Q3 2024 Aquestive Therapeutics Inc Earnings Call
Good morning and welcome to the requested therapeutic third quarter of 2024 conference call. At this time all participants are an elicinomi mode. After the speaker's presentation, there will be a question and answer session.
2. Ask a question, please press star 1, 1 on your telephone and wait for your name to be announced.
to withdraw your question, please press star one one again. As a reminder, this call will be recorded. I would not like to introduce your host for today's conference call, then it Watson of ICR Westwick Investor Relations. You may begin.
Ben Watson: Good morning and welcome to today's call. Today's call I'm joined by Dan Barber, Chief Executive Officer and Ernie Toath, Chief Financial Officer. We're going to provide an overview of recent business developments in performance for the third quarter of 2024 followed by a Q&A session.
Ben Watson: During the Q&A session, the team will be joined by Dr. Carl Crock, Chief Medical Officer, Dr. Steve Workach, Chief Science Officer, and Cherry Corsons, Senior Vice President of Sales and Marketing.
Ben Watson: As a reminder, the companies are marked today, correspond with the earnings release that was issued after market closed yesterday. In addition, a recording of today's call will be made available on a quest's website within the investor section shortly following the conclusion of this call.
To remind you, the Equestrive team will be discussing some non-GAAP financial measures this morning as part of review of third quarter 2024 results.
Ben Watson: A description of these measures, along with a reconciliation to GAAP, can be found in the earnings release issued yesterday, which is posted on the Investors section of Cuesta's website.
During the call, the company will be making forward-looking statements.
We remind you of the company's Safe Harbor language as outlined in yesterday's earnings release.
as well as the risks and the certainties affecting the company as described in the risk factor section and in other sections included in the company's quarterly report on Form 10-Q filed with the Securities Exchange Commission on November 4, 2024.
Ben Watson: 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.
Ben Watson: Given these uncertainties, you should now place undue reliance on these forward-looking statements, which speak only as of the date made.
Ben Watson: Actual results may differ materially from these statements.
Ben Watson: All forward-looking statements attributable to a collective 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.
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.
Ben Watson: With that, I will now turn the line over to Dan.
Dan Barber: Thank you, Bennett. Good morning, everyone, and thank you for joining us today.
Dan Barber: I am pleased to say that we have once again made tremendous progress since our last earnings call in early August.
Dan Barber: This is truly an exciting time for the Aquestive team.
Dan Barber: In the last three months, we have announced a major new product candidate from our Adreniverse Pipeline Program with AQSC-108 for alopecia areata.
Dan Barber: expanded our liver vent launch in the two to five year old space by adding retail distribution and a full sales team
Dan Barber: completed what we believe to be our final adult study for our Anafilm program and submitted our pre-NDA briefing book to the FDA in anticipation of a fourth quarter pre-NDA meeting.
Dan Barber: We believe this work has set us up well for continued progress in 2025 and beyond.
Speaker Change: Now let's focus on NFL.
Speaker Change: We recently announced the top-line results from our Oral Allergy Syndrome Challenge study, which we refer to as our OASIS study.
Speaker Change: The OASIS study was requested by the FDA to provide clinical data showing that epinephrine plasma concentrations following dosing of antifilm are similar with and without the presence of an allergen.
Ben Watson: As you have seen from our reported results, we have confirmed that the absorption profile of Anafilm remains the same whether subjects have been exposed to an allergen or not.
Ben Watson: Importantly, the most meaningful part of this study was our symptom resolution data.
Ben Watson: During the OASIS study, we tracked the time to symptom resolution without Anafilm administration and with Anafilm administration.
Ben Watson: As a reminder, symptoms included swelling of the lips, tongue, and throat, along with nasal congestion, and systemic symptoms such as GI tract discomfort, as well as tingling.
Ben Watson: When no antifilm was administered, the median time to full symptom resolution was 74 minutes.
Ben Watson: When Anafilm was administered, this dropped to 12 minutes.
Ben Watson: In fact, there are three numbers that resonate with me from this study, 2, 5, and 12.
Ben Watson: The data showed that subjects started seeing symptom resolution two minutes after the administration of Anafilm.
Ben Watson: All swelling symptoms were resolved within five minutes.
Ben Watson: and median time to full symptom resolution was 12 minutes.
Ben Watson: These are truly remarkable results that make us wonder if treating at the site of symptoms may bring additional benefit to patients.
Ben Watson: This is something we hope to understand more as we continue to progress.
One of the questions that we have heard from the allergy community is how to correlate this data to anaphylaxis.
Ben Watson: I have discussed this with our medical experts.
Ben Watson: And we believe that it is important to note the systemic symptoms from our OASIS study
Ben Watson: as well as the fact that up to 10% of OAS reactions progress into more severe allergic reactions.
Ben Watson: with up to 2% resulting in anaphylaxis.
Ben Watson: This gives us confidence that the OASIS study increases our understanding of how antifilm works in the presence of edema.
Ben Watson: I am also excited to announce today that we received the first part of feedback from our FDA pre-NDA process.
Ben Watson: We had previously submitted our chemistry, manufacturing, and controls pre-NDA questions to the FDA.
Ben Watson: We recently received a written response from the FDA on all our questions.
Ben Watson: and I am pleased to say we found the FDA's responses supportive of filing our application.
Ben Watson: I am also pleased to confirm that we have submitted our antifilm clinical briefing book to the FDA for review ahead of our pre-NDA meeting.
Ben Watson: While we are not disclosing the specific date of the meeting, we remain on track to complete this meeting before the end of the year.
Ben Watson: We plan on sharing our findings from this meeting once we have final FDA meeting minutes, if not sooner.
Ben Watson: If the FDA is supportive of our plans for submitting our NDA, then we will immediately start our Pediatric Pharmacokinetic, or PK, study.
Ben Watson: This is a single-dose study in children and adolescents between the ages of approximately 7 to 17 years of age.
We expect to enroll between 18 and 24 subjects.
Ben Watson: This will be a multi-site study and each subject will be administered one dose of antifilm.
Ben Watson: Blood draws will be taken and then the subject will go home.
Ben Watson: This is a similar study to the one conducted by the recently approved epinephrine nasal spray.
Ben Watson: based on the anticipated positive FDA feedback.
Ben Watson: and the expected pace of enrollment in our pediatric study, we continue to plan for a Q1 2025 filing and a Q1 2026 launch of Anafilm, if approved by the FDA.
Ben Watson: Now, turning to our commercial capabilities, they continue to grow on a daily basis.
Ben Watson: Our LibreVent launch in the two- to five-year-old space has helped us build infrastructure around pharmacovigilance, medical affairs, market access, and sales management.
This has been particularly helpful when it comes to market access.
Ben Watson: as we know that a successful launch must include quick wins with payers.
Ben Watson: That is why I am pleased to share with you today that we now have Medicaid coverage of liver vent in all 50 states.
Ben Watson: I am also pleased to share that as of the first week of October, Libervent was available through retail distribution on a national basis.
Ben Watson: and we have a dozen sales colleagues spending their days educating physicians on the benefits of liver vent for the indicated patient population.
Ben Watson: This has resulted in a steady increase in prescriptions between September and October, and we are working hard to continue this trend.
Ben Watson: We will take these learnings and apply them to our Anafilm commercial launch if approved by the FDA.
Ben Watson: We have continued to increase our non-promotional efforts in the anaphylaxis space.
Ben Watson: These efforts will be an area of increased focus as we move towards submission of our NDA for Anafil.
Ben Watson: Now let's turn to AQST-108, our epinephrine prodrug topical gel.
Ben Watson: As you heard during our investor day on September 27th, we believe that the commercial opportunity for AQST 108 could be equal to or larger than Anafil.
Ben Watson: Our goal for 2025 is to conduct a phase 2a study that will provide additional clinical data supporting our view on the benefits of AQST-108 for alopecia areata.
Ben Watson: This week, we submitted our briefing book to the FDA for our pre-IND meeting, and we continue to anticipate concluding this activity before the end of the year.
Ben Watson: We will then open our IND and begin the Phase 2a study.
Ben Watson: As a reminder, our initial study will focus on determining if we detect a meaningful change from baseline in the severity of alopecia tool score, or SALT score, for enrolled subjects.
Ben Watson: We believe patient unmet needs in alopecia areata remain high. The existing JAK inhibitor treatment products in this space work systemically and come with a significant black box warning.
Ben Watson: We anticipate AQST-108 will only be absorbed locally and may provide an opportunity for treatment without the adverse events associated with JAK inhibitors.
Ben Watson: In conclusion, we continue to focus on growing the company across multiple platforms.
Ben Watson: This includes continuing to advance Anafilm towards NDA submission.
Ben Watson: continuing to grow our liver vent
Ben Watson: and continuing to advance our AQSD-108 program for the treatment of alopecia areata.
Ben Watson: This truly remains an exciting time for the company, the patients it serves and seeks to serve, and all our stakeholders.
Ernie Toath: With that, I will turn the call over to Ernie.
Ernie Toath: Thank you, Dan, and good morning, everyone. By now, you have seen our financial results in our earnings release that was issued last evening.
Ernie Toath: As we typically do, we will address most of the discussion related to the third quarter 2024 results in the Q&A.
Ernie Toath: During the third quarter, we continue to execute on our strategy to support the further development of Anafil, our lead product candidate that has no needle, is not a device, is orally administered, and is easy to carry.
Ben Watson: We continued our pre-commercial launch activities for Anafil to increase awareness among physicians, payers, and the advocacy community.
Ben Watson: On April 26th of this year, we received approval for liver ban for patients ages between two and five years.
Ben Watson: We have expanded our launch for this pediatric age group with broadening national retail distribution.
Ben Watson: expanded insurance coverage, and additional commercial infrastructure including a national sales team of 12 individuals in the third quarter to support the continued growth of this product.
Now, let's turn to the third quarter results.
Ben Watson: Total revenues increased to $13.5 million in the third quarter of 2024 from $13 million in the third quarter of 2023.
Ben Watson: This 4% increase in revenue was primarily driven by an increase in license and royalty revenue due to the recognition of deferred revenue from the termination of a licensing and supply agreement.
Ben Watson: partially offset by decreases in manufacturer and supply revenue.
Ben Watson: Excluding this one-time recognition of deferred revenue, total revenues decreased by 0.7 million dollars or 5% year-over-year.
Ben Watson: Manufacturer and supply revenue decreased to $10.7 million in the third quarter of 2024 from $11.4 million in the third quarter of 2023
Ben Watson: primarily due to the timing of suboxone and simpazan revenues partially offset by an increase in on def revenue
Ben Watson: Co-development and research fees in the third quarter, 2024, remained relatively unchanged compared to the same period in the prior year.
Ben Watson: Total revenues increased to $45.7 million for the nine months ended September 30th, 2024, from $37.4 million for the nine months ended September 30th, 2023.
This 22% increase in revenue was primarily driven by the increases in license and royalty revenue due to the recognition of deferred revenues from termination of license and supply agreements.
Ben Watson: increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue.
Ben Watson: Excluding this one-time recognition of deferred revenue, total revenues decreased by $3.2 million, or 9% year-over-year.
Ben Watson: Research and development expenses increased to $5.3 million in the third quarter of 2024 from $3.2 million in the third quarter of 2023.
Ben Watson: Research and development expenses increased to $15.4 million for the nine months ended September 30th, 2024, from $10.2 million for the nine months ended September 30th, 2023.
Ben Watson: Selling, general, and administrative expenses increased to $12.1 million for the third quarter of 2024 from $7.4 million in the third quarter of 2023.
Ben Watson: This increase was partially driven by a $1.5 million year-over-year change in the allocation of expenses of manufacturing and supply costs.
Ben Watson: Given this year-over-year change, the company expects to continue to see a positive benefit in gross margin offset by somewhat higher selling, general, and administrative expenses.
Ben Watson: Excluding this item, increases in SG&A expenses were primarily driven by increased commercial spending and regulatory fees related to the approval of liver bands and the commercial preparations for Anafil.
Ben Watson: Selling, general, and administrative expenses increased to $34.2 million for the nine months ended September 30, 2024, from $22.2 million for the nine months ended September 30, 2023.
Ben Watson: The remainder of the increase is largely driven by higher commercial spending and regulatory fees related to the approval of LiberBand. The commercial preparations for Antifilm
Ben Watson: partially offset by lower legal fees and decreases in other general and administrative costs including insurance fees.
Ben Watson: Equestria's net loss for the third quarter of 2024 was $11.5 million.
Ben Watson: or $0.13 for both basic and diluted loss per share compared to the net loss for the third quarter of 2023 of $2 million for $0.03 for both basic and diluted loss per share.
Ben Watson: The increase in net loss was primarily driven by increases in selling general and administrative expenses.
Ben Watson: research and development expenses, non-cash interest expense related to the amortization of the debt and royalty obligation discounts, and decreases in interest income and other income.
Ben Watson: partially offset by increases in revenues and decreases in manufacturer and supply expenses.
Ben Watson: Equestria's net loss for the nine months ended September 30, 2024, was $27.1 million, or $0.32 for both basic and diluted loss per share.
Ben Watson: compared to the net income for the nine months ended September 30, 2023 of $0.2 million or zero cents for both basic and diluted loss per share.
Ben Watson: The increase in net loss was primarily driven by the items previously mentioned.
Ben Watson: Non-GAAP-adjusted EBITDA loss was $6.6 million in the third quarter of 2024 compared to a non-GAAP-adjusted EBITDA loss of $1.3 million in the third quarter of 2023.
Ben Watson: Non-GAAP-adjusted EBITDA loss excluding adjusted R&D expenses was $1.6 million in the third quarter 2024.
Ben Watson: compared to a non-GAAP-adjusted EBITDA income, excluding R&D expenses, of $1.7 million in the third quarter of 2023.
Ben Watson: Non-GAAP-adjusted EBITDA loss was $11.9 million for the nine months ended September 30, 2024 compared to a non-GAAP-adjusted EBITDA loss of $8.5 million for the nine months ended September 30, 2023.
Ben Watson: non-gap adjusted EBITDA income.
Ben Watson: excluding adjusted R&D expenses was $2.6 million for the nine months ended September 30, 2024, compared to a non-GAAP-adjusted EBITDA income excluding R&D expenses of $1.3 million for the nine months ended September 30, 2023.
Ben Watson: Cash and cash equivalents were $77.9 million as of September 30, 2024. During the third quarter, we did not sell any shares under our ATM facility.
Ben Watson: We continue our focus in 2024 on the advancement of anafilm, epinephrine, and AQST-108 programs and continued commercialization of LibriVent for patients ages between 2 and 5 years old.
Ben Watson: As outlined in the press release issued last night after market close, our outlook for 2024 remains unchanged at total revenues of approximately $57 million to $60 million.
Ben Watson: and non-GAAP-adjusted EBITDA loss of approximately $20 million, $23 million.
Ben Watson: Our guidance for 2024 includes, for Anafilm, conclusion of the supportive studies,
Ben Watson: engaging the FDA in a pre-NDA meeting this quarter, commencing a pediatric study, and pre-commercial activities for a planned launch in the first quarter of 2026 if approved by the FDA.
Ben Watson: Our guidance also includes continued expansion of the commercial launch of liver band for patients ages between 2 and 5 and the advancement of our AQST-108 epinephrine topical gel program.
Ben Watson: With that, I will now turn the line back to the operator to open the line for questions.
Speaker Change: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions.
Speaker Change: Our first question comes from Roano Ruiz with Lyrinc Partners. He may proceed.
Roano Ruiz: Hi, morning everyone. Two questions for me. First one for Anna Thelm and the clinical briefing book. Was curious what topics did you seek to highlight most to the FDA and if you're able to share what were some of your main goals when assembling the data for this briefing book?
Speaker Change: Good morning, Rowan. Did you have a second question or what was that? The second question was on LibriVent. So I was also curious how did the initial negotiations go with the first two PBMs and if you have any color around that?
Speaker Change: Sure, so let me, I'll talk to the Anafilm question and then I'll hand it over to Sherry who will give you her view of how the negotiations have gone. Though I may not be able to help myself, I might give you a comment or two.
Speaker Change: In terms of the clinical briefing book for Anafil, look, as you know, we are exactly where we've wanted to be. When we look at the goal of that meeting, it's very simple.
Speaker Change: We have done everything the FDA has asked us to do to date. We think the results of what we have produced are positive, as we've shared with the public.
Speaker Change: and we're looking for the FDA to provide us their guidance.
Ben Watson: on the completeness of our package. So we think we're well positioned. We think we've put our best foot forward and we're excited for that upcoming meeting.
Ben Watson: In terms of liver vent and the negotiations, I also couldn't be happier with the work that Sherry and her team have done in terms of getting us positioned well. And I'll let her walk you through what she's seen so far. Thanks, Dan. Hi, Rowana. How are you?
Ben Watson: As long as the product is being prescribed for a patient's agency,
Ben Watson: two to five. We are we are getting, liver ban is getting covered for these patients.
Ben Watson: And so, we continue to broaden our reach into the downstream payers as well, and again, it is very consistent. There is a significant unmet need in the market, and for patients ages 2 to 5, it is really being seen by physicians and payers as a game changer.
Speaker Change: Got it. That's great. And one quick follow-up for Libervant. I noticed you mentioned you have Medicaid coverage now. When should we expect that to start to impact prescribing going forward?
Ben Watson: Well, I would remember to think about the two- to five-year-old spaces we've guided before from a financial perspective or a size perspective
Ben Watson: that will be limited in scope and what that...
Ben Watson: does for Questive in 2025.
Ben Watson: where I would have people look in terms of results and what we're driving for the company is our ability to get coverage, drive patients to our product, which we believe is a better product than the product that's in the two to five year old space right now.
Ben Watson: and get our scripts to grow accordingly.
Ben Watson: So I believe we're on track to do that with now our national sales force in place for, Sherry, what, all of three weeks at this point? Three or four weeks? Four weeks, yeah. And we're really excited by the feedback we're getting so far. So while it will be financially small until we
Ben Watson: are able to access the entire market in the years to come. We think the learnings we're getting are the places to focus on as we go forward.
Speaker Change: That's great. Thanks.
Ben Watson: Thank you.
Speaker Change: Our next question comes from David Anselm with Piper Sandler. You may proceed.
David Anselm: Thanks, so just have a couple first.
David Anselm: Regarding the NDA for Anafoam, are you going to assume or at least prepare for an ADCOM, particularly given the experience with NEPHE? How are you thinking about that, or how should we think about that? That's number one. Number two, you just remind us...
David Anselm: How are you thinking about the initial sales force?
Ben Watson: for Anafilm. I'm specifically interested in how are you thinking about prescriber concentration on EpiPen and what that means in terms of your target audience and initial Salesforce headcount.
Ben Watson: And then, lastly, a liver vent question, which is if you have executed on
Ben Watson: You're going to continue to keep rights to the product and ultimately over the long term, launch it in a wider population. In other words, is this asset core to the overall mission of Equestrid? Thank you.
Ben Watson: Sure.
Ben Watson: Able to launch our product into a very specific area.
Ben Watson: The infrastructure pieces and parts are up and running get learnings for NFL and Thats, all very beneficial to us.
Ben Watson: No.
Ben Watson: Right now our focus with liberman is on growing it in the two to five year old space when the opportunity comes to be in the <unk> space.
Ben Watson: Absolutely want to be.
Ben Watson: Front and center and ready to launch in terms of all of our products, whether we hold onto all of the efforts ourselves or augment our efforts with other people sales forces that is purely weather.
Ben Watson: Falls into our ability to grow the company and we're not so we will always look to what's the best for the company and what's the best for the shareholders on all of our assets.
Speaker Change: With that let me pass it over to Sherry on the anecdotal question, specifically hi, David. Thank you so much for the question.
Sherry: Really exciting time.
Ben Watson: Thank you art.
Ben Watson: Our commercial readiness.
Ben Watson: We are we have our plans in place to ensure we have a very successful lines as it relates specifically to the sales force. This is a well worn path.
Ben Watson: The allergen content.
Ben Watson: Yeah.
Ben Watson: They prescribe approximately 200 epinephrine prescriptions annually. So our focus for our sales force will be on those allergists and then the high decile prescribing.
Ben Watson: TCP.
Ben Watson: Colleges and PPA and pediatrician and we believe based on the expertise that we have here at how does salesforce about the size of 100, perhaps we won't be able to cover those large high prescribing physicians.
Ben Watson: To answer your question.
Speaker Change: Yes, that's helpful. Thank you.
Speaker Change: And Carl could you give your view on.
Speaker Change: On the outcome.
Speaker Change: Sure happy to good morning, So obviously I can't predict what that what the FDA will do I can say that we have risk mitigated. This program tremendously all of our our primary and secondary endpoints have been met for all of our studies, whether it's our pivotal ourself administration, our temperature ph and most recently the oral Amazon symptom intervention.
Speaker Change: Study the Oasis study.
Speaker Change: We're certainly considering the possibility.
Speaker Change: And we will be prepared should this become an avenue that FDA pursuit, but right now we don't have insight into the FDA thinking.
Speaker Change: Okay I appreciate all the color thanks, everyone.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Francois Roswell with Oppenheimer You May proceed.
Francois Roswell: Hey, Thanks for the question. So I was just wondering you touched on the allergen test and the study and I was just trying to figure out the importance of efficacy here based on this study just in terms of real world adoption with doctors and just maybe a little more if you could push off.
Francois Roswell: On the potential endpoints here of treating at the site.
Speaker Change: To see benefit is this something that can help in the real world just because.
Speaker Change: Like a lot of launches docs, what kind of.
Speaker Change: Wait and see sometimes how things work and I was just wondering is the OAS study is something that should really.
Speaker Change: Create some buzz with the medical community. Thank you.
Speaker Change: Yes, good morning, Frank.
Speaker Change: I'll pass it over to Karl to.
Speaker Change: Walk through your full question.
Karl: Have to tell you from my perspective.
Speaker Change: Credibly excited to have this data we think this is a differentiator as far as we're aware, we're the only ones with data like this and we absolutely from the recent interactions at several conferences with physicians think theyre paying attention.
Speaker Change: With that I'll, let.
Carl: Carl answer your specific questions.
Speaker Change: Yes, no. That's a good question and I can tell you both anecdotally and in meeting with a number of Kols there was.
Speaker Change: <unk> spreads support that these data do indicate delivery of epinephrine into the oral cavity, probably does hold promise when you think about interrupting the anaphylactic cycle certainly localized reactions in the oral cavity.
Speaker Change: I didn't realize it but many allergists actually use.
Speaker Change: Direct spraying of epinephrine into the back of the oral cavity when the symptoms do arise as a way of trying to get more drug at the site of.
Speaker Change: A reaction.
Speaker Change: Worth, noting that we do have for the first time.
Speaker Change: Oral physiologic changed model that hadn't been developed before those changes did not impact any film absorptions as Dan said earlier, we certainly shrink time for symptom resolution all of those in my mind, certainly underscore the fact that we now have a.
Speaker Change: Potentially predictive model.
Speaker Change: One could use and think about when it comes to evaluating anaphylaxis so useful for many different regards.
Speaker Change: Thank you.
Speaker Change: Oh go ahead Sir.
Speaker Change: I was just going to say, we just released these results.
Speaker Change: I don't know less than 10, maybe about 10 days ago.
Speaker Change: Didn't have the opportunity to.
Speaker Change: Conference at that time with this community. So we really appreciate you, bringing this up because this is a big major point.
Speaker Change: Our program, but any way you were going to ask additional question I think.
Speaker Change: Great No I think it makes a lot of sense to me.
Speaker Change: I just wanted to this is as much a question is I just I don't think I heard it quite right.
Speaker Change: The percentage you mentioned I think 10%.
Speaker Change: <unk> progressed with the Allergan says I just you mentioned the percentage in terms of patients that progressed to anaphylaxis and the railroads can you just repeat what that was in your prepared remarks.
Speaker Change: Sure My prepared remarks.
Speaker Change: Ken can add to it.
Speaker Change: I would like to dig deeper.
Speaker Change: Does that in oral allergy syndrome, so OAS, which was the model we use study.
Speaker Change: There are a percentage of.
Speaker Change: Patients when they have an OAS reaction.
Speaker Change: Pressed to anaphylaxis.
Speaker Change: So.
Speaker Change: The literature says that around 10%, it's 9% 10%.
Speaker Change: More severe allergic reaction that progresses from their initial reaction.
Speaker Change: 2% actually end up with anaphylaxis, So we're simply making the point that OAS somewhere on the continuum of.
Speaker Change: Anaphylaxis.
Speaker Change: Okay, it's 2% of the total not 2% of that 10%.
Speaker Change: It's 2% of the total that's correct okay perfect.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Ross <unk> with HC Wainwright <unk> Company you May proceed.
Ross: Thanks, very much for taking my questions and congrats on all the progress can you hear me.
Speaker Change: We can hear you just fine Rob.
Speaker Change: Okay very quickly with respect to liver event I was wondering if you could comment on two things one is the overall pricing paradigm that currently prevail with respect to Val cocoa and.
Speaker Change: What you believe is likely to be the implication for the future introduction of Lipper hand into the adult population any kind of thoughts there any granularity you can provide to us regarding where the pricing levels are and secondly, you mentioned in the press release that you will be filing for.
Speaker Change: Approval of live event in that population a head of the exploration of orphan drug exclusivity on valve Tokyo, but I wanted to better understand what that means how far in advance of the expiration of some exclusivity in early 2000 2007 do you expect to file and what are the likely.
Speaker Change: Implications of that with respect to the FDA path forward.
Speaker Change: Yes.
Rob: Rob Let me, let me start with the liver filing question because that's largely just a technical question. So the way. It works is we have to.
Speaker Change:
Speaker Change: Submit our bid.
Speaker Change: Administrative.
Speaker Change: Filing I'll call it.
Speaker Change: Six months before were requesting.
Speaker Change: The date of approval right. So we would be which is time that based on when the OE exclusivity expires.
Speaker Change: Also still have to complete the approval process for the six to 11, because we were obviously focused in other places so that most of that will be behind the scenes because it's just tactical SBA paperwork I'll call it but rest assured our plan and the work we'll be doing.
Speaker Change: That is up and our goal continues to be that the day, we are allowed to sell in the sixth and population six it up and all adults that we will not only be ready, but we will be approved.
Speaker Change: And in the market.
Speaker Change: Yeah.
Speaker Change: On the pricing side.
Speaker Change: I would I would give you this to think about what we're finding so far with launch is this is a rescue product.
Speaker Change: Our rescue product in epilepsy, and right now in pediatrics.
Speaker Change: <unk>.
Speaker Change: We have not found a price to be an obstacle we have not found coverage speed obstacle. We have not found in places where there is still a prior off because we're going through the contracting process. We have not found prior offs to be a problem. So we feel that the payer community understand the necessity of the product.
Speaker Change: And is acting accordingly.
Speaker Change: In terms of how pricing dynamics will come when we have access to the full market.
Speaker Change: We have no reason to believe right now that they would be materially different than they are today.
Speaker Change: Okay. That's very helpful somewhat analogous question with respect to.
Speaker Change: Anna film.
Speaker Change: <unk> is on the market I was wondering if you intend to do any kind of prescriber outreach or market research to kind of assess who the high value prescribers are high frequency prescribers of an SCR.
Speaker Change: Who might not necessarily be.
Speaker Change: Completely onboard with prescribing nothing and then those kind of two general populations of prescribers, what sort of product characteristics that are embodied by Anna films product profile as seen so far would be most likely to appeal to that sort of as a precursor to engaging in sort of.
Speaker Change: Full blown launch preparations for the product.
Speaker Change: Yes. It is.
Speaker Change: Second I'll hand, it over to Sherry if you could just walk you through that.
Speaker Change: The survey type work in general that we're.
Speaker Change: Under taking and preparing but what I would say as a general comment is one of the nice things about.
Speaker Change: Watching a competitor launch in this space is exactly that we're getting to watch. So we absolutely are touching the pricing dynamics watching that.
Speaker Change: Prescriber habits reaction watching the spots where things were watching the spots where things don't work. So we continue to believe.
Speaker Change: This is not as zero sum game for this space.
Speaker Change: The patient need is high and that as patients.
Speaker Change: Learn about alternate products.
Speaker Change: We'll be looking for what fits the best which I think leads to your question of what characteristics.
Speaker Change: In our survey work do we think are most exciting for us, which I'll, let sherry covered fleet.
Speaker Change: Hi, Ron Thanks, so much for the question.
Speaker Change: Rare to be able to launch.
Speaker Change: Multiple products that are game changers, but I can tell you again based on market research we are engaged in over.
Speaker Change: Over the last few weeks it is a common term, but physicians are using game changer for their patients and why is that well if you think about it.
Speaker Change: Yes.
Speaker Change: Product category has a significant unmet need and when you as you know about anaphylaxis.
Speaker Change: It is a condition that cannot comes on rapidly and Kelly.
Speaker Change: Very challenging outcomes.
Speaker Change: It's critical for patients to have a an epinephrine product that they can easily use.
Speaker Change: Easily Terry and so again all of our market research comes back to saying Amazon is the easiest to carry ESPN and on top of that you have.
Speaker Change: Great.
Speaker Change: Advocacy working quickly and consistently so at the end of the day, who are the patients well. We think look we're watching obviously very closely and we'll continue to watch as Dan has shared but youre always going to have the sufficient that our doctor youre going to their doctors and so we also believe that patients with an app.
Speaker Change: The prescription.
Speaker Change: Or their devices.
Speaker Change: We will be quick adopters of our products, both patient and HCP we.
Speaker Change: We believe that patients newly diagnosed.
Speaker Change: That don't yet have a prescription that nothing will or excuse me NFL.
Speaker Change: We will be the preferred option and finally, we see this market expanding and that patient that have never filled a prescription and just avoid their allergan will be a great patient it's hard for the truck.
Speaker Change: Yeah.
Speaker Change: Great. Thanks, very quickly one last thing with respect to 108.
Speaker Change: Given the timeline that you've laid out with respect to the IMD and initiation of the phase Iia trial.
Speaker Change: Are we to assume that this effectively falls within the scope of the previous timeline guidance that you provided indicating an expectation that this product could be launched before the end of 2028, just wanted to make sure that things are still effectively on track relative to what you previously showcase.
Speaker Change: At the Investor Day event.
Speaker Change: Yes, Rob we're very excited and very serious one way.
Speaker Change: Already as you heard from the comments before in our press release, we've already put our briefing bookings at the FDA.
Speaker Change: We are ready to file our IND and we want to get our phase Iia going so absolutely on schedule just like we laid out just a few weeks ago.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Jason Butler with JMP Securities You May proceed.
Jason Butler: Hi, Thanks for taking the question.
Jason Butler: Thinking about the meeting with FDA for.
Speaker Change: Can you maybe talk about and obviously I understand you can't go into a ton of detail here, but what aspects of the product label do you think are still.
Speaker Change: Up for debate or discussion what data do you think that you can discuss with FDA, including the oral outlets allergy Challenge study.
Speaker Change: <unk> studied et cetera, but just anything that can help provide a differentiated picture relative to Murphy. Thank you.
Speaker Change: Yes.
Speaker Change: Good morning, Jason and I'll hand, it over to Carl in a second here, but yes, just in terms of global strategy with the label like like any company in our position while there will be elements of the label that are just standard.
Speaker Change: We do believe that we have differentiation.
Speaker Change: A couple of places like you mentioned the yield of Oasis study that could be very interesting.
Speaker Change: Carl I'll, let you go a little deeper.
Carl Crock: Yes, Jason Thank you for the question.
Carl Crock: We agree I think there are elements here that are clearly differentiating.
Speaker Change: We've created an.
Speaker Change: Demonstrated utility with regards to thinking about it.
Speaker Change: Symptom resolution in a relatively predictive model right, we're actually introducing allergan into the oral cavity, where you typically see allergens introduced in people with food allergies, but with regard to the forthcoming pre NDA meeting as Dan said earlier, the overarching intent is to align on the completion of the adult program in March.
Speaker Change: Word with the execution of the pediatric program study so that is really the intent overall, but we're certainly considering all potential opportunities too.
Speaker Change: To include the most recent data as a differentiating element.
Speaker Change: Great.
Speaker Change: And then just a follow up for Ernie.
Speaker Change: I understand you're not going to give guidance for 2025 at this point, but how should we think about the trends for legacy revenues as we as we exit this year and I'm not thinking about live event around a film everything but.
Speaker Change: That's driven the other revenue streams up until now.
Speaker Change: What does the tail kind of life of those those royalty streams of revenue streams.
Speaker Change: Well I think yes.
Speaker Change: Thank you are asking mostly about suboxone.
Speaker Change: Well, we as we've.
Speaker Change: Said in the past.
Speaker Change: It is a legacy product for us that continues to generate cash flow.
Speaker Change: Part of the company, but recognizing that.
Speaker Change: Its future.
Speaker Change: Yes.
Speaker Change: <unk> is somewhat.
Speaker Change: Questionable at times, depending on the competitive nature of the market, we depend on in <unk> for the orders.
Speaker Change: We would expect there's going to be some.
Speaker Change: Therefore.
Speaker Change: A dislocation in that market and that will flow through to us going forward.
Speaker Change: We continue to stress it is an important part of the company to generate positive cash flow for us.
Speaker Change: And I think when we.
Speaker Change: Provide our guidance for 2025, we will take that into account.
Speaker Change: Okay, great. Thanks for taking the questions.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Thomas Flaten with Lake Street Capital Markets. You May proceed.
Thomas Flaten: Excellent good morning, and thanks for taking the questions sticking with Ernie.
Speaker Change: For the cash runway into 2026 month level of commercial investment does that contemplate.
Speaker Change: And if so will you have a fully.
Speaker Change: Fully staffed sales force stood up by then within that within the guidance.
Speaker Change: That contemplates something more.
Speaker Change: Maybe measured.
Speaker Change: From a salesforce perspective.
Speaker Change: So what we have said in the past Thomas is the cash gets into 'twenty six.
Speaker Change: We've not given any more granularity on that.
Speaker Change: While we could say is.
Speaker Change: Here in 'twenty four 'twenty five that cash supports the launch of the expanded launch of <unk> and that will continue into 'twenty five.
Speaker Change: It includes all pre commercial activity in 'twenty four 'twenty five for NFL.
Speaker Change: We have also publicly said that we would not be ramping up any sales Rep force.
Speaker Change: Until we have approval.
Speaker Change: Got it I appreciate that.
Speaker Change: And is there anything ongoing with respect to trying to overturn the orphan drug exclusivity for <unk> I know a while back you had the major contribution to patient care argument that was trying to be made is there anything going on there.
Speaker Change: Yes, Thomas we.
Speaker Change: We do have.
Speaker Change: Yeah.
Speaker Change: I guess I would call back and forth with the FDA.
Speaker Change: But as you can see from the way we positioned the company that is not where are we.
Speaker Change: Are putting a lot of our energy right now so our focus is on.
Speaker Change: The next milestone in next few milestones for NFL are focused on buildings that are two to five focuses on getting out.
Speaker Change: Why don't wait for alopecia area out it through the next couple of milestones and yes somewhere behind all of that there is.
Speaker Change: With the FDA, but the main place that was focused in terms of that exclusivity is just watching the clock run out.
Speaker Change: Okay. Appreciate it thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Gary Nachman with Raymond James You May proceed.
Gary Nachman: Thanks, Good morning, so back on the NFL do you still need to get alignment at all specifically on the pediatric study the FDA meeting or do you feel you have good visibility on the dose and design for that pediatric study that youre going to start soon after the meeting.
Speaker Change: And then how will you be prepping.
Speaker Change: The NDA, while the Pea study is ongoing so that you meet the <unk> 25 filing in the CMC feedback anything you still need to do with manufacturing before the filing or is that completely buttoned up.
Speaker Change: Yes.
Speaker Change: Good morning, Gary I'm glad you brought up the CFC because.
Speaker Change: Sometimes from our perspective, because we have such a deep history in CMC.
Speaker Change: I'll talk about it as much as we should.
Speaker Change: That was in my view, a major win for our organization and I'll pass it over to Steve who can give you his view.
Steve Workach: What it means for a major part of the.
Speaker Change: NDA, which by the way as you know.
Steve Workach: More than half of <unk> that occur are due to the CMC sections of NDS.
Steve Workach: Thank you Dan and Gary Yes, we're really excited about the feedback that we were able to put a line on all of the viewpoint.
Speaker Change: The important features that you just want to present, the best possible way.
Speaker Change: Completed all the work you've done.
Speaker Change: We needed to do for our filing.
Speaker Change: But the presentation of that data.
Speaker Change: Specification to all of the stability data and things that we're going to use.
Speaker Change: Within our NDA in just aligning on exactly how that presented.
Speaker Change: There's a big red to have the cleanest possible filing.
Speaker Change: Okay.
Speaker Change: And going on to the prepping of the NDA.
Speaker Change: Yes.
Speaker Change: Gary as you know.
Speaker Change: NDA as a major paperwork undertaking I'll call it to get into the SBA. So there are.
Speaker Change: Major section of that NDA that or are we now have all the information right. So CMC B b.
Speaker Change: One of them. So yes. The work is going on as we speak to prepare the NDA.
Speaker Change: And the information that we gain from whatever is left to do from here forward would be.
Speaker Change: Flattish into the.
Speaker Change: The document as we get close to filing in terms of pediatric alignment.
Speaker Change: I'll, let I think you can look at our.
Speaker Change: The competitive landscape and see that the pediatric study is fairly.
Speaker Change: Standard across all of the different programs I'll, let Gary excuse me I'll, let Carl give you give you his view.
Carl Crock: Yes, Thanks, Dan Thanks, Gary.
Carl Crock: The study design itself is quite straightforward as Dan alluded to.
Carl Crock: We do and I, certainly do expect and anticipate an alignment with the FDA for our targeted adolescent study, which would be 7% to 17 using the same dose so I don't anticipate.
Carl Crock: Anything other than moving forward after this pre NDA meeting.
Speaker Change: Okay, Great and then maybe you can just comment on what the expected shelf life is going to be for Ana film versus <unk>.
Speaker Change: And any potential temperature requirements.
Speaker Change: And then just on <unk> regarding the phase Iia in alopecia Areata. How confident are you. The FDA will be aligned on that study design and your pre NDA meeting both in terms of doses end points that you're looking at thanks.
Speaker Change: Yes, thanks, Gary so.
Speaker Change: We understand shelf life is an important component for patients and caregivers in this space and shelf life.
Speaker Change: Mean different things to different people right. So when we refer to it.
Speaker Change: Like this is life sciences experts on our side and your side, where typically referring to the temperature at which you can store the product right, but we think when you look at.
Speaker Change: What's important to patients and caregivers.
Speaker Change: Your ability in the real world to have a product that can go through all of the daily changes of their lives and still work right. So our focus is.
Speaker Change: That way of thinking around shelf life, and while we haven't.
Speaker Change: Stated what our.
Speaker Change: Our excursion data in our shelf life data will look like.
Speaker Change: Absolutely are planning on making that robust and something that meets the needs of patients in.
Speaker Change: In terms of alopecia areata.
Speaker Change: We'll let.
Speaker Change: Carl will give you his view.
Carl Crock: Sure. Thanks for the question.
Carl Crock: Did rely heavily on the published data from the Illumina and the <unk> II study, where they conducted regression bidding for those data really showing that there is a strong cohort of early responders and we're using that as a biomarker.
Speaker Change: I suspect that FDA would view that.
Speaker Change: Appropriately.
Speaker Change: Okay.
Speaker Change: A reasonable endpoint given that these are data extracted and published from the recently approved.
Speaker Change: Drug for this indication, but just leveraging their analysis for our needs and in an earlier phase II study. So I do think this will be well received but we'll have to wait for their responses.
Speaker Change: Okay, and then if you start that phase Iia and what's it going to be the second quarter of next year, just how long to get the data I know you said before that the overall timeline and longer term timeline is intact, but just.
Speaker Change: Maybe just comment on the phase III specifically.
Speaker Change: So we haven't given guidance yet.
Speaker Change: When we think the conclusion of that study will be probably maybe you could just give some high level thoughts around.
Speaker Change: How you would think about it generally.
Speaker Change: Yes, so we're looking to have it.
Speaker Change: It's an adaptive study an interim look at 12 weeks.
Speaker Change: Presumably will be able to move forward then we would have a 24 week readout, but if you add that all up I would obviously think that we're going to be somewhere a little bit north of six months.
Speaker Change: Okay, great. Thanks, guys.
Speaker Change: Thank you.
Speaker Change: Our next question comes from James Molloy with Alliance Global partners.
James Molloy: Hey, guys. Thanks for taking my questions. Just a couple quick ones I know that you've touched upon.
James Molloy: Whether or not you're going to make a decision on partner in a self launching based on whats best when do you think you'll come to that decision is that something that happens post.
James Molloy: Hopeful approval next year.
James Molloy: What are the deciding factors for self launch versus partner and then.
James Molloy: On the EQM and <unk>.
James Molloy: You want to wait what does the post phase III <unk> trial timelines look like.
James Molloy: Okay.
Speaker Change: 2028 is the expected launch can you walk us through how do you get to that please.
Speaker Change: Sure.
Speaker Change: And good morning, Jim in terms of partner or sell swatch.
Speaker Change: My.
James Molloy: Philosophy for lack of a better word.
James Molloy: You can never.
James Molloy: You should never look at the universe as black and white as it's one or the other.
James Molloy: As we're building this company as you've seen as we hit the milestones that we put.
James Molloy: Ahead of US, we're always interacting with the.
James Molloy: Community at the life Sciences community around us.
James Molloy: There are.
James Molloy: Opportunities that enhance our ability to grow and enhance our ability to get to more patients will take those opportunities.
James Molloy: When those opportunities are not there we will do it ourselves. So we don't look at it as a black and white either state either have to have a partner whereby the state we have two self launch it as a continuum and what I think we're very good at as a management team is making sure that we stay focused on growing rather than.
James Molloy: Sure.
James Molloy: Specific moments in time around partners or self launch.
James Molloy: One way.
James Molloy: I think this gets back to the question Gary asked before we are.
James Molloy: You'll see from the materials, we are planning on starting the phase III in the second quarter of next year.
James Molloy: As I said.
James Molloy: <unk> said before we haven't given specific guidance on when that would conclude Carl gave a high level view that perhaps its a six month ish timeframe and our <unk>.
James Molloy: Obviously would be after that typically there would be a phase II.
James Molloy: And then after that we would do our phase III.
James Molloy:
James Molloy: As we get further along we can talk about.
James Molloy: <unk> of the phase II into phase III, and so on but.
James Molloy: All of that we believe can be done.
James Molloy: And a reasonable timeline for launch in 2028.
Speaker Change: Okay, and just a quick follow up on that because I'm looking at the timelines because present.
Speaker Change: From last month or the other months the phase Iia Q3 hundred 25 of the phase <unk>.
Speaker Change: Thanks to our Q2 dollars 25 face to be Q3 dollars 25, which would seem to suppose a three month timeline should we think that maybe that it's more likely that's a little longer than that.
Speaker Change: For let's say a flat quarter.
James Molloy: Yes, I would I would focus on.
James Molloy: Yes.
James Molloy: <unk> alluded to in our <unk>.
James Molloy: Yesterday and some of the discussions we've had publicly said spend.
James Molloy: We are and actually I think you mentioned that we are contemplating having adaptive design to our study so what that would allow us to do is get some of that.
James Molloy: Additional information that would come from our phase II B.
James Molloy: As we go which actually I believe theres a slide in our Investor day presentation that would lay out that continuum, a phase iia to phase <unk>.
Speaker Change: Great. Thank you very much for taking the questions.
Speaker Change: Thank you I would now like to turn the call back over to Dan Barber for any closing remarks.
Dan Barber: Thank you Josh Thank you to everyone for the time this morning.
Dan Barber: I.
Dan Barber: Just want to reiterate.
Dan Barber: The excitement we have about the moment we're in for this company. We believe we have.
Dan Barber: Value across several different areas, we're focused on continuing to hit our milestones as we continue forward you'll hear us be disciplined about staying focused on those milestones with that.
James Molloy: We appreciate your time and we will talk to you soon.
Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
James Molloy: Okay.
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