Q3 2020 Nabriva Therapeutics PLC Earnings Call

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Forward looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ.

Please note that these forward looking statements reflect our opinions only as of the date of this call.

We will undertake no obligation to revise our publicly released the result of any revisions to these forward looking statements in light of new information or future events.

Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filings on form 10-K, and our other periodic report on form 10-Q, and 8-K filed with the SEC.

Ted Schroeder and Abreva CEO, we'll start with a business update and will present, an overview of the commercial highlights for the quarter.

Then I will provide a financial review and Ted will come back with some summary comments and leader Q&A session.

In addition to me and Ted joining us on the call for the Q&A steps and his Dr. Stege alone, our president and Chief operating Officer Dr.

Dr. Jennifer strands, our Chief Medical officer is under the weather and won't be joining us today.

I would now like to turn the call over our to our Chief Executive Officer, Ted Schroeder Ted.

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Computer.

Sorry. Thank you sorry, I was I was on mute [laughter], let's if we can if we can start on slide five as you will hear during our call we were quite productive during the quarter, despite not having promotional activity until the last week of September.

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During our last Investor update call. We told you about the in licensing of some extra for Merck that transaction created tremendous energy and the company as we plan for the relaunch of bursts of extra and then let it in the community and.

In the third quarter, we work closely with amplitude health or contract sales partner or the sales force deployment plan, while also continuing to improve patient access by further increasing managed care coverage, we've been very busy since I'll realigning, our marketing strategy to be more community based in the early signs of <unk>.

And encouraging.

In a moment I will walk you through our current activities and some key metrics that are Directionally positive first let me briefly describe a few of our other near term priorities.

We and the entire industry await future communication from the FDA as it continues to assess the options available under existing regulations in raw laws to address this growing threat to the public health of U.S. citizens.

It is noteworthy that the FDA has not requested any new non clinical or clinical data and did not raise any other concerns with regard to the safety or efficacy of can CFO.

We will provide updates when we learn new material information.

Regarding growth oriented try in transactions, we are confident that adding some extra to our portfolio will help build our community business and we are evaluating a wide range of business development opportunities that can also strengthen our franchise by leveraging our core capabilities.

In parallel with the strategic initiatives. Just described we have maintain prudent control of our balance sheet, which Gary will describe in more detail we.

We adapted our organization and established a flexible commercial infrastructure through our partnership with amplitude, where we can adjust spending in line with the changing environment.

Turning to slide six I'm excited to share the commercial highlights from the quarter and beyond including the deployment of our first 15 sales professionals in the field in late September I.

I will provide more detail later in the presentation, but based on the initial favorable experience I am happy to say that we have expanded the number of representatives to 60 and they will be fully trained in the field by the end of November these.

These 60 sales professionals are expected to be able to reach approximately 7800 healthcare providers are HCPCS. We've been pleased with our access to physicians to date, which has been better than expected, particularly in the midst of the COVID-19 pandemic. Those sales calls have included a mix of it.

In person and remote interactions early on we are finding that physicians knowledge of and experience with Surfaxin ROE has helped open the door for discussing than letter.

Our strong managed care access frozen, let it continues to expand quarter over quarter as new plans are added.

As of the end of the third quarter, 92% of commercial lives now have access to then leta up from 87% in the second quarter would.

What is significant is that about three quarters of commercial lives covered our unrestricted.

Let me also provide you with a brief international update as.

As you know since letter has received approvals in Europe, and Canada. We are actively engaging with potential partners to brings and led to European patients where the size of the cap market is about the same as the us.

In China through our partner sign event. The phase three study recruitment is underway with an unexpected end the filing in 12 to 18 months.

On slide seven I want to remind you about the synergies of our two products and our approach to optimizing traction with prescribers Cyvex DRO isn't OXXO is a little known class antibacterial. It's a short course once a day oral treatment that addresses the most common pathogens that call.

As acute bacterial skin and skin structure infections, commonly referred to as ABSSSI include.

Including methicillin resistant Staphylococcus aureus or MRSA.

It has also been shown to be a promotionally sensitive product.

There is a highly complementary customer base for some extra ends and let it including primary care prescribe offers as well as infectious disease and urgent care physicians. This coincides nicely with the call effort around Xin latta for community acquired bacterial pneumonia or CABP.

Similar to our analysis of cap prescribers about 5% of total prescribers account for more than 50% of total antibiotic prescriptions for ABSSSI.

On slide eight let me provide more detail about the expanded opportunity as we are relaunching. Both then let answer beckstrom. This.

This map highlights our plan to expand our commercial footprint from the current 15 person Salesforce to 60 by the end of November we expect that our sales force can efficiently and effectively reach a high percentage of our 7800 targeted customers the representatives.

Currently in the field have an average of 10 years of community selling experience prior antibiotic and specialty pharmacy pull through x. expertise and are accustomed to working with not only in person, but also with virtual engagement tools.

This last part is especially critical given the changing dynamics brought on by the current pandemic.

In fact, one of the key advantages we have found working with amplitude is their knowledge of which physician offices are accessible.

More details on the Bereavements HCP coverage and reach can be found on slide nine our goal is to target the right shared prescribers to optimize the outpatient business opportunity for both products in our portfolio.

Given the very high volume of cap and ABSSSI patients treated by primary care physicians plus nurse practitioners and physicians assistants. These providers are going to be key shared target customer groups. As we think about the other HCP specialties, who most often treat these diseases.

You can see that our final targeting list also includes key specialist prescribers for Xin letter like Pulmonologists as well as important prescribers for sub xtremio, such as Podiatrist and dermatologists. This call plan will increase in the previous reached from approximately 2008 Cps.

Today to 7800 once we utilize all 60 representatives each of whom has 130 customers in their geography.

This gives us the ability to reach about 60% of historical sort of extra prescribers and Fiftyth and 57% of estimated then led to prescribers, we estimate that 3900 or half of the 7800 targets our customers for both drugs.

Slide 10 shows some early call activity metrics from our initial highly focused sales deployment since commencing our new promotional activity at the end of September. The Salesforce has certainly been active and they have delivered approximately 3300 calls to health care providers about.

About 70% of these customer interactions has been in person, which is much better than we had anticipated since according to our Q via the national average of in person calls to primary care physicians is only about 47%.

However, while early this is promising based on some of the preliminary feedback one reason for this may be physicians historic knowledge of Cyvex drove this is helping to get us in front of doctors and with just four weeks of data we have seen in nearly 20% increase in some sub extra prescriptions.

Written by the HCP as we've called on supporting the historical insights that this is a promotionally sensitive product. In addition, many of our sales interactions with HCP practices has been extended engagements such as lunch and learns.

As we mentioned we are in the process of training and additional 45 sales Representatives, who will start the call and eight Cps later this month.

Is many of whom are treated in their outpatient clinics, while health trusts serves over 1600 hospitals and health systems.

Although our core focus for us and letter has shifted to the community.

It reinforces the value proposition of both Ivy and Orange and letter.

We were at a pivotal time in the company with the re launches in letter and <unk>.

In order for the company to be successful are ongoing commercial strategy and execution needs to be flawless and in lock step.

As the CEO there is nothing more important for me to focus on than that.

Therefore in order to flatten our structure and allow me to be closer to the day to day commercial business I recently decided to eliminate the chief commercial officers role and I am directly leading all commercial functions.

Look forward to working even more closely with the debris that commercial team to educate the medical community about our innovative treatments and how they can help their patients in need.

Now like the hand, the call back over to Gary.

Thanks, CAD on slide 14, I've lifted some key financial highlights.

The brief generated total revenue of approximately $1.3 million from the third quarter.

As Ted mentioned, we had no promotional activity for then later horse of extra until the last week of the quarter. So is expected there was minimal prescription our sales activity in the third quarter.

I will discuss a small adjustment made a product sales further than lighter return from a mail order pharmacy during the third quarter.

Other sales are comprised of collaboration revenue for which we received $500000 from our Canadian partner due to the approval of Zen letter.

It also includes continued grampian come from the Austrian government.

Like with all companies. The COVID-19 pandemic has made it difficult to predict future sales there a variety of scenarios, which could evolve for the rest of the year, depending on demand in our ability to continue promoting both then later and sort of extra therefore sales for the remainder of 2020 or difficult to forecast how.

However, we're excited and encouraged by early feedback from the community based sales reps that are experiencing better than expected access to physicians through in person and virtual interaction.

We actively managed our expenses to optimize resources, we wanted to ensure that our investments and commercial activities achieve are expected returns.

Our SG&A spending increased by $3 million from the third quarter compared to the second quarter of 2020, primarily due to the relaunch efforts in the community.

We expect that our commercial and investments will continue to increase going forward as we expand our territory footprint to a total of 60 reps in November.

We ended the third quarter with cash a $41 million, we added approximately $5 million to our cash balances in the third quarter through our ATM activity collaboration revenue and warrant exercises.

We expect that our current cash balance will fund operations substantially through the first quarter of 2021.

Let's now look at the details of our P&L and balance sheet.

Please advance to slide 15.

Slide 15 provides details of our P&L and I ask that you look at the notes on the right side.

Our total revenues of $1.3 million were driven primarily by collaboration revenue and government grants.

Collaboration revenue included a modest level of contribution from some extra sales in the last few days of September.

Product sales were minimal and due to a small returned from a mail order specialty pharmacy, we recorded net negative net product revenues of $47000 for the third quarter.

R&D expenses lower year over year due to a decrease in development activities.

And a expenses lower compared to Q3 2019, and then letter was launched in the third quarter of last year.

We continue to allocate our resources resources in a thoughtful manner and make investments where they expected return is justified.

Interest expense was significantly lower given the reduction in our debt balances.

Please turn to slide 16, which has our September 30th balance sheet.

We previously discussed our cash balances inventory has increased primarily as a result of supply purchases in accordance with our contractual obligations.

Prepaid expenses increased primarily due to accrue to insurance expenses and due to payments made to our contract manufacturing partners for news then later inventory.

Year over year that balances are significantly lower due to the paydown of debt, which occurred in the first quarter of 2020.

For the next part of the call Ted will make some closing remarks, and then we will head into a Q&A session Ed.

Thanks, Gary.

Maximizing access for patients who can benefit from and let it in Savak Stroh remains our primary goal. We think we've made the necessary organizational adjustments to meet the ever changing demands of our business.

The early trends indicate that we are moving in a positive direction with our sales force re engagement access to our targeted customers and are growing number of quality managed care wins.

Importantly, we have build a flexible organization that can adapt depending on the current scenario, allowing us to also carefully manage our balance sheet.

Business development remains an important area of focus and we will also pursue opportunities to develop our own pipeline prioritizing indications for rare and serious diseases.

Adding some <unk> is a demonstration of our ability to bring in complementary assets. We know from past prescription data that's of extra was promotion really sensitive and we're seeing some good early data points.

As I previously mentioned the sales force has been able to leverage physicians experiences with some dextro to open the door for a discussion about Zen letter.

In the coming months, we look forward to reporting on the progress of our sales reps is the educate hcp's on Zen, let it and some extra.

I would now like to ask the operator to open up the line for questions.

Hey, Tingly, ladies and gentlemen, if you have a cost and at this time. Please pass tied into the number lenke on your Touchtone telephone against that will decline in the number one key on your touchdown telephone.

Your first question comes from the lineup Alan Carr from need have uncomfortable with your line in Burbank.

Alright, thanks for taking my questions.

Hello, Ellen 10.

I'd like to hear more about the beady strategy here in licensing you have.

Mm no cash to.

The first quarter next year.

You're interested in and.

Okay.

Implement.

Look at and I wanted to be sure that they are value, creating transactions in the in the short term with enough news flow to to continue to build the value proposition for those for whatever transactions we do.

Alright are you considering bringing in <unk>.

Element stage assets or commercial assets.

Yeah, they're they're.

Yeah I think there is there are a couple of things that we're looking at as I mentioned in my comments. We we do have early stage assets that we're looking at four.

Yeah that would be in more of a rare disease.

And serious disease.

<unk> disease space.

And that's something that we're interested in moving forward all those kind of pre commercial act or excuse me preclinical activities now are being funded through grants and we expect that that will continue but maybe I could.

Turn the turn the Mike over to Steve to loan our Chief operating officer to talk a little bit more about business development priorities.

Sure. Thanks.

To add an additional comment or two out and I think.

Just alluded to.

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Foremost right, we're trying to leverage our existing portfolio and.

I think on previous calls recently or <unk> ran to talk a little bit about them, but.

How it's anti potent anti staphylococcal activity lends itself to potential development as an oral treatment option for exacerbations of stiff aureus, and CF patients as well as the activity against Multidrug resistant sexually transmitted infections, but gonorrhea mycoplasma genitalium.

And instead said, we're moving ahead on those programs for grant funding and.

And then our earlier stage portfolio we have.

A compound called <unk> 20, 126, which is the sooner for stuff was born which is highly active against Pseudomonas aeruginosa estimated back there in burkholderia, which we're exploring and inhaled treatment option for bacterial exacerbations of patients with C. F. So those are those of what's inside the walls.

That is Ted said, we obviously are exploring a variety of options outside the walls to bring in to complement.

Both the existing portfolio as well as the team <unk>.

And.

Although we don't talk about it a lot we do have some deep roots in our team and bench strength and rare disease drug development and commercialization that we're we're looking to leverage.

Okay, and then over with extra.

I think the same the same group.

Was promoting some extra when it was Murray.

So do you have the actually the same sales reps involved again.

Different different folks in the same.

Contract sales organization.

Yeah, and so I'm not really sure how many of the folks have had.

Previous of extra experience.

Way the Cso's work they move people around this contracts come and go and some of those people are actually hired by Mark in the past so I'm not exactly sure that what what the counters, but I know that from the senior leadership to the organization they have quite a bit of.

Quite a bit of some extra experience.

Think that's really.

Been evidenced in our conversations as we've planned they've been able to provide quite a few insights and it's been very helpful to us deploying a.

The sales organization, we have and I think that just four weeks to see at 20% chain.

Change and prescribing of the physicians are calling on is actually pretty outstanding so.

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