Q4 2021 Adamis Pharmaceuticals Corp Earnings Call

Greetings and welcome to <unk> Pharmaceuticals, full year of 2021 financial results and corporate update conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

If you require operator assistance during the conference. Please press star zero on yourself phone keypad as.

As a reminder, this conference is being recorded.

I'd now like to turn the conference over to your host Robert rule with ICR Westlake.

Thank you operator, and good afternoon, everyone and welcome to the Atmos Pharmaceuticals, 2021 financial results and corporate update conference call. Thank you for joining us today for the update and welcome.

Welcome our shareholders analysts and anyone else interested in Adams joining me today is Adam us as President and CEO , Dr. Dennis J Carlo Chief Medical Officer, Dr. Ron Moss, Chief Business Officer, David Margulies, and Chief Financial Officer, David Benedicto.

The format for this call will consist of prepared remarks from management followed by Q&A. This call is being webcast and will be available for replay in the investors section of our website, Adam pharmaceutical stock comp.

In today's call, we will make certain forward looking statements regarding our business based on current expectations and current information those statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward looking statement made today.

Of course any forward looking statements involve risks and uncertainties and our actual results could differ materially from those anticipated by any forward looking statements that we make today.

Additional information concerning factors that could affect our business and financial results is included in our most recent annual report on Form 10-K , with the Securities and Exchange Commission and in other subsequent filings that we make with the SEC.

These are available at the SEC's website.

With that I will now hand, the call over to Dr. Dennis Carlo President and CEO .

Thank you Robert and thanks to all of you for joining us today.

Wanted to begin with a review of how the company performed against our internal objectives for 2021.

I want to start by introducing our five major corporate objectives for 'twenty one.

Number one was to begin our clinical trials using temple for the treatment of COVID-19.

Obviously this has been completed and is ongoing.

The steps necessary steps, we have taken to begin the trial included obtaining drug product contract with a major CRO and recruiting patients finding a lead investigator and putting together a quality the SMB.

Our second objective is to meet and discuss with the FDA. Our plan responses to the agency's 2000, Twenty's complete response letter regarding our naloxone or Zemarai, NVA and resubmitting, the Zimmer and new drug applications.

This led to a third objective, which was to obtain approval for our semi product, which we received on October 12 2021.

The fourth objective was to complete an executed purchase agreement for the sale of assets relating to our U S compounding subsidiary.

And the fifth and final objectives was to file an IND.

Do you sample as a treatment for drug addiction.

At this time.

Most pleased to report that we accomplished all of our major corporate goals for 2021.

Additional accomplishments were number one we completed and published cytokines study with Stanford investigators and we recently completed a COVID-19, Hampshire study in which animals were treated with temple and received high doses 11 Grand virus. The study was conducted at University of Texas.

And show a significant reduction in inflammation.

I would like to go back and say a little bit more about funding.

We have and we will continue to explore options regarding funding and design a clinical study to examine the effects of temple for other clinical indications, but not limited to the treatment of Covid bottoming in coking use disorder long term COVID-19 or asthma, we are engaged in activities of sports such development shouldn't.

We determined to proceed with such activities.

To this end we've applied for government grant from the Academy use disorder and have received a fundable score.

But they're not know if we receive funds until sometime in the second quarter of this year.

In a few minutes Dr. Moss will proceed will provide a detailed discussion of each of these product development programs.

To summarize my opening.

Opening remarks at the beginning of 2021.

We have established what I believe we're very ambitious corporate goals for the company the size of ours.

I'm pleased to say that we feel we achieved 100% of our objectives.

This was with less than 15 full time employees. Additionally, I've challenged my team to set ambitious goals for this year with the commercial launch of Zimbabwe and increasing patient enrollment in our phase two three.

<unk> clinical trial in the first quarter of this year I believe that 2022 is off to a very good start.

With that I'll turn it over to our CFO David Benedict.

To provide some highlights from our recently filed financial statements. Thank you. Today. This afternoon, we were pleased to file our Form 10-K for the year ending December 31 2021.

This indicator all the intend to highlight key parts of our financials in this discussion and I encourage you to thoroughly review the 10-K for additional details and disclosures I should point out that the financial statements presentation is very different this year from past years because of our sale of asset.

It's relating to our compounding pharmacy business, formerly conducted by our U S compounding subsidiary and our decision to wind down that business and sell or dispose of the remaining assets relating to that.

As a result.

Revenues and expenses relating to the business and those assets and liabilities are reflected in the discontinued operations items in our income statement and our balance sheet.

First despite the significant increase in retail scripts and unit sales of <unk> in 2021 compared to 2020.

Net revenues from continuing operations for 2021, with $2 2 million compared to $2 8 million in 2020.

Lifting the effect and impact of a $2 million reserve reflected in the company's financial statements related to the same jiffy recall.

The company may be able to be reimbursed.

Certain third parties for some cost of the recall under the terms of its manufacturing agreements, but there are no assurances regarding the amount or timing of such recovery.

Selling general and administrative expenses for the years ending December 31, 2020 were $16 1 million and 21 million respectively.

Greece was primarily attributable to the reduction in expenses related to legal.

Sensation relating to employee terminations, including for procure some stock compensation and depreciation and amortization.

Those decreases were partially offset by the fees paid to the financial advisor related to the sale of the assets of USC and other administrative expenses.

Research and development expenses were 11, 3 million and 8 million for 2021 and 2020, respectively. They.

The increase in research and development expense was primarily due to development expenses related to Zim high and simple products.

Loss from discontinued operations for 12 months ended December 31, 2021, and 2020 were approximately $11 2 million and $13 5 million respectively.

Increase in loss was primarily due to the offset but again from the sale of certain assets of abuse of U S compounding plus third party.

Cash and cash equivalents at <unk>.

100000, plus one totaled approximately $33 2 million.

In 2022, we expect to receive additional proceeds resulting from amounts payable to us pursuant to our sale of certain assets.

And from the disposition of the remaining USD assets, which include the lab using the machinery and the equipment. Once again, please see our Form 10-K for the year ended December 31, 2021 for additional details and disclosures I will now turn it over to our.

<unk> Medical officer, Dr. Ron Moss for an update on our project development. Thank.

Thank you David in March as previously announced Atomist initiated a voluntary recall of four losses from Jetblue pre filled syringe in the marketplace due to a manufacturing issue with one of our contract manufacturers Cadillac pharma solutions.

Even though there has been no confirm complaints for this issue from consumers in an abundance of caution certain lots for distribution of being recalled the lots are being recalled due to the potential clogging of the syringe needle preventing the dispensing of the product.

<unk> exclusively markets and distributes to jetblue in the United States under license from Animas, the NDA holder.

<unk> will handle the entire we call process Fathomless with Adam This oversight.

Manufacturing of <unk> is currently on hold pending the results of the investigation underway with Cadillac to determine the root cause of this issue.

We anticipate the resolution and resumption of manufacturing after the investigation is complete and resolved.

Do not anticipate decision to impact on the exciting Zim high launch whatsoever.

Then I will be the highest dose of naloxone on the market to combat the more potent opioids such as fentanyl.

As we recently announced data some experiments at University of Texas demonstrated the temple significantly decrease inflammation in the lungs of hamsters compared to control animals, when challenged with high levels of Omnicom variant virus.

And as mentioned this is important as the VA to.

Two omnicom variant is now circulating throughout the world and in the U S.

This data complements earlier reported data that also showed decreased inflammation and the same model when challenged with the Unmedicated Sars cov two virus because of COVID-19.

These experiments and other data supports the design of the current ongoing phase II trial.

Earlier this year, we apply for fast track designation for <unk> for the treatment of COVID-19. However, the designation was not granted.

The abstract is defined as a process designed to facilitate the development of drugs to treat serious conditions and fill an unmet medical need.

Efficient by FDA appear to be administrative in nature and not based on any clinical data related to temple. However, we believe that the phase II trial as possible. The FDA will provide a timely review of the data and feedback due to the ongoing COVID-19 pandemic. Currently as you know there are no oral anti inflammatory drug.

<unk> approved for the treatment of COVID-19, what is the long cohort.

Since opening the enrollment of our phase II <unk> III trial last year, we have exceeded the number of subjects needed for the second interim analysis schedule for me as well.

Minder objectives of the study determined temples effect on clinical development inflammation in the rate of hospitalization. We are also measuring long COVID-19 symptoms in this trial a significant unmet medical problem is no treatments are approved for this debilitating disease.

Our trial requires individuals with moderate COVID-19 symptoms have comorbidities, such as heart disease patients typically have worse outcomes, sometimes requiring hospitalization.

The trial is a double blind, which means only the date data safety monitoring board of DSM B notes what treatment of subjects may be getting during the trial at the trials interim analysis, the DSM being carefully reviewed the data and can stop or continue a trial and can also make recommendations to modify the trial. If there are major.

Concerns.

To be clear Adam this is blinded to the data and we will not see the final results until the trial is completed.

In March the data safety monitoring board withheld receives the trial met to review the interim data from the first 50 patients.

Based on the analysis of safety and clinical data with DSM be recommended that the trial continue with it.

Without any additional modification, we and others believe this is a good time.

<unk> will meet again in May to review the data from approximately 224 locations and we will try to provide us with a new recommendation.

We believe the next and final analysis of this study will allowed with the S&P will provide meaningful feedback on the clinical and safety aspects of the trial, we will provide an update on the trial. After the next meeting by the DSM V.

Time to completion of the trial of course depends on many other factors and bulk COVID-19 infection rates and on the DSM beans recommendations. Following completion, we anticipate that the key clinical data will be made available to the public.

If the trial is successful we will also submit a clinical study report and request a meeting with the FDA as soon as possible.

Finally, as Dennis mentioned, we are looking at potential other clinical uses of temple and continue to see government and commercial non dilutive funding at this time I will turn it over to David Montgomery.

Sure.

Well all I want to talk about today is Jim hi, so after more than six months.

Close working with closely working with the U S World Meds and their team as well as our manufacturers I am very pleased to share with you today that U S will merge has commenced the commercial launch of <unk>. As a reminder, zim high is our high dose naloxone injection product approved by the FDA last year for the treatment of.

Opioid overdose naloxone is generally considered the drug of choice for immediate administration for opioid overdose works by blocking or reversing the effects of the opioids, including drowsiness slow breath or loss of consciousness with most the most recent CDC data showing the highest.

A drug overdoses recorded in any 12 month period and drug overdose now, becoming the leading cause of death for Americans under the age of 20 or excuse me under the age of 50.

We are excited to provide patients and health care workers with a powerful new weapon.

To combat this growing epidemic.

Zimmer Hi is approved for use in adults and children and is exclusively marketed it as I said by U S World Meds.

<unk> has a proven track record of successfully commercializing <unk>.

Several different pharmaceutical products and we believe Zim high is synergistic to and a perfect companion product for their looser mirror product U S will match has a first in class only approved product for the treatment of opioid withdrawal symptoms and looser mirror and we are confident that they can leverage.

This existing commercial infrastructure as well as their presence in the opioid addiction market to hit the ground running with Zim hacked.

I would encourage everybody to explore the new zim Hy Dot com website for additional information on the product and its availability and with that I will turn it back to Dennis for closing remarks. Thank you. This will conclude our call and we are now opened up to questions.

Thank you.

Ladies and gentlemen, we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

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One moment, please where we pull for questions.

Our first question is from Elliot Wilbur with Raymond James. Please proceed.

Good afternoon.

On behalf of.

Regarding foreign policy there appears to have been some adjustments to the clinical trial protocol, including client and primary endpoint reduction in hospitalization to reservation system as well as a change in the enrollment cross-react from acquiring at least one time already currently one risk factor called progression.

I'll go through the rationale for the changes and how those might impact.

Data Readouts please.

Well, there's a doctor wants yes, we changed the.

The endpoints or move them around quite a bit said that there were more consistent with endpoints or other antivirals, such as a relenza and tamiflu. So we're looking at resolution of symptoms as the primary endpoint because we believe the temples anti inflammatory activity in antiviral activity with greatly impact on this end.

And we still are tracking hospitalizations, but that is now a secondary endpoint due to the lower hospitalization rate in the United States.

The inclusion criteria has been expanded to include patients who had been vaccinated because we didn't have that information. When we started this study by many individuals who are vaccinated.

Thats getting quite sick and so from our standpoint as long as they have a moderate symptoms to begin with it doesn't matter if they're vaccinated on vaccinated. So overall.

What's the rationale for the changes and we are continuing to work.

Very closely with the FDA feedback on this protocol and.

We believe that the current endpoints are are going to be very important at the end of the day when we unblinded the study.

Okay.

Okay. Thank you.

Okay.

Ladies and gentlemen.

There are no further questions at this time I would like to turn the call back to Robert Who'll.

For any closing remarks.

Okay that will conclude our call today. Thank you for participating and for your interest in Atmos Pharmaceuticals have a good evening everyone.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Okay.