Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strong revenue growth with net revenues of $30.9 million, up 547% year-over-year and 43% quarter-over-quarter.
- Successful launch and positive reception of ZORYVE cream and foam for psoriasis and seborrheic dermatitis.
- Expansion into the primary care and pediatric space through a co-promotion deal with Kowa Pharmaceuticals.
- Improved gross-to-net percentages, with ZORYVE cream and foam achieving high coverage rates.
- Favorable renegotiation of debt terms with SLR, providing improved financial flexibility and reduced interest rates.
Negative Points
- High SG&A expenses, which increased to $58.2 million, impacting profitability.
- Continued reliance on prescription growth for revenue, with potential moderation in gross-to-net improvements.
- Uncertainty around the timing of meaningful revenue contributions from the primary care and pediatric expansion.
- Challenges in achieving broad Medicare and Medicaid coverage, with ongoing negotiations required.
- Potential delays in pipeline developments, with specific timelines for new indications and products still uncertain.
Q & A Highlights
Q: Hi, good afternoon. Thanks for taking our questions. We had two. First on ZORYVE, both for psoriasis and also for seb derm. We were just curious if you could comment on your latest findings on refill rates and your, I guess, most recent estimates for how many tubes or cans per year you think patients are going to be working through.
A: Yeah, thank you, Frank. So in reference to PSO and seb derm and the latest, the refill rates, we see on psoriasis our refill rates are roughly around 38% of our total volume. And with seb derm, we see something similar. Although we do see some signals that there will likely be a higher refill rate on seb derm eventually than that of psoriasis. So we're very encouraged with the refill rate percentages for both products. And then in reference to utilization of those products, we're assessing that. And at this time, our estimates are that for a patient, average patient utilization per year for seb derm will likely be around two cans per year. And for psoriasis, it's going to be like around two to three tubes per year for psoriasis. And in reference to the steady state prostanet for foam, we've seen an encouraging ramp relative to improvements in our prostanet for foam, especially with the line extensions of the three PBMs. And that we anticipate that we're in a very good position to be able to be in that steady state high 50s well into the end of this quarter, beginning of the fourth quarter of this year.
Q: Hey guys, congratulations on another solid quarter and all the progress. I have two for you. So the first one is just the prescriptions for the cream have made a nice week over week jump over the past two weeks. So I'm curious to understand if this is pulled through from the early Atopic derm launch already. And if you believe this could be a new trend line moving forward. And then the second question is considering the latest performance for the foam, do you believe that the foam and the cream will split overall ZORYVE sales pretty evenly in the longterm or that one of the products will be substantially larger than the other?
A: We are pleased with the most recent week over week performance for that product. And I think that there's a couple of things here that are creating some definitely some positive tailwinds for us. And that is that with the launches of ZORYVE foam and creating a portfolio of products, this has really resonated with the providers as far as ZORYVE cream across these two patient populations of psoriasis and seb derm creating a halo effect on both products to include the ZORYVE cream. Not only that, but we have expanded our field sales organization that we expanded it by roughly 40 representatives that was fully executed on July 1, of this year. So I think that additional share of voice is starting to have a positive impact relative to our ZORYVE cream and psoriasis brand performance. And then in reference to foam, once again, we're very encouraged by the performance of the foam, especially in the last weeks, we're seeing very positive week over week prescription growth and relative to the split on the business between psoriasis and foam, I would anticipate that we will have a higher weekly TRx prescriptions and eventually in foam that we want psoriasis because the market is so much larger relative to seb derm and foam. There's no brand of competition within that market. There's been no innovation in many years. And so it creates a great opportunity relative to the value proposition that we offer to these patients. And we continue to hear very, very encouraging, and positive feedback, not only from the dermatology community, but from patients. So I think that that's what we can suspect going forward.
Q: Well, thanks very much and congrats on the quarter and all the progress. A couple of questions on the progression in AB and how we should think about it. One question that I have is just as Kowa comes on to expand the promotion of ZORYVE, can you help us understand, some of the key impact points and how we should be thinking about the prospect of acceleration there? And then separately, just hoping to understand how you're thinking about the opportunity in the pediatric AD setting. Obviously, that's another sNDA file would bring the availability of ZORYVE to a very important younger patient population. Interested to know how you're thinking about the promotion in that setting and the importance of it as well.
A: So when we're thinking about pediatric AD, that two to five-year-old represents about 10% of the AD patients that are in dermatologist's office. But I think what's really important is to keep in mind that the pediatric AD community is already very much involved in our launch given that we have six to 11-year-olds with the 0.15% approval that we just had in July as well as adolescents. And both of those are kind of core patients for the pediatric AD treating community. So, I think that we're already really heavily engaged with them. And then as we bring the age range down into the two to five-year-olds, we'll just be able to kind of build upon that. And if you think back to the data that we had for two to five-year-olds, it's very, very consistent with what we have for ages six and above. So it'll seem like a very natural extension, I think as we add on that additional age to the indication.
Q: Hey, guys. Yeah, congrats on a solid quarter. Thanks for taking our questions. So, I guess our first question is, maybe just help us to understand a little bit about the gross net changes. I think you indicated from low 60s to high 50s. But if you just take the sales number and divide it by the total scripts, the implied price seems to be relatively flat. So, that's sort of the first question. And the second question is, could you maybe just help us understand like the proportions of pediatric patients in the derm offices that you currently detail to versus those in the primary care and pediatric markets that you're expecting Kowa to go after? Yeah, and I guess maybe thirdly, you indicated that the amended term loans has now removed restriction on asset purchases. Just wondering what do you have in mind in terms of BD? Thanks.
A: In reference to the gross to nets, what's been driving, first, what's been driving the improvement in gross to net? What's probably been driving that is the increased number of covered prescriptions that we've had in place. And there's kind of three factors that are driving that. First, is we have had some improvements in relative to our market access. This gives us the opportunity to increase the percent of product that's now being covered by the insurance companies. The other is that we've had, as mentioned earlier, a nice acceleration of gross to net improvement was the refoam with the three PBM line extensions that have happened there. A little bit of a higher volume in seb derm. That's given a positive mix when you blend the two together to give us improvements also within our gross to net. In addition to that, some of the changes that
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
