Q4 2022 Zevra Therapeutics Inc Earnings Call
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Speaker 2: Good day and welcome to the Zebra Therapeutics fourth quarter and full year 2022 update call.
Speaker 2: Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be open for questions.
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Speaker 2: Please be advised that today's call is being recorded.
Speaker 2: I want to hand the call over to Zevrez Vice President of Investor Relations and Corporate Communications, Nicole Oschner. Thank you. Team of experts are at a Maryland level and not to cover look for
Speaker 3: Good morning. Thank you for joining us today to review Zebra's fourth quarter and full year 2022 clinical, operational progress, and financial results. A few housekeeping items before we start. I invite you to view the webcast slides and the press release.
Speaker 3: both of which were issued this morning and can be found in the investor section of our website.
Speaker 3: As outlined on slide 2, during today's presentation, we will be making several forward-looking statements.
Speaker 3: These forward-looking statements include, but are not limited to, the clinical and regulatory path for Eremoclimol, Astares, revenue milestones and expected revenue from the French EAP program, the planned next steps in our pipeline programs.
Speaker 3: the timing for enrollment, initiation, the completion and reporting of data from our clinical trial, and the upcoming annual meeting of stockholders. These statements are neither promises nor guarantees and involve risks and risks of death.
Speaker 3: and uncertainties, and other important factors that may cause actual results to differ materially from those discussed here. Important factors that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of our annual report on Form 10-K for the full year ended December 31, 2022.
Speaker 3: expected to be filed with the SEC today.
Speaker 3: Finally, you can view the agenda for today's call on slide 3.
Speaker 3: I am pleased to welcome Zebra's management team members participating in today's call. I'm joined today by our CEO , Richard Pascoe, our President and Co-Founder, Dr. Travis Mickle, our Chief Financial Officer, LaDwayne Clifton, and our Chief Financial Officer, Dr.
Speaker 3: our Chief Product Development Officer and Co-Founder Crystal Mickle and Joshua Shaffer, Chief Commercial Officer and Executive Vice President, Business Development.
Speaker 3: I will now turn the call over to Rich Pascoe.
Speaker 2: Thank you, Nicole, and thank you all for joining us today to review our Q4 and full year 2022 results.
Speaker 2: Before we get into the highlights of a successful year, I want to take a step back and talk about where we are today and provide an overview of our strategic evolution over the past 18 months. A lot has happened with the new name FOCUS. It is important to walk our investors through how we got here and share my enthusiasm for our future.
Speaker 2: Today we're Zebra Therapeutics, a nimble and focused rare disease company. Our team has a successful track record of success in championing patients in need, as well as tackling and overcoming challenges in drug development and regulatory approval.
Speaker 2: We are leveraging our years of expertise and unique insights to chart a new course for drug development.
Speaker 2: and forging pathways to success for promising product candidates. As we move Zebra forward, we will continue to leverage our legacy platform to target internally discovered rare disease product opportunities.
Speaker 2: and extend our pipeline assets exclusivity through life cycle management.
Speaker 2: In this way, we bring transformational therapies and hope.
Speaker 2: to patients with rare diseases and their families, and create value for our shareholders.
Speaker 2: Importantly, we are well positioned for success.
Speaker 2: We have a robust pipeline of promising rare disease product candidates with multiple value-creating milestones expected over the coming year.
Speaker 2: We have a world-class leadership team with the experience of numerous successful product approvals and an equally accomplished board of directors that align with our strategic trajectory in rare disease.
Speaker 2: Supporting it all, we have a strong balance sheet.
Speaker 2: strong balance sheet. So how did we get here?
Speaker 2: We've worked hard to evolve the company's strategy over the past two years, thoughtfully led by our management team in collaboration with our board of directors and supported by our shareholders.
Speaker 2: After the approval, licensing, and commercialization of Astaris and our actions to put the company on a firmer financial footing, the management team and board paused to evaluate where we were and what we learned in getting Astaris to the market.
Speaker 2: Our objectives were to determine our best passport to create value in a timeframe and at a scale that our shareholders deserve.
Speaker 2: We concluded that we have strong capabilities and success in the scientific, development, and regulatory areas.
Speaker 2: However, focusing exclusively on a pipeline of product candidates that will eventually compete in heavily generic markets and outlicensing those products as a commercial strategy would likely fail to meet our objective of delivering a significant return on investment to our shareholders.
Speaker 2: We then worked thoughtfully. We then worked thoughtfully set a new course for the company focusing on bringing the organization's existing strengths together with a refined strategic focus on rare disease indications with the goal of commercializing our products in the United States.
Speaker 2: We took a series of transformative actions that aligned perfectly with our strategy.
Speaker 2: highlighted by the acquisition of AeroLocklemall and NDA Stage Product Canada upon which we intend to build commercial capabilities that will allow us ever to create value for the benefit of shareholders.
Speaker 2: This new direction capitalizes on our strengths and cash position to enable us to retain the value of our hard-earned approvals and control our commercial destiny while delivering much-needed therapeutics to patients with limited or no treatment options.
Speaker 2: It is important to note that rare disease is not an entirely new focus for us.
Speaker 2: We were already working in rare disease with our pro drug technology applied in rare sleep disorders with KP1077 for idiopathic hypersomnia.
Speaker 2: From that experience we recognize that rare disease drug development offers several significant advantages over development at a large mass market indications.
Speaker 2: First and foremost, we have the privilege of partnering with patients, families, and advocacy groups to deeply understand their needs and ensure that our therapeutic approaches are answering their biggest quality of life and disease management concerns. This ensures our products are relevant and capable of commercial success. Yes.
Speaker 2: Rare disease drug development timelines are often shorter and involve much smaller studies than larger indications.
Speaker 2: Rare disease drug development timelines are often shorter and involve much smaller studies than larger indications, resulting in lower costs of research and development.
Speaker 2: Through the Orphan Drug Act, the company benefits from incentives such as priority review voucher and a six month review window for pursuing therapeutics for rare diseases.
Speaker 2: and the resulting products received extended patent protection for longer market exclusivity.
Speaker 2: Rare Disease products also do not experience significant generic competition once patents expire.
Speaker 2: Moreover, with a small patient population treated primarily by specialist clinicians, we can bring those products to commercialization with our own in-house commercial team.
Speaker 2: Taking this together, we saw that rare disease truck development creates an ideal platform for maximizing value creation for patients and shareholders.
Speaker 2: This led to our decision to focus exclusively on rare disease and our strategic acquisition of airlock them all.
Speaker 2: Through that acquisition, we acquired a high potential product candidate for Neiman-Pick disease type C.
Speaker 2: We also onboarded an amazing European team with deep connections to the NPC patient community and significant rare disease drug development expertise.
Speaker 2: As we began focusing on rare diseases, we recognized that our name and branding as Kim Farm no longer reflected who we are as a company.
Speaker 2: So we underwent a process to redefine our messaging and brand story. The outcome of that process is our new name, Zebra Therapeutics, and branding to reflect our commitment to the rare disease patients we deserve.
Speaker 2: The word zebra is Greek for zebra, which is the internationally recognized symbol for rare disease community.
Speaker 2: Interestingly, a group of zebras is also called a zeal or a dazzle.
Speaker 2: These expressions capture our team perfectly as we are zealous about empowering people with rare diseases.
Speaker 2: We are confident that Zebra is a name that will resonate with patients, and we envision a dazzling future for the rare disease communities that we serve.
Speaker 2: Zebra is better positioned today than at any point in its history as we work towards our key priorities to secure regulatory approval for our pipeline assets.
Speaker 2: build top-tier commercial capabilities, and enhance our pipeline through internal and external efforts.
Speaker 2: We have two very strong product candidates with multiple value creating milestones expected this year.
Speaker 2: We continue to explore new product opportunities both through our Pro Drug Platform and business development activities focused on rare disease.
Speaker 2: We are a rare beast in that we already have a growing revenue stream as a development states company which bolsters our already strong financial position.
Speaker 2: I am confident in the team, in our strong financial foundation, and diverse portfolio of multiple clinical programs and in our ability to deliver value in 2023 and beyond.
Speaker 2: Importantly, we have a fully engaged and supported board of directors that has been deeply involved in our strategic evolution and can help us to advance our company.
Speaker 2: 2022 is a pivotal year for our organization and our evolution into a rare disease company with the acquisition of Aramark Amal and the completion of a four-year safety study of that product candidate in MPC.
Speaker 2: Our ongoing collaborative dialogue with the FDA around the program has been highly productive in preparing us for NDA resubmission.
Speaker 2: We've also made tremendous headway in our KP1077 program for rare sleep disorders over the last year, including positive data from our cardiovascular trial of SDX.
Speaker 2: a primary component of KP1077, and a phase two trial initiation in idiopathic hypersomnia.
Speaker 2: Orphan drug designation for this product candidate in IH provides the advantages I highlighted earlier including regulatory incentives and extended market exclusivity after approval.
Speaker 2: We continue to bolster our strong financial position, earning a one-time fee of nearly two million dollars from Coriam following the FDA approval of Atelierity. Our net revenue for the full year was 10.5 million. Cash, cash equivalents and investments as of December 31st, 2022 were 102.9 million.
Speaker 2: Our available capital is expected to extend our cash runway into 2026, an enviable position for any biotech company in today's capital markets.
Speaker 2: In 2022, we began our efforts to further build our team by appointing Nicole Oschner as VP of Investor Relations and Corporate Communications.
Speaker 2: In addition, the board appointed Christopher Posner as an independent director, another great addition to the team. As you can see from this slide, we've had tremendous momentum in the fourth quarter of 2022 and the beginning of 2023 on several fronts.
Speaker 2: I want to point out a few of those. Notably, a recent development in the Aramachlmal program was a presentation of the data from the interim analysis of the Phase 2-3 four-year safety study.
Speaker 2: point out a few of those. Notably, a recent development in the Aremachimal program was a presentation of the data from the interim analysis of the Phase 2-3, four-year safety study at the 2023 World Symposium.
Speaker 2: These data, which demonstrate the clinical benefit of Aramachemol will be a cornerstone of our resumission of a new drug application expected as early as the third quarter of this year.
Speaker 2: Notably, the data suggests that airlockable mold may reduce the progression of NPC.
Speaker 2: This underscores our understanding that if you can improve life-to-summel function, you can improve outcomes for patients.
Speaker 2: We also underwent our strategic rebrand Zebra Therapeutics in alignment with our identity as a rare disease company.
Speaker 2: and to further engage with the rare disease community we joined, the Nord Corporate Council. Since the beginning of the year, we have made several additional key appointments and changes to our leadership and board of directors.
Speaker 2: Strengthening a team that I'm confident can lead Zebra into the future with success.
Speaker 2: shown here are executive team and our four directors.
Speaker 2: Not only are we an accomplished group with decades of experience in R&D and commercialization leadership,
Speaker 2: But we are also a blend of legacy team members and new talent with skills that can take us into the future. The team is aligned with our direction and transformation into a rare disease company.
Speaker 2: Now I'd like to turn our attention to our Aremokomal program for Leven Pick Disease Type C.
Speaker 2: Farramoklamol is administered orally and is formulated for ease of use in varying patient circumstances.
Speaker 2: This product candidate has been studied in 10 phase 1, 4 phase 2, and 3 pivotal phase 2, 3 trials.
Speaker 2: Aremokomal has received orphan drug designation for NPC in the United States and the European Union and Fast Track designation.
Speaker 2: Breakthrough therapy designation and rare pediatric disease designation from the FDA for MPC.
Speaker 2: If approved in the US, air and lock them all would also be else, but to receive a pediatric priority review voucher.
Speaker 2: We are on track to submit the new drug application to the FDA as early as the third quarter of this year for Aromaglobul.
Speaker 2: One of the most attractive aspects of the air mock them all program is that it should it be approved if we have the near term opportunity to commercialize the product ourselves. It retained the full market value for our shareholders.
Speaker 2: We believe a small and nimble commercial team could fully serve the specialist and medical centers treating the NPC patient population. The benefit of a small commercial team is the lower cost of market entry. We believe a small and nimble commercial team could fully serve the specialist and medical centers treating the patient.
Speaker 2: We believe that our established and new advocacy relationships in the NPC community will help support the adoption of Aramark Amal. And we have already established market entry with this patient population through our US and EU early access programs.
Speaker 2: Beyond our immediate focus on a successful U.S. commercial launch, we also see the commercial potential for air and local law outside of the U.S. in the EU, to be in the EU, to pan China and other geographies.
Speaker 2: Now I will highlight our KP1077 program for rare sleep disorders, beginning with idiopathic hypersomnia, which is currently enrolling patients and dosing patients in a Phase II clinical study in the US.
Speaker 2: The market potential for idiopathic hypersomnia is also highly compelling.
Speaker 2: with limited treatment options available for this small underserved patient segment.
Speaker 2: KP1077 has been designated by the FDA as an orphan drug, as well as possible eligibility for fast track review status and designation as a breakthrough treatment.
Speaker 2: In addition, we believe that if differentiated from other treatment options, pricing KP1077 in between products like Teva Pharmaceuticals ProVisual, which is approximately a $24,000 per year treatment at the highest dose, and Jazz Pharmaceuticals ZiWave, which is approximately $187,000 per year at the highest dose.
Speaker 2: that leads to capturing significant market share. Because this is a rare indication, our intent is the commercialization of this product ourselves, which is aligned with our strategy for air lock them all, and therefore allows us to keep a larger portion of the economic value. We expect interim data from Phase 2, from the Phase 2 drawlet KP10.
Speaker 2: We are also planning a development program for KP1077 in narcolepsy.
Speaker 2: The IND filing for this additional program is expected during the second quarter of 2023.
Speaker 2: With that, I will turn the call over to our CFO , Lidwane Clipton. Lidwane. Thank you, Rich. Good morning, everyone.
Speaker 4: Let's jump right into the numbers with an update on the commercial progress of Astaris.
Speaker 4: Like many of you, we closely tracked the prescription transphorisaurus, and the trend line since the third quarter of last year has become more encouraging. While the early days of the launch were impacted by COVID-related challenges and the need for greater formulary coverage with the largest PDNs,
Speaker 4: There has been a meaningful change in prescription volume starting in July 2022.
Speaker 4: You may recall that we had reported to you that as of Q3 2022, Corium had achieved coverage with the three largest PBMs and doubled the size of their field force to 175 reps.
Speaker 4: The growth trajectory of the product since that time has continued and we are optimistic about the possibility of reaching one or more milestones during 2023.
Speaker 4: With an improving prescription trend, the amount of the royalties realized from the license is meaningful though modest.
Speaker 4: The table provided here shows actual royalties earned by quarter and the corresponding prescription count estimates based on publicly available data.
Speaker 4: These trends suggest that royalties will contribute more revenue in the future. Still, we realize that achieving the sales milestones may be a more significant driver of value from this license.
Speaker 4: This leads to another critical point. Our legacy model for developing an asset and then outlicensed for commercialization is not expected to drive strong growth for Zebra in the short or medium term. Back in 2021, as we began thinking strategically about rebuilding our pipeline,
Speaker 4: We knew this had to be addressed. The ability to directly commercialize a product we developed and get approved became a primary criterion in evaluating where we would focus our pipeline investments.
Speaker 4: Our decision to focus on the rare disease space positions us to feel a small, nimble, commercial team that can be highly effective and drive better return on capital than the results we have had to date with the out license model. We see the historic license that's foundational to where we are as a company. But we also look forward to the potential for growth that we may be able to unlock.
Speaker 4: with the direct commercialization of both Aramachimo and KP 1077 if approved.
Speaker 4: Now, let's focus on the financial results for Q4 in full year 2022.
Speaker 4: In 2022, we took significant steps to improve our financial position.
Speaker 4: We continue to have a solid balance sheet and adding the Aromoptimal program has begun to provide a steady revenue stream to support our ongoing regulatory and product development initiatives.
Speaker 4: For Q4, net revenue was $2.3 million, driven primarily by reimbursements from the French EAP program. In 2019 statement Global corporate bang inherited $10 million worth of gross women's 1991 salary SLD promotion schedule to reach English press for $ PCP1, $ commit $ Infinity at killers financial Act sooner.
Speaker 4: The full year net revenue was 10.5 million.
Speaker 4: We reported a Q4 net loss of $9 million, or $0.26 per share, which was driven by our R&D estimates and increased DNA.
Speaker 4: All associated with the KAP 1077 and Aramachan programs.
Speaker 4: For the full year, net loss was $41.5 million or $1.20 per share, which includes a one-time non-cash charge of $17.7 million related to the in-process R&D assets we acquired from Opposite
Speaker 4: Net loss was $41.5 million or $1.20 per share, which includes a one-time non-cash charge of $17.7 million related to the in-process R&D assets we acquired from Orthozide. On a non-GAAP basis, the R&D asset is $1.5 million.
Speaker 4: FY 2022 net loss, excluding the one-time non-cash charge, was 23.9 million for 69 cents per basic and diluted share. And as Rich has already noted, our cash position remains solid.
Speaker 4: With 102.9 million on the ballot sheet as of December 31, 2022.
Speaker 4: Looking ahead to 2023, we reiterate our guidance that our existing available capital on the balance sheet is expected to extend our cash runway into 2026.
Speaker 4: This includes the reimbursements from the French EAP, what we need for the Aromachamal NDA resubmission, the completion of the development program for KP1077 through its NDA submission and potential PDUFA, as well as our preparations for the possible US launch of Aromachamal if approved.
Speaker 4: In addition, we anticipate that the prescription trend for ascaris will allow us to earn at least one and possibly two of the sales milestones under that license agreement during 2023.
Speaker 4: Net revenue from the French EAP program is expected to continue at the rate of about $2 million per quarter throughout the year.
Speaker 4: To conclude, we believe we are in a solid financial position with numerous opportunities to create value for our shareholders as we execute our business plans.
Speaker 4: And now I return the call back to Rich. Thank you, Lidwain.
Speaker 2: As we look to 2023, I'm excited about what lies ahead as we continue to transform Zebra and work to enhance value creation for our shareholders.
Speaker 2: We continue our ongoing discussions with regulatory agencies and are preparing to refile the Aramakamo NUJRAG application as soon as the third quarter of this year.
Speaker 2: For the KP1077 program in rare sleep disorders, we are on track to file an IND for 1077 in our CLEPSE in the central quarter of this year. We also anticipate interim data from the Phase 2 trial in idiopathic hypersomnia as early as the third quarter, with top-line results.
Speaker 2: in that trial by the end of this year. Those data have the potential to not just support the advancement of KP1077 into a Phase 3 study in NIH.
Speaker 2: but also may support a Phase III trial in narcolepsy. We anticipate ongoing revenue from our AeroMoccalMole expanded access program in France.
Speaker 2: and we have the potential to realize additional sales milestones and revenue for Starris.
Speaker 2: This provides further capital flexibility and the potential to further extend our cash runway which already extends into 2026.
Speaker 2: In closing, I want to reiterate our commitment to creating value for our shareholders and bringing life enhancing products to patients, suffering from rare diseases.
Speaker 2: As I look around our industry, I see small-cap biotech companies dealing with failed clinical programs, employee layoffs, toxic financing, and bankruptcies among other challenges.
Speaker 2: In contrast, Zebra is financially sound with two promising late-stage assets, and we are growing the company in a thoughtful and measured fashion.
Speaker 2: Before we open the call for questions, I want to briefly address the alternative slate of three director candidates proposed by one of our shareholders.
Speaker 2: The Zebra Board believes that electing any of these candidates would diminish the overall quality of and experience represented on the board.
Speaker 2: By contrast, the three incumbent directors collectively bring decades of biotech and pharmaceutical experiences, both as senior executives and as public company board members.
Speaker 2: Their backgrounds cover a range of relevant areas including drug development, medical, finance, business development, and commercialization.
Speaker 2: all of which are essential to driving continued momentum and shareholder value as we execute our transformative growth strategy.
Speaker 2: Your Board regularly seeks to maintain open communication with our shareholders and values constructive input. In fact, many of the changes I discussed on this call today are in direct response to are Nick Conte.
Speaker 2: to feedback received from our shareholders.
Speaker 2: We heard you loud and clear that you want to change, that you value revenue, and that you wanted the board and management to be bold.
Speaker 2: We heeded that call. We took a hard look at our organizational strengths. We invested in a better understanding of where and how to invest the resources entrusted to us by our shareholders.
Speaker 2: We continued to leverage the team that got us to higher ground and we added new talent where needed. We undertook an ongoing board refreshment program to bring new and critical thinking to the boardroom. And we focused on creating values of the commercialization of rare novel disease products in areas of significant unmet need.
Speaker 2: I believe that today the company is in the strongest position to succeed at any time in its history.
Speaker 2: And I'm so excited for our future as a company and what we aim to accomplish for patients and shareholders alike.
Speaker 2: Thank you for your continued support as we work to transform lies with new therapies for rare diseases with limited or no treatment options.
Speaker 2: Please note that we will not be commenting further on the proxy matter during the Q&A, and I would appreciate it if you would keep your questions directed to our performance, results and strategy. Thank you.
Speaker 2: With that, I will now return the call to the operator for questions. Operator.
Speaker 5: Thank you, sir. At this time, if you wish to ask a question, please press star 1 on your telephone keypad.
Speaker 5: You may remove yourself from the queue at any time by pressing star 2. Again, to ask a question, please press star 1 now.
Speaker 5: Our first question comes from Sumant Kulkarni with Kenicord Genuity.
Speaker 5: Hello, this is Kyle speaking for Sumat Kaparni. Good questions from us.
Speaker 5: Have there been any specific interactions with the FDA since your last update? That gives you more confidence in your ability to potentially refile the armoomo NDA as early as three -q.
Speaker 5: And then the second question, has the FDA already seen the open label extension data presented recently? If not, when do you expect the agency to see that data would it be prior to the filing or as part of the fund package?
Speaker 2: Cal, it's rich thanks to the question. I'm going to ask Travis Mikkel to address those questions. Yes, sure, no problem. So as far from our last update, we have not had a more formal interaction with the FDA as to the resubmission. And then which really answers the next part of your question as well.
Speaker 2: which is no, the FDA hasn't seen the data yet. We do plan to submit the information, the ongoing clinical data, the four-year wrap-up study, as well as additional conformatory evidence that was collected, and we will either provide that to them in a form of a formal meeting, or we will actually just provide that to them and ask questions. So the format of that in our ongoing dialogue,
Speaker 6: I think they're 10 and $20 million each if I remember correctly. When in 2023 do you think you would intend to achieve those two sales thresholds that would trigger the 10 and the 20?
Speaker 4: Yeah, good morning, Jonathan. Thank you for the questions. So while we've tried to provide more information today than we have in the past, from publicly available data, we're still not able to give the exact sales thresholds for the actual amount of the milestones.
Speaker 4: So with that said, we do expect likely if we achieve one or possibly two of those, it would most likely be toward the second half of 2023.
Speaker 7: Jonathan, I might just add, you know, the way that deal is constructed, which is good for the company. They were, you know, lower thresholds and you might typically find an license agreement for the achievement of certain milestones. And so, you know, we tried to front load as much of it as we could.
Speaker 6: the press release. So will you be waiting for the outcome in IH before starting perhaps a phase 3 trial in narcolepsy or are you still going to start a phase 2-3 trial before getting any data in IH?
Speaker 8: So this is a crystal Nicole. We are actually, we will look to see what data we get from this Phase 2 study with IH and determine whether or not we go with the parallel program with NARCLEC and IH for Phase 3 studies. That would help with enrollment and other, you know, cross savings.
Speaker 8: But again, we will wait for the readout with the Phase 2 setting before we make any of those decisions.
Speaker 6: Okay, thank you. And I'm guessing just briefly the Aramaklamol 4Q data, I mean, 4Q revenue was about $1.9 million or was there a bunch of other non-drug revenue in there?
Speaker 4: No, that's right Jonathan, that was Steve now. And just keep in mind that that includes this callback liability that we have to record. So we often talk about gross revenue of a million dollars a month from that, or about a million euros a month.
Speaker 4: and then we have to claw back the liability. I think you may be familiar with that from prior quarters. Thank you very much.
Speaker 4: to call back the liability. I think you may be familiar with that from prior quarters. Yes, thank you very much. Yes. Thank you.
Speaker 2: Thank you. As a reminder, to ask a question, please press star 1. Our next question comes from Louise Chen with Cantor Fitzgerald.
Speaker 9: Hi, congratulations on all the progress this quarter and thanks for taking my questions here. I have two questions for you. I wanted to ask you about IH and the readouts that are coming, the intern and then the top line data readout.
Speaker 9: later this year and what would you consider a successful outcome that would make you competitive in the market? And then also the other question I have for you is when you think about expanding your rare disease pipeline you know, are you going to do that through M&A, internal development? What kind of resources can you put behind it? And when can we see additional products being added? I know you're very busy with what you have on your plate right now but just kind of curious...
Speaker 8: study and a future study and really looking at what a future study would look like. Dosing regimen, things like that. So those are all still playing out. Obviously, we expect with our FCS profile looking different than, say, what's on the market as far as off-label use of methylphenidate and things like that.
Speaker 8: We look to that as a differentiator with our product as we have with the start in the past. And this is Jeff Schafer. I'll take the second question. We are very actively looking to add new products to the portfolio.
Speaker 4: whether that would be through internal development and leveraging our pro-drug platform to bring new products into the pipeline. But we're also looking very actively at potential M&A licensing deals, any number of constructs to bring additional products into our portfolio that can.
Speaker 4: really accelerates and advance our transition into a rare disease company. I mean, said that we're looking for opportunities that are...
Speaker 7: synergistic with Eremachemal and where we can leverage a commercial organization and development organization that is really focused on the rare disease capabilities that we're building. Louise, this is rich just to add to all of that. I think, you know, clearly the priorities today are the resubmission and approval and potential launch for Eremachemal.
Speaker 7: differentiate the product in the marketplace and that's the goal there. Beyond that, you know, we're always looking for good opportunities. At the same time we understand the priorities are advancing the existing pipeline.
Speaker 7: Thank you. Thank you. Our next question comes from Orrin Livnett with HC Wainwright.
Speaker 10: Thanks for taking the questions. I have a few actually. You mentioned actually in your press release and in the script, specifically extending exclusivity of your pipeline assets with a life cycle management. That kind of jumped out at me. I was wondering, can you just remind us what is the current IP landscape of your development assets?
Speaker 10: What are we thinking about in terms of life cycle management? Is this just new IP you're working on or are there actual product innovations that are already in the hopper longer term and then I follow up. Yeah, or I'll ask Travis to address specifically, but one of the things I'll preface it by saying, one of the things that really excited me about these opportunities and rare diseases.
Speaker 7: and looking at products like Aramakamal, is we have this terrific internal capability to not only discover new assets, but to extend life cycle of those assets. And so we are very intent on doing both. And so, unlike a lot of companies I mentioned in our...
Speaker 7: my prepared remarks, you know, we're a development stage company with revenue. We're also a development stage company focusing on rare diseases with this internal capability that I'm not sure other companies can mimic.
Speaker 7: bringing all of that to bear in terms of creating value for the future is really important to us and so I think you know that's the the underpinnings if you will behind those statements. With that Travis do you want to address you know maybe a little more specifically the mechanics of what we're doing? Yes as far as the IP question Oren
Speaker 2: and upon IP.
Speaker 2: You're always aware, too, with a rare drug in a pediatric area, it's going to be seven and a half years of NCEA or orphan exclusivity. For CP1077, those patents run until 2037 and beyond.
Speaker 10: Those are, of course, composition of matter-based patterns. Okay, appreciate it. So we're thinking primarily about extending air and moclemol, looks at the exclusivity well beyond the orphaned period. How I'm interpreting that, correct? Okay.
Speaker 10: That's right. On Air Maclimol, I get to build upon the first question today regarding that confirmatory evidence and the FOIA safety data and everything you need to do for the FDA filing.
Speaker 10: And on Air Maclamall, I get to build upon the first question today regarding that, you know, confirmatory evidence and the four-year safety data that, you know, and everything you need to do for the FDA filing.
Speaker 10: Should I think of this four-year data as sort of clearing the lane and ending up itself potentially addressing any FDA skepticism to extent it might have existed at some point going forward or is there significantly more quote unquote confirmatory evidence that you still need to do separate from that and you know where where does that stand?
Speaker 2: Can you give us any clarity on sort of progress on that front? Thanks. Travis, you want to field out? Sure. No more clarity, unfortunately, Oren, than what we kind of stated before, what I said before. The data, I believe, from the four-year extension arm, will regulate the appropriate number of ranges that a person will be using, and we look on learning data, using diverse levels of insights,
Speaker 2: is very helpful, especially if you look in light of the AMLIF approval earlier this year, where they used the extension arm to show increased survivability. Here we're looking at kind of the robustness of the effect and how it's sustained kind of this lower trend of progression in the disease.
Speaker 2: that Orphasine generated in the past as well as...
Speaker 2: You know, putting that all together in a cohesive story will be compelling, more compelling certainly than at the time of the CRL, and certainly something that we will at least impart if not in its entirety, discuss with the agency before the resubmissions.
Speaker 10: Okay. And lastly, on KP1077, I think you mentioned brain fog on multiple occasions. So the key end point you're looking at, can you just remind us, based on your interactions with FDA or understanding of the landscape in general, what do you see as the necessary?
Speaker 10: a hurdle in terms of endpoints for approvability, and to what extent do you believe you need to show additional endpoints, like brain fog or others, to differentiate from off-label wakefulness or agents or stimulants? Hi, Oren. It's Rich. I'll just maybe preface the conversation.
Speaker 7: for the product in a competitive set or a competitive world with some of these other employments. I think it's perhaps too early to comment specifically on the magnitude of effect, but clearly we'll assess that in the space 2 program and build whatever is appropriate into the phase 3 protocol which will then serve.
Speaker 7: products that can be highly competitive, command premium pricing in the markets and more over, allow us to go out and create the value that we foresee for the company through that process. Okay, well good luck. Look forward to updates.
Speaker 7: Thank you for being on the call.
Speaker 7: Thank you for being with us.
Speaker 5: Thank you. Our next question comes from Simultt Coocawny with Ken Corte Genuity. Oh this is Kyle for Simultt again. Quick follow up on EAP gross revenue. We see that the new guidance is roughly paid million annualized versus a prior estimate of 12 million. We are curious what are the factors affecting this number and do you think this
Speaker 4: What we tried to do in today's guidance though is to account for the around 30 or 35 percent clawback liability which we always have to recognize when we put out our financial statements. So that's really the difference there is simply giving you guidance of net revenue.
Speaker 4: which is around 2 million a quarter versus the gross revenue that we've sometimes spoken about before.
Speaker 4: the quarter versus the gross revenue that we've sometimes spoken about before. Other thanks.
Speaker 5: Thank you. This concludes the Q&A portion of today's call. I would now like to turn the call over back to Richard Pascoe for any additional or closing remarks.
Speaker 7: Thank you, operator. And first of all, I want to thank all of our employees and leaders, in particular my colleagues here today, around the table for their tireless efforts to bring several therapeutics into a very strong position for 2023 and beyond. It's an exciting time for us, and I appreciate their support and hard efforts.
Speaker 7: to get us to where we want to be. I also want to thank all of our shareholders for your continued support and for all of those that have joined us today on the call. We appreciate your interest in your questions and we look forward to speaking with you in the future.
Speaker 5: Thank you. This concludes today's several therapeutic fourth quarter in full year 2022 earnings call and webcast.
Speaker 5: You may disconnect your line at this time and have a wonderful day.
Speaker 1: The TR that.
Speaker 1: I one.