Q2 2019 Earnings Call
2019 financial results and corporate update conference call.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions for how to participate will follow at that time.
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I would now like to turn the call over to Peter Vozzo from Westwicke Partners Investor Relations for Autonomous Pharmaceuticals. Please go ahead.
Thank you Jamie and good afternoon, everyone before we begin I would like to remind everyone that this call will contain forward looking statements, which are subject to risks and uncertainties any statements regarding future events results or expectations are forward looking statements. Please note that these forward looking statements reflect our opinions only as of the date of this call. We undertake no obligation to revise or update. These forward looking statements in light of new information or future events information concerning factors that could cause actual results to differ materially from those contained in or implied by such forward looking statements are discussed in greater detail in our Form 10-Q filed today with the FCC I will now turn the call over to Greg went Chief Executive Officer.
Thank you Peter and good afternoon, everyone. Thank you for joining us today I'm here with VJ Shreedhar, our new Chief commercial officer, Dr., Rajiv Patni, our Chief Medical Officer, and Alf memory, whether our Chief Financial Officer.
Our two priorities for Domus in 2019 are driving towards commercial success.
By broadening and deepening go coverage for use in patients with Parkinson's disease with disc in Asia.
And delivering topline phase three data for an additional indication for go coverage in multiple sclerosis patients with walking impairment.
Turning to our second quarter total coverage paid prescriptions, which excludes patients from the free trial program Rose to 6160 up about 6% from Q1 2019.
This growth continues to be driven by patients refilling go country.
New patient starts were up about 2% to 740.
Primarily from patients using the new free trial program.
While it's early days for this program. The initial conversion to paid prescriptions is running at 40% to 50%.
We look to improve utilization with better promotion of the program with our physicians and increase conversion by improving operational efficiencies with the process.
Patients refilling their prescriptions remains a key driver of go coverage growth and provides a strong foundation for our future commercial initiatives.
Persistence remains very solid with 55% to 60% of patients remaining on go coverage at six months and 45% to 50% at 12 months.
Maintaining this level of persistence from six to 12 months is a strong indicator of the value that go cover is bringing to patients and these numbers are compelling.
For context recycling, a commonly use and widely considered well tolerated adjunctive treatment for Parkinsons disease showed persistence rates of 49, and 37% at six and 12 months, respectively, and our recently presented a poster.
Turning now to our development programs, our inroads phase three trial completed enrollment this quarter and is set to read out at the end of 2019.
Rajiv will walk you through the final enrollment details later on this call.
It's important to note that this is an already established market today. We believe there are approximately 270000 multiple sclerosis patients with moderate to severe walking impairment.
Of those patients approximately 50000 are receiving ongoing treatment with dalfampridine.
Another 100000 have tried dalfampridine and discontinued it.
And the remaining 120000 or dalfampridine naive.
We anticipate that our initial commercial focus will be on those who have tried to discontinue dalfampridine and we look forward to seeing the topline data from our in Red study prior to finalizing that strategy.
Now I'm pleased to introduce VJ Street, Hart, who joined US last quarter to lead our commercial efforts.
DJ its a proven commercial leader, who has grown multiple brands across multiple therapeutic areas at amgen over the past decade.
What is particularly impressive about VJ is a strong scientific and broad business background.
He has demonstrated success at Amgen enroll spanning the commercial continuum from sales to marketing brand management.
P.J. has used his skills to both launch and realize the value of some of Amgen's key brands I'm delighted to have DJ joined us to lead our commercial team and help drive us forward.
Over to you BJ.
Thank you, Greg and good afternoon, everyone.
It is great to be speaking with you today.
In the last two months or so that I've been at Adamas I have been in listening and learning mode.
Interacting with the range of key stakeholders.
To develop a deep understanding of our business.
I've visited top movement disorder centers, and urologists to observe practice considerations.
Attended the International Association of Parkinsonism and related disorders Congress to meet with thought leaders and gather insights from the leading healthcare providers.
On our Speaker Bureau.
Additionally, I have visited our specialty pharmacy partner to assess the operational elements of our fulfillment and distribution process.
Internally I have spoken individually and collectively to our entire sales and broader commercial teams to collect learnings and assess our organizational needs to fully unlock the commercial potential of recovery.
These interactions have confirmed the optimism and excitement for the potential of recovery, which drew me to Adama us in the first place.
I have been impressed to hear from many of the physicians and nurses, who have clinical experience with recovery about the positive impact that the drug has on patients and caregivers lives.
These health care practitioners seek recovery as a drug with proven clinical data and a differentiated clinical profile as a result of these data.
The recently published individual patient level analyses of the diary data from our pivotal phase three program corroborate the prescribers feedback to me I could probably represents a paradigm shift because of its concomitant effects on disk in Asia and all.
Many of the clinicians I have interacted with have positive patient stories and are excited about the prospects for recovery moving forward.
In short the clinicians I've spoken with believe the drug works very well.
My interactions with our sales force have shown me both their commitment and passion to improve the lives of people affected by Parkinson's disease.
And the depth and relevance of their experience in urology and with previous launches.
However, my interactions have also highlighted that we have work to do.
There are three key areas, where I will focus intensively in the weeks and months ahead.
First.
We need to do a better job in educating healthcare practitioners to recognize the disruptive impact of this condition.
Its relationship to off and its impact on the effective treatment of Parkinson's disease.
Well prevalent in patients treated with LIBOR dopa. This condition is still relatively poorly understood or appreciated by both prescribers and patients.
It is often confused with tremors and the impact that it may have on many aspects of a patients daily life is not effectively highlighted.
Educating healthcare practitioners on these aspects.
And on how to systematically identifying appropriate patients for consideration of the Cobi therapy offers an opportunity for enhancing patient care.
Second.
Based on my recent observations there was an opportunity to improve our operational effectiveness in the fulfillment process from the moment when a physician sends in a treatment form to when a patient gets the drug.
I have noted some level of frustration among prescribers.
And we are working actively to address this and to improve the customer centricity of our overall fulfillment process to ensure that we create one that is simple reliable and transparent.
Third.
We need to better educate a wider audience about our 28 day free trial program, which we hope will expand trial of the drug among non adopters.
We will look at every element of the program in order to make progress on this front.
Well I mean initially focused on these three areas I continue to examine every element of our strategy and execution.
And I look forward to sharing additional details about our strategic and operational plans in future calls.
All of the interactions that I have described have deepened my belief in the opportunity that initially drew me to a domus.
I have heard how recovery has a significant impact on patients with Parkinson's disease.
And have come to appreciate the impact it may have overtime in other indications.
I'm, particularly excited about the first of these other indications in M.S. walking and we'll turn the call over to Rajiv to discuss our progress. Thanks VJ.
I'm happy to report that enrollment is complete in our inroad phase three trial of Adss 51, or two in Mds patients with walking impairment.
This is a significant milestone in our development program.
We are on track to report top line data in late Q4 2019.
This study is a three arm randomized double blind placebo controlled study of two dose levels of 80 S 51 out.
The primary efficacy endpoint is the proportion of responders in each treatment group.
A responder is defined as the patient who experienced at least a 20% increase in walking speed from baseline as measured by the time 25 foot walk test.
Key secondary endpoints include the mean change from baseline in walking speed, the timed up and go or tug and the two minute walk test.
The baseline demographics are noteworthy because these data provide a snapshot into the real world effectiveness of dalfampridine.
Approximately 50% of enrolled patients had received dalfampridine in the past and discontinued.
This represents the dalfampridine discontinued subgroup.
The other 50% of enrolled patients represent the dalfampridine naive subgroup.
In the dalfampridine discontinued subgroup the reason for discontinuation prior to study entry was limited efficacy in 48% and adverse events and 21%.
Since the dalfampridine discontinued and naive subgroups or each reasonably sized pre specified analyses will provide an opportunity to characterize the treatment effect of 80 S 51 or two in both subgroups.
Our thesis remains that the treatment effect will be consistent irrespective of prior dalfampridine use.
If the phase three data from Inroad supports our thesis and 80 has 51 or two has the potential to be a treatment option for the breath of the Mds population with walking impairment.
We believe the initial unmet medical need is in patients who discontinued dalfampridine in the past due to limited efficacy and or Intolerability.
Our current estimate of the size of this population today is about 100000 patients. We look forward to the read out of this trial late in fourth quarter of 2019.
If successful we expect to initiate a second pivotal study to support the approval.
If approved on this pathway and timeline, we would plan to launch go coverage for this new indication and 2020 two I will now turn the call over to al.
Thanks for JV in the second quarter of 2019, we recorded equal covering product sales of 12.7 million.
This was recorded on the sell in method with revenue recognized typically upon delivery to our specialty pharmacy.
The approximate number of total paid prescriptions was 6160 in the second quarter compared to 5820 in the first quarter and putting 19 about 6% higher than the prior quarter.
Gross and that was consistent with the prior quarter and our commentary on the last call.
Regarding our overall operating results net loss for the quarter was 24.9 million or a loss of 90 cents per share compared to a loss of $34 million or $1.26 cents per share in the second quarter of 2018.
Cash and investments as of June Thirtyth, 2019, or 169 million compared to $211 million at December 31, 2018.
Overall cash burn for the quarter was consistent with prior quarters at approximately 22 million.
Let me now turn the call back over to Greg.
Thanks, Alf Thanks, Rajiv and thanks Vijay.
I want to thank the whole Adonis team for their continued commitment to building a sustainable business based upon the discovery development and commercialization of our time dependent medicines.
As we reported in the press release earlier today, we announced that Alf will retire on December 30, Onest 2019.
He will be succeeded by Chris premise on November Onest.
The company's current senior Vice President Finance, and Chief Accounting Officer.
I am deeply appreciative you al for your contribution to the Armistice growth and your role and mentoring Chris is your successor.
I also appreciate your continued involvement to ensure a smooth transition.
Many of you will already know Chris from our interactions with you on the road. He has been a leader in our finance organization since he joined US in early 2015 and has played an integral role in building our financial infrastructure.
Finally, I'm thrilled to have Djs leadership as he reshaped and focus our commercial efforts to better drive the adoption to go country by physicians and patients.
I'm also excited for our inroads topline results in late Q4, which if successful we expect will add significant potential to go country.
And with that I'd like to open up the line for questions operator.
Thank you, ladies and gentlemen, if youd like to ask a question to our speakers. Please press Star then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. You may do so by pressing the pound key.
Yeah. Thank you. Please go ahead your line once you've asked your question to prevent any background noise from coming through.
Again its star then one to ask a question.
Our first question comes from Marc Goodman SBB Leerink. Your line is now open.
Hi, this is true.
Okay. So.
First question.
Oh the physician.
Patient feedback so far for the free trial.
I didn't notice any notable changes.
Okay.
A second question.
<unk> <unk>.
Patient awareness campaign.
I'm just wondering can you provide more color on that program.
Thank you very much for the question BJ you want to tackle both of those.
Sure let me begin with the free trial program.
The program is being perceived right now in terms of feedback as being one of the most generous among all of the peer set a it has a 28 day free trial program. The adoption among current users of <unk> has been very robust.
And as I said, our goal moving forward is to expand knowledge and awareness of that program and trial of that program among non adopters and new patient types.
In terms of your second question, we have initiated a program called a go getter patient education program.
It is currently in market. It was fielded towards the end of May beginning of June .
It is just a little early to to speak to what the impact of the program is but we'll keep you posted in future calls.
Okay, that's very helpful.
Thank you and our next question comes from David Amsellem with Piper Jaffray. Your line is now open.
Oh. Thanks, So just a couple first on a commercial consideration for.
We'll calibrate and you know Matt sorry are you expecting you really for VJ are you expecting a step clearly.
Sure Adele samper gain in order to gain access.
So the product and I realize that you don't have the data, but we'll talk about the.
How restrictive you think the payer landscape can be easily they all cant for Dean will follow on and then number two what do you consider.
Partnering.
It's another company for the commercial launch are you completely wedded for launching it on your own and if so how many reps are you going to add to support.
The launch in MSK. Thanks.
Hey, Jay.
Yeah. So two part question I'd say it so the first question in terms of M.S. itself. It all depends on the clinical profile of the drug and what the clinical studies show us and what that read out is we all eagerly anticipate towards the end of this year, what I will comment on the Dms marketed was commented on in the prepared remarks is.
Lot of learnings for us from where we are in the PD market and what we can apply to and the M.S. market now it is a.
Well established market premise walking you disease.
Market, which has seen specialty in urology drugs for a long period of time the patient demographics are younger more motivated to seek help and to proactively talk to their physicians about new treatment options. So we expect a different and more active dynamic for how that drug launches in that market to your second question. We have done some preliminary analysis of where the account concentration and physician prescriber concentration is for him that he does remain highly concentrated so we'll keep you posted about our plans for the sales force, but currently I believe we're right sized for what what we need to do.
Thank you.
Thanks, David.
Thank you and our next question comes from Tim Lugo with William Blair. Your line is now open.
Hi, This is milestone for Tim Thanks for taking the questions.
Just the first one on your 40% to 50% conversion right for the free drug program I'm wondering how many of those patients actually experience.
I never I saw adverse event.
And whether or not.
There's obviously more conversion from free drug supply jogging in patients that happened had that aren't that bad experience.
And then secondly.
Just in terms of the inroads trial and now assessing dalfampridine Discontinuations and I know I have treatment.
Was that.
So when you just onto it was it already powered.
To view those two groups on and off drug on your primary end point and what are your powering assumptions in general thanks.
BJ you once you go first again.
So we have done an analysis of patients will receive drug to the free trial program.
In order to understand where the gaps were in them converting to a to maintenance scripts.
The vast majority of patients actually drop off because of operational considerations right. There. Our prior authorizations that are still in process. There are steps that a physician's office needs to complete there are steps that a patient themselves need to complete that's where we believe we can have the most impact which is why one of the focus areas that I articulated in terms of fulfillment.
Our focus is on the operational effectiveness to make it simpler and more transparent and reliable and and actually the AIDS are not one of the big reasons why they drop off as far as we have seen in our initial analysis I mean passengers.
And onto the enroll the study design as I shared in my prepared remarks.
The trial based on Ft, a hefty a feedback at the end of phase two meeting was powered to compare active to placebo.
A assumption of 33% an active versus 20% placebo and equally importantly is that each subgroup I commented on is.
Reasonably sized permitting us to characterize the effect in those patients who are treated with dalfampridine in the past versus were not.
Okay beautiful, thanks for that clarification and congratulation self.
Thank you.
Thank you and our next question comes from Ken Cacciatore with Cowen and company. Your line is now open.
Hi, Thanks, guys for the question BJ I know your your new and going through all the different parts of the operation, but just wondering your view of.
Automobile accidents implications to the launch and.
Is there any way in which.
We can avoid them or somehow.
Have that impact mitigated.
And then secondly can can you get into a little bit deeper into this fulfillment issue with the number of patients that you're talking about new patients starting.
It seems as if you could really give a white glove service almost on an individual level to get them going so just confused as to what is happening that somehow.
With this fewer patients were losing not properly processing paperwork and getting the drug.
To them and then lastly can you just talk about the co pay and the charities that are available to help.
Any sense of what's going on with those and is the co payment and that issue, causing some problems as well. Thank you.
Sure. So let me begin with the first part of your question, which was with regard to osmolarity, Here's what I've learned in my in my listening tour of the last couple of months as I said in my prepared remarks, good coverage really stands out as a differentiated drug in this space because of the clinical profile, which has been demonstrated through a couple of clinical trials right. So the only drug to to have clinical efficacy demonstration in a in a large clinical trial. Both on the discussion you just side and secondarily on the office side and also in the recent a post talk analysis to show the increase in continuous on time and the production of.
Disruptive episodes in a patient's day, so really a remarkable clinical profile and how physicians characterize it to me. So I think the other competitors are in the market, but we don't believe that they are making a as many inroads are having a significant impact on our presence in the marketplace. So that's your question one in terms of fulfillment, which was your second question.
Well I I think we're looking at various aspects of the process the steps in the process the complexity of the process.
The lack of or I'd rather.
Frame it as a white space that exists between a physician sending in the treatment form and then finally getting confirmation that their patient is on drugs. There are a lot of elements. During this process, where we could.
Potentially look and improve our services and Thats, where our focus is so so so the option that you proposed is on the table and were looking at all options, but the third question. You had was about co pay and charities I presume, you're referring to foundations, and and where where assistance to patients.
He is being offered.
We are continuing to see that patients are able to access our drug both on the commercial side and on the Medicare side, and we're continuing to see that happen I think you raise a larger question in terms of cost of some specialty drugs and were looking at looking at a.
Various options to continue to drive access.
Thank you.
Thank you and our next question comes from to Xena Ahmad with Bank of America. Your line is now open.
Hi, This is bill on for disease.
Two questions first of all good coverage it has a pretty clear story around the time dependent biology, where you want to wake up with therapeutic levels onboard to avoid the morning off how does the same time, Tim biology translate into and Thats walking where the iron ore pass and as clear.
And then for VJ, you mentioned, expanding the free drug program and getting more non adopters.
To take it up and Youre listening tour or what have you heard from the non adopters as their primary reason for for now.
Adopting covered at this point thanks.
Hey, Bill its Greg Thanks for the question I'll take the first one and then I'll see if rajiv wants to add to it.
Yeah, you know that I think the reason why folks are familiar with the time dependent hypothesis around a discussion each and often Parkinson's is because we're well beyond our phase three program, where we demonstrated that and we've talked about the underlying science to a much greater deal.
In the N.S. area, we began with a very similar understanding of the pathways that are involved and allowing people to move we understood. How those were coupled to our circadian patterns are crucially drove the hypothesis and we proved that program out beginning with preclinical studies.
Moving it into animal models and moving it into human proof of concept. So as we look and see the data coming out here and I have more confidence from completed phase three programs will begin to tell that story. The basic science story and the symptom covered story Ana.
A more public for.
And the only thing I would add.
Greg is.
I encourage you to.
See our poster from a man.
Where we began explain to the community the time dependency of Emmis walking impairment for the first time.
Hi in Vishay had a second one for you.
Sure I think the question was about.
The reason that our stated in terms of my listening tour in terms of not adopters right. They really boiled down to two areas. I think the first is what I alluded to in terms of the opportunity with educating physicians because I think what I've heard so far is confusion around disconnect. How does that manifest is it bothersome that conversation that happens with patients.
His daddy now on a on a once every three to six month basis to identify the patients up for consideration the relationship between Dyskinesias and off.
And I think when they learn about our clinical profile more data that shows us as an opportunity for us to for us to really talk about discovery and get them along the continuum of the odd the other reason that they talk about most often is is cost and perceptions of cost and as as we share some of our real real data from the last year and a half of experience that seems to help them as well in terms of making mentors.
Thank you thanks.
Thank you and our next question comes from surgical manager with Needham.
Line is now open.
Hi, good afternoon.
Couple of questions from me.
First on the payer landscape how satisfied are you with the current landscape what else needs to be done there and do you think it could be a driver to a four for sales in the second half of the year.
BJ you want to take that sure.
So let me state upfront rate, we're committed to making of Calgary as broadly available to patients as possible and we continue to see.
From what Weve tracked in the first part of 2019, the prescriptions are being paid through the prior auth mechanism and coupled with the medical necessity for both commercial Medicare plans, we've seen no significant change in access in the first part of 2019, so I want to make sure that that books you're aware.
We continue to evaluate the payer landscape and we evaluate contracting as a means to drive access to simplify the prior auth process to reduce physician burden in terms of process, but in the meantime, I think a greater.
Area of focus for us would be educating them about just can you join the value of recovery there the real simplification of our fulfillment process to make it simpler for the physician's practice.
And really making them aware of the free trial program to even trial the drug.
And those are the three areas within folks.
Okay, and just looking at my notes in terms of.
New patients that number has been in the 700 range for the last few quarters.
Should we expect that to move up as the free program gets.
A little bit more implemented.
So so I would say are we satisfied with that number though we are continuously looking at ways for us to educate all stakeholders and improve that number I think it's a little early for me to speak to when that turnaround will happen, but that is definitely the goal is to get us on a trajectory of a of robust growth in that number.
Thanks, and I also want to offer my congrats to itself.
Thank you.
Thank you and as a reminder, ladies and gentlemen, if youd like to ask a question. Please hit Star then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. You may do so by pressing the pound key.
Our next question comes around Selvaraju with H.C. Wainwright. Your line is now open.
Thanks, very much for taking my questions I just wanted to get some additional clarity on the 28 day sampling program do you have a sense of how long you expect to keep that in place if that's going to be sort of a.
Core component of the sales and marketing strategy for the recovery.
Indefinitely or if you have a plan to sort of.
Eventually phase it out or change it in any way and if so what might the train just be that you would make and then I also wanted to ask if.
You are seeing any potential promotional impact from osmolarity are obviously, that's been kind of around for a while but I don't know, whether you're actually seeing any promotional activities of that product coming up against you in the marketplace.
If you could provide some color on that that would be helpful.
To your latter question. Your second question the answer is no.
To the first question I would say.
In terms of the free trial program. The current plan is in the current format.
To remind folks is a 28 day free trial, where the drug is shipped directly to the patient.
In that format, we plan to continue through the end of the year as we have previously announced.
But.
Part of what part of what I'm looking at right now is all of the various options open to US. In addition to looking at the key metrics that come off of off the current program were looking and evaluating at various options one obvious option is.
Do we do we go with one of the other ways of getting a free trial to a patient. So we are evaluating all the all options as I keep you posted.
In the coming in coming quarters.
Okay and then just do you have any further updates at this time on the status of the qui Tam lawsuit.
I'll take that no we don't and we don't as you mentioned, we don't comment on ongoing litigation.
Okay. Thank you.
Thanks, Rob.
Thank you and I'm showing no further questions in the queue at this time I'd like to turn the call back to Greg went for any closing remarks.
So listen I want to thank everyone for participating today at the end of the summer and we look forward to seeing you at upcoming conferences and meetings that we have a head of our next earnings call. Thanks, So much today and again my thanks again to al for his service here the team as well as looking forward to having Chris on the next call. Thanks very much.
Ladies and gentlemen, thank you for your participation on today's conference. This does conclude your program and you may all disconnect everyone have a great day.