Q1 2022 Acorda Therapeutics Inc Earnings Call
We'll take calls from our analysts and then we'll take some questions from other investors, who have written and when they registered for the call I'll now pass the call over to our CEO Ron Cohen.
Thanks, Tony welcome everyone.
We will dive right in embrasure net revenue for the first quarter of 2022 was $3 $5 million or 26% decrease over the first quarter of 2021.
This does not reflect our expectations for <unk> performance for the rest of the year. We were pleased to see that as the omicron wave waned at the beginning of the year from the beginning of the year and Brita sales rebounded significantly in particular.
January and February sales were similar March sales increased by approximately 85% over February and then continued to increase through April .
So what would happen we believe the following factors affected the quarter's results first we typically see a decline in net sales in the first quarter over the fourth quarter of the prior year and that's due to seasonal overstocking at the end of the year by patients and pharmacies as well as by changing of insurance carriers at the beginning of <unk>.
Each year. So we expect that however, the declines were exacerbated this year due in large part to a significantly higher estimates for discounts and allowances that we have in Q1 2022 as compared to the estimate in Q1 2021 and in fact gross.
Sales were essentially the same in each period, we expect DNA rates to decline during the rest of this year.
We also saw significantly fewer retails of embrasure prescriptions in Q1.
And that was related to both the Overstocking in Q4, and the extreme spikes in the National Covid cases, but we saw in December to February , which we believe caused Parkinson's patients who are among the most vulnerable to reduce their activity levels. Therefore reduce their usage of embrasure to treat their off peer.
<unk>, we believe that the large rebound in net sales in March and April reflects both the depletion of the Overstocking from Q4, and the subsiding of that major omicron way with patients becoming more active again.
Also related to embrasure, we are delighted to announce today.
We've signed an agreement with <unk> laboratories to commercialize <unk> in the nine largest countries in Latin America, including Mexico and Brazil.
<unk> is the leader in commercializing CNS therapies in Latin America. This is our third ex U S. Commercialization agreement. We're also in active discussions with other companies for the rights to commercialize <unk> in additional countries.
By way of update it Stephanie plans to launch embrasure in Germany in June and as a reminder, Germany is the largest pharmaceutical market in Europe .
Fourth largest in the world and we expect to begin to receive revenue from our supply agreement with Sberbank in the current quarter June by June .
Moving to ramp here.
And Purion net revenue for the first quarter was $14 9 million, 27% decline over Q1 2021.
However, gross sales were reduced to only by about 11% over Q1, 2021 and that was consistent with our internal projections again as with <unk>, We had a higher estimated DMA for <unk> in Q1 2022 than in Q1, 2021, and we expect.
The DNA to decrease the decrease over the remaining quarters of 2022, we're reiterating our guidance for 2022 net sales of <unk> of between 68 and $78 million.
So to provide a bit more depth on in brita.
As we noted previously the net sales were 26% lower in Q1, 'twenty two versus 21.
In addition, total prescriptions decreased by 12%, however, dispense cartons, which we believe is the true indicator of demand decreased by just 5% and again. This does not reflect our expectations for <unk> performance for the rest of the year, we believe that the major omicron Spike in December .
February was the major contributor to these declines very importantly, and really worth emphasizing again, we saw that 85% increase in net sales in March and then continued growth through April as that Covid. Despite subsided.
Feedback we are hearing in the field is that people with Parkinson's are in fact anxious to return to their more normal levels of activity and that motivates them to address their off periods more.
Now we've talked about the impact of Covid periodically on the launch of a breach.
I want to provide some color here some data to give you some color on that.
This graph illustrates the new prescriptions for <unk> have tracked with the average increases and decreases in in person office visits during the various waves of Covid. This is our <unk> data.
So you see that.
<unk> office visits go up prescriptions go up as they go down.
Prescriptions go down.
As you might expect but then we can actually see it here, we don't have the data yet on office visits for Q1 2022. However, as I mentioned earlier, we also saw a decrease in daily utilization in refills in Q1 2022, as we experienced that record number of cases, there were 20 in the over <unk>.
20 million cases of Covid in January alone that was over four times those of previous peaks and hopefully as that is subsiding, even with the more modest so far new wage we will see improvements there.
Moving to our financials and our goals for 2021, Mike would you. Please go through the financials.
Thanks, Ron.
For a bridge of net revenue was down 26% quarter over quarter as described previously.
Essentially flat sales due to the increase Medina.
<unk> net revenue was down 26, 6% quarter over quarter on lower gross sales and due to the increase of the DNA estimate decrease of empirical sales were within our internal expectations.
On Opex we are.
Our lower quarter to quarter by $7 million, reflecting our actions taken in 2021 to reduce opex going forward.
Note that the Q1 2021 cash included the proceeds of the Chelsea facility sale prior to the $6 million to $9 million Paydown of our debt in Q2 2021.
As we have noted we are aiming to be cash flow neutral on a run rate basis.
By the end of the year.
For 2022 quarter continues to expect and Purion net revenue to be within the range of $68 million to $78 million we.
We expect operating expenses to be within the range of $110 million to $120 million as previously announced given the uncertainty about how long the pandemic will continue to impact and breach of revenues, we are not providing revenue guidance on <unk> at this time.
Now I'd like to turn it back to Ron Ron.
Thanks, Mike.
Now moving to moving to look forward look ahead on building long term value. Our focus is to build that through execution on our key goals you see here.
First with respect to driving impressive growth now.
The effects of the pandemic continued to recede, we believe that people with Parkinson's are anxious to become more active as I mentioned.
And that's especially since activity is an important part of managing their Parkinson's are referred from patients plus the health care providers in the field that patients had sequester then they felt even more.
Vulnerable than the regular population and in fact they have.
Then overall there has been much more laxity with their overall medication regimen. So that the doctors are having to address that as they begin to come back to the offices.
We expect that the trends now with patients coming back.
Accelerating getting back to active lives are going to positively impact <unk> trajectory.
We also as I mentioned, we expect that <unk> is going to launch in the EU as largest market, Germany. This June and in Spain. In early 2023, plus we have just entered into the deal with <unk> for the nine largest markets.
Our largest countries in Latin America. So we're very pleased with that and we are in active discussions with several parties for additional territories in Europe and the rest of the world.
So I.
I'd like to take just a couple of minutes to.
To talk more about the big picture as we see it.
<unk>.
Obviously, the quarter was not what we would've liked to see and.
We've talked about that and I know everyone is hired of Covid explanations I am tired of them.
Beginning to sound like an excuse over time now I did show you some of our data we have more that makes it clear.
It's data, it's not an excuse it's a reality, it's a set of challenges that happen to overlap with the launch of this drug this drug in particular requires training, it's not a pill. It's a drug device. It's an inhalable you do have to give it some tender loving care with <unk>.
Both the prescriber offices, and the patients to train them appropriately to educate them appropriately and not having the proper access.
In person over the last couple of years has just been a drag its been a challenge now having said that.
All of the research that we have been doing continue to do all of the conversations and I've had many of them personally tell us that.
This is still a superb drug it is a great drug for patients. It is still the number one selling on the it's the number one prescribed on demand therapy for off periods and Parkinson's.
It empowers patients to treat their off periods in the moment at the time that it happened. So it is a.
A very much needed and appreciated by the patients adjunct to their daily regimens of medications for Parkinson's.
We have been doing our research we have been listening, we've been modifying and amending our programs accordingly.
We've had a huge amount of success online with millions of views of our ads driving hundreds of thousands of views of various.
Assets on our websites one of the things I would encourage you to do if you want to learn more is go to <unk> dot com, we've added new patient videos showing the actual before an after effect of ingredients. We have new messaging that is going out with regard to having.
Patients talk to their doctors about on demand therapies, we have several new programs that we have been implementing just in the last couple of months.
We still do all the data tell us that as long as.
The society in Parkinson's patients start coming out or keep coming out of the sequestering over the last couple of years that we will get a tailwind and we will see an acceleration of.
Of the growth of a breach of trajectory as long as that happens.
So with that.
In Tara we expect the brand to continue to decline against generics. However, we're very pleased that it's been very durable more durable than many expected and that the tail off the decline rate has been flattening over time.
We are reiterating as you've heard our net sales guidance. This year of 68 to 78 million of net sales.
With regard to finances, we are continuing to exercise our fiscal discipline to evaluate opex in relation to revenue in an ongoing way. We also expect to have the royalties from Biogen on ex U S sales of <unk> revert back to a quarter in the middle of this year are those are double digit.
Tiered royalties on net sales and as I mentioned, we also expect to begin to see revenue from sales of embrasure in Germany as of this June .
And then as.
We've mentioned in the past we're also building on the ARCUS technology platform, which has been validated by the approvals of Enbridge on the Es in the U S and EU, which allows large quantities relatively large quantities of drug to be developed to be I'm, sorry to be delivered <unk>.
<unk> via the lungs, where that may be advantageous versus going through the gut or other means.
We are in discussions about potential collaborations with other companies that have expressed interest in formulating their novel molecules for pulmonary delivery with ARCUS and we've already been performing feasibility studies on a number of those opportunities.
So with that.
I will open the call for your questions.
Thank you.
We have one question by phone from online.
So assuming with H C. Wainwright. Please go ahead.
Thanks for taking my questions.
Congratulations on the maximum amount of steel headwind.
Just one for months do you have any promising preclinical research in the pipeline for neurological disease.
Including from the quota Grant program.
You can share with US is there any movement on perhaps restarting your clinical pipeline programs.
It's one thanks.
One step.
For the other right so.
The entire focus right now is to get embrasure, where we absolutely believe it is.
B and ultimately we believe it will be.
In terms of being a standard of care for people with off periods in the field. There is nothing we have seen that changes that evaluation about the fundamental benefits of this drug to people with Parkinson's.
So we need to get that straight we need to we need some more time.
To see the trends that we we believe we're going to see and then we can turn our attention to investment in the rest of the pipeline now having said that we have assets in the pipeline right now and one in particular.
Excuse me that where we continue to be very excited about but we just are not able to spare the cash to invest in it currently and that would be our <unk> two asset initially for heart failure, we have human data on that that we talked about in the past we think it's a very exciting opportunity.
And that's something that once we get to a point, where we're able to branch out and and broadened our focus in addition to two <unk>.
That's something we very much want to get back into a substantial phase II trial.
And then plus anymore.
Okay.
Yes.
Great. Thanks for the color and in terms of the marketing and education efforts, particularly to the Huntington's patients are you thinking about.
Evolving cost.
But the web initiatives and perhaps going into apps.
Something else of that nature.
Yeah, So actually we already have been going back as as the pandemic has allowed we've already been going back to what we think is the single most effective thing and that is in person speaker.
Speaker programs, where you actually get 10 to 20 people or more in a room patients and their care partners and <unk>.
It's a three dimensional thing right you have that drug device you can demonstrate it in front of them you can talk directly to it they can talk to each other.
We found that that is a.
Much more effective means and we're doing that now so we have.
As conditions have allowed we have been getting back to those in person programs. In addition to the digital programs. Our digital team is exploring apps. We don't have anything specific to say about that yet, but we are exploring that as well.
Alright excellent.
Appreciate you taking our questions.
Thanks Bruce.
Thank you Ms <unk>.
Okay I'll pass it to tyranny casino floor rating question.
Okay.
This quarter, we gave investors the opportunity to buy some questions to the management team when they registered thank you to everyone who participated.
Hi, Seth.
All questions on similar topics.
And then into the following question.
First question.
You reported a good quarter why should investors believe that the performance of this company I was wondering anywhere Mccann.
Can't keep hiding behind Colgate Altai region first of all what are you going to do to improve the stock price.
We appreciate straightforward questions on that that's a very straight question. So.
I think I addressed most of this.
End of the formal remarks.
I'll address them in the context of the question look we agree we're not.
We're not happy I'm not happy with the quarter there were the mitigating factors I discussed, but the quarter is what it is.
I think we need to be clear about what the data say.
There's no question that Covid has impacted the launch it is not an excuse it is a reality and we have to deal with it.
And it continues to do so into the beginning parts.
Of this quarter.
People with Parkinson's are generally older.
There they can be immune compromised they've stayed at home during the pandemic they've not gone to regular doctor visits even when they have.
The pandemic has added layers of complexity to even managing them.
Which makes it more challenging to get messages in and if you look there are a number of other Parkinson's drugs not all of them, but there are a number of other Parkinson's drugs that have also experienced these issues for various reasons that are related to this.
Importantly, I think I'd want to emphasize again that.
Youre looking at the net sales gross sales were essentially flat quarter, one to quarter one.
Last year versus this year now flat is also not what were going for but it's not as dramatic as what the net sales look like and the net sales were.
<unk> largely by those DNA issues, which are estimates that are put in and then true up later and it just happened.
But the DNA line was substantially higher.
This quarter than it was in 2021.
Again, I do want to.
Point in addition to what was disappointing I think we need to also assess what is encouraging and what I find truly very encouraging is that consistent with our thesis consistent with what we believe the data are telling us we saw an 85% jumped a rebound in March.
And then it continued to increase through April and net sales of <unk>.
It tells you something right.
Find that encouraging we don't like January and February , but it does say that our thesis about the patients not having been refilling wildly sequestering and then coming back and beginning to do that again is sound and intact.
So.
I think just like the whole society in the whole world has been dealing with the challenges and the negatives of this pandemic for the last two plus years.
We are dealing with it as well I think.
The b the team the commercial team that has launched embrasure I'll just point out is largely the same one uncertainty. The leadership is largely the same as the one that launched and peer out which way way blew through People's expectation. So our team did.
Just lose their ability through that it's a matter of adapting to these conditions and also frankly to adapting to a different disease state a different mindset and a different.
Set of algorithms that these health care professionals use on their patients and educating them on how to marry that to this new modality of an on demand therapy that empowers the patient to address their off periods in real time, not just based on.
Tweaking their daily regimen, which is also important.
So all of that considered.
I am optimistic based on what we're seeing as long as we we are going to be coming out of this pandemic set of challenges.
Thank you. The next question is the logo on it says I'd like to know the internal valuations of these assets are aligned with public market valuations or if not what is the management team doing to address this dislocation keeping our head down and executing a strategy that is now I think.
The past few years, Colorado, and Nevada market, we think those are not balanced.
Lack of inpatient growth on the Comstock.
Right.
Well.
I guess there are couple of things to unpack there.
We can we can.
Talk more offline whoever that was on <unk>.
Covid and broader market weaknesses.
Being valid excuses or not it's not an excuse its data and there is no question. If you look at the data that both of those factors do affect.
The embryo.
<unk> growth and or stock price, having said that.
I've already talked about where I think we are and what we need to do and what we are doing to address those challenges. We believe that embryo is still we still believe it is a very valuable product. It is an excellent product again. It is the number one prescribed on demand treatment for off periods with all the <unk>.
Issues and challenges it still is.
And we believe that and PURA.
Real value, even though it is it will decline over time and that ARCUS is actually a a superb.
Platform technology that can be adapted to a number of different drugs and indications. So we're working to exploit that value to realize that value.
Look I appreciate the frustration I am also frustrated I'm a shareholder we're all all of US here are shareholders.
So our interest as they should be are alive.
I think we as long as I'm repeating myself, but I think I'll close by saying as long as we see the day light at the end of the tunnel or the light at the end of the tunnel.
The change in behaviors of Parkinson's patients based on the pandemic as long as we get them to continue and they already are already coming out of their shelves.
Certain degree as long as that continues I believe it actually gives us a unique opportunity to educate and to message with respect to that issue actually turn the challenge on its head and educate them to say look you've been in hibernation.
<unk> for over two years, we know you want to be active your Doctor tells you to be active you want to be active you havent been enacted that impacts your your just your whole health your whole emotional well being everything and.
Off periods prevent you from being active in the ability to address your off periods. When they occur is something that can be even more welcome to you as you are getting back to the kind of activity level. The kind of light that you would like ideally to live so that's where we're going with this and.
Again, as I said I'm optimistic.
Thank you the next question.
Has the company made any decision as I mentioned an interest payment.
Stock why is it consistently used equity to pay at the desk.
Well here again.
We're all shareholders I'm, a large shareholder of the whole leadership team and board our shareholders. Our interest are aligned here.
You know.
When we're looking at how to pay these interest payments.
We have to do is consider.
Impact on shareholders ourselves included and we have to consider all of the other factors that go into these decisions we need to consider the strategy. The long term goals, how we'd get their cash position anticipated test and a myriad of other details we put that all together.
We discuss it heavily.
We look to make the best possible decision and the circumstances with respect to the ultimate goal, which is getting a healthy vibrant growing company with growing assets.
I think that's the best I can say at this time, except to say that we are all shareholders.
Absolutely understand and.
I am very empathetic with the notion of dilution when you when we pay in stock.
I also we also have to consider the impact of what do we what is.
What is the ideal or optimal use of that cash at any given time. So we take all of that into account.
Okay. Thank you and the final question that has been that as.
While the company conducts a strategically to sell itself.
I think the answer to that is is.
<unk>.
Is that.
We need to always be prepared to consider.
Any.
Realistic and legitimate way of.
Maximizing shareholder value maximizing value of the company to our stakeholders.
So.
If.
If.
<unk> or sale of the company turns out to be that way that is something that we must do so we are open to whatever means it makes the most sense.
Maximizing the company's value.
So I think I'll leave it at that.
Thank you that is the underwriting questions.
Alright.
Well, thank you all for joining us.
Sure.
I'll close on a high note of this third major deal for embrasure.
Look forward hopefully to take.
Having a more positive things to tell you in the coming quarters.
Have a great week everyone.
Fifth.
Quanta Therapeutics first quarter 2022 financial and business update. Thank you for your participation you may now disconnect your lines.