Adamis Pharmaceuticals Corporation Q1 2023 Earnings Call

Greetings and welcome to Animas Pharmaceuticals, first quarter 2023 financial results Conference call.

At this time all participants are in a listen only mode.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Robert.

I see all Westwood. Thank you Sir you May proceed.

Okay.

Thank you operator, welcome to the Atmos Pharmaceuticals first quarter 2023 financial results and corporate update conference call.

Joining me on the call today are members of the Animas executive team, including Chief Executive Officer, David J, Mark Julio and Chief Financial Officer, David Benedicto, and once again, Dmk Pharmaceuticals, CEO Doctor even diversity will also join the call.

Our format for this call will consist of prepared remarks from Animas management and Doctor versa, followed by a Q&A session.

This call is being webcast and will be available for replay in the investors section of our website at Adams Pharmaceuticals stopped all in.

In today's call, we will make certain forward looking statements regarding our business based on current information and expectations. Those statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward looking statements made today of course any forward looking statements.

Risks and uncertainties and our actual results could differ materially from those anticipated by any forward looking statements that we make today.

Additional information concerning factors that could affect our business and financial results is included in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission and in other subsequent filings that we make with the SEC.

These are available on the SEC's website at SEC Gov or on Atomist. This website.

Now, let me hand, the call over to David Margulies CEO of Adams.

Thank you Robert and thanks to everyone for joining our call. This afternoon.

Today, it's certainly been an exciting day for all of US here at Atmos as you May know earlier, we hosted a special meeting of stockholders during which stockholders approve both measures that will enable us to proceed with the merger with T. M K pharmaceuticals.

Following the stockholder meeting the Animas board of directors met to review the voting results.

After the board meeting we filed our 10-Q with financial results for the first quarter ending March 31st from what you David Benedicto will provide a summary of in a few moments.

During the board meeting among other matters. The board discussed necessity for meeting the minimum bid price requirement to avoid being delisted from Nasdaq.

We are determined that it is in the best interest of the company and its stockholders to avoid delisting and therefore authorized the company to effect a reverse split in the near future.

To be able to reach the closing price of over $1 a share.

For at least 10 consecutive trading days prior to the NASDAQ imposed deadline of June 26.

We noticed by NASDAQ of our plan.

And in the coming days, we intend to further describe the timing and the ratio for the reverse stock split.

Following the reverse split.

And upon the satisfaction or waiver of the remaining closing conditions, we intend to close the merger with D. M. K. This merger has been the result of countless hours of work over the last six months by the employees of both companies as well as our respective auditors lawyers and other advisers I believe I speak for everyone involved when I.

Say that this merger is truly an exciting milestone in the history of both companies and.

And we have great expectations for the future of the combined company.

Before turning it over to our incoming CEO Doctor EBIT mercy to provide a glimpse of that future.

I'll ask David Benedicto to summarize the first quarter 'twenty twenty-three financials David.

Thank you.

As David mentioned this afternoon, we filed our Form 10-Q for the quarter ending March 31st 2023.

I would like to describe a few key items from those financials, but I encourage you to review the full 10-Q for additional details and disclosures.

Revenue for the first quarter ending March 31st 2023 increased by 26% to approximately 1.5 million versus approximately $1 2 million for the same period in 2022.

The increase in revenues was primarily due to product sales of semi to U S World Meds, no revenues relating to some JP were reported for the first quarter of 2023 or 2022 due to its manufacturing hold and the voluntary product recall that was announced in March 2022.

Selling general and administrative expenses for the three months ending March 31st 2023, and 2022 were approximately $4 8 million and $3 4 million respectively.

The increase was primarily a result of increased legal audit and advisory fees.

Associated with both the merger and the financing transaction, which closed in March.

Research and development expenses were lower for the first quarter at approximately one 3 million compared to $4 2 million in the first quarter of 2022. The decrease was primarily related to the wind down of temple clinical trial and product development work.

Net loss from continuing operations decreased by approximately 12%.

<unk> 9 million from approximately $2 2 million for the quarters, ending March 31st 2023, and 2022 respectively lost.

Lastly, cash and cash equivalents at smart at March 31st 2023 totaled approximately 3.1 million.

I would now like to hand, it over to Doctor E book Mercy Doctor Mercy.

Thank you David.

I would like to thank both Atlas and the MK stockholders for that approval and support.

Look forward to completing this merger in the coming days.

To accelerate integration teams from both companies have been meeting regularly to level set and alignment strategic objectives.

On damaged his last earnings call I described dmk's need compounds, the stage of development and the indications and regulatory pods, we intend to pursue.

Today I want to spend some time discussing my vision for the combined company.

Which will focus on saving lives and treating patients with substance use disorder.

Whereas the dampness focus was on saving lives through the development of rescue treatments for opioid overdose and anaphylaxis I intend to use Jim Hi is the foundation upon which to establish the new company as the leader in the treatment of substance abuse.

And the American dies every five minutes from an opioid overdose.

And 85% of these defense now that is plaguing our country.

Given the high potency of FEMSA I believe the intranasal narcan or each generic equivalents I'm able to revive patients with a single dose.

Recently talked to Strauss up the FDA presented data that suggested against fentanyl rapid dosing with naloxone is the most effective reversal treatments.

This is precisely what Shanghai achieved.

No Ken the leading naloxone product franchise reported revenues in excess of approximately 374 million.

2022.

And I believe we can overtime achieve a significant share of this market without being while being even more effective at preventing deaths from Clemson all evidence.

No I don't know if the damage who've commercial products have even approached the market share I believe they can.

One of my first initiatives as CEO of the combined companies will be to make increasing sales my top priority by taking an active role in your commercial efforts to achieve greater market penetration.

I've already identified several strategies to improve themselves the standpoint, which we intend to roll out in the near future.

Not only are you do you the stockholders deserve the long awaited price depreciation because I believe should come from putting more meaningful sales numbers on the board.

<unk> given us all so just have the benefit of these important and differentiated products to save lives.

Yeah.

While seeking to change the sales trajectory is the same high end to inject it.

We will look for opportunities to further the development of our lead clinical stage compound DPI 125, as a treatment for opioid use disorder.

Yeah.

The same characteristics and mechanism of action that we believe should make deep at $1 25, a useful tool in the fight against addiction could also make it a game changing alternative all currently marketed opiates opioids used for treating pain.

If we can do that.

Just the possibility for this company not only to create shareholder value, but also to play a significant role in trying to substantially reduce or and this opioid crisis.

The clinical programs that will be required to potentially gain marketing approval for deep Guy 125 in multiple indications will require investments in time.

The MTA has a track record of attracting non diluted funding in the form of government grants and I proposed to continue these activities to fund our programs.

The merged company has several valuable asset not central to our core mission of treating substance use disorder.

My plan is to seek opportunities to develop or co develop these additional assets with non diluted dulles.

And advance them through proof of concept from which they can then be out license to.

To generate cash from upfront milestones and royalty payments.

By increasing the sales of our marketed products getting out license revenues and by increasing to get non diluted funding I expect to defray the costs of our clinical programs and to increase shareholder value.

Lastly.

I would like to say, how excited and privileged I am to have this opportunity to unleash the potential that our combined company has.

Saving lives.

While increasing shareholder value.

Yes.

David Hi.

I will not pass the call back to you.

Thank you Dr. Diversity I think you described the new vision very well at this point, we'll open it up to some questions.

Yeah.

Robert.

Alright, thank you.

For the first one have sales to date for Zimmer <unk> matched the company's expectations.

[laughter] no and in fact.

I'd say, if they're they're well below our expectations.

However, we still believe them high represents a huge unmet need.

And it's a very large and growing market.

So part of this strategy is as Dr. Oversee just described moving forward will be to introduce new strategies to increase marketing and sales efforts.

Which we believe will be a.

Mental in boosting market share in unit sales.

Great. Thank you.

Here's one for Dr. Diversity, you mentioned three avenues for cash generation increased sales of existing products out licensing and royalty revenue and grants does this mean that a follow on equity offering or other financing is not part of your plans.

As a as with old small public biopharma companies.

Until we reach profitability.

We will continue to consider raising capital through the sale of equities.

However.

The financing strategy will be to prioritize growing revenue from the commercial products as these will be key to our long term growth.

In addition.

We want to focus on getting non dilutive capital in the form of governments and nongovernment grants.

As well as co developments in that box and what maturity.

Yeah.

Okay, great. Thank you what is the next step in the clinical development of <unk> 125 is initiation of the next clinical trial anticipated for later this year and what indication will you be pursuing.

Yeah.

Today.

The development of deep at 125 has completed a dose escalation first in human phase one study, which showed that the drug was well tolerated and had no serious adverse effects.

The next time human studies will attempt to confirm what has been demonstrated in preclinical studies in terms of that's a safety from respiratory depression.

And reduction in abuse liability.

Once these key characteristics have been demonstrated we intend to develop TPI 125, as a treatment for opioid use disorder and eventually as a treatment for acute and chronic pain.

Alright, here's here's another one for you Dr diversity you.

You have previously mentioned that D. M. K brings to the merger of portfolio with over 750 novel molecules can you tell US why these are valuable and what your plans are for extracting this value.

Yes sure.

There is scientific literature.

Yes that these compounds could be useful and alcohol use disorder.

Depression and anxiety.

Heart disease cancer Europe protection.

And wound healing to mention some of them.

More recently as tools have been developed that can screen such compounds relatively cheaply to identify the targets.

We intend to use these techniques to find high value indications.

If these newly discovered potential treatments are core to our mission.

We'll develop them ourselves.

If not we will out license them to generate additional cash to fund our priority programs.

Alright. Thank you you have previously mentioned, having a product to treat Parkinson's disease. What are your plans for this product.

Yes, I am very excited about this molecule as results from preclinical investigations, including nonhuman Primate studies suggest that it can be used as monotherapy.

And also as adjunctive therapy with levodopa.

One <unk> is the gold standard treatment for Parkinson's disease, and it is very effective.

However.

After a few years some patients become intolerant to this and have to resort to brain surgery called D. B S.

I believe that this product could prevent the need for such surgery and the F. D. A H could granted orphan drug status, making it potentially a very valuable product for partnerships.

Alright.

Can you provide a timeline of the key expected events for the company over the next several months.

Okay.

Sure I'll take that so.

Next steps will be to effect, a reverse stock split as I indicated earlier.

And then to proceed with the close of the merger transaction and the integration of the two companies.

And as far as the specific timeline I think it's realistic that that can all be achieved in the in the next 30 days.

Alright terrific. Thank you all that.

That brings us to the end of our call today. Thank you again for joining and for your interest in Atmos Pharmaceuticals have a nice evening everyone.

Sure.

This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.

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