Q2 2020 AMAG Pharmaceuticals Inc Earnings Call
Good morning, My name is Regina I Hope you're conference operator today at this time I would like to welcome everyone. Today, Matt Pharmaceuticals second quarter 2020 earnings call. All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session. If he would like to ask a question. During this time simply process star and the number one on your telephone keypad. If you would like to withdraw your question press. The pound key it is now my pleasure to turn todays call over to Mr. Rush May not singer Vice President of corporate Affairs, and Investor Relations you may begin your.
Conference.
Thank you Regina good morning, and welcome to be in AG Pharmaceutical conference call to discuss our second quarter 2020 financial results.
Earlier. This morning, we issued a press release for those of you who don't have a copy you can access at an investor section up or website at www Dot E. Maxpharma Dot com.
Please be reminded that remarks made during this call may include forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act is 1995.
We want to emphasize that these forward looking statements involve risks and uncertainties that could cause actual results could differ materially from those discussed in such forward looking statements.
Please refer to where 2019 form 10-K, our form 10-Q's, an 8-K, including or upcoming form 10-Q for the quarter ended June 30, 2020 as well as statements included in our presentation materials for a full review of the risks and uncertainties associated with her business.
On today's call, we will discuss certain non-GAAP financial measures with respect to our performance. We use these non-GAAP measures for financial and operational decision, making and doesn't mean to evaluate our performance because we believe they better represent the ongoing economics of our business.
Recognition that are non-GAAP measures are set forth in our earnings release, which was filed with the FCC today.
Copies may be obtained at FCC dot Gov and in the Investor section of our website.
We are conducting todays earnings call with participants in different locations given the Kobe 19 pandemic. So we ask that you. Please bear with us if there any technical issues. We do have a team in process in place to handle issues should they arise.
Today, we are focusing our prepared remarks on the progress, we're making against our strategic evolution to become a focus biotech company.
We will have comments, we've got Meyers, our president and CEO, Tony Casiano, our Chief operating officer, and Brian Kiko, Our Chief Financial Officer.
After their brief upfront comments, we're looking forward to opening the line for key money.
With that I will turn the call over to Scott.
Thanks Rush made good morning, thanks, everyone for joining us today.
Since our last call on May 11, we've been making a great deal of progress on key milestones all the while managing the business through the Koby 19 pandemic.
You can see some of the headway. We've made recently here on this slide will talk about these accomplishments throughout this morning's call.
Our board of directors and executive team are fully committed to our company's evolution. It's an exciting time to be any back in shape. The future of this company and continued to help to meet the unmet medical needs of our page.
Changes were driving your multi faceted requires to take a holistic view at our people are products the capabilities and culture about company.
So I joined just the CEO in late April we've been building our management team to driver evolution.
We made some organizational changes in June to hope is further unlocked potential in or people and our products. Some of these changes included appointing Tony Christiana was our chief operating officer. This morning, we shared that Brian Pico. She has been promoted to the role of our Chief Financial Officer.
I greatly appreciate the leadership and business partnership that Brian brings to our team and I'm thrilled to have Im sure. It was our CFO and further contribute on our management team as we drive a badge evolution.
Our company is focused on advancing assets with the highest potential and probability of success, which includes developing syrup franchise also referred to as an American 977.
It's an exciting development program is exploring house Europe Red tag could reverse the effect of direct oral any.
For low molecular weight.
We believe syrup rentech could offer a new treatment option for physicians searching for a broad spectrum reversal agent.
In July we announced that we entered into an exclusive licensing agreement with Norgine to develop and commercialize syrup rentech across Europe, Australia, and New Zealand.
Disagreement providers with a total of $30 million up for upfront consideration we also.
She up to 260 million in development and commercial milestones together with very attractive escalating double digit royalties Norgine has also committed to contribute one third of the out of pocket cost for our phase three clinical development program.
We're excited about this license agreement because we believe it reflects the emerging.
And our pipeline, we will continue to explore ex us business development opportunities jumped was further unlocked the value of this pipeline.
Last month, we also completed the divestment of our women's health assets.
Allows us to reduce operating expenses as we focus on our marketed assets and our pipeline.
We also announced another change short portfolio. This morning, we have stopped D.A. bags for Q3 phase to be three a trial based on the recommendation of an independent review board.
Small patient population made this difficult trial to enroll.
Then when the covert 19 pandemic began earlier this year, we were forced upon us all trial related activities.
In this pause forced by cold team, we made the decision to conduct an interim analysis to help validate the assumptions from the original study which was completed in 2007.
The data safety monitoring board or de SMB and independent group of physicians understand is sufficient convened to provide analysis and advice on this trial and they conducted the interim analysis. A bag reminder, remains blinded to this actual data.
In July the de SMB came back with a unanimous recommendation to stop the trial.
It's important to note that there were no safety concerns raised.
By their analysis. However, the data did indicate that there is a low likelihood that future enrollment would demonstrate a benefit of a back for Q3 in women with severe preeclampsia. It was this data that led to their recommendation to stop the trial.
We have accepted the de assemblies recommendation and have stop the trial. We're in the process of winding down the trial in addressing contractual obligations and ancillary contracts associated with the trial.
As we work closely with the key stakeholders to close out the trial I want to share our gratitude to everyone who played a role in the mix for 23 trial, especially the patients and their families who made the choice general.
Slide five please.
As we have reached many accomplishments in a short period of time, we've done it during the Kogan 19 pandemic.
We have navigated the Kobin 19 pandemic by following a few key principles first protect the health of our employees.
Next to do our part to stop the spread of Coven 19, and support our customers are providers by allowing them to focus on direct patient care all of a sort of problems. This approach we've taken during the pandemic at our team's ability to evolve and execute in a rapidly changing environment.
Now it states and municipalities take steps to reopen we're keeping the same guiding principles at the forefront as we prepare to allow our field force to return to a limited number of in person engagements. It's Dan providers are comfortable doing so.
These returns will be based on public health data and in accordance with the standards from institutions and offices were also requiring all field based personnel to participate in mandatory safety training developing sure this health and safety of our workforce and those with whom they interact.
We remain flexible with our teams and continue to prioritize their health and safety as they continue to utilize technology for virtual engagements or make the voluntary choice to return to in person engagements.
In addition, Garfield teams, our corporate functions have been working remotely since March and remain virtual today, our supply chains have remained intact throughout the entire pandemic and as we shared is we shared in our May call. We continue to bleed. The Kobin 19 will not materially impact our ability to supply the market for the foreseeable future. We continue to work diligently.
Diligently with our suppliers to ensure that our products continue to grow made available to our patient and are providers.
We've also been able to continue our regulatory interactions during the pandemic now I'd like to share an update on how we're working with the FDA to retain patient access to Mckenna.
Six please.
On our Q1 call we shared that the FDA had not yet completed their review of our product and it would be premature toehold in meeting in a recent call with the FDA. The agency. The agency indicated they need more time for your information pertinent to Mckenna given the complexity of the issue into competing in ongoing priorities, we're not surprised.
They need additional time for their review they haven't yet indicated a time in which they plan on continuing to discussions it's important for everyone to remember that any decision regarding bettina also affects the commercial availability of five additional FDIC approved generics that are currently on the market.
We continue to educate the market through our MSL team and our commercial team continues to promote Mckenna on label.
In anticipation of future discussions with the FDA regarding makita, we plan to generate supporting data on the efficacy of the product. We have proposed to conduct a retrospective study using secondary data sources and a prospective primary data collection study. Both of these studies would support further define the patient populations that most benefit from 17 Pete.
The retrospective study would aim to use real world data to evaluate the effectiveness or 17 P. Predictors of benefit in women with the Singleton pregnancy with the history of a spontaneous preterm birth.
While we are waiting further discussions with the FDA, we've decided to initiate the first part of the retrospective study, which will be important in evaluating the baseline characteristics and patients overall by treatment status that was being treated versus untreated.
We believe this is optimal feasible tightening in 400 way to confirm clinical benefit. Our research indicates that you have today is increasingly rely upon real world data or known as our WD and real world evidence notice our Debbie.
Inform regulatory decisions on medical products across a range of indications when assessing their safety and effectiveness both with the original as well as supplemental approvals that led to the label expansions.
Well, a placebo controlled randomized trial would traditionally be the design utilize to confirm clinical benefit. Following you accelerated approval FDA has shown a willingness to consider alternative approaches to support regulatory decision, making for other therapies.
They should've Bettina has remained steady and providers continue to prescribe it during these unprecedented times <unk>.
We're pleased with a durability mackinder during the coven 19 pandemic.
Now I'm Gonna turn it off with a call over to tell me, who will share more of the fries or a portfolio during the coven 19 pindaric Tony.
Thank you Scott and good morning, everybody.
Well the the next couple of Fries I'll share revenue performance in the corner for both Mackinnon alrighty.
Due to the timing of a pandemic and a quarter.
Which has impacted our products and different ways.
Oh sure some additional data to help illustrate how reviewing the underlying how of our brands.
We did not intend on sharing this level of information my future calls.
I thought it might help provide some insights as you'd think about the back half of the year on the updated pull your guidance we've provided today.
So let's start with like you know slide Saturday.
On the left Amazon to slide you'll see that revenue quarter was below cute too of last year, primarily due to the volume decreases we observed immediately following the Q for 2019 Advisory Committee.
He's monthly volumes have some stabilized and in fact <unk>.
Volume relatively stable in the corner despite the pandemic as illustrated on the right hand side of a slot.
Whereas noting lucchino auto injector market share grew in the corner to 66 per cent.
As we continue to ensure patients and healthcare provider's have access it is important therapy.
While extra equerry volume was relatively stable and market share group during the quarter. We did see some softening of makena patient enormous in a corner specifically following our field restructuring and May I.
Incorporated these friends into our Q3 expectations and hopefully your guidance.
Turning to slide eight or Feraheme.
You'll see that revenue and a quarter was below for you to 2019 and this was primarily due to Kobe related impacts.
<unk> do you want earnings call and we saw disproportionate impacts with very human early April, but some leading indicators of a recovery as we exited the month.
We're happy to report as illustrated on the right hand dislike.
Early indicators translated into a strong recovery over the quarter with sequential monthly growth and all time high as an X factory volume and market share in the month of June.
This strong ex actually performance in June was driven by a combination of the Ivy iron market recovery market share games, and some inventory normalization at the wholesalers.
So some positive momentum with bury him as we enter the backup dear.
Alternative O'brien for an update on due to financial results an hour position to return to the guidance that we announced this morning, Brian.
Please go ahead Brian.
Hi, Thanks, Tony I'm glad to join everyone on today's call.
As far as those Scott and telling you highlighted we're making progress against our 2020 goes educated evolution.
Yeah on slide nine you can see your financial results for the second corner of 2020 compared to the same period last year plenty watching the revenue perform isn't I'll provide some color on expenses and an accounting error in fact can be kiener Avenue in Pryor periods.
As far as I discussed in the press release, the financial referenced this morning had been adjusted correct immaterial errors to mckean of revenue in Pryor periods.
2016 in 2019 machine is gersten adjustments or I understand it by a total of six $3 million.
They are identified by US and then may relates to the time the recognition of certain governmental rebates.
I still reviewing a prior parents financial statements and the potential in fact on our internal controls.
Yeah for the historical financials and today's release, our preliminary maybe updated in the 10-Q.
To rent a sarah from recurring during the second quarter, we enhanced our controls around the time the recognition of governmental rebates.
Turn it back to second quarters performance operating expenses declined 44 million compared to the second quarter of 19.
A research and development expenses for the corner, where low urge you to cold related delays and clinical trial activities and the 2019 by at least you related NDA spend did not recur.
S T N I spend declined I, almost 50% driven by or just suggested if that's the one in south business and reduce the size of irritation by approximately a third.
That's got sure do you have adapted or a business to operate during the Korean 19 pandemic.
A second corner results indicate that are quite a business remains intact providers in patients recognize it very mckean are important treatments and are working to ensure of patients have access to the treatments during the pandemic.
Based on the trends were saying I give you the second quarter and the strength of the business. We are reassuring full year 2020 guidance.
And a consolidated basis, we expect a little revenue for you to come in between $225 million and 255 million leaning too and I, just even arrange a negative 5 million deposit of 20 million.
A full year revenue guidance range balances the ongoing rest related to cove. It in our may restructuring with a strong performance. If he produced in the second half of the corner.
He's just EBIT guidance reflects additional delayed R&D spend you recovered and confirmation that with the women's health divestiture and associated organizational structure and completed will return deposit EBIT. After the second half of the year.
Now I'll turn the call back the Scotch finding out the ankle the objectives before we turn it over for Q&A.
Thanks, Brian here on Slide 11, you can see the progress we'd been making against our 2020 goals and as you can see it's been a very busy hundred days My first hundred days here as part of the management team.
We spoke about many of our recent accomplishments. This morning, [noise] and then I'll quickly recap these here.
We divested the women's health assets to aligned with our company's new strategic direction.
Completed an exclusive licensing Greenwood, nor Jane for <unk>, we continue to drive growth Feraheme and so strong recovery amidst the pin debit.
Kinda continues to remain available for patients weird initiating a retrospective data analysis as part of our commitment to generate additional data on efficacy and our field teams continued to promote and educate on the product and this will be a stop the a bag for 23 trial. Following the recommendation from the D. S N B C.
<unk> Creek key priority for this company in recent months I missed the coven 19 pandemic, we've made steps to advanced preparations, but if they used to be studies and healthy volunteers. As a reminder, these studies will confirm their proposed Joseph <unk> to be used in the Faith Street program and we will use that coagulometer.
We have progressed training for our company is quite a cooperations team to use the coagulometer in the face to be study. Additionally parents were technologies initiated the final study in a multi side validation study and supportive their investigation device exemption R. I D E.
Successful completion of the study will enable pair of spirit to submit the idea to be FTA for review. These are key milestones on the assets journey into phase three it would it be sharing more detailed progress later in this year.
These recent achievements of set us up to reissue guidance, which includes our project. So it will return to EBIT positive for the second half of this year.
We are building momentum, which prokaryotes carry our company forward in the back out of 2020 and beyond as we continue to evolve into a focus biotech like company with that I'll know what else the operator to open the lines are Q&A.
Alright. This time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad again that is star one what parts for a moment to compile the Q&A roster.
Our first question will come from the line of Army body I with Leerink.
Good morning, Thanks for my question.
Oh, congratulations on all the progress that's being made at the company.
I've got three questions Firstly answer a parent tag.
Thank you for the update when do we when do you think they say there'll be able to complete.
The study and the mix the idea application to be S. T. A by when do we get that update and from there on can you lay out some timeline on by then he might be able to have a <unk> to be completion.
Secondly on Saturday, if you could remind us on your agreement with Sandoz.
And the likelihood of E genetic being approved by the F D. A.
And thirdly just on.
The 2022 can but as you restrict as of the company how do you plan to address the can but thank you.
Thanks for.
For all the questions. This is great. So with regard to <unk>. We are on our on track as we set out in the clinical development plan that should that idea. He should be submitted in late third quarter early fourthquarter. So by the by the end of the year and we should based on the timeframe for review we were.
[noise] hear back to that or a plan would be would be to start to face to be.
Directly after that so end of the your early next year and a 2020 early 2021 emissaries to be and that that trousered in this kind of trial setting the.
The time from dosing two responses very short so we would expect to have that's awesome data by by mid next year I I would say in anything related to clinical trials with I'm sure you've seen in your other coverage companies Covid plays a role in that so we are holding to our plan right now and that plan seems reasonable and feasible, but we'll update you as we know more.
Or at the back half of the year on the I D E.
With regard to Feraheme, we have no further information on the generic.
M as of right now.
When you assume they might be working on it but we don't know they've just been no communication on that and we haven't heard anything for the agency. So we're we're plowing ahead business as usual.
And.
Okay, Alright. Thank you so I'm just gonna work.
Yeah, it towards Brian do you want to handle this one.
Yeah sure Scott So the last few months, we've continued have discussions with shareholders and the convert holders on refinancing approaches.
I said before <unk> been really focused on getting the women's health divestiture behind us the organizational changes important.
To reshape the finished profile of the company with those tasks behind us in a castle positive forecasts, we are discussing with our advisers kind of available financing alternatives and timelines.
Trying to find the optimal refinancing approach ahead of the 2022 a maturity.
Uh-huh and Brian just a quick follow up.
With the Doctor the V statement.
When do you expect to be able to file the cube.
Yeah, what are working expeditiously with the auditors.
You know, it's the control side is difficult and we were walking quickly through that.
Certainly are aiming to get the queue filed on time, but these things are complex and difficult.
Great. Thank you.
Thank you.
Once again for any questions. Please prices star one on your telephone keypad. Your next question will come from the lineup Douglas out with H C. W.
Hi, good morning, Thanks for taking the questions just maybe Makena just curious in terms of what you saw in terms of trends during the quarter and how we should think about it for the rest of the year just <unk>. It sounds like you know April yeah, obviously the quarter Yeah sure some really good resilience just.
April sounds like there's a lot a continuation of therapy, how should we think about what is their sort of impact in terms of new enrollments you're in may and maybe they really part of June and how does that affect the revenue trajectory. Yes. We go through the rest of the year an hour or are enrollments going in and the early part of July. Thank you.
Yeah. Thanks for the question good morning, I'm Gonna have Tony address that question Tonio pick that up.
Yeah sure. Good question. So I think personally let's just maybe clarify so the the graphic that we had shared was extra I agree volume so.
<unk> in there obviously it can be inventory movement is there sometimes as in and just to be clear there wasn't a lot of movement, but from a month to month perspective, a day or two here or there. So we did see a slight build and Martha slight build in April and then we sauce like give back.
Both may and June so the man underlying demand was pretty stable actually how'd you went month to month, what we think I'm gonna call on the forward promise was the fact that we did see a little bit of a softening N R enrollments as we exited the quarter primarily after the restructuring that we.
Had rolled out an early to midnight.
No I I I, just want to point out that.
Okay sure enrollments is not a super sophisticated forecasting cool so it's not 100 per cent.
But it did factor into how we're looking at the third quarter in particular, because that definitely saw it may we do thank plays out in dispensers, an actual product ship.
The third quarter and we wanted a highlights actually is there something about the second half of the year.
So hopefully that answers your question I don't know there was a july in there. So I was premature to talk about July I can tell you that June we did have a bit of a rebound inpatient enrollments.
And that's gonna be working hard to to work to stabilize that further.
Okay excellent.
And I will now I'll turn the call back over to Scott Friday closing remarks.
Hello, Thank everyone again for during this pandemic being so involved as supportive of a bag. It's it's been a very interesting time, we know we still have a lot of work to do we were committed to building upon the progress that we've made recently and we'll do this by staying focused on our key priorities and executing accordingly, we look forward to helping you.
Busters game, the deeper understanding of the value, we believe exist and the company I look forward to continue to engage with investors to share progress over the coming months.
<unk>. This concludes today's call. Thank you.
Ladies and gentlemen, thank you all for joining you may know disconnect.
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