Q1 2021 Biohaven Pharmaceutical Holding Company Ltd Earnings Call
Good morning, welcome to the Bio Haven Pharmaceuticals, Q1, 2021 earnings call.
At this time all participant lines are in a listen only mode on.
After the Speakers' presentation, there'll be a question and answer session.
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Please be advised that today's conference call maybe recorded.
I would now like to hand, the conference over to Clifford Bechtold from bio happen Dio Haven. Thank you and please go ahead.
Thank you and good morning, everybody and welcome to the <unk> first quarter 2021 earnings call.
Speaking on today's call are Dr. Vlad <unk>, our Chief Executive Officer, Jim Engelhart, Chief Financial Officer, B, J Jones, Chief Commercial Officer, and Dr. Lee stock, our Chief Medical Officer.
Earlier. This morning, we issued a press release announcing the first quarter of 2021 highlights a copy of this press release can be found on our website at Bioherm farmer Dot com and we will file our form 10-Q later today.
Before we begin let me remind everybody that today's discussion contains forward looking statements based on the environment as we currently see it and includes risks and uncertainties a list and description of the risks and uncertainties associated with an investment in bio Haven can be found in the company's filings with the U S Securities and Exchange Commission.
Please be aware that you should not place undue reliance on the forward looking statements we make today.
Yeah.
For this call we will focus on non-GAAP financial measures with detailed descriptions of GAAP and non-GAAP analysis, and our filings an archive of today's call will be posted to the bio <unk> website in the Investor Relations section.
With that I will turn the call over to our CEO Dr. Vlad charge.
Good morning to our investors and thank you for joining the first quarter earnings call, representing our first full year of earnings since the launch of <unk> ODT.
The company continues to excel on our launch on <unk> and more broadly advancing our strategic goals across the pipeline to grow value for patients and that strength in years to come.
Our first quarter 2021 performance continues to exceed expectations across multiple fronts Neurotechnology <unk> was approved a little more than a year ago and despite facing what was perhaps the greatest challenge of any new drug launch with the emergence of the pandemic the buyer's agent team effectively and safely delivered on our new migraine medications to patients.
To date, we have achieved over 600000 prescriptions of <unk> ODT and access for patients is broad with greater than 89% commercial coverage.
While we had expected first quarter sales to be impacted by the seasonality of patient deductibles on prescription reauthorization typically experienced in our business <unk> and our strong commercial team broke the mold and demonstrated exceptional deliberate with first quarter net revenues of approximately $44 million for a year one post launch net revenue.
Total of $107 million and climbing I have to say, it's a testament to our determined commercial team and the entire organization that fulfill our responsibility to patients to ensure the drug supply chain remains strong during the pandemic.
Together, we relieve suffering by delivering this novel migraine therapy to patients.
In addition to <unk> ODT I'm also pleased to report that our internal robust pipeline continues to grow across both migraine and non migraine indications and common and rare diseases. We believe that <unk> has the most broad and differentiated <unk> antagonist platform in the pharmaceutical industry.
At this time, we have over 10, <unk> antagonist clinical programs across both migraine and non migraine indications running around the globe aimed at areas of significant unmet need.
In addition to a growing and robust <unk> platform, we continue to grow and expand the pipeline and the areas, including multiple system atrophy, AOS Spinocerebellar ataxia, OCD and others.
These programs will bring treatment option for millions of patients suffering from rare and common diseases that are untreated or undertreated.
We stopped our CMO will shortly speak in more detail regarding these programs and I am pleased to share that as we build our pipeline. Our goal is to bring value to patients and shareholders for many years to come.
We have multiple significant near term milestones anticipated in 2021 and the early part of 2022 star.
Starting with anticipated approval in migraine prevention in the second quarter of 2021, and then followed closely by top line results earlier than expected with our <unk> inhibitor <unk> and MSA in the third quarter.
We anticipate that enrollment in our phase III study for <unk> and AOS being performed at mass General will now complete in the fourth quarter true Rosenthal is also anticipated to read out top line data in SBA at the end of the year or early in 2022, we are excited about the potential of our pipeline to bring value to patients suffering from devastating.
<unk> disorders, and bring long term value to our shareholders.
<unk> ODT continues to hold strong and the market as a differentiated product profile continues to drive demand. During this quarter, we have taken steps and have made appropriate and rigorous decisions to ensure our continued growth and future success with minimal impact to our share and brs. These decisions will allow us.
To see further improvement in GTS in the latter half of 2021.
I'd like to thank our entire commercial organization and managed markets team for their dedication and continuing to deliver strong market performance in the first quarter of 2021.
For much of 2020, we heard directly from patients at their experience on Eurotech ODT was quite different than past experiences with other standard of care medications. We believe that <unk> ODT has the potential to become the first line standard of care therapy, given its efficacy and safety profile.
This slide shows that we are at the very beginning of our market penetration compared to the Triptans and a lot more growth ahead of us.
This slide.
Also shows on <unk> on making steady progress and increasing market share specifically compared to the triptan due to this profile.
I want to note that despite does not include the separate large population of patients who can't take triptans due to contra indications or patients who have failed to show a full response to triptans.
This type of growth early against the standard care Medicare medications.
Certainly boding well for the entire <unk> class and shows that we are changing the paradigm by which migraine is treated.
When we look at <unk> targeting agents as a whole and refresh this slide it remains evidenced that oral <unk> antagonist continue to drive the lion's share of the overall <unk> market.
Slide also suggests that effective acute therapy results in a diminished need for patients to go on to injectable preventative agents, we believe oral <unk> antagonist for the acute treatment of migraine will ultimately grow into a $4 to $5 billion a year annual market in the U S alone.
Given the projected size of the overall market, we remain focused on investing in the long term success of <unk> ODT and growing the overall oral <unk> market.
<unk> ODT is going to continue to be a key growth driver for our company. This next year, but we have many other value on effects endpoints for 2021 and beyond.
While the commercial organization continues to focus on driving sales of neuropathic OTT. The rest of the organization will be equally focused on driving new value inflection milestones. This slide summarizes the breadth of our pipeline and lifecycle management opportunity a bioware.
Outside of the U S. We have seen global approvals on <unk> ODT began in early 2021 and have already established distributor agreements in certain geographic regions.
While we await our EMA approval for dual acting therapy, we continue to advance discussions regarding ex U S partnering of <unk> in Europe and other major markets.
In addition to our lifecycle management of <unk> ODT, we expect to have top line data from intra nasal as the bed, Japan by year end and if positive we have been ready to file that that Japan is the FERC intranasal <unk> antagonist for the ultra rapid treatment of migraine.
On oral versions of that Japan is also set to begin clinical testing this year in migraine and non migraine indications, giving our CRP franchise flexibility and multiple formulations and different drugs that can be optimized for various seed European mediated diseases outside of migraine.
Beyond the <unk> antagonist franchise, we also have important phase III readouts on our Myeloperoxidase inhibitor and glutamate modulator and platforms for <unk>, a drug thought to decrease brain inflammatory pathways as expected that top line results in both MSA and so it really is all a glutamate modulator is also expect to have top line.
Data by the end of the year early next year. In addition, we have multiple assets moving through our bio Haven labs discovery engine, bringing diversity to our portfolio on long term value to bio Haven, and we anticipate some robust clinical candidates coming in day in the next year or so and enabling us to branch out further beyond neuroscience build additional.
<unk> partnerships and deliver more medicines across multiple areas of serious unmet need.
Bio havens robust pipeline is poised to continue to deliver value for patients on investments for the long term. Our R&D team has delivered on past milestones and Hasnt Excitingly. This portfolio that we believe will continue to create value over the next year.
To summarize we have a differentiated commercial price and Nordic ODT that is generating increasing an impressive revenue growth and we have a strong portfolio of product opportunities that we believe will deliver value for patients on investors in the near term as well as for years to come on.
Goal is to continue to work hard to improve the lives of patients suffering from neurological and neuropsychiatric disorders and continue to deliver best in class therapies from our promising pipeline for patients on.
I'll now turn it over to Jim <unk>, Our Chief Financial Officer to review the detailed results of our financial performance in the first quarter of 2021.
Thank you Brad.
Morning, everyone and thank you for joining today.
<unk> ODT achieved net sales of $43 8 million in quarter, one demonstrating another strong performance versus prior quarter, increasing 25% versus quarter four of 2020, driven primarily by strong prescription volume.
Continuing down the P&L for SG&A SG&A expenses in the quarter on a non-GAAP basis was $130 9 million compared to $85 million over the prior year quarter, an increase of $45 9 million most of our SG&A costs are in support of our commercial sales of <unk> ODT.
The increase is primarily due to a full quarter of commercial support including DTC investment in Q1 2021 as compared to Q1 2020, when Theyre Tech ODT was launched in the last few weeks of the quarter.
For R&D, our R&D investment in the quarter on a non-GAAP basis was $74 1 million compared to $49 8 million over the prior quarter prior year quarter, an increase of $24 3 million. The increase was primarily due to the acquisition and integration of BIOLASE labs earlier this year an increase.
<unk> expenses from completing the later stage trials in these about Japan program, which had two ongoing phase III trials by the end of Q1 2021, as well as investments in our expanding pipeline.
We reported non-GAAP adjusted net loss for the three months ended March 31, 2021 of $188 4 million.
On a $3 <unk> per share loss compared to $134 9 million or $2 39 per share loss for the same period in 2021 from 2020.
Turning to our balance sheet, we continue to be well capitalized with $570 9 million in cash cash equivalents in marketable securities as of March 31, 2021.
In addition, we have immediate access to $225 million from our debt facility with sixth Street, and anticipate $182 $4 million of additional capital from the previous royalty pharma funding agreement.
With that let me turn it over to B J Jones, our Chief commercial officer B J.
Jim.
This year's Q1 earnings marks the anniversary of <unk> inaugural commercial launch of <unk> ODT.
A year like no other as we collectively weather the impact of the COVID-19 global pandemic.
But in the midst of this once in a century struggle.
<unk> remained focused on our patients and customers needs and in so doing we're rewarded with exciting commercial milestones throughout.
We are extremely pleased with <unk> odt's launch success to date and what we believe to be positive signals for a strong rebound in the broader pharma market and specifically robust growth and the oral <unk> migraine market.
With 13 months in market, we're proud to report Nortek Odt's net sales achievement of $107 million.
<unk>, which is an outstanding outcome for year, one of launch and we're particularly enthusiastic about driving strong performance in Q1. Despite the traditional challenges of shifting insurance coverages resetting of deductibles and the non traditional hurdle of COVID-19 winter surge, we exceeded market expectations again.
Delivering $44 million on sales on 25% growth quarter over quarter.
We're also bullish on market growth as we expect this momentum to continue and only accelerate over time.
With the percentage of Americans vaccinated, increasing in COVID-19 related deaths hospitalizations and daily infections falling we see early signs of this lingering market depression finally lifting.
With each passing quarter <unk> continue to win the hearts and minds of clinicians due to differentiated efficacy and safety profile that they believe are significant advance over the current standard of care.
Syndicated series data show more than half on neurologists and headache specialists believe this to be true as of Q1.
We're also encouraged by these data highlighting <unk> differentiated profile and preference among specialists and primary care physicians with suggest significant <unk> upside as we breakthrough chip Pan prescribing habits.
A key driver in changing prescriber belief as trial and increased experience.
As market penetration continues with increased promotion from various manufacturers, we expect adoption to grow significantly in the months and years to come.
As Youre well aware, we're anxiously awaiting news from the FDA regarding the status of our SMB EBITDA for the preventive treatment of migraine. If approved we expect to launch <unk> Odt's, new indication by end of Q2 <unk>.
As such we're busy finalizing preparations for what we believe is a significant milestone in migraine treatment what would be the first and only medication proven to treat and prevent migraines.
If approved <unk>.
ODT has the potential to offer patients with migraine with no other medication hands.
Personal control for.
For the first time, they will have a highly effective treatment option that offers flexibility and simplicity by reducing polypharmacy or pill burden with one medications that can be used to effectively stop on the tank and taking less or prevent one taking more.
We'll share more once we hear from the agency.
So in summary, we closed out Q1, 'twenty, one with strong performance delivering above expectations driven by our best in class compound and outstanding execution in the market the future looks bright as COVID-19 receive markets open again, we're all <unk> continued to penetrate triptans.
And we hope to receive approval for transformational indication.
But I'd like to close as we often do with a spotlight on our patients.
We continue to receive thousands of testimonials each month from patients and their loved ones sharing stories of hope resilience and strength.
Each with a unique and compelling story of how <unk> has given them a better quality of life and the experienced previously due to migraines.
These communications served to fuel our collective passion and deepen our resolve to provide access to <unk> ODT.
Every migraine patient who needs and deserves more treatment options were.
We're grateful to all of our patients and their clinicians for the trustee placed on us as we partner to address the tremendous unmet need in this disease state.
And with that I'll turn it over to our Chief Medical Officer, and my partner at least on.
Thank you P J.
Dan this quarter I'm happy to highlight the significant advances made across our R&D organization and I'm also happy to look to the future and bile havens potential to bring multiple novel therapies to patients.
We continue to make great progress across our programs, including our <unk> franchise.
Hello per oxidase inhibitor platform, our glutamate modulating agents and the new opportunities, we have across both common and rare diseases and our late stage portfolio as well as their labs.
Finally, even lab has numerous early and exciting platforms being developed as well on some assets or.
Or nearing clinical trials.
Progressing our antibody recruiting molecules multimodal antibody therapy Enhancers also known as mates.
Molecular day graders extra cellular protein and they have great potential and youll be hearing a lot about these in the coming years, we expect our early pipeline to bring us exciting compounds in numerous areas over future years, but for today on <unk>.
Going to focus on our later stage program.
They're in the clinic with many nearing top line readout. Our aim of course is to always look to novel targets, so as to be able to bring treatments to sell many who suffer from debilitating neurologic disorders.
No Jack ODT remains our cornerstone marketed product indicated for the acute treatment of migraine.
Net cash prevention S. NDA as you've heard is currently under evaluation by the FDA and the Paducah date is nearing does that Japan, just following closely behind with the intranasal and oral formulation in clinical trials.
Our third CRP antagonist small molecule <unk> thousand 100, <unk>, it's also headed to the clinic.
I'll be highlighting some of our most important progress to date.
Our portfolio of small molecule <unk> affords us great flexibility and has the potential from multiple blockbusters in price.
Commercial success at <unk> in the United States has been touched upon by both flat and BJ.
On your tax S. NDA for prevention of migraine is under evaluation and has it could use a day. This the second quarter of 2021.
The European evaluations vertex dual acting filing is underway.
And with these approvals, we look forward to being able to treat the continuum of migraine disease with simplicity of using one medicinal product.
This significant paradigm shift will be able to improve the lives of many living with migraine across the globe.
Filings and approvals for the acute treatment of migraine have taken place or underway in multiple countries.
In the Middle East.
And we have already secured approvals in Israel and the UAE, we expect further approvals throughout this year.
Lifecycle expansion beyond geographic region, and the dual acting indications is also of critical importance.
We have ongoing trials in both pediatric migraine as well as trigeminal neuralgia and expect to studying <unk> in several additional bank grain adjacent areas, including post traumatic headache, Kemper on <unk> joint disease in at least one other undisclosed area.
Investigator initiated trials and studies and health economics will add to the wealth of information that will ultimately be available from your cash and will help define the scope to the important information for patients providers and payers.
The debt Japan program includes both intranasal and oral formulations.
On a Q treatment phase III study, which intranasal so that Japan's began in October of last year, and followed a positive phase III study.
The second pivotal so that Japan trial has the potential to confirm an even more rapid onset of effect.
And oral formulation has also been advanced and began one it's two phase III studies in migraine prevention in March.
Newest inner pushed <unk> antagonists small molecules or number of next generation <unk> antagonist. We expect the first of these 3100 to advance to the clinic in the second quarter on this year.
<unk> represents an important pathway and the nexus between the immune and central nervous system across a range of CJR antagonist assets, we'll follow the science and conduct multiple proof of concept and Registrational studies. Some of these have begun for example plaque psoriasis.
With remote Japan, and COVID-19 was about Japan.
Additional non migraine studies are planned, including asthma and others remain undisclosed piece.
These multiple <unk> antagonists.
<unk> opened new possibilities for us to expand our <unk> platform and afford us the ability really to customize the unique attributes of each of these structurally unique compounds.
We have deep experience in this mechanism of action and now we have multiple assets to optimize for different indications.
We're quite busy with the <unk> antagonist as well as <unk>.
Our other important platforms.
Haven pipeline has both low risk opportunities and lifecycle management of our <unk> platform and higher risk high reward investments in our glutamate and Myeloperoxidase inhibitor platforms.
Ah glutamate modulating platform is one of those high risk high reward areas.
So really you saw recently completed enrollment in a phase III study and Spinocerebellar ataxia and is expected to read out top line results between for Q2 thousand 21 on the first quarter of next year.
Our phase III program in OCD started at the end of last year with the enrollment in the first study on the second study was initiated in the first quarter of this year.
Both studies are based on critical signaling that emerge from the earlier proof of concept OCD study we conducted.
Glutamates the most abundant excited Troy transmitter in the brain and we believe to really itself has and will provide important advances in the neuroscience fields across many areas, which may then be expanded.
With regard to our NPL platform, our Milo peroxidase inhibitor trial and multiple system atrophy, a rare and rapidly progressing disease with FDA fast track designation, we will read out top line data in the third quarter of this year.
The mass General Healy study that is testing this agent in AOS is also on Delhi and is expected to complete enrollment in the fourth quarter of this year.
Bio havens efforts across our glutamate and Milo peroxidase platforms allows us to target three rare and devastating diseases multiple system atrophy, amyotrophic lateral sclerosis, and Spinocerebellar ataxia.
We anticipate all of these to read out over the next year and the potential for three global orphan drug approvals in 2022 and 2023.
We are really excited by the immense opportunities across all of our assets and platforms and we will continue to make strategic decisions across the portfolio with both external partnerships and internal programs.
Our pipeline is as always exciting and we continue to drive these robust platforms and programs forward.
We're very busy and we remain committed to follow the science and to keeping the patient at the center of all we do it is really again, a pleasure to be able to share all of this with you and I will now turn the call back to flat.
Thank you Jim and BJ.
Clothing BIOLASE, David has demonstrated robust growth in terms of the commercialization of <unk> ODT and impertinent maturation of our late stage neuro innovation pipeline and we expect continued market expansion on the Neurotechnology and migraine and anticipate at least for pivotal trial readouts over the next year, we have the potential from multiple NDA.
Over the next couple of years and importance to us as a growth of the company to continue advancing this robust pipeline.
Before opening up to Q&A I'd like to end by thanking the entire BIOLASE on team for their relentless commitment and value creation for patients and investors I also want to thank all the patients their family members and investigators.
Dissipate in our clinical trials and it helped advanced clinical care in the area of neuroscience, we must continue to work hard to bring novel treatments to patients suffering from these diseases.
Finally, thank you to our visionary investors who've helped fund our studies and bring <unk> ODT to patients.
We'd like to now open it up to questions operator.
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Our first question today is from Ken category of Cowen. Please proceed with your question.
Hey, good morning, everyone. Congratulations on all the progress I was just wondering.
If you could talk about any kind of interactions to date with the agency in terms of the prevention or are we down to labeling discussions or any nuance on a perspective you could provide.
Second question is.
So what degree are we going to need to sample of support.
We do get the prevention approval during the year. So I'm just trying to think about if we could set some expectations for gross to nets as we try to convert over the managed care for prevention, maybe just make sure. We're all properly prepared for how we're going to support that launch when it occurs thanks so much.
Hey, Ken Thanks for the questions.
We said, we don't give a lot of details about the interactions with FDA I think suffice it to say, we're at the appropriate time and interactions with the agency and we look forward to their decision which should be coming shortly.
And with regards to prevention and looking forward to next year.
Something that's really a benefit and allows us to streamline the launch of <unk> ODT and prevention is the fact that we're using the same dose the same APAC.
And there is a significant advantage to that when it comes to both payers and also our sampling strategy I'll ask Vijay to add any comments to that but I don't anticipate there being major changes to <unk> around that BJ just to reinforce that land. Thank you and thank you for the question Ken We believe one will retain.
<unk>.
And maintain our excellent acute commercial access and continue to aggressively pursue what will be preventative access as well.
And we can already tell you we have significant interest in preventive indication among payers in early discussions have been fruitful as it relates to any changes from a sample strategy standpoint, we really don't believe that to be necessary as.
As we provide appropriate sample support for all our commissions great. Thanks P. J as I say there is also this efficiency and think about the fact that in our media spend and our physician outreach you don't have to do to set the advertising. It's not like you have to have a different DTC budget for a different brand at Ada and so if we had to.
Two drugs going into the space you might.
There'll be a significant increase in those costs youre going to see a pivot in our advertising that can be very.
Focused and streamlined debt. This is going to include both on like that slide B J showed earlier, we're going to dissolve the line between acute and prevention that also means we can be very efficient with our marketing dollars on our interaction because we will be able to send either this dual therapy message and one interaction or one add on.
Next question.
The next question is from Paul Choi of Goldman Sachs. Please proceed with your question.
Hi, Thank you good morning team and let me also add my congratulations on the quarter end on the progress.
I don't have a couple of questions on prevention as well just first Vlad.
Bladderwort BJ.
Anti body growth is from pretty flat for the past couple of quarters here and I was just wondering if you could maybe just comment on whether this is.
What's the sort of a penetration issue or is it primarily a payer issue in terms of that's been driving sort of this flat growth with regard to the anti bodies in prevention and then second I know the Bachelor pad oral trial is just starting to kick off but could you maybe speak to how youre thinking about positioning down the road as that trial completes on that product income.
From market and how you think about it in the prevention indication versus Nortek. Thank you very much.
Thanks, Paul.
Going back to a year or so ago. We had made the prediction that if you had <unk> that were readily available that we believe patients would prefer oral solution over injectable. We've updated that slide that we showed on the deck here quarter over quarter and as you said.
It's flat now that's speculation for why it's flat can vary but.
It's our belief that when you give patients on oral solution and access to this mechanism in acute that it makes sense right that if you're effectively treating acute episodes less people will need to go on to preventative agents and actually when you look at the treatment guidelines right they specify that debt.
Should go through effect acute therapy before going on to preventative agents and so it's speculation, but it's our belief that it's the effective acute therapy with oral <unk> that.
Are going on.
Two.
Less patients needing those those maps.
Getting on to your question about the debt Japan.
<unk> look I think as you've heard from multiple individuals on the call. This is a franchise that we've developed with multiple assets. We do not want any area of migraine or any area, where seizure. If he is going to be leveraged in a disease to not be.
Top competitor in that area, So Oro that Japan really puts us into two positions right through those very few patients who may need absolutely everyday use we want to have a solution for them or the debt Japan in prevention, but then I'll also gives us massive flexibility and non migraine indications to bring.
Different formulations forward for these.
And so at least had outlined we have a vision for this mechanism of action that extends into very large and common disease areas well be on migraine migraine, just the beginning and we're going to be excited about seeing those studies and future years. Thanks and next question operator.
The next question is from Chris Raymond of Piper Sandler. Please proceed with your question.
Hey, Thanks for taking the question.
Hum.
On the primary care versus specialist sort of sales effort. How are you guys thinking about the volume split here between specialists and primary care docs, maybe over the next year or two.
Especially with the prevention label.
Being added potentially.
You guys had talked about efficient DTC advertising here with the label expansion, but maybe talk about how you approach the sort of the sales effort to keep.
Keep the momentum going among P C piece.
BJ talked about it.
It won't be a surprise, we've already transitioned to that focus I think when you first.
Started commercial launch it's no surprise in this space. It starts on the specialty clinics and Vijay you want to comment about that transition to primary care how important it is to us in the plant.
And Chris Thanks for the question. This is a very unique scenario in which is why I mentioned, a moment ago, it's almost 100% like synergistic and so.
The beauty is we don't need to shift our attention or focus if you will from the current folks that we call on again and we believe that just as an acute and kind of what has been this rapid adoption of oral <unk> has happened primarily in specialty first and then we'll.
We'll slowly, but importantly transition out to primary care. We believe the same thing will happen as it relates to the preventative indication as well and.
And so we feel very confident as it relates to our promotion whether it be DTC or whether it be from direct promotion to commissions is that we're well focused again every dollar we spend.
<unk> supports both what would be acute and preventive.
So it all works extremely well for us as we as we pursue.
What is this dual therapy and it's different in the marketplace.
Great. Thank you.
Operator next question.
The next question is from Laura Chico of Wedbush Securities. Please proceed with your question.
Hey, good morning, guys. Thanks for taking the question.
So.
Just kind of following back the market research it seems like there's a little bit of a disconnect on a couple of levels.
In one regard.
Guys greater familiarity comfort with your broadly versus near term, but more favorable views on your take in terms of durability of effect on speed of onset. So I'm. Just wondering if you can plan on help us understand how you're reconciling the data, but also maybe it was 2021, having a lot of reopening changes how are you planning to kind of modest.
By your outreach efforts to position and then secondarily.
On filing May use submission I guess I'm trying to think about the balance on capital allocation between the SG&A spend and build out there on further pipeline investment. So I guess any color there would be helpful. Thanks.
Thanks, Laurie I appreciate it.
I know you watch the weekly scripts vary.
Closely with your note that comes out every weekend.
Type a word on the N B Rx every.
Every week and so you see that there is growth.
Splitting of market share at this point, because I think it's a win for both companies and also went for patients to have choice in this space, we do happen to believe and I think the.
Research reflects debt we have.
A more differentiated label from our competitor with the early on.
On said that the return to normal by 60 minutes and the durability of 48 hours, that's really resonating and then the drug is really I think because of that profile built for.
My primary care.
I need to dose titration right. So we think that's going to just continue to resonate throughout this year in our messaging and we think you will see perhaps a little bit more of a differentiation in those market numbers.
As we continue to penetrate primary care and then the prevention.
<unk> comes in and so B J do you want to talk a little bit more about capital allocation.
The other aspects of where a question.
Absolutely so and Laura Thanks for the question as it relates to how the market's opening and how do we kind of shift our allocation.
We will still focus on what are kind of these two anchor points of of making sure. We can activate patients, but but also making sure we communicate effectively and broadly with physicians and that's the area of opportunity for us and frankly, not just for us but for the entire market is that we just haven't been able to get the cash.
Clinicians than we normally do and so.
We will take kind of current access opportunities that will broaden and we will be able to be more productive in some sense and so that's that's the relative shift we see it's still consistent with our overall strategy and we just expect more productivity kind of in that space, So as well as things have gone thus far.
We expect them to accelerate as the market opens Bryan Bryan. Thanks, Vijay Operator next question.
The next question is from Marc Goodman of SCB Leerink. Please proceed with your question.
Hey, Mark.
Thanks, Brian.
Yes, we can area net market.
Sorry about that good morning.
So before you pre announced the first quarter sales slide you had talked about gross to net staying high.
And at the same high levels that we were used to seeing kind of on the second half of last year, and you said that would be well into this year.
And then in the first quarter it kind of felt like gross to nets dropped quite a bit but obviously, there's a lot of things that go on in between the gross and the average price and so maybe you guys can talk a little bit about what happened in the first quarter was there any like one time adjustment that helped you in revenues or or why where gross to net so though it maybe.
You could just give us a flavor for how you're thinking about gross to nets for the rest of the year.
And then secondly, Jim maybe you could just give us a sense of.
How we should be thinking about spending.
For the rest of the year the numbers went up pretty dramatically in the first quarter. There was some share.
Share based compensation expense that look very high.
Just wondering if there's kind of a one timer in there or if those things are going to be.
They're each quarter and just give us a sense of.
Thank you.
Thanks, Mark I'm glad to hear you're saying gross to net there load. So thank you for that day, but no.
As you know and what we had always said is that there will be turbulence around gross to net and they certainly are there so many different variables.
Go into a <unk>.
It's something that we did say last year, we would start to do when we werent sure. What the success of that would be would be to start change some of the rules around our affordability programs and so I think first quarter. What you also saw the cycling out of non paying customers.
To more paying customers and that reflects that out or otherwise we're able to identify.
As you know most plans were equal hearing with our competitor in 90 day.
Presenters from answers a few plans, where we have some wins they have some wins and so you saw some of our rural changing that people who aren't on our.
On the insurance coverage and Euro V is theres no reason for us to continue to cover those patients and so.
Part of what you saw was coming off of.
Aerotech and say you might see a decrease in some of those scripts and then going on to you broadly but for us that we are efficient because it meant that we were fine tuning debt more paying customers.
This is going to be a challenging year as you know first quarter always is we had a little bit more success than we thought on getting through the deductibles and co pays for first quarter.
But it's something I would caution people that we will continue to tweak these affordability programs and when we do that there is some learning that occurs and back on for it. So it's not so straightforward that you just get better G. Tanzania say, there. So I would say, let's all be cautious about this year.
And especially as we saw on were surprised by.
On the resurgence in COVID-19 and then also some weather in Texas that affected script. So theres a lot of external variables, let's let's be cautious, but I think after this year you should see more steady and predictable GDN numbers, Jim just wanted to talk about the one time cost that I think.
Definitely increased.
The perception of our R&D spend but I'll remind folks a lot of things get wrapped into R&D spend that aren't always arent R&D.
Yeah G&A is like.
Oh on SG&A as well.
So thanks for that and thanks, Mark for the question So Mark as you pointed out the.
Increase in spending that there are a number of drivers there stock based comp is one of them, which is why we also provide a lens on non-GAAP to see some of those things out stock comp. Obviously when you have stock performance. The way we have there is more there's exercises, but theres also timing of awards.
That play into that as well.
And then outside of the one times on SG&A. There is certainly as we've said in the past there is always going to be timing of how.
How we invest in our in our brand and a pulse strategy and so on any given quarter can see.
<unk> ability, but it doesn't necessarily set the tone for what what what our future is on future quarters, So hopefully that.
Addressing your question.
Thanks, Jim and Merck and next question operator.
The next question is from Charles Duncan of Cantor Fitzgerald. Please proceed with your question.
Okay.
Good morning.
Glenn and team congrats on a great quarter.
Let's see we're juggling call. So sorry, if this has already been asked I wanted to ask a couple of questions about the pipeline in particular is the band Japan I guess I'm wondering can you provide a little bit more color on how you think this advantage of pant will fit within <unk>.
Current <unk> franchise, and then I had a follow up on the on the other pipeline assets.
So the debt.
Japan also represents we did comment very briefly earlier about the flexibility in different modalities formulations indications and as well as non migraine indication, but to start with maybe differentiation in the intranasal. So we've seen every single migraine mechanism action eventually.
Great to an intranasal and northern dies, because you're trying to get a greater speed of onset and also remind you that when patients are nausea or vomiting. It gives an alternate weighted.
Weighted patients can get drug in their body without that so again, we wanted to be at the lead with this robust franchise that we have so with our strategy we will be their first intranasal, assuming we get positive data towards the end of the year years ahead of any competitor and also highlight that some of these <unk> are actually.
Difficult to make into intranasal, because they struggled with liability, but does that Japan is a really unique characteristics and that it's highly soluble so youre going to see the first entry will be in the intranasal for ultra rapid onset of action. We think it's going to be complementary to neurotechnology, it's not going to take away share from air ticket patients generally speaking prefer on.
Oral over intranasal over Injectables in that order and so this would be a nice.
Additional formulation and in the toolkit.
If you have that are really quick onset of action or.
Nauseated or vomiting, and then when you look past to the auto versions, we're going to compete with an oral version for every single day use of prevention for those patients who really need that level and as we know that's the minority of patients that will need that level of daily use, but we will have that.
Then the other oral formulations will allow us to.
Specifically target other disease states and we're excited about that so it really represents a nice expansion on the franchise chez.
Okay. That's helpful. And then just quickly on Charles really is on <unk>.
I know that they are in call. It tough put indications initially, but I'm wondering if for <unk> and or excuse me sure really zone, and spinal cerebellar ataxia and verdict stand in multi system atrophy I'm.
If you could provide a little bit of color on.
Why you have confidence or what you've done to I guess reduce risk with those current clinical trials.
Great question. So I think when you look at where we are with treasuries, though and where that percentage youre right. These are tough indications historically the difference is we're finally coming to these registrational trials that had been performed and designed on the platform of.
Phase II data that showed a signal right. So our strategy is always have these multiple kind of basket trial like approaches or indications because they're tough disorders and the remaining FCA had really nice proof of concept data. We're allowed to then use that data to.
Increased or it does increase our sample size and make adjustments to the scale. So we did everything we can to improve our probability of winning based on our phase III output. So that's why we're particularly excited about FCA same goes for Deborah said I think astrazeneca prior to exiting neuroscience had performed at really nice phase II, demonstrating a dose dependent signal an MSA.
Once again, it's an area, where we've now going forward with an optimized dose higher sample size and a scale. That's been optimized. So we think both of those albeit tough areas increased chance of winning because of the phase two work that was done and then some of the other indications that we pursue debt were a little bit higher risk, but high unmet need where we didnt.
That phase II proof of concept to give us the advantage. So we're excited about both of those readouts and as we said today. We're tracking early MSA will now be a readout in third quarter and.
And by the end of the early next year. So thanks, Jeff.
Very good thanks for taking my questions. Thanks, Operator next question.
The next question is from Tim Lugo of William Blair. Please proceed with your question.
Hey, this is lachlan on for Tim Thanks for taking the questions.
So you mentioned earlier that you expect increased productivity as the market starts to reopen.
Can you sort of help kind of quantify that or just help us think about how much upside there is to the productivity as the team.
Productivity of the team as the market continues to reopen and then.
Secondly, you mentioned the usual payer dynamics on the first quarter.
Were there any.
Was there any pushback that you experienced or any surprises there.
Thank you I appreciate it and I'll turn it over to Vijay to address this.
Thank you so as it relates to productivity and quantifying that.
Once again as well as things have gone for from <unk> and frankly for oral <unk>.
No theres been a bit of a blanket right on this since since the launch and it's because patients haven't readily been going to their doctors clinicians appropriately had not been.
On widely open to two.
On our promotion and to our representatives as well and this is happening across the industry as a whole and so as it relates now to what we think is upside.
As well as we could have done it would've increased what was.
The growth rate of our launch that that is what we expect now is to kind of enter back into what should be substantive growth debt.
We could have seen right since since the launch and so that's that is what we expect to see again I want to be very careful and we want to.
Set up with the right expectations.
We have not seen thus far we don't expect to see just all of a sudden on June one the market opens up broadly interest takes off it will be incremental because that's the way the nation has been opening up.
We're starting to see evidence of that already and so we're very bullish on that.
As it relates to discussions thus far with payers.
There's a lot of work to be done for sure as it relates to the preventive indication, but as I mentioned, thus far dialogue with <unk>.
Different payers and we're well into those discussions.
There is a lot of interest and we're having very good and robust discussions we will not land anything in the near term, we're still waiting obviously to hear back from the agency, so but more work to be done, but thus far on things.
Things look good.
Operator next question.
The next question.
As from Vermeil demand of Mizuho Securities. Please proceed with your question.
Hi, great. Thanks for taking my question. So maybe I also apologize if I missed this earlier, but just in terms of the European opportunity.
Can you talk a little bit more about your partnership discussions it sounds from a few months ago that you were making good progress there just wondering if we should expect something.
A potential approval there or are you planning to go alone.
We needed and then just a second question maybe around the.
As you move from just having the acute label to potentially having prevention as well can you talk I don't have any market research on that you've seen kind of talks about.
On sort of severity of the patients that are coming on generic like how many migraines do they have on a month on average or anything along those line.
Do you think as you get to the prevention side, maybe you can kind of tap into.
More severe patient population I'm, just trying to get a little better sense of kind of where you might be I'll expand your day.
The opportunity thank you.
Thanks, So on the really appreciate it. So you know as you know with any partnerships or potential partnerships, we're very careful not to get into too much specific details around timing or other things around that what I would say is look just like we've said in the U S right.
We always have to be prepared to.
Launch and do things.
On her on and we've proven we can do that ex U S. There is definitely an efficiency of other companies and groups that had preexisting established.
Infrastructure as well as relationships with them.
Pay on regulatory front, so there would be a heightened efficiency ex U S. As we've previously said and the interest has varied from local regional.
Groups are very good in certain markets to larger groups that are global.
It's not surprising that.
One could think of there would be an efficiency and ease of one global partner on.
But that doesn't mean that.
That would kind of take precedent over a really strong local groups. So we have to balance those two and see what.
On the best relationships and economics would be for.
For our investors, but then also who can most effectively and efficiently deliver this globally to patients. So.
That's all we can say about it at this point and stay tuned in.
B.
Additional details that you get there so getting to your second part of the question about.
What are the types of patients coming in.
About a year ago again. This is another area, we were different than a lot of the messaging that traditionally investors have had around <unk>.
Migraine.
A hyperfocus and prevention and I think a lot of people missed the fact that it's actually people with less frequent migraines debt.
Makeup very large numbers in this space of using it more than 65% of our patients.
Have kind of less in that four to eight kind of migraines.
Per month, and so those have traditionally been people for acute therapy.
I think youre seeing that in the great numbers that both ourselves and our competitor are putting up as a very large unsatisfied acute population here, we have not seen a lot of prevention use off label because I think people are very conservative they're waiting for that data. They are waiting for they saw the.
Data on the lancet that we had that was robust I think thats step one step two is getting the approval from the FDA and being able to promote on it. So I think there'll be a lot of growth ahead in this redefining of the space. If we're successful with the NDA of one drug same dose.
Treat both the acute and prevention and finally getting rid of the distinction between these two different categories. So thanks for the question from Elena next question operator.
The next question is from Douglas Tsao of H C. Wainwright. Please proceed with your question.
Hi, good morning, Thanks for taking my questions.
I'm just curious is that we look at the script data on the data that you presented you had sort of really tracked ahead of your browsing on the new to brand and it's sort of now seems to be backing sort of back and forth and maybe you can you're probably having a slight advantage. It just curious if youre seeing anything in the market and obviously, we have the prevention launch which should be.
Quite meaningful inflection point for you, but just on the acute side, what you might be seeing in the near term some of the dynamics of the marketplace. Thank you.
Yeah look we've been very happy I think if you rewind to a year ago. Most people were saying look at your competitor is going to get 70% of this market because they are the established competitor.
You know, it's going to be hard for bio avid to get in there and I think we're very pleased where we are but we're not resting on our laurels. There of course, we want to become the market leader and I think we'll be on that trajectory.
Given the profile and especially with the upcoming <unk>.
Prevention.
As well and I just by BJ to see if he wants to add any.
Anything to that commentary, but.
Yeah don't over interpret the script numbers, especially when we're changing rules on affordability programs and you don't have a line of sight into some of the rationale as to how those affordability program change and then the impact so it might seem as though you have a reduction.
On a reduction in the subset of patients, but again, if it if it's converting people over to being more paying and nonpaying customer then it might look like there is a change in the Rx when there really isn't right Theres just a program wide affordability changes BJ anything on <unk>.
Yes, the only thing I'd add but.
For outlining that it's really since July of last year, if you look holistically.
We've been literally within a few percentage points of one another in <unk> and and again, it's a very very positive thing we continue to be in that space, even with the affordability changes.
<unk> talked about and so we believe absolutely, especially with the market research. So positive in the fullness of time, we will be the market leader and we expect to make that happen that being said this market is huge and there is plenty of room actually from.
Multiple.
Very successful drugs and so we continue to be excited about what's ahead.
We think theres going to be a halo effect on acute if we're successful in prevention right.
If you're on a patient or physician wouldn't you want your patient to be on the on the acute therapy that could also prevent you from to migraine right. So we think there's going to be a nice to have effect here. So thanks for the question on operator next question. Please.
The next question is from Esther <unk> of UBS. Please proceed with your question.
Hey, good morning, Thanks for taking my question.
I have two quick ones first on <unk>.
On the MTO inhibitor can you share your thinking on the commercial environment for MSA.
What you would need to do to educate prescribers to diagnose correctly.
Any color you can share on the regulatory timeline considerations would be helpful. And then I have a quick follow up on Mueller Tech.
Awesome. Thanks for the question, we're really excited about MSA because as you know there is no current treatment for MSA whatsoever.
And as you alluded too often it gets misdiagnosed as Parkinson's but.
Very quickly the right diagnosis is achieved.
Because patients progressed much more rapidly become wheelchair bound and unfortunately die much earlier versus that's a very different.
On set.
With Parkinson's so most of the highly skilled neurology centers that were working with them to call on that C. MSA the diagnosis.
It's pretty straightforward I think where some of the education will be having to occur or is it more of the larger community center neurology offices, where these individuals may get diagnosed with with Parkinson's earlier, and so we have a plan around that and making sure that we get more widespread education about the differences between parkinson.
<unk> and <unk>.
MSA, but like Lake migrate youre going to see the launch in more of a specialty centers first and then.
Branch out from.
There so.
Hopefully that answered the first part of your question yesterday on the second one that share.
Yeah in terms of non attack. It just wanted to see what proportion of patients on batch are also getting scripts on a C. T. R. P right now.
That's a good question.
What we know on what we've heard from folks is that people have used it for a breakthrough we actually don't have a quantifiable number but that's a good question, we'll see if we can.
To drill down on that on that a little bit, but we are hearing that look if you're on any preventative agent, whether it's topamax mab.
Patients continue to have breakthrough in our understanding from clinicians has been really welcome to have a new mechanism that can treat that breakthrough, but I don't have a specific number for you, but we will look into it.
And I think we are unfortunately out of time. Thank you as there. So we're going to have to stop the questions. There. Thank you all are very much for joining our first quarter call and look forward to the next quarter discussion. Thank you all.
Okay.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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