Acorda Therapeutics, Inc. (ACOR) on Q2 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, hello and welcome to the Acorda Therapeutics Second Quarter 2021 Update. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. I will now hand you over to your host Tierney Saccavino, Executive Vice President of Corporate Communications at Acorda to begin. Tierney, please go ahead when you're ready.
Tierney Saccavino: Thank you, Maxine 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. As a reminder to all callers, during the Q&A session, we will only take calls from our analysts. I'm now going to pass the call over to our CEO, Ron Cohen. Ron?
Ron Cohen: Thanks, Tierney. Welcome, everyone. We'll get right into our report. I'm pleased to report that INBRIJA net revenue for the second quarter of 2021 was $6.4 million. That was a 36% increase over the second quarter of 2020. This was particularly encouraging in light of the continuing impact of the pandemic. AMPYRA net revenue for the second quarter was likewise encouraging at $21.8 million. We believe that the durability of AMPYRA brand since it went generic in September 2018 is due to the strategies that we deployed and that we're continuing to execute. AMPYRA 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 our INBRIJA business and 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 medications. We saw encouraging signs of growth in INBRIJA compared to the second quarter of 2020 as the pandemic began to recede. And as I mentioned, we had a 36% year-over-year increase in net sales. We also had a 16% increase in total prescriptions over Q2 2020. And importantly, we had a 22% increase in organic growth, measured by dispensed cartons, which most accurately reflects demand. While we're pleased with the progress, the course of the COVID pandemic continues to make it difficult to predict how quickly positions offices will continue to open and how quickly at-risk populations will resume their office visits. We also announced our first ex-US commercialization agreement with Esteve Pharmaceuticals in Spain. Esteve has a successful track record of commercializing pharmaceutical products in the Spanish market. And this is an important milestone toward our goal of ex-US commercial partnerships for INBRIJA. As part of the supply agreement, Acorda will receive a significant double-digit percent of gross sales in exchange for supply of the product. Esteve expects to launch INBRIJA in the fourth quarter of 2022. We're also in active discussions with additional companies for the rights to INBRIJA in other territories in Europe and the rest of the world. Moving to AMPYRA. AMPYRA net revenue increased 7% over the first quarter of this year and decreased only by about 15% over Q2 2020. We believe that the durability of this franchise is due to a number of factors. First, patients and their physicians remain loyal to the brand. We've earned that loyalty based on the education, support and care that we've always provided and continue to provide for branded AMPYRA. And that includes our first step program in which commercially insured patients get their initial two months of AMPYRA free and we also provide co-pay mitigation for commercially insured patients and physician and reimbursement support. And our field sales team is also continuing to call on MS specialists, where they've maintained strong relationships. Moving to our financials and goals for 2021. The financials are summarized in this table and in more detail in our press release and 10-Q. I want to note in particular, that our cash of approximately $71 million at the end of Q2 is net of the -- payment that we made during the quarter to settle our short-term convertible debt. So moving to how we are building long-term value going forward. We've taken significant steps to position Acorda to build long-term value. We're focused on the following key factors: first, continuing to drive INBRIJA's commercial growth. The initiatives that we started in 2020 to enhance the patient experience are continuing to yield positive results as prescriptions and dispensed cartons grew nicely in the quarter. We held over 100 virtual patient events in the first six months of 2021 and potentially will add in-person events later this year depending on the status of the pandemic. Our field team has returned to in-person meetings with prescribers and we believe that contributed materially to the increases in prescriptions in the second quarter. To the extent that the effects of the pandemic hopefully recede in the fall and beyond, we expect our field teams to gain increasing in-person access to physicians' offices and to see more patients returning to regular office visits. Importantly, as we mentioned we've secured our first agreement to commercialize INBRIJA outside the US and Spain and we're in active discussions with several parties for additional territories in Europe and the rest of the world. Regarding AMPYRA, while we expect the brand to continue to decline against generics over time, we've been very encouraged by the brand's durability to-date. And we will maintain that as much as possible by continuing to provide our support programs and to have our field teams calling on MS Offices. Another key factor in building value is to continue our fiscal discipline and continue to reduce expenses going forward. We also expect to receive a total tax credit from the CARES Act this year of approximately $5 million to $7 million of which about $2 million has already been realized. In addition, we expect to have the royalties from Biogen on ex-US sales of FAMPYRA revert back to Acorda in the second half of 2022. As a reminder, these are double-digit tiered royalties on net sales. And also by way of reminder, we're aiming to be cash flow neutral on a run rate basis by the end of 2022. We're also seeking to build on the ARCUS technology platform. It's now been validated by the approval of INBRIJA in the US and EU as well as by funding from the Gates Foundation developed of a pediatric inhaled surfactant product. We plan to discuss potential collaborations with other companies some of whom have already expressed interest in additional potential indications for ARCUS. We plan to discuss potential collaborations with other companies some of whom have already expressed interest in additional potential indications for ARCUS. We'll now open the call for your questions.
Operator: Our first question comes from Muzamil Saleem from H.C. Wainwright. Your line is now open.
Muzamil Saleem: This is Muz on for Ram Selvaraju H.C. Wainwright. Thanks for taking my questions. So first with regard to the marketing -- firstly with regard to the marketing efforts for INBRIJA can you get how effective your digital marketing has been during the pandemic? And to what extent base-to-base marketing activities are resuming?
Ron Cohen: It's always difficult or challenging to gauge precisely or with any precision, how much any given part of a marketing program is contributing to the overall trends that one sees. Based on various types of analyses; both on the data itself and then feedback from the field, we believe that the digital programs have been affected especially during the pandemic, during periods where the number of physicians' offices that were open and the number of patients who were visiting physicians' offices plummeted that -- particularly in March, April, May and beyond of last year those fell off a cliff. And the digital programs that we were sponsoring, we think did a lot to keep INBRIJA in mind for the physicians and the patients. And you can see it in terms of -- for example how many clicks we get, how many downloads we get on the website of patient position discussion guides which were extremely robust during that time and they continue to be extremely robust. We sent the field force back into the field as of February -- February/March timeframe. What I can tell you is that for a product like INBRIJA which is novel it is a drug device combination. So it's a novel kind inhaler. And the whole method of delivery or route of delivery to deliver levodopa systemically through the lungs is a completely novel concept. So it requires training. It requires education. And what we have found is in-person demonstrations, in-person conversations are the most effective ways of achieving that without question. So, the pandemic unfortunately hit us right during the launch phase of the product and we've had to compensate for that. Getting the field force back in the field is very important. It's very important in solidifying the relationships with the physician offices where they understand the educational materials that we offer, the hub services that we offer to patients and more than anything where they understand the product itself and how it's used. They can see it. They can see a demonstration of it. You can do that on Zoom or on other video modalities. But the reality is, number one it's not always that easy to get a given physician to get on a video call, right? And number two it's just not as effective as being there letting them touch it and feel it and so forth. So, the short answer after all that is that the in-person field force is very important we believe to the whole effort. To this point it is still the case particularly with Delta variant and the new wave of COVID. It is still the case that we are not nearly at 100% in terms of resumption of patient visits to many of the offices. Some of them are at 100%. Others are not. And in practice it's difficult to gauge nationally what percent that is. But we believe it is meaningful -- a meaningful percent where we're still waiting to see resumption of completely normal volumes. The other piece of that is that even offices that are open are not always open to the field force. So they may be open for patient visits, but they are limiting their volume and part of that limitation is the less essential visits. Obviously, the patients are the essential visits. So, the less essential which is everything else including our field force, even though they're important tend to fall by the wayside when that choice is being made. So we are getting access, but it is nowhere near what it was before the pandemic. And we expect that as the pandemic recedes, we should see a return to more normal patterns more normal access. And from our perspective that will be meaningfully beneficial to the brand going forward.
Muzamil Saleem: That's a very helpful color and some very useful insights. Thank you. One more if I may regarding the sales of AMPYRA. We're glad to see that they're resilient to genericization. To what extent do you think, your dispense as written DAW's strategy has been pervasive in your payer marketing? Would you be able to estimate the percent of DAW prescriptions that are happening?
Ron Cohen: I am not. I just don't have it. What I can tell you is that at the I'm sorry there was a little interference on the line. Are you still there, hello. So what I can tell you is that, at the time that generics hit the market which was September of 2018 we had well -- we had over 90% of prescriptions that were being written as DAW at that point. And I don't have the latest numbers for you on that but that was certainly an important element and has been an important element in maintaining the strength of the brand. And again, it reflects what I just reported on our quarterly report which is there is enormous -- to this day enormous brand loyalty which I think we well earned over the years. And many physicians continue to favor the brand as a result.
Muzamil Saleem: Thanks, fantastic. Thanks for taking the questions.
Ron Cohen: My pleasure. Thank you.
Operator: We have no further questions so I'll hand it back to you.
Ron Cohen: Well thank you very much operator and thank you all for joining us. We look forward to updating you again at our next quarterly. Have a great evening. Bye now.
Operator: Ladies and gentlemen this concludes today's call. Thank you for joining. You may now disconnect your lines.
