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spk05: Good morning and welcome to the Biohaven Pharmaceuticals fourth quarter and full year 2021 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. If anyone should require operator assistance, please press star zero on your telephone keypad. Please be advised that today's conference will be recorded. I would now like to hand the conference over to Caroline Dirks from Biohaven. Thank you, Caroline. Please go ahead.
spk08: Thank you, and welcome to the BioHaven fourth quarter and full year 2021 earnings call. Speaking on today's call are Dr. Vlad Chorich, our Chief Executive Officer, Matthew Butin, Chief Financial Officer, BJ Jones, Chief Commercial Officer, and Dr. Elise Stock, Chief Medical Officer. Also speaking on today's call are Dr. Michael Bozic and Dr. Stephen Dworski, who will be joining BioHaven as President, Biohaven Labs, and Senior Vice President, Biohaven Labs, respectively, and Cliff Bechtold, President and General Manager, Biohaven Ireland. We are also pleased to announce the addition of Jennifer Porcelli to Biohaven Pharmaceuticals as Vice President, Investor Relations. Earlier this morning, we issued a press release announcing the fourth quarter 2021 highlights and a summary of year-end results. A copy of this press release can be found on our website at biohavenpharma.com, and we will file our Form 10-K later today. Before we begin, let me remind everyone 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 risks and uncertainties associated with an investment in Biohaven can be found in the company's filings with the U.S. Securities and Exchange Commission. Please be aware that you should not place undue reliance on any forward-looking statements we make today. For this call, we will focus on non-GAAP financial measures. Detailed descriptions of these non-GAAP measures and reconciliations to the most comparable GAAP measures can be found in our SEC filings. An archive of today's call will be posted to Biohaven's website in the Investor Relations section. With that, I will turn the call over to our CEO, Dr. Vlad Chorch.
spk11: Thank you, Caroline. Good morning, and thank you to our investors for joining the year-end fourth quarter earnings call. Fourth quarter 2021 has been another standout quarter in what was simply an exceptional year for Biohaven. NERTEC ODT has become the number one prescribed migraine treatment in its class, allowing patients and doctors the ability to customize a single therapy to treat and prevent migraines. Business performance continues to exceed all expectations with 2021 year-end date sale revenues of $463 million in net revenue and over 1.6 million prescriptions since our launch. Our strong revenue growth highlights the value that our differentiated product brings to patients and physicians. The only simple-to-use oral migraine medication with dual indications to stop your migraine attack now and prevent your next one. Our global strategic collaboration with Pfizer for markets outside the U.S. is well underway, and our teams are working lockstep to prepare for an expanding global launch of Remedipant. This partnership will serve as a catalyst for the creation of a world-class migraine business that will open the door to delivering Remedipant to millions of patients around the globe. Imagine what our global commercialization with Pfizer will achieve for patients. We are extremely pleased to announce this morning the CHMP positive opinion for Remedipant in the EU, recommending the granting of a marketing authorization for the prophylaxis and acute treatment of migraine. I want to congratulate the Biohaven and Pfizer teams for this exceptional outcome and working closely with the CHMP to achieve this milestone. With recent positive data for our Our pivotal trial for MedJapan and acute treatment migraine in China and South Korea. We are targeting a regulatory submission in the second half of 2022. And if approved, this will unlock a market of greater than 120 million acute migraine patients in China who may benefit from the relief provided by the number one migraine treatment in its class. In addition to the market growth and anticipated expansion of NeurTech ODD around the globe, our team is completing the NDA submission of Zavegipant in the U.S., which we anticipate will be filed later this year. Zavegipant is the only intranasal CGRP receptor antagonist in late-stage development and has demonstrated an ultra-rapid onset of action within 15 minutes of administration. If ultimately approved, we believe that Zavegipant will provide an important treatment option to enhance speed to migraine relief, and a non-oral formulation for patients with prominent nausea or vomiting at the time of the migraine attack. While we are very proud of our robust CGRP franchise and the positive impact that it's having on patients, we continue to focus on advancing other novel and potentially best-in-class therapies for patients suffering from neurologic and neuropsychiatric disorders. We are excited to announce this morning the acquisition of two new platforms to our pipelines, We acquired what we believe is a potentially best-in-class KV7 ion channel activator for epilepsy and other neurologic indications that we will discuss in further detail later in this presentation. We are also pleased to report that we have licensed a late-stage myostatin targeting asset from Bristol-Myers Squibb that is expected to enter Phase III clinical trials in spinal muscular atrophy, or SMA, later this year. The license of Taldefgravet, will become the third drug candidate to enter the clinic that we have licensed from BMS. With the two additions to our portfolio announced this morning and the discovery engine of Biohaven Labs, our clinical pipeline is robust, and we believe will fuel the development of new, innovative drugs for patients. In the U.S., we have raced ahead of the competition, and Neurotech continues to be the number one migraine treatment in its class. Our commitment to innovation in the treatment of migraine is strong as we continue to strive for excellence and look forward to bringing this leading therapy to patients around the world. The new CGRP oral medications are just beginning to scratch the surface of the migraine market in the U.S. The oral CGRP class is showing strong growth and continues to gain momentum into 2022. To put the progress in perspective, oral CGRPs as a class recorded a remarkable net sales of approximately $1 billion in 2021, while only representing a small fraction, about 5% to 6% of the overall migraine scripts. We believe that the Oral-CGRP class will show growth for many years and ultimately will become first-line therapy for migraine. Looking specifically at fourth quarter market share versus Triptan, the Oral-CGRP has continued to gain market share. This reflects the limitations of these older therapies and the advantages offered by the new oral CGRP class. The oral CGRPs have shown quarterly increases in both TRX and NBRX volume compared to the tryptans. As you can see, there is a significant growth opportunity ahead of us, and we are already seeing the increased penetration of oral CGRPs as patients increasingly become more informed about the fast and lasting benefits of dual-acting NERTEC ODT. We continue to update this slide regarding the oral CGRP class penetration compared to the injectable monoclonal antibodies. Oral CGRP antagonists continue to drive the growth of the overall CGRP market. Injectable MABs are limited to prevention, and many patients consider an injection less desirable compared to a single dissolving pill. Given the projected size of the overall market, We remain focused and committed to investing in the long-term success of NERTEC ODT as the only medication that can provide acute and preventative treatment. Our world-class global commercialization partnership for Medjapant with Pfizer will allow us to bring what is the leading oral CGRP antagonist in the U.S. to patients worldwide suffering from migraines. Our mutual goal continues to be gaining approvals to deliver dual therapy neurotic ODT rapidly to as many patients as possible around the world. There are approximately 1 billion patients who suffer from migraine across the globe. The news released this morning regarding the positive CHMP opinion for Remedipant or Vidura, as it will be marketed in Europe, to treat acute and prevent episodic migraine is exciting. In addition to the regulatory progress in the EU, we also recently received positive phase-through data in our China-South Korea study for the treatment of migraine. We anticipate filing an NDA in China later this year. The global market opportunity for Mirage Japan is becoming a reality, and the expansion of neurotic ODT beyond the US continues to be robust. With multiple approvals in migraine for both acute and prevention, double-digit submissions across the globe, and multiple pivotal trials ongoing, we are seeing the results of our differentiated product. We are confident in the power of our collaboration with Pfizer and their long history of successfully launching and building partnered brands around the world. With the positive phase three data of Zavegapan, which is another cornerstone of our unparalleled CGRP franchise, Biohaven has the only intranasal CGRP antagonist with ultra-rapid migraine relief and the potential to usher in a new era of non-oral CGRP-targeting migraine therapies. Our CMO, Lee Stock, will update you on the progress in our regulatory efforts for Zevegipant later during the presentation. Now, moving from one cutting-edge development platform to the next, we are excited this morning to announce the acquisition of Channel Biosciences, a subsidiary of Knopp Biosciences and their KV7 platform. an innovative potassium channel platform that is expected to move into the clinic by the end of this year. Later in the presentation, you will hear directly from the clinicians and scientists who developed this platform. We believe the lead molecule, BHV7000, has the potential to be a best-in-class potassium channel modulator for epilepsy and represents a validated mechanism of action with other broad therapeutic applications. We are especially excited to welcome the entire KV7 team from channel biosciences or not biosciences to Biohaven. And this includes their leaders, Dr. Mike Bozic and Steven Duretsky, who will be joining our company to ensure that the lead assets are efficiently advanced to patients. Mike and Steven will be discussing the exciting program with you in more detail shortly. In what has been a morning filled with new announcements, we are pleased to announce more breaking news with the acquisition of Taldef Gravep from Bristol Myers Squibb. Taldef Gravep is an anti-myostatin adenectin and a phase three ready asset that already had a sizable human safety database in pediatric populations. Given the recent proof of concept data, Of other myostatin-targeting agents, our intention is to initiate a Phase III study in the first half of 2022 for the treatment of spinal muscular atrophy. Importantly, this acquisition further extends the neuroscience R&D collaboration between BioHaven and BMS. This is our third late-stage asset licensed from BMS to enter the clinic, and Cliff Bechthold, who previously was the development lead for this asset at BMS, will speak in more detail about this differentiated product in just a few minutes. To summarize, we have a strong portfolio of product opportunities that we believe will deliver value for patients and investors in the near term and for years to come. Our goal is to continue to deliver best-in-class therapies from our promising pipeline for patients across the globe. I'd like to now introduce Matthew Beaton, our new Chief Financial Officer who joined us in December. As a former Managing Director of Foresight Capital, Matt brings to Biohaven more than 20 years of experience in healthcare investment, investment banking, and strategic structuring deals for both large and small cap companies. We are thrilled to have him. I would also like to thank Jim Englehart for his long service and dedication to Biohaven. We wish Jim well in his much deserved retirement. Matt will now review the details and results of our financial performance in the fourth quarter and year-end of 2021.
spk07: Thank you, Vlad. First, let me say how thrilled I am to be here for today's call. As many of you have seen, I joined the Biohaven team in early December, right off the heels of the company announcing an incredible strategic collaboration with Pfizer, enabling us to gain access to their industry-leading expertise and global footprint to turbocharge global commercialization efforts for measurement. I've been following Biohaven's progress for many years while I was at Foresight, and I couldn't be more enthusiastic about the opportunity to join this incredible team, especially at a time like this as I look at the opportunities in front of us. Some of the guiding principles that I've incorporated in my role from learnings during the transition of my predecessor, Jim Englehart, are threefold. Maximizing value for shareholders is top of mind. Ensuring we're adequately capitalized, limiting dilution for shareholders whenever possible. This was and will continue to be a critical focus for us. This dovetails into the next key tenet of our strategy, which is ultimately getting to a place of profitability. This is critical for us ensuring we are well positioned to realize long-term revenue streams. We have obviously made tremendous inroads since the launch of our dual acute prevention label, and we see strong growth as we eventually pursue more of the extension opportunities for NERTEC in pediatric migraine, pain adjacencies, and other non-migraine indications. And finally, maintaining that steadfast financial discipline while continuing to ensure we are driving access and new patient starts. investing wisely in a brand that is still relatively new in a market that only continues to grow rapidly. These are the critical components of our strategy, and I look forward to sharing more updates in the months ahead as we make progress. So with that in mind, let me take you through some of the financial highlights from the past year. The press release we issued this morning contains details of our financial results for the fourth quarter of 2021, with further details in our 10-K, which should be filed shortly. And rather than read through all those details, my comments will focus on some key financial results. Neurotech ODT achieved net sales of $190 million in Q4, demonstrating another quarter of strong performance, increasing 40% versus Q3 and increasing 440% year-over-year, driven largely by increased sales volume in Neurotech ODT and expanded and improved managed care reimbursement. The oral CGRP market continues to grow at an exceptional pace, carving out a small but expanding market share for migraine drugs, while generating over a billion in revenues last year. In total, oral CGRP market revenues grew greater than 400% for the full 2021 year, while biohaven grew revenues over 600%. As the market continues to grow, we expect to see higher-than-market rates of growth for the oral class of CGRPs as well as for biohaven. In the fourth quarter, we benefited from a large and growing market, which supported higher volume. And in addition, we had some favorable seasonality, which impacted us in a few ways. Higher volume in net price as payer constraints on patients, such as deductibles and coinsurance, were largely satisfied, resulting in reduced copay assistance for BioAven. This is in addition to direct efforts we made to encourage refills. We also experienced favorable payer mix with lower rebate payers. And then we discussed the influence of positive seasonal factors, as well as market growth in our Q4 results during webcast presentations and investor meetings, as well as last year on our year enterings column. Many of these favorable contributors we experienced in Q4 are typical and expected with patient-supported pharma programs and may pull back along with the typical seasonal changes anticipated in Q1, and it could have an impact on volume as well as sequential revenues. Now, as we go down to P&L, R&D investment in the quarter on a nine-gap basis was $76.4 million compared to $57.8 million in the prior quarter, an increase of $18.6 million, or 32%. The increase is primarily due to continued funding of post-approval international and pipeline expansion spending for Medjapant as well as our late-stage product candidates, including Zavejapant, Truliazol, and Rigipostat, which combine with the vast majority of our spend. SG&A expense in the quarter on a non-GAAP basis was $189.3 million compared to $114 million in the prior quarter, an increase of $75.3 million, or 66%. Most of our SG&A costs continue to support commercial sales of NERTEC ODT as we invest behind our novel dual-indication therapy, with less than 50% of our spend on personnel costs and the rest supporting our promotional spend. Now moving on to the full year 2021 results. Nerdtech ODT achieved net sales of $462.5 million for 2021, growing $399 million, or 627%, demonstrating very strong performance. This is driven by increased volume in Nerdtech ODT, which benefited from a partial year of sales associated with the expanded label to include prevention, compared to a partial year of sales in 2020 with only the acute label. Net revenues were also benefited by improvements in net price realization. R&D investment for the year end of 2021 on a nine-gap basis was $287.1 million compared to $195.4 million in the prior year period, an increase of $91.7 million, or 47%. Again, the increase is primarily due to our continued investment and our post-approval international and product discussion opportunities from Remedipant, as well as other late-stage product candidates and preclinical research. The late-stage products I mentioned earlier also comprise the vast majority of our spend for the year. SG&A expense for 2021 on a non-GAAP basis was $623.6 million, compared to $428.6 million in the prior year, an increase of $195 million, or 45%. The increase is primarily due to increased promotional activity supporting NERTEC ODT commercial sales in 2021, for the treatment and prevention of migraine, which got its dual indication approval in May 21. And compare that to the same period in 2020, which reflects pre-commercial and promotional NERTEC ODT spend, which was launched in March of 20. Now, turning to our balance sheet. Performant for the closing of our collaboration and subscription agreements with Pfizer in early January, we have access to approximately $1 billion in liquidity. As of December 2021, we have $367 million in cash and cash equivalents, and marketable securities, immediate access to $125 million from our debt facility with Sixth Street, and an additional $500 million of cash we received on January 4th from Pfizer. Let me echo what Vlad said about our excitement over our recently announced acquisition of Channel Biosciences, adding a valuable KB7 program for epilepsy and potentially other indications to our pipeline. The terms of the deal are as follows. Upright consideration comprises $65 million in buy-in stock and $35 million in cash. Success-based milestone payments broken down as follows. BHV 7,000 regulatory milestones of up to $325 million for U.S., EMA, and Japan approvals for epilepsy, and $250 million for additional geographies and additional indications for KV7. BHV 7,000 sales-based commercial milestones of up to $562.5 million, with a full amount achievable upon reaching $3 billion in annual sales. And we'll pay scaled royalties for BHV 7,000 of high single digits to low teens, and for additional programs will pay starting royalties in the mid-single digits. And with that, let me turn it over to BJ Jones, our Chief Commercial Officer. BJ? Thank you, Matt.
spk03: And good morning, all. 2021 has been a transformational year for Biohaven and NerdTech ODT. We remain enthusiastic about the brand's success to date and significant impact we've had in the lives of so many patients with migraines and their loved ones. Looking back at the year, NERTEC ODT experienced strong and steady growth in market as healthcare professionals and patients became more familiar with the brand's unique and what we believe to be best-in-class profile. We began the year singularly focused on promotion and acute therapy, which produced a healthy growth curve through the spring. And once NERTEC received agency approval for preventive therapy, we witnessed dramatic acceleration in our growth rate. with early trial among established prescribers as well as those new to Brent. We remain confident that Neurotech ODT's unique profile as the first and only medication proven to treat and prevent migraines is well positioned to shift the paradigm in migraine treatment to dual therapy. We're very pleased with fourth quarter sales of $190 million, an increase of 40% over prior quarter, which totaled $463 million in our first full year of commercialization. With NERTEC ODT only now approaching its second anniversary in market, we've achieved $526 million in revenue since launch. We're certainly proud of our commercial team and what it's accomplished. With passionate support from every member of the Biohaven family, because we realize that every prescription filled is a potential life-changing moment for patients and those they love. The new year brings with it tremendous opportunity, as the oral CGRP class continues to penetrate what is a highly dissatisfied market. As Vlad mentioned earlier, we're witnessing significant penetration of the generic triptan market, as well as significant growth from patients who haven't filled a prescription in years. and it may do with over-the-counter meds and other means to address their migraine attacks. With a tremendous clinical advance of oral CGRPs, we see old habits changing. In the most recent sphere status, evidence suggests physicians are optimistic about GPANS and expect their adoption to accelerate in the months ahead. Not surprisingly, we see a similar dynamic among preventive therapies. Physicians predict strong uptake of oral CGRPs specifically NERTEC, while generic therapies continue to erode over time. Although changing physician prescribing behavior doesn't happen overnight, these data are a leading indicator of the evolution taking place across the migraine market that will come to fruition in the months and years to come. Another leading indicator is physician satisfaction with migraine therapies, and as you can see by this graph, all CGRPs dominate. Even among these impressive class data, a consistent theme shows NERTEC is the brand of choice among physicians. And highlighted here, we see NERTEC chosen as the brand with the highest level of satisfaction. As the market leader, NERTEC is poised to benefit differentially by the growth dynamic among the oral CGRPs. We're also encouraged by the class volume growth within the last few weeks. In early Q1, we anticipated slower uptake for all the seasonal factors that are endemic to our industry, i.e., new year insurance plan changes, deductible annual resets, prescription acceleration in year-end refills in Q4, et cetera. But we are seeing earlier return to growth trends than in years past. In closing, 2021 has been an amazing year. We're pleased with our position as market leader in a rapidly growing market with high unmet needs. We continue to perform well across all launch measures as prescriber and patient trial and advocacy steadily grow. In addition, I'm pleased to report we've maintained NERTEC's extremely strong formulary access for both acute and preventive indications. With that, I'd like to introduce you to another NERTEC patient, Greg, with a great testimony to share. I'm a retired Green Beret from the Army, 21 years, seven combat tours. I have a TBI and bad migraine headaches. I started to take NERTEC ODT, and I think it has changed my life. I used to live in my closet. Between migraine headaches and all my other problems after seven combat tours, I had lost hope. NERTEC has made my life so much better. I have now started Blue Ridge Safe House. It's a nonprofit to help active duty guys like me. Patients like Greg and so many others make what we do every day so incredibly worthwhile. At this point, I'd like to hand it over to my partner, Elise Stock, our chief medical officer.
spk01: Thank you, EJ. Oh, my goodness. So much has happened in this last quarter, and I'm really delighted to share it with you. Before I start, I really want to thank the fantastic people that I work with at Biohaven because they are really the ones who are delivering the milestones that I'll be sharing with you this morning. With these talented individuals, we will be able to unleash the potential of our multiple assets and bring multiple therapies to patients here in the US as well as with our Pfizer colleagues across the globe. So far this year, And I'll remind you, we're only in February. We're delivering on important milestones. Just yesterday, we received news of a positive opinion from the CHMP on our filing of NERTEC for both acute and preventive treatment of migraine. This quarter, we also had positive top-line results from our NERTEC acute treatment of migraine study in Asia. And at the end of last year, we delivered positive results on our second registrational intranasal vegepant trial. We're expecting further milestones to be achieved over the course of the year, but I'll delve into each of our most recent achievements just a bit more. Our impressive CGRP franchise at Biohaven is just unparalleled in our industry. NERTEC ODT remains our cornerstone marketed product and the only oral migraine product indicated for the acute treatment of migraine as well as for prevention. Yesterday, we got news from the CHMP's that we've been given a positive opinion on our NeurTech submission for this dual treatment. For those of you following closely, we were not required to attend an oral explanation. We were quickly able to address all of the issues raised and really appreciate the speed and collaborative nature of the European regulators. The ability to treat a large number of patients across the migraine continuum is a truly innovative approach to the treatment of migraine, and we look forward to an approval over the coming weeks. Earlier this month, we also announced positive results from our fourth positive Phase III study of Remedipant for the acute treatment of migraine, which was conducted in China and Korea. The study met its co-primary endpoints of freedom from pain and freedom from the most bothersome migraine-associated symptom, also known as MBF. which includes nausea, phonophobia, and photophobia at two hours following a single oral dose of Remedipant. As seen in the graph, a single oral dose of Remedipant 75 milligram provides statistically significant relief of migraine symptoms and return to normal function at two hours and delivered sustained efficacy that lasted up to 48 hours for many patients. Remedipan showed broad efficacy across multiple clinically meaningful endpoints and a favorable safety and tolerability profile that was consistent with prior clinical trial results in the United States. Our work with Pfizer has brought us great collaborative colleagues, and I'm confident that they will be able to take these tremendous accomplishments and expand our global footprint, bringing relief to patients suffering with migraine across the globe. As I said before, we will continue to expand our program with lifecycle studies of NERTEC ODT, both within neuroscience as well as explore a wide variety of scientifically relevant indications outside of migraine as we follow the science of the CGRP antagonist. Earlier this month, we enrolled our first patient in a NERTEC study of rhinosinusitis. This is just one of the NERTEC studies we intend to begin this year. Investigator-initiated trials, Phase IV clinical trials, and studies in health economics will add to the wealth of information that will ultimately be available for NERTEC and will help define the scope of important information for patients, providers, and payers, both within the U.S. as well as globally. We recently announced positive results from our intranasal Zovegapan phase three study. Its co-primary endpoints of pain freedom and freedom from MBS at two hours were statistically significant and replicated the results seen in our positive phase two study. As we hoped, it confirmed an ultra-rapid speed of onset with pain relief differentiating from placebo as early as 15 minutes with a single dose. After the Zovegapan treatment, patients who previously experienced moderate to severe pain achieve reductions to mild or no pain. And we anticipate a filing of intranasals of Vegepant for the acute treatment of migraine in the first half of this year, 2022. Our oral formulation of Vegepant is being evaluated now in a Phase III study in chronic migraine. We continue to just make great progress across all of our late-stage assets, including our glutamate modulating agents and our myeloperoxidase inhibitor platform. And over the coming months, we will see top-line readouts and are excited about all of the opportunities that we've got across both common and rare diseases. Our BioHaven laboratories also remain busy with its early discovery work, and it continues just to grow. We have more than 10 preclinical programs that include both novel small and large molecule approaches. These currently target over 12 indications with high unmet medical need. Our pipeline is not only advancing, but it's growing. We're delighted to have just announced the acquisition of Channel Biosciences, and we are really delighted to welcome their team into the Biohaven family. Their innovative potassium channel modulation platform is exciting, and we believe that the unique and differentiated pharmacology of their lead compound will allow us to effectively study pediatric and adult seizure disorders. But I'll let Mike and Stephen tell you about it in just a moment. Additionally, we've added Teldef Grobap, an anti-myostatin asset to our portfolio, and you will hear more about that as well. We will continue to make strategic decisions across the portfolio as our data matures with both external partnerships and internal programs. Our pipeline is large and growing, and I'm really excited about Biohaven's future. It's a real pleasure to be able to turn the call over to Mike Bozek and Stephen Dworowski to speak about Biohaven's newest innovative platform technology, KB7.
spk14: Thank you, Elise. We couldn't be more delighted to be joining Biohaven Labs at such an exciting time for the business, and we're pleased to be delivering our KB7 platform to the capable and efficient hands of Biohaven Pharmaceuticals. We founded the KB7 platform at Channel Biosciences to address an ancient disease and also one of the most prevalent. In the United States alone, 3.5 million people suffer from epilepsy, a disease that can take over and disrupt your life because of seizures that can strike at any moment, and comorbidities like depression and migraine headaches. Focal epilepsy is the most common form of the disease, affecting both children and adults, and for many patients, it's not easily treated. In fact, focal epilepsy is refractory in one in three adults and one in four children, often requiring two or more medications in highly individualized treatment regimens. Epilepsy is not only difficult to treat, but tragically it can also be lethal. Each year, more than one in 1,000 people with epilepsy die from SUDEP, or Sudden Unexpected Death in Epilepsy, in a person who was otherwise healthy. Clearly, there's a missing piece in epilepsy treatment, and from the start, we targeted a critical regulator of neuronal excitability called KV7, a voltage-gated potassium channel present in the brain. The field discovered KV7 about three decades ago, but unlocking the pharmacology is proven difficult. Although targeting KV7 has been clinically validated as a mechanism for seizure treatment, existing KV7 activators carry tolerability risks. We believe our in-house team of biologists and medicinal chemists have cracked the KV7 code. We have a library of small molecules in the platform with different pharmacology profiles and that have the potential for development in adjacent indications beyond epilepsy. We believe our lead molecule, BHV7000, shows potential to be a best-in-class KV7 activator. CHV7000, the lead candidate to emerge from our platform, was rationally designed to target KV7. Importantly, it's structurally distinct from two other KV7 activators, Izagabene and XEN1101, with patent life to at least 2039. Its profile is also highly differentiated because we dialed out the GABAergic activity intrinsic to these competing molecules. We expect BHV7000 to be in the clinic this year. An important next step in delivering what we hope will be a key missing piece for the treatment of epilepsy. The molecule also benefits from rare pediatric disease designation from the FDA. All in all, We're coming to Biohaven with a potential best-in-class treatment for epilepsy and with follow-on compounds from our KV7 platform with the potential to treat other types of epilepsy as well as pain disorders and affective disorders. With that, I'll turn it over to my friend and colleague of 30 years, Dr. Steven Dworetski.
spk02: Thanks, Mike. Let me reinforce being excited about the opportunity to be joining Biohaven Labs and working with the team to deliver BHV7000 for rapid and efficient development by this organization. As Mike mentioned, we see BHV7000 as highly differentiated from the existing KV7 modulators, azogabine and XEN1101. Those first and second generation drugs clinically validated KV7 as a compelling target in epilepsy. but with attributes we have worked hard to overcome. For example, on the left panel, azogabine is chemically unstable to light, and its label cites the risk of blue skin discoloration as well as a boxed warning for potential retinal effects and vision loss. In contrast, BHV7000 is stable to photooxidation. Shown in the middle panel, XEN1101, like azogabine, has significant activity at the GABA-A receptor, which may account for the off-target activities responsible for somnolence, dizziness, fatigue, and other tolerability issues that have been reported. In comparison, as you can see, BHV7000 has negligible activity for GABA-A receptors. Our aim from the start was to avoid these liabilities while also maintaining potent anti-seizure efficacy in vivo. Put another way, we want to maximize the therapeutic index by putting as much distance as possible between efficacy and intolerability. As shown on the right panel, BHV7000 attained that goal as both a potent activator of the KV7 channel and was effective in preclinical seizure assays and was well tolerated. Allow me to share more detailed evidence in the following slides. Epilepsy happens to be a disease where the preclinical assays have excellent predictive validity in humans. What we're showing here on the left graph in the green circles is the number of animals protected from seizures with increasing dose. We demonstrate excellent potency with an ED50 of 0.5 mg per kg. Now take a look at the open red circles along the bottom of the graph. That is the measure of tolerability according to a neurological deficit. with zero reflecting normal animal behavior. As you can see, these animals are normal. The shaded area between the green and red results calculates a therapeutic index greater than 40-fold. On the right, you can see the similar experiment for azogabine. The green triangles represent the anti-seizure efficacy, which you see has an ED50 of about 20 mgs per kg, so the potency is much lower than for BHV7000. Let me turn your attention to the red triangles, which you can see shows the neurological deficit increasing with increasing dose, and it's close to the efficacy dose. Thus, the therapeutic index is approximately threefold compared to more than 40-fold for BHV7000. This approximates the clinical experience with hizogabine as the drug was poorly tolerated. We do not have the same experimental results for XEN1101, But based on xenon-reported data, we estimate its therapeutic index at approximately six-fold, somewhat better than azogabine, but dramatically different than the greater than 40-fold therapeutic index of BHV7000. Our aim is to develop and deliver the third-generation, best-in-class KB7 modulator, and we hope this will give people with refractory epilepsy better control of their diseases and their lives. In closing, we believe BHB7000 significantly differentiates from other molecules in this class of KB7 activation. The graphic shows where we believe the superiority of our lead asset will provide the potential best-in-class for the treatment of refractory epilepsy and other neurological hyper-excitability disorders. Thanks for the chance to share a bit of the 7000 story, and now back to you, Elise.
spk01: Thanks so much. I would also like to introduce Cliff Bechtold, who will provide a brief update on the recently-enlicensed anti-myostatin inhibitor.
spk04: Thanks, Elise. We're very excited to add DefcoBep to the BioHIM portfolio. Myostatin is a well-characterized negative regulator of muscle growth. Based on a number of disease models and clinical studies, we believe a molecule that can target the signaling pathway of myostatin has potential in many different disease areas, that could lead to improved strength in function in patients with muscular dystrophies and other neuromuscular diseases as an adjuvant to their current therapies. Teldefcovap Alpha is an advanced development program that has extensive human data, especially in the pediatric population. With this robust package, we will be able to rapidly enter phase three in neuromuscular diseases, including SMA. I know this asset very well. I led the program while I was at BMS, and it oversaw its development from the lab into Phase III. This program will synergize with Biohaven's experience in ataxia and other rare diseases, and we are looking forward to partnering with the SMA community of patients, physicians, and advocacy organizations to find novel combination therapies. With that background, I'm going to head on back to Vlad.
spk11: Thank you, Matt, BJ, Elise, Mike, Steven, and Cliff. And once again, welcome to the entire Channel Biosciences team. We're so excited to have you part of Biohaven. And also, on behalf of the whole team at Biohaven, We just wanted to say how excited we are to be working with Mike and Steven again. Many might not know this, but they were both important leaders at the BMS neuroscience group that many of us were all part of years back. So it's somewhat of a homecoming to have them in the company and working with us again. In closing, Biohaven has demonstrated robust growth in our commercialization of NeurTech ODT and important maturation of our late stage innovative pipeline. We continue to expand our clinical pipeline as well as our early stage portfolio with the goal of increasing value and growth year over year. Our commitment to people with migraine around the globe has never been stronger, and our global expansion with Pfizer will open the door to the 1 billion people worldwide who suffer from this debilitating disease. Before opening up to Q&A, I would like to thank the entire Biohaven team for their relentless commitment, drive, and value creation for patients and investors I also want to take the opportunity to thank all the patients who have enrolled in our clinical trials, their family members, and investigators who participated in advancing our pipeline. We will continue to work hard to bring novel treatments to patients living with the burden of devastating neurologic and neuropsychiatric diseases. Finally, thank you again to our visionary investors who have helped fund our studies and bring NeurTech ODT to patients. Operator would now like to open up the call and take some questions.
spk05: Thank you. We're now conducting a question and answer session. If you'd like to be placed in the question queue, 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'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Ken Cacciatore from Cowan & Company. Your line is now live.
spk10: Hey, good morning, and congratulations on all the progress. I was wondering, with no formal guidance, could you give us a sense of comfort maybe around the streets, NERTEC-specific revenues for this year, around $850 million? And then maybe, Matt, could you speak a little bit to the thoughts on spending this year as a Q4 run rate good? And then a general question for you, Vlad, obviously really exciting new pipeline additions, but some investors do worry that increasing the pipeline investment, which you further enhanced today, could detract from NERTEC value. It's just hard to value the pipeline versus easier to value NERTEC. So can you talk about the balance of really huge spending to support NERTEC need to invest in pipeline versus potentially an exit or maybe even a split of the business? Are all options still on the table? Can you talk us through that? Thanks so much.
spk07: All right, I'll have Matt start off, and then I'll jump in. Yeah, Ken, as you know, we don't provide guidance, so can't really comment on the 850. And as it relates to sort of the Q4 run rate for expense, we do expect modest increases on the expense side, and we just have added a few really promising assets, which would be part of that calculation.
spk11: So, Ken, we're excited about NERTEC, and as you know from prior discussions, when you look at where we are in our net revenue generation and where we and others believe we'll be in future years, There's very few drugs that have this type of potential, both for patients and net revenue generation for companies. So I don't think we have a large spend to support that. I think it's an appropriate infrastructure size and spend to what we believe ultimately will be multi-billion dollar net revenues at peak sales. And give you a little bit of a glimpse as to how early we are and how much growth is ahead of us. And so in addition to the revenue from NERTEC, we do want to make sure we have other assets that can mature into the commercialization infrastructure that we have. And I think what you saw today is an addition of what I would view as two de-risked mechanisms of actions that are very much fast follower approaches. And when you look at some of the external data that's been generated in KB7 and epilepsy and the predictability of assays to how those assets will perform the clinic, we think these are high probability or higher probability wins in neuroscience. And that's why we're so excited to be incorporating them into the pipeline. Your question about M&A and other activity, as you know, we can't comment too much on that, you know, other than say that, look, acquisitions like today and broadening the pipeline just strengthens our company and strengthens, I think, our ability to organically generate increased revenue in future years or for something that would be of interest to other parties, right, to put together a pipeline like this. So we're going to continue to run our business, maximize investor returns and grow value, and We're going to continue to do that until there's a reason not to. So thanks for the question, Ken, and I appreciate it.
spk05: Thank you. Operator, next question. Our next question is coming from Charles Duncan from Cancer Fitzgerald. Your line is now live.
spk00: Yeah, good morning. Thanks for taking the question. Congrats, Vlad and team, on continued good commercial execution as well as the news flow this morning. Wanted to ask a commercial question for BJ. And that is that, BJ, you mentioned in your prepared remarks that you've seen earlier returns to growth in the first quarter than perhaps you would have expected given your experience in previous years. And I'm just wondering if you could provide some more color on that. And then relative to the current, I'll call it, adoption rate of the oral CGRPs and specifically NERTEC ODT, what message would you like prescribers to hear that could drive further adoption of the class and the drug specifically.
spk03: Charles, thank you for the question. Appreciate that. And I would say just to provide a little context around the comment around the earlier growth is that, you know, it is a little bit slow in regards to what the uptake is in Q1. Normally, again, that's not just either a NERTEC or a migraine issue in some sense, right? It's just more broad across the industry. But I will say that, again, in recent weeks, basically starting in February, we start to see what is kind of that return to growth again, and I'd say across the class, which is positive news for us. Again, there are good reasons for that. I think a lot of it is the incremental promotion that's happening. because of different products actually entering the market as well, which actually benefits everyone, especially patients. So that's a good news story overall. So that points to greater growth, and so we're pleased about what that means for coming weeks. As it relates to the adoption rate that's happening and what I'd like to say to prescribers, and this is essentially what we communicate on a day-to-day basis with all of our customers out there, is that essentially now they have an opportunity to utilize a product for patients who've been suffering in this space for so long with really very, very little risk. But tremendous upside for those individuals, and they can use it in this convenient platform, which, again, is one product, obviously, right, that can treat and prevent. And it's one dose. And again, does not have the same kind of baggage, if you will, that, you know, the older medications have had in the past. And so, you know, I will say again, I think it's part of what is the fire that's lit kind of under this marketplace is that clinicians perceive that, they see it, they actually give trial and get tremendous feedback from patients. And that is what we believe really will fuel this market going forward.
spk11: Thanks, Chas. Operator, next question.
spk05: Thank you. Next question is coming from Chris Raymond from Piper Sandler. Your line is now live.
spk12: Yeah, thanks. Just a couple of questions on some of these new assets, if you don't mind. So I guess the anti-myostatin, just did some digging on this molecule. It looks like it's been studied already in DMD and failed to show impact on ambulatory measures. And I know DMD and SMA are different. a lot of ways, but just kind of what are you guys, are you seeing in the data that sort of gives confidence, you know, in this indication? And then just thinking about phase three design, is it contemplated this to be looked at in combo with a disease modifier like Spinraza? Any details on that sort of plan would be great. And then, you know, I guess on the KV7 asset, you know, it looks like this has been, on the NOP website anyway, is in development for epileptic encephalopathy. You know, can you maybe – is that still on the table as an indication that you're targeting as maybe sort of a quick path to market? Just maybe talk about that a little bit. And then maybe if I can put one more question to you guys, maybe more strategic, just on how you're thinking about guidance. Are there some elements around the business that you're looking for before guiding – or is there maybe sort of some philosophical reason to not guide? Thanks.
spk11: Great. Thanks, Chris. I'll turn it over to Mike in a minute to talk about KB7, respond to that comment. On my statin, I'll also have Cliff chime in here, but the mechanism of action has not been demonstrated in DMD to establish efficacy. However, we have a very large safety database from that experience, and as you know, the ScalaRock data in SMA with a similar myostatin targeting did suggest efficacy, and that's really the clinical proof of concept that is, you know, advancing our interest in this area. We also note that there's other competitors, you know, Roche, who have a myostatin targeting agent as well. So Roche and Scholar at Rock are both heading into SMA given the recent clinical POC there. We believe that this has the potential to be a best-in-class myosin targeting agent and excited to quickly advance into SMA given the emerging data. Cliff, do you want to add anything?
spk04: Yeah, just really quickly. I think what we learned in the Duchenne area is that the molecule is very safe. It's a well-tolerated pediatric population. But we also learned that at As a model therapy, it didn't hit the significance to see a clinical benefit. What's different in SMA is the presence of the SMN upregulating therapies that are approved in the market, which we think, and demonstrated by preclinical models, will show a synergistic effect. And so that's why we're targeting SMA to begin with.
spk11: Great. And yes, the study would be in combination with standard of care therapy and others. Great. And then, Mike, do you want to comment on... Sure.
spk14: So we are really excited to be joining the BioHaven team and their commitment to advancing BHV7000 for the treatment of epilepsy. And in answer to your question, the drug has great sort of clinical proof of concept as a treatment for adult refractory focal epilepsy. So we'll clearly be advancing BHV7000. the drug along that path. It's an established clinical development pathway. You're following footprints in the snow. So that is a strong commitment. We're equally committed to exploring the potential of the drug as a pediatric epilepsy treatment, including the opportunity to treat patients with casein Q2 epileptic encephalopathy. So we'll be advancing the molecule in clinical development. As you know, there are that you need to take before you can treat children and certainly young children. We'll be taking the steps that we need to be able to walk down that path.
spk11: Matt, you want to guide us?
spk07: From a guidance perspective, I think we're going to be more comfortable getting to a place where we're guiding next year. At this point, we have a lot of variables, a lot of moving parts, including Pfizer and sort of how they're looking at this in EU from a contribution. We have prevention, which is still kind of early-ish in the launch phase. We have a highly competitive environment. So there are variables there as well. So as we get more comfortable with all those, we'll start to provide guidance.
spk11: Great. Thank you. Operator, next question.
spk05: Certainly. Our next question is coming from Paul Choi from Goldman Sachs. Your line is now live.
spk13: Thank you. Good morning, everyone, and let me add my congrats on all the progress as well. My first question is for Vlad and BJ as well, maybe. As you're thinking about the commercial execution strategy here in 22, you launched in a pandemic environment which involved a lot of virtual selling. How are you thinking maybe about pivoting to more feet on the street to grow the NERTTEC franchise over the course of this year and next year? as we exit the pandemic. And then second on the pipeline, maybe for Elise, as you think about the clinical strategy for SMA, is there going to be a particular focus on a subpopulation, whether it's type 1, where you see the highest probability, or type 2 and so forth? And just maybe any specifics you can provide on your high-level thoughts on clinical trial design here would be great. Thank you.
spk11: Thanks, Paul. And, you know, with regard to this year, you know, the pandemic, we demonstrated the success of Neurotech despite the pandemic. And I think it reflects how debilitating this illness is and that people will go out and get a novel treatment because they're so disabled by migraine when it strikes. So we've demonstrated the ability to do this well in a very harsh environment. And what we see from the data is that as patient traffic and volume at physicians' offices increases, we do better. And so we believe as the pandemic gets behind us, there will be a greater opportunity to increase volume. And we are... Tad Piper- Not planning anything other than modest changes towards sales force there'll be some like always some optimization to ensure we're remaining highly competitive and maximizing. Tad Piper- You know share but you're going to see a continued emphasis on digital and virtual in addition to the in person, of course. But the things that made us successful during the pandemic, we're going to continue to optimize as that alleviates. BJ, you want to add anything to that?
spk03: The only thing I'll add is very well said, but thank you. I'd say is that we are absolutely committed to what is kind of our digital first approach. And again, that is in the full light of day, hopefully, as this pandemic passes. And the beauty is what we can and will do is build this capability so that we can actually integrate that with what are our feet on the street. And as Vlad mentioned, we'll do kind of what is kind of a modest incremental investment in feet on the street, but we are focused on increasing impact. of each one of our folks out there, and we look forward to the full year.
spk04: And I might, Cliff and Elise, maybe make a comment. Yeah, on the design of the SMA, I mean, one thing, the field has changed significantly, and we've been partnering with thought leaders and experts in the area to understand that with the advances in the marketed products that are operating in the SMA, we're seeing it move away from the classification of SMA 2 and 3 because they are performing differently. So partnering with the experts in the field, with patient advocacy, we're still coming up with the right design to move forward. Great. All right, operator, last question.
spk05: Thank you. Our final question today is coming from Laura Chico from Wedbush. Your line is now live.
spk09: Hey, thanks, guys, for squeezing me in. Just two on the pipeline. So first, BHV 7000, could you talk a little bit more on how you see clinical points of differentiation manifesting? It sounds like you're highlighting GABA activation, and I'm just curious how this plays out. Is this more on the adverse event side, and I guess how would you elaborate or could you elaborate on how you would tease that out from a trial design perspective? And then just with respect to Verdiprostat, I know we're getting results in around the middle of the year, but could you talk a little bit more about the communication strategy around those top-line results? This is obviously a unique design, evaluating a couple different therapies in the study, so I just want to make sure I understand perhaps how the degree of disclosure might work or who will be leading that effort. Thanks.
spk11: Sure. So, we'll invite Mike and Steven to comment and reply on the KB7. Mike, you want to start?
spk14: Sure. So, as you probably know, the first and second generation KB7 activators are not specific for KB7. They have a GABA activation component to their pharmacology. And we specifically dialed out the GABA activity because we're very confident and we have the preclinical data to show that KV7 activation alone is sufficient for efficacy and potent efficacy at that. And then what has really limited KV7 activators to date is the fact that as you become effective, you bump up against side effects, somnolence, vertigo, diplopia, and when you hit those side effects, you can't go further. And so you have efficacy limitations, and you also have compliance limitations. And we have preclinical evidence that we don't see this. So we will be looking for differentiation in terms of side effect profiles, and there are other liabilities that the first and second generation activators have had, including events of urinary retention. So we think we'll be differentiated both as a more potent activator of the target, which we hope will translate into very good efficacy, as well as a compound that will be very well tolerated and patients will stay on the drug.
spk11: Great. Thank you. And just to wrap up on the question about the HEALY and the ALS trial, so although that's a platform trial with multiple different assets, they share a placebo arm. As a asset reads out, we will get the top line on that asset, so we're not waiting for other assets to read out. So once we get to that top line data, it will be revealed, and we're thinking somewhere around mid-year. So I know we have to wrap up now as we're out of time. So thank you, everyone, for joining us today. We deeply appreciate the support of our employees and investors as we move forward to delivering life-changing therapies to patients and talk to everyone very soon. Thank you.
spk05: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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