KemPharm, Inc.

Good day, and thank you for standing by. Welcome to the Kemp Farm second quarter 2021 results conference call. At this time, all participants are in a listen-only mode. If you require any further assistance, please press star zero. And I'd like to hand the conference over to your speaker today, Jason Rando, with Timberland Strategic Advisors. Please go ahead.

Good afternoon, and thank you for joining our call today to discuss Kemp Farm's second quarter 2021 financial and corporate results. Before we begin, I would like to remind our listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties and are subject to changes at any time, including, but not limited to, statements about ChemPharm's expectations regarding future operating results. Forward-looking statements are made pursuant to the safe harbor provisions of the federal securities laws and represent management's current expectations. Actual results may differ materially. ChemPharm disclaims any obligation to update or revise its forward-looking statements, except as required by law. More complete information regarding forward-looking statements, risks, and uncertainties can be found in ChemPharm's filings with the SEC, which are available on ChemPharm's website under the investor relations section. Speaking on today's call will be Travis Mikkel, ChemPharm's president and CEO, and LaDwayne Clifton, CFO. Following the remarks, there will be a question and answer session which will include responses to questions that were submitted during the past week. With that, it is my pleasure to introduce Travis.

Thanks, Jason, and thanks, everyone, for joining this afternoon. We'll start with some recent highlights, many of you that are already aware of most of these, but I'd like to run through them very briefly. Of course, most of you are aware that Starus, our lead ADHD product that was approved back in March, was launched commercially. on July 21st. Very exciting milestone for us. Our partner Quorium announced that launch and we are excited to see how that progresses. We do expect to see royalties and sales milestones in 2022 and beyond, but as you'll hear in a further update, that is probably the extent of any sort of projection that we can give at this time. Just as you may recall, the royalty rates on U.S. sales go from the high single digits up to the mid-20s. And our Astaris patents run until 2037. So sitting here in 2021 with a product that just launched, now we have a 16-year product life, just a tremendous opportunity in front of us for Astaris. We also heard in the second quarter, received notice that the DEA did take the recommendation from the FDA as to schedule SDX, or Seerdex methylphenidate, as a Schedule IV control substance. All methylphenidate products right now are Schedule II. This is the only methylphenidate-containing product that is a Schedule IV. It is remarkably beneficial. It means it has a lower potential for abuse when compared to other demethylphenidate products and, in fact, lower than a Schedule III product. and it's a key differentiator for Staris. Not only that, it's also a key value proposition for our other STX-based product candidates. I'd be happy to report, and LeDwayne will give us all the great details. We have a healthy balance sheet. We also have net income, so he'll get to talk about that shortly. Of course, that was the combination of the warrant transaction, which he'll explain in more detail. as well as the regulatory milestones received in the second quarter. And then we are excited to think about the future, especially beyond the Staris. You know, it's great to have sales rolling in and royalties potential, but at the same time, STX holds many different avenues for us. And we do expect to have some clinical data prior to year end with STX. That is something that I will detail more in just a moment. KVK Tech did pass along that they're preparing to expand the SureMed collaboration for Apidaz. I know that's not a word you hear very often from our mouse anymore, but certainly that's still ongoing. They're expanding that collaboration known as Perspectives in Care into additional regions. So we'll be excited to hear about any updates that they pass along to us. So moving on, as I mentioned extensively, the U.S. commercial launch with SARS is well underway. We are excited about the product, so is Corium. If you have a chance, please visit the website. You can learn more about the product, also some of the promotional and sales-based tactics that Corium is undertaking for the product, primarily all around the label differentiation related to Asaris. So if you remember or recall, those various label elements include how the product is administered, It can be taken with or without food. It can be opened up and sprinkled on applesauce or in water. There was no changes in height and weight over time that were clinically meaningful. The pharmacokinetics of the product is very smooth. You have an early peak early in the morning, and then it tends to gradually decrease throughout the day. And the efficacy data does show that, that you have this very early onset through a long through the entirety of the day. All of that, combined with the fact that this product has 70% STX, which is also, as I mentioned, a control for control substance, makes this really a completely different type of product when we talk about methylphenidate and what is available today. Corium did provide us some commercialization updates that we're going to pass along. I will caution everyone. This is very early days. In those particular instances, it will be a slow road. We have to be patient to see how these types of products will launch. It's initially going to be a focused launch in just a few states with select prescribers, and that's really due to a number of different factors. And mainly I believe that's all around the fact that you don't have payer coverage in many cases. Large payers and a lot of payers will actually block the product from being reimbursed initially for about a six-month period of time as seen by industry-wide standards. So any new product, it doesn't matter if it's a stardust or something for blood pressure or something for oncology, it's going to see that initial NDC block until a payer has a chance to review it. and discuss with the company any potential contracts that need to be placed in front of it. We have heard from Coriam that some of the payers have indicated some initial receptivity to Astaris, just given its differentiation. Many times when you hear that feedback, payers are worried that they're going to have to actually pay a large amount and would like to discuss contracting for the product. And then we have heard from Coriam that when payer access opens up, uh, when the current COVID, uh, environment, uh, opens up as well as, um, you know, as they're starting to get some initial velocity, that that launch will expand. It will become a national launch, um, with more sales folks. And I think this is a perfect strategy. Um, don't oversell it. Uh, don't have physicians write a bunch of scripts that don't get filled. because they get stopped at the payer side. So they certainly know exactly what they're doing. I think they have all the resources in place, and we are excited to see them take this forward. As you may be aware, based on that label, we did update our internal forecast, and this really was the basis for the amendment that we did to the license agreement with ComAv, which is an affiliate of GPC back in April. Moving on briefly here to the Cirdex or STX opportunity, certainly there's a number of different features here, and I've rattled on and on about the C4 scheduling, but also it's the unique profile of the pure prodrug that provides us a real opportunity. So you have this lower abusability potential as well as this pharmacokinetic profile that And the fact that you can't just swap it in for other methylphenidates gives us a unique chance to really capitalize on the molecule. And so we recently initiated a trial with SDX. We did so under the KP879 IND. I'm not calling this product 879 for a very good reason. It's that this study itself was designed to tell us a lot more about SDX than just what it could do for... stimulant use disorder. So we're exploring the pharmacokinetics at high doses as well as the safety and some of the exploratory effects. So this would be like side effects related to abusability and or wakefulness, you know, side effects that may come with a methylphenidate product. And, you know, some of the reason why we haven't, you know, really announced the initiation of the study is primarily because I can't tell you exactly when it's going to end. I heard everything from first quarter next year to third quarter this year, and it's going to be somewhere between that. We really do believe it's going to be prior to year end. It's a difficult sort of trial to enroll for. We're looking at people with a history of stimulant use, significant stimulant abuse, almost to the point of addiction. And so we really need to keep those individuals, which they're not the most reliable individuals from that perspective. We're going to use the clinical data from the study to decide what the future is for the program. Is it going to be primarily in stimulant use disorder? Is it going to be used for idiopathic hypersomnia, the product 1077 that we announced last year as a potential, or others? There's a number of different other indications. We want to pick the right one that has the right market conditions. as well as the best opportunity for that product to do well. And one that won't cannibalize itself, where you can do a little bit too much with the same molecule. So now that I've run through that, I'm going to turn it over to LeDwayne to provide you with a financial update. LeDwayne?