Q1 2022 Opiant Pharmaceuticals Inc Earnings Call
[music].
Greetings and welcome to opioid Pharmaceuticals first quarter 2022 earnings conference call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Ben Atkins Weiss.
President of communications and Investor Relations.
Thank you and over to you.
Thank you operator, and thank you all for joining us this afternoon.
With me on today's call are Chief Executive Officer, Dr. Roger Crystal Chief Scientific Officer, Dr. Phil Skolnick, and Chief Financial Officer, David a tool.
Chief Commercial officer, Matt roof will join the question section of the call.
This afternoon <unk>.
A press release announcing financial results and providing a business update for the three months ended March 31st 2022.
We will also be presenting slides today today's press release and the slides for this call are available on our website at www Dot dot.
Dot com.
Before we start please note that certain information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act, we caution listeners that during this call <unk> management will be making forward looking statements.
Actual results could differ materially from those or.
Our implied by these forward.
The risks and uncertainties associated with the company's business.
These forward looking statements are qualified by the cautionary statements contained in <unk> news releases and SEC filings, including our annual report on Form 10-K for the year ended December 31st 2021, and subsequent filings. This conference call also contains time sensitive infill.
That is accurate only as of the date of this live broadcast May 10 2022.
Undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
Now I'd like to turn the call over to Roger.
Thanks Ben.
Warm welcome to you all thank you for joining our conference call to discuss <unk>.
Financial results and business highlights for the first quarter 2022.
We appreciate everyone's time and attention.
Third we are focused on our mission to advance medicine.
To treat addiction and drug overdose.
Few companies have dedicated research and development in this area.
Fewer sale their entire mission.
Yet the disease death, and economic costs associated with the substance abuse is overwhelming.
We are.
We are proud to be a leader in this field with a strong pipeline and exciting catalyst in the near term and beyond.
The first quarter of 2022 marked another strong quarter for us as we move or PMT 003, nasal nalmefene closer to NDA submission.
We are very excited with the recent results of the Pharmacodynamic studies topline readout, which builds off the impressive data we saw from our prior clinical pharmacokinetic studies.
Dr. Phil Skolnick, our Chief Scientific officer will speak to the PD results shortly.
At the end of March we completed a pre NDA meeting with the FDA.
The purpose of the meeting was to discuss our planned NDA submission to ensure that all requirements for a complete application will be met.
Based on that meeting we believe our NDA submission for <unk> III is on track and we remain hard at work to ready to filing.
Simultaneously, our commercial preparations continued to advance in support of a launch.
Our teams continued to execute on our other pipeline programs, while we prepare our regulatory submission for <unk> III.
Specifically, we are exploring the potential for <unk> 002, nasal naltrexone to reduce heavy drinking associated with alcohol use disorder.
We are in an ongoing phase II clinical trial in Europe .
This is a condition, which affects millions in the United States.
Continues to be a significant need for better medical treatment.
Less than 10% of people classified with alcohol use disorder receive pharmacotherapy.
To date, we have enrolled over 80 patients in our trial with a target of 300 patients.
We expect to complete enrollment in early 2023.
I would also like to highlight <unk> driven event for acute cannabinoid overdose for which we expect to complete IMD, enabling activities. This year.
Our work is supported by a strong balance sheet and the continued support from our government partners.
As I noted at the beginning we are making good progress with <unk>.
The opioid epidemic has continued to evolve with synthetic opioids like no now accounting for almost 90% of opioid overdose death.
Which equates to about 70000 deaths from synthetics in 2021 up from less than 10000 in 2015.
Significantly fentanyl and other synthetic opioids are now found across non opioid substances, including cocaine and counterfeit prescription medicine, such as Adderall and Percocet.
Anecdotal.
I think that anecdotal accounts.
<unk> in young adults being targeted by dealers selling these counterfeit pills through the use of social media is particularly stressful.
In our effort to develop treatment better able to confront our current opioid overdose crisis.
We are very encouraged with the topline data from a pharmacodynamic study.
Phil Skolnick, our Chief Scientific Officer designed the study working with the FDA, which requested efficacy data compared with naloxone.
I've asked Phil to join US today to provide more detail on the PD study and the packages data is complete.
Phil over to you.
Thank you Roger.
To understand the significance of our data for <unk> three.
To understand the unique pharmacological properties synthetic opioid fentanyl and how they've exacerbated.
Worsening public health crisis next slide please.
Thank you.
First synthetic opioids like fentanyl are highly lipophilic molecules compared to opioids like heroine.
This property results in a very rapid entry into a person and central nervous system.
And a much more rapid onset of action.
This rapid onset effectively shortens the window of opportunity for successful rescue in an overdose.
Like other opioids fentanyl binds to view opioid receptors. These receptors mediate the analgesic and rewarding effects of opioids as well as the respiratory depression actions.
However.
Fentanyl and related synthetic opioids. In addition to binding with high affinities are very potent and activating new opioid receptor associated signaling pathways.
On a milligram per milligram basis, a compound like fentanyl is about 50 times stronger than heroin.
Both very high potency and rapid entry into the brain greatly increase the risk for overdose with synthetic opioids, lastly, and adding yet another level of complexity to treating synthetic opioid overdose.
<unk> has a plasma half life of seven to eight hours, while the plasma half life with naloxone is about one to two hours.
This means fentanyl as well as many other opioids with longer plasma half life than naloxone can lead to a recurrence of respiratory depression. After the effect of the reversal agent wears off.
This is a phenomenon termed re narcotization.
Re narcotization complicates the management of overdose, which can include the need to re dose with the reversal agent is <unk>.
Symptoms reoccur to the need for an extended intravenous infusion of reversal agent in the emergency room.
The half lives of opioids can vary widely.
There is no information about either the opioid for the amount taken after receipt of an overdose.
A rescue agent with a longer duration of action can reduce the risk of re narcotization.
Naloxone is currently the only FDA approved opioid overdose reversal agent.
Multi reports have emerged over the past five years, indicating that more effective rescue agents are needed in an era when.
High potency synthetics are responsible for the majority of opioid overdoses.
Within this context that the national institutes of health leadership.
As calls for the development of quote stronger longer acting formulations of antagonist and cold.
Like naloxone Nalmefene is a new opioid receptor antagonist that can reverse the signs and symptoms of any opioid overdose, including respiratory depression.
However.
We believe that the Pharmacodynamic and pharmacokinetic properties Nalmefene may differentiate it as a reversal agent, particularly well suited to community environment now dominated by synthetics.
Our use information learned from a large body of existing research as well as our own clinical development program to demonstrate why this is so next slide please.
Thank you.
Multiple studies have demonstrated that Nalmefene has a fivefold higher affinity at the new opioid receptor compared to naloxone.
It's higher affinity results had much higher.
New opioid receptor occupancy than naloxone, even it's Tim Luke plasma concentrations.
Our pharmacokinetic study.
Demonstrated higher plasma concentrations of <unk> nasal nalmefene compared to nasal naloxone.
This is especially important at early time points six critical for successful rescue.
Illustrated here.
<unk> concentrations at five minutes.
Data from our PK or one study showed that the plasma concentration of Nalmefene.
Our almost three times that reported for nasal naloxone.
Can also see here this illustrated here by the T Max and the C. Max.
It took nasal nalmefene 15 minutes to reach T. Max and contrast to 30 minutes with nasal naloxone.
And <unk> the total concentration of reversal agent in the plasma is twice that of the nasal naloxone.
Finally, multiple studies, including our own have demonstrated that the <unk>.
The half life of Nalmefene at 8% to 12 hours.
Essentially longer than naloxone at one to two hours.
In addition to these PK data.
At the request of the FDA. We also designed the recently completed Pharmacodynamic study.
This compared nasal nalmefene to nasal naloxone in an experimental model of opioid induced respiratory depression.
The study was powered to show non inferiority at five minutes Post administration.
The primary endpoint agreed to with the FDA.
This means demonstrating now awesome to be as good as nasal.
<unk> nasal nalmefene to be as good as at least as good as <unk> at this time point in reversing opioid induced respiratory depression.
This was a crossover study conducted in healthy volunteers to compare nasal nalmefene nasal naloxone in reversing the respiratory depression effects of the synthetic opioid Remy fentanyl.
The two drugs were assessed by measuring changes in minute ventilation following the administration of the respective drug <unk>.
Minute ventilation is the amount of air inhale or exhaled permit.
Our primary or our primary endpoint as I indicated before was five minutes post administration.
An early time point was agreed to as the primary endpoint measure because it is critical for a rescue agent to be able to act quickly in an overdose.
This is especially important to the case for synthetic overdose, where there is in fact, a reduced window of opportunity to affect us.
Eric successful rescue.
Subjects were randomized to receive either no ochsner nalmefene either day, one or day five.
Washout in between study drugs next slide please.
This figure illustrates how we conducted the study.
I will explain the procedure.
And I will go through what we see at the primary endpoint.
Minutes and also after the first 20 minutes in this study.
Thank you.
To start.
All subjects were tight fitting facemask.
At time zero.
Which you can see on extreme left of the graph.
Subjects were administered a gas mixture containing a high concentration of steel to.
You can see in this graph.
By 10 minutes.
After breathing. This hyper capita gas mixture the minute ventilation substantially increase.
At this point, Jamie Fentanyl infusion would start you can see that by the downward arrow, which says Remy infusion.
Okay.
This infusion was started at that point and it lasted through the end of the study.
You can see that Randy said no produced a rapid reduction in <unk> it.
It is this reduction in benefit inflation that is central to the extent mental model of opioid induced respiratory depression.
At 15 minutes into the Remy Fentanyl infusion, which is <unk> 25 on that graph.
The face masks was briefly removed and the subjects were dosed intranasal <unk> with either nalmefene or naloxone.
Minute ventilation within measured over the first 20 minutes, which of course includes the primary endpoint at five minutes, which is indicated by the downward arrow on the on the graph, let's examine these first 20 minutes in more detail <unk>. The next slide please.
Thank you.
Working from the left of the slide to the right.
The bar graph.
Demonstrates <unk> five minutes and at five minutes nasal nalmefene produced a greater reversal of respiratory depression that was nearly twice that produced by naloxone.
Increases in benefit inflation were 575 liters per minute and three point <unk>, one liters per minute with nalmefene than naloxone, respectively.
As you can see the minute the different subminimum insulation between the two groups clearly favors nalmefene.
Now moving to the middle panel.
This figure is graph to illustrate the FDA criteria that had been established to demonstrate non inferiority.
As the left.
The film Circle is the difference in minutes inflation between naloxone anomalies.
With a 95% confidence interval indicated by the lines bracketing the field circle.
The first started line to the right is the benefit inflation.
Where there was no difference between the two treatment that is the line intersect zero.
Which would mean no net difference the second line to the right is the point. We proposed is non inferiority with nalmefene could be no more than 20, 20% lower than naloxone.
Nalmefene falls.
Well to the left of this slide.
Indicating the LPN teal III clearly met the primary endpoint of non inferiority.
Yes.
The third panel shows the first 20 minutes post dosing.
At five minutes post nalmefene increases in minutes inflation well.
Within the 95% confidence interval of the inflation of four subjects were given where we stand now.
<unk> seven and a half 10, 15 and 20 minutes.
Post Nalmefene are all also within the pre Remy Fendt mill values and should be very clear from the slide because those points.
Actually dot debt or cross that dotted line or come close to it.
By contrast, we took nasal naloxone 20 minutes to increased minute ventilation to level seen.
Five minutes with Nalmefene and if you look closely at the graph you can see the <unk>.
Circles as opposed to the squares.
Recall also this is an experimental model of opioid induced respiratory depression.
This model has a ceiling effect that may underestimate true differences between naloxone and now machine with respect to both the speed of onset and efficacy at which an overdose can be reversed.
Next slide please.
It is with these compelling PD data.
Together with the PK studies, we conducted demonstrating both rapid absorption and long plasma half life.
That suggests or PNT over three represents a highly promising opioid overdose reversal agent.
These studies.
Will form the clinical basis of our NDA submission to the FDA.
And if I may at this point I'd like to thank our government partners, the biomedical advanced research and development authority.
And the National Institute on drug abuse for their support.
I'd also like to acknowledge the contributions of my colleague, Dr. Mark Ellison and its clinical development.
To the success of these studies.
Okay.
Thank you for your attention let me now hand, this over to David David.
Thank you Phil the details of our financial results are in the press release, So I'll focus now on a few highlights.
For the first quarter 2022, we reported revenues of $4 5 million of which $2 2 million of revenue was attributable to royalties from the license agreement with emergent Bio solutions, Inc.
<unk> or ebs.
The sale of Narcan nasal spray.
This compared to approximately $6 $4 million in revenue and $4 3 million in royalties for the same period of 2021.
The decrease in royalty revenue was due to a reduction in the royalty rate to 2% from tiered royalties with rates ranging from 6% to 12%.
This is the result of UBS applying the generic reduction clause provided for in the license agreement.
A prospect that we anticipated included in our current financial plan and discussed on our last earnings call.
This provision in the agreement states that once the generic is launched in a particular country.
Each subsequent quarters performance in that country is measured against Narcan sales for the same country in the quarter immediately preceding the quarter in which the generic launched.
The first commercial sale of Teva generic occurred in the U S. In December 2021.
First quarter 2022 sales of Narcan nasal spray in the U S and Canada were approximately $93 1 million as reported by Ebs.
This was actually a 25% increase over net sales during the first quarter of 2021.
However, based on information provided by UBS. The U S specific net sales decreased more than 30% when compared to U S sales in the third quarter of 2021, the reference quarter.
The royalty rates applied to net Narcan sales in Canada were not impacted as no generic version has been launched to date in Canada.
This calculation is completed separately each quarter, which means that the application of the generic reduction caused this quarter has absolutely no bearing on whether it is triggered in the remaining quarters of 2022.
Total operating expenses for the first quarter were $16 3 million compared with $8 7 million for the same period in 2021.
Operating expenses included $4 4 million in general and administrative expense compared with $2 6 million in 2021.
$8 8 million in research and development compared with $4 1 million in 2021.
And $2 seven.
Million in sales and marketing compared with $1 million in 2021.
The increase in investment in R&D and sales and marketing were primarily associated with the completion of our clinical work for <unk> 003.
And heightened pre commercialization efforts respectively.
Net loss for the three months ended March 31, 2022 was approximately $12 2 million or a loss of $2 43 per basic and diluted share compared to a net loss of approximately $2 8 million or a loss of <unk> 66 per basic and diluted share for the <unk>.
Comparable period of 2021.
From a capital resource perspective, we ended the first quarter with approximately $51 million of cash, which puts us in a position to execute on our key commercial and R&D initiatives.
We also potentially have access to an additional $30 million under the existing debt facility at certain milestones are met.
Thank you and with that let me open the call for questions.
Thank you.
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One moment please wildly.
Four questions.
Okay.
Thank you.
First question comes from the line of Brandon Folkes with Cantor Fitzgerald.
Please go ahead.
Sure.
Hi, Thanks for taking my questions and congratulation on the data and I appreciate all the color.
Maybe just firstly.
Thank you.
Provide maybe some insight into the feedback you've received so Paul just on the onset of action.
I guess, it seems pretty significant impact.
Paula you proceed Paul.
And then maybe secondly, anything on the market currently and market dynamics that you're seeing.
Have a nice market.
And that may not be playing out as you expect.
Yes.
Without giving away your commercial strategy.
And then you do have the ability.
All of it but just how you're seeing that market play out.
I wanted to get a very different.
Differentiated product thank you.
Thank you Brandon Thanks for the question.
In terms of the feedback and onset of action.
Thanks, Greg.
Top line data, but very encouraging what we know.
For a successful opioid overuse those rescue.
Delivering as much of a potent opioid overdose reversal agent into the ultimately the great as quickly as possible is key.
And the feedback we've had so far let me speak to our Kols and our advisory Board, that's very much what theyre seeing as represented in this Pharmacodynamic study and the other consideration is just around whether you save a life or not.
It's also weather.
The person can avoid longer term visibility.
Even the immediate thing if you can reduce the amount of acute medical care required such as the expensive intensive cat so anything that can reduce that.
Not just well received from a clinical perspective, but also from a health economic perspective, as well, which is why we are confident that this product.
We think it will be differentiated.
And we'll have a significant value proposition as well.
Clinical and economic angles.
Then in terms of the market dynamics.
When we embarked on this program this is a competitive market.
Have a strong player.
And.
The majority market share and there is other.
Product on the market as well and we welcome that.
In a sense, we won't competition be one innovation.
I think the market dynamics.
Around the competition should continue.
When we look at some of the opioid settlement around free goods.
Teva for example, that's important to increase access to opioid overdose reversal agent and communities otherwise.
Satisfactory solutions, such as some of these harm reduction communities or what.
Important when we think about the market dynamic is that this is a long term solution because innovation is here and it should continue and we still allow for that but.
The addressable market. This is my final comments in terms of market dynamics continues in many ways. Unfortunately continues to grow and now we're seeing increasing year on year quarter on quarter.
Not just opiate overdose death, but in parallel the proportion of those that are.
Due to synthetic opioids.
Yeah.
Okay.
Thank you.
The next question comes from the line of.
Len George Hill with Oppenheimer.
Please go ahead.
Okay.
Thanks for taking the questions and also my congratulations on the terrific data.
Two questions one first for David David If you could just to the extent you're able to remind us of.
The interplay between the authorized generic.
And what you may take.
Royalties versus sales of the branded.
Narcan nasal spray.
And then also just thank.
Thank you mentioned that <unk> would be on the on the Q&A I just wanted to ask Matt. If you could provide some more color I know its little bit early but just as you gear up for commercial for Diablo III.
With those preparations are looking like thank you.
Thanks, Thanks Leland.
I appreciate you being on the call and the questions.
Answer first and then Matt is here and he can answer that question. The second question for you.
As far as the authorized generic and the branded the interplay there.
The branded Narcan.
Under the agreement those two amounts are combined as far as the dollar amount and we receive royalties based on the total look there is no differentiation between the authorized generic and the branded as far as what royalty rate applied.
Thanks.
Hi, This is Matt I'll go ahead and answer the second question. So and result in regards to our commercial preparation.
We have secured a very strong leadership team and all of the different functions are required to effectively launch a commercial drug. So we've got trade and distribution, where we're securing distribution licensing.
Distribution methods.
For one we launch this obviously, we've got a strong marketing team sales.
Sales leadership government affairs initiatives.
And market access. So we are in preparation building the foundation by which we will be able to launch this pending FDA approval.
Great. Thanks, very much taking questions.
Okay.
Please go ahead.
Line is on mute you can speak now.
Oh, great. Thanks for the question and congratulations on the progress of what's clinically what clinical differentiating data or language do you hope to anticipate to have.
L three label versus nasal naloxone, and then I have a follow up as well thanks.
Thanks, Carl so.
Again this is all dependent.
Our interaction with the FDA.
David.
Very receptive to this program overall.
With fast track designation, we're able to have that interaction real time.
However, when we think about the overall differentiating factor with this product we see it as fast.
And longer.
Bill.
Auction based on the PK now the Ped study as well when we look at the minute ventilation.
Naloxone.
Now within analyses.
As Phil said just to reemphasize the.
The response, we see that Nalmefene.
Five minutes in the Ped study is achieved with.
Naloxone nasal naloxone until 20 minutes.
The strong it's also related to that.
We looked at the PD study lets see well, it's two data points stronger if you like the PD study.
Hey, Ken.
Many of installation.
Brent.
Respiratory recovery.
From Remy Fentanyl infusion.
The minute ventilation.
Now.
Double got at Noah.
The other stronger aspect to the inherent properties of the Nam with the molecule.
It has at least five times greater affinity critical new opioid receptor when compared to the Lockdown and then finally the longer piece.
The longer peso.
Yes.
From our data, although our data support this was actually in the existing label for injectable <unk>, which was the original branded nalmefene in the language in that label that includes the fact that Nalmefene Axa <unk>.
Goes out in Milwaukee.
So.
Those are the.
That's the underlying supporting data on that.
The discussion with the FDA as to how that will fit into the label itself.
Okay.
Great. Thanks, that's very helpful. And then the follow up question.
Is probably more for David.
How should we look at SG&A and R&D spending for the balance of the year.
Understanding that in the current quarter, the first quarter, rather you had $2 7 million.
Related to pre commercialization activities, and then art and in the R&D line, you had $2 2 million from the BARDA grant. Thanks.
Okay.
Yes.
So a couple of things on BARDA I think that's worked.
Thanks, Karl for the question and thanks for being on the call first of all but for BARDA. The total contract as you remember was $10 3 million.
We recognized $6 $8 million of that through March 31, 2022.
So we have another three 5 million that will be recognized and received.
This year.
So the R&D spend 4003 will be August four.
The for the year for the next quarters will be offset by the $3 5 million that we we do get in revenue from from BARDA.
We are as we've mentioned in the process of doing the 002 study out of.
For alcohol use disorder, and so we would see that the R&D spend.
We would not be as great in the first quarter because most of that work was done core zero-zero III and won't be continued obviously, we're at the cleanup clinical end of <unk> III.
So the R&D spend for the rest of the year will be focused primarily on 002 and finishing up the.
Regulatory and FDA approval for 003.
SG&A as we get closer to.
FDA approval towards the end of the year.
The sales and marketing spend will increase.
Many of the hires will be contingent upon FDA approval. So many of those.
A lot of that expense won't be incurred until we get really FDA FDA approval for the sales side of it.
G&A, we're going to keep that as lean as possible going through the end of the year.
To save.
To expeditiously watch our expenses.
And make sure that we have all of those all of our resources focused on.
Commercializing Zero-zero theory.
Great. Thanks, so much.
Thank you.
Next question comes from the line of David Bautz with Zacks.
Go ahead.
Hey, good afternoon, everyone.
Hi, first question three I am.
Curious if you've had any discussions with the FDA regarding the need to do any type of drug drug interaction studies.
And then in addition, I wonder if you feel like there is going to be the need to do any additional studies to understand the risk of precipitated or abrupt withdrawal from the use of Nalmefene nalmefene.
Thank you David Yes, there's.
Nothing that's certainly around drug drug interaction again that was already well known with the existing.
Approved <unk>.
In terms of.
Withdrawal and additional studies at this point the FDA haven't specifically said, we need to do any additional studies.
Regarding this as well.
Okay.
Okay. Thanks for taking the question.
Thank you.
Ladies and gentlemen, we have reached the end of question and answer session and I would like to turn the call back to Roger Christian for closing remarks.
Thank you operator, thank you for joining us today and for your interest in OPM. Please enjoy the rest of your day.
Yeah.
Thank you.
Concludes today's conference you may disconnect your lines at this time, thank you for your participation.