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spk05: Welcome to Accorda Therapeutics first quarter 2022 financial and business update. Please be advised that this call is being recorded at the company's request. I would now introduce you to our host, Tierney Sacavino, Accorda communications consultant. Tierney, please go ahead.
spk04: Thank you, Bethany, and good afternoon, everyone. Before we begin, let me remind everyone that our presentation will contain forward-looking statements. Detailed disclosures can be found in our SEC filings, which are public, and we encourage you to refer to those filings. Today during Q&A, we will first take calls from our analysts, and then we will take some questions from other investors who have written in when they registered for the call. I'll now pass the call over to our CEO, Ron Cohen. Ron?
spk01: Thanks, Danny. Welcome, everyone. We'll dive right in. Embresa net revenue for the first quarter of 2022 was $3.5 million, a 26% decrease over the first quarter of 2021. This does not reflect our expectations for Embresa's performance for the rest of the year. We were pleased to see that as the Omicron wave waned from the beginning of the year, in Breesia sales rebounded significantly. In particular, whereas January and February sales were similar, March sales increased by approximately 85% over February and then continued to increase through April. So what happened? We believe the following factors affected the quarter's results. First, we typically see a decline in net sales in the first quarter over the fourth quarter of the prior year, and that's due to seasonal overstocking at the end of the year by patients and pharmacies, as well as by changing of insurance carriers at the beginning of each year. So we expect that. However, the declines were exacerbated this year due in large part to a significantly higher estimate for discounts and allowances that we have in Q1 2022 as compared to the estimate in Q1 2021. And in fact, gross sales were essentially the same in each period. We expect DNA rates to decline during the rest of this year. We also saw significantly fewer refills of the breeder prescriptions in Q one, and that was related to both the overstocking into four and the extreme spike in the national COVID cases that we saw in December to February, which we believe caused Parkinson's patients, who are among the most vulnerable, to reduce their activity levels, therefore reduce their usage of ambrosia to treat their off periods. We believe that the large rebound in net sales in March and April reflects both the depletion of the overstocking from Q4 and the subsiding of that major Omicron wave with patients becoming more active again. Also related to Imbresia, we are delighted to announce today that we've signed an agreement with Biopass Laboratories to commercialize Imbresia in the nine largest countries in Latin America, including Mexico and Brazil. Biopass is the leader in commercializing CNS therapies in Latin America. This is our third ex-U.S. commercialization agreement. We're also in active discussions with other companies for the rights to commercialize in Brescia and additional countries. By way of update, Esteve plans to launch in Brescia in Germany in June. And as a reminder, Germany is the largest pharmaceutical market in Europe. It's the fourth largest in the world. And we expect to begin to receive revenue from our supply agreement with Esteve in the current quarter by June. Moving to Ampira. Empira net revenue for the first quarter was $14.9 million, a 27% decline over Q1 2021. However, growth sales were reduced only by about 11% over Q1 2021, and that was consistent with our internal projections. Again, as with Ambregia, We had a higher estimated DNA for Ampira in Q1 2022 than in Q1 2021, and we expect the DNA to decrease over the remaining quarters of 2022. We're reiterating our guidance for 2022 net sales of Ampira of between $68 and $78 million. So to provide a bit more depth on Ambregia, As we noted previously, the net sales were 26% lower in Q1 22 versus 21. In addition, total prescriptions decreased by 12%. However, dispensed cartons, which we believe is the true indicator of demand, decreased by just 5%. And again, this does not reflect our expectations for Imbresa's performance for the rest of the year. We believe that the major Omicron spike in December to February was the major contributor to these declines. Very importantly, and really worth emphasizing again, we saw that 85% increase in net sales in March and then continued growth through April as that COVID spike subsided. The feedback we're hearing in the field is that people with Parkinson's are in fact anxious to return to their more normal levels of activity, and that motivates them to address their off periods more. Now, we've talked about the impact of COVID periodically on the launch of ambrosia. I want to provide some color here, some data to give you some color on that. This graph illustrates that new prescriptions for ambrosia have tracked with the average increases and decreases in in-person office visits during the various waves of COVID. This is our QVIA data. So you see that as office visits go up, prescriptions go up, as they go down, prescriptions go down, as you might expect, but then we can actually see it here. We don't have the data yet on office visits for Q1 2022. However, as I mentioned earlier, we also saw a decrease in daily utilization and refills in Q1 2022. as we experienced that record number of cases. There were over 20 million cases of COVID in January alone. That was over four times those of previous peaks. And hopefully, as that is subsiding, even with the more modest so far new waves, we will see improvements there. Moving to our financials and our goals for 2021, Mike, would you please go to the financials?
spk02: Thanks, Ron. For Impreja, net revenue was down 26% quarter over quarter as described previously on essentially flat sales due to the increase in the DNA estimate. For Impera, net revenue was down 26.6% quarter over quarter on lower gross sales and due to the increase of the DNA estimate. The decrease of Impera gross sales were within our internal expectations. On OpEx, we are lower quarter to quarter by $7 million, reflecting our actions taken in 2021 to reduce OpEx going forward. Note that the Q1 2021 cash included the proceeds of the Chelsea facility sale prior to the $69 million pay down of our debt in Q2 2021. As we have noted, we are aiming to be cash flow neutral on a run rate basis by the end of the year. For 2022, a quarter continues to expect impure net revenue to be within the range of $68 to $78 million. We expect operating expenses to be within the range of $110 to $120 million. As previously announced, given the uncertainty about how long the pandemic will continue to impact Imbresia revenues, we are not providing revenue guidance on Imbresia at this time. Now I'd like to turn it back to Ron. Ron?
spk01: Thanks, Mike. Moving to look forward, look ahead on building long-term value, our focus is to build that through execution on the key goals you see here. First, with respect to driving increases growth. Now, As the effects of the pandemic continue to recede, we believe that people with Parkinson's are anxious to become more active, as I mentioned. And that's especially since activity is an important part of managing their Parkinson's. And we've heard from patients, plus the health care providers in the field, that patients have sequestered and they felt even more vulnerable than the regular population. And in fact, they have been overall there's been much more laxity with their overall medication regimens so that the doctors are having to address that as they begin to come back to the offices we expect that the trends now with patients coming back accelerating getting back to active lives are going to positively impact increases trajectory We also, as I mentioned, expect that Esteve is going to launch in the EU's largest market, Germany, this June, and in Spain in early 2023. Plus, we have just entered into the deal with Biopass for the nine largest markets or largest countries in Latin America. We're very pleased with that, and we are in active discussions with several parties for additional territories in Europe and the rest of the world. So I'd like to take just a couple of minutes to talk more about the big picture as we see it. Obviously, the quarter was not what we would have liked to see. And we've talked about that. And I know everyone is tired of COVID explanations. I am tired of them. It begins to sound like an excuse over time. Now, I did show you some of our data. We have more that makes it clear. It's data. It's not an excuse. It's a reality. It's a set of challenges that happen to overlap with the launch of this drug. This drug in particular requires training. It's not a pill. It's a drug device. It's an inhalable. You do have to give it some tender loving care with both the prescriber offices and the patients to train them appropriately, to educate them appropriately, in person over the last couple of years has just been a drag. It's been a challenge. Now, having said that, all of the research that we have been doing, continue to do, all of the conversations, and I've had many of them personally, tell us that this is still a superb drug. It is a great drug. for patients. It is still the number one selling on that. It's the number one prescribed on demand therapy for off periods in Parkinson's. It empowers patients to treat their off periods in the moment at the time that it happened. So it is a very much needed and appreciated by the patients adjunct to their daily regimens of medications for Parkinson's. We have been doing our research. We have been listening. We have been modifying and amending our programs accordingly. We've had a huge amount of success online with millions of views of our ads driving hundreds of thousands of views of various companies. assets on our website. One of the things I would encourage you to do if you want to learn more is go to embresia.com. We've added new patient videos showing the actual before and after effect of embresia. We have new messaging that is going out with regard to having patients talk to their doctors about on-demand therapies. We have several new programs that we have been implementing just in the last couple of months. We still, all the data tell us that as long as the society and Parkinson's patients start coming out or keep coming out of the sequestering over the last couple of years, that we will get a tailwind and we will see an acceleration of the growth of a recent trajectory as long as that happens. So with that, On Antira, we expect the brand to continue to decline against generics. However, we're very pleased that it's been very durable, more durable than many expected, and that the tail-off, the decline rate, has been flattening over time. We are reiterating, as you heard, our net sales guidance this year of 68 to 78 million of net sales. With regard to finances, we are continuing to exercise our fiscal discipline. to evaluate OPEX in relation to revenue in an ongoing way. We also expect to have the royalties from Biogen on ex-U.S. sales of Vampira revert back to a quarter in the middle of this year. Those are double-digit tiered royalties on that sales. And as I mentioned, we also expect to begin to see revenue from sales of Ambrosia in Germany as of this June. And then, as we've mentioned in the past, we're also building on the Arcus technology platform, which has been validated by the approvals of Imbrega in the U.S. and EU, which allows large quantities, relatively large quantities of drugs to be developed, I'm sorry, to be delivered systemically via the lungs where that may be advantageous versus going through the gut or other means. We are in discussions about potential collaborations with other companies that have expressed interest in formulating their novel molecules for pulmonary delivery with Arcus, and we've already been performing feasibility studies on a number of those opportunities. So with that, I will open the call for your questions.
spk05: Thank you. We have one question by the phone from the line of Moves Celine. With H.C. Wainwright, please go ahead.
spk03: Good afternoon. Thanks for taking my questions. Congratulations on the Latin American deal, by the way. Just one from us. Do you have any promising preclinical research in the pipeline for neurological disease, you know, including from your Accorded Grant Program? that you can share with us? Is there any movement on perhaps restarting your clinical pipeline programs?
spk01: You know, it's one step before the other, right? So, you know, the entire focus right now is to get in Breesia where we absolutely believe it should be and ultimately we believe it will be. in terms of being a standard of care for people with off periods in the field. There's nothing we have seen that changes that evaluation about the fundamental benefits of this drug to people with Parkinson's. So we need to get that straight. We need some more time to see the trends that we believe we're going to see, and then we can turn our attention to investment in the rest of the pipeline. Now, having said that, we have assets in the pipeline right now, and one in particular that we're We continue to be very excited about, but we just are not able to spare the cash to invest in it currently. And that would be our GGF-2 asset initially for heart failure. We have human data on that that we talked about in the past. We think it's a very exciting opportunity. And that's something that, you know, once we get to a point where we're able to branch out and broaden our focus in addition to Imbresia, that's something we very much want to get back into a substantial phase two trial. And then plus, of course, Yeah. Yeah.
spk03: Great. Thanks for the color. And in terms of the marketing and education efforts, particularly to the Parkinson's patients, are you thinking about evolving past, you know, the web initiatives and perhaps going into apps or something else of that nature?
spk01: Yeah. So, uh, actually we, we already have been going back as, as the pandemic has allowed, we've already been going back to, uh, what we think is the single most effective thing. And that is in-person, uh, speaker programs where you actually get, you know, 10, 20 people or more in a room patients and their care partners. And, you know, you, you, it's a three-dimensional thing, right? You have that drug device, you can demonstrate it in front of them. You can talk, directly to it they can talk to each other we found that that is a much more effective means and we're we're doing that now so we have uh you know as conditions have allowed we have been getting back to those in-person programs in addition to the digital programs our digital team is exploring apps we don't have anything specific to say about that yet but we are exploring that as well
spk03: All right, excellent. I appreciate you taking our questions. Thanks, Luis.
spk05: Thank you, Mr. Salim. I'll now pass it to Taranee Sokovino for written questions.
spk04: Thanks, Bethany. So this quarter, we gave investors the opportunity to write in some questions to the management team when they registered. Thank you to everyone who participated. We had several questions on similar topics, so I can combine them into the following question. First question. you reported a not good quarter why should investors believe that the performance of this company is going anywhere but down you can't keep hiding behind covet as a reason for poor sales what are you going to do to improve the stock price you know we appreciate straightforward questions and that that's a very straight question so
spk01: You know, I think I addressed most of this at the end of the formal remarks, but I'll address them in the context of the question. Look, we agree. We're not happy. I'm not happy with the quarter. There were the mitigating factors I discussed, but the quarter is what it is. I think we need to be clear about what the data says. uh there's no question that covid has impacted the launch it is not an excuse it is a reality and we have to deal with it uh and it continued to do so into the beginning parts of uh of this quarter uh people with parkinson's are generally older uh they're they can be immune compromised they've stayed at home during the pandemic they've not gone to regular doctor visits even when they have um the pandemic has added layers of complexity to even managing them, which makes it more challenging to get messages in. And if you look, there are a number of other Parkinson's drugs, not all of them, but there are a number of other Parkinson's drugs that have also experienced these issues for various reasons that are related to this. Importantly, I think I want to emphasize again that You know, you're looking at the net sales. Gross sales were essentially flat quarter one to quarter one of last year versus this year. Now, flat is also not what we're going for, but it's not as dramatic as what the net sales look like. And the net sales were affected largely by those DNA issues, which are estimates that are put in and then trued up later. And it just happened that the DNA line was substantially higher this quarter than it was in 2021. Again, I do want to... point, in addition to what was disappointing, I think we need to also assess what is encouraging. And what I find truly very encouraging is that consistent with our thesis, consistent with what we believe the data are telling us, we saw an 85 percent jump, a rebound, in March, and then it continued to increase through April in net sales of Ambrosia. That tells you something, right? We find that encouraging. We don't like January and February, but it does say that our thesis about the patients not having been refilling while they were sequestering and then coming back and beginning to do that again is sound and intact. So, you know, I think just like the whole society and the whole world, has been dealing with the challenges and the negatives of this pandemic for the last two-plus years. We're dealing with it as well. I think, you know, the team, the commercial team that has launched Imbresa, I'll just point out, is largely the same one, and certainly the leadership is largely the same as the one that launched Ampira, which way, way blew through people's expectations. So our team didn't just lose their ability to that. It's a matter of adapting to these conditions and also, frankly, to adapting to a different disease state, a different mindset, and a different set of algorithms that these healthcare professionals use on their patients and educating them on how to marry that to this new modality of an on-demand therapy that empowers the patient to address their off periods in real time, not just based on tweaking their daily regimen, which is also important. So, you know, all of that considered, I am optimistic based on what we're seeing, as long as we are going to be coming out of this pandemic set of challenges.
spk04: Thank you. The next question is related, and it says, I'd like to know if the internal valuations of these assets are aligned with public market valuations. If not, what is the management team doing to address this dislocation? Keeping your head down and executing a strategy is not enough. As we've seen over the past three years, COVID and the broader market weaknesses are not valid excuses for the lack of embrasure growth and the current stock price.
spk01: Well, I guess there are a couple of things to unpack there. You know, we can talk more offline, whoever that was, on COVID and broader market weaknesses being valid excuses or not. It's not an excuse. It's data. And there is no question, if you look at the data, that both of those factors do affect the Imbresia growth and or stock price. Now, having said that, I've already talked about where I think we are and what we need to do and what we are doing to address those challenges. We believe that Imbresia is still, we still believe it is a very valuable product. It is an excellent product. Again, it is the number one prescribed on-demand treatment for all periods with all the issues and challenges it still is. And we believe that Ampura has real value, even though it will decline over time, and that Arcus is actually a superb platform technology that can be adapted to a number of different drugs and indications. So we're working to exploit that value, to realize that value. Look, I appreciate the frustration. I'm also frustrated. I'm a shareholder. We're all, all of us here are shareholders. So our interests, as they should be, are aligned. I think we, as long, I'm repeating myself, but I think I'll close by saying as long as as we see the daylight at the end of the tunnel or the light at the end of the tunnel on the change in behaviors of parkinson's patients based on the pandemic as long as we get them to continue and they already are they're already coming out of their shells to a certain degree as long as that continues i believe it actually gives us a a unique opportunity to educate and to message with respect to that issue actually turn the challenge on its head and educate them to say look you've been in hibernation for over two years we know you want to be active your doctor tells you to be active you want to be active you haven't been active that impacts your you're just your whole health your whole emotional well-being everything and Off periods prevent you from being active, and the ability to address your off periods when they occur is something that can be even more welcome for you as you are getting back to the kind of activity level, the kind of life that you would like ideally to live. So that's where we're going with this, and again, as I said, I'm optimistic.
spk04: Thank you. The next question is, has the company made any decisions on the June interest payment? Will you use cash or stock? Why have you consistently used equity to pay the debt interest?
spk01: Well, here again, we're all shareholders. I'm a large shareholder. The whole leadership team and board are shareholders. Our interests are aligned here. when we're looking at how to pay these interest payments what we have to do is consider impact on shareholders ourselves included and we have to consider all of the other factors that go into these decisions we need to consider the strategy the long-term goals how we get there cash position anticipated cash and a myriad of other details. We put that all together, we discuss it heavily, and we look to make the best possible decision in the circumstances with respect to the ultimate goal, which is getting a healthy, vibrant, growing company with growing assets so I think that's the best I can say at this time, except to say that we are all shareholders. I absolutely understand and I'm very empathetic with the notion of dilution when we pay in stock. We also have to consider the impact of What is the ideal or optimal use of that cash at any given time? So we take all of that into account.
spk04: Okay, thank you. And the final question that has been written in is, will the company conduct a strategic review to sell itself?
spk01: You know, I think the answer to that is yes. is that we need to always be prepared to consider any realistic and legitimate way of maximizing shareholder value, maximizing value of the company to our stakeholders. So if if uh acquisition or sale of the company turns out to be that way that is something that we must do so we are open to whatever means makes the most sense uh of maximizing the company's value and uh so i think i'll leave it at that okay thank you that is the end of the write-in questions All right. Well, thank you all for joining us. And, you know, I'll close on the high note of this third major deal for Embresa and look forward, hopefully, to having more positive things to tell you in the coming quarters. Have a great week, everyone.
spk05: This concludes. Corda Therapeutics First Quarter 2022 Financial and Business Update. Thank you for your participation. You may now disconnect your lines.
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