Q4 2020 Adamis Pharmaceuticals Corp Earnings Call
Greetings and welcome to the of Damas Pharmaceuticals Corp for fourth quarter and full year 2020 conference call. At this time all participants are in a listen only mode. A brief question answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
The reminder of this conference call is being recorded it is now my pleasure to introduce your host Robert Westwick ICR. Thank you Robert you may begin.
Thank you operator, good afternoon, everyone and welcome to the Dominoes Pharmaceuticals fourth quarter 'twenty 'twenty earnings Conference call. Thank you for joining us today for the update and we welcome our shareholders analysts and all others interested in the the amas joining me today is the Donaldsons President and CEO Dr.
Jay Carlo Chief Financial Officer, Rob Hopkins, Chief Medical Officer, Dr. Ron Moss, and Chief Business Officer, David Barguna layout.
The format for this call will consist of prepared remarks from management followed by Q&A. This call is being webcast and will be available for replay in the investors section of our website of dumbest pharmaceuticals Dot com.
In today's call, we will make certain forward looking statements regarding our business based on current expectations and current information.
Those statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward looking statement made today of course any forward looking statements involve risks and uncertainties.
And our actual results could differ materially from those anticipated by any forward looking statements that we make today.
Additional information concerning factors that could affect our business and financial results is included in our most recent annual report on form 10-K, with the Securities and Exchange Commission and in others. The subsequent filings that we make with the SEC.
These are available on the SEC's website with that I will now hand, the call over to Dr. Dennis Carlo President and CEO.
Thank you Robert.
Well a lot has happened since our last earnings call in November certainly the complete response letter the FDA delivered to us shortly after the call relating to our Zen high data.
NDA once the surprised to say the least.
I am pleased to say that we had a very productive meeting with the agency on April eight.
During which time, we came to a consensus with the FDA on the path forward.
Based on our discussion at the agencies responses. There is no need to file an appeal some of them, we will not be filing of an appeal. The review of Canadian encourage us to resubmit, the NDA and we intend to do so within the next 45 days.
Although they would not provide the specific timeline there of sensitive because of the impact of the opioid crisis and committed to work closely with us to hasten their review.
Even as recently as of few days ago, the CDC reported that overdose deaths have dramatically surge during the pandemic.
Now I'd like to move on to epinephrine.
As we mentioned on our last call.
<unk> completed the transition of commercial responsibility for some Jeffrey from Sandoz at the end of October.
<unk> took the range, we have seen a significant uptick in commercial efforts.
Well, the only success with Walgreens, adding some getting to the description of savings club in January which now has 750 thousands of subscribers.
On the retail side U S World net has filled the sales force to call on high prescribing doctors, while at the same time there of seeking additional contracting opportunities on the institutional side, which includes now the department of defense The Indian Health system in the VA system and in addition, Kroger stores.
We are using some jeffy.
Their epinephrine of choice accompanying the Covid vaccine program.
So with this we believe we believe or expect to see those efforts translated into increased sales during the year and hit.
Shifting to the temple.
We're very encouraged by the results both in the animal studies as well of Stanford University study on the effects of the temple on immune cells from COVID-19 patients.
Remember, we're selling to suppress cytokines from COVID-19 stimulated sales.
Based on the information and data that was generated we filed an investigational new drug application after receiving clearance from the FDA in late February we are preparing to begin a phase II III blinded placebo controlled study examining the effects of the temple in COVID-19 patients early in the infection and.
On preventing hospitalization in subjects with COVID-19, we expect to begin the study this quarter. Dr. Morris will provide more details on the trials in a few minutes.
As I previously mentioned in addition to potential as a treatment for COVID-19, Depomed shown in phase II studies, two of a positive impact and reduce the radiation dermatitis in patients undergoing treatment for cancer.
We are currently working on additional formulation development and GMP manufacturing processes to support an IMD to begin a phase three pivotal study for the treatment of radiation induced dermatitis, which of course of the very large commercial opportunity.
I would now like to turn it over to our CFO, Rob Hopkins could provide some highlights from the fourth quarter financials.
Thank you Dennis.
One of them I want to begin by discussing the company's restatements of prior financial statements on April 14th 2021, the Adams' audit committee in consultation with management and our new independent auditors concluded that the company's valuation principles used to estimate the non cash warrant liabilities and related.
Change in fair value of warrant liabilities was not aligned with the accounting guidance in place during 2020.
The change of significant enough to restate the previous quarterly financial statements for the period ended March 31.
June 30.
And September 30 of 2020.
The issues identified were non cash and do not impact revenues operating expenses operating loss assets or cash position for the prior periods.
It's also worth mentioning that applying the new accounting guidance adopted January one 2021 eliminates this notion of treating of warrants as derivative liabilities going forward.
Please see note number for in the 10-K for more detail on the restatement.
With that said I want to highlight a few items from our 2020 financials.
I also encourage everyone to review of our 2020 form 10-K for additional details and disclosures.
First revenue for the year of decreased 25% from $22 1 million of 2019 to $16 5 million in 2020.
The decrease was primarily attributable to a decline of sales of products by U S. Compounding due to the restrictions on outpatient surgery and other medical procedures caused by the COVID-19, pandemic and related impacts net sales and marketing efforts.
Selling general.
Administrative expenses for the year ending December 31, 2020, and 2019 were approximately $36 million and $25 3 million respectively. The.
The increase was primarily attributable to the contingent liability accrual of $7 9 million related to the net from litigation.
There were also increases in license permits and other related administrative expenses those increases were partially offset by decreased selling expenses and U S kind of funding.
Research and development expenses were approximately $8 3 million and $10 4 million for the year ended December 31, 2020, and 2019, respectively. The.
The change was primarily due to a decrease in development expense of our pipeline candidates.
Cash and equivalents at the end of the year was approximately $6 9 million. However, the company received approximately $5 9 million in January and $48 6 million in February from the exercise of warrants and an equity financing transaction respectively.
Once again, please see our form 10-K for additional details and disclosures I will now turn it over to our Chief Medical Officer, Dr. Mark for an update on our regulatory pipeline development.
Thank you Ralph as Dennis just mentioned with regard to Zim high we believe that this higher dose intramuscular and naloxone product is an extremely important countermeasure to combat the current opioid overdose crisis, which has definitely been exacerbated during COVID-19, and in fact, the CDC. This week release that there were 80.
So 87000 deaths due to.
Due to drug overdoses between October 2019, and September 2020 at the 29% increase from the previous time period before.
As Dennis mentioned, we had the type a meeting with the FDA to review the comments on additional information provided on the same high and also to obtain concurrence on the resubmission of the NDA.
The company believes the meeting was productive and the Resubmission of the NDA for CMI is now planned within the next 45 days.
The FDA did not provide a detailed timelines for the review of the NDA. However, they acknowledged the need to review and rapidly because of the ongoing opioid epidemic and agreed to provide a timely review.
We believe the totality of the data suggests the Zim high has a positive benefit risk profile and we'll fulfill an important unmet medical need to prevent death from the more potent synthetic opiates sort of driving the current opioid epidemic.
Before discussing our clinical plans for temple I wanted to provide a quick refresher on temple itself per.
Paul is an antioxidant then the capitalized as harmful reactive oxygen species that cause systemic inflammation.
Unfortunately few therapies have been successful so far for the treatment of early COVID-19.
It is now apparent the messengers of the immune system called cytokines are released during the COVID-19, the release of multiple harmful Friday kind of causes of mortality and morbidity that can be lifelong of one survive the initial infection.
The search at the cytokines ultimately May result in a quote unquote cytokines storm.
Later in COVID-19 infection.
New preclinical data in new in vitro data suggests that early treatment of temple with temple may be beneficial in this data supports the rationale for a clinical program.
And the results from the study in collaboration with Stanford University Temple inhibited the release of multiple cytokines from activated immune cells from patients with COVID-19 the.
<unk> side of cytokines may be activated very early in COVID-19 infection.
Cause damage to multiple organs of the body beyond the lungs the.
The ability to suppress multiple cytokines from only activated immune cells maybe of unique attribute of temple. These encouraging results will now be submitted two of peer reviewed journal.
Additional in vivo preclinical data from the Hamster challenge model in collaboration with researchers at University of Texas. Further supports the importance of overall temple may play in COVID-19.
The hamster animal model of challenges animals with high levels of Sars Covid two virus the.
Same virus that causes COVID-19 the.
The animal model results in lung pathology similar to what is seen in humans. It is an important the animal model for it to be predictive of human COVID-19 infection.
This animal model has been used successfully to test vaccines, antivirals and monoclonal antibody.
We are very pleased to see the strong consistent anti inflammatory effects of temple in the animal model, resulting in an attenuation of lung pathology and changes, which suggested earlier and more rapid healing of the loans after infection with the virus in animals that were treated with temple as.
As mentioned earlier these results support the clinical program of testing temple and early Covid infection to determine the effects on inflammation and the rate of hospitalization.
As announced earlier, our R&D and clinical study had been allowed to proceed by the FDA. We're now preparing for the initiation of the clinical study working with a well known and experienced clinical research organization.
We are also beginning to work on another clinical indications for temple of the treatment of radiation dermatitis.
The common problem and unmet medical need in cancer patients requiring radiation therapy.
Radiation dermatitis can be quite debilitating and there are no approved the effective therapies.
We're currently working with the radiation oncology group at the University of Pennsylvania to design of clinical protocol for this indication of temple of.
Out of previous Phase II study of capsule for the treatment of radiation dermatitis has shown encouraging results and provides additional data.
To support the design of the New study. We're also beginning to make topical drugs that will be needed for the IMD and the clinical study.
At this time I will turn it over to David <unk> for an update on our partnering program.
Thank you Ron.
I'd like to provide some additional color on the recent developments concerning nephron litigation.
As we've previously disclosed in September 2018 of competitor filed suit against U S compounding the.
Later added Animas.
The matter essentially related to U S. Compounding is hiring of of former nephron field sales person.
And in the Nephron allege the former employee took net drawn confidential information to U S. Compounding, which included among other things of customer list and pricing information.
So it was never establish the U S compounding used or financially benefited from this information and more than a de minimis way for us at the information was in fact.
A trade secret information.
In the event of an adverse outcome in this case there exists the potential for significant compensate compensate tory of damages punitive damages and attorney's fees.
And other costs prior attempts to resolve this matter for an amount that we viewed as a reasonable sales and the case was set for trial later this month.
However, in recent weeks, leading up to the trial the court made determinations and decisions in hearings in pre trial motions, which we believe were very favorable for macron and affected the conduct of the upcoming trial it became clear to us debt proceeding to trial and both new additional risk.
Debt, we would likely because we would likely not be permitted to share significant arguments in testimony. We believed was favorable to our position.
These recent developments and determinations by the court in combination with the usual high cost of continuing litigation and uncertainty of jury trials.
Prompted the company to agree to settle this litigation.
As well as related matters.
For more details on this case and settled and the settlement.
Please refer to our form 10-K filed today.
Turning to product commercialization has Dennis covered in late October we completed the transition from of.
Some jaffe from Sandoz U S World net since.
Since November of U S World merger has been free to enter into new distribution agreements. The biggest win to date was in January when Walgreens added some jetblue to their prescription savings goal. We remain very pleased with U S. World match commercial efforts to date, and we expect to see those efforts translate into more of.
Significant increases in revenue.
During 2021.
As we prepare to submit the NDA for Zim high the commercial team at <unk> is readying for the launches of the mine.
Our share goal is to be able to launch them high in the U S within weeks of receiving regulatory approval.
With that I'll turn it back over to Dennis.
Thank you very much.
I will conclude by listing some of the target of milestones for this year.
Number one we intend to resubmit the naloxone as in my NDA to FDA within the next 45 days.
Number two we will start of phase III clinical trial of the temple and COVID-19 patients in the second quarter of 2021.
Number of three will move from nine binding term sheet to execute a purchase agreement for the sale of USD outsourcing division in the second half of 2021.
We will also increase market penetration and increased sales of some jetblue in the U S through throughout 2021, and lastly approval and commercial launch of Slim high before the end of the year before end of two points from BARDA.
With that we'll open it up for questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate that your line is of the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up of your handset before.
The Star Keys.
One moment, please while we poll for questions.
Yeah.
Thank you. Our first question comes from Elliot Wilbur with Raymond James. Please proceed with your question.
Good afternoon question for Brian or Dennis could you just talk about some of the various funding initiatives you're pursuing with respect to temple I know you had outlined a.
A couple of different sources different sources, both respect to the radiation dermatitis.
The trial then obviously.
Looking to potentially.
Fund Temple.
The COVID-19 under.
The OWS program, just wondering if theres any updates or whats kind of the status of those initiatives are.
On the <unk>.
Relation dermatitis, we're talking to.
One of the universities right now that we're going to conduct the study.
We believe that they'll pay for the majority of the studies for radiation dermatitis on temple, we're talking to the U S government, both the number of different divisions within the government.
And I really can't give you any more information than that of that we are in discussions with a number of divisions in the U S government to help us.
Conduct studies with temple.
Yeah.
Okay and the.
Then maybe just if we could get.
Perhaps a little more clarity in terms of the expected <unk>.
<unk> of the phase II phase III, so start in the second quarter would you have.
For readout by the end of the year I presume that there's some sort of interim analysis.
Yes.
Confirm that and how might debt.
[noise] might alter the the progress of the the trial based on the the interim readout.
Yes, Elliot I'll turn it over to Dr launch for the answer to that question.
You are correct. There is an interim analysis in the study.
Looking at the for 60 or so patients.
The interim which right now is projected to be sometime this summer.
Hello.
Okay, and so just the based on net debt interim read is it is it just essentially kind of a go no go.
No that decision at that point or are there other parameters that debt youre sort of looking at debt that may be altered or modified kind of based on the interim rates.
Net debt interim analysis will look at the event rates and also look at inflammatory markers in the safety. So we will have a good idea whether temple is exerting an anti inflammatory effects on the markers in the blood and we will also have an idea of whether there are enough of hospitalizations occurring.
Whether our sample size needs of reassessment of more patients.
Okay.
And I wanted to ask a question for.
Sure of.
Dennis around the recent addition of Jim Hi.
Any obviously you expect the Schmitt in 45 days in any material.
Outstanding deliverables that have to be completed on your end or essentially you have everything you need.
Two to satisfy.
You know what the what the agency was looking for.
Or didn't see sort of last time.
Around I guess, the real question is sort of based on year.
The face to face with them.
Are you comfortable that both of you and the agency of sort of on the same page or at least you can make.
Make a strong case based on the factors that kind of led to the CRO last time that that Shouldnt in fact, the the case of this time.
No we.
We don't have to add anything to the NDA. The bulk of the work was done well before that we did come through of consensus with the FDA I think the meeting went very very well.
We will be submitting within 45 days and.
There's really nothing else, we have we have to do I think the.
<unk> did not as I said.
<unk> two of timeline, but they did commit to working rapidly working with us.
Because obviously everybody knows the opioid crisis is quite significant and increasing as the as the.
Pandemic goes on.
Yeah.
Okay, and then one final question.
Notice of the company recently filed for some intellectual property protection covering various cargo.
The Tropic homeruns looked to be like synthetic versions of.
Corticotropin and include potential usage in COVID-19, just wondering if there is anything that you could share there in terms of how you may be thinking about of development program.
Involving.
Involving corticotropin.
If you are in check now.
That's not going to be used are not intended to be used for COVID-19, We just had a little program here in which we were able to share.
The two two per.
At times, we're able to essentially the.
Eliminate MFS relapsing model mouse model not only at the.
The treatment, but also presented.
And those models.
The example of the use of Covid, It's just something we were doing on the side.
We're looking to license it out.
Okay.
Okay.
Thank you those were my only questions.
Thank you very much.
Thank you there are no further questions at this time I would like to turn the call back over to Robert <unk> for any closing comments.
Okay. Thank you operator that will conclude our call for today and I. Thank all of you for participating and we look forward to our next call coming up.
Just very soon in May alright, thanks, everyone have a good evening.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation of a wonderful evening.