Acorda Therapeutics Inc (ACOR) 2020 Q4 法說會逐字稿

Welcome to Acorda Therapeutics Fourth Quarter and Year-End 2020 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, Ms. Tierney Saccavino, Executive Vice President, Corporate Communications at Acorda. Ma'am, please go ahead.

Thank you, Joanna. Good afternoon, everyone.

Before we begin, let me remind you that this 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.

I will now pass the call over to our CEO, Ron Cohen.

Thank you, Tierney, and welcome, everyone. We'll go right into INBRIJA net revenue for the full year 2020, which was $24.2 million. And for the fourth quarter, net revenue was $9.3 million. We're encouraged that sales increased every quarter during the year given the impact of COVID-19.

AMPYRA net revenue for the full year 2020 was $98.9 million. And for the fourth quarter, net revenue was $25.3 million. Physicians and patients maintained a high degree of brand loyalty, and Acorda continues to offer co-pay mitigation and a free 60-day trial for those patients who are eligible.

I'll now review our key achievements of 2020. We set several important goals for 2020. And I'm pleased to report that we achieved all of them. First, to monetize the excess capacity of our Chelsea manufacturing facility, then to improve our balance sheet, to reduce our cost structure, to accelerate the INBRIJA trajectory, and to maintain our AMPYRA franchise. And I'll now review these in more detail.

So we achieved our goal of monetizing the excess capacity of our manufacturing operations. In February 2021, we announced that we closed our deal to sell our manufacturing operations to Catalent. This deal includes a global supply agreement for INBRIJA, which ensures that it will continue to be manufactured to the highest quality standards and be available to people with Parkinson's worldwide.

Acorda's associates at the Chelsea plant will continue to manufacture INBRIJA, and now as Catalent employees. We received an $80 million upfront payment resulting in net proceeds of approximately $74 million. The deal also substantially reduces both our operating expenses and the cost of goods for INBRIJA. We believe that the lower cost of goods will also accelerate our efforts to obtain commercialization partners for INBRIJA outside the U.S.

We also achieved our goal of strengthening our balance sheet by over $100 million, including the $74 million net upfront payment from Catalent, a $15 million milestone payment from Biogen for FAMPYRA, and a $12.7 million tax refund under the CARES Act.

Regarding our goal of reducing our cost structure, we reduced our expected operating expenses for 2021 by about $40 million, about $10 million resulted from the sale of our manufacturing operations, $6 million from a 16% headcount reduction in our Ardsley and field teams and $24 million in additional cost reductions. And note that in making these reductions, we focused on ensuring that the commercialization of INBRIJA would remain fully funded.

Moving to our key goal of accelerating INBRIJA's trajectory. First, as a reminder, INBRIJA is inhaled levodopa. Levodopa is the gold standard therapy for improving symptoms of Parkinson's, and INBRIJA is indicated to address the return of symptoms in between doses of regularly scheduled medication as needed. Also know -- these returns of symptoms are also known as off periods.

We had several key learnings regarding the INBRIJA launch in 2020. Prescribers were enthusiastic about INBRIJA when we launched it in March of 2019, and we saw initially high rates of prescribing in the first few months. However, these tailed off in the latter part of 2019. This was initially due to poor access to INBRIJA and consequent frustration for the prescribers.

However, as we significantly improved access and more patients were able to fill their prescriptions, we then saw higher-than-expected early discontinuations. And we learned that these were due to unsatisfactory experiences. And these appear to be related to suboptimal training about the proper use of the device and inhalation method. Some of this, to be frank, was on us.

We realized that an instructional video that we provided needed to be improved. And some was due to a lack of hands-on training or often none at all. About 30% of patients reported 'no' in-office training. So we responded by implementing new training initiatives. And in the first quarter of 2020, we saw progressively increasing prescriptions. This -- I'm sorry, yes, so 2020, we saw progressively increasing prescriptions.

This progress acutely reversed in late March as the pandemic hit and physicians' offices closed. So even with some recovery and the shift to telemedicine during the year, we found that an additional 30% of patients now reported no training. So 60% or more of our patients were not reporting training.

We also found that physicians were hesitant to start new treatments during the pandemic. Now despite these pretty significant headwinds, we were able to achieve growth in each quarter of 2020. We believe that, that success was related to our having responded to our learnings by implementing initiatives during the pandemic to address the need for additional training and support as an adjunct to the training that was being provided by the physician's offices.

One of our key initiatives was providing nurse educators. These nurses are available by phone or video to coach patients on the correct, most effective way to inhale and administer INBRIJA. The nurses also call every patient who receives a new INBRIJA prescription to offer training and answer questions, and this has been highly effective, which I'll discuss in more detail on the next slide.

We also have had our customer service team reach out to patients whose prescriptions have been canceled or discontinued to answer questions and provide additional tips and training. In 2020, to date, this has resulted in approximately 1,000 patients returning to or beginning therapy with INBRIJA. In addition, we developed a very clear, Helpful Hints guide. We updated our training video, and we sent a letter through the post office with the Helpful Hints guide to patients who had either never filled a prescription or discontinued therapy without a refill. And that resulted in an additional approximately 250 patients returning to therapy.

We've also been providing patient ambassadors who share their experiences with Parkinson's and INBRIJA in consumer education programs. So here's an analysis of what I referred to earlier with our nurse educators. This is an analysis of the first refills by comparing patients who had not received coaching from a nurse educator to those who had. Patients who had spoken with a nurse educator had a 20% higher refill rate than those who had not. And we're continuing this program, along with the others I mentioned in 2021.

So the key, we believe here is continuing to build on what we learned in 2020 about the importance of optimal training for patients and how to achieve that. As I mentioned, we're continuing our Nurse Educator and patient support services outreach. These strategies, again, brought about 1,250 patients back to therapy in 2020, even during the pandemic. We're also adapting what we've learned during the pandemic about how to connect virtually with our prescriber and patient audiences. Our field sales team has now returned to in-person physician visits as of this month, March, and will now be pursuing a hybrid model of both in-person and virtual education and communications.

In 2020, we were able to refine a highly effective model for working with patient advocacy groups in Parkinson's and patient support groups virtually to educate large numbers of people with Parkinson's about INBRIJA, and we're going to continue those virtual events even as we resume in-person events, hopefully later this year as the pandemic hopefully subsides.

And the INBRIJA patient ambassadors will continue to speak about their experiences at both virtual and in-person events. We'll also be adding a significant number of patient ambassador videos that people with Parkinson's can access online. I also want to mention that we recently added a new telemedicine initiative, where patients who are interested can consult with a neurologist online, and if appropriate, receive a prescription for INBRIJA. This initiative has already been bringing in new patients to INBRIJA.

This graph shows INBRIJA's performance since it was launched in March of 2019. We were encouraged to see growth in 2020 despite the pandemic. And after a dip in the first quarter of 2020, which we have typically seen each year for our other products and also was influenced by the pandemic coming in last year in March, total prescriptions or TRX' increased every quarter through 2020. INBRIJA's Q4 revenue of $9.3 million was greater than 50% increase over Q4 of 2019, and that included approximately 17% of organic growth in Q4 2020 over Q4 2019.

In addition to organic growth, we saw the typical factors that occur in the fourth quarter. The D&A line typically is the lowest in Q4 and the highest in Q1, which increases net Q4 sales and decreases Q1 sales on a relative basis. In addition, patients refilled their prescriptions earlier ahead of the new year, and the Medicare reset and specialty pharmacies tend to stock a bit more to account for the holidays in the new year.

It's also worth noting that in Q4 of 2020, we had an additional one-off factor. The other factors tend to recur every year in our experience with our other products, but we had a one-off factor in that in the fourth quarter we consolidated from multiple specialty pharmacies to a single one. And that pharmacy initiated stocking for the newly transferred patients during the quarter.

So moving to AMPYRA. We've been very pleased to see the durability of the AMPYRA franchise. The brand loyalty continues to be high, and we're continuing to support key activities for the brand. Such as our First Step free trial program for 60 days, physician and reimbursement support and co-pay mitigation for commercially insured patients. Interestingly, we're still calling on key MS prescribers. And interestingly, approximately 150 new doctors wrote prescriptions for the AMPYRA brand in 2020.

Moving to our 2020 financials and our 2020 -- 2021 guidance and goals. This slide outlines key financials for the fourth quarter and full year 2020. You'll find these addressed in detail in our press release. As we previously reported, in the third quarter, we achieved a milestone payment of $15 million from Biogen based on FAMPYRA cumulative sales. And in the fourth quarter, we recorded a loss of the assets held for sale of $57.9 million, which represents the amount by which the carrying value of the Chelsea manufacturing assets sold to Catalent exceeded the net purchase price. We ended the year with cash, cash equivalents, divestments and restricted cash of $102.9 million.

For 2021 guidance, our AMPYRA net revenue guidance is $75 million to $85 million. Our 2021 operating expense guidance is $130 million to $140 million. We're not providing revenue guidance for INBRIJA at this time. We've seen a strong correlation between the pace of prescriptions and the surges in COVID-19 over the past year when office visits decline again. To the extent that the pandemic recedes as vaccinations increase, we believe this will contribute to the growth of INBRIJA in 2021.

So in summary, we achieved significant goals in 2020 to position Acorda to build long-term value. Moving forward, we're going to focus on the key factors that you see here: First, continuing to drive INBRIJA's commercial growth. We've seen that the initiatives we developed in 2020 to better train patients resulted in substantial increases in both filled prescriptions and return of patients to INBRIJA. We're also reengaging with physicians in-person as the pandemic recedes, and we believe that the return to more normal interactions of patients with physicians will also provide significant opportunity to accelerate adoption of INBRIJA as the pandemic recedes, again, hopefully, by the second half of the year.

The sale of our manufacturing operations to Catalent has significantly lowered the cost of goods for INBRIJA, and this has reinvigorated our discussions for ex U.S. partnerships as lower reimbursement and our previously higher cost of goods was pressuring our ability to enter into such partnerships. And having now addressed that, we're finding that these discussions are renewing with vigor.

It's also worth noting that the GBA in Germany, which is the -- which sets the reimbursement prices after the first year on the market, ruled recently, that we do not need to submit a reimbursement dossier for INBRIJA. This was extremely good news, and it's resulted in additional interest by potential partners for Europe's largest market, Germany.

We're also going to continue to support the AMPYRA franchise. That remains a significant contributor to Acorda's revenue. Note that in 2020, 150 new physicians wrote for AMPYRA for the first time. While we continue to expect that AMPYRA revenue will decline over time, we have been gratified by its performance to date.

We're also going to maintain our fiscal discipline, and importantly, address the $69 million convertible debt payment that's due in June of this year. And 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 development of a pediatric inhaled surfactant product. We're also seeking collaborations with other companies to -- for other potential indications for the Arcus technology.

So we look forward to updating you during the year, and we will now open the call for your questions.

(Operator Instructions) Speakers, we do not have any audio questions as of this moment.

Thank you, Joanna. If there are no questions, we're going to end the call now. Thank you, everybody, for dialing in.

Okay. Thanks, everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.