Athenex, Inc.

Greetings and welcome to the Athenix, Inc. fourth quarter and fiscal year 2020 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Steve Rubis, Senior Director of Investor Relations for Athenix. Thank you. You may begin.

Good morning and thank you for joining our conference call. This morning we published two press releases. The first announces that we received a complete response letter from the FDA for oral Paclitaxel. The second announces our fourth quarter and full year 2020 financial results. These news releases crossed the wire earlier this morning and are available on our website. Today we will provide an update on Athenix's business as well as a review of financial results for the fourth quarter and full year 2020. A replay of this call will also be archived on the company website. During the conference call, the company will make projections or forward-looking statements regarding future events, including statements about financial, business, and clinical milestones anticipated in fiscal year 2021 and beyond. We encourage you to review the company's past and future filings with the SEC, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. You can find our SEC filings in the EDGAR database at www.sec.gov or in the investor relations section at our website at www.athenex.com. This morning, we are joined by Dr. Johnson Lau, Chief Executive Officer, Mr. Jeff Yorden, Chief Operating Officer, Dr. Rudolph Kwan, Chief Medical Officer, and Mr. Randall See, Chief Financial Officer, who all will be available to answer questions after the prepared remarks. I will now turn the call over to Johnson for introductory comments.

Thank you, Steve. I will provide an update regarding the complete response letter we received for Oropacatexel and our first FDA-approved product, Casiri, and its launch before turning the call over to our chief medical officer, Dr. Rudolph Kwan. This morning, we announced that the FDA issued a complete response letter related to the new drug application for Oropacatexel. We are surprised and disappointed with the FDA's decision. We believe that autopracketexel demonstrated a superior efficacy and safety profile in a well-controlled phase three trial setting, and we remain committed to exploring all options to unlock value from this asset. I will give a quick recap of the issues raised in the complete response letter, and Dr. Kwan will provide additional details later in the call. The FDA expressed concerns about safety risks associated with the increase in neutropenia-related sequelae. The agency also expressed uncertainty with regard to the primary endpoint assessment conducted by the Blinded Independent Central Review in the Phase III trial. The FDA recommends We submit results from the new clinical trial and Dr. Kwan will elaborate on all of these later. The Infinix team is actively working to analyze and respond to the complete response letter. We will request a meeting with the FDA to discuss its concerns as soon as possible. During the meeting, we hope to align with the FDA on the path forward required to obtain approval. The complete response letter represents a disappointing outcome, not only for us, but also for our colleagues, clinicians, and patients who helped facilitate development of Oropracatexel in Medecine Breast Cancer. As a company, we are working to identify and undertake the appropriate internal organizational adjustments accordingly. We will be able to communicate more about this adjustment once we gain clarity on the path forward for Olpacatexel from the FDA. Despite the disappointing outcome with Olpacatexel, our team achieved regulatory success with the FDA approval for Caceri late last year. Let me provide you with an update. The product has been approved for the treatment of actinic keratosis of the face or scalp and has already been launched in the United States with our partner, Admiral. The launch of Caseri in the United States provides physicians with a compelling new product that can benefit patients. Caseri is a novel, topical first-in-class microtubule inhibitor indicated for the topical treatment of adenine keratosis of the face or scalp. In two Phase III clinical trials, Cassini demonstrated both efficacy and a favorable side effect profile. The short treatment protocol is unique, as Cassini requires one steady application for only five days. The Demonstrated Efficacy and Safety Profile positions Kesari as a compelling new treatment option for patients with adenocaritosis, the second most common condition with diabetologists in the United States. In mid-February, the New England Journal of Medicine published the results of our two Phase III trials that serve as the foundation for FDA approval of Kesari. The publication of this data reinforced the innovation and clinical significance of Kisari and further raises the profile and awareness of Kisari as a possible treatment option for physicians. In terms of launch, Admiral intends to reinforce its U.S. sales force to support the marketing sales force A marketing authorization application is also currently under review by the European Medicines Agency. Infinex maintains attractive economics around the company's partnership with Emerald. In addition to the $50 million in upfront and additional milestone payments already received, Infinex is eligible to receive up to an additional $65 million in aggregate milestone payments associated with the Ethereum launch and expansion into additional indications. Additionally, the company is eligible to receive additional sales milestone payments and is eligible to receive tiered loyalty payments starting at 15% of annual net sales. In conclusion, we had regulatory success for CACIRI. For Olpacatexol, I want to reiterate our belief in the superior efficacy and safety profile of Olpacatexol. In Phoenix, we mainly focused on unlocking maximum value around not only Olpacatexol, but also the broader oil discovery program. We are committed to breast cancer patients and are focused on bringing this issue to the market.