PLx Pharma Inc (PLXP) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the PLx Pharma Fourth Quarter 2020 Earnings Results and Business Update Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference to your speaker today, Lisa Wilson. Please go ahead, ma'am.

Thank you, Victor. Welcome to PLx Pharma's Q4 2020 Earnings Results and Business Update Call. This is Lisa Wilson, Investor Relations for PLx.

With me on today's call are Natasha Giordano, President and Chief Executive Officer; and Rita O'Connor, Chief Financial Officer of PLx. You can also access the webcast of this call through the Investors section of the PLx website at plxpharma.com.

Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to PLx Pharma's management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. PLx specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.

The archived webcast will be available 30 days on our website, plxpharma.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on March 12, 2021. Since then, PLx may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to PLx's CEO, Natasha Giordano.

Thank you, Lisa. Good morning, everyone, and thank you for joining us today.

As we announced on March 1, we're excited that the FDA has approved the supplemental new drug applications for both the 81-milligram and the 325-milligram dose strength of VAZALORE, the first and only liquid-filled aspirin capsule.

It's taken several years of hard work and dedication to develop this innovative aspirin therapy that uses our proprietary PLxGuard drug delivery platform to deliver this life-saving drug. Having the patient top of mind has always been our motivation to overcome the challenges we experienced over the past few years. And now we are very proud that our vision can be realized to launch VAZALORE in the third quarter to the medical community and to those patients who need a reliable and predictable aspirin therapy to inhibit platelets.

Aspirin is the most widely used drug in the world, and yet, there's been no innovation in the category in decades, until now. The valiant proposition for VAZALORE is straightforward. VAZALORE demonstrates fast, reliable and predictable platelet inhibition, thus addressing the limitations of the current standard of care, enteric-coated aspirin.

It's been well-established that enteric-coated aspirin is radically absorbed in the GI tract, and VAZALORE significantly reduces the risk of stomach erosion and ulcer than immediate-release aspirin as observed in our published clinical trial.

This is a large commercial opportunity for us. With the retail market estimated at about $10 billion, this market includes more than 40 million patients in 2 groups, both with vascular disease, defined as those who have already suffered from an event like a heart attack or stroke, and those with diabetes were at high-risk for having such an event and thus may be candidates for aspirin therapy. We believe VAZALORE will transform the standard of care.

Importantly, VAZALORE's novel mechanism of delivery is the reason we have 58 patents extending into 2032, quite unique for an over-the-counter product. And finally, our scientific advisory board is made up of world-renowned experts in cardiology, neurology and gastroenterology, shared by the esteemed and extensively published Drs. Deepak Bhatt and Dominick Angiolillo.

The scientific advisory board is excited for the potential of VAZALORE to address a serious unmet need, and have been instrumental in guiding our strategy and understanding of what's important to clinicians to treat vascular disease. We are thrilled that we recently closed a $63 million public offering of common stock with a substantial amount of interest from both existing and new institutional investors.

I will now turn the call over to our CFO, Rita O'Connor, to discuss our financials. Rita?

Thank you, Natasha. I'd like to echo Natasha's enthusiasm for our approval as we move into the execution phase of our commercial plan.

First, I'll discuss the cash flow for the fourth quarter of 2020. As of December 31, 2020, the company had cash and cash equivalents of $22.4 million, with a cash burn of $3.5 million for the fourth quarter.

In November, we secured an $18 million private placement that will be used primarily to build commercial inventory and prepare prelaunch marketing materials. Last week, we closed on an underwritten public offering of 7.9 million shares of our common stock at a price of $8 to the public. Gross proceeds to the company were approximately $63 million before deducting underwriting discounts and other offering expenses. We expect this $59 million of net proceeds, plus our existing cash of $22 million, should be sufficient to execute our commercial activities for VAZALORE for at least the next 2 years.

We've been very busy on the manufacturing front, too. With our partner, Thermo Fisher, in Cincinnati, we completed our validation batches for both doses and began commercial inventory production in this quarter. We expect to have sufficient inventory ready to supply retail stores across the country this summer.

We expect cash burn to be around $5 million for the first quarter of '21, as we made our final payments of $1.2 million on our term loan and continued manufacturing activities. In the second quarter of '21, the cash burn will increase, as we continue to build commercial inventory and increase sales and marketing activities to prepare for the launch of VAZALORE in the third quarter. Once we are closer to launch and we receive purchase commitments from the retailers, we will share more details on distribution and shelf placement as well as our sales and marketing spend.

With that, I will turn the call back over to Natasha.

Thank you, Rita. We are extremely proud of the 2 FDA approvals we announced last week. As a reminder, we took the time to align with the FDA in a series of meetings to understand completely what they required for those 2 submissions. These sNDAs were considered chemistry and manufacturing control, or CMC filings, as they included information on the change in formulation, the new manufacturing sites for VAZALORE 325 milligrams and the new product strength for the 81-milligram dose. The submission for the 325-milligram dose also contained the results of a clinical study conducted, demonstrating VAZALORE's bioequivalence to immediate-release aspirin, further supporting the change in formulation.

The submission for the 81-milligram dose builds off of the information in the original approved NDA and the sNDA submitted for VAZALORE 325 milligrams. All of this information formed the basis for 2 strong submissions to the agency as evidenced by their approval for both doses earlier than expected.

Now with the FDA approvals in hand, the PLx team is excited to do what we do best, launch products. This management team has launched many mega brands successfully, and we look forward to turning VAZALORE into a household name.

Collectively, our leadership team has been involved in successful launches of products across the prescription and OTC segments, and built household names such as Mucinex, LIPITOR, Zantac and Zicam, just to name a few. This depth of experience is highly relevant to successfully launching VAZALORE.

We understand the challenges that HCP is faced in clinical practice and how consumers make their buying decisions. We also have extensive experience with retail trade customers and understand the intricacy of U.S. distribution channels.

The world has certainly changed in the past 12 months with COVID and this more virtual world is important now to leverage this evolving market dynamic. Our commercial launch plans are advancing and specifically focused on health care professionals, retailers and consumers. Additionally, central to our marketing strategy is raising awareness, educating and informing our 3 stakeholders about VAZALORE as the first and only FDA-approved liquid-filled aspirin capsule, its unique mechanism of delivery and our supporting published clinical data. We firmly believe that our compelling data, support from the clinical community, our focus on the consumer and the depth of this management team's experience represents a winning combination for a successful launch.

We look forward to sharing more information on our retailer commitments and commercial plans as we get closer to launch.

With that, I'll open the call for questions. Operator, please go ahead with the instructions.

(Operator Instructions) Our first question will come from the line of Elliot Wilbur from Raymond James.

So I think last call, I congratulated you on completing an odyssey when you resubmitted the VAZALORE sNDA. I'm not sure what follows an odyssey, a pilgrimage maybe, but I just want to -- my congratulations, obviously, on the approval as well.

So Natasha, maybe just -- first, it's been a little while since you've talked in detail about the launch strategy in launch plans outside of maybe timing? So anything you can share with us at this point in terms of the initial strategy with respect to having a primary detail force on the ground? What numbers you may be thinking about? How the pandemic has maybe altered your initial plans or given you ideas that you may have not considered previously? Just thinking about more sort of the initial primary detail effort and just remind us who, in fact, will be the primary call, initially. Obviously, cardiologists, but maybe beyond that physician audience. And then I've got an additional question as well, but I'll hold off until you respond.

Okay. So that was loaded. So let me, as I say, unpack the question. First of all, thank you. We are so excited about having 2 FDA approvals, and then additionally, securing the capital that we need to successfully launch this very important product.

The patient really is central to our beating for this management team. It really does drive us. We do believe we're going to make a huge impact in the market with addressing this very serious unmet need. And so you raised the pandemic. Certainly, COVID has changed the way that all of our stakeholders are doing business, not only the cardiologists, the consumer is buying more online, picking up in store. So we need to be everywhere that, that consumer is.

And the retailers also have built up their e-commerce business. Last year, when we spoke, it was about Amazon. Now all the top retailers have accelerated their e-commerce platforms. And so, of course, we've incorporated that into our strategy.

I think what it did was enabled us to allocate our resources in a very balanced way because, now more than ever, all 3 stakeholders are really very important to us. And we need to generate awareness, educate and inform and get patients and physicians to the trial. So with that, we'll be doing a very much multichannel, integrated approach. And listen, we've said those words before COVID, but now more than ever, we're going to be doing things in media, and in search, in digital. We'll be extending towards the HCPs in that way as well.

We will be using nonpersonal and personal promotion. And I think that, that will be even more effective than the way that we've all launched products before. It's going to enable us to broaden our reach because it is done through a virtual way. I know that everybody is always very interested in numbers and want to understand how many people that we're going to put out there, feet on the ground, with our HCPs. And of course, I'm not going to share that for obvious reasons.

However, what I will tell you is that yes, the cardiologist is essential to our strategy. And we will -- and we have developed very deep sales plans and they're very laser-focused plans on generating volumes through our cardiology practices, which may entail several different professionals in those group practices. We also are looking at the top hospitals in the U.S. that are heart and stroke hospitals, and we'll integrate that into our plans as well.

And as we got closer, I know that you all are very interested in some more detail. As we get closer, we'll talk to you about the specifics as we get closer to launch.

Okay. And then I wanted to ask you another question around -- on the specifics of the launch itself. So obviously, timing, third quarter, with respect to shipments to retailers. But are we -- should we be thinking about kind of a phased or stage launch effort with supply being provided to just a limited number of initial retailers across their entire networks? Or should we be thinking about a broader launch strategy initially hitting all retailers, but maybe at not all of their locations?

What we're planning is a very balanced but very deep plan to reach those 3 stakeholders. So the consumer, the retailer and the HCP. And no, not in a phased approach. We really want to hit the ground day 1 with this product and get as much uptake as quickly as we can through our very unique plan. And we are expecting this to be a national launch.

So no, it's not regional. It's not -- it's a national approach.

Okay. And then just last question here. Just in thinking in terms of patient expense, presume that your anticipating VAZALORE will largely be paid for out of pocket. I know that aspirin is a covered category under the ACA. Just wondering if you think, longer term, there's an opportunity here to maybe gain more favorable formulary positioning so that the product could actually eventually be covered?

Sure. It's Rita. So yes, right at launch, we're modeling is that it will be all out of pocket. But you're right. There is certainly a market for that, and we could, as this launch rolls out, really approach managed care and the ACA. I mean right now, ACA covers generic aspirin. So we would have to do some work to really show and prove the value of VAZALORE, which we know we can do, but we're just not targeting that audience at launch.

Our next question comes from the line of Jason Butler from JMP Securities.

And let me add my congratulations on the approvals as well. Can you me -- sure. Could you talk about some of the education activities that you're going to be doing ahead of the launch? Will you be using peer-to-peer educational forums? When could that start? When could we start to see DTC campaigns roll out?

Sure. So essential to our marketing strategy and our VAZALORE launch plan is communication and education, obviously. We've been participating in all the top key cardiology conferences for a few years now, and we are continuing to do so even in a virtual way. We will have a strong presence at ACC and AHA. We are wrapping up those plans as we speak.

And with that, also a publication strategy for me, is extremely important for the cardiologist, knowing how cardiologists educate themselves and who they listen to, publication is really very important. So we're very proud of the fact that our study has been published in top peer-reviewed journals like the Journal of American College of Cardiology, with the investigator, principal investigator to keep on [track], but also our published study in the Journal of Gastroenterology. These things are really important.

Last year, we spent a number of conferences talking about different abstracts and posters of our data. This year, those data will be converted into manuscripts and submitted for publication, also led by our publication committee that's made up of Deepak Bhatt, Dominick Angiolillo and others.

So we will continue to do that all along the way, prelaunch and certainly post launch. Our media campaign to address the consumer is really also to raise awareness and drive the consumer to their cardiologist.

What we do know about our specific consumer, the secondary prevention patient and the potential diabetic patients who maybe a candidate for aspirin therapy is that they listen to their physicians. That's number one influence.

They also need to see and have brand familiarity. So you'll see our media campaign will be centered around that during the launch in Q3.

Okay, great. That's helpful. And then Rita, I know you're not guiding for the spend for the rest of the year. But can you just give us a sense in terms of the manufacturing and inventory build? Is that cost going to primarily occur earlier in the year in 2Q? Or will that be spread out through the remaining 3 quarters of the year?

Pretty much the second quarter will be the bigger ones of them. And then the third quarter, I mean, we still will have sales and marketing expenses in the third quarter. They will go up. But as we get into the third quarter, we'll still have cash burn on the inventory build. But our goal is to have it ready to go in the DC this summer. So it should be fairly evenly spread between the second and third quarter in inventory, and sales and marketing will be heavier in the third than it is in the second. Is that helpful?

(Operator Instructions) Our next question will come from the line of Leland Gershell from Oppenheimer.

Natasha and Rita, my congrats again on everything that you've accomplished. I wanted to ask a couple of questions. First, with the product like VAZALORE being a very consumer-driven product, OTC, wanted to just ask your thoughts about kind of a customer loyalty program that might be facilitative in terms of end users kind of coming back to stay on the product? And then also I wanted to ask -- it maybe some time away, but what you may see for ex U.S. opportunities for VAZALORE?

So it's Rita, I'll take the first question, and I'll defer to Natasha on the international question. So yes, actually, the retailers are very big on their customer loyalty programs, especially the top chain drug stores have a lot of customer loyalty programs. So we have actually been working with all of those chain drug stores for several years now and working with them on the best strategy to launch VAZALORE. And yes, that does include customer loyalty programs. So we plan to use that channel as a significant part of our reach.

Okay. That's helpful.

And on the ex U.S. opportunities, we are absolutely open and have had some discussions in that area. But our real primary focus is to make this a huge success. And help as many patients as we -- millions of patients that we can possibly help with this great product because in the end, that is the key, right, to help physicians manage patients that are high risk for vascular disease.

And so we -- our priority is to launch here. However, yes, that's always an opportunity. And in fact, we have representation on our scientific advisory board with Gabriel Steg, who is just world renowned in this category as a cardiologist and very well published as well. He participates in our scientific advisory board for the last 4 years. So yes, there is absolutely discussions in that regard.

And also, a lot of our patents are all over the world as well in the big European and Asian markets. So we do have patent protection for quite a lot of years.

Yes. Good point. Thanks.

Thank you. And there are no further questions in the queue. I'll turn the call back over to Natasha for any closing remarks.

Thank you. Thank you for your time this morning. We are so excited to have achieved these critical milestones, 2 FDA approvals and the capital needed to launch VAZALORE. We believe VAZALORE will transform the standard of care for millions of patients at risk for vascular disease.

We thank and sincerely appreciate the support of our partners, for all their dedicated hard work, and our shareholders, for their continued confidence in the PLx management team. Stay healthy and safe, and have a great day.

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