Evoke Pharma, Inc. (NASDAQ:EVOK) Q4 2024 Earnings Conference Call March 13, 2025 4:30 PM ET

Company Participants

Daniel Kontoh-Boateng ??? DKB Partners
Matt D???Onofrio ??? Chief Executive Officer
Chris Quesenberry ??? Chief Commercial Officer, GIMOTI, EVERSANA
Mark Kowieski ??? Chief Financial Officer

Conference Call Participants

Yale Jen ??? Laidlaw & Company

Operator

Good afternoon, and welcome to the Evoke Pharma, Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call. Currently, all callers have been placed in a listen-only mode. Following management's prepared remarks, the call will be opened for your questions by pressing star and one on your telephone keypad.

Please be advised that today's call is being recorded. We will be standing by should you need any assistance. I would now like to turn the call over to Daniel Kontoh-Boateng.

Thank you, sir. You may begin.

Daniel Kontoh-Boateng

Good afternoon, and thank you for participating in the Evoke Pharma, Inc.'s conference call today. With me today are Matthew D'Onofrio, Evoke Pharma, Inc.'s Chief Executive Officer, Christopher Quesenberry, Jim Moody's Chief Commercial Officer from Eversana, and Mark Kozlowski, Chief Financial 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 the annual report on Form 10-K, which is now filed with the SEC. The company's Form 10-K and earnings release are also available on Evoke Pharma, Inc.'s website.

Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation 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 both 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 accurate only as of the date of this live broadcast. Evoke Pharma, Inc. 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 Matthew D'Onofrio. Matt.

Matthew D'Onofrio

Thank you, Daniel. Good afternoon, everyone. Thanks for joining today.

Starting with the portion story to keep our focus while we are working so tirelessly to help children suffering from gastroparesis. This quote here is from a real patient that highlights why we do what we do. A physician recently described to us a twenty-year-old patient who had been to the ER eight times in the prior six months.

Due to him receiving Medicaid, he lost his job, moved back with his parents, and dropped below a hundred pounds. Dean and his mother were desperate for a solution. One month after starting Gimoti, he did not return to the hospital, started regaining weight, and had only experienced one episode of vomiting when he missed a dose.

That's the kind of light and heavy impact we aim to deliver. Stories like these drive us forward and reinforce our mission to make a meaningful difference in the lives of gastroparesis patients. 2024 was another year for Evoke Pharma, Inc. It was a year we continued on our strategy, tracking in the market, delivering strong financial results.

We see $1.2% million total revenue, quoting a 97% year-over-year increase after the prior $9.5% to $10 million guidance. Revenue of $3.3% million, a 24.6% sequential increase. A major driver of this growth was the expansion of Gimoti's subscriber base and improved prescription fulfillment.

The transition to Aspen pharmacies played a crucial role in this, significantly accelerating the delivery time of Gimoti and rapid adjudication of insurance authorizations for patients. This, along with our growing provider engagement, led to a 46% increase in prescribers year over year, bringing our total cumulative prescriber base to 2,553. Additionally, fill rates increased 72% year over year, and patient enrollments grew 22%.

Our corporate position continues to improve with two additional Orange Book listed patents that were allowed in 2024 and recently posted on the FDA website. We now have six listed patents related to Gimoti, into 2030.

Christopher Quesenberry

Additionally, the recent Vanda CRL and FDA's posted notice on Domperidone discontinuation via the compassionate use program further emphasized the critical need for Gimoti. Gimoti remains the only approved product to treat this disease that has any evidence of improvement over prior standard of care oral metoclopramide. We continue to capture stories of patients that are not adequately treated with oral medication and find relief with Gimoti, the only non-oral and reliable FDA-approved nasal treatment for gastroparesis.

Evoke Pharma, Inc. remains the only company positioned to elevate treatment for this devastating disease. Now we'll turn to Chris to recap our commercial progress over the course of 2024 and plans moving forward into 2025. Thanks, Matt.

Good afternoon, everyone.

Matthew D'Onofrio

Reinforce Matt's summary of 2024, in addition to improving the efficiency of our processes with our Aspen partner pharmacy, we had a number of milestone moments in 2024 that helped us to achieve the growth that Matt described. We expanded our pharmacy distribution networks to create redundancy in key markets and mitigate loss of out-of-network scripts. In other markets, we continue to build evidence supporting the utilization of Gimoti and challenge the use of oral metoclopramide as the standard of care for patients with gastric diseases.

We improved our execution in the field and overall by launching a fully integrated omnichannel program powered by our artificial intelligence and launched a new marketing campaign focused on Switch. Our message is being heard and recognized in various channels, including awards and presentations at conferences, attendance at sponsored speaking programs, and publications of our data. Beyond commercial execution, we have also made meaningful strides in clinical validation.

Christopher Quesenberry

Our healthcare research utilization or HRU data has continued to reinforce the value proposition of Gimoti. At ACT in October of 2024, we presented data evaluating the impact of COVID. Our FDA-approved metoclopramide nasal spray patients with diabetic gastroparesis who were simultaneously taking GLP-1 receptor agonists.

This research highlights Gimoti's role as a potential supportive therapy for GLP-1 users experiencing gastroparesis symptoms. Furthermore, given the frequent questions and interest from providers on this topic, we are now integrating this data into our educational efforts. ACV was a defining moment for us.

Not only did we receive the presidential poster award, but our larger booth presence allowed us to engage with hundreds of physicians, doubling the number of interactions from last year. Many of whom were learning about Gimoti for the first time and a good number who specifically sought us out. This underscores what we already believe: we're just scratching the surface in terms of market penetration.

Awareness remains a top priority, and with Eversana's expanded efforts, we are well-positioned to accelerate broad provider education and drive adoption. Again, to emphasize the impact of working with Aspen over the past year, this transition has been one of the most effective commercial strategies we've implemented. It has not only streamlined prescription fulfillment but has also improved the overall patient experience, reducing frustration and improving the chance.

Aspen's high patient retention rates help to ensure that more patients stay on therapy, which is critical for improving outcomes and supporting provider confidence in prescribing Gimoti. The results of these adjustments to strategy and tactical moves are that we were able to double revenue in 2024 from 2023. In fact, we've doubled revenue two times over the last two years.

We are making an impact in the market and proving that we can impact both providers' behaviors as well as our own processes to continue to build on performance agility. We took particularly big strides in the second and fourth quarters of last year and plan to continue progress towards growing business and market share as well as Brett's describing towards value. In fact, as we continue to add new prescribers to the range of Gimoti, the prescribing continues to grow.

On average, we add between 65 and 75 new prescribers each month, which generally write for their first prescription. And yet we still continue to see the depth of prescribing per physician continue to grow and is now at nearly six and a half scripts per prescriber. We believe neither of these trends show signs of slowing and underscore the fact, again, that we've only scratched the surface for this brand in the market.

There is and continues to be significant upside potential. When we look at patients and the average number of months on therapy, the trends are remarkably similar to what you see here. This graph continues to grow, and they show no signs of abating either.

I'm excited because we continue to see signs of repeat patients with prescription renewals, strong refill rates, and overall fill rates that are cumulatively catching up to cumulative prescriptions and watch. Let's now look at the efficacy of key components of our program. There are several improvements we've made within our process teams, communication, and education and coordination with our pharmacy partner, Aspen.

They have leading capabilities in communicating and onboarding patients, reporting and transparency, and tools for providers to support access for patients to important medications like Gimoti. We are focused on streamlining the process and integrating it into the provider's workflow as much as possible. A significant indicator of those efforts is seen in a meaningful rise in conversion rates over the course of the year. The quality of those same adjustments is reflected in improving the conversion rate for each payer type throughout the year.

In addition to improvements with processes with Aspen, we added capacity and coverage by expanding our distribution network by 7% in pharmacies. These partnerships have helped us patch holes in a payer system that in some instances requires pharmacies to be part of a PBM's network of pharmacies. For another, it requires them to be within the state where the prescription is billed.

We added these pharmacies throughout the year, which contributed to a 30% faster speed to therapy for patients, which is essentially the time between prescription intake and the receipt by the patient of Gimoti. A significant reduction in out-of-network prescriptions and increased overall conversion and reimbursement. This yielded a growth in year-over-year expenses by 72%.

Importantly, when patients see their prescriptions filled, it increases both their confidence and prescriber confidence, which is a very important currency for us. No matter what the market data is saying, and the gastroparesis market is no different. While we have a needle registration that demonstrated faster bioavailability and clinical trial efficacy that shows relief of symptoms, previously, we couldn't answer two critical questions that physicians had.

First, does the rate of nasal metronization really matter. And second, are you getting better than oral metoclopramide. Our retrospective real-world data and perhaps one of the largest studies of patients with gastroparesis was a significant step towards answering those questions.

We demonstrated that Gimoti was significantly better than oral metoclopramide in reducing ER visits and hospitalizations. Emphasizing the point nearly two-thirds of patients in the Gimoti previously took oral metoclopramide. By switching from oral to the nasal route of administration, the patient achieved better results.

In fact, it answers a third important question, which is if a patient is not doing well on oral metoclopramide, would they seek benefit by switching to Gimoti. We think the answer is yes. So along with these data, we feel confident that we can move Gimoti from a product providers are willing to try to a product they rely on.

So we've taken this message to the market and we've initiated a definitive switch campaign and supercharged that with an omnichannel campaign powered by artificial intelligence that we launched at the beginning of Q4 last year. Our message is reaching a broader audience with a faster cadence and a more reliable presence than ever before. We believe we have high commitment within our sales team and committed engagement with our providers.

In fact, we've been able to improve our reach to targeted physicians to 60%, made more than 2,000 additional calls that we wouldn't have been able to make beforehand, and sent content over email that was engaging enough to compel a 15% open rate versus an industry average of 2%. Qualitatively, we know we're having an impact because more providers are seeking to know about Gimoti rather than us taking Gimoti to them. Providers are asking more questions and digging deeper into our data.

As I transition from accomplishments in 2024 to double that revenue, we need to dig deeper into 2025 to achieve our own performance and expectation. We need to build on this momentum we've earned and not rest on those achievements. As I said, we've only scratched the surface and there are so many more patients who we can potentially help.

One area where there's still significant room for impact is on the pharmacy side and doing so in a strategic and thoughtful manner. Within gastroenterology, the landscape has been changing pretty dramatically and thousands of providers are now part of very large GI practice organizations. These organizations are purpose-built to harmonize and share operational pain and to scale off the service specifications.

Hospital systems and payers. Based on their slide, they have increasing clout and many of them have preferred specialty pharmacies they work with. Our goal is to meet them where they're at.

We have many common goals and objectives, primarily centered on improved patient care and wanting a streamlined process. By adding pharmacies here and in this way, we believe it will be additive to our business. As we grow volume and continue to obtain higher authorization, we're going to invest in improving this process as well.

I'm really excited to announce that we recently added four field rate person managers for FRMs and a leader to serve as a resource to prescribers in the prior authorization process. Currently, only 50% of them are being completed. We have demonstrated though that we can improve the completion rate with our sales team, but that took them off the task of selling.

By deploying FRMs, we hope to solve a pain point for prescribers to obtain prior authorizations, which take them away from patient care, and we solve a pain point for ourselves by increasing completion of quality of prior education. We expect this to impact conversions, gross to net, and again, overall confidence in prescribing. We're going to continue to invest in evidence generation and education to reinforce that Gimoti should be the standard of care.

We will continue to feature our healthcare resource reduction data prominently. As I mentioned earlier, recently we have provided data to the growing discussion about GLP-1 use and the association with symptoms like nausea, vomiting, and gastroparesis. In a sub-analysis of our HRU data in 91-92 patients, we show that patients taking Gimoti fared better than patients taking oral metoclopramide across different healthcare businesses.

While these data are limited, we believe Gimoti can be an option for patients on a GLP-1 who have diabetes and suffer from gastroparesis. This pillar of evidence will continue to be an important part of Gimoti and will further entrench the brand in the market today and serve to differentiate Gimoti against future ventures. In summary, we are ambitious about our plans and goals for 2025.

We set some solid groundwork and have made adjustments to capitalize on our opportunity and diminish our challenges. Our aim is to continue to build on our performance to strategically partner with both pharmacies, improving the prior authorization process, expanding our share of voice, and improving our execution, adding to the reasons to believe that Gimoti has it. Data and continuing to challenge ourselves on where else Gimoti might add value to patients and providers.

With that, I'll turn the call over to our Chief Financial Officer, Mark, to go over the financials. Thanks, Chris.

Mark Kozlowski

Once again, thank you for all joining us this afternoon. I'll get right into Evoke Pharma, Inc.'s financials for the fourth quarter and full year-end 2024 results. As Matt mentioned, for the fourth quarter of 2024, net product sales were approximately $3.3% million compared with $1.7% million during the fourth quarter of 2023, and a net loss of approximately $1.2% million or $0.49% per share compared with $2 million or $7.13% per share for the fourth quarter of 2023. For the year ended December 31, 2024, net product sales were approximately $10.2% million compared with approximately $5.2% million for the year ended December 31, 2023, and the net loss was approximately $5.4% million or $2.81% per share with a net loss of $7.8% million or $27.97% per share for the year ended December 31, 2023.

The year-over-year increase in revenue was due to the higher net product sales in 2024 resulting from enhanced prescription fulfillment through the Aspen Pharmacy network, robust commercialization efforts, and increased provider awareness through marketing of head-to-head real-world data MSD and Gimoti of resource utilization benefits over oral metoclopramide. There were no research and development expenses incurred during the fourth quarter of 2024 compared to $23,000 for the fourth quarter of 2023. For the full year of 2024, research and development expenses were approximately $16,000 compared with approximately $0.2% million for the prior year. For the fourth quarter of 2024, selling, general, and administrative expenses were approximately $4.4% million, compared to $3.5% million for the fourth quarter of 2023. For the year ended December 31, 2024, SG&A expenses were approximately $15.1% million versus approximately $12.2% million for the year ended December 31, 2023.

The increase in SG&A costs year over year resulted primarily from higher marketing and advertising and profit-sharing costs. We expect that SG&A expenses will increase in the future as we continue to progress with the commercialization of Gimoti and reimburse Eversana in the sales of Gimoti. Total operating expenses for the fourth quarter of 2024 were approximately $4.5% million compared to $3.6% million for the same period of 2023. For the year ended December 31, 2024, total operating expenses were approximately $15.5% million compared with approximately $12.6% million for the full year of 2023. As of December 31, 2024, cash and cash equivalents were approximately $13.6% million.

We believe based on our current operating plan, that our existing cash and cash equivalents, including proceeds raised from financing in 2024, as well as future cash flows from net product sales of Gimoti, will be sufficient to fund our operations into the first quarter of 2026. It's worth reiterating that one of the biggest financial milestones of 2024 was our $14.3% million capital raise, which was achieved through equity financings and warrant exercises. This funding has allowed us to ensure NASDAQ compliance and extend our cash runway into Q1 2026, giving us the financial flexibility needed to execute operations smoothly and expand market access.

We have a strong financial outlook for 2025. As noted in our press release, we are projecting net revenue guidance of approximately $16 million, which represents a 60% increase over 2024 net revenue. This projection is built on the momentum we've established, improved reimbursement pathways, and increasing prescription fills.

Of course, as with any guidance, this outlook also considers external factors outside our control, such as macroeconomic conditions, supply chain constraints, and inflationary pressures. That said, we remain highly confident in our ability to execute and continue delivering strong results. And with that, we'll open the call to questions.

Operator.

Operator

Absolutely. At this time, if you'd like to ask a question, please press the star and one keys on your telephone keypad. Keep in mind, you may mute yourself at any time.

We now support questions today from Yale Jen with Leaf Log Company. Please go ahead. Your line is open.

Yale Jen

Good afternoon. Thank you for taking the questions. Congrats on a good quarter.

Thank you. We have two questions here. The first one, I just want to look at the competitive landscape that you have the Vanda's drug, the FDA's company response letter, and also the compassionate use of the Domperidone input from the FDA.

How do you see that could impact the competitive landscape. And what do you feel is the content you use among the scope of the compassionate use drug and how much that could potentially be in the market. You could capture some of those.

Matthew D'Onofrio

Sure. I'll make a comment, and then maybe, Chris, you can chime in. It's really hard to know exactly what will happen in terms of the Domperidone component.

We don't know when it will finally run out. We know that they said sometime this year. Obviously, there are patients that are out there taking it through that mechanism.

The exact number is not reported anywhere, so we don't know. We also know that some patients are getting it legally shipped in from Canada or other countries externally, which will probably continue as well. We recognize that there's just a big need for the product, and it's most likely going to end up in some way falling into our laps in terms of those patients are probably going to end up having to turn to an alternative like Gimoti.

I'll stop with that and maybe, Chris, you can further chime in.

Christopher Quesenberry

I agree, Matt. It's not clear the volume, but what is clear is that yet another option is no longer available for patients sometime later this year. It continues to cement Evoke Pharma, Inc. as a leader in this market, and as patients and their providers turn to options, then we will be there as an option for them.

Okay. Great. That's very helpful.

Maybe a follow-up question here that I remember a few quarters ago you guys were talking about increasing the Medicaid and Medicaid-like, private Medicaid pharmacy in different states. Any update on that front. Thanks.

Matthew D'Onofrio

Yeah. Chris, why don't you take this one.

Christopher Quesenberry

Yes. So that strategy, as I mentioned earlier, has helped us. You saw earlier the slide that the dispersion rate of Medicaid and Medicare scripts has increased over the year, and part of that reason is because we have brought on board those seven additional dispensing pharmacies.

Medicaid, as an example, has gone from about 2% of our business at the early part of 2024 to now between 5% and 7%, depending upon the month, so it's growing. And as we demonstrate to providers that we can fill those prescriptions, we believe that will continue to grow. Okay.

Great. That's very helpful. Again, congrats, and thanks for taking the question.

Operator

And once again, if you'd like to ask a question today, please press the star and one key on your telephone keypad. We can pause for a moment to allow any further questions to queue. And there are no further questions on the line at this time.

So this concludes the Q&A portion for today's call. I would now like to turn the call back over to Matthew D'Onofrio for any additional or closing remarks.

Matthew D'Onofrio

Sure. Before we conclude the call, I want to take a moment to reflect on where we are heading. Looking ahead into 2025 and beyond, our strategy remains clear: expand pharmacy partnerships to continue improving access, increase provider awareness and engagement to drive broader adoption of Gimoti, leverage real-world data to strengthen payer discussions and reinforce Gimoti's value, continue improving prescription fulfillment rates to reduce leakage and abandonment, and as per our mindset since Evoke Pharma, Inc.'s inception, maintain a disciplined approach to capital allocation, ensuring we maximize the return on every dollar invested in commercialization.

We've built strong momentum, and we are in a great position to capitalize on the foundation we've laid over the past year. With the right commercial infrastructure, strong strategic partnerships, and growing clinical validation, we believe Gimoti is honestly becoming the standard of care for gastroparesis treatment. We're looking forward to sharing our progress over the course of the year.

Thank you for your continued support.

Operator

This concludes today's Evoke Pharma, Inc. Fourth Quarter and Full Year 2024 Earnings Call and Webcast. You may disconnect your line at this time, and have a wonderful day.