months ended March 31st 2020, compared to 3.4 million in the first quarter 2019.
Decrease of 800000 was attributable to managing costs diligently, especially third party consulting expenses.
R. and D. expenses were 1.4 million and 3.6 million for the three Magenta March 31st 2020, and March 31st 2019, respectively.
The 2.2 million decrease was primarily attributable to reduction in third party clinical trial and development expense.
Sales and marketing expense were approximately 1.1 million compared to non during the first three months in 2019.
As we continue to advance O.B.M.P. 003 towards potential regulatory approval, we anticipate that our sales and marketing expenses will increase as we invest in multiple key areas in order to support the development of a commercial platform that would allow us to potentially commercialized P.M.T. 003.
As well as future pipeline products.
The development of this commercial infrastructure includes increasing commercial personnel.
You want sales and marketing.
Planning activities supply chain and distribution.
As we build this infrastructure, we are continuing to evaluate the ideal go to market strategy that will allow us to maximize the poor commercial potential Oh P.M.T. 003.
Not lost for the three months ended March 31st 2020 was 1.7 million or a loss of 40 cents per basic and deluded share.
The comparable period and 2019, we also had a net loss of 1.7 million or a loss of 44 cents per basic and we're to chair.
March 31st 2020, we had caution cash equivalent of 32.2 million.
Paired to 30.9 million December 31st 2019.
The reminder, the current cash balance does not include the majority of the 7.4 million Nighter grant or the 4.6 million part a contract.
Looking at the remainder of the year as Roger noted.
Yes reiterated its not again 2020 sales guidance range of 285 million two to 315 million.
At the mid range of 300 million, where you would expect to receive row piece of approximately 26.2 million.
Without I will now ask the operator to open the call up for questions operator.
Thank you at this time all the conducting a question then secession if you'd like to ask a question. Please press dial one on the telephone keypad called summation time.
As the question.
You May Christ.
If you would like maybe a question from the cure well participant <unk> equipment, it may be necessary to stop your hands, but <unk>.
That's the question comes from Brendan part from 10 to six year old.
Please go ahead.
Hi, Thanks to pay my criticism, saying congratulations on Frank Rich and maybe just curious I'm not pharmacodynamics studies have you.
<unk> wants to see just given yeah my understanding no. If he is quite a well understood molecule.
Secondly, then.
Maybe you can you do some elaborate on the European manufacturing equipment Engineers delays you caught out [laughter] dish know, where it's being done on this device currently and it's so does this and what we stick the stability timeline.
And then lost.
To the extent you can kinda just elaborate on the changes that we agreed to pay study is this just a change in design or should we take up additional patients as well. Thank you.
The size of questions Brian.
Hmm.
Okay. The next to the Sun.
This is to study is an agreed with him because we want to make sure. We have a product that has the most compelling profile.
No. This point disclosing the exact I'd be design.
Say, it's a short study unhealthy voluntary is we think will essentially generate.
More meaningful value proposition for the product.
Lesson I started yesterday, requiring it more the discussion with them around what would allow us to present something that we think most compelling.
Oh ultimately for patients.
In terms of the supply chain you mentioned in the manufacturing.
Headline is it.
You're asking in terms of it.
Stability not really.
Essentially the.
You can we have found my confidentiality commitment to off.
Partner.
I don't need to say that.
Engineers were needed in order to establish commercial scale, selling and because of restrictions or travel. They just weren't allowed to make the Japanese.
In the matter we'd hope.
But there's no inherent.
She wasn't an issue with the equipment or anything like that it was just the normal course of business two longest because of travel restrictions.
And I'm in terms of the case studies and the change in the design.
And they are what we'd regarded very minor amendments.
Not easy Josh maybe just one follow up they.
Just following circling back to your interactions with the FDA just given the sort of patient population you going off there is this something you expect the FDA would take an ad com.
I'm, it's quite possible yes.
Okay. Thank you.
Thank you Sir your next question comes from Barra paper from Cowen and company. Please.
Please go ahead.
Great. My first question is on just the competitive landscape and now moving there are several obviously injectable products in development I'm. Just curious what is the timeline potential approval of those products and just want to kind of get a sense how that compares to your approval timeline.
Yeah, that's probably going to what nothing has been disclosed on the exact timing of injectable.
Very mine to Ah I think this one of the as far as I'm aware of it novel opioid overdoses more of a death or injection of Nama theme for opioid use disorder.
And there wouldn't be a part of the competitive landscape procured overdose.
Yes. This idea, though form is an injection, yes for overdose.
A timeframe how them to.
Disclose as far as I'm aware of.
But certainly not under the impression that the on the market this year.
Gotcha.
And then maybe just a general more competitive dynamic question.
When you get an approval for your double over three now a film nasal spray what is going to be the a picture that they're better than the commercial message to compete with nor can and are there any kind of a subgroup seminar can buyers right. Now that you think are gonna be maybe lower hanging fruit for now mifid than others.
Yes.
Well ultimately I think it depends on what the data show and without in mine opposition. We believe is certainly from the initial data. We haven't this has the potential to be a better products again.
So when I say, that's a meaning greater likelihood of saving a lifestyle footwear aiming towards.
In terms of the market a role or would you see that I'm sitting to grow because he's not camel remains a very successful products and many people will absolutely remain loyal and to this.
Since products as well so in terms of competition, yes, there's overlap.
We see the says.
Absolutely, placing the market lets say very good products.
With everything that.
The data, we hope to generate though people will be persuaded by being a part of the great likelihood of saving alive, let's say the other segments of the market, where I think there's less relevant so knock on tries to say not strictly knock on but the locks own based products.
Because there are few and development, where we think navin has so that does have a.
There was an exclusive area, where it can perform it around the potential of.
Fentanyl being used isn't a chemical attack. So this is an area of concern for about a where they see large amounts of fentanyl continuing to be.
Sees on U.S. soil and with in the past extensional, having been used in the chemical attack in Russia, and nearly 2000 getting over 100 people.
And they're interested in supposing Oh PNC there there are three development program.
To position it I'm in a stockpiling mine a because of the potential of a chemical attack on on vulnerable hot spots in the U.S.
So that's an area where they have set they don't believe naloxone is sufficient than that down the C.
Could be quite important.
Gotcha.
And lastly in terms of shelf life, a we've heard that you'd be I'd say that they're looking to expand the nor can shelf life labeling or just curious where youre Oh, Pete you know double O three would come out and your thoughts on the importance of a shelf life.
The.
Shelf life, we would look to harvest under due to your shelf life on.
For our understanding is that.
Certainly the emergency services sex sector.
Okay and other forms and also can get used quite frequently.
So it doesn't appear the significant.
Stock piling as such they they get used in reorder sportswear away quite frequently so.
During the two year shelf life should be LCD sufficient.
Great. Thank you very much taking my question.
Thank you. Your next question comes from called then from Northland Securities.
Please go ahead.
Thanks first congratulations on your progress can you tell me if you have any ex <unk> what are your expectations for additional states potentially adopting mandatory co prescribing programs in 2020, and then I have a follow up question to that thanks.
Since there's a magical describing so the remind visits nine states that currently have some form of Mastercard prescribing and for Twentytwenty, that's five more state as our understanding of.
The states have it on the docket for review and potential approval now.
I'm.
Good day, whether.
They were all adopted.
But certainly we see co prescribing in general to grow.
And you will see knows the progress is how many of these states take it on day, one of the states as well it Mystic States. It's a new York is part of is one of those states has it on that docket for this year.
Great. Thanks, and do you have any update or any visibility in terms of the timeline and the pattern.
Litigation really thank you.
No I mean, thanks, Yeah, we ask ourselves and question, we're expecting a ruling any day, but.
There's no definite commitment as to when that might be.
Fair enough thanks, Kent.
Thank you. Your next question comes from David fell from Zacks Investment Research. Please go ahead.
Hey, good afternoon guys.
Roger you had mentioned that there's been an increase in opioid overdoses recently I'm. Just curious if you know what percentage of those ever due to fit and all that information available.
For the most complete dataset.
For the country overall.
Relates to 2018.
And there are approximately 49000 opioid overdoses.
Of which 66% Sentinel related.
I did have like.
Complete dataset.
For what we're experiencing now with curve. It we're just getting multiple reports of increases as a county level.
For example, and that base will obviously be compiled and we'll get more updates over the course of the next year as well.
Okay, No one you're able to get the O. Three studies underway, where will those be taking place and is this a single center a that you'll be working at or multiple theaters.
Although the say there in healthy volunteers, so they'll be it single center sites I singles answer site.
I'm not not attached to a large hospital emergency services or anything like that.
Got it might be.
Will likely be impacted as a further coated outbreak.
Certainly the sites that we all the company, we're working with aside the.
We're going to using the PK study has been fully operational.
Okay and Ah David you had mentioned that.
Sales and marketing expenses in the first quarter now what should we expect a similar amount spent in that category in the coming quarters.
Well I think it's a good starting as far as a precedent sort of number we're just starting sales and marketing.
If we wouldn't see that number going down.
From from that 1.1 million and it just depends on how we progress over the next few quarters, how and whether or not we make a decision on how we're going to commercialize 003.
But to answer your question I would say, yes that's.
A good number to at least project for the next couple of quarters.
Okay, great. Thanks for taking my questions.
Thank you.
Thank you.
Ladies and gentlemen, we have reached the end of our question and answer session and I would like to turn the call that Dr. Roger question for closing remarks.
[noise]. Thank you operator.
Thank you for joining us today and for your interest in European we believe that our opportunities for value creation may remain compelling.
Given the significant need and the diseases, we are pursuing.
We look forward to keeping you updated on our progress in the months ahead.
Enjoy the rest of your day and please stay healthy.
This concludes today's conference you might just yet connector lines at this time. Thank you for your participation.
[music].
[noise] Oh.
[music].
[noise] [noise].
[music].
Huh.
[music].
And.
[music].
<unk>.
[music].
[music].
[music].