Jaguar Health, Inc.
Q1 2020 Earnings Call Transcript

Published: 15 May 2020

[Operator:]

Welcome to the Jaguar Health Investor Conference Call. Before I turn the call over to management, I’d like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impacts of competitive products and pricing, industry trends and product and technology initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements.Forward-looking statements are subjects to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management’s current assumptions, expectations and projections about future events. While management believes that its assumption, expectations and projections are reasonable in view of currently available information, you are cautioned to not place undue reliance on these forward-looking statements.The company’s actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the forward-looking statements and Risk Factors sections of the company’s Form 10-K for the year ending December 31, 2019, which was filed April 3rd, 2020 and its other filings with the SEC which are available on the Investor relations section of Jaguar’s website. Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.Additionally please note, the company’s supplement its condensed consolidated financial statements presented on a GAAP basis by providing gross sales, non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which company management assesses and operates the business. These non-GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP.At this time, it’s my pleasure to turn the call over to Lisa Conte, Jaguar’s Health President and Chief Executive Officer. Lisa, the floor is yours.

[Lisa Conte:]

Thank you. Thank you all who are on the phone, very much for joining our call today. My name is Lisa Conte. I’m the Founder and CEO of Jaguar Health and are wholly-owned subsidiary Napo Pharmaceuticals, often I’ll use Jaguar and Napo interchangeably.I want to start off today’s call by giving my heartfelt thanks to our dedicated team, many of whom have been working together with me over the last 30, 31 years with one goal in mind

[Carol Lizak:]

Yes. I am.

[Lisa Conte:]

Okay. Take it away.

[Carol Lizak:]

Thank you, Lisa. And thank you all for joining our call today. The key financial highlights for the quarter ended March 31, 2020, are as follows. Net sales during the first quarter of 2020 were approximately $900,000 and approximately $1.6 million in the first quarter of 2019, a decrease of 45% or $700,000 quarter-over-quarter, largely due to a significant purchase of Mytesi in the first quarter of 2019 by Cardinal Health, the company’s third-party logistics and distribution agent for commercial sales for the purpose of establishing Cardinal Health’s initial inventory of Mytesi, from which Cardinal Health would distribute the Mytesi. Although our overall volume decreased quarter-over-quarter, the Mytesi total prescription volume increased 16% in the first quarter of 2020 over the first quarter of 2019.The total operating expenses for the first quarter of 2020 was approximately $8.5 million as compared to approximately $7.4 million for the same period last year, a 16% or $1.1 million increase quarter-over-quarter. This increase was primarily due to a non-cash one-time item, inducement expense of $1.6 million relating to the accounting for warrant exercise, preferred stock amendment and a reduction in the conversion price of the series B preferred stock of a certain investor recorded in the first quarter of 2020, and none in the same period last year.The net loss for the first quarter of 2020 was $7.9 million, compared to a net loss of $8.3 million in the first quarter of 2019, a 4% or approximately $400,000 decrease quarter-over-quarter. There was a recorded loss on extinguishment of debt of $1.9 million in the first quarter of 2019 and none in the same period of 2020.That concludes my recap of high-level financials for the first quarter of 2020, and I will now hand the discussion over to our next speaker, Ian Wendt.

[Ian Wendt:]

Good morning, all. I hope everybody is doing well. I’d like to start out by saying how proud I am to be working with this team. We are committed to doing the right thing, not only for people and the animals we serve, but also for the planet. We want the people living with HIV who benefit from our plant-based products to thrive. We want the planet to thrive, while we sustainably harvest crofelemer and responsibly work with local and indigenous communities in the rainforest. And we want our business to thrive, so we can continue to support people living with HIV to rely on our medically necessary product.Every decision we make is based on this longstanding commitment. As recently announced, in concert with the aforementioned goals, we expanded the NapoCares Patient Support Program for Mytesi last month. The expansion meaningfully increased copay support for commercially insured patients, which includes allowing the copay amount to remain the same whether a patient fills a 30-day or a 90-day prescription of Mytesi.I’m pleased to report that commercially insured patients increased utilization of this program by 27% in Q1 2020 versus Q4 2019. In April of this year, Jaguar also expanded its NapoCares Patient Support Program by increasing the income ceiling from two times the federal poverty limit to five times the federal poverty limit, which will allow more low-income patients to receive Mytesi at no cost to them. This helps patients access Mytesi when cost was previously a barrier. The copay program and patient assistance program are components of a comprehensive suite of patient support services that we are rolling out in the current quarter with the support of AssistRx, a patient hub services provider.To date, there are no contracted discounts with commercial insurers in place and contracting represents another significant opportunity to reduce access barriers that exist with payers. Contracting talks with select large payers are expected to begin next month. As we announced on Wednesday of this week, April 2020 sales of Mytesi to Cardinal Health have a gross value of $2,753,639.As with all Mytesi gross sales, this figure will be reduced by Medicare, ADAP 340B chargebacks, returns and wholesale distribution fees based on historical trends to determine net sales. That concludes my comments, and I will now turn the conversation over to Lisa Conte.

[Lisa Conte:]

Thanks, Ian. Okay. Looking ahead, we continue to believe 2020 has the potential to be a transformative year for Jaguar and Napo. We look forward to continuing expanding the NapoCares program as part of our enhanced market access strategy as we continue to work to become a financially sustainable business. I can’t say that enough, financially sustainable business. I can’t say that enough, financially sustainable business, supported primarily by the growth in Mytesi sales.Our additional mantra at Napo is pipeline, pipeline, pipeline, driven by business development, business development, business development, non-diluted funding sources. We have a remarkable risk-mitigated pipeline that includes multiple novel and important potential follow-on indications for Mytesi, which we consider to be a pipeline within a product.GMP commercial manufacturing, obviously, is in place for Mytesi, and several of our targeted Mytesi follow-on indications are backed by strong Phase II and/or proof-of-concept data. As an additional reminder, because Mytesi is approved under FDA’s botanical guidance, there is no pathway by which a generic version can be developed. The depth of our pipeline provides potential supportive care solutions for large patient populations across multiple disease indications and around the globe. And we believe this pipeline will fuel long-term value creation for investors and provide non-dilutive funding opportunities for our partner collaborations.With that, I conclude my comments, and I’m looking to see, and I don’t believe we even have any questions submitted through the portal. So, this concludes our call for today. Thank you all once again for joining. Please be safe. Be well, and we’ll see you next quarter.

[Operator:]

This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.