Q4 2021 Clarus Therapeutics Holdings Inc Earnings Call

Yeah.

Ladies and gentlemen, thank you for Johnny and declared fourth quarter and for year 2021 financial results Conference call.

Today's call is being recorded and webcast live on the company's website at Ww Dot Clarus therapeutics Dot com in the Investor Relations section and it will be available for replay for 10 business days. Following this live call.

Please note that discussions today may include forward looking statements.

Forward looking statements may involve a number of risks and uncertainties some of which are beyond Clarence control and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward looking statements.

These risks and uncertainties include but are not limited to the risks associated with claris financial position risk inherit and hurts it in pharmaceutical development and those factors described under the heading risk factors in the prospectus filed with the Securities and Exchange Commission the SEC under.

Q4, two four B three on December 23rd 2021, and those that are included in any of clearer speech of filings with the SEC, including its annual report on 10-K for the year ended December 31, 2021 when filed.

These forward looking statements speak only as of the date of this call and Clearers disclaims any intent or obligation to update. These forward looking statements to reflect events or circumstances. After the date of such statements, except as may be required by law.

Following the prepared remarks, Clarence will not be taking questions.

At this time I'd like to turn the call over to Bob Doctor Bob Dudley.

Under President and Chief Executive Officer of Claris. Please go ahead Sir.

Thank you good afternoon, everyone and thank you for joining US today, we appreciate your interest and clearer.

With me today is our Chief Financial Officer, Rick Petersen, and our Chief Commercial Officer, Frank Yeager.

Let's get started with our recent business highlights we.

We continued to see total prescription growth for its it turns up in the fourth quarter of 2021, with an increase of 11% sequentially and 81% year over year, driven primarily by advertising and promotion and increase in payer coverage across all channels.

Two new patents issued.

Two new patents were issued for Japan in November 2021.

It's been listed and Ftes Orange book, bringing the total number of patents protecting <unk> to seven <unk>.

Close to $15 million private placement with the leading health care Investor in December 2021, the proceeds of which support the ongoing commercialization of DEXTENZA.

In January of this year, we appointed John argument the logo.

As Chief clinical development officer, she brings a depth of clinical development experience that will be important as we develop our pipeline products and explore potential new indications for Japan.

And to this very point, we initiated and screening for the first patient and then in an investigator initiated phase four clinical study of just Enzo for the treatment of Hypocone Adelman with chronic kidney disease. In March 2022, we expect to announce announced results from this trial in the <unk>.

First half of 2023.

On the commercial side of the Ledger, we launched strategic partnerships with adult health and assist Rx in February to make patient access to Japan, so easier and enhance their overall prescription process.

Included in this initiative is a telemedicine portal for patients who do not have access to a health care provider.

Recently, we completed filming of the direct to consumer advertisement for Japan. So as part of a comprehensive plan to increase awareness among hyper banana man for whom Japan, Zoe is medically appropriate.

Assuming we are able to address our capital needs. Our current plan is to air. This piece later in the year and avail ourselves of the highly focused media technologies that are far cry from buying expensive time in major network channels.

Finally, while we are excited that Japan continues to perform well in the market the ability to raise capital support to.

To support the brand remains a challenge and in light of our current cash position, we have initiated a process to explore strategic alternatives to maximize shareholder value.

Now Rick Peterson, our Chief Financial Officer will discuss <unk> financial status Rick.

Thanks, Bob and good afternoon, everyone I'll be going over the fourth quarter and full year 2021 financial results.

To start with fourth quarter revenue was $4 6 million.

Paired to two 4 million in the same period for last year.

Full year revenue was $14 million compared to $6 4 million in 2020 this represents growth of 119%.

Contributing to the growth in Japan zone sales.

Gross margin for the quarter was 71, 7% compared to 85, 2%.

For the corresponding prior year period.

Gross profit was 85% for the full year compared to a negative margin in 2020.

Cost of goods sold decreased to 68, 7% in 2021 compared to 2020.

Attributable to write offs in those years.

<unk> 7 million and $7 8 million for inventory obsolescence reserves.

For the years ended December 31, 2021, and 'twenty, respectively.

Fourth quarter operating expenses were $10 5 million compared to $10 2 million in the same period last year.

And for.

For the full year operating expenses were $51 million compared to $44 9 million for 2020.

This represents an increase in operating expenses that were driven mostly by head count and professional fees associated with financing activities.

And operating as a public company.

Fourth quarter.

And marketing expenses were $5 7 million.

Compared to six point.

Zero million in the same period last year.

Full year sales and marketing expenses.

Were $30 7 million.

Compared to $30 5 million for 2020.

This represents a 0.5%.

Increased primarily due to G kenzo.

In commercial analytics marketing research cost.

And additional sales and marketing expenses associated with the brand.

Fourth quarter <unk>.

General and administrative expenses were $4 3 million.

Compared to $3 7 million in the same period last.

Last year.

Full year general and administrative expenses were $16 7 million.

<unk> to $11 9 million for 2020.

This represents an increase of $39 6 million attributed to higher personnel costs due to an increase in headcount and consulting costs.

And an increase in public company expenses.

For R&D.

R&D increased.

We were four 5 million compared $2 6 million in the same period in the previous year.

And then looking at the full year for research and development.

Expenses were $3 6 million compared to $2 4 million in 2020.

This represents a 51.4 increase primarily attributable attributable to clinical costs associated with our lead commercial asset to tango and licensing fees related to the hover and Mcgill in licensing agreements.

Our cash and cash equivalents as of December 31, 2021 will fund our current operations plan in April two.

2022.

As Bob noted, we continue to explore strategic alternatives for the purpose of maximizing stockholder value and.

And while we expect to devote significant efforts to raise capital.

Restructure or indebtedness and identify and evaluate potential strategic alternatives, we may not be successful, which could force us to delay limit or terminate our operations, including workforce reductions.

<unk>, two asset sales or other alternatives, including seeking protection under the provisions of the U S bankruptcy code.

Notwithstanding our challenges <unk> has continued to perform well.

Well in the marketplace now.

CAGR Chief commercial officer will discuss some of these important highlights.

Great. Thanks, Rick.

Thank you Rick I'm proud to announce that she kenzo has experienced several notable milestones in the fourth quarter and full year as the brand continues to grow.

Total prescription growth or just turns on the fourth quarter increased 11% sequentially and 81% year over year, driven primarily by advertising and promotion and an increase in payer coverage across all payer channels.

Specifically, our prescription growth has been driven by the following first and foremost we continue to receive positive feedback from providers and patients regarding their experience with <unk>.

Second we made changes to our sales force by increasing the number of sales representatives from 55 to 60.

And optimizing the sales territories to ensure we have a national footprint.

These have resulted in sales territories, increasing their overall testosterone replacement therapy prescription coverage volume from 59% to 80% of all prescriptions written in the marketplace in the United States.

Next we are seeing increased access with waning COVID-19 concerns to physicians.

Spike on the ground presence in the fourth quarter, specifically, we have been able to increase sales rep access to providers.

Offices in fact, nearly 90% of all of our health care provider calls are alive calls.

Additionally, we are seeing patient visits for hypogonadism returned back to normal levels, which means more patients returning to health care provider offices.

And we expect to see this trend continue throughout the year.

And finally, we have an increased patient access to tens or <unk>.

As for payer coverage at the end of 2021, two turns don't have access to 70% of the overall lives that are there where patients have coverage in the United States. Those those plants coverage at Enzo and when you look specifically at the commercial channel where the bulk of the prescriptions prescriptions are written in this class.

77% of all commercial plans now coverage it turns out.

These are significant changes over the course of the year and now it turns out is one of the best in class.

And as for patient assistance, we are seeing continued success and growth in our just turns on co pay assistance program.

We believe <unk> is poised for accelerated growth throughout this year in.

In fact, the TRT market is large at approximately 8 million prescriptions written in this market each year and it's growing with an over a 6% compounded annual growth rate in 2021 over the past seven years again despite COVID-19 .

This is a large number considering that there are $2 2 million patients who are currently being treated and greater than 4 million patients who have either been diagnosed or have stopped treatment.

These patients represent our opportunity because we know based on an independent survey and over 400 hypogonadism men that nearly eight out of 10 patients are not satisfied with their current non oral option.

Additionally, we know that as an oral tens of overcomes the significant administration issues associated with the injections in the gels, where a majority of the prescriptions are written today.

It tends to always be only oral that's approved that has multiple doses sold prescriber individualized treatment for each patient.

And finally, we know through our market research that physicians universe. We report that they would nearly always switch a patient to just Enzo if the patient requested the switch even if the patient was therapeutic on their current product.

And was not experiencing side effects.

Bottom line is is that a patient to ask Virginia, Enzo, they're very likely to get prescribed <unk>.

As we move forward into the second quarter of 2022 and beyond we are excited about the impact we're seeing in the initiatives that we have put in place and are on the horizon.

We expect that our recent salesforce national footprint expansion will continue to reach and educate more health care providers at a time when COVID-19 is becoming less of a concern.

Additionally, we recently held a wide national sales meeting, where we focus on raising the bar on what good messaging and good selling looks like.

We expect that our overall payer coverage will continue to grow throughout the year and already in Q1 of this year, we have already seen our overall payer coverage increase now to 72%.

Also in the first quarter, we launched two new strategic partnerships with volatile and assist Rx leaders in providing health care services to patients.

Both of which underscore our continued commitment to providing solutions for patients.

Our partnership with bulk health enables patients who may be suffering from hypogonadism, good clinical care from the comfort of their own home via telemedicine approach.

And our partnership with assist our Rex who is the leader in providing prescription initiation and patient support solutions allow patients to streamline the process and getting G. Tens of prescriptions fulfilled and sent directly to them via mail order.

These two partnerships work together synergistically and an end to end solution from diagnosis to product fulfillment, helping to eliminate barriers through a streamlined single portal experience.

What this means is that through our partnerships, we can help patients determined if theyre hypogonadism.

In terms of directly to their homes, and importantly, refill prescriptions automatically at a cost savings.

Bottom line, we believe these customized patient support offerings will result in better treatment and ultimately better adherence to therapy.

And finally as Bob mentioned briefly mentioned just a few minutes ago on the near term horizon. We are excited as we finalized our new integrated health care provider and consumer promotional campaign.

And with additional outcome, we have additional capital we expect to launch that in the coming months.

As part of that New campaign, we will be launching a direct to consumer TV component that will target the appropriate hybrid gonadal diagnosed and currently or previously treated patient.

This is really exciting for the business and we expect that this will be a significant driver of <unk> growth in the future as we move forward.

And now Bob will provide recent pipeline and other updates Bob.

Thank you Frank.

Regarding <unk> it turns out we announced the initiation of screening for the first patient in an investigator initiated phase <unk> clinical trial of Japan for the treatment of pipe Oakland Adelman with chronic kidney disease.

And we expect the results from that.

To read out in the first half of 2023.

We continue to work on several label expansion lifecycle management project sports at Enzo and pending availability of funds. These are in all these are all in large markets, including testosterone therapy for female to male transgender individuals.

Another label expansion with phase four initiation anticipated in the second half of 2022 again subject to availability of funding and one store once daily oral to you with the phase two.

<unk> alright.

Phase two study initiation excuse me anticipated in the second half of 2022 is well again subject to our ability to fund these studies.

Next subject to availability of capital, we continued to advance our pipeline candidates, including CLA or $1 21, the combination of testosterone and <unk> result, this is a product and license in May 2021 can have a third hover therapeutics in Australia for the treatment of certain.

[noise] inflammatory breast diseases in particular, Perry ductile mastitis, and as adjunctive adjunctive therapy in estrogen positive androgen positive breast cancer.

<unk> initiation of phase II for.

For the four P. D M would be in the second half of 2022.

For C. L. A R. <unk>, two which is the combination of coenzyme Q1 0, plus Castro pungent.

This is a technology licensed from Mcgill University in September of 2021 with projected initiation of phase one for the treatment of primary and secondary forms of co Q1 0 deficiency and related mitochondrial dysfunction.

The second half of 2022.

Regarding intellectual property highlights as noted earlier in the fourth quarter, we now have a total of seven.

Orange book listed patents for each of them purchased Enzo.

Providing coverage to 2030.

Finally, two upcoming medical conferences offer along the way the opportunity for us to showcase it turns out for.

For the first time since Covid altered the medical land unmet medical meeting landscape Institute.

We are extremely excited to have the.

A significant presence.

At two important medical meetings in May and then June both of these will be live. These represent the first opportunity since to tender was launch just three weeks before COVID-19 that endocrinologists and urologists can interact with claris commercial and medical affairs personnel.

What was a common annual gathering. So these two meetings are the energen excuse me.

A way.

Meeting in New Orleans, and the Endocrine Society meeting in Atlanta, and I should mention we will have at least one abstract presented at the.

And in Society meeting in April .

21st to the 23rd in Orlando.

So as I close my sincere thanks to team Claris and all of our external partners for their hard work on our behalf. Thanks al. Thanks also to our stockholders and to our directors for their support.

I'll now turn the call back to our operator to Wanda.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

Yes.

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