Q1 2021 Jaguar Health Inc Earnings Presentation
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Good day and welcome to the Jaguar Health Investor Webcast. Today's conference is being recorded before I turn the call over to management I would like to remind you that management may make forward.
Looking statements relating to such matters as continued growth prospects for the company uncertainties regarding market acceptance of product the impact of competitive products and pricing industrial industry trends and product and technology initiatives, including projects in the development stage with.
You may not achieve scientific objectives, all meet stringent regulatory requirements.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements.
These statements are based on currently available information and management's current assumptions expectations and projections projections about future events.
While management believes that its assumptions expectations and projections are reasonable in view of current available information you are cautioned not to place undue reliance on these forward looking statements. The company's actual results may differ materially from those discussed in this call for a variety of reasons, including those disk.
Tribes in the forward looking statements and risk.
Factors section of the company's form 10-K for the year ending December 31, 2020, which was filed March 31st 2021, and its other filings with the SEC, which are available on the Investor relations sections of the Jaguar website.
Except as required by law Jaguar contained.
Jaguar Health undertakes no obligation to update or revise any forward looking statements contained in this presentation to reflect the new information future events or otherwise. Additionally, please note that the company supplements its condensed consolidated financial statement presented on a G. A a P basis pipes.
Providing gross sales non G. A a peak EBITDA and non G E b recurring EBITDA.
Jaguar believes that the disclosure items of these non GAA P measures provide investors with additional information that reflects the basis upon which company management assesses and operates the business. These non G. P financial measures should not be viewed in isolation or as substitutes for G. P. Net.
Sales and G. A a P net loss and are not substitutes for or superior to measures of financial performance in conformity with G. A a P.
At this time, it's my pleasure to turn the call over to Lisa Conte Jaguar Health founder President and Chief Executive Officer, Lisa the floor is yours.
Thank you. Thank you for that for those.
Statements and thank you all for joining our webcast today.
My name is Lisa Conte.
<unk> and CEO of Jaguar health in our wholly owned subsidiary in the United States Snapple Pharmaceuticals.
And I'm, so pleased as I am.
I'm also a director of our new Italian subsidiary Knapp L E U.
Today, we will update stakeholders on the progress of naphtha used proposed business combination with Dragon stack.
The progress of our ongoing phase III trial in cancer therapy related diarrhea.
And of course, the financial performance of the commercialization of my testing for.
First quarter of 2021, specifically in comparison to last year, the first quarter of 2020.
We're going to start with the key financial results for the first quarter of 2021, which will be provided by Carol lies at Jaguar as Chief Financial Officer.
Before we jump in I would like to let all of you participating today know that we will have a brief Q&A segment at the end of the webcast to address questions. If any submitted in writing.
<unk> can be submitted via the webcast link for today's event that appears on the events and presentations page of the Investor Relations section of Jaguar website U R. L for Jaguar website is Jaguar got health.
Okay, we'll now move along and start with the key financial results for the first quarter of 2021, and I'm going to turn it over to Carol lies that Huron Carole.
Well, thank you Lisa and thank you all for joining our webcast today.
Key financial highlights for the quarter ended March 31 2021.
No.
My testing net sales during the first quarter of 2021.
Approximately one 2 million.
And <unk> 9 million in the first quarter of 2020.
This first quarter 2021 result represents an increase of approximately 43% of the same period in 2020.
Or an increase of <unk> 3 million quarter over quarter.
My testing gross sales during the quarter the first quarter of 2021.
Approximately four 6 million and $1 3 million in the first quarter of 2020.
This first quarter 2021 result represents an increase of approximately 250% over the same period in 2020.
For an increase of $3 3 million quarter over quarter.
Total by testing unit sales volume increased by approximately 6%.
First quarter of 2021 over.
Over the first quarter of 2020.
U S prescriptions for my Tessie.
Decrease slightly by 2% in the first quarter of 2021.
Compared to the first quarter of 2020.
Prescription volume is the best estimate of patient demand while unit sales volume may reflect varying buying patterns among wholesalers as they manage their inventory levels.
This can result in differences between these two metrics.
The company believes the COVID-19 pandemic played a role in the slight decline in prescription volume.
The pandemic, resulting in fewer patient visits to their health care providers and.
And subsequently fewer opportunities to diagnose new mitek for patients.
This is consistent with overall pharmaceutical industry performance that show the negative growth in total U S prescriptions for all drugs and decreases in new to brand prescription.
Additionally, pandemic necessitated travel restrictions negatively impacted the ability of the company sales personnel to promote my test to.
<unk> decisions in the first quarter of 2021.
For the first quarter of 2021.
The loss from operations was $8 8 million.
Compared to a loss of $7 7 million in the first quarter of 2020.
Our loss increase of 15% or $1 1 million quarter over quarter.
The net loss for the first quarter of 2021 was $12 million.
Paired to a net loss of $7 9 million in the first quarter of 2020.
<unk> 51, 3% for approximately $4 1 million dollar increase quarter over quarter.
In addition to the loss from operations.
Interest expense increased by $1 7 million from $199000.
In the three months ended March.
31 2020.
Two one for $9 million for the same period in 2021.
Primarily due to interest expense incurred on royalty interest agreements.
<unk> exchange note too.
Additionally, there was a change in fair value of financial instruments, and hybrid instruments designated at fair value option losses increased $598000.
From a loss of $1000 in the three months ended March 31 2022.
A loss of 599000 for the same period in 2021 designated as cash.
Fair value option.
That concludes my recap of high level financials with first quarter of 2021.
I will now hand, the discussion back to you Lisa.
Thanks Carol.
Okay, I'm now going to move to.
Nappo EU, which is the name target of Dragons back.
I'm happy to announce that Dragon stack like Jaguar subsidiary Napa U has recently been successfully incorporated in Italy and has brought on two remarkable board members.
The process of incorporating Dragon stack to Dragon stacks founding sponsor, Josh Mailman, a little longer than hoped a lot longer than hoped to the factors such as pandemic necessitated administrators and government office closures and delays the same issues, we faced in the timing to get Nappo EU incorporated in.
Josh has indicated that he expects the financing of Dragons back with naphtha with the EU as the named target for merger to be completed by the end of June 2021.
We too are confident of that timing, we are both being advised by global and Italian banks and expect to hold another joint communication. This month, introducing the board members drug development update.
Of course, the key business activities.
I know this feels long I received the investor messages. So let me say that again, Josh has indicated that he expects the financing of Dragons back with Napa, we knew as the target for merger to be completed by the end of June 2021. This year and we too are confident of that timing.
In the meantime, the profile of our drug development for the European marketplace for COVID-19 related diarrhea is moving with deliberate speed being funded now by the parent corporation and targeting an accelerated regulatory pathway conditional market marketing authorization by the EMA the European.
As soon as agency, which is the European FTA for COVID-19 related diarrhea.
Daily Life provides an interesting analogy I'm sure you've all heard other 17 your emergence of the cicadas. It made me think what was Napa pharmaceuticals doing 17 years ago.
I look back at that time, we were creating the manufacturing process and transferring that technology, the manufacturing process for cross sell them or to India.
That is currently part of the approval for my Tessie.
Right interesting most people don't realize that the two most common reasons that new drug applications fail, because the safety and manufacturing issues. As we are progressing in development pipeline indications for cross sell them or follow on indications copolymers, such as COVID-19 related diarrhea, and cancer therapy related.
Diarrhea. These are planned follow indications for a product that is already approved for HIV related diarrhea are currently commercialized Mackenzie with chronic safety.
And of course, GMP manufacturing and under F. D. A botanical guidance is the only oral plant based F D. A approved drug.
For cancer therapy related diarrhea, as a reminder, we are in the midst of our pivotal phase III trial with FDA agreement on trial design.
<unk> M D. Anderson agreed to be a participating site and interestingly Dr. Pablo adhesive from MD Anderson had a poster accepted for poster presentation at next month's <unk> annual meeting the American Society of clinical oncology.
And this poster is regarding patient outcomes associated with cancer therapy related diarrhea. The title of the accepted poster presentation is the impact of cancer related diarrhea unchanged is in cancer therapy patterns real world evidence.
There are two additional publications at Astro by key opinion leaders accepted for online publication as part of the event, which is being run virtually this year.
On similar topics of the important benefits of managing diarrhea in cancer patients.
<unk> is the most common symptom associated with cancer therapy, and there are no approved agents, specifically tested and approved in this patient population.
We are quite pleased with the attention as these activities engaged the oncology world and provide pre education to the benefits of managing diarrhea pre education to the time when we complete the trial and are able to launch and commercialize my testing for this indication.
As announced this past Friday, the annual meeting of stockholders of Jaguar Health was held on May 13th and was adjourned until Friday June 11, 2021, because there was an insufficient number of shares of the company's common stock present or represented by proxy to reach cash.
From.
Stockholders have thus far strongly supported the proposals and we needed an approximate additional 11% of the company's eligible common stock outstanding as of April 12, 2021, which is the record date for the meeting those are the shareholders who are eligible to vote.
And they need to be voted to reach quorum.
And we actually even need more to have sufficient votes to approve the proposal to increase the company's number of authorized shares.
So this is important without additional shares.
We will be compromised in our ability to react and respond to strategic options, which may include potential product acquisitions may include equity financings is deemed.
Important and valuable.
And in the shareholders best interest by the board in any potential use of equity for.
For the devaluation enhancement activities of our commercial operations, we encourage all eligible stockholders, who have not yet voted their shares for.
Or provide voting instructions to the broker other record holder. Please do so prior to the annual meeting.
Is your participation is important.
If you would like to speak to me prior to your vote.
Free to reach out to Peter Hodge, who is responsible for investor relations at Jaguar to schedule a call.
It's an important vote and it's important to me that all our shareholders have the opportunity to understand why it hasnt common vision with the recommendation of the board of Jaguar.
With that we will now address written questions.
And.
I'm going to go to a different location here.
E.
No other written questions that have come in so give me a moment.
Okay, I will get there.
Yeah.
Okay.
Yeah.
No.
There's a question.
From one of our analyst day.
Data from investigator studies, including what and timing on potential data. So we have a couple of investigator initiated trials that are going on right. Now. There is one that has completed which is for cancer therapy related diarrhea, it's called the Hulk study. It is it was completed at Georgetown So the key thing.
By an investigator initiated trials is that it is exactly as they are defined investigators initiate them.
They ask companies to support them in our case, we supported this drug. This is a study that's actually is being funded by Genentech and it was run in cancer patients on Herceptin.
Breast cancer and diarrhea associated with debt.
Epic journey.
Epidermal growth factor receptor antibody.
And so.
So we don't have control over the data, but I would suspect since the trial is over that that data will be out sometime in the next weeks or months. It did miss the ask a deadline, but there are additional cash.
Cancer meetings later this year, so we're very excited and anticipating that.
There are one to two other investigator initiated trials that are enrolling right now one is in functional diarrhea, and one is in idiopathic diarrhea. So those are rolling we don't have data from those.
And there is one additional study which was non investigator initiated for the phase four study looking at microbiome restoration and important topic in our on label in HIV patients and that's a study that we ran and data is being analyzed from that study right now so that should be.
Out in the next same thing weeks or months.
Another question was what is the total addressable market for cancer therapy related diarrhea, Theres, a lot of drugs for chemotherapy induced nausea, and vomiting, but not for diarrhea.
So the numbers that we have there.
Our.
And if that is correct there is great.
A great number of drugs for chemotherapy induced nausea, and vomiting in fact sales.
For for this indication in 2013 were $620 million. It's expected. This market is expected to be over $2 $5 billion by 2022, just around the corner and what's interesting is the comparison is chemotherapy induced nausea and vomiting.
Is typically an issue for the first couple of days for perhaps the first three days in a chemo cycle, but we're looking at now with cancer therapy related diarrhea is a chronic situation from epidermal growth factor receptor anybody's tyrosine kinase inhibitors about three dozen of these agents.
That are utilized for adjuvant therapy for patients staying on them for a year or two or three to keep them.
In a remission state and in a healthy state.
Most of these agents if not all of these agents are working by a mechanism that induces fluoride mediated diarrhea secretly diarrhea, which is the way our product works.
So there are about 650000 cancer patients who received chemotherapy in allocations oncology clinics. So this is in the United States chemotherapy induced diarrhea is the most common side effect and as I mentioned, there are new agents, specifically tested or approved in this indication.
Sure. So my Chelsea is the leader of first in class.
Our new way of managing the disease.
And it's expected to be about 50 to 80 per cent of the patients are dealing with diarrhea, either chronically or chronic episodically.
<unk> quite blockbuster in terms of the number of patients that can benefit the number of lives that can benefit and as well as the financial return to the company.
And as I mentioned with the publications that are coming out and ask or this is not just an issue of patient comfort, which is at a very very important issue, but it's also a matter of allowing patients to stay on their lifesaving cancer therapies, not take drug holidays not go to reduced.
Therapeutic doses because of the siding side effect of diarrhea.
And that affects patient outcome that becomes disease modifying and also the cost of the there are many patients for example, with <unk> about 40% of grade three diarrhea or worse grade three we'll put you in the hospital for a need for <unk>.
Hydration, so the expense associated with that.
So that's that question.
E.
Another question.
Let's see sorry about that.
Okay.
The status of NAPCO EU I think this is the third question I gave that status. So it is it is moving forward. We are as I mentioned, we're quite confident in.
At the end of June as is Josh, which is dragging the stack which is.
The organization that will be financed to merge with Nappo EU.
And then there's a question about tele health.
And.
So tele health has been quiet.
Interesting.
So.
What we heard from some of our treating physicians and HIV. If they were to do a virtual appointments with their patients.
Got less reimbursement so they had to have more patient appointments.
And when they each IV patient has less time with.
Their physician.
Often what gets cut or those questions about guidance are those questions about Gi health because they focus on their anti Retrovirals medicine.
And you know if they're dealing with accelerated aging issues that might be cancer or some other issues. So we're quite pleased that as offices are opening we're gonna get patients back to face to face.
Appointments with their physicians, we don't currently have any tele health.
Initiatives.
Beyond what's going on in the physician's offices themselves. We are looking at to explore new ways of working with some of these companies on our own initiatives and some of the innovations that have occurred because of the pandemic and we'll see how that goes in the next in the next year or so.
Yeah.
Let's see.
And I think that those.
For those questions so let's see.
How many additional shares are being requested.
And Carl maybe you can help me out here Peter is it 150 million additional shares that are being requested.
Okay.
140 million additional hires 249. Thank you. So we currently have 150.
<unk> shares that are authorized almost all of those are utilized on a fully diluted basis, so $140 million, which is not an indication that we're using that number. It's just to have it done and so we don't have to come back and do this in any foreseeable future because he said there.
Shares are important as a commercial organization with one product of course for always on the outlook for business development activities and there are some business development activities. For example that are it's it's more valuable in our opinion for shareholders to utilize shares rather than to use cash.
Cash for example, so the company really needs to have additional shares to operate and the number as I said, it's just so that we don't have to be coming back and doing this in the next five years or so.
Okay.
Do we have any additional pharmaceuticals in the pipeline.
So our philosophy for drug development is risk mitigation. So.
Drug development in the pharmaceutical industries is risk based pharmaceutical development is exactly what it says it's risky and as I mentioned for my test do you from a cross sell them or we already have two of the most important issues two of the most risky issues. When you file a new drug application addressed which is safety and.
In particular, chronic safety and commercial manufacturing and so what we do with our six or seven follow on indications is take as much risk out of the pipeline as possible. How do we do that what's left is to achieve pivotal trial results that show that the product works to the.
Testicle satisfaction of the F D. A so we meet with the FDA and spend the time. This is not a rapid process and spend the time to gain their agreement on patient enrollment criteria on trial design on endpoint definition on the statistics that will be used for the endpoint definition, we have well over.
A dozen studies published studies with copolymers, who we understand what is the endpoint what is the powering that is necessary that shows that the product works and to the satisfaction of the FDA and we don't want to compromise on that experience and that knowledge in our trial design for.
For example for our cancer therapy related diarrhea, we spent close to two years working with the F. D. A to come up with a design and a common vision of design and endpoint definition of statistics that we feel a mirrors. The successful design that we had in our pivotal trial for the HIV the approved <unk>.
Occasion, and B will in fact be successful and C will in fact allow not only for enrollment for the trial. So you don't want to have criteria that limits the enrollment of the trial because its so strict but also therefore will support a label that will allow for broad utilization.
As many patients as possible that can benefit. So for example, the cancer study will we expect to have final results such a long study, it's about 240 something patients.
By the end of second half of 2022, and that's taking into account a bit of a slow up.
Has occurred during the pandemic when there are certain sites that we're managing COVID-19 and we're not able to open up and sign on for our clinical trials.
Which is a changing right now.
Okay.
And the other question.
How is the employment of Napa EU managed Nappo EU is currently searching for three key positions managing director essentially a business had president head of Nappo EU achieved.
Medical officer, and head of regulatory so it will be there in Europe will be there in Italy employed there at this time there is a signed management service agreement with key personnel from Napa Pharmaceuticals. So nappo EU is progressing or I should say the COVID-19 indication.
I indicated in my comments is progressing it has not slowed up in any way.
Based on support from Napa Pharmaceuticals, Jaguar Health, the parent corporation here in the United States, and that's adding value to Napa, we use for NAPCO EU is continuing to gain in value as it is the named target of a dragon staff.
Okay.
Is there any update on the nomad. So the nomad is the nominating advisor, it's basically the index sort of between and investment banking had governance body. When you list publicly.
On the aim exchange in Italy.
And so we will as I said, we expect to have a joint assess especially in a joint announcement as we did in the past with Josh Mailman and at that point, we expect to be naming the organizations that we're working with so we there are details of engagement letters et cetera that need to be worked out.
And then we'll be naming the banks that we're working with.
What is the status of emergency authorization with long haul or is it granted only upon Napa U I P O.
So the drug development process with the EMA, which is the equivalent of in Europe of the in the European Union of the FDA here in the United States is unrelated.
In it you know.
Unrelated to the Napa EU IPO so.
So that as I said is progressing we have met with the European regulatory agency.
We have agreement on a COVID-19 related patient population more of the acute is that did that qualifies for conditional approval and we've been asked to provide a protocol synopsis, which we have provided and waiting for a response on that.
And in the meantime, preparing to initiate the clinical trial in Europe, we've already identified the CRO. The clinical research organization that we will be working with and that is moving forward. So there is nothing that is slowed up and as I said. This is a pathway for drug development pathway, but it's unrelated.
Good to the IPO or the stack.
Financing or the merger with net bookings.
And.
My other message was a congratulations on the financial metrics, that's nice and I think that those are all the questions.
So Peter did I Miss any.
I wish I believe all the questions that we can address had been had been addressed.
Terrific, Okay, well, thank you everyone, who listened in and thank you everyone who participated thank you for your support of Jaguar and Napo Pharmaceuticals, and now Nappo EU in Europe, we are energized. So I'm glad we did this early we have a full day ahead of us. So that's for all of you be healthy be safe and well.
Tom.
We'll have another session in the next couple of weeks as I mentioned.
Yeah.
Okay.
Okay.
Ladies and gentlemen, this concludes today's call. Thank you for your participation you may now disconnect.
Okay.
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