Aquestive Therapeutics, Inc.

Q3 2021 Earnings Conference Call


spk_0: good morning and welcome to they can't predict snow quarter two thousand twenty one conference call at the time advertisement analysts normally out as a reminder was call will be recorded i like introduce your hosts for today topic scott bennett watson from as you are westwick
spk_1: thank you operator good morning and welcome to today's call on today's called i'm joined by keep kendall chief executive officer and early tote chief financial officer for going to provide an overview of recent business development and performance in the third quarter twenty twenty one followed by q and a session in total we expected a call to last approximately sixty minute as a reminder that companies are mark play correspond with the earnings early that was issued after market closed yesterday in addition a recording of today's call will be made available on a quest is website within the investors section shortly followed the conclusion of this call to remind you be a quest if team will be discussed faith and non gap financial measures this morning as part of it's her view of third quarter twenty twenty one result a description of these measures along with the reconciliation to gap can be found in their earnings early issued yesterday which is posted on the investors section of a quest it's website during the call the company will be making forward looking statements we remind you of the company safe harbor language as outlined in yesterday's earnings really as well as the risk and uncertainty is affecting the company as described in the risk factors section and in other sex since included in our annual report on form ten k files with the securities exchange commission on march tenth twenty twenty one and in our quarterly reports on form tell you and current reports on form a case filed with the fcc as with any pharmaceutical company with product candidates under development and products be commercialized there are significant risks and uncertainties with respect to the company's business and the development regulatory approval and commercialization of it's products and other matters related to operation the impact of the ongoing covert nightie pandemic is highly uncertain and cannot be predicted with certainty or clarity given these uncertainties you should not place undue reliance on these forward looking statements which speak only as the deep made actual results may differ materially from these statements all for the for statement attributable to a collective or any person acting on it's behalf or expressed the qualified in their entirety by this cautionary statement and the cautionary statement a change in the early early issued yesterday the company seems no obligation to update its or looking statements after that the of the cough cough weather as a result of new information future events or otherwise except as required under a flick of a lot with that our now turn the line over to keep
spk_2: thank you to everyone on the call for joining us this morning in our remarks today ernie i will be discussing recent developments in our business during the third quarter twenty twenty one and through early november as always ernie i we joined by additional members request of leadership team during the two in a session afterward it's been a very exciting few months since we last spoke you through the third quarter we executed as we committee on our key priorities for the two most important value drivers for the company liberty and a quest of one oh nine liberate continue to progress to the review process with yeah and we had very exciting results freaks u s t one oh nine we appear to have solved for the last remaining hurdle of asked h u s t one on i absorption speed or t max compared to auto injector like happy pen and hobby to the current standard of care for this patient population additionally are ongoing business continues to be strong as you saw release last night and is only will discuss more fully in a few minutes we have improved our outlook and guidance for the year let's start with liverpool we're focused on the upcoming produce dated december twenty third any ongoing anthrax is with the f eight regarding the and be a for libertarian it was resubmitted in june we continue to have multiple interactions with the f t a as they completed the mid cycle review of our application in late september in addition to responding to a number of information requests the agency has concluded an audit of post marketing adverse event reporting capabilities they have requested and have been provided additional information about the patent coverage for the product the idea has approved for use to trade name for liver france and they have made recommendations for changes in language relating to our packaging additionally we spoken to the at the office of orphan product development we have provided additional information supplementing our regional correspondents to the group we continue to believe that we have provided a strong set of facts supporting a finding that liberal that represents a major contribution to patient care and thereby a decision by the f b i have clear nickel superiority to prior approved products for the syndication liberty is an exciting product for the underserved epilepsy community and we are focused on ensuring patients have the broadest access to this product as quickly as possible if approved by the at the a for us market access liberty it would be the first orally delivered by as a product for the management of seizure clusters the patient population remains under served with more patients over the last twelve months across all age groups continuing to utilize the diazepam rectal gel product versus the diazepam nasal products despite good pair coverage the vast majority of potential patients are still not accessing either of these difficult to interact with alternatives providing a preferred method of delivery and all product that can be used where it's needed and when it's needed and is the size of a postage stamp has the potential to provide a highly differentiated treatment option for this patient population maximizing our footprint facilitating patient access and garnering visibility across the of epilepsy community are important foundational elements for our success we believe that every patient should have a seizure action plan with the rescue treatment available we believe that labour that represents an attractive noninvasive and innovative products that is population preparations are advancing for the commercial launch of liver van if approved by the at the a as soon as possible after that approval the continued commercial progress of sympathy and has laid the foundation for the launch of live event by gaining penetration and pair coverage for our farm film based cns products we continue to believe liberman is an important choice for epilepsy patients in a form they prefer we remain excited about and believe liberal and continues to be a meaningful opportunity for the company and will generate material and significant sales revenue at peak or next priority is advancing are up an affront product candidate for severe allergic reactions including anaphylaxis a q s p one nine as we have discussed previously we have demonstrated the ability to consistently deliver therapeutic doses of app and efron comparable to the standard of care auto injectors the remaining challenge was modifying are formulation to achieve the absorption rate necessary to produce a t max equally comparable to those auto injectors based on the top like data released just last week from our first in human phase one pick a clinical trial freak us the one nine we believe we have met that hurdle the formulations tested during the trial resulted in t massive fifteen minutes comparable to the auto injectors and within an hour range and the published data for those products a q s he one are lying if approved will be the first orally administered fnf from based treatment for had a full access with safety tolerability pk mpv measures falling within the target range of the standard of care auto injectors a que se one oh nine has the potential to be a transformative treatment for patients in this population especially those who don't carry their medications regularly because they are resistant to injections with don't find that devices easy to use or carry this is another example of how our knowledge and technology can create value to a better treatment alternative that can be used where it's needed when it's needed and in a form or all that is preferred by most patients we're very excited by these findings and continued to believe that patients will embrace this needle free user friendly alternative should be approved by the f t a and other regulators around the world we plan to commence a second adaptive design study that will compare the pk pt of our target formulation against up in akron i am injection in canada during the fourth quarter twenty twenty one this study will be used to determine the final formulation and dosage strength that would be used to manufacture registration batches and conduct pivotal pk studies in twenty twenty two we have submitted our data packets for the pre i envy meeting to the ft eight and anticipate receiving a written response from the agency before the end of the year we anticipate that this feedback will provide us with greater insight as we planned for the development of a s t one oh nine under the five or five be to pathway and begin to enter pivotal trials in the us next year next symposium sympathetic continue to perform well in the third quarter of twenty twenty one which marked it's eleven
spk_3: period of quarter over quarter growth
spk_2: sympathetic continues to set the stage for a potential lots of liver man we have always thought it valuable have to complementary products available to a common set of prescribers with simple and leading the way prior to cancel launch of liberal man we feel that our commercial team with their efforts on sip of them has done a good job of establishing our footprint in conclusion as we progress through the fourth quarter and head toward twenty twenty two were focused on advancing are proprietary products or team is continuing to engage with the at the a regarding the and the eight for liver and ahead of the december could do for date watch preparations are advancing and if approved by the f b a we plan to launch shortly after market access is granted a question one on i reported exciting cop like data and we moving to a new study to determine final formulation and though strength before year end we also anticipate from feedback from the ft eight regarding our pre i envy the meeting data packets before the end of december our ongoing business continues to perform well and we look forward to delivering the strong results we have guided to here today we look forward to continuing to update all of you as we advance all of these initiatives throughout the fourth quarter and as we head into next year with that i'd like to turn the line over to ernie who provide specifics on our financial performance capital access strategy
spk_4: and outlook
spk_5: thank you kate and good morning everyone by now you have seen our financial results in our can queue and earnings release that were filed last evening as we typically do we will address most of the discussion related to the third quarter twenty twenty one results in the qnx
spk_2: complementing our focus on the priorities of liver that and eight s t one oh nine the keep just discussed has been a strong financial focus this year including extending the time that we have access to an additional thirty million dollars available within our existing death facility until june twenty twenty three if we choose to fully fund the launch and liver that if approved by the f t a for us market access updating the agreement with our lenders to amend the principal amortization schedule to free up over ten million dollars of capital between now and year and twenty twenty two for a two point seven million dollar fee payable in for quarterly installments beginning may fifteen twenty twenty two and continued strong performance of our existing business and business development activities as well as prudent expense management and diligently managing our cast position in order to not only improve results as a revised guidance indicates that also extending our capital horizon
spk_5: our total revenues were thirteen point three million dollars in the third quarter twenty twenty one compared to a point three million dollars in a third quarter twenty twenty comparing the third quarter twenty twenty one to the park period the company saw an eighteen percent increase in simpler then net revenue despite the continued market access limitations due to covert nineteen and seventy seven percent increase in manufacture and supply revenue our net loss for the third quarter twenty twenty one was fourteen point six million dollars or thirty seven cents loss per share the net loss for the third quarter twenty twenty was sixteen point six million dollars were forty nine cents loss per share
spk_2: this year by year change and net loss was driven by higher revenue lower costs and expenses offset by an increase in noncash interest expense related to the kind moby monetization transaction which does not represent a cast output or monetary obligation at any time during the like that
spk_6: the transaction
spk_2: non gaap adjusted even dollar loss was five point three million dollars in the third quarter twenty twenty one compared to eleven point three million dollars in the third quarter twenty twenty the year over year change in non gap adjusted ebitda was driven by higher revenue large costs and expenses offset by an increase in noncash interest expense revenge the kind moby month as a son agreement again with does not represent a cat output or monetary obligation at any time
spk_5: time during the life of the transaction as of september thirtieth twenty twenty one cash and cash equivalents were thirty one point two million dollars during the third quarter twenty twenty one we received six point one million dollars in net proceeds from our at the market or a t m facility and a one point two five million dollar net milestone to code about and provide commercial product for a potential to feel or of well product for the treatment of erectile dysfunction all of which were partly offset by cashews and operations we expect not exist existing cash and cash equivalents revenue from our ongoing business including simpler than continuing business development activities and prudent expense management actions combined with eighty activity will provide adequate fun and meet expected cash requirements
spk_6: for the next twelve months
spk_5: while we have not been accessing the a t m recently it remains an important tool to support the capital needs of the company separately we expect the potential watch him liver that if approved by the ft a for us market access to be funded by the additional thirty million dollars and contingent funds available as part of the existing twelve and a half percent notes
spk_2: looking beyond or bad we expect rotty streams from license agreements to contribute to our future revenue
spk_3: these wrote streams include as tars which was recently launched by korean under license from can farm suboxone and market outside of us with and devier acts or van in the us when mitsubishi to naughty and in the ear with them bone as well as potential edition
spk_5: or payments available under the kind navi monetization agreement as outlined in the press release issued last night after market close we are improving our four year twenty twenty one financial guy citizen growth the performance of our manufacturing and supply operations and are other ongoing business activities generated strong operating results during the first three quarters of twenty twenty one moreover we have taken steps to continue to strengthen our capital position
spk_2: as that we have updated our for financial expectations as follows total revenues of approximately forty seven to forty nine million dollars increased from forty six to forty eight million dollars and the prior guns non gap adjusted gross margin of approximately seventy percent to seventy five percent unchanged from prior guns
spk_5: and non gap adjusted even da loss of approximately thirty two to thirty four million dollars improved from thirty nine to forty two million hours in the prior guy it is worth reiterating that is updated twenty twenty one financial guns does not include any revenues from liver that which has up a duvet target go date of december twenty third twenty twenty one with that i will now turn the i'm back to the operator to open the vying for questions
spk_0: would you like want to consequence of carbon one been looking across multiple can only let's move movement mchugh hope upon t authors conclude awesome do not smoke loquat the the michael mullen without
spk_7: i didn't have been papillon and for gary nachman thanks for take my question ah and congratulations on all the progress so regarding liberal that and and to ot for market access would be was handsome more color on of what additional information or market data you shared with the orphan drug group and i still cough then you'll be able to get as ot around the same kind of potential provable i would be follow up with us
spk_2: hey evan thanks services keith i'm too thanks to the question we still do think that the decisions will come at the same time although we don't control either of them as you know ah but we do believe based on the way you this product has been prosecuted both him in our filing and others that the decision will come at the same time ah we did augmented the that were not for i think reasons that are fairly well understood not going to talk publicly about what that additional data was until after the agency make their decision
spk_7: not it
spk_3: and not regarding edgar he won a nine puppies one pk off
spk_5: ah how how comfortable are you with the median pm after fifteen minutes for the target atheist people in l nine formulation are compared to a pen and avi queues medium peanuts and any intention on trying to prove that as well
spk_8: allah allah then barber out respond to that for you have in the morning and and how are you nice to hear your voice ah did that that's an easy question we feel great about army and t max army and team access fifteen minutes the to auto injectors on the market ah are at the panic that ten and of
spk_9: the queue that twenty so a right between the auto injectors even more importantly when you look at our median t max up to were actually at the low end of of the range from medium key max maxell when you look at an auto injector at their range of possible t max outcomes goes up to sixty
spk_8: or ninety minutes our product or date and the farthest out t max we saw was well below that at so we think we're in a great place for t to max out we do not believe up for our at the a ah finally we need to be any faster than we are but of course will continue to develop the product or as we go forward and and
spk_7: you'll you'll see that median t max continue to to be a differentiator for our proc ah and now walmart follow from me it would release rights more color on which form way since to be taking ford from the face on pk trial ah that's being evaluated in that crossover study
spk_8: we beat us all the formulation when people pick a city or just a target formulation now i get it in another great question of the so we will take to heart formulation forward and we disclosed last week the for formulations simply to show the breadth of data we had created and that no matter which formulation you look at we had really solid results with of really good median for
spk_7: max up at a target formulation will be the one that we take forward or and the the next studied will are defined not only the final commercial formulation for his but also the dosage strength that we think our best fits in comparison to the reference products
spk_0: but thanks for taking the questions
spk_10: and that question consumption and butler with seen people cuny airline and open i thanks for taking the questions ah a acknowledging other not gonna go into a time detail on the a interactions ah lubber that i'm just wanted to ask is that the eight me interactions with up the i i don't focus on that the court bomb substance abuse the are allen the bummer
spk_2: growing work you did say to attract the at the eight questions whether you still feel comfortable about your your your strategy to address the fts questions yeah i hate taking a doing today thanks for the question and when we were very comfortable the actually asked us to extend the model to some of the groups that the the dosing doesn't cover
spk_10: so we've had ah some questions at but none that would cause us to believe that they're questioning the model or that the model isn't the right path to add the dosing recommendations that we made great and then i'm on a que you are nine you know either data looked really great last week and i'm in other up at the target profile looks to be the regular a really compelling so can you talk a little bit about with the goal of the crossover trial where are ah in terms of finding that final form
spk_8: violation i a other significant improvement then the target profile that you're trying to achieve here and then he is talk about the other component the adapted components the trial at that can how that can benefit year when and if you decided what the they can powder arm will be at this point
spk_1: yeah i do thank you jason and ah and so he added that we're taking the target formulation into the adapters study design are in terms of up formulation work at this point we while we're saying word dialing and on the final formulation we basically have the final formulation so the snack study is to really do
spk_11: dial in on very very minor changes in formulation and the final ghosts it's strength
spk_8: in terms of how the studies put together the first stage of the study will ah compare different dose of strength and then we'll take the final doses strength that we like the most and compare that to our reference products on the second part of the study a reference product at this point is open so we have opportunities across them
spk_12: variety of injectors available and i think you'll see as make that choice once we get to the that the second part of the study
spk_0: great thanks for taking the license
spk_13: i'm next crossing points and promised plan with like see capital your lung open
spk_5: hey guys thanks singing the questions a dentist a follow up on your last response could you just give us some some thinking behind what would cause you choose one injector over the other from a comparative perspective sure i think it it comes down to regulatory new os right so from a commercial perspective out we don't think it it particularly matters what are reference product is up but when we think about her interactions with the sta out will will look at the profile dogs happy pain avi the them
spk_1: manual injectors and will make our choice based on which one of those we think ah
spk_13: provides the big the cleanest and clear path with the regulators i don't think that any more magic to it than that
spk_2: got it and then there was no mention of a kyosti want to wait and the press release or in the prepared comments could you give us the a status update on that
spk_13: sure i you can assume we want to stay focused on the two things right in front of us a q s p one l a times utility bill are beyond anaphylaxis i and we're doing work behind the scenes to flesh that out when it's appropriate we'll talk more about it right now our focus is
spk_11: on one oh nine obviously ah with the amount of conversation we've had in the last week and the great results we had ah and continuing work with the agency on liberal than moving toward the december do for date
spk_5: got and just one quick final on guidance there is that the the guidance imply that the significant down tick and revenues in the fourth quarter is that just the conservatism or is or something that you're you're anticipating there that would drive revenues down with their circular
spk_13: now i don't think hi thomas attorney i'll think it's ray revenue going down fourth words it's really true and up the revenue for the full year as you see in our our full year guy certainly the increased manufacturing and supply revenue was more skewed towards the that increases more
spk_0: skewed to the second and third quarter of this year right think you the key point is that we are ah yeah up in arduino up in our guidance are expanding the range for the the full year and we feel very confident about them
spk_14: other things thing the questions much appreciated oh months question come from and ring or are go out with one place your one the
spk_2: more than one guys are you taking your question ah just too quick ones from us so you know regarding liberman when my you guys provide a bit more detail on the commercial launch pricing etc will now maybe a quick update on x or moon and the a bit on the on the roll out there of thanks sure it's so what we're we're we're preparing to launch ah liberman were going through their early conversations with payers we are going through the search for sales and medical affairs people now so that once we get notice frugal shit that come that we're ready to move as you know we've gotta salesforce in place ah that are calling on many of the doctors who will be this prescribers of man and we intend to use them
spk_8: ah first and foremost as soon as we if we do get that approval ah so we'll talk more about our a launch plan i suppose i once we have ah launched to to launch but come were doing those things now so that we're prepared as soon as we
spk_15: here from the agency in am december one way or the other ah in terms of acts or man i'll let dan a give you a brief update on where that is with our partners around the world shirt is that thanksgiving andre to ensure you ah at his country now our our focus
spk_8: highly and liver than an aqueous the one nine or button or in our film part of our business we do continue to have a solid growth is as ernie talked about before in part of that growth story is the role lot of acts of and ah we are partner mitsubishi to nabil in here in the us in detailing a accident
spk_1: an ad continues to see that as an important product in their ale less
spk_14: call point out we also continued to ah
spk_0: focus on the launch of acts of in europe which will happen at some point late next year or so on active and continues to be at a nice up program behind the main programs of the company i'm great confidence the up to that alabama schools
spk_16: reminder clock frequency response time on one
spk_2: i'm like concerned comes along on the lomu with i'm feeling low your one and up and
spk_16: hi think for my my questions can you hear me yes thanks rob okay first of all just wanted some additional clarity you can provide acts on ah whether you have started labeling discussions with the f b a on libert and and if indeed that sort of continuously picked up where you had left off ah at the time of the receipt
spk_2: the crl and if there's any other color you can provide regarding the nature of those labeling discussions at this time also if they haven't resumed when might you expect them to resume and the other follow on from that from a commercial perspective assuming that live event it with he's timely regulatory approval when you look at the current state of the target market how entrenched is the nasal spray and to what extent do you think it could constitute ah you know a hurdle to commercial uptake of liver cancer or do you think that it's not really likely to be an obstacle ah so let let's take those one at a time ah we have had interactions with the agency where they have recommended language changes to our packaging i in terms of the main label weeds probably too early for us to expect to engage in those i think we would start looking for those conversations to be three four weeks out from the producer date ah but they are paying attention did give us language changes on our packaging both on each individual strip and on the box that it'll be at that they'll come in an ain't in terms of the market look for the last twelve months more patients have chosen to continue to use the rectal gel than they have the nasal spray i'm and over with you know about ninety percent of the potential patient population is still not accessing an appropriate rescue medication either nasal or rectal
spk_16: that doesn't change the fact that will be the third product to the market however we believe that ah the product we're bringing to the market in an oral form that i can be carried and use the way in the film fan i'm is going to give people a much better opportunity to have one they need where they need it and when they need it and in a form they like interacting with ah so we feel good about ah the competitive valuation at the the competitive value proposition our product brings to these patients but we we are third to the market and will have to deal with that
spk_8: okay thank you and that with respect to one oh nine and one a late for one oh nine i was just wondering if you could walk us through the registration batch manufacturing timeline and for one oh wait i understand that you are looking to position this in markets that are ah effectively complimentary to the one nine target market and target population and i was wondering if you could elaborate a little bit on what those target markets are likely to be for one wait thanks check than you i glance target be good morning rom or in terms of the registration batches out right now we see those occurring in the middle of twenty twenty two as so with the under study design and talked about before we will want to get to our final though strength are obviously before we do the manufacturing scallop process and get to are those batches having said that at the process were using for making the some while the film itself has a very unique technology and it that is is very strongly protected the actual manufacturing process is straightforward so we don't see that been ah a anything other than a than getting through to the final those that we will ah that we will make a registration batches on
spk_16: in terms of one or eight or is keep as pointed out out before and in public comments are we do see up alternate indications complimentary as you put it in the allergy space for that product were pursuing up and working on understanding those indicate
spk_1: patience and understanding the da's requirements around those indications are right now and when we get to the right place will be talking more about them but we do see utility in one away i'm more excited to continue to work on at products out albeit in a different indication other than anaphylaxis
spk_16: so i just have a cleric a tory point of those indications for one oh wait are actually not indications for which either all the you already agreed and are currently approved by correct that's correct
spk_3: right and that one other question with respect to future financial guidance i was just wondering if you could give us a sense of when you might be in a position to provide financial guidance for twenty twenty two and if you anticipate qualitatively doing the same thing and twenty twenty two at the
spk_5: you've done historically which is to provide sort of a wider guidance range of the beginning of a year at narrowing go forward lol a circle ironic sorry certainly yeah out the guides for twenty two is going to depend on what happens on december twenty third
spk_0: ah so we would hope that acres and any as we rate reiterated in my name is not of our guides for this year has anything any revenue in are caught by the any revenue for lever bat on approval so we would expect that he have based on the events of the end of year we get approved that we would
spk_2: ah for guidance and the same manner that we've done in the past with a wider range thank you for no further questions or the time the call back over to keep can know many closer like but thank you everyone it's sad for us certainly been a very exciting
spk_0: a quarter and we've got a lot of hard work coming to a place that we feel good about you continue obviously to work with the at the a on liver amp is that progress through it's process ah we've got some near term events in up in africa

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