Q2 2021 Opiant Pharmaceuticals Inc Earnings Call
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Please standby.
Good day and welcome to the Opiate Pharmaceuticals second quarter 2021earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Ben Atkins, Vice President of Communications and Investor Relations. Please go ahead Sir.
Thank you operator, and thank you all for joining us for this afternoon.
With me on today's call are Chief Executive Officer, Dr. Roger Crystal and Chief Financial Officer, David is true.
Good afternoon, Opiates issued a press release announcing financial results and providing a business update for the 3 and 6 months ended June 30 of 2021.
Please note that certain information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act.
We caution listeners that during this call <unk> management will be making forward looking statements actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in <unk> news releases and SEC filings, including in our annual report on form 10-K for the year ended December 31st 2020 and subsequent filings.
This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast August 5th 2021.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect the events or circumstances. After the date of this conference call.
Now I'd like to turn the call over to Roger.
Thanks, Ben and the very warm welcome to you all.
We're pleased to provide you with an update on our second quarter, but we have made significant progress.
With <unk> 003, nasal nalmefene for opioid overdose alongside strong financial performance.
In July we share the positive top line data from the complementary pharmacokinetic study for O Pmt's every day with 3.
We believe the results of the study were outstanding across all key metrics.
<unk> achieved significantly higher plasma concentrations versus nalmefene injection.
It's achieved rapid absorption into the blood for the team acts of 15 minutes.
We were able to demonstrate even greater levels of nalmefene in the blood with OPM is there is there of 3 C Max being much higher than that observed in the prior pilot study.
And <unk> III demonstrates the plasma half life of approximately 11 hours, which we believe potentially provides more protection against the secondary opioid overdose known as Rina optimization.
The <unk> zone currently the only FDA approved treatment for opioid overdose is the half life of approximately 2 hours.
These results underscore our belief that the opn sees areas area of 3 has the potential if approved to emerge as the best in class therapy for opioid overdose.
Having a more rapidly absorbed and durable treatment for opioid overdose could prove the essential.
And use of grapple with market increases in opioid overdose deaths.
The U S experienced more overdose deaths last year than at anytime in our history.
Primary problem remained opioids.
According to data from the centers for disease control over 69000 people died from an opioid overdose in 2020.
Alongside COVID-19, the skyrocketing number of overdose fatalities has significantly contributed to the U S life expectancy falling by 1.5 years and 2020, I guess dropping of generation.
The impacts from synthetic opioids like fentanyl shows no sign of slowing.
Sentinel represents a lucrative business opportunity the drug traffickers, because it is incredibly powerful and small amounts and is easy to produce.
Cutting fentanyl with drugs like heroin and cocaine dramatically intensifies, the potency and the makes it far more addictive benefiting drug dealers with dependent consumers.
Sentinel is also used to create a comparable from day to look like prescription medicines and sold the people widely through social media.
Synthetic opioids, most dangerous characteristics, including very high potency, the rapid onset and the risk of <unk>.
These attributes combined to make synthetic opioids, both more likely to cause the lethal overdose and produce more serious adverse health consequences. Following a non lethal overdose compared to other opioids.
Significantly synthetic opioids display much load sensitivity to the zone.
The <unk> 10 of the opioid overdose deaths linked to synthetic opioids, we believe high potency appetites are critical in protecting the public.
As we look ahead, we hope the demonstrates that the clinical advantages of <unk> seen in the PK study will also be seen in the Pharmacodynamic study.
We anticipate data later in the fourth quarter.
Meanwhile, we are pleased to be making excellent progress advancing the other elements of our planned NDA submission, including required human factors assessments.
Still aim to file at year end or in the first quarter of 2022, using the 5 out of 5.2 pathway.
Turning briefly to the rest of our pipeline.
We continue with the preclinical and formulation development of <unk> T Zero day before doing the event for acute cannabinoid overdose.
These activities are on track to support the phase 1 study with parental true and events in 2022.
The start of our phase II study for <unk> nasal naltrexone for alcohol use disorder remains of course however.
However, we are cautiously optimistic we will have an update on the start of the study in the coming months.
The further support us in successfully executing on our long term strategy pipeline and the potential launch of <unk> Xu as the 3 we also made 2 important appointment.
We announced in July the appointment of <unk> as Chief commercial officer.
Let the launch of the Narcan nasal spray working at adapt pharma.
We're very pleased the hottest experience on the team and we look forward for welcoming Matt on future calls.
And we're pleased to announce we promoted Brian Goldman to EVP corporate development and General counsel.
Brian is an integral part of our leadership and I am personally very pleased the highway of in this exciting new position as we aim to further build our pipeline earlier.
As you can see we have a very full plate in the near term and we look forward to updating you on our milestone as we proceed as of the <unk>.
Back half of the year.
Meanwhile, underpinning our operational progress as a very strong financial position, David O'toole, our CFO will now discuss.
Of it.
Thank you Roger.
Today, I'll summarize our financial results for the second quarter and year to date.
For full details of our financial results for the second quarter and first 6 months of 2021.
Please refer to today's press release.
And as usual are reported on the quarter is also available in our form 10-Q filed today.
In summary increased demand for narcan nasal spray in the current quarter, we recognized significantly higher than expected royalties this quarter.
This resulted in stronger than expected revenue for the second quarter and the upward revision of our full year financial guidance in 2021.
We also maintained disciplined cost containment, while executing on the clinical development and regulatory advancement of <unk> 003 nasal nalmefene.
Total revenues were $11.3 million in the second quarter and $17.6 million year to date in 2021.
This compares to $6.3 million and $10.6 million, respectively. During the corresponding periods of 2020.
Growth over 2020 reflects the increased revenue from our license agreement with emergent <unk> solutions, Inc. For EPS for the sale of Narcan nasal spray as.
As well as increased funding received from neither in BARDA for the development of <unk> III.
Second quarter and year to date 2021 sales 2021 sales of Narcan, where approximately $106.2 million and of $184 million, respectively as reported by UBS.
Research and development expenses were $3.2 million in the second quarter and $7.2 million for the first half of 2021.
R&D expenses have increased significantly over the same periods in 2020, which we anticipated as there has been increased activity on our lead investigational candidate <unk> III.
Illustrating our commitment to cost containment, we kept G&A expenses essentially flat in the second quarter and first half of 2021 at approximately $2.7 million and 5.4 million, respectively compared to the comparable periods in 2020.
Sales and marketing expenses were $1 million in the second quarter and $2 million for the first half of 2021.
This compared to $1.7 million and $2.7 million for the comparable periods in 2020.
With Matt joining <unk> to lead the commercial organization and as we progress through NDA filing we expect to increase spending on our commercial activities in future quarters.
The net income for the 3 months ended June 32021 was approximately $1.7 million or income of 39 per basic share.
<unk> 31 per diluted share.
Compared to a net loss of approximately 0.2 million for a loss of <unk> <unk> per basic and diluted share for the comparable period of 2020.
Net loss for the 6 months ended June 32020 was approximately $1.2 million or a loss of 27 per basic and diluted share.
<unk> to net loss of approximately $1.9 million or a loss of $4.45 per basic and diluted share for the comparable period of 2020.
As of June 32021, we had $48.5 million in cash cash equivalents in marketable securities.
As indicated previously reflecting higher than expected sales of narcan nasal spray.
We are raising our 2021 financial guidance.
We are now aligning our guidance to the upper range of the full year 2021 guidance for sales of Narcan nasal spray.
By EPS of $325 million.
With that we now expect full year 2021 royalty revenue from the sale of Narcan nasal spray of approximately $28.9 million.
We are also now expecting to end 2021 with cash cash equivalents and marketable securities in the range of approximately 42 million to $44 million.
Not including potential receipt of any additional tranches from the convertible debt deal.
As a reminder, we have 2 additional tranches of the convertible debt deal we completed in December of 2022.
$10 million available on NDA filing and $20 million upon FDA approval of <unk> III.
In conclusion, we continue to have strong financial strength to invest in our pipeline and our commercial readiness.
Thank you and with that let me open the call for questions.
Thank you if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad, if youre using the speaker phone. Please make sure. Your mute function is turned off July youre sticking to 1 of each of our equipment again that of star 1 to ask a question. Our first question comes from Carl Byrnes with Northland capital markets.
Great. Good afternoon, congratulations for all of the progress.
I was just wondering if you have any updates with respect to legislation.
Thats ongoing for co prescribing.
I believe that we're getting very close if not at signature in New York State for example.
Anything that you can help provide there would be helpful. Thanks.
Yeah. So in general there's been good progress already this year, if I'm not mistaken here in Israel.
About <unk> asos, although half.
For total Scribing legislation in place.
That tends to vary from state to state exactly what the guidelines are.
But to your point, Yes, New York.
The bill circulating.
And the New York State for.
For many many years apparently.
Finally in the last month of 2 they have.
Overcome that test for I understand the fleet.
The rest of the major hurdle.
At the level of the assembly.
It's now waiting for Covid.
The New York Governor to sign.
That.
It's still happen this year, what we understand so thats been the yieldco.
Great that's very helpful and again, congratulations on all of the progress.
Thank you.
The next question comes from David <unk> with Zacks small cap research.
Hey, good afternoon, everyone.
So when we're looking at the target market opportunities, particularly in terms of lake supplying E. Ms fire departments. Please.
With Oh 3.
Do you guys perceive this product as being a dark and replacement is it going to be on the shelf with Narcan I'm, just trying to trying to figure out where 1 of 3 is going to fit in that dynamic.
So when we look at the central product profile for <unk>.
We do believe.
We get good.
Okay dynamic data as well the.
The better suits for the current day.
So of the opioid crisis.
And therefore has the potential to save more lives of.
That said the choice of which opioid overdose reversal agent.
The.
<unk> might use whether the consumer to appoint as the first responder market, whether it's the physician co prescribing.
Some of it might make that choice is up to the individual.
And we strongly believe that the marketplace does it require choice and we do believe the addressable market will continue to grow.
As it relates to my previous answer around co prescribing as well, we see that growing year on year.
So the larger addressable market alongside more products out of that provides more of choice, but we believe the absolutely. The open seas areas area of 3 should we deliver on good data in the ship.
How the FDA approval.
<unk> has substantially the same of lives not just in synthetic opioid overdose setting, but for all opioid overdoses.
And therefore, that's something that should be considered in English.
The English opioid overdose reversal agents to choose from.
Okay great.
David I got a couple of quick questions for you. So E emergent bio did not raise their guidance.
But I see that you guys of aligned your guidance more of at the upper end of their limited I mean is that just the case of them kind of setting the bar low or did they know something else about what the revenue is going to be in the second half of the year and then the other quick 1 is how much is left on the neither in the BARDA grants.
Yeah.
David Thanks for joining and thanks for the for the questions.
I really can't comment.
On why EPS.
The guidance the same.
The only thing that we have the choice of doing is to we had been using the midpoint to determine what our revenue guidance was going to be for the year and given the results for the first half of the year, we see that the the <unk>.
Best thing to do is to increase our guidance to the upper end of their guidance. We can't go any further than that because we don't know what.
As far as their projections are narcan sales are for the rest of the year.
And so that's why we upped the ars regardless of whether or not.
Decided and they decided not to.
And as far as.
The neither in BARDA grant.
The night of grant and the BARDA BARDA contract.
The a good portion of that those the.
The grant and the contract have been spent as you can see from our BARDA.
The contract revenue.
Grant and contract revenue that we recognized this quarter and year to date, we still have a good.
The amount on it for the.
For the second half of the year and also into when we file the NDA.
The NDA filing fee is also covered under the BARDA contract.
So there is.
The specifics around the numbers, we haven't given that guidance, yet David but.
But at the same time.
It is covering the majority of the.
Development program for zero growth rate.
Okay, Alright, great I appreciate it.
That does conclude today's question and answer session. At this time I would like to turn the conference back to Roger Crystal for any additional or closing remarks.
Thank you operator, and it is an exciting time at the OPM. Thank.
Thank you for joining us today and for your interest enjoy the rest of the day and please stay healthy.
That does conclude today's conference. We thank you for your participation you may now disconnect.
Yeah.
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