Q1 2022 Clarus Therapeutics Holdings Inc Earnings Call
Okay.
Yeah.
Thank you for joining and declared our first quarter financial and operating results conference call.
Today's call is being recorded and webcast live.
Website at Ww, Dod Clarus therapeutics Dot com in the Investor Relations section and will be available for replay for attendees. Following this lifestyle. Please note. The discussion should be may include forward looking statements.
These forward looking statements include statements regarding the mortgage off with Florida.
Well it depends though the anticipated benefits of recent patient initiatives and statements regarding the clarity with your growth strategy its pipeline and IP portfolio among others.
Forward looking statements involve a number of risks and uncertainties some of which are beyond <unk> control or other assumptions that may cause actual results or performance to be materially different from those expressed or.
Or implied by these forward looking statements.
This risks and uncertainties include but are not limited to the risk associated with the pharmaceutical development.
Risks associated with the Claris financial position and those factors described under the heading risk factors and <unk> annual report on turnkey for the year ended December 31, 2021 filed with the Securities and Exchange Commission. The S. E. T. On March 31, 2022, and those that aren't included in any of.
With feature filings with U S. E. T. These forward looking statements speak only as of the beta fish call and clearest disclaims any intent or obligation to update these forward looking statements.
Reflect events or circumstances. After the date of such statements, except as may be required by law.
Following the prepared remarks, there will not be taking questions. At this time I'd like to turn the call over to Joe Torre Doctor, Bob Dudley founder President and Chief Executive Officer of Congress. Please go ahead Sir.
Okay.
Thank you good afternoon, everyone and thanks for joining US today, we appreciate your interest in <unk>.
With me today is our Chief Financial Officer, Rick Petersen, and our Chief commercial officer break eager outlets.
Now, let's get started with our recent business highlights.
We continue to see total prescription growth for <unk> in the first quarter of 2022, with an increase of 12% sequentially and 75% year over year, driven primarily by advertising and promotion and an increase in payer coverage across all payer channels.
We presented new data for tens of it the androgen societies fourth annual meeting.
And at the recently concluded 2022 American Urological Association annual meeting just concluded in New Orleans.
We plan to submit new data to a peer reviewed publication.
Peer I'm, sorry peer reviewed medical journal publication.
In the near future, notably these meetings are the first in person medical meetings, where classes and has been able to showcase it turns though since the start of the Covid pandemic.
And next month, we will have a significant presence at the endocrine Society annual meeting in Atlanta again also an in person conference.
We received a notice of allowance from the U S patent and trademark office.
Our patent claims covering your Tencel once issued we expect this will be the eighth patents for Japan zero to be listed in the U S food and drug administration Orange book.
Also on the patent front, we received a notice of allowance from the U S. PTO for patent claims covering a CLA or $1 21, a proprietary combination of testosterone plus in astra's, all delivered by a subcutaneous implant for the treatment of androgen receptor mediated inflammatory breast disease.
<unk> that occurs predominantly in women.
We've also applied for orphan drug designation from the FDA for C. L. A R 121 for the treatment of inflammatory Perry ductile mastitis or P. D. M again that condition largely expressed in women and we expect FDA action end of June .
We also announced the close of an Upsized 30 million dollar underwritten public offering enabling us to continue to promote CIT Enzo while extending our cash runway into approximately September of 2022.
And finally as Ed noted, we continue to explore strategic alternatives.
Alternatives to maximize.
Stockholders' value.
Now Rick Peterson, our Chief Financial Officer will discuss Clarus with financial status Rick.
Thank you Bob I'll go with the first quarter 'twenty two financial results.
In summary, first quarter revenue was $4 million compared to $2 3 million in the same period last year.
This represents significant growth to 72%.
Attributed to jet engine sales.
Gross profit margins was 83% for the first quarter compared to 84% for the prior period.
First quarter operating expenses were $16 9 million compared to $12 8 million in the same period last year.
This represents an increase of 33%.
Driven by increased sales and marketing activity associated with the promotion of two turns out.
And an increase in general and administrative expenses associated with increased head count partially offset by decrease in research and development expenses.
So to break that down first quarter sales and marketing expenses.
Were $10 7 million compared to $7 9 million in the same period last year.
This represents an increase of 35% again, driven by an increase in advertising and promotional spend associated with kenzo.
General and administrative expenses were $5 3 million compared to $3 6 billion in the same period last year.
This represents an increase of 47.
<unk>, primarily attributable to higher personnel costs and costs associated with being a public company.
First quarter research and development expenses.
We're point 9 million compared to $1 2 million in the same period last year.
This is a 27% decrease primarily attributable to just timing of clinical costs associated with just Enzo.
Our cash and cash equivalents as of March 31, 22.
Were $9 1 million.
And then as Bob noted, we did closed and Upsized 30 million underwritten public offering on April 27, 22, which will fund our current operating plan into approximately September of 'twenty two.
I will now turn it over to Frank our Chief Commercial Officer Frank.
Yeah.
Thanks, Rick.
I am proud to announce that just turns off has experienced several notable milestones in the first quarter as the brand continues to grow.
Total prescription growth for <unk> turns in the first quarter increased 12% sequentially and 75% year over year, driven primarily by advertising and promotion of an increase in payer coverage across all payer channels.
So let's dig in specifically our prescription growth has been driven by the following first and foremost we continue to receive positive feedback from health care providers and patients.
<unk> their experience with just Enzo.
Second we are starting to see an impact the changes that are made in the fourth quarter of 2021 with our sales force. So recall that in the fourth quarter. We increased the number of sales representatives from 55 to 60.
We optimized the sales territories to ensure that we have a national footprint and we increase the overall PRT prescription volume coverage from 59% to approximately 80%.
Next we are seeing increased health care provider access with waning COVID-19 consent. Despite <unk> presence in the fourth quarter. So specifically, we have been able to increase sales rep access to health care provider offices in fact, nearly 90% of all of our health care provider calls araguaia.
Yes.
Additionally, we are seeing patient visits for hypogonadism returned back to normal levels, which means more patients returning to health care provider offices.
We expect to see both health care provider access and patient visits continue to increase throughout the year.
Additionally, another important growth driver for US is our launch of two new strategic partnerships with vault help and assist Rx. Both organizations are leaders in providing health care services to patients and both underscore clarus, whose continued commitment to providing solutions for patients.
Let me give you a brief overview of each first.
Our partnership with Volte health enables appropriate patients who may be suffering from hypogonadism to get clinical care from the comfort of their own home via telemedicine approach.
Through our partnership patients can access our telemedicine provider through a link on our website and by the end of the session get a visit scheduled with a provider with appropriate lab tests being ordered.
And second our partnership with assist Rx allows health care providers to take the administrative burden for their practice and have assist Rx do the heavy lifting for them.
<unk> integrates to health care providers EMR system, they will process the heat benefits verification handle any prior authorizations get patients started with tens of co pay assistance and even provide a 30 day starter prescription for non E scripts.
For the patient the offering gets even better as the SR X is in constant communication with them seamlessly filling or refilling their prescription and shipping tens of straight to their home that's taking a lot of the burden off of the patients place.
Important to understand that these two solutions work synergistically to provide better health care provider and patient support through a white glove service model to streamline and simplify the process from getting diagnosed to putting pen to paper to giddings it turns out.
And finally, we have increased patient access to CIT Enzo as for payer coverage in the first quarter of 2022 <unk> reached an all time high in access and overall lives covered for those patients who have insurance coverage in the United States to Tango is accessible to 72% of them. This represents one of the best.
Class branded agents with access and the story gets even better when you look at the commercial channel where the bulk of the TRT prescriptions go through we have even greater coverage there with 76% of all commercial plans now covering <unk> in terms of.
These are significant changes over the course of the year and now as mentioned just turns out as one of the best in class.
And as for patient assistance, we are seeing continued success and growth in our <unk> tens of co pay assistance program.
In January of 2022, we increased our annual support for out of pocket expenses from $2000 to 'twenty $400 per year.
This is important as we are helping patients to an even greater extent to reduce the financial burden of co pays and their out of pocket expenses towards it turns out it should be mentioned that this is significantly different in both amount and scope as compared to the competition.
As we move forward through the rest of 2022, we believed it turns a was poised to continue to accelerate growth.
First we expect that our overall payer coverage will continue to increase in 2022 and already in the second quarter. This year, we have seen an overall increase now to 72%, we believe that getting into the mid to upper 70 as possible.
Second we believe that when additional competition comes to the marketplace. We will only seek to increase the awareness and recognition for the treatment of hypogonadism and the awareness of oral therapy. We believe that this will increase our tier two market share. It will raise the awareness of it depends on if we are the only oral product that not only gets 87%.
Ah patients into normal therapeutic range.
Also has dosing flexibility to allow health care providers to find the right dose that works for their patients.
To be clear with just Enzo health care providers can go up or down on their treatment dose to dial in the exact therapy that the patient needs.
Next we expect the TRT market will continue to grow even larger currently the market is about over $8 1 million prescriptions with over $2 2 million appropriate patients getting treated.
These patients represent a key opportunity for tens of as these patients are currently on therapies that are associated with administrative challenges.
And it turns out is as straightforward as taking a medication with two meals per day.
Specifically as I mentioned on our previous earnings call, we know that an.
Independent survey study that we did and over 400 hypogonadism men that nearly eight out of 10 patients are not satisfied with their current non oral therapies.
We also know that she turns her overcomes those administration issues as an oral in fact, 82% of the patients if they knew and oral existed would want to learn more and would ask their doctor about she turns out.
And finally, we know that physicians would nearly always switch a patient to Japan. So if the patient requested the switch even if the patient was therapeutic on their current product that was not experiencing side effects.
We have finalized our new integrated health care provider and consumer promotional campaign and have a focused consumer media plan in place to address and raise awareness of <unk> to these targeted pay that said these targeted patients.
Vehicles like paid search display advertising and through social channels like Facebook Instagram and Youtube.
And finally, we know that there is additional opportunity with the greater than 4 million patients who have either been diagnosed or have stopped treatment.
These patients are ideal candidates for CIT Enzo as many patient stopped therapy due to product specific issues and as an oral and we believe that <unk> may be an option for many of those patients.
Besides the consumer media plan that I just mentioned, we are finalizing the production of a DTC television commercial and plan to launch that DTC component in the coming months the target to target the appropriate hypogonadism diagnosed and currently or previously treated patients with.
Currently expect that this is gonna be a significant driver in terms of growth in the future.
So as I close I want to reemphasize that we are excited about the impact we're having in the market today with our current initiatives and those that we have in place and we're excited by what lies ahead for us on the horizon and now I'll turn it back over to Bob.
Bob.
Thank you break.
Let's talk a little about our recent pipeline highlights and some updates around where we are headed from a pipeline perspective.
With respect to Japan, So we announced the initiation of <unk>.
Screaming for first patient in an investigator initiated phase four clinical trial in Japan for the treatment of Hypo gonadal men with chronic kidney disease in March we expect to announce the results of this trial in the first half of 2023, and we continue to work on several label expansion lifecycle management projects.
Also for Japan, Zoe and all with potentially large markets. These include.
T therapy for female to male transgender individuals or trans males.
And then the other invest.
It would be another investigator initiated label expansion study that.
We anticipate starting a phase four study in the second half of 2022.
As mentioned before we still believe that there is the potential for a once daily oral T U.
Product and we are looking at potential phase two initiation in the second half of this year also subject to availability of funding.
Regarding our R&D pipeline, we continue to advance both the CLA or $1 21, and the 222 projects.
The CLA C. L. A R 121, as a reminder, a combination of testosterone plus anastrozole, we license from Hollywood Therapeutics in Australia for the treatment of inflammatory breast disease, most notably current ductile mastitis and as a potential adjunctive therapy in estrogen positive androgen receptor positive.
Breast cancer.
We project an initiation of a phase two study for P. D M. A.
In the <unk>.
Late second half of 2022 again subject to availability of funding.
With respect to C. L. A R. <unk>. Two this is the combination of co Q10 or ubiquinone.
Kasper pungent.
We in licensed this technology from Mcgill University in September .
Project initiation of phase one treatment.
For primary and secondary forms of co Q10 deficiency and relate related mitochondrial dysfunction in the second half of 2022 again.
Both of these projects are.
Both for <unk> and for co Q10 deficiency subject to availability of funding.
Relative to intellectual property highlights for <unk> zone as of the first quarter. We had a total of seven Orange book listed patents in the Orange book for Iga turns out providing coverage to 2030 in April we announced that the U S. P. T O had issued.
An important notice of allowance covering additional claims for Japan zone. Once issues. We anticipate this patent will be listed in the Fda's Orange book as well, that's bringing the total number of Orange book listed patents two eight.
For C L a or $1 21. This is the.
Combination of testosterone plus anastrozole last week, we announced the U S. P. T O issued a notice of allowance covering claims.
For C L. A on $1 21.
And we have an active orphan drug designation application.
Under review by FDA for the treatment of Perry Ductile Mastitis, and we expect a response in the second quarter of this year.
As noted in my earlier remarks, we have been active in attending medical conferences.
Happily all of these have been in person this year, starting with the androgen Society in April in Orlando, The a way with just completed in New Orleans.
Well attended and we had significant interest there.
We will be also presenting.
The abstract and have.
They have a booth at the endocrine Society annual meeting.
Alive in Atlanta, Jimmy 11th to the 14th.
As we close I just wanted to give my sincere thanks to our team Claris, we are lean and mean and work very hard for all of our efforts towards kenzo and our shareholders.
We also thank our external partners for their hard work on our behalf and we thank our shareholders and our directors for their support.
We're excited about our future and look forward to providing continued positive news in the second quarter.
And with that this call will end after the operator has final comments. Thank you.
This concludes today's conference call you may now disconnect.
Okay.
Yeah.
Okay.
Yeah.
Yes.
Uh huh.
Yes.
[music].
Yes.
Okay.
[music].
Yes.
Okay.
Yes.
Okay.
[music].