Aquestive Therapeutics, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2020 Equestive Therapeutics earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker today, Ms. Stephanie Carrington. Ma'am, please go ahead.

Thank you, operator. Good morning and welcome to today's call. On today's call, I am joined by Keith Kendall, President and Chief Executive Officer, and Ernie Toth, Interim Chief Financial Officer, who are going to provide an overview of recent business developments and performance in the fourth quarter and full year 2020, followed by a Q&A session. In total, we expect today's call to last approximately 60 minutes. As a reminder, the company's remarks 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 Equestive Therapeutics' website within the Investors section shortly following the conclusion of today's call. To remind you, the Equestive team will be discussing some non-GAAP financial measures this morning as part of its review of the fourth quarter and full year 2020 results. A description of these measures, along with a reconciliation to GAAP, can be found in an earnings release issued yesterday, which is posted on the Investors section of Equestria Therapeutics' 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 uncertainties affecting the company, as described in the risk factors section included in the company's annual report on Form 10-K, filed with the SEC on March 10, 2021. 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. The impact of the ongoing COVID-19 pandemic is highly uncertain and many more. The forward-looking statements attributed to Request of Therapeutics or any person acting on its behalf are especially 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 optical law. With that, I'll now turn the line over to Keith.

Thank you, Stephanie, and thank you everyone on the call for joining us this morning. I'd like to take this opportunity to introduce you to Ernie Toth, the company's interim chief financial officer, and welcome him to his first Equestive quarterly business update call. Ernie joined Equestive in December and has already become a valued member of our management team. In our remarks today, Ernie and I will be discussing a number of important developments in our business for the fourth quarter and over the first two months of 2021. As always, Ernie and I will be joined by additional members of the Equestive Leadership Team during the Q&A session afterwards. As we look back at the extraordinary events occurring during this past year, we're proud that, as a company, we were able to successfully execute on our key priorities, starting with the safety of our colleagues, the people we do business with, and the patients and caregivers who interact with our products, while at the same time continuing to advance the important work of the company. Let's look at our performance for 2020 and the progress we've made. As we committed through this period, we delivered a number of important milestones related to the key drivers of value for our company. First, we remain focused on building our CNS franchise. She is in the process of finalizing the resubmission of our new drug application for LibriVant after receiving guidance from the FDA on its expectations for information and supporting analysis relating to the PK modeling and simulations included in our prior submission to the agency in December 2020. The developing lipovant is an alternative to the device-driven, invasive, inconvenient, and difficult to administer alternatives, including a rectal gel, currently available for patients with refractory epilepsy. As a result of the issues many patients have regarding the current products in the market, a large portion of the patient population does not receive adequate treatment or foregoes treatment altogether. The company believes that LiberVant, if approved for U.S. market access, will enable a larger share of these patients to receive more appropriate treatment by providing consistent therapeutic dosing in a non-invasive and innovative treatment form. As we previously communicated, we resubmitted to the agency a revised weight-based dosing regimen along with modeling and simulation data in December 2020 to address the issues raised by the FDA in the complete response letter received in September. As you may recall, the FDA limited its comments in the CRL to one out of nine studies that we included in our NDA. The study in question was the single dose crossover PK study in 28 patients that we refer to as study 180323. The FDA confirmed that the issues identified in this CRL may be addressed by utilizing modeling and simulations based upon the information provided in our FDA meeting package submitted in October. In response to our December submission, the FDA provided written feedback in February which clarified its expectations relating to the information to be presented in the population PK model and the safety data that should be included in the NDA resubmission. We expect to perform the additional analyses and file the NDA by the end of the second quarter, 2021. Based on the FDA's feedback, we continue to believe that no further clinical studies will be necessary for the resubmission of the NDA for liver hand. Once resubmitted, we anticipate a six-month review process. We continue to expect a producer action date in 2021. There have been no indications to date from the FDA relating to market access, and we do not expect to receive any FDA guidance regarding market access prior to the PDUFA action date for Liberman. Regarding FDA approval for U.S. market access, we believe that we've provided a strong set of facts supporting a decision by the FDA of clinical superiority to prior approve drugs for this indication based upon a finding that LibriVant represents a major contribution to patient care. Once we've resubmitted the NDA for Libervant, we will re-engage with the FDA and update prior communications to demonstrate our position that Libervant, as an orally delivered product, meets one or more of the criteria to be considered a major contribution to patient care, including convenience of treatment location, duration of treatment, patient comfort, Reduced Treatment Burden, Advances in Ease and Comfort of Drug Administration, and Longer Periods Between Doses. Subject to FDA approval, we are committed to launching LibriVent as soon as possible after that approval. Let's now turn to our exciting epinephrine program. Utilizing Equesta's Farm Film Technologies AQST-108, is the first of its kind oral sublingual film formulation delivering systemic epinephrine that is in development for the treatment of anaphylaxis. As previously reported, the FDA granted fast track designation for AQST 108 in August of 2020. AQST is being reviewed under the 505 approval pathway. Fast Track is an FDA process designed to facilitate the development and expedite the review of therapies to treat serious conditions and full unmet medical needs. In granting a Fast Track designation, the agency acknowledged that AQST-108 satisfies an unmet need in the patient population relating to those patients resistant to taking intramuscular or subcutaneous injections. To date, we've completed two Phase I PK trials for this product. The data from the two Phase I PK studies demonstrate that Equestrit-108 can consistently deliver epinephrine sublingually, and all subjects have measurable plasma concentrations of epinephrine. The top line data for AQSD 108 provides further evidence that we have developed a unique technological solution that can deliver epinephrine sublingually. We plan to share details about these trials and the clinical development strategy for the epinephrine program during the virtual investor and analyst event that is scheduled for March 25th at 9 a.m. Eastern Time. with presentations delivered by a quest of senior management team and prominent key opinion leaders in the field of allergy disorders. Additionally, we have also submitted our dossier to Health Canada for a third Phase I PK trial and plan on commencing the study as soon as we receive the necessary documentation. This is another significant step toward a final product formulation and dosing regimen. With respect to capital, in November we completed the monetization of our Royalty Rights for Kinmobi, a product launched in September 2020 by Synovian Pharmaceuticals, which is used for the treatment of off-episodes in patients suffering from Parkinson's disease. Most importantly, the net cash provided by the Kinmobi Monetization, our cash on hand, our ATM activity to date, and expense management activities provide us with 12 months or more of capital with additional options for capital when needed. Ernie will be speaking more about this in more detail later. Next is Simpazan. Simpazan continued to perform and grow despite COVID-19-related restrictions on face-to-face interactions with healthcare providers. While at times these restrictions were absolute, as they were for much of the second and fourth quarters of 2020, Simpazan's shift to pharmacies grew nearly 100% in 2020 versus 2019. We believe that our continued growth in prescriptions and net revenue demonstrate that we've been able to continue to connect with extraordinary times. Simplifan saw continued growth in the prescriber base with over 30% penetration into the company's focus group of prescribers and over 79% of those prescribers writing multiple scripts. We continue to ramp up payer acceptance for Simpazan and currently have over 72% commercial wives covered and an 85% coverage of state Medicaid regions. Paid pharmacy claims were 87% of all commercial and state Medicaid claims. We believe our position with prescribers and payers will be important to a successful launch of LiberVans. Regarding Exervan, as we had committed previously, we entered a licensing and supply agreement with Mitsubishi Kanabe Pharma America in January 2021 for the U.S. rights to commercialize Exervan. An oral film formulation of wills all for the treatment of ALS. Mitsubishi's a leading innovator in ALS with a deep commitment to the patient's immunity, Mitsubishi will commercialize ExraVan in the U.S., and we will serve as the sole and exclusive manufacturer and supplier for the product. Under that license, we received $3 million in milestone payments in January of 2021 and expect an additional $2 million prior to launch, currently anticipated to occur mid-2021. In addition to the revenue generated from the exclusive supply agreement with Mitsubishi, we are entitled to receive double-digit royalty payments on the net sales of the product. Next, as we continue to execute our strategy developing and potentially commercializing additional proprietary products, we continue to add executives and board members with experience, As earlier introduced, Ernie Toth was appointed Interim Chief Financial Officer in December and is a seasoned financial executive with over two decades of senior financial leadership at Aris Global, JHP Pharmaceuticals, and most recently with EHE Health. Dr. Mark Lepore was appointed as Chief Medical Officer for Allergy in January 2021. Mark is a board-certified allergist and pediatrician and has over 14 years of drug development experience with prior roles at Lupin Pharmaceuticals and Teva Pharmaceuticals. Dr. Julie Kropp, Chief Medical Officer of Freeline Therapeutics, and Dr. Marco Taglietti, Director, President, and Chief Executive Officer of Synexis, were appointed as independent directors to the board in February of 2021. Julie and Marco bring significant experience in the pharmaceutical and biotechnology industry that are additive to our current board of directors. We're confident that they will provide valuable perspectives as we continue to develop and commercialize proprietary products that fill significant unmet patient needs and enhance value for the company's shareholders. In addition, sadly, Doug Bratton retired from the board in February after more than 17 years of service as our original chairman of the board. We thank Doug for his valuable contributions to the board and our company for these many years. So to summarize, going forward in 2021, we're focused on advancing our proprietary products. We're preparing for the resubmission of our NDA for LiberVant. Expect to file at the end of the second quarter of 2021 and anticipate launching LiberVant as soon as possible after an FDA approval for market access. Next, we've submitted our dossier to Health Canada for a third phase one PK trial as part of our epinephrine program and plan on commencing this study as soon as we receive the necessary documentation. We'll continue to efficiently grow Simpazan shipments and revenue while establishing strategic relationships for us in the epilepsy market in advance of an anticipated liver vant launch. And finally, we'll continue to prudently manage expenses and consider capital opportunities to extend our cash horizon. We look forward, as always, to continuing to update you as we advance all of these initiatives throughout 2021. With that, I'd like to turn the floor over to Ernie, who will provide specifics of our financial performance and outlook.