Impel Pharmaceuticals Inc.
Q2 2021 Earnings Call Transcript

Published: 17 Aug 2021

[Operator:]

Ladies and gentlemen, welcome to the Impel NeuroPharma Second Quarter 2021 Earnings and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Impel's Chief Financial Officer, Mr. John Leaman. Thank you. Sir, please, go ahead.

[John Leaman:]

Thank you, Operator and good morning, everyone. We're delighted that you can join us today for Impel NeuroPharma's First Quarterly Earnings Conference Call, during which we will review our Second Quarter 2021 Financial Results, as well as providing general corporate update. Joining me from Impel this morning is Adrian Adams, Impel's Chairman of the Board and Chief Executive Officer. Before we begin, I would like to remind everyone that we have a slide presentation to accompany our conference call this morning, which can be viewed at our website at www.impelnp.com. If you're listening to this call on your telephone, you may access a synchronized slide deck on our website by choosing the link on our Webcast page that says Click Here to Listen. If we could advance the Slide 2, I'd ask everyone to review the forward-looking statements and I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. With that, I will turn it over to Adrian.

[Adrian Adams:]

Thank you, John, and good morning, everyone. We certainly appreciate the time you're giving this morning. On this next slide, Slide 3, you will find the agenda for this morning's call. I will begin with a brief overview of our business and the potential value-generating opportunities that lie ahead. Then, we're reviewing a little more detail, the commercial opportunity and potential for TRUDHESA in the rapidly-growing and dynamic acute treatments of migraine market, including an overview of our core pre-launch, and launch activities and plans. Following that, I will provide a summary of the market opportunity and outline plans for another of our development assets, INP105 before turning the call back over to John to review our second quarter financial results in more detail. I will then conclude with a summary of recent and upcoming milestones before opening the call up for your valued questions. Turning now to Slide 4. On this slide, I would like to highlight several points which we believe illustrate an attractive investment opportunity with Impel NeuroPharma. Earlier this year, the FDA accepted for review or new drug application for INP104, the acute treatment of migraine headaches with or without aura in adults, a large and growing market opportunity. INP104 is dihydroergotamine mesylate or DHE delivered directly into the vascular rich upper nasal space using Impel's unique and proprietary POD technology. If approved INP104 will market on the trade name TRUDHESA in the United States. The FDA has set a PDUFA target date of September 6, 2021, which reflects a standard 10-month review time frame and is just three weeks away. We are planning to launch TRUDHESA early in October with a highly targeted go-to market strategy, which will fully leverage existing knowledge, experience and indeed support in use with DHE among neurologists and headache specialists. I will review this in a little more detail shortly. In parallel, we're also advancing our second lead asset, INP105, which is being targeted for the acute periods of agitation and aggression in autism, another disease area with significant unmet need. INP105 also utilizes a unique Impel POD technology targeting the upper nasal space. To further illustrate our focus pipeline progress you will see on our next slide, Slide 5, the clinical candidates that we are currently evaluating. We believe that the Impel POD technology has the potential to unlock the therapeutic viability of a previously untapped treatment pathway, the vascular rich upper nasal space for a variety of serious medical conditions. Although we are initially focused on CNS disease, our strategic intent is to evaluate its broader utility potential in other therapeutic areas, either through internal, organic development or through value added corporate development and licensing activities. Please now refer to our next slide, Slide 6. Over the past year, we have carried out a tremendous amount of both qualitative and quantitative market research, including in-depth discussions with key opinion leaders, broader healthcare providers and the patient community, all with the aim of better understanding what physicians and patients are looking for in terms of an ideal acute migraine treatment. Patient reported outcomes were a critical part of our pivotal STOP 301 Phase 3 study design, and this study produced excellent results. We are pleased that these study results were just published in the August 7 edition of Headache, the official journal of the American Headache Society. This is perfect timing, even our planned October launch time frame. We believe that these data reinforced the potential for TRUDHESA to be a differentiated, well-tolerated treatment that's subject to approval by the FDA has the potential to deliver rapid and reliable symptom relief for patients with acute migraine. In fact, its priority data showed improved and sustained patient reported pain freedom and pain relief rates compared to existing standard of care. Turning now to Slide 7. I would like to illustrate the strong growth that is being seen in the acute migraine market. At the end of 2020, there were 27 million prescriptions written in this market, an impressive growth of 15% year-over-year. This robust growth has continued into 2021 and it's important to note that much of this growth is being driven by non-tritan therapies and in large part by the neurologist and headache specialist communities. It is also worth noting that despite this strong growth and the shift away from triptans, there are still a lot of turnover in therapies, as patients and physicians continue to search for more effective and better-tolerated therapy. This is the opportunity for TRUDHESA. I'd now like to summarize our plan go-to launch market strategy as shown on our next slide, Slide 8. We will adapt a disciplined commercialization approach and with initial salesforce size of 60 experienced sales professionals, we will pursue a highly concentrated prescriber base of around 8,000 physicians that are responsible for approximately 35% of market prescriptions. These 8,000 physicians will comprise a 4,000 neurologists and 4,000 high prescribing primary care physicians. Importantly, our target neurologists accounted for nearly 90% to 95% of all prescriptions that are written for acute migraine amongst the neurologist community. These target neurologists are important, not just because of their strong influence on growth, but also because of their historical and current experience in support of DHE, a product that is recognized as being the gold standard efficacy product for acute migraine treatment. As we make progress during our initial launch phase, we do plan to further invest into this opportunity by doubling the size of our salesforce and increasing our reach to nearly 45% of the marketplace. You will see on our next slide, Slide 9 that our commercial strategy also includes promoting swift and accelerated pair adaption through early introduction of Impel and TRUDHESA to the top five payer organizations. This work has been ongoing as part of our pre-launch efforts and utilizes our experienced medical affairs and market access professionals. We recognize the importance of developing strong market access in the post triptan failure space and we've set a goal of approximately 70% of commercial lives covered by the middle of 2022. In summary, we are progressing well with our pre-launch efforts and our confidence in our discipline and targeted approach to building share in this large and rapidly growing market. As we move to our next slide, Slide 10, I would like to underscore the broad clinical possibilities that we see with our POD technology platform. On the cusp of the imminent FDA decision with TRUDHESA, we believe that the POD technology has the potential to deliver numerous additional therapeutics, which the next in line is INP105. INP105 is comprised of a powder formulation of olanzapine, which is the most commonly used treatment for acute agitation and aggression, but its use is currently limited to intramuscular injection. We believe that INP105 has the potential to significantly reduce emergency room visits for patients with autism spectrum disorder. We've uncovered this as being a major unmet need, as there are at least 220,000 emergency room visits a year, a large majority of which relate to patients that cannot be controlled in the home setting. Therefore, there is a significant market opportunity to bring a more humane approach to deescalating agitation and aggression episodes in the autism patient population. As we illustrate on our next slide, Slide 11, by targeting the upper nasal space in the studies we've conducted, INP105 achieve rapid IV-like absorption which may provide an effective, convenient and non-invasive future alternative for treating acute agitation and aggression in the home, community or hospital setting. These Phase 1s that are results of INP105 in healthy adults were published in the Journal of Clinical Psychiatry last year. The findings demonstrated that INP105 reached peak plasma levels approximately twice as fast as intramuscular olanzapine currently marketed as ZYPREXA and 10 times faster than orally-disintegrating tablets. An ideal desired medication for acute agitation and aggression in autism according to a 2005 expert consensus is easy to administer, non-dramatically administered, provides rapid tranquilization without excessive sedation, as a swift onset of action was sufficient duration to prevent on timely recurrence and as low risk for adverse events and drug interactions. This is the goal with INP105 and we are planning to initiate a Phase 2 proof of concept study in the fourth quarter of this year. With that, I'll now turn the call over to John to review our financial results for the quarter. John?

[John Leaman:]

Thank you, Adrian. On this next slide, Slide 12, you will see our financial results for the second quarter of 2021. Research and Development expenses for the second quarter of 2021 were $6.1 million, which compares with $6.8 million for the second quarter of 2020. The decrease in R&D spending was due primarily to a decrease in clinical cost post the completion of the TRUDHESA Phase 3 trial. General and administrative expenses for the second quarter of 2021 were $8.9 million, which compares with $6.1 million for the second quarter of 2020. The increase in G&A was due primarily to the ramp up in expenses for the commercial and marketing activity preparations for the TRUDHESA launch. Please now refer to Slide 13. For the second quarter of 2021, Impel reported a net loss of $15.5 million, compared to a net loss of $13.1 million for the same period in 2020. The net loss per share was $1.10 for the second quarter of 2021 and $35.88 for the second quarter of 2020. As of June 30, 2021, the company had cash and cash equivalents of $60.9 million. This cash balance coupled with the debt financing we announced on July 2, provide the company with a cash runway through the end of 2022. I would now like to hand the call back to Adrian, who will summarize before opening the call for questions. Adrian?

[Adrian Adams:]

Thank you, John. On our final slide, Slide 14, I would like to conclude by highlighting our recently achieved and upcoming milestones. This is an exciting and potentially transformative time for Impel. We have made tremendous progress so far in 2021 and look forward, subject to FDA approval to successfully launching TRUDHESA into the rapidly growing acute migraine market and to initiating a Phase 2 proof of concept study with INP105. We would now like to open up the call for your valued questions. Operator, can you please give the instructions?

[Operator:]

Thank you. Our first question comes from the line of Ken of Covenant Company. Your line is open.

[Unidentified Analyst:]

Hey, good morning, guys. Thanks for the call. Just a couple questions. Adrian, wondering if you can give a little bit of nuance on the FDA interactions if we're in labeling or any color you can provide there? That's my first question. Then second question, really, it's been a fantastic launch for both Nurtec and Ubrelvy. Really good success with managed care in what appears to be very solid net value pricing for prescription. So, wondering if you could talk about how you feel you'll be able to do with that setting a nice example or a nice platform in terms of both managed care and pricing, as we think about TRUDHESA? And then lastly, was wondering if you could comment on views of failure rates between triptans and CGRP just looks like a massive opportunity, a lot of churn still in prescriptions. And so, I was hoping you could frame the failure rates? Thanks so much.

[Adrian Adams:]

All right. Thank you. Thank you, Ken, for the question. I'm sure it's a question that's on many minds in relation to how things are tracking with the FDA and clearly, I think, I can't comment on specifics with the FDA. I would say that since our file was accepted for review and in January , we've had a number of information requests as is normal course of business with the FDA. We've responded to all of those questions promptly and clearly. And we are looking forward to the PDUFA date in three weeks' time. In addition, during the call, I did make reference to our commercial preparations for the early October time frame. We have started the discipline build outs of our commercial organization. We've hired head of sales, we've hired regional managers, and during the course of August, we are recruiting our 60-person salesforce. So, as you well know, with the FDA, you don't know right up until the end, but I would set all the questions that we've had, we've responded in a prompt and timely way. On the second point on Nurtec and Ubrelvy, I think you're quite right. We've actually been pleased with the success that they've had in the marketplace, as you've seen from our presentation and clearly that success is manifest in terms of a very high proportion of the market growth that is being driven by non triptan therapies. And clearly, I think we're delighted with that growth. Just to pick up on one of your last questions, I think one of the things that we have noticed within the marketplace to your point is that there is a tremendous turnover in therapists. Our estimates are that there are in excess of 50% of patients who are put on these treatments that tend to either switch away from our drop-off therapy. What is clear from all of the work that we've done is that that turnover in the market is being driven by a desire for enhanced efficacy and enhanced tolerability. And clearly, we feel that illustrates the potential for TRUDHESA or given the profile of product that's manifest in these top 301. I'll ask John to comment in a moment. I think you also asked questions in relation to price in the managed care and market access environment. And clearly, our view is that a successful product launch is dictated not just by what you do at launch, but what you do ahead of launch. We've been doing a tremendous amount of information exchange with the top players in the market access space. We want to have a goal of about 70% of commercial lines being covered by the middle of next year, which is roughly what was achieved by some of the newer in that time frame. We are looking forward actually to exceeding that. And clearly, the value proposition that we had amongst payers with all the interactions we've had to-date are allowing just to crystallize our overall pricing strategy with the products and indeed a pricing strategy that will give us the flexibility from a discount perspective to offer a compelling rebate strategy. But John, maybe I'll ask you to comment on that a bit further.

[John Leaman:]

Sure. And I think as we previously stated, as we've looked at the pricing on basically a four pack of prescriptions for TRUDHESA, we've looked at a range of different pricing. That range being somewhere between 600 to 850 for the four-pack and I think as we've taken a look at the pricing, we believe that we'll probably be towards the upper end of that range as we look at pricing. And I would just add that one of our major focus is getting access through the payers and I think Adrian, and the team that he's brought on, what she's done this several different times, I think, are making great progress in that.

[Unidentified Analyst:]

Great, thanks so much. Real exciting time. So, I'll go back in the queue.

[John Leaman:]

Thank you very much, Ken, for your questions.

[Operator:]

And your next question comes from the line of Eddie Hickman of Guggenheim Securities. Your line is open.

[Eddie Hickman:]

Hey, guys, thanks for taking my questions. So, if you get the approval next month, can you talk about what kind of launch metrics you will disclose on future earnings, and what you consider the most important sort of launch factors early in the launch? And then given your targeted strategy, how quickly do you think you can start to make a dent in the CGRP RX numbers? Thanks.

[Adrian Adams:]

Yes. Eddie, thank you very much for your questions, I think clearly just to emphasize, I think we are adapting a very targeted, disciplined approach to the markets. Just to reiterate, targeting those eight powers and kind of target positions made up of predominantly neurologists, and headache specialists. I only repeat that point, because clearly, we do believe that one key measure of our success, given the belief we have in this targeted approach is the market share evolution and prescription evolution in that target audience. So, the metrics that we're going to be following in addition to the account of top line, prescription growth, or an NRx and TRx perspective, is indeed market share evolution in that target group. We believe passionately that given the strong support and experienced by the neurologist community are already very, very supportive of the utility of DHE in the treatment of acute migraine, that measuring the uptake and impact by them is very, very important. So clearly, those are going to be very important metrics. And clearly over Q1 of loss, in Q2, Q3, as we evolve into next year, we want to make sure that we have a very strong start to the prescription journey. That is one of the reasons obviously, we are investing in pre-launch efforts with all market access team with the top payer population. So, that's how we will be measuring success over the first number of number of quarters. And clearly, I think one of the questions that you've touched on as well is obviously, it's a very competitive market and we want to make sure that we have a strong uptake and a way of putting in place a lot of programs to ensure that patients can get access to our treatment very quickly during initial launch phase in the fourth quarter of this year, and into the early part of next year. So, we are putting in place a number of quick start programs, which will ensure that patients while we're building up our market to our footprint in the market access area, that patients can get rapid access to the treatment. But, John, do you want to add anything to those points?

[John Leaman:]

I don't, Adrian, I think I would just reinforce that, as Adrian laid out earlier, there's 4,000 neurologists and 4,000 headache specialists is our target market. That's where we're looking to drive scripts. And I think monitoring how we're doing in that space is really going to be key to the success as we launched the product.

[Adrian Adams:]

And, Eddie, just one final point. Again, thank you for your questions. The reason that we believe it's really important to monitor success in this target group and neurologists and headache specialists in particular. I think is that if you actually analyze -- I made reference earlier that we've been very pleased with the success of Nurtec and Ubrelvy to-date, but despite that success, there's been a lot of turnover in the market. It is also worth noting that if I looked at all of the prescriptions that have been written since launch, for on Nurtec and Ubrelvy, in excess of 80% to 85% of both prescriptions have come from around about 5,000 to 5,500 prescribing physicians with a strong predominance amongst the neurologist community. That is the essence of our targeting strategy and how we intend to grow this product moving forward.

[Eddie Hickman:]

Great, thank you so much for that. Can you also just talk a little bit about the pipeline opportunities? Like a little bit more about what you're thinking about what kinds of trials you'll need in the autism indication, and sort of what metrics you're looking at there? Then what that program could look like, if you show proof of concept?

[Adrian Adams:]

I'll ask John to just comment on the top line of that. John?

[John Leaman:]

Yes. Eddie, I think we're looking at initial Phase 2 proof of concept trial. As we've indicated, we plan on doing that in the fourth quarter of this year. That would be typically patients who have aggression in ASD. They have a stimulus. And so, in the right environment, we can test basically our product versus a placebo and we can use basically bipolar, schizophrenia scales to basically take a look at the improvement in aggression that happens with or without our product. I think that will be the first step. We plan on having results in the fourth quarter of 2022 with that. And then basically, the plan would be post those results to move into basically the Phase 3 program going forward. But we'll start with a proof of concept. As Adrian has pointed out, atypical anti-psychotics. I've always worked in ASD. We're giving a much more convenient -- and I would actually say not a shot, but the ability to utilize it through the nose. And I think caregivers and parents would really like that in this population. So, next step is as we said, fourth quarter this year, we'll initiate the trial and we'll have results in the second half of 2022.

[Eddie Hickman:]

Thanks, guys. Appreciate it.

[Adrian Adams:]

Thank you.

[Operator:]

Your next question comes from the line of Laura Chico of Wedbush Securities. Your line is open.

[Laura Chico:]

Hi. Good morning, guys. Thanks for taking the question. I think some of my questions have already been answered, but I guess maybe one on drug device combination. These are inherently a tougher review process. But you have the advantage of DHE being a relatively known quantity here. So, I guess in terms of the device review, I'm just wondering if you can offer any commentary around maybe what have been the primary points of concerns from regulators towards the NDA submission? Thank you.

[Adrian Adams:]

Thank you, Laura. That's a very important question. We've been asked that quite a number of times. And again, I think one of the reasons that we have a competence in this area is that the all the way through development with TRUDHESA, we've used the same product or the same device. And clearly, we've been doing that in consultation and discussion with the FDA. In addition, I think, if one looks at the drug component, DHE, we are sourcing that drug from meat lamb . They're an FDA-approved manufacturer. They're manufacturing for well over 20-25 years and have a good inspection history with the FDA. So, I saw all of those particular components, I think, that consistency through development and that professionalism, I think something which we believe significantly lowers the risk that has been seen with other drug device combinations. And I guess other points out of it, over the course of the last number of months, as we've been answering questions from the FDA in relation to both from a clinical and a CMC and drug device perspective, we've answered all of those questions promptly. And clearly I would consider all our interactions so far as being normal course of business. So, that's how I would respond to that, Laura.

[Laura Chico:]

Thanks very much.

[Operator:]

Thank you. And I'm showing no questions in the queue at this time. I'll hand the call back to Mr. Adrian Adams for further remarks.

[Adrian Adams:]

Okay, thank you very much, Ludy . And I would like to thank you all for joining us this morning and we look forward to updating you on our continued progress and corporate milestones going forward. Thank you so much for your time this morning.

[Operator:]

Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect. Have a good day.