Nabriva Therapeutics plc

Welcome to the Nebreva Therapeutics Third Quarter 2022 Financial Results Call and Corporate Update. All participants will be in listen-only mode. Should you need assistance, please signal a comfort specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Dan Dolan, CFO. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Nibriva's conference call and webcast, where we'll be discussing the third quarter 2022 earnings and providing a business update. The 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 will 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 SEC. Turning to slide three, Let's briefly run through this afternoon's agenda. Ted Schroeder, NEBREVA's CEO, will start with a business update and present an overview of the commercial highlights from the quarter. I will then provide a brief financial review before Ted comes back with some final commentary and leads our Q&A session. I will now turn the call over to NEBREVA's Chief Executive Officer, Ted Schroeder.

Thank you, Dan, and thank you to everyone joining our call this afternoon. As we turn to slide five, I'd like to take some time to update you on our outlook regarding the current position of the business against the backdrop of the broader macro environment. Like many of our peers, Nebreva has faced headwinds in the macro environment as it relates to investor sentiment for the biotech and more specifically, the anti-infective space. As a result, we believe our portfolio of assets are significantly undervalued by the markets. given that we are currently trading at approximately 40% of cash with revenue-generating assets, it's clear to see that the sum of the parts valuation is worth more than we're currently getting credit for in the market. With access to capital limited in the current market environment, our ability to raise capital efficiently and effectively continues to be a challenge. Given these challenges, we have shifted efforts to focus primarily on Civextro by building upon our commercial success as we believe this is the most efficient and effective way to extend our cash runway and preserve optionality and value for our shareholders. Additionally, and following a broader assessment of potential options, we have engaged Teraya Capital to help advise us on a range of strategic options to maximize the value of the underlying business. Starting with Cevextro, We have a revenue-generating asset which fully funds our commercial infrastructure and has generated net sales of approximately 24 million year-to-date through September 2022. Second, we have an approved product in the U.S. for CAP with Zenletta. It offers both IV and oral monotherapy with a novel mechanism of action and a well-tolerated option for patients with CAP. This is an asset with 11 years of patent life remaining. and has the potential to deliver more value in the future with an increase in investments to drive awareness of the attributes and benefits of Zenletta. With the appropriate resourcing behind the brand, we believe there is significant untapped potential for Zenletta in the U.S. Zenletta also has three separate and distinct royalty opportunities outside the U.S., with income-generating potential in Canada with our partner Synovion, in Eastern Europe with our partner, Erkin, and with the potential approval in China with our partner, Sumitomo. Additionally, we have another potential life cycle management opportunity with Xenleta in the treatment of patients with cystic fibrosis that could generate up to 100 million in incremental peak sales. Given the small concentrated patient population, we remain optimistic about the potential of Xenletta in cystic fibrosis and look forward to having top-line data before the end of this year. Lastly, with Contipo, for the U.S., we have a product with a novel mechanism of action, patent exclusivity now extended through 2038, and a proven track record outside the U.S. for over 40 years, treating multidrug-resistant organisms across various indications. With over 3 million patients in the U.S. with MDRs, Antipo provides an attractive alternative for treatment of this growing issue in the United States. To summarize, we have multiple assets currently generating or on the verge of potentially generating revenue in the near future. With this backdrop, we believe the most efficient path forward is to attempt to maximize value from these assets in the near term. while extending our cash runway and maintaining optionality as we look to realize the full value of our assets for both the patients they treat and our shareholders. Moving to slide six, I'd like to highlight some of the efforts we've made to optimize our cash position. Our strategy includes suspending all non-core R&D projects and implementing a 40% reduction in our global workforce by reorganizing functions and streamlining back office support. As a result, we have reduced operating expenses, created efficiencies within the business, and extended our cash runway into the first quarter of 2023. These efforts will remove approximately 20% of operating expenses from our base operating plan by the end of 2023. Our near-term focus is to optimize our cash position maximize value from individual assets within our portfolio, and efficiently enhance shareholder value while building upon our commercial execution. We believe this provides us time to adequately assess a broader range of value-creating options across the business by controlling what we can control within our existing business. Moving to slide seven, we continue to be encouraged by our operational execution in the business. On the commercial side, we saw continued momentum in the acceleration of Savextro. We had a 16% quarter-on-quarter TRX demand growth and continue to focus on the Salesforce execution with Savextro, capitalizing on the significant acceleration in demand. I'm thrilled that we have achieved our goal of hitting the peak historical sales run rate in the middle of 2022 in line with our previous guidance. As I mentioned, we have implemented a strategic restructuring plan to reduce cash burn and refocus our efforts on near-term value drivers, and we continue to see improvements in our operating cash burn compared to the prior year. We continue to challenge ourselves to be disciplined with spending to further accelerate the operating leverage driven by the continued growth of Civextro. On the clinical side, we now expect top-line data from the Phase I cystic fibrosis study in Q4 2022. This is an acceleration from our previous guidance of Q1 2023. This is a credit to the team as we have demonstrated the ability to execute operationally in the clinical side of the business. We have talked previously about the possibilities that's unleaded in this patient population, and I will reiterate these points later in the presentation. Lastly, the LaFamulian China NDA decision remains on track, with an expected regulatory approval in the second half of 2023. As you will recall, this has the potential to generate low double-digit royalties and up to $86 million in incremental sales and regulatory milestones, another significant value creation opportunity within the portfolio over the next 12 months. As you can see on slide eight, the Vextra posted its third consecutive quarter of double-digit prescription demand growth, with 16% prescription demand growth in Q3 22 versus Q3 21, and 18% year-to-date prescription demand growth compared to the same nine-month period of 2021. During the recent quarter, we saw yet another high in retail prescription demand since we restarted promotion of the brand, generating 1,148 retail prescriptions. On the back of this retail prescription demand, we have achieved our guidance of getting back the peak historical sales run rate of Civextro by the middle of 2022. This is another example of our ability to deliver operationally on our goals and objectives with our commercial footprint. The continued momentum with Savextro's promotion reaffirms our confidence in the realignment efforts that were implemented in April of this year. We remain confident in our ability to continue to grow Savextro and view this as a solid foundational asset in the portfolio. As we move on to slide nine, we are encouraged to see that our target call reach for Savextro has more than doubled in the third quarter of 2022, compared to the first quarter of 2022, following our realignment in April of this year. Additionally, since the realignment, we have converted 225 new Cevextro writers, the podiatrist accounting for 40% of those new prescriptions written. This is encouraging, given the promotionally sensitive nature of the brand and the opportunity to continue to expand Cevextro's use within this key segment of prescribers. We expect to continue to expand. Combining the increased reach and frequency with the established promotionally sensitive nature of Vextro, we believe it sets up for continued momentum as we move forward with this commercial strategy and focus around the brand. Shifting our focus to an update of our Phase I trial of Xenletic in patients with cystic fibrosis. Slide 10 lays out our rationale for exploring Zenletta as a treatment option for CF patients with chronic Staph aureus MRSA infections. The CF Foundation has stated that one of their key areas of focus is to identify effective treatments against methicillin-resistant Staphylococcus aureus and MRSA. This supports our thesis when evaluating Zenletta in CF patients. that Staph aureus remains an unmet medical need in patients with cystic fibrosis. Because Zenletta is available on both an oral and IV formulation, has demonstrated potent anti-MRSA activity, excellent lung penetration, potent anti-inflammatory activity, and is well tolerated, we continue to believe it may provide an attractive treatment option for this difficult to treat population. We have completed enrollment in the Phase I cystic fibrosis study in partnership with the CF Foundation and now expect top-line data in Q4 2022, accelerating our prior guidance of Q1 2023. We look forward to sharing these important data in this patient population with Senletta in the weeks and months ahead. We believe that positive data in this trial could create another potential revenue catalyst with a potential peak incremental market opportunity of $100 million. I'd now like to turn the presentation over to Dan for a brief update on the financials for the third quarter.