Horizon Therapeutics Public Limited Company

Good morning, and thank you for standing by, and welcome to Horizon Therapeutics PLC First Quarter 2021 Earnings Conference Call. As a reminder, today's conference call is being recorded. I would now like to introduce Ms. Tina Ventura, Senior Vice President of Investor Relations.

Thank you, Justin. Good morning, everyone, and thank you for joining us. On the call with me today are Tim Walbert, Chairman, President, and Chief Executive Officer of Paul Holscher, Executive Vice President, Chief Financial Officer, Liz Thompson, Executive Vice President, Research and Development, and Andy Pasternak, Executive Vice President, Chief Strategy Officer. Tim will provide a review of the business, including our first quarter performance. Liz will then provide a review of our R&D programs, followed by Paul, who will discuss our financial performance and guidance in more detail. After closing remarks from Tim, we'll take your questions. As a reminder, during today's call, we'll be making certain forward-looking statements, including statements about financial projections, development activities, our business strategy, and the expected timing and impact of future events. Our actual results could differ materially due to a number of factors, including the risk factors and other information outlined in our latest forms 10-K, 10-Q, and any 8-Ks filed with the Securities and Exchange Commission, and our earnings press release, which we issued this morning. You are cautioned not to place undue reliance on these forward-looking statements and Horizon disclaims any obligation to update such statements. In addition, on today's conference call, non-GAAP financial measures will be used. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and other filings from today that are available on our investor website at www.horizontherapeutics.com. I will now turn the call over to Tim.

Thank you, Tina, and good morning, everyone. The first quarter is one with multiple achievements for Horizon. First, we completed the acquisition of ViolaBio, advancing our position as a high-growth biotech by adding a deep, mid-stage biologics pipeline, expanding our R&D capabilities, particularly in early-stage research, and diversifying our portfolio with the on-market rare disease biologic of Plisna. We now have a total of 22 development programs in our pipeline, including eight trials scheduled to start this year. We initiated the relaunch of Tepesa in mid-April after receiving FDA approval in March for the increased-scale manufacturing process for Tepesa. This followed the temporary supply disruption that began last December, which was a result of the U.S. government-mandated COVID-19 vaccine orders. We're advancing our global expansion strategy with today's announcement of our plan to build out our European infrastructure infrastructure to launch a PRISNA in Europe, if approved. We anticipate approval in the first quarter of 2022. Our geographic expansion strategy includes introducing Tepes in Japan, as well as other markets, establishing a platform for the future launch of additional medicines outside the U.S., and we made significant progress here as well. We generated strong growth from our orphan disease medicines, Cristexa, Revicti, Crisizbi, and Actimune. We also received multiple Best Workplace awards since the start of this year, including number one ranking on Fortune's Best Places in Biopharma 2021, and the number three ranking, the highest-ranked biopharma company on the prestigious Fortune's Top 100 Places to Work list, a tribute to the strong engagement of our employees, an important factor in hiring and retaining talent in the highly competitive biotech sector. starting with Viola, which brought us four candidates in nine development programs and considerably expanded our pipeline across all phases of clinical development and is strategically aligned with our therapeutic areas of focus. Viola's R&D team enhances our ability to innovate with its broad experience in biologics, its strong early-stage research and translational capabilities, and its deep scientific knowledge of autoimmune and severe inflammatory diseases. Finally, the acquisition diversifies our on-market medicine portfolio with the addition of Viplezna, an infused biologic medicine indicated for the rare disease neuromyelitis optica spectrum disorder, or NMOSD. We've been impressed by the talent and expertise that the yellow team brings to Horizon. Since completing the acquisition in mid-March, our teams have been working together to successfully integrate the two companies. And this morning, we finalized and rolled out our fully integrated organization. We're advancing and refining our strategy for the VLA development portfolio to maximize its potential. Our near-term commercial priority is to successfully relaunch APLISNA for NMOSD in the U.S. and prepare for the potential launch in Europe. APLISNA was approved by the FDA in June of last year as the first and only B-cell depleter for the treatment of adult patients with NMOSD. This is a severe... rare relapsing neuroinflammatory autoimmune disease that attacks the optic nerve, spinal cord, and the brainstem. Manifestations of the disease include loss of vision, paralysis, and also respiratory failure. B-cells play a critical role in the pathogenesis of NMOSD, and B-cell depletion is a mechanistic approach preferred by physicians. Because Oplizum was launched during the pandemic and with relatively minimal resources, we are planning a full relaunch of the medicines. including expanding the size of the commercial organization. We're applying key learnings from the successful strategies we used to launch Tepeza and relaunch Cristexa. A key component of that strategy is to invest in the marketing and field-based teams to ensure optimal support for Plisna. We're well on our way in our relaunch preparations and expect the results of our efforts to accelerate as we move throughout the second half of this year. Our next steps are pleased to include adding sales representatives to maximize the opportunity in NMOSD, adding and applying our comprehensive patient services, site of care, and payer support teams to optimize patient pull-through, which as we know from TPEZ and CROSTEXA, is critical to the success of rare disease infused medicines. We're also leveraging our extensive TPEZ site of care network to support physicians referring their patients to infusion centers. which is a particular challenge for APLISNA in its early launch. We're also investing in medical and scientific engagement to establish scientific leadership in NMOSD. This includes conducting further analysis of APLISNA clinical programs to expand the understanding of its differentiation, as well as continuing to build a base of compelling real-world evidence supporting the use of APLISNA. Important new data were recently presented at two key medical meetings, which Liz will discuss in more detail. This type of clinical analysis is core to our medical affairs and clinical strategy at Horizon to engage, educate, and collaborate with the treating community. Gristek's an example of how we have successfully executed this strategy. Keys to our commercial strategy are ensuring that physicians are aware of the benefits of Aplizna and how it is differentiated from other on-the-market medicines. For example, we see multiple opportunities to differentiate Aplizna from Rituximab. an off-label treatment that has been used to treat NMOSD given the lack of an approved medicine for this devastating disease. One important distinction is that a plismid is a humanized monoclonal antibody targeting the CD19 receptor, while rituximab is a chimeric molecule targeting the CD20 receptor, which does not deplete plasma cells or plasmablasts. In NMOSD, autoantibodies are secreted by plasmablasts and plasma cells, and a plismid depletes these pathogenic cells. Additionally, Plisna has shown a relatively low rate of anti-drug antibodies and infusion reactions, with recent data also confirming its long-term efficacy. Other benefits of prescribing Plisna are resonating with physicians, including its convenience, favorable safety profile, and well-understood mechanism of action. Moving to Tepeza. Tepeza is the only approved medicine for the treatment of thyroid eye disease, which is a serious, progressive, and vision-threatening rare autoimmune disease. As you're aware, we were in a temporary supply disruption of Tepeza throughout the first quarter, with no supply since the end of December. This was due to U.S. government-mandated COVID-19 vaccine orders and our third-party drug product manufacturer, Catalan's. This was very challenging for Tepeza patients and treating physicians, and certainly for our business. We understand how critical it was to accelerate COVID-19 vaccine production to save lives and hopefully end this pandemic. Fortunately, we had already began a process early last year to increase the scale with which we could fill and finish vials at Catalan. This increased scale allowed us to manufacture many more vials with each manufacturing run. This new manufacturing change required FDA approval, and we submitted a prior approval supplement in January to the FDA. We're pleased to announce that the FDA approval of that supplement in March, and we also announced resupply of Tepeza in mid-April. While this has certainly been a very difficult situation for TED patients who had to stop Tepeza in the middle of their treatment and continue to live with the debilitating effects of TED, we appreciate the incredible commitment from the FDA, HHS, the White House, and Catalan to work with us to expedite FDA approval of and resupply Tepeza for patients as quickly as possible. In addition to obtaining approval for the new increased scale production of Catalin, we continue to make progress on our strategy to expand supply capacity, which includes adding a second drug product manufacturer by the end of this year. Tepeza has been available for about two weeks now, and we're extremely pleased with the progress we've seen. Patients are eager to resume or start therapy, physicians are reengaging with their patients to help them get on treatment. The feedback has been overwhelmingly positive so far. As we've seen since our launch, TED patients have built strong communities on various social channels, and many have posted about how deeply thankful they are to resume treatment again. Tepeza is making a huge difference in their lives. We now have two types of patients who are starting on Tepeza. disrupted patients who were on therapy but had to stop treatment due to the supply shortage, and new patients who were starting Tepeza for the first time. With disrupted patients, we were making great progress early in the relaunch. To date, about half of disrupted patients have already scheduled their infusions. Based on physician and patient research we conducted during the supply shortage, we expect the vast majority of disrupted patients to resume therapy. While we're only two weeks in, we're seeing evidence that this is happening as we expected. The remaining disrupted patients continue to move through the process to get their treatment scheduled. The re-verification and scheduling process can take up to a few months, depending on the patient, their physician, and their insurance provider. We plan for this, and our patient services team continues to do an incredible job communicating with each dependent patient throughout their journey. We're very encouraged with the progress we've seen in the first few weeks. Regarding new patients, as I mentioned in our last earning call at the end of February, despite the supply disruption, we continued to promote TPEZA and saw continued strong growth of patient enrollment forms, or PEPs. We completed the expansion of our TPEZA commercial and field-based organization in the fourth quarter last year, which included the addition of sales representatives, patient access liaisons, regional reimbursement liaisons, site of care managers, and medical liaisons. This expanded team continued to drive demand for new patients during the disruption, communicating frequently with their customers. Since our resupply announcement at the end of March, we've seen an acceleration in that PEP growth. An impressive number of new prescribers are prescribing Tepeza each week. In fact, since our last update at the end of February, the total number of PEPs has increased significantly, and we had an all-time high for total monthly PEPs in April. We've already seen a good number of new patients whose PEFs were generated in the fourth and first quarter of this year scheduled their first infusion. While the accumulation of disrupted patients resuming treatment, along with the new PEFs generated in the fourth and first quarters, we have a unique dynamic occurring as we relaunch TPEZA. This will result in an unusual quarterly net sales progression, with the third quarter expected to be TPEZA's highest net sales quarter of this year. as we work through treating disrupted patients and adding the new accumulated patients. As we have said, we are significantly increasing our investment in TPEZA this year, including in the first quarter to drive awareness of TED and TPEZA, targeting not only TED patients but also those with Graves' disease to raise awareness of the connection between Graves' and TED and to increase the speed to diagnosis and treatment. Our unbranded direct-to-consumer television campaign last year was highly successful, as evidenced by the fact that patients continue to search for TED specialists on the TED and TPEZA websites during the temporary supply disruption. On Monday, in addition to resuming our unbranded television campaign, we also launched our first branded TPEZA television campaign, which we expect to drive even broader reach and awareness for TED and TPEZA. motivating patients to seek treatment more quickly. We expect the new TTC campaigns, which are national campaigns and will run through the rest of the year, to drive increased uptake of Tepeza as we progress towards our 2021 Tepeza net sales guidance of more than $1.275 billion. We're highly confident in the growth prospects for Tepeza and continue to expect peak annual global net sales of more than $3.5 billion. On the clinical development front, we expect to begin enrollment in our trial in chronic TED patients mid-year. In the meantime, we continue to see positive data published by physicians who have used Depesa in treating their chronic TED patients, as well as presentation of case studies at medical meetings. We continue to expect more data to emerge throughout this year. With Gerstexa, we reported first quarter net sales of $107 million. an increase of 14% versus the prior year, despite the ongoing challenges associated with COVID-19. We're encouraged by a recent increase we've seen in patient visits to rheumatologists, as well as the highest number of in-person calls by our sales team since the onset of the pandemic. Key to the long-term success of Cristexa is our immunomodulation strategy. We continue to see increased use of Cristexa with immunomodulators as physicians become increasingly aware of the significantly higher response rate for Cristexa plus immunomodulation compared to Cristexa alone. Between 35% and 40% of new patients are now using Cristexa plus immunomodulation. We attribute this to higher levels of clinical conviction for Cristexa among physicians who co-prescribe immunomodulators. Our strategy for Cristexa is working, and it supports our expectation for strong growth again this year, with full year 2021 net sales guidance of more than $500 million. It also supports our peak U.S. sales estimate of more than $1 billion. Our rare disease medicines, Revicti, Presisvi, and Actimune, all generated strong growth in the first quarter, driven by durable active shipping patient growth and continued high rates of compliance and adherence. I will now turn the call over to Liz.