Q3 2021 Acorda Therapeutics Inc Earnings Call

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Good afternoon, good evening welcome to the quarter Therapeutics third quarter 2021 update at this time all participants are in a listen only mode. There.

There will be a question and answer session to follow please be advised that this call is being recorded at the company's request I will now introduce your host for today's call Jeremy <unk> from Macquarie. Please go ahead.

Thank you Felicia and good afternoon, everyone before we begin let me remind you that our presentation will contain forward looking statements.

Disclosures can be found in our SEC filings, which are public and we encourage you to refer to those filings as a reminder to our color during the Q&A, we will only take calls from our analysts and I will now pass the call over to our CEO Ron Cohen Rod.

Thank you Jenny and welcome everyone.

We used to open with late breaking news. This afternoon, we announced that we had executed an agreement with Sberbank, the commercialized and Breeze in Germany, which is the largest pharmaceutical market in Europe and the fourth largest in the world.

We will receive a 5 million euro upfront payment promised Debbie will also receive a significant double digit percent of the selling price for supplying the product and additionally, milestone payments based on net sales.

We previously announced an agreement with established to commercialize <unk> in Spain.

February is a prominent highly successful pharmaceutical company in the EU and these deals further validate embryos importance as an innovative treatment for the many people with Parkinson's disease, who suffer from off periods.

<unk> expects to launch <unk> in Germany.

In mid 2022.

As a reminder, the GBA, which makes reimbursement assessments in Germany has not required a benefit assessment prior to embryo is launch we're in discussions with additional parties. The commercialized embrasure in other territories in Europe, and the rest of the world.

And I am pleased to report that embryo net revenue for the third quarter of 2021 was $78 million. That's a 34% increase over the same quarter in 2020 and that was particularly encouraging in light of the continuing impact of the pandemic.

And <unk> net revenue was likewise, encouraging a $20 million and <unk> remains an important contributor to shareholder value and to our goal of becoming cash flow neutral on a run rate basis by the end of 2022.

I'm also very pleased to announce that we've added two seasoned biopharma executives to our leadership team. Mike Guesser has joined the quota as CFO, Mike has held senior finance positions at both large and small companies, including Allergan he will enhance our ability.

To maintain fiscal discipline and increase the efficiency of the organization and to continue to build shareholder value.

Neil Beloff has joined the quarter as General Counsel Neil has extensive senior legal experience with Biopharma companies such as Celgene and he has also served at the Securities and Exchange Commission.

We also announced the Burg card Blonk, our chief Medical officer will be leaving his position with a quarter at the end of this year, but he will continue to advise the company in a consulting role I want to thank Dr. <unk> for his years of service under his leadership, we secured marketing authorization square embrasure from both the <unk>.

And the European Medicines Agency. We're also very pleased that a quarter will continue to benefit from his expertise and his new role as consultant to the company.

So moving to embryos trajectory.

As a reminder, embrasure is inhaled levodopa, it's indicated to address the return of symptoms or off periods that many people with Parkinson's experience in between their doses of regularly scheduled medications as.

As I've mentioned the pandemic has continued to pose headwinds for them breezes launch. This is manifested in a number of ways.

First although more patients are now visiting doctors than earlier in the pandemic level still haven't returned to the pre pandemic norms overall in.

In addition, many practices remain close to in person visits by salespeople and until very recently, we were also not able to hold patient or physician speaker programs in person.

Also for people with Parkinson's disease in particular.

Many had reduced their activity significantly such that they've been less likely to report to their physicians their need for a therapy to treat their off periods. Now all that said we are seeing improvements in these trends as the pandemic subsides and we expect that as long as it continues subside.

Subside, we will continue to do so.

And despite those headwinds our team has been able to adapt creatively through digital means and otherwise and we've continued to see encouraging signs of growth in embryo compared to the third quarter of 2020 as I mentioned, we had a 34% year over year increase in net sales we also.

A 16% increase in total prescriptions over Q3, 2020, and importantly, we had a 19% increase in organic growth, which we measure by the number of cartons that are dispensed to patients, which most accurately reflects demand.

Hi.

We've seen that as each of the four waves of the pandemic to date has receded.

Been corresponding upward trends in prescriptions for embrasure and again, we believe that when the pandemic fully received we should see a further upward inflection and embraces trajectory.

And with regard to <unk> net revenue decreased by about 28% over Q3, 2020, and while we expect revenue to continue to decrease over time, we believe the rate of it.

The decrease has begun to stabilize note that quarter over quarter sales in the first three quarters of 2021 have been fairly level.

We believe that the durability of this product is due to a number of factors first patients and their physicians remain loyal to the brand. We've earned that loyalty based on education support and the care that we've always provided and continue to provide for branded <unk> and that includes <unk>.

Our first step program in which commercially insured patients get their first two boxes. Our first two months of Empire are free.

And we also provide co pay mitigation for commercially insured patients and we provide physician and reimbursement support.

Our field sales team is also continuing to call on MF specialists, where they've maintained strong relationships.

Now I'd like to now introduce our new CFO, Mike Guesser to provide an overview of the financials Mike.

Thanks, Ron I'm very happy to join you all here this quarter and I'm looking forward to continuing to rebuild shareholder value the team.

A quarter announced restructuring and further budget cuts in September of 2021 with the goal of aligning our operating expenses to our revenue.

Company reduced head count by 15% the majority of which took place immediately with the balance expected to be completed by the first quarter of 2022.

We expect there will be a $20 million in annualized cost savings from the head count reductions and additional budget cuts.

Our financials are summarized in this table in more detail in our press release and 10-Q.

In terms of burn rate, we anticipate that Q3 burn rate of $9 $5 million will decrease in the fourth quarter and into 2022 with the goal of being cash flow neutral by year end 2022 on a run rate basis.

Now I'll turn things back over to Ron.

Thanks, Mike.

So moving forward our focus is to build long term value at a quarter.

Through execution of our key goals you see here first continuing to drive <unk> growth the initiatives, we've taken to enhance the patient experience are continuing to yield positive results as I noted earlier net sales increased by 34% and dispense cartons grew by 19%.

That was despite the pandemic and as the effects of the pandemic continued to recede, we expect our field teams will gain increasing access to the physician offices and patients will have return both of their normal levels of activity and to their regular office visit schedules, we expect all of those trends to positively impact.

<unk> and breezes trajectory going forward.

We also just executed a terrific deal for Europe's biggest market, Germany, and we continue to be inactive discussions with several parties for additional territories in Europe and the rest of the world.

Regarding <unk>, while we expect the brand to continue to the glut to decline against generics over time, we've seen and we've been encouraged by its durability to date and we will continue to provide the support programs and have our field teams, calling on MFS offices.

Another key factor is we will be continuing our fiscal discipline to achieve our goal of being cash flow neutral on a run rate basis by the end of 2022 as I mentioned, we expect annualized cost savings of approximately $20 million from our recent reduction in head count and budget cuts and in addition.

We expect to have the royalties from Biogen on ex U S sales of <unk>, which is the ex U S version of <unk>, we expect to have those royalties revert back to a quarter in the second half of 2022 of those are double digit tiered royalties on net sales. So they will be a signal.

<unk> at.

We're also seeking to build on the ARCUS technology platform that we've now had validated by the approval of <unk> in the U S and the EU and we are discussing collaborations with other companies that have expressed interest in formulating their novel molecules for pulmonary delivery with ARCUS.

And we have feasibility studies ongoing for a number of those opportunities.

With that we will open the call for your questions operator.

Ladies and gentlemen, if you wish to ask a question. Please press star followed by one on your telephone keypad.

We have no questions from the telephone lines, so I'll hand back to the management team.

Alright, well, thank you and thank you all for joining US we're very pleased to deliver.

This quarter's results and we look forward to updating you next quarter have a good.

Right Thanksgiving.

Yes.

Ladies and gentlemen, this concludes today's call. Thank you all for joining you may now disconnect your line.

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