Acorda Therapeutics Inc (ACOR) 2018 Q1 法說會逐字稿

Welcome to the Acorda Therapeutics First Quarter 2018 Update. (Operator Instructions) Please be advised that this call is being taped at the company's request.

I will now introduce your host for today's call, Felicia Vonella, Executive Director of Investor Relations at Acorda. Please go ahead.

Thank you so much, and good morning, everyone. Before we begin, let me remind everyone this presentation will contain forward-looking statements. Our more detailed disclosures are found in our SEC filings, which are public and we encourage you to refer to those filings.

Let me now pass the call up to Ron Cohen. Ron?

Thanks, Felicia, and good morning, everyone. Thanks for joining us.

Highlights for the quarter included acceptance of our NDA for INBRIJA by the FDA with a PDUFA date of October 5, 2018. INBRIJA is our investigational inhaled levodopa treatment for symptoms of OFF periods in people with Parkinson's disease, who are taking carbidopa/levodopa regimens. We also submitted a Marketing Authorization Application, or MAA, to the European Medicines Agency for INBRIJA at the end of March.

Last week, we presented new data on INBRIJA at the Annual Meeting of the American Academy of Neurology. We had 4 abstracts accepted for oral presentations. Dr. Stuart Isaacson and Bob Hauser presented Phase I safety and exploratory efficacy data for INBRIJA in early morning OFFs, which is Study 009; and Acorda's Dr. Charles Oh presented long-term safety and efficacy data from Study 005, our extension study -- or excuse me, long-term safety study. The presentations were well received, indeed enthusiastically well received.

Turning to AMPYRA. We reported revenue of $103 million in the first quarter. This was below analysts’ consensus of $129 million. However, it was only slightly lower than our own internal forecast. And that was primarily related to a modest expansion in inventories in the fourth quarter, although still within our contractual terms, which normalized by the end of the first quarter.

Prescription demand in the first quarter was in line with our forecast as well. And second quarter sales to date and prescription demand is also in line with our internal forecast. We are therefore reiterating our net sales guidance for the full year of $330 million to $350 million.

Regarding our AMPYRA patent appeal, we've been assigned a date of June 7 for oral argument before the federal appeals court. And we are looking forward to the opportunity to argue our case in court.

This table summarizes the key financials for the quarter. Of note, we ended the quarter with $333 million in cash and are well capitalized for anticipated launch of INBRIJA.

Moving to our key milestones for 2018, most important is our PDUFA date for INBRIJA on October 5. We're preparing for approval and launch potentially in the fourth quarter of this year. And as I noted previously, we'll also have oral argument for the AMPYRA patent appeal on June 7, with a decision anticipated in the second half of the year.

We've completed and analyzed the Phase I data for our remyelinating antibody, rHIgM22. This was a study in 27 people with acute relapse in multiple sclerosis, and the study's primary objective was safety and tolerability of a single dose following a relapse. The data showed that a single dose of rHIgM22 was not associated with any safety signals, but the study was not powered to show efficacy. We had exploratory efficacy measures, which showed no difference between the treatment groups. And we're now considering the next steps for the program.

So our strategic priorities for 2018 are to achieve approval and successful launch of INBRIJA, to maximize the value of AMPYRA, including our vigorous prosecution of the appeal and continued financial discipline.

We'll now open the line for your questions. Operator?

(Operator Instructions) Your first question today comes from the line of Michael Yee with Jefferies.

This is Andrew Tsai in for Michael. Maybe at a high level, if you win the AMPYRA appeal, do things resume back to normal? Or what changes would you have to make? And maybe if you lose, then what happens? Are you already fully prepared for this scenario? And I have a follow up to that.

Yes, so, well, the -- our base case on which we base our projections has to assume, as it does, that there is a loss of exclusivity unless and until we win the appeal. Should we win the appeal, we would expect to continue to have exclusivity on AMPYRA for several more years, and that would be a -- obviously a very good scenario and would allow us to accelerate development of pipeline, and it would be a very good upside scenario in terms of our ability to build value and develop additional products.

Understood. And has the FDA's medical device division reviewed your manufacturing facility that's making your drug device combo? And if not, when would that happen? And I guess, do you construe that as a risk because you may have a relatively new facility?

Okay. So we don't comment on ongoing activities with FDA during the NDA review unless there is something material. So really can't comment on an inspection question at all. In the normal -- I will say just as a general principle, in a normal course of an NDA, one would expect at some point that there would be inspections by the FDA of our manufacturing facilities. I do want to add a thought to your previous question, which is that, of course, we expect a precipitous decline in revenue, if we were to have generic entry following the end of July. And we are going to take appropriate steps as needed with regard to that. And depending on the trajectory of the loss of revenue, we would adjust expenses as needed.

Your next question comes from the line of Laura Chico with Raymond James.

This is actually Timur Ivannikov on for Laura Chico. And we had a question about your inventories. You mentioned expansion of customer inventories, they're now back to normal. Could you also characterize any potential impact or drawdown to your own inventory in the quarter? And given the setup for the remainder of 2018, would you anticipate any fluctuations to occur in 2018?

I'm sorry, I'm not sure I understood your question about drawdown to our own inventories. If that means...

Sure. It looks like your inventories is down quarter-over-quarter about $10 million.

Dave?

Yes. It's just a normal flow of how we order depending on when batches come in. So there was nothing unusual about what happened in the quarter to our inventories.

Okay, great. And then, I guess, our second question would be about your AMPYRA guidance. So we were wondering if you can just walk us through the AMPYRA guidance assumptions for $340 million at the midpoint? I think looking back at historical sequential growth for 2Q over 1Q, you typically grow around 15% quarter-over-quarter. And so that suggests about $120 million assumption in the back half -- in the second half of 2018. Are there any growth drivers in 2Q that we are missing? Could you elaborate on anything else?

Yes. We really -- we don't give quarter-by-quarter guidance. So what we can tell you is that again, I'll reiterate, we were very close to our actual numbers with our internal forecast for the first quarter. The second quarter prescription trends, inventories and sales are all in line with our internal forecast. And we are therefore reiterating our guidance for the year.

Your next question comes from the line of Cory Kasimov with JPMorgan.

This is Carmen on for Cory. So on INBRIJA, ahead of the potential launch in the fourth quarter, have you initiated discussions with payers around pricing? And if so, could you comment on their receptivity so far? And then in general, how are you thinking about pricing of INBRIJA?

Okay. So I'm afraid I can't answer any of your question because we just don't give that kind of guidance in advance while we're in the stage where we're having discussions. So I can tell you that, of course, we are having discussions, and we're having a lot of them, and we expect to have a lot more before launch. That's all part of the process of coming to a price and a pricing strategy and a contracting strategy and so forth. So the whole commercial team is vigorously involved in that. I will take the opportunity to point out that we have had an extensive amount of very successful experience in doing precisely that with AMPYRA. And both products share a lot in common in terms of being therapies that are addressing -- or aimed at addressing very important symptoms of chronic neurological diseases. So we have a lot of experience with that, a lot of successful experience and we're using all of that knowledge and experience and applying it to our planning now. So we expect that by the time we get to launch, we'll be fully locked and loaded. And frankly, you almost never have a final determination on price until you actually have approval and your label. And so we would wait for that to give more color on it.

Okay, great. And then, just one follow-up, if I could. What was kind of the reception of INBRIJA at AAN this year? Could you speak to kind of physician excitement to use the product?

Yes. It was enthusiastic. I think that's a fair characterization. I was there. I had 2 full days of meetings with KOLs myself. Our whole -- we had a full team there, Medical Affairs having conversations. And the overall feedback was, if I can summarize it this way, it was very consistent with our market research, which is that we need this medicine. OFF periods are our biggest single challenge with this patient population. And we -- also, we really like L-dopa. It's a gold-standard therapy. And the frustration with L-dopa is that the oral regimens are so inconsistent and inconsistently absorbed and so forth. We -- our own research has said that 89% of doctors say that they will use a therapy like this. And from what I saw and our teams saw at AAN, that is consistent with the market research.

Your next question comes from the line of Phil Nadeau with Cowen.

First, on the INBRIJA filing, has the FDA suggested whether an AdCom will be necessary?

We would have disclosed if there were an AdCom -- if the FDA had suggested that. So no, we have not heard that to this point from FDA.

Great. And then second, I guess, just back on your guidance, sorry to harp on this. But if you assume that in Q3, whatever inventories in the channel is going to be bled out, so sales -- you won't have a full month of sales. It does seem tough to us to get to the bottom end of your guidance without a massive Q2. So appreciating that you don't give quarter-by-quarter guidance. What gives you confidence, or what should we take as a reason that Q2 will be a particularly large AMPYRA quarter?

Phil, I'm sorry, I can't give you more than I've given, which is that we have our own internal forecast. Based on what we're seeing so far, the year is consistent with those forecasts. And with -- by the way, with due acknowledgment, that it is more difficult to forecast in a year where one anticipates a potential loss of exclusivity, that does make it more difficult because you have other assumptions you have to put in. But I can't go into it on a quarter-to-quarter basis. I'm sorry.

Your next question comes from the line of Kevin Patel with Goldman Sachs.

Could you provide details on your plans for INBRIJA's commercial sales force? What stage in planning are you? And will you be hiring more reps?

So our current sales force is rightsized for the launch of INBRIJA. And if we are successful on the appeal and we're able to keep our exclusivity on AMPYRA, we would need to increase the sales force to sell both products simultaneously. So we would anticipate a 30%, 35%-or-so expansion of the sales force in that case. But in the case where they were only selling INBRIJA, they are rightsized right now. And so we have the -- that they would actually transition seamlessly from AMPYRA into INBRIJA.

(Operator Instructions) Your next question comes from the line of Jay Olson with Oppenheimer.

With regards to the European filing for INBRIJA, is there any additional color you can provide with regards to the time line there? And also, any update you can give us on your thoughts about commercializing it yourselves in Europe versus seeking out a partner? And then, any other potential filings in other ex-U. S. countries?

Right. So the MAA was submitted in late March. It's currently undergoing what's called the validation by the EMA or the European Medicines Agency. That's, broadly speaking, it's kind of like being accepted for filing by the FDA. And we anticipate that the validation process will be completed around the end of May, if it goes by typical timing. If they do validate it, then the review procedure could take approximately another year, give or take a few months, depending on whether there are clock stops and how many and so forth. With regard to selling abroad, we are looking at a number of options. As we said earlier, we are exploring potential partnerships ex U.S. not only in Europe, but elsewhere in the world. We are exploring whether there is a role for us to expand ourselves into marketing in certain territories. We have not, at this point, applied anywhere else. That is something that we're evaluating in terms of where and when we would versus having a partner potentially do it, and it depends on the territories such as Japan or some of the larger markets.

Okay, great. And then, just to follow up on the data you presented at AAN, I appreciate the feedback you provided from physicians in attendance there. Is there any additional color you can provide with regards to anything you learned at AAN about how INBRIJA will fit into the treatment paradigm with regards to other potential rescue therapies, such as sublingual apomorphine.

Yes, we can. The thrust of the approach to INBRIJA is that this is L-dopa, which is the gold-standard therapy. It is addressing what is recognized by the vast majority of clinicians in this space to be the #1, and certainly, one of the #1 problems they have in treating people with Parkinson's disease, which is that L-dopa is extremely effective and safe in general, but it is also poorly absorbed and subject to significant fluctuations during the day in terms of plasma levels with currently available oral therapies. And when the plasma level drops below therapeutic level, the patient turns OFF, which means they go back to their baseline disease state and now they can be incapacitated because they're trembling and they're stiff and they are falling and their motor function is declining and other things are declining as well. So this is seen correctly as a bridge between the oral doses, where you have the random and unpredictable drops in plasma level, you inhale INBRIJA and fairly rapidly come back to a therapeutic level, come out of your OFF period. And our studies showed that, that effect lasted at least an hour. So enough time to bridge you between the times when your oral doses are kicking in. So that is widely appreciated by -- what we are finding, it's widely appreciated by clinicians, thinking of it as a way to optimize the impact of the gold-standard therapy in Parkinson's disease.

Your next question comes from the line of Ram Selvaraju with H.C. Wainwright.

This is Julian on for Ram. I was just curious what the path forward is for rHigM22. Specifically, are any additional safety studies necessary? And do you expect any changes to efficacy endpoints in later-stage studies?

We're still working on that, so I don't have a definitive answer for you. We don't expect -- currently, I don't expect a need for any more safety studies. Obviously, this is a single -- so far, we've only done single-dose study here. So we are talking about what future studies might look like.

And your next question comes from the line of Ken Trbovich with Janney.

Ron, I got a few quick ones. First one, is there anything on the tail for AMPYRA that we should be thinking about with regard to either an authorized generic or a potential lag before the decline occurs, simply because of the method of distribution for AMPYRA?

Yes, we can't address anything specific with respect to that. I mean, I think it's fair to say that no matter what, we're expecting a precipitous decline in sales. This is just no way to get around that. Obviously, we'll do what we can with that and we'll brief you as -- if we get to that point. Our goal is not to get to that point, obviously. We believe that our patents are valid and that we're going to argue that in the appeal. But we're reiterating our guidance for the year. And if there are changes as we go along, we'll obviously alert everyone.

Okay. And then, just with regard to INBRIJA, can you give us a sense, I know the R&D guidance, implicit in there, there was some manufacturing cost. Should we be assuming that there is a portion of that, that would be -- inventory that would be salable post approval? Or could you give us a sense as to whether you go at risk for that?

I'm going to ask Dave to respond.

Yes, there would be -- in the R&D expense, there is a portion of that is related to commercial inventory.

Okay. And then, last question, just with regard to morning OFF, I know there was a study presented at AAN regarding morning OFF and it didn't hit statistical significance, but certainly suggested that there may be some benefit there. Is there any thought as to going back and powering up the study and doing another? Or could you give us a sense as to how you'll go forward with that material?

Yes, so we were encouraged by that study. Obviously, the reason for the study was safety to make sure there was no contraindication or reason not to let people use it in the morning. And once we saw that the safety data were good, we opened up the extension study and allowed people to use it in the morning as well. And we were encouraged by the data you pointed out, which even though it was not a -- it was -- by no means was it an efficacy study or powered for efficacy, we were encouraged by some of the trends that we saw in the data. So we are talking about what future studies might look like to look into that more deeply.

And we have no further questions at this time. I would now like to turn the call back to the presenters.

Great. Well, thank you, everyone, for joining us, and we look forward to briefing you in the next quarter. Have a great week.

Thank you to everyone for attending today. This will conclude today's call, and you may now disconnect.