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spk06: Please continue to stand by. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Please stand by. Your program is about to begin. Good morning, everyone. My name is Keith, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Eagle Pharmaceutical's second quarter 2021 financial results call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answers period. At that time, if you have a question, please press star 1 on your telephone keypad. As a reminder, this conference call is being recorded today, August 5th, 2021. And it's now my pleasure to turn the floor over to Ms. Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. Please go ahead.
spk01: Thank you, Keith. Welcome to Eagle Pharmaceuticals' second quarter earnings call. This is Lisa Wilson, Investor Relations for Eagle Pharmaceuticals. With me on today's call are Eagle's Chief Executive Officer, Scott Tariff, Chief Medical Officer, Dr. Judith Noonkashen, and Chief Financial Officer, Brian Cahill. This morning, the company issued a press release detailing financial results for the three-month end of June 30th, 2021. This press release and a webcast of this call can be accessed through the investor section of the Eagle website at eagleus.com. Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Eagle Pharmaceuticals management as of today and involve risks and uncertainties including those noted in this morning's press release and are filing through the SEC. Such forward-looking statements are not guaranteed the future performance. Actual results may differ materially from those projected in the forward-looking statements. Eagle Pharmaceuticals specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. A telephone replay will be available shortly after completion of this call. You'll find the dial-in information in today's press release. The archived webcast will be available for one year on our website at eagleus.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on August 9, 2021. Since then, EGLE may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. And with that, I'll turn the call over to EGLE CEO, Scott Karrasch.
spk07: Thank you, Lisa. Good morning, everyone, and thank you for joining our call today. We had a strong and productive quarter. Before I get into those details, I wanted to share some overarching thoughts. We are proud of the strategy deployed here at Eagle over the past few years. If we assume for a moment that we bring vasopressin to the market relatively soon, then we are entering a new phase where vasopressin, pemfexi, bendamustine in Japan, and now landilol, are shaping our growth. Some may argue that this progress has been slow, but we have managed EGLE with a low-risk, effective, and efficient approach. Importantly, every day we add to our footprint in hospitals and oncology, and every day our EGLE employees interact with physicians, pharmacists, and nurses in these settings. Combine this with our clinical regulatory quality and manufacturing experience. and we believe that we will continue to drive growth. What we have quietly done is build a very robust hospital and oncology company with broad multifunctional capabilities. We've accomplished this while still buying back $211 million, or 22% of our company, maintaining a clean, strong balance sheet and continue to post strong earnings as evidenced by today's announced 93 cents. which represents a 63% increase from $0.57 a year ago. We also have net cash and working capital of around $100 million on hand. Obviously, our goal is to accelerate the growth of the company. Bendamustine in both U.S. and Japan and Rianidex, Basopressin, and Pemfexi have all been largely organic. We now add in Philandialol. Let me point out that by being disciplined, meaning not using significant amounts of our cash to pay up for assets or diluting our shareholders, we have done this in a way that, in essence, we get paid for our commercial and functional infrastructure. With Landia Law, we will use our much-needed and clearly much-desired commercial and functional capability that we have been building. Landialol will enter the organization with very little additional infrastructure requirements or cash requirements. We are also hopeful that other companies see the value and need for the Eagle platform and that we announce a further expansion of the pipeline. At the same time, we are targeting products like Landialol, which are more mainstream pharma products with longer exclusivity and and transitioning away from reformulations in spec pharma. We remain very proactive about building out a strong foundation for sustained future growth and believe additional pipeline products will be announced soon. Between our internal research and development and our ongoing business development efforts, we believe we'll be able to generate consistent growth for the company. Turning now to our second quarter, we outperformed consensus earnings forecast, and we had what we believe was an excellent few days in court on vasopressin. We expanded the Mustang franchise in Japan, and we're getting very close to our Penthexy launch and a period of exclusivity beginning February 1st already. Taken together, these factors will contribute to a potentially doubling of revenues and impressive revenue growth next year in 2022. In terms of our products, let me start with days of Preston, the trial, which had been delayed more than a year due to COVID began on July 7th. We believe the trial went well in some respects, the delay turned into a positive as it allowed us to gather significantly more proof and assurance that our product is manufactured and maintained within the appropriate non-infringing pH range. We expect to have the courts ruling around mid September. In mid-June, we responded to the CRL with full study results and were assigned a GDUFA date of December 15th. Our belief is that we had a very robust response and believe we satisfied all questions raised by FDA. We were pleased that FDA maintained priority review of our ANDA for vasopressin, which is a very important program for us. And remember, EGLE is first to file with an ANDA referencing vasostrict, which had total U.S. sales of $786 million in 2020. In light of the priority review, as well as being flagged as a COVID priority, we continue to believe that we can bring vasopress into the market this year. We look forward to updating you about the trial outcome and the decision from FDA in the weeks and months to come. In addition to the VASA present opportunity, we are excited now to be getting close to our four-month exclusivity period for Pemfexi, which begins on February 1st. This is another significant market for us. A U.S. sales of Olympia in 2020 totaled nearly $1.3 billion. As you recall, we also have approval for a multi-dose file, and we have a unique J-code, which provides coding clarity to outpatient facilities and physicians and also facilitates access for patients and reimbursement from Medicare, Medicaid, and commercial insurance. We've been looking forward to this launch since we first received FDA approval in February of last year, and believe it will be an important revenue stream in 2022 and beyond. Now, moving to our Bend and Mustang products in Japan, which are progressing nicely. In the second quarter, we announced that Symbio, our partner in Japan, received approval from the Pharmaceuticals and Medical Devices Agency, or PMDA, for trachosin, ready to dilute liquid formulation. That approval meaningfully increases the market opportunity for Triacosem in Japan. Also in the second quarter, and notably ahead of schedule, Symbio filed an application with the PMDA for the Triacosem rapid infusion 50 ml liquid formulation. That application was based on the results of clinical studies investigating the safety and pharmacokinetics of Triacosem RTD administered by 10-minute intravenous infusion. With these important extensions of the Bend the Mustang franchise, Eagle's Japan royalty and milestone income next year is expected to be in the $20 to $25 million range, representing another solid source of revenue. Taken together, the launch of Days of Press and Late This Year, an exclusive launch of Pemfexi, and the royalty income from Japan, we have a solid foundation for revenue growth next year. In 2022, we will have ample cash, and we will be very well positioned for another strong year. So now let's turn to 23, 24, and beyond, and how we plan to ensure long-term sustainable growth for Eagle, and in the face of declining revenue due to trend and generics in late 22. Our licensing agreement with AOP Orphan Pharmaceuticals for the U.S. commercial rights to land the all is a very exciting near-term opportunity. Judy will discuss the scientific merits of the product as well as the regulatory path forward in a few moments. But first, I'd like to share how it helps in our transformation to a company that is less reliant on spec form and reformulations. First, for the initial indication, upon approval, as I mentioned earlier, EGLE will need very little additional infrastructure to support the launch, as we already call on most of these providers. And second, Landialol is a new chemical entity, or NCE, and will therefore receive five years of exclusivity. This is Eagle's first NCE and is a true catalyst in reshaping our company as we evolve into a mainstream pharmaceutical company with a vibrant pipeline of products less reliant on reformulations. And third, it allows for a very efficient flow-through to the in place in our existing footprint to handle marketing and commercial efforts. We're excited to bring this important therapeutic to the United States and believe that we have a clear regulatory path forward. In addition to the upfront $5 million milestone payment, and we will split profits equally, which we believe benefits our shareholders, we can look forward to a significant revenue stream in 2023. We're very proud that we were able to find a way to bring such an important product to the company. And in light of all of these factors, vasopressin, panfexis, and bio now landia law, we anticipate significant growth going forward, even in the face of diminishing revenue eventually for Benamustine in 2023. With that, I'll now call, turn the call over to Judy, our medical officer, our chief medical officer, to discuss landia law in more detail. Judy?
spk08: Thank you, Scott. While Landialol is a novel therapeutic in the U.S., it has been used in the care of critically ill patients in Japan and Europe for years. Landialol was first approved in Japan in 2002 as OnoAct and in several European markets as Racobloc in 2016. Landialol is indicated as an antiarrhythmic agent in Europe for supraventricular tachycardia and for the rapid control of ventricular rate in patients with atrial fibrillation or atrial flutter in perioperative, postoperative, or other circumstances where short-term control of the ventricular rate with a short-acting agent is desirable, as well as non-compensatory sinus tachycardia where, in the physician's judgment, the rapid heart rate requires specific intervention. In Japan, Landia Law has also been approved for the treatment of ventricular fibrillation or ventricular tachycardia. The management of rapid heart rate or tachycardia in critically ill patients can be quite complicated regardless of the underlying cause which may include shock, arrhythmias, heart failure, and the postoperative setting. Beta blockers, also known as beta adrenergic blocking agents, are a class of drugs that works by blocking the neurotransmitters norepinephrine and epinephrine from binding to their receptors. These neurotransmitters contribute to the development of tachycardia. The beta-1 receptor beta blockers are used frequently in critical care settings to manage tachycardia. However, the available beta-1 beta blockers in the U.S. can also have the unwanted effects of decreasing the contractility or muscle strength of the heart and of lowering blood pressure. Landialol has the potential to become a cornerstone therapy in the management of these patients. It is ultra-short acting with a rapid on and off effect that allows clinicians to balance heart rate control and blood pressure more precisely. In addition, it predominantly affects heart rate without much effect on cardiac contractility and blood pressure. We believe that clinicians in the US will welcome Lamdialol as a key therapeutic tool for the more precise management of tachycardia in the critical care setting. There could be additional clinical settings for which Lamdialol has the potential to improve patient management. The FDA has tentatively agreed that a pediatric study being conducted in Europe could form the basis for an initial pediatric study plan for future submission to the agency. In terms of the regulatory timeline to approval in the U.S., in July of 2020, AOP held a Type C meeting with the FDA at which time AOP proposed a submission strategy in which it would provide summaries of preexisting safety and efficacy data and a meta-analysis of published randomized controlled trials. The FDA tentatively agreed with this approach and deemed these datasets adequate to support a proposed NDA without additional U.S.-based clinical trials. AOP intends to submit the NDA in the first quarter of 2022, seeking approval of Landialol for the short-term reduction of ventricular rate in patients with supraventricular tachycardia, including atrial fibrillation and atrial flutter. The expected review time is 10 months based on feedback from the agency that was provided during the previously held Type C meeting. With that, I'll turn the call over to Brian Cahill to discuss our second quarter financials. Brian.
spk04: Thank you, Judy, and good morning. In the second quarter of 2021, total revenue was $48.1 million compared to $41.9 million in Q2 of 2020. Product sales during the second quarter increased by $5.2 million year-over-year, totaling $19.6 million, compared to $14.4 million in Q2 of 2020, primarily driven by a $3.2 million and $3.5 million increase in Ryanabex and Belrasto sales, respectively. BellRapso product sales were $7.6 million in the second quarter compared to $4.1 million in Q2 of 2020. Eagle recognizes BellRapso sales and shipments by Eagle to wholesalers. Based on IMS data, Eagle's market share of vendor must be in wholesaler shipments to end users was 8% of the U.S. market for the second quarter compared to 5% for the prior year quarter. Second quarter Ryanadex product sales were $7.9 million compared to $4.7 million in Q2 of 2020, driven by strong reorders in the quarter. Orders for Ryanadex are cyclical, driven primarily by product expiry, with few customers acquiring Dantrolene unless their stock is expiring. Q2 2021 royalty revenue was $28.5 million compared to $27.6 million in the prior year quarter. This is almost entirely from Bendecca for each period. Eagle's royalty rate on Bendecca was 30% during the second quarter of 2020 and 31% during the second quarter of 2021. Royalty revenue also includes royalties earned from sales on Triacosin by Symbio. On the expense front, R&D expenses were $9.9 million for the second quarter compared to $7.1 million in the prior year quarter. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the second quarter was $9.2 million. The year-over-year increase is largely attributable to higher spend on vasopressin and Ryanidex programs. We expect R&D spend in 2021 on a non-cash basis will be between $34 and $38 million, up from our prior guidance of $26 to $30 million. The change is the result of our launch preparedness strategy on vasopressin, reflecting our confidence in the outcome of the trial, as Scott has discussed. The anticipated 2021 R&D spend includes launch preparedness and CMC initiatives for vasopressin, the RANVEX trials for the treatment of nerve agent exposure, and EA114 clinical and CMC initiatives. SG&A expense in the second quarter of 2021 totaled $16.6 million, compared to $18 million in the second quarter of 2020. The decrease is primarily related to stock-based compensation expense. Excluding stock-based compensation and other non-cash and non-recurring items, the second quarter of 2021 SG&A expense was $12.4 million. Net income for the second quarter was $3.6 million, or 28 cents per basic, and 27 cents per diluted share compared to a net loss of $0.3 million or 2 cents per basic and diluted share in the prior year period. Adjusted non-GAAP and income for the second quarter was $12.4 million or $0.95 per basic and $0.93 per diluted share, compared to adjusted non-GAAP net income of $8 million, or $0.59 per basic and $0.57 per diluted share in the prior year quarter. For a full reconciliation of non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of our press release. As of June 30th, 2021, the company had $108.7 million in cash and cash equivalents and $30 million in outstanding debt. So we have $78.7 million in net cash. We ended the quarter with $52.7 million in net accounts receivable. In the second quarter of 2021, we purchased an additional $2.9 million of Eagle's common stock as part of our $160 million share repurchase program. Since August 2016 through June 30th, 2021, we have repurchased $211 million of our common stock. With that, I'll ask the operator to open the call for questions. Operator, please go ahead.
spk06: And at this time, if you would like to ask a question, press star and one on your touch-tone phone. Star and one. We'll take today's first question from Brandon Foulkes with Cantor Fitzgerald. Please go ahead. Hi. Thanks for taking my question, and congratulations on the acquisition and the quarter. So maybe firstly, can you just elaborate on the gating factors between now and filing Landio in 1-2-2021? then maybe on vaso um you know a question i get a bit so i'd love to just get your input just given sort of the discussions um around the crl and what we've seen in the case do you think the drug sorry the judge needs to have an approved product here to rule on the case and then along staying on vaso just um if this case does go in your favor
spk07: does endo have any additional avenues to stop you launching straight away thank you well thanks brandon why don't we take the baso questions first and and the first answer is no the judge does not need to wait nor will he we had some good conversations about the plan going forward in the in the courtroom and as we stated our expectation is that we'll hear from him the court will rule by around mid-September. And so I don't think there's an issue there. As far as what Endo may or may not do, let's see what the opinion is. But based on our knowledge of the situation and the work that we've been doing, our expectation is that we should be able to go to the market later in the year, assuming we have both an approval and a decision. And we're expecting both of those to wrap up here in the next three to six weeks. And You know, I think it's just right around the corner, and we're gearing up to get to the market, as Brian indicated in his section. So we feel, you know, rather positive about our position now. And, you know, let's get through these next few weeks, but, you know, we're feeling pretty good. In the case of Landia Law, we're just going through the normal process that takes place and some of the little bit of work that AOP needs to get done to move the product into the United States. But we also think, you know, from all the diligence that we've done in wrapping up the agreement that we're in, you know, pretty good shape to get the product filed in the first quarter as we just announced. It's also obviously a very exciting road driver for the company going forward. Did I answer all of that, Brandon? Yes.
spk06: It did. Thanks very much. And maybe just so then on basis, you know, sort of any reason we should think or anything we should consider that you wouldn't be able to ship product basically on December 15 or December. So have the trucks loaded, ready to go.
spk07: The only thing I can say about that, Brandon, is that we are. I think we're consistent with our thought process, but we believe that we're in a good position to get it launched before the year is over. I mean, obviously, we need to see the court decision. We need to get an approval, but that's our expectation, that we're in a position to get the product to the market.
spk06: Okay. No, I appreciate that. Thanks very much, and congrats on the progress.
spk07: Thank you very much. Appreciate it.
spk06: Our next question is from Kim Lugo. with William Blair. Excuse me, please go ahead.
spk05: Hey, this is Lachlan. I'm Tim. Thanks for taking the questions. So I was just wondering, you mentioned, I guess, first of all, congrats on the land deal. Can you provide more color on the sort of potential size of that opportunity and how big you think that could be for you? And then second of all, with COVID restrictions starting to creep back in in certain regions. How should we think about the second half of the year for the current franchise, and how are your inventory levels for the Benton Mustang franchise looking?
spk07: Thank you. Very good. So the size of Landia Law, as you can imagine, after going through quite a bit of diligence to bring the agreement into the company and bring the product into the company, we have a range of forecasts, as you can imagine. you know, from high to low. I would say that give or take, generally speaking, I think about $100 million of peak sales is a good starting point. And then we're just going to have to refine that as we get into it some more and, you know, get the product launched. But I think that $100 million peak sales is probably the right number to work on for now. And, you know, we'll refine it as we go on. And then the second half of the years, it relates to anything that may go on in the economy. Let me turn that over to Brian.
spk04: Where I think about the potential COVID creep, I would just reverse the tape back, you know, six months on Fender Mustings. That's the way that we think about it and potentially relive that. But our inventory levels are just fine. Any inventory levels are fine. Our supply chain has not, and we have no expectation that it will be interrupted.
spk00: Okay.
spk04: Awesome. Thanks. Thank you. And frankly, if it was today, we would have sufficient safety stock to pull us through. So no interruption and sufficient supply. Good.
spk06: And our next question is from Daniel Busby with RBC Capital Markets. Please go ahead.
spk02: Hey, good morning, guys. This is Steve on for Dan. Thanks for taking our questions here. I've got two, and I'll ask them both up front here. First is on just the PENFEMC launch you guys had in February coming up, you know, about six months away or so. I'm just curious if you guys can provide a little more color on how you guys were preparing for that launch, and any color that how that's going to go. And then on the second one for VASO, you know, just based on, sounds like based on your confidence from the trial that happened a few weeks ago here, I'm just kind of curious if a settlement with Endo is still on the table and if you guys are still in any type of discussions with them on that. Thanks for taking the questions.
spk07: Steve, thank you. Pemfexi, just an exciting opportunity. Olinda is about a billion three product. We should have four months of exclusivity. We're gearing up and, you know, in that particular case with the JCODE, that we have, and now the multi-dose vial approval, I think the conversion that we'll see from our Pemfexi is similar to the conversion that you'll normally see in the A&DA world, which we think is pretty considerable. So we're expecting to have really a very, very strong four months. Then other competitors will come into the market, obviously, and then we'll see the value of the J-code and what that gets us by having that differentiation. But the ramp-up should be pretty good because of the reimbursement that we have. And look, if we maintain 5% of the market at a price that hospitals are willing to pay for the advantages that we have in our product in a billion-dollar market, that's a pretty considerable tail going forward. And so we think it's a great opportunity. And you combine that with Beza Press and the royalties we're getting out of Japan, you can see why we're so excited about next year. It could just be a remarkable year in the company's history and then throw Landia Law in and other deals we hope to do going forward. I think we've turned a corner and we're in great shape. And as far as a Beza settlement, I just don't know what to comment about that. We think we're in a very strong position right now. Our expectation, our hope after sitting in the courtroom for three days is that we'll wind up in a good position, and we'll get that out of the way after the COVID-related delays, and we'll get through that portion of it. And we think we did a really strong job in responding to the CRL. We've put a remarkable amount of effort into that, spent a lot of money, did a lot of work, and we're very hopeful, and our expectation in turn really is that we'll get approved before the year's over. And so based on those two elements, believe that puts us in, you know, good, strong position. If there's a settlement to be had that makes sense, then we'll listen. We'll do what's in the best interest of our shareholders. That's our obligation. But right now, we're very focused on monetizing the asset, bringing in meaningful value to the company, combining it with the rest of the pipeline and now land along. You know, we'll do what we need to do to grow this company as aggressively and safely as we can. And I think we're, you know, looking forward. I know we're looking forward to next year. And, you know, let's see what happens with all these different levers that we have. But Again, our expectation is that we're creating significant value for our shareholders, and we're really a short period of time away from that. Great.
spk06: Thanks for the call, guys.
spk07: Yeah, thank you.
spk06: Once again, it is star and one on your touchstone phone for questions today. Next will be David Amselem with Piper Sandler.
spk03: Please go ahead. Hi, this is back on for David. Thanks for taking my questions, and congrats on the Lend-You-All agreement. Just a question for me on the Benda Mustang franchise. I was just hoping you got your latest thoughts on how you see the market evolving, particularly with Bendeca once generics for legacy trend entering the market at the end of the year. And then if you could also just provide a quick update on where things stand with Fulvestrant and potential thoughts on timing for a filing there, that'd be great too. Thanks.
spk07: Yeah, fantastic, Jack. I appreciate it. So, you know, the Benda Mustang franchise, we're very consistent in what we've been saying. You know, I think give or take Brian, we get about $100 million a year coming in on the asset. And once generics come into the market and trend, what we've been saying is, you know, this 30% to 40% decline from the franchise is what we can see, you know, over the near term after generics come to the market, which leaves us with about, you know, a $35 or $40 million hole that we need to make up. And so when you take a look at that relative to everything else we have in the company, we think we've done more than enough to be able to give us back the $40 million that we may lose from the franchise over a couple of years after generic launch. Between Pemfexi and vasopressin and now LandiaLol and the rest of the pipeline and other things that we expect to hopefully announce, I think we get through that hurdle and we continue to grow the company out in the future, even with the trend of generics coming to the market. In case of Full Distrand, we're collecting some more data, and we expect to have some news before the year's over. Hopefully that's on track and going well. You know, that could be another very significant product for the company. Add that into the mix, and we think our future is rather bright. We're very excited. And I would add that it appears that a number of companies around the globe, domestically and internationally, see the footprint that we have here at Eagle. And if you're trying to launch a hospital product or an oncology product and you don't have the infrastructure that we have or the commercial capability that we have, I think there are a number of companies that are seeing us as a fantastic partner to bring their products through FDA and commercialize successfully. And hopefully, we'll have other agreements similar to Landia's coming to fruition here before too long, further increasing the pipeline and the growth of the company. Let's see how that all works out for us.
spk03: Great. Thank you.
spk07: Thank you very much.
spk06: It appears we have no further questions. I'll return the floor to Scott Kerr for closing remarks.
spk07: Well, thank you. Thank you again for joining us today. We had a strong and productive quarter, adding meaningfully to our product pipeline and revenue base for the years to come. We have a lot to look forward to in the second half of this year with Bayes & Preston. 22 stands to be a pivotal year, robust growth for Eagle with the launch of Pemfexi and expanding our trackers and product portfolio in Japan. And now in early 23, we have the potential to launch LandiaLol. We're solidifying our hospital and critical care product portfolio and continue to pursue near and long-term opportunities for growth, both organically and licensed, all of which will enable us to deliver value to our shareholders and important medicines to the patients in need. We look forward to updating you as we continue to evolve our base of business and grow our earnings in the short-term, long-term. Stay safe. Thank you for spending the time with us, and we look forward to updating you in the near future. Thanks for joining us today. Appreciate it.
spk06: This will conclude today's program. Thanks for your participation. You may now disconnect.
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