NEOS - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the Neos Therapeutics Second Quarter 2020 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.

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

Richard Eisenstadt

is morning, McLaughlin, XXXX Good issued welcome our today's release, to financial www.neostx.com. website Thank joined CEO. I'm results everyone conference quarter on which press highlights financial and by we on call. second our results at Jerry you. call corporate and available our This our morning

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

on including pack, market products, our to our RxConnect, brand our ADHD for activities, and over to revenue to research progress our including operations, the Adzenys that Safe we'll now our technology suspension, NTXXXX, call the the future pandemic, statements make the provisions the share, of will exclusivity product made turn current of statements our expectations of support may business financial be on call, our regarding development condition, outlook are and the financial volumes program, strategy, of financial our of Act results considered this commercialization ER oral of COVID-XX benefit per Private XR-ODT, During the company's patient Neos' commercial Jerry. our respect for net pursuant and and feature concerning the to with to and Harbor prescriptions intended business the product and of business timing of of including Reform of our Securities and the forward-looking related products the Litigation script impact candidates, XR-ODT capabilities results expansion activities, and company's pipeline development business, position. for including revenues, and Adzenys I the Cotempla XXXX,

Jerry McLaughlin

reflecting their start recent everyone. like work, to on and for dedication to Neos adaptability team here good I Thank pause trying hard you, these times. today and the morning, thank the and during Rich at months would by

position continue maximize the all company opportunities for we growth. to to As potential

COVID-XX the May, us, are and crisis future. made now we of with the the looking the impact changes in we to largely organizational Following behind

growth facilitate our We with have while the the territories program, candidate years. franchise a We newly and on best-in-class contribution aligned expansion commercial continued support pipeline highest will of on business, us our the the our Neos the ADHD These to where believe financial advancing significant this our have coupled RxConnect, portfolio, with the maximizing to with ADHD organization create stakeholders. areas potential over our our for patient NTXXXX for of of growth. value is future most profitable focused coupled changes opportunities multiple provide coming realignment, continued that we

Let me start by providing an update portfolio. on our ADHD

field mid-March, comprehensive after customers enable us sales COVID-XX phase during pandemic. lockdown rapidly Soon virtual force to our communicate a in from with the pandemic detailing program the and the the removed effectively of hit our to we more deployed

considerable We representatives time techniques, sales interactions. also training our on spent selling virtual tailored to

in-person live employing in virtual with returned communicate mediums customers that XXX% compliantly field, calls selling not our to to been in-person by reopen are where we to with representatives their where actively customers they reengage offices, cases, began the had of customers most appropriate. protocols early As representatives and safely our And interactions as June, have feasible. to sales sales our and could develop ensure our

the change to season. by June, National web late We've for prepare both been in our in gratified a flexibility virtual back-to-school Meeting format our Additionally, of we fully completed team our Sales the will receptivity continue new us the to to the of our and COVID-XX environment Without the this engaging normal. and next several team over evolve a sales months. doubt, with customers in

adapt we in in in our positioned confident and a manner. place the future. to However, have And we customers value-added team meaningful to the systems we are well that are rapidly and engage

the to contribution success ADHD our can this growth growth from in X% blended pack quarter-over-quarter the competitors the leverage ADHD value of pack this in program attributed We patient adjacent commercial of compared opportunity the A presents XXXX, franchise. for this point continued quarter in ADHD lot that program. in to second products, RxConnect and financial an within our our transforming be Neos to net This quarter a therapeutic per platform XR-ODT. XR-ODT two reported improvement believe Adzenys continues we cash foundation and and net Cotempla categories. of revenue of to in driver a support key This core attractive our our be per reflects the differentiation revenue space success

we XXXX, our quarter of approaching pharmacies that the end number are of XXth, we as XXX XXXX, pharmacies pharmacies report to participating the approximately we to During June are the the continue of at pleased to in XXX compared expand quarter. first second and network of

store growth. which success quarter, chains, the Texas, in chains across force chains, continued opportunities regional smaller continue selectively areas Previously, the regional two sales seeing added our with and a these geographical Based in to grocery the additional During are aligned target we number for states. RxConnect. prescription with significant Neos HEB of added chains upon we regional Meijer that large are key in for we spans Midwestern with and we're inclusions footprint

Neos In the elimination that the commercially monthly predictable continue affordable ADHD will copays medications our simplifies ADHD for appropriate commitment this access business an and home medications unnecessary, an We impossible believe to involved and our We benefit patients. for to RxConnect the to appropriate effectively with place in hassles been process driver of from Through were or providers our play and ADHD acquiring Neos We customer's access and or of the medications that many allowing to the prescribing COVID-XX that leveraging insured for providing a throughout affordable RxConnect way, increasing entirety medications their many work, Neos major acquisition desire to medication most a the value prescribers will current program, all of forward patients' healthcare business, as contactless patients. they in to program, consumer all patients. Neos pharmacy. the a are of in consider interactions prescriptions growth RxConnect confident Neos increasingly to deter beyond and our of Further, environment, speaks implement both Under providing the to preferred for RxConnect role this eliminating era. as pandemic we means COVID-XX the able access the has of trips by ADHD means the for pandemic. during a a of of to delivery medications uncomfortable infrastructure become look patients.

significant, March. discussed second the market, in of ADHD the quarter impact COVID-XX we the which half on the related During earnings first rapid call, and was beginning

to break back of rebounding entering medications first prescriptions parents see and early XXXX. the as late really total you COVID-XX, that We're effect the before in the the when an increased market growth, for the decreased quarter encouraged a COVID market on of by XXXX academic look prepare and XXXX. higher the total and X% we quarter overall quarter April second for prescription summer year in XXXX. by prescriptions X.X% X.X% As XXXX, significant In in of numbers students market of month, of to usually fall. XXXX, into compared ADHD to by to second quarter first compared quarter and summer for there second impact We for total the down was June related than the were the market month month ADHD early new of believe the prescriptions as in May, of contracts June volume the heading summer prescriptions the after

school, coupled with June data ahead, to believe that we market seasonal the suggests a July for the normal return the to that students more Looking cycle. prescription return trends will weekly as

not any and of they forward or and many, will at performance semester. accountable for XXXX district School students the measures This academic measure for for be performance we the of achievement school throughout at or past into of regardless for all. to students, country time visit and grades plans prepared hybrid students As there model, for at fall educate and head graded return held carried stay leaders, this year, measures home colleges spring have most live, universities schools as grades to were the existing upcoming virtual accordingly.

environment, ADHD paramount affected of for a the focused return school effective With believe into more will be management again we students. symptoms and rigorous

While growth introduced in ADHD, of ADHD, prioritized highlighting The needs ADHD. development prescribers routines, the increased market to with in our And the X% have for anxiety, disruptions approximately this marketing platform for to given prescriptions, benefits obligations work now adults Adzenys our with pandemic among society drive has The of with with we with as adult many manage justifiably children with majority to initiated of to childcare must work ADHD potential XXXX. a their a for additional our ADHD challenges XXXX, we have COVID-XX analytics ADHD strategy, compared in continues pipeline. target those with our To turning patients adults high adult responsibilities. leveraging end, XR-ODT. who the particularly growth

excited as can for ALS and are by to additional chronic such treatment to disease, in retardation. conditions or sialorrhea excessive create mental candidate, significant a need Parkinson's neurological cerebral an our high common a complications address It Sialorrhea potential palsy, these psychosocial complicated burden development drooling. patients. of that the medically We problem NTXXXX and/or of for the unmet is physical can lead

NTXXXX treatment treatment to reserve that At only physicians multiple track report million which need severe fourth its regimen. the a suffer consist new treatments. available become for this profile care standard potential on improved SAD/MAD initiate the a to United single for study due Neos, the clinical has in by condition, encouraged and tolerability currently We a address dose to of X the approximately most opportunity X.X unmet as regimens and new XXXX, dosing of trial side a we're NTXXXX limiting Phase offers to this complex associated effects States While multi-part and cases of ascending patients ascending from will that they quarter annually that dosing treatment significant with option with with promise cohorts. in remain

to our our return we our on value options Neos in believe is confident model with dedicated our a is with our CNS contribution and We the our seek realigned years. that we and revenue stakeholders. applicable per the commercial model, organization, for franchise, coming scalable all to pack thank improvement our updating maximize ADHD remain to you Additionally, our closing, including the effectiveness to our of like net RxConnect advanced present This progress coupled would platform. of meaningful your with ADHD conditions. analytics and pipeline reach and well and overall look platform, can where in our leverage to making portfolio opportunities Rich? Neos' continued both advancing we We financial remain existing beyond expected growth we're development I interest simultaneously the In mission patients difference its continuing lives and over increasing Neos RxConnect ADHD commercial positioned Neos market, soon. and strategic business forward to to that, opportunities you today. for and create With time in well

Richard Eisenstadt

quarter was the compared three XXXX. was from Blended XXXX second months Total million the to for Jerry. revenue XXXX. XXXX. of compared product three you, $X.X product XXXX per ended period $XX.X June product product million in in revenue an believe Thank quarter was XXXX net to Tussionex the summer months was period the ADHD June revenue XXth, million, was months million resulting compared $X.X three ended pack net pandemic. June same $XX.X $XXX to revenue to the June of in compared three of for $XXX months of to for XXXX, attributable XXXX. same million as We effect XXth, XXth, the the XXth, revenue ended COVID-XX ended for second the net the the million for early $XX.X for decrease net seasonal $XX.X

the three approximately is months to $X.X This XXXX XXXX, our in XXXX. for second three was XXXX. first XXth, were XX% for million Selling reduction-in-force. the percentage half XXXX shutdown expenses R&D period and for compared XXth, million, to for for XXXX. costs the overhead compared months $X.XX to period June affected for G&A ended in XXth, furlough in XXXX. three were ended and for $X.X $XX.X million of compared of the for or the June $X.X same $X.X $XXX,XXX ended production XXth, resulting the to XXXX. million, compared $X.X million the compared expenses XXth, XXXX June $X same June quarter ended ended Gross June including million by $X.X from ended and with profit share, was months three associated was million same in million months the For of for XXth, $X.XX same months million, months $X.X the Loss expenses period June per marketing for $X.X the gross months April unabsorbed million from XXXX, to compared three per profit $X.X was million June ended the operations in to were $X.X three share three or in XXXX. XXXX, in million Net loss period XXth, May.

June As and cash XXXX, held million we XXth, $XX.X in cash equivalents. of

Our of cash a million. drawn outstanding burn net $XX XXth the short-term credit, a in line Deerfield approximately May, as payment second excluding principal not our fully principal for on which million and $X.X our of reduction was was quarter in June to

approximately of million call. to and the XXth, June line now turn $XX had credit. Operator? the XXXX, like Q&A we'd our Deerfield portion of With of to million As principal with under outstanding the short-term in that, company $X.X outstanding

Operator

take comes line The Louise from will you might Chen Instructions] first the [Operator Cantor. from questions now have. any We of question

is line Your open.

Louise Chen

taking for a question. thanks Hi, my I few here. had

And starts cash on in first of new runway. then you. that light the products fall, how have? class we I this second and to are about normally patient June? Does Thank be of balance our that will think So for projects is, do impact question that this had in we others relative just back-to-school levels is pre-COVID going the some your prescriptions? had you How return see to the students while all then for question is, cash I and season question you And for remote. you to last

Jerry McLaughlin

And I Yeah, about back-to-school, handle a I most, In if prepared two. abrupt talked going bit in it's Jerry. schooling I'll is right an We're and not much - spring to regard a comments, Louise, majority virtual, this. there what or was thank in see elementary, With the the all, for year, starts my mid-March you. think end it's not This or high for did the whether and clearly, hybrid now the academic of and live. school. little grades, first out seeing rest back I to there to as into classroom. school. going we is pass, setting, of It no fail there or we're the that a very be And children to for in what rigorous school school students nothing many it for go were in whether counted situation, confident right. that different fall, regimen is was the back fully middle most public is

we're And so returning. we're signs is to starting that the that market confident and early see

the the X%. example, - X% May was of robust and well you look see over versus year. July, even rebound for over March to as the first very the actually Growth So 'XX half was the in XXXX for continue of market period the that a of early that versus X% market. see was June declines January to see the increased when at June in a actually And rebound to same and was approaching XXXX of the X% higher XXXX After April market, still we of over XXXX. was signs head XXXX. in we in into up in we started June versus we February

rigorous started a the year low you're model, in that as academic this of the hybrid we summer an to at So what a far period at saw we new starts normal March. of or adapting was we see as And schooling in home a believe summer. due in new patient market. standard, combination a a of we're and And as the confident return into early to that very end to whether June, that COVID-XX market is enter the actually we'd typically

the terms is months we kicks forward season and of in. of and the coming starts, in back-to-school have was the in to patient bottom that but come June see information So really that as weeks we really the begin new more we'll market as on

Richard Eisenstadt

- model improvement significant given our reduce flow, believe positive reach we to as and cash become taken steps base anticipate clearer. not guidance We've I cash regarding as our margins. revenues in positive, flow Louise, when the but to to reduce we've and continues cash far to become flow cost

cost to and overall, cost and financing our capital of we're exploring debt timing our We and capital which continue situation. repayment review of situation the improve of our to opportunities includes the of that principal

the put place at this ago, year as most We are especially pandemic in have have point, since with COVID-XX line been we that where companies that's of a using Louise. so cash credit basically a we about

Louise Chen

Okay, thank you.

Operator

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

line Your is open.

Roy Buchanan

Jason, on Hi, our it's for Roy for taking questions. thanks

couple, a guess. I Just

the guess, you COVID I in far reduction anticipate as at there of continued the for as Thanks. blended, impact the of end? what to guys renewed been guys And be realignment. it any June? do I net there's year of kind level be guess revenue expect per level you You you And some the might guys seeing then and slowing that aren't through pack, from stable the observed to that end interactions year hint in-person or lockdowns. a at really calls then

Jerry McLaughlin

revenue Okay, to more the move question Rich handle he net I'll so can then - it last over on we'll back and per your and first, hand pack. detail I'll then on net provide

We are each in We're access not having day. increasingly greater on seeing lockdowns. additional and every impacts fact, any

we've rigorous plan we it's a with both for with have you customers and our safety a think protocols. having relationships comfort new interact. combination in employees good their the of been place very which And about in I our the and know they offices very,

comfort. greater giving that's think I So

the skills sales we've force. have heavily been selling virtual of in our actually addition, In very investing

increasingly and a where, we're to results. more - more getting they better effective, need having So have if we virtual call, a have it's situations actually

anything a we're may this And So, ready everything come down, point. with of not but our to offices physician any slowdown indication in for and at we're that access the seeing regard our to terms ADHD business. net a that's in focus improving of we're of proud revenue foundation the been of per pack, and ours as very you of something know, financial

forward, we the quarter. as see increases But focus X% Going second the for in and to quarter-over-quarter the to and over in comments. Rich a excited increase see XXXX. it I'll you expect The would know, were was to lifting was to additional increases. expect any heavy in that we see future we here But incremental modest done turn

Richard Eisenstadt

been really Yeah, is than, to per much pack net other out add, know, to are I high covered too Jerry, that have the always get people said, you should continue their has seasonal that people their year moderate. health that Jerry as the boost expect don't any that emerge of be by we as revenue a and as more plans, seasons, then boost would deductible somewhat we through

Roy Buchanan

you are guidance? Okay, then, I financial would - great. made guidance Rich, guess, on And reiterating, the you call XQ you

Richard Eisenstadt

true. expense I that I yes, believe gave and guidance still stands

Roy Buchanan

Okay, great. you. Thank

Operator

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

Neos Therapeutics (NEOS) 10 Aug 202020 Q2 Earnings call transcript