Antares Pharma, Inc.

Ladies and gentlemen, welcome to the Antares Pharma First Quarter 2020 Operating and Financials Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star 1 on your telephone keypad. I will now hand the conference over to Jag Howarth, Antares Vice President of Corporate Affairs. Please go ahead, sir.

Thank you, Jonathan, and good morning, everyone. Earlier today, we announced our first quarter 2020 financial results and operating achievements. A copy of the press release and slide presentation for today's conference call are available on the investor section of the Ontario website. Before we begin, I'd like to remind you that some of our statements made during this conference call will contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include those related to our future financial and operating results, including our expectations regarding the impact of the COVID-19 pandemic and mitigation measures implemented in response to the outbreak on our product supply, demand for our products, new patients and future prescriptions, future revenue, development programs, our overall business, operating results and financial condition, the adverse effect of the COVID-19 pandemic on the global economy and financial markets, and the potential adverse effect on our future business and operations, future revenue growth, prescription volumes and market share for our products, new product approvals and launches, FDA actions and other regulatory activities, results of ongoing and future clinical trials, and other product development activities and business development efforts. These forward-looking statements are subject to certain risks and uncertainties, and actual results could differ materially. They are identified and described in today's press release, in the accompanying slide presentation, and from time to time in the company's filings with the SEC on Form 10-K and is updated in ANTERRA's recent periodic filings on Form 10-Q and Form 8-K. ANTERRA is providing this information as of the date of today's conference call and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events, or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements. Joining me on the call today are Bob Apple, President and Chief Executive Officer, and Fred Powell, Executive Vice President and Chief Financial Officer. Let's review the agenda for today's call on slide three. Bob will begin with a high-level review of our business. Fred will go through the detailed financials, and then Bob will conclude with some closing comments before opening up the lines for your questions. I'll now turn the call over to Bob Apple. Bob?

Thanks, Jack, and good morning, everyone. We were speaking to you this morning during unprecedented times, but I'm happy to report that we had another solid quarter of financial progress for Antares Pharma. Today, we announced a 42% increase in revenue versus the first quarter of last year. In addition, we have seen an improvement in gross margin across our business, and we generated cash from operations. These strong results were driven in large part by sales of our flagship product, Zysted, as well as increased demand and market share growth for Teva's generic EpiPen. Our revenue is diverse and driven by a portfolio of five marketed products, revenue from four partner products in development, and royalties. Importantly, total proprietary product revenue, which is our highest margin business consisting of Zysted and Atrexib sales, grew 163% versus the same period last year. On slide number five, you will see that prescription trends for ZioStick continue their upward slope through the first quarter before peaking in March. Since the product launch last year, more than 100,000 prescriptions have been filled and approximately 5,300 different physicians have prescribed ZioStick to more than 19,000 different patients. First quarter total prescriptions increased 18% sequentially from the fourth quarter of last year, and we believe much of this growth can be attributed to the expansion of prescribers writing Zyvested and an enhanced copay card support program. We believe the enhanced copay program has made it easier for both new and current Zyvested patients to fill their prescriptions while dealing with the annual resets of copays and high deductible insurance claims. Unfortunately, right as Zyvested prescriptions were peaking, The COVID-19 pandemic started to spread in the US, and state-by-state shelter-in-place restrictions began to limit patients and our sales representatives' ability to visit physician offices. Fortunately, our commercial team had already trained all of our reps on an existing virtual selling platform that was being utilized by virtual reps that we had engaged in the fourth quarter of 2019. Once the entire sales force had been fully trained, our reps now had the option of adding virtual detailing to their daily routine of selling Zysta and Otrex up, which at that time still included limited visits to physician offices. As the pandemic spread, we began to see that physicians were reducing office hours or limiting office access to patients only. As of today, our entire sales team is operating virtually. Armed with this virtual detailing tool, Our reps were able to continue selling our products without office visits. They were able to get samples, copay cards, and do product presentations all via the electronic platform. They also have been able to conduct virtual lunch and learns, as well as virtual speaker programs that provide healthcare professionals with the information and tools they need to continue prescribing our products. The company and its sales representatives are committed to making sure patients have what they need at this critical time. And for those initiating treatment on our products, our goal is to minimize any disruption to new patient starts by staying in close contact with our customers. Generating new patient starts is a challenge under the best of circumstances, but in the context of the pandemic, it is especially difficult. Because we rapidly deploy these dynamic virtual selling tools, we are still able to generate new patient starts albeit at a lower rate in an otherwise very challenging period. In addition to changing the way we communicate with our customers, we also had to make sure our messaging as it relates to the unique product attributes of Ziosted were fully appreciated in a time of potentially limited access to care. Ziosted is a once-weekly, subcutaneous, and virtually painless product that is safely administered at home. With current shelter-in-place restrictions, Some patients may not want to or be able to visit their physicians for an IM injection or implantable testosterone pellets. If a patient has been diagnosed with low testosterone and has already satisfied the insurance prior authorizations to initiate testosterone therapy, they can be easily switched from a physician-administered IM injection or implant to an at-home self-administration of Ziosted. We have targeted those physicians that perform in-office injections or implant testosterone pellets with our switch messaging, and we believe that is one of the reasons we continue to see new patients' starts on this difficult time. We continue to refine our messaging through social media on Facebook and Instagram, and as a result, we have seen an increase in utilization of the internet copay cards. In fact, we recently learned that our Zysted social media Life is Messy campaign had won a Gold Muse Creative Award in recognition for creativity in advertising, design, and digital. When we look at xFactory's shipment data and weekly prescription trends, we believe April will be the highest month of total prescriptions since launch, despite the COVID-19 crisis. Zyastate continues to be the fastest-growing branded testosterone product on the market. While we cannot fully predict how COVID-19 may impact future prescriptions, we are pleased with the results to date. Going forward, our team is developing a safe plan for return to the field as states begin relaxing the restrictions. We continue to remain focused on ensuring our customers and our patients have easy access to Zysted while protecting the health and safety of our employees and the communities in which we operate. Turning now to slide six and another one of our growth drivers, Teva's generic EpiPen. According to Symphony prescription data, 206,000 prescriptions were filled with Teva's generic EpiPen in the first quarter, representing a 43% share of the EpiPen market. Historically, the first quarter of every year has the lowest number of prescriptions due to seasonality and resets of co-pays and high deductible insurance plans. While the overall EpiPen market declined in the first quarter versus the fourth quarter, Teva's share in the EpiPen market increased 7%. While their total prescriptions increased almost 13% sequentially during the same period. It is also important to point out that in the first quarter of this year, the overall EpiPen market grew 8% versus the same period last year. While we do not fully know how COVID-19 may impact sales of Teva's generic EpiPen, we've been very pleased with the results through the first quarter. Turning now to our pipeline on slide seven, let's begin with Teva's generic version of Verteo. According to Teva, they believe their end of filing could be approved in the latter part of this year. As a reminder, Teva expects their generic Fratello pen will be fully substitutable at the pharmacy, and they maintain they have first-to-file status. According to Lilly's 2019 10-K, Fratello achieved $1.4 billion in global sales, with the U.S. making up $646 million of that total. Our agreement with Teva provides for us to sell the devices at cost plus margin, and receive escalating royalties from high single-digit to mid-teen percentages. If approved, we believe the product represents a significant opportunity for both Teva and Antares. As a reminder, we have already manufactured and shipped pre-launch quantities of generic Frateo devices to Teva. The next exciting program in our pipeline is the Saladagrow Rescue Pen, which is detailed on slide number 8. Last November, we entered into a significant new collaboration with Adorsia Pharmaceuticals to develop a product combining salatagrel, a new chemical entity, with our QuickShot auto-injector. To date, Adorsia has completed two phase two studies and believes salatagrel could be self-administered at the onset of symptoms to stop a suspected heart attack. We have initiated the usability and reliability studies with the QuickShot device while a partner conducts a clinical bridging study as well as finalizing the phase three study design with health authorities. The global registration study is expected to be initiated in the first half of 2021. Medorski will pay for the development of the rescue pen and will be responsible for obtaining global regulatory approvals for the product. Antares will provide fully assembled and labeled finished product to our partner at cost plus margin, who will then be responsible for global commercialization of the product, pending FDA and foreign approval. we would then be entitled to receive escalating royalties on global net sales of a commercial product. We believe that the potential importance of this product, both for patients, Adorsian, and Antares, can be significant. Turning now to our development agreement with Pfizer, we continue to make good progress on the program for an undisclosed rescue pen. As a reminder, subject to FDA approval, we will supply Pfizer with a fully packaged, commercial-ready product at cost plus margin, and then receive escalating royalties from mid-single-digit to double-digit percentages on end sales of the product. We will provide estimates on the development timeline once we receive clearance from Pfizer. And finally, I'd like to outline some of the changes we have made to the way we operate as a company given the global healthcare crisis we are all facing. In response to the COVID-19 pandemic, most of our executive and administrative functions are working remotely, and we have limited the number of staff in our facilities to those necessary for essential functions such as development, manufacturing, and supply chain. As discussed earlier, we suspended face-to-face activity for our field-based employees who are now utilizing virtual meeting platforms and other forms of social media to connect with our existing and potential new customers and healthcare professionals. Antares provides essential medicines to our partners and patients and we are committed to delivering on this important mission. We are working closely with our third party manufacturers and distributors in order to manage supply chain activities and mitigate any potential disruptions to our ability to supply products to our customers and our partners as a result of the COVID-19 pandemic. Thus far, we have seen a limited softening of demand for our products through the end of March and into April. With a portfolio of commercial products that treat life-threatening and chronic diseases, Coupled with our strong financial position, we believe that we are well-situated to navigate through this pandemic and execute on our key strategic objectives to support long-term growth. I will now turn the call over to Fred for the financial details on our first quarter. Fred?