Horizon Therapeutics Public Limited Company

Good morning and thank you for standing by. Welcome to the Horizon Therapeutics Third 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. Please go ahead.

Thank you, Anthony. 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 third quarter performance. Liz will then provide a review of our R&D program, 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 will 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. We delivered strong results again this quarter across our business and continued to generate record performance for our key growth drivers, Tepeza and Cristexa. The Tepeza relaunch continued to outperform our expectations, driven by rapid patient starts, strong new patient demand, and increasing prescriber base. As a result, we are increasing our full year 2021 to PESA net sales guidance to more than $1.625 billion. Cristexa generated another strong quarter with new patient growth across rheumatology and nephrology, as well as continued acceleration in the use of Cristexa plus immunomodulation, which is now more than 45% of new patient starts. We are raising our full-year 2021 Cristex and net sales guidance to more than $550 million. We also generated strong growth from both Revicti and Persisbee. In total, our net sales increased 63% year-over-year and adjusted EBITDA increased 54% year-over-year, underscoring our position as one of the fastest-growing biotech companies. Given our outperformance, we are increasing our full-year net sales guidance to $3.16 to $3.21 billion, and adjusted EBITDA guidance to $1.315 to $1.345 billion. The midpoints represent 45% and 33% year-over-year growth, respectively. Our strong performance was accompanied by several key achievements. We initiated our TPEZA randomized clinical trial and chronic thyroid eye disease patients in September. We announced results from our Cristexa mirror randomized clinical trial that demonstrated that Cristexa plus the immunomodulator methotrexate results in a complete response rate of 71% at month six, a more than 30 percentage point improvement compared to Cristexa plus placebo. In line with our strategy to expand our pipeline for future growth, We announced five new R&D programs during an inaugural R&D day in September. We presented new aplism data at multiple medical meetings, adding to the compelling evidence supporting the use of aplism in neuromyelitis optica spectrum disorder, or NMOSD. We acquired a new biologic drug product manufacturing facility in Waterford, Ireland, to support the continued growth of Topeza, Cristex, and aplism as well as our development stage biologics. From a talent and workplace perspective, we demonstrated gender and ethnicity pay equity for the second consecutive time based on a pay equity study conducted by Aon, a leading compensation consulting firm. We continue to be recognized as the best workplace, receiving 11 workplace recognitions this year, including being the highest-ranked company in the biotechnology and pharmaceutical category on Newsweek's inaugural Most Loved Workplace list, which recognizes employee happiness and satisfaction at work. Before I move on to our third quarter performance, I also wanted to highlight the announcement we made this morning regarding the retirement of our CFO, Paul Holscher. Paul's planning to retire in May of 2022 and will stay on an advisory role through May of 2023 to ensure a smooth transition. Aaron Cox, who has been named EVP Finance and has been my Chief of Staff and Head of Corporate Development for the last four years, will be taking on the CFO role. Paul has been a tremendous partner to me over the last seven years, and I'm very grateful for his leadership and dedication to Horizon. I'm equally pleased to name Aaron to the role of CFO. Aaron has a deep knowledge of the business. He's been a leader in many of our major strategic efforts. He's led our capital market activities and has a strong financial background. I'm confident that Aaron, along with our experienced financial leadership team, will continue to drive our long-term strategy at Horizon. Moving on to our third quarter results, beginning with Tepeza. Third quarter Tepeza net sales were $616 million, with year-over-year growth of 115%. With the year-to-date Tepeza net sales of $1.72 billion, Tepeza became our first medicine to generate a billion dollars in annual net sales. We continued our strong execution on the relaunch that followed the government-mandated first quarter supply disruption. Since then, we have helped patients whose treatment was disrupted resume their treatment. We've successfully converted new patients added during the disruption, and we continue to see strong new patient demand for Tepeza. We attribute this strong growth to the fact that we have continued to add new prescribers and further penetrate our existing prescriber base, deepening the penetration among ophthalmology subspecialists prescribing to PESA, such as oculoplastic surgeons, neuro-ophthalmic surgeons, and strabismus specialists. We also continue to expand our reach to ophthalmologists and endocrinologists referred to a TED specialist upon diagnosis. We also continue to significantly invest in direct-to-consumer marketing initiatives, including our branded and unbranded television campaigns, which have been effectively increasing awareness about TPEZA and TED. Our goal for these national campaigns is to increase awareness of TPEZA and accelerate the speed to diagnosis and treatment of TED. We're also starting to proactively engage physicians on the use of TPEZA in chronic patients. As we noted last quarter, we now have six publications studying the successful experience with TPEZA treatment for a total of more than 50 chronic TED patients, surpassing the number of TPEZA acute patients studied in the Phase III clinical trial. The commercial team is leveraging these new publications to educate physicians about the efficacy of TPEZA in chronic patients, with the goal to expand the use of TPEZA beyond the acute patient population. We remain very enthusiastic about the prospects for Tepesa to help more patients address the serious, debilitating, and sight-threatening aspects of TED. Given third quarter's better-than-expected results and continued strong new patient demand, we increased our full-year Tepesa net sales guidance to more than $1.625 billion, which is a near doubling of net sales in our second year of launch, despite the supply disruption and other limitations from COVID-19. Our guidance continues to assume that the third quarter is the highest net sales quarter for TPEZA in 2021. This is a function of three factors. First, disruptive patients who resumed treatment beginning the second quarter. Second, patients with patient enrollment forms, or PEPs, that were generated in the fourth quarter of 2020 and the first quarter of 2021 who started treatment after supply resumed in April. And third, new patients who started treatment in the second and third quarters. Our increased full-year guidance positions us for year-over-year growth of more than 60% in the fourth quarter. We estimate that the vast majority of fourth quarter growth will be driven by PEPS generated after reinitiation of supply in April. We continue to see significant opportunity ahead for TPEZA, both in the acute patient population as well as in the untapped chronic population. We remain well on track for a Topesa peak global net sales estimate of more than $3.5 billion. Cristexa delivered another quarter of strong performance, generating net sales of $158 million. As a result, we have increased our 2021 net sales guidance to more than $550 million, representing year-over-year growth of more than 35%. We're very pleased to announce top-line data from our MIRROR randomized controlled trial last week, demonstrating that 71% of patients randomized to receive Crostexa plus methotrexate achieved a complete response compared to 40% response rate for patients randomized to receive Crostexa plus placebo. Our clinical team is working to complete the analysis of the results to submit a supplemental biologics license application, or SBLA, in the first quarter of next year. We anticipate a standard 10-month review. An approval would allow our commercial team to proactively promote Cristexa plus methotrexate to physicians. In the meantime, our medical affairs and clinical teams are working to present the mirror trial results and additional analyses from the trial at medical congresses next year. We'll be engaging with key opinion leaders on the data as well. The mirror results are a culmination of significant investment we have made in immunomodulation for the last several years based on our long-held belief in its potential to increase the complete response rate of Cristexa, which Mira has now substantiated. Immunomodulation is a core element of our strategy to maximize the value of Cristexa, because it allows more patients with uncontrolled gout to benefit from the medicine, the only biologic approved for treatment of this debilitating disease. We've been seeing increased adoption of the approach and estimate that Cristexa plus immunomodulation is now being used for more than 45% of new patients. The Crostexa team is continuing to drive strong PEF growth and adoption by both rheumatologists and nephrologists. We're seeing results in the growth of our prescriber base. By October, more rheumatologists have prescribed Crostexa this year compared to the total number of prescribers in all of 2020. In nephrology, we significantly grew our prescriber base compared to 2020, to date exceeding the total of full-year 2020 prescribers by 30%. With Aplizna, our humanized monoclonal antibody B-cell depleter, we generated strong third-to-quarter net sales of $18.7 million. Given the timing of Aplizna approval last year at almost the height of the pandemic, we're executing a full relaunch of the medicine, leveraging the patient-centric approach we use for both Tepeza and for Crostexa, We made significant progress on that front. We completed the expansion of our commercial team in the third quarter. Our new team with deep neuroimmunology experience, relationships, and market knowledge is now fully onboarded and started meeting with key physician targets early in the fourth quarter. In less than six months, we developed and launched a new brand campaign based on key opinion leader feedback and market research. Our goal here is to drive awareness about APLISA and NMOSD reduce the time to diagnosis, and highlight the urgent need for treatment. We have put a robust commercial structure in place designed to support the complex aspects of the APLISNA patient journey. We've also bolstered our site of care and reimbursement support, and we have been receiving positive feedback from both physicians and sites of care. A critical part of our strategy is to drive physician and patient preference for APLISNA based on its differentiated mechanism of action, strong clinical data, and clear patient benefits, which we're doing through our investment in medical and scientific engagement to develop our scientific leadership position at NMUSD, which Liz will discuss in more detail shortly. It takes time to effectively launch and infuse rare disease medicine and educate stakeholders about the new medicine. We're off to a good start with the plism and expect to see the benefits of our new commercial organization and investments as we head into the new year. I'll now turn the call over to Liz.