Impel Pharmaceuticals Inc. (NASDAQ:IMPL) Q1 2023 Earnings Call Transcript May 12, 2023

Impel Pharmaceuticals Inc. misses on earnings expectations. Reported EPS is $-1.27 EPS, expectations were $-0.9.

Operator: Good morning, ladies and gentlemen and welcome to Impel Pharmaceuticals First Quarter 2023 Earnings and Business Update Conference Call. At this time, all participants are in a listen-only mode. Later in this call a question-and-answer session will be conducted and instructions on how to participate will be given at that time. As a reminder, today’s conference call is being recorded. And now I would like to turn the conference over to Impel’s Chairman and Chief Executive Officer, Mr. Adrian Adams. Mr. Adams please go ahead.

Adrian Adams: Thank you, operator and good morning everyone. We are delighted that you could join us today for Impel Pharmaceuticals’ earnings conference call to review our first quarter 2023 commercial and financial results, as well as to provide a general business update in addition to highlighting the key priorities for Impel for the remainder of 2023. Joining me from Impel this morning is Len Paolillo, our Chief Commercial Officer; Rajiv Amin, our Controller and our new Chief Financial Officer, Michael Kalb. Michael brings to Impel and ascending track record of executive leadership in pharma, capital raising, business development, and operations management and we are thrilled to have someone of his caliber and experience join our leadership team at this critical phase of our evolution.

Before we begin, I would like to remind everyone that we have a slide presentation to accompany our conference call this morning which can be viewed on our website at www.impelpharma.com. If you are listening to this call on your telephone, you may access a synchronized slide deck on our website by choosing the link on our webcast page that says Click Here to listen. I would also like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Now I’d like to turn to Slide number 4 where I will summarize our first quarter and year-to-date performance with Trudhesa. Firstly, I would like to remind everyone of the tremendous opportunity that exists within this large migraine market.

This is a market growing 10% year-over-year and becoming increasingly branded with most of that growth coming from newer non-triptan options. Within this market, we’ve adopted a highly talented commercialization strategy with a current sales force focus on 11,000 target physicians made of predominantly neurologists, headache specialists, and high prescribing primary care physicians. Together, this target group generates 73% of all branded prescriptions. Our journey with Trudhesa continues to make consistent progress, and we are pleased to announce first quarter 2023 revenue of $4.4 million, driven by strong in-market demand of over 18,000 normalized prescriptions, over 70% of which were reimbursed. Importantly or key leading indicator of new patient starts were up by 18% versus the fourth quarter of 2022.

This momentum added to our stable prescription size of six PODS per prescription, a solid and high refill rate in the low 60% range, and an expanding prescriber base. These achievements to date form a solid foundation for continued growth as we move through 2023. With this said, let us now turn to Slide number 5 to begin our commercial performance review with Trudhesa in more detail. As mentioned on the left hand side of this slide, we are delighted to show continued robust growth in new patient starts reaching over 3,600 in the first quarter, an 18% increase versus the fourth quarter of 2022. Now, looking at the right hand side of the slide, you will know the momentum shifts at two distinct time periods. The first is late in the third quarter of 2022, as our field force expansion began to take hold, and the second is the post-holiday period, or more specifically in March and April of 2023.

It is this latest search in new patients that provide us with additional compass in Trudhesa’s momentum as we move through the second quarter of this year. Turning now to our next slide, Slide number 6. On the left hand side of this slide, you will note the consistent quarter-over-quarter growth we saw throughout 2022. To date, we have generated just over 25,000 prescriptions, more than 100% increase versus the same time last year, and that’s a significantly higher net price. In the first quarter of 2023 we did see a small pullback in normalized nTRx, however, this was not surprising given normal first quarter dynamics seen with all products like deductible resets and reauthorizations. Moreover, we added to this unit pressure by proactively making targeted adjustments to our QuickStart free goods program.

These adjustments, while producing a higher net price per prescription, did have an impact on volume. Please now refer to our next slide, Slide number 7. As mentioned in previous calls, given our targeted and disciplined approach to commercialization, we believe the most appropriate way of measuring our success over time is by market share evolution within our targeted group of physicians. Therefore, we are delighted to see continued market share evolution already reaching 4.7% share among prescribers of Trudhesa in the first quarter of 2023, just 18 months into the launch of Trudhesa. Driving depth of prescribing among our high value prescribers, a larger proportion of whom are neurologists is a critical success factor for continued growth in 2023.

You will know, significant share gains amongst our top prescribers who now have Trudhesa accounting for 7.6% of the few branded prescriptions, a clear sign that with continued investments and focus, we believe that Trudhesa can achieve a 12% share predicted by neurologists in independent surveys. Please refer to our next slide, Slide number 8. You’ll remember that we secured key PBM and payer contracts quickly after launch in 2021, securing 80% of commercial lives under contract in just the first quarter of launch. This enabled consistent improvement in the percent of prescriptions reimbursed over the course of 2022, peaking at 60% in the fourth quarter. Now in 2023 with established payer policies, we are taking steps to tighten the business rules associated with our free goods program and have seen the percent of prescriptions reimbursed jump from 60% in the fourth quarter of 2022 to 72% in the first quarter of 2023 with continued momentum and improvement to 75% in April.

Importantly, our refill rates have remained consistent and solid in the lower 60% range. This increasing reimbursement, together with high refill rates, provide a solid foundation for meaningful revenue growth in 2023. Turning now to Slide number 9, we continue to monitor the favorable market dynamics and source of business for Trudhesa. Symphony data continues to show that a very high percentage of patients, around 60% on gepants, specifically Nurtec and Ubrelvy, drop off or switch away from these products at some point in therapy. Given the tolerability of these products, it is our contention that the primary reason for this continued churn over with gepants is that prescribers and indeed patients are not finding the rapid sustained and consistent efficacy they are looking for in the acute migraine treatments.

This churn over in the market opens up a large pool of eligible patients and more specifically, a significant ongoing opportunity for Trudhesa. The source of current business for Trudhesa remains diverse with approximately half of new Trudhesa patients switching from a triptan and a half from a gepant. We also note that Trudhesa is most often added to existing therapy as an efficacious, reliable and non-oral option. Turning now to our final slide in this commercial section, Slide number 10, is against the backdrop of this drawing branded market where so many patients still seek efficacy that we are launching our new targeted DTC campaign camp target [ph]. The campaign highlights the common challenge patients face when taking oral medications.

Efficacy is often dependent on taking pills early. But unfortunately life does not always allow that. We demonstrated in our Phase 3 STOP 301 trial Trudhesa’s ability to deliver efficacy even when taken late into an attack. And for the past 18 months we just heard patients relate the tremendous impact has on their lives. We’re excited to bring these authentic experiences directly to patients via key social media platforms and influencers, raising awareness of what good versus great looks like in the treatments of migraine. 2023 is off to a strong start, and I would like to take this opportunity to thank all our talented, patient focused and dedicated team members across all the Impel functions for their continued professional and successful contributions.

I now would like to provide a brief overview of our financial results for the first quarter of 2023. Please refer to our next slide, Slide number 11. The net product revenue for the first quarter of 2023 was $4.4 million versus $1.8 million for the same period in 2022. This increase is due to higher Trudhesa sales volume and improvements in net price realization. Research and development expenses for the first quarter of 2023 were $3 million versus $3.7 million for the same period of 2022. The decrease is primarily due to decreased personnel costs and program costs as we redirected our resources from R&D activities and pivoted our focus to supporting our commercial operations rather than research and development in the first quarter of 2023.

Selling, general and administrative expenses for the first quarter of 2023 were $22 million, which compares with $19.8 million in the same period of 2002. The increase in SG&A expenses during 2023 is primarily due to the ramp up in spending to support Trudhesa commercialization activities. For the first quarter of 2023, Impel reported a net loss of $30.1 million or $1.27 per common share compared to a net loss of $27 million or $1.17 per common share for the same period in 2022. And finally, as of March the 31st, 2023, the company had cash and cash equivalents of $35.5 million. Related to this, we have ongoing discussions regarding additional capital and are optimistic of sharing progress in the near-term. With that, I would like to close with our final slide, Slide number 12, which provides a summary of Trudhesa performance in the first quarter and year-to-date 2023 in addition to outlining our ongoing priorities for the remainder of 2023.

After a solid first full year of commercialization for Trudhesa in 2022, we remain pleased with the continued performance of Trudhesa in the first quarter of 2023, and in particular with the strong growth in new patients, and importantly, net price evolution. These lead indicator growth catalysts are providing excellent momentum as we journey through this in the second quarter of 2023. Regarding Impel’s ongoing priorities in 2023 our execution focus remains on the following key buckets of potential value growth; accelerating prescriptions and share gains with Trudhesa among our target positions, continued evolution of the Trudhesa net price and the resultant positive impact on net revenue growth, securing additional financing to fuel our ongoing commercialization activities and as previously mentioned, we do have ongoing discussions regarding additional capital and our optimistic assuring progress in the near-term and continued interest in aggressive and opportunistic business development.

And then finally, based on the performance and momentum to date, I would like to reaffirm our prescription guidance for Trudhesa for 2023. We continue to anticipate delivering prescriptions in the range of 80,000 to 110,000, the midpoints of which would represent a 64% growth over 2022. Thank you. And we will now open the line up to your valued questions. Operator, can you please give the instructions?

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from Stacy Ku with TD Cowen. Your line is open.

Operator: One moment for our next question. Next question comes from Eddie Hickman with Guggenheim Securities. Your line is open.

Operator: And I’m not, actually, my apologies, I’m just queue up for a question one moment. Our next question comes from Sean Kim with Jones Trading. Your line is open.

Operator: And I’m not showing any further questions at this time. I’d like to turn the call back over to Adrian Adams for any closing remarks.

Adrian Adams: Thank you operator, and thank you all for joining us this morning. We do look forward to updating you on our continued progress during our second quarter call and later this year as we strive to continue to create value for patients, healthcare professionals and obviously the shareholders we serve. So thank you very much and have a good rest of the day and indeed a nice weekend. Thank you.

Operator: Well, ladies and gentlemen, this does concludes today’s presentation. You may now disconnect and have a wonderful day.