EGRX - Earnings call transcript Q3 2019 | Eagle Pharmaceuticals, Inc.

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Operator

Good day, and welcome to today's program. My name is Keith, and I'll be your conference operator. At this time, I'd like to welcome everyone to Eagle Pharmaceuticals Third Quarter 2019 Earnings Results Conference Call. All lines will be placed on mute to prevent any background noise. [Operator Instructions]

conference being this XX, today reminder, XXXX. a call recorded is November As my the to Ms. is pleasure It now turn floor to over Lisa Eagle for Wilson, Investor Pharmaceuticals. Relations Please go ahead.

Lisa Wilson

call. XXXX. Pharmaceuticals Keith. Pete Eagle for Meyers. Financial Officer, me are quarter months to This press release, release detailing results ended morning, Scott you, September of company call three With XX, Investors section webcast Lisa Eagle be issued This today's Chief a Thank a XXXX Investor Welcome website, of Pharmaceuticals. earnings Officer, the Eagle's can the This accessed press the on for and Relations financial call Eagle Tarriff; is the Wilson, Chief third this Executive and eagleus.com. at through

I statements defined statements like that company's and that Reform Act. would everyone future anticipation projection, call conference events may started, made forward-looking Private today's a intent be remind any as belief, express expectation, the by Litigation performance or the forecast, to we Securities Before future on regarding get considered

filings forward-looking statements guarantees available future this management and the performance. to today results statements. of uncertainties, Eagle risks differ forward-looking and are Such not from information and as release our those press in materially forward-looking SEC. involve the noted may based morning's statements including in projected are Pharmaceutical's These with on Actual of those

intent law. any to statements, this available update obligation disclaims of or replay A after telephone by specifically will as Eagle call. these completion required shortly forward-looking except be

website, be at in release. will archived on press The our today's for You'll dial-in available information find the webcast eagleus.com. one-year

call XX, held or may announcements then, be may XXXX. and to have discussed. archived of recorded those webcast, to listening For November topics who the the the related Eagle made Since on replay was this benefit

company's most and the SEC So, releases press filings. recent reference please

that, Scott with call CEO, over Eagle's Tarriff. turn to I'll the And

Scott Tarriff

start of this to apologize Lisa, everyone. through and you. If continued morning, quarters. pipeline I cough advance we doing for several my last quarter few morning, that have investments months significant been busy by had making we you, have and the in a We let the saying all last way off me Thank now our in in sure good I and

million getting exertional In we that share, which expense heat external per for $XX advance believe invested X of for R&D appropriate or our which our from stroke $X.XX vasopressin, QX, we legal investors. credit includes pipeline. and PEMFEXY, was frankly not to million currently are we and

from demonstrated our about optimism we the regarding the announced nerve stroke as to believe results and weeks next by earlier, fulvestrant This the next planned PEMFEXY. investments. to secondary study ongoing positive clinical initiation news we of Importantly, release our is damage of see brain of or few these that their exposure, today treatment in are EHS, beginning agent heat exertional

We the going late provide products forward. believe these stage company could significant upside for

confident are of we and that the unlock pipeline. We this money spent well intrinsic value expect ultimately, the to was

are start pleased EHS. Now, RYANODEX the first progress which our turning very with about. portfolio, I’ll with we to

care, with this stand approved currently is comprised RYANODEX, in product of investigating fatal a current As addition the drug are may you treatment treatment for to There and no which cooling we body the of measures. supportive recall, of condition. often EHS and of is serious

to program, the XXXX. in development we received complete Over determine with address to letter appropriate had the response we times of course the met steps the FDA multiple back

from Saudi earlier we evaluating our clinical XX of press X our as additional took RYANODEX. continue in this August EHS conducted Arabia that with Hajj pilgrimage through during result study controlled noted an a FDA, and in patients dialogue morning As the this place release year of to XXXX

XXXX and of number heat additional XX XXXX, an XX. now up stroke patients to patients bringing total enrolled the recruited exertional XXXX, We in

intend have to the agrees with XX patients. plan, that We the If collectively one have NDA we all reviewing proposes for when update we share. a for this the FDA a resubmit submitted and provide to to will further plan FDA data EHS

pleased around Rodents, animal RYANODEX clarity have of the JALP the the dialogue for secondary animal brain recent second we should positive stated following recommended with the as agent we study of also has that study in very exposure the species. in conduct rule, nerve We’re After an additional FDA now well. our with damage treatment as our to in results FDA

the expeditiously plan work agreement come We species final on to FDA second study. of to with the design this and

current to file next expect of year. We our supplement to NDA half second in the

Our RYANODEX plans continue in on acute to developing receptor Track, Ryanodine to to make also IM be chemical our as are or in syndrome radiation evaluate progress new we of development for administered EA-XXX treatment antagonist entity the formulation. and

would we Although that believe a our IM which current volume is in create product certain protect and alike. push, military an our low will we civilians formulation, situations advantages by have IV significant

secondary pursue future. to the we relates discussed hopeful it near likely that additional as exposure as heat damage to indications conclusion, term products in would agent nerve stroke previously, we are acute RYANODEX, we and in the two And expand to syndrome. will brain we the In include remain that like near to label to announce radiation

very oncology to Let which about. me our now we excited pipeline, also are turn

Pharmaceuticals we Approval licensing We a dilute are which milestone $X to time are its announced payment. our to in partner million already, at SymBio expected ready year delighted is next of filing XXXX, NDA in the Japanese entitled back bendamustine that September.

launch up the XX could reach the launching royalty to plans cumulative first bag once royalty our in quarter milestones first to in SymBio year. million million we’re sales ml expect and that the $XX step we bag, then the XXX of XXXX, ml on rate $XX per the in approved. in Based

able in asset are important bendamustine to continue licensing to We that been monetize successfully pleased have by we Japan. this

to fulvestrant. turning Now,

for therapies. may areas improvement highly an available cancer product XXX looks extensive over program data of that allow Our significant The suggest trial currently clinical our promising. from subject breast

have through you may why we a Let believe product. efficacious more me we walk

of that presence cell. tumors XX% grow of block to patient’s are on estrogen, cancers mechanism the about hinges action The its these in receptor breast and of estrogen positive. Effectively in receptors bind fulvestrant ability estrogen breast cancer of

Our blockade the may activity the proliferative receptor. strengthens tumor. enhance other off of delivery blocking estrogenic estrogen the that technology the In words, novel

We dose will receptor in expect patients. to estrogen which our the Study inform conduct pivotal future results in help study, to first in study cancer post-menopausal December. positive subject our we intend pilot

aim to currently if to receptors, available Specifically, addition unique fulvestrant the result product outcomes in this options. estrogen Eagles’ will compared trial better treatment patient of greater will determine and

the half first is XXXX. of Our the expectation market be that we on in could

another continues This us a likely be turn successful Let to oncology royalty important XXXX. highly providing me long-term bendamustine. asset, beyond stream now a revenue to for franchise

our top lines increased royalty forward. This from X, October impact and rate Importantly, going current price the positively royalty XX% XX%. on increase bottom should to offset our compression BENDEKA in and

continue expected in will X years. percentage XXXX. The point are another for by Treanda on year Generics royalty rate increase October caps a not each to X three XX% until it

we regarding until the four believe Finally, trial of is it break had XX. There PEMFEXY, days now went a trial December we well. in and

we asset. will of we the find in value As expect significant today, that

upcoming first good on about launch Endo’s is to We as could this The remain on vasopressin, of is the XXXX position feel paragraph product. scheduled generic as injectable October. vasopressin for May already. our we now vasostrict. our trial product, begin filing about Turning filing and optimistic soon this Eagle to next

share add We will market our vasostrict these million significant our generates $XXX product annual since more in in vasopressin value. We review therefore currently very that the as hope of near a net have this projects attractive in term. very each investment around We to to opportunity used sales. in tangible believe

have by pipeline. on our progress are we that proud Let me of conclude near-term the saying very made we

to prioritized underserved flow the our populations. improve to we and company to critical back oncology always believe investing care will have cash the outcomes of We the best-in-class research patient that lead into fund products

that, I’ll with third turn call discuss our over And quarter Pete? to Pete, results. to financial the

Pete Meyers

to Thank by to of of injection and RYANODEX QX year-over-year $XX.X a primarily in $X.X driven in revenue a was docetaxel during BELRAPZO compared XXXX, million sales, $XX.X $XX.X million sales XXXX, the in million, compared discontinuation Product September quarter XXXX. totaling million, sales, third of by $XX.X total $X.X the you, decrease Scott. decreased in quarter million In decrease million QX XXXX. the nonalcohol third in $X.X million

BENDEKA Those XXXX. by to compared million. decreases of were product wholesalers. sales were an sales to Eagle BELRAPZO of on quarter, partially of shipments million $X.X revenue in increase $X.X product in offset by QX Eagle recognizes third BELRAPZO the $X in million

X% of share As anticipated, the in wholesalers brand data, XQ stocking U.S. Eagle's a market third was June. shipments bendamustine quarter the of with over quarter. third down wholesaler result as cut name IMS of market sequentially was to associated end-users the to bendamustine the on BELRAPZO in Based the revenue

million, is third quarter RYANODEX driven XXXX. Third dantrolene QX very terms compared requiring the few to quarter their Orders million was in primarily dollars. normalized of RYANODEX $X.X customers expiring. RYANODEX cycle unit XX% product share the XX% for by in $X.X sales with are in expiry market and were share of unless stock

will BENDEKA impacted low $XX.X was QX compared expected royalty uptick $XX.X XXXX. that was $XX.X the royalties pricing anticipate QX We expiry revenue were million, by quarter. million, of in in BENDEKA third also the $XX.X negatively revenue million fourth to trends. year the to XXXX. be prior quarter million in quarter compared on an with royalty

in prior earnings call, IMS approximately EBITDA. in of suggest royalty Eagles is $XX BELRAPZO BENDEKA’s second by At per a that compressed our As launch XX XX% vial points [GTN] quarter data we into in in points. XXXX, of discussed approximately incremental since the Eagle rate, translates GTN XX

However, beginning on due vial to down to cycle. increased we BELRAPZO points and year-over-year $XX translates Eagles’ XX% In XXXX, of incremental approximately BENDEKA EBITDA. Five Eagle RYANODEX one be per sales expiry into royalty year-over-year, to rate expect sales XXXX royalty as October rate increase you the to in from XX%. know, X,

the third the of compared royalty third to sales Eagle decrease margin no are in our in increase as was BENDEKA of XXXX XXXX, was the driven XX% quarter by into on quarter partner an quarter in gross Gross during in which XXXX. marketing of of and margin profit, The the compression to product third BENDEKA XX% revenue.

to front, compared in prior the The year the R&D million attributable and were to is fulvestrant. largely quarter, $XX.X third for quarter. $X increase year-over-year On the expense expenses vasopressin million

non-recurring and the non-cash Excluding other was R&D stock-based quarter items and expense million. third $X compensation during

we Scott legal our and $XX of expenses plus As QX, in pemetrexed. development million and vasopressin on million in non-GAAP million mentioned $X.X pipeline. research advance to invested expense, upfront, $X

reiterating We $XX in are R&D XXXX. to million to expense expected XXXX $XX spend as of compared basis million $XX on a non-GAAP guidance with million,

IND and for XXXX. the to vasopressin to market on toxicology products third Lower $XX.X SG&A spending XXXX spend the EA-XXX by quarter compared in-part CMC Offset XXXX scale million decrease the in up to increased third and in expenses. of budget accounts those million, year-over-year to enabling expected the fulvestrant quarter PEMFEXY in bring costs. in expenses and $XX.X

expenses legal and litigation PEMFEXY the and stock vasopressin higher with compensation associated expense increase. of account year-over-year External for

and Excluding was non-cash quarter other XXXX SG&A compensation non-recurring $XX.X stock-based items, expense and million. third

on XXXX basis guidance million to expected as We to in expense with million SG&A are $XX reiterating million, spend XXXX. $XX a compared non-GAAP $XX of

million attributable increased is per $X.XX discussed increase higher basic the year above. marketing prior as diluted well and per or or $X.XX largely was $X.X loss compared year-over-year Net $XX the The of to income as to and sales in of levels the payroll. expense, to third and basic quarter for external factors million $X.XX share, due legal per period share diluted net

$X.XX incomes in quarter non-GAAP basic $X.XX $XX.X diluted of and million, non-GAAP or or $X.X per $X.XX for compared per third income share share, million the quarter. per $X.XX per adjusted net was net and prior of year to XXXX diluted basic Adjusted the

of metrics, a For the end to release. reconciliation of GAAP the full comparable non-GAAP our the tables most please see income press net at financial

was the to for XXXX in million, quarter. compared EBITDA Our $XX.X million year of the $X third prior quarter

to For the nine million, first million was $XX.X of EBITDA nine XXXX, in of months $XX.X XXXX. months first compared the

first operations, months nine $XX.X months receivables excluding shifts $XX.X of cash to from million, XXXX. in first of in the compared million XXXX, was nine flow the For

XX the million. million. EBITDA from flow Cash operations, $XX.X ended For shifts XX, was receivables was excluding months in September $XX.X XXXX

Last on executed week, and secured amended our we extend facility. senior credit

secured LIBOR a remains $XX The term on revolver. the And of facility exchange X.X the $XX plus a for of Our million million $XX $XXX which a net amended plus component. consisted prior had remained decreased X.XX senior The leverage joint net loan, a term revolver, maximum times slightly XXX undrawn. unchanged plus from million pricing consists to covenant at in million loan, covenant, leverage removing times. facility total

of company XXXX, in the of from cash not plus million did the $XX.X $XX.X Therefore, million was cash accounts which $XX company $XXX XXXX, buy The We Teva. $XXX.X any September of million. net in and as As XX, had September company due debt. equivalents million the cash outstanding quarter. receivable, receivables and stock net million had in had XX, of back in

please ahead operator, open line and questions. that, go With for the

Operator

We'll [Operator take ahead. Instructions] from Jaffray. first Amsellem David Piper go our with question Please

Your line is open.

Unidentified Analyst

for had the couple [indiscernible] bendamustine questions. a David. everyone, Thanks ones taking We Hi, is my on just on products this quick here. for

you. your Treanda Thank what – First, in terms then the Treanda BENDEKA. of decline BELRAPZO, sort just particularly for a similarly your wanted terms pick market? what enter Also, your the for share after on thoughts are thoughts Generics brand just once of Generics to we peak market, your on share entered latest of and in

Scott Tarriff

Yes. Thanks, [Zach].

Generics we're of that the the we the care we keep large reimbursement of way with So, majority the ultimately market, of products staying largely have been over there the we’ll that works. where Treanda when because enter believe our

years BENDEKA that we've so, think to than we along And And the our to different that value we've the nothing to the going seen way. market view along its will three historical what's saying believe continue any been on the hold the that way. to reason any now, because us to of share what it's happen give – majority from no, marketplace there's of

Unidentified Analyst

you. Okay. Thank

Scott Tarriff

Thank you.

Operator

ahead. we'll with question Folkes our from next Brandon And Fitzgerald. Cantor Please take go

Brandon Folkes

And talk RYANODEX questions. Thanks to Hi. about my I EHS. for wanted just taking first,

that to Hajj. go yet going I now though patients trip the XXXX patients XX the you're to post got with, you've mentioned agency to You XX the

clarify, just have change talk secondly, any for was with decline one can this million at you to patients you. sorry, said been Pete, are in Thank criteria was So, you sales, about agency? there if if BELRAPZO And that agreed just now excluded inclusion maybe year-over-year? the and on $X.X then

Scott Tarriff

Brandon. Scott. Hi, It's

Let me take the first one.

no previously, there's So, change. we had XX

and XX So, the XX, patients. the had XX to we want we And take do have then, Pete, added now question? we you second

Pete Meyers

of was BELRAPZO ago. Brandon. million revenue year as a Hi, $X.X The to Yes. million $X compared

Brandon Folkes

total you And so, maybe one RYANODEX clarify, just had to you Thank it, or enrolled XX patients on you had dose just, sorry, historically? think you.

Scott Tarriff

another nothing's dropping haven't There we have been very out very this XX and no, We've just year year, everything's speaking consistent. about. been coming No, had It’s Yes. – then time we've the We so of first XX seven changed. last anything out. consistent. as and been

Brandon Folkes

Okay. you very Thank much.

Operator

Stanicky we'll go And Capital next RBC to Randall with Markets. ahead. Please go

Randall Stanicky

Scott. Thanks, Great.

improved also what formulation wouldn't pursuing some or differentiated your I'm that up. on, what then respect why then the well, a estrogen I like? of all do show to to blocking? that XXX(b)(X) words, goes or follow have endpoints to In First is, have improved could specifically, it if asking the head-to-head blocking? estrogen with FASLODEX? like another data what other any provides other company a fulvestrant able a would And comparable pivotal sense to not brand And include you look you And is

Scott Tarriff

questions. good Yes,

of the to that will blocking be how more less So, actually be show of study of the the produced. will the one primary approach That things. estrogen to we're ultimately or going we're estrogen is functions endpoint

our particular believe In technology terms allows potential we formulation is that competitors, all is tell we have And I unique capability this using. we of proprietary are that to have would to unique we a that, that happen. you

Randall Stanicky

to detail and I whether going get into timelines around we moving are guess, when or pivotal? And the the pilot forward on

Scott Tarriff

Yes.

– the now. coming into all So, play it's

Though, already. on have product the is to we map dosing. start. publicly this of pivotal morning, that we committed timelines the haven't In of the first-half over a first-half And will weeks. few in date it we starting mentioned provide next information yet will believe out, we’ll December, study we have. the approved study As when start the that the the when XXXX We’ll more we pilot

a date. rough point The important just let me give is you other – and

of the certain, believe look it'll recruiting goes. we’ll the meaningful around have tangible, how So, the for timeframe. will we won't very April pivotal think, but pilot And informative on see what like. know be data We I that I

So, I the a come this April-ish, believe of project. know lot success future about we’ll

Randall Stanicky

clearly, debate around new. I cash, mean, then pipeline think, But Okay. question, on value generated sheet And the there's you much million balance the step we that's not can last now. my I to mean, how be deliver, $XXX back, going you have when cash in I right

on either critical You've just get a to not need got else? depressed, you companies business oncology a development? it little across Why guys funding, be aggressive, clean somewhere balance more prime aggressive care here that me the bit seems to more sheet. is landscape for or Evaluations

Pete Meyers

Well, that's well a We're Randall. for interested very of now, host question agree cash balance together sheet strategically-wise with we're expand in but really I coming ultimately, pipeline offering a you. make and the product that, us, time using seems aggressively of fortunately continue in transactions We transaction be to whole lot And good we’ll way. to on very another evaluating our opportunities. our a and or to and it. we our multiple believe a And spend financially

So, the how let's least, tuned active, just at stay and evaluating But goes. very in opportunities we're for company. it see

Randall Stanicky

guys – last and oncology we those are the think Thanks. critical now care? in, five path Scott, areas is is, here to that for about platform next three should strategic And And, are question two the being the most think that should you the interested we my years?

Scott Tarriff

Randall. definitely, Yes,

investor we the success that in conversation the couple of past, the base this here going to To we sides to had unfold. always or under an ecology over spoke business. both we're with know we're significant company our we belief critical companies, care that, how have to sit today have we morning, when we the are see the of would the asked As pipeline we'd last years in said

And to going an both those consider so we'll both and of right legs oncology now, assets care to for externally and forward we and be critical fit the ourselves business. looking be grow the we're company, internal development additional and to that time. business And probably we'll our over and round hopefully will continue sides fit pretty of business then announce candidates both significantly out to

Randall Stanicky

guys. Thanks, great. Okay,

Operator

[Operator Instructions] ahead. next Please to William go Tim with Blair. Lugo We'll go

Lachlan Hanbury-Brown

And Tim. expect that is give you you Do year. in this what year, And this is can Lachlan about or next seen inside the if the of see be successful taking know point and of thoughts on proceed national sort weakness for that sort to this we've just and of the weakness what commercialization, in broader end I the question. expect you infrastructure terms – you out current wondering further of to Hi, for secondly, can’t sort ride thinking I of market? on TREAKISYM, do the your was to some what terms rate? should us of going fill sort of need forward? we Thanks you out? you would then commercialization, sort with looking is would build be or time

Scott Tarriff

Thank you. Yes.

the, we call it XX mentioned, But, XXXX. bendamustine. need take sales probably marketplace. to infrastructure expecting are Pete in as between me support, in particular I of let over and terms the the for that of first first-half So, to somewhere people on the the product and to piece turn XX to bring market We'll

need We already rep do sales people. for we Eagle, else think on so that opportunity more we sale now that difference is we the we everything specifically bit a product. the us colleges. additional do in hire warrants to place. headcount But force, for BELRAPZO already have well be little sales our at in in on the here The the some with have We will will calling category,

to a add a So, prepared on offering tremendous company is demands we're significant to to not that's without need going number people This infrastructure products product of additional the it. launch. to

more we're then could it'll hoping that even be have products that oncology other So, also that rather well, the efficient. efficient. portfolio make by we much And it in as

by give extra the… you people, size the that an be internal and I’d of of opportunity. ordinary supported to want take run maybe nothing to some we can't the need, or out take say, Pete, XX the So, Then, but it salespeople or

Pete Meyers

question, for thanks Yes, the Lachlan.

So, deterioration revenue on see another X% unit’s market, the that We'd X% year-over-year was royalty to diminution suggests data down third quarter. price, expect was largely a the perhaps in the our The to not in attributed bendamustine in volume XXXX. volume. the

hanging actually price face some the But therapies quite bit approved so, seen novel some frankly, in And a candidly, syndications. in the we substantial market there is of in have well deterioration.

our Based BENDEKA, our same since BELRAPZO. as royalty come data about the significantly XX has And near-term. would points Lachlan. And launched GTN the on the deduce in pricing we IMS, by that is in that yours, obviously on of affected has the one our source

degradation. it’s we royalty So, course, to note, the that quarter just of offset important this step up commenced largely that

Lachlan Hanbury-Brown

Thank you. Great.

Pete Meyers

more I one should information. guess, is this I that, make And point public is

increased starting have product. has of X. whack our price The increased October We the been

So, we that'll help on Obviously, comment on the cannot the we have BELRAPZO front. since BENDEKA knowledge. no pricing of

Lachlan Hanbury-Brown

Thank Yes. you.

Operator

does I’ll have Tarriff Scott no Thank remarks. we further appear floor you. questions. for return closing It the to

Scott Tarriff

the call ongoing everyone Well you joining for support. and for thank your

continue We to in to pleased and in excited opportunities short-term. hope growth pipeline information with drive you and remain you our our more again. and the the share about have to decision with are Thank ahead long-term investing

Operator

Thanks today’s conclude This for participation. does your program.

disconnect. You may now

Eagle Pharmaceuticals (EGRX) 12 Nov 192019 Q3 Earnings call transcript