This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk12: The Avondale Pharmaceuticals fourth quarter and full 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. Please note, this conference is being recorded. I'll now turn the conference over to your host, Tom McHugh. You may begin.
spk02: Good morning, and thank you for joining us on our conference call. This morning, we shoot our full year and fourth quarter financial results news release. The release can be accessed on our website, www.avidel.com. As a reminder, before we begin, the following presentation includes several matters that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These risks include risks that products in the development stage may not achieve scientific objectives or milestones or meet stringent regulatory requirements, uncertainties regarding market entry and acceptance of products, and the impact of competitive products and pricing. These and other risks are described more fully in AVIDEL's public filings under the Exchange Act, included in Form 10-K for the year ended December 31, 2019, which was filed on March 16, 2020, and subsequent SEC filings. Except as required by law, Abidell undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events, or otherwise. On the call with me today are Greg Divis, our Chief Executive Officer, Richard Kim, our Chief Commercial Officer, and Dr. Jennifer Goodeman, our VP of Medical and Clinical Affairs. At this time, I'll turn the call over to Greg.
spk13: Thank you, Tom. Good morning, everyone, and thank you for joining us on our fourth quarter 2020 conference call. I will begin with several updates on our business outlook, highlighting the significant progress made and key milestones achieved over the past several months. Jennifer will then offer an overview of the progress we've made with our scientific communications for FT218, including the upcoming presentation of secondary and post hoc data from Reston, which we are all excited for as it builds upon the primary endpoint data presented last year. Richard, who just recently joined as our Chief Commercial Officer, will provide his early views on where we are from a launch readiness perspective, including his initial insights into our commercialization and launch planning for FT218 and his near-term priorities as we move closer to the PDUFA date and a potential FDA approval. Finally, Tom will provide a review of the financial results for the quarter, and we will conclude with a Q&A session. With that as an outline for the call, let's get started. Overall, I am very proud of and pleased with the progress we have made over the last 12 months. We continue the transformation of Avidel while successfully executing the clinical development and the regulatory filing strategy for our lead program, FT218, an extended release, a once-nightly formulation of sodium oxibate, for the treatment of excessive daytime sleepiness and cataplexy in adults with narcolepsy. It was just a year ago that we were completing our pivotal phase three rest on study of ST218, just prior to the pandemic taking hold. Since then, and despite the COVID-19 challenges we have all faced, we announced in late April the positive top line results from the rest on study, including that ST218 met all three co-primary efficacy endpoints at all three doses, demonstrating highly significant clinically meaningful improvements compared to placebo, and was well tolerated with low rates of commonly known sodium-oxibate adverse reactions. We completed the additional work for and preparation of the NDA filing for FT218, including a successful pre-NDA meeting in Q3 that was followed up with the full NDA submission to the FDA in December. and just last week announced that the FDA notified us in a day 74 letter that the NDA for FT218 was accepted and assigned a PDUFA target action date of October 15, 2021. We are pleased with the overall response and the limited comments that the agency has provided to date. The acceptance of the submission supports our confidence in our NDA and overall regulatory filing strategy. In addition, Through this stage of the review, we have not been asked to provide a paragraph four certification against any orange book listed patents. Furthermore, based on the proposed label and data package we've submitted as part of the NDA for FD218, we have no reason to believe we should be asked to do so. As we advance and execute our business plan and priorities, the same success brief success is beginning to ring true for Avidel. The full promise of FT218's profile is now coming into view as we deliver the positive rest on data. Confirm the significant commercial opportunity with our market insights, including the clear patient and physician preference for once nightly FT218. And now on the heels of FDA acceptance of our NDA, with our strong conviction and our regulatory filing strategy, we are positioned to deliver on our mission of liberating patients with narcolepsy from middle-of-the-night dosing and creating significant and deserved value for our shareholders. The momentum we are experiencing in the market is real and it is profound, from key opinion leaders to patient groups to our newest team members. The growing level of interest in once-nightly FT218 and Avidel is rapidly accelerating and is attracting the best of the best as we prepare to disrupt this 18-year-old multi-billion dollar market to the potential benefits of patients, healthcare providers, and our shareholders. With that setting of the stage, let's get into a little bit more detail on some of these highlights. To begin, I'm pleased to turn the call over to Dr. Jennifer Goodeman, who joined our team at the end of last year and is overseeing all medical and clinical affairs activities and is already making a tremendous impact. Jennifer, the floor is yours.
spk05: Thanks, Greg. It's great to have the opportunity to update everyone on today's call regarding the exciting work we are doing to expand awareness of the FT218 program, and most importantly, the unequivocal clinical benefits FT218 has proven in our pivotal trial. Since joining Avidel toward the end of last year, I have come to fully appreciate the tremendous body of work that has been completed to date, much of which has formed the basis for the NDA submission. Now, in 2021, we are leveraging these data and generating additional insights to engage the medical community on the potential of this investigational once-nightly OXIV-8 formulation. While we have previously focused on the primary endpoints with our pivotal trial, Reston, we have also completed 10 Phase I PK studies in more than 250 healthy volunteers, which have affirmed the predictable PK profile. and adds to the body of evidence supporting the safety of FT218. We also recently initiated an open-label extension and switch study known as Restore. Collectively, there is a substantial amount of data we will be presenting this year and beyond, and Restore will only add to this already strong foundation. Our efforts will ensure physicians understand that FT218 if approved, will liberate patients from unnecessary middle-of-the-night dosing. Looking first at Reston, we announced last April the top-line results, which reported that FT218 met all three co-primary efficacy endpoints compared to placebo for all three doses evaluated, 6-gram, 7.5-gram, and 9-gram. These results were highly statistically significant with all p-values less than 0.001 and clinically meaningful as assessed by the maintenance of wakefulness test, clinical global impression improvement, and mean weekly cataplexy attacks. Notably, improvements across these endpoints were demonstrated at week three with the lowest dose of six grams. Furthermore, multiple sensitivity analyses of the primary endpoints were completed affirming the positive results. Adding to the strength of these primary endpoints, we are also very pleased that the secondary endpoints and post-hoc analyses further substantiate the robust findings from Reston with additional measures of improvement in daytime sleepiness and improvements in disturbed nocturnal sleep, which we believe is key for patients living with narcolepsy. These data provide us an excellent platform for a robust publication plan that we are already executing upon. We are excited to announce that eight abstracts we've submitted have officially been accepted to be presented at AAN in April and the suite meeting in June. We look forward to sharing these new secondary endpoints and key post hoc data from the Reston trial once permitted under the embargo rules set by the conferences. Earlier this month, we announced publishing pharmacokinetic data in a leading international peer-reviewed journal, Clinical Therapeutics, reviewing four of the clinically relevant PK studies from our Phase I program. These data provide a solid understanding of FT218's unique PK profile, including the demonstration of dose proportionality and a limited food effect. Taking it a step further, I'd also say that these data support our belief that the design and formulation of FT218 are ideal to enable once-nightly dosing of sodium oxidate. This follows a publication we supported last quarter in Sleep Medicine, authored by Dr. Avedon and Dr. Kushida, which systematically reviewed the nearly 20 years of data for twice-nightly sodium oxidate finding no evidence of increased cardiovascular risk, including hypertension. These publications are just the beginning. We are hard at work with notable thought leaders in the narcolepsy space, and we'll soon have many more publications to share with the medical community. Let's turn now to Restore. As a reminder, this study is not required for FDA approval. While it is early, we are pleased with initial investigator and patient feedback, including a tolerability profile consistent with that of Reston. Importantly, no patients have withdrawn from Restor due to adverse reactions. Lastly, we are also asking patients who have previously been on twice-nightly sodium oxibate which dosing regimen they prefer. and we are very pleased with the preliminary feedback thus far, which we look forward to sharing in the future. Restore underscores Avidel's commitment to patients and this therapeutic area. We fully intend to continue generating meaningful data to improve patient care. It's now my pleasure to introduce Richard, who shares my excitement at how the positive data generated with FT218 could translate to disrupting the narcolepsy treatment market and improving the lives of patients living with this chronic and debilitating condition. Richard, the floor is yours.
spk11: Thank you, Jennifer. And let me say how great it is to join everyone on the call today. Even though it was just last month that I joined Avidel, I had been speaking with Greg and members of the team for several months prior and keeping track of the company's significant progress at the end of 2020 with Jennifer's hiring and the submission of the NDA. As I continued to do my diligence on the company, I became convinced that if approved, once nightly, FD218 would become a game-changing therapy for patients suffering from narcolepsy. And I could not pass up the opportunity to be part of the Avidel team. Now, since joining, I've had the chance to review the incredibly strong foundation of data and research guiding our launch preparations. We have tapped into key claims and prescription databases that allow us to look at the narcolepsy market at various points in time and longitudinally. Additionally, to date, we have conducted over a dozen large market research initiatives with hundreds of physicians, patients, caregivers, office staff, and peer groups who represent over 175 million covered lives. The knowledge about narcolepsy that we have already amassed really gives us confidence that we are making launch decisions based on a deep understanding of the market. Now let me share some of the more striking insights about the current level of treatment dissatisfaction in the oxibate marketplace. Almost half of all patients refuse twice nightly sodium oxibate when offered by a physician. This is primarily due to the requirement of taking the second dose in the middle of the night. About 60% of patients report dose-adjusting their twice-nightly sodium oxibate outside physician direction. This tends to occur when patients take more at bedtime and less at the required second dose two and a half to four hours later. And almost 60% of patients report negative treatment outcomes. From this research and other work that we have done, it's clear that there is still significant unmet need that is not being well addressed with current oxibate treatment. As such, if approved, once nightly, FT218 has the potential to gain market-leading share in the Occupate class. Now, our team has been busy, and we have already begun to build the critical components for our launch, like safely and efficiently distributing FT218 if approved through the REMS, patient services hub, and specialty pharmacy networks. Our pricing research today and a framework for our peer discussions have centered on ensuring that FT218 is not considered a convenience play, but rather that once-nightly dosing should lead to meaningful outcomes for patients. With the data from Reston and additional clinical studies that Jennifer described, we also have a very strong foundation for promotional claims and messages if FT218 is approved. Additionally, key operational work for targeting, field force sizing, data integration, and much more is well underway. And finally, one more key area of preparation that has been really impressive is the patient focus and the work that has been done with advocacy groups, like the Narcolepsy Network, Wake Up Narcolepsy, and Project Sleep, as ultimately, we only succeed when patients do. In short, the team is making significant progress And now with the October 15th PDUFA date, we are taking our work to the next level. This brings me to our goal to successfully build out a world-class commercial team and be ready to launch Once Nightly FT218 if approved by the FDA. Now I've been privileged to launch several products that made a significant difference to patient care, predominantly in specialty and orphan diseases. Now, each product launch has its own unique set of challenges and opportunities that I've had the benefit of learning from, whether that was building a team from scratch, dealing with entrenched competitors, or shifting a treatment paradigm. All those learnings and the experience of each new team member will collectively be leveraged to support our potential launch of once nightly FT218. With the progress made to date and the actions required to realize our launch vision, My immediate priorities are to further build out internal capabilities within the commercial team, with my immediate focus on market access, patient services, and marketing teams. As Greg mentioned, we are attracting exceptionally talented people to join us, and we are very excited about how our team is shaping up. Second, to continue to hone our launch strategy and resources. We will invest disproportionately in the most critical parts of our launch, but at the same time, due to the concentrated nature of the customer base, unlike primary care or larger specialty markets, we anticipate not having to dilute our resources to cover a large prescriber audience. Last, but maybe most important, is our overall company commitment, as we will continue to speak with physicians, patient advocacy groups, and payers. and ensure that we hear the customer voice about what they need from a new therapy. This is exactly what FP218 is really about, delivering a new option if approved that can be transformative for people suffering from narcolepsy. Well, if you can't tell, I am really excited, as it isn't often that a new product has the potential to offer a significant advancement in patient care for an established multi-billion dollar market. I look forward to providing updates about our progress on future calls. Now, I will turn the call back over to Tom to provide an overview of our financial results for the quarter. Tom, over to you.
spk02: Thanks, Richard. During 2020, we completed several important actions to strengthen our balance sheet and position the company to prepare for the approval of FT218 and, if approved, its launch. In that regard, we received 177.5 million net proceeds from financing activities in the first half of the year, and also sold our sterile injectable drug portfolio for 42 million on June 30th. As a result of that sale, we did not report revenue or cost of products in the second half of 2020. R&D expenses were 5.3 million in the fourth quarter of 2020, compared to 7.8 million in the fourth quarter of 2019. The $2.5 million year-over-year decrease was primarily due to the completion of the Reston study during the first quarter of 2020, as well as lower headcount due to the restructuring activities initiated during 2019. SG&A expenses were $9 million in the fourth quarter of 2020, compared to $7.7 million in the fourth quarter of 2019. The $1.3 million year-over-year increase is a result of a number of factors, including FT218 NDA preparation and submission costs, FT218 commercial launch planning costs, and higher stock-based compensation. Net loss for the fourth quarter of 2020 was $11.3 million, or $0.19 per diluted share, compared to a net loss of $2.7 million, or $0.07 per diluted share, in the prior year. The increase in net loss and diluted loss per share It's primarily the result of the year-over-year decrease in revenue, which was partially offset by lower overall operating expenses. In addition, our diluted share count increased by approximately 21 million shares year-over-year due primarily to the financing activities completed during the first half of the year. Our full-year tax benefit was $12.1 million, or a 238% effective rate. This was largely driven by a $9 million benefit resulting from the passage of the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. And as I mentioned a moment ago, we significantly strengthened the balance sheet and ended the year with $221.4 million of cash, cash equivalents, and marketable securities, compared to $64.2 million at December 31, 2019. The year-over-year increase was due in large part to the $177.5 million of net proceeds from the financing activities, plus $25.5 million of proceeds received during 2020 from the sale of the sterile injectable drug portfolio. We expect to collect the remaining $16.5 million of the total $42 million sale transaction value in the first half of 2021. The cash proceeds received in 2020 were partially offset by approximately $49 million of net cash used in operations. We believe our cash, cash equivalents, and marketable securities will support the expected financial requirements to complete the NDA review process, compile additional supporting scientific data to position FT218 in the market, and ramp up our launch preparation for FT218.
spk13: I will now turn the call back over to Greg. Thanks, Tom, and thanks, team. Before I provide my closing comments, why don't we open the call up for Q&A, and operator, if you could do that, that'd be great.
spk12: Sure. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Our first question is from Ami Fadia with SVP Lyric. Please proceed with your question.
spk04: Hi, this is Yves and Leon for Ami. Thanks for taking our questions. Maybe two quick ones, please. First, just how much read-through would you say the FT20 NDA acceptance provides in terms of whether a 30-month stay is now off the table? And then maybe second, In terms of orphan drug exclusivity, maybe remind us what are the arguments and data you guys have put forth by which FD28 should get this, and help us think about the timelines for when this exclusivity could be granted relative to the October 15th . Thank you.
spk13: Yeah, thanks, and appreciate the question. Again, the comment relative to read through on NDA acceptance and relative to 30-month stay is a question we get quite often. and clearly there's some views who believe that that decision point is an important confirmatory decision on the part of the FDA. Again, we're very pleased having, you know, accomplished and achieved and surpassed that milestone, and we're very pleased what I would describe generally as the nature of the commentary and feedback we've received to date as our NDAs under review. We've also been very clear that we are not just asking for a carve-out. We have generated our own data as we've shared publicly. We have provided that data to the FDA, including our proposed labeling, even before NDA submission, which has helped guide our strategy. So because we view the first 60-day period as a period of review of completeness, not necessarily of substance, we believe that some of these matters could very well be arbitrated post this acceptance as the NDA review gets into the heart of the data that's been submitted. That being said, it could very well have been arbitrated already. A decision could have been made. What we've always said is that we certainly are very confident in our regulatory strategy, and we're very confident in particular as we continue to advance through this review process. That being said, we won't speak to the affirmative. on this matter definitively until the FDA does, which we would expect to be at the approval date. The only caveat to that would be is if something changes relative to the strategy and the FDA has required us to do something different, then we would clearly communicate that as urgently as we possibly can. So again, I think that we're very comfortable and confident in our strategy. We're very pleased with kind of passing the first milestone. and will continue to execute and prosecute the NDA accordingly. With regards to orphan drug, from our perspective, again, we were granted orphan drug designation on really the plausible hypothesis that once nightly FT2 and 8 could be clinically superior to the reference product. You know, from a submission perspective, although we won't go into details, we've provided and have completed our own robust rationale for confirmation of this exclusivity which includes data we generated to support our position both relative to our product and the Twice Nightly product as well. We recognize, as you noted, this is a matter of review and that that will be, you know, arbitrated and decided by the agency, you know, at or around the time of approval. Our experience would be that that decision comes somewhere, you know, 30 to 90 days or so post-approval, where your exclusivity decisions are made and the orange book is appropriately updated accordingly. So that's our current assumptions. There's always exceptions to those things, but that's how we're thinking about it today. So appreciate the question.
spk12: Thank you. Next question. Our next question is from Paul Mateus with Stifel. Please proceed with your question.
spk08: Hey, thanks so much for the question. This is Thor on for Paul. Can you just give us a little bit more color onto your thoughts on Salesforce sizing and potential SG&A ramp as we approach potential launch for FT218?
spk13: Sure. Why don't I turn the Salesforce sizing question over to Richard, and then maybe Tom can comment a little bit on SG&A ramp.
spk11: Yeah, thanks for the question, Warren. So as far as Salesforce sizing is concerned, we're clearly doing the analytics into it now. The one thing I'll say since joining the team is the narcolepsy marketplace definitely within the oxibate class is a relatively concentrated market. We know that there's only about 4,000 prescribers of current oxibate therapies in the country today, and which about 1,600 physicians make up 80% of the total prescription. So we're still looking at things. It's a little too early for us to make a call on the size, but we know that it's relatively concentrated, and we don't need a huge field force But I think the other thing that we'll be looking at is other services that we will add in addition to the sales team to really be customer facing. So I don't anticipate it being huge, you know, not in the hundreds and, you know, probably more in the less than that range. But once again, we'll be updating that over time as well. And for the SG&A, I'll pass it over to Tom.
spk02: Yeah. So with SG&A, as I mentioned, we had 9 million of SG&A in the fourth quarter. We haven't provided specific guidance around OpEx for 2021. But listen, I think what you can expect is that we're going to step up from that level as we proceed, you know, through the year, you know, quarter over quarter. Our spending will be more heavily weighted towards the second half of the year, and, you know, particularly as we approach the duka date.
spk12: Great. Appreciate it. Thank you. Our next question is from David Amslem with Piper Jaffray. Please proceed with your question.
spk07: Hey, thanks. So a couple of questions on the commercial landscape. And I guess what we're seeing now is, you know, conversion of patients from Xyrem to ZyWave. And to the extent that that continues, how do you think about your ability to then get these patients – from the low-sodium product to FT-218? I mean, asking it another way, do you think that these patients will prove to be sticky? And what's your market research telling you about propensity to switch from low-sodium twice a night to high-sodium once a night? So that's question number one. Number two, Jazz has been contracting aggressively on the payer front. So I guess with that in mind, is that something we should presume you're going to be equally or more aggressive, and what kind of ramifications does that have for your gross to net spread? I know it's early to talk about, but wanted to at least get some qualitative color from you. Thanks.
spk13: Thanks, David. Richard, feel free to start, and I'll provide any other comments when you're finished.
spk11: Yeah, sure. Dave, thanks for the question. So as far as You know, our competitors' sort of conversion from the sodium oxibate twice nightly to the Mixol twice nightly. You know, I'm not sure how I sort of view their early success. You know, they've clearly had some patients convert. But if we really think about this, there's really been no clinical benefit for that conversion that's gone on. You know, there are a lot of drivers. There's been a lot of marketing and efforts that have gone on. There is a lower copay for commercial patients for the mixed salt formulation. But as far as the stickiness of sort of patients to your question, what our market research shows us unequivocally is that patients, when given an option, really see the most important attribute of a new therapy being a once-nightly formulation. it really addresses a lot of the issues that they currently have, as I noted in some of my prepared remarks. And going from a sodium oxibate to a mixed salt twice nightly really does nothing to change the treatment paradigm with the exception of sodium. So the fact that patients are changing actually we see as a good sign for us, knowing that patients who may have been on therapy of twice nightly sodium oxibate for years are potentially willing to change therapy, we actually see as a potential upside. And as far as your question about contracting is concerned, obviously it's a little too early for us to get into our contracting strategy discussion, but the one thing we will absolutely make sure we do with payers is ensure that they understand fully that FT218 is not a convenience play, but it is absolutely an opportunity to look at potentially improving outcomes for patients as well. we believe that by focusing the discussion on the clinical benefit of FD218, that is absolutely our best leverage point. And yes, there may be some work that has to be done with contracting, but by keeping our clinical profile front and center, we believe that is our absolute best leverage with payers.
spk13: Just additional comment, David, if I may, just on the pricing, and that is clearly, I think from a pricing perspective, we're only seeing favorable trends relative to the opportunity for us, right, in terms of what's happening on a list basis. We saw Potola Sand take a 14-plus percent increase at the end of last year. We saw the Twice Nightly product take 8.5 percent in January. You know, those things clearly are putting the average kind of net price that we can calculate in the marketplace at a higher level than we had previously, you know, estimated. And at the end of the day, we understand that the price to pay to play is going to be the price to play. So if there's a net price at a specific plan that's going to be required for us to be there to create access, then we're going to have to do that to create access. And our goal, again, is to ensure that we're, as Richard noted, defending our proposition relative to the true benefits clinically and for the patient of a once nightly. And there'll be, in some payers, there'll be pricing matters that we're going to have to resolve. And in some, perhaps not. But I think your comment that it's a bit early is correct. But we certainly understand that there's going to be a net price in the marketplace at specific payers that we're going to have to meet to get into the category. Thanks.
spk07: Okay. Yeah, that's helpful. If I may just think in a follow-up, do you think you can capture oxibate-naive patients? Your competitors talked about getting some ZyWave patients who were oxibate-naive. So is that something that you think is realistic on a meaningful scale? Richard, do you want to start?
spk11: Yeah, sure. You know, David, it's a great question. So our focus is really going to be predominantly focused on the unmet need with the patients who have been exposed to twice-nightly sodium oxibate. However, we do know from our market research there is a significant amount of patients who are eligible for oxibate. 60% of patients who are eligible for current oxibate therapy are not going on it. As I mentioned in my prepared remarks, half the patients who are offered this from their physicians don't take it. So there is a great opportunity there as well. However, I think our immediate focus will really be on those who have been exposed to twice nightly Oxyvates. But absolutely, that opportunity for patients who have not even taken or taken that initial dose is an opportunity for us as we build this launch going forward.
spk13: Yeah, maybe just an additional add-on to it, if I may, and that is we've heard the feedback from the other companies in the marketplace about market expansion opportunities primarily driven by comorbidities. In our research project, we confirmed some of those numbers talking to those physicians. who are treating sodium oxibate today. And I think that's the important point to make, is that when we're talking to hundreds of physicians, we're talking to physicians who are actively prescribing sodium oxibate today, and at the same point in time, actively deciding not to treat specific patients in the marketplace, perhaps for reasons the other company has referenced. But also, as we've learned in our research, equally as much, if not more, due to the fact of the dosing-related challenges. So I think what's good here is that, as Richard described, the highly concentrated marketplace with a small, discrete number of prescribers, the opportunity to take share and expand the opportunity sits within that same universe.
spk12: Thanks, guys. Thanks, David. And our next question is from Francois Brisebois with Oppenheimer. Please proceed with your question.
spk09: Thanks for taking the questions. Richard, I think the first one would be for you. I was just wondering your thoughts when you did your diligence here on the importance of really the market penetration prior to maybe not as much the authorized generics in 23 potentially, but especially in 2026 with the regular generics. Any thoughts there through your due diligence would be helpful.
spk11: Yeah, Francois, thanks for the question. So yeah, you know, obviously, we do keep in, we keep our forward looking thoughts about as we prepare for the launch of FT218 as well. You know, I think the one thing I would say when multi source generics can come into the market potentially in 2026 is at the end of the day, you know, it's still going to be a twice nightly regiment that is done. What we know about the narcolepsy marketplace is people step through their therapies moderately quickly as well. So first and foremost, we believe that the value proposition of once nightly FE218 and the clinical benefits associated with that are a really significant offering in this marketplace. Even if we get in a situation where there is penetration from twice nightly generics in the future, those step throughs are still through a potential for a twice nightly. And we believe that even though it may alter some of the opportunity, it significantly still doesn't really change the value proposition to patients. So, you know, at the end of the day, when I've done my diligence, I really do believe that the once nightly is such a potentially game changing therapy for patients that if we do our job with pairs, we help them along this journey as well. But also when patients realize it's still a twice nightly, we still think that there is significant opportunity even after the multi-source generics may enter the marketplace as well.
spk09: Okay, great. Now that's helpful. And then I wanted to ask just in terms of I know all the focus here is on FT218, but any thoughts as you're going through this about maybe growing the pipeline or is this still – FD218 is the first, second, and third priority at Avidel?
spk13: Yeah, Frank, great question. And again, I think, you know, we've been, obviously, as we've described over the last couple years, incredibly focused on, you know, executing on the 218 program, and that hasn't changed by any stretch of the imagination. But I would say that we've begun and have done work relative to kind of the what's next question and we're not going to obviously do that without, you know, we're not going to do anything that we think will compromise the focus on FT218 because it is really the catalyst to help drive the kind of what's next strategy. But that being said, I would say there's, you know, a few legs of that stool that we've begun and have done quite a bit of analysis on and even a little bit of very early work that we're just not prepared to discuss at this stage. But I think whether it's you know, the concept of a pipeline in a product from formulation development to lifecycle management or other indications, certainly that's a leg to the stool. Certainly the application of our technology is an opportunity for us in the future given it's our technology and our rights, whether that's strategically in an overlapped marketplace or a very close adjacency. And then I guess the third leg would, you know, obviously be BD&L that, you know, to leverage the infrastructure. Let's be clear. I think the focus has to be 218, and then from there is how do we build around that to allow us to, you know, define what's next. And I think as time goes on, we'll certainly talk more about what that is as we, you know, get further down the path. From that standpoint, I just think we're just not prepared to discuss it in detail right now.
spk09: Great. All right. That's it for me. Congrats on the progress.
spk12: Thanks, Frank. Our next question is from David Sherman with Lifestyle Capital. Please proceed with your question.
spk03: Hi, guys. Thanks for taking my question. I was just wondering if we could get any more detail on what we might see at AAN and some of the other medical meetings. I assume sleep transitions is probably something that we're going to be seeing, but just any more color on data relating to, like, sleep architecture or EEG power analysis or anything like that would be helpful.
spk13: Thanks, David. Jennifer, you want to take that?
spk05: Yes, absolutely. Thank you so much for the question. Your assumption is absolutely correct. Starting at a big picture point of view, we have seven secondary endpoints that were part of the statistical analysis plan, so we will be presenting those, including endpoints such as the upward sleepiness scale, where we assess the subjective improvement in terms of patient sleepiness, A big focus, though, for us will certainly be on sleep architecture and looking at improvements in the shifts for patients who are treated with FT218. As I mentioned in my prepared remarks, disturbed nocturnal sleep is an area that we really want to focus in on with FT218. I think it's been an area that has been minimize to a certain degree, and I'm not going to get ahead of sharing the actual data that we'll be presenting, but I'll just reiterate that we are very pleased with the results and look forward to sharing them.
spk03: Okay, great. Thanks for taking my question.
spk12: Thanks, David. Our next question is from Matt Kaplan with Vandenberg-Dalman. Please proceed with your question.
spk06: Hi, good morning, and thanks for taking the questions, and congrats on the NDA acceptance. I just wanted to dig in a little bit more to the Restore study and what you hope to show with that, and I guess is there a chance that the patients that end up in that study could transition to commercial patients?
spk13: Yeah, thanks, Matt. Jen, you want to start with that as well?
spk05: Yes, absolutely. So just a quick reminder for all, Restore is not required or as part of our FDA approval. Our main focus with Restore is on long-term safety, tolerability, and efficacy. And it's early, but we are pleased with what we are seeing. I mentioned the fact that the tolerability profile remains consistent and that there have been no withdrawals due to adverse reactions. And Greg, do you want to comment on the transmission? Yeah.
spk13: Yeah, I think just to add a couple other comments, I think the data we're generating is really, really important for us, right, because it's going to help inform healthcare practitioners how to switch patients. It's going to talk about, you know, patients who were on a stable dose of the twice-nightly and moved into what dose of the once-nightly product, right? And again, and then we're going to get some feedback, as Jen noted, in terms of patients' preference and experience. And I think all of those are really important data points to generate that as we go on we'll communicate publicly around as we advance the study to the balance of this year. And I would say, again, as Jen noted, early on we're very pleased with it. In terms of what we can expect post-approval, there certainly is the opportunity as that study ramps up that will create the opportunity for patients to move into a transition window and onto commercial drug from that standpoint as we get into that phase of our launch. But we're very pleased with what we've seen early on and we'll continue to chop wood and execute against it and look forward to sharing more as we go. Thanks, man.
spk06: Great, great. And then one other question maybe for Richard. I guess, what's your initial research showing with respect to the unmet need of sodium oxibate patients, current patients? Specifically, how many patients are coming off drug, I guess, in the first six months due to, I guess, issues with the current offerings?
spk11: Yeah, thanks, Matt. No, great, great question. So, as I mentioned before, you know, in my prepared remarks, there is significant unmet need. You know, half the patients not actually wanting to take twice-nightly sodium oxypate when prescribed by their physician is you know, interesting 60% of the patients dose adjusting when their physician hasn't even talked to them about that, mostly because of the concern of taking that second dose two and a half to four hours after their initial dose during the middle of the night. But what our research does show us is about a quarter of patients who are taking twice nightly sodium moxibate discontinue after their first month, and about half have discontinued by the end of the first year. You know, to me, especially that first month metric really tells me there is some significant challenges with how patients are accepting the use of twice-nightly sodium loxivate. So, you know, it's a tremendous opportunity, and we absolutely believe that once-nightly FT218 may be able to provide, you know, address some of that unmet need that patients and physicians are facing today.
spk13: Yeah, and I'll just add to that. I think that, you know, the other part of that research that says that there's actually more patients that these treaters are not putting on sodium oxidate, I think is equally as emblematic of the challenges associated with the twice-nightly product, right? It manifests itself both in terms of discontinuations, and it manifests itself in terms of those who decide not to go on, as Richard noted. So those are both opportunities for us. And, again, as we stated before, this is all within that highly concentrated marketplace that we've described. So thanks, Matt.
spk12: Thank you. Our next question is from Robin Garner with Craig Howell. Please proceed with your question.
spk01: A lot of great questions today. Thank you for taking mine. Just wanted to ask, are there any key learnings from commercializing the injectables portfolio that you could apply to FT218?
spk13: Yeah, I would say not really. Robin, it's just a different channel, and it's much more of a commodities marketplace. given that, although at times we may have been only one or one of two agents in the marketplace, it got to as many as 11. So it was really a price-driven, concentrated purchasing channel in the GPO sector. So not really related and commercially only required about half of a person to manage. So very different from that standpoint.
spk01: Okay. Thank you for that. My final question is just – A big part of the untapped market is the number of undiagnosed patients with only 50,000 being diagnosed in a disease with two decades of history with a therapy available. How do you expand this market, which would significantly rise all boats in this market?
spk13: Richard, would you care to offer your two weeks of insight on that? And I'm happy to add on top of that.
spk11: Absolutely, Greg, and thanks for the question, Robin. Yeah, no, I think for us, you know, all things will come in time as well. I mean, we are going to be absolutely laser focused on converting patients who have already experienced twice nightly sodium or oxibate treatments initially. We talked about the other opportunity that Greg said about all these patients who have been considered for treatment within that concentrated treater base that are sitting there as well. That's really the low-hanging fruit for us. But, you know, I guess what I've always experienced in my past, Robin, is as new innovative therapies come to the marketplace, to your point, it just raises the entire level of awareness in this category. So I think that will come over time. But what I will say is at the beginning, that really will not be our initial focus. But I think having a great new innovative therapy like once I leave FD218 really will create some more attention in this marketplace. And over time, I think that other untapped, underdiagnosed marketplace will continue, will potentially grow as well into more meaningfully diagnosed patients as well. So great question and something that we are definitely thinking about for the future as well.
spk01: Thanks, Robin. Okay, thank you.
spk12: And again, as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad. Our next question is from Lauren Luna with AC Wainwright. Please proceed with your question.
spk10: Thanks for taking the question. If I could just circle all the way back and follow on to one of the first questions about orphan exclusivity. Even conservatively assuming you don't get orphan exclusivity, can you just speak to the picket fence, the fences that exist around FT218 now and that you continue to build, whether it be patents or just inherent difficulties around formulating and manufacturing the product and maybe duplicating your particular PK profile?
spk13: Yeah, Oren, thanks. Again, I think as a company that was the first to innovate a modified release GHB formulation that could demonstrate the clinical effect in a single once-nightly dosing, you should assume that we have taken all the steps to protect that from an intellectual property standpoint as extensively and as broadly as we can, both in the U.S. and abroad, from that standpoint. So we already have a handful of patents that have been and that are orange book listable for sure. There is many, many more that are in and under review at the USPTO, and I would just say that it is our expectation that we'll have a robust patent estate that just doesn't protect, if you will, the uniqueness of this formulation, but not only our formulation, but GHB-derived drugs, whether it's pro-drugs, alternate salts, not only the formulation, but how that formulation performs from release profiles, PK, so on and so forth. So, again, we're very pleased with how that's been executed to date, and, you know, we've spent a lot of time over the last, you know, year and a half defending how we're going to navigate orange book listed patents, and, you know, in the future we'll have our own, and others will have to likely do that, navigate over ours.
spk10: Okay, and just one quick one. Sorry if I missed it. You mentioned the restore study a few times, and I think you actually gave us a number of patients enrolled in that last quarter in 3Q, like 29. I'm just wondering, is there any update to that now, or should we just hold on until we see updates in the future?
spk13: Yeah, I mean, again, we're not so focused on enrollment. It's going to be something we'll continue to update. We've almost doubled that number. I think we're just a little right approaching 50 right now. Since the last time we updated, I think we updated at 27. So anyway, that's where we are at this stage. and now we're seeing our sites ramp up in terms of beyond our restaurant sites. So we're really pleased with the momentum we're seeing coming out of the holidays, despite kind of the COVID-related challenges. So at this stage, you know, we've got good momentum going there, and we'll update as we go forward.
spk10: All right, thanks. Appreciate it.
spk13: Good luck. Thanks, Owen.
spk12: And thank you, ladies and gentlemen. We have reached the end of the question and answer session. I'll now turn the call over to Greg for closing remarks.
spk13: Thanks, everybody. I know this has been a bit of a long call. I appreciate all the questions and the opportunity to introduce some of our new team members here. But maybe just wrap up on a couple of comments, right, because we're really, you know, the momentum we're building right now is really profound. whether it's from the progress we've made on the regulatory front with our now acceptance and PDUFA date, and specifically what we believe the confidence in our regulatory filing strategy that will enable us to navigate any third-party related challenges with regards to FT218. We're very pleased on that front. And, again, as we sit here today through the review process, we've not been asked to certify against any orange book listed patents, and we do not believe there's a reason to do so. Jennifer covered some of the data, but clearly our data stands on its own. Whether it's primary data you've all seen, the secondary post hoc and adverse reaction data you'll see more of coming up this year, it is unequivocal and has the potential to be the best-in-class treatment. And that very much demonstrates itself when we share that data, even in a blinded basis, along with a blinded target product profile in our market research to patients and physicians. who quickly conclude that once nightly SD218, if approved, is something very unique and different and has the potential to be the preferred treatment of choice, both for currently treated OxyBait patients and untreated eligible OxyBait patients as well. And I would say the last thing that I'll comment on is that all of this momentum is really resulting in us being able to attract really great new team members, whether it's Richard and Jennifer as new leaders to the organization But the breadth and depth of the quality of folks who are raising their hand to want to come be a part of this opportunity to introduce this breakthrough treatment for patients who, unfortunately, from a patient perspective, have had very limited options for nearly two decades, it's really great. And we're really excited about what the team is going to look like as we go forward. So we're very focused in terms of bringing FT2 and A to patients. and to do all we have to do to ensure we command a meaningful and potential market leading share of this highly dynamic, highly valuable multi-billion dollar marketplace. And again, as we noted earlier, our mission is to help liberate patients with narcolepsy from the middle of the night dosing and make sure we're doing all we can to create significant and deserved shareholder value. So I'm very proud of the work the team has done. We're here in large part because of all of the work they've done, along with the dedication and support of physicians and patients alike. And we remain committed and focused and, quite frankly, relentless in doing all we can to ensure we deliver the best outcome for all stakeholders, patients, providers, and our shareholders. So we look forward to providing you more updates as we go along, including sharing our data here coming up next month. And with that, I thank you for joining our call. Stay safe, be healthy, and have a great rest of the day. Thank you.
spk12: And this concludes today's conference and you may disconnect your lines at this time. Thank you.
Disclaimer