Radius Recycling, Inc.

Thank you for joining. Your conference will begin momentarily. We thank you for your patience and please stand by. Your conference will begin momentarily. Thank you. Thank you. Thank you. Welcome to the second quarter of 2021. Radios Health Incorporated earnings conference call. My name is Hilda, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star and then 1 on your touch-tone phone. I will now turn the call over to Ethan Halday from Head of Investor Relations. You may begin.

Hello everyone and thank you for joining us today. A press release and presentation that we will use to guide the discussion can be found in the investor relations section of our website. A replay of the call will also be available on our website three hours after the call. Before we begin, I'd like to remind everyone of our safe harbor statement on page two. This presentation includes forward looking statements and non-GAAP financial measures. You can find the reconciliation of GAAP to non-GAAP at the end of the presentation. Our most recently filed 10-K and subsequent filings identify factors that could cause our actual results to differ materially from those indicated by the forward-looking statements. Any forward-looking statements represent our views as of today only. On today's call, Kelly Martin, President and CEO, will start with his opening comments. Jim Tropis, our principal finance and accounting officer, will then provide a financial update. Sal Grasso, chief commercial officer, will follow with an update on the Timlos commercial business. Chaya Shah, chief business officer, will provide an update on the clinical and regulatory progress. And Liz Messersmith, SVP and head of the orphan business group, will finish with an update on RAD11. We will then open the call up for questions. I'd now like to turn it over to Kelly.

Thanks very much, Ethan. Good morning, everybody. For those of you in the U.S., I know some are calling in from Europe, so good afternoon. I do have some opening comments. Then I'll turn the call to Jim Chopas, who will then turn the call to Sal, Shia, and Liz. So it's my pleasure to have the chance with my teammates here to go through where RADIUS is from a Q2 perspective and, importantly, from a half-year perspective. On page four, opening comments, I've been asked by a few investors and analysts, you know, Kelly, you've been here roughly a year. You know, it'd be great to hear some of your thoughts, kind of putting things in perspective over the course of the last year or so. What do you think? What are we doing? Why have you done certain things? And how do you philosophically want to move things forward? So my comments this morning will be a little bit longer than I would normally do for a quarterly earnings report. So hopefully it's helpful for you. So first initiative was repositioning the company. The company went public in 2014. There's been a lot of progress, different iterations, particularly around the original molecules in the company. And the company made a tremendous amount of progress with regard to advancing the original thesis. There was a point in time where All companies need to rethink and reposition perhaps how it's going to go forward and over the last year we've been working on that, sort of a repositioning of the company and how do you do that in a manner that would create potential for enhancing the shareholder value proposition of the company from a short-term, intermediate-term, and long-term point of view. Sort of fundamental to that is creating as much operating leverage as possible so that the P&L would come forth and that you become a self-sustaining company from a P&L and earnings point of view. That is a major goal for us. And in doing that in bullet point three, you got to set the direction and take the steps necessary to do that. You know, very simply from an operating point of view, we want to generate more cash than we are spending. And we are well on the way to that as Jim Choplas will go through from a P&L point of view in a few minutes. We had last year three pivotal trials in flight. All of them needed to be completed from an enrollment point of view. And once completed from an enrollment point of view, preparation and anticipation of readouts. Again, pleased to say with the work of the team that we have in the company, the trials were fully enrolled and currently are in tremendous preparation for readouts over the course of the next few months. Three pivotal trial readouts obviously will be an exciting time in the coming months for the company. From a BD point of view, as everyone knows, we outlicensed Elastistran. I'll talk a little bit more about why we did that, but it had significant event risk for us. We think it's a fantastic molecule. We think the opportunity in the space is fascinating. It's interesting. But for where we were at a point in time, it was a significant amount of event risk. So taking that risk out of the equation was something that was a primary focus of ours. And then we in-licensed some additional technology. RAD 011, which Liz Messerschmitt will talk about in a few minutes, was something that we were able to bring in. something that we're able to integrate to the company, and we'll talk about that a bit more. And that allowed us to distribute the risk around now three different molecules, all with slightly different business models, but between abaloparatide, elastostran, and RAD011, we have exposure to three technologies at much less risk than we had a year ago. Last but not least, certainly, Abalaparatide is a phenomenal molecule in its characteristics, in its behavior, in its data, in its real world data. It is a molecule that we are blessed to have. And very simply, we are working on how do we make sure that that molecule is positioned both in the U.S. and globally to create the most value possible for shareholders and get to or be in front of patients with the most significant need for the molecule. So that's sort of the last 12 to 14 months, what we have been focusing on, and there are many other things, but those are the highlights. If you go to the next page, just reiterating the timeline. So from today through the end of the year, as we have announced, we would anticipate with current plans that we would have three different readouts, and these are in no particular order, by the way, so I wouldn't overread how they're listed. But the ADAM trial or the MAIL Abalaparatide trial will have a readout between now and year end. We will have, as publicized before, we will resubmit to the European market Abalaparatide. A tremendous amount of work has been going on with regard to that. You'll hear from Shia about that momentarily. We will have the Emerald readout, Elastostrand will read out between now and year end from a pivotal point of view. We will initiate a Prader-Willi phase three, or the pivotal trial, phase two slash three. We will initiate the trial in the fourth quarter. First patient in will be either the end of this year or the very early part of next year. And last, but certainly not least, the wearable trial, pivotal trial will read out the transdermal system, i.e. the patch, That will read out as well. So these are five rather significant events for the company. There are other events embedded in and around these and some additional ones. But I think from a small company point of view to have this amount of things that will come to fruition over the next few months having had a reasonable amount of experience in this industry, is rather unique, and I can assure all of you that we're totally focused on the execution and follow-through of all of those things. Some additional commentary, page six. Again, keeping things simple, clear, and as crisp as I can communicate. And some of these topics I'm specifically speaking to Because, again, very legitimately been asked questions by either analysts or some of our current investors or some potential investors. So the trans-terminal system or the patch, if approved the way we think of it, it's going to be very accretive to cash flow. We have not put out models. We have not put out targets on it. The way we're managing it, the way we're working on it is – It's going to be accretive to our business, accretive to cash flow, and certainly a value enhancer to the Ebola paratide molecule. Number two, TMLOS for male. How big is the male market? How big is it? How should people think about it? How do we think about it? Well, we actually think that the male opportunity is somewhat bigger than sort of the common understanding or anticipation of the male market. business or opportunity. Regardless of whether it's X, Y, or Z from a size point of view, everything that we do in May will also be accretive to the cash flow and the P&L of the ballot power type. Number three, as we have talked about, we are expanding the global footprint of TMLOS. We have announced Canada at the end of last year. We have an established partner, a very excellent partner, Teijin in Japan. which I remind people is the largest anabolic market on the earth. They are making great progress, but we're also working on and we're in current dialogue on several additional either regions or countries in addition to the European resubmission. All of that would be accretive to the cash flow of the balaparatide. So we continue to work on pushing forward on the infrastructure and the fundamental value enhancement of Avala Paratide across the transdermal system, the male indication, and global expansion, in addition to all of the work that Sal and the commercial team are doing in the US, which you'll hear a bit more of in a few minutes. In addition to all of that, we had mentioned on a business update that we were looking at a depot opportunity. Some people thought we were looking at the depot opportunity because we didn't have confidence in the transdermal system, all of which would be a rather erroneous combination of things. We actually think the transdermal system, as I said, is going to add some significant opportunity from an accretion point of view. Why the depot? Well, the depot could be transformational if... If there's a way to administer a valiparatide either on a weekly, biweekly, or monthly basis, we think that that would be of enormous interest to patients and patient care. There's original dogma in the anabolic space, which would indicate that perhaps the depo approach would not work. There's been scientific data and literature which would suggest that it actually could work. And so we're going to spend some time and a little bit of capital on investigating more fully the preclinical data that you would need to make the go-forward strategy. The good news about the depot is if we did go forward on it, we would have the data in hand to scientifically and clinically justify why. And the timeframe on a depot potential delivery is three to five years as opposed to more multiple, and the cost would be easily absorbable. in our P&L. So that's another piece of the puzzle that would again, characteristically reinforce the fact that we are continuing to invest very prudently and hopefully very intelligently into creating as much value in the abalaparatide business and molecule as possible. Next topic, RAD011. People ask, why did you in-license RAD011? Several reasons. One is you don't want to be a one-product company. That's number one. It's inefficient and it's illogical. Number two, we could acquire this asset at what we thought was a relatively inexpensive for us consideration up front. Number three, The time frame that we can move this asset forward is rather significant from a shortness of time frame. As again, we have already announced a pivotal trial for Prader-Willi. We have indicated that we will add other pieces to the life cycle in the coming near term. And there are multiple orphan diseases that we can move this asset forward in. I would also stress, also easily absorbable in our P&L and cash flows. So it gives us a lot of potential upside with future progress and any future regulatory success. Other questions, why did you out-license Elastostrand? Well, Elastostrand at a point in time for Radius as a company was what I would describe to all of you and I described to others as a way outsized risk. The event risk for elastostrand being positive or negative was way beyond the capacity of what radius could have handled. Obviously, if it were read out positively, there's a gigantic upside. If it read out negatively, there was more than a gigantic downside. As a matter of fact, I think there's probably a catastrophic downside. So in order to maintain a participation in Elastostron, massively reduce the enterprise risk for RADIUS, we outlicensed it. We have a great partner with Menorini. They are moving it forward with us. There's lots of plans, which you'll hear from Shia, about some lifecycle opportunities. Our relationship with them is excellent. And Menorini and ourselves are delighted to be in the position we are. The CERD market is... is very exciting. It's rather crowded. We're in the lead. We have a monotherapeutic molecule. We've talked to multiple oncologists about how they would use that kind of molecule, and I would say that we're in a very good position relative to where we were, where we're kind of betting the farm on a molecule readout as opposed to still having a participation but no longer needing to bet the enterprise. From a commercial point of view, and again, you'll hear a bit more from Sal, Our strategy has been to narrow and deepen the focus around the fracture centers, the bone health centers, the orthopedic-related rheumatologists, to go to where the fractures are as opposed to have big breaths that were more focused on depth. As radius with approximately 80 to 100 salespeople in our company, there is absolutely zero chance that we're going to win on a breadth strategy. But we can win, and we can win very significantly on a depth strategy. And we're making great progress with that, and we expect to make more progress with that. Last but not least, then I'm going to turn it to Jan Chopas. We try to announce about approximately every five weeks how we're doing with patient additions. I think you have seen, if you've been following, that our patient additions, particularly going from towards the end of last year, kind of coming out of some of COVID and then to the first six months of this year, have been fairly robust. So that focus from our commercial point of view is working and will continue to work. In addition to the new patients or the patients we're adding to the drugs, We are also doubling back and focusing on our existing patients or refill patients, those patients that were already on drugs, and how can we continue to focus with, in an appropriate manner, on the refills of the existing drugs, the existing patients. And that's a focus from both Sal and his team on increasing that. And it's those two pieces of the equation that over time give us our confidence that we have upside and the ability to continue to grow the revenue of this molecule in the SC product in the US. So I can go on. I'm sure there's more important things to get to, but I think these things are all important to understand as a point in time what we've been focusing on for the last 12 to 14 months. Why have we made certain decisions? and what it is we are trying to accomplish. And very simply, from a cash flow point of view, we want to be positive. From a risk point of view, we want to be distributed. And from an optionality point of view, i.e., equity optionality value or the potential, we want to provide some significant optionality to shareholders for their judgment. So with that, and I apologize for going on slightly longer than I would normally, but I'll turn the call now to Jim Chopas, and he will take you through – through the financials with particular highlights on particular parts of the equation. So, Jim, over to you.