AVDL - Earnings call transcript Q4 2018 | Avadel Pharmaceuticals plc

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Operator

Good morning, ladies and gentlemen, thank you for standing by. And welcome to the Avadel Pharmaceuticals’ Fourth Quarter and Full-Year 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Mr. Officer Financial Chief Kanan, of Avadel. Mike

begin. may You

Mike Kanan

financial and Thank for again morning accessed issued and on everybody can at The conference you good morning we full-year quarter fourth and our thank our news joining be This release. release you call. to results avadel.com. us website our on

matters the reminder, statements within forward-looking before following Private As of constitute Litigation begin, a Act presentation includes meaning of that the we a Securities Reform number of the XXXX.

public risks year Except competitive Form objectives by Exchange filings XX, to to XXXX. Avadel Act, as market in subject XX, the filed March These products are and uncertainties the those products that requirements, was or or in results statements scientific more meet opening or Forward-looking undertakes December other which uncertainties ended law, including under risks stage to achieve Q&A. on contained After information, Avadel's statements. the that actual prepared are acceptance required stringent cause and for include differ and no contemplated may could regarding in development products XX-K risks described from materially otherwise. regulatory in will of events These update to for and not reflect such of forward-looking obligation forward-looking new any this future we remarks, their the or revise fully call pricing. milestones be impact presentation the risks statements XXXX

turn this is of will the Board Greg Executive and Chairman Officer me I our over On Chief Greg? to the At Geoff Directors. call Greg Divis, call today Interim our Divis. with of Glass, time,

Greg Divis

good you, everyone. morning and Thank Mike

an and operational to recap developments summarize Avadel’s our full-year the taken business, fourth its simplify date want I actions status. health provide the leadership corporate financial on focus. preserve to restructuring our our our briefly update current I quarter announced XXXX strengthen results, reviewing and and changes and Before focus recent undertaken including and to will

progress restructuring and shareholder we January realize changes of the to weeks and assessment commenced Although actions and only of a significant the announced of Directors urgent the in taking management to a to have made year, rebuild position of required promise potential this the we few necessary FTXXX ourselves begin are announced was Board ensure we ago, we value. and then our businesses of all In strategy. to and comprehensive existing that aspects

and February of plan includes to health steps. on preserving Following runway assessment The X, operational clear comprehensive restoring financial the priority following the focusing that our our full with resources of and on our announced our attention into plan the XXXX. restructuring our extend financial liquidity development and important we FTXXX

we’re more XX XXX a the of undertaking approximately initiative XXXX. companywide including end from to headcount First, than total reducing cost our reduction by

will maximizing we focus hospital and on the continue Second, products business. the to performance of cash flow

it is facing generic both entrants. new profitable and Although from increasing pressure existing

continues business As while the position we will generate and expenses respective past, continue market our aggressively cash the profitably defend positive flow. managing to to ensure we done in to carefully have in each that

NOCTIVA we we the considerable despite are that announced business. to-date investments. has Third, expectations product underperformed exiting significantly The

the to LLC, independent all objective, so program. FTXXX initiated flow and XXXX, fully importantly of NOCTIVA the sell Therefore experts focus driver our creating our development Consistent the cash cash third-party through that business in and business proceedings major assets a burn aspects is shareholder the sole cleanly maximizing can we to of resources we and most value, FTXXX. on evaluate filing, hospital this its XX by the exiting generated products will owner value Pharmaceuticals, engage Specialty for this cash a of Avadel has with Chapter quickly As our asset preserved. essential fourth be capital of

expect broad auxiliary ultimately is engagement includes we’ll data to-date. The scope submit We opportunities supply the chain the the review and to to PK our identify generated studies, and FDA. that site our enhance in strategy, clinical application total readiness to drug REST-ON package new them trial protocol,

we In addition, on expertise can enhance internal impacting we focus REST-ON our are trial positively a assessing with how clinical the trial.

As disclosed of in been announcement, in we enrollment study, February X goal. had our XXX XX% overall the randomized patients the

progress goal call, today's basis conjunction a quarterly our additional going enrollment regularly to have provide of As we earnings scheduled and toward our in made with enrollment progress commit updates forward, calls. we on

that REST-ON question also We trial the needs answered. understand date of an be end is that important to anticipated the

we financials. like diagnostic as Mike earnings the over and I would enrollment next call as the call in to discuss implications over action these actions well our Kanan, our complete Mike? completion now brief which place estimated an of we XXXX to take and will hand plans to financial review date for follow-up to expected quarter by CFO is our full-year weeks, As provide fourth REST-ON the coming May. for a

Mike Kanan

you, Greg. Thank

As restructuring fund Greg enough ensure explained, operations we to the just have that XXXX. we into to have help initiated cash actions

So our $XX cash actions long are cost $XX range how cash, resulting recent our of current do million of a amount hospital rate runway the from to full-year for million we on projection get which reductions portfolio. our and level restructuring anticipated there? Our based run revenue assumptions, our to

business to generate first business between $XX $XX anticipate expected products and XXXX million. this positive for million quarter hospital cash Our XXXX flow to in we be revenues is and

when $XX which for could from million business actions include finished These to incorporated levels reduced business XXXX’s is the current be expenses significant and SG&A necessary Total from for financial of increased a it's launched XXXX This reduction from in expected expected rightsizes be due model. actions, strengthen cash products million operating in to our appropriately be are below our million. However company launched operational is XXXX XXXX’s R&D to our runway to anticipated possibility guidance. $XX $XXX as about levels into competition as but by This well revenues or price and simplify and approximately million. to health XXXX $XX focus. our market

Greg, on and XXXX respectively. in of These million result million back our I the XXXX of like Revenues were competition. net to would fourth highlights the and to selling prices in fourth call R&D as company's increased products was handing Before $XXX.X the quarter and $XX.X fourth declines compared quarter in the driven to fourth a $XX.X full-year. million by a million touch million market quarter XXXX. to $XX.X across $XXX.X were financial full-year for lower and hospital $X.X million all of the quarter year-ago compared the of

full-year, was full-year million to and the million of little to a related assets. of costs last to NOCTIVA of in $XX.X was These XXXX. divestiture the quarter XXXX. $XX.X This million XXXX year. launch XXXX increases partially the fourth million due $XXX company's of over sales primarily compared and trial XXXX SG&A was unchanged REST-ON quarter February the were primarily offset For compared million X in for associated million marketing R&D is XXXX savings pediatric due to cost the increase by $XX.X relatively million in SG&A of the with $XX.X $XX.X Phase of to $X.X expense clinical The fourth FTXXX. the increased spend from

XXXX SG&A expect announced significantly NOCTIVA. due and in of decline to the to exit We restructuring the

severance outlook primarily restructuring. and remaining write-off XXXX, impairment We of one-time been pre-tax of did cash the to related other of carrying value NOCTIVA for to for in that $XX $XX.X runway million flows charge recorded forecast. long-term concluded the its we NOCTIVA between carrying sales incur million intangible to the not during assets. expect the our one-time costs And factored support and in an quarter value. first of the half XXXX $XX fourth associated charges evaluated have costs into These and million We the the cash

Now additional with back that, the to few a for like comments, Greg I'd Greg? call to turn

Greg Divis

you, Thank Mike.

you update Next company. I for milestones the key want upcoming on to

relates UMD only AVXXX launched, positioned First be treatment, pleased X March on a the with today stated NDA be pipeline on risks should and products. our also competitive we our and based FDA to generate for for we which infrastructure The product believe NDA our our product additional XX. the AVXXX. the known this Should favorable risk landscape unnecessary leverage market to to introduces to we approved to current hospital positive to believe FDA we candidates fourth current cash guidance as flow. can I’m expertise unapproved one to well be will be that approval patients is that as obtain addressed might submit who AVXXX with our expect AVXXX expect and market announce it

Specialty Now for restructuring, related Pharmaceuticals, to our process sale NOCTIVA. recently solely court LLC’s approved related the the Avadel assets which are corporate to

Specialty Avadel and of outcome the know exit the to April. the expect team timeline subsequent process remaining for sales in We Pharmaceuticals

company to health stated, while and to Mike value. can the dramatic of the rapid rebuild As our begin taken financial and have actions entire drivers shareholder the on company that we simplifying strengthen focusing

moving third-party as stated to XXX plan are and we deep on our program. into diagnostic Now previously FTXXX, for our action

company and transparency upon X suite as our committed our progress as the development Phase for status to update our patients is appropriate building the readiness the focus we market option and to the market unique to and FTXXX, this including program will continue and expertise on for We the once-nightly external internal on continued With REST-ON of drive trial. physicians.

Glass. will up the turn over it Geoff? our I So Geoff before opening call for Chairman, Q&A, to

Geoff Glass

implemented. and just I to financial has investors committed a of very new transparency providing Management required and assure months want and health of been operational including transparency Board restructuring The level understands announced enrollments, REST-ON actions level since to were of of Furthermore, engaged our is made performance Greg. Thanks the urgent restore and into ago maintain. company. and is board the to the the then we've that changes few company expectations a a the

of Let's of in this. not the lose all element sight human

and many team to and of of played thanks by want Mike As in part actions this restructuring. in here, the each yet impacted support Greg express of professionally And have I their mentioned, and company to of them my decisions members them. led personal conducted Many of company. all themselves no the the are in them that functions our

narcolepsy. Lastly patients, our and suffering profit whatever a physicians we to from as remain to we've once-nightly company market importantly and clear doing those to loud and for you to committed we most heard bring our can and

Greg Divis

Operator? we And can the open line now questions. for you. Thank

Operator

[Operator Instructions] Ladenburg first Matt And Kaplan question Thalmann. comes your with from

Matt Kaplan

the Hi guys, the for morning. detail Thanks good on call.

giving little us you're understand a current bit more your of the guidance terms Just in that with respect to help products. hospital

had $XX the quarter of terms in in Vazculep the half think competition. the board gave that during and million the second that guidance or quarters franchise it you'll you're with fourth is do revenues products? only Where largest three XX the first Is for help and the for essentially across it you hit guiding for you about quarter. of $XX those understand year the million have You us -- in roughly that that see on potentially second

Greg Divis

Yes, thanks Thanks your Matt. morning. Good question. for

time. the two the have And continued impact with business. As centers that and to and also as predict category. really to into could Vazculep, last in difficult we QX impact are as approvals business changes look potentially into entering is really actually the market there the you have the had three the additional the QX, our we largest understand But point be into December year, of it out believe to-date. late make not of XXXX, mid we and we've those come will although launched within assumptions relative forecast been marketplace have this But I recently the of launch for to sure competitors know market at the they market in as the very some since exited to to products have understands impact go that at you largest new this to the market they will coupled hasn't it's new seen happening on as some three year, transparent coming Clearly, the products. have balance substantial it's you've yet largest impact of of these what want around the

Matt Kaplan

market Okay, then still that franchise, the give potential product a the on congrats XXX getting that there it of hospital and chat the safety marketplace. helpful. a Thank NDA know size in be that's today. that earlier Can some the was that product you. in could for in us sense this characteristics filed terms staying I point actually other unique you And some or from some differentiated give position view could that possibility? Is of

Greg Divis

is the it yes on FDA we development, identified again have should today, during as look there our Matt, will of based category today, on at shortages this that course volume and And believe think stated based in and that product of are it’s But million based who what addressed believe Again that market past we approved, as are that market it. potential at we has history product product about has treatment. really the thanks. safety current market patients a we that will benefit think we issue in we real And of the $XX significant we issues on whatnot. that recognizing safety million the provide for $XX it approximately and guidance. to The be been have need AVXXX look this some we the it the how about a guidance

Matt Kaplan

the understand us in XXXX? point of from from And in of Thank just the in savings NOCTIVA expenses SG&A a restructuring the that view of reduction terms the help going of in expecting you. question then exiting kind forward business you're an or terms the

Mike Kanan

Hey Thanks Matt, it's for the Mike question. Kanan.

stated, of will $XX XXXX, place of we to the we but all which that we've $XX As as have million end fully before said run are once expect place. restructuring in rate full in actions million our we savings

of year, between is implementation about about that’s million had million have sort million XXXX spend we $XXX XXXX the and we $XX of R&D in in of operating $XXX SG&A. in about So sort

operating We're XXXX were million which be $XX at to rate we is as we're that aggressively are we $XX expense taking fully the into rightsize hospital as as programs for do to number move we that. $XX our to million the our need to will further operating then million and into expect, preserve XXXX expect we So the declining to reductions you if $XX and the about for and XXXX $XX reduced fully the million those with cost XXXX and business plan $XX implemented, remove We as is actions stated from that and implemented. expense recognize would to be what before XXXX. million XXXX business is fully million even we looking we get liquidity to

the point and savings primary we've see directly in clinical at cash, those start cost the the to So even quarter cash quarter then preserve restructuring place plan in the we're some complete we which savings through here we is in we're preserving time harvesting cost see almost we first will we right first the quarter so us will that got that and in to think and savings, the for development this starting translate can cost focus to is the of FTXXX. first

Matt Kaplan

the more program. Okay, that’s guess focusing I for where yet. forward with Thanks a your completed for going are that question terms of update on your And understanding their thoughts very last XXX, helpful. will Thanks there. central us the opportunities be just give and then hasn't Mike. now broadly focus that third-party what that's But in sense the analysis

additional in really here could right some the of made you've of track? XX% getting progress What that be or patients terms parts moving the kind program of stated You've in on that the it the terms from goal. of expediting enrolling

Greg Divis

Yes, hi Matt, Greg.

trial that this ongoing because on we continue through company primarily lot work diagnostic gone when will we the basis. the really as progress or the we've and next more diagnostic again the done earnings on are quarterly is The and important have updating As on a as expect trial to of a again before against call, enter provide FTXXX. to and we insight some focusing transparency conclude regular we

orphan gone the or to a trial us say opportunity think aware uncover well. of be to is It expected. stage wanted that the trial FTXXX. major time, we that is look commercially the primary that of in we the have have I the product the to And than a opportunities this trial have the important it and major this that execution assuring really approvable taken diagnostic, to were of time. longer objective needed issues we been we've no there the has we in conduct point comprehensive, it's an at of if what has we that done at we with of any But same identified to make sure So took issues condition, viable and through as

focus provide but across as development more the improve and the really looking program. so within to And of we’ll insight trial recognize we is REST-ON go clinical go for we broadly opportunities forward entire that as both on the

Matt Kaplan

detail added going luck for Thanks the good forward. Great. and

Greg Divis

Thanks Matt.

Mike Kanan

Thanks Matt.

Operator

question next from Your comes with Brisebois Francois Laidlaw.

Francois Brisebois

Hi questions. for thanks guys,

lot Just a here, a touched on. couple was

so update number make a you was I which but patients XXX before this more XX%. update. update of call is chance well, new of is about you'll that? next patients, is to update enrolling I that the how sure clarity just an the an earnings the the about and May on and patients XXX, just mentioned purely it definitely mentioned those you of of heard just update Is So was an when sites, of are number get have in on sites, want location there to the number or

Greg Divis

that Hi at the Greg. call and Franc, next we'll update provide to provide then earnings is thanks Yes we update next quarterly. intend the again

And on think and germane we the in of to else update information certainly into And we anything interest on enrollment earnings or complete. be you in so we important to I we that our as share we expressed is next site course most go is will forward. that’s as trial share, views call, new to think will have update as number we expect that else will numbers, to the go that certainly that the that is we folks an whether certainly when number the update specifically. relevant anything

Francois Brisebois

$XX is out there for market, been have this one And AVXXX, great. might the NDA only the on today. million there now, touched Okay product

like Just taken product this hearing only Are we are approved. they Are enter hit any can off you other that it this should guys you the you is just haven't remind obviously the take there's just million seems of you that? there. expect think how that expecting and product of past of once $XX products other, us or to could when you one market there in to and guys most other

Greg Divis

event through AVXXX or but we're of XXXX we but really how others company today today think share forward. knowledge for sure will will only be patients in we're to safety be may We an market the moving we shareholders bring be well doing It's our have may not benefit terms about believe would which for what and the no expect should have in strength a currently in our what with distributed that I revenue who and be a We not will it that insider product the to the channel that product market improved us and and we same our in the us. ability and in improved. grab the product Yes, today. be it have We channels, bode think believe successful this to a don't will this category profile. the we're thinking will infrastructure

Francois Brisebois

Thank you. Got That's for it it. me.

Operator

time. I for call hand are at closing There no questions this will the back remarks. further now

Greg Divis

day Thank a great Thanks. rest thank great today. on for a the operator have call you you weekend. and joining and our of And everyone us

Operator

today's you participation, you concludes now for disconnect. conference. That may Thank your

Avadel Pharmaceuticals (AVDL) 15 Mar 192018 Q4 Earnings call transcript