Jaguar Health Q2 2023 Earnings Call Transcript

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August 14, 2023

There are 3 speakers on the call.

Operator

Good morning. Before I turn the call over to management, I would like to remind you that management may make forward looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. These statements are based on currently available information and management's current assumptions, expectations and projections of future events. While management believes its assumptions, expectations and projections are reasonable in view of currently available information.

Operator

You are cautioned not to place undue reliance on these forward looking statements. The company's actual results may differ materially from those discussed during this webcast for a variety of reasons, including those described in forward looking statements and risk factors sections of the company's Form 10 ks for the year of 2022, which was filed on March 24, 2023, and its other filings with the SEC, which are available on the Investor Relations section of Jaguar's website. Except as required by law, Jaguar undertakes no obligation to update or revise any forward looking statement contained in this presentation to reflect new information, future events or otherwise. Additionally, please note that the Company supplements its consolidated financial statement presented on a GAAP basis by providing non GAAP EBITDA and non GAAP recurring EBITDA. Jaguar believes that the disclosed items of these non GAAP measures provide investors with additional information that reflect the basis upon which the company's management accesses and operates the business.

Operator

These non GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP. Today's conference is being recorded. At this time, it is my pleasure to turn the call over to Lisa Conde, Jaguar Health's Founder, President and Chief Executive Officer. Lisa, the floor is yours.

Speaker 1

Thank you. Thank you all for joining our earnings web forecast for the Q2 of 2023. And welcome to all of you, and as you just heard, my name is Lisa Conti. I'd like to begin today's call with a high level overview of the Jaguar family of companies, and then I will provide updates on our key near term initiatives and milestones. Following my comments, Carol Isaac, Jaguar's Chief Financial Officer, will provide a detailed recap of the key financial results for the Q2 of 2023.

Speaker 1

Although, spoiler alert, we're very pleased to report that the next revenue net revenue increased 36% in Q2 2023 versus the Q1 of this year. Jaguar, as if you know the company is a commercial stage pharmaceuticals company focusing on developing novel proprietary prescription in medicines sustainably derived from plants from rainforest areas for people primarily and animals with GI distress, specifically overactive bowel, which is fresh lexicon I'm introducing today. There's a range of interpretations when we use the word diarrhea. With the terminology overactive bowel, we include symptoms such as chronic debilitating loose watery stools or as some will refer to diarrhea, also GI urgency and unpredictability and GI incontinence, all disrupting and disturbing to the patient, their quality of life and their health. I'll now review also the relationship of the Jaguar family companies.

Speaker 1

NAPO Pharmaceuticals, wholly owned by Jaguar focuses on developing and commercializing the human prescription pharmaceuticals we develop. Napo Pharmaceuticals' crofelamer drug product candidate is the subject of the ONTARGET study, our ongoing pivotal Phase 3 clinical trial for preventative treatment of chemotherapy induced overactive bowel, CIOB, And that is the acronym that we're all going to start to get used to. CIOB in adults with cancer on targeted therapy. Jaguar Family Company, Napo Therapeutics, as opposed to Napo Pharmaceuticals, Napo Therapeutics is an Italian corporation Jaguar established in Milan, Italy in 2021 focused on expanding prophylamer access in Europe, specifically for rare diseases. Jaguar Health is doing business as animal Jaguar Animal Health focuses on developing and commercializing animal prescription pharmaceuticals and non prescription products, a small portion of our business.

Speaker 1

And then Magdalena Biosciences is a joint venture recently formed by Jaguar and Filament Health and is focused on earlier stage developing novel prescription medicines derived from plants for mental health indications, non prophyloma related. As a reminder, our commercialized human prescription drug product, prophylamer is brand named Mytesi. The generic name is Crevelamer, brand name Mytesi. It's the 1st in class anti secretory chloride ion channel modulator approved initially in the U. S.

Speaker 1

For the specialty indication of symptomatic relief of non infectious diarrhea in adult patients with HIV AIDS on antiretroviral therapy. That is the label. As the term specialty market implies, this is a relatively small market in the United States. The indication was fast tracked by the FDA and that's primarily the reason why it's the 1st FDA approved indication for prophylmer. Propeller, Mytesi is plant based, it's organic, it's natural, it's sustainably harvested, it's fair trade and it is the only oral prescription drug approved by the FDA under botanical guidance.

Speaker 1

There is no practical pathway to bring a generic version of prophylamer to the market under botanical guidance. So In addition to all the patents we filed, just like any other pharmaceutical company does and all the expense associated with that, we essentially Have an exclusivity position forever. And that's a very powerful factor when we're in discussions, for example, corporate partnerships and we're talking about terminal value and net present value and potential license fees, non dilutive funds to come into the company. We have global unencumbered rights to prophylamer. So there are always business development activities and discussions going on And you never know when these are actually going to occur and come to the public consciousness.

Speaker 1

Well, the market for small cap biotechs is undeniably in a horrible state at present. We at Jaguar are fortunate this year that we have 2 major and what we feel are transformative clinical events coming up in the next couple of months, literally around the corner that take pipeline opportunities to major blockbuster opportunities. And this is the most important takeaway message from today. And I'll say it again, 2 major late stage clinical events, which we feel will be transformative for company value recognition and patient assistance. 1st and foremost, these late stage clinical events are major opportunities to help address neglected medical needs for patients and what follows from a focus on patients are the benefits to all the stakeholders in the company, financial and otherwise.

Speaker 1

As I frequently say, what's really powerful about prophylamer is that it is a pipeline within a product. Gefelimir has the potential to be expanded to multiple follow on indications beyond the HIV indication. We can't focus on all potential indications at the same time. So the ones that we have prioritized and are focusing on now are which previously we have been referring to as cancer therapy related diarrhea. So let me make that link for our long term followers.

Speaker 1

CTD, cancer therapy related diarrhea now referred to as a more inclusive CIOB and 2 rare disease indications, short bowel syndrome and microvillous inclusion disease, MBID, with Intestinal failure. SBS, chirpaula syndrome and MDID with intestinal failure are catastrophic medical situations for patients where they end up on total parenteral nutrition for up to 20 hours a day, 7 days a week. There are currently no approved drug treatments for MBID. As we were thrilled to announce last week, the FDA activated our investigational new drug application for Croselamer for the treatment of MBID and the FDA approved a physician IND for an SBS patient with a distressful and severe diarrhea situation. We are so grateful that Crevelamer has an opportunity to benefit these patients who are not only managing really difficult health situations, but also the dramatic impact on their quality of life.

Speaker 1

Our paramount near term completion of our clinical activity for our Phase 3 pivotal on target trial of my testi, this is literally the same formulation as my test C currently in the market. For the follow on indication of the preventative treatment of chemotherapy induced overactive valve, We've completed patient enrollment for OnTarget, an important milestone on our journey to making prophylamer available to treat the neglected comorbidity of CIOB and top line results from this pivotal trial are expected in late October of this year 2023. Again, one of the most important takeaway messages from this call, top line results in late October of this year to potentially expand the indication of my test to see IOB. In support of our goal of obtaining FDA approval for a paradigm shifting first oral drug for the preventative treatment and management of CIOB, OnTarget is the first trial of its kind. The trial includes participation of adult cancer patients with a diversity of solid tumor types.

Speaker 1

We call that a basket trial. It is the 1st clinical trial to include multiple targeted therapies that have greater than 50% all grade diarrhea on their label, and which by the way, decided because typically worse in a real world situation than the label, includes targeted therapy with or without standard cytotoxic chemotherapy being administered to the patient And it is the first trial for prophylactic use, the preventative treatment, which with targeted therapy is a situation where you're treating the patient potentially for months years, often essentially for the rest of their lives in both the curative and metastatic situation. If we compare this to, for example, the established chemotherapy induced nausea and vomiting protocols. And by the way, that is referred to as CINV. Treatment typically occurs for the 1st 3 days with CINV in a limited cytotoxic chemotherapy treatment protocol.

Speaker 1

So CIOB, chemotherapy induced overactive bowel is a dramatically different situation from the Nausea CINV in terms of the length of treatment. There's an estimated 1,900,000 new cancer cases projected in the U. S. For this year, 2023. The global market for the comparable CINV prophylactic indication is projected to reach a value of approximately $3,900,000,000 by 2029, and that's according to market research from an outside firm, Eye Health Care Analyst.

Speaker 1

Again, those products are taken for approximately 3 days for the 6 months or so of the duration of cytotoxic chemo. The on target study design is studying preventative treatment of CIOB from chronically administered targeted therapy essentially every day for months years and sometimes for the rest of the patients hopefully extended in quality of life. Another important similarity is the preventative treatment to address and assist the opportunity for the patient to stay compliant with their anticancer therapy, potentially affecting the outcome of the patient's cancer care in a positive way. I'm going to refer back to the lexicon shift of CIOB, which as you've heard is similar to The terminology for CINV, also CIMP, chemotherapy induced neuropathic pain. A preventative labeling benefits the patient who could be dealing with severe watery stool daily, essentially chaining the patient to their home, as well as the patient who deals with the unsettling, unpredictable and disrupting surprise diarrhea, which might happen once a week, once a month, but unpredictable.

Speaker 1

Both circumstances can be isolating, embarrassing and impact the dignity and well-being of the person with the cancer diagnosis as well as the health and compliance to other therapy implications, the anticancer therapies. As an analogy, Think of preventative treatment for epilepsy. You don't want to wait until the seizure occurs to treat. You want therapy on board to prevent and or mitigate the impact of a seizure. That's how we think about the preventative treatment of the full range of episodes of CIOB.

Speaker 1

The cancer treatment landscape has wonderfully radically changed. We're in the age of targeted therapies. You're seeing advertisements for new targeted therapies wherever pharmaceutical companies advertise direct to consumers. There are now dozens of approved targeted therapies, most, if not all, of which caused diarrhea by the exact secretory mechanism that Cofelimer normalizes. Cofelimer is a novel first in class anti secretory gastrointestinal chloride channel modulator.

Speaker 1

It is the disruption to the gut is caused by over secretion of fluids into the intestines following the active secretion of chloride ions into gut. So the osmosis that occurs from the active secretion of excess chloride ions into the gut and the water therefore that follows and then the watery diarrhea that occurs. By normalizing ION flow, Cofilamer's unique mechanism of action normalizes the flow of fluids into the intestine and normalized intestinal behavior. Tefelmer is taken orally and it acts locally in the gut, meaning it goes into the intestine and it normalizes that over activation as I just described. It doesn't block it up or clog it up.

Speaker 1

It normalizes that over activation, which normalizes the flow of water into the intestines and brings the fluid situation back to normalcy. When you think of anti diarrheals historically, you think of products such as Imodium and loperamide, which are taken typically after a diarrhea episode occurs. These products are opioids and may essentially work by the mechanism of constipation. And obviously, you can't stay constipated chronically. Prophenol is not an opioid and therefore does not have that risk of constipation because prophenol is acting locally in the gut.

Speaker 1

It doesn't have any known drug drug interactions, prophylmer doesn't have secondary metabolites causing problems later on, you don't have a first pass effect in the liver And it's not an antibiotic. So you don't have the resistance that antibiotics can generate. And the safety profile is Part of why we focus on complicated patient situations where you don't want to interfere with their lifesaving therapies And you do want to address the quality of life and the health care, health benefit implications that can come from managing CIOB. The 2 most common reasons why new drug applications fail are safety and manufacturing. Mytesi is already on the market for an approved chronic indication.

Speaker 1

So we've already completed, for example, 2 year carcinogenicity. Safety is a huge hallmark of the product. We have Majidacy safety is a huge hallmark of the product. We have never seen a side effect profile different than placebo and we have no serious adverse events that have been reported for a product that's been in the market for many years now and in thousands of patients living with HIV AIDS on label. So in October, when we released top line data, it's a matter of what is the statistical significance on the primary endpoint for the on target trial in people undergoing cancer treatment.

Speaker 1

That's the key transformative event for the cancer indication, CIOB. Again, top line data last week of October. And then the rest of the data is There's a beautiful collection of secondary endpoints and a rich database that will come from the completion of this trial. The rest of that data will come out in conferences and presentations that we'll make throughout the next year as we prepare for the potential approval of myTessi, a product that's already in full supply chain from the rainforest to essentially any specialty pharmacy in the United States for this important new indication and for this much larger neglected market opportunity with a much larger number of patients potentially benefiting. We believe the on target trial will successfully demonstrate The normalization provelamer provides to the over activation from targeted cancer therapies and that Krophelmir should be taken as a companion drug every single day and should be part of the standard targeted therapy protocols while patients are remaining on their targeted cancer therapy.

Speaker 1

Again, either in a curative situation or to maintain cancer as a chronic situation that patients can live with. And the key word here is live with, not just exist, but live life fully addressing the quality of life of patients undergoing cancer treatment, focusing on control and dignity and a common voice in the choice of how to live. This is the power of patient voice, which importantly is infused throughout our development and educational planning. And there are potential important health benefits to highlight as well, which is very important not only for the patients and of course the healthcare providers, the prescribing providers, also for payers. Publications show that about 40% of the time, people living with Cancer on targeted therapies will go to a sub therapeutic dose or go off their life saving targeted therapy It costs of the side effect of diarrhea, loose watery stools, overactive bowel.

Speaker 1

So preventing This type of diarrhea, otherwise known as chemotherapy induced overactive bowel as we're introducing today, can support better adherence to cancer treatment for patients and better treatment outcomes. And it's been shown that it costs about 3 times as much to take care of people living with cancer and targeted therapies when they suffer from loose water stools diarrhea as well. I'll now discuss Jaguar's 2 prioritized rare disease investigative indications for a novel prophylamer powder and highly concentrated oral formulations. So, Crophelamer, yet a different product than Mytesi. MVID is a life threatening and ultra rare autosomal recessive disease estimated to affect couple of 100 newborns in children globally, leading to intestinal failure, significant morbidity and even death from severe secretory diarrhea.

Speaker 1

While there are currently no approved therapeutic treatments for MVD, total Carenteral Nutrition, delivery of nutrition of life, VNIV, which is the standard of care for the management in its NVID, can cost around $150,000 a year or multiples of that with complications. In the U. S. And symptomatic management of diarrhea and M. V.

Speaker 1

I. D. May reduce their dependence on parenteral nutrition. We plan to host an investor facing webinar in the near future with leading pediatric gastroenterologists further elaborate the value of managing diarrhea and MVID patients with intestinal failure and bring a greater understanding to this ultra rare disease. Prophylamer has been granted orphan drug designation by the and the European Medicines Agency, EMA or MVID and Provelinor has also been granted orphan drug designation by the VA and the EMA for short bowel syndrome, which is referred to as SBS.

Speaker 1

SBS patients with intestinal failure are also treated with parenteral nutrition. Jaguar is supporting investigator initiated proof of concept studies of Crefloamer for SBS and MDID with intestinal failure in the EU and MENA regions with the goal of reducing dependence on parenteral nutrition by about 15% to 20%, a known and accepted regulatory endpoint. We're also providing product for an FDA approved physician IND for an SBS patient here in the United States. We'll be looking at improved stool volume and stool formation and other metabolic measures. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to prophylamer, for short, bowel syndrome or NVID or both, potentially in 2024 for these debilitating conditions.

Speaker 1

And early access programs, which do not exist in the United States, provide an opportunity for reimbursement while impacting the morbidity and high cost of care of these chronic neglected needs and was a major catalyst and impetus for us establishing napho therapeutics in Europe to be able to have feet on the ground to be able to access these early patient access opportunities for both patients and the benefit for all our stakeholders. And again, that is the 2nd major what we feel is a transformative clinical event, late stage clinical event in 2023 around the corner for these rare diseases to effect the opportunity for patients to access these products in 2024. An estimated 40,000 short bowel syndrome patients around the world, So it's a typical rare disease business model. SBS patients have high morbidity, high mortality, high expense, active patient advocacy group and the patients require very expensive and toxic, in some cases very toxic parenteral nutrition, essentially every single day, 20 hours a day for the rest of their lives. The goal, the global SBS market is projected.

Speaker 1

Again, these are rare disease business models. It's projected to grow to by third parties to $4,600,000,000 in 2027. This is the market research firm Vision Research Report. Other studies put the growth to approximately $12,000,000,000 and the standard of care at this time for the population of SBS patients is in fact parenteral nutrition. So to recap here, we expect to have top line results from our Phase 3 trial prophylamer for the prophylaxis of chemotherapy induced overactive bowel, CIOB, in the last week of October this year, and we expect initial proof of concept evidence before the end of the year for patients with either SBS and or MVID with intestinal failure in support of early patient access participation in certain European countries.

Speaker 1

So both potentially important revenue generations in 2024 based on these late stage clinical results in 2023. Today, know that we will have a brief Q and A segment at the end of the webcast to address any questions submitted in writing. They can be submitted via the webcast link for today's event that appears on the Events and Presentations page of the Investor Relations section of Jaguar's website and the URL for our website is jaguar. Health. And we'll now move along to the key financial results for the 2nd quarter of 2023.

Speaker 1

Carol, I'll turn it over to you.

Speaker 2

Well, thank you, Lisa, and thank you all for joining our webcast today. I'll begin my review of our financials for the Q2 of 2023. Prescription product net revenue was approximately $2,700,000 in the Q2 of 2023, representing an increase of 36% compared to prescription product net revenue in the Q1 of 2023, which totaled approximately $2,000,000 and a decrease of approximately 8% over prescription product net revenue in the Q2 of 2022, which totaled approximately $2,900,000 Mytefi prescription volume increased approximately 4% in the Q2 of 2023 compared to the Q1 of 2023 and decreased approximately 4.5% in the Q2 of 2023 compared to the Q2 of 2022. Prescription volume differs from invoiced sales volume, which reflects, among other factors, varying buying patterns among specialty pharmacies in the closed network as they manage their inventory levels. And loss from operations increased by $1,600,000 from $6,500,000 in the quarter ended June 30, 2022 to $8,100,000 during the same period in 2023, largely from increased research and development expenses related to the clinical trials for CIOB and other indications and non GAAP recurring EBITDA for the Q2 of 2023 and the Q2 of 2022 were a net loss of $7,800,000 $5,300,000 respectively.

Speaker 2

And net loss attributable to common shareholders increased by approximately $2,800,000 from $9,400,000 in the quarter ended June 30, 2022 to $12,200,000 in the same period in 2023. That concludes my recap of high level financials for the Q2 of 2023. And I will now hand the discussion back to Lisa Conte.

Speaker 1

Thank you, Carol. We at Jaguar and our family companies are highly, highly energized about or important initiatives underway in 2023 and the culmination of these late stage clinical events and what this can mean for patients and all that follows from that. We have no questions that have come in unless I have screwed up my access to them, but I believe we have no questions. So with that, we'll conclude our call for today. Thank you all who have listened and participated and support Jaguar.

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Key Takeaways

  • Jaguar reported a 36% increase in Q2 2023 prescription product net revenue versus Q1 2023, reaching $2.7 million, driven by higher Mytesi sales.
  • The company completed patient enrollment in its pivotal Phase 3 OnTarget trial of Mytesi (prophylamer) for the preventative treatment of chemotherapy‐induced overactive bowel, with top-line results expected in late October 2023.
  • Two late-stage clinical catalysts—OnTarget results for CIOB and proof-of-concept data in rare diseases short bowel syndrome (SBS) and microvillous inclusion disease (MVID)—could transform Jaguar’s pipeline into blockbuster opportunities.
  • Mytesi is the only FDA-approved botanical prescription drug for non-infectious diarrhea, granting Jaguar exclusive plant-derived rights and effectively preventing generic competition.
  • R&D expenses rose significantly in Q2 2023 due to clinical trial activity, contributing to a loss from operations of $8.1 million and non-GAAP recurring EBITDA net loss of $7.8 million.
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Earnings Conference Call
Jaguar Health Q2 2023
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