Halozyme Therapeutics, Inc.

Ladies and gentlemen, welcome to the Antares Pharma Second Quarter 2020 Operating and Financial 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. And at that time, please press star 1 on your telephone keypad to join the queue. I would now like to hand the call over to Jack Hoerth, Antares Vice President of Corporate Affairs. Sir, please go ahead.

Thank you, Katie, and good morning, everyone. Earlier today, we announced our second 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's 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 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, the global economy, and financial markets in our overall business, operating results and financial condition, our ability to achieve the restated 2020 revenue guidance, Future revenue growth, prescription volumes, and market share for our products and our partner 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 Antares' recent periodic filings on Form 10-Q and Form 8-K. Antares 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 closing comments before opening up the lines for your questions. I'll now turn the call over to our CEO, Bob Apple. Bob?

Thanks, Jack, and good morning to everyone. This morning, we reported another quarter of record financial results and significant operational progress for the company. We achieved a 14% increase in quarterly revenue versus the same period last year and improved overall gross margin across the business as we continue to generate cash from operations despite the impact of the COVID-19 pandemic on patients, physicians, Our employees and communities that we serve. As we manage through daily obstacles to potentially eliminate any disruption to our business and supply chain, we were able to deliver hundreds of thousands of auto-injectors to our partners and patients who rely on our products while advancing our internal pipeline. Furthermore, we continue to support the growth of our business with our development partners as we recently announced the launch of generic Firsteo in parts of York by Teva and the International Distribution Agreement with Lunatus for Ziosted. Today's strong results reported for the second quarter speak to the exceptional teamwork demonstrated at Antares during a difficult time in our country's history and were driven in large part by sales growth of our flagship product, Ziosted, as well as year-over-year growth for Teva's generic EpiPen. The highlights of the second quarter saw Ziosted grow 136% versus the same period last year, and 274% over the first six months of 2020, with June recording the highest number of shipments and prescriptions filled to date. In addition, last week Zyestad recorded the highest number of total prescriptions filled in one week, according to Symphony Prescription data. In our alliance business, The combined revenue of device sales and royalties generated from Tevis Generic EpiPen grew 61% in the second quarter and 83% over the first six months of this year as compared to the same periods in 2019. We believe this is impressive revenue growth by any standard for both products. Our proprietary products Ziosted and OtrexUp which represents our highest margin business had a 65% increase in the quarter versus the same period last year and doubled over the first six months versus the same period in 2019. Our commercial team has driven impressive growth of Zyvested while maintaining Otrexup as a steady contributor to our business. On slide five, you will see that prescription trends for Zyvested continue their upward slope through the second quarter with June totaling another record month. Since the product launch last year, more than 132,000 prescriptions have been filled through June 30th, and approximately 6,000 different physicians have prescribed Zynostat to more than 20,000 patients. Second quarter total prescriptions increased 11% sequentially from the first quarter of this year, despite the limitations our sales force had placed on them when they were unable to physically interact with physicians and their staff, coupled with reduced number of patient visits. We believe our decision at the end of the first quarter to strategically shift to an existing virtual detailing platform early in the pandemic, as well as leveraging our social media presence to connect with our existing and potential customers and healthcare professionals, has led to a positive impact on Zyocet prescription growth and sales. Since early July, most of our sales professionals have been able to resume limited in-person detailing and will continue to work virtually in those offices or regions that don't allow access to the physician's office based on the varying stay-at-home orders, restrictions, and phased openings. Since patients may continue to have limited access to physicians, we made a tactical decision last quarter to shift our messaging as it relates to the unique product attributes of Ziosted, which was developed as an easy, once-weekly, subcutaneously administered product designed for at-home use. We have heard from physicians that some testosterone-deficient patients may not be able to or willing to visit their offices for treatment. If a patient has already satisfied the prior authorization requirements from their insurance provider to initiate testosterone therapy, they can be easily switched from a physician-administered therapy to self-administration of Zyvested at home. We will continue to target these physicians with our switch messaging, as well as physicians who are new to the Zyvested story who may be unaware of the virtually painless administration that has been shown to produce steady-state testosterone levels throughout the once-weekly dosing period. We believe the benefits of Ziosted will continue to drive demand for an at-home injection option. Recently, we had the opportunity to welcome Pat Shea to the Antares organization as our Senior Vice President of Commercial. Pat joins us with over three decades of sales, marketing, market access, and commercial operations experience. His past commercial leadership roles include the development of strategic marketing plans for products associated with men's health, urology, pain management, and oncology. Pat has a proven track record of leading pharmaceutical commercial organizations, both large and small, and we believe he will be a valuable asset to us as we enter the next phase of growth for Ziosted and our proprietary commercial business. I would also like to take this time to thank Ed Kesick for his leadership during the launch of Ziosted and his contribution in making it the fastest growing branded testosterone product on the market. Ed has chosen to retire after a successful career in the industry and we wish him well in his future endeavors. Turning now to slide six and some exciting news from our development partner, Teva. This past July, we announced the first commercialization of our multi-dose pen platform in Europe. Teva launched TeraPyrotide Injection, the generic version of Eli Lilly's European brand product for sale. TeraPeritide is a drug-device combination product used for the treatment of osteoporosis. The product was initially launched in eight European countries, and they recently advised us that this product has also been launched in Denmark, Ireland, Israel, and Canada. TeraPeritide is currently approved in 17 countries in Europe, and Teva has indicated that they expect to launch in other European countries later this year. The European launch represents another milestone achievement in our collaboration with Teva. This is the third successful approval and commercialization of a drug device combination product with our partner and follows the previous launches of the generic epinephrine and generic sumatriptan autoinjectors. With respect to the end of filing for their U.S. generic version of Forteo, Teva continues to believe they could receive FDA approval later this year. If approved, the generic Forteo pen will be fully substitutable at the pharmacy, and we believe we'll receive six months of exclusivity. Under our global agreement, we sell the devices to Teva at cost plus margin and receive escalating royalties from high single digit to mid-teen percentages based on net sales by Teva. If approved, we believe the product represents a significant opportunity for both companies. I'd now like to talk about our first international distribution opportunity, which we announced earlier this week. This past Monday, we disclosed an exclusive Distribution Agreement with Lunatus Global Medical Supplies to distribute, support, and promote the sale of Zyastat in Saudi Arabia and United Arab Emirates. Lunatus has a proven track record of introducing, building, and maintaining profitable brands in the Arabian Gulf and Middle East regions. We believe the Zyastat product profile will fit nicely into a market which is currently underserved and lacks attractive treatment options for testosterone deficient men. Under the terms of the agreement, we will be responsible for the supply of fully packaged product to Lunatus, and our partner will be responsible for submitting and obtaining regulatory approvals for Zyastat. Once approved by health authorities, Lunatus will also be responsible for all marketing, promotion, and distribution of Zyastat in both countries. We believe this agreement will help lay the groundwork necessary to expand our global footprint for Zyastat. We continue to make good progress on our pipeline despite the new COVID working environment. This lateral rescue pen development program with our partner, Dorsia Pharmaceuticals, continues to advance. We are working with Dorsia to develop a rescue pen which would deliver a potentially fast-acting P2Y12 antagonist. Dorsia believes the rescue pen could be self-administered at the onset of symptoms to stop a suspected heart attack and preserve muscle and heart functions. We have initiated the usability and reliability studies with the QuickShot device while partner Adorsia prepares to conduct a clinical bridging study as well as finalizes the phase three study design with the various health authorities. Adorsia has indicated that they expect to initiate their global registration study in the first half of 2021 and we look forward to the start of this exciting trial. Adorsia 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 will then be entitled to receive escalating royalties up to double digit percentages on global net sales of the commercial product. We believe the potential importance of this product for patients of Dorsey and Antares can be significant. Turning now to our development program advisor, We continue to make good progress on this project for an undisclosed rescue pen. As a reminder, subject to FDA approval, we will supply Pfizer with the 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 anticipate that we will be able to provide estimates on the development timeline once we receive clearance from Pfizer. Shifting now to our own internal pipeline, As previously disclosed, we are in the early stages of developing two new assets in the endocrinology and urology areas. The endocrinology program is a rescue pen that is currently in the preclinical and formulation stage of development. The company had a successful pre-IND meeting with the FDA, which enabled us to identify and agree on a development path forward for a 505 approach for an eventual NDA submission. If formulation development is successful, We anticipate filing our initial IND in 2021. The next potential product candidate is an assay in neurology. We are working on a potential weekly formulation of an auto-injector administered product with a target of obtaining pre-IND feedback from the FDA and a first in human clinical study in 2021, which could potentially be followed by an IND filing in the same year. Finally, I would now like to update you on some of the day-to-day changes we are making to the way we operate as a company. In response to the pandemic, most of our executive and administrative functions are still 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. We have implemented numerous health and safety protocols and are taking precautions to help protect our employees. Antares provides essential medicines to our partners and patients, and we are committed to delivering on this important mission. We are continuing to work 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 or partners during the pandemic. As a result of the commendable efforts of the organization to maintain the momentum of our business in these unprecedented times, we are taking this opportunity to reinstate our full year 2020 revenue guidance which we believe will be in the range of $135 to $155 million, which represents a year-over-year growth rate of between 9% and 25%. Given the evolving nature of the pandemic, the company may revisit revenue guidance at some future point in time. We will, however, stay laser-focused on our business and be ready to adapt to any changes to market conditions should they occur. We'd now like to turn the call over to Fred for the financial details of our second quarter in six months ended June 30, 2020.