Q2 2024 Aquestive Therapeutics Inc Earnings Call
Speaker Change: Good morning, and welcome to the Questive Terapeutic Second Quarter 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you may need to press star-1-1 on your telephone. You will then hear an automatic message advising your hand is raised.
Bennett Watson: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you may need to press Star 1-1 on your telephone. You will then hear an automatic message advising that your hand is raised. As a reminder, this call will be recorded. I would now like to introduce your host for today's conference call, Bennett Watson of ICR West Investor Relations. You may begin.
As a reminder, this call will be recorded. I would now like to introduce your host for today's conference call, Bennett Watson of ICR West Investor Relations. You may begin.
Bennett Watson: Thank you, operator. Good morning and welcome to today's call. On today's call, I am joined by Dan Barber, Chief Executive Officer, and Ernie Toth.
Speaker Change: Chief Financial Officer, who are going to provide an overview of recent business developments and performance for the second quarter 2024, followed by a Q&A session.
Speaker Change: During the Q&A session, the team will be joined by Dr. Carl Kraus, Chief Medical Officer, Dr. Stephen Wargacki, Chief Science Officer, and Sherry Courgette, Senior Vice President of Sales and Marketing.
Speaker Change: As a reminder, the company's remarks today correspond with the earnings release that was issued after market close yesterday.
Speaker Change: In addition, a recording of today's call will be made available on Equestria's website within the Investors section shortly following the conclusion of this call.
Speaker Change: To remind you, the Equestive team will be discussing some non-GAAP financial measures this morning as part of its review of second quarter 2024 results.
Speaker Change: The description of these measures, along with the reconciliation to GAAP, can be found in the earnings release issued yesterday, which is posted on the Investors section of Equestria's website.
Speaker Change: During the call, the company will be making forward-looking statements.
Speaker Change: We remind you of the company's safe harbor language as outlined in yesterday's earnings release, as well as the risks and uncertainties affecting the company, as described in the risk factors section, and in other sections included in the company's quarterly report on Form 10-2 filed with the Securities Exchange Commission on August 6, 2024.
Unnamed Speaker: As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and uncertainties with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations.
Speaker Change: As with any pharmaceutical company with product candidates under development and products being commercialized, there are significant risks and insurgencies with respect to the company's business and the development, regulatory approval, and commercialization of its products and other matters related to operations.
Speaker Change: Given these uncertainties, you should not place undue reliance on these four looking statements, which speak only as of the date made. Actual results may differ materially from these statements.
Speaker Change: All forward-looking statements attributable to a questive or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement and the cautionary statements contained in the earnings release issued yesterday.
Speaker Change: The company assumes no obligation to update its forward-looking statements after the date of this conference call, whether as a result of new information, future events, or otherwise, except as required under applicable law. With that, I will now turn the line over to Dan.
Dan Barber: Thank you, Bennett.
Dan Barber: On the heels of our successful equity raise in the first quarter, we had a very eventful second quarter.
Unnamed Speaker: We progressed our anafilm epinephrine sublingual film program, and gained FDA approval of Liebervent diazepam buckle film for the two to five-year-old age group. Starting with Anafilm, our momentum continues to build. On past earnings calls, I have focused on some of these important attributes; we estimate that 98% of the EpiPen formulation is water. Now think about Anafel, as we have seen with our other products over the last two decades. These are our temperature pH study and self-administration study.
Dan Barber: We progressed our anisome epinephrine sublingual film program, gained FDA approval of Liebervent diazepam buccal film for the 2-5 year old age group,
Dan Barber: streamlined our base business to focus on growth and continued to expand our Lieberman launch efforts for epilepsy patients aged between two and five years.
Speaker Change: As usual with Equestria, this was an action-packed 90 days.
Speaker Change: Starting with Anafilm, our momentum continues to build.
Speaker Change: When I look at the competitive landscape for Anafilm, I remain more optimistic than ever.
Speaker Change: with the potential to be the first and only oral epinephrine product for the treatment of severe allergic reactions including anaphylaxis.
Speaker Change: We believe Anafilm easily fits within the patient's daily life.
Speaker Change: due to its highly differentiated product attributes.
Speaker Change: On past earnings calls, I have focused on some of these important attributes.
Speaker Change: such as ease of carrying and ease of use.
Speaker Change: Today, let me expand on an additional area of differentiation.
Speaker Change: Let's talk about the durability of rescue products in the real world.
Speaker Change: You see, approved epinephrine medical devices, such as auto-injectors, come in liquid form and are largely made up of water.
Speaker Change: Products composed largely of water are subject to degradation in real-world conditions like high temperatures.
Speaker Change: That is one of the main reasons that EpiPens have such strict storage instructions.
Speaker Change: as they may no longer be effective if they are left on a soccer field in summer heat for an extended period of time.
Speaker Change: We estimate that 98% of the EpiPen formulation is water.
Speaker Change: Now think about Anafel.
Speaker Change: Only 2% of the Anafilm product is composed of water.
Speaker Change: As we have seen with our other products over the last two decades, oral films are different.
Speaker Change: Anafilm's low water content means it has the potential to remain stable even after long durations of heat exposure.
Speaker Change: It means Anafilm has the potential to still work in freezing temperatures.
Speaker Change: It means Anafilm has the potential to work in a broad spectrum of real-world conditions
Speaker Change: which we do not believe can be matched by any other existing or pipelined product in this category.
Speaker Change: Now turning to our development progress, we have successfully completed two of the three supportive studies necessary for engaging the FDA in a pre-NDA meeting.
Speaker Change: These are our temperature pH study and self-administration study.
Speaker Change: In both cases, as we have already shared publicly, the top-line data was positive.
Unnamed Speaker: The third study, our Oral Allergen Challenge Study, is currently in the clinic. Once the pediatric study has completed, we will file our NDA, and we will be in the first quarter of 2026. Anafilm is easy to carry and keep everywhere you go, whether you are headed to the beach or the soccer field.
Speaker Change: The third study, our Oral Allergen Challenge Study, is currently in the clinic.
Speaker Change: We are advancing our enrollment of the patients needed for the study and expect completion of the study late in the third quarter or early in the fourth quarter of this year.
Speaker Change: We continue to anticipate holding a pre-NDA meeting in the fourth quarter and starting our pediatric study immediately afterwards.
Speaker Change: Once the pediatric study has completed, we will file our NDA.
Speaker Change: At this time, we expect to begin our NDA submission in December and complete the submission in the first quarter of 2025.
Speaker Change: Based on FDA approval, our timing for a full launch at the end of 2025, or in the first quarter of 2026,
Speaker Change: remained unchanged.
Speaker Change: Our commercial launch activities remain on track.
Speaker Change: We now have in place very experienced leadership over both our commercial and medical affairs efforts for NFL.
Speaker Change: The team is focused on increasing awareness among physicians, payers, and the advocacy community.
Speaker Change: Across this entire stakeholder universe, we are hearing that Anafilm is the answer to address the significant unmet need of healthcare providers, patients, and their caregivers.
Speaker Change: Even though other alternative medical devices may be on the horizon, there is nothing like Anafilm. No needle. No device. Oral administration.
Speaker Change: Anafilm is easy to carry and keep everywhere you go, whether you are headed to the beach or the soccer field.
Speaker Change: There's no need for a carrying case.
Speaker Change: Antifilm fits on the back of your phone or easily in a wallet and is durable enough to withstand the real-life activities of patients.
Speaker Change: all while potentially improving the carry rate for patients.
Speaker Change: Our data suggests Anafilm is not impacted by comorbid allergic diseases such as congestion, atopic dermatitis, and asthma.
Speaker Change: Anafilm remains highly differentiated and poised to positively disrupt rescue treatment for severe allergic reactions including anaphylaxis.
Speaker Change: As we get closer to filing and launch...
Speaker Change: We have had multiple inbound inquiries from companies interested in helping us distribute Anafil.
Unnamed Speaker: Our goal is to maximize the distribution of antifoam to all patients immediately if approved by the FDA. We are now focused on expanding our LibreVent launch in the 2- to 5-year-old age group, who are proactively seeking information on Lieberwitz. We expect to have national retail distribution capabilities in place by October 1st while continuously improving our commercial and Medicaid coverage through the fourth quarter. We believe expanding our sales team for Lieberman for the two to five-year-old age group will result in minimal single-digit million in cash burn in 2025.
Speaker Change: Our goal is to maximize the distribution of antifoam to all patients immediately if approved by the FDA.
Speaker Change: Over the next year, we will continue to examine if our commercial efforts can be augmented by utilizing the sales and distribution platforms of other companies.
Speaker Change: Speaking of commercialization, let's turn to Lieberman.
Lieberman: We are now focused on expanding our Liebervent launch in the two to five year old age group.
Lieberman: Over the last few months, we have received significant feedback on the value and benefits Lieberman offers to patients and their caregivers.
Lieberman: This feedback includes outreach from major children's institutions across the country who are proactively seeking information on LibraVid.
Lieberman: We expect to have national retail distribution capabilities in place by October 1st, while continuously improving our commercial and Medicaid coverage through the fourth quarter.
Lieberman: We will expand to a national sales team of 10 representatives in late Q3.
Lieberman: We believe expanding our sales team for Lieberman for the two to five-year-old age group will result in minimal single-digit millions in cash burn in 2025.
Lieberman: and will generate top-line revenue in 2025 to be somewhere in the neighborhood of $5 million.
Unnamed Speaker: While that may seem modest in the short term, there is significant benefit to the company as we prepare for an Anafilm launch in 2026, if approved, and a full LibraVent launch in 2027 on the expiration of a competitor's orphan drug exclusivity. As you may recall, Anafilm was born out of our Adreniverse platform technology. We believe there are additional major products that will come from this platform. In the next few months, we will hold an Investor Day to outline how Anafilm has helped propel our scientific thinking, the science behind our Adreniverse platform, our unique intellectual property position, and the potential products that could arise from the work we have done.
Lieberman: While that may seem modest in the short term, there is significant benefit to the company as we prepare for our Anacel launch in 2026.
Lieberman: if approved, and a full LibraVent launch in 2027 on the expiration of a competitor's orphan drug exclusivity.
Speaker Change: We continue to see the long-term potential for Lieberman as a brand with over $100 million in peak annual net sales. And we look forward to our sales expansion for the 2- to 5-year-old age group in the weeks to come.
Speaker Change: Now let's turn to our Adrenaverse Epinephrine Prodrug platform.
Speaker Change: As promised,
Speaker Change: We are preparing to share more with the investor community on the future pipeline potential of Adreniverse.
Speaker Change: As you may recall, Anafilm was born out of our Adreniverse platform technology.
Speaker Change: We believe there are additional major products that will come from this platform.
Speaker Change: In the next few months...
Speaker Change: We will hold an Investor Day to outline how Anafilm has helped propel our scientific thinking,
Speaker Change: the science behind our Adreniverse platform.
Speaker Change: our unique intellectual property position, and the potential products that could arise from the work we have done.
Unnamed Speaker: Finally, on our base business, such as suboxone with individual. Our lead pipeline program, Anafilm, for severe allergic reactions, including anaphylaxis, is nearing the end of its development cycle and we believe it is only months away from filing. This affords us the opportunity to begin commercialization in a low-risk, low-cost environment while still retaining significant long-term potential.
Speaker Change: This is an exciting part of our business.
Speaker Change: Finally, on our base business, we have completed our strategic review of our existing collaborations and eliminated our unprofitable relationships.
Speaker Change: This includes no longer focusing on China, as well as terminating our U.S. based partnership for the distribution of Exergon Rilisol oral film.
Speaker Change: In 2023, Equestria's revenue from Exurban was negligible.
Speaker Change: Bernie will provide more details on revenue in a moment.
Ernie Toth: Eliminating these distractions will allow the executives responsible for our base business
Ernie Toth: to focus on products such as Suboxone with Ambivore, Amylase with Zambone, Zimbazine with Assertio, and Ondeath with Hypera, while also preparing for higher volumes of LibraVent and the launch of Anafilm, if approved.
Ernie Toth: In conclusion, we continue to be a company with incredible growth potential.
Ernie Toth: Our lead pipeline program, Anafilm, for severe allergic reactions, including anaphylaxis, is nearing the end of its development cycle, and we believe is only months away from filing.
Ernie Toth: Our commercial product, LibraVent, affords us the opportunity to begin commercialization in a low-risk, low-cost environment while still retaining significant long-term potential.
Ernie Toth: Our Adreniverse platform gives us a unique intellectual property position that can generate meaningful programs for years to come.
Ernie Toth: And our base business continues to be a meaningful part of our story.
Ernie Toth: With that, I will turn the call over to Ernie.
Unnamed Speaker: By now, you have seen our financial results in our earnings release that was issued last evening. Second quarter revenue for Liebervant was minimal due to limited launch activities, our pipeline, and commercialization of LibraVent for patients ages between 2 and 5. Excluding this one-time recognition of deferred revenue, total revenues decreased by $3.4 million, or 26% year-over-year. Research and development expenses increased from $7 million for the six months ended June 30, 2023 to $10.1 million for the six months ended June 30, 2024.
Ernie Toth: Thank you, Dan, and good morning, everyone.
Ernie Toth: By now, you have seen our financial results in our earnings release that was issued last evening.
Ernie Toth: As we typically do, we will address most of the discussion related to the second quarter 2024 results in the Q&A.
Ernie Toth: During the second quarter, we continued to execute on our financial strategy to strengthen our financial position to support the continued development of Enafil.
Ernie Toth: Our lead product candidate that has no needle, is not a device, is orally administered, and is easy to carry.
Ernie Toth: On April 26, we received approval for Liebervent for ages between 2 and 5.
Ernie Toth: Second quarter revenue for Liebervant was minimal due to limited launch activities.
Ernie Toth: But we expect to expand our launch for this pediatric age group during the remainder of the year with broadening national retail distribution and expanded insurance coverage.
Ernie Toth: We continued our pre-commercial launch activities for Anafilm to increase awareness among physicians, payers, and the advocacy community.
Ernie Toth: In addition, during the quarter we conducted a strategic review of our existing collaborations with a prioritization of our focus on promising products from a long-term profitability perspective.
Ernie Toth: We terminated our U.S. and China-based collaborations for ExtraVan, allowing us to focus on the continued development of Anafilm.
Ernie Toth: our pipeline, and commercialization of LibraVent for patients ages between 2 and 5.
Ernie Toth: Now, let's turn to the second quarter results.
Ernie Toth: partially offset by decreases in manufacturer and supply revenue.
Ernie Toth: Excluding this one-time recognition of deferred revenue, total revenues decreased by $3.4 million, or 26% year-over-year.
Ernie Toth: Manufacturer and supply revenue decreased from $11.6 million in the second quarter 2023 to $8.1 million in the second quarter 2024, primarily due to timing of Suboxone and ONDEEF orders.
Ernie Toth: Co-development and research fees increased by $0.6 million for the second quarter 2024 versus the prior year period.
Ernie Toth: Total revenues increased from $24.4 million for the six months ended June 30th, 2023 to $32.2 million for the six months ended June 30th, 2024.
Ernie Toth: This 32% increase in revenue was primarily driven by the increases in license and royalty revenue due to the recognition of deferred revenues from the termination of licensing and supply agreements, partially offset by decreases in manufacture and supply revenue.
Ernie Toth: Excluding the one-time retroactive 2022 price increase of $1.7 million, recognized in the six months ended June 30, 2023, manufacture and supply revenue decreased by 5 percent
Ernie Toth: primarily due to lower undeef revenue, which was attributable to a decrease in volume due to timing of orders, partially offset by an increase in suboxone manufacturing revenues.
Ernie Toth: Research and development expenses increased from 3.5 million dollars in the second quarter 2023 to 4.2 million dollars in the second quarter 2024.
Ernie Toth: The increase in research and development expenses was primarily due to clinical trial costs associated with the continued advancement of our Antifilm program, an increase in personnel costs, and an increase in share-based compensation.
Ernie Toth: As a reminder, the first three quarters of 2024 will contain expenses for multiple clinical studies being conducted to advance the Anafilm program.
Ernie Toth: Research and development expenses increased from $7 million for the six months ended June 30, 2023, to $10.1 million for the six months ended June 30, 2024.
Ernie Toth: The increase in research and development expenses was primarily due to the clinical trial costs associated with the continued advancement of the Anafilm program, an increase in personnel costs, and the increase in share-based compensation.
Unnamed Speaker: Selling, general, and administrative expenses increased from $7.4 million in the second quarter 2023 to $11.4 million in the second quarter 2024. The increase of $4 million, or 54%, primarily represents higher personnel costs of approximately $0.5 million. Of the increase of 49% or $7.2 million for the six months ended June 30, 2024, as compared to the same period in the prior year, more than half of this increase was driven by severance costs of $1.1 million incurred in the first three months of this year and $2.5 million due to a year-over-year change in the allocation of manufacturer and supply. Equest's net loss for the second quarter of 2024 was $2.7 million, The increase in net loss was primarily driven by a decrease in net other income and increases in selling general and administrative expenses.
Ernie Toth: Selling, general, and administrative expenses increased from $7.4 million in the second quarter of 2023 to $11.4 million in the second quarter of 2024.
Ernie Toth: The increase of $4 million, or 54%, primarily represents higher personnel costs of approximately $0.5 million.
Ernie Toth: Share-based compensation expense of $0.6 million Regulatory and licensing fees of $0.4 million related to the regulatory fee for Lieberman Consulting costs of $0.7 million
Ernie Toth: Selling, general, and administrative expenses increased from $14.8 million for the six months ended June 30, 2023, to $22 million for the six months ended June 30, 2024.
Ernie Toth: Of the increase of 49% or $7.2 million for the six months ended June 30, 2024, as compared to the same period in the prior year,
Ernie Toth: The remainder of the increase is largely driven by higher commercial and regulatory costs related to LibraVent and Anafilm, partially offset by lower legal fees and decreases in other general and administrative costs, including insurance.
Ernie Toth: Aquesta's net loss for the second quarter of 2024 was $2.7 million, or $0.03 for both basic and diluted loss per share.
Ernie Toth: June 30, 2024 was $15.6 million, or $0.19 for both basic and diluted loss per share.
Ernie Toth: The increase in net loss was primarily driven by a decrease in net other income,
Ernie Toth: Non-GAAP-adjusted EBITDA income was $1.8 million in the second quarter of 2024, compared to non-GAAP-adjusted EBITDA loss of $3.3 million in the second quarter of 2023.
Ernie Toth: non-GAAP-adjusted EBITDA income
Ernie Toth: excluding adjusted R&D expenses.
Ernie Toth: with $5.6 million in the second quarter of 2024.
Ernie Toth: compared to a non-GAAP-adjusted EBITDA income.
Ernie Toth: excluding adjusted R&D expenses of $0.1 million in the second quarter 2023.
Ernie Toth: non-GAAP-adjusted EBITDA income excluding adjusted R&D expenses.
Ernie Toth: was $4.2 million for the six months ended June 30, 2024, compared to a non-GAAP-adjusted EBITDA loss excluding adjusted R&D expenses of $0.4 million for the six months ended June 30, 2023.
Ernie Toth: Cash and cash equivalents were approximately $90 million as of June 30th, 2024. During the second quarter, we did not sell any shares under our ATM facility.
Unnamed Speaker: We continue to be focused in 2024 on the advancement of our antifilm epinephrine program and continued commercialization of LibraVent for patients ages between 2 and 5 years old. As outlined in the press release issued last night after market close, we are revising our outlook for 2024 as follows. Our guidance for 2024 includes the conclusion of the supportive studies, engaging the FDA in a pre-NDA meeting, commencing a pediatric study, following the NDA, and pre-commercial activities for anaphylaxis.
Ernie Toth: We continue to be focused in 2024 on the advancement of our antifilm epinephrine program and continued commercialization of LibraVent for patients ages between 2 and 5 years old.
Ernie Toth: As outlined in the press release issued last night after market close, we are revising our outlook for 2024 as follows.
Ernie Toth: Total revenues of approximately $57 million to $60 million from prior revenue guidance of $48 million to $51 million.
Ernie Toth: Our guidance for 2024 includes conclusion of the supportive studies, engaging the FDA in a pre-NDA meeting, commencing a pediatric study, filing the NDA, and pre-commercial activities for Anafil.
Ernie Toth: in addition to expanding the commercial launch of LibraVent for patients ages between 2 and 5.
Operator: Thank you. Ladies and gentlemen, to ask a question, you will need to press R11 on your telephone and wait for your name to be announced.
Speaker Change: With that, I will now turn the line back to the operator to open the line for questions.
Speaker Change: Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we call the Q&A roster.
Speaker Change: And our first question coming from the line of Rhino Roots with Learning Partners. Your line is open.
Unnamed Analyst: So two questions for me. First of all, I was curious about the upcoming launch preparations for Anafilm. Could you talk a bit about your overall plan to target key physicians and hospital accounts? And how might you pursue possibly unbranded marketing and engage with advocacy groups alongside that?
Rhino Roots: Great. Good morning, everyone.
Rhino Roots: So, two questions for me. First one, I was curious about the upcoming launch preparations for Anafilm. Could you talk a bit about your overall plan to target key physicians and hospital accounts and how might you pursue possibly unbranded marketing and engaging with advocacy groups alongside that?
Speaker Change: Good morning Rwanda, nice to hear your voice. So I am very fortunate today on this call that as we've invested in our company I have a phenomenal leader of commercial with me named Sherry Korsinsky who actually has a deep background.
Sherry Korsinsky: in the epinephrine space. So I'm going to hand it over to Sherry to walk you through the awareness activity we're doing right now and some of her thoughts on our Anafil launch.
Unnamed Speaker: Good morning everybody. I'm super excited to be here, and I cannot be more thrilled at the opportunities we have with Secondly, we're doing all of our block and tackle marketing activities to prepare Anafilm for launch day. This is market research with the high prescribers, our brand building work, such as positioning, advertising concepts, key messaging, and perhaps most importantly, we're having conversations started with key payer decision makers so that at or shortly after QDUFA, we ensure that patients have affordable access to...
Sherry Korsinsky: Good morning, everybody. I'm super excited to be here, and I cannot be more thrilled at the opportunities we have with
Sherry Korsinsky: meeting significant unmet need in the severe allergy market. As we think about what we're doing today to prepare for our launch,
Sherry Korsinsky: in late 25, early 26, really focused on implementing a three-pronged strategy that targets high autoinjective prescribers.
Sherry Korsinsky: And this encompasses first, obviously, awareness of the data and the functional benefits of Anafilm. Secondly, believability in Anafilm, that it works as...
Sherry Korsinsky: at least as well as the EpiPen based on the data we have. And third, we want to ensure there is confidence to prescribe Anafilm when approved.
Sherry Korsinsky: So to achieve this and to answer your question a little bit more detailed, we've put significant effort into three key areas, as you would expect at this time in preparation for launch.
Sherry Korsinsky: The first is around medical education and KOL interaction. So we're out at the Allergy Conferences. We are consistently meeting with the top four advocacy groups.
Sherry Korsinsky: We have engaged to start CME and non-CME programs, leveraged through channels as doctors access for information.
Sherry Korsinsky: Secondly, we're doing all of our block and tackling marketing activities to prepare Anafilm for launch day.
Sherry Korsinsky: This is market research with the high prescribers, our brand building work.
Sherry Korsinsky: such as positioning, advertising concepts, key messaging, and perhaps most importantly, we're having conversations, have started with key payer decision makers so that at or shortly after PDUFA, we ensure that patients have affordable access to MSL.
Unnamed Analyst: Got it. It's super helpful. And then, second one for me, could you remind us from the recent temperature and pH and self-administration studies, how the PD data tracked with the PK data and when you looked at the data in these studies, and do you plan to disclose the exact specifics coming up in the fall?
Speaker Change: Got it. Super helpful. And then second one from me.
Speaker Change: Could you remind us, from the recent temperature and pH and self-administration studies, how the PD data tracked with the PK data, when you looked at the data in these studies, and do you plan to disclose the exact specifics coming up in the fall?
Operator: Just a technical note. In our supplementary materials online, we actually did include the PD data for our temperature pH study, but I'll let Dr. Kraus give you his view on that.
Speaker Change: Sure, so Rwana, I'm going to hand it over to Dr. Kraus in a second here, just a technical note I'll call it. In our supplementary materials online, we actually did include the PD data for our temperature pH study, but I'll let Dr. Kraus give you his view on the results.
Carl Kraus: The pharmacodynamic data, as we've seen in the past, does reflect the pharmacokinetic data in our data set historically, and we see the same kind of tracking both in the temperature pH study as well as in the self-administration study. So I think overall there is consistency across our data.
Dr. Kraus: Yeah, I'm happy to and thanks for the question.
Dr. Kraus: does reflect the pharmacokinetic data in our data set historically, and we see the same kind of tracking both in the temperature pH study as well as in the self-administration study. So I think overall there is consistency across our data set.
Speaker Change: Got it. Thanks for clarifying.
Speaker Change: Hey thanks, just a couple for me. So first...
Speaker Change: I believe, so that's something you're going to be discussing with the FDA in your pre-NDA meeting, if I'm not mistaken. So, can you elaborate on the discussion points and what, if anything, needs to be discussed?
Speaker Change: I guess, ironed out with the agency as it relates to the pediatric studies. So that's number one. Number two, on LibriVant, can you talk more about your long-term strategy for the asset? Is the idea here that...
Speaker Change: to ultimately out-license it or are you contemplating keeping it? I just want to get your latest and greatest on how you're thinking about the role of that asset in the business.
Unnamed Speaker: Yeah, no, thanks. Thanks for the question. On the pediatric study for...
Speaker Change: Yeah, thanks for the question. On the pediatric study, fortunately the trial design is relatively
David: And David, just to add to Dr. Kraus' view, just two reminders. One, again, in our supplementary materials we have the design for people to see, and two, we have shared that with the FDA before, so this is an ongoing discussion that
Unnamed Speaker: On your second question about LibraVent, I'm really glad you asked that question because with all of the focus we have on Anafil, both in our company and outside of our company, sometimes LibraVent gets overshadowed. But LibraVent is, in my view, a fantastic product for patients. The differentiation we offer in this space, and the fact that it's the only oral product available to the two- to five-year-old patient group, is, in my mind, truly disruptive in that space.
Lieberman: on Lieberman.
Speaker Change: I'm really glad you asked that question because with all of the focus we have on Anafil both in our company and outside of our company, sometimes LibraVent gets overshadowed. But LibraVent is, in my view, a fantastic product for patients.
Unnamed Speaker: And we think, as we get to 2027 and are able to launch across all the age groups, that that will continue to unfold. Our mandate as a company is to make sure, one, patients have the product, and, two, that we maximize our upside and our position in the product. As of today, that means we are putting together and launching a small – or, excuse me, expanding a small –
Speaker Change: The patient group is, in my mind, truly disruptive in that space, and we think as we get to 2027 and are able to launch across all the age groups, that that will continue to unfold.
Speaker Change: is to make sure, one, patients have the product.
Speaker Change: like any of our products, over time it could remain with us for 10 years or it could end up being distributed by another company in the years to come. I think that remains to be seen.
Speaker Change: with the ODE situation in the rearview mirror. I guess the question is, if you were to keep it, what kind of commercial infrastructure would you put behind it more broadly than what you're doing now? How many reps, et cetera, et cetera?
Speaker Change: Yeah, yeah. Well, and Lieberman is...
Speaker Change: And our plans that we originally had when we thought we were launching Lieberman years ago remain evergreen. So the rep size would be limited.
Unnamed Speaker: in a very targeted way, as we continue to ensure that patients ages 2 to 5 have access to liver bands.
Unnamed Analyst: Okay, helpful. Thank you.
Speaker Change: Okay, helpful. Thank you.
Operator: And our next question comes from the line of Francois Brisebois from Oppenheimer. Your line is open.
Speaker Change: And our next question coming from the line of Francois Brisebois from Oppenheimer, your line is open.
Speaker Change: is meant to characterize whether or not.
Speaker Change: Changes in the physiology of the oral cavity have an influence on the pharmacokinetics of antifilm so the way that the study is designed is
Speaker Change: that causes the symptoms. They will be provided and dosed with anafilm. The pharmacokinetics will be evaluated, and that will be compared to the same situation, but without the challenge, as well as with the intramuscular administration of adrenaline.
Unnamed Speaker: And on timing, Frank, yes, our guidance on timing is that we expect top-line data from that study either at the end of this quarter or early in Q4.
Speaker Change: And on timing, Frank, yes, our guidance on timing is that we expect top-line data from that study either at the end of this quarter or early in Q4.
Speaker Change: to the discussion or strategy of looking to a bigger partner. And just show in the desktop a little bit these prescribers and what kind of sales force they would require. Thank you.
Unnamed Speaker: However, the high prescribers are concentrated in allergists and pediatricians, and so we feel very good about the opportunity we have to really penetrate those high prescribing allergists and pediatricians, and that will be our key focus.
Speaker Change: And so we feel very good about the opportunity we have to really penetrate those high prescribing allergists and pediatricians, and that will be our key focus upon launch.
Speaker Change: Thank you. Bye-bye.
Speaker Change: Thank you.
Speaker Change: Hi, thanks very much for taking my questions. Firstly, with respect to Anafilm, I was wondering if you could provide us with some more detail on what you plan to discuss at the upcoming showcase event, and in particular, if you're going to discuss ways in which you're going to
Unnamed Analyst: differentiate Anafilm from Nefi, assuming those products are both on the market simultaneously, particularly with respect to the overall marketing message that you expect to utilize, and also, if you could comment at all, you know, assuming you're comfortable doing so, to what extent do you believe you might be able to utilize a more efficient, you know, smaller commercial footprint to support the commercialization of Anafilm versus what conceivably would be necessary for Nef But thanks anyway, Ram. So,
Speaker Change: Differentiate Anafilm from Nefi.
Speaker Change: Assuming those products are both on the market simultaneously.
Speaker Change: particularly with respect to the overall marketing message that you expect to utilize.
Ron: Thanks, Ram.
Speaker Change: all parts of your question, but if I miss one, please let me know. First, on our upcoming Investor Day, and this may be underappreciated,
Dr. Wargacki: But I'm going to pass it over to Dr. Wargacki for a second here And he can tell you a little bit more about What we're really excited to talk about at that investor event outside of Anisfeld
Dr. Wargacki: And we're really excited to come talk to everybody here shortly about the progression we've done on the nonclinical front and securing our intellectual property as we prepare for our interaction with the agency.
Unnamed Speaker: Yeah, so the plug I'll put in is make sure you attend. We think it'll be worth everyone's time. So we don't see ourselves in any way as being a product that will have an issue separating ourselves.
Dr. Wargacki: at Kent and Deere.
Sherry Korczynski: And I'll let Sherry walk you through some of the highlights from her perspective.
Sherry Korczynski: Again, thank you for that question. We've spent a great deal of time conducting market research to understand what our key competitive advantages are in the minds of physicians and patients. And as I mentioned earlier, the unmet needs in this market are well known and well articulated. Next, you don't have a needle, and there is no device.
Unnamed Analyst: Great. And then just two very quick additional ones.
Dr. Wargacki: The beauty of anafilm is the simplicity of anafilm.
Speaker Change: But perhaps most importantly, and if you take nothing else away from this,
Speaker Change: It is the one and only epinephrine product that can fit into any lifestyle, and it doesn't require an active carry decision, so it fits and can always be kept in a wallet.
Speaker Change: a small change purse, and the credit card holder that you put on the back of your phone. So I believe, based on my experiences in this therapeutic area, we will have the best form of epinephrine upon approval by FDA for patients and caregivers alike.
Speaker Change: really around sales coverage and distribution, right? How are we thinking about that? And I think you mentioned a more efficient smaller footprint. As I put in my prepared comments, I think you
Speaker Change: and that we are able to do that efficiently.
Speaker Change: As I mentioned in my prepared comments, we do have some inbound interest that we're walking through, and as we get closer to our launch, we will look at how do we cover the entire market to make sure we maximize patients' ability to get the product.
Unnamed Analyst: I was wondering if Ernie could comment on the components driving the updates to 2024 top-line guidance, and in particular, I wanted clarity on two aspects of this. One is the extent to which the revenue reported in the second quarter was effectively non-cash impacting because of what you disclosed in the press release were effectively agreement terminations and recognition of deferred revenue. And also, when we look at the updated guidance number, how much of that is being driven by improved expectations for organic growth of underlying revenue streams, like, for example, the royalties that you expect to receive from partners on partnered products?
Speaker Change: The Components Driving the Updates to 2024 Top-Line Guidance.
Speaker Change: and, in particular, wanted clarity on two aspects of this. One is...
Speaker Change: The extent to which the revenue reported in the second quarter was effectively, you know, non-cash impacting because of what you disclosed in the press release were
Speaker Change: How much of that is being driven by improved expectations for organic growth of underlying revenue streams like, for example, the royalties that you expect to receive from partners on partnered products?
Unnamed Speaker: The guidance for 2024, revenue is increased because of the deferred revenue recognition due to the terminations of the two agreements, as we mentioned back in May. We went through a strategic review to focus on, so we were able to focus our time not only on profitable products, but also from a long-term perspective, but also from a time allocation resources point of view of being able to focus both on Antifilm and on the expanded launch now of LibriVent.
Speaker Change: Hi, Ram. Thank you. Good to talk to you.
Speaker Change: and on the expanded launch now of LibriVet.
Unnamed Speaker: So the revenue guidance for the year does include those terminations. But, as you mentioned, they are non-cash items. We actually received that cash back in the 21-22 timeframe. So that's cash that we had, and now it's just a non-cash recognition of that revenue. When we look at our guidance for the year, we've taken those into account. When we look at our demand for Suboxone for the remainder of the year, we see that increasing from the levels that we saw in the first half of the year.
Speaker Change: So, the revenue guidance for the year does include those terminations. They, as you mentioned, they are non-cash.
Speaker Change: items, we've actually received that cash.
Speaker Change: recognition of that revenue. When we look at our, again, the guidance for the year, we've taken that those into account. When we look at our demand for suboxone for the remainder of the year,
Speaker Change: We see that increasing from the levels that we've seen in the first half of the year. And then from an EBIDTA perspective, we have built in now, which was not in our prior guidance, was the Liebervant launch.
Unnamed Speaker: From an EBITDA perspective, we have built in now, which was not in our prior guidance, the LibriVent launch cost that we had and some additional spending, the timing of spending on the pre-commercial spend for Antifilm. So all told, it provides guidance. This concludes the recognition of deferred revenue, timing of suboxone for the remainder of the year, on an EBITDA basis, timing of the LibraVan launch cost, and also some pre-commercial spend for anonymity.
Speaker Change: So all told, it provides guidance.
Speaker Change: includes the recognition of deferred revenue, timing of suboxone for the remainder of the year on an EBITDA basis, timing of the LibraVan launch costs, and also some pre-commercial spend for anecdotes.
Unnamed Speaker: So, Ram, the only thing I'd add to what Ernie said is, if you back away from the ins and outs that Ernie walked you through, we're right where we want it to be, right? The investment dollars we have are going to commercial and to NFL development, and we are on track with all of the expectations that we have set over the last two quarters.
Speaker Change: Right, the investment dollars we have are going to commercial and to the NFL development And we are on track with all of the expectations that we have set over the last two quarters
Speaker Change: Thank you.
Yolanda Saltman: And our next question coming from the line-up, Thomas Flaten with Lake Street Securities, Yolanda Saltman.
Unnamed Analyst: Great, thanks for taking the questions. Dan, in the press release, you mentioned that you'll be submitting for the 6 to 12 year old age bracket for Libervant. What data do you have or do you need to get to enable that submission to go into FDA?
Thomas Lam: Great, thanks for taking the questions. Dan, in the in the press release you mentioned that you'll be submitting for the 6 to 12 year old age bracket for LibraVant. What data do you have or do you need to get to enable that submission to go into FDA?
Speaker Change: Yeah, we did that work years ago as Thomas you probably remember, so that that is strictly a paper exercise at this point.
Speaker Change: Okay, got it. And then for the Investor Day coming up and maybe some of the unveiling around the Adreniverse opportunity, I'm trying to interpret the press release. Can I read into that that you'll be unveiling additional products beyond AQST 108, or is it more of a 108-focused presentation?
Unnamed Speaker: Yeah, now our plan is to, we know we have continued to talk about Adrenaverse and 108 without giving a lot of detail to you, and we appreciate everyone's patience. As Steve mentioned before, intellectual property being in place is very important before you have those days. So one of the things we'll do, as Steve mentioned, is walk you through the science because I don't think we've given you a fair view of why we're so excited about it.
Speaker Change: Yeah, now our plan is to we know we have Continued to talk about adrenovirus and 108 without giving a lot of detail to you and we appreciate everyone's patience
Speaker Change: Given you a fair view on why we're so excited about it. We will walk through the specific
Unnamed Speaker: We will walk through this. We have not given you an indication for 108 yet, but in that discussion, we believe you will walk away understanding that while we are announcing 108 and an indication, there are multiple programs that could come after 108.
Speaker Change: INDICATION for 1.08.
Unnamed Speaker: and others. Thank you. Companies in our space have more of an eye toward where we are and what's happening. We've had inquiries that have spanned the spectrum.
Speaker Change: Companies in our space have more of an eye towards where we are and what's happening. We've had inquiries that have spanned the spectrum.
Unnamed Analyst: Got it. Appreciate you taking the time to ask the question. Thank you. Thanks, Thomas.
Operator: Thank you. And our next question coming from the lineup, Jason Butler with Citizen Scampi, Yelena Selkin. Hi, thanks for taking the question.
Thomas Lam: Thanks, Thomas.
Speaker Change: Thank you. And our next question coming from the line-up, Jason Butler with Citizens JMP, Milana Saltman.
Unnamed Speaker: I'll let Carl take that one. Yeah, Jason, thanks for the question. Really, it's a...
Speaker Change: It's making sure that we have alignment with the agency that...
Speaker Change: to act as a tollgate for starting the pediatric program. So that's really one of the critical questions we're going to secure out of the pre-MDM meeting.
Speaker Change: Okay, thank you.
Speaker Change: with all your conversations.
Speaker Change: with FDA in support of studies that wouldn't be necessary. And since NEFI could get approved on October 2nd, you know, just what do you think the read-through is there for you guys from a regulatory standpoint?
Unnamed Speaker: I'll take your second question first and then I'll hand it over to Carl to talk about It's tricky to look at someone else's application and have a read-through of your program, right? So our engagement with the FDA has been very open, transparent from our perspective, consistent, and supportive of what we are looking to accomplish. I don't, I haven't been in the discussions that the other, that our competitor has had, so I think we're all looking to see on October 2nd how their product fares and whether, if they don't get approval, whether that's related to something that
Speaker Change: It's tricky to look at someone else's application and have a read-through to your program, right? So, our engagement with the FDA has been very open, transparent from our perspective.
Speaker Change: We believe that the program continues down a path of declining risk.
Unnamed Analyst: Okay, and then just, you know, with LibraVant, as you're building out that infrastructure a little bit, just talk about how you'll be able to leverage that effort, potentially for Anafilm, where there's going to be some overlap. And with respect to the inbound interest in Anafilm, you know, I would imagine that it's more likely to be for primary care, someone who has a primary care capability. But maybe you could just elaborate on that a little bit.
Speaker Change: Okay.
Speaker Change: And then just, you know, with LibraVant, as you're building out that infrastructure a little bit, just talk about how you'll be able to leverage that effort potentially for Anafilm, where there's going to be some overlap. And with respect to the inbound interest on Anafilm, you know, I would imagine that it's...
Unnamed Speaker: Yeah, for whatever reason, Gary, I'll start with your second question again here. So, of course, primary care would be an interesting addition to our capabilities for the NFL. It's early days in terms of any discussions that we're having. So, my view would be it will be quarters of time before we have a view on what we will or won't do with someone else in the NFL. In terms of Lieberman, there are some really nice infrastructure pieces that do tie to the NFL. I'll let Sherry give you her thoughts on some of those infrastructure overlays. Yes, obviously.
Speaker Change: Yeah.
Speaker Change: It will be quarters of time before we have a view on what we will or won't do with someone else on the NFL. In terms of Lieberman, of course, they're Lieberman, excuse me.
Sherry Korsinsky: There are some really nice infrastructure pieces that do tie to Anafilm. I'll let Sherry give you her thoughts on some of those infrastructure overlaps.
Sherry Korsinsky: Yes, obviously it's important. It will start to lay a foundation for all of our commercial activities between salesforce, marketing. It will give us synergies in commercial operations.
Unnamed Analyst: Okay, great. Thank you very much.
Sherry Korsinsky: Wow.
Speaker Change: Thank you. And our next question coming from the line of James Molloy with Alliance Global Partners. Your line is open.
Unnamed Analyst: The top line does include the 10 million one-timer. So excluding that for top line and EBITDA, should we just stay with the prior guidance on both those items as a more sort of cash-driven EBITDA and top line?
James Malloy: The top line does include the $10,000,000 one-timer. So excluding that for a top line and EBITDA, should we just stay with the prior guidance on both those items as a more sort of cash-driven EBITDA and top line?
Speaker Change: Hi, Jim. So again, the amount of the deferred revenue that was recognized was non-cash. We got that cash.
Speaker Change: I don't know if that's exactly what you're asking, there will be some increased expenses
Speaker Change: as we get into the second half of the year around the Lieberman launch activities.
Speaker Change: for Anafilm, in addition to some other timing issues around revenue and expenses.
Speaker Change: So, I think backing out the one-time revenue...
Speaker Change: For, um, that is included in both revenue and contributes to EBITDA, you, you could get to another number. That's not something we give.
Speaker Change: I thank you very much. It actually ties in with the next question too. The R&D and G&A in the current quarter, is that the number that we should expect going forward or we just paid any material changes up or down on those?
Speaker Change: Well, again, you know, some of these expenses we would expect.
Speaker Change: to increase a little bit in the second part of the year, R&D, and annualizing it. Remember that we...
Speaker Change: We do have some of these studies that are coming to a conclusion in the...
Speaker Change: the second part of the year. In addition, there is some of the selling expenses that is included in SG&A around the expanded launch.
Dan Barber: Question for Dan. Thank you, Ernie. The topical challenge, could you walk through the phase 2 trial design and one of the things you guys talked about, the adrenaverse, the billion dollar opportunity. Could you walk through some of the big pillars of that billion dollar opportunity could be?
Unnamed Speaker: Jim, I want to make sure you attend our Investor Day, so I'm going to give you a teaser that this is exactly some of the things you'll hear at our Investor Day.
Unnamed Analyst: Honestly, my apologies for missing that answer. And then we'll also, on the R&D day, talk about the number of reps for the Anafilm self-launch, if you should indeed self-launch. And could you walk through, again, maybe this will be on the R&D day as well, the go-no-go on a partner versus self-launch? Yes.
Unnamed Speaker: Yeah, yeah, yeah, the we will, of course, look, Anafilm is the central theme of our company at this time, right? So we, of course, at investor day, we'll start with any updates we have on Anafilm, anything that we think is meaningful to share and how it ties to our Adreniverse technology.
Unnamed Speaker: In terms of the sales force, I think Sherry gave you her thoughts before and her timing on how we go from where we are today to a very specific plan. One of the things I think is important that Sherry said is that this is a well-worn path. She's done it before. She understands it. So I don't think there'll be any need for, if something like that were to be put in place. As we go through the next two quarters, those conversations will develop, as will Sherry's plan. And then we'll know exactly how the company...
Speaker Change: Just to make sure I clarified that where we are today as we've had inbound inquiries. We are just beginning to think about what.
Speaker Change: What type of arrangement, we may or may not want to have I would say it is not imminent nor do we want it to be in a minute.
Speaker Change: That's something like that were to be put in place as we go through the next few quarters. Those conversations will develop as we'll share as planned and then we will know exactly as a company, where we want to place our bets so to speak.
Speaker Change: Thank you I'm showing no further questions at this time I will now turn the call back over to Dan Palmer for any closing remarks.
Unnamed Speaker: Thank you, Olivia. Well, of course, as always, we appreciate your time this morning. As you heard, we are truly excited about the progress the company has made over the last year. We're confident in our Antifilm development program, and we're ready to expand our sales efforts for Lieberman in the two to five-year-old space.
Dan Palmer: Thank you Olivia.
Dan Palmer: Well of course as always we appreciate your time. This morning as you heard we are truly excited about the progress. The company has made over the last year.
Speaker Change: We're confident in our NFL development program, we're ready to expand our sales effort efforts for Libre event and the two to five year old space and we have meaningful in house technology to refill. Our pipeline. This is a great place to be we hope you had.
Speaker Change: Hope you have a great rest of your day, and we look forward to our future interactions.
Speaker Change: Okay.