Evoke Pharma, Inc. (NASDAQ:EVOK) Q2 2022 Earnings Conference Call August 10, 2022 4:30 PM ET

Company Participants

David Gonyer – Chief Executive Officer

Chris Quesenberry – Chief Commercial Officer

Matthew D’Onofrio – Chief Business Officer

Conference Call Participants

Unidentified Company Representative

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 new, 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 accurate only 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 thank you all for joining us today.

I'll be providing updates on key developments that have occurred during the second quarter, ending June 30 and thus far in Q3. I'll then turn the call over to Chris and Matt to discuss commercial operations and financials.

I like to first begin this afternoon with a key and important data point. During the second quarter our pharmacy and patient support program received the largest number of inbound quarterly prescriptions to date with more than 500 patients. That's an increase of 24% compared with the first quarter of 2022.

Why is this so important? This patient support program provides patient access to pharmacists and nurses, support for benefit verification in prior authorization and is critical to patients obtaining access to the medicines their provider prescribed for them. We see this program in partnership with the vitaCare Prescription Services as a patient portal to the entire healthcare universe with vital touchpoint that provide a seamless and reliable patient experience to optimize their benefits and ensure that patients receive their prescription at the most affordable cost.

We've now converted our reimbursement program primarily over to vitaCare, which is a wholly owned subsidiary of GoodRx. This program will serve as a valuable indicator of GIMOTI prescription pills for the second half of this year. Chris will discuss how we believe vitaCare and other partnerships enhance our second half outlook and beyond as well.

One significant feature of our HUB platform is the streamlining of the complex process to submit and receive approval for medicine, for both providers and patients. So patients can start their medications more quickly. This is critical for patients with gastroparesis who are symptomatic and are looking for relief.

As our customers navigate insurance coverage, positive coverage and reimbursement decisions that open access to GIMOTI is critical. The recent announcements of the new state Medicaid approvals in Texas and Florida are so important, as these states provide services to approximately 10 million or nearly 16% of the Medicaid population nationally. What's more of Texas and Florida add to the list of other state Medicaid approvals, including New York, which we announced in Q1 of this year and Michigan prior to that. We're pleased with the progress and access for the Medicaid population, as it represents a recognition of value and limited alternative of options for patients. We'll continue update, monitor, and track utilization in all these government programs.

On last quarter's call, we mentioned that Evoke was granted FDA market exclusivity in April. As a result Evoke has exclusive U.S. marketing rights over a three-year period, beginning on GIMOTI’ s FDA approval under the Hatch-Waxman Act to protect the product from generic competition. Our proprietary position regarding GIMOTI got a boost in July when we announced that Evoke was awarded a Canadian patent covering the method of use of GIMOTI.

Importantly, the new protections in Canada mirror those granted in the U.S. The new patent adds to two other FDA Orange Book-listed patent under the same title that don't expire until 2029, 2030.

Another positive development during the quarter was the main announcement that our first ever patient-centric survey conducted by Evoke and Everson reported, increasing patient awareness, trial, and product usage of GIMOTI. I'll let Chris tell you a bit more in a moment, but overall, these data gathered from patients are promising and clearly show the vast potential value that GIMOTI provides to people suffering with symptoms associated with gastroparesis.

Last month I was able to meet with several key opinion leaders in gastroparesis. And in conjunction also spent a few days working with some of our sales representatives out in the field meeting with gastroenterologists, physician assistants, nurse practitioners, and medical assistants across the country. The reception and feedback I received was quite rewarding, very encouraging, and rather humbling as it relates to patients struggling with gastroparesis and how GIMOTI is helping. This mirrors what we've heard in both HCP and patient market research.

My experience out in the field allow me to speak, discuss, and further understand the benefits of GIMOTI with frontline healthcare providers first hand. It also provided me the increased confidence for GIMOTI is important and needed place in the treatment of patients with gastroparesis, for today and for the future.

In May, Evoke also participated at Digestive Disease Week, which is the largest global conference for gastroenterology. And we are gratified to present a poster of distinction to scientific and clinical experts and key opinion leaders that provided real world statistics using the largest claims database available, which covers over 80 million lives in the U.S. to assess the incidence of TD, including patients taking metoclopramide over a 10-year period. Results from patients that received metoclopramide demonstrated a lower risk of developing tardive dyskinesia or TD, than stated in previously reported studies. The data showed 98.8 per 100,000 incidences of TD, or just 0.1% among gastroparesis patients treated with metoclopramide.

The posters supports the safety profile of metoclopramide as the only approved molecule in the U.S. to treat symptoms of acute and recurrent diabetic gastroparesis. And the aim of the study was to update the medical literature with current information about the incidence of TD in patients with and without gastroparesis and those taking metoclopramide.

By supporting the largest ever real-world study on this important issue, we hope these data help HCPs and organizations understand the incidence of TD, recognize patients who might be at a higher risk and revisit the benefit versus risk of this important compound in patients with gastroparesis.

In the second quarter and now in the third, we continue to expand access, to GIMOTI in collaboration with Eversana and other partners that will help us access patients who need help with their disease.

I want to add to what we said in Q1 about our partnership with vitaCare, which I referred to earlier. vitaCare is an e-prescription service that provides an effective, quick and convenient way for patients to receive medications. This platform is meant to help patients navigate key access and adherence barriers for brand medications like GIMOTI.

While the specifics of a deeper, long-term partnership are still being discussed between vitaCare and Evoke through Eversana, we've expanded the service from a pilot in February to full scale launch in May, which has contributed to the increase in prescriptions, especially inbound.

And specifically vitaCare care helps patients understand coverage and identify available savings opportunities, as well as facilitating communications between providers and payors.

Last, key developments I would like to touch on where our successful efforts to regain NASDAQ compliance and improve Evoke’s cash position. On June 7, we received notice from NASDAQ stating that we had regained compliance with a minimum $1 per share requirement. And as we also disclosed earlier in May Evoke utilized its ATM or at-the-market facility to raise net proceeds of approximately $7.1 million. And this extends our cash runway into the second quarter of 2023 with approximately $13.5 million in cash as of June 30.

And with that, I'll turn the call over to Chris. Chris?

Chris Quesenberry

Thank you, Dave. The second quarter has been a strong quarter of progress on many measures. Performance wise, we had the strongest quarter to date with 24% increase in prescriptions. In addition, the number of GIMOTI new cumulative prescribers increased by 23% from 543 at March 31 to 669 new prescribers at June 30 of this year.

As I look back to the beginning of this year, our growth is at the strongest pace since January compared to any time period, since launch. In fact, we have already exceeded our dispense total for all of 2021 through the first half of this year.

There are several contributing factors to this, including improved brand messaging, stronger execution from our sales team and key initiatives to streamline the prescription process for patients and providers. One of the more significant changes to our business was our change in distribution via a partnership with vitaCare Prescription Services, which is now owned by GoodRx.

The primary reasons for partnering with vitaCare – to simplify and streamline the prescribing process for providers integrate prescribing into their workflow and leverage vitaCare's automated platform to adjudicate claims. In addition, we wanted to communicate with providers and patients and provide auto shipments to patients who requested it.

He needs some prescribing and speed to therapy are some of the most important drivers of utilization for our customers. And we feel this was an important change to make for the long term health of our business. When making such a significant change to a key process, there are always inherent challenges and you run the risk of slowing your performance in the near term?

Overall, we see sustaining or improving performance. And based on these learnings and performance from the pilot program, we launched a full scale rollout to all our customers on May 2. Prescriptions vitaCare, already account for 62% of the prescriptions through the end of second quarter. The rate of prescription growth for vitaCare prescriptions is 2.3 times the overall growth of prescriptions of GIMOTI since launch.

I'm going to spend a good amount of time on the second piece here, which is patient awareness and what we've learned about patients. In the second quarter, we conducted our first patient ATU study, which stands for awareness, trial and usage. And this surveyed 110 patients that were representative of patients with gastroparesis, including those with and without diabetes.

70% of respondents experienced flares generally defined as sudden acute and more severe periods of GP symptoms. Diabetic gastroparesis patients experience up to 13 flares on average each year. And most of these patients have taken medications for their gastroparesis, including many that take multiple medications. Roughly half of users report no symptom improvement from either oral tablet or liquid metoclopramide or other off-label medications. As a result 38% of respondents discontinue those GP medications primarily due to either side effects or lack of symptom improvement. One fundamental issue among patients is difficulty with taking oral GP medications with 50% of respondents saying that they've had a tough time taking orals. So it's not surprising that diabetic patients – diabetic gastroparesis patients indicated strong interest in trying a non-oral option.

Patient awareness of GIMOTI has risen to 19% of patients compared to 8% awareness last fall. Off those patients in the study who were aware of GIMOTI prior to the survey, 43% are current users. GIMOTI rated higher in experienced scores across symptom relief, side effects and ability to keep medication down compared to every other medication that was rated. 100% of GIMOTI users reported seen at least some symptom improvement on the nasal spray. These latest patient data underscore the unmet need within gastroparesis and reinforce our need to reach these patients with education and helping them to understand there is a non-oral option for them.

Moving to physicians, the feedback from the Eversana sales organization continues to be positive with regard to physician interest. Since product launch, it has taken an average six to seven physician details before a physician writes their first prescription, which is lower than we initially expected and we believe congruent with the straight-forward non-oral benefit for route of delivery. We're seeing improved access in the second quarter which allows us to reach more healthcare providers. New prescribing physicians increase 23% compared to the prior quarter.

HCP awareness stands at 80% of target GI and awareness among non-target GIs, primary care physicians and NPs and Pas have all risen since January. The most notable increase in awareness is among nurse practitioners and physician assistants, which increased from 60% in the fall to 81% awareness in the most recent survey. Strong awareness of our product, which is a score of four or five out of five, is generally a leading indicator of prescribing. And that has also risen to its all time high of 55% of strong awareness among all HCPs from 48% at the beginning of the first quarter.

In January, we instituted new targets for our field sales team enhancing the potential of their targets overall and including NPs and PAs were [indiscernible] created within GI practices. They account for a significant portion of the medical management of gastroparesis. NPs and PAs and other non-GI specialties continue to increase their contribution of total prescriptions for GIMOTI. Although we continue to obtain new prescribers, our reliance on new prescribers is lessening with more prescribing coming from ongoing prescribers. 59% of our prescriptions overall came from HCPs who have written at least five or more prescriptions for GIMOTI.

In the second quarter, we accelerated our speaker programs and trained both GI and nurse practitioner and physician assistant speakers. And we are pleased with the initial attendance and educational impact of these programs. Also in the second quarter, we updated our physician campaign and messaging. This campaign is a natural evolution from our Spray Away Symptoms Campaign, which focused on the route of administration for GIMOTI, and the benefits of bypassing the GI tract. Our new campaign, which is titled the right delivery, so it can work, focuses on more on the differentiation from oral therapies that are at the mercy of erratic absorption and thus may delay symptom relief.

In early August, we plan to launch our new patient campaign, similar to the evolution for HCPs. We are moving from Spray Away Symptoms to think outside of the pill box patient feedback to this campaign via Marco research was very well received when patients saw the profile for GIMOTI and our new campaign, they indicated an overwhelming interest in learning more about GIMOTI rating, their interest of 4.9 out of five, which is unheard of.

We're continuing to make progress on the access to GIMOTI among insurance companies and pharmacy benefit managers. Ay coverage and reimbursement health study. We continue to have productive dialogues with payers through our capable national account teams. Importantly, we expect plans to want to drive generic utilization for patients and would require patients to try Carlson of oral therapy, first

Our position is to work with payers to allow access for patients who cannot take oral or for those who orals pro provided inadequate response. They've mentioned Florida has recently added GIMOTI to the preferred drug list and medicated in the ongoing opportunities for us. Today, at least 97 plans of approved at least one prescription for GIMOTI since launch. And 54 plans have approved GIMOTI in the second quarter alone. While the majority of prescriptions required a prior authorization, we are improving our ability to gain approval across commercial, Medicare, and Medicaid payers. It's important to note that when a prior authorization is approved, it's generally approved for an entire year.

We expect to gain positive decisions and improved assess access from payers over time. As I see demand grow, experience how GIMOTI, patients response clinically and are educated on the needs of this patient population and the differences between oral and nasal route administration, we will believe – we believe they will understand the value proposition of GIMOTI. As I close out the commercial update, I'd like to summarize a few key points. Awareness of GIMOTI is high among providers and growing among patients. Strong awareness is what we are targeting and you can expect us to work even more diligently to encourage patients to request GIMOTI and provide them tools to facilitate the dialogue between physicians and patients.

We have learned a great deal about what has led provider’s decision to prescribe, and we are enhancing the positioning and messaging of GIMOTI to more clearly differentiate from oral therapies. Our performance continues to steadily improve in terms of reach and access to providers, prescription volume, number of new and total prescribers, breadth of prescribing from different specialties and depth of prescribing among other leading indicators. Our goal is to increase the percentage of our utilization within moderate and severe patients and firmly cement ourselves a second line behind generic. We are showing signs of progress among specialties with the greatest response from targeted GIs and NPs and PAs saying they preferred use GIMOTI a second line, 40% and 44% respectively. We have taken significant strides to improve the access to GIMOTI, enhance patient and provider experience through programs, including our partnership with vitaCare. We will continue to provide patient saving support and expect to improve coverage over time.

And lastly, we continue to work on improving the conversion rate of prescriptions into the dispenses via vitaCare and other efforts. This conversion hinges on coverage and coverage decisions via prior authorization, which needs to be completed and submitted by the physician offices. We have a significant focus on this to help support the office staff in completing these in a timing FA fashion. This coordination is important and is critical to speed-to-therapy for patients. On this metric, we have improved speed-to-therapy to 12 days within vitaCare compared to 20 days historically for our program.

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 second quarter of 2022. For the second quarter of 2022 net product sales were approximately $462,000 compared to $237,000 during the second quarter of 2021. And the net loss was approximately $2.2 million or $0.71 per share compared with $2.3 million or $0.85 per share for the second quarter of 2021. The increase in net sales was due to higher number of GIMOTI prescriptions. Research and development expenses totaled approximately $191,000 for the second quarter of 2022 compared with approximately $195,000 for the second quarter of 2021. These expenses generally relate two manufacturing testing.

For the second quarter of 2022, selling, general and administrative expenses were approximately $2.3 million compared with $2.1 million for the second 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 reimburse Eversana from the net profits obtained from the sales of GIMOTI. Total operating expenses for the second quarter of 2022 were approximately $2.6 million compared with $2.4 million for the same period of 2021.

In addition, we also received net proceeds of approximately $7.1 million from the sales under our ATM program during the second quarter as Dave mentioned. As of June 30, 2022 Company’s cash and cash equivalence were approximately $13.5 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 at least into the second quarter of 2023.

And with that, I'll turn the call back over to the operator for questions from the analyst. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] And it appears we have no questions. This concludes the Q&A portion of today's call. I would now like to turn the call back over to Dave Gonyer for any additional or closing.

David Gonyer

Okay. We continue to see improved performance from quarter-to-quarter and are making great strides in our programs and the services that we're providing to physicians and patients. And it's showing up an improvement in the leading indicators of what we deem is success. And I'm really excited about what we've accomplished in this second quarter and how we've set ourselves up for the continuous success for the remainder of the year. So we look forward to providing more updates as they occur and thank you for joining today.

Operator

This concludes today's Evoke Pharma second quarter 2022 earnings call and webcast. You may disconnect your line at this time and have a wonderful day.