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spk13: Good morning. Welcome to the BioHaven Pharmaceuticals Q1 2021 earnings call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please be advised that today's conference call may be recorded. I would now like to hand the conference over to Clifford Bechtold from Biohaven. Biohaven, thank you, and please go ahead.
spk15: Thank you, and good morning to everybody. And welcome to the Biohaven first quarter 2021 earnings call. Speaking on today's call are Dr. Vlad Torch, our chief executive officer, Jim Englehart, chief financial officer, BJ Jones, chief commercial officer, and Dr. Elise Stock, our chief medical officer. Earlier this morning, we issued a press release announcing the first quarter of 2021 highlights. A copy of this press release can be found on our website at biohavenfarmer.com, and we will file our Form 10-Q later today. Before we begin, let me remind everybody that today's discussion contains forward-looking statements based on the environment as we currently see it, and includes risks and uncertainties. A list and description of the risks and uncertainties associated with an investment in Biohaven can be found in the company's filing with the U.S. Securities and Exchange Commission. Please be aware that you should not place undue reliance on the forward-looking statements we make today. For this call, we will focus on non-GAAP financial measures with detailed descriptions of GAAP and non-GAAP analysis in our filings. An archive of today's call will be posted to the Biohaven's website in the investor relations section. With that, I will turn the call over to our CEO, Dr. Vlad Chorch.
spk14: Thank you, Cliff. Good morning to our investors, and thank you for joining the first quarter earnings call, representing our first full year of earnings since the launch of NERTEC ODT. The company continues to excel in our launch of NERTEC ODT and, more broadly, advancing our strategic goals across the pipeline to grow value for patients and investors in years to come. Our first quarter 2021 performance continues to exceed expectations across multiple fronts. NeurTech ODT was approved a little more than a year ago, and despite facing what was perhaps the greatest challenge of any new drug launch with the emergence of the pandemic, the Biohaven team effectively and safely delivered our new migraine medication to patients. To date, we've achieved over 600,000 prescriptions of NeurTech ODT, and access for patients is broad with greater than 89% commercial coverage. While we had expected first quarter sales to be impacted by the seasonality of patient deductibles and prescription reauthorizations typically experienced in our business, NERTEC and our strong commercial team broke the mold and demonstrated exceptional delivery with first quarter net revenues of approximately $44 million for a year one post-launch net revenue total of $107 million. And climbing, I have to say. A testament to our determined commercial team and the entire organization that fulfills our responsibility to patients to ensure the drug supply chain remains strong during the pandemic. Together, we relieve suffering by delivering this novel migraine therapy to patients. In addition to NERTEC ODT, I'm also pleased to report that our internal robust pipeline continues to grow across both migraine and non-migraine indications in common and rare diseases. We believe that BioAvent has the most broad and differentiated CGRP antagonist platform in the pharmaceutical industry. At this time, we have over 10 CGRP antagonist clinical programs across both migraine and non-migraine indications running around the globe aimed at areas of significant unmet needs. In addition to our growing and robust CGRP platform, we continue to grow and expand the pipeline into areas including multiple system atrophy, ALS, spinal cerebellar ataxia, OCD, and others. These programs will bring treatment options to millions of patients suffering from rare and common diseases that are untreated or undertreated. Elise Stock, our CMO, will shortly speak in more detail regarding these programs, and I'm pleased to share that as we build our pipeline, our goal is to bring value to patients and shareholders for many years to come. We have multiple significant near-term milestones anticipated in 2021 and the early part of 2022, starting with anticipated approval in migraine prevention in the second quarter of 2021, and then followed closely by top-line results earlier than expected with our MPO inhibitor for defrostat in MSA in the third quarter. We anticipate the enrollment in our phase three study for defrostat in ALS being performed at Mass General, will now complete in the fourth quarter. Trobilizol is also anticipated to read out top line data in SCA at the end of the year or early in 2022. We are excited about the potential of our pipeline to bring value to patients suffering from devastating neurologic disorders and bring long-term value to our shareholders. Neurotech ODT continues to hold strong in the market as their differentiated product profile continues to drive demand. During this quarter, we have taken steps and have made appropriate and rigorous decisions to ensure our continued growth and future success with minimal impact to our share and NVRX. These decisions will allow us to see further improvement in GTN in the latter half of 2021. I'd like to thank our entire commercial organization and managed markets team for their dedication and continuing to deliver strong market performance in the first quarter of 2021. For much of 2020, we heard directly from patients that their experience on NeurTech ODT was quite different than past experiences with other standard of care medications. We believe that NeurTech ODT has the potential to become the first-line standard of care therapy, given its efficacy and safety profile. This slide shows that we are at the very beginning of our market penetration compared to the triptans, and a lot more growth is ahead of us. also shows that oral seizure P's are making steady progress in increasing market share specifically compared to the triptans due to this profile. I want to note that this slide does not include the separate large population of patients who can't take triptans due to contraindications or patients who have failed or don't show a full response to triptans. This type of growth early against the standard care medications is certainly boding well for the entire oral CGRP class and shows that we are changing the paradigm by which migraine is treated. When we look at CGRP targeting agents as a whole and refresh this slide, it remains evident that oral CGRP antagonists continue to drive the lion's share of the overall CGRP market. The slide also suggests that effective acute therapy results in a diminished need for patients to go on to injectable preventative agents. We believe oral CGRP antagonists for the acute treatment of migraine will ultimately grow into a $4 to $5 billion a year annual market in the U.S. alone. Given the projected size of the overall market, we remain focused on investing in the long-term success of Neurotech ODT and growing the overall oral CGRP market. Neurotech ODT is going to continue to be a key growth driver for our company this next year, but we have many other value effects and points for 2021 and beyond. While the commercial organization continues to focus on driving sales of Neurotech ODT, the rest of the organization will be equally focused on driving new value inflection milestones. This slide summarizes the breadth of our pipeline and lifecycle management opportunity at BioAven. Outside of the U.S., we have seen global approvals of Neurotech ODT begin in early 2021 and have already established distributor agreements in certain geographic regions. While we await our EMA approval for dual-acting therapy, we continue to advance discussions regarding ex-U.S. partnering of Neurotech in Europe and other major markets. In addition to our lifecycle management of Neurotech ODT, we expect to have top-line data from intranasals of Vegepant by year-end, and if positive, we will be ready to file the Vegepant as the first intranasal CGRP antagonist for the ultra-rapid treatment of migraines. An oral version of the VEGPAN is also set to begin clinical testing this year in migraine and non-migraine indications, giving our CGRP franchise flexibility in multiple formulations and different drugs that can be optimized for various CGRP-mediated diseases outside of migraine. Beyond the CGRP antagonist franchise, we also have important Phase III readouts in our myeloperoxase inhibitor and glutamate modulating platforms. For Depristat, a drug thought to decrease brain inflammatory pathways is expected to have top-line results in both MSA and ALS. Torrelizol, a glutamate modulator, is also expected to have top-line data by the end of the year or early next year. In addition, we have multiple assets moving through our Biohaven Labs discovery engine, bringing diversity to our portfolio and long-term value to Biohaven, and we anticipate some robust clinical candidates coming to to IND in the next year or so and enabling us to branch out further beyond neuroscience, build additional partnerships, and deliver more medicines across multiple areas of serious unmet need. Biohaven's robust pipeline is poised to continue to deliver value for patients and investors for the long term. Our R&D team has delivered on past milestones and has an exciting late-stage portfolio that we believe will continue to create value over the next year. To summarize, we have a differentiated commercial product in NeurTech ODT that is generating increasing and impressive revenue growth, and we have a strong portfolio of product opportunities that we believe will deliver value for patients and investors in the near term, as well as for years to come. Our goal is to continue to work hard to improve the lives of patients suffering from neurologic and neuropsychiatric disorders and continue to deliver best-in-class therapies from our promising pipelines for patients. I will now turn it over to Jim Englard, our Chief Financial Officer, to review the detailed results of our financial performance in the first quarter of 2021.
spk02: Thank you, Vlad. Good morning, everyone, and thank you for joining today. Neurotech ODT achieved net sales of $43.8 million in quarter one, demonstrating another strong performance versus prior quarter, increasing 25% versus quarter four of 2020, driven primarily by strong prescription volumes. Continuing down the P&L for SG&A, SG&A expenses in the quarter on a non-GAAP basis was $130.9 million compared to $85 million over the prior year quarter, an increase of $45.9 million. Most of our SG&A costs are in support of our commercial sales of NERTEC ODT. The increase is primarily due to a full quarter of commercial support, including DTC investment in Q1 2021 as compared to Q1 2020 when Nerdtech ODT was launched in the last few weeks of the quarter. For R&D, our R&D investment in the quarter on a non-GAAP basis was $74.1 million compared to $49.8 million over the prior year quarter, an increase of $24.3 million. The increase is primarily due to the acquisition and integration of biohazard labs earlier this year and increased expenses from completing the latter stage trials in the Japan program, which had 2 ongoing phase 3 trials by the end of Q1 2021 as well as investments in our expanding pipeline. We reported non gap adjusted net loss for the 3 months ended March 31, 2021 of 188.4M. or $3.04 per share loss compared to $134.9 million or $2.39 per share loss for the same period in 2020. Turning to our balance sheet, we continue to be well capitalized with $570.9 million in cash, cash equivalents, and marketable securities as of March 31, 2021. In addition, we have immediate access to $225 million from our debt facility with Sixth Street and anticipate $182.4 million of additional capital from the previous Royalty Pharma funding agreement. With that, let me turn it over to BJ Jones, our Chief Commercial Officer. BJ?
spk12: Thank you, Jim. This year's Q1 earnings marks the anniversary of Biohaven's inaugural commercial launch of NERTEC ODT. It's been a year like no other. as we collectively weathered the impact of the COVID-19 global pandemic. But in the midst of this once-in-a-century struggle, Biohaven remains focused on our patients' and customers' needs, and in so doing, we're rewarded with exciting commercial milestones throughout. We are extremely pleased with Nerdtech ODT's launch success to date and what we believe to be positive signals for a strong rebound in the broader pharma market and specifically robust growth in the oral CGRP migraine market. With 13 months in market, we're proud to report NERTEC ODT's net sales achievement of $107 million, which is an outstanding outcome for year one of launch. And we're particularly enthusiastic about driving strong performance in Q1, despite the traditional challenges of shifting insurance coverages, resetting deductibles, and the nontraditional hurdle of COVID's winter surge. We exceeded market expectations again, delivering $44 million in sales on 25% growth quarter over quarter. We're also bullish on market growth, as we expect this momentum to continue and only accelerate over time. With the percentage of Americans vaccinated increasing, and COVID-related deaths, hospitalizations, and daily infections falling, we see early signs of this lingering market suppression finally lifting. With each passing quarter, oral CGRPs continue to win the hearts and minds of clinicians due to differentiated efficacy and safety profiles they believe are a significant advance over the current standard of care. Syndicated spheric data show more than half of neurologists and headache specialists believe this to be true as of Q1. We're also encouraged by these data highlighting NeurTech's differentiated profile and preferences among specialists and primary care physicians, would suggest significant NERTEC upside as we break through Triptan prescribing habits. The key driver in changing prescriber belief is trial and increased experience. As market penetration continues with increased promotion from various manufacturers, we expect adoption to grow significantly in the months and years to come. As you're well aware, we're anxiously awaiting news from the FDA regarding the status of our SNDA for the preventive treatment of migraine. If approved, we expect to launch NERTEC ODT's new indication by end of Q2. As such, we're busy finalizing preparations for what we believe is a significant milestone in migraine treatment, what would be the first and only medication proven to treat and prevent migraines. If approved, Neurotech ODT has the potential to offer patients with migraine what no other medication has, personal control. For the first time, they will have a highly effective treatment option that offers flexibility and simplicity by reducing polypharmacy or pill burden with one medication that can be used to effectively stop an attack by taking less or prevent one by taking more. We will share more once we hear from the agency. So in summary, we've closed out Q1 2021 with strong performance, delivering above expectations, driven by a best-in-class compound and outstanding execution in market. The future looks bright as COVID recedes, markets open again, oral CGRPs continue to penetrate tryptans, and we hope to receive approval for a transformational indication. But I'd like to close, as we often do, with a spotlight on our patients. We continue to receive thousands of testimonials each month from patients and their loved ones sharing stories of hope, resilience, and strength, each with a unique and compelling story of how NERTEC has given them a better quality of life than they experienced previously due to migraines. These communications serve to fuel our collective passion and deepen our resolve to provide access to NERTEC ODT for every migraine patient who needs and deserves more treatment options. We're grateful to all of our patients and their clinicians for the trust they place in us as we partner to address the tremendous unmet need in this disease state. And with that, I'll turn it over to our chief medical officer and my partner, Elise Stein.
spk01: Thank you, BJ. Again, this quarter, I'm happy to highlight the significant advances made across our R&D organizations. And I'm also happy to look to the future and Biohaven's potential to bring multiple novel therapies to patients. We continue to make great progress across our programs, including our CGRP franchise, our myeloperoxidase inhibitor platform, our glutamate modulating agents, and the new opportunities we have across both common and rare diseases in our late-stage portfolio, as well as our labs. Biohaven Labs has numerous early and exciting platforms being developed, as well as some assets in or nearing clinical trials. We're progressing our antibody recruiting molecules, multimodal antibody therapy enhancers, also known as MAIDs, and molecular degraders of extracellular proteins. And they have great potential, and you'll be hearing a lot about these in the coming years. We expect our early pipeline to bring us exciting compounds in numerous areas over future years. But for today, I'm going to focus on our later stage program that are in the clinic with many nearing top line readouts. Our aim, of course, is to always look to novel targets so as to be able to bring treatments to so many who suffer from debilitating neurologic disorders. NERTTEC ODT remains our cornerstone marketed product indicated for the acute treatment of migraines. NERTTEC's prevention SNDA, as you've heard, is currently under evaluation by the FDA and the PDUFA date is nearing. The VeggiePants is following closely behind with both intranasal and an oral formulation in clinical trials. Our third CGRP antagonist, small molecule 3100, is also headed to the clinic. This morning, I will be highlighting some of our most important progress to date. Our portfolio of small molecule CGRPs affords us great flexibility and has the potential for multiple blockbusters. The impressive commercial success of NERTEC in the United States has been touched upon by both Vlad and BJ. NERTEC's SMDA for prevention of migraine is under evaluation and has its PDUFA date, this, the second quarter of 2021. The European evaluation of NERTTEC's dual acting filings is underway. And with these approvals, we look forward to being able to treat the continuum of migraine disease with the simplicity of using one medicinal product. This significant paradigm shift will be able to improve the lives of many living with migraine across the globe. Filings and approvals for the acute treatment of migraine have taken place or are underway in multiple countries, in the Middle East, and we have already secured approvals in Israel and the UAE. We expect further approvals throughout this year. Life cycle expansion beyond geographic regions and the dual acting indications is also of critical importance. We have ongoing trials in both pediatric migraine as well as trigeminal neuralgia, and expect to study NeurTech in several additional migraine-adjacent areas, including post-traumatic headache, temporomandibular joint disease, and at least one other undisclosed area. Investigator-initiated trials and studies in health economics will add to the wealth of information that will ultimately be available for NeurTech and will help define the scope of important information for patients, providers, and payers. Our Zevegipant program includes both intranasal and oral formulations. An acute treatment phase three study with intranasal Zevegipant began in October of last year and followed a positive phase two study. The second pivotal Zevegipant trial has the potential to confirm an even more rapid onset of effect. An oral formulation has also been advanced and began one of two phase three studies in migraine prevention in March. Newest in our portfolio of CGRP antagonists, small molecules, are a number of next-generation CGRP antagonists. We expect the first of these, 3,100, to advance to the clinic in the second quarter of this year. CGRP represents an important pathway in the nexus between the immune and central nervous system. Across our range of CGR antagonist assets, we'll follow the science and conduct multiple proof-of-concept and registrational studies. Some of these have begun, for example, plaque psoriasis with Remedipant and COVID-19 with Zevegipant. Additional non-migraine studies are planned, including asthma, and others remain undisclosed. These multiple CGRP antagonists all open new possibilities for us to expand our CGRP platform and afford us the ability really to customize the unique attributes of each of these structurally unique compounds. We have deep experience in this mechanism of action, and now we have multiple assets to optimize for different indications. We're quite busy with the CGRP antagonists as well as our other important platforms. Biohaven's pipeline has both low-risk opportunities and lifecycle management of our CGRP platform and higher risk. high-reward investments in our glutamate and myeloperoxidase inhibitor platforms. Our glutamate modulating platform is one of those high-risk, high-reward areas. For Riluzol, recently completed enrollment in a Phase III study in spinocerebellar ataxia, and is expected to read out top-line results between 4Q 2021 and the first quarter of next year. A Phase III program in OCD started at the end of last year with the enrollment in the first study, and the second study was initiated in the first quarter of this year. Both studies are based on critical signaling that emerged from the earlier proof-of-concept OCD study we conducted. Glutamate is the most abundant excitatory transmitter in the brain, and we believe tririluzole has and will provide important advances in the neuroscience field across many areas, which may then be expanded. With regard to our MPO platform, our myeloperoxidase inhibitor trial in multiple system atrophy, a rare and rapidly progressing disease with FDA's fast-track designation, we'll read out top-line data in the third quarter of this year. The Mass General Healy study that is testing this agent in ALS is also ongoing and is expected to complete enrollment in the fourth quarter of this year. Biohaven's efforts across our glutamate and myeloperoxidase platforms allows us to target three rare and devastating diseases, multiple system atrophy, amyotrophic lateral sclerosis, and spinocerebellar ataxia. We anticipate all of these to read out over the next year and the potential for three global orphan drug approvals in 2022 and 2023. We are really excited by the immense opportunities across all of our assets and platforms and will continue to make strategic decisions across the portfolio with both external partnerships and internal programs. Our pipeline is, as always, exciting and we continue to drive these robust platforms and programs forward. We're very busy and we remain committed to follow the science and to keeping the patient at the center of all we do. It is really, again, a pleasure to be able to share all of this with you, and I will now turn the call back to Vlad.
spk14: Thank you, Lise, Jim, and BJ. In closing, BioHaven has demonstrated robust growth in terms of the commercialization of NERTTEC ODT and permanent maturation of our late-stage neuroinnovation pipeline. We expect continued market expansion of NERTTEC ODT in migraines, and anticipate at least four pivotal trial readouts over the next year. We have the potential for multiple NDAs over the next couple of years and importance to us as a growth of the company to continue advancing this robust pipeline. Before opening up to Q&A, I'd like to end by thanking the entire Biohaven team for their relentless commitment and value creation for patients and investors. I also want to thank all the patients, their family members, and investigators who have participated in our clinical trials and have helped advance clinical care in the area of neuroscience. We must continue to work hard to bring novel treatments to patients suffering from these diseases. Finally, thank you to our visionary investors who have helped fund our studies and bring Neurotech ODT to patients. We'd like to now open it up to questions. Operator?
spk13: Thank you. At this time, we'll 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 2 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 today is from Ken Katakore of Cowan. Please proceed with your question.
spk16: Hey, good morning, everyone. Congratulations on all the progress. I was just wondering if you could talk about any kind of interactions to date with the agency in terms of the prevention. Are we down to labeling discussions or any nuance or perspectives you could provide? And the second question is, to what degree are we going to need to sample a support if we do get the prevention approval during the year? So I'm just trying to think about if we could set some expectations for gross to nets. as we try to convert over the managed care for prevention, maybe just make sure we're all properly prepared for how we're going to support that launch when it occurs. Thanks so much.
spk14: Again, thanks for the questions. You know, we typically don't give a lot of details about the interactions with FDA. I think suffice it to say we're at the appropriate time and interactions with the agency, and we look forward to their decision, which should be coming, you know, shortly. And with regards to prevention, looking forward to next year, you know, something that's really a benefit and allows us to streamline the launch of NERTEC ODT and prevention is the fact that we're using the same dose the same 8-pack, and there's a significant advantage to that when it comes to both payers and also our sampling strategy. I'll ask BJ to add any comments to that, but I don't anticipate there being major changes to GTNs around that. BJ?
spk12: Yeah, just to reinforce that, Vlad, and thank you for the question, Ken. We believe, one, we'll retain and maintain our excellent acute commercial access. and continue to aggressively pursue what will be preventive access as well. And we can already tell you we have significant interest in preventive indication among payers and early discussions have been fruitful. As it relates to any changes from a sample strategy standpoint, we really don't believe that to be necessary as we provide appropriate sample support for all our clinicians.
spk14: Great. Thanks, BJ. And as I say, there's also this efficiency. Think about the fact that in our media spend and our physician outreach, you don't have to do two sets of advertising. It's not like you have to have a different DTC budget for a different branded agent. So if we had two drugs going into the space, you might expect there would be a significant increase in those costs. You're going to see a pivot in our advertising. This will be very focused and streamlined. This is going to include both. And like that slide BJ showed earlier, we're going to dissolve the line between acute and prevention. That also means we'll be very efficient with our marketing dollars and our interaction because we'll be able to send either this dual therapy message in one interaction or one ad. Operator, next question.
spk13: The next question is from Paul Choi of Goldman Sachs. Please proceed with your question.
spk11: Hi, thank you. Good morning, team, and let me also add my congratulations on the quarter and the progress. I also have a couple of questions on prevention as well. Just first, Vlad or BJ, the antibody growth has been pretty flat for the past couple of quarters here, and I was just wondering if you could maybe just comment on whether this is a Was the, you know, sort of a penetration issue, or is it primarily a payer issue in terms of that's been driving sort of this flat growth with regard to the antibodies and prevention? And then second, I know the Zevegipant oral trial is just starting to kick off, but could you maybe speak to how you're thinking about positioning down the road as that trial completes and that product can come to market, and how you think about it in the prevention indication versus Neurotech? Thank you very much.
spk14: Thanks, Paul. Look, going back to a year or so ago, we had made the prediction that if you had oral CGRPs that were readily available, that we believe patients would prefer oral solution over injectable. We've updated that slide that we showed in the deck here, a quarter of a quarter, and as you said, it's flat. Now, the speculation for why it's flat can vary, but it's our belief that when you give patients an oral solution and access to this mechanism in acute, that it makes sense, right, that if you're effectively treating acute episodes, less people will need to go on to preventative agents. And actually, when you look at the treatment guidelines, right, they specify that, that you should go through effect acute therapy before going on to preventative agents. And so it's speculation, but it's our belief that it's the effect of acute therapy with, you know, orals that, you know, are going on, you know, to less patients needing those MABs. Getting on to your question about the VegerPants positioning, look, I think as you've heard from multiple individuals on the call, this is a franchise that we've developed with multiple assets We do not want any area of migraine or any area where CGRP is going to be leveraged in a disease to not be a top competitor in that area. So oral Zevegipant really puts us into two positions, right? For those very few patients who may need absolutely everyday use, we want to have a solution for them in oral Zevegipan and prevention. But then it also gives us massive flexibility in non-migraine indications to bring different formulations forward for those diseases. And so, as Elise had outlined, we have a vision for this mechanism of action that extends into very large and common disease areas well beyond migraine. Migraine is just the beginning, and we're going to be excited about seeing those studies in future years. Thanks. And next question, operator.
spk13: The next question is from Chris Raymond of Piper Sandler. Please proceed with your question.
spk04: Hey, thanks for taking the question. Just on the primary care versus specialist sort of sales effort, how are you guys thinking about the volume split here between specialists and primary care docs maybe over the next year or two. I mean, especially with the prevention label being added potentially. I know you guys have talked about efficient DTC advertising here with the label expansion, but maybe talk about how you approach sort of the sales effort to keep the momentum going among PCPs.
spk14: Yeah, I'm going to have BJ talk about it. It won't be a surprise. We've already transitioned to that focus. I think when you first start a commercial launch, it's no surprise in this space it starts in the specialty clinics. And BJ, do you want to comment about that transition to primary care, how important it is to us and the plan?
spk12: Absolutely. And Chris, thanks for the question. This is a very unique scenario in which As Vlad mentioned a moment ago, it's almost 100% synergistic. The beauty is we don't need to shift our attention or our call focus, if you will, from the current folks that we call on. Again, we believe that just as in acute and what has been this rapid adoption, of oral CGRPs has happened primarily in specialty first, and then we'll slowly but importantly transition out to primary care. We believe the same thing will happen as it relates to the preventive indication as well. And so we feel very confident as it relates to our promotion, whether it be DTC or whether it be from direct promotion to clinicians, is that we're well-focused. Again, every dollar we spend supports both what would be acute and preventive. And so it all works extremely well for us as we pursue, you know, what is this dual therapy and is different in the marketplace.
spk13: Great. Thank you, Vijay. I'll bring in the next question. The next question is from Laura Chico of Wedbush Securities. Please proceed with your question.
spk06: Hey, good morning, guys. Thanks for taking the question. I've got two. So, you know, just kind of following back, The market research, it seems like there's a little bit of a disconnect on a couple levels. So in one regard, you've got greater familiarity comfort with UBELV versus NERTEC, but more favorable views on NERTEC in terms of durability effects and speed of onset. So I'm just wondering if you could kind of help us understand how you're reconciling the data, but also maybe with 2021 having a lot of reopening changes, how are you planning to kind of modify your outreach efforts to physicians And then secondarily, just, you know, because that's on filing the EU submission, I guess I'm trying to think about the balance on capital allocation between the SG&A spend and build out there and further pipeline investment. So I guess any color there that would be helpful. Thanks.
spk14: Thanks, Laura. Appreciate it. So, you know, as I know you watch the weekly scripts very closely with your note that comes out every weekend. you know, there's a tug of war on the NBRX, you know, every week. And so, you know, you see that there's roughly a splitting of market share at this point, which I think is a win for both companies and also a win for patients to have, you know, choice in this space. You know, we do happen to believe, and I think that the research reflects it, that we have a more differentiated label from our competitor with the early, you know, onset of the return to normal by 60 minutes and then the durability of 48 hours, that's really resonating. And then the drug is really, I think, because of that profile built for primary care, where one dose, no titration, right? So we think that's going to just continue to resonate throughout this year in our messaging. And we think you'll see perhaps a little bit more of a differentiation in those market numbers. as we continue to penetrate primary care, and then the prevention label comes in. And so, BJ, do you want to talk a little bit more about capital allocation and the other aspects of Laura's question?
spk12: Absolutely. And Laura, thanks for the question. As it relates to how the market's opening and how do we kind of shift our allocation, we will still focus on what are kind of these two anchor points of making sure we can activate patients, but also making sure we communicate effectively and broadly with physicians. And that's the area of opportunity for us. And frankly, not just for us, but for the entire market, is that we just haven't been able to get to clinicians in the way that we normally do. And so we will take kind of current action. access opportunities that will broaden, and we will be able to be more productive in some sense. And so that's the relative shift that we see. It's still consistent with our overall strategy, and we just expect more productivity kind of in that space. So as well as things have gone thus far, we expect them to accelerate as the market opens more broadly.
spk14: Thanks, BJ.
spk12: Operator, next question.
spk13: The next question is from Mark Goodman of SCB Leerink. Please proceed with your question. Hey, Mark.
spk03: Hey, sorry about that. Can you hear me now? Yeah, we can hear you now, Mark. How are you? Sorry about that. Good, good. Good morning. So before you were pre-announced the first quarter sales, you had talked about gross to net staying high and at the same high levels that we were used to seeing kind of, you know, in the second half of last year. And you said that would be well into this year. And then in the first quarter, it kind of felt like gross to net dropped significantly. quite a bit, but obviously there's a lot of things that go on in between the gross and the average price. And so maybe you guys can talk a little bit about what happened in the first quarter. Was there any like one-time adjustment that helped you in revenues or, or why were gross to net so low? And maybe you could just give us a flavor for how you're thinking about gross to nets for the rest of the year. And then secondly, Jim, maybe you could just give us a sense of how we should be thinking about spending. For the rest of the year, the numbers went up pretty dramatically in the first quarter. There was some share-based compensation expense that looked very high. Just wondering if there's kind of a one-timer in there or if those things are going to be there each quarter. And just give us a sense of thank you.
spk14: Thanks, Mark. I'm glad to hear you saying gross nets are low, so thank you for that. But, no, as you know, what we had always said is that there will be turbulence around gross nets, and they certainly are. There are so many different variables that go into GTNs. And, you know, something that we did say last year we would start to do, and we weren't sure what the success of that would be, would be to start to change some of the rules around our affordability programs. And so I think first quarter what you also saw is a cycling out of not paying customers to more paying customers. And that reflects that after the year of launch, we're able to identify, as you know, most plans were equal tiering with our competitor, 90% or so plans. There's a few plans where we have some wins, they have some wins. And so you saw some of our rule changing that people who aren't on our You know, we're not on the insurance bridge and there's no reason for us to continue to cover those patients. And so, you know, part of what you saw was coming off of neuro tech. And so you might see a decrease in some of those scripts and then going on to, but for us, that very efficient, because it meant that we were fine tuning that more pain. This is going to be a challenging year. As we know, first quarter always is. We had a little bit more success than we thought on getting through the deductibles and copays first quarter. But it's something I would caution people that we will continue to tweak these affordability programs. And when we do that, there's some learning that occurs and, you know, back and forth. So it's not so straightforward that you just get the better GTNs and you stay there. So I would say let's all be cautious about this year. And especially, you know, as we saw and were surprised by, the resurgence in COVID, and also some weather in Texas that affected Scripps. So, you know, there's a lot of external variables. Let's be cautious. But I think after this year, you should see more, you know, steady and predictable GTN numbers. Jim, did you want to talk about the one-time cost that I think, you know, definitely increased, you know, the perception of R&D spend? But I'll remind folks, a lot of things get wrapped into R&D spend that always aren't R&D. Yeah, that's the next slide. Yeah. Oh, and AskG&A as well.
spk02: Yeah. So, thanks, Vlad, and thanks, Mark, for the question. So, Mark, as you pointed out, the increase in spending, there are a number of drivers there. Stock-based comp is one of them, which is why we also provide a lens on non-GAAP to tease some of those things out. Stock comp, obviously, when you have stock performance the way we have, there's more. There's exercises, but there's also timing of awards that play into that as well. And then outside of the one times on SG&A, there's certainly, and as we've said in the past, there's always going to be timing of how we invest in our brand and kind of a pulse strategy. And so any given quarter can see variability, but it doesn't necessarily set the tone for what our future is, future quarters. So hopefully that addresses your question.
spk14: Thanks, Jim and Mark. And next question operator.
spk13: The next question is from Charles Duncan of Cantor Fitzgerald. Please proceed with your question.
spk08: Hey, Doug. Hey, morning. Vlad and team, congrats on a great quarter. Let's see, we're juggling calls, so sorry if this has already been asked. I wanted to ask a couple of questions about the pipeline. In particular, Zabangapan, I guess I'm wondering, can you provide a little bit more color on how you think Zabangapan will fit within the current CGRP franchise. And then I had a follow-up on the other pipeline assets.
spk14: Thanks, Jess. So, you know, the VEGIPAN also represents, we did comment very briefly earlier about the flexibility in different modalities, formulations, indications, as well as non-migrant indications. but to start with maybe differentiation in the intranasal. So we've seen every single migraine, you know, mechanism of action eventually, you know, migrate to an intranasal, and normally it does because you try to get a greater speed of onset, and also it reminds you that when patients are nauseated or vomiting, it gives an alternate way patients can get drug in their body without that. So, again, we want to be at the lead with this robust franchise that we have. With our strategy, we will be the first intranasal, assuming we get positive data towards the end of the year, years ahead of any competitor. And I'll also highlight that some of these CGRPs are actually very difficult to make into intranasals because they struggle with solubility, but Zevegipan has really unique characteristics in that it's highly soluble. So you're going to see the first entry will be in the intranasal for ultra-rapid onset of action. We think it's going to be complementary to Neurotech, that it's not going to take away shear from Neurotech, because patients, generally speaking, prefer oral over intranasal over injectables in that order. And so this would be a nice additional formulation in the toolkit if you have to have a really quick onset of action or are nauseated or vomiting. And then when you look past to the oral versions, you know, we're going to compete with an oral version for every single day use and prevention for those patients who really need that level. And as we know, that's the minority of patients that will need that level of daily use, but we'll have that. And then the other oral formulations will, you know, allow us to specifically target other disease states, and we're excited about that. So it really represents a nice expansion of the franchise, Jeff.
spk08: Okay, that's helpful. And then just quickly on tririluzole and verdipastat, you know, I know that they are in, you know, call it tough putt indications initially, but I'm wondering if for verdipastat and, or excuse me, tririluzole and spinal cerebellar ataxia and verdipastat in multi-system atrophy, I'm wondering if you could provide a little bit of color on why you have confidence or what you've done to, I guess, reduce risk with those current clinical trials.
spk14: Great. Great question. So I think when you look at where we are with Trolizol and Verdeprasab, you're right. These are tough indications historically. The difference is we're finally coming to these registrational trials that have been performed and designed on the platform of phase two data that showed a signal, right? Our strategies always have these multiple kind of basket trial-like approaches of indications because they're tough disorders. And the remaining, you know, SCA had really nice proof-of-concept data. We were allowed to then use that data to, you know, increase our dose, increase our sample size, and make adjustments to the scale. So we did everything we can to improve our probability of winning based on a Phase II output. So that's why we're particularly excited about SCA. Same goes for Vredeprasat. I think AstraZeneca, prior to Exxon Neuroscience had performed a really nice phase two demonstrating a dose-dependent signal in MSA. Once again, it's an area where we're now going forward with an optimized dose, higher sample size, and a scale that's been optimized. So we think both of those, albeit tough areas, increased chance of winning because of the Phase II work that was done. And unlike some of the other indications that we pursued that were a little bit higher risk but high unmet need, where we didn't have that Phase II proof of concept to give us the advantage. So we're excited about both those readouts. So we said today we're tracking early. MSA will now be a readout in third quarter and SCA by the end of the year early next year. So thanks, Jeff.
spk08: Very good. Thanks for taking my questions.
spk14: Thanks.
spk13: Operator, next question. The next question is from Tim Lugo of William Blair. Please proceed with your question.
spk10: Hey, this is Lachlan on for Tim. Thanks for taking the questions. So you mentioned earlier that you expect increased productivity as the market starts to reopen. Can you sort of help quantify that or just help us think about how much upside there is to the productivity as the team or productivity of the team as the market hopefully continues to reopen. And then secondly, you mentioned the usual payer dynamics in the first quarter. Was there any pushback that you experienced or any surprises there?
spk14: Thank you. Appreciate it. And I'll turn it over to EJ to address this.
spk12: Tim, thank you. So, as it relates to productivity and quantifying that, you know, once again, as well as things have gone for NeurTech and, frankly, for oral CGRPs, we know there's been a bit of a blanket, right, on this since the launch. And it's because, you know, patients haven't readily been going to their doctors. Clinicians appropriately have not been, you know, widely open to to our promotion and to our representatives as well. And this is happening across the industry as a whole. And so as it relates now to what we think is this upside, as well as we could have done, it would have increased what was the growth of our launch. That is what we expect now is to kind of enter back into what should be substantive growth that we could have seen, right, since the launch. And so that is what we expect to see. Again, I want to be very careful when we want to, you know, set up what are the right expectations. We have not seen thus far. We don't expect to see just all of a sudden on, you know, June 1, the market opens up broadly and just takes off. It will be incremental because that's the way the nation has been opening up. And we're starting to see evidence of that already. And so we're very bullish on that. As it relates to discussions thus far with payers, again, there's a lot of work to be done, for sure, as it relates to the preventive indication. But as I mentioned, thus far, dialogue with different payers, and we're well into those discussions, there's a lot of interest. and we're having very good and robust discussions. We will not land anything in the near term. We're still waiting, obviously, to hear back from the agency. So a lot more work to be done, but thus far, things look good.
spk14: Thanks, Peter. I'll bring our next question.
spk13: The next question is from Vamil Devon of Mizuho Securities. Please proceed with your question.
spk07: Hi, Craig. Thanks for taking the question. So maybe I also apologize if I missed this earlier, but just In terms of the European opportunity, can you talk a little bit more about your partnership discussions? It sounded a few months ago that you were making good progress there. Just wondering if you should expect something ahead of a potential approval there, or are your plans sort of to go alone if needed? And then just a second question maybe around the, as you move from just having the acute label to potentially having prevention as well. Can you talk, I don't know if you market research or anything you've seen, It kind of talks about the sort of severity of the patients that are coming into NERTEC, how many migraines do they have in a month on average or anything along those lines. And do you think as you get to the prevention side, maybe you can kind of tap into a more severe patient population, just trying to get a little better sense of kind of where you might be able to expand the opportunity? Thank you.
spk14: Thanks. I really appreciate it. So, you know, as you know, with any, you know, partnerships or potential partnerships, we're very careful not to, you know, get into too much specific detail around timing and other things around that. What I would say is, look, just like we've said in the U.S., right, you know, we always have to be prepared to, you know, launch and do things, you know, on our own. And we've proven, you know, we can do that. Ex-U.S., there is definitely an efficiency of other, you know, companies and groups that have pre-existing, you established infrastructures as well as relationships with payer and regulatory fronts. So there would be a heightened efficiency ex-US, as we've previously said. And the interest is varied from local regional groups that are very good in certain markets to larger groups that are global. It's not surprising that one could think of there would be an efficiency and ease of one global partner, but that doesn't mean that that would kind of take precedent over a really strong local group. So we have to balance those two and see what the best relationships and economics would be for our investors, but then also who can most efficiently deliver this globally to patients. So that's all we can say about it at this point. Stay tuned and There'll be additional details that you get there. Getting to your second part of the question about what are the types of patients coming in, About a year ago, again, this is another area we were different than a lot of the messaging that traditional investors have had around migraine. There's, I think, a hyper-focus in prevention, and I think a lot of people missed the fact that it's actually people with less frequent migraines that make up very large numbers in this space. If you have more than 65% of patients You have kind of less than that, you know, four to eight kind of migraines, you know, per month. And so those have traditionally been people, you know, for acute therapy. And I think you're seeing that in the great numbers that both ourselves and our competitor are putting up is a very large unsatisfied population. Acute population here, we have not seen a lot of prevention use off label because I think people are very conservative. They're waiting for that data. They're waiting for. They saw the data in the Lancet that we had. That was robust. I think that's step 1 step 2 is getting the approval from the FDA and being able to promote on it. So. So I think there'll be a lot of growth ahead in this redefining of the space if we're successful with the NDA of one drug, same dose, treat both acute and prevention, and finally getting rid of the distinction between these two different categories. So thanks for the question, Emil, and next question operator.
spk13: The next question is from Douglas Sao of HC Wainwright. Please proceed with your question.
spk09: Hi, good morning. Thanks for taking the questions. You know, I'm just curious. We look at the script data and the data that you presented. You know, you had sort of really tracked the head of Ubrel, the new-to-brand, and it sort of now seems to be sort of back and forth and maybe even Ubrel having a slight advantage. I'm just curious if you're seeing anything in the market. And, you know, obviously we have the prevention launch, which, you know, sort of should be a quite meaningful impression point for you. But just, you know, on the acute side, what you might be seeing in the near term, some of the dynamics in the marketplace. Thank you.
spk14: Yeah, look, we've been very happy. I think if you rewind to a year ago, most people were saying, look, your competitor is going to get 70% of this market because they're the established competitor. It's going to be hard for Biohaven to get in there. And I think, look, we're very pleased where we are, but we're not resting on our laurels there. Of course, we want to become the market leader. And I think we'll be on that trajectory, given the profile, and especially with the upcoming prevention, you know, as well. And I just invite BJ to see if he wants to add, you know, anything to that commentary. But, you know, don't overinterpret the script numbers, especially when we're changing rules on affordability programs and you don't have a line of sight into, you know, some of the rationale as to, you know, how those affordability programs change and then the impact. So it might seem as though you have a, you know, a reduction in this subset of patients. But again, if it's converting people over to being more paying than non-paying, a customer, then it might look like there's a change in the RX when there really isn't, right? There's just a program wide affordability changes. BJ, anything on MBRX or, you know, what are your thoughts?
spk12: Yeah, the only thing I'd add, but thank you for outlining that. It's really since July of last year, right? If you look holistically, you know, we've been literally within a few percentage points of one another in MBRX. And again, it's a very, very positive thing. We continue to be in that space, even with the affordability changes. That Vlad talked about. And so we believe, absolutely, especially with the market research so positive, is that in the fullness of time, we will be the market leader. And we expect to make that happen. That being said, you know, this market is huge. And there's plenty of room, actually, for multiple, you know, very successful drugs. And so we continue to be excited about what's ahead.
spk14: And, you know, we think there's going to be a halo effect in acute if we're successful in prevention, right? Wouldn't you, you know, if you're a patient in a position, wouldn't you want your patient to be on the only acute therapy that could also prevent your future migraine, right? So we think there's going to be a nice halo effect there. So thanks for the question. Operator, next question. Okay, left.
spk13: The next question is from Esther Rajavu of UBS. Please proceed with your question.
spk05: Hey, good morning, Vlad and Jean. Thanks for taking my question. I have two quick ones. First, on the MPO inhibitor, can you share your thinking on the commercial environment for MSA and what you would need to do to educate prescribers to diagnose correctly? And any color you can share on the regulatory timeline and considerations would be helpful. And then I have a quick follow-up on Nortec.
spk14: Hey, Esther. The question, we're really excited about MSA because as you know, there is no current treatment for MSA whatsoever. And as you alluded to, you know, often it gets misdiagnosed as Parkinson's, but, you know, very quickly the right diagnosis is achieved because patients progress much more rapidly, become wheelchair-bound, and unfortunately die much earlier versus at the very different, you know, onset with Parkinson's. So most of the highly skilled neurology centers that we're working with and call on that see MSA, the diagnosis changes. is pretty straightforward. I think where some of the education will be having to occur is in more of the larger community center neurology offices where these individuals may get diagnosed with Parkinson's earlier. And so we have a plan around that and making sure that we get more widespread education about the differences between Parkinson's and MSA. But like migraine, you're gonna see the launch in more of the specialty centers first and then branch out. You know, for there, so hopefully that answered the 1st, part of your question. And you said you have a 2nd, 1, sir.
spk05: Yeah, in terms of North tech, it just wanted to see what proportion of patients on match are also getting a script for all right now.
spk14: That's a good question and. You know, what we know and what we've heard from folks is that people have used it for breakthrough. We actually don't have a quantifiable number, but that's a good question. We'll see if we can, you know, drill down on that a little bit. But we are hearing that, look, if you're on any preventative agent, whether it's Topamax, MABS, you know, patients continue to have breakthrough. And our understanding from clinicians has been really welcome to have a new mechanism that can treat that breakthrough. But I don't have a specific, you know, number for you, but we'll look into it. And I think we are unfortunately out of time. Thank you, Esther. So we're going to have to stop the questions there. Thank you all very much for joining our first quarter call and look forward to the next quarter discussion with you. Thank you all.
spk13: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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