Q3 2022 Evoke Pharma Inc Earnings Call

Good afternoon, and welcome to the evoke pharma third quarter 2022 earnings Conference call. Currently all colors have been placed in listen only mode and following management's prepared remarks, the call will be open for questions. If you would like to ask a question at that time. Please press star one on your telephone keypad.

Need to remove yourself from the queue Press star two at anytime if you should need operator assistance. Please press star zero be advised that today's call is being recorded I will now turn the call over to Daniel <unk>. Thank you you may begin.

Good afternoon, and thank you for participating farmers conference call today.

With me today are David Dodd here evokes Chief Executive Officer, Chris question, Barry <unk>, Chief commercial officer from ever song and bathroom <unk> evokes Chief business Officer by now you should have a copy of the press release, we issued earlier.

Not it is available on the Investor Relations page of our website at evoke pharma dot com.

We encourage everyone to read today's press release as well as <unk> quarterly report on Form 10-Q, which has now filed with the SEC.

The company's 10-Q report and press release are also available on evokes website.

Please note that certain information discussed on the call today is covered under the safe Harbor provisions of the private Securities Litigations Reform Act.

Caution listeners that during this call management will be making forward looking statements.

Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.

These forward looking statements are qualified by the cautionary statements contained in evokes press releases and SEC filings, including its annual report on Form 10-K and subsequent filings.

This conference call contains time sensitive information that is only accurate as of the date of this live broadcast.

<unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances.

After the date of this conference call with that I would now like to turn the call over to David Doll here Dave.

Thank you Danielle and thanks, everyone for joining us today.

I'll start by providing key takeaways from <unk> third quarter ended September 30, and then hand, the call over to Chris and Matt to discuss commercial operations and financials.

I am very pleased to report that our third quarter featured record financial and operating results in all of the key metrics, we use to gauge the overall strength and value of our business.

These include a record quarterly net revenue of $832000 representing growth of 80% over Q2 net revenue.

A record number of dispensed prescriptions in Q3 compared to Q2 with an increase of 56%.

A record 143, new prescribers, which represents 13% increase over Q2.

And lastly, 812 total chimbote prescribers at September 30, an increase of 21% over the prior quarter.

And our fourth quarter has continued to show strong growth with new prescribers hitting a record high for the month of October up 62, new writers.

During the third quarter, we shifted our distribution program to vital care a wholly owned subsidiary of good Rx.

And bound vital care prescriptions during Q3 increased by 32% over Q2.

Last quarter, we said that <unk> would provide a leading indicator of gymboree prescription fills for the second half of this year.

Let's electronic prescription submission process seems to be simplifying physician prescribing and consequently, accelerating the inbound prescriptions.

Chris will go into more detail about how vital care contributed to our prescription fill performance in Q3.

Another positive development in Q3 with our announcement in August that we had launched a telehealth solution for patients through up scrip health. We believe this partnership will allow for more rapid consultation and potentially treatment initiation within just a few days if medically appropriate.

Chris will also discuss how all of these partnerships enhance our outlook for the remainder of the year and into 2023.

Our goal remains as it has always been to make Jim Modi the standard of care for the relief of symptoms associated with diabetic gastroparesis.

In September we announced that <unk> had been nominated for Helios annual disruptive Innovators award under the Helio, an industry Breakthrough award category and it took place at the American College of Gastroenterology meeting last month.

<unk> was selected among other novel Gastroenterology products.

From six other major pharmaceutical companies the likes of Medtronic, Bristol Myers Squibb and Abbvie for example.

Considering the other products in the category from multinational billion dollar pharma organizations. We believe this nomination further highlights the novelty of a non oral treatment for a disease, where traditional oral treatments are noted to be unpredictable.

This concept the lines with the FDA comments within its guidance for clinical evaluation of drugs for the treatment of Gastroparesis.

Patients with Gastroparesis may and general benefit benefit from alternatives to oral solid dosage forms, including including but not limited to medical.

Medical Vermont.

In addition, the American College of Gastroenterology also released their updated guidelines in almost a decade for treating gastroparesis <unk>.

<unk> was included in the guidelines along with comparative data to oral medical Vermont.

This inclusion is important to our goal of making <unk> the standard of care.

In this pursuit protecting our intellectual property is a foremost importance.

In Q3, we announced that the U S. PTO issued a notice of allowance for a U S patent application for <unk> Wen.

When granted the patent will cover methods for treating moderate to severe gastroparesis with medical provide inter nasally.

Once issued the patent entitled treatment of moderate to severe gastroparesis will expire in 2037.

The patent will add two folks existing patents and other patents in the EU, Japan and Mexico.

And importantly, the patent protects our phase III clinical trial outcomes and data that show efficacy with nasal medical from my formulations for people suffering from moderate to severe diabetic gastroparesis.

And in addition to this patent other applications are currently being reviewed by the U S. PTO.

And with that I'll turn the call over to Chris <unk>, Chris.

Thank you Dave.

Third quarter was a strong period of progress on many measures. Our Q3 performance was our strongest since <unk> became commercially available in Q4 of 2020.

I am proud of how the team continues to execute on our strategy to deliver meaningful value to patients through genuity and the support programs and services we offer.

Continually inspired by our purpose to improve the health and lives of patients suffering with diabetic gastroparesis.

I'm, particularly proud of our sales and market access team that are bringing the message of novel treatment options for patients. They continue to drive trial and adoption, which is showing up in our results.

I will summarize our top line quarter over quarter growth by saying, we generated a 32% increase in prescriptions, a 56% increase in dispensers.

Which resulted in an 80% increase in net revenue.

That was driven by a 26% increase in total prescribers from quarter over quarter.

Yes.

The driver for Q3 performance is increasing the number of new and repeat prescribers. We continue to believe that we are still in launch mode, and therefore, continuing to increase breadth and depth of prescribers is critical for ongoing success.

As David indicated we successfully implemented our full transition to vital care in may.

Our goal was to take advantage of <unk> automated platform and operate within physicians normal workflow via electronic medical record systems.

Both physicians and advanced practice providers overwhelmingly showed their support of this change by writing significantly more prescriptions.

With some perspective to that Hcp's generated.

Prescribed <unk>, 29% more during the 10 months that <unk> has been available than the 22 months under the prior process.

<unk> prescriptions via Vida care since May is equal to the number of prescriptions written previously since launch.

Looking forward, we are focused on continuing this trend in improving the conversion rate of prescriptions due to Smith.

In August we implemented a telehealth option for diabetic gastroparesis patients access scale cure.

<unk> is increasingly utilized by providers and patients and Covid only accelerated adoption of this channel.

We believe telehealth as an important option for patients who don't have regular access to care due to remote location lack of transportation affordability work schedule.

And those that would prefer to access care via telehealth option.

Ill health provides access to care from a license healthcare provider generally with access to same day physician appointments.

This may allow for more rapid consultation and potentially treatment initiation within just a few days.

If medically appropriate pace.

<unk> can find telehealth on Germany, Rx Dot com, where can learn about it via our online digital advertising efforts.

As mentioned on past calls direct to patient advertising, particularly paid search and social is an important part of our marketing mix as we continue to invest patients' awareness continues to improve increasing nearly 11% since our last measurement late in Q2.

Additionally, we see increased posting of interest in <unk> on social media forums.

Ultimately our goal is to facilitate conversations between patients and providers and whether it's <unk> Modi is appropriate for them.

And our most recent patient awareness trial and usage market research study, which surveyed 200 patients patient.

Patients indicated that they are highly interested in a non oral option for the treatment of their GP symptoms.

Patients, who are taking chimbote rated genuity more favorably on efficacy and tolerability measures compared to patients taking other treatments patient.

Patients also taken chimbote rated promoting more favorably for symptom improvement and ease of use compared to other treatments.

All patients on Chimbote reported symptom relief, while one in four patients treated with other products indicated no symptom relief at all.

These data along with the anecdotal daily reports from providers of patients experience relief motivate us and provide confidence that there is a significant unmet need.

<unk> is uniquely positioned to help patients and providers, who are struggling to gain the upper hand on symptoms of Gastroparesis is they can use a nasal spray when they experienced nausea, and vomiting, which is not usually possible with oral treatments.

On the provider front, we have seen significant gains in access to offices, coupled with a fully staffed and very engaged sales team in the third quarter.

Not only are our representatives, reaching a greater percentage of their targets, but theyre getting more time with them the appointments educational meetings and speaker programs.

This extra time affords an opportunity to address the key advantages of Genuity and differentiate our route of administration as well as allow platform to discuss any questions or hesitancy to prescribe.

Great example of this is our speaker programs over 500 customers have attended to at least one program since inception earlier this year, resulting in a 48% lift in prescribing for attendees after the program compared to what they prescribed prior to attending educational program.

Our efforts are having an impact and patients are ultimately the ones benefiting from improved provider understanding.

In addition to our promotional speaker programs, we've expanded our presence with Kols and important guests neurology Congresses.

Advocacy and interest continued to grow at the KL level.

At the Motility Society meeting, we sponsored a symposium with doctors, Linda wind of Stanford University, and Richard Mccallum with Texas Tech University.

They spoke to a standing room only audience of motility experts and orange underscores the need to resurrect metoclopramide through <unk> as the only FDA approved option to treat gastroparesis referenced data from <unk> clinical trials and the recent study demonstrating a low incidence of tardive dyskinesia compared with what was previously.

<unk> reported in the literature.

These data as Dave mentioned, we're also recently highlighted an updated gastroparesis guidelines that were published in August <unk>.

<unk> was included in the guidelines along with our comparative data to oral and the.

Our recent tardive Dyskinesia study, we completed and presented at digestive disease week in June .

These milestone events are critical to the brand as they provide independent support for <unk> and provide content for kols to using their own presentations with Lakeland lecturing at different forms across the country.

Lastly, we continue to make progress on overall patient access and success with Payors.

Without rebates to payers, thus far 115 plans have approved at least one prescription of <unk>.

77% of our prescriptions were reimbursed in Q3 versus 63% in Q2. This is a significant improvement and contributed to the 80% improvement in net sales for the quarter.

Our patient support grant patient support program through vital care, which includes supporting providers and completing prior authorizations is contributing as well importantly, when plans approve a prior authorization is generally approved for a 12 month period.

<unk> patients have an opportunity to try to Modi. Many are experiencing positive results as evidenced by an overall refill rate of 71%.

Yes.

Continue to enhance our position the gastroparesis market through the right strategy and continually improving execution.

Each quarter, we have seen improvement over the prior quarter and importantly saw a significant improvement in <unk> over <unk>.

With that let me turn the call over to Matt to discuss financials.

Thanks, Chris.

Now I'll review, our financial performance for the third quarter of 2022.

Net sales of approximately 832000 compared with approximately 462000 in the second quarter of 2022, an increase of approximately 80% net sales for the third quarter of 2021 were approximately 247000, which excludes approximately 683000 and sold to a third party for research purposes.

The increase in net sales sequentially and year over year was due to higher number of <unk> prescriptions and greater overall reimbursement.

Net loss was approximately $2 million or <unk> <unk> per share in the third quarter of 2022, compared with approximately $2 2 million or <unk> 71 per share in the second quarter of 2022.

Net loss for the third third quarter of 2021 was approximately $2 million or <unk> 73 per share.

Research and development expenses for the three months ended September 32022 were approximately 40000 compared with approximately 191000 for the three months ended June 32022, and approximately 82000 for the third quarter of 2021.

R&D expenses in the second quarter of 2022 were higher as a result of increased nonrecurring manufacturing testing.

Sure.

For the third quarter of 2022, selling general administrative expenses were approximately $2 6 million compared with $2 3 million for the second quarter of 2022.

SG&A expenses were essentially unchanged from the third quarter of 2021.

Continue to expect that selling general and administrative expenses will increase in the future as we continue to progress with the commercialization of <unk> and we reimburse ever Sona from our net profit obtained from the sales of promoting.

Total operating expenses for the third quarter of 2022 were approximately $2 7 million compared with $2 6 million for the second quarter of 2022, and approximately $2 8 million for the third quarter of 2021.

As of September 32022, company's cash and cash equivalents were approximately $12 4 million.

We believe based on our current operating plan that existing cash and cash equivalents as well as future cash flows from net product sales of <unk> will be sufficient to fund operations into the second quarter of 2023.

With that.

We'll open the call to questions from our analysts I'll turn to the operator.

At this time, if you wish to ask a question. Please press the star one on your telephone keypad, you may lose yourself from the queue by pressing star two.

And we'll pause a moment to allow questions to queue.

Okay.

And we see no questions in the queue from the covering analyst I will turn the program back to David Gardner for closing remarks.

Okay. Thank you.

I'll close with some brief remarks, we believe the third quarter represented an important milestone for evoke the operational details. We shared are certainly noteworthy however, the numbers really tell the story in Q3.

The significant increases in net sales, new physician metrics and inbound prescriptions as well as the increasing patient and HCP awareness of chimbote give us tremendous optimism for the future of evoke and our naval.

Novel Intranasal treatment of diabetic gastroparesis.

As we approach the end of 2022, we have high enthusiasm for our product and our business and we look forward to updating our investors and supporters as events warrant. Thank you.

This concludes today's evoke pharma third quarter 2022 earnings call. You may disconnect. Your line at this time and have a wonderful day.

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