Nabriva Therapeutics plc

Good day and thank you for standing by. Welcome to the Navriva Therapeutics second quarter 2021 financial results call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, then the number one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to our speaker today, Mr. Dan Nolan, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Nibriva's conference call and webcast, where we will discuss the second quarter 2021 earnings and also provide a business update. Slides for today's presentation are posted on the company's website, www.nibriva.com, and can be found under the Investors tab in the Events and Presentations section. We recommend that you refer to the presentation as we'll be using those slides for today's discussion. Before we begin on slide two, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Forms 10-Q and 8-K filed with the SDC. Ted Schroeder, Nebreva's CEO, will start with a business update, including our activities in China, and will present an overview of the commercial highlights for the quarter. Then, I will provide a financial review, and Ted will come back with some summary comments and lead a Q&A session. In addition to Ted and me, joining us on the call for the Q&A session is Dr. Steve Jalone, our President and Chief Operating Officer. I would now like to turn the call over to Nebreva's Chief Executive Officer, Ted Schroeder.

Thank you, Dan, and thanks to everyone joining our call this afternoon. Let's start on slide five. We are advancing our commercial effort to drive awareness as we continue to position both Cevextro and Zenletta for growth. As access is improving in the U.S., we are happy to see increased face-to-face visits between our sales team in the field and healthcare providers through our partnership with AmpliD Health. In addition, we are seeing some promising trends in the overall antibiotic prescription market, which I'll touch upon later in this presentation. We believe that our sales representatives are continuing to gain traction with providers in the field and are on our way to getting Civextro sales back to pre-pandemic levels. As we previously stated, we anticipate a return of historical peak sales trends for Civextro by mid-2022. As we mentioned last quarter, Nebreva was granted its own National Drug Code, or MDC, for Civextro, which allows the company to recognize 100% of net product sales of Civextro. As of April 12th, Civextro has been sold under the Nebreva label, and this provided a positive impact on our P&L during the quarter. which Dan will discuss in more detail later in the call. Next, and importantly, in late May, we, along with our partner, announced positive top-line results from a Phase III trial of lefamilin in Chinese adults with community-acquired bacterial pneumonia, or CAP. We will briefly review the data results and the market in Greater China in a few minutes, but I am pleased to say that that our new partner, Sumitomo Pharmaceuticals, a wholly owned subsidiary of Sumitomo Dinipam Pharma, has deep experience in the region and an established commercial infrastructure in the anti-infective field. We think this could provide a considerable revenue opportunity for Nebreva with an agreement that provides for low double-digit royalties and up to 86 million upon the achievement of certain sales and regulatory milestones, starting with the approval for Greater China. As mentioned previously, we are going to complete a Phase I safety and PK study for Zenletta in CF patients and expect to begin enrolling that study in the second half of this year. Partnering discussions for Zenletta outside the U.S. remain active, as we continue to look to form strategic business development agreements in Europe and other territories. Talks are ongoing with multiple parties who have expressed interest in a BD partnership. As we evaluate our options, we want to ensure that any transaction that occurs is in the best interests of patients and our shareholders. Regarding Contipo, despite some updated guidance from the FDA, We have not received any additional clarity on our specific situation at this time. We continue to work with the FDA, our manufacturing partners, and consultants to understand the FDA's guidance and the implications for resubmission of the Contipo NDA. We are confident that our contract manufacturers are prepared when the FDA is ready to conduct an on-site inspection. Consistent with our prior comments, we do not intend to file the Contipo NDA until we have confidence that the FDA can complete any required inspections within the six-month PDUFA clock. Finally, we were able to extend our cash runway substantially through the first quarter of 2022 as a result of successfully negotiating to extend our debt repayment as well as the ATM proceeds received during the quarter. We are also excited about the recent extension of our manufacturing agreement with Hovion Limited for Zanletta through 2030. The extension of the agreement reflects confidence in the long-term potential of Zanletta. In recognition of the impact the global pandemic has had on antibiotic demand, the revised terms provide for lower minimum purchase requirements in the near term, therefore giving Nebreva some near-term flexibility, and cash allocation, allowing us optionality to invest in additional value-creating initiatives. One such example I will touch on later in the presentation is the deployment of inside sales representatives to expand our reach, raise awareness, and drive prescriptions for both Zenletta and Civextro. Now, turning to slide six, here is a reminder of our broad pipeline across serious and rare infectious diseases. For cystic fibrosis, I think it's worth reiterating that if the trials prove to be successful, we think this could provide us with a $100 million incremental net sales opportunity. In China, on the heels of the recently announced positive top-line results from the Phase III lefamulin trial, We would anticipate the next step is the submission of the NDA, which is targeted in the second half of 2021. Turning to slide 8 for a commercial update, let's first take a look at the progress we continue to make with face-to-face interactions with healthcare providers. As you can see from the chart, as physician offices continue to reopen, we went from 68% in-person interactions during our last update in May to 72 percent in-person interactions for primary care visits as of July 2021. If you look at healthcare providers overall, 85 percent of our interactions are in-person. Our sales representatives have now been in the field for two full quarters, and we expect to see the number of in-person interactions further increase in the coming weeks and months. we will continue to adapt our approach as local guidance to COVID restrictions evolve. Assuming COVID restrictions are not enacted, our expectation is for access to doctors' offices to rise. In addition to the improving conditions for our reps in the field, we are also starting to see more promising trends in the general antibiotic market, as you can see on slide nine. After a sharp drop in total prescriptions in the antibiotic market in 2020 and the beginning of 2021, we are seeing the current trajectory approaching pre-pandemic levels of 2019. We believe the continuation of this trend will rely on an increase in respiratory infections later in the year. Combining these factors, the improving macroenvironment, getting more face-to-face time with prescribers, and antibiotic prescriptions beginning to trend in a favorable direction, I think you can understand why we are bullish about the opportunity for prescription growth for both Cevextro and Zenletta. We continue to engage in discussions with both products with HCPs. For Cevextro, our focus remains on driving prescribing for appropriate patients. For Zenletta, Our efforts are focused on educating providers on the benefits of Zenletta to lay the groundwork to ensure that Zenletta is top of mind heading into the fall. We are also excited to share that in order to help complement our commercial team in the field, we are deploying new resources to help target the areas in the U.S. that our representatives currently do not cover. If you turn to slide 10, you will see the current coverage of the sales force. It shows the regions of the approximately 7,800 currently targeted customers. We now plan to initiate a pilot program to expand our reach to cover white space geographies. We believe that this represents a large, untapped market opportunity for the company. We are deploying this strategy to further accelerate Civextro scripts and to continue to expand Zenletta awareness. If you turn to slide 11... You can see more details about our plan to expand our reach and frequency with virtual promotion tactics. According to an analysis performed by IQVIA, there are approximately 8,000 providers in these uncovered territories. We plan to initiate a pilot program to reach the top 25% of prescribers within these white space geographies, with a goal of approximately 40 outbound calls per day per representative. This is an opportunity to efficiently expand reach, raise awareness, and drive prescriptions for both Zenletta and Civextro. The question you may be asking is, why now? Part of our decision is based on the opportunity to reach these high prescribers, many of which are already familiar with Civextro. In addition, we have been getting inbound requests from providers in the uncovered territories for information and samples of both brands. These two factors, coupled with a focused investment, prompted the decision to expand into these white space territories. We look forward to kicking off this program by the end of the third quarter and will monitor the impact it is having on our business over the coming quarters. We view this program as especially complimentary to Zenletta, where we recently launched a new branded campaign in order to highlight the appropriate patient types for Zenletta. In addition, our medical affairs team has been developing additional materials to educate prescribers on current treatment guidelines for CAP and the threat of rising resistance to pathogens that cause CAP. As we continue to educate physicians on Zenletta's benefits, slide 12 introduces our new patient-focused campaign, and shows examples of the non-personal promotional initiatives we are employing to support this unleaded message. As we have previously mentioned, we are targeting patients with a more complicated medical history, such as older patients, CAP patients who have recently been on antibiotics, which puts them at an increased risk for resistance with traditional antibiotics. We're expanding our marketing impact by deploying a variety of non-personal promotional initiatives such as branded emails, paid search, point of prescribing messaging, rep-delivered materials, display advertising, and KOL-driven content. We believe that, coupled with the increased face-to-face promotion and the positive prescription trends we are seeing in the overall market, we are building the foundation for Zenletic growth in the fall and when we anticipate a greater incidence of CAP. Now, let me spend some time on Lathamulin in China and what that could potentially mean for Nabreva. Turning to slide 14, earlier this quarter, we announced positive top-line results from a Phase III trial evaluating Lathamulin in adults with CAP in Greater China. This trial was conducted by our partner, and the results were consistent to what we saw in the pivotal LEAP-1 trial and Leap 2 trials. An NDA submission in Greater China is expected in the second half of 2021. We also announced that development and commercialization rights of lefamulin in Greater China were transferred to Sumitomo Pharmaceuticals. Sumitomo opted to pursue lefamulin as it is highly complementary to their existing anti-infective product portfolio in China. For those that are not aware, Sumitomo is already a dominant player in the anti-infective space in the greater China region, putting them in a solid position to launch lefamulin in China once approved. Taking into account all these factors, positive Phase III data, partnership with Sumitomo and their established commercial capabilities, along with their knowledge of the Chinese regulatory authority, we feel extremely confident in the path forward for expanding global access to Lefamulin. In terms of how this impacts Nebreva, we are entitled to low double-digit royalties on net sales as well as payments of up to $86 million upon the achievement of certain sales and regulatory milestones, the first milestone of which is due upon approval in the region. As we turn to slide 15, you see that the data from the Phase III trial of lefamulin in China produced results consistent with prior pivotal trials. Lefamulin achieved the primary endpoint of non-inferiority versus moxifloxacin and also demonstrated comparable results on the secondary endpoint of the investigator assessment of clinical response to test a cure based on the clinically evaluable population. 70% of lefamulin-treated patients demonstrated success after failing prior antibiotic treatment versus just 44% for moxifloxacin. Overall adverse event rates of lefamulin and moxifloxacin were similar, but serious adverse events were higher in the moxifloxacin group than lefamulin. We will continue to work closely with our partner, Sumitomo, and are looking forward to an NDA submission later this year. Moving on to slide 16, we see that the antibiotic market in China was on a steady growth rate prior to the impact of COVID-19. Prior to the COVID-19 pandemic, antibiotic sales in China totaled approximately $14.8 billion, with macrolide and quinolone use representing greater than $2 billion of sales. We believe that the differentiated profile of Lathamulin provides an attractive option to other standards of care for CAP that prescribers can turn to for the benefit of patients in China. Finally, on slide 17, you can see why we are excited to have Sumitomo as a commercial partner in China. Sumitomo has an already well-established presence with a sales force covering all of mainland China. Across their 31 regions, they have access to over 3,000 hospitals with more than 36,000 physicians. This established and reputable infrastructure provides an excellent opportunity for lefamulin to gain incredible reach and access from launch. Putting lefamulin alongside meropenem, the number four anti-infective brand in China in 2020, serves as an excellent opportunity to accelerate a launch of lefamulin in China. Participating in a larger antibiotic market like China, Partnering with a high-performing organization in Sumitomo provides a great opportunity to further de-risk the commercial launch and related milestones to create value for Nebreva, while bringing new therapeutic options for CAP in China. I would now like to turn the presentation over to Dan for the financial review. Dan?