Horizon Therapeutics Public Limited Company

Good morning, and thank you for standing by. Welcome to the Horizon Therapeutics PLC second 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, 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 second 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 case files with the Securities and Exchange Commission, and our earnings press release, which we issued this morning. Your caution 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. We delivered fantastic results this quarter with strong performance across the business, which sets us up for continued momentum in the second half of the year. The Tepeza relaunch has outperformed our expectations driven by rapid patient starts, strong new patient demand, and increasing prescriber base. Cristexa generated year-over-year growth of 73%, driven by continued acceleration in the use of Cristexa plus immunomodulation, which is now at more than 40%, with growth driven by both rheumatologists and nephrologists. Revicti and Prasizmi each delivered strong double-digit growth as well. In total, our net sales increased 80%, and adjusted EBITDA increased 92%. Underscoring our position as one of the fastest-growing biotech companies. As a result of our performance, we have significantly increased our guidance for full-year to peasant net sales, full-year total company net sales, and full-year adjusted EBITDA. Full-year to peasant net sales guidance is now more than $1.55 billion, representing more than 89% growth year-over-year. Our increased full-year net sales and adjusted EBITDA guidance ranges from represent strong year-over-year growth at the midpoints of 40% and 28%, respectively. I'll now discuss key second quarter and recent achievements. We continue to significantly expand our portfolio and pipeline, adding a new early-stage next-generation gout program through our collaboration with Arrowhead, as well as we initiated three new clinical trials. We continue to support our on-market medicines with many new data presentations and publications. This includes two new publications in June by independent physicians on the successful use of TPEZA in patients with chronic thyroid eye disease, or TED. There are now six publications with a total of more than 50 chronic TED patients in multiple case reports. In addition, we presented new data highlighting the efficacy, safety, and differentiated benefits of Aplizna. We awarded four new Best Workplace recognitions, with the number of awards for the year now at seven. This is continued evidence that our performance and employee-focused culture is a key factor in our industry-leading growth. We acquired the new Biologic Drug Product Manufacturing Facility in Waterford, Ireland. This is key to supporting the continued growth of Tepeza, Cristexa, and Aplizna, as well as our development stage biologics, and represents an important step in our evolution as a leading biotech company. We continued our global expansion as we advanced launch preparations in support of potential approval for Aplizna in Europe and progress with clinical trial preparation for Tepeza in Japan. We also announced we'll be hosting a virtual R&D day for investors and analysts on September 29th to discuss our pipeline and new programs planned. It was significantly expanded this year with the acquisition of the Yellow Bio in March. Looking at second quarter results, Tepeza's second quarter net sales were $453 million, with impressive year-over-year growth of 173%. The strong performance of the Tepeza relaunch was the result of excellent execution by the Tepeza team to resume treating patients impacted by the government-mandated first quarter supply disruption. We converted new patients added during the disruption and drove new patient enrollment forms successfully. The strong relaunch demonstrated the continued ability of our commercial team to execute. We were able to rapidly restart existing patients on therapy once we resumed Supply of Tepeza. As we discussed last quarter, two groups of patients were involved. First, patients who were on therapy when the supply disruption began or disrupted patients. And second, new patients enrolled during or prior to the disruption who had to wait until after supply resumed in April to start taking Tepeza. The second group of patients added based on our continued promotional efforts during the fourth and first quarters of this year. As expected, the vast majority of disrupted patients resumed therapy in the second quarter. New patients with PEPs generated prior to or during the disruption also started to PESA very rapidly. The rapid access to therapy for both these new patients and the disrupted patients was driven by the execution of our field-based teams, who continue to remain in constant communications with physicians, patients' insight of care throughout the first quarter. We're very pleased to see the strong growth of PEPs during the disruption, a trend that continued post-relaunch. We attribute this continued strong growth in the patient demand due to the fact that our new and existing prescriber base continues to increase. We're also seeing increased conviction from these prescribers, with two-thirds of them running more PEPs in the first half of 2021 than in the second half of 2020. Finally, given the rapid relaunch, we have accelerated and significantly increased our investment in direct-to-consumer marketing initiatives with very positive results, notably from our branded and unbranded television campaigns, which have been increasing awareness about TED and TPEZA. Our goal for these national campaigns is to increase awareness of TPEZA and accelerate the speed to diagnosis and treatment. We are enthusiastic about the prospects for TPEZA to help more patients address the serious, debilitating, and sight-threatening aspects of TED. Given the second quarter's better-than-expected results and continued strong new patient growth, we increased our full-year TPEZA net sales guidance to more than $1.55 billion, which is near a doubling of net sales in our second year of launch. As we discussed last quarter, our guidance continues to assume that the third quarter is the highest net sales quarter in 2021. This is a function of disrupted patients completing treatment, patients with PEPs generated in the fourth and first quarter starting treatment after the April resupply, and new patients starting treatment in the third quarter. The outperformance of the relaunch positions us for strong year-over-year growth of more than 50% in the fourth quarter this year. driven by continued strong PEP generation after the April relaunch. Tepes is one of the most successful rare disease medicine launches ever. There's still tremendous upside opportunity, and we're focused on driving greater penetration, both in the acute patient population as well as the untapped chronic opportunity. We remain well on track for our peak global net sales estimate of more than $3.5 billion. With Cristexa, we delivered outstanding results for the quarter, generating record net sales of $130 million, with year-over-year growth of 73%. A key driver of this quarter's strong growth was the increasing adoption of Cristexa plus immunomodulation, the core part of our strategy to maximize the value of Cristexa and enable more patients with uncontrolled GEM to benefit from the medicine. Use of Cristexa plus immunomodulation for new patients is now at more than 40%. which we attribute to the greater clinical conviction of physicians who use Cristexa plus immunomodulation. We look forward to the results of the mere randomized controlled trial in the fourth quarter of this year, which is evaluating Cristexa plus methotrexate versus Cristexa alone. A strong execution is driving growth in Cristexa prescribing physicians, both rheumatologists and nephrologists. For nephrology in particular, we created a dedicated nephrology sales team early this year, and they have already driven more prescribing nephrologists in the first half of this year versus all of 2020. In addition, our messaging on the safety and efficacy of Cristexa is resonating with nephrologists, which has been reinforced by the positive interim results from our PROTECT trial for kidney transplant patients who have uncontrolled gout. We're encouraged by what we're seeing in nephrology with significant upside opportunity ahead. As a result of our execution, Christexa PAFs and new patient starts both increased by strong double digits in the second quarter, which sets us up well for the second half of the year. With Aplizna, our humanized monoclonal antibody B-cell depleter, we generated second quarter net sales of $14.5 million. Pleasant is indicated for the treatment of NMOSD, a severe, rare, relapsing, neuroinflammatory autoimmune disease that attacks the optic nerve, spinal cord, and the brainstem. The timing of approval at almost the height of the pandemic last year proved to be very challenging for Veal Abio. We are planning on executing a relaunch of the medicine over the second half of this year, leveraging the patient-centric approach we used for both Tepeza and Cristexa. Commercially, we're focused on rebuilding and expanding the sales team and establishing a robust commercial structure to support the complex aspects of the Polizna patient journey. We made good progress on this in the second quarter and expect to complete the commercial expansion by the end of the third quarter. We're also leveraging support services we built for TPEZA. For example, as with TED specialists, many NMOSD specialists do not have infusion capabilities We are leveraging our extensive TPEZA site of care network to support patient referral to infusion centers, which was a gap in the initial Implizna launch. On the clinical side, we're investing in medical and scientific engagement to develop our scientific leadership position in NMOSD. This includes conducting further analysis of the Implizna clinical programs to expand understanding by the prescribing community of its differentiation as well as continuing to build a base of compelling real-world evidence supporting the use of APLISNA. In addition to presenting new data at several key medical meetings, which Liz will touch on, we've been actively reaching out to key NMOSD opinion leaders who welcomed our entry into the market and expressed enthusiasm for the differentiated approach APLISNA offers in treating NMOSD. It takes time to establish infrastructure and educate stakeholders about a new medicine. In fact, we began our market preparation for Tepesim more than six months before we launched it. With a pleasant, we're off to a good start and expect to see the benefits of our new commercial organization and investments as we exit the year. I'll now turn the call over to Liz.