Acorda Therapeutics Inc (ACOR) 2021 Q1 法說會逐字稿

Welcome to Acorda Therapeutics First Quarter 2021 Financial and Business Update. (Operator Instructions) Please be advised that this call is being recorded at the company's request. I will now introduce your host for today's call, Tierney Saccavino, Executive Vice President, Corporate Communications at Acorda. Please go ahead.

Thanks, Philip. Good afternoon, everyone. Before we begin, let me remind you that our presentation will contain forward-looking statements. Detailed disclosures can be found in our SEC filings, which are public, and we encourage you to refer to those filings.

And I'll now pass the call over to our CEO, Ron Cohen.

Thanks, Tierney. Welcome, everyone. Starting with INBRIJA net revenue for the first quarter of 2021, was $5 million. That's a 13% increase over the first quarter of 2020. We are pleased to see this increase despite the significant impact of the pandemic on the INBRIJA launch. As we've discussed previously, the first quarter historically has been lower than the preceding fourth quarter and the lowest sales quarter of the year due to a number of seasonal factors. And as we expected, sales increased markedly in March and April into May of 2021 relative to January and February.

AMPYRA net revenue for the first quarter was $20.3 million, that's about the same as in Q1 2020. And that's the first time we've seen stable yearly quarter-over-quarter net sales since AMPYRA went generic in September 2018. We believe that, that is due to the strategies that we've executed to maintain the brand. The strength of the AMPYRA brand is an important contributor to Acorda's financial stability and to our goal of becoming cash flow neutral on a run rate basis by the end of 2022.

Moving to accelerating INBRIJA's trajectory. As a reminder, INBRIJA is inhaled levodopa, it's indicated to address the return of symptoms or off periods that many people with Parkinson's experience in between doses of their regularly scheduled medication. Despite the continuing impact of the COVID-19 pandemic, we saw encouraging signs of growth in INBRIJA compared to the first quarter of 2020. As I mentioned, we saw a 13% year-over-year increase in net sales. We saw a 5% increase in total prescriptions and very importantly, a 25% increase in organic growth over Q1 2020. Organic growth is measured by dispensed cartons, which most accurately reflect demand.

This 25% increase represents an acceleration of the approximately 17% organic growth that we saw between Q4 2020 over Q4 2019 -- I'm sorry -- that's right, Q4 2020 over Q4 2019. I'm going to discuss this in more depth on the next slide. So recall that INBRIJA is an as-needed therapy and patients can take it up to a maximum of 5 times per day, but they're not required to take it if they don't feel that their off periods require it. Overall, 44% of all INBRIJA patients are regular users, and that's defined as taking an average of at least 1 dose a day, obviously all the way up to 5, but an average of at least 1 dose a day. And importantly, of those regular users, 70% are still on therapy a year later. We've also been pleased to see that the average consumption for regular users is 2.8 doses per day, up from 2.5 doses in April of 2020.

In addition to the importance of maintaining these regular users, we're also focused on growing the brand by bringing new patients to therapy and converting them to regular users, which I'll discuss on the next slide.

We believe that the work we've done since 2020 to increase access to INBRIJA, and to improve the patient and physician journeys, have positioned the brand for growth in 2021 and beyond as the pandemic subsides. The conversion of written to filled prescriptions increased from about 50% to about 67% in 2020. We believe this resulted from improved access to the medication for both commercially insured and Medicare patients. For commercially insured patients, 96% now have formulary access to INBRIJA without need for medical exception. And for Medicare patients, 85% have access with no block. Now these patients may require an additional submission by their physicians for a medical exception, but they are then able to obtain INBRIJA.

We also moved to a single specialty pharmacy in the fourth quarter. That streamlined and unified the experience that patients and health care professionals had with our customer service hub and the specialty pharmacy, and it also reduced our costs. As I mentioned in the previous slide, in 2020 we improved our training materials to help patients have a better inhalation experience with INBRIJA, and we also added nurse educators to work individually with patients to help train them both by phone and video.

We have received universally positive feedback about these initiatives from both prescribers and patients, and our data support the effectiveness of these enhancements. So the nurse educators alone have increased our first refill rate by about 20%. And in 2020, we also reached out to patients who had either not filled or not refilled their INBRIJA prescriptions, and we provided them with the updated training materials and/or telephone or video training. That resulted in about 1,250 patients returning to therapy to date. So we take those as excellent signs that the improvements, the enhancements that we added in 2020 are having a real impact, and we expect that they will continue to.

Despite the pandemic, about 550 new physicians wrote prescriptions for INBRIJA in 2020. Health care professionals continue to express enthusiasm for INBRIJA, and they tell us they expect to increase their rate of prescribing as patients return to in-person office visits and also as they return to their previous levels of activity, and therefore feel increasing need to address their off periods. So as the pandemic subsides, we expect these factors to increasingly come into play.

Our field sales team returned to making calls in person this past March. And together with the impact of COVID vaccinations and the receding pandemic, we have seen progressive increases in new prescriptions in March and April, continuing into May of this year versus what we saw in January and February.

Moving to AMPYRA. We were very pleased to see stable net sales in Q1 2021 compared to Q1 2020. That's the first time that this has happened since AMPYRA went generic in September 2018. In addition, approximately 150 new doctors wrote prescriptions for branded AMPYRA in 2020 and 2021 -- excuse me, in 2020. And in 2021 we've actually seen progressive month-over-month increases in new prescription forms from January through April. So we believe that performance is due to a variety of factors. First, physician and patient brand loyalty. We continue to hear from both health care professionals and patients who value the support that we've always provided and are continuing to provide for branded AMPYRA. This includes our First Step program that provides the initial 2 months of AMPYRA free to commercially insured patients, co-pay mitigation for commercially insured patients, and physician and reimbursement support.

And our field sales team continues to call on MS specialists, where they have maintained outstanding relationships. So moving to our financials and goals for 2021. We're prioritizing the calibration of our OpEx to our revenue, and our goal is to be cash flow neutral on a run rate basis by the end of 2022. Key elements of this are as follows: first, the durability of the AMPYRA brand; and the growth of INBRIJA as the pandemic subsides. We're also engaged in substantive discussions now with multiple parties to enter into commercialization agreements for INBRIJA ex-U. S. These conversations have been revitalized by the sale of our manufacturing operations to Catalent, which significantly reduced the cost of goods for INBRIJA, as well as by the favorable decision by the GBA in Germany that an early benefit assessment would not be required.

Based on the current sales trajectory, we also believe that the double-digit tiered royalties on net sales for FAMPYRA, which Biogen commercializes ex-U. S., will return to Acorda in 2022. In addition, the lease on our Ardsley headquarters is currently approximately $8 million per year. And based on excess capacity at the facility and our increasing focus on a hybrid model of work from home and in office, we believe that we can recognize significant savings by making our office presence more efficient. And we will continue to maintain our focus on fiscal discipline and reduce spending wherever possible without impacting the INBRIJA launch.

So moving to our Q1 financial summary. In addition to the INBRIJA and AMPYRA net revenue, which I discussed previously, R&D and SG&A costs decreased by 39% and about 17%, respectively, compared to the same quarter in 2020. The reductions in spending are due to the cost reduction initiatives that we implemented and a continuing focus on reductions in noncore spending. And note that Q1 contains significant onetime expenses that we do not expect to recur during the remainder of the year. These included costs related to the Catalent transaction, severance payments related to our restructuring and incentive compensation. A GAAP loss for the quarter was higher compared to Q1 2020 and that was due primarily to a $26.5 million derivative gain that was reported in Q1 2020.

Non-GAAP net loss for the quarter was 4.5% lower compared to Q1 2020. We ended the quarter with over $148 million in cash, cash equivalents, short-term investments and restricted cash, and this represents an approximately 18% increase compared to the same quarter in 2010, due primarily to the net cash received from the Catalent transaction in February of this year. So as we noted on our Q1 call, we achieved all the goals we set for the company in 2020 to position Acorda to build long-term value, and moving forward, we're focusing on the key factors you see here.

First, continuing to drive INBRIJA's commercial growth. As I noted earlier, we validated the training initiatives that we developed in 2020 by the substantial increases we saw in both filled prescriptions and return of patients to INBRIJA. In addition, our field team has returned to in-person meetings with prescribers, and we believe that this will also provide a significant opportunity to accelerate adoption of INBRIJA. And while it's still early to project, we are very pleased to have seen prescriptions increase -- new prescriptions increase in March and April into May, which we believe is related to both the field force and to the receding of the pandemic.

The sale of our manufacturing operations to Catalent has significantly lowered the cost of goods for INBRIJA. And as I indicated, this has reinvigorated our discussions for ex-U. S. partnerships. And the recent favorable decision by the GBA in Germany not to require a benefit assessment has sparked additional interest by potential partners for Germany, which is Europe's largest market. We're also continuing to support the AMPYRA franchise. As we've discussed, that remains a significant contributor to Acorda's revenue and Q1 '21 -- Q1 2021 sales were about equal to Q1 2020 net sales. We've been pleased to see the durability of the product to date. We're on track to achieve our 2021 net sales goal of between $75 million to $85 million.

We'll also maintain our fiscal discipline. We expect to receive a tax credit from the CARES Act this year, totaling approximately $5 million to $7 million. And we also plan to address the $69 million convertible debt payment that's due in June of this year.

Finally, we're also seeking to build on the ARCUS technology platform that's now been validated by the approval of INBRIJA in the U.S. and the EU, as well as by funding from the Gates Foundation for developing a pediatric inhaled surfactant product. We are also seeking collaborations with other companies for additional potential indications for ARCUS.

So that concludes my formal presentation, and we'll now open the call for your questions.

(Operator Instructions) Your first question is from the line of Sam.

Yes. This is Sam. I'm a retail investor with Acorda. So I have a question about the note deal in June. I think, Ron, you mentioned you are working to address that note. Are you planning to pay out of the cash or using shares?

Yes. So obviously, the Catalent transaction and the $74 million that we brought in that -- upfront on that has shored up the balance sheet very well. We are looking at alternatives; absent a better alternative, we would plan to retire the debt in June, and we are still looking at that.

Okay. So potentially to finance the debt, get another loan or so you are looking at all options?

Yes, we are. And again, I just want to say, we're about a month away from the due date. So we are prepared to retire the debt in June. And -- in the time until then, we're continuing to explore options. But if there are not better alternatives than simply retiring it, we would do that.

(Operator Instructions) And there are no questions in queue at this time.

All right. Well, thank you, everyone, for joining us. We are pleased with the progress, and we look forward to updating you next quarter. Have a great rest of your week.

That does conclude today's conference. Thank you for participating. You may now disconnect. Have a great (technical difficulty).