Q2 2022 Liquidia Corp Earnings Call
Good morning, and welcome everyone to do your liquidity at Corp, second quarter, 2022 financial results and corporate update conference call.
My name is Angela and I'll be your conference operator today.
Currently all participants are enablers didn't only mode. Following the presentation, we will conduct a question and answer session and instructions will be provided at this time for you to queue up for questions.
If anyone has any difficulties hearing the conference. Please press star zero for operator assistance at any time.
I would like to remind everyone that the conference call is being recorded I would now.
Now I'll hand, the call over to Jason <unk>, Senior Vice President corporate development and strategy.
Thank you Angela It is my pleasure to welcome everyone to <unk> second quarter 2022 financial results and corporate update conference call.
Joining the call today are Chief Executive Officer, Roger Jeffs, Chief Medical Officer, Dr. Rajiv Sauger General chemical Rusty Schundler, Chief Financial Officer, Mike <unk> and other members of <unk> management.
Before we begin please note that today's conference call will contain forward looking statements, including those statements regarding future results and forward looking financial information as well as the Companys future performance and our achievements.
These statements are subject to known and unknown risks and uncertainties, which may cause our actual results or performance to be materially different from any future results or performance expressed or implied on this call.
For additional information, including a detailed discussion of our risk factors. Please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on our website.
I would now like to turn the call over to Roger for our prepared remarks, after which he will open up the call for your questions.
Thank you, Jason and good morning, everyone.
Over the last three months, we've continued to gain momentum across all areas of the company as we build towards our primary objective of preparing for the potential launch of <unk>, an inhaled dry powder formulation of <unk>.
I'll share just a few examples of our progress.
In the marketplace, we continue to build the awareness and reputation of liquid you amongst key stakeholders involved in delivering treatments for P. H, while also increasing utilization of <unk> injection.
The clinical arena.
Published data from the completed inspire trial in the journal of public pulmonary circulation, which validates the enduring value and therapeutic potential for <unk> to be a game changer for CAH patients.
In the regulatory area. The FDA confirmed that no additional studies will be required to seek label expansion to treat patients with ph ILD in March 2024.
Illegal forums, we advanced down the path towards your trumpets final approval with the peak turbine validating all claims of the 793 pad.
On the balance sheet, we continued to build for lunch, while being efficient with our use of capital.
And inside the company, we continue to build a high performing culture hiring key people to enable both near and long term success of our products and pipeline.
Speaking of hires I want to introduce you to one of our key new hires our new Chief Medical Officer, Dr. Rajiv <unk>, Rajiv and I have known each other for years and he's always impressed me with his determination to make a difference in patients' lives.
When I saw the opportunity to include them on our team took it immediately.
He brings the strength of knowledge experience and curiosity that will help take liquidity out to the next level.
Since most of our investors have not had the chance to meet Rajiv I've asked him to share his impressions so far rajiv.
Thank you Roger.
I'm very excited to join liquidity.
Pivotal moment in our company's evolution.
Just steps away from the potential introduction of your trip, yet as a central and critical treatment modifier of the prostacyclin pathway.
With immediate focus on the potential launch of new truck here. We are committed to the continued scientific research and education efforts and pulmonary hypertension for patient clinician and the broad community.
<unk> was first introduced to the ph community in 2015, and just two years later start enrollment in the inspire trial. The first program to explore the benefits of an inhaled dry powder formulation of <unk> for patients who are naive to prostacyclin therapy.
Transitioning from Nebulizer Televisa.
During that time I was a pulmonary specialist in clinical scientists with a focused interest in pulmonary hypertension.
And along with many other investigators was thrilled to participate in the study.
Now as the Chief Medical Officer.
Importing over the robust clinical data that includes largest funeral patient exposures to your truck exceeding three years between the inspire study.
And the ongoing extension trial.
In fact, we recently announced the publication of the completed inspire trial, which included patients treated between eight and 18 months before rolling into the extension trial in.
In reviewing the data.
I was pleased to confirm that <unk> can be safely titrated across doses comparable Q3 to 24 breakfast <unk>, indicating that a wide range of therapeutic doses can be easily administered just a few breath from one or two capsules of your trip yet as compared to nebulizer.
Your trip your treatment is also durable and fact of the 121 patients enrolled more than 90% completed treatment at the primary endpoint.
And when combined with exposure data from the extension study, we saw that more than 75% of patients completed treatment of at least 12 months.
Lastly, <unk> is attractive to patients.
After only two weeks nearly all of the transition patients preferred or strongly prefer the DPI over the nebulizer.
Only one patient reported no preference after two weeks, but at four months, 100% of transition patients preferred you truck yet.
We believe this data demonstrates the patients' unmet needs.
And potential for rapid adoption when available.
All of this data has been enabled by our proprietary print formulation of unified dry powder particles ideally sized into risk variable range to enhance drug exposure, while using an inhaler very familiar to clinicians who have treated tens of thousands of COPD and asthma patients with a similar device.
Yes.
We believe that <unk> profile will help build on the body of knowledge in the medical literature that higher inhaled doses may lead to better clinical outcomes.
So we are not required to generate new clinical data to CP pulmonary hypertension associated interstitial lung disease in the <unk> label, we will look for opportunities to fully explore you trip yet with the help with the help of the wider community Roger.
Thank you Rajeev beautifully stated.
It's exciting to think where we can guide the company with your help but first and foremost we need to get the product approved I'd now like to ask Rusty Shindler. Our general counsel had can never seen or legal case to summarize our key legal advances in just this past quarter.
Thanks Roger.
We have recently taken two major steps towards resolving the outstanding claims brought by United Therapeutics.
First we have submitted all post trial briefings and our hatch Waxman litigation in the United States District Court for the district of Delaware.
As previously disclosed trial was completed at the end of March.
Thus with the submission of all post trial briefings. The court now has all of the material required to reach a decision on the alleged infringement of the API manufacturing patents, which we refer to as the <unk> six patent.
And the method of use patents, which we refer to as the 7900 patents.
The trial material cereals in the transcripts are available from the court and we believe demonstrate all claims asserted are invalid and or not infringed.
We do not know when judge Andrews will issue its ruling but do you expect that it will come before the end of October when the regulatory stay expires.
Second we successfully concluded the inter parties review of the 703 patent with the patent trial and appeal board or P tab.
Rolling in July that all claims are on patentable.
<unk> ruling is not binding on the court and the hatch Waxman litigation would not override in order of the court.
That you dropped it may not be approved due to infringement of the 703 patent unless and until the decision of the Pea tab is affirmed on appeal.
Coupled with United Therapeutics prior stipulation of partial judgment in favor of liquidity.
With respect to the 91 patent another patent that was initially asserted against liquidity you pay tabs rolling means that even before the decision in the hatch Waxman litigation liquidity has now received favorable rulings with respect to two of the three patents initially asserted by United Therapeutics against liquidity.
We will continue to keep you updated on any material developments as we approach the court's decision.
Yeah.
Thank you Randy.
I would now like to ask Mike <unk> to highlight a few points from the second quarter.
Yeah.
Thank you Roger and good morning, everyone.
Our second quarter 2022 financial results can be found on the press release issued earlier today and on our Form 10-Q to be filed with the SEC after market close today in.
And those documents you will see that revenue was $3 9 million for the three months ended June 32022, compared to $3 4 million for the same quarter in 2021 revenue related primarily to the sale of two cross known Jackson under the profit split agreement with Sandoz.
It is important context that despite the decrease in our profit split percentage from 80 20 to 50 50 in Q3 2021 quarterly revenues have increased each quarter since the launch of subcutaneous.
We continue to see consistent demand with more than 500 patients on treatment and increasing support from payer mandates for generic.
Cost of revenue.
With <unk> 7 million for the quarter, which was the same compared to the second quarter of 2021.
Research and development expenses were $5 2 million.
Compared with $4 6 million.
Zero point $6 million increase from the same quarter last year split between timing of manufacturing related to that you talked to your program and a one time charge for personnel related costs.
General and administrative expenses.
Were $6 $9 million compared with $4 4 million, a $2 $5 million increase of which just over half was due to increases in commercial marketing and personnel expenses in preparation for the potential commercialization of <unk>.
Other expenses in the quarter totaled <unk> 5 million, an increase of zero point $3 million over the same quarter last year were related to a higher interest expense on our debt with Silicon Valley Bank.
All told all totaled we incurred a net loss in the second quarter of 2022 of $9 4 million or <unk> 15 per basic and diluted share compared to a net loss of $6 5 million or <unk> 13 per basic and diluted share for the second quarter of 2021.
Turning to our balance sheet, we ended the second quarter well prepared to execute on our plan.
At June 30, cash and cash equivalents totaled $103 8 million as compared to $57 5 million as of December 31, 2021, we really believe that the cash on hand, combined with revenue from structure proximal injection will support operations into 2024, I would now like to turn the call back over to Roger.
Thank you Mike at this time I would now like to open it up for questions. Operator first question. Please.
Yeah.
If you would like to ask a question simply press star one on your telephone keypad.
Your first question comes from the line of Greg Harrison with Bank of America. Your line is open.
Hey, good morning, Thanks for taking the questions.
First I wanted to ask how quickly can.
Can you launch if the hatch waxman decisions are favorable and what preparations.
Are underway.
I know the press release mentioned new hires.
Sales are those contingent on.
On the resolution of the trial and.
A full approval.
Hey, Greg This is Roger thanks for the question.
So the launch timing from once we have a successful resolution of the hatch Waxman trial, we believe will be between weeks to a maximum of let's say two months and really Thats just resubmitting for final approval will be.
Small bit of final safety data that will submit along with that.
We've already discussed how our labeling will be finalized so I don't think theres going to be any labeling revisions required.
We think we'll be on the shorter end of that two to two weeks to months spectrum.
And then secondly in terms of your question of print.
We have hired key leadership positions, so obviously, bringing rajeev in with his expertise, which you could hear very eloquently in his summary of the data today.
We are bringing in what we call regional business directors, which are the key regional sales heads for the different areas of the country.
Now interviewing and scaling our sales force through contingent offers as you as you surmised.
Those are going to be contingent on final resolution of the hatch Waxman trial.
As we have been and will continue to be we're trying to be efficient with our use of capital.
So we are preparing I think the other thing that you should notice.
Preparing commercial product and we will have commercial product ready for the market.
Upon the resolution of the hatch Waxman trial.
Thank you for the question Greg Operator next question Greg.
Your next question will come from the line of charge Ballinger with Needham and company. Please go ahead.
Hi, good morning.
Couple of questions on the ongoing legal proceedings.
First on the timing of the district Court decision.
Just curious I think there was a recent.
Post trial briefing.
Demanded by the District Court judge.
Curious if that potentially portends an earlier decision then.
Tober and then secondly, maybe just talk about how different the <unk> six patent that remains.
At issue in the District Court litigation.
Two $901 79, three thanks.
Yes. Thank you. Thanks for the question I'll ask you to address those please.
Yeah.
Thanks Serge.
So on your first question regarding the timing of a district court decision.
It's hard to predict when the court is going to roll.
Correct. The court did ask for some supplemental briefing.
<unk>.
I think it was in July but that does not necessarily mean that the decision will come earlier.
Again, we think it'll be before the end of the 30 months stay at the end of October .
But beyond that could theoretically.
We'd be any day.
It's just hard to predict because the courts are busy and they have a lot of competing.
Hands on their time.
And the second question.
On the differences between the <unk> six patent in the 91% to 79 three.
The next six to 901 are both methods.
Methods of manufacturing the personal API.
The 703 patent is a method of treatment patents. So the 703 patents quite a bit different from the <unk> 901 patents.
691 patents are very similar as to what they cover but the language of the claims is different and so.
If you look at the.
The claim construction and what that meant as far as what the 901 patent covered versus the six six.
There are some differences.
I'm not sure if that answers your question, but they do cover very similar things, but again there are some key differences in the way the claims restructure and those two patents.
Thank you Ross you could call it.
Yeah.
Operator next question please.
Your next question comes from the line of Matt Kaplan with <unk>.
<unk> Berg with Zelman. Please go ahead.
Hi, Good morning, guys and thanks for taking my question.
Just as you kind of enter your performing the preparation for commercialization.
Can you give us some of the sense some sense in terms of the feedback that you're getting.
On the profile of <unk> versus <unk>.
<unk> and <unk>.
And what the responses from the treatment community so far.
Yeah. Thanks, Matt So I'll start, but maybe then I'll ask Rajiv to comment since he's very close obviously, Tim and number of the Kols.
I think for us the things that resonate with physicians and the patient community is is the therapeutic what I'll call. The therapeutic flexibility of your trip yet its ability to tight to titrate <unk>.
AE profile.
And durability abused.
Rajeev mentioned in his opening comments.
And the next thing that really went the next nicely is the ease of use so the portability the low resistance device.
Just the encapsulated blister blister pack product, which is just easy to carry as well it doesn't spill theres no orientation requirements. So theres a number of what we call preference preferential aspects that the community is looking forward to.
But rajiv maybe if you have any color that you'd like to add to that.
Thanks, Roger and thanks, Matt for the question.
I agree with everything you said I think that I think what is exciting to the community is another opportunity to provide.
This form of <unk>.
<unk> through lower device.
<unk> I think the ability to provide.
For strength of different capsules leased up to the 160 microgram dose and then to be able to continue to titrate to doses beyond what is typically known as nine to 12 breaths.
That we've seen with Toby so I think it can be well received.
Typically practice shares.
Have been taught that Televisa effectively has a ceiling because its inability to titrate undertook a sudden hypervisor. This is the first time, we're going to be able to offer patients the opportunity to continue to match their clinical symptoms and needs by uptight trading Tobey so as deemed titrate.
Titrate your trip USDA fit by the providers. So we're really excited about that.
But the feedback from Kols.
Thank you.
Great. Thanks for the question I appreciate it. Thanks, Operator next question. Please.
Your next question comes from the line of Julian Harrison with BTG. Please go ahead.
Good morning. Thank you for taking my question and welcome to liquidity of Dr. Sagar. Most of my questions have already been asked but I'm. Just wondering if you could talk now a little more about the key details the provisional label for your trip such as maybe the highest dose indicated and what that corresponds to.
Nebulize, Televisa breaths equivalent or anything else, you're able to share at this time.
Yes, so I'll just say, what we've said publicly.
Which is that the label will include doses.
Describe the exposure during the inspire.
Trial up to 212.
Micrograms four times a day, so that would be an equivalent of 24 breast Memorial day basin, given four times a day.
And we're obviously doing it in two to four breaths per session.
Yes.
A very quick.
Time to set up there is very little cleaning the only clean at the end of the day so.
What I'd like to call the game changer really changed completely changes the delivery profile of inhaled your personnel.
Both to be flexible therapeutically in terms of dose and also in terms of ease of administration and then as Rajeev said.
We had four cats the strengths that will accommodate these escalating doses.
And as I mentioned those are being prepped now for for launch so we will be ready for <unk>, when we launched the product.
To initiate patients on therapy to transition to high they said patients as well as to have hospital supply as needed.
Again really working hard to focus all our attention on the launch.
Yes.
Blessed with the product profile of that product.
Ports.
Thanks for the question very much.
Next question please.
There are no further questions at this time, Mr. Jeff I'll turn the call back to you.
Thank you thank you Angela.
I'd like to thank everyone for joining us on the call today.
We absolutely appreciate your continued interest in liquidity.
And we'll certainly update you on our progress throughout the year.
Thank you for calling and have a nice day.
This concludes today's conference you may now disconnect.
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