Amryt Pharma plc

Hello, everyone, and thank you for joining us for the call to discuss the proposed acquisition of Chiasma by Amish. Before we begin formal remarks, let me remind you that some of the information in today's news release and on this conference call contain forward-looking statements related to, among other things, the anticipated benefits of the proposed transaction, the anticipated impact of the proposed transaction on the combined company's business, and future financial and operating results. the expected amount and timing of synergies from the proposed transaction, the anticipated closing date for the proposed transaction and other aspects of our operations or operating results. These forward-looking statements involve risks, uncertainties and assumptions that are difficult to predict and which may be outside of the party's control, including, among other things, risks that the merger disrupts current plans and operations of the businesses, the outcome of any legal proceedings related to the merger, the ability of the parties to consummate the proposed transaction on a timely basis or at all, the satisfaction of the conditions preceding the consummation of the proposed transaction, the development of amnesty and chiasmus businesses, trends in their operating industry, changing economic, financial or other market conditions. In light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward-looking statement may differ materially from those indicated in these statements. Words of expression reflect optimism, satisfaction with current progress, prospects or projections, as well as words such as believes, intends, estimates, expects, plans, projects, anticipates, and other similar variations identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Any forward-looking statements made speak only as of the date of today's press release and conference call, Wednesday, May 5th, 2021 and the companies undertake no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this call. I want to draw your attention to two press releases that we used earlier today. Earlier today, Amherst and Chiasma published a joint press release announcing the proposed acquisition of Chiasma by Amherst, copies of which can be found on the respective Amherst and Chiasma corporate website. Separately, Amrit issued a press release this morning announcing financial results for Q1 2021. Today's call will happen in two segments. To begin with, Dr. Joe Wiley and Raj Kannan will present the details of the proposed transaction and then will be joined by senior management from both companies for a Q&A session regarding the transaction at the conclusion of their formal remarks. We will then turn the call back to Joe Wiley and Rory Nealon, Amrit's CFO and COO, to discuss Amrit's Q1 2021 results. This will be followed by a second Q&A session specifically focused on questions around AMRIS Q1. There are slides accompanying today's call. You can access these through AMRIS and Kiasma's corporate website. At this time, I will turn the call over to Dr. Joe Wiley. Joe, please go ahead.

Thank you, Simon. I am now at slide five. Good afternoon, everyone, and good morning to those joining from the U.S. Today is an important day for AMRIS. we are very excited to be announcing that we've entered into a definitive agreement to acquire Kiasma in an all-stock transaction. I'm pleased to be joined on the call by Raj Pranan, CEO of Kiasma, along with other members of the Kiasma management team. Before getting into the details of the transaction, along with the deal rationale and more, Let me first say thank you to the teams from both companies for working very hard over these last few weeks to get to this point. This is a deal which further strengthens Armour's position as a global leader in treating wear and orphan conditions. The combined company will have three on-market commercial products, Lumicipide, Metroleptin and Mycafta, as well as a significant development pipeline. This portfolio will be supported by a global commercial and operational footprint. Mycapsa is the first and only approved oral somatostatin analogue for appropriate patients with acromegaly. We see significant revenue growth opportunities for Mycapsa in acromegaly, where we estimate the global market is worth $800 million. We are also very excited to further develop the potential for mycapsa in patients with carcinoid symptoms stemming from neuroendocrine tumors or NET, where the total market opportunity is even larger, estimated at $1.9 billion. This transaction is expected to accelerate and diversify AMET's growing revenues, and we believe this combined portfolio of products offers a pathway to a potential $1 billion in peak revenue. Moving on to slide six. For Amerslea's development candidate, Oleogel S10, we have made regulatory submissions in both the US and EU. If approved, this will bring the combined company's portfolio of commercial products to four. Very importantly, this transaction will leverage our track record of successful integration. Amrit already has in place the infrastructure, expertise, and the financial flexibility to realize the full potential of myCAPSA. We intend to deploy this infrastructure to further accelerate the launch of myCAPSA in the US and also leverage our regulatory affairs experience and global commercial infrastructure to seek myCAPSA approval and launch internationally. The acquisition is expected to deliver annual cost synergies of approximately $50 million and we expect that it will be revenue and EBITDA accreted and cash generated in the first full calendar year of combined operations and substantially accreted thereafter. Fiatma's existing Royalty Interest Financing Agreement is expected to be fully repaid upon closing of this transaction, allowing us to add a high margin unencumbered asset to our portfolio. This is an all-stock transaction with Amris shareholders to own approximately 60% of the combined company and Chiasma shareholders to own approximately 40%. The deal has been unanimously approved and recommended by the board of both Amris and Chiasma. We also have boating agreements with the shareholders of both businesses, Ethereum Capital Management, Highbridge Capital Management and MTM Capital. Slide seven. should help explain exactly why we're so excited about this transaction and how we can leverage our combined infrastructure to really get the most out of our assets and create shareholder value. The addition of my capture to Amrit's existing commercial products means the combined company will have a total of three products on the market with strong IP protection. Amrit already has existing global infrastructure. In addition to our commercial and medical teams, We also have strong capabilities in R&D and regulatory, and the addition of Chiasma will further strengthen our existing footprint in the U.S. MyCAPSA has recently been launched in the U.S., and given the significant degree of customer call point overlap, we believe the combined business will potentially accelerate the adoption of MyCAPSA with endocrinologists. Given our strong existing relationships with endocrinologists, and by combining and scaling sales forces, We believe that this will both drive more cancer adoption and also potentially enable further metraleptin revenue growth. On the R&D front, our lead development pipeline product, Oleogel S10, is under regulatory review in the US and EU. And we intend to advance our gene therapy asset, AP103, into the clinic in 2022. With this transaction, we are also excited by the opportunity for Mercasa in NEP. And post-FDA discussion, it is our intention to start a Phase 3 study on this indication in the first half of 2022. We believe there is also a potential to leverage GASMA's technology delivery platform with our other products. I already mentioned the financial benefits, but just to reiterate, the transaction will be revenue-accretive immediately, We expect approximately $50 million in annual cost synergy and expect to be EBITDA positive and cash generative in the first full calendar year. Turning to slide 8. This is an overview of Amherst, and I'm presenting this mainly for the benefit of Chiasma shareholders and others who might be a bit less familiar with us. Amherst is a growing commercial business with two commercial products, MetroLeptin and Memitified, and a significant development pipeline. Our business is EBITDA positive and cash generative. Our global HQ is in Dublin, Ireland. Our US HQ is in Boston. The company was founded in 2015. On the right, you can see financial metrics, including some highlights from our Q1 2021 numbers that we reported this morning. Slide nine presents a financial snapshot of Amrit and should give you a sense of how well the business is currently performing. What you are seeing here are the 2020 versus 2019 numbers, as well as some highlights from our Q1 2021 financial results. What I want to emphasise here is that these numbers are, to a large extent, testament to the success of the Agerian acquisition. We acquired Agerian in September 2019 and it was successfully integrated, turning the combined business EBITDA positive in Q1 2020. Acquiring businesses and products is an integral part of Amrit's growth strategy and success to date. We have a proven track record of doing it successfully and I am fully confident that we can repeat this success with Chiasma. Today we announced Q1 2021 revenues of $48.4 million. That's up 8.7% over the same period last year and up 13.9% sequentially over Q4 2020. Metro-Lefton revenues in Q1 increased by 11.3% year-over-year to $30 million, and limited product revenues increased 4.4% year-over-year to $18.2 million. EBITDA in Q1 was $9.9 million, and that compares with $4.6 million in Q1 2020. We have a strong balance sheet with cash of $118.6 million as of March 31st. Today, we have announced that we are raising our full year 2021 revenue guidance from a previous range of $200 million to $205 million to now $205 million to $210 million. This, of course, reflects the strength of Armlet's existing business and excludes the expected uplift from my capital revenues post-transaction growth. Moving on to Armlet's approved products, I am now in slide 10. I will start with metraleptin, which is our product for the treatment of lipodystrophy. This is a chronic condition that results in leptin deficiency, which in turn causes metabolic abnormalities, including severe insulin resistance, diabetes, hypertriglyceridemia, and fatty liver. Metraleptin is an analogue of the hormone leptin and has been shown to improve these metabolic parameters, resulting in lower triglyceride levels, lower blood sugar levels, and lower HbA1c. The size of the opportunity in the major markets is summarized here. We estimate that the global market for metrolapsin is worth $530 million. We believe the product still has significant potential for further market penetration. On to slide 11. Our other product, Lumitify, is approved as an adjunct to a low-fat diet and other lipid-lowering medicinal treatments for adults with a rare cholesterol disorder known as homozygous familial hypercholesterolemia, or HOFH. HOFH is a potentially life-threatening disorder that impairs the body's ability to remove LDL or bad cholesterol from the blood. The result is extremely high blood LDL cholesterol levels that, left unfeated, can lead to blocking of arterial blood vessels. HOFH patients are at risk of experiencing life-threatening cardiovascular events and untreated have a substantially reduced life expectancy. We estimate that the global market for the misplaced in HOFH is approximately $250 million. On slide 12, AMIT's most advanced development stage candidate and potentially a very significant growth driver is Oleogel F10. If approved, this product will be known under the brand name Silt-A-Bed. The successful completion of our Phase 3 trial in EB was one of AMRIT's major accomplishments last year. The trial, known as EASE, met its primary endpoint with 41.3% of patients in the Audiogel S10 group achieving first complete closure of EB target rooms within 45 days of treatment versus 28.9% in the control group. The results were statistically significant, the p-value was 0.013. EASE was the largest phase III trial ever conducted in EB and also the first to show a positive readout. Our plans to seek approval for Oliogel S10 are already far advanced and we have made regulatory submissions in both the US and EU. Our NDA submission to the FDA includes a request for priority review which could potentially expedite the review process to six months following acceptance of the NDA submission. If this is granted, we could potentially be looking at a U.S. approval in the fourth quarter this year. Previously, Oligogel S10 has been granted orphan, fast track, and pediatric rare disease designation by the FDA. It means that if an NDA is approved under priority review, we will be eligible to apply for a priority review voucher, which can be used sold or transferred. Turning to slide 13. As you can see, the combined portfolio of products and pipeline post-transaction flows will be significant. For the two commercial AMRAC products, Limitified and Metroleptin, you can see the approved indications on the upper section of the chart. Mycapsa in acromegaly will be our third market for products, and as I mentioned, this also has the potential to be developed for neuroendocrine tumours. I've already discussed Oliogel S10 and would like to highlight our exciting gene therapy asset AP103, which is expected to enter the clinic next year. The important thing to note here is both the breadth of our portfolio and also that these products will generate meaningful news flows this year into 2022 and beyond. Slide 14 shows the extent of AMRET's global infrastructure. For the US and major markets in the EU, we have our own direct sales teams. In the Middle East, we operate a hybrid model with our own teams working together with local distributors, and we have a similar model in Latin America. Beyond that, we have distributors in Canada, Central and Eastern Europe, and in Russia. We plan to leverage this infrastructure to drive the launch of myCAPTA internationally. At this point, I will hand over to Raj Kanan to talk about Kiasma, the opportunity for myCAPTA and the potential for this transaction to deliver significant value for shareholders. Raj.

Thank you, Joe. And good morning and good afternoon, everyone, depending on where you are. Let me start by saying I'm equally excited about the combination and the potential for the combined company to deliver value for both the patients we serve and for our shareholders. For the AMOLED shareholders and for those of you who may be less familiar with Chiasma, we're a commercial stage company that is focused on developing and commercializing oral formulations for patients who face significant challenges with their infectables. We were pleased to see MyCapsa, as the first and only oral somatostatin analog approved for patients with acromegaly in June of 2020. The U.S. adult acromegaly market is a commercially attractive space in which we estimate approximately 8,000 patients to be on chronic somatostatin injectable therapy. We believe, given the robust clinical data that we have generated for Mitasa and the patient preference for orals, Mycapsa has the potential to become the new standard of pharmacological care for the maintenance treatment of patients with acromegaly. We believe we have strong patent protection for Mycapsa in the US and in the EU through 2029, with method of use coverage in the US through 2036, and with the EU patent pending. And lastly, our company is genesis with the technology platform we call TPE, or transient permeability enhancer. And with the approval of MICAXA, we believe we now have a validated platform to explore other development opportunities in the conversion of burdensome injectables in therapeutic areas of high unmet need for an oral option. Moving on to slide 16, acromegaly, as many of you may know, is a rare disease most often caused by a benign pituitary tumor and characterized by an excessive growth hormone and insulin-like growth factor 1, also called IGF-1. It is a serious life-altering and life-threatening disease. The first-line treatment choice is surgery. However, we estimate that 4 out of 10 patients are either ineligible for surgery or are not cured and will need lifelong pharmacological treatment. The somatostatin analog or SSA class is the preferred dominant first-line therapeutic choice for these patients. Prior to the introduction of mycapsa, the current SSA injectables, while offering a life-altering treatment option for patients with acromegaly, brought with them significant challenges. These injectables are administered via large board needles, 18 to 19-gauge injections, Many patients experience considerable pain even days after administration, and a significant percentage of patients experience modest to severe injection site reactions. Importantly, more than half experience breakthrough symptoms towards the end of the monthly dosing cycle when the level of the monthly depot injections begins to taper off. Patients may also miss working days in scheduling visits with their doctors, as these injections often have to be administered by a healthcare provider. Given the significant challenges patients with acromegaly face, we believe Mycasa offers an attractive alternative in providing consistent biochemical control and a positive patient experience with a simple daily dose regimen of an oral pill. Turning to slide 17. We launched MyCAPSA in September of 2020, and given the launch was during a pandemic, we adopted a hybrid and a phased approach in our go-to-market launch plan with MyCAPSA. We're pleased with our launch progress to date. We've significantly increased the number of covered lives with access to MyCAPSA, now over 185 million lives, and also significantly increased our reach into pituitary centers and high-volume endocrinologists who are most likely to be early adopters of the potential paradigm shift. Importantly, based on our market research, the leading indicators on physicians' intent to prescribe, the patient's willingness to try an oral option, and the increasing care coverage who recognize and accept the value proposition of a needed oral option for patients with acromegaly support our belief that Mitasa is well-positioned to become the new standard of pharmacological care in the maintenance treatment of patients with acromegaly. Moving on to slide 18, net sales of somatostatin analogs in 2019 were estimated at $2.8 billion globally, of which acromegaly represents approximately 800 million. In addition to this opportunity, the dominant utilization of SSAs is in NET. Potentially expanding the benefits of mycapsa to patients with neuroendocrine tumors, or NET, is a logical next step. NETs represent the single largest segment of the U.S. SSA market, accounting for approximately $1.3 billion. This could represent a significant market opportunity for mycasa. Moving on to slide 19, NETs or neuroendocrine tumors are abnormal growths of neuroendocrine cells occurring throughout the body, most commonly found in the gastrointestinal tract. NETs can metastasize and produce hormones that cause significant symptoms termed as carcinoid syndrome, which includes diarrhea and flushing episodes. Treatments include surgery and somatostatin analogs to limit tumor progression and address carcinoid symptoms. Octreotide LAR and landreotide DEPO injections are broadly used as first-line pharmacological treatments, and the potential addressable market with somatostatin analogs in any T is estimated at approximately 24,000 patients in the U.S. We believe there is a high unmet need for an oral option in neuroendocrine tumors similar to the acromegaly market. As we noted in the joint press release today, following feedback from the FDA, we believe we have a modified 505 regulatory pathway for marketing approval that could potentially enable mycapsa to become the first approved oral somatostatin analog indicated for the treatment of carcinoid symptoms in patients with NET. Moving on to slide 20. Finally, myCAPSA emerged from our proprietary oral technology platform, which we call TPE. This is now a validated platform that allows us to further explore additional new development opportunities in therapeutic areas dominated by burdensome injectables with high unmet needs. I'm now on slide 21. I hope that gives you a good overview of Chiasma and why we are confident in establishing a successful commercial company with a meaningful pipeline. I now want to articulate why we want to join with Amherst and why this is the right time in Chiasma's evolution to enter into this transaction. As you heard from Joe, Amrit is an established successful company focused on rare and orphan diseases with a consistent track record of commercial success. Amrit's global presence is a key factor for us in joining forces with them. Chiasma is a US-focused organization today so there will be clear benefits to leveraging AMRIT's global commercial presence and success in key markets outside the United States. This will be critical, we believe, to the continued growth of MICAPSAR globally. Importantly, we believe this combination allows us to accelerate the commercialization of MICAPSAR in the United States while extracting significant operational synergies of approximately $50 million in annual savings. We believe the combination allows our business to get to profitability and positive cash flows faster than doing this alone. Lastly, capitalizing on AMET's financial strength and cash flows, we expect the combined company to further expand the development opportunities for MyCapsa beyond Acromegaly and by leveraging our technology delivery platform. Importantly, I believe that Amrit and Chiasma have shared values in that both companies are passionate about delivering innovative new treatments that can help improve the lives of patients with rare and orphan diseases. In meeting with Joe and many members of his management team, I believe there's a good cultural fit, and this is going to be a key factor in making this combination a success. Finally, I can say that I'm impressed by the management team at Amrit. They have a clear vision for the company, and I'm confident that they have the passion, the drive, and the resources to maximize the value of myCAPSA and the TPE to create long-term value, both for our patients and for our shareholders. I will now turn the call back over to Joe for closing remarks.