REPH - Earnings call transcript Q2 2018

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

Operator

Good morning, and welcome to Recro Pharma Second Quarter 2018 Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded at the company's request. I would now like to turn the call over to Natalie Wildenradt, Investor Relations.

You may begin.

Natalie Wildenradt

you Recro's us results. second thank call today's and discuss to quarter morning, for on joining conference Good XXXX financial is Financial I Henwood, and Chief Natalie today This Gerri by Financial am Officer. President and Officer; joined Chief Ryan Lake, and Wildenradt,

questions. today release for press detailing the and results this prepared our the recropharma.com. remarks we three open issued on the page available Investors website for June is The Gerri financial release by Following morning XX, months Ryan, we and will & call Earlier press XXXX. our ended a operating News of at

clinical of any for preclinical Drug Litigation the timeframe resolution our such results U.S. with our Complete we make Administration resolve Act candidates, identified including and to ability trials raise in and December the section Form factors year and be and and XXXX, annual ended by on not Any for subject believe, Condition development of and estimate, expect, I'll with such today to comments, remind call meaning. of the our our file words on Results Financial materially day XX, to the performance and Recro XXXX, as statements differ capital and categories. timing risks as we forward-looking Securities cause risk These the statements remarks actual Analysis to the involve on pursuant acceptable forward-looking of various we available other words of related this our fiscal obligation undertake meloxicam this product and plan, may Securities Reform call is SEC's no Before on other financial certain to on constitute of by in website. provision New Food begin make XX-K of the Discussion associated this and us; guarantees issued and forward-looking safe the XXXX, only to and terms provided for statements can future risks Operations uncertainties. statements to similar you plans and otherwise. we including ability the studies statements Management's our and Commission for formal the of Drug of harbor in IV Response Exchange forward-looking and that of Private is on Pharma's which Letter outlook; Application will, upcoming, product should, Any anticipate, of intend such are new future, update the uncertainties information are any we described X, on to future conference August such product These risks results provide call, are events may report expectations or information, that from forecasts, the may, our account

financial the unaudited and may financial may company. forma positions any as to performance noncash may pro XX, measures purport operating the information that addition, differ ended six or In Actual financial project with XXXX. also discuss does financial provided not or June of respect months our results We to materially. our for results be preliminary

this be addition release CDMO be considered and financial supplemental financial in call. measures in information to, organization measures to help amortization the gives the greater the and financial These for, and used our understanding investors as non-GAAP business. our business interest, evaluating transparency development may by depreciation of a these it business. before or for subject that our on we or EBITDA discussed in as believe in contract earnings not Specifically, taxes, but results earnings should CDMO We manufacturing to included one reported discuss our CDMO management noncash GAAP performance

measures financial page GAAP to & We schedule, made our recropharma.com. have on has of been which a at Investors supplemental of available included website News reconciliation EBITDA in the a

no has would IV will include the not this FDA. investigational not determined. like meloxicam meloxicam regulatory any and IV the marketing turn efficacy to approved to of has The IV call, safety been meloxicam Gerri and over by IV for on There be addition, agency. guarantee references Henwood. of is In that by I will investigational now to call Gerri? we the of approved product. use been Use meloxicam

Geraldine Henwood

Thank you, Natalie, joining you thank morning. for us and all this

steps IV meeting, in inhibitor with know, of in COX-X of and Administration, for the A been July, focused Letter the pain. In Response you what Type in we written the working FDA. covered of address our this our plan on the management CRL, Complete many the on and could CRL. the forward FDA moderate-to-severe we we meeting this non-opioid this FDA of intravenous to everyone a for update participated Since meloxicam, meeting topics is from Drug to with receive U.S. the the meloxicam, in received next concerns to Application provide for a outcome interested once end-of-review New be to path for understand know May, the discuss Food from receipt team an outlined and As the the CRL. the preferential we We Drug the has minutes

for determine meeting hear CRL, we While is their and we better that NDA be the a continued and to surprised position on the Based accrued steps. disappointed minutes, from package, this we'll and to what in FDA we were approval. next adequate submitted by believe we

and IV Before we the Lake, expansion of In highlights. a touch like issuance of call Ryan recent few property patents announced patents meloxicam's We remain expiry new committed IV these clinical XXXX. Book IV this June, expanding by as a to in a listable the were portfolio, further in portfolio. to property Office. Chief issuance the with new arising these data The of we innovations U.S. In is significant intellectual Global financials, patents Open. the I'd briefly and to meloxicam will anticipate May, Plastic journal of peer valuable Reconstructive online of be Patent Surgery patent the Financial forward one protecting three our development product-by-process meloxicam positive that our intellectual robust Officer, on the the for III and the turning review to of Orange review out Phase abdominoplasty look the of published a patent

age II impairment. eight IV And as pain During of the our highlighted use renal the XXrd impressive Pain the last, also highlights. major Medicine. data patient American quarter, III well and Anesthesia orthopedic we The now from annual posters Phase Society trials CDMO several presented important and of abdominoplasty, as settings, of not performance clinical across Ryan call of least, populations, discuss financial meeting I'll posters but certain including bunionectomy, opioid the moderate-to-severe the in procedures over meloxicam advanced to Phase our continued to turn Ryan? Gainesville like of patients with division. Regional

Ryan Lake

issued key morning, our some Thank, we a release Since quarter second financial XX-Q outlining Gerri. I'll press morning, just Form of everyone. earlier review this Good full highlights. the in results, our

June XX, XXXX, we had and of $XX As cash of cash equivalents million.

increased XXXX sales contract to one $XX quarter by increased recognition XXXX. legal to were increase due commercial was of in to impact and offset of three increase increase generating and $X.X a was an with of primarily the $XX.X $XX.X recognized The were the ended administrative second IV of costs of The primarily XXXX, our product cost of The year of well second decrease the fees trials product benefits Research increase development the The in prior compared to included second quarter clinical costs for continued precommercialization were million regarding in clinical increase period. expense, related a and million due as of sales Our were Phase XXXX and standard, the increased costs profit an quarter, second for respectively. million the from the to quarter in revenue for increase III due $X.X June second million increase General $X.X our primarily associated other as modest expenses $XX.X new million to partners in to and and issued NDA manufacturing meloxicam. compared extremely partially compared million increase in with meloxicam, commercial Cost one Phase $XX.X $X.X IV the our expenses primarily well costs pipeline CRL during for perform million for XXXX XXXX. to due quarter quarter manufacturing to XX, partners. of consulting incurred the IIIb for the trial increases for by from products. and These and for the the million for an revenues was salaries the sharing XXXX. second commercial $X.X million in at in increase months accounting increased addressing $XX.X division an million and FDA sales. and development development million revenue and was

small We recognition contracts revenue patterns taking timing and million order in standard are consideration our we and reaffirming the revenue, new generate belief will experience approximately customer and XXXX anticipated CDMO $XX believe despite year of figure, estimations. in million, approximately upside customer's may couple the our with but be that will CDMO a to is $XX we with possibly There amount product million a as market of impact our unfavorable the as from into end existing that guidance, revenue. of well

we our are our encouraged briefly call positioned are to CDMO other We development to well Gerri, XXXX. to business some Gerri? candidates. believe back continue now care of activities the in acute build and product I'll by turn the to business discuss

Geraldine Henwood

Ryan. Thanks,

data drivers the agent the pipeline, care to We the the program While model, forward of In XXXX of neuromuscular both our neuromuscular product on IV the reversal the rapid-acting the these but to Acute acute enhance and only in value also of surgical data limited division to antagonize April, a molecule agents the recovery at rapid for the believe Annual ability look preclinical ultrashort-acting agent call Operator? lead Association program, anesthetic in solely for These one preclinical recovery. presented were showcased open the represent I'd of neuromuscular Anesthesiologists not potential agents and significant Care meloxicam to blocking our in and activity Meeting. University effective the updates future. isn't induce novel blockade to reversal is this with induction preclinical within like our more this candidate. and providing now We questions. demonstrated primate setting.

Operator

[Operator Instructions].

David of Piper first line comes Jaffray. question the Our Amsellem from of

David Amsellem

until providing but you're meloxicam So I you pose to update a meeting minutes, hypothetical. know get the a on wanted detailed not I

view that you're about product. you So an confident that talked you approvable your have

there CRL, potentially Do two number looking FDA is one. then, some agency So to companies - active comparators, language means we've seen just at that you is in resolution? secondary at perhaps, dispute the and seen to have the where Pacira's in And And expectations? language with a around of we at I Exparel. starting what's the number studies because analyses other it to back process this that agency language going of by taking saw up migrate that past, it not any was is and mind, guess what likelihood color with panel for on something step with towards vague the that? around That's came the looking we've the the active comparators look up being

So get the that. by think I'm mean what to of you might understanding trying just an agency

Geraldine Henwood

Yes.

occurred that you as minutes. have meeting be to careful there are it is particular this So with has to thoughts - in David, them the post appear sometimes one might because division, can that imagine,

but that topic Phase comparators that And trials active has So the that the FDA. those trials. would you bit included, were that with I'll although that is last program raised little been were we conversation there since remarks, would comparator in I a raised point active not my were be circumspect by surprised about be our a in II say within

forward give future. the was the clarification not expect we're We with or vague, would some position to hoping at September, confirmation detail in believe the terribly more that should but in minutes, some be that a the the CRL position by we path in detail. distant that, than describe we'll could that be provide sooner a more of we So to of middle worst, hopefully, we the in

David Amsellem

follow-up ask guess, And Okay. that a again, question just something it potential sneak And of CRL. I'll is that a if the in path dispute resolution come post a I scenario may did on I it as I up mean, is because forward? just

Geraldine Henwood

for filed the time statutory at part believe have meloxicam with around So as risk-benefit call we said a CRL, efficacy well-described the good demonstration we fulfilling package safety the profile. because the adequate we we an we had of that for that that and that of requirements the NDA for IV was profile and

there that dispute could And package remain believe comes resolution, while certainly approval. would straightforward, that we support we So the that and consider. that from be we might relying do more that adequate path part meant what consider we're a it that minutes, on if to be something we is that would this to is needed hopeful

Operator

Our next comes from Trbovich the Ken question of of Janney. line

Kenneth Trbovich

get study. wanted of, an Gerri, update the, Phase to try sort IIIb I just on

on IIIb sort be we you of, studies how to, Can about would the for the that it appear sense might half of those? things depending ways, year. ways, data complicates other the as So here additional you forward. give I and timing in the path in a provide know the Phase those us it have back might, of should thinking outcome a that in benefit, some

Geraldine Henwood

received the of the regulatory use ahead we also of, that the decision because anyway, would tools completed. for quickly, that that Sure. At a to do not very put likely used the in the get studies to bag. that to would have we further do CRL, not we some we some progress the time, - and help steps that did quarter first that at have have escalate taken in reasons made studies both escalation been the kind and input those financial little would've the past the in would time have, but They position go to been more didn't but we bit we've of a

would to a they're they would the as them bit they had at steps. to lower we done certainly where So than little of than that little bit expense would complete we escalation have right from hit. more we monthly that target would've a stand first been that but expect delayed running longer than running rate of quarter maybe 'XX have hoped those - But now, quarter a probably in a we

Kenneth Trbovich

Okay.

agency part So be we but on of, was potentially been of would they the the hand with one part hasn't to the sort of a filed as asset data obviously, that the set don't concerned have to, as want and separate to the NDA that, see submitted NDA?

Geraldine Henwood

with they surgery during be close not at And a studies, those the in some surgical dosing to and position patients set. No. provide We the would a - time. of think, I that such one data to are there very are - onset differences or

have a little those the regulatory there's of we're the and as that difference the no, that between no decision at agency. required us So But, versus studies we in getting don't studies time design caught harm efficacy we'll hand the by the FDA. them a from believe in

Kenneth Trbovich

the example spend a have give but you we you sort to one think on guidance we how should changed of with plan, can bit. an then And that all us the and be CDMO things Okay. I SG&A, sorts how was general thinking thinking the a know their spending regard are provided perhaps and perhaps of, business, that should the plan of in then about folks R&D sense what on we about, outside be has I from to some is of non-CDMO spend have looking rate. How challenges related? just the as discussed those

Geraldine Henwood

paths opportunity taken will at about minutes cut discretion. position on where In imagine think, we to we end detail we of and that a that steps had so the to confirm because general, do kind our are that that after better we've help us beliefs where the to of own there meeting. have the were now, be we'll I Yes, to can you seen give more in open as multiple

we and as go had instance, ahead did hire sales for conveyed been contingently have the qualified. we that not force So

individuals was So of not not those that not time. sense we period would've been make those expense because did responsible sales incurred, regional indeterminate to they who directors for individuals but had hired, an were hired it for retain

of have that decrease number we that other by of people new plans each a staff a departments as reduce had have as to would happened commercial slowed departments. well And approval. in the add did gotten we some So in individuals modest our

So the some prudent look in specifics in to a less give we'll worst like to some more financially back, qualitatively ourselves but runway, would numbers hopefully, you feedback more like. at on be trying giving the general, hopefully, the until but month what we by than and I'd you that we're come defer middle September, of know give quantitatively and

Kenneth Trbovich

question. just Okay. last And then

this it's opportunities earlier, we've regard detail sense potentially? potential them, volume sort last big there's business of, I'm at guys, more to if Is curious even or seen we eluded the to the versus of to metric in if think about new XX as just, back opportunity guess, look with progressing can looks to kind tableting of submissions any the or I as just, in all any sort will CDMO half specifically, but that until You "Hey, a be to of, there three year." to how business

Geraldine Henwood

we to happy some we're team underway half Yes, are that so you isn't And area, which early There in has volume this projects the second and than that hope in year. that tableting, over both some I it pilot think see added tableting just XXXX, members to the And the become around first as would we that time. something to increased could although, know, grow half dramatically. more are too. our in of senior proposal of

as help is this within that's - both us who projects high-potency that solving capabilities early where formulation expanded a development imagine, and where minutes are the and them and for younger We XX could companies, is, the of and to in demand plant well some through also we work. on at stage proposals handle many the have the won facility commercial problems, and analytical to available some like. formulation products, initiating shortly more scenario allow that as seeing stage for able as up development lot need And that you problems especially, we're more can companies projects have will

Operator

line Henry next of of Scott Our is from question the Capital. Roth

Scott Henry

regards remind target XX minutes? just do occurrences? prior a or an those written Is it days approximation is it timeline First, the me, to XX they you you to getting on get minutes. or based Could have

Geraldine Henwood

perhaps days. sometimes be because This guidance a a weeks doesn't is there longer of minutes always meeting that, So cetera, says the hit than such that couple - workload, they'll run a of XX division et that should that. their

somewhere it's range. So in that

Scott Henry

And had I other Great. Okay. then question the the on business. CDMO

your could what really, over we have million is be to You're expect from the to But continue to upside, XXXX the trying question reflective the the second the of the that clearly - is, Because upside half, I'm mean, or it. what with year? second guidance a on should noise trend, year? in numbers you some wondering couple growth a just XXXX? my more trail do half. current And even sense of get to long-term full on I I'm expect is, half first XXXX

Geraldine Henwood

growth it's overall the ordering do going ins year year part pattern of talked that be. XXXX clients I to Yes. in growth where to full a most is have over as of cause continue gauge is to reliable in and expect there that higher the We the some another, are we the think we've year to than one but outs want think, XXXX. before, individual about And

will growth will added of has that 'XX we over see revenue and that overall, impact the total at is. this. recognition amount some the factor looking add to that indicated. we're see change This some 'XX, want think report plus Ryan, the to we even do you XXXX. additional growth had in out $XX number we we we will year So do as million anything Ryan what that, But on modest considering

Ryan Lake

great No. business, a I business. a mean, strong it's it's

a continue where millions mentioned, reaffirm kind couple might as quarter pattern bit that We to Gerri be fourth of of with And the $XX million lighter. generally, upside. little a follows a of

Scott Henry

as any changes maybe there about are factor kind should within CDMO components losing XX any should we thinking - Okay. should the that in? that that be patent months? And exclusivity of any Such over just we next products levers or business the of to then, XX

Geraldine Henwood

to you space of take that analytical even I those look fit we XX deal why easy associated ability XX because could we high cost, dedicated a be wins products. months, would formulation issues the with those at things and with modest high-potency wasn't on products to and plant understand plant in at that up one because hope not further an more is think, the the will to a to containment main engender with set So new very

there the really been products that know, you So couldn't of be a be may have oncology had a category. or lot do able position we'll would solve before, and to But number in fall in problems that companies - we're before are - as for now a space we help there that into to that.

to And our so I new are demand to looking customers part response kinds and these think, activities, business very offerings. of that in forward increasing of for are we the active seeing

are see. those positives that we So

negatives of - that And the the off, remaining to Sandoz as and supplies seen of end the that, have is going we'll are our on with as good continue to and we Focal, for we've you terms Novartis the for franchise In staying and believe well as that's with XXXX, Novartis patent division demand continue. but we Novartis strong. goes providing relationships believe at

Operator

Our comes Leland Gershell next from question Oppenheimer. of

Leland Gershell

have we I the discussions, path on the I any you label perhaps that are see meeting that's to studies. had wanted If thoughts I perhaps negotiation thoughts a what that up with - narrower had further your in that approved, thing. to await expand is as come IV that and under ask meloxicam wanted and think, to a further get consideration, earlier that minutes, get then if to possibility label ask with we

Geraldine Henwood

Sure.

that the case sufficient and reflected that its and or clarity, the the certainly such things. this minutes, there description may extent to So hope will of with we - would to again, the better we that a can of in at concern label believe and activities. is product We lack a amount to data open descriptions is FDA's filed because of the in would the information we arrive good the that areas provide filing, be be there as of we that and be, that hope XXX(b)(X) label of satisfy

So we'd might there thank remains hope you is again, that to any guess, further And, the minutes. that step be those not studies that be first to But all but for in getting I seen. that firm for the question.

Leland Gershell

with if to discussions for your potency in frequency of increased. FDA consideration something one dosing the perhaps what satisfy side? here Okay. provides is of nice of, or improvement product which efficacy the again, follow-up, in every the an area terms of the once terms And obviously, then under dosing, is sort Is that With may something along NDA. convenience same also were there of on where a could able but lines the be being the XX-hour be that - part advantage, looking

Geraldine Henwood

the to only life real understanding describe loath because like me confirmation the beyond role I'm allow now But and the our in and is us we're able without for So were an that, of bring that. the did minutes could where have back, agent about of of we hope to clinical been get lack the certainly And this. utility the that into into until to to, We interpretation talk that had agent I usage way intended that. minutes guess we say, experts was of got we've - company guessing will more just something detail who the having play. like best a that is, to an FDA clinical that at there that of this going we right believe meeting, see

Operator

[Operator Instructions].

Our comes from Capital. next question of Berenberg Trucchio Patrick

Patrick Trucchio

of adjustment. follow-up tell scenario, this response might occur? that CRL? how some to soon on In the the How reviewed? particularly Just respond can on the might the scenarios, might soon how you various to be soon application you And us label

Geraldine Henwood

million could we be and taking say number we take great Patrick, that certainly in $XX back, questions. are minutes are will forms. different the I to a and have prepared questions, the action of These that quick once

is but give So to be the of with the whether about are that right and is that's some hope an doing appeal. discussion response before time, that now, formal can't be or - there we that when or It there of questions we'll you a could there the CRL I what resubmit mid-September. period

I to depend what the of on lot things think minutes a demonstrate us.

see thought then look on can think, position and the what in we've on the for to what's in we based seen this path there, them our we'll best So it you does investors their it forward, and how corroborate I of to basis to is minutes. be a that better describe the we determine as based what version

give I can't Sorry, more. you

Patrick Trucchio

I'm sorry?

Geraldine Henwood

give can't that but I more too sorry I'm you just information, there's many options.

Patrick Trucchio

Yes. No, understood.

held ahead to in expectations just then seems guidance. be So business of you revenue relation your to the the This that business. CDMO performing

can is be is approximately wondering And this in to EBITDA I'm that in the expect happening the business million suggests you half? in you what the business what's XXXX? And second these business it still specifically. driving results from won't So or continue that upside secondly, confirm what $XX about the then,

Geraldine Henwood

Ryan?

Ryan Lake

sure, Yes, Patrick.

first standard of we the from of saw favorability we the through that as months some due recognize on the and we So revenue six way just to saw second year, recognition the some new the the half then year of shipments adoption timing the revenue.

upside the some earlier, half reaffirm guidance. that described $XX still second million we lighter, see we a being but do plus bit little As

Geraldine Henwood

EBITDA.

Ryan Lake

we're the in EBITDA, second $XX yes, million reaffirming that Yes, regarding EBITDA. was question your

Patrick Trucchio

do we And also...

Geraldine Henwood

Patrick, quarter, And, the the lighter generally, fourth again quarter is for this business.

So there's nothing about unusual pattern. that

Patrick Trucchio

expecting in XXXX as be well to then EBITDA you grow I would - Okay. mean? And also XXXX,

Geraldine Henwood

new to be that, we addition to business opportunity that grow, and the related to it somewhat business, contributory new that believe would adding Especially, we to have, in won't. continue expecting. an would business no as to We But in Yes. baseline be reason have we're well. targets has

Operator

We closing showing remarks. call are to turn no further I'll Gerri, the now back questions. for

Geraldine Henwood

you as giving and here for information thank the company. for updates advance both morning. you on thank to Thanks care, again operator, progress more and We our divisions you, morning. Take this meloxicam you. resolving your CDMO joining Okay, and all work towards to working - us forward IV the Care we CRL, goodbye. of this additional Thank communicating Acute look joining

Operator

does gentleman, and today's in you conference. thank today's participating That program. Ladies conclude for

great all may day. have a Everyone, disconnect. You

Societal CDMO (SCTL) 7 Aug 182018 Q2 Earnings call transcript