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Edited Transcript of UROV.OQ earnings conference call or presentation 2-Nov-20 9:30pm GMT

·24 min read

Q2 2020 Urovant Sciences Ltd Earnings Call Nov 2, 2020 (Thomson StreetEvents) -- Edited Transcript of Urovant Sciences Ltd earnings conference call or presentation Monday, November 2, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Ajay Bansal Urovant Sciences Ltd. - CFO & Senior VP of Business Development * Cornelia Haag-Molkenteller Urovant Sciences Ltd. - Chief Medical Officer of USI * James A. Robinson Urovant Sciences Ltd. - President, CEO & Director * Ryan Kubota Urovant Sciences Ltd. - Executive Director of IR ================================================================================ Conference Call Participants ================================================================================ * Biren N. Amin Jefferies LLC, Research Division - MD and Senior Equity Research Analyst * Raghuram Selvaraju H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to the Urovant Sciences Fiscal Year Second Quarter 2020 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference to your speaker today, Ryan Kubota, Investor Relations. Please go ahead, sir. -------------------------------------------------------------------------------- Ryan Kubota, Urovant Sciences Ltd. - Executive Director of IR [2] -------------------------------------------------------------------------------- Thank you, operator. Good afternoon, and thank you all for joining Urovant's Fiscal 2020 Second 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 on 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 for 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 statement disclosures 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 A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Ryan, and thanks to all of you for joining the call today. In our second fiscal quarter of 2020, Urovant continued to make strong progress preparing for the anticipated approval and commercial launch of vibegron as well as advancing our clinical programs. I'll start today's call discussing the status of our regulatory and commercial activities for vibegron in overactive bladder. In regards to our New Drug Application, we continue to be engaged with the FDA and our interactions with the agency remain on track as we continue to work towards our upcoming PDUFA date of December 26. With just over a month until reaching this pivotal period in the company's history, we're actively preparing for the expected commercial launch of vibegron late in the first quarter of 2021. Now let me provide you with an update on the hiring of our sales force, our co-promotion agreement with Sunovion, our market access activities and our marketing plans. In terms of our sales force, our sales leadership team has been hired and is on board. I'm pleased to say that this team of 20 individuals brings a significant amount of knowledge and proficiency to Urovant, with combined experience of nearly 260 years in the pharmaceutical industry and an average of 10 years of experience in the urology space. We're now in the process of recruiting approximately 120 representatives for our urology sales force and approximately 35 representatives for our long-term care sales force. I'm very pleased with the significant level of interest that we received from these highly qualified applicants. With this sales effort at launch, we'll have the highest share of voice in the combined urology specialty and long-term care segments of the overactive bladder market. Our urology specialty sales force will also call on the top prescribing primary care providers. And to augment our efforts in the primary care space, we recently signed a co-promotion agreement with Sunovion. Sunovion's multi-specialty sales force will enable us to further expand into medium- and high-prescribing Primary Care Physicians. This is an important factor when you consider that our primary care providers represent approximately 40% of all prescriptions in overactive bladder. Under this agreement, Sunovion will invest more than $60 million in sales and marketing activities from the launch of vibegron through March 31, 2023. We expect this agreement to create significant value by amplifying our reach within this critical segment of the market without the need for us to deploy additional capital. Now let me provide you an update on our efforts and market access. Since August, our market access teams have been meeting with key payers to introduce and educate them on vibegron through preapproval information exchange meetings. These meetings have given us the opportunity to discuss with payers the safety and efficacy data that vibegron has demonstrated in our pivotal EMPOWUR trial as well as the clinical value proposition that we believe vibegron will provide, if approved. These meetings have been beneficial as we prepare for launch. Now shifting to our marketing efforts, our sales teams will be supported by an extensive multichannel marketing campaign. We've launched non-branded health care provider and consumer communications through various digital partnerships. This platform will engage health care providers, patients and payers alike, all of whom play an important role in our launch efforts. Additionally, our sales leaders have engaged key stakeholders to further educate them on our company and pipeline, and the response has been very positive. As we shared with you on our last call, we've launched unbranded virtual community, bladderchatter.com, over the summer. The purpose of this community is to help change the dialogue around overactive bladder, which is often misunderstood, stigmatized and too often accepted as normal. bladderchatter.com provides a forum where people can learn from each other and discuss their overactive bladder issues and concerns. With more than 170,000 site visits and approximately 12,000 individual registrations, we've learned a lot. Through this virtual community, it's very clear that people suffering from overactive bladder are seeking a better alternative to what's available today. Some key insights include that 86% are bothered or very bothered by overactive bladder; 73% have discussed their symptoms with their doctor and 68% are not currently on treatment. By bringing to market a potentially best-in-class treatment, we hope to make a significant contribution to alleviating the symptoms of overactive bladder from many of these patients. In summary, we believe that we're well prepared to successfully commercialize vibegron, pending the FDA's approval. Now let me briefly transition over to our development pipeline, which Cornelia will then get into more detail on in a moment. We're pleased with the ongoing progress we've made in a number of programs designed to maximize the value of vibegron beyond its initial indication for overactive bladder. Our lead clinical program, the Phase III COURAGE study, is developing vibegron, [the treatment], with overactive bladder and BPH. We're continuing to enroll patients into this study and expect top line results in the second half of 2021. Our second clinical program for vibegron is the treatment of irritable bowel syndrome pain. We currently expect to have top line results for our Phase IIa study for this program in the coming weeks. Regarding our second development program, URO-902, a novel injectable gene therapy for the treatment of overactive bladder, we are continuing to enroll patients who have failed oral pharmacological therapy for OAB into our Phase IIa trial. 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, and is expected to occur in early 2021. This concludes my opening remarks. And let me now turn the call over to our Chief Medical Officer, Dr. Dr. Cornelia Haag-Molkenteller. -------------------------------------------------------------------------------- Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [4] -------------------------------------------------------------------------------- Thank you, Jim. As previously announced, and Jim just discussed, we submitted our new drug application for vibegron with the treatment of OAB to the FDA in December of 2019. On March 5, the FDA notified us that they accepted the NDA for review that our PDUFA date is December 26, 2020. We continue to respond to FDA request as part of the regular review cycle, and we remain confident in the data and NDA we submitted for vibegron. Let me take a minute to provide some details on the upcoming data presentations that we have planned for vibegron and OAB as well as for our ongoing clinical development programs. The International Continent Society, ICS meeting, is taking place from November 19 to 22, 2020, and is scheduled as a virtual meeting. The quality of life responder data from the Phase III EMPOWUR extension study have been accepted for a presentation and will be available on November 19. 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-milligram vibegron or 4-milligram extended-release tolterodine. Vibegron was able to sustain its efficacy for over 52 weeks of observation, with very favorable long-term efficacy results including the key symptoms of urinary frequency, urgency, urge urinary incontinence, total incontinence, and it also demonstrated a good long-term safety and tolerability profile. The patients respond on the quality of life scores as on the disease-specific questionnaire OAB-q in this study corresponded well with the improvements in OAB symptoms, again, demonstrating the sustained efficacy of 75-milligram vibegron over time. Urinary urge incontinence is one of the leading symptoms of OAB that cause patients to seek treatment. Our data show that 71% of patients treated with vibegron experienced a 50% reduction of the baseline incontinence episodes at week 52 in contrast to only 61.9% in the tolterodine group. And 40.8% of all patients in the vibegron treatment group became dry, meaning that they did not have any incontinence episodes in contrast to only 34.2% in the tolterodine group at week 52. I will now comment on our ongoing clinical trials. Given the COVID-19 pandemic, we had temporarily halted the enrollment of new patients into ongoing clinical trials in 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 a Phase III COURAGE development program for vibegron in men with OAB and benign prostatic hypoplasia or BPH, we're now in part 2 of this large trial, in which over 1,000 patients will be enrolled. The trial is taking place in North America and Europe, with study sites initiated in Europe. Part 2 of this Phase III trial will assess both the efficacy and safety of vibegron in men with OAB and BPH. The co-primary endpoints are reduction in duration 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. Due to the ongoing COVID-19 situation and the increase in the number of cases reported in the U.S. and many European countries, we're continuing to monitor the situation closely with respect to enrollment. As a reminder, there is currently no FDA-approved product specifically indicated for overactive bladder in men with BPH. Regarding our Phase IIa clinical program for vibegron and IBS-associated abdominal pain, we completed the enrollment of 222 female patients with IBS-associated abdominal pain at the end of June 2020. Patients were randomized to either 75-milligram of vibegron or placebo. The primary endpoint is a 30% reduction in abdominal pain intensity on an 11-point rating scale, ranging from 0 to 10 over 12 weeks for IBS-D, which is the IBS with diarrhea. A response is defined as a subject with at least a 30% decrease in worst abdominal pain compared to the weekly baseline average. Secondary endpoints include the global rating scale and safety, in particular, lack of negative effects on stool frequency or consistency. We now plan to report top line data from this study at the end of this month. Regarding the development program for URO-902, our novel injectable gene therapy for the treatment of OAB, we're studying URO-902 in a Phase IIa trial and are enrolling patients with OAB with a 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 running in the U.S. This therapy is administered via direct intradetrusor injected into the bladder wall under local anesthesia. The trial is expected to enroll approximately 80 female patients in the U.S. in 2 cohorts. The first cohort will receive either a single administration of 24-milligram of URO-902 or matching placebo. And the second cohort will receive 48-milligram of URO-902 for matching placebo. The primary outcome measure is the change in the average daily number of urge urinary incontinence episodes from baseline at week 12 as well as assessment of the safety and tolerability of this new potential therapy. Patients will then be followed for up to 48 weeks after 1 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. This trial is only running in the U.S. And based on the enrollment levels due to COVID-19 situation, the DSMB meeting will now be held in early 2021. I'm pleased with the progress we made despite the enrollment challenges presented by COVID-19, and I look forward to providing you with further updates in the future. I'll now pass on to Ajay for a financial update. -------------------------------------------------------------------------------- Ajay Bansal, Urovant Sciences Ltd. - CFO & Senior VP of Business Development [5] -------------------------------------------------------------------------------- Thank you, Cornelia, and thank you, everyone, for joining us on today's call during this exciting time in the company's history. Please note that in addition to the results summarized in our press release, you can find additional information in our upcoming Form 10-Q. R&D expenses were $14.5 million for the second quarter of fiscal 2020 compared with $17.8 million for the same period in the prior year. The year-over-year decrease is primarily due to a $6.8 million reduction in our CRO costs stemming from the completion of the double-blind extension study of our EMPOWUR study in the prior year and the completion of enrollment in our Phase IIa trial for the treatment of abdominal pain due to IBS in June this year. This decrease was partially offset by an overall increase of $2 million for CMC costs, resulting from the manufacturing of initial validation batches and purchase of drug substance and other starting materials for future manufacturing campaigns of vibegron as well as the manufacturing of drug substance for future clinical supplies of URO-902. G&A expenses were $18.9 million for the second fiscal quarter of 2020 compared with $7.4 million for the same period in the prior year. G&A expenses have gone up due to an increase of $5.4 million in commercial readiness costs and an increase of $4.9 million in personnel-related costs as we continue to prepare for the commercial launch of vibegron, if approved. Total operating expenses were $33.5 million for the second quarter of 2020 compared with $25.2 million for the same period in the prior year. Net loss was $35.2 million or $1.12 per share for the second quarter of 2020 compared with a net loss of $25.7 million or $0.85 per share for the same period in the prior year. Cash used in operations was $32.6 million for the quarter ended September 30, 2020, as compared to $30.8 million in the immediate prior quarter ended June 30, 2020. As of September 30, 2020, total cash on hand was $74.4 million. At the end of the quarter, we still had $128.5 million available for drawdown under our low interest, 5-year term loan facility with DSP. Looking ahead, for the third quarter of fiscal 2020, we expect our cash burn to be approximately $45 million. For the full fiscal year 2020, we now project a cash burn between $185 million and $190 million. With that financial update, I would like to turn the call back over to Jim. -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [6] -------------------------------------------------------------------------------- Thank you, Ajay. As we prepare to 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 thus far, and we continue to make strides across all aspects of our business. We have several upcoming important milestones during the remainder of our fiscal year, including top line efficacy and safety data from the Phase IIa study of vibegron for the treatment of IBS-associated pain later this month; the potential approval of vibegron late next month, the expected completion of cohort 1 enrollment in the Phase IIa of our novel injectable gene therapy for overactive bladder, URO-902; and the commercial launch of vibegron, if approved, in the first quarter of calendar year 2021. In anticipation of vibegron's approval, we're focused on building our commercial team and executing on our launch plan. In summary, we believe we're well positioned to be a strong leading competitor in this market and are excited about the future. And with that, we finished our prepared remarks, and we'll now go to questions. Operator? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Ram Selvaraju with H.C. Wainwright. -------------------------------------------------------------------------------- Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [2] -------------------------------------------------------------------------------- Firstly, would it be possible for you to comment on the nature of the sales force that the DSP is likely to be using in support of vibegron as part of the co-promotion arrangement. And in particular, how large this group is expected to be? And what other products they are currently promoting? And how much of their time they're expected to be devoting to detailing vibegron? -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [3] -------------------------------------------------------------------------------- Ram, it's Jim. Thanks for your question. So let me maybe give you a sense of the criteria in terms of what was important to us when we were evaluating partners in this area. First, we wanted to make sure we had end-market successful experienced primary care team that was very important to us, having the relationships with the primary care providers, being in market and having a demonstrated track record of success, as you would expect, was very important for us. Sunovion will be dedicating 90 sales professionals to vibegron. The other key component for us is we wanted someone that was willing to invest along with us. Part of the investment is effort. So Sunovion, the representatives that will be working on behalf of vibegron, it will be their primary detail, and it has to be at least 60% of their overall incentive compensation weighting. So it's a big part of their effort and it's going to be the first-line detail for that sales team. And we also wanted someone that was going to invest along with us. And as you saw, there's a willingness of Sunovion to invest $60 million over the first 2 years in not only people, but also programs, marketing expenses in sample, et cetera. So in terms of the criteria that we laid out for the right partner, they met all the criteria for us. So they're going to be very important for us in augmenting our primary care approach from that mid-decile to the high decile prescribers. -------------------------------------------------------------------------------- Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [4] -------------------------------------------------------------------------------- Okay. Great. And then with respect to the applicability of vibegron and IBS-associated pain, just wanted to get some clarity on what you folks expect to be the most critical secondary endpoints in the study from the vantage point of competitive positioning of the drug in this indication? And also, if you could elaborate on the pathway to formal approval in this indication, assuming that this study is positive, as well as how hypothetically vibegron would be positioned from a commercial standpoint vis-à-vis, for example, the way you allocate the sales effort, the commercial infrastructure with regard to this indication relative to the OAB indication. -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [5] -------------------------------------------------------------------------------- Sure. So I'll let Cornelia add some color to this. But as you know, we've announced at the end of November, we expect to have the Phase IIa top line results. At that point, we'll evaluate the Phase IIb/III -- or Phase IIb/III in combined development program requirements for our next step. In terms of utilizing the organization, there's 2 answers to that. Without question, we would utilize the existing sales and commercial infrastructure that we have. We find it to be extremely efficient. We would add potentially a little effort in the GI space as well, which would augment our already sizable sales organization. In terms of the other component is it allows for a differentiated label. So not only do we have a chance to differentiate the label in the U.S. but also abroad and would provide an opportunity to show that beyond the OAB indication, vibegron is effective. And let's say, IBS pain, if successful. It also goes to speak to the development program we're doing in OAB and then with BPH. So either one of those indications provide for a significantly differentiated label in the U.S. and abroad. In terms of endpoints, in terms of primary and secondary, I'll let Cornelia handle that and maybe provide a little more color on the development programs, pending the outcome of the Phase IIa study that we'll get the readout on at the end of November. Cornelia? -------------------------------------------------------------------------------- Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [6] -------------------------------------------------------------------------------- Yes. This is Cornelia. So again, it is like in all IBS studies. It is the reduction in the worst abdominal pain over the 12-week period. It's a 12-week study, double-blind, placebo-controlled. And again, as Jim said, this is a 75-milligram dose. So currently in the Phase IIa, we have studied 1 dose. If this continues, this program, we will probably have to study at least 2 doses. We will also be looking at no negative effects on stool consistency for IBS. -------------------------------------------------------------------------------- Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [7] -------------------------------------------------------------------------------- Okay. Perfect. And then just one very quick regarding DTC advertising. -------------------------------------------------------------------------------- Cornelia Haag-Molkenteller, Urovant Sciences Ltd. - Chief Medical Officer of USI [8] -------------------------------------------------------------------------------- Sorry? -------------------------------------------------------------------------------- Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [9] -------------------------------------------------------------------------------- Can you confirm that at that time that you expect vibegron to be launched, there's probably likely to be no significant or a tailing-off significance of counter detailing DTC presence of other OAB products in the vibegron class? -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [10] -------------------------------------------------------------------------------- I don't know if I could make a definitive statement on what another company will do with their DTC program. But what I can tell you is that we will have a multichannel marketing campaign, as we've talked about previously, we expect to leverage digital and social channels. The evolution of the ability to reach people that are interested about learning more about overactive bladder has been significant. The ability to provide curated content on demand to people that are interested in learning more about how to talk to their doctor about it as well as the potential products that are available significantly changed in the last 5 to 10 years. So we expect to be able to have a very successful and a very targeted direct-to-patient campaign launched sometime in 2021. So in terms of what other companies will do, I mean, I think we can only speculate. -------------------------------------------------------------------------------- Operator [11] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from Biren Amin with Jefferies. -------------------------------------------------------------------------------- Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [12] -------------------------------------------------------------------------------- Maybe just on the vibegron potential approval. If you're approved later this month, and with launch shortly thereafter, how should we think about the trajectory of the launch? Should we be looking at the vibegron TRx script count in the first few months of its launch and tracking to that? -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [13] -------------------------------------------------------------------------------- Biren, it's Jim. That's a good question. In terms of timing, again, the PDUFA date is December 26. We'll onboard our sales team over the course of January and February. We're interviewing them now, making contingent offers now. The offer would be effective upon the approval of vibegron. And so again, we do the onboarding and launching in the January, February time frame of that sales force with an expected launch in March, like we said, late 2021 -- or so late in the first quarter, excuse me, of 2021. In terms of the trajectory, as you probably know, the payer aspect is going to be important for us to be able to get access at launch. If I were to say, could you overlay the 2 launch curves? I think you're going to see that and vibegron's launch is going to be right from a standpoint of a trajectory similar, I would say, to mirabegron, probably slightly below until we have formulary access. But we do expect formulary access in the important plans, both in Part D and commercial in 2021 and early '22 and obviously, when we have formulary access at a critical mass, we expect that our launch trajectory will reflect that access and grow accordingly. -------------------------------------------------------------------------------- Biren N. Amin, Jefferies LLC, Research Division - MD and Senior Equity Research Analyst [14] -------------------------------------------------------------------------------- And so you talked about Part D. I guess is that component going to come through in 2022, Jim, because that seems to take a little bit more time than the commercial payers. -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [15] -------------------------------------------------------------------------------- Yes. Generally, as you said, 2021 bid cycles would have been in and reviewed at this point. So for us, without question, 2022 is an area of intense focus for Medicare Part D access. But beyond that, we still expect to get some access in Part D and we expect some access in commercial. And as we've talked about previously, long-term care, we believe represents a significant opportunity for us to be able to provide access early in 2021 and be able to grow vibegron in that important segment of the market. -------------------------------------------------------------------------------- Operator [16] -------------------------------------------------------------------------------- I'm not showing any further questions at this time. I would now like to turn the call back over to Jim Robinson for closing remarks. -------------------------------------------------------------------------------- James A. Robinson, Urovant Sciences Ltd. - President, CEO & Director [17] -------------------------------------------------------------------------------- Thank you very much, operator. And again, I want to thank all of those that have attended today's call and also want to thank those for the questions, and we look forward to providing you an update on our next call. Thanks very much. -------------------------------------------------------------------------------- Operator [18] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.