Q4 2020 PLx Pharma Inc Earnings Call
Ladies and gentlemen, and thank you for standing by and welcome to the P. O Lakes pharma fourth quarter 2020 earnings results and business update call. At this time all participant lines on them is only mode.
This presentation, there will be a question and answer session to ask a question. During this session unique for star one on your castle. Please.
Please be advised that today's conference is being recorded and if you would pay for any further assistance. Please press star zero.
And the conference to your Speaker today, Lisa Wilson. Please go ahead ma'am.
Thank you Victor welcome to peer like pharma is Q4, 'twenty 'twenty earnings results and business update call.
This is Lisa Wilson Investor Relations for P. L Ax.
With me on today's call are Natasha Giordano.
President and Chief Executive Officer, and Rita O'connor, Chief Financial Officer of P. L Ax.
You can also access the webcast of this call.
For the investors section of the Pls website at Pls pharma dotcom.
Before we get started I would like to remind everyone that any statements made on today's conference call that express a belief expectation projection forecast anticipation.
Or intent regarding future events and the company's future performance may be considered forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are based on information available to P. L X for them as management as of today and involve risks and uncertainties, including those noted in our press release issued this morning, and our filings with the SEC.
Such forward looking statements are not guarantees of future performance.
Actual results may differ materially from those projected in the forward looking statements.
<unk>, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
The archived webcast will be available for 30 days on our website he likes pharma dot com for the benefit for those who maybe listening to the replay or archived webcast. This call was held and recorded on March 12th 'twenty 'twenty. One since then <unk> may have made announcements related to the topics discussed.
Please reference the company's most recent press releases and SEC filings and with that I'll turn the call over to P. L X the CEO Natasha Giordano.
Thank you Lisa.
Good morning, everyone and thank you for joining us today as we announced on March 1st were excited that the FCA has a true supplemental new drug application for folks.
The 81 milligram and 300.
25 milligram dose strength of that alarm.
<unk>.
Liquid filled aspirin capsule it's.
It's taken us several years of hard work and dedication to develop innovative aspirin therapy.
Duffy that uses our proprietary Felix.
Drug delivery platform to deliver this life saving drug.
The patient top of mind has always been.
So overcome many challenges.
So for the past few years.
We are very proud on vision can be realized.
In the third quarter to the medical community and to those patients who need on our lives.
Therapy to inhibit platelet.
As for news.
Widely used drug in the world and yes, there's been no innovation in the category in decades.
Till now.
Compensation for basketball is straightforward.
Demonstrating that reliable and predictable platelet inhibition non suggesting limitations on the current standard of care.
Garrett coated aspirin.
It's been well established that enteric coated aspirin.
We absorbed in the Gi tract.
That significantly reduce the risk of stomach.
Also an immediate release aspirin as observed in our published clinical trial.
This is a large commercial opportunity for us with the retail market estimated at about $10 billion.
This market includes more than 40 million patients in two groups those with vascular disease defined as those who have already suffered from it.
The heart attack for stroke, and those with diabetes, who are at high risk for having such an event and that may be candidates for aspirin therapy, we believe that will transform the standard of care.
Importantly, bachelor's novel mechanism on delivery is the reason we have 58.
Extending until 2032.
Quite unique for an over the counter products.
Finally, our scientific Advisory Board is made up for a world renowned experts in cardiology, neurology and gastroenterology chaired by the scene and extensively published doctors Tokbox and Dominic Angela alone.
The scientific Advisory Board is excited for them.
And for to address the serious unmet need and have been instrumental in guiding on strategy and understanding of what's important to clinicians who treat vascular disease.
Im thrilled that we recently closed a $63 million.
With the offering.
On the stock, but a substantial amount of interest from both existing and new institutional investors.
I will now turn the call will be for our CFO Rita O'connor.
Thus our financial leader. Thank you Natasha I'd like to Echo natasha's enthusiasm for our approval as we moved into the execution phase of our commercial plan for.
First I'll discuss the cash flow for the fourth quarter of 2020.
As of December 31, 2020, the company had cash and cash equivalents of $22 $4 million with a cash burn of $3 $5 million for the fourth quarter.
In November we secured an $18 million private placement that will be used primarily to build commercial inventory and prepare prelaunch marketing materials.
Last week, we closed on an underwritten public offering of seven 9 million shares of our common stock at a price of $8 to the public.
Gross proceeds to the company were approximately $63 million before deducting underwriting discounts and other operating expenses.
We expect this $59 million of net proceeds plus our existing cash of $22 million should be sufficient to execute our commercial activities for Bachelor for at least the next two years.
We've been very busy on the manufacturing front too with our partners Thermo Fisher in Cincinnati, we completed our validation batches for both doses and began commercial inventory production in this quarter.
We expect to have sufficient inventory ready to supply retail stores across the country. This summer.
We expect cash burn to be around $5 million for the first quarter for 'twenty. One as we made our final payment of $1.2 million on our term loan and continued manufacturing activity.
In the second quarter of 'twenty, one the cash burn will increase as we continued to build commercial inventory and increased sales and marketing activities to prepare for the launch of <unk> in the third quarter.
Once we are closer to launch and we receive purchase commitments from the retailers, we will share more details on distribution and shelf placement as well as well as our sales and marketing spend with that I will turn the call back over to Natasha.
Thank you read on.
We are extremely proud subject to FDA approval, we announced last week as a reminder, we took the time to align with the F. D. A series of meetings I understand completely what they required for those two submission vs. F. N B age when considered chemistry manufacturing control for CMC filing.
They included information on the change in formulation, the new manufacturing site for that for CMV.
Five milligram and a new product strength for the 81 milligram dose.
Submission for the 325 milligram dose also contains the results of the clinical study conducted demonstrating basketball bioequivalence to immediate release aspirin for.
For the supporting the change in formulation the submission for the 81 milligram dose built occupancy information in the original approved NDA and yes NDA submitted for example, a 325 wells on.
All of this information form the basis for two strong submissions to the agency as evidenced by their approval for both doses earlier than expected.
Now with the SBA approvals in hand helix team is excited to do what we do best launch product. This management team has launched many mega brands successfully and we look forward to turning back into a household name Coincidently. Our leadership team has been involved in successful.
On shoes of product across the prescription and OTC.
Tc site.
And build household names such as Houston Lipitor Zantac Zicam just to name a few.
Yeah.
Spirit is highly relevant for successfully launching downpour, we understand the challenges that HCP state clinical practice and how consumers make their buying decisions.
We also have extensive experience with retail trade customers and understand the intricacies of U S distribution channel.
Well, it's certainly changed in the past 12 months with Covid and this move virtual world. It's important now to leverage this evolving market dynamics.
Our commercial launch plans are advancing and specifically focus on health care for retailers and consumers.
Additionally, central to our marketing strategy is raising awareness educating and informing our free stakeholders above that for as the first and only FDA approved liquid filled aspirin capsule.
Unique mechanism of delivery and our supporting published clinical data.
We firmly believe that our compelling data support from the clinical community on focus on the consumer and the depth of this management team's experience represents a winning combination for successful launch.
We look forward to sharing more information on our retailer commitments in commercial plans as we get closer to launch with that I'll open the call for questions. Operator. Please go ahead with the instructions.
As a reminder to ask a question you will need to press star one on your telephone.
And to withdraw your question just for the penalty.
Lease them bylaws from probably the Q&A.
On the roster.
Our first question on come from the line of Elliot Wilbur from Raymond James maybe begin.
Hi, good morning.
So I think I think last call I congratulate you on completing.
And Odyssey when you are.
Resubmitted, the Badger more F&B, yeah, I'm not I'm not sure what follows.
And Odyssey, a pilgrimage, maybe but I just wonder.
Congratulations obviously on.
On the approval.
As well so it's hard for maybe just firstly, it's been a little while since you've talked in detail about the launch strategy and launch plans outside of maybe timing.
Anything you could share with us at this point in terms of the initial strategy with respect to having.
A primary detail force on the ground what numbers you may be thinking about how the pandemic has maybe altered your initial plan for or giving you.
Ideas that you may have not considered it.
Previously just thinking about more sort of the initial primary detail effort and just remind us who in fact will be the primary.
Call initially, obviously cardiologists, but maybe beyond that to physician audience and then got additional question as well, but I'll hold off until you respond.
Okay.
That was loaded.
As they say unpack your question.
First of all thank you we are so excited about having two FDA approvals.
<unk> securing the catheter for let me eat to successfully launch for this very important product.
The patient really essential to our B for this management team. It really does drive on we do believe we're going to make a huge impact in the market with addressing that very serious unmet need.
And so you raised the pandemic.
Certainly COVID-19 has changed the way that all of our stakeholders are doing you know not only the cardiologist.
The consumer is buying online picking up in store, so we need to be everywhere. The consumer is.
And the retailers also have built up their ecommerce business you know last year. When we spoke it was it was about Amazon now on retailer.
For some accelerated their e-commerce platform.
So of course, we've incorporated that into into our strategy I think what day, what it did was enabled us to allocate our resources in a very balanced way because now more than ever on all three stakeholders are really very important too low.
And we need to generate awareness.
Educate and inform and get get patients and physicians.
The trial, so with that we'll be doing.
Very much multi channel integrated.
<unk> net.
And we've said those words before COVID-19, but now more than ever we're going to be doing things in media and search and digital will be on them.
Extending towards the HCP and in that way as well, we will be using non personal.
For motion and I think that that will be even more effective than the way that we've launched products before it's going to enable us to broaden our reach not because it is.
It sounds on.
For virtual way I know that everybody is always very interested in in numbers.
So understanding on how many people that were going to put out there.
On the graph on specific with our HCP and <unk>, but I'm not going to share that.
For obvious reasons, however, what I will tell you that he actually cardiologists.
True to our strategy and need low and we have to balance very detailed plans and theyre very laser focused.
On generating volume through our cardiology practices.
Which may entail.
Different professionals in those for practices. We also are looking at the top hospitals in the U S that are heart and stroke hospitals as well.
<unk> that into our plans as well and as we get closer and I know that you all are very interested in some more detail as we get closer we will talk to you about the specifics.
As we get closer to launch.
Okay, and then I wanted to ask you. Another question around on the specifics of the launch itself. So obviously timing third quarter.
With respect to shipments to retailers, but are we should we be thinking about kind of a phased or stage.
Launch effort.
With.
Supply being provided to them just a limited number of initial retailers across their entire networks or should we be thinking about it.
A broader.
Launch strategy initially hitting all retailers, but maybe it not all of their their locations.
What we're planning is.
Very balance but.
But very D.
Plan to reach those three stakeholders, so the consumer the retailer on the H.
And no not did not occur.
So we really want to hit the ground day, one with this product.
And get as much uptake as quickly as we can through our very unique.
Unique planning.
And we are.
Testing needs to be a national launch so no it's not regional it's not.
National accounts.
Okay and then just.
Just last question here just.
Just in thinking in terms of about the.
Patient to expense presume that.
We're anticipating reservoir will largely be paid for out of pocket I know that aspirin is a covered category under the ace.
Just wondering if you think longer term, there's an opportunity here to maybe gain more favorable formulary positioning so that the product could actually eventually be covered.
Sure so.
So youre right at launch we're.
<unk> is that it will be all out of pocket, but you're right. There is certainly on market for that and we could as this launch rolls out really approach managed care in the HCA me right now HCA covers generic aspirin.
So we would have to do some work to really show and prove the value of Basel or which we know we can do but we're just not targeting that audience at launch.
Yeah.
Alright, thank you.
Okay.
Our next question comes from the line of Jason Butler from JMP Securities You may begin.
Hi, Thanks for taking the questions on let me add my congratulations on the approvals as well.
Do you mean.
Sure could you.
Talk about somebody education activities that youre going to be doing ahead of the launch will you be using you know peer to peer educational forums when could that start when could we start to see DTC.
No campaigns rollout.
Sure.
On.
Central to our marketing strategy for.
Our launch plan.
Communication and education.
Yeah.
Participating on the top key cardiology conferences for.
A few years now.
<unk> continuing to do so.
EBIT.
The virtual universal away.
We will have a strong presence.
C J D R.
Wrapping up.
As we speak and with that also publication strategy for me.
Extremely important for.
Cardiologists.
Knowing how cardiologist.
Educate themselves.
Good day listening to publication is really very important so we're very proud of that guidance.
Studies have been published in peer reviewed journals like the channel.
Cardiology.
With the investigator principal investigators on fire.
It also.
For the study.
Gastroenterology these things are really important.
Last year, we spent a number.
On conferences talking about different abstracts and posters on data.
Those data will be converted into cash.
These scripts and submitted for publication also led by our publication Committee, that's made up of the top five Dominic Angela.
And on others. So we will continue to do that.
On all along the way prelaunch.
Certainly post launch.
Our media campaigns.
On the consumer.
Also to raise awareness and drive the consumer to see their cardiologist, what we do know about our.
On specific consumer secondary prevention patient potential diabetic patients may be candidates for aspirin therapy is that they listened to their position.
Number one.
They also need to see.
On behalf of brand familiarity so you'll see our.
Media campaign will be centered around that sharing.
During the launch on.
In Q2 Q3.
Okay, Great. That's helpful and then Rita I know youre not guiding for for the spend for the rest of the year, but can you just give us a sense in terms of the the manufacturing and inventory build is that cost going to primarily occur earlier in the year on <unk> or or will that be spread.
Out through the remaining three quarters of the year.
Pretty much.
Second quarter will be the bigger one of them.
And then the third quarter I mean, we still have sales and marketing expenses in the third quarter. They will go up but as we get into the third quarter will still have cash burn on the inventory build but our goal is to have it ready to go when the D. C. This summer so it should be fairly evenly spread.
Between the second or third quarter on inventory and.
In sales and marketing will be heavier in the third than it is in the second.
Okay, great. Thanks, a lot for taking yep. Thank you.
Thanks, Thank you.
And once again Thats star one for a question Star one.
Our next question will come from the line of Leland <unk> from Oppenheimer.
May begin.
Oh, Hey, good morning on my question Lisa Thanks for taking my questions and my Congrats again on on.
We've accomplished.
Wanted to ask a couple of questions first.
With for products like reservoir being a very consumer driven park OTC wanted to just ask your thoughts about you know.
Kind of a customer loyalty program that might be.
First of all it sort of in terms of.
Users kind of coming back to us to stay on the product.
And then also wanted to ask and maybe some time away, but when you may see for extra less opportunities for Venezuela.
Sure <unk> I'll take the first question and ill for didn't touch on the international question. So yes actually the retailers are very big on their customer loyalty programs, especially the top chain drug stores have a lot of customer loyalty program. So we have actually been.
Working with all of those chain drug stores for several years now and working with them on the best strategy to launch that at the lower end, yes that does include customer loyalty programs. So we plan to.
Use that channel as a significant part of our reach.
Okay. That's helpful.
And then Pete.
S opportunities.
We are absolutely open.
And have had some discussions.
That area, but on <unk>.
Primary focus is to make this a huge success.
And help as many patients for milk.
The patients.
Absolutely.
This is great product because in the end.
That is the key to help physicians manage patients that are high risk for that.
Absolutely.
And so we our priority is to launch here however, yet.
That's always an opportunity in fact, we have representation on our scientific advisory board with Gabrielle Sag.
World right now.
Category is a cardiologist.
Published as well he participates in our scientific advisory board for the last for years.
Yeah.
Discussion.
And also a lot of our patents are all over the world as well on the Big European and Asian market. So we do have patent protection for quite a lot of years.
Thank you for services.
Alright, well, thank you very much for the extra information and good luck.
Thanks Day Cleveland.
Thank you.
And there are no further questions in the queue I'll turn the call back over to the cautious for any closing remarks.
Thank you. Thank you for your time. This morning, we are so excited to have achieved critical.
Critical milestone two FDA approvals and the capital needed to launch that we believe that will transform the standard of care for millions of patients at risk for vascular weekday.
We thank him sincerely appreciate the support of our partners for all of the dedicated hard work and our shareholders for their continued confidence in the management team stay healthy and safe and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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