Q1 2020 Earnings Call
Good day, everybody and thank your for holding welcome to the Titan Pharmaceuticals first quarter 2020 financial results Conference call.
At this time, all participants are getting in listen only mode.
There will be a question and answer session. Following today's remarks. Please be advised that this call is being recorded at the company's request.
I will be archived on the company's website.
Starting later today.
Sorry, Oh.
Oh, it's like they had the conference over just the deal both like President and CEO type Pharmaceuticals. Please go ahead.
Thank you Eric.
And thank you all for joining us.
Welcome to the Titan Pharmaceuticals called to review financial and operational results for the first quarter ended March 31st 2020.
For white and update on our business.
It's been only six weeks since the last call at the end of March.
With that changing environment, we have encounter these have been very busy Andy.
Before we begin.
I wanted to inform you that we have filed quarterly report on form 10-Q, with the FCC and the press release issued earlier today provides a summary of to resolve sense can be found on our website at <unk> Dot com.
Joining me on the call today from Titan.
Dr., Marc Rubin Executive Chairman.
Dr Escape pardon me executive Vice President and Chief Scientific Officer.
And Brian Colley, Vice President Finance.
Before we get into the details of the financial results and provide an update on the company.
Jennifer Pure and then we'll review the required cautions regarding forward looking statements.
Jennifer.
Thank you for Neil I want to remind everyone that certain matters that will be discussed today other than historical information may contain forward looking statements within the meaning of section 27 eight.
Charities after 1933 and section 21, each of the Securities Exchange Act as 1934.
Such statements include but are not limited to any statements relating to our product commercialization and development programs and any other statements that are not historical facts.
Statements involve risks and uncertainties the could negatively affect our business operating results financial condition and spot pricing.
Factors that could cause actual results could differ materially from management's current expectations include those risks and uncertainties relating to the commercialization of Probuphine the regulatory approval process heightens ability to access capital development testing production and marketing of our drug candidates patents and intellectual.
Property matters and strategic agreements and relationship.
We express we disclaim any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein do reflect any change in our expectations for any changes in events conditions or circumstances under which any such get my this based except as required by law.
And now back to use the deal.
Thank you Jennifer.
We will start the call with an overview from our executive Chairman Dr. Mark.
And as you know they have work is no longer at Titan. So I will provide an update of the commercial activities followed by medical affairs regulatory and brought into development updates from dr. be funny.
And then Brian Crowley will summarize the financial results.
Ending with the closing from me.
He freak out before opening the call for questions.
So let's get started mark.
Thank you for Neil and Hello, everybody and thank you as always for joining us today.
First I want to reassure you that since the departure of Dane Holbrooke from the company that the commercial organization is in excellent hands with the sales team being led by the National sales Director Mike Fritz.
The marketing and market access and many support functions related to those being led by the executive director of commercial operations Joe Schrader.
Both Mike and show report directly to steel and are supported by Tightens Executive management team.
We very much appreciate Danes efforts since he joined the company in the fall 2018.
And we all wish him well.
During the 2021st quarter, we continued to execute a number of important initiated since aneel and keep will provide more detail. Shortly so let me just highlights some of the key activities.
We've continued refining invalidating or market segmentation strategy as well is rolling out new health care provider caregiver and patient education programs to the increasing number of certified health care providers.
Since the beginning of this year, we also strengthened our balance sheet the financing and the exercise of previously issued warrants, which together have provided approximately $8.6 million.
In addition, thanks to the payroll protection program, we obtained the low end up $654000 from the small business business administration.
This is particularly important at this time, that's the environment in which we function has been dramatically affected by the cobot 19 pandemic.
Hi, I'm sure all of you have experience many changes in your daily routines with the advent of shelter in place policies and social distancing requirements et cetera.
And while it's an organization we are operating in a virtual mode with all staff working mainly from home.
There has been considerable disruption of commercial activities as health care providers have also had to make significant changes with some of them limiting direct interaction with patience and many employing tele medicine when possible.
Well cadence Neil will elaborate further I wanted to emphasize the fact that some of these changes will continue for a long period of time.
And all right adapting and we are adapting our business practices accordingly.
I believe we have the right people in place to address these challenges, but we will require additional resources in order to thrive in this new market environment, and we will keep you updated as we progress and as we evolve.
Lastly, I wanted to mention that our 10-Q financial report indicates that we have sufficient funds to continue operations through the third quarter. This year.
While we continue to focus on growing our revenue stream and looking at business opportunities to add value.
We currently have only about 5 million shares authorized common stock remaining make it making it virtually impossible to add capital via the equity markets later this year.
We will address this by asking our shareholders to approve an increase in the number of authorized shares at a special shareholder meeting scheduled for June Thirtyth 2020.
Shareholders of record on May 20 seconds will receive the appropriate proxy material later this month.
And I together with all the board members urge all of you were shareholders to support this request and approve it at the special meeting.
Thank you for your support please be safe and stay healthy.
I will now pass the call back to Neil Neil.
Thank you Mark and Hello, everybody once again.
Over the past few weeks.
I had been working directly with Mike Joe and the commercial team to enable a smooth transition.
And with the help bookmark, Kate and Federico said directly of Multani.
I believe we have established just structure that book for White strong leadership and direction.
Commercial operations in these changing times.
The product sales revenue for the fourth quarter wasn't nominally higher than the previous calls quarter.
Despite the fact that some apart action plans were interrupted primarily due to the disruption caused by the hope igniting vendor.
As Mark highlighted.
Well with Nike in has made this thing outside the box to create new ways of conducting business.
Our staff has been rapidly implementing plans to continue interactions with our certified health care providers.
I don't know if that changes that they are putting in place. So we can assist them in this process, while also creating new ways to conduct business in a virtual environment.
Early this year.
We announced that a federal supply schedule pricing agreement went into effect.
For a five year Chuck.
We have made some initial inroads with the V.A. medical support organization or whatever you to restricted travel we have been unable to conduct the additional necessarily follow up.
With the expected easing of travel related restrictions in the coming days, we will once again focused on T V. Eight clinics well also seeking alternative ways to interact with the V. Eight to promote the use of Probuphine and they'd Friedman.
Opioid use disorder patients.
Let me elaborate on some of the commercial activities. During these past few months and the progress we're making.
As you know we started expanding our commercial team late last year.
And continue to do so this year with the addition of experienced pharmaceuticals saves leadership, Ben Saitz managers.
Such that we now have a safe professional and each upward 10 territories that I've worked the United States and Puerto Rico.
These sales professionals are being supported by four equally qualified and experienced medical science liaisons within our medical affairs team.
Our goal is to improve product adoption and generate sales growth.
When addressing the fast few months challenges, we have learned much above the target or you need treatment programs best suited for the use of Probuphine.
He factors, we believe that positively impact results include proper selection enough. He has kept providers will provide long term maintenance treatment support.
And those who we can assist in identifying those up their existing patients who meet the criteria for probuphine treatment.
We are now selecting clinics, what stat experienced and managing third party feared coverage plans that required prior authorization.
To the Subdermal insertion procedure.
And for those that don't have the experience we are providing adequate staff educational support so they can manage this process with relative ease.
We are being proactive.
We're also focusing on attractive attracting health care providers.
Including nurse practitioners and physician assistants, who consider the current procedure reimbursement is being adequate.
As we pursue ways to get third party they used to more appropriately reimburse the healthcare providers for this activity.
We have created Facelifts for health care providers that easily provide important information to educate caregivers and patients about the benefits for the long acting medication like probuphine.
To promote the step into stability cafe.
During this time of working from home.
We have shifted our focus and I was limited resources to preparatory work using digital communication techniques to establish relationships with new healthcare providers and this stuff.
A wide virtual communication tools for these health care providers to use with their patients.
I like the potential benefits of Probuphine as a treatment modality in this increasing tele medicine environment.
We have also established a social media presence in select geographies to increase awareness of Probuphine and enhance our share of voice in the medication assisted treatments face.
This has been working very well and we plan to expand it.
Our goal is to establish strong relationships with the medical community.
And inform patients of the long acting frequent adoption with Probuphine in order to increase the usage of Probuphine once the restrictions on mobility getting medical businesses I relaxed.
We strongly believe that which sufficient capital resources Probuphine has the potential to be an important weapon in the battle against opioid use disorder, providing health care providers patients and their caregivers within important.
Maintenance treatment option.
We are continuing to implement our patient support model, which aims to increase the number of active prescribers.
Like supporting those clinicians who prefer to only beside probuphine.
These physicians have been option.
You have a reddish certified clinician insert and good morning, Probuphine on their behalf.
But as you move up what potential barrier for both patients and clinicians.
With initial indications of this modest success, we hope to expand this model wherever appropriate.
With that said, let me now turn the call over to our Chief Scientific Officer, Dr. KZ, Marty will discuss tightness progress on our medical affairs drug safety and compliance functions.
Well as our product development and regulatory activities a lot of things to handle gate.
Thank you Neil and as you know no approved approximately 8.7 million in funding over two years from now machine development program for the prevention of opioid relapse. Following detoxification and this provides funds for the completion of in place.
Relation development Cgmp manufacturing and Nonclinical studies required for the idea filing.
During the first quarter, we met with the XT eight to review, our non clinical development plans and shipping guidance regarding filing the I envy application.
The FDA provided clear guidance to us on the types of development plan that we should follow specifying inside those type b, one regulatory pathway and this is due to the lack of safety data on now machine for a long acting formulation as well as indicating the Nonclinical studies that.
Fire to file the I indeed.
Based on this input collecting all the nonclinical chronic toxicology data will require an additional study as well as increased duration currently ongoing study, which delays the filing of the I enter into Q2 2021.
Now we discussed this with nine yet and we are collectively formulating our plans together, which we believe can be accomplished with some real reallocation of funds that have already been approved.
As discussed recently on the last financial results Conference call. We continue to collaborate with the Walter Reed Army Institute, a research or Delta you are eight IR as well as South West Research Institute, whereas W.R.I. I mean early Nonclinical evaluation are the primary platform in malaria.
Principal access.
On the producing front, we continue to focus our resources on providing medical and rents training support to the commercial team.
The drug enforcement agency or D.A., it's granted an exemption for tele medicine to be used in place of initial in person visits and many of our Probuphine health care providers are now using this treatment paradigm very effectively.
To ensure that the insertion and were minimal procedures are not barriers for both health care providers and their patients due to the pen down that we have recently developed a completely virtual rents training program. So health care providers can continue to be train two prescribed and had been strip have you seen during this period.
Sheltering plates.
This program has now been submitted to the FTC review and approval and we hope that this can be completed quickly. So that we can start training to health care providers, who are awaiting training that's been delayed due to the code 19 related restrictions.
And lastly, I want to reiterate that people with the opioid use disorder comprise one of the most vulnerable populations at risk for morbidity and mortality joins 10 deneke.
Not only from kind of 19, but from their underlying addiction and potential co morbidity cuts as well.
So it's critical that people, who need medication assisted therapy and other addiction treatment had access and are able to receive treatment safely and consistently in the context of this ongoing emergency.
We believe that treated with Probuphine provides the opportunity for minimizing direct ongoing physical interactions between the patient health care provider and other services and this person per presents a real opportunity to more fully integrate telemedicine into the treatment process.
We will continue to generate training programs and support information. It makes it easier for health care providers to provide long term maintenance treatment to patients while minimizing the in person exposure and risk.
That concludes my remarks for today and I look forward to keeping you updated on our progress over the next several months now I'll turn the call over to Brian to discuss tiny tightens financial results Brian.
Thank you Kate.
Hello, everyone.
A summary of the financial results was provided in our press release issued earlier today.
And details are available in our form 10-Q filed with the FCC.
At this time I'll just highlight a few key items.
Please note all the numbers I'm about to provide have been rounded and are therefore approximate.
In the first quarter of 2020.
We reported 1.3 million in revenue.
This included.
Point 2 million from product sales 1.1 million related to our nighter grant.
This compares with point 9 million in revenue during the same period a year ago.
Which was comprised of point threemillion and product sales.
Point Threemillion related to the amortization of deferred revenue related to the sale to multi any of the European intellectual property rights to preview fun.
<unk> point Threemillion related to the night of ground.
Total operating expenses for the first quarter of 2020.
Consisting primarily of R&D that's true in a.
Expenses.
In cost of goods sold inclusive of distribution expenses were 5.6 million.
Compared with 5.2 million in the same quarter in 2019.
R&D expenses for the quarter ended March 31st 2020.
Were 2.3 million compared to 1.8 million in the same quarter in 2019.
The increase in R&D costs was primarily associated with increased activities related to our nighter grant and clinical activities.
Yes, you in a expenses for the first quarter 2020.
Were 3.1 million essentially unchanged from the first quarter of 2019.
Net other expense.
Assisting primarily of interest expense non cash losses on changes in the fair value warrants and cost attributable to the issuance of warrants was 1.4 million in the first quarter.
2020.
This compared 2.2 million in the first quarter of 2019, which consisted primarily of interest expense.
Our net loss applicable to common shareholders in the first quarter of 2020.
Was 5.6 million.
Or.
Seven cents per share.
Paired with a net loss of 4.5 million worth 34 cents per share in the same quarter 2019.
As Mark mentioned subsequent to the quarter end, we received a 654000 dollar loan pursuant to the Paycheck protection program of the cares Act.
At March 31st 2020, we had cash and cash equivalents of $8 million.
Which we believe together with the proceeds from the Paycheck protection program alone.
And cash proceeds from the subsequent exercise of warrants during May 2020.
Are sufficient to fund our planned operations through the third quarter of 2020.
I'll now pass the call back to steal if you have any questions I'll be happy to address them during the Q and at the end of the presentation.
So Neil.
Thank you Brian.
I hope the information for why did today gives you a good overview of the ongoing activities that Titan, especially regarding the changes we haven't made to rapidly adjust the new restrictive environment.
Losing sight of farcical.
Increase utilization of Probuphine for the maintenance free.
If you use disorder.
Let me summarize by mentioning some of the key actions today.
We have completed the first phase of expanding our commercial organization. This includes the sales and marketing teams as well as the medical affairs team.
And I believe we have the right people in place to grow the business.
Well the Kolpin 19 pandemic has disrupted our prior to routine.
We have adjusted quickly to the new environment and have implemented several plan such as framing the sales force and selling marketing techniques.
18 eat documents that can provide information on probuphine. So it is easier for us and health care providers to communicate with patients and caregivers.
We've also created virtual training fro friends that are awaiting FDA review and approval.
We've implemented social media programs to increase the awareness of Probuphine and fuel.
We are taking this opportunity to build relationships with health care providers and their staff.
Helping them with the changes they need to implement providing training as required and also providing them with the tools they need to manage their business successfully in this so called new normal environment.
We are identifying new health care providers.
Who understands the value of long acting medication in the maintenance treatment dose that stations.
And we are getting them ready to participate in the Probuphine rents training and certification program at some of these restrictions I relaxed.
We continue to emphasize the value proposition of Probuphine, especially during the covert 19 endemic.
And were working with the clinics that have remained open to put patients on probuphine treatment.
We have identified Probuphine experienced health care providers, who are willing to become the hub for insertion and removal procedures.
Tend to expand the usage of Probuphine by those health care providers, who understand the value of Probuphine and are willing to prescribe the product while using implant procedural services from others hub and spoke model.
We have also been preparing.
The Probuphine manufacturing sites to meet all the EU regulations and we are now in the final stages of preparation to make the first batch of Probuphine next month for Multani pharmacy teaching our partner in the E U.
The remote management.
The multiple activities involved has also been a challenging task and this manufacturing upgrade program.
But seeing that come to completion will be a major milestones as it is key to the launch of six small then brand name of Probuphine in the E.
So despite working mostly from home. This has been a very busy time for all of us.
And I believe our organization has rallied and come together to overcome the challenges ahead.
I would like to close by repeating what Mark said about the upcoming special shareholder meeting.
Without shareholder approval to increase the authorized shares what I can we will not have the resources needed to be successful.
And implementing the plants, we had presented today.
We'll be happy.
These support as in helping to grow the company and add value for all stakeholders.
This concludes our prepared remarks, what today.
Before I open the call two questions I'd like to paying taxes Board executive management and staff for their continued hard work and dedication in these challenging time.
Eric we're ready for it to take questions from the call participants.
Thank you.
We will now begin the question and answer session.
Yes. Good question you make press Star then one on your Touchtone phone.
If you're using a speakerphone please pick up your handset before passing the keys.
Sure withdraw your question. Please press Star then to.
At this time, we will pause for a moment to assemble our roster.
Our first question will come from John Vandermosten with Zacks. Please proceed with your question.
Good morning, I wanted to start with a question on online prescribing and how that.
He is trending obviously this is a good time for it or will you be looking for a partner to implement that.
Or is that something that you can do internally.
Hi, John.
Uh huh.
The online prescribing or has it.
And for Probuphine and of course has multiple steps as you can imagine the actual.
Prescription.
Is going through our hub, which today is available to be done online has been cannot through the portal that was created where a clinic a physician health care providers that sort if I can actually go ahead and process eight.
Prescription back is then vetted by the hub they have to check to make sure. This is a certified healthcare provider prescribing look at the third party. They are coverage that is available for the patients verify all of the ER requirements for that before.
That prescription is then processed for their and but when I say process for there in terms of sending it to the third party payers insulin so ah that online prescription processing is there.
Where of course challenges that the clinicians. During this time have been is you know a lot of the facilities or have been.
Most for patient access so they are doing their work through tele medicine, which doesn't always a lot when new patients do before dawn probuphine. So.
Those numbers have been limited just because of some of the restrictions that have come up at this stage, but the online ordering process and so on has been in place for us, it's making sure the communication between the clinic and the patient.
Whiting all of the information now electronically. These are the things that we have been producing and for whiting through the clinic. So they can.
Managed to patients in a more effective way and Kate if there's anything or else or John is that what you I mean it yeah.
That's helpful. Yeah, I, just I guess I want to understand I guess the whole eco system you know the with the I just like fight live outside what you're doing where where a doctor physician to provide it would be on some kind of telemedicine platform and then.
When they have the patient and they prescribe. It then it goes on to a the online prescribing part, which is I guess more writer involved.
Oh, absolutely and Okay. I you know a if you have something.
Please jump in to that sure no I think I think you've answered that that very completely Sunil and I would just reiterate that we are we haven't developed inc. fully virtual rems training that we will be rolling out as soon as me her back from the SDMA and there are some areas now where.
They are lifting you know some restrictions and we we did up partially virtual rents training last weekend. For example, we have another one coming up in the middle of June so.
But taking advantage of every opportunity that we can to interact either virtually or semi virtually with health care providers and we do you still have quite a demand for training a amongst health care providers to have currently have patients that they would like to treat.
Okay and have you guys updated the number providers that have been trained to date.
Total number of I know it or not updated it through the current period I think we provided some information during our last call six weeks ago, where it was.
Close to 300 physicians, who are actively prescribing right now as you know the number of people that are being trained and so on is much larger than that.
Uh-huh, Okay, yeah it.
Especially I mean, the update in the sense that you know in the last.
Four week six weeks there.
Has been a lot of restrictions that have limited that's training new people and escape mentioned they truly there is a backlog that they're hoping to be able to take care of very quickly.
Some of these restrictions are relax and case team has already started in certain locations, where they have been relaxed already.
Okay, I guess I'm sure.
Oh Rolling thing based on state Yeah go ahead.
Yeah, sorry, sorry, John just to reiterate something that see Neal said earlier in the call. We are seeing a lot more interest and have been for several months now from nurse practitioners and positions assistants, who are qualified not only cheap prescribed Peggy senior other people working containing products.
They also a sub subset of them have surgical training skill and for them. This is or it's a great procedure to be able to do.
They are satisfied with the level of reimbursement that we're able to provide right now, whereas some of the physicians are not so to the extent that we can bring more nurse practitioners and more physicians assistant into the system I mean that isn't real target trusts now I think we're gonna be able to overcome.
That until we can change the reimbursement level for physicians.
Okay and I'm just looking at a the current impact on distributors has there been any any impact on receiving or certain products or any part of the distribution chain, it's not been operation over the operational over the last couple of months.
There's been some delays that we have noticed and has to do more with.
I'm not the shipment of product, but when there have been questions I related to these third party theater coverage or with some information may have been missing.
The process of getting back with the healthcare provider has and in some cases is not being as easy because they're not always in the clinic. There also working from home and things like that that has a in a being a little challenging but the hub and the team.
Hadn't been persistent them getting through it.
Okay.
And moving to Europe.
I thought it seems like the bottleneck, maybe right now that the production of product to send over there, but I know that price negotiations. We're also going on.
How is that progressed in a in the Corona environment.
Are they able to do that or has it been kind of put on hold.
They have been able to continue with but it has been delayed or they say that target or a euro it's still very much or launching the product during the second half of this year or.
The for US you know getting the manufacturing site.
Fully compliant with the EU regulations, which are more.
And it requires a higher level of a environmental monitoring things like that or that we haven't been able to do that.
Mostly by people from here, you know communicating via phone and bringing in people at different steps as essential services, but each one of those things as.
What should have taken a date takes for five days to accomplish just because of the.
Ah environment, we're in what I'm very happy to see is it is now finally at this stage, where we are doing the actual production simulation runs to make sure everything is working in tandem and.
Soon after that we'll actually make the product and make it available.
In Europe.
So they can launch the product during the second half. So that's still the plan that pricing is expected to be approved and available for them to do that.
Okay.
And.
Also a question on the on the extra study for normal thing well that well that ultimately to more funds for that project or just the same funds because you mentioned that things might be moved around but it does it does that open up opportunity, perhaps more funds to to work on that since you're taking a different pathway.
Then originally yeah. So as I said, we are we are able to to reallocate funds that we currently have in the budget and NYCDA has has actually giving us that guidance in suggestion to do it that way it should that we don't have kids.
With his funds right now but.
And we're gonna be able to cover or the work that we need to do to get the I. Indeed filed at this point and he is as we said in earlier calls the second half of this funding period happens after we file the I. Indeed, so when we meet that milestone we are then eligible.
Two we see the funding for the best at the development program, we will be supporting a portion of it ourselves of course, but that's a couple of years away at this point, we get to the clinical trial section.
Okay, great. Thank you for taking my questions appreciate it.
Thanks, John.
Thank you Chuck.
This concludes our question and answer session I would now like to turn the conference back over to Suneel boasts life for any closing remarks.
Thank you Eric.
Thank you all for participating in this fall.
We stay safe and healthy during these challenging times and as always we appreciate your ongoing support and we look forward to reporting continued progress as we move forward.
Have a great day.
The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect.
[music].