Q4 2020 Acorda Therapeutics Inc Earnings Call
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Welcome to <unk> Therapeutics fourth quarter and year end 2020 financial and business updates at this time all participants are in a listen only mode. There will be a question and answer session to follow the advice of this call is being recorded at the company's request I will now introduce your host for today's call Mr. Danny Chung of Neenah.
The executive Vice President corporate communications at the accordion Ma'am. Please go ahead.
Thank you Joanne al Good afternoon, everyone. Before we begin let me remind you that this presentation will contain forward looking statements detailed disclosures can be found in our SEC filings, which are public and we encourage you to refer to the filings I will now pass the call over to our CEO Ron Cohen.
Thank you Jeremy and welcome everyone.
We'll go right into a breach of the net revenue for the full year 2020.
It was $24 $2 million for the fourth quarter net revenue was $9 $3 million. We're encouraged that sales of increased every quarter during the year given the impact of COVID-19.
And PURA of net revenue for the full year 2020, with $98 9 million and for the fourth quarter net revenue was $25 3 million physicians and patients maintain the high degree of brand loyalty and of course continues to offer co pay mitigation and of free 60 day trials.
Those patients who are eligible.
I'll now review our key achievements of 2020.
We said several important goals for 2020 and I'm pleased to report that we retreat, where we achieved all of them.
First to monetize the excess capacity of our Chelsea manufacturing facility.
Then to improve our balance sheet.
To reduce our cost structure to accelerate the embryo of trajectory and to maintain our empire of franchise and I will now review these in more detail.
So we.
Shaved our goal of monetizing the excess capacity of our manufacturing operations in February 2021, we announced that we closed our deal to sell our manufacturing operations to Cadillac. The steel includes of global supply agreement for embrasure, which ensures that it will continue to be manufactured to the highest.
Quality standards and be available to people with Parkinson's worldwide.
Quarters associates at the Chelsea plant will continue to manufacture embrasure and now as Cadillac employees.
We received an $80 million upfront payment, resulting in net proceeds of approximately $74 million the.
Neil also suspect of substantially reduces both of our operating expenses and the cost of goods for egregious and we believe that the lower cost of goods will also accelerate our efforts to obtain commercialization partners for British us outside the U S.
We also achieved our goal of strengthening our balance sheet by over $100 million, including the $74 million net upfront payment from catalyst of $15 million milestone payment from Biogen for fan pier up and the $12 $7 million tax refund under the cares Act.
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Regarding our goal of reducing our cost structure, we reduced our expected operating expenses for 2021 by about $40 million.
The $10 million resulted from the sale of our manufacturing operations 6 million from the 16% head count reduction and our ardsley and field teams and 24 million and additional cost reductions and note that in making these reductions we focused on ensuring that the commercials.
Nation of Enbridge would remain fully funded.
Moving to our key goal of accelerating embryos trajectory.
First as a reminder, embrasure is inhaled levodopa levodopa is the gold standard therapy for improving symptoms of Parkinson's and embrasure is indicated to address the return of symptoms in between doses of regularly scheduled medication as needed also.
Though these these.
The returns of symptoms are also known as off periods.
We had several key learnings regarding the enbridge the launch in 2020.
Prescribers were enthusiastic about in breach of when we launched it in March of 2019, and we saw initially high rates of prescribing in the first few months. However.
These tailed off in the latter part of 2019.
This was initially due to poor access to embrasure and consequent frustration for the prescribers.
However, as we significantly improved access and more patients were able to fill their prescriptions. We then saw higher than expected early discontinuation of we learned that these were due to unsatisfactory experiences and these appear to be related to sub optimal training.
The proper use of the device and installation methods of.
Some of this.
To be Frank was on US, we realized that and instructional video that we provided needed to be improved and some was due to a lack of hands on training or often none at all about 30% of patients reported no in office training.
So we responded by implementing new training initiatives and in the first quarter of 2020, we saw progressively increasing prescriptions.
I'm sorry.
Yes. So of 2020, we saw progressively increasing prescriptions of this progress acutely reverse in late March as the pandemic hit and physicians offices close so even with some recovery in the shift of telemedicine during the year, we found that an additional 30% of patients now.
Ported no training, so 60% or more of our patients were not reporting.
Training.
We also found that physicians were hesitant to start new treatments during the pandemic.
Despite these pretty significant headwinds, we were able to achieve growth in each quarter of 2020.
We believe that that success was related to our having responded to our learnings by implementing initiatives during the pandemic to address the need for additional training and support as an adjunct to the training that was being provided by the physicians offices.
One of our key initiatives, what's providing nurse educators. These nurses are available by phone or video to coach patients on the correct, most effective way to inhale and administer embryo.
The merchants also call every patient who receives a new embrasure prescription to offer training and answer questions and this has been highly effective which I'll discuss in more detail on the next slide.
We also have had our customer service team reach out to patients, whose prescriptions have been canceled or discontinued to answer your questions and provide additional tips and training out in 2020 to date.
This has resulted in approximately a thousand patients returning to or beginning therapy with embryo.
In addition, we developed a very clear helpful. Hints guide, we updated our training video and we sent a letter of through the post office with the helpful getting sky to patients who had either never filled the prescription or discontinued therapy without the retail and <unk>.
It resulted in an additional approximately 250 patients returning to therapy.
We've also been providing patient ambassadors, who share their experiences with Parkinson's and in breach of in consumer education programs.
So here's an analysis of what I referred to earlier with our nurse educators. This isn't the analysis of the first refills by comparing patients who had not received coaching from a nurse educator to those who had patients who had spoken with the nurse educator had a 20% <unk>.
Higher refill rate than those who had not and we're continuing this program along with the others I mentioned in 2021.
Okay.
So the key we believe here is continuing to build on what we learned in 2020 about the importance of optimal trading per patients and how to achieve that as I mentioned, we're continuing our nurse educator and patient support services outreach. These.
Strategies again brought about 250 patients back the therapy in 2020.
Even during the pandemic.
We're also adapting what we've learned during the pandemic about how to connect virtually with our prescriber and patient audiences. Our field sales team has now returned to in person physician visits as of this month March and will now be pursuing a hybrid model of both in person.
<unk> and virtual education and communications and.
In 2020, we were able to refine our highly effective model for working with patient advocacy groups in Parkinson's and patient support groups virtually to educate large numbers of people with Parkinson's about in breach of and we're going to continue those virtual events, even as we resume in.
Person events hopefully later this year as the pandemic hopefully subsides.
And the embryo of patient ambassadors will continue to speak about their experiences at both virtual and in person events will also be adding a significant number of patient ambassador of videos that people with Parkinson's can access online.
Also wanted to mention that we recently added a new telemedicine initiative, where patients who are interested can consult with a neurologist online and if appropriate receive a prescription for embrasure. This initiative has already been bringing in new patients to <unk>.
This graph shows and bridges performance since it was launched in March of 2019, we were encouraged to see growth in 2020, despite the pandemic and after a dip in the first quarter of 2020, which we have typically seen each year for our other product.
And also was influenced by the pandemic coming in the last year in March total prescriptions or <unk> increased every quarter through 2020.
Embryos Q4 revenue of 19 of $9 3 million was greater than 15, 50% increase over Q4 of 2019.
That included approximately 17% of.
Organic growth in Q4 2020 over Q4 2019.
In addition to organic growth we saw the typical factors that occur in the fourth quarter.
The B DNA line typically is the lowest in Q4 and the highest in Q1, which increases net Q4 sales and decreases Q1 sales on a relative basis.
In addition.
Patients refill their prescriptions earlier.
Of the new year, and the Medicare reset and specialty pharmacies tend to stock a bit more to account for the holidays in the new year.
It's also worth noting that in Q4 of 2020, we had an additional <unk>.
One off factor the other factors tend to recur every year in our experience with our other product, but we had a one off factor in that in the fourth quarter, we consolidated from multiple specialty pharmacies to a single one and that pharmacy initiated stocking for the newly transferred patients during the <unk>.
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We've been very pleased to see the durability of the <unk> franchise.
The brand loyalty continues to be high and we're continuing to support key activities for the brand such as our first step free trial program for 60 days physician and reimbursement support and co pay mitigation for commercially insured patients interestingly, we're still calling on.
Key Ms prescribers and interestingly approximately 150, new doctors wrote prescriptions for the Empire of brand in 2020.
Moving to our 2020 financials, and our 2020 guidance 2021 guidance and goals.
This slide outlines key financials for the fourth quarter and full year 2020.
Youll find these addressed in detail in our press release.
As we previously reported in the third quarter, we achieved the milestone payment of $15 million from Biogen based on fan pier of cumulative sales and in the fourth quarter. We recorded a loss of the assets held for sale of $57 9 million, which represents the amount by which the carrying.
You of the Chelsea manufacturing assets sold the Catlin exceeded the net purchase price.
We ended the year with cash cash equivalents divestments and restricted cash of $102 $9 million.
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For 2021 guidance.
Our interior of net revenue guidance is $75 million to $85 million.
Our 2021 operating expense guidance is $130 million to $140 million, we're not providing revenue guidance for <unk>. At this time, we have seen a strong correlation between the pace of prescriptions and the surges and COVID-19 over the past year when office space.
It's declined again to the extent that the pandemic recedes as vaccinations increase we believe this will contribute to the growth of embrasure in 2021.
So in summary, we achieved significant goals in 2020 composition of accorded to build long term value move.
Moving forward, we're going to focus on the key factors that you see here first.
<unk> to drive embryos commercial growth we've.
We've seen that the initiatives we developed in 2020 to better train patients resulted in substantial increases in both filled prescriptions and return of patients to embrasure.
We're also re engaging with physicians in person as the pandemic recede and we believe that the return to more normal interactions of patients with physicians will also provide significant opportunity to accelerate adoption of embryo as the pandemic recedes again, hopefully by the second half.
Of the year.
The sale of our manufacturing operations. The catalyst has significantly lowered the cost of goods for embrasure and this has reinvigorated our discussions for ex us partnerships as lower reimbursement and our previously higher cost of goods was pressuring our ability to enter into such partnerships and having now address the.
We're finding that these discussions are renewing with vigor.
It's also worth noting that the GBA in Germany, which is the which sets the reimbursement prices. After the first day around the market.
Ruled recently that we do not need to submit a reimbursement dossier for embrasure. This was extremely good news and its resulted in additional interest by potential partners for Europe's largest market Germany.
We're also going to continue to support the Empire of franchise that remains of significant contributor to record as revenue.
Note that in 2020 150, new physicians wrote trend here for the first time, while we continue to expect that <unk> revenue will decline over time, we have been gratified by its performance to date.
We're also going to maintain our fiscal discipline and importantly address the $69 million convertible debt payment. That's due in June of this year.
And we're also seeking to build on the ARCUS technology platform. That's now been validated by the approval of <unk> in the us in the EU as well as by funding from the Gates Foundation for development of the pediatric inhaled surfactant product. We're also seeking collaborations with other companies.
Two for.
For other potential indications for the ARCUS technology.
So we look forward to updating you during the year and we will now open the call for your questions.
Thank you so much ladies and gentlemen, thank you mind day to ask the question you May Press Star then the number.
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Thank you Joanna if there are no questions, we're going to end the call now and thank you everybody for dialing in.
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Thank you speakers, ladies and gentlemen. This concludes today's conference call. Thank you also joining us now disconnect.
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