Urovant Sciences Ltd
Q3 2019 Earnings Call Transcript

Published: 14 Feb 2020

[Operator:]

Good day, ladies and gentlemen, and welcome to Urovant Fiscal Third Quarter 2019 Earnings Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, today's conference is being recorded.I would now like to turn the call over to Ryan Kubota. Sir, you may begin.

[Ryan Kubota:]

Thank you, Fathi. Good afternoon and thank you all for joining Urovant fiscal 2019 third quarter financial results conference call. With me today are four members of our leadership team

[Keith Katkin:]

Thank you, Ryan, and my thanks for all of you for joining us this afternoon. This has been a very exciting and transformational quarter for Urovant marked a key milestones across all aspects of our business. First, in December, we submitted our new drug application to the U.S. Food and Drug Administration for vibegron for the treatment of patients with overactive bladder. The submission comes one quarter earlier than we initially anticipated and we are very excited to have submitted our application by the end of the calendar year and ahead of schedule. Second, we initiated our Phase 2a study in URO-902, a novel gene therapy product for patients with overactive bladder suffering with urge urinary incontinence that have failed oral pharmacologic therapy.The study is evaluating URO-902’s efficacy, safety and tolerability of a single administration of the product and we expect top-line safety data towards the end of the year. Third, pursuant to the transaction between Sumitomo Dainippon Pharma also known as DSP and Roivant Sciences, DSP is now Urovant’s majority shareholder. As part of the transaction, Urovant entered into a loan agreement with DSP whereby DSP provided Urovant with a $300 million low interest, interest only five year term loan facility with no repayments due until the end of the term. This loan facility provides Urovant with capital well into 2021 and enabled us to pay back the outstanding amount on our previous loan agreement with Hercules Capital. DSP also expect to support Urovant through profitability and provide support for the commercialization of vibegron providing access to its U.S. commercial infrastructure including drug distribution, operations and managed care support.Finally, Urovant and DSP entered into an investor rights agreement that provides certain protections to Urovant minority shareholders for as long as DSP holds between 50% and 90% of Urovant’s outstanding voting power. We're excited about our new strategic relationship with DSP, the potential benefits that brings to Urovant and the future of our company. With the submission of our new drug application and launch preparations for vibegron well underway, we look forward to the strategic support and proven commercial resources of DSP. Their drug distribution, operational and managed care support capabilities should greatly optimize Urovant’s commercial approach to the U.S. market.Now to comment briefly on some of our other important business highlights, we continue to enroll patients into Part 2 of the Phase 3 COURAGE trial, which will assess both efficacy and safety of vibegron in men with OAB and BPH, a patient population for which no product is currently approved. Enrollment also continues for patients into our IBS associated abdominal pain trial with top line results expected later this year.With that, I'll now turn the call over to our Chief Medical Officer, Dr. Cornelia Haag-Molkenteller, who will provide more detail on our clinical programs.

[Cornelia Haag-Molkenteller:]

Thank you, Keith. As I mentioned before, we are pleased to have submitted our new drug application for vibegron for the treatment of OAB to the FDA at the end of last year. Let me briefly outline what to expect regarding the OAB filing and the program and then provide an update on our other clinical development programs.In OAB, first the submission of our new drug application to the FDA at the end of December, 2019 we'll be waiting for the notification by the FDA on the acceptance of our file in March of 2020. Second we are expecting a 12-month review cycle at the FDA and potential approval could occur at the end of this year. We are looking forward to working with the FDA during the review process.Third, in May at the upcoming AUA, American Urological Association 2020 Annual Meeting in Washington DC we will have two presentations. The first presentation would be our 52-week EMPOWUR extension study data and the second presentation will be that of the EMPOWUR data by age.Regarding the EMPOWUR extension study, we performed a post-hoc analysis to test the difference in week – at week 52 between vibegron 75 milligram and the active comparator tolterodine of the change from baseline in the urge urinary incontinence and total incontinence episodes between vibegron and tolterodine. Notably for both products vibegron demonstrated a statistically significant reduction of tolterodine.The symptoms of urinary incontinence are key symptoms to OAB and the main reason for patients to seek treatment. We're very excited by this data and believe this further supports the strong efficacy profile of vibegron.Let me now turn to our other clinical programs. I'm pleased to report that we continue to make excellent progress across all of our development programs. Regarding our international Phase 3 COURAGE development program for vibegron in men with OAB and benign prostatic hyperplasia or BPH, we continue to enroll patients into part two of the trial, in which over 1,000 patients will be enrolled. The trial is running in North America and we will soon be initiating trial sites in Europe.Part 2 of the Phase 3 trial was that both the efficacy and safety of vibegron in men with OAB and BPH. The co-primary endpoints are a reduction in micturition frequency and urgency episodes for 24 hours. Key secondary endpoints are reduction in nocturia episodes, which means that awakening at night to void, prostate symptom scores and safety.In addition, the first patients from Part 1 have enrolled into the long-term extension study, which will follow patients for a total exposure of 52-weeks. We're excited about this program as there is currently no FDA approved product specifically indicated for overactive bladder in men with BPH.Let me now turn to our Phase 2a clinical program for IBS-associated abdominal pain. This study continues to enroll female patients with IBS-associated pain. Patients are randomized to either 75 milligram of vibegron or placebo. The primary endpoint is a 30% reduction of abdominal pain intensity on an 11 point rating scale over 12 weeks for IBSD, which is the IBS with diarrhea, responders declined with the subject with at least 30% decrease in worst abdominal pain compared to the BT baseline average. Secondary endpoints included global rating scale at safety in particular a lack of negative effect or stool frequency or consistency. We expect to report top line data from this study in the third quarter of 2020.Finally, as we reported recently we initiated the Phase 2a trial for URO-902 in December, 2019. Our novel injectable gene therapy for patients with OAB who have failed oral pharmacologic therapy. This is a randomized double-blind placebo controlled trial that will evaluate the efficacy, safety, and tolerability of a single administration of URO-902. The therapies 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., two cohorts.The first cohort will receive either single administration of 24 milligrams of URO-902 or matching placebo. The second cohort will receive 28 milligrams of URO-902 or matching placebo. Patients will be then followed for 48-weeks. The primary outcome measure is the change in the average daily number of urge urinary incontinence for baseline to week-12 as well as assessment of safety and tolerability for this potential new therapy.I am pleased with the progress we made over the last quarter and look forward to providing with further updates in the coming quarters. Now I'll pass 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-Q, which will be filed later today.R&D expenses were $23.1 million for the third quarter of 2019 compared with $21.3 million for the same period in the prior year. In the third quarter of 2019, R&D expenses were comprised of costs related to the submission of a new drug application for vibegron to the U.S. FDA. Clinical development. Specifically, our ongoing study is in OAB plus BPH and abdominal pain associated with IBS.Where comparing the two quarters, the increase in R&D expenses is primarily due to

[Keith Katkin:]

Thanks, Ajay. I'd like to reiterate our excitement for what we have accomplished during this past quarter, especially, the progress we have made with the submission of our new drug application for vibegron and the initiation of the our Phase 2a study for URO-902.Our new relationship with DSP provides us with a stronger and more stable financial profile while also providing access to a global platform, enhance commercialization resources and other significant advantages as we prepare for the launch of vibegron. We remain very excited about the market opportunity for vibegron in OAB. Our belief in the differentiation of vibegron is further supported by what we believe has been a very strong launch in the Japan. While the market dynamics in Japan are very different than the United States, current data suggest that vibegron was able to take meaningful share from mirabegron in a short period of time.In closing, the third fiscal quarter of 2019 was transformational for our company, marked by key milestones across all aspects of our business. We look forward to several upcoming milestones that will continue to drive toward the goal of developing Urovant into a leading specialty urology company. These upcoming milestones include, FDA acceptance of our new drug application vibegron in OAB, which we anticipate at the end of Q1 2020; our two upcoming presentations in May at AUA in Washington DC that includes data from our recently completed post-hoc study demonstrating the statistically significant benefit of vibegron over tolterodine at week-52. Phase 2a top line safety data for IBS associated pain in the second half of 2020. The continued and the patient of cohort one enrollment in Phase 2a of our novel injectable gene therapy for OAB, URO-902, followed by the initiation of cohort 2 enrollment later this year, and the ongoing evaluation of part two of the Phase 3 COURAGE trial, which will assess both efficacy and safety of vibegron in men with OAB and BPH.With that, I'll now open the call to questions. Operator, can you open the line?

[Operator:]

[Operator Instructions] Your first question comes from the line of Mr. Eric Joseph from JP Morgan. Your line is open sir.

[Eric Joseph:]

Hey guys, thanks for taking the questions. You kind of anticipated one of them here. I'm just curious to get a bit of a sense of what you're seeing from Kyorin in the launch Biova in Japan and understanding that there's going to be differences in dosing in the label here in the U.S. but where are they seeing patient demand come from, and what's the dynamic then with a mirabegron there?

[Keith Katkin:]

Yes, thanks for the question Eric. We don't have a ton of information from Japan. Particularly we don't have insight into exactly what patients they're going after with their campaign. What we do have is we've got two sources of information. We've got essentially the Japanese IQVIA-like data and also maybe more importantly, we've got the sales numbers that have been reported by Kyorin as they're a publicly traded company. Both the IQVIA-like data in Japan and also the sales numbers that we're seeing from Kyorin suggest they're taking a really nice percent share. We don't want to go into the specifics, but we'll leave it as if we got that share within the first 12 months of our launch. We would be extraordinarily happy with the uptick of our launch as we think everybody else would be as well.Obviously the reimbursement situation is different in Japan, there's a single-payor system and once you get coverage from the Japanese government it alleviates one big hurdle that we're obviously going to have to face here in the States. But it does give us confidence that once we get appropriate reimbursement the physicians will see the merit and the benefits of vibegron.

[Eric Joseph:]

Got it. And maybe just a follow-up question on URO-902. Can you talk a little bit about the rationale for dose selection the 24 milligrams and the 48 milligrams? And I guess you also – there are some placebo arms, I guess, for both of those cohorts. Can you just talk about sort of the randomization across the total 80 patients being enrolled? And the powering assumptions, I guess, the effect size that is adequately powered to detect under the trial design. Thanks.

[Cornelia Haag-Molkenteller:]

Okay. Well, thank you. First of all, this is a Phase 2a study. So this is really early development. We chose the highest dose and we recently announced the publication on our recent study of the recent prior Phase 1b study which was conducted by Ion Channel. So we chose the highest dose which showed efficacy there, which is 24 milligram. And then we are going to repeat that dose now in a larger group of patients. And then we will go in a stepwise approach to doubling the dose and this was discussed with the FDA, and they agreed to it [indiscernible] needs to be a core design to increase these doses. The placebo group will be distributed evenly amongst those two cohorts. So basically overall URO-902 and placebo group is being split between treatment groups.And regarding the fixed side, of course, is an injectable therapy. We are expecting a larger effect. But again, this is very – we need to see how actually the efficacy will be. We have about a 55% power at this point, but again, we have to say in this Phase 2a, difference we powered it urinary incontinence results and we achieved higher effect size than for an oral drug. So we assume a difference of 1.8 episodes, but again its Phase 2a study, I have to really use this disclaimer.

[Keith Katkin:]

And I think just to add Eric in the early Phase 1 the 24 milligram dose we didn't see any particular adverse events or concern. And so we want to do some dose finding in this Phase 2a. So we felt that going with a dose 2X would really give us a good band where we can really get an early read of what the safety efficacy looks like as well as durability which is obviously important as well.

[Eric Joseph:]

Any expectation or need or is there any anticipation that you might need or want to dose higher than 48 milligrams. And I think this is recorded call out for that?

[Cornelia Haag-Molkenteller:]

Well, we will see it again. We need to look at efficacy and safety. Again, the efficacy alone of 24 milligrams from the very small Phase 1b already was good. We need to also see duration. We're going to follow those patients out for nine months and of course if we continue we may consider higher dose, but at this point for Phase 2a study, we decided to go with two dose groups, one dose and that doubling the dose and then see how efficacy and safety look.

[Eric Joseph:]

Great. Thanks for taking the questions.

[Keith Katkin:]

Thanks.

[Operator:]

Your next question comes from the line of Ritu Baral from Cowen. Your line is open.

[Unidentified Analyst:]

Hey guys, Shanton for a Ritu. Just one question for me in terms of the commercialization, as you guys are thinking about it, could you just speak to kind of the approach that you're going to be going after, but more specifically how you're going to be leveraging the Sumitomo partnership that you have right now? Thanks a lot.

[Ajay Bansal:]

Sure. Absolutely. And so at a high-level, Urovant is going to maintain responsibility for what we think is the largest and most important market segments. So we'll be building out a urology sales force, approximately 110 sales representatives that sales force will also call on a very high-writing primary care doctors. And in addition, we'll have an approximately 50% long-term care sales force which will give us obviously very strong coverage within the long-term care facilities in the U.S..Those will still be responsible and managed by Urovant, where we're in discussions with Sunovion, a DSP’s U.S. subsidiary on particularly a trade and distribution. You may be aware that small companies really get abused on the wholesaler fees and they can be very high easily double digits.And so we believe that if we can tap into their relationships and their agreements, given that we’re now a subsidiary of DSP, we can get much improved wholesaler and distribution fees. Additionally, Sunovion is a very large managed care infrastructure. They’ve got something that’s much larger than we could ever build, and those teams have very strong relationships with, both the national and the regional payers.And so we are currently in discussions with them about how we can effectively use that team. And we think that’s really important because, obviously, in today’s day and age, coverage is critical to both the short-term and long-term success of any product launch. And so being able to tap into a big-pharma-like managed care structure that we think can accelerate our access will just serve to greatly enhance our launch.And then we’re also talking to them about back office things, when they were may be able to work with them, whether it’s media buying, or contract and discount management, things of that nature. But overall, we’re really impressed by everything we’ve seen from their suite of services so far. And we think that assuming we can get to terms with them that it will be able to really very cost-effectively enhance what we’ll be able to do at – for vibegron, both at launch and over the long term.

[Unidentified Analyst:]

Got it. Thanks guys.

[Keith Katkin:]

Thank you.

[Operator:]

Your next question comes from the line of Raghuram Selvaraju from H.C. Wainwright. Your line is open.

[Edward Marks:]

Good afternoon. This is Edward on for Ram. Thank you guys for taking the questions. First is a question on the recent 902 publication. Just wondering if you think age had any effect on the 24-mg group? And also, what sort of effect do you think the low baseline incontinence values had on the lesser efficacy seen also in that 16-mg group?

[Cornelia Haag-Molkenteller:]

Well, it is not known for OAB that you did – generally that it’s sort of efficacy is linked to the number of incontinence episodes. Of course, statistically in the larger studies, it is. That’s why you have a minimum, but I don’t believe that this has anything to do. Again, this was given a smaller study than our Phase 2a. On the age group, these are, again, people, who are, by definition typically post-menopausal women, which will be 50 and older, and we are also going to enroll 50 and older. And also efficacy, it is not known in OAB. That efficacy is linked to age or non-efficacy is linked to age.

[Edward Marks:]

Okay. So the baseline levels in the 16-mg group, would you say that those are more common for a patient population than what you saw in the 24-mg group?

[Cornelia Haag-Molkenteller:]

It’s a small group. I don’t know if you could say more common, maybe, but I don’t think it is really – basically, it’s quite high. Both of them are high. I mean, the number of urge incontinence episodes are relatively high. And the 24-mcg group may have had higher one, if that is correct. But again, the study is extremely small. Look at the ends. So I don’t think you can really draw conclusions from these small ends.

[Edward Marks:]

Okay. I understand that it's a small trial. And just on a broader level, is there any new information you can provide on some of the likely pricing for vibegron?

[Keith Katkin:]

Yes. The – I don't think our guidance has really changed too dramatically since we last spoke. We really think that there's likely a range around mirabegron and wherever that mirabegron price is at the time that we announced our commercial launch. As a reminder, mirabegron right now is around $405 per month WACC. And so depending on the final package insert that is agreed upon with the FDA, we could see a band around that of essentially plus or minus 20% from pricing perspective.

[Edward Marks:]

All right. Excellent. Thank you.

[Keith Katkin:]

Thank you.

[Operator:]

Your next question comes from the line of Biren Amin from Jefferies. Your line is open.

[Biren Amin:]

Yes. Hi guys. Thanks for taking my questions. Just on the Sumitomo relationship and the loan facility. Can you just talk about if there's any gating items that would prevent you from accessing the remaining capital or any milestones that you need to achieve to access the remaining capital?

[Ajay Bansal:]

No the remaining capital, actually the way it's structured is we can make quarterly draws and those quarterly draws would depend upon the approved budget from the board. So our next draw for example, we'll reach out to them towards the end of March and let them know based on our board-approved budget how much we want to draw for the next quarter and that will repeat itself quarter after quarter.

[Biren Amin:]

Got it. Okay. And then on 902, I know it's a 12-week endpoint on efficacy, but are you looking at earlier time points as well? I mean, when you look at some of the literature with Botox, you're seeing onset of activity as a soon as four weeks. So is that something that you'll measure as well? And on the UUI reduction at 12 weeks, what should we expect? Would it be similar to like Botox? I think there's some literature out there that suggests it's about a 50% to 60% reduction on UUI at 12 weeks.

[Cornelia Haag-Molkenteller:]

Okay. So we are, of course, going to measure at earlier time points and it has to be at least as good as Botox. We hope it'll be better, but we believe for it to be competitive, and to continue, it will have to be at least as good as Botox.

[Biren Amin:]

Okay. And then I guess are you going to be measuring detrusor overactivity in the trial?

[Cornelia Haag-Molkenteller:]

Yes, we will – do URO dynamics. We're enrolling people with or without detrusor overactivity activity just to have made the point. It is not known for an OAB drug, including Botox, that due detrusor overactivity, the presence or not of detrusor overactivity at URO dynamics has any effect on basically the outcome, but we will be measuring it in all patients. We were measuring URO dynamics in all patients.

[Biren Amin:]

Got it. Okay.

[Cornelia Haag-Molkenteller:]

And we do – central reader URO dynamics like in Botox

[Biren Amin:]

Okay. Great. Thank you.

[Operator:]

All right. There are no more questions from the queue. You may continue presenters.

[Keith Katkin:]

Thank you everybody for joining us. We look forward to hosting our fiscal year end call at the – after the end of the next quarter. So thank you very much everybody.

[Operator:]

This concludes today's conference call. Thank you everyone for joining. You may now disconnect.