Impel Pharmaceuticals Inc.

Good morning, ladies and gentlemen, and welcome to Impel Pharmaceuticals' first quarter 2023 Earnings and Business Update conference call. At this time, all participants are on a listen-only mode. Later in this 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 call is being recorded. Now I'd like to turn the conference over to Impel's Chairman and Chief Executive Officer, Mr. Adrian Adams. Mr. Adams, please go ahead.

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 first quarter 2023 commercial and financial results, as well as to provide a general business update, in addition to highlighting the key priorities for Impel for the remainder of 2023. Joining from Impel this morning is Lempel Elul, our Chief Commercial Officer, Rajiv Amin, our Corporate Controller, and our new Chief Financial Officer, Michael Cald. Michael brings to Infel an outstanding track record of executive leadership in finance, capital raising, business development, and operations management, and we are thrilled to have someone of his caliber and experience join our leadership team at this critical phase of our evolution. 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 on 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. Now I would like to turn to slide number four, where I will summarize our first quarter and year-to-date performance with Tradesa. Firstly, I would like to remind everyone of the tremendous opportunity that exists within this large migraine market. This is a market growing 10% year-over-year and becoming increasingly branded, with most of that growth coming from newer non-tryptan options. Within this market, we have adopted a highly targeted commercialization strategy with a current Salesforce focus on 11,000 target positions made up of predominantly neurologists, headache specialists, and high prescribing primary care physicians. Together, this target group generates 73% of all branded prescriptions. Our journey with Tradesa continues to make consistent progress, and we are pleased to announce first quarter 2023 revenue of $4.4 million, driven by a strong in-market demand of over 18,000 normalized prescriptions, over 70% of which were reimbursed. Importantly, our key leading indicator of new patient starts were up by 18% versus the fourth quarter of 2022. This momentum added to our stable prescription size of six pulse per prescription, a solid and high refill rate in the low 60% range, and an expanding prescriber base. These achievements to date form a solid foundation for continued growth as we move through 2023. With this said, let us now turn to slide number five to begin our commercial performance review with Trudessa in more detail. As mentioned, on the left-hand side of this slide, we're delighted to show continued robust growth in new patient starts, reaching over 3,600 in the first quarter, an 18% increase versus the fourth quarter of 2022. Now, looking at the right-hand side of the slide, you'll note that the momentum shifts at two distinct time periods. The first is late in the third quarter of 2022, as our field force expansion began to take hold. And the second is the post-holiday period, or more specifically, in March and April of 2023. It is this latest surge in new patients to provide us with additional competence introduces momentum as we move through the second quarter of this year. Turning now to our next slide, slide number six. On the left-hand side of this slide, you will note the consistent quarter-over-quarter growth we saw throughout 2022. To date, we have generated just over 25,000 prescriptions, more than 100% increase versus the same time last year, and at a significantly higher net price. In the first quarter of 2023, we did see a small pullback in normalized TRXs, however, This was not surprising, given normal first quarter dynamics seen with all products, like deductible resets and reauthorizations. Moreover, we added to this unit pressure by proactively making targeted adjustments to our quick start free goods program. These adjustments, while producing a higher net price per prescription, did have an impact on volume. Please now refer to our next slide, slide number seven. As 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. Therefore, we are delighted to see continued market share evolution already reaching 4.7% share among prescribers of Tredesa in the first quarter of 2023. just 18 months into the launch of Tradesa. Driving depth of prescribing among our high-value prescribers, a larger proportion of whom are neurologists, is a critical success factor for continued growth in 2023. You will note the significant share gains amongst our top prescribers, who now have Tradesa accounting for 7.6% of their acute branded prescriptions, a clear sign that with continued investment and focus, we believe that Tredesa can achieve the 12% share predicted by neurologists in independent surveys. Please refer to our next slide, slide number eight. You remember that we secured key PBM and payer contracts quickly after launch in 2021, securing 80% of commercial lives under contract in just the first quarter of launch. This enabled consistent improvement in the percent of prescriptions reimbursed over the course of 2022, peaking at 60% in the fourth quarter. Now, in 2023, with established payer 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 the fourth quarter of 2022 to 72% in the first quarter of 2023, with continued momentum and improvement to 75% in April. Importantly, our refill rates have remained consistent and solid in the low 60% range. This increasing reimbursement together with high refill rates provide a solid foundation for meaningful revenue growth in 2023. Turning now to slide number nine. We continue to monitor the favorable market dynamics and source of business for Trudesa. Symphony data continues to show that a very high percentage of patients, around 60% on G-pounds, specifically Nertec and Uralbin, 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 turnover with GPAMs is that prescribers and IV patients are not finding the rapid, sustained, and consistent efficacy they are looking for in their acute migraine treatments. This turnover in the market opens a large pool of eligible patients, and more specifically, a significant ongoing opportunity for Tredesa. The source of current business for Tredesa remains diverse, with approximately half of new Tredesa patients switching from a triptan and a half from a GPAP. We also note that Tredesa is most often added to existing therapy as an efficacious, reliable, and non-oral option. Turning now to our final slide in this commercial section, slide number 10. It is against the backdrop of this growing branded market where so many patients still seek efficacy that we are launching our new targeted DTC campaign, Count On It. The campaign highlights the common challenge patients face when taking oral medications. Efficacy is often dependent on taking pills early. But unfortunately, life does not always allow that. We demonstrate in our phase three, stop 301 trial, Trudessa's ability to deliver efficacy even when taken late into an attack. And for the past 18 months, we have heard patients relate the tremendous impact it has on their lives. We're excited to bring these authentic experiences directly to patients via key social media platforms and influencers, raising awareness of what good versus great looks like in the treatment of migraine. 2023 is off to a strong start, and I'd like to take this opportunity to thank all our talented patient-focused and dedicated team members across all the Impel functions for their continued professional and successful contributions. I'd now like to provide a brief overview of our financial results for the first quarter of 2023. Please refer to our next slide, slide number 11. The net product revenue for the first quarter of 2023 was $4.4 million versus $1.8 million for the same period in 2022. This increase is due to higher Trudessa sales volume and improvements in net price realization. Research and development expenses for the first quarter of 2023 were $3 million versus $3.7 million for the same period of 2022. The decrease is primarily due to decreased personnel costs and program costs as we redirected our resources from R&D activities and pivoted our focus to supporting all commercial operations rather than research and development in the first quarter of 2023. Selling general and administrative expenses for the first quarter of 2023 were $22 million, which compares with $19.8 million for the same period of 2022. The increase in SG&A expenses during 2023 is primarily due the ramp up in spending to support Tradesa commercialization activities. For the first quarter of 2023, Impel reported a net loss of $30.1 million or $1.27 per common share compared to a net loss of $27 million or $1.17 per common share in the same period in 2022. And finally, as of March 31st, 2023, the company had cash and cash equivalents of $35.5 million. Related to this, we have ongoing discussions regarding additional capital and are optimistic of showing progress in the near term. With that, I would like to close with our final slide, slide number 12, which provides a summary of the traditional performance in the first quarter and year-to-date 2023, in addition to outlining our ongoing priorities for the remainder of 2023. After a solid first full year of commercialization for Tradesa in 2022, we remain pleased with the continued performance of Tradesa in the first quarter of 2023, and in particular, with the strong growth in new patients, and importantly, net price evolution. These lead indicator growth catalysts are providing excellent momentum as we journey through this, the second quarter of 2023. Regarding Impel's ongoing priorities in 2023, our execution focus remains on the following key buckets of potential value growth. Accelerating prescription and share gains with Tradesa among our target positions. Continued evolution of the Tradesa net price and the resultant positive impact on net revenue growth. Securing additional financing to fuel our ongoing commercialization activities. And as previously mentioned, we do have ongoing discussions regarding additional capital and are optimistic of sharing progress in the near term and continued interest in aggressive and opportunistic business development. And then finally, based on the performance and momentum to date, I would like to reaffirm our prescription guidance for Tudesa for 2023. We continue to anticipate delivering prescriptions in the range of 80,000 to 110,000 the midpoints of which would represent a 64% growth over 2022. Thank you, and we will now open the line up to your value question. Operator, can you please give the instructions?

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