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spk00: Greetings. Welcome to the Opiate Pharmaceuticals First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to your host, Ben Atkins. You may begin.
spk03: Thank you, operator, and thank you all for joining us this afternoon. With me on today's call are Chief Executive Officer Dr. Roger Crystal and Chief Financial Officer David O'Toole. This afternoon, Opiant issued a press release announcing financial results and providing a business update for the first three months ended March 31, 2021. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, opiates management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in Opium's news releases and SEC filings, including in our annual report on Form 10-K for the year ended December 31st, 2020, and subsequent filings. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11th, 2021. Oakland undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now, with that, I'd like to turn the call over to Roger.
spk04: Thanks, Ben, and a very warm welcome to you all. I'll begin by offering a brief corporate update and then hand off to David O'Toole, our Chief Financial Officer, to provide an overview of the financial highlights. Our mission is to transform the therapeutic treatment of addictions and drug overdose, and in so doing, help more patients and drive the future growth of our company. Our priority is OPMT-003, nasal now the theme for opioid overdose. About 180 people are dying every day from an opioid overdose in the United States, higher than ever before. 80% of these deaths are due to illicit synthetic opioids, mainly fentanyl. New therapeutic ideas are needed to save more lives, and we believe nalmophene has the potential to be particularly well-suited to treat synthetic opioid overdose. I will discuss the growing opioid epidemic and what differentiates OPMT003. First, I'd like to provide an update on the status of OPMT003 development program. In 2021, our focus is on execution and expanding on the robust body of data in support of OPMT003. I'm pleased to report that we are making important progress. We are fully enrolled and are close to completing our confirmatory pharmacokinetic study. We look forward to reporting top-line data from this study in the next few months. In addition, we have dosed the first subjects in our head-to-head clinical pharmacodynamics study, comparing the effectiveness of opium T003, nasal nalmophene, with nasal naloxone. In this study, we modeled respiratory depression using the synthetic FDA-approved opioid remifentanil in healthy volunteers. We expect to report top line data in the fourth quarter. Other drug development activities are also on track for an NDA filing using the 505 regulatory pathway by year end or early first quarter 2022. Further reflecting our progress, in March, we were awarded the third and final tranche of $1.8 million and the total grant of approximately $7.4 million from NIDA to support the advancement of OPMT-003. As a reminder, the development of OPMT-003 is also supported by BARDA. With that, I'd like to provide some further context on how we arrived both at this point in the evolving opioid crisis and in our development of OPMT-003. About eight years ago, we saw an opportunity to help save lives from opioid overdose. We developed Narcan nasal spray so any bystander could administer a potentially life-saving medicine to a victim. In 2018, the US Surgeon General Jerome Adams encouraged people to carry Narcan with them. adding that in some communities, when finding someone unconscious, you would more likely need to administer Narcan than carry out CPR. When we developed the Narcan nasal spray containing naloxone, overdoses were commonly linked to prescription opioids and heroin. Today, we face an entirely different class of opioid, illicitly made synthetic opioids, particularly fentanyl. In new data released by the CDC, deaths linked to illicit synthetic opioids, and in particular fentanyl, were up 55% to 53,877 during the 12 months ended September 2020. That figure compares to approximately 10,000 deaths in 2015, an illustration of how firmly fentanyl has become entrenched in America's illicit drug supply. Fentanyl and synthetic opioids differ from opiates. First, they are more lipophilic. Fentanyl, for example, is more easily taken by fatty tissues, including the brain. This enables it to cross into the brain more quickly and in greater quantity. This combination gives the user a fast and intense high. However, too much fentanyl entering the brain will also rapidly suppress breathing, leading to overdose. Depending on the circumstances surrounding the overdose, this can take seconds to a few minutes. The second differentiation are the sustained effects of synthetic opioids like fentanyl. Naloxone lasts between 30 to 90 minutes, while fentanyl has a plasma half-life of about seven hours. It is possible that as naloxone levels fall, while fentanyl levels fall far more slowly, the victim can sink back into an overdose known as re-narcotization. Both the potency and long plasma half-life of certain synthetic opioids is challenging naloxone. As we have discussed on previous calls, scientific literature reports from ENS teams, and in December, Public Health Advisory by the CDC collectively confirmed that multiple doses of naloxone are likely necessary to revive an overdose victim and that further doses could be needed to avoid a recurrence. It is this medical insight that has driven us at Opium to explore alternative molecules to naloxone. Based on its pharmacological characteristics and the compelling data from our pilot PK study, OPNT003, nasal nalmophene, could prove uniquely suited to treat synthetic opioids in three important ways. First, nalmophene has a higher affinity at the opioid receptors than naloxone, which makes OPNT003 more potent. Second, nalmophene has a longer half-life, which, as I explained before, reduces the potential for re-narcotization. Third, we formulated OPNT003 for rapid absorption by incorporating Intravail into our formulation and using a simple nasal spray device. This is important due to the shorter window to save a life from a synthetic opioid, including fentanyl. We believe OPNT003 has significant potential to treat synthetic opioid overdoses and look forward to the availability of the confirmatory PK and PD data in months ahead. With that, I'll now move to the rest of our pipeline. We continue to progress our IND-enabling work with the National Center for Advancing Translational Sciences to formulate OPNT004, Grinobant, for human studies for acute cannabinoid overdose. We expect to complete this work in 2021. Regarding OPNT002, nasal naltrexone for alcohol use disorder, we paused the start of our planned phase two study due to the COVID-19 pandemic in Europe. The start of the study remains on pause, and we are assessing the optimal time to proceed. In March, we were pleased to welcome Season's Clinical Development Executive, Dr. Lorianne Masuoka, to our Board of Directors. Her extensive experience successfully expanding the depth and value of the development pipelines of several biotech companies will be incredibly valuable to Opium as we further advance our mission to develop new medicines for the potential treatment of addictions and drug overdose. With that, I will now turn the call over to David to discuss the finances. David.
spk06: Thank you, Roger. For the three months ended March 31st, 2021, we recorded approximately $6.4 million in revenue compared to approximately $4.3 million during the corresponding period of 2020. This includes $2.1 million in grant and contract revenue, which is an increase of approximately $2 million over the same period in 2020. and illustrates the significant development efforts made in this first quarter for OPNT-003. We also recorded approximately $4.3 million of revenue from our license agreement with Emergent BioSolutions, or EBS, for the sale of Narcan, compared to approximately $4.2 million in the same period of 2020. 2021 sales of Narcan were approximately $74.2 million, as reported by EBS. Research and development expenses for the first quarter were approximately $4.1 million, as compared to approximately $1.4 million in 2020. External development expense increased by $2.6 million, primarily due to increased activity on our lead product candidate, OPNT-003. nasal nalmophene for opioid overdose. We also had an increase of approximately $100,000 in personnel and related expenses for this quarter versus the same quarter last year. For the three months ended March 31, 2021, G&A expenses were approximately $2.6 million, essentially flat as compared to the same period in 2020. Sales and marketing expenses were approximately 1 million for pre-commercial efforts related to OPNT003. This compares to approximately 1.1 million in the first quarter of 2020. Keeping our sales and marketing expenses and general administrative costs constant this quarter versus the same quarter last year demonstrates our continued effort to control cost as we do our important clinical work for OPNT003. Royalty expense for the three months ended March 31st, 2021 was approximately $1 million compared to $0.9 million for the comparable period of 2020. Interest expense was $537,000 for the three months ended March 31st, 2021 compared to zero for the comparable period of 2020. This interest expense is related to the convertible debt. Net loss for the three months ended March 31st, 2021 was approximately $2.8 million or a loss of $0.66 for basic and diluted share. This compares to a net loss of approximately $1.7 million or a loss of $0.40 for basic and diluted share for the comparable period of 2020. As of March 31st, 2021, Opium had $50.6 million in cash, cash equivalents, and marketable securities. The current balance does not include the full impact of the NIDA grant of approximately $7.4 million or the BARDA contract of approximately $8.1 million. Overall, we remain in a strong financial position to support our ongoing drug development activities and clinical studies and to support pre-commercial efforts for our lead program, OPNT-003. Lastly, based on the mid-range of the full year 2021 guidance for sales of Narcan nasal spray, recently reaffirmed by EBS, of $315 million, we continue to expect full year 2021 royalty revenue from the sale of Narcan nasal spray of approximately $27.8 million. We also continue to expect to end 2021 with cash, cash equivalents, and marketable securities of approximately $40 million, which will not include any receipt of additional tranches of the existing convertible debt facility. Thank you. And with that, let me open up the call for questions. Operator?
spk00: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Brandon Foulkes with Kantor Fitzgerald. Please go ahead.
spk01: Hi, thanks for taking the question and congratulations on all the progress during the quarter. Three quick ones for me maybe. Can you just provide any color on the 003 trial enrollment? you know, I guess, hopefully we're living with COVID a lot. So just, you know, running a trial now, just any colors there. Second, just saying 003, any thoughts on the recent HICMA approval, market dynamics, and obviously in the differentiation of your product to that drug. And then lastly, given an increase alcohol problems, let's say during the quarantine, does that change your view in terms of how quickly you'd like to expedite your alcohol product? Thank you.
spk04: Thank you, Brandon, and thanks for the question. In terms of the 003 trial enrollment, this is in healthy volunteers, so overall there remains an abundance of them. The enrollment itself has overall gone well so far. We had a momentary pause of, I think, a couple of weeks because of the pharmacokinetics study that's being conducted in a facility in San Antonio, Texas, where you recall they had severe weather issues, which meant no power supply to the facility. So that, for example, caused a small pause. But overall, the enrollment is going as planned. Question on the HICMA approval. Headline is, we welcome more innovation in the space of opioid overdose. And we've said all along, and I remain true on this, that the overall market is growing. More reversal agents are needed. There is a place for Narcan. There might be a place for the HICMA product as well as a result. What we believe, nevertheless, is that compared to what we're doing with nasal nalmophene, we don't believe it sufficiently differentiated from the Narcan nasal spray compared to the differentiation we think we can provide with 003, and we hope that we get the data to support this. The issues around AUD, alcohol use disorder, absolutely, this just reiterates the urgency through which we'd love to see this program be successful. Let's not forget that even prior to COVID, actual deaths from alcohol use disorder in this country exceeded opioid overdose deaths. It is a complex disease. There are FDA-approved drugs on the market, but we don't believe any of them are sufficiently comprehensive to address all patients' needs in this space, which is why we are so keen to kick off this Phase II study. However, we want to do it in a way that will allow us to complete the study in the most efficient manner. So, that's the reason to not yet still kick it off. Thank you for the questions.
spk01: Great. Thank you very much.
spk00: Next question comes from Carl Burns with Northland Securities. Please go ahead.
spk02: Thanks, and congratulations on the progress. With respect to 004, Do you have a target IND filing date? And what would be your expectation of first in humans after the NDA was made valid? Thanks. And I have a follow-up as well.
spk04: So for 004, yes, we will provide more details on the timing of the actual first in humans and filing that IND once we've successfully completed this reformulation. But I, in general, upon the successful reformulation, I envisage a few months it will take between that and filing that, getting the data, filing the IMD, and then a few months to actually initiate the clinical study. So aiming for a 2022 actual proof of contact clinical study in humans.
spk02: Great, that's helpful. And then this is probably a question for David. How much remains available on the 8.1 million BARDA award if memory service was largely earmarked to fund NDA submission and related NDA submission costs? Thanks.
spk06: Carl, thank you for the question and thanks for attending. I don't have the exact number, but I would say the majority of it is still available. If you recall, we were just granted an additional $3.5 million in December, and almost all of that will be used in the next, I would say, eight to nine months. As you said, most of that was back-end loaded for reimbursement of expenses through the NDA filing.
spk01: Great. Thank you.
spk00: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from David Bout with Zach's Small Cap Research. Please go ahead.
spk05: Hey, good afternoon, everybody. So I got a few questions on the PD study. First one, so you're using a 3 milligram dose of nalmophene in that study. So is that going to be the dose that's commercialized? And then also, how was that dose decided on? Second, is the study powered to show a statistically significant difference between nalmothene and naloxone and the primary outcome? And then lastly, will you be testing how long nasal nalmothene is active versus nasal naloxone? Thank you, David.
spk04: The dose selection arose from a combination of some initial PK work we did on nasal nalmothene with the pilot study. So that was very directional in selecting the dose alongside, obviously, the interaction with the FDA to get their preliminary support on this dose going into the study. The study is going to be powered for statistically significant outcomes, and that's been in consultation with the appropriate statisticians at the CRA. We're using the study as well. And your question was around, will we also be evaluating, you said, the long half-life? Is that the question, the final question? Yes. Yes. Yes. That's also part of the study design exactly, is to try and determine whether there's a difference in those two outcomes.
spk05: Okay. And for the alcohol use disorder study, is there anything in particular that you're looking for or what you want to see before you want to get the study underway? I mean, I'm assuming it's delayed because of COVID and all that. I mean, are you looking for vaccination rates or, you know, what are you looking for before you want to get that study up and going?
spk04: There's no specific, there's no one specific aspect. COVID is the main driver. And when we look at the overall rates, in particular not just Europe overall, I should add, The majority of the locations are in Eastern Europe, where exactly so. Vaccination rates are far lower than here in the US or Western Europe. That is a consideration. It's vaccination rates alongside the overall rates of COVID-19. So it's getting not just a view of what things are like today, but the key thing is, can we see the study through to completion and be confident that there won't be a surge that might impact matters But that's also a factor.
spk05: OK. All right, great. Well, I appreciate you taking the questions.
spk00: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Okay, I would like to turn the floor over to Roger Christowitz for closing remarks.
spk04: Thank you, operator. Thank you for joining us today and for your interest in opium. We had an extremely busy start to 2021, and we look forward to an exciting remainder of the year, during which we expect to update investors on a series of important clinical and regulatory milestones. Enjoy the rest of your day, and please stay healthy. Thank you.
spk00: This concludes today's teleconference. You may disconnect your lines at this time. And thank you for your participation.
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