NEOS - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for holding. Good morning, and welcome to the Neos Therapeutics’ Fourth Quarter and Full Year 2017 Financial Results Conference Call. Today’s call is being recorded. At this time, all participants are in a listen-only-mode. There will be a question-and-answer session to follow.

remarks, of the Neos opening Richard over and CFO Eisenstadt, Therapeutics. introductory I’m call turning to For Please go ahead.

Richard Eisenstadt

Chief results Tom morning, Thank joined I you. and on and President financial our quarter our to corporate by our call. McDonnell, Good morning, which CEO; Commercial at and everyone, Vipin full and highlights press Web Officer. year Garg, is financial site issued am our we welcome our release, fourth conference and results This available XXXX Today, www.neostx.com.

Before read statements. we the following I’d like begin, to regarding forward-looking

concerning our organization this that are Cotempla XR-ODT, will During and guidance. Safe Private XXXX, commercial we make Adzenys the call, and to XR-ODT, accounting statements Reform pursuant be statements Harbor oral our and commercialization related forward-looking of Litigation suspension, to of of our the of Securities business Adzenys considered provisions adoption ER the may Act made including

our differ with as or expectations. expect, be we subsequent uncertainties reflected words not of could often as may reflect statements today These and date. indications results to a statements similar views as and are our expectations. views should representing as variety identified risks Forward-looking of upon of that such only upcoming of anticipate, we actual cause These materially be from statements to any subject future

recent our For to will a most over discussion and SEC results, XX-K please actual factors affect turn to of other refer contained Vipin. now could and call filings. material our Form risks our that the those in important I other

Vipin Garg

have launched beyond. in and and ADHD everyone. In our its and just potential Thank six are product you, alone, with medications last morning, new Rich. we portfolio months two XXXX very pleased Good

unique and professionals of portfolio promoting to XR-ODT given the well us as to and opportunity products our develop, the both treatments product product and patients’ our are healthcare to successfully. ADHD technology differentiated to the to a are strength for We partner these has believe our team’s needs. competitive tailor diverse as organization methylphenidate products the only of with commercialize and ability our treatment speak We believe and platform manufacture amphetamine

years recent treatment tablet deficit XR-ODT, or X old first release amphetamine the attention and once require refrigeration that suspension extended the hyperactivity reconstitution not ER, include the to ADHD Adderall Adzenys disintegrating for release methylphenidate and XR. to at a product two orally of a extended in Our disorder day does and oral launches is pharmacy or product level XX bioequivalent Cotempla patients only

it for data very are just of to prescription launched we was trends for XXth, are gate. the on out strong we because the ER, have While report don’t XR-ODT February Adzenys Cotempla pleased yet that prescription very

entire with growth our Cotempla using Adzenys These their prescriptions of We awareness market. which are over first established numbers result and XX,XXX our and are X.XX% a our our ADHD interest their professionals, now the also nearly X,XXX, of technology weekly reported now of in products. continued healthcare innovative XR-ODT XR-ODT. product, total market XR-ODT of of equivalent relationships combined an represent aggregate The commercial of Adzenys XR-ODT share

of to Let recap a turn me our XR-ODT. Adzenys now Cotempla products; and commercial XR-ODT two

launched launched remind in October XR-ODT XXXX Cotempla me May Adzenys in you Let and XR-ODT XXXX.

for cumulative increase by increase the XX,XXX, of prescription XXXX. XR-ODT, total trends Adzenys XX,XXX continue months over reported Adzenys were ended months the September XX.X% For XX, The of an XXXX. to XR-ODT number as three XX, IQVIA for for December filled ended three prescriptions

and reported to for accounted medications. other switching of of to number IQVIA, XXXX, XR-ODT as product prescriptions by Vyvanse since switches approximately recognize February ADHD Daytrana. from XXX,XXX. XX% prescriptions, as As were approximately launch such were May of an XXXX. Concerta, are of of XR-ODT and switches XX% Adderall IQVIA, Adzenys total the the benefit such product as March a of Adzenys filled cumulative in these from and week XX, Quillivant its XX% amphetamine of Adzenys ended by XR-ODT as continue XXXX, their switches as Patient Adzenys from all were methylphenidate X, and actively reported Approximately for the new XR-ODT patients Doctors the

new Adzenys of While believe becoming product. the a positive majority this new ADHD to experience their physicians were is XR-ODT with medication, another increase of starts. also more XR-ODT prescribing switches prescriptions Adzenys are increase We in slight due seeing patients from to because the we comfortable therapy

for for Adzenys ended week of new patients all of patients, XXXX, XX% XR-ODT were prescriptions Adzenys and a XX, were pediatric XX% February appeal in indicating reported patient XR-ODT adult as of all As types. by IQVIA, broad

that turn need lasts throughout Let the We believe unfilled and onset a marketplace, now methylphenidate meets with action in Cotempla a which the a to Cotempla need fast an XR-ODT. product XR-ODT duration of for the us day.

the We ended to of first few the prescriptions total The are XX,XXX. months prescription XX, XXXX, of in for that XR-ODT. a December Cotempla of the for have number reported equivalent pleased unit monthly was months report three IQVIA, launch filled growth as cumulative XR-ODT rapid we Cotempla seen by

equivalent prescriptions had to February continued monthly grow of unit month increased XXXX, as by and the reported for IQVIA. addition, to In XX,XXX

as and products in specialty sales and such as an Approximately Adderall. employees. Cotempla of switching update cumulative switches force XX,XXX. the as Quillivant as methylphenidate amphetamine an ended launch Focalin product Neos important our XX% was another of the are by reported XR-ODT Patients as prescriptions week As approximately its With of October reported accounted of that from unit all March IQVIA, three we to we bringing and these as since XXXX. Cotempla Vyvanse medication our in-house by the bag were pleased XX% ADHD equivalent of a XX, the in for prescriptions, were and such from of for from X, XR are force, February XR-ODT sales total XXXX, announce driver were IQVIA, switches XXXX, filled XX% of product Concerta, product

operating force team sales our As with for efficiencies work cost our the having we’ll directly in-house gain manufacturing, we company. and believe

We I Rich the nationwide. will approximately complete XXXX Neos and to over will review Rich? turn expect to to this representatives have financials. our by XXX now to territories transition April continue in call

Richard Eisenstadt

December ended Thanks, three amounted equivalents and the for period Vipin. XXXX. At XX, product million the combined Total in December months and short-term revenue $X.X investments for $XX.X to XXXX, million XXXX XX, cash cash to million. was compared $X.X same

to For the the full XXXX. compared year million revenue product for year was million ended December XXXX, total XX, $XX fiscal $X.X

for period script Cotempla XX, million for one the compared period XXXX. XXXX ago. for million to XX and XX% XX, quarter three of net million Cotempla months product XR-ODT XXXX million $X.X million as same For the compared the XX, Tussionex in December sales resulted revenue comparison. ADHD as for million revenue including XX, for XXXX a XR-ODT. months XXXX. was $X.X ended loss the in totaled discounts And for loss of was Revenue were XXXX. to $X December million in XR-ODT December and three months ended gross same $XXX,XXX revenue the same fiscal the $XX.X per approximately for Normalized the XX, a profit of $X.X in Generic $XXX,XXX. December XR-ODT fiscal to product net the $X.X the $X.X XR-ODT. XR-ODT compared million for XXXX. fourth the XXXX XX, $X.X $XX period for were Total Adzenys for expenses ended December Adzenys million in Net of was with same Generic for million R&D XXXX, ended of with gross ended XXXX a quarter declined for ended the of year million were gross million ended the for net was XXXX. XX% the quarter, net $X.X compared of in Cotempla XX, Adzenys gross Net XR-ODT $XXX,XXX This profit $X.X for sales from approximately or in revenue months period Gross months the the Tussionex Adzenys million $XX three year Adzenys during XX% $X December for $XXX for of the for three decrease $X.X $X.X fourth million December of for XR-ODT to the revenue compared and XXXX year XXXX, period same

For expenses due XXXX. product filing million compared year for R&D administrative in $X The $X application XXXX. associated And was million of expenses in with fourth the compared period ended million $XX.X December coupled period approval FDA drug million candidates General XX, new fee same expenses testing, our for the of XXXX. December expenses the primarily XXXX ADHD to the in were of were XX, decrease a period ER compared quarter XXXX, a general for and ended for for administrative decline and with XXXX. December months the the the same $XX.X XX to to and the supply in with million XXXX, to same were the $XX.X the non-recurring million due ended three of $X for months materials Adzenys XX,

XXXX, months expenses the marketing to million and XXXX. the in same three For XX, ended selling compared $XX.X $X.X December for were period million

selling was of a with XXXX processing December and higher corresponding level $X.XX ended period increased marketing prescriptions. three expenses expense for million transaction for a months costs in XXXX. higher million principally million $XX.X XX, of $XX.X to compared XX, loss Net authorizations the the to fees fourth a compared the were or $XX.X loss XXXX million prior year, higher of due and in and share offers share marketing of XXXX. quantity same quarter year $XX.X ended For for was for savings in loss December the the full or per $X.XX a The medical to increased per

company net for the or XX XXXX. net XX, per months or $X.XX year per of ended XX, the to share the loss loss share December million For compared $X.XX December a ended a $XX.X XXXX, $XX.X reported of million

and the Contracts fiscal product XXXX, adopted of quarter versus the ship ASU determining wholesalers the an effective amount recognize entity This revenue transferred recognition. Revenue prescriptions. a product now on company to current guidance to under the in we from a U.S. the revenue GAAP recognizing customer. of time to guidance of new the at practice will with we with filled transaction or guidance Finally, upon first based revenue principles-based past value requires or in estimating The Customers replaces point services Topic XXX. revenue goods for rate industry-specific recognize return revenue while approach practice, XXXX-XX, of In the

this reducing per like turn to Operator? call. of we’d now while impact standard the the the revenue that, expect will of script. We Q&A portion With to accelerate new recognized revenue

Operator

you. Thank Instructions]. [Operator

from Maris David comes first line of from The question the Fargo. Wells

now Your open. line is

David Maris

progress. the congratulations of good couple morning A on and Good questions.

going you other to the if and other The you’re on as now, that the not hope is how first do about from how the your balance but to that? The or build do, platform ideas couple Is it there that look that for do of is, creative talk but us review do – we’re – off it you the technology you parties Maybe maybe think learn some of what issue? own a why a really also to well, resource a to more pipeline day, to dollar Obviously cover topics desire two and a go that? you day. a is during upcoming versus what at could issue? going things years you cover tell or loss balance you you time? is to up there R&D after, we interest next further a how if into and you. with probably taking do just a that can a go Thank three balance Is you don’t giant at can the afford

Vipin Garg

morning. you, Thank Good David.

Let the me having day just having week. first that address are that we here Dallas we in the Day Analyst next R&D are or

what’s is the really on on at goal Our facility. everybody going to update

we in-house As you as facility have our own know, R&D well own capabilities. our manufacturing as

of them. we’ll So showcase some

We couple their XR-ODT. you. Cotempla experiences have of as will of a They Adzenys with share physicians some well as both who write

our Friday products, we’ll walk products. morning KOLs platform. ADHD team on that night we will our the the sort will technology have So R&D Thursday And about through have then talk approved on you two of

the we we programs. still how to in going about applying but to as to in to we’ll and what be are working capabilities future the and able We’re are of a specifically good thinking projects on, idea technology not be disclose you our are it what a give position actually

So that’s having regards many the out and ways to, upfront. different next platform of Day sort we things of everybody good to and of technology the really we the how Analyst would that week we I are summary to you next balancing of join money balancing or take is encourage week. on figuring a work that us can directions The lot a as act. know our don’t cost it’s most always news With

we work initial comes into the that – clinical trials. when the man So in we when expense real you are doing do you as go preparing start

perspective, next timing terms quite a expense things be fairly year programs, are from work the at the least the the of So seeing would for limited what we laboratories. nicely lining done be would internal over because that our so in is are or that in up

cash As from development, of point positive clinical cash the the sale and to at those we be activities expect move that from able the will fund our of that flow generating be into products. to be we some we

continue point interest look programs. nicely entities new existing some with chemical To might internal the where we how for particular them. really fits at that’s leading programs, technology our – some technology The So in chemical programs, the are create value. of on to our new technology of significant we your top external balancing about those entity

continue that partnership. or them. we’ll look certainly figure want If then may look we’ll a at like out at look to that, So we that how to to something acquire fund and to do we

So all of those options are open.

to and evaluate the future out our application continue platform. or of sort best figure of We what’s application technology them

David Maris

Great. Thank much. you very

Operator

you. Thank

Fitzgerald. Chen question from next Our line comes from of the Louise Cantor

Your line is now open.

Louise Chen

taking for my Thanks questions. Hi.

with able if respect for of more respect is XXXX? should in OpEx you. and could R&D on first next high for think key pipeline, be how give company? more will your the versus then Secondly saw what specifics you my you the your your what’s with question then we sales products question Thank So that? XXXX in think last to to drugs is, do And about switch is, to here we elaborate driving rate when you what

Vipin Garg

Louise. Thanks,

– just turn me over seeing from you it much to Let your question just to asked Tom? the second I’ll to why turn first Tom the about to Tom over are so talk products. it question about, other address and first we then me switching let switching,

Thomas McDonnell

thanks the Good question. sure. Yes, and morning for

a in that, speaking the So off in itself rate high switch. lot start marketplace. just There on of category to generally a of see churn ADHD is the you

being the such extended tablet for offering both a technology However, getting Adzenys and what’s that and I we specific portability. also unique the speaks to on convenience, is and patient first-ever and patient the release disintegrating symptom that control, Cotempla, think our a to satisfaction products unique product of have coming feedback orally the doctors been to patient the that we’ve both

think both a interesting is, seen whole throughout that So switch of about and the host most methylphenidate. I from and think market, is what the the I thing amphetamine they’re coming products we’ve

also So does what I two think rate that switch a of is high you’re differentiated of but a seeing combination highly products. market a have

Vipin Garg

internally. too progress around need continue is R&D them with. of program new able make or discuss to haven’t talk to main With much the regards we we really we about are question IP regarding your The to one we secure second been to the programs, each working that reason

And sometimes vivo to of protection most good times bit – in actually a or do some get patent including in quite to filings, work. of order you the work actually good have IP

but point, this that we’ll my and talk year are making to the the So a those But on where progress. half we good in of by are progress of second this good that’s about guess those making unfortunately we At pipeline. some programs. things time position are take is we be

Richard Eisenstadt

XXXX. can in around sales give we’re XXXX. on for guidance, same not to still expectations to position on some we that. have spend you we’re operation not regard that to guidance do in and operations And in a looking given guidance we basically I Louise, amount the spent

So And R&D. R&D we million million in million – $XX and probably spend to It to we’ll spend XXXX and over flat, and spend the think so approaching on think mid-teens. sales that sales was fairly slightly roughly million, so than $XX $XX less million in in stays same. I $XX marketing we we’ll million continue then be marketing. could the somewhere $XX G&A $XX that’s but not

in Our and make gross QX there. about XX% we’ll percent continue was margin progress to

know, we a we you have third we as cost manufacture to overcome have in-house, opposed since just directly that buying As from a fixed to product party.

So margins we’re as continues making on gross our utilization improvement capacity to increase.

expect continuing we So margin on gross percentage. improvements

Louise Chen

for the than saying year that to clear better XXXX? So XX% be full will you’re be margin the gross

Richard Eisenstadt

it think be that’s I would XX% XXXX, than better in correct.

Louise Chen

Thank you. Okay.

Operator

you. Thank

of Butler comes question Jason the next Our JMP from Securities. line from

line Your now open. is

Jason Butler

the questions. have for I taking two. Hi. Thanks

question, about switching the the the and and [indiscernible] early compares from any could about Cotempla from Adzenys if space? and support other co-pay talk Thanks. you how products that compared you with prior retention with that experience how think to experience your perspective just on patient question, primarily the persistence changes Adzenys can second And then following the to First could or help? you there talk are that with in

Vipin Garg

do Tom, please? questions Jason. take to Thanks, these you want

Thomas McDonnell

Sure. questions. the Good for Thanks morning, Jason.

we’re have on started the and yet. any get that for in you follow we early that data firstly to the seeing, to So them that and a really It’s Cotempla don’t just the patients persistence throughout have of follow cohort have too really data year. launch

ADHD on is not that work For we’ve Adzenys, class. products it persistence patients. And other what we than different the have is of really the significantly done some those seen in

seeing than we’re any significantly other stay patients longer ADHD So Adzenys therapy. not with

It’s and which really is the add should that to a we’re in clinical to then actions, the seeing been we what saw little absolutely more strong we’ve exactly we promise has the with trials The the with expected fantastic. that works a what experience onset as really physicians early with morning we far As has been early hours. and bit experience And very been XX throughout seeing to to the I carries day very Cotempla, living that up in question. with fast been that of just Cotempla the patients, in pleased have Cotempla.

being access far Cotempla early you, to launching as able to patients in stages. As every is and just of the remind philosophy our

to for launch place to make plans patients difficult very that have Our market in is to main Many goal blocks access have medication. brands. access to have and it make to sure new patients the new

have to that is patients philosophy our have to the to our access to that’s that said, that positive offer able I doctor. programs Cotempla provide been lead access our able exactly then get way make and savings and sure to be that As back the patients to and clinical experience to

that we’re have So same Adzenys. we used using model with the

I and our comfortable and very, we’ve physicians works way very more much access that are of to They of the pleased think medication. the model now. with launch Cotempla patients with the ability the understand been

Jason Butler

Great. taking questions. Thanks the for

Thomas McDonnell

Thank you.

Operator

Thank you. Instructions]. [Operator

of line the from comes Gary question Markets. BMO Nachman from next Our Capital

Your line is open. now

Nicole Germino

Good gross Gary we for the to and questions. for where morning. on for course Cotempla give net Adzenys ER over the Nachman. the and both you This expect of trend a is Nicole sense us Thanks taking of should Germino Can year? this

Vipin Garg

Rich?

Richard Eisenstadt

sure. Yes, Nicole. Good morning,

I year Cotempla is guided. XXXX. was quarter in XX% was previously for net in Adzenys for which it the of remarks, had which the prepared roughly where As end the we And the it was where gross XX% to is reported at fourth

the know, see gross as first we in to you early and the quarter. continued to expect net So second quarter improvement,

we estimate of return policy, they will Sometimes we’re pocket deductibles recognize due supplemental to Medicaid Also of drive discount. a of contract our continuing share anticipate as on payors we down total future we formularies new But out discounts and to become larger transitioning continue progress we of backwards the also that step recognition to rebating the and drive net on with prescriptions. improvement returns prescriptions do our revenue commercial gross to an to as due making. a as take –

And there payors have believe to opens into from rebate currently announced who example, our agreement of Scripts are just per in entering A a ability which other Express XR-ODT discussing follow similar $XXX additional to agreements $XX. into Scripts from follow We And leads. we entered to the revenue previously in revenue payor Adzenys year. $XXX $XXX preferred with shifts get And an in Neos these as less evaluate we status. Cotempla a in earlier to our with XXXX that. QX is script effectively XR-ODT situations with to of are which was than number QX coverage the payors. Express primary we way rebate versus rebate the case door agreements secondary and to

our and $XXX for in XR-ODT we that year end fourth expect think could by the the range XR-ODT Cotempla approaching to XXXX per of we’ll $XXX quarter. Adzenys be increase to script We $XXX revenue for in

Nicole Germino

a will follow do this from? Thanks. think take up. ER to And major share be just quick where year Is expected a Adzenys contributor it and you

Vipin Garg

who Adzenys an physicians designed ER even want to really provide as very ODT. suspension. is oral additional not an one It’s for you option the may patients to take know young to

us really So we and gives voice. don’t [ph], it huge but up going think a product to gives of us our share portfolio this be it’s rounds more story

our that the Adzenys Adzenys can in and ODT in say really overall ways helps them your that the by and technology, XR-ODT patients patients right just you basically way oral exactly because XR-ODT. what perhaps the to go would portfolio that doctor same the and Adzenys very start are one I are helps out in now on dosages the figure of format your Adzenys ER, then than in you each it’s look, suspension, the Adzenys are ER it’s tell more for can same young we So particles the many can XR-ODT Adzenys transition and ER

of So these that and an as them for XR-ODT and very then capture transition XR-ODT. right may we really the plan then Adzenys patients, beginning suspension oral at some prefer it to very patients to a young setup Adzenys use capture

itself the we’ll so ER by therefore that’s two really contributor how So XR-ODT as Adzenys be big not position a it, may products. as

Nicole Germino

you. Thank great. Okay,

Operator

Garg I questions would this closing back to to the remarks. time, Vipin Thank over like call over you. for showing I’m further turn the phone. At no And

Vipin Garg

forward Thank many year. progress forward Thank our look to today. look you at & later our this on the you We month. us here you very we joining updated upcoming much. keeping you Investor Analyst everyone our at throughout of And for facility continued to Day seeing

Operator

and for gentlemen, may your participation in and a today’s Ladies day. now This have you great program Everyone, thank disconnect. conference. you the concludes

Neos Therapeutics (NEOS) 15 Mar 182017 Q4 Earnings call transcript