Q1 2022 Aquestive Therapeutics Inc Earnings Call

Good day and thank you for standing by I would now like to introduce your host for today's call. Ben Watson you may begin.

Operator: Good day, and thank you for standing by. I would now like to introduce your host for today's call, Bennett Watson. You may begin. Thank you, operator.

Thank you operator.

Bennett Watson: Good morning and welcome to today's call. On today's call, I'm joined by Keith Kendall, Chief Executive Officer, and Ernie Toth, Chief Financial Officer, who are going to provide an overview of recent business development and performance in the first quarter of 2022, followed by a Q&A. As a reminder, the company's remarks today correspond with the earnings release that was issued after the market closed yesterday. In addition, a recording of today's call will be made available on Equestiv's website within the Investors section shortly following the conclusion of this call.

Good morning, and welcome to today's call.

Bennett Watson: To remind you, the Aquestive team will be discussing some non-GAAP financial measures this morning as part of its review of first quarter 2022 results. The description of these measures, along with a reconciliation to GAAP, can be found in the earnings release issued yesterday, which is posted on the Investors section of Equestria's website.

On today's call I'm joined by Keith Kendall, Chief Executive Officer, and Ernie Chokes, Chief Financial Officer, who are going to provide an overview of recent business development and.

And performance in the first quarter 2022.

Led by a Q&A session.

Yeah.

As a reminder, the company's remarks today correspond with the earnings release that was issued after market closed yesterday.

In addition, a recording of today's call will be made available on our questions website within the investors section. Shortly following the conclusion of this call.

To remind you the requested team who will be discussing some non-GAAP financial measures. This morning as part of its review of first quarter 2022 results.

Description of these measures along with a reconciliation to GAAP can be found in the earnings release issued yesterday, which is posted on the investors section of them questions website.

Bennett Watson: During the call, the company will be making forward-looking statements. We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company, as described in the risk factors section and other sections included in our annual report on Form 10-K filed with the Securities Exchange Commission on March 8, 2022, and in our quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC.

During the call the company will be making forward looking statements. We remind you of the company's safe Harbor language as outlined in Yesterdays earnings release.

As well as the risks and uncertainties affecting the company as described in the risk factors section and other sections included in our annual report on Form 10-K filed with the Securities Exchange Commission on March eight 2022 and in our quarterly reports on.

Form 10-Q , and current reports on form 8-K filed with the SEC.

Bennett Watson: As with any pharmaceutical company, with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations. The impact of the ongoing COVID-19 pandemic is highly uncertain and cannot be predicted with certainty or clarity. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as of the date made. The actual results may differ materially from those statements.

As with any pharmaceutical company with product candidates under development and products being commercialized there are significant risks and uncertainties with respect to the company's business and the development regulatory approval and commercialization of its products and other matters related to operations.

The impact of the ongoing COVID-19 pandemic is highly uncertain and cannot be predicted with certainty or clarity. Given these uncertainties you should not place undue reliance on these forward looking statements, which speak only as of the deep Mi.

Bennett Watson: All forward-looking statements attributable to a company or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday. The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. With that, I will now turn the line over to Bennett. Thank you, Bennett, and thank you everyone on the call for joining us this morning.

Actual results may differ materially from these statements all forward looking statements attributable to a question or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday.

The company assumes no obligation to update its forward looking statements. After the date of this conference call, whether as a result of new information future events or otherwise, except as required under applicable law.

With that I will now turn the line over to Keith.

Thank you Bennett and thank you everyone on the call for joining us this morning.

Keith Kendall: In our remarks today, Ernie and I will be discussing recent developments in our business during the first quarter of 2022 and through early May. As always, Ernie and I will be joined by additional members of the Equestive Leadership team during the Q&A session afterward. The company remains keenly focused on the two most important value drivers for Equestive, LibraVant and AQST 109. Related to the epinephrine program, we recently reported positive top-line data from Part 2 of the EPIFAST crossover study for AQSD-109 and commenced Part 3 of that study in late April.

In our remarks today, Ernie and I will be discussing recent developments in our business during the first quarter of 2022 and through early may.

As always I will be joined by additional members of the quest of leadership team during the Q&A session. Afterwards.

The company remains keenly focused on the two most important value drivers for our quest of Liberum events and eight Qs T. One O nine.

Related to the Epinephrine program, we recently reported positive top line data from part two of the epic fast crossover study break USD, one O nine and commenced part three of that study in late April .

In mid March we received fast track designation for <unk> do you want a line from the FDA.

Keith Kendall: In mid-March, we received fast-track designation for AQSP-109 from the FDA. We continue to engage with the FDA regarding the ongoing review of Libervans. Additionally, our core business remains strong in the first quarter of 2022. In April 2022, we entered into a new equity facility for up to $40 million. We believe this is good housekeeping that gives us an additional source of funds as well as some flexibility and options as we fund our ongoing operation. Let's start with Liberman.

We continue to engage with the FDA regarding the ongoing review for Liberman.

And Additionally, our core business remains strong in the first quarter of 2022.

In April 2022, we entered into a new equity facility for up to $40 million. We believe this is good housekeeping that gives us an additional source of funds as well as some flexibility and options as we fund our ongoing operations.

Yeah.

Let's start with liberate.

Keith Kendall: Equestiv continues to interact with the FDA regarding the orphan drug review of the NDA for liver function tests. As you recall, we received a notification from the FDA indicating that the agency would not be ready to act by the PDUFA date of December 23rd, 2021. The agency was unable to provide an estimated timing of an expected action at that point in time.

Quest continues to interact with the FDA regarding the orphan drug review.

The NDA for liver band.

As you recall, we received a notification from the FDA, indicating that the agency would not be ready to act by the producer date of December 23rd 2021.

The agency was unable to provide an estimate of timing of an expected action at that point in time.

Keith Kendall: In correspondence we received in April of 2022 from the Office of Orphan Product Development, the agency communicated that, and I quote it, the agency is actively working on the orphan drug exclusivity issues related to your NDA. OOPD is also diligently coordinating with the relevant FBA stakeholders in considering each of the arguments raised in your communications. The agency assures you that these issues are top of mind and have not fallen off the agency's radar.

In a correspondence we received in April of 2022 from the office of orphan products development. The agency communicated that and I quote. The agency is actively working on the orphan drug exclusivity issues related to your NDA.

O P. D is also diligently coordinating with the relevant SBA stakeholders and considering each of the arguments raised in your communications.

The agency assures you that these issues are top of mind and have not fallen off the agencies radar.

Keith Kendall: Although we, the agency, cannot commit to a precise date for providing a response, we can answer that we are making all efforts to respond in a reasonable time frame. The company continues to believe that LibraVant is an approvable product for safety and efficacy, as evidenced by the completion of the pre-notice requirements such as labeling that we discussed previously. With respect to the FDA granting market access given the orphan drug exclusivity issue, we continue to believe that we have made a compelling case that LibraVent represents a clinically superior product to the previous rectal and nasal product.

Although the agency cannot commit to a precise date for providing a response, we can't answer that we are making all efforts to respond in a reasonable timeframe close well.

The company continues to believe that Liberty is an approvable product for safety and efficacy as evidenced by the completion of the pre notice requirements such as labeling that we discussed previously.

With respect to the FDA granting market access given the orphan drug exclusivity issue. We continue to believe that we have made a compelling case that liberal represents a clinically superior product to the <unk>.

Previous rental and nasal products.

Keith Kendall: This is based on our belief that LibraVamp provides a major contribution to patient care, as outlined in the agency's guidelines. Libervance, if granted market access, has the potential to transform the lives of refractory epilepsy patients seeking a non-invasive and innovative product for the management of seizure clusters.

This is based on our belief that Libre provides a major contribution to patient care as outlined in the agency's guidelines.

Labour Rants, if granted market access has the potential to transform the lives of refractory epilepsy patients seeking a noninvasive and innovative product for the management of seizure clusters.

Keith Kendall: Equestiv remains prepared to launch this important product for epilepsy patients if granted market access by the FDA. Furthermore, we remain focused on advancing the clinical development of AQST-109, our epinephrine-based product candidate for severe allergic reactions, including anaphylactic. As a reminder, AQST-109 is the first and only orally-delivered epinephrine-based product candidate to demonstrate results comparable to autoinjectors such as EpiPen and AviQ that are the current standards of care for the emergency treatment of severe allergic reactions.

Our quest of remains prepared to launch this important product for epilepsy patients if granted market access by the FDA.

With respect to epinephrine.

We remain focused on advancing the clinical development of <unk> T. One O nine our epinephrine based product candidate for severe allergic reactions, including anaphylaxis.

As a reminder, <unk> T. One O nine is the first and only orally delivered epinephrine based product candidate to demonstrate results comparable to auto injectors, such as Epipen, and Avi Q that or the current standards of care for the emergency treatment of severe allergic reactions.

Yeah.

Keith Kendall: With such a significant part of this patient population not having this medicine where they need it, when they need it, for a variety of reasons including needle phobia, convenience, delayed or incorrect administration, AQSP-109 represents a meaningful improvement in this group of patients' and caregivers' lives. In February, the FDA provided clearance for an IND request, allowing clinical development in the United States. As a reminder, the agency previously confirmed the 505B2 regulatory approval path as appropriate for AQST 109.

With such a significant part of this patient population not having this medicine, where they need it when they need it.

For a variety of reasons, including needle phobia convenience delayed or incorrect administration.

C. One O nine represents a meaningful improvement in this group of patients and caregivers lives.

In February the FDA provided clearance for request a XI indeed, allowing clinical development in the United States.

As a reminder, the agency previously confirmed the five O five beat to regulatory approval path as appropriate for a U S. T. One O nine.

Keith Kendall: Additionally, the FDA granted fast-track designation in March 2022 to 109. FastTrack is an FDA process designed to facilitate the development and expedite the review of potential therapies that seek to treat serious conditions and fill unmet medical needs.

Additionally, the FDA granted fast track designation in March 2022 to one O nine.

Fast track is an FDA process designed to facilitate the development and expedite the review of potential therapies that seek to treat serious conditions and.

Fill unmet medical needs.

Keith Kendall: We want to highlight that we are conducting part three of the EPIFAST study and plan to complete one additional study in line with the guidance received from the FDA in our pre-IND correspondence. We're seeking to amass a robust data set for the end of Phase 2 meeting anticipated later this year. In early April, we completed Part 2 of the FFS study evaluating AQSD-109. These product candidates showed rapid absorption and conversion of the prodrug to epinephrine in subjects with a median time to maximum concentration, or Tmax, of 15 minutes.

We want to highlight that we are conducting part three of the <unk> study and plan to complete one additional study in line with the guidance received from the FDA in our pre R&D power suppose we're seeking to amass a robust data set for the end of phase two meeting.

Anticipated later this year.

In early April we completed part two and yet the first study evaluating <unk> T one or not.

The product candidate showed rapid absorption and conversion of the pro drug to epinephrine in subjects with a median time to maximum concentration or <unk> of 15 minutes.

Keith Kendall: Part 2 confirmed earlier results in a larger population of healthy subjects. We're excited that we have again shown pharmacokinetic results that demonstrate delivery of epinephrine with the absorption and conversion speed necessary for a rescue product of this kind. The area under the curve, or AUC, within the clinically relevant periods of 10 minutes, 20 minutes, and 30 minutes were comparable for both AQST-109 and the 0.3 milligram manual IM injection. The median time to reach 100 picograms per milliliter, which has been suggested to be the threshold for the onset of hemodynamic effects, was eight minutes for Questiv 109 and 10 minutes for the IM injection.

Part two confirmed earlier results in a larger population of healthy subjects.

We're excited that we have again shown pharmacokinetic results that demonstrate delivery of epinephrine with the absorption and conversion speed necessary for our rescue product at this time.

The area under the curve or AUC within the clinically relevant periods of 10 minutes 20 minutes 30 minutes, where comparable football's Ecu SD Wan O nine and the <unk> three milligram manual I am injection.

The median time to reach 100 Pico grams per milliliter, which has been suggested to me that threshold. So he onset of hemodynamic effects was eight minutes for a question one on nine and 10 minutes for the Im injection.

Based on our interactions with the FDA showing consistent fast absorption is key.

Keith Kendall: Based on our interactions with the FDA, showing consistent fast absorption is key. We commenced part three of the EPIFAST study in April 2022. The purpose of part three is to continue to study the administration of the film under a variety of conditions and further characterize its pharmacokinetics, pharmacodynamics, and safety.

We commenced part three of the up a fast study in April 2022.

The purpose of part three is to continue to study the administration of the film under a variety of conditions and further characterize its pharmacokinetics pharmacodynamics and safety.

Keith Kendall: We anticipate completing Part 3 of the FFAIR study by the end of the second quarter of 2022. The additional study that we plan to conduct is designed to compare AQST-109 to EpiPen, and we expect to report top-line data from this study during the third quarter of 2022. We plan to incorporate data from this study into our FBA data package for the end of the Phase 2 meeting later this year. We plan to include the data from the EPIFAST study and the EpiPen comparative study in our data package as per guidance received from the FDA in a written response to our pre-IND submission. We then plan to commence the pivotal study under the U.S. IND before the end of the year. Additionally, during the quarter, our core business continued to contribute new opportunities as well as cash.

We anticipate completing part three of the upper fifth study by the end of the second quarter of 2022.

The additional study that we plan to conduct is designed to compare <unk> one O nine to Epipen and we expect to report topline data from this study during the third quarter of 2022.

We plan to incorporate data from this study into our FBA data package for the end of Phase II meeting later this year.

We plan to include the data from the <unk> study and the Epipen comparator study and our data package as per guidance received from the FDA in a written response.

Two our pre IND submission. We then plan to commence the pivotal study under the U S D.

Before the end of the year.

Additionally, during the quarter, our core business continued to contribute new opportunities as well as cash.

Keith Kendall: Our Suboxone business remains resilient and continues to contribute at a higher level than expected. Symposam continues to perform and has now grown 13 straight quarters since its approval and launch. These will all continue to contribute revenue and cash in 2022 and beyond. In summary, as we progress through the second quarter of 2022, we're focused on advancing our proprietary products. We'll remain in contact with the FDA regarding the application for liver van. The FDA is continuing to evaluate the impact of orphan drug exclusivity, as it has said repeatedly in our correspondence. We believe that LibraVance is an approvable product for safety and efficacy, as evidenced by the completion of the pre-notice requirements that I discussed earlier.

Our suboxone business remains resilient and continues to contribute at a higher level than expected.

<unk> continues to perform and has now grown 13 straight quarters since its approval and launch. These all contribute continue to contribute revenue and cash in 2022 and beyond.

In summary, as we progressed through its second quarter 2022, we're focused on advancing our proprietary products.

We remain in contact with the FDA regarding Apple kidney application for Libertad.

The FDA is continuing to evaluate the impact of orphan drug exclusivity as I've said repeatedly in the correspondence.

We believe the Liberal Vance, an approvable product for safety and efficacy.

In.

As evidenced by the completion of pre notice requirements that I discussed earlier, we're prepared to launch immediately if granted U S market access.

Keith Kendall: We're prepared to launch immediately if granted U.S. market access. 109 has been advanced into Part 3 of the EPIFAS study after we reported positive results from Part 2. We're planning an end-of-Phase 2 meeting with the agency in the second half and expect to commence pivotal trials before the end of the year. Meanwhile, our ongoing business continues to perform well, and we look forward to delivering the strong results outlined in our release, which Ernie will discuss in a minute.

One O nine has advanced into part three of the <unk> study. After we reported positive results from part two we're planning an end of phase two meeting with the agency in the second half and expect to commence commence pivotal trials before the end of the year.

And our ongoing business continues to perform well and we look forward to delivering strong results outlined in our release, which Ernie will discuss in a minute.

Keith Kendall: We look forward to continuing to update all of you as we advance these initiatives throughout 2022. And with that, I'd like to turn the line over to Ernie, who provides specifics on our financial performance, capital access strategy, and outlook. Thank you, Ernie.

We look forward to continuing to update all of you as we advance these initiatives throughout 2022 and with that I'd like to turn the line over to Ernie who will provide specifics on our financial performance capital access strategy and outlook.

Ernie.

Ernie Toth: Thank you, Keith, and good morning, everyone. By now, you will have seen our financial results in our 10-Q and earnings release that were filed last evening. As we typically do, we will address most of the discussion related to the first quarter 2022 results in the Q&A. Overall, we saw continued strong performance from our existing business and continued contribution of cash.

Thank you Keith and good morning, everyone.

By now you will have seen our financial results and our 10-Q and earnings release that were filed last evening.

As we typically do we will address most of the discussion related to the first quarter of 2022 results into Q&A.

Overall, we saw continued strong performance from our existing business and can Kent continued contribution of cash.

Ernie Toth: While Suboxone is a legacy product for us, it remains a significant part of our near-term revenue outlook. This product performed well in the first quarter and exceeded our expectations with a 41% year-over-year increase in revenue. As Keith mentioned previously, CIPAZAN generated sequential quarterly revenue growth for 13 straight quarters, trends on wholesaler shipments of Stempizan to retail pharmacies. And growth in new and repeat prescribers represented a very solid 28% increase when you compare the first quarter of 2022 with the same period last year.

While suboxone is a legacy product for us it remains a significant part of our near term revenue outlook.

This product performed well in the first quarter and exceeded our expert expectations with a 41% year over year increase in revenue.

As Keith mentioned previously <unk> generated sequential quarterly revenue growth for 13 straight quarters.

Our trends on wholesaler shipments a symposium to retail pharmacies and growth in new and repeat prescribers represented a very solid 28% increase when you compare the first quarter 2022 with the same period last year.

Ernie Toth: We anticipate continued growth for Symposan through the rest of 2022. On April 12, the company entered into a purchase agreement with Linkin Park Capital Fund, which provides that, subject to the terms and conditions of the conditions and limitations under the purchase agreement, the company has the right, but not the obligation, to sell to Lincoln Park up to $40 million of its common stock from time to time over the 36-month term of the purchase agreement.

We anticipate continued growth for <unk> and the rest of 2022.

On April <unk>, the company entered into a purchase agreement with Lincoln Park Capital Fund.

Which provides that upon the terms and subjects of the conditions and limitations under the purchase agreement. The company has the right, but not the obligation to sell to Lincoln Park up to $40 million of its common stock from time to time.

Over the 36 month term of the purchase agreement.

This facility along with our ATM are important tools for our questions.

Ernie Toth: This facility, along with our ATM, is important tools for requesting, together with our strong, ongoing business. Our expense and capital management activities, as well as the additional funds available under our existing debt facility, should LiverVant be approved and gain market access, provide the tools and flexibility as we fund our ongoing business activities. Looking forward, we expect royalty streams from license agreements to contribute to our future revenue. These royalty streams include Astaris, which will be launched in 2021 by Corium under license from Chemfarm, Suboxone in markets outside of the U.S. with Indivier, extravan in the U.S. with Mitsubishi Tanabe and in the E.U.

Together with our strong ongoing business, our expense and capital management activities as well as the additional funds available under our existing debt facility should live event be approved and gain market access provide the tools and flexibility as we fund our ongoing business active.

<unk>.

Looking forward, we expect royalty streams from license agreements to contribute to our future revenue.

Royalty streams include as Tars, which was launched in 2021 by Corium under license from Chem farm Suboxone in markets outside of the U S within <unk>.

Ernie Toth: with Zambon, as well as the launch of Undancatron by Hypera in Brazil following their recent approval, in addition to contributing revenue and cash to the company. These assets also represent potential opportunities to monetize streams of royalties, as we did for the Kain-Mobi Royalty.

Extra ban in the U S with Mitsubishi Tanabe and in the EU with them bonds as well as the launch launch of Ondansetron by high power in Brazil. Following the recent approval.

In addition to contributing revenue in cash to the company.

These assets also represent potential opportunities to monetize streams or royalties as we did for the kind mobi royalties.

Ernie Toth: As outlined in the press release issued last night after market close, we reconfirmed our full-year 2022 financial outlook. Snippets and growth, the continued performance of our manufacturing and supply operations, and our other ongoing business activities are expected to provide strong results during 2022. Spending on R&D is projected to accelerate as we continue development of AQST 109 during 2022. As a reminder, our full year financial expectations are as follows: total revenues of approximately $42 million to $47 million, non-gap adjusted gross margin of approximately 70% to 75%, and non-gap adjusted EBITDA loss of approximately $51 million to $58 billion.

As outlined in the press release issued last night after market close we reconfirmed our full year 2022 financial outlook.

<unk> growth.

Performance of our manufacturing and supply operations and our other ongoing business activities are expected to provide strong results during 2022.

Spending on R&D is projected to accelerate as we continue development of <unk> 109 during 2022.

As a reminder, our full year financial expectations are as follows.

Total revenues of approximately $42 million to $47 million.

non-GAAP adjusted gross margin of approximately 70% to 75%.

non-GAAP adjusted EBITDA loss of approximately $51 million to $58 million.

Ernie Toth: It is worth reiterating that this 2022 financial guidance does not include any revenues from the liver ban and will not until U.S. market access is certain and the launch is underway. In summary, our 2022 guidance for full-year, non-gap adjusted EBITDA loss reflects a lower projected revenue base from Suboxone as compared to 2021, partially offset by steady growth in Symposan, and significant additional focused R&D At the same time, we will continue to prudently manage our costs across our business to be as capital efficient as possible.

It is worth reiterating that this 2022 financial guidance does not include any revenues from Weber vans, and we will not until U S market access is certain and the launches underway.

In summary, our 2022 guidance for full year non-GAAP adjusted EBITDA loss reflects a lower projected revenue base from suboxone as compared to 2021.

Partially offset by steady growth in incentives and add significant additional focused R&D investments related to the advancement of <unk> one O nine.

At the same time, we will continue to prudently manage our cost across our business to be as capital efficient as possible.

Operator: With that, I will now turn the line back to the operator to open the line for questions. And thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And once again, that is star one.

With that I will now turn the line back to the operator to open the line for questions.

And thank you as a reminder to ask a question you'll need to press star one on your telephone to reach all your question press the pound key please standby, while we compile the Q&A roster and once again that is star one.

Operator: And our first question comes from Gary Nachman from BMO Capital Markets. Your line is now open. Hey, this is Evan LaPla on behalf of Gary Nachman.

And our first question comes from Gary Nachman from BMO capital markets. Your line is now open.

Hey.

On for Gary Nachman.

Couple of questions for me.

Evan LaPla: A couple of questions for LibreVend. Is there any more...? And are you still committed to launching LibriVend? Timing, and what other options. And then I have a few followers.

For live events.

Is there.

Any more active discussions recently with the different groups of SBA, including orphan drug group.

And are you still committed to launching libert bad depending on timing and what other options are being considered for it if any and then I have a few follow ups after that.

Keith Kendall: Sure. Well, good morning and thanks for the question. We remain in contact with the FDA as, you know, we take, I think, the unusual step of.., sharing the actual letters word for word as we get them so everybody sees in an unvarnished way how the agency is communicating with us. We have spoken to the office of the commissioner, we've spoken to the head of CDER, we've spoken to the head of OOPD, we've spoken to all of the levels within the CDER project group, and we continue to be active with the ombudsperson in the FDA, in the commissioner's office, and we'll continue to communicate with them and try to get some clarity from them, but you know their answer as we just read it to you the most recently from the office of orphan drug is that they're working on it, they know it's there, it's top of mind, and they'll get to us in a reasonable period of time whatever that means.

Sure well good morning, and thanks for the question.

We are we remain in contact with the FDA as we take I think the unusual step of.

Sharing the actual letters word for word as we get them so everybody sees.

In an unvarnished way, how the agency is communicating with us.

We have spoken to the office of the Commissioner we've spoken to the head of Cedar we've spoken to the head of O O P. D. We've spoken to all of the levels within the Cedar project groups.

And we continue to be active with the <unk> person in.

And the FDA and the Commissioner's office, and we will continue to communicate with them and try to get some clarity from them but.

You know their answer as we just read it to you. The most recently from the office of.

Orphan drug is that they're working on it they know what's there it's top of mind and Daryl.

They'll get to us in a reasonable period of time, whatever that means we'll continue to try to clarify that and shake loose at the same time.

Keith Kendall: We'll continue to try to clarify that and shake that loose, and at the same time, we'll also continue to monitor the legislative progress of uh, the refresh of the PDUFA statute, which we believe has some language in it around changes to the orphan drug law, so we're not sure if those are related unless the agency tells us, but we'll monitor that as well to understand or try to understand what the agency's thinking The second part of your question. We're prepared to launch. Obviously, we have a fiduciary responsibility to realize or extract the maximum amount of value for our assets.

We will also continue to monitor.

Keith Kendall: So if there's a better way to extract value as opposed to launching it directly, we'll certainly be considerate of that. And another question I had was... 3109 [inaudible] Could you review Part 3 of that? https://www.kenhub.com? Is that data still expected in the first half of 2023 and would that be sufficient for filing? Wow, you do a great job of stuffing 12 questions into two, but I'll give Dan Barber the opportunity to answer that for you. Sure, good morning.

The legislative progress of.

The refresh of the produce the statute, which we believe has some <unk>.

With Janet around changes to the orphan drug law. So we're not sure. If those are related unless the agency tells us, but we'll monitor that as well to understand or try to understand what the agency is thinking about orphan drug exclusivity.

The second part of your question.

Prepared for launch.

Obviously, we have a fiduciary responsibility to.

Realize or extract the maximum amount of value for our assets, So theres, a better way to extract value.

As opposed to launching it directly.

Li be considerate of that.

Okay.

Great.

Another question I had was on <unk> 109 could you review.

Three of the past.

Study and what are you hoping to show there and then what are you planning for in terms of the pivotal PK study, especially with the final formulation size in dose.

Is that data is still expected in the first half of 2023 and would that be sufficient for filing.

Well you do you do a great job of stuffing 12 questions into two but all you have Dan Barber the opportunity to answer that for you sure. Good morning, So yeah. The final formulation size and dose we.

Daniel Barber: So yeah, the final formulation, size, and dose; we feel very good about where we are from the Part 2 data that we recently put out. So, as Keith walked you through that Part 2 data, and as you saw in the press release we put out a few weeks ago, we believe we have hit the key marks around Pmax, Cmax, PD, and so on, based on the formulation we have. So we don't see, or we don't imagine at this point, any additional changes to the formulation size or dose.

We feel very good about where we are from the part two data that we recently put out.

As Keith walked you through with that part two data and as you saw in the press release, we put out a few weeks ago we.

We believe we have hit.

The key marks around T Max.

C Max PD and so on.

Based on the formulation, we have so we don't see or we don't envision at this point additional changes to the formulation size or dose so.

So that will remain the same in terms of part three.

Daniel Barber: So that will remain the same. In terms of part three, as we said before, that is really additional characterization of the product in anticipation of our end of phase two meeting in the fall. And so, what do I mean by that? We will do things that we know the FDA would like to see. So one question is, what happens if you swallow the film rather than put it under your tongue? And what happens when you take the film after having a peanut butter sandwich?

As we've said before that is really additional characterization of the products in anticipation of our end of phase two meeting in the fall and so what do I mean by that.

We will do things that we know the SBA would like to see so one is what happens if you swallow the film rather than put it under your tongue what happens when you take the film after having a peanut butter sandwich.

What happens under different dosing administration parameters. So that data is really about rounding out the data we already have.

One thing I would also point out is key.

Daniel Barber: What happens under different dosing administration parameters? So that data is really about rounding out the data we already have. One thing I would also point out is key, walkthrough before: in the summertime, we will do a crossover study versus EpiPen, which will provide us with a nice set of data for that end-of-Phase II meeting. If at that end-of-Phase II meeting the FDA agrees with where we are in our plan, as you mentioned in your question, we will move forward with a pivotal PK study, and I just want to make sure I answered all the parts of your question. Yeah, that was really great. Thank you. And our next question comes from Jason Butler from JNP Security. Your line is now open.

Walked through before.

In the Summertime, we will do a <unk>.

Crossover study versus Abbvie patents, which will provide us with a nice set of data for that end of phase II meeting.

In that end of phase two meeting the FDA agrees with where we are in our plan.

You mentioned in your question, we will move forward with the pivotal PK study and we would at.

At this time expect that to read out in the first half of two.

<unk> 2023.

I just want to make sure I answered all the parts of your question.

Yep.

Very helpful. Thanks.

Thank you.

And our next question comes from Jason Butler from JMP Securities.

Your line is now open.

Jason Butler: Hi. Thanks for taking the questions. Congratulations on the progress. Just a couple follow-ups on 109. I think Part 2, one of the goals was to inform the powering assumptions for a potential pivotal if you use the IM as a comparator.

Alright, thanks for taking the questions.

Congrats on the progress.

Just a couple of follow ups on one O nine I think part two one of the goals was was informing the powering assumptions for a potential pivotal if you use the I am as a comparator do you have any updated thoughts on whether you have it.

Jason Butler: Do you have any updated thoughts on whether you have that information now and what a sample size could look like for a pivotal study? And then, second question, just on the trial, the head-to-head versus crossover versus epinephrine, other than the obvious difference of the comparator arm, any differences here in trial design versus epifast or what information you're looking to gain from this study? Thanks.

That information now on water sample size could look like for a pivotal study and then second question just on the trial the head to head versus a crossover versus epinephrine other than the obvious difference of the comparator arm.

Any differences here and trial design versus at the fast or what.

Information Youre looking to gain from from this study thanks.

Daniel Barber: Yes, so the first part of your question, in terms of the powering for the Pivotal PK study, we did get what we needed from Part 2, and right now, we would imagine the Pivotal PK study being somewhere between 80 and 100 healthy volunteers. So, pretty standard for what others have done with this molecule, if you look at the other injectable products like AviQ or Syngepi or so on. So on that part, we feel good about where we are and the information we have. And on the...

Thanks, Jason Yes.

So the first part of your question in terms of the powering.

For the pivotal PK study, we did get what we need from from part two and right now we would envision the pivotal PK study being somewhere between 80 and 100 healthy volunteers.

Pretty standard for.

For what others have done with this molecule if you look at the <unk>.

Other injectable products like all the queue or some <unk> or so on so.

That part we feel good about where we are in the information we have.

And on the.

Daniel Barber: The additional study that we will do in the summertime, to your point, it does have a different design than the EPIFAST design, and that's because there is an additional element to it that we will use to fill out our end-of-phase 2 work. So it'll be 24 subjects, it'll be a crossover trial, EpiPen 0.3 versus our product, but we will also do a repeat dosing of the film and a repeat dosing of the IM injection.

The additional study that we will do in the summer time to your point. It does have a different design than the epic fast design and Thats because there is an additional element to it that we will use to fill out our end of phase two.

Work. So we will do it will be 24 subjects it'll be crossover.

B Penn.

Three versus our product, but we will also do a repeat dosing of the film and repeat dosing of the Im injection.

Daniel Barber: So there really are two things that we'll get out of that study. One will be the comparison to EpiPen, and two will be the repeat dosing data, which we know is a requirement that the FDA wants to see. Okay, great. Really helpful.

There really are two things that will get out of that study one will be the compare to epipen.

And two will be the repeat dosing data, which we know is a requirement that the FDA wants to see.

Jason Butler: And then, sorry if I missed this on LiberVent, but just a clarification point. Has the FDA asked you for any new information, you know, in the last several weeks or since the April meeting? Or is it just a case of, you know, them needing to do their work and get back to you at this point?

Okay, Great really helpful. And then sorry, if I missed this on live event, but just a clarification point has the FDA asked you for any.

New information.

No.

In the last several weeks since the April meeting or is it just a case of them needing to do that work and get back to you at this point.

Keith Kendall: Yeah, Jason, they've said repeatedly since the communication in December and every time we've talked to them since, excuse me, that there's no additional information they require from us, that they have to do their work, and as you heard in the last letter, they're working on it, they're focused on it, it's top of mind, I think is the language that they used, and they'll get to us in a reasonable time, Okay, thanks Keith. Thanks for taking the questions. Yep.

Yes.

Jason <unk> said repeatedly since the communication in December and every time, we've talked to them since.

Excuse me that there's no additional information they require from us that they have to do their work and as you heard in the last letter.

They are working on it they are focused on it it's top of mind I think is the language that they use.

And they'll get to us and in a reasonable time whatever that definition is for them.

Okay. Thanks, Keith Thanks for taking the questions.

Yes.

Operator: Thank you. And our next question comes from Thomas Flaten from Lake Street. Your line is now open.

Thank you and our next question comes from Thomas Flaten from Lake Street Your.

Your line is now open.

Thomas Flaten: Great, thanks for taking the questions. Just to round out 109, so assuming success in the pivotal study and data readout in the first half of 23, timing for a submission to FDA would be what, second half of the year, kind of, you know, late early 24, something like that? Yes, Thomas, this is Dan again.

Great. Thanks for taking the questions just to round out 109.

<unk> success in the pivotal study and data readout in the first half of 'twenty three timing for submission to FDA would be what the second half of the year kind of late.

Late <unk> early 'twenty four something like that.

Daniel Barber: Yes, we... If the FDA at our end-of-phase 2 meeting agrees with our plan, there would be two things that we would come out of that study doing or out of that meeting doing. One would be the pivotal PK study, and the second is we will do a small pediatric study in parallel to the pivotal PK study.

Yes, Thomas this is Dan again.

Yes, we.

Daniel Barber: Both of those things we see happening in the first half of 2023, and both of them would lead us to our continued goal of a filing at the end of 2023, as we see it right now. Great. And then, back to Liberman, have you found any precedent?

If the FDA in our end of Phase II meeting agrees with our plan there.

There would be two things that we would come out of that study dealing or out of that meeting doing one would be the pivotal PK study and the second is.

We will do a small pediatric study in parallel to the pivotal PK study both of those things we see happening in the first half of 2023 and both of them would lead us to.

Our continued goal of filing at the end of 2023 as we see it right now.

Great.

And then back to the limber events are there have you found any precedent.

Keith Kendall: or precedent situations where FDA has acted in a similar manner to how they've done with LibraVent, anything you can learn from what they've done in the past with respect to timing or outcomes? There is another company that's in a similar situation to us right now. There have been other companies in the past where, I don't know whether or not they were orphan drug related or not, but the FDA did not act on time. The FDA didn't give a follow-up date.

Or precedent.

Situations, where ftes acted in a similar manner to how they how they've done with liberal rent any anything you can learn from from what they've done in the past with respect to timing or outcomes anything with them.

There is there is another company that has seen a similar situation to US right now there have been other companies in the past where.

We I don't know whether or not they were orphan drug related or not but the FDA did not act on time on time, the FDA didn't give.

A follow up date.

Keith Kendall: Ultimately, some of those companies went to court to try to force action. So, I think with the orphan drug exclusivity issue, I'm not sure there are many precedents. I think that the FDA is following a couple of court cases. I think the FDA is trying to understand and ensure and protect exactly what authority and ability they have, and I think we're caught up in that. And then just one final one, any updates, or anything to share on AQSP 108?

Ultimately some of those companies went to court to try to force action.

So I think with the orphan drug exclusivity issue I'm not sure there are many precedents.

I think that the FDA is following a couple of court cases.

I think the SBA is trying to understand and ensure and protect exactly what authority an ability they have and I think were caught up in that.

Got it and then just one final one any update anything to share on HFC one way.

Keith Kendall: Yeah, so we remain excited about the profile we've created with 108. And we do believe that there are additional indications, and we have done work to identify what some of those indications could be. At this time, though, we wanna make sure that Libervant and 109 get to the right place, so you'll see us continue to focus on those two assets, with 108 coming up behind those two as they get farther along.

Yes. So we remain excited about the profile, we've created with want to wait.

And we do believe that there are additional indications and we have done work to identify what some of those indications could be.

At this time, though we want to make sure that liver and 109 I'll get to the right place. So youll see us continue to focus on those two assets with 100 weight coming up behind.

And those two as they get further along.

Great I appreciate you taking the questions. Thank you.

Thank you.

Thomas Flaten: Great. Appreciate you taking the time to answer the questions. Thank you. Thank you. And our next question comes from Andreas Argyrides from Wedbush Security. Your line is now open. Good morning and thanks for taking our questions, two for us here on 109. First, can you help us better interpret the differences between the arithmetic and geometric mean CMAX values that were in the EPIFAS study? And then how should we also interpret the lower AUC 0-10 minute value but the greater AUC 0-20 and 0-30 values? Compared to the point you made, in essence.

And our next question comes from Andreas <unk> from Wedbush Securities.

Your line is now open.

Good morning, and thanks for taking your questions two for US here on one nine.

First can you.

Help us better interpret the differences and the arithmetic and geometric mean C Max values.

That were in the <unk> study and then how should we also interpret the lower AUC, you're at a 10 minute value greater than you've seen year to 20 year to 30 values.

<unk> to the 0.3 makes up thank you.

Andreas Argyrides: Thank you. Good morning, Andreas. So, I'll do my best on the first one without delving into the statistical world. So, the main difference between arithmetic and geometric, as I'm sure you're very aware, would be how they're calculated, right? One, arithmetic is just literally the average, and geometric is the mean of the means. So, geometric gives you a better indication. Traditionally, it is seen as giving you a better indication of what your number would look like in a larger population.

Good morning Andreas.

I'll do my best on the first one.

Yeah.

Delving into the statistician world.

So the main difference between arithmetic and geometric as I'm sure you're very aware.

Would be how they're calculated right one arithmetic just literally average than geometric mean it means so.

Jim metric.

Gives you a better indication traditionally geometric as soon as giving you a better indication of what your number would look like in a larger population.

And the difference between arithmetic and a geometric mean in this case would largely be due to variability.

Daniel Barber: And the difference between an arithmetic and a geometric mean would largely be due to variability. So, we know there is variability with this molecule. We know epinephrine has an inherent high level of variability, and we're continuing to focus on that as we do larger studies going forward. The second question around the AUCs at 10, 20, and 30 minutes, we feel really good about all three of those. At 10 minutes, while we are below 100%, which I think is what you're referring to, we are within the 80 to 125 window that you would typically broadly think of as kind of a comparable window. So, I think we're in the low to mid-80s.

We know variability with this Molly.

A molecule we know epinephrine has an inherent high level of variability and.

And we're continuing to focus on that as we do larger.

Studies going forward.

The second question around the AUC at 10, 20, and 30 minutes, we feel really good about all three of those at 10 minutes.

While we are below 100%, which I think is what you're referring to we are within the 80 to 125 window that you would typically.

Broadly think of it as kind of a comparable windows. So I think we are in the low low to mid eighties.

Daniel Barber: What we like even more is at the 20 and 30-minute marks, we are above the 125. So, we're at, I think, 144 or something like that for the 20. And we think that shows a significant improvement or potential for a significant improvement versus what the IM is providing. So, we're really happy with the 10, 20, and 30-minute data. Great. Thanks. That's it for me.

What we like even more is at the 20 and 30 minute marks.

We are above the 125, so where we're at I think $1 44, something like that for 'twenty.

And we think that shows a significant.

Improvement or potential for a significant improvement versus what the I M is providing so we were really happy with the $10 $20 30 minute data.

Great Okay.

Thank you guys.

Operator: Thank you. And thank you, and if you have a question you'd like to ask, that is star number one again if you'd like to ask a question, that is star number one, and our next question comes from Ron Selvaraju from HP Wainwright. Your line is now open.

And thank you and if you have a question you'd like to ask that is star one again, if you'd like to ask a question that is star one.

Our next question comes from Ron Silver Rajiv from HP Wainwright.

Your line is now open.

Raghuram Selvaraju: Thanks very much for taking my questions. With respect to 109, I was just wondering if a special protocol assessment is likely in any way to be a possible applicable route that you would seek with respect to the FDA, for example, in the context of the end of phase two discussions. And secondly, if you could provide us with any color on 109 commercialization or optimization of value initiatives that you may take outside of. Sure, Ram.

Thanks, very much for taking my questions.

With respect to 109 I was just wondering if you could comment on firstly.

Any special protocol assessment is likely in any way to be a possible applicable.

Route that you would speak with respect to the FDA for example in the context of the end of phase two discussions and secondly, if you could provide us with any color on.

109.

Commercialization or optimization of value initiatives that you may take outside of the United States.

Sure Rob This is Dan I'll take the first part and then I'll hand, it over to my colleague, Ken who is here with us.

Daniel Barber: This is Dan. I'll take the first part, and then I'll hand it over to my colleague, Ken, who's here with us. We have thought about using the SPA process, but we don't see it as necessary for this program. As you know, from our understanding, one of the benefits is, especially... things like fast-track designation, getting a fast response, and good agreement with the FDA. But we don't think with the types of studies that we're running and the availability we have with the end-to-phase 2 meeting that it will be necessary to take that action.

We have thought about using the spa process, but we don't see it as necessary for this program.

From our understanding one of the benefits is.

Specially.

Things like fast track designation getting getting a fast response and good agreement with the FDA.

But we don't think.

With the types of studies that we're running and the availability we have with the end of phase two meeting that it will be necessary to take that that action. So we are planning on a very traditional.

Daniel Barber: So we are planning on a very traditional request meeting, put a briefing book in, have our study designs in the briefing book, and ask our questions in that end-to-phase 2 setting. So I'll pass it over to Ken for the commercial part. Hi, Ram. It's Ken. Your question was optimizing value outside of the US. Not inside the U.S.

Request, a meeting put a briefing book and have our study designs in the briefing book and ask our questions in that end of phase II setting.

So I'll pass it over to Ken for the commercial.

Commercial partners.

Hi, Ron It's Ken your question was optimizing value outside of the U S.

Not not and that is in the U S.

Yes exactly.

Keith Kendall: Yes, exactly, 4109. Yeah, Ron, this is Keith. Typically, well, as you know, we have no intent at this point in time or at this stage in the company's life to commercialize anything outside the United States on our own. Typically, we would wait until a product like this gets a little further along where its value is a little bit greater. I think the time for us to start looking at partners, and that's how we would do this outside the United States, as we've done with some of the other approved products that we've licensed, is after we get through the end of phase two discussions with the agency.

Yes, Rob this is Keith typically.

Well as you know we have no intent at this point in time or at this stage in the company's life to commercialize anything outside the United States on our own.

Typically we would wait until a product like this get a little further along where its value was a little bit greater.

The time for us to start looking at partners and that's how we would do this outside the United States as we've done with some of the other.

Proof products that we've licensed I think the time to do that.

Do we get through the end of phase two discussion with the agency we have good clarity around what.

Keith Kendall: We have good clarity around what the pivotal study would look like, and we could demonstrate that full, robust set of data to people outside the United States to get them interested in the product. That's the time we start thinking about and start our efforts to find a partner outside the United States in the various regions. Okay, and then with respect to LibreVent, just engaging in a hypothetical here, if, for whatever reason, LibreVent does not have a path to regulatory approval in the US, you know, for the moment, are there any ways to optimize its value in ex-U.S. territory? Yeah, that's a great question.

What the pivotal study would look like and.

We could demonstrate that full robust set of data to people outside the United States to get them interested in the product.

That's the time, we'll start thinking about the start.

Our efforts to find a partner outside the United States and in the various regions.

Okay, and then with respect to live events just.

Engaging in a hypothetical here.

If whatever reason liberal event does not have a path to regulatory approval in the U S.

For the moment.

Uh huh.

Are there any ways to optimize its value.

Ex U S territories.

Keith Kendall: Look, LibraVant is a great product, and it's going to get to the market at the end of 2026. We're working really hard to get it to the market much sooner based on what we believe the regulatory opportunities are, and we'll continue to work as hard as we possibly can. But LibraVant's going to get to the market. It's going to compete with products we believe it has a great chance of beating competitively when it gets there.

Yeah. That's a great question look lip event, there is a great product at Liberum Vance can it get to the market at the end of 2026, we're working really hard to get it to the market much sooner.

Based on what we believe the regulatory opportunities are and will continue to work as hard as we possibly can but labor Vance can it get to the market, it's going to compete with products. We believe it has a great chance of.

Of beating competitively when it gets there outside the United States, where we're at a place where we were with the other products we've licensed with Liberum.

Keith Kendall: Outside the United States, we're at a place where we were with the other products we've licensed with LibraVant, where we are talking to people who may be interested in the product in different parts of the world.

Where we are talking to people, who may be interested in a different parts of the world in the product.

Keith Kendall: And obviously, with a product that's gone through the regulatory process at the level that LibraVant has, those are attractive conversations. We'll continue to have those conversations until we find the partner that we like. Thank you, and thank you. And I have no further questions.

And obviously with a product that's gone through.

The regulatory process at the level that Liberty has those are attractive conversations we will continue to have those until we find the partner that we like.

Thank you.

And thank you.

And I am showing no further questions I would now like to turn the call back over to Keith Kendall for closing remarks.

Keith Kendall: I would now like to turn the call back over to Keith Kendall for closing remarks. Thank you, operator. Thank you, everyone, for joining today's call. We appreciate your time. The next few months, obviously, are going to be a critical period for Questive as we continue the clinical development of AQSD 109 and we get prepared for the end of phase two meeting and begin and kick off the pivotal trials before the end of the year. Obviously, we're all frustrated and anxious about where we are with the liver vamp.

Operator: We're going to continue to stay in contact with the FDA and try to get either clarity or action from them on the liver vamp filing. And as we go through all of those things, we'll make sure that we We will stay in touch with all of you, and we will continue to share with you the progress that we make. We appreciate your time today, and we look forward to talking to you again soon. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. [music]

Thank you operator, thank you everyone for joining today's call. We appreciate your time.

The next few months, obviously, you're going to be a critical period for quest as we continue the clinical development of <unk> 109.

And we get prepared for the end of phase two meeting and became and kick off the pivotal trials before the end of the year.

Obviously, we're all frustrated and anxious around where we are with liver.

We're going to continue to stay in contact with the FDA and try to get either clarity or action from them.

Round deliberate filing and as we go through all of those things will make sure that we.

Stay in touch with all of you and we continue to share with you the.

The progress that we make.

We appreciate your time today, and we look forward to talking to you again soon.

Okay.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

[music].