NEOS - Earnings call transcript Q1 2018

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Operator

Thank you for holding. Good morning, and welcome to the Neos Therapeutics' First Quarter 2018 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

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

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

capabilities we pursuant During related of our Safe call, Reform of the statements our Adzenys development including research and this will forward-looking XR-ODT, to statements activities commercialization Litigation and and product provisions ER business make considered Act candidates. be timing our and Harbor including of concerning product the the Securities that of to may our and Private of are progress the XXXX, and technology XR-ODT, made Adzenys Cotempla oral suspension, the

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

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

Vipin Garg

morning, Thank everyone. you, Rich. Good

along commercial our to and we capabilities in our many was perspective Relations of manufacturing headquarters R&D manufacturing two our section Analyst say we March at Day of for product operations XR-ODT you KOLs our First and provide facility seeing we available the presentation and Investor on night where had where before, the who with our the technology, attended is our showcased like portfolio. website. dinner their The in great would that download

at emphasized a Analyst believe momentum. of be XXXX year strong will we As we our Day,

two launch third we three February, the into then believe ER healthcare of amphetamine unique to the portfolio ADHD programs an Adzenys patient needs. diverse provides product, with methylphenidate commercial us to through both With opportunity our product and offering in the treatment After professionals and our and of moving clinic partner tailor to specific treatment technology of the for treatment to drug product branded high-value years, R&D release advance AGI either we moved diverse nausea as market or modified additional drug as pipeline indication. vomiting, and back have identify to less than one focus the well on candidate for the for our our our in developing CNS delivery candidate our proprietary using the

a treatment standard-of-care unique had pharmacokinetic has to this current our to plans nervous applicability technology technology to micro-particles drug release a provide capability And that of because profiles. its create we a broad delivery potential generate complex release modified the Our believe, properties superior can to with for and unveiling look disorders. nausea treatment for the later to as the as forward well of We compared approach the of year. you and gastrointestinal vomiting, system central

our demonstrated have Adzenys to growth. XR-ODT, products, continued Turning lead both two Cotempla and XR-ODT commercial

XX,XXX now net numbers first established time These XXXX. their in we We first relationships million products. quarter are over sales innovative and in pleased a result professionals to report over product in reached proven our the that with $XX of for interest healthcare the are our of using

XX,XXX increase for ended for prescriptions increase number three March filled Adzenys an were to continued same Adzenys the months last XX.X% reported XXXX, For XR-ODT of the for over cumulative period XX,XXX, IQVIA as the year. XX, XR-ODT, the prescription by trends total of

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

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

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

total are we strong to seen of report pleased we that XX.X% have monthly six prescriptions the by March March of have prescription launch. The IQVIA in increased a the XR-ODT IQVIA Cotempla prescriptions months number as months first XR-ODT cumulative for XXXX XX,XXX. ended XX,XXX. growth XXXX as for the was by reported Total monthly filled Cotempla reported to for XX, For three

of non-stimulant week X% another the switches Approximately approximately XX% ended continues April XX, were an of and product April XX% and and product of as the switches prescriptions accounted of Quillivant by its cumulative Focalin for XX% prescriptions, were Approximately ADHD product as a of XX,XXX. switches such from filled uptake of Concerta, a for as Adderall total As the by as XXXX the these since as number be in such September reported Cotempla for IQVIA medication driver switching of was to important XXXX. and launch were methylphenidate XR-ODT all Cotempla XXXX XR-ODT IQVIA reported amphetamine from Vyvanse an of XX, Patients XR. XR product. from

our coverage progress for we managed Finally, are products. good making care on

improved access to with work for been with better access had many all the our ongoing plants blocks number of Cotempla ER. market of continue plans discussions with on in We an and removing XR-ODT XR-ODT and We successful have providing both on and new Adzenys to a gaining Adzenys national regional for products.

we say representatives now in we our I house Before want completed that sales Rich, call approximately that over announce bringing turn in XXX territories very to the pleased I transition have employees to the of have and force to Neos as are nationwide.

financials. efficiencies that directly work gain I to call we sales operating turn manufacturing, the team with Rich? the believe over having As our Neos our will review in-house to for company. Rich now continue to our will

Richard Eisenstadt

of A we versus the recognize reminder, XXXX. March million million March recognizing to We short-term for $XX.X to X, XX, wholesalers cash past equivalents period point the filled ended Vipin. you, Revenue time upon in revenue for XXXX were effective the XXXX compared company Customers ASU the in product three practice estimating XXXX-XX, now XXXX and adopted cash from Contracts return at Thank deliver and January Topic investments XXX. months or while with million. to $XX.X revenues product the rate XX, At $X.X product prescriptions. revenue Total an same combined amounted

new and for months $X.X $X.X March Generic Revenues ended in of XX, XXXX negligible standard quarter net of $X utilization for revenue cover were in of be ER totaled tend XX% net ADHD first including offers were quarter, Adzenys for cost under plan first increased XX, the the XR-ODT adjusted $XXX,XXX. fourth February sales as first million quarter Net the March patient XR-ODT sales XXXX net of three ended $X.X Normalized every totaled discounts were new which quarter the our XXXX reflecting resets. net discounts during second months savings standard to discounts and Gross XR-ODT. XR-ODT total Sales high XX% approximately to the Cotempla $X.X incentives deductable XXXX. gross million. a for Cotempla from for the three in growth prescription revenues in Tussionex XXXX quarter the of million revenue were XX% greater compared XX, for and to year $X.X Adzenys XX% XR-ODT for XXXX XR-ODT million. were in resulting million, to to Cotempla higher revenues Under XR-ODT. million the Adzenys For net and of and commenced Adzenys the for product

net pack under the in addition, discount estimate net to the the new XXXX. $XX In us gross for approximately our XXXX versus standard revenue future XR-ODT first per $XX requires revenue standard first quarter was returns. of recognition revenue of for product quarter to Adzenys the on Normalized new

$X.X ended cost. first of to XXXX months and compared gross in XXXX XXXX. $XX for General approval cost in period approaching XX, of $XXX,XXX R&D same XXXX. revenue $X.X combined when million the pre over the of quarter as the For March were for Gross million XXXX revenue $X.X products for the of expensed of ended sales included is quarter a a the March and was in in three same for in the inventory the three for under margin high of of Past first ended to XXXX and standard million first Cotempla XX, XX% research which per the manufactured product lower was expenses to of Gross quarter costs full gross XX, $X.X mix development. XXXX. flat were net profit period at for expenses goods months million FDA per and both administrative profit revenue also were three the March XXXX. months compared a result new seasonal quarters the XXXX both net net with the unit discounts to was pack reflective

increased the XX, Net the per on the September now whereas For Q&A share commercial one of the to quarter per period for sales of period a expenses for million ended only in in ER turn period million ended available of were branded of which on product XR-ODT to principally XXXX. XX, support in to XXXX of $X.XX XR Cotempla months the which was three $XX.X $XX call. was we’d and X, had selling portion XXXX in for lost to months the a or loss $XX.X XXXX. loss XXXX the XX, Operator? marketing we that, expense same three compared $X.XX the Adzenys the loss $XX.X The commenced February, million Adzenys million XXXX and With same March March compared same like first or XXXX. share

Operator

[Operator Instructions] from comes of Maris Our Fargo. Wells David first question

is line open. Your

Katie Kerfoot

quarter. on your improve what Kerfoot about gross commentary we would the had My you first had was quarter the previous margins gross David. that lower given the for bit Katie reported a XX% in question in fourth is your This margin than is expected over

this in how gross you can helpful. my in seasonality is some question that we forward think us there should give business and color thanks sharing that's that realized on that, And be then going such that understanding would So, the quarter was is price on if net just about next where helpful. for margins

share you the improvements in in you you how too plan for those realized what to where for net realized Cotempla longer-term and and If goal hope price? can to net Thanks. those and is get also price like your Adzenys near achieve

Vipin Garg

same Gross both revenue standard remains also cost. of function we QX is on down returns of where margin plans recent accounting new percentage. so gross revenue pressure flow, deductible net margin is account cost as obviously lower the in for but a and is begins of constant product the revenue with there high the the because the units When case and

to be was that expected. So

In fully COGS now cost inventory. the our addition, costing we’re of

as upper could had operations, cost our We gross gross that ADHD inventory off we and manufactured included by products net year in manufacturing to and margin improves mid-XXs of previously guided. mentioned still written XXs we back approach continue mix believe approval products the believe products. past as these quarters of gross I've mid throughout fourth we leverage pre-FDA the when to XX% have to margins are were R&D. climb to we the Regardless as As quarters a our

we Medicaid just we we’ll the towards it think same reported year On So higher to last Katie the is at as net and and erosion our net guidance gross In net pocket some we of realized in our and gross the new to ended throughout Cotempla. the mentioned the rebating. Under for end number deductibles, or prior so a anticipated XX% we'll recognized discount. normalized really revenues, discounts of we future the had Also the a well year. quarter, that the fourth new plan improvement at for revenue part gross year XXXX XX% of in out XX%. same first of also were the the quarter to returns and net for gross those We rollovers to net of standard, to new Cotempla in that as high for that discount Adzenys standard, which XX% for XX% and due XX% year quarter of XXXX Cotempla. supplemental gross some first Adzenys that as Adzenys took we to revenue the for discounts net we move

of demand anticipate we gross as net commercial become on we driving As prescriptions. to total down contract the continuing our a discount formularies transitioning with this drive payers, larger share and we prescriptions

the our rebate to discussing preferred We of number continuing secondary in rebate agreements script and QX, Adzenys evaluating Neos standard. status. our as in adjusted Entering revenue the a standard way $XX was as revenues Cotempla XXXX. effectively of which from payers $XX $XX payer under revenue script And are under versus the case $XX per national revenue versus about regional. normalized we’ve primary follow in QX a with in both of per new was talked agreements new shifts to

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

Katie Kerfoot

if And typical Cotempla was Adzenys of that TRx play. in Adzenys, from speak if were high get to treated be was something question some in, or helpful? the it decline is to that that of the Adzenys was deductibles And the specific would to switches can to revenue, seasonality due were more to percentage patients as Adzenys specific as can sequential you anything kind at I

Vipin Garg

first impact on we were Adzenys. and on to Tom this the maybe just had quarter you question, the can that of and about take able how traction on sort gain talk potentially Cotempla

Thomas McDonnell

thanks Katie question. morning good So, your for

coming if which the which have exactly for of different of switch more was the from this Cotempla switches prescribers. work methylphenidate the the to actually want. we with it we kind they the more brand quarter and for first on Adzenys talk first energy approach. the first Cotempla The first approach of from see. market and from what that refocused that towards portfolio have And maybe products As absolutely selling the when of excitement many went of has patient, things been and that we very the both majority methylphenidate technology want that we the fantastic, far response switches quarter, focus many are around was on In delivery one Cotempla and with switches as a the the exactly from the amphetamines being we and the and to not Cotempla how stick is for what to our good to does in of But data start for physicians are know you switches end we strategy really hyper quarter same to coming quarter then Adzenys to the on like product at look of Adzenys or full them don't they’ll Adzenys to is we Cotempla. our got majority do

excited So portfolio we're market. and that about having approach into really bringing that the

going for as adult Now moving months bit Adzenys more we prepare we’re to with back-to-school. into summer the little market refocus to the a

as is has high Adzenys far on significantly amount with see patients the that increased year. of are we what though general last plans in think I as since revenue deductible

a Cotempla high to have the will to will we but already that for patients continue progress deductible both reason, Adzenys so the year seeing is that decline. and percentage think I we’re of erode big as that

Operator

JMP Securities. question from Jason comes next Butler of Our

open. is line Your

Roy Buchanan

Jason. field talk you taking drug? persistence commentary positive last Cotempla, for wondering Roy the for have do feedback from call around could translating bit sense still that the experienced that's yet if some I for In highly are and Adzenys Thanks into seeing questions. was if a the particularly patient It’s about Cotempla. you had the a Thanks. for the for and you you

Vipin Garg

Tom?

Thomas McDonnell

any So our patients medication, in versus therapy. as as to don't how our with the far difference as see the will we far medications term or really stay use as persistence long we adherence marketplace

and been fantastic. wrapped qualitative we we've feedback packaging as to from commentary far hear that for water, patient receiving, fantastic convenience that taking without As vista just packages the both on individually the of so go been is experience of products the has the really to taste, the kind the the or

we’ve hours. actions, really as duration exactly throughout strong onset in a contemplate far what our profile, trials day XX it’s clinical As in of the which efficacy a upto and the is seen very

what is pleased been see and the patients product. is world, clinic it receiving. profile real feedback not but get with same continues that you to already the always thing the So are really efficacy is in get of the Adzenys with And you is the in what that we’ve tolerability the

excited we physicians base extremely we’re really same. of strategy And nice it physicians the again, to XXXX has have So Cotempla. over for have XX,XXX built over our prescribed Adzenys the physicians prescribe built with and that base remains us a

going really execute because focus in on starting this are We’re to medication. switching continue current those positioned the that methylphenidate. only are prescribers both strategy we we amphetamine portfolio of company or to and to and that patients have gain feel we And ADHD share

Roy Buchanan

Cotempla number beginning there to to just overall And then structure. reps March seasonal look the and an other Thanks. ADHD or from force Adzenys sales adjustments at the was a IQVIA to if changes? the there looks at were sales there I’m like any changes strips, of is curious the numbers at maybe flatness impact And

Thomas McDonnell

of representatives sales XXX of we place. have had sales we number bit sales vacancy So, We month the or - little nearly when have and did sticking over we did in had higher vacancy we to a a a we rate brought are the where force of approximately in we we’re representatives. our conversion. so with now We've all XXX though filled excited the not because very prior that force every about bring sales

important In share some an in professionals share of XX% fact healthcare of call strategy and those above have on to focusing have X% The for Adzenys fact growing that physicians. majority market our above and back X%. target Adzenys and we a

as see spring it starting certainly to growing then And we seasonality we're the through and looks of seasonality the head great, effect summer. we’re go. runway March yes, into to late but early have to the So effect lots definitely we

start specifically decline the sales earlier we've methylphenidate adult see market earlier and adult actually to on I Vipin will as market We in is as already than in adult. The the market. now business of the XX% I refocused pediatric the is and Adzenys said market force Adzenys think said larger

So we for great population. a think we adult XR-ODT proposition Adzenys in the value have

Operator

question next Louise Our from of Chen comes Fitzgerald. Cantor

line is Your open.

Jennifer Kim

have This thanks taking Louise, here. Kim two for is I my Jennifer on questions. for

the The first just is your one development broadly product. on pipeline of

you And second of a and going my going just has any wondering IP you wondering progress launch trials color made are about in filings just and Do the of into continuing then I timing what momentum? you give you’ll could and any been if So forward quarter on on be the having required, and those thinking is if I the also of second, that sort how more stronger like question Cotempla pursuing Cotempla you’re second types general. see assets. definitely was

Vipin Garg

there, the during the profile profile is so the around is long of course take the terms rather we’re that of going medications pipeline, during do not first advantage just PK PK are to the of forward ODT's delivery have strategy to coverage extended our sort profile of that are to looking them, pipeline PK the don't So take our many of fluctuate existing of technology enough what actually developing really or and the the release, sort PK course out on develop than and of all in day change either they have the the improve profile, of day.

the would our that be PK desirable throughout the can it of have course So think we sort We technology. of highly with consistent day. to do

sticking they’re doing (X) we’re XXX(b) So what pathway. the with still

that employing do as So we chemical would not but be will extensive the with strategy conducting additional entity. plan that as a trials development have to the we you are new

limits that the the molecules the we still relying market, of profile (X) So are on filings. molecules but PK within the existing are really the improving on XXX(b)

we Phase when see useful filing Adzenys Adzenys can on versus take Adzenys, think we bioequivalent as study was impact you powerful, we with own similar that the we go X you that data developed promote So of is very and Cotempla can our that - bio-equivalent having know within Cotempla study advantage versus the and based based very product. to on our

up and very forward once that So going to that prevents is vomiting instance, strategy with taking has that’s the which be our nausea and try that same a can we are strategy drug any a developing profile PK with to we nausea consistent problem. are breakthrough the day is medication major come for a

for to indicated of in the we longer wait have discuss On finalizing in I finalize number - that having we As A filed data reason programs. will able launch Cotempla then as the and to for little of that these that point have have of we finalize at that disclose a now and compelling still data, is to very indicated been Phase IP more powerful. I a very have provisional we question process just be no everything filings details those to fact before, Cotempla. great or X patterns but are

and and Cotempla we believe on potentially features Then duration. of have really long one in spectrum that In feedback what’s but have these the we best-in-class duration, we've we're products of don’t been other the There onset. that that in onset, missing based both slower product a end side quick market. XX-hour have fact the us. onset Concerta data the their the of brought are they but and in hours, XX really that’s enough helping is product the marketplace. Quick products getting really methylphenidate that last could on which the like for In have

with also frankly physicians So now have right Adzenys care helping the the XX,XXX market we plus with And technology, the company the with better XR-ODT, much they’ve manage XR-ODT. lift that to they relationships relationship, all already Adzenys we of able is us. outpaced, the of in would the know with know be to the so again to people Adzenys so managed is new one with plans that have know coverage existing block faster they Cotempla that’s seen than able market our approximately we is the know, because reasons, care technology results been would do

of and XR-ODT things have reach going So the of all Cotempla at far we those helped us It’s are think still the as need beginning in just concerned. the point continue. physicians we many quarter this that’s and as first features to to more

Operator

from of Gary And our comes question next Markets. BMO Capital Nachman

line open. is Your

Nicole Germino

This is questions. a Germino on Gary. couple of for just I quick Nicole had

product the about So for what for is XXXX? and the should vomiting market nausea to get how and this phasing for product, to timing we think R&D

Thomas McDonnell

we typically the years want end take in and four of program ready towards of the to that it’s So question address they clinical terms of when should to we this that timing, timeframe These Rich and to are so R&D talk about of except you spending. to that. year do in same three terms model how start in will we start programs the that

Richard Eisenstadt

still a doing work We are money. lot in-house. not we of A anticipating lot are is spending of

R&D overall evenly for I we year are spread given It's throughout roughly and the $X.XX still spend So be I think our million had fairly spend that for within anticipated planning around the probably guidance this had that. year. to this that year we will $XXX,XXX

Nicole Germino

sales quick how wraps think on, marketing And in getting just you have that should model follow-up back XQ about we sales brought XXXX, to we is the sales in-house. one representative just should marketing. How

Richard Eisenstadt

and previously and have to QX year. part probably continue our been saying. on out that tails of somewhere am later just what the million we largest of towards we the and guide quarter Well, had we so it this is off spend we so will I consistent always guided $XX of year

we to stay shouldn’t were. flat where it So

something guidance less is still slightly So million. the yearly than $XX overall

Operator

you in disconnect. And program in the all the today's day. gentleman, a This I have am at showing conclude you great no questions time. Ladies participating may thank and does this queue and conference. further for Everyone

Neos Therapeutics (NEOS) 9 May 182018 Q1 Earnings call transcript