Myovant Sciences Ltd.
Q1 2021 Earnings Call Transcript

Published:

  • Operator:
    Good day everyone and welcome to Myovant Sciences First Quarter of Fiscal Year 2021 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Ryan Crowe, Vice President of Investor Relations at Myovant. Please go ahead.
  • Ryan Crowe:
    Thank you, operator. Good morning and thanks for joining us today to review the financial results of Myovant's first quarter of fiscal year 2021 and to discuss other corporate and business updates. Joining me for today's call are Dave Marek, Myovant's Chief Executive Officer; Frank Karbe, President and Chief Financial Officer; Lauren Merendino, Chief Commercial Officer; and Dr. Juan Camilo Arjona, Chief Medical Officer. In addition to the press release issued earlier this morning, the slides that will be presented during today's webcast are available on our Investor Relations website investors.myovant.com.
  • Dave Marek:
    Thank you Ryan and good morning everyone. Myovant’s 2021 fiscal year is off to a strong start marked by accelerating commercial momentum in the U.S. and significant regulatory achievements that will enable us to bring our differentiated therapies to more and more patients. In our first quarter, Myovant recorded $41.1 million of total revenue including $11.6 million of product revenue and $29.5 million of Pfizer collaboration revenue. During its second quarter on the market, ORGOVYX achieved revenues of $10.5 million reflecting strong sequential growth quarter-to-quarter. This continued growth reflects increasing enthusiasm from clinicians regarding the differentiated clinical profile of ORGOVYX as well as increased payer coverage. We're also pleased with the FDA approval and June launch of MYFEMBREE as the first and only once daily oral treatment for women with uterine fibroids. We achieved revenues of $1.1 million reflecting initial inventory stocking by distributors. We and Pfizer conducted a simultaneous launch and remain excited to bring this differentiated profile to the millions of women battling uterine fibroids where high unmet need remains. From a regulatory standpoint we've achieved several significant milestones over the past few months. In addition to the FDA approval of MYFEMBREE, the European commission also approved RYEQO, the European brand name for relugolix combination tablet. The commercial launch of RYEQO is expected to begin in the second half of this calendar year and will be executed by Gedeon Richter, Myovant’s commercialization partner for RYEQO in Europe. The approval of RYEQO is notable for a couple of reasons. Not only is it the first once daily oral treatment for women with uterine fibroids approved in Europe, it's also the first treatment that does not have a limitation on duration of use. Recall that our European regulatory submission included two year bone mineral density data from the Phase 3 LIBERTY Randomized Withdrawal Study where those data were not available at the time of our FDA submission. We do intend to submit the two year BMD data to the FDA later this year for potential inclusion in the MYFEMBREE label.
  • Lauren Merendino:
    Thanks, Dave. Today I will provide an update on the early progress we have made in the launch of MYFEMBREE, followed by an update on the ORGOVYX launch. MYFEMBREE was approved by the FDA in late May and is the first and only once daily oral treatment for the management of heavy menstrual bleeding associated with uterine fibroids in premenopausal women. We believe MYFEMBREE has the potential to be a truly meaningful advance in women's health and could become the standard of care medical treatment for women with uterine fibroids. The unmet need in uterine fibroids is enormous. Approximately 5 million women in the U.S. have sought treatment for symptoms of their uterine fibroids. Of these women, 60% are failed by first line therapy, typically oral contraceptives, which are unable to control their most challenging symptoms. Even those two out of three women prefer a medical option versus surgery, approximately 250,000 women per year in the U.S. make the difficult choice to undergo a hysterectomy for relief from their uterine fibroids. Myovant and Pfizer are united in our goal to provide these women with an effective, well tolerated, and convenient medical option. We believe MYFEMBREE aligns well with physician’s stated treatment goals of meaningfully improving heavy menstrual bleeding and other challenging symptoms with minimal side effects in an easy and convenient dosing regimen.
  • Frank Karbe:
    Thank you, Lauren. As usual, I will focus my comments on the highlights of our financial performance in the quarter, and refer you to our press release and Form 10-Q issued earlier today for additional information. Let's begin with revenue, Myovant recorded 41.1 million of total revenue for the first fiscal quarter ending June 30, 2021 composed of 10.5 million and 1.1 million of net product revenue from ORGOVYX and MYFEMBREE respectively, as well as 29.5 million of Pfizer collaboration revenue consisting of 21 million related to the partial recognition of the upfront payment Myovant received from Pfizer in December 2020 and 8.5 million related to the partial recognition of a 100 million regulatory milestone payment that was triggered upon FDA approval of MYFEMBREE. In future quarters, the Pfizer upfront payment will continue to be amortized at a rate of 21 million per quarter and the MYFEMBREE uterine fibroid FDA approval milestone will be amortized at 4 million per quarter through the end of calendar year 2026, when the amortization period is scheduled to end. For fiscal Q2 2021, we also expect to recognize approximately 31.7 million of license and milestone revenue from our collaboration with Gedeon Richter, comprised of 15 million regulatory milestone for the July 2021 European commission approval of RYEQO for uterine fibroids and 16.7 million related to the remaining portion of the upfront and initial milestone payments. Moving on to other highlights of our income statement, cost of product revenue for the quarter was 1 million and largely comprised of the high single digit royalty on net sales of ORGOVYX payable to Takeda and to a lesser extent expenses related to the cost of goods sold for ORGOVYX and MYFEMBREE. Collaboration expense was 5.3 million reflecting Pfizer's 50% share of net profits from the sales of MYFEMBREE and MYFEMBREE in the U.S. during Q1. R&D expenses in the first quarter was 30.9 million compared to 44.2 million for the comparable prior year period. The decrease in R&D expenses was mainly driven by cost share reimbursements from Pfizer, as well as a reduction in clinical study costs resulting from the completion and wind down of Myovant’s Phase 3 LIBERTY, HERO, SPIRIT studies. The decrease also reflects lower regulatory expenses in Q1 2021, as the prior period included NDA submission fees for ORGOVYX and MYFEMBREE. These decreases were partially offset primarily by higher expenses incurred by Myovant’s medical affairs organization, which was built out in recent quarters to support the ORGOVYX and MYFEMBREE launches as well as increased study costs related to relugolix lifecycle management activities. SG&A expenses in the quarter was 61.2 million compared to 22.8 million for the comparable prior year period. The increase was primarily due to higher expenses related to commercial activities to support the U S launches of our ORGOVYX and MYFEMBREE and higher personnel related costs in connection with the hiring of Myovant’s commercial operations, marketing, and market access teams, as well as the oncology and women's health sales forces. Myovant generated a net loss of 61.7 million or $0.67 per share in the first quarter of 2021, compared to a net loss of 32.9 million or $0.37 per share in the prior year quarter. Looking ahead, R&D expenses for the remaining fiscal 2021 quarters are projected to be modestly lower than Q1 actual spend. SG&A expenses for the remaining fiscal 2021 quarters are expected to increase modestly from Q1 actual . We ended the fiscal Q1 with total cash and committed financing of 611.1 million comprised of 569.8 million of cash, cash equivalent, and marketable securities and 41.3 million of capacity remaining under the low cost loan facility extended to us by Sumitomo Dainippon Pharma, our majority shareholder. This balance does not include 115 million of recently triggered milestone payments from the regulatory approvals of MYFEMBREE and RYEQO. We received the 100 million milestone payment from Pfizer in July 2021, and expect to receive a 15 million milestone payment from Richter in second fiscal quarter 2021. Our cash position and potential future milestone payments over the next 12 months, coupled with the sharing of certain expenses with Pfizer and the anticipated increase in ORGOVYX and MYFEMBREE revenue puts Myovant in an excellent position to execute our commercial strategies while at the same time expanding our pipeline through future relugolix lifecycle programs and business development. I would like to wrap up with a bit more color on the recent developments pertaining to our intellectual property associated with relugolix, which we believe could extend U.S. marketing exclusivity for both ORGOVYX and MYFEMBREE into late 2037. Significantly expanding the value of the relugolix franchise. Depicted here is a subset of the patents listed on the FDA orange book for each product. Each product has three listed patents relating to the composition of methods case, which we've highlighted previously. The gray bar on the first composition case indicates that we have applied for patent term extension, which is currently pending a decision from the FDA and U.S. PTO. We expect to receive the full five-year term extending the relugolix species patent to January 2029. The more recent development pertained to methods of treatment patents, which represent the culmination of years of research and innovation. All three of these patents expire in September of 2037, potentially extending the U.S. marketing exclusivity for these products. The two methods cases for ORGOVYX cover among other aspects, the particular dosing regimen for ORGOVYX. The methods patent for MYFEMBREE was issued last month and covers the use of our unique relugolix combination tablet to treat the FDA approved use relating to uterine fibroids. Among others we have also filed the patent application, which is currently pending on our next anticipated indication for MYFEMBREE relating to the treatment of endometriosis. Now, with that, I'll turn it over to Dave for some closing remarks. Dave.
  • Dave Marek:
    Thank you, Frank and Lauren. The approval and launch of MYFEMBREE represents a significant milestone in expanding the treatment options for women with uterine fibroids to include for the first time a one pill once a day regimen, with the clinical profile that prescribers and patients have long desired. We're encouraged by the early progress that we've made with MYFEMBREE launch and look forward to delivering this important new medicine to patients. We're also excited about the launch momentum that we've been able to generate for ORGOVYX through our strengthened prescriber educational efforts and increased payer coverage that we achieved over the past few months. In addition to continuing to execute on the ORGOVYX and MYFEMBREE launches, the remainder of 2021 will bring several other important milestones. By the end of October, we expect Pfizer’s decision its international option for relugolix rights in oncology. In the second half of the calendar year, we expect Gedeon Richter to launch RYEQO in Europe, and to submit the European filing for endometriosis. We also expect to submit our randomized withdrawal study results to the FDA by the end of the calendar year, which will include two-year bone mineral density data. And looking further ahead into the calendar year 2022, we expect a European commission decision on our advanced prostate cancer filing. As Frank highlighted, we continue to operate from a position of financial strength, which gives us the flexibility to sufficiently fund our U.S. product launches while simultaneously expanding our pipeline through relugolix lifecycle opportunities and business development opportunities. I'm extremely proud of the passion and the work done by our Myovant team to enable us to deliver on our mission to positively impact the lives of so many men and women. Thank you for your attention and I'll turn the call over to Ryan to begin the Q&A session.
  • Ryan Crowe:
    Thank you, Dave. Operator, can we now please poll for questions.
  • Operator:
    Certainly. . We have a question from the line of Jason Butler with JMP Securities. Your line is open.
  • Jason Butler:
    Hi, thanks for taking the questions and congrats on the progress. First one for me just in terms of the MYFEMBREE launch, can you just give us a sense, I know it is early, of what number of prescribers are your target prescribers are actually already writing prescriptions? And what's the feedback you're getting from the initial interactions in terms of what docs would need to start writing prescriptions, is it reimbursement access or is there anything else that physicians are looking for? And then I have a follow-up. Thanks.
  • Dave Marek:
    Thank you, Jason. I'll let Lauren address some of those. Just as a bit of an intro, of course it's early goings as you know, and we also have a number of -- we're looking at kind of triangulating a number of different areas of demand. So we see the audited data, but we also have activity within our hub services and then we're starting to take requests for samples from physicians that have yet to be distributed to the patients with the prescription or have a prescription involved. So let me let Lauren provide a little more color on that.
  • Lauren Merendino:
    Yeah, thank you for the question, Jason. As Dave said, it's a little bit convoluted right now because of how early it is. So of course we have prescription data that you see as well but the other factors include the 100 patients we've seen come through our hub services as well as over 150 requests for samples for starters. So we had seen quite a bit of interest from prescribers to start patients, even in these early weeks, although it may not all be in the data yet because they're receiving samples first. And then as far as the anecdotal feedback from the field, we have been very pleasantly surprised with the positive feedback from prescribers. It's clear that they understand there is an unmet need here with the treatment options that were previously available, and they understand the value that MYFEMBREE brings from a clinical perspective. As far as what may cause some hesitation, I think that they are very sensitive to payer coverage. And so we are actively in discussions with payers and hope to have some decisions relatively quickly that will help us to build confidence in the payer landscape and payer support for MYFEMBREE. In the meantime, we do have our patient support services and we've received positive feedback from our physicians on not just the services themselves, but also the hub and the level of support that they receive in going through the hubs. So we believe we're doing everything we can at this point and are confident that we'll continue to build confidence as they get experienced with the drugs, and also as we build that payer coverage.
  • Jason Butler:
    Great. And then Dave, just as a follow-up, can you talk in any more color about the extension of the Pfizer opt in, is this being driven by waiting for more commercial information or regulatory dynamics or any additional color you can give us there?
  • Dave Marek:
    Sure. Look, we enjoy an excellent relationship with Pfizer. We have been in discussions regarding the opportunity in Europe and really, we just felt that as we were going through some of these discussions that an extension was warranted just to allow Pfizer to complete its diligence and make a fully informed decision. So, we feel very comfortable with the discussions that we're having and we wanted to ensure that they had the right duration of time to fully explore the opportunity. So -- and we support that.
  • Jason Butler:
    Great. Thanks for taking the questions and congrats again on the launches.
  • Operator:
    Thank you. Our next question comes from Eric Joseph with a J.P. Morgan. Your line is open.
  • Eric Joseph:
    Good morning. Thanks for taking the questions. And thanks for all the color on the ORGOVYX launch metrics. The 75% versus 25% breakdown of restrictions coming from specialty distributors versus pharma -- pharmacies, can you talk a little bit about how that compares with the historical demand trends with ADT and that skew similarly, I'm just trying to get a sense of where you kind of see kind of the greater level of headroom in either of those segments? And then perhaps just to follow-up also on the extended opt-in to Pfizer, is there something particularly about this timeframe to October as opposed to the end of the year, would you rule out an additional extension of the deadline? Thanks.
  • Dave Marek:
    Well, thank you, Eric. I'll let Lauren address the first question regarding the breakdown of kind of source of demand and then I'll take the Pfizer question. Lauren.
  • Lauren Merendino:
    Yeah, thanks for the question. I can't speak to the comparison to other marketplaces, but what I can say is that this is playing out exactly as we expected. We knew from the beginning that it was important for us to remove any disincentive for using ORGOVYX from a financial perspective to support offices from an operational perspective. And of course to build the confidence in our clinical profile. And so we fully expected that the majority of our business would be flowing through the specialty distributor channel and we expect that for the foreseeable future, that is our plan. And that's why we're continuing to bring on new accounts from the perspective of using ORGOVYX, many of which are dispensing. And so we would expect -- this is exactly as we expected and we think the mix will stay similar to what it is today.
  • Dave Marek:
    Yeah. And then regarding the Pfizer opt in decision, Eric, there really was no market or regulatory milestone that led to the specific 90-day or roughly 90-day extension. It was really the amount of time that we felt like was warranted to allow them to complete their diligence. So, that was really the nature of it. We just sat down and thought that that timeframe would make sense. And it doesn't necessarily mean that they will take the full 90 days to get to a decision, we just felt like that was enough lead time to allow for the proper diligence to be done and for them to have conviction in their decision.
  • Eric Joseph:
    Okay, great. Thanks. Thanks for taking the questions.
  • Dave Marek:
    Sure, thank you Eric.
  • Operator:
    Our next question comes from Phil Nadeau with Cowen & Company. Your line is open.
  • Phil Nadeau:
    Good morning. Let me add my congratulations on the two simultaneous launches. First question on ORGOVYX. Appreciating that it is early days, do you have a sense of how patients are using ORGOVYX, is it being used as chronic therapy or are the men adopting it using it in an intermittent fashion, any sense of what role is playing in the treatment?
  • Dave Marek:
    Yeah Phil, I don't think we have the proportionality but I think overall we believe it's more chronic therapy. We know there is some intermittent use that we hear anecdotally. Of course, we don't have the data specific to that. But the vast majority of the feedback that we're getting is for chronic use. And I think as Lauren mentioned, a disproportionate share of those are new to ADT therapy.
  • Phil Nadeau:
    Perfect. And then second question, relugolix is supposed to have cardiovascular safety data come out I think any day, we've heard from physicians that that could really spur the market towards the antagonist should it show a benefit to , do you have any sense when that data could be released, it seems like according to clinical trials that the trial completed some time ago?
  • Dave Marek:
    Yeah, I don't have particular insight in terms of the timing for their data. What I would say is that we certainly received very positive feedback around the data that we were able to generate through our HERO trial as it relates to cardiovascular risk. And we're very heartened to hear the feedback from clinicians as cardiovascular risk has really continued to become a consideration increasingly with the proper awareness of the cardiovascular risk that these patients have. So we're happy to see the increased attention on that. We think that's good for providers and we think it's good for patients.
  • Phil Nadeau:
    Great. Then last question, in Lauren's prepared remarks she mentioned the unmet need for the treatment of uterine fibroids. I'm curious if, as you've been detailing the practices, if you have a better understanding of what it is that kind of done wrong, why or hence launch hasn't gone better and therefore, what ways could you improve with MYFEMBREE to get us uptake to be somewhat more rapid than what we've seen from the competitor?
  • Dave Marek:
    I think, it starts with really deep understanding of the marketplace. And I'll let Lauren address, there's kind of three key areas that we focus on, leading up to the launch. And we think each of those provides a significant departure from what's occurred previously. So Lauren?
  • Lauren Merendino:
    Yeah, thanks Dave. We, as you have, we have observed the competitive launches and the challenges that they face, and learn from that. And I think the first thing that's most important is that our clinical profile is really unique and is uniquely meeting the specific needs that prescribers say that they have in this market as well as patients. And so we're bringing a unique offering to this market. The second thing is that we are optimizing the first experience for patients. We've invested a great deal in making that first experience a positive one. And that's something that we learned was a challenge in previous launches. And then finally, we believe our field execution with having two teams, both of which have a lot of women's health experience and being able to flex those teams appropriately to reach the breadth of targets in this market since it is very diffused, but also being able to get the frequency where it's needed. And so in those ways, we believe that we'll be able to show up differently than our competitors have in the past.
  • Phil Nadeau:
    Perfect, thanks for taking my questions.
  • Operator:
    Thank you. And our next question is from Brian Skorney with Baird. Your line is open.
  • Brian Skorney:
    Hey, good morning guys. Thanks for taking my question. And congrats on a very successful launch so far. I guess, to switch topics a little bit, I was just wondering if you could kind of give us some details on the protocol amendment, BMD monitoring in the SERENE study and just kind of how to think about that going forward? And just in terms of the role of relugolix in pregnancy prevention, how do we kind of think about the safety profile there versus approved oral contraceptives, I got sort of a substantial advocacy benefit over these in UF and endometriosis but can you help understand what you see as the potential differentiation in pregnancy prevention here? Thanks.
  • Dave Marek:
    Yeah, certainly, I'll let Juan Camilo address that. At the risk of saying that we don't typically comment on the FDA discussions back and forth, but Juan Camilo, what can you share with us?
  • Juan Camilo Arjona Ferreira:
    Yeah, I think that we reference of the amendment, we followed the advice that we received from FDA and we've submitted the amended protocol to them. We expect to hear back from them soon, and expect that to be with a hopefully a removal of the holes and allowing us to restart the study. Regarding the second part of your question about differentiation, I think that as you know women with uterine fibroids in the future will move within the maturities are premenopausal women and as they are considering their options for treatment for their diseases that we're talking about, they are also considering their reproductive decisions and that includes contraception. So the ability to have a product that treats their symptoms of uterine fibroids and endometriosis and provide prevention of pregnancy is something that we've heard loud and clear from gynecologists and from women to be pretty important differentiating factor is something that they really care about. I can tell you as a gynecologist that that's something that I've had top of mind since we started developing relugolix combination tablets, because I can't imagine those conversations happening in the clinic. So we feel very strongly that this is a pretty important component to the future of MYFEMBREE and in the treatment of uterine fibroids and endometriosis.
  • Brian Skorney:
    Great, thanks.
  • Operator:
    Thank you. Our next question comes from Paul Choi with Goldman Sachs. Your line is open. Paul, your line is open. We cannot hear you, Paul. . We're going to proceed with the next question from Josh Schimmer with Evercore ISI.
  • Unidentified Analyst:
    Hey, this is Gavin on for Josh. Nice quarter and thanks for taking the question. Just had one, on the provider economics for ORGOVYX, that's the spend through the provider owned specialty pharmacies. I believe you had mentioned that the practice economics were pretty similar to the GnRH agonists but given how eroded their ASP is, and where ORGOVYX is priced, it feels like there would be room to offer a little better economics, could you just elaborate on this dynamic a bit?
  • Dave Marek:
    Yeah, certainly. Well we have seen the change in ASP. Lauren, maybe you could address that.
  • Lauren Merendino:
    Yes. And so as I believe you're already aware, we have contracted with the clinical accounts. But when we did that, we did that to remove any disincentive from an economics perspective. Since then, the ASP dynamic for our competitors has changed. We are not affected by that and at this point, it actually improves the economic dynamics in favor of ORGOVYX. So we currently do not have any plans to change our contracting strategy. But the way that clinics determine how this plays out in their clinic, and their decision making is up to them. And, it's unclear, how much of a role that will play considering that shifting a patient, especially for some Medicare patients may change their copay. And so offices will have to consider both dynamics in making their treatment selection. Did that answer your question?
  • Unidentified Analyst:
    Yes, that's helpful. Thanks.
  • Operator:
    Thank you. . We have a question from the line of Paul Choi with Goldman Sachs. Please proceed.
  • Paul Choi:
    Hi, thank you. Sorry about earlier. Just two quick ones from our side, please. Just with regard to your other comments on for demand for ORGOVYX here, can you maybe just sort of comment on how you're thinking about potential changes with regard to patient visit levels, just given what seems to be the changing backdrop with regard to COVID and any additional color, you can say there? And then I had a follow up question on MYFEMBREE.
  • Dave Marek:
    Yeah, hello. I'll let Lauren address that. I think we're seeing certainly patient dynamics, I think are different in the urologist office versus the oncology office. So Lauren, do you want to address that?
  • Lauren Merendino:
    Yeah. Thanks, Paul. So I think there's two . There's two elements of the COVID impact. One is what you were referencing, which is patients going into the clinic and we've essentially seen that return on our pre-COVID levels. So we're comfortable that that dynamic is rebounding now. The second part is the access that we have to customers. And to Dave's point that does vary between urologist and oncologist. With oncologist, managing immunosuppressed patients, they are a little more restricted at this point. However, in both cases, urologist and oncologists that access has improved. And so that's why we're able now to have a higher percentage of in person details which is more valuable and allows us to have greater access to our customers, which is important to driving demand.
  • Paul Choi:
    Okay, thanks for that additional color, Lauren. And then on MYFEMBREE, appreciate that the early sales were primarily stocking and inventory. I guess, with regard to messaging in the market, and having a sort of more fulsome presence in the market this quarter, for either Dave or Lauren here, I guess, can you maybe just sort of reframe for us again, the learnings from the competitors launch and just where you will primarily be focusing on addressing questions where there may have been resistance among potential prescribers for the GnRH class here, and just what additional messaging you'll be bringing to market? Thank you very much.
  • Dave Marek:
    Well, thanks Paul. I think, one thing just for context, the real opportunity is not really for us to focus specifically on GnRH antagonists as a class. I think the real opportunity is to really look at those women who are still on oral contraceptives, who've been failed by their first line therapy. We're looking at 3 million women who have been failed by their first line therapy, and another or a total of 5 million women who are seeking treatment. If we can step in and provide a better option for those patients with our clinical profile and then, specifically with our administration of one tablet once a day, we think that's really where the opportunity is. And that is really where we think we can unlock the full potential of this marketplace. I think our clinical profile, coupled with our one pill once a day, it makes us really the ideal choice that physicians are telling us they're looking for. And we think now coupled with the positive discussion that we're having with payers, we think that the payer environment will open for us, as we hope. And in the interim, we certainly have all the patient support services to support the offices and the patients along the way. So we feel very good about the ability for MYFEMBREE to make a significant impact in the marketplace and really provide the treatment that both clinicians and patients have been waiting for.
  • Paul Choi:
    Thank you very much.
  • Operator:
    Thank you. And I'm not showing any further questions in the queue. I will turn it back to Dave for his final comments.
  • Dave Marek:
    Okay, thank you. Well, look, Myovant is at a very exciting time with two launches underway with differentiated therapies that can really make a meaningful difference for patients with advanced prostate cancer and with uterine fibroids. We are very well positioned both operationally and financially to deliver strong commercial execution, as well as build sustainable long-term value. So thank you all and I look forward to keeping you updated on our progress.
  • Operator:
    And ladies and gentlemen, this concludes the Myovant Sciences first fiscal quarter 2021 earnings conference call. Thank you for your participation and you may now disconnect.

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