NEOS - Earnings call transcript Q4 2018

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Operator

Good morning. And welcome to the Neos Therapeutics' Fourth Quarter and Full Year 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, CFO turning of opening to call and Eisenstadt, Richard Neos introductory I the am over For Therapeutics. Please go ahead.

Richard Eisenstadt

Thank CEO. to www.neostx.com. joined by our is available XXXX everyone. I and corporate And am and financial our release, issued morning, McLaughlin, call. Jerry year which press we conference financial you. full call results Web results on morning, our on today’s highlights fourth our Good quarter This welcome site at

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

During are our XR-ODT statements statements ER oral of that intended including growth Reform this and Adzenys of related to and may be Litigation we will business, new Cotempla the XXXX, call, make to concerning provisions our the considered made Harbor Securities the our of business our benefits forward-looking patient our suspension, capabilities of Safe commercial commercialization exclusivity Private and of terms cost the regarding Act the of profitability financial with XR-ODT, pursuant Adzenys expectations of brand and for and commercial research refinance through product our our facility our our ADHD the debt of candidates, pipeline development activities, opportunities business development strategy, timing, products, our expansion product of including activities progress, the programs, technology position. our our and access product and

of of only date. that similar variety to Forward-looking not development as of any the associated may today not commercialization realize statements indicators from our that of upon or to expectations. are but views expect, These strategy new expectations, results performance product risks of as or indications results could not may and the be and candidates for our with limited as statements subject upcoming, differ may often not inherent any be anticipate, future views identified statements with to, our commercialization operations we including period. words benefits reflect of intended our we actual such subsequent uncertainties and and products cause of a preliminary we as of that materially representing reflected These risks and should early reflect actual

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

Jerry McLaughlin

you, Neos Thank can create to And in good it's foundation have stakeholders. Since and great for tremendous with drive whole how been to I’m amount today. Rich. a working joining see and proud and the morning accomplished say we I value laid be team the and have mid-XXXX, everyone with growth beyond. our look we you here at company strong to today, Sitting XXXX to for

discuss strategy our discussing operational ADHD before then force; from million completing sheet the our fact, long-term start four, I commercial will sales I the will restructuring Rich as the finally, turning ADHD and business our equity NTE today while to new in as now Teva the in IV brand ADHD until additional exclusivity net the XX.X we the highlights fourth our business well both and revenues. least call have Parkinson's concurrently products we such NTXXXX associated our excessive commercial including In raise, we a completing CNS several gained clarity alone; organization, strengthened or by we for fourth balance debt; with palsy, a we growth for cerebral disorders Cotempla our we volume financials. expected pipeline support over for X, July the second, first, XR-ODT as sialorrhea commonly prescription key our exclusivity settlement at for Paragraph drooling record quarter XXXX; net treatment of the third, disease; to to with on we by licensed growth and review for quarter, reported implemented realigned

commercial. to Turning

As unveiled strategy In initiated we ADHD drivers our identify accelerate a many process our November, comprehensive and and of growth in our believe and the we profitability for of late commercial know assessing with both Cotempla on market our XXXX, efficiencies per a quarter strategy to business. revenue for focus to will of net third to you new increasing share path that increasing XR-ODT. the Adzenys realize operational pack XR-ODT we

Heath position of we result, of strategy President Sales a as Vice Commercial structure, and and experience, creating Both wealth Officer record Pyszczymuka, leadership Greg the positions. Commercial leadership me. a are President As new the our They report now and Access. Chief Greg packed Darren of reporting Strategy and Darren with eliminated commercial positions joined two Vice specialty pharmaceutical against of flattened commercial track including to in directly companies. a Market success new and had executing several Neos across

for focused and XX ADHD also these force most Additionally, geographies made net a medications. toward approximately We and ADHD at healthcare operate our the targeting to we professionals changes realigned profitable with we efforts our on specialty professionals territories and and the highest patients in-house sales advance where sales potential help healthcare business. revenue sales could representatives growing

alignment, XR-ODT. to the both the Adzenys net sustainable long-term revenue our for XX% creating of an ADHD medications Neos, we new outstanding alignment, potential by of have the increased with At of to fortunate Cotempla in compared very on territories ADHD average fact, growth treatment opportunity are the and XR-ODT sales In territories business. previous for with

also challenges. to a today's broadly complex across difficult healthcare This enhancing pharmacies the the with environment began However, filled not enhance To and support get but be overwhelmingly feedback to first provide and and building predictable program RxConnect, ability and access XXXX. medications. of to introduction these patients times we to mitigate throughout Neos it we industry, is RxConnect year, to many this source at continually more their can frustration better for patient and more patient on expanding create who positive affordability Neos our to focus in access the prescriptions intend to in ever patient products due our improved help and prescribe medication. stocking our earlier consistent their and Neos and ADHD issues caregivers, professionals believe and in which is a and medications, access of puts our offering healthcare the by physicians Early great only patients

the are skills We in and and making contribution talented our these capabilities of tremendous strategies. embraced success. new have a our to confident against to and managers are execute sales sales commercial model force They regional

and feedback sales healthcare board recently from as to solicit our sales ways professionals. engage to are field advisory our working strategy convened And new learn and week to We the as team. our listen, closely and on tactics field last better brainstorm

some evaluate are new we're at to what early metrics strategy, XXXX seeing. Looking we by our really encouraged

we in While performance. are our based the indicators believe of is commercial sound optimistic strategy that it's early and on early year, we

downward Looking are at in put the expected that to that strategies volume total the the changes on despite masked growth, prescription we performance, of to many short-term has prescription recent and prescription organization made commercial pressure market. our performance

per net overall by same making through according the weeks excellent X.XX% the At ending ADHD are progress the fact encouraged for the prior increased time, with versus to four four In XXXX XX, consistent in we revenue February market. X.XX% IQVIA our are XXXX the product ADHD the improvement XXXX, ADHD and early for weeks, portfolio A deductible reset year declined prescription revenue the annual from franchise. insurance in month, December of January commercial the declined prescription plans. revenue January per Neos XXXX. XX% ADHD by Typically, net ago, December for commercial business high the from per net commercial driven to prescription previous

month, did of not net this comparison commercial metrics per year, at same results January made performance program to with only commercial patient some the late XXXX. December report and the these in XX% changes of performance increased prescription strategy, in of XXXX. Neos future, We number In of the the RxConnect including provide provide enhanced favorable new key these revenue to we we XXXX can the for prior implementation early not the be today believe versus strategy commercial the changes the quarterly to co-pays. We given to but revenue only actually For decrease deployment insight commercial XXXX full metrics. attributed beginning our plan associated XXXX

prescription the year remain encouraged data the look updates revenue commercial plan. quarterly We are prescriptions XXXX net we’re While on our providing unfolds. for and as the commercial of quite to early for execution focused forward and measures,

marketing confident Finally, we strategy will that accelerate and are path profitability. our expenses our commercial to sales allocation smarter coupled of with

sialorrhea, significant stigmatization mental not our a physical ALS, retardation. chapping, exhibit level patients with development neurological the chemical condition CNS conditions We adequately dependency dehydration, pipeline, October chronic and formerly patients addition a for can the hope as psychosocial Regarding for lead need NTXXXX, on NTXXXX, of growing managed foul address we the to where adult as disease referred or announced odor, pediatric unmet of including to options significant Parkinson's complications, treatment medical cerebral for drooling. salivation increased if infection, excessive Sialorrhea entity in and perioral new treatment and and palsy, of care. such to

can dosed orally NTXXXX technology glands, compound their improved to to delivery more new once twice and of this or provide the pharmacokinetics, that complex complicated as regimen. to caregivers regimen We and molecule daily ability offer and no which salivary dosing of could a option accessible the route the the and dosing formulation of burden optimize believe the preferential will administered easy additional of create titration be these All We for develop selectivity particle due already patients. to in an swallow tolerability receptors patients medically micro our to treatment for with plan required. that profile an

broader than enabling this helping better the opportunity disease development is will and actively to of so neurological in the product, pipeline. Briefly, disorders from system amended that more also Simultaneous XXXX, condition they X.X work are is stigma if comfortable of with financing, first associated overcome our central believe patients step IND and for strengthened an The disorder focused We this our November more underwritten with a to them and who symptoms in we new provide studies with large we term public first initiate option formulation address proceeds from offering suffer with to sheet millions burden. this live Management. worldwide, with Deerfield can there net more XXXX NTXXXX a in many the loan XX.X PK approved, expect of the exacerbate complete We balance believe our we in million. million associated nervous XXXX. lives. objective in overall that and development U.S. pilot the half isolation build a by raised

We XXXX. all Cotempla Finally, patent. exclusivity right and its Teva in exclusivity profitable secured XX, with to to with July our and significant has to to Actavis. XXXX, a with license in a We market for agreement previously and into XR-ODT. our agreement litigation the also we made XXXX, own patients' have a strategic resolve the believe expand Teva position pharmaceutical to and entered brand Adzenys difference we secured and XR-ODT, license beginning on develop, we following become clarity portfolio Teva X, September late on generic continue anticipated ongoing successful us a brand December lives. and for until settlement our involving specialty settlement with build In making changes business closing, company focus we commercial ADHD manufacture develop a necessary

Our and comes are the both products and company the today the Neos long-term. people within success to to of the we this committed competitive offer patients advantage from for who

success. we for our key important are continued identified have forward, components that Going

portfolio environment at sales employees; programs; for and ADHD We net our realigned and excellence access on; three, newly approach licensing streamlined advancing always an call with continue patient of to our here; financials. Rich thank you. to look business disciplined future to commercial our outstanding evaluating today operational creating maximizing will demonstrating the and by turn our focus our investment acquisition newly With work our review with infrastructure one, and that, to the and grow force And we additional and two, opportunities. the to enhanced revenue for finally, will I over NTXXXX

Richard Eisenstadt

$XX.X XXXX. for for ended were $XX XXXX, December product year million December XXXX were XXXX three $XX up the product $XX the versus months three from for Thank franchise September XX, ended the growth were XX, over ADHD $XX.X for revenues you, in for the December reported XXXX. million product the Total December ADHD three months represent ended revenues for XX, million the Total Total and ended million XX.X% revenue three ended $X.X XX, product XXXX, months XXXX. months million $XX.X million revenues which XX, for million Jerry. our

pack During the ended Cotempla XX, XXXX, months was revenue $XX. three $XX XR-ODT December XR-ODT net was for per and Adzenys

XXX, topic fourth fiscal ASC per XX, XXXX-XX, new the pack Adzenys revenue for customers high plan the year Cotempla negatively with With December our affect contracts revenue for for begin revenue $XX pack XR-ODT revenue net in standard $XX fiscal XXXX quarter. of from per rollovers deductibles adoption or year ended Net insurance averaged XR-ODT. from to the and

compared first begin earlier to the high Looking and Net revenues net our our becomes $X.X beyond, Tussionex December impact per data. $X.X period December was XX, year move Net $XX.X generic and period we increase revenues in we for to compared same XX, the XXXX revenue XXXX strategy product as XXXX. XXXX in evident Tussionex to the months were in the product pack generic the forward million December quarter to period annual $XXX,XXX deductible our expect the million to our the commercial compared million ended the million new for was year. the in beyond profit XXXX of Gross year XXXX. for for $XX.X fiscal ended ended for XXXX in for XX, same million to three $X.X

for XR-ODT, XXXX same associated expenses the For XR-ODT license for paid the XXXX, for XX, well in for quarter months ended as $X the XXXX. The profit XX, December ended primarily expenses compared December the million compared million NTXXXX. ended $X.X compared commitment million $X.X December Cotempla three fourth year the was $X.X December million of G&A the R&D the due $XX.X XX, million year million XX, period post-marketing the for XX, expenses to were for ended were XXXX. months XXXX. of XXXX. compared gross the Adzenys in clinical increase December trial for three were December and million studies profit XX, gross ended December to for to $X.X R&D million year $XX.X ended XXXX three ended to months expenses as fee to as year XXXX XX, with was $X.X

$X XX, expenses XXXX For XXXX. year the $XX.X the $X.X and were ended December fiscal million to And XXXX. for million compared compared for year same three months period million to the the decrease for for quarter December XXXX, Selling XX, in expenses G&A marketing ended of XXXX compared associated charges Selling to million $XX.X were commercial the $XX.X for ended with million months same million were a for expenses in the XX.X%. fourth included XX, $X.X three restructuring organization. the and of period $X in December marketing XXXX, approximately million

loss fiscal XXXX share XX, December the $X.XX or or period $X.XX million net in to per ended share the million loss compared XXXX. per year, $XX.X to three $X.XX million the $X.X $XX.X was share $X.XX $XX.X same XXXX compared per For or million per for for for or XXXX. was months share Net

and we approximately December November, equity At cash the three in repayment debt of was burn and XX, cash equivalents Excluding our net financing ended months and cash investments. for XX, XXXX $X principal million. short-term $XX.X XXXX, million December held

to XXXX. ahead Looking

mid increased post clinical expenses in to an teens commitments. increase XR-ODT R&D anticipation We low and our marketing Adzenys trial XR-ODT for to Cotempla expenses anticipating are in of

anticipated mid-teens. relatively the Our XXXX to to to of the Selling be call. With we marketing expense the that, Operator? the portion are decrease are fiscal G&A anticipated now Q&A for like in mid-XXs. would flat to and turn to expenses

Operator

[Operator Instructions]. you Thank

question Our from Cantor. comes Louise with first Chen

is now line Your open.

Louise Chen

the reach to first increase last do to they margin would terms relative to was, I in do then you I about had question you much before? does you And Where Thank cash question peak And have quarter? profit about in still was today? runway. like it that for had increase? you your how of that targets do had script, that terms that you of after what then target have think be you are it we And And revenues how to or the will also here hit get you talked a a going sequential you. think will per First XXXX, XXXX? with

Richard Eisenstadt

and you make it will revenue to the But net on order throughout expect year. I same increase the Louise, we the Thanks take numbers asked. it that

for it We fourth then would We disappointed watermark, that through increase through third quarter and high quarter expect year-over-year being third be we still take they quarter. tend they our dip and now to don’t believe if in We we’re that margin. profit products both by for script our point revenue as net not of in as lead the our give mid per far XXX products, time. guidance

cash the going revenues We as cash positive be haven’t sustain the of ourselves indicated company to off or get do guidance our given we to to But have now to expect sufficient we forward. in able be when the profitable. we and that flow believe is to

Operator

Thank you.

JMP Butler question with Our next from Securities. Jason comes

Your now open. line is

Jason Butler

changing changes, commercial that stability the this the driver several on as and the primary my both you’ve on to pipeline. or you've you the the then in technology Obviously, you’re anything out the progress with proprietary about anything point about delivery leverage second of to how necessary changes thinking contract is as are at continuing early you And Thanks. even seen being can stands making the and obviously, talk gains? net platform price first But The then strategy? that capabilities? made XXXX. And question key manufacturing is Rx

Jerry McLaughlin

morning, Jerry. this good those will handle questions. is Jason, I

leadership has several sales stability, in the management and we pressure. the it's On team really expect well team, front-line new time would and field the force point where we sales helped our in the work embracing as as commercial us changes commercial with model through Rx the think this downward

customers changes. to as plausible days, that And we and place. Neos some access that having the we about the overwhelmingly that RxConnect It's embrace good excited that had early think program in our expect team program. very grows, really really how on And we’re favorable. more positive the feedback we've in be also So they from the patient been

think the seeing. two of we’re some been stability those drivers we of So

stated, previously here we but transformation some going we’re downward pressure significant on great. growth, As period with it's through

see the We’re in this excited very stability to early of weeks the year.

I really part two, your out have can focusing force the where of pick now really our and was but what of and net is second are one. and to number that’s revenue. success. it's if on our And volume combination So physician drivers sales positive I volume here a just not we think realignment And I That the key targets patients of growth growth. profitable generate think

yet. a made, footprint force about one. our potential So combination a able to were so territory revenue Rx to the that net medication provides the patients in will and we in increasing pharmacy key classic will program the connect drive it I back of XX% was each number with point easier access better a facilitate and will We case. The patients I'll physicians sales offering the and really almost by the and refer reduce that’s co-pays on program that XX%, going we And our confidence And are much by shelves then driver and for believe what that think be be forward. growth for future. that best-in-class

change. analyze and so, run as part we well. measuring, we're of keep but we on our further we a working forward also But will advised a And on nothing yet we metrics anything the to we the and have quantitative that we the you with not of about list do the both as will finance will in those move need but necessary this, we seen as we adjustments eye very it we keep make change, the organization sales think to-date close yet. have we qualitative. business way both I And and will

question pipeline. on Turning to your the

salivary we about for great see sialorrhea. a taking NTXXXX, of We’re phenomenal it that’s very because Jason, to as example excited glands treat molecule selective preferentially a

itself dosing three an where has can a But So technology, benefit. microparticle kinetics, delivery the most day. been enhance times has we in dosed our of drugs patients issue for regimen, reduce which then applying the and are

So our great for that’s a leveraging first we start, think, technology.

we companies matter microparticle the where area having continue disorders. We And ways look and Further, afield many eventually As concentrations into inside, it's looking of and we’re field CNS the with calls particularly technology. in like with pediatrics will that provide difficulty lot and believe to believe sales in we the competitive partner. also that model can model from stage at team pharmacokinetics those will leverage believe ADHD And advantage go averse. us. itself CNS are forward, And could look And from building development we we well. where we development we the model partnerships, leverage. look force evolve receiving are inbound genetics with for who commercial to commercial for provides are We we for advantage. plasma matter, a about believe that we looking internal our we’re we as our competitive a a to and so we're not the the just can commercial just

just So scope our we well. portfolio the existing are as looking beyond of

Operator

Our with Company. comes and Bill from next Maughan question Cowen

Your line now is open.

Bill Maughan

a say locally arrived that through per revenue mouth I XXXX, is And So you Thanks. be the any then module you where the the territory is was and generally part in hoping, Could you going the way dissolution of Or key is net that portfolio? how when XX%. a swallowed goes that's something up down actual in bloodstream? at the to break that that potential acting is on number?

Jerry McLaughlin

for Bill, thanks this, will take your question. I

then territories, So assigned managed overall net realigned when physician down examined built We potential, sales we we market. looking profitability future and ADHD measured to coverage future a at for then measured a when care the our -- potential the the coverage. revenue level. the the net organization, And of revenue we force volume, we combination

we were to that’s ADHD. territories, the where how us potential It very So we compete. and a up This prescriptions smaller a XX market, each that. million to and built we healthcare then able preferentially do is to valued And the professional select with our large how selecting first. opportunity as gave those company, highest individual for

target. we've so of And the able been really to each push value up

who previously. of targeting the current prescribed We've to sales reduce our in the a in is XX% of our physicians haven’t verses yet been physicians significantly. increase percentage there force example, of products For looking productivity

to skewed the really higher potential much we've physician So targeting a level.

that, going payer, really profitable better key so we’re about where not, prescriptions that targeted forward. return. into that is well. And that much where primary more often so beyond than can we more a analysis this of potential It's And net revenue goes generate excited not actually as part we're we have where the

As delivery, far as this patient absorbed And deliver; having not benefit question the for the it has your a of oral-disintegrating liquid population glands. on NTXXXX, and the giving the within true there The systemic one, much -- we is it think a for advantage. is or But receptors, form, technology muscarinic mount. work more for but that of enhanced and a pharmacokinetic locally friendly salivary an is systemically. form the route big for absorption in preferential through benefit will tablet The or is; receptors that's value acting then, be in it’s potential product will the selectivity product. true properties

Operator

Gary Our BMO next from Nachman question Capital comes with Instructions] [Operator Markets.

Your now line is open.

Unidentified Analyst

for on Gary. It's A] [Ruf

to more hit changes if profitable profitability? As that have going as patient result that? to a program you what to expecting then any And you've Rx. might made any of improve shifted assistance after volume the Are you

Jerry McLaughlin

order investors growth, that slight means the little end we a or remains business lot is massaged be the that is calls down doesn’t of made to a yet first shift we’re bit that And meetings at to in year previous we growth. profitable on changes what believe in our the prescription seen. downward What flat more that to So in we previously we’re put and to mean growth. some quarter, pressure short-term of

the early the We’re changes what That our all stable. share encouraged market data been win the by and in given is these we've that early has we're to with market that made. days, moving

and simple As to perspective. is is co-pay have there patient an Rx programs more of other in part a from had our channels, approach created confusing, simplified the Aid, assistant really what for doing, and XXXX patients. And makes CVS, talk believe Rite we program much programs our difficult and We quite are your analytics analyzing of for are pharmacies, very question XX traditional or is we second of I be lot that half and and could Basically two forward second very the the physicians on us one retail we've with network. connect Walgreens best program. the

coverage, commercially that Walgreens patients or $XX simple you're a uncovered, have if is it's very if $XX. insured For co-pay you is CVS a

that network, prescription first we is insured able In coverage patient Connect to after. $XX our for patients. prescription actually for co-pay Rx and then at every The co-pay have Neos were uncovered zero-dollar commercially offer and

we simple of is so predictable the free and and believe believe be been know we one. is sudden that month across it's and it's one you’re also paying patients. you for There paying for highly of all we best-in-class our its And a quite believe you're And that co-pay could growth our business. as offers, terms spectrum in the from physicians the has then no what for consistent and is clear, months for driver a ADHD well market the long-term couple early positive, feedback $XX,

Operator

you. Thank Wells from next And with Fargo. Jacob comes our Hughes question

line Your now is open.

Jacob Hughes

agreement. guess if I just question could Deerfield the us remind it. the terms a had just of on you I

$XX sales will think I your exceed be payment deferred. million, a

could expectation you that your is growth? year will there get So confirm you this or just that

Richard Eisenstadt

Jacob, your recollection is correct.

So under that. million have $XX.X currently we outstanding

$XXX in year due million to due $XX in $X.X and So revenue then have next XXXX payment we XXXX, hit million million we in be that in a could deferred be deferred that's revenue if $XX we then million can till May. And XXXX. further if then May payment hit that’s

Jacob Hughes

that expectation your you Is will hit that or? here this

Richard Eisenstadt

we lot of thought it that on give revenue We a our that don’t went number. give but guidance into

Operator

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

Neos Therapeutics (NEOS) 14 Mar 192018 Q4 Earnings call transcript