Horizon Therapeutics Public Limited Company

Today's conference is scheduled to begin shortly. Please continue to stand by and thank you for your patience. THE END Thank you. Good day and thank you for standing by. Welcome to Horizon Therapeutics' first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After this week's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Tina Ventura, Senior Vice President, Chief Investor Relations Officer. Please go ahead.

Thank you, Norma. Good morning, everyone, and thank you for joining us. On the call with me today are Tim Walbert, Chairman, President, and Chief Executive Officer, Liz Thompson, Executive Vice President, Research and Development, Paul Holscher, Executive Vice President, Chief Financial Officer, Andy Pasternak, Executive Vice President, Chief Strategy Officer, and Erin Cox, Executive Vice President, Finance. As a reminder, Erin will be transitioning to the role of CFO on May 16th. Tim will provide a review of the business, including our first quarter performance. Liz will then review 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. 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. 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 had a strong start to the year with first quarter net sales of $885 million and first quarter adjusted EBITDA of $371 million. We also reiterated our full year 2022 guidance this morning and are well-positioned for another year of top-tier growth. In addition to strong financial and operational performance, we made meaningful progress on our strategic priorities. We continue to advance our pipeline, initiating two of the seven clinical trials expected to start this year. We also advanced our DASA DALABAP clinical programs, announcing positive top-line results for our Phase II trial in rheumatoid arthritis, and completing enrollment in our phase two trial in Sjogren's syndrome. The positive readout from our RA study serves as an important proof of concept validating the DASA-DALABET mechanism of action, as well as providing further validation of our acquisition of the yellow last year. We look forward to the readout of the phase two trial in Sjogren's syndrome next year. With Cristexa, we're pleased to be granted FDA priority review of our supplemental biologics license application for Cristexa plus methotrexate. This marks an important milestone in establishing Cristexa plus immunomodulation as a standard of care. We're also making progress in our global expansion strategy. We recently received approval for a in Europe for NMOSD, and we're initiating its European launch starting with Germany. We also initiated the build out of our infrastructure in Brazil, to support the potential launches of Aplizna and Tepeza. As we continue to advance our strategy to drive rapid growth over the coming years, we announced today that we have hired Jacopo Leonardi as President, Global Commercial Operations, reporting to me. Jac is an accomplished life science executive with more than two decades of commercial experience, including driving growth of high performing businesses in rare diseases and immunology. YACC will oversee the U.S. and international commercial organizations, commercial development, and global medical affairs. Finally, we continue to receive recognition as the best workplace, including ranking in Fortune's 100 Best Companies to Work For for the second consecutive year and retaining the highest ranked position in the biotechnology pharmaceutical category. This recognition underscores the strong engagement of our employees, which is very important in our highly competitive industry. Before I move on to our results in the quarter, I want to thank Paul Holscher for his contributions that he's made to Horizon during his time here. As many of you know, Paul is retiring this month. He has been a tremendous partner over his nearly eight years with us, and I'm grateful for his leadership and dedication to Horizon, as well as his financial stewardship that has contributed significantly to our success and transformation during that time. We're pleased that Paul will be staying on an advisory role through May of next year to ensure a smooth transition. As announced previously, Aaron Cox will assume the CFO role on May 16th. Moving on to our growth drivers. Tepeza first quarter net sales of $501 million were in line with our expectations. As we mentioned last quarter, the Omnicon variant had an impact on our business beginning at the end of last year, as did typical seasonality. Despite that, we generated strong performance in the quarter. As we discussed last quarter, we continue to drive the next stage of our commercial strategy. This includes more deeply penetrating our high-priority TED physician targets. Additionally, we are broadening our reach to general ophthalmologists and endocrinologists in order to further educate them on thyroid eye disease and accelerate the referral of their patients to TED treaters. As part of our plan, we're increasing our field force to accelerate referrals to existing treaters and expand the number of physicians prescribing Tepeza, as well as continuing our significant investment in direct-to-consumer and other key digital activities. We expect these activities to accelerate growth as we move further throughout the year. Reaffirming our confidence in achieving our strong growth expectations for Tepeza this year, despite Omnicon-replated impacts, persisting into the second quarter. The TED market has evolved considerably in the last two years since the approval of TPEZA, which has proved to be a paradigm-shifting medicine. As the TED market leader, we have continued to do a significant amount of work to further inform our understanding of the market. This includes additional market analysis, payer claims analysis, physician and patient market segmentation, and commercial strategy work. which all support the growth of TPEZA over the long term. Initial readouts from this have been very insightful and positive. First, we have continued to validate the size of the U.S. TED market and believe it is at least as large as what we have communicated in the past, if not larger. This gives us even greater confidence in the long-term potential for TPEZA and our global peak annual net sales expectation of more than $3.5 billion globally. Second, it is providing us with important information about the patient journey, and therefore how we can further drive execution over the short and long term. We are finding that patient symptoms, such as diplopia and pain, regardless of the time from diagnosis, are what drive them to seek treatment and drive physicians to prescribe Tepeza. In contrary to earlier views suggesting the majority of TED patients experience less severe symptoms over time, we now know that there's a significant cohort of patients who experience high inflammation and high proptosis more than two years after diagnosis. In fact, most of the chronic patients being treated with Tepeza today have high levels of inflammation along with their proptosis. When you launch a transformative medicine into a market that has never had an adequate treatment, the treatment of the disease is continually being redefined. We see symptoms versus time from diagnosis as the key driver of patient uptake. As you've seen in our DTC commercials and other digital activities, we're expanding our messaging to cover a broader set of signs and symptoms beyond proptosis. Symptoms such as diplopia, eye mobility, eyelid retraction, orbital pain, and swelling around the eye. We see significant potential to access many more patients with thyroid eye disease who are appropriate for Topeza. For Cristexa, first quarter net sales were $141 million, representing year-over-year growth of 32%. We generated strong performance despite the impact of the Omicron variant. This was driven by continued adoption in both rheumatology and nephrology market segments, as well as uptake of Cristexa plus immunomodulation which is now running at approximately 50% of new patients. This is up from 35% just a year ago, and remarkable considering the MIRA data is not currently available for promotion by our commercial organization. We expect the rate of immunomodulation use to continue to increase over time. We're preparing for the July 7th PDUFA Action Day to modify the Cristexa label with the results of the MIRA trial. which demonstrated 71% of patients who received Cristexa plus methotrexate achieved a complete response, more than 30 percentage point improvement compared to placebo patients who received Cristexa alone. With an expanded label, our commercial team would, for the first time, be able to actively promote the benefits to physicians. We expect this to drive higher clinical conviction, broadening our reach to more physicians and deepening our penetration among current treating physicians. This will help to address the significant ongoing unmet need for more than 100,000 patients living with the debilitating effects of uncontrolled count. The team is preparing for the potential approval and will be ready to launch a new promotional campaign in early July. Additionally, our clinical team continues to work on MIRA data dissemination at medical meetings and throughout key publications. We'll be conducting peer-to-peer education programs to continue to build a broader understanding of the MIRA clinical data. We're also very pleased that the MIRA trial was accepted as an oral presentation at the upcoming European Rheumatology Medical Conference, or ULAR, in June. We've been significantly investing in Cristexa to change its perception since we acquired it in 2016. Rarely, if ever, has a company been able to completely transform the profile of a 12-year-old medicine as we have with Cristexa. And we're now incredibly proud to be at this next step in its transformation to bring the medicine to so many more patients, which gives us increased confidence in our peak annual net sales expectation of more than $1 billion. Moving on to APLISNA, which we began the relaunch in the fourth quarter of last year. We delivered another strong quarter, generating first quarter net sales of $31 million. Approximately $5 million is international revenue from our international partners. We continue to make good progress with our relaunch, expanding the prescriber base and driving new patient starts. In the first quarter, more than half of the patient enrollment forms are generated by new prescribers, building a foundation for long-term growth. While the majority of new patients are switching from other therapies, which is in line with our commercial strategy, we're also seeing a good portion of new patients that are naive to therapy. This speaks to the confidence physicians have in UPLISA as a next-generation B-cell depleting therapy. We continue to see faster and higher patient pull-through, driven by the strong support provided by our patient services, reimbursement, and site-of-care teams. which is a critical component of the APLISNA relaunch. On the clinical side, we continue to invest in medical and scientific engagement to drive patient and physician preference for APLISNA based on its strong clinical data, its differentiated mechanism of action, and clear patient benefits. We significantly expanded peer-to-peer speaker programs with more programs held in the first quarter than all of last year. In addition, we presented new data at several key medical meetings, continuing to build on its long-term safety and efficacy data. As part of our global expansion strategy, we will be launching APLISNA in Europe, starting with Germany, following the recent European Commission approval. We are increasingly confident in the prospects for APLISNA in animalicity, as well as in other indications we are pursuing, for the medicine and are progressing towards our peak global annual net sales expectation of more than $1 billion across all indications. I will now turn the call over to Liz.