Evoke Pharma, Inc. (NASDAQ:EVOK) Q3 2022 Results Earnings Conference Call November 10, 2022 4:30 PM ET
Company Participants
Daniel Kontoh-Boateng – Investor Relations, DKB Partners
David Gonyer – President and Chief Executive Officer
Chris Quesenberry – Chief Commercial Officer
Matthew D’Onofrio – Executive Vice President, Chief Business Officer, Secretary and Treasurer
Conference Call Participants
Operator
Good afternoon. And welcome to the Evoke Pharma Third Quarter 2022 Earnings Conference Call. Currently, all callers have been place in listen-only mode. And following, management’s prepared remarks, the call will be open for questions. [Operator Instructions]. We advise that today’s call is being recorded.
I will now turn the call over to Daniel Kontoh-Boateng. Thank you. You may begin.
Daniel Kontoh-Boateng
Good afternoon. And thank you for participating in Evoke Pharma’s conference call today. With me today are David Gonyer, Evoke’s Chief Executive Officer; Chris Quesenberry, GIMOTI’s Chief Commercial Officer from EVERSANA; and Matthew D’Onofrio, Evoke’s Chief Business Officer.
By now, you should have a copy of the press release we issued earlier. If not, it is available on the Investor Relations page of our website at evokepharma.com.
We encourage everyone to read today’s press release as well as Evoke’s quarterly report on Form 10-Q, which is now filed with the SEC. The company’s 10-Q report and press release are also available on Evoke’s website.
Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigations Reform Act.
We caution listeners that, during this call, management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company’s business. These forward-looking statements are qualified by the cautionary statements contained in Evoke’s press releases and SEC filings, including its annual report on Form 10-K and subsequent filings.
This conference call contains time-sensitive information that is only accurate as of the date of this live broadcast. Evoke undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.
With that, I would now like to turn the call over to David Gonyer. Dave?
David Gonyer
Thank you, Daniel. And thanks, everyone, for joining us today. I’ll start by providing key takeaways from Evoke’s third quarter ended September 30 and then hand the call over to Chris and Matt to discuss commercial operations and financials.
I’m very pleased to report that our third quarter featured record financial and operating results in all of the key metrics we use to gauge the overall strength and value of our business. These include a record quarterly net revenue of $832,000, representing growth of 80% over Q2 net revenue; a record number of dispensed prescriptions in Q3 compared to Q2, with an increase of 56%; a record 143 new prescribers, which represents 13% increase over Q2; and lastly, 812 total GIMOTI prescribers at September 30, an increase of 21% over the prior quarter. And our fourth quarter has continued to show strong growth with new prescribers, hitting a record high for the month of October of 62 new writers.
During the third quarter, we shifted our distribution program to vitaCare, a wholly owned subsidiary of GoodRx. And inbound vitaCare prescriptions during Q3 increased by 32% over Q2. Last quarter, we said that vitaCare would provide a leading indicator of GIMOTI prescription fills for the second half of this year.
The electronic prescription submission process seems to be simplifying physician prescribing and consequently accelerating the inbound prescriptions. And Chris will go into more detail about how vitaCare contributed to our prescription fill performance in Q3.
Another positive development in Q3 was our announcement in August that we had launched a telehealth solution for patients through UpScriptHealth. We believe this partnership will allow for more rapid consultation and potentially treatment initiation within just a few days, if medically appropriate. Chris will also discuss how all these partnerships enhance our outlook for the remainder of the year and into 2023.
Our goal remains, as it’s always been, to make GIMOTI the standard of care for the relief of symptoms associated with diabetic gastroparesis. In September, we announced that GIMOTI had been nominated for Healio’s Annual Disruptive Innovators Award under the Healio Industry Breakthrough Award category, and it took place at the American College of Gastroenterology Meeting last month.
GIMOTI was selected among other novel gastroenterology products from six other major pharmaceutical companies, the likes of Medtronic, Bristol Myers Squibb and AbbVie, for example. Considering the other products in the category were from multinational, billion dollar pharma organizations, we believe this nomination further highlights the novelty of a non-oral treatment for a disease where traditional oral treatments are noted to be unpredictable.
This concept aligns with the FDA comments within its guidance for clinical evaluation of drugs for the treatment of gastroparesis that states, patients with gastroparesis may, in general, benefit from alternatives to oral solid dosage forms, including, but not limited to, metoclopramide.
In addition, the American College of Gastroenterology also released their updated guidelines in almost a decade for treating GIMOTI. GIMOTI was included in the guidelines, along with comparative data to oral metoclopramide. This inclusion is important to our goal of making GIMOTI the standard of care.
In this pursuit, protecting our intellectual property is of foremost importance. In Q3, we announced that the USPTO issued a notice of allowance for a US patent application for GIMOTI. When granted, the patent will cover methods for treating moderate to severe GIMOTI with metoclopramide intranasally. And once issued, the patent entitled, Treatment of Moderate and Severe Gastroparesis, will expire in 2037.
The patent will add to Evoke’s existing patents and other patents in the EU, Japan and Mexico. Importantly, the patent protects our Phase 3 clinical trial outcomes and data that show efficacy with nasal metoclopramide formulations for people suffering from moderate to severe diabetic gastroparesis. And in addition to this patent, other applications are currently being reviewed by the USPTO.
And with that, I’ll turn the call over to Chris Quesenberry. Chris?
Chris Quesenberry
Thank you, Dave. The third quarter was a strong period of progress on many measures. Our Q3 performance was our strongest since GIMOTI became commercially available in Q4 of 2020. I’m proud of how the team continues to execute on our strategy to deliver meaningful value to patients through GIMOTI and the support programs and services we offer. I’m continually inspired by our purpose to improve the health and lives of patients suffering with diabetic gastroparesis.
I’m particularly proud of our sales and market access team that are bringing the message of novel treatment options for patients. They continue to drive trial and adoption, which is showing up in our results.
I will summarize our top line quarter-over-quarter growth by saying we generated a 32% increase in prescriptions, a 56% increase in dispenses, which resulted in an 80% increase in net revenue. That was driven by a 26% increase in total prescribers quarter-over-quarter.
A driver for Q3 performance is increasing the number of new and repeat prescribers. We continue to believe that we are still in launch mode, and therefore continuing to increase breadth and depth of prescribers as critical for ongoing success.
As Dave indicated, we successfully implemented our full transition to vitaCare in May. Our goal was to take advantage of vitaCare’s automated platform and operate within physicians’ normal workflow via electronic medical record systems. Both physicians and advanced practice providers overwhelmingly showed their support of this change by writing significantly more prescriptions.
To put some perspective to that, HCPs prescribed GIMOTI 29% more during the 10 months that vitaCare has been available than the 22 months under the prior process. In fact, prescriptions via vitaCare since May is equal to the number of prescriptions written previously since launch. Looking forward, we are focused on continuing this trend and improving the conversion rate of prescriptions to dispense.
In August, we implemented a telehealth option for diabetic gastroparesis patients to access care. Telehealth is increasingly utilized by providers and patients and COVID only accelerated adoption of this channel. We believe telehealth is an important option for patients who don’t have regular access to care due to remote location, lack of transportation, affordability, work schedule, and those that would prefer to access care via telehealth option.
Telehealth provides access to care from a licensed healthcare provider, generally, with access to same day physician appointments. This may allow for more rapid consultation and potentially treatment initiation within just a few days, if medically appropriate. Patients can find telehealth on gimotirx.com or can learn about it via our online digital advertising efforts.
As mentioned on past calls, direct to patient advertising, particularly paid search and social, is an important part of our marketing mix. As we continue to invest, patient awareness continues to improve, increasing nearly 11% since our last measurement late in Q2. Additionally, we see increased posting of interest in GIMOTI on social media forums. Ultimately, our goal is to facilitate conversations between patients and providers on whether GIMOTI is appropriate for them.
In our most recent patient awareness trial and usage market research study, which surveyed 200 patients, patients indicated that they’re highly interested in a non-oral option for the treatment of their GP symptoms. Patients who are taking GIMOTI rated GIMOTI more favorably on efficacy and tolerability measures compared to patients taking other treatments. Patients also taking GIMOTI rated GIMOTI more favorably for symptom improvement and ease of use compared to other treatments. And all patients on GIMOTI reported symptom relief, while one in four patients treated with other products indicated no symptom relief at all.
These data, along with the anecdotal daily reports from providers of patients experience relief, motivate us and provide confidence that there is a significant unmet need. GIMOTI is uniquely positioned to help patients and providers who are struggling to gain the upper hand on symptoms of gastroparesis, as they can use a nasal spray when they experience nausea and vomiting, which is not usually possible with oral treatments.
On the provider front, we have seen significant gains in access to offices, coupled with a fully staffed and very engaged sales team in the third quarter. Not only are our representatives reaching a greater percentage of their targets, but they’re getting more time with them via appointments, educational meetings, and speaker program. This extra time affords an opportunity to address the key advantages of GIMOTI and differentiate our route of administration as well as allow platform to discuss any questions or hesitancy to prescribe.
A great example of this is our speaker programs. Over 500 customers have attended at least one program since inception earlier this year, resulting in a 48% lift in prescribing for attendees after the program compared to what they prescribed prior to attending the educational program. Our efforts are having an impact and patients are ultimately the ones benefiting from improved provider understanding.
In addition to our promotional speaker programs, we’ve expanded our presence with KOLs and important gastroenterology congresses. Advocacy and interest continue to grow at the KOL level.
At the Motility Society Meeting, we sponsored a symposium with Drs. Linda Wind of Stanford University and Richard McCall of Texas Tech University. They spoke to a standing room-only audience of motility experts and underscored the need to resurrect metoclopramide through GIMOTI as the only FDA-approved option to treat gastroparesis, referencing data from GIMOTI clinical trials and the recent study demonstrating the low incidence of tardive dyskinesia compared to what was previously reported in the literature.
These data, as Dave mentioned, were also recently highlighted in the updated gastroparesis guidelines that were published in August. GIMOTI was included in the guidelines, along with our comparative data to oral and the recent tardive dyskinesia study we completed and presented in Digestive Disease Week in June. These milestone events are critical to the brand as they provide independent support for GIMOTI and provide content for KOLs to use in their own presentations when lecturing at different forums across the country.
Lastly, we continue to make progress on overall patient access and success with payers. Without rebates to payers thus far, 115 plans have approved at least one prescription of GIMOTI. 77% of our prescriptions were reimbursed in Q3 versus 63% in Q2. This is a significant improvement and contributed to the 80% improvement in net sales for the quarter.
Our patient support program through vitaCare, which includes supporting providers in completing prior authorizations, is contributing as well. Importantly, when plans approve a prior authorization, it is generally approved for a 12-month period. And once patients have an opportunity to try GIMOTI, many are experiencing positive results as evidenced by an overall refill rate of 71%.
We continue to enhance our position in the gastroparesis market through the right strategy and continually improving execution. Each quarter, we have seen improvement over the prior quarter and, importantly, saw a significant improvement in 3Q over 2Q.
With that, let me turn the call over to Matt to discuss financials.
Matthew D’Onofrio
Thanks, Chris. I’ll now review our financial performance for the third quarter of 2022. Net sales were approximately $832,000 compared with approximately $462,000 in the second quarter of 2022, an increase of approximately 80%. Net sales for the third quarter of 2021 were approximately $247,000, which excludes approximately $683,000 sold to a third-party for research purposes. The increase in net sales sequentially and year-over-year was due to higher number of GIMOTI prescriptions and greater overall reimbursement.
Net loss was approximately $2 million or $0.06 per share in the third quarter of 2022 compared with approximately $2.2 million or $0.71 per share in the second quarter of 2022. Net loss for the third quarter of 2021 was approximately $2 million or $0.73 per share.
Research and development expenses for the three months ended September 30, 2022, were approximately $40,000 compared with approximately $191,000 for the three months ended June 30, 2022 and approximately $82,000 for the third quarter of 2021. R&D expenses in the second quarter of 2022 were higher as a result of increased non-recurring manufacturing testing.
For the third quarter of 2022, selling, general and administrative expenses were approximately $2.6 million compared with $2.3 million for the second quarter of 2022. SG&A expenses were essentially unchanged from the third quarter of 2021. We continue to expect that selling, general and administrative expenses will increase in the future as we continue to progress with the commercialization of GIMOTI and we reimbursed to Eversana from the net profits obtained from the sales of GIMOTI.
Total operating expenses for the third quarter of 2022 were approximately $2.7 million compared with $2.6 million for the second quarter of 2022 and approximately $2.8 million for the third quarter of 2021.
As of September 30, 2022, company’s cash and cash equivalents were approximately $12.4 million. We believe based on our current operating plan that existing cash and cash equivalents as well as future cash flows from net product sales of GIMOTI will be sufficient to fund operations into the second quarter of 2023.
With that, we will open the call to questions from our analysts. I’ll turn it to the operator.
Question-and-Answer Session
Operator
David Gonyer
Okay. Thank you. I’ll close with some brief remarks. We believe the third quarter represented an important milestone for Evoke. The operational details we shared are certainly noteworthy. However, the numbers really told the story in Q3.
The significant increases in net sales, new physician metrics and inbound prescriptions as well as the increasing patient and HCP awareness of GIMOTI give us tremendous optimism for the future of Evoke and our novel intranasal treatment of diabetic gastroparesis.
As we approach the end of 2022, we have high enthusiasm for our product and our business, and we look forward to updating our investors and supporters as events warrant. Thank you.
Operator
This concludes today’s Evoke Pharma third quarter 2022 earnings call. You may disconnect your lines at this time and have a wonderful day.
Be the first to comment