Impel Pharmaceuticals Inc.

Good morning, ladies and gentlemen, and welcome to MPEL Pharmaceuticals' fourth quarter and full year 2022 earnings and business update conference call. At this time, all participants are in a listen-only mode. Later in the call, a question-and-answer session will be conducted, and instructions on how to participate will be given at that time. As a reminder, today's conference is being recorded. I would now like to turn the conference over to MPEL's Chairman and Chief Executive Officer, Mr. Adrian Adams. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. We are delighted that you could join us today for Impel Pharmaceuticals' earnings conference call to review our fourth quarter and full year 2022 commercial and financial results, as well as to provide a general business update. Joining me from Impel this morning is Len Perlilo, our Chief Commercial Officer, and Rajiv Amin, our Controller and Interim Chief Financial Officer. Before we begin, I would like to remind everyone that we have a slide presentation to accompany our conference call this morning, which can be viewed at our website at www.impelfarmer.com. If you are listening to this call on your telephone, you may access a synchronized slide deck on our website by choosing the link on our webcast page that says, click here to listen. I would also like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. During the call this morning, I will provide an overview of the commercial performance of Dredesa in 2022, our first full year of commercialization, in addition to covering some early positive performance indicators in 2023. I will then briefly review the financial results for the fourth quarter and the full year 2022 before summarizing and highlighting Impel's core priorities for 2023. With this said, let's now turn to slide number four to begin our commercial performance review with Tradesa. On the left-hand side of this slide, you will note the sustained growth in prescriptions throughout 2022. with almost 20,000 normalized prescriptions written in quarter four alone. This represents a 52% increase versus the second quarter, or last quarter before we expanded our sales force from 60 to 90 sales professionals. This was also a 19% increase versus quarter three. Moving to the right-hand side of this slide, this consistent quarter over quarter growth delivered over 58,000 normalized prescriptions in 2022. Very pleasing, since this was the first full year of commercialization with Tradesa. Turning now to our next slide, slide number five. As I've mentioned in previous calls, given our targeted and disciplined approach to commercialization, we believe the most appropriate way of measuring our success over time is by market share evolution within our targeted group of physicians. We are delighted, therefore, to see continued market share evolution already reaching 4.3% share among prescribers of Tredesa in the fourth quarter of 2022, just five quarters into the launch. Driving depth of prescribing amongst our high-value prescribers, a larger proportion of whom are neurologists, is a critical success factor for continued growth in 2023. According to a report from Spheric Research, neurologists predict a 12% peak share for Trudessa, reinforcing the positive experience of both physicians and patients, and of course, the value creation opportunity. Please now refer to our next slide, slide number six, where we will take a closer look at the important leading indicators of Trudessa growth and early progress in this the first quarter of 2023. The increase in new patient starts illustrated on this slide reinforces the impact of our expanded sales force as growth accelerated in the third and fourth quarters with 23% and 24% growth respectively versus the previous quarter. You'll also note that our quarter one 2023 new patient starts are on pace to surpass our quarter four number and continue the robust growth we have seen post expansion of our sales force. As expected, quarter one normalized total prescriptions are slightly down from quarter four as deductible and prior authorization resets slow down refills. Additionally, we have taken steps to tighten off green goods program, leading to predicted pressure on non-reimbursed refills. However, as you will see on the next slide, these changes are having the desired effect on the business. With this in mind, please refer to our next slide, slide number seven. You remember that we secured key pharmacy benefit managers and payer contracts quickly after launch in 2021, securing 80% of commercial lives on the contract in the first quarter of launch. This enabled consistent improvements in the percent of prescriptions reimbursed over the course of 2022, peaking at 60% in quarter four. Now, in 2023, with established pair policies, we're taking steps to tighten the business rules associated with our free goods program and have seen the percent of prescriptions reimbursed jump from 60% in quarter four to 71% and 73% in January and February, respectively. Importantly, our refill rates in every quarter since launch have remained consistent and solid in the low 60% range. the increasing reimbursement and high refill rates provide a solid foundation for meaningful revenue growth in 2023. Turning now to our final commercial slide, slide number eight, we continue to monitor the favorable market dynamics and source of business for Tradesa. Symphony data continues to show that a very high percentage of patients, around 60% on GPATs, specifically Nertec and Ubrelvi, drop off or switch away from these products at some point in therapy. Given the tolerability of these products, it is our contention that the primary reason for this continued churn over with GPANS is that prescribers and indeed patients are not finding the rapid, sustained, and consistent efficacy they're looking for in acute migraine treatments. This churn over in the market opens up a large pool of eligible patients and more specifically, a significant ongoing opportunity for Tredesa. The source of business for Tredesa remains diverse, with approximately half of new Tredesa patients coming from a triptan and a half from a GPAN. We also know that Tredesa is most often added to existing therapy as an efficacious, reliable, and non-oral option. We are pleased with all these market dynamics and the momentum we are seeing with Tradesa in 2023 already. I would now like to provide a brief overview of our financial results for the fourth quarter and full year 2022. Please refer to our next slide, slide number nine. The net product revenue for the fourth quarter of 2022 was $5 million versus $0.6 million for the same period in 2021. For the year ending December 31, 2022 and 2021, Trudesa reported net product revenues of $12.7 million and $.7 million, respectively. As mentioned on past calls, initial shipments of Trudesa to specialty pharmacies began in September of 2021, ahead of the October 21 commercial launch. Research and development expenses for the fourth quarter of 2022 were $0.7 million versus $4.5 million for the same period of 2021. For the years ended December 31st, 2022 and 2021, research and development expenses were $11.5 million and $20.6 million, respectively. The decrease in research and development expenses during 2022 is primarily due to reduction in Tradesa clinical expenses as the Phase III STOP301 study was closed in 2021, and due to a return of the $2.9 million new drug application fee from the FDA received in Q4 2022 related to Tradesa. These decreases were partially offset by an increase in spending for the clinical development of IMP105. Selling general and administrative expenses for the fourth quarter of 2022 were $20.3 million, which compares with $19.9 million the same period in 2021. For the years ended December 31st, 2022 and 2021, SGN expenses were $77.9 billion and $50.9 million, respectively. The increase in SGN expenses during 2022 is primarily due to the ramp-up in spending to support the commercialization activities with Tradesa. For the fourth quarter of 2022, Impel reported a net loss of $23 million, or $0.97 per common share, compared to a net loss of $24.7 million, or $1.07 per common share, for the same period in 2021. The year ending December 31, 2022, Impel reported a net loss of $106.3 million, or $4.53 per share, compared to a net loss of $76.7 million, or $5.25 per common share, for the same period in 2021. And finally, as of December 31, 2022, the company had cash and cash equivalents of $60.7 million. With that, I would like to close with our final slide, slide number 10, which provides a summary of Tradesa's performance in 2022, in addition to outlining our business priorities in 2023. We are pleased with the overall performance of Tradesa in what was its first full year of commercialization. The overall revenue and prescription performance together with continued momentum across all lead indicators, provide a solid foundation for growth in 2023. With regard to Impel's core priorities in 2023, the focus is on accelerating prescription and share gain amongst our target positions, evolving net price and resulting positive impact on revenue growth, Securing additional financing in a disciplined way. And finally, aggressive and opportunistic business development. And finally, I would like to share our prescription guidance for Tredesa for 2023. We anticipate delivering prescriptions in the range of 80 to 110,000, the midpoint of which would represent a 64% growth for the 2022. Thank you, and we will now open the line up to your value questions. Operator, can you please give the instructions?

Thank you, Mr. Adams. As a reminder, to ask a question, you'll need to press star 11 on your telephone. To withdraw your question, please press star 11 again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. Moment for our first question. Our first question comes from the line of Stacy Ku with CalWIN. Your line is now open.