Acorda Therapeutics, Inc.

Welcome to the Accorda Therapeutics fourth quarter and year-end 2022 financial and business update. At this time, all participants are in a listen-only mode. There will be a question and answer session to follow. Please be advised that this call is being recorded at the company's request. I'll now introduce your host for today's call, Tierney Sacavino at Accorda. Tierney, please go ahead.

Thank you, Emily, and good morning, everyone. So before we begin, let me remind you 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 the Q&A, we will first take calls from our analysts, and then we will take questions that other investors have written in when they registered for the call. I'll now pass the call over to our CEO, Ron Cohen. Ron?

Thanks, Tierney. Good morning, everyone. Diving right in, in 2022, we achieved a stream of business successes, particularly in the latter three quarters of the year that all increased shareholder value. Despite an unusually challenging first quarter that severely impacted Ingrigia sales, which we believe was related to the COVID Omicron surge, the quarter delivered strong financial and operational performance. We met our financial guidance for Empira and Embresa U.S. net sales and also for operating expenses. Although we were not cash flow neutral in Q4, we significantly lowered the trajectory of our cash firm and we expect to be cash flow neutral or positive for 2023. Additional successes included closing an agreement with Biopass to commercialize Imbresia in the nine largest Latin American countries, the launch of Imbresia by Esteve in Germany, and the licensing of our clinical stage asset, Napikistat, to Aceris for $500,000 up front, plus up to $7 million in regulatory milestones, plus royalties on sales of commercialized products. We received an award of $18.3 million in our Ampera arbitration with Alkermes that also resulted in a marked reduction of our cost of goods going forward. We expect to save $10 to $12 million in these costs in 2023 alone. And we renegotiated our agreements with Catalyst, which we expect to substantially reduce our cost of goods for Ambresia going forward. And in addition, we obtained a waiver of our $27 million in Finland loans. And so far in the new year, we've received an extension from NASDAQ to June 20th, 2023, to bring the company's share price back into compliance with NASDAQ listing requirements, thus avoiding having to implement a reverse stock split. And we just announced that Esteve has also launched in Inbrisia in February in Spain, So moving to Imbresia, Imbresia U.S. net sales for the full year 2022 were $28 million. That was a 5.6% decrease from 2021, and fourth quarter U.S. net sales were $9 million, a 13.1% decrease over Q4 2021, but a 146% increase over the first quarter of 2022. And I'll discuss this in more detail in the next three slides. So you see here the pattern of net sales each quarter since launch. Overall, the trend repeats itself each year. Sales always dip in the first quarter as a result of insurance deductibles resetting and Q4 buy-in by the specialty pharmacies. And then sales increase steadily during the year. Sales dropped far more in Q1 2022 than in the prior first quarters of the launch. And we believe that this excessive drop was primarily related to the COVID Omicron surge that occurred in Q4 and through Q1 2022. That was by far the largest surge of the pandemic. However, sales were covered very well during the year. And as I noted, Q4 sales were 146% greater than Q1. We saw a similar pattern in this next slide in total prescriptions, or TRFs, which dropped by an outsized 27% in Q1 2022, and then recovered much of that lost ground over the year. And here you see cartons dispensed to patients, which is the most accurate measure of true demand. This also followed a similar pattern. You see a minimal drop in 2021, in Q1 2021 versus Q4 2020, but a 25% drop in Q1 2022 versus Q4 2021. And again, we progressively recovered most of that lost ground during the year. For the first two months of 2023, we're running significantly ahead of 2022, a similar period, in dispenses to date. And we're also encouraged that new prescription request forms for January and February are significantly higher than the comparable period last year. On this next slide, based on these encouraging trends, as well as responses to the new programs that we've been implementing, we believe we will continue to grow the Ambresia brand in the U.S. and the ex-U.S. in 2023. We're providing U.S. net sales guidance of $38 million to $48 million. Ambresia currently has 67% of the on-demand treatment market for Parkinson's disease, But fewer than 2% of the about 380,000 people with Parkinson's who could qualify are currently taking any of the on-demand treatments. And that gives us a significant opportunity to grow that market, particularly now that patients and physicians are moving past COVID. Just to review some of the new programs that we've been implementing. Our new brand campaign for Imbresia is focused on educating healthcare professionals, people with Parkinson's and their care partners, about the emotional impact of off periods on the lives of both people with Parkinson's and their care partners. Now, this is important. We've learned from our experience so far in the market that this is something that is widely missed among healthcare professionals who treat Parkinson's disease. They understand about the medical aspects of off periods, but many of them don't fully grasp the impact on their patients. And just to give you an illustration or a couple of illustrations, because we talk to a lot of patients out there, if you consider someone whose major activity, let's say, is golf, And that's their major social activity. It's their major exercise. And that's very important for people with Parkinson's, to stay active, to exercise, to be social, because it can be an isolating disease. And last couple of times, they went golfing on the eighth hole, on the 11th hole. All of a sudden, one of their hands started to tremble as their symptoms came back with their off period. Their game just... Just, you know, they started slicing and hooking every shot. It wasn't a severe off necessarily. They weren't incapacitated, but their entire outing became embarrassing and miserable. And after a couple of these times, these are real stories that we've heard. After a couple of times of that happening, the person, the next time their buddies call and say, hey, tea time, Joe, on Saturday morning, nine o'clock, they say... Hey, you know what? You guys go on without me today. I'm not feeling well. They begin to isolate themselves, not because they're having an off in that moment, but because they've had them before in embarrassing, terrible situations, and now they're afraid it's going to happen again and they have no way of dealing with it. Whereas if they have a way of dealing with it, they have an on-demand therapy that you can see what that would add to their ability to address their disease and the issues in their disease. And that affects care partners as well. So if you think about it, here's a real example. We have one patient whose wife is, he used to be a Coast Guard pilot. His wife is a salesperson and her job requires her periodically to travel. She told us that it got to a point with his off periods where she was afraid to actually go out and do her job, afraid to go. She was thinking that she might have to give up her job because she was afraid to leave him alone if he got into trouble with an off period and couldn't do anything about it. And now you can see the impact of having embresia. This patient happens to be on embresia where they both know that he can address it. at the time it happens and our data show that the onset of action is in as little as 10 minutes. So our campaign is encouraging physicians to think about how off results in Parkinson's patients making their lives smaller and how we need to encourage them and their care partners to take actions that will give them back some control over their lives. We've increased our digital promotion of this new campaign, and in Q4 relative to Q3, we saw a 145% increase in returning website visitors and a 104% increase in website visitors taking what we call high-value actions, such as downloading a brochure or watching a video or registering to get more information. And by the way, to the extent you all have an interest, I encourage you to go to embresa.com, take a look at the patient before and after videos. You'll actually see the one I just talked about with Jimmy and his wife, Christy, as she helps him out of a chair with his off period. I find them extremely compelling. I believe you will as well. And more to the point, we have heard from physicians, other healthcare professionals, and patients and their care providers that they find them compelling. Moving to Ampera. Ampera net sales for the full year 2022 were $73 million. That was consistent with our guidance of $68 to $78 million. And this was a 13.7% decrease from 2021. Sales in the fourth quarter were 19 million, a 16.6 decrease over Q4 2021. Recall that we have said all along that this will decline over time relative to generics. However, the rate of sales decline versus generics has been leveling off quite a bit, and we expect it to continue to moderate, and I'll show you that in the next slide. So here you see From the beginning of generic competition in Q4 of 2018, there's a leveling of the decline of sales through the end of 2022. The slope continues to flatten through 2022. And for 2023, we expect Ampera net sales of between $65 and $70 million. Next slide, we project that Ampira sales over the next five years will stabilize at approximately $60 million a year or higher based on these trends. And something really encouraging to note, about 200 doctors wrote prescriptions for branded Ampira in 2022 who had not written since it went generic in 2018. And you might ask yourself, well, why? And we believe that performance is due to the way we've been maintaining the brand. First of all, we increased our field sales calls on MS specialists to ensure that they're aware of the various support programs that we're continuing to provide for the brand. Many of them thought once we went generic that we were no longer supporting it, and we found that We need to get that word out because there's a lot of embedded physician and patient brand loyalty that we built up when we had the exclusivity period. And we continue to hear from both the healthcare professionals, healthcare providers, and patients that they value the support that we've always provided and are continuing to provide. That includes our First Step program. that gives the initial two months of Ampera free to commercially insured patients. Copay mitigation, so that patients with commercial insurance are paying no more than $10 a month out of pocket for the brand, which is less than usually they're paying for generics. And also, we continue to provide physician and reimbursement support. Access also has remained high for Ampera. About 70% of covered lives can get access to it through insurance. And with that, I'm going to turn the call over to our CFO, Mike Gesser, who will review the financials with us. Mike?