Q1 2021 Adamas Pharmaceuticals Inc Earnings Call
Before we begin I would like to remind everyone that this call will contain forward looking statements, which are subject to risks and uncertainties and statements regarding future events results or expectations are forward looking statements. Please note that these forward looking statements reflect our opinions only as of date of this call. We undertake no obligation to revise or update these forward looking statements and.
In light of new information or future events, except as required by law information concerning factors that could cause actual results to differ materially from those contained in or implied by such forward looking statements are discussed in greater detail and our form 10-Q filed today with the SEC, especially the and under the caption risk factors I will now turn the call over to Neil.
And Mcfarland.
Thank you Peter good afternoon, everyone. Thanks for joining us today.
I will provide an overview of the first quarter and I'll turn it over to Vijay to provide more details on our commercial performance.
The first quarter was marked by continued strong execution of our growth strategy by the <unk> team.
We advanced the commercialization of <unk> coverage by increasing the number of patients being treated and expanding the number of prescribing physicians and launching a second indication for off episodes and following the approval of our NDA and February.
The expanded label differentiates go covering as the first and only medication approved to treat dyskinesia in patients with Parkinson's, taking levodopa based therapy and as an adjunctive treatment to levodopa carbon <unk> and patients with Parkinson's experiencing off episodes.
The S. NDA approval provides a dominance of the opportunity to deepen engagement with stakeholders and a broader set of patients with Parkinson's.
In April we presented data at the American Academy.
Of neurology annual meetings, highlighting the negative social and emotional impacts of motor complications for people with Parkinson's and their care partners.
And respond to these findings and the widespread prevalence of motor complications and we launched a national disease Education program called picture and more time to raise awareness and understanding of off episodes and dyskinesia and.
Additionally, we published new go covering data analysis. This quarter that highlighted go coverage availability, sorry go coverage ability to improve on time without any dyskinesia.
These data emphasized co coverage role and easing motor complications that often hinder the daily activity of people with Parkinson's.
As we continue to make progress on the commercial front and we'd go covered we took several steps and the quarter to strengthen the foundation of our business.
We closed the settlement of our patent litigation with US Monica and following the subsequent acquisition of Oswald ex ER successfully integrated the product into our organization.
While we have transitioned commercialization to one on us as Monica remains the sole manufacturer.
As Vijay will discuss in a minute we plan to expand our commercial footprint beyond Parkinson's disease, leveraging on <unk> ER to benefit patients with drug induced extrapyramidal reactions.
Further during the quarter, we settled patent litigation with Zaidis resolving and the first filer and the challenges from both a go coverage available strengths.
And amended certain key terms of our royalty backed loan agreement with healthcare royalty partners and.
In addition, we took the opportunity to improve our financial flexibility with a successful capital raise to support our growth strategy.
Moving on to the pipeline.
And I recall in 2019, we made a decision to defer further investments and Avs 40 101 hour.
Our investigational modified extended release <unk> capsule for the treatment of partial onset seizures and patients with epilepsy.
Last month, we were issued two new patents for <unk> 40, 101, which we believe will assist us as we continue our efforts to partner or out license. This program.
In summary, our Q1 achievements are aligned with our strategic goals to grow our commercial product portfolio and strengthen the foundation of our business and leverage our operational capabilities to support long term growth and.
And we're looking forward to and exciting year I'll turn the call over to Vijay to review our commercial progress.
Thank you Neil and good afternoon, everyone.
I will begin my comments with highlights of our performance in Q1 with particular focus on the progress we have made with the launch of the off indications.
And provide an update on the commercial strategy for <unk> ER.
Starting with performance.
Let me begin by highlighting that we continue to achieve significant progress in a fluid and complex environment, and which patient appointments remain disrupted in several parts of the country.
To put the strength of our Q1 performance and context, the negative impact of the pandemic on the marketplace was seen through a 21% year over year decline in Q1 patient claims data for levodopa carbon dopa. The primary drug of choice for treatment of most Parkinson's disease patients.
<unk>.
We are pleased to report that despite this challenging environment Q1 total recovery paid prescriptions are tiara ex excluding product from the free trial program grew 21% year over year versus Q1, and 2022 8735 with 7% sequential growth.
Versus the prior quarter.
There was 18% growth and new paid prescriptions or <unk> versus Q1 last year, and 16% growth versus the previous quarter to a total of 590 and Rx.
This steady growth and numbers of new patients coming after the strong and Rx results, we reported and Q4 highlights continued momentum for <unk> and reflects our commercial teams sustained execution.
We believe our strong Q1 performance was aided by improved access and offices with live sales force interactions continuing to increase over Q4, and reaching new highs in March highlighting that our team adapted well to the evolving situation by increasing live interactions with prescribers.
Where possible.
Simultaneously, our digital campaign continues to gain momentum with high engagement from both prescribers and patients.
We also saw increasing momentum with vaccinations and encouraging signs of this leading to better access to all stakeholders.
We believe that this led to an increase and in office patient visits and thereby increasing comfort by physicians and prescribing new medications.
Turning to the orphan indication we are excited to be launching this label expansion as it has made go covering the first and only product indicated both for the treatment of off episodes and dyskinesia. The two extremes of the motor complications spectrum, thereby helping prescribers avoid the compromises previously.
Larry and managing their parkinsons patients.
While these are still early days, we believe that we're seeing positive signs at this stage of our product launch.
First we see a mix of prescriptions spanning the entire movement complications spectrum with patients prescribed recovery being diagnosed with dyskinesia.
Or both.
Island and Q1, most prescriptions remained for dyskinesia. These are early signs of <unk> expansion into the treatment of off episodes.
Second we have seen a significant increase in demand through prescriptions and a continued increase in new prescribers to the brand.
Third on the reimbursement front peers have been processing and approving prescriptions for recovery for patients experiencing off episodes using the same criteria and processes that we have seen for dyskinesia.
As part of the 2022 cycle of discussions we continue to engage with payers and have delivered clinical and health economic value presentations to the formulary decision makers at the major health plans.
Meanwhile, we are pleased with the 93% payer approval rate, regardless of cocoa dairy formulary status, which indicates patients are getting access to our drug.
With the addressable population for recovery expanding from an estimated 200.
Two 400 to 500000 with the approval of the orphan indication we fielded quantitative market research in Q1, and this research confirmed the significant market potential for recovery due to its differentiated clinical profile.
Our focus is to efficiently unlocking the expanded opportunity by fielding our sales force and multichannel campaigns to educate stakeholders to raise the urgency to treat motor complications.
Differentiating recovery to drive demand and ensuring unhindered access to the product.
Transitioning to <unk>.
Q1 represented the first quarter of commercialization after the patent settlement and product acquisition.
Consistent with Abdominous values, the team successfully integrated <unk> into our product portfolio with existing patients receiving uninterrupted care and also brought new patients to the brand.
We completed a market assessment of the opportunity for asthma and <unk> across multiple therapeutic areas.
Based on the findings of this analysis, we see opportunity in the indication for the treatment of extrapyramidal reactions in adult patients for a range of conditions, including tardive dyskinesia and dystonia.
Our initial focus is on psychiatrist who are familiar with the specialty pharmacy process due to their current use of branded products.
And who prescribe amantadine immediate release and their practices.
Our analysis identified patients and these practices, who could benefit from a once a day IR amantadine option.
Beyond ensuring access to existing patients we are being disciplined with our gated resource investment plan.
As communicated on previous calls, we're maintaining the level of prescriber promotion for <unk> CR with tele detail team.
We will modulate our approach based on the results that we see in the coming quarters.
With good coverage remaining our priority.
Q1 continued to present, a fluid situation and the marketplace and we are incredibly proud of our team for remaining focused on our mission to serve patients.
I will now turn it over to Chris to provide an overview of our financial performance.
Thanks, Vijay and good afternoon, everyone.
Please refer to our press release issued earlier today for a summary of our financial results for the first quarter of 2021.
Total revenues for the first quarter of 2021 were $19 3 million, which includes recovery product sales of $17 7 million <unk> product sales of 300000 and royalty revenue earned from Nims, Eric of approximately $1 3 million.
Product sales of <unk> coverage and the first quarter increased 22% over the same quarter last year, primarily driven by volume growth.
Gross to net for the quarter was approximately 26% which is in line with the guidance range we provided.
Our gross to net expectations for the balance of the year remain at low to mid <unk> for the second quarter and declined to the mid teens for the second half of the year as patients move through the Medicare part D coverage GAAP.
R&D expenses for the first quarter of 2021, or $1 8 million compared to $2 5 million from the prior year quarter as we close out the <unk> 51, or two multiple sclerosis program.
Current quarter, SG&A expenses were $26 6 million compared to $24 6 million and the prior year quarter.
SG&A expenses for the first quarter of 2021 represent the execution of our go covering commercialization strategy as well as the integration of <unk> ER.
We will continue to be disciplined and our investment and the business with a focus on being accretive in the near term.
Cash and investments as of March 31, 2021 were approximately $127 4 million.
As we have previously discussed during the first quarter, we closed our $7 5 million settlement of patent litigation and acquisition of asthma CR as well as raised approximately $66 $5 million through a combination of a public equity offering.
And at the market common stock sales.
Our 2021 expense guidance reflects thoughtful and disciplined investment and the business as we execute on achieving the full opportunity for <unk> as well as discovering the potential for Arsenal SCR.
While the environment remains fluid the team's performance and our strong cash position give us confidence that we have the right strategy and with our recent expanded label for off episodes, great excitement about the opportunity ahead of us.
This concludes our prepared remarks with that I will open the line for questions operator.
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 and confirmation total indicate that your line is and the question queue you.
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 your handset before pressing the star Q1 moment, while we poll for questions.
Thank you. Our first question comes from Marc Goodman with SBB Leerink. Please proceed with your question.
Yes, hi.
So first of all I just want make sure I understand when you mentioned before 101 product you got two new patents. So the idea is still not to bring that product internally right, you're really going to partner to out license that youre not going to do it internally and maybe you can comment on.
Business development or how youre thinking about things right. Now in addition, and then and then secondly, just tactical coverage for a second and I do want to ask about them.
Commentary about the payer rates.
And I guess, how you know that this new indication is really really helping can you just go through that one more time and as the access.
And getting better are you, saying that the payer rates, no matter, which indication and theyre going for whether its the off on whether it's the dyskinesia youre getting reimbursed now, whereas before you warrants. So it's clear that the syndication is helping you at least from a payer perspective. Thanks.
Thanks, Mark I'll answer the <unk> 41 on one questions and I'll hand, it over to Vijay to take care of the access questions for <unk> covering.
So youre absolutely right.
And our have been evaluating the potential value of 41 on one and exploring partnership opportunities. These two new issued patents. We believe we will continue our efforts and moving 41 on one to being a partner and product, we will not be investing and that internally.
P J.
Sure. Thanks, Mark for the question I will say from a payer perspective, one of the first things we did with the approval of the orphan indication was to move rapidly to make them aware and update their formulary files in terms of our indication.
For recovery and a second.
Approval for the off indication so that happened pretty rapidly after approval now one of the things. We've been monitoring. Since then is are we getting prescriptions for patients identified as.
Being diagnosed with off.
<unk> or with often dyskinesia episodes and are those prescriptions going through and receiving payer approvals and the good news is that we're seeing those prescriptions and they are going through and Theyre getting paid for the 93% approval rate is what we have seen over the last 12 month period, we're very proud of that fact and it in.
The case that access is being provided to patients.
With respect to what is happening with off it's a little too soon and we will be monitoring that carefully.
Okay.
Yes.
Thank you. Our next question comes from Tim Lugo with William Blair. Please proceed with your question.
Okay.
Hey, guys. This is lachlan on for Tim. Thanks for taking my questions you mentioned, you've been saying encouraging new prescribers and sort of.
Throughout the start of the year can you just help us set our expectations.
And what kind of growth, we should expect that.
Okay.
On the balance of the year and then.
And second of all.
Yes, <unk> bin.
Providing a new indication.
What's the major pushback.
Pushback, you've been hearing from the field and terms and conditions.
Not yet.
Prescribing to patients with all.
I realize it's early but would be interested to hear if there's any commentary there.
Thanks, Lachlan, let me start off by saying I am really pleased with the continued strong execution of go covering and as we mentioned in the prepared remarks on a quarter over prior year quarter perspective, we saw a decrease of 21% and carbon Opel levodopa claims.
Patient claims and and I think that the continued momentum and we had coming out of 2020 is really showing us that our strategy is continuing to work and a very fluid and complex environment. After a good start with the launch of off but we've had another.
Very strong performance with 21% year over year growth for go cover that we are quite proud of and Jay will talk a little bit about.
And any pushback sure.
In terms of the.
Off indication.
There is an important aspect to remember that there is an established treatment of symptomatic management of these patients with all of the variety of options that have been available. So far so it requires education of the connectivity between often dyskinesia and the.
Since the management of patients and that education will take time, so the number one pushback we get is.
Recognizing it's early and launch we've got to recognize that physician clinical practice will have to change from the symptomatic management of off or symptomatic management of dyskinesia to a comprehensive management of patients across the motor complication spectrum, but having said that we're extremely pleased with the progress we have seen and the early days.
And validated potential the significant potential we see with the market research and.
And that's where I'll leave that.
Thanks.
Okay.
Thank you. Our next question comes from Jason Butler with JMP Securities. Please proceed with your question.
Hi, Thanks for taking the questions and congrats on the demand growth and the quarter.
A couple from me first of all can you in any way quantify on the B.
Well, let me say the on Rx number looked impressive.
Can you and anyway quantify what percentage of those to what proportion of those patients were driven by the new label.
The majority of what we saw Jason came from patients who are diagnosed with dyskinesia.
And what we are pleased with is the fact that we are seeing consistently.
Prescriptions coming in with patients who are diagnosed with dyskinesia, but also off.
Our off alone so that mix of patients that we've started to see consistently is what is giving us great optimism about the growth prospects and we are continuing to focus on breadth and depth of prescribing as a and important strategy for our growth moving forward.
Okay great.
Great and then you mentioned, obviously the pandemic continues to be.
And you know and and uncertainty.
And then and impact.
<unk> in terms of in person detailing obviously, we saw.
Spike post holiday period was this a headwind at all and the quarter and and if it was do you expect any improvement as cases are now dropping and hopefully we see resist restriction of these and as appropriate.
It remained a headwind in parts of the country access has varied in parts of any parts of the country, depending on what the local situation is but the good news is that we have been maintaining a sales force level of activity at pre pandemic levels for a while now it is a mix of both live and <unk>.
Actual call, but the important aspect of Q1 is we have started to see the increase in live calls as a proportion of the total calls that we've been making with a new high being seen in March which is encouraging that the inc.
The momentum with vaccinations is leading to greater access overall.
Okay, Great and then just last one from me and.
It's gone on and off we are.
You mentioned that tele detail or any sense of how promotion sensitive the psychiatrist that youre targeting might be to the drug and essentially the value of all considering or went to consider and person detailing and and maybe how that ties and also to you.
Plans about publishing the optimal ex yard.
Clinical results.
Yes, Jason. Thank you so maybe I'll start with the latter and then I'll hand, it off to Vijay to be able to talk a little bit about the opportunity, we see and the gated investment approach as we try to discover the potential for <unk> ER.
In terms of the phase III data for <unk>, we are committed to moving that into publication.
We're analyzing that data today.
Andrea and is actually on the call with us today, but he and his team are doing a great job of.
On unwinding that and getting it ready for publication and so we hope to get that and the public domain.
<unk>, which again, we hope will further differentiate the products and provide some clarity for physicians.
With respect to <unk> and promotion of <unk> first off we are we are.
Quite excited to be expanding beyond Parkinson's disease, and going into the extra criminal reactions and adult patients space and we are going there with a label that's identical to the amantadine IR immediate release label. So recognize that we have the indication for it.
And we have assessed that and IR ER options, such as ours and molecular has potential in that space to serve patients better. However, we are still discovering the full potential for ALS and <unk>. We are planning to move forward carefully with a gated investment plan.
Maintaining our focus on <unk> coverage and we will keep you posted I am sure on this forum and many as as time goes on.
Great sorry, if I can squeeze one last quick one and Chris any impact of inventory, especially from <unk> in the quarter.
Okay.
Inventory can change by a couple of days between quarters. So no significant shifts there to note.
Great I appreciate taking all the questions and thanks again.
Thanks, Jason.
Thank you. Our next question comes from Steve <unk> with Cowen <unk> Co. Please proceed with your question.
Hi, Thanks for taking my questions and congrats from Macquarie.
And looking forward and this current quarter. So Q2 are you seeing an acceleration and adoption of off and putting your early expectations for the split between dyskinesia versus off price is both for the year.
And <unk>.
And also right now, it's encouraging to see that the authentication and things and birthday, Paris, So could.
Could you clarify if there will be any changes as you negotiate payer contracting and 'twenty 2022 and all.
And it would be helpful. Thank you.
Yes, sure Stacy I would start with saying we are pleased with the continued growth. We are seeing building off of the momentum we had in Q4 of last year and that reflects on the strong continued execution of our commercial strategy and and a validation that this commercial strategy.
Is.
Proven and is delivering results in a fluid and complex environment and I think that is something that makes us feel very good at the end of Q1 and.
And as well as the fact that compounded with that we are seeing a good start to the off launch and we're feeling positive about our footprint expanding beyond Parkinson's disease, all of which get us quite excited about our prospects for the year.
In terms of your second question.
The conversations with payers have been good we've had multiple clinical presentations with payers and we're engaging them and conversations.
The fact that they have been approving these.
<unk> four off is a very positive sign.
And I think.
And we'll keep monitoring how else do insurer access to patients.
Okay.
Thank you. Our next question comes from David <unk> with Piper Sandler. Please proceed with your question.
Hey, Tim This is Zach on for David Thanks for taking my questions. Just a couple from me I was hoping to get your latest thoughts on your plans for the free trial program and I forgot February for how long do you plan to keep that program going and placed after a societal norm is normalization of COVID-19 and then if you could just remind me.
If you expect any sort of additional investment and sales and marketing to support the new indications such as to your latest thoughts on their commercial strategy here would be helpful. Thanks.
Yes, sure Zac, let me begin with the free trial program. The free trial program is designed to provide clinical experience to new physicians coming on board or for new patients who want to trial the product and that is the intent of the program and we see tremendous opportunity to continue to bring on new <unk>.
Physicians and new patients and the evidence on the that we have from Q1 is that it is working and that we have continued to expand our prescriber base and we're continuing to see new patients coming on board. So as long as we continue the potential for <unk>.
Growth there in terms of new prescribers and new patients to the brand we will keep the free trial on board.
And in terms of our sales force and marketing expense.
We'll say that in going from and analysis, as we said and our previous call.
Because of the additional patients who are diagnosed with off being in the same practices being treated by the same physicians that we call on we believe that we are right sized with our sales force to unlock this opportunity.
And and.
We're clearly hopefully seeing the results.
And of that in the first few months of launch so we feel good about it.
Okay.
Okay, great. Thanks.
Thank you. Our next question comes from Ross Silver Roger with H C. Wainwright. Please proceed with your question.
Hi, This is mas on from our ramps of Rajiv.
And for taking our questions I was wondering if you could provide some granularity on.
Tandem future marketing strategy for recovery and awesome, Alexia together and what the physician feedback has been regarding formulary that might include on comments on treatment with both of these drugs.
Okay.
I think the first recognition.
And that we're hearing back from is these are two different products with two clinical datasets, two different indications and and ability to serve two different groups of patients and.
And our marketing strategy is to ensure that we educate on just that and bring these two products two to the appropriate patient groups that can be addressed with their indicated.
With their indications and and and grow both of them.
Okay, very useful and a question if I may on your recent frontiers and neurology paper.
You presented a unique analysis, whereby you show an increase and on time without any dyskinesia.
Rather than measuring troublesome and non troublesome categories are you envisaging that this will become a standard and.
Future PD clinical trials across the board.
Whether that becomes a new standard and not sure that depends on how the neurologist fused captured I think it was more important is that we capture and what is important to patients. So good on time without any dyskinesia is whats really meaningful for patients and Thats, how we did the analysis and congrats.
And to show that recovery shows significant improvement and on time.
Okay. Thank you and our final one if I may just regarding the competitive landscape.
<unk> levodopa induced dyskinesia.
On.
And I was wondering if youre familiar with at ex therapeutics, and and how youre viewing their upcoming phase <unk> three trial next quarter and evaluating their allosteric modulator.
And so we are we are familiar we track all of the competitors and the space.
And the ones that are.
And I have been recently approved and the ones and develop and along with the ones who have recently discontinued their programs I.
I really don't have much to say about the program.
But.
As we've seen these.
<unk> approval.
Approval.
Episodes products approved over the last year or so what we've found is is that there is an incredible increase in the education and disease awareness for the community. That's been helpful for for products like <unk> covered.
Alright, very useful thanks for taking my questions.
Thank you.
There are no further questions at this time I would like to turn the floor back over to Neil Mcfarlane for any closing comments.
Thank you operator, and these are exciting days for Adonis I want to thank our employees for their dedication to our mission to improve the lives of patients and I. Appreciate your time and questions and look forward to updating you on future calls have a great day.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation have a wonderful evening.