Urovant Sciences Ltd
Q1 2020 Earnings Call Transcript

Published: 13 Aug 2020

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Urovant Sciences [Fiscal 2019 Fourth Quarter] (sic) Fiscal 2020 First Quarter Financial Results Conference Call. [Operator Instructions] As a reminder today's conference is being recorded. I'd now like to turn the call over to Ryan Kubota, Executive Director of Investor Relations. Please go ahead, Mr. Kubota.

[Ryan Kubota:]

Thank you, Operator. Good afternoon, and thank you all for joining Urovant's fiscal 2020 first quarter financial results conference call. With me today are key members of our leadership team, Jim Robinson, President and Chief Executive Officer; Ajay Bansal, Chief Financial Officer; and Dr. Cornelia Haag-Molkenteller, Chief Medical Officer. Christine Ocampo, our Chief Accounting Officer, is also present and will join us for the Q&A portion of the call. Today, after market close, we issued a press release containing detailed information on our quarterly results. You may access the release on our company website, urovant.com. We use our website as a channel to distribute important and time-critical company information, and you should look to the Investor Relations page of our website for this information. During our call, we will be making forward-looking statements, including statements regarding our plans and strategies of the clinical development of vibegron and other treatments for urologic diseases. Listeners are cautioned that all of our forward-looking statements are based on our current expectations and assumptions, which are subject to numerous risk factors that could cause our actual results to differ materially. Accordingly, we advise listeners to review the forward-looking statements disclosure in today's press release, the Risk Factors section of our Form 10-K, as well as our Form 10-Q which will be filed soon. With that said, I will now turn the call over to our President and CEO, Jim Robinson. Jim?

[James Robinson:]

Thank you, Ryan, and thanks to all of you for joining the call today. In the first fiscal quarter of 2020, Urovant continue to make strong progress on a number of important operational milestones, advancing our clinical programs and preparing for the anticipated approval and launch of vibegron. Before I discuss recent accomplishments, let me give you a brief update on how we're continuing to navigate the COVID-19 situation as hotspots keep changing around the country. First, our employees continue to work remotely, relatively small size of our workforce has enabled us to remain nimble and productive as we leverage technology to manage our day-to-day activities. Second, working remotely has not impacted our preparations for vibegron's expected PDUFA in December, or if approved the drugs anticipated launch in the first quarter of 2021. So as we announced last quarter, following the addition of Walt Johnston and Ken Stewart, we are continuing to build out our commercial and market access capabilities, we've made several key hires under both of these respective veterans. The pedigree and experience of the individuals we're hiring, are essential of a long-term and short-term success of our launch, particularly in the current environment. We say that we're bringing a high quality individuals with deep expertise and strong relationships in urology. Over the last eight weeks, we've hired a number of key people in our commercial organization, including the majority of our regional sales managers. This team has significant urology and overactive bladder experience. We've also made strong progress building out our market access capability and the hiring of this team is now largely complete. Later this month, we will begin to engage with key national, regional and long-term care payers as we prepare for anticipated launch. In July, we initiate our unbranded campaign to EMPOWUR, inform and support them with overactive bladder. The key element of the unbranded campaign is the launch of our OAB-focused community website called bladderchatter.com. The purpose of bladderchatter.com is help change the dialogue on overactive bladder which is often misunderstood, stigmatized and too often accepted as normal. Bladderchatter.com provides a safe and private environment that people can learn from each other and discuss overactive bladder. Initial appearing for the potential approval and launch of vibegron will also continue to drive forward a number of program designed to maximize the value of the molecule. We recently completed enrollment our Phase 2a study of vibegron for irritable bowel syndrome pain and continue to enroll patients in our other ongoing studies. So now let me turn the call over to our Chief Medical Officer, Dr. Cornelia Haag-Molkenteller, will give you more detail our clinical programs?

[Cornelia Haag-Molkenteller:]

Thank you, Jim. As a reminder, we submitted our new drug application for vibegron for the treatment of OAB to the FDA in December 2019. And on March 5 this year, the FDA notified us that they have accepted our NDA for review and that our PDUFA goal date has been designed for December 26, 2020. A 12-month review cycle at the FDA is ongoing and we continue to respond to FDA requests as part of the regular review cycle. Let me now provide updates on further data presentations for vibegron OAB and our ongoing clinical development programs. Quality of life and respond to data from the Phase 3 EMPOWUR extension study has been accepted for presentation at the upcoming International Continence Society or ICS meeting scheduled for November 2020. This meeting will be virtual. As you may remember, this was the double blind extension study of the placebo controlled EMPOWUR pivotal study. Patients in this study received either 75 mg vibegron or 4 mg extended release tolterodine. This study demonstrated that vibegron was able to sustain its efficacy over 52 weeks of observation, with very favorable long-term efficacy results, including on the key symptoms of urinary frequency, urgency, urge urinary incontinence, total incontinence and a good long-term safety and tolerability profile. The patient's response on the quality of life scores in this study corresponded well with the improvement in the way these symptoms, again demonstrating the sustained efficacy of 75 mg vibegron overtime. Regarding one of the most important OAB symptoms of OAB, urge urinary incontinence 71% of patient experience a 50% reduction of the baseline incontinence episodes at week 52 in contrast to only 61.9% in tolterodine group, and 40.8% of all patients with vibegron treatment group became dry, meaning that they did not have any incontinence episodes anymore, in contrast to only 34.2% in the tolterodine group at week 52. I will now comment on our ongoing clinical trials. In the COVID-19 pandemic, we have temporarily halted the enrollment of new patients into ongoing clinical trials mid-March 2020. At the end of April, we began to reopen our trial sites for the screening of new patients in all of our trials in a stepwise manner. For our Phase 3 COURAGE development program for vibegron in men with OAB and benign prostatic hyperplasia or BPH, we are now in Part 2 of this large trial, in which over 1,000 patients will be enrolled. The trial is running in North America, and the study sites in Europe have been initiated in those countries. Part 2 of this Phase 3 trial will assess both efficacy and safety of vibegron in men with OAB and BPH. The co-primary endpoints are the reduction in micturation frequency and urgency episodes for 24 hours. Key secondary endpoints are reduction in nocturia episodes, which is the awakening at night to void, prostate symptom scores and safety. Additionally, the first patients are also enrolling into a long-term extension trial, which will follow patients for a total exposure of 52-weeks. As a reminder, there's currently no FDA-approved product specifically indicated for overactive data in men with BPH. Regarding our Phase 2a clinical program for vibegron in IBS-associated abdominal pain, following the slight delay due to COVID-19, we have completed the enrollment of 222 female patients with IBS associated abdominal pain at the end of June 2020. Patients are randomized to either 75 mg of vibegron or placebo. The primary endpoint is a 30% reduction in abdominal pain intensity on a 11-point rating scale going from 0 to 10 over 12 weeks for IBS-D, which the IBS with diarrhea. A responder is defined as a subject with at least a 30% decrease in worst abdominal pain compared to the weekly baseline average. Secondary endpoints include a global rating scale of safety, in particular, a lack of negative symptoms of stool frequency or consistency. We now plan to report top line data from this study towards the end of November 2020. Regarding further pipeline projects, I will now continue with URO-902, a novel injectable gene therapy product for the treatment of OAB. We're studying the URO-902 in the Phase 2a trial and enrollment patients with OAB who have failed oral pharmacologic therapy. This is randomized, double-blind placebo controlled trial that will evaluate the efficacy, safety and tolerability of a single administration of URO-902 running in the U.S. This therapy is administered by direct intradetrusor injected into the bladder wall under local anesthesia. The trial is expected to enroll approximately 80 female patients in the U.S. and two cohorts. The first cohort will receive either single administration of 24 milligrams of URO-902 or matching placebo and the second cohort will receive 48 milligrams of URO-902 or matching placebo. The primary outcome measure is the change in the average daily number of urge urinary incontinence episodes for baseline at week-12 as well as assessment of safety and tolerability of this new potential therapy. Patients will be then be followed for up to 48-weeks after one injection. The decision to move from cohort 1 to cohort 2 will be made on the recommendation from the independent data safety monitoring Board, or DSMB, which is now planning to meet in the December 2020. Depending on the development of the COVID-19 situation in U.S. this meeting may also occur in early 2021. I'm very pleased with the progress we've made and I'm looking forward to providing you with further updates in the future. Now I'll pass on to Ajay for a financial update.

[Ajay Bansal:]

Thank you, Cornelia. In addition to the financial results summarized in our press release, you can find additional information, in our upcoming Form 10-K. R&D expenses were $16.3 million for the first quarter of fiscal 2020 compared with $22 million for the same period in the prior year. The decrease in R&D expenses is primarily due to lower clinical study costs of $10.2 million as Phase 3 EMPOWUR study was completed in fiscal 2019. This decrease was partially offset by an increase of $4.1 million for the manufacturing of our initial validation batches, and purchase of drug substance and other starting material costs for future manufacturing campaigns for vibegron. G&A expenses were $12.5 million for the first fiscal quarter of 2020, compared with $5.5 million for the same period in the prior year. The increasing G&A expenses primarily due to an increase of $3.1 million in commercial readiness costs, and increases in personnel, related costs and other general and corporate expenses as we continue to prepare for the, commercial launch, if approved vibegron. Total operating expenses were $28.8 million for the first quarter of 2020 compared to $27.5 million for the same period in the prior year. Net loss of $30.5 million or $0.99 a share for the first quarter of 2020 compared with a net loss of $28.5 million or $0.94 per share for the same period in the prior year. Cash used in operations were $30.8 million for the quarter ended June 30, 2020 as compared to $31.6 million in the immediate prior quarter ended March 31, 2020. As of June 30, 2020 total cash was $63 million. In July, we added to this cash position by drawing down $43 million from our low interest five-year term loan facility with DSP. We now have $128.5 million remaining under this facility. Looking ahead, for the second quarter of fiscal 2020, we expect our cash burn to be in the range of $35 million to $40 million. For the full fiscal year 2020 we now project the cash burn between $195 million to $205 million. With that financial update, I'd like to turn the call back over to Jim.

[James Robinson:]

Thank you, Ajay. As we before go to your questions, I'd like to summarize how we're thinking about what we’ve accomplished to-date and our focus for the future. We're pleased with the progress we've made so far and we continue to make strides across all aspects of our business. We have several important milestones in the back half of the year, including top line safety data from the Phase 2a study of vibegron for the treatment of IBS-associated pain in November. We expect the completion of cohort 1 enrolment in our Phase 2a of our novel injectable gene therapy for OAB, URO-902 and potential approval of vibegron in late December. Anticipation the approval vibegron we’re focused on building our commercial team and executing our launch plan. In summary, we believe we are well positioned to be a strong leading competitor in this market and are excited about the future. And with that operator, we finish our prepared remarks. We’ll now go to questions. Operator?

[Operator:]

[Operator Instructions] Our first question comes from Ram Selvaraju with H.C. Wainwright. Your line is now open.

[Blair Cohen:]

This is Blair Cohen on for Ram, just a couple questions from me. First, have you started label discussions about vibegron with FDA? And if not when you expect this conversation to start?

[James Robinson:]

Cornelia, do you want to handle that?

[Cornelia Haag-Molkenteller:]

Yes, so the label discussions. Thank you for your questions. The label discussion started a bit later in the review cycle. So with a PADUFA goal date in December, we'd expect them in the fall. So as of now we've been responding to FDA requests label discussions, we expect to start in the fall.

[Blair Cohen:]

And then, as far as drug-to-drug interactions in particular, do you consider the most problematic for vibegron and that you do not expect to see with vibegron and what commercial implications do you think this could have?

[James Robinson:]

So, Blair thanks again for your question. I'll have Cornelia start, and I'll add on the commercial aspect on the second part of your question, Cornelia?

[Cornelia Haag-Molkenteller:]

Okay, first of all, vibegron does not have a drug-drug interaction at the CYP2D6 level. And as you know this for example, is called out in the label of the other beta-3 agonist at least on the first page. So we do not have the drug-drug interaction at the CYP2D6 level which we think is clinically very important, a lot of cardiovascular drugs and a lot of psychotropic drugs, and also pain drugs are metabolised by a CYP2D6. So I think this lack of this drug-drug interaction is very important. Of course, we need to see the final label from the FDA. But we do not expect a drug-drug interaction regarding that cytochrome P450. I'll hand to Jim for the commercial side.

[James Robinson:]

Yes thanks Cornelia. And as Cornelia just said Blair, if in fact the label reflects the lack of CYP2D6 interactions, the commercial implication for that would be, for patients, especially if you think about the elderly population or long-term care, those drug-to-drug interactions are going to be pretty important and have been important to monitor. And the lack of that interaction is important, especially when you think about the number of medications that patients in long-term care facilities are often on including antidepressants, as well as antihypertensives. And so, we do think there's a clear message about the value that vibegron would provide in patients that are on those types of medications.

[Blair Cohen:]

And then last one from me. Could you just comment on how enrollments proceeding for the COURAGE study with Coronavirus? And have you adjusted the protocol at all, have you added any insights and virtual visits, things like that?

[James Robinson:]

Yes thanks, Blair. I'll have Cornelia handle that one as well.

[Cornelia Haag-Molkenteller:]

So the COURAGE study is running in the U.S. and Europe and as you know, there are regional differences with the Coronavirus. We have restarted the study in most centers also in the U.S. But of course, depending on geographic location, and having documented COVID-19 measures in place. We are actually content with a current enrollment in the COURAGE study. Also because we have Europe as additional continent in the study, but of course, we have to closely monitor and are monitoring the development of COVID-19 globally. So, at the moment we are content but of course we have to monitor the situation.

[Operator:]

And our next question comes from Eric Joseph with JPMorgan. Your line is now open.

[Eric Joseph:]

I just had one that is related to the COURAGE trial and the opportunity in men with BPH. Can you talk a little bit about how the ideology of OAB may differ in this population compared to men without BPH or women? And then, in understanding there is no approved medication currently for this population, and curious to know what your senses on the extent to which OAB and then the BPH is currently managed with mirabegron, so to what extent there may be pushback on the part of pairs for physicians looking to like - for these patients currently? Thanks.

[James Robinson:]

Thanks, Eric. I'll let Cornelia start with the answering your question and I'll follow-up.

[Cornelia Haag-Molkenteller:]

As you know, the real etiology of OAB is not known, it has to do with the ageing of the bladder. That certainly is one of the main factors maybe with the stretch receptors. However, the true origin is not known. Men with BPH have an additional extra factor, which women don't have, because men have a prostate. So they urethra is longer sorry to go into anatomy now, and their bladder outlet is different from that in women, women have a very short urethra, while the men have the prostate and if there is an enlargement or an obstruction of the outlet, basically, the overactive bladder sort of works against this outlet obstruction, and so it is actually pathophysiologically slightly different from the OAB - the general OAB particularly in women. That's why the FDA agreed two separate development program for OAB in men with BPH. There is no approved therapy. There are occasional published studies they exist. But there is really no good development program to fully characterize the efficacy and safety of an OAB medication, including a beta-3 agonist in men with BPH and OAB.

[James Robinson:]

Eric, if I just build on the question related to the label, clearly differentiated label with vibegron is more successful with achieving that indication. And I think from a pair receptivity perspective is already positive, given the fact that it has the ability to treat overactive bladder and overactive bladder in men with BPH. So if you were to obviously have strong positive from a differentiation perspective, including a pair differentiation perspective.

[Eric Joseph:]

And just as a follow-up, if I could just thinking about commercial preparedness and just kind of anticipating kind of competition in the space. Do you have a sense currently if the footprint that Astellas currently has with mirabegron, Urovant still supporting that brand and do you anticipate much in the way of sort of [indiscernible] selling at launch?

[James Robinson:]

I can't comment specifically on their sale force size or structure. What I can tell you is that with the size and structure that we're putting in place, we feel very comfortable that we'll be able to cover over 50% of the market as it exists today. As we've spoken previously, we'll have roughly 115 to 120 urology specialty reps, which will cover the universe that we want to cover. In addition to that, we'll have 30 to 40 long-term care sales reps, which will cover the long-term care facilities and provides us. We believe an advantage in terms of that space. So with just 116 sales reps will be able to cover well over 50% of the market closer to 55% of the market. We also expanded with our urology specialty team to be able to cover the top decile primary care physicians, which are prescribed basically at the level of urologist. So we feel very good about that. As we've talked about previously, we continue to evaluate primary care partnerships, which will also be an important part of our go-to-market strategy and that's something that we're continuing to work on and evaluate as we speak.

[Operator:]

[Operator Instructions] Our next question comes from Biren Amin with Jefferies. Your line is now open.

[Biren Amin:]

Maybe also to start on COURAGE. The first portion of the BPH, [indiscernible] 80 patients, and I think you looked at safety week-4, but have you evaluated any efficacy components in that Phase 1 portion of COURAGE in terms of daily micturation or urgency at week-4. And can you comment on if there's any read through that you've seen in that first portion to the week-12 primary endpoint for the part two portion?

[James Robinson:]

Darren, it’s Jim, thanks for your question. I'm going to have Cornelia handle that to start.

[Cornelia Haag-Molkenteller:]

The review by the safety - of data safety monitoring board was based on the safety and not efficacy and they reviewed the safety data. So that's basically is what they reviewed and they concluded that we can continue to the larger patient population. And as of now, for all OAB drugs, just put it carefully, there typically is not a big, you know not a substantial difference between week-4 and week-12 regarding efficacy. I may remind you, if you look at the vibegron data in OAB efficacy was already seen at week-2 over placebo and then certainly at week-4. So I don't think even OAB, BPH you have to wait for week-12. However, we will of course look at week-12. It is however also a double-blind six months study as this was the requirement from the FDA, but the primary endpoint is week-12.

[Biren Amin:]

And then maybe if you just comment on launch and any feedback you've received from payers, regarding your discussions with the upcoming launch in terms of pricing or regarding step edits, prior authorization that you think you might face? Any I guess anecdotals would be helpful?

[James Robinson:]

Yes, so its Jim again, thanks for the question. And so, we have just completed our hiring of our market access team. So the entire long-term care regional account and national account’s team is complete. That team is engaging in preapproval information exchange meetings starting next week. So, we'll be able to engage with key national payers and regional payers on the clinical overview of vibegron. But we do expect we'll get some indications and feedback at that point about vibegron. And we'll be able to take that into consideration as we move forward with our go-to-market strategy. As you were to guess, we've done extensive market research with payers today on pricing, what the expectations would be. We still have yet to make a determination on pricing both at a whack basis as well as a contracting basis. But we will expect to have that pretty much locked in and have our go-to-market approach, finished in December expecting approval and then engage with negotiations starting literally January 1 or 2nd. So, that, we can accelerate the review and potential for an addition of vibegron as soon as possible.

[Biren Amin:]

And then on the long-term care side of things, that seems to be a considerable component of patients that drives prescriptions in the OAB market. What are your thoughts Jim in terms of, is this an area that would be an early adopter or and I guess what challenges do you face in gaining adoption in this market?

[James Robinson:]

So I do think it's going to be an early adopter. If you think of the profile vibegron one of the key differentiators versus any other beta-3 in the space is that vibegron is crushable. And so in the stats basically indicate up to 40% of patients in long-term care facilities either can't swallow or have trouble swallowing. So having the ability to have a crushable tablet is going to be very important in that space. And it provides a differentiation for us and as was mentioned earlier by Cornelia, the lack of CYP2D6 interactions is also going to be important differentiator. So I do think, they have the potential to be an early adopter to vibegron. In terms of challenges, I think the obvious challenges for us will be access from a standpoint of what the access to long-term care facilities could look like if we’re still dealing with the pandemic and COVID-19. But even that being said we have plans in place that will allow us access at the corporate level as, well as at consulting pharmacy level so that we can engage with the right people that are make formulary decisions to create order sets for access of vibegron. So we feel good about long-term care as you asked is earlier adopter and for sure and we believe that an opportunity for differentiation for us.

[Operator:]

Thank you. I am not showing any further questions at this time. I would now like to turn the call back over to Jim Robinson for any closing remarks.

[James Robinson:]

Well, thank you, Daniel, and thank you for those that attended our earnings call today. We appreciate your attendance and absolutely appreciate your questions and we look forward to providing future updates in the coming quarters. Have a good afternoon.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.