Acorda Therapeutics, Inc. (ACOR) on Q2 2022 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, welcome to Acorda Therapeutics' Second Quarter 2022 Financial and Business Update. 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 at Acorda. Tierney, please go ahead.
Tierney Saccavino: Thank you, Abby, and 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. Today, during the Q&A, we will take some questions from investors that they have written in when they registered for the call. I will now pass the call over to our CEO, Ron Cohen. Ron?
Ron Cohen: Thank you, Tierney. Welcome, everyone. We'll go right into the report, starting with INBRIJA. INBRIJA net revenue for the second quarter of 2022 was $7.4 million. That's a 16% increase over Q2 of 2021. This also doubled our net revenue from the first quarter of 2022, which followed the buy-in that we saw in Q4 2021 and also a challenging Q1 due to the COVID Omicron surge at that time. We were also encouraged to see that new prescription forms increased progressively since the first quarter. And in July, we're 37% greater than in January as the country has opened up even in the face of COVID. Regarding AMPYRA. AMPYRA net revenue for the second quarter was $18.2 million, that's a 17% decline over Q2 2021, but a 22% increase over the first quarter of this year as, again, specialty pharmacy buy-in in the fourth quarter had a rollover effect into Q1. We are reiterating our guidance for 2022 net sales of AMPYRA of between $68 million and $78 million. Moving to our ex-U.S. revenue. INBRIJA launched in Germany, which we were delighted to see in June, and we recorded $1.9 million in revenue from ESTEVE for the initial launch shipments under our supply agreement and an additional $900,000 worth of drug was shipped in July. ESTEVE is reporting that feedback in the first 2 months of the launch in Germany has been enthusiastic with excellent uptake. ESTEVE has benefited from our learnings in the U.S., which we transferred to them, particularly regarding the importance of training about proper inhalation technique, and we believe they're also benefiting by not launching into the onset of the pandemic. ESTEVE expects to launch in Spain in the first quarter of 2023. And our other partner, Biopas is continuing to work toward launches of INBRIJA in the 9 largest Latin American markets, including Mexico and Brazil. We're also in discussions for commercial INBRIJA partnerships in additional territories around the world. Regarding AMPYRA, which is the -- I'm sorry, FAMPYRA, which is the ex-U.S. version of AMPYRA that is marketed by Biogen, our obligation to health care royalty partners has been fulfilled and the double-digit royalties for FAMPYRA reverted to Acorda as of late June. We expect to see the full benefit of those royalties commencing again in Q3. And in addition, we are pleased that Biogen has now launched FAMPYRA in China. Our CFO, Mike Gesser will now review the financials. Mike?
Mike Gesser: Thanks, Ron. OpEx for 2022 is $2.5 million lower than our Q2 2021, and we are maintaining our 2022 OpEx guidance of $110 million to $120 million. The amendment to the Catalent supply agreement that was effective from July 1, 2021, through June 30, 2022, resulted in a $4.6 million in savings from the minimum commitment. As of July 1, 2022, we have reverted back to the original contract conditions. Although we were aiming to be cash flow neutral by the end of the year, we now anticipate that will occur in 2023. While we have seen a gratifying bounce back in our business from Q1 and the Q1 shortfall had a bigger effect than we originally anticipated based on the buy-in in Q4 and the extremely large COVID surge during that quarter. Back to you, Ron.
Ron Cohen: Sorry, I had -- I was on mute, and I have corrected that. So we continue to focus on building long-term value through execution on the key goals you see here. First, continuing to drive INBRIJA's growth. We were encouraged to see that new prescription forms grew in the second quarter through July following the dip in Q1, which was associated, as you heard, with a large fourth quarter buy-in as well as the extreme Omicron wave at that time. Although COVID has not moved past the country, the country has clearly been moving past COVID. And as the effects of the pandemic continue to recede, we believe that people with Parkinson's are anxious to become more active again, especially since activity is an important part of managing their Parkinson's. And we expect those trends to continue to positively impact INBRIJA's trajectory. And we've been implementing multiple new commercial programs to take advantage of that. Those programs include, for example, a new electronic or e-prescribing option, which reduces friction for physicians when prescribing INBRIJA. We've also added before and after videos to the INBRIJA website, inbrija.com. These compellingly demonstrate INBRIJA's potential benefits, and I encourage you all to visit the imbrija.com site to see them for yourselves. We're also gratified to have begun to receive initial revenues from our ex-U.S. INBRIJA partnerships, and we're looking forward to additional launches from our existing partners as well as additional partnerships for new territories moving forward. Regarding AMPYRA. While we expect the brand to continue to decline against generics over time, that decline has been flattening, and we've been encouraged by AMPYRA durability to date. We're continuing to provide our support programs, have our field force call on MS offices, and we're reiterating our net sales guidance of $68 million to $78 million in 2022. We're also continuing to exercise fiscal discipline to control operating expenses. And as the Biogen royalties on the ex-U.S. sales of FAMPYRA have reverted to Acorda, we'll receive the full value of these royalties commencing in the third quarter. We're also building on the ARCUS technology platform, which has now been validated by the approval of INBRIJA in both the U.S. and the EU. We're in discussions about potential collaborations with other companies who've expressed interest in formulating their novel molecules for pulmonary delivery with ARCUS, and we've already been performing feasibility studies for a number of these opportunities. So with that, we will open up the line for questions.
A - Ron Cohen: As Mike Gesser just shared in our presentation, we had been aiming to be cash flow neutral to reach cash flow neutrality on a run rate basis by the end of this year due to the outsized impact in the first quarter of both the fourth quarter buy-in and the tremendous Omicron surge. We are now aiming for 2023, and we believe we will hit that in 2023. We'll narrow that more as we gather more data in the next couple of quarters. Second question is FDA is slated to release product-specific guidance to develop a generic INBRIJA later this year. How long do you envision Acorda can or will retain branded exclusivity on INBRIJA? And two, what are your life cycle plans to blunt the impact of the brand? Are the patents strong enough to hold off generics? So a few points on that. First of all, FDA was actually scheduled to have issued the guidance last year. They have not yet done so. We are not aware of any ANDA filers yet, but the broader point is we believe we have a strong patent portfolio that extends to 2032. In addition, the product is based on the ARCUS technology. And we think the complexities of that technology along with the patent portfolio and the fact that this is an inhaled drug, which brings additional obligations for safety and so forth, that all of that will be helpful in defending the franchise going forward. Are there any other questions, operator?
Operator: I have no further questions at this time.
Ron Cohen: All right. So with that, thank you all for joining us, and we look forward to updating you in our third quarter call. Have a great evening.
Operator: And ladies and gentlemen, this concludes the Acorda Therapeutics Second Quarter 2020 Financial and Business Update. We thank you for your participation, and you may now disconnect.
