UROVANT SCIENCES LTD (UROV) Q1 2020 Earnings Call Transcript

UROVANT SCIENCES LTD (UROV)
Q1 2020 Earnings Call
Aug 13, 2020, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Urovant Sciences fiscal 2019 fourth-quarter financial results conference call. [Operator instructions] As a reminder, today's conference is being recorded. I'd now like to turn the call over to Ryan Kubota, executive director of investor relations.

Please go ahead, Mr. Kubota.

Ryan Kubota -- Executive Director of Investor Relations

Thank you, operator. Good afternoon, and thank you all for joining Urovant's fiscal 2020 first-quarter financial results conference call. With me today are key members of our leadership team, Jim Robinson, president and chief executive officer; Ajay Bansal, chief financial officer; and Dr. Cornelia Haag-Molkenteller, chief medical officer.

Christine Ocampo, our chief accounting officer, is also present and will join us for the Q&A portion of the call. Today, after market close, we issued a press release containing detailed information on our quarterly results. You may access the release on our company website, urovant.com. We use our website as a channel to distribute important and time-critical company information, and you should look to the Investor Relations page of our website for this information.

During our call, we will be making forward-looking statements, including statements regarding our plans and strategies for the clinical development of vibegron and other treatments for urologic diseases. Listeners are cautioned that all of our forward-looking statements are based on our current expectations and assumptions, which are subject to numerous risk factors that could cause our actual results to differ materially. Accordingly, we advise listeners to review the forward-looking statements disclosure in today's press release, the Risk Factors section of our Form 10-K, as well as our Form 10-Q, which will be filed soon. With that said, I will now turn the call over to our President and CEO Jim Robinson.

Jim?

Jim Robinson -- President and Chief Executive Officer

Thank you, Ryan, and thanks to all of you for joining the call today. In the first fiscal quarter of 2020, Urovant continued to make strong progress on a number of important operational milestones: advancing our clinical programs and preparing for the anticipated approval and launch of vibegron. Before I discuss recent accomplishments, let me give you a brief update on how we're continuing to navigate the COVID-19 situation as hotspots keep changing around the country. First, our employees continue to work remotely.

The relatively small size of our workforce has enabled us to remain nimble and productive as we leverage technology to manage our day-to-day activities. Second, working remotely has not impacted our preparations for vibegron's expected PDUFA in December or, if approved, the drug's the anticipated launch in the first quarter of 2021. As we announced last quarter, following the addition of Walt Johnston and Kenton Stewart, we are continuing to build out our commercial and market access capabilities, and we've made several key hires under both of these respective vectors. The pedigree and experience of the individuals we're hiring are essential for the long-term and short-term success of our launch, particularly in the current environment.

We say that we're bringing on high-quality individuals with deep expertise and strong relationships in urology. Over the last eight weeks, we've hired a number of key people in our commercial organization, including a majority of our regional sales managers. This team has significant urology and overactive bladder experience. We've also made strong progress building on our market access capability, and the hiring of this team is now largely complete.

Later this month, we'll begin to engage with key national, regional and long-term care payers as we prepare for our anticipated launch. In July, we initiated our unbranded campaign to help empower, inform and support women with overactive bladder. The key element of that unbranded campaign is the launch of our OAB-focused community website called bladderchatter.com. The purpose of bladderchatter.com has helped change the dialogue around overactive bladder, which is often misunderstood, stigmatized and too often accepted as normal.

Bladderchatter.com provides a safe and private environment where people can learn from each other and discuss overactive bladder. In addition to preparing for the potential approval and launch of vibegron, we also continue to drive forward a number of programs designed to maximize the value of the molecule. We've recently completed enrollment in our Phase 2a study of vibegron for irritable bowel syndrome pain and continue to enroll patients in our other ongoing studies. So now let me turn the call over to our chief medical officer, Dr.

Cornelia Haag-Molkenteller, to give you more detail on our clinical programs.

Cornelia Haag-Molkenteller -- Chief Medical Officer

Thank you, Jim. As a reminder, we submitted our New Drug Application for vibegron for the treatment of OAB to the FDA in December 2019. And on March 5 this year, the FDA notified us that they have accepted our NDA for review and that our PDUFA goal date has been assigned for December 26, 2020. The 12-month review cycle at the FDA is ongoing, and we continue to respond to FDA requests as part of the regular review cycle.

Let me now provide updates on further data presentations for vibegron in OAB and our ongoing clinical development programs. Quality of life and responder data from the Phase 3 EMPOWUR extension study have been accepted for presentation at the upcoming International Continence Society or ICS meeting scheduled for November 2020. This meeting will be virtual. As you may remember, this was the double-blind extension study of the placebo-controlled EMPOWUR pivotal study.

Patients in this study received either 75-milligram vibegron or four-milligram extended-release tolterodine. This study demonstrated that vibegron was able to sustain its efficacy over 52 weeks of observation with very favorable long-term efficacy results including on the key symptoms of urinary frequency, urgency, urge urinary incontinence, total incontinence and a good long-term safety and tolerability profile. The patient's response on the quality of life scores in this study corresponded well with the improvement in [Inaudible] these symptoms, again, demonstrating the sustained efficacy of 75-milligram vibegron over time. Regarding one of the most important OAB symptoms of OAB, urge urinary incontinence, 71% of patients experienced a 50% reduction of the baseline incontinence episodes at week 52 in contrast to only 61.9% in the tolterodine group, and 40.8% of all patients in the vibegron treatment group became dry, meaning that they did not have any incontinence episodes anymore in contrast to only 34.2% in the tolterodine group at week 52.

I will now comment on our ongoing clinical trials. Given the COVID-19 pandemic, we have temporarily halted enrollment of new patients into our ongoing clinical trials mid-March 2020. At the end of April, we began to reopen our trial sites for the screening of new patients in all of our trials in a stepwise manner. For our Phase 3 COURAGE development program for vibegron in line with OAB and benign prostatic hyperplasia or BPH, we are now in Part 2 of this large trial in which over 1,000 patients will be enrolled.

The trial is running in North America and the study sites in Europe have been initiated in most countries. Part 2 of this Phase 3 trial will assess both efficacy and safety of vibegron in men with OAB and BPH. The co-primary endpoints are reduction in micturition frequency and urgency episodes for 24 hours. Key secondary endpoints are reduction in nocturia episodes, which is the awakening at night to void, prostate symptom scores and safety.

Additionally, the first patients are also enrolling into a long-term extension trial, which will follow patients for a total exposure of 52 weeks. As a reminder, there is currently no FDA-approved product specifically indicated for overactive bladder in men with BPH. Regarding our Phase 2a clinical program for vibegron and IBS-associated abdominal pain. Following the slight delay due to COVID-19, we have completed the enrollment of 222 female patients with IBS-associated abdominal pain at the end of June 2020.

The patients were randomized to either 75 milligram of vibegron or placebo. The primary endpoint is a 30% reduction of abdominal pain intensity on an 11-point rating scale going from zero to 10 over 12 weeks for IBS-D, which is the IBS with diarrhea. A responder is defined as a subject with at least a 30% decrease in worst abdominal pain compared to the weekly baseline average. Secondary endpoints include a global rating scale in safety, in particular, lack of negative symptoms of stool frequency or consistency.

We now plan to report top-line data from this study toward the end of November 2020. Regarding further pipeline projects, I will now continue with URO-902, our novel injectable gene therapy project for the treatment of OAB. We are studying URO-902 in a Phase 2a trial and enrolling patients with OAB who have failed oral pharmacologic therapy. This is a randomized double-blind placebo-controlled trial that will evaluate the efficacy, safety and tolerability single administration of URO-902 running in the U.S.

This therapy is administered via direct intradetrusor injection into the bladder wall under local anesthesia. The trial is expected to enroll approximately 80 female patients in the U.S. in two cohorts. The first cohort will receive either single administration of 24 milligram of URO-902 or matching placebo, and the second cohort will receive 48 milligram of URO-902 or matching placebo.

The primary outcome measure is the change in the average daily number of urge urinary incontinence episodes from baseline at week 12, as well as assessment of the safety and tolerability of this new potential therapy. Patients will then be followed for up to 48 weeks after one injection. The decision to move from cohort one to cohort two will be made on the recommendation from the independent Data Safety Monitoring Board, or DSMB, which is now planning to meet in December 2020. Depending on the development of the COVID-19 situation in the U.S., this meeting may also occur in early 2021.

I'm very pleased with the progress we've made, and I'm looking forward to providing you with further updates in the future. Now I'll pass on to Ajay for a financial update.

Ajay Bansal -- Chief Financial Officer

Thank you, Cornelia. In addition to the financial results summarized in our press release, you can find additional information in our upcoming Form 10-Q. R&D expenses were $16.3 million for the first quarter of fiscal 2020, compared with $22 million for the same period in the prior year. The decrease in R&D expenses was primarily due to lower clinical study costs of $10.2 million as Phase 3 EMPOWUR study was completed in fiscal 2019.

This decrease was partially offset by an increase of $4.1 million for the manufacturing of our initial validation batches and purchase of drug substance and other starting material costs for future manufacturing campaigns of vibegron. G&A expenses were $12.5 million for the first fiscal quarter of 2020, compared with $5.5 million for the same period in the prior year. The increase in G&A expenses is primarily due to an increase of $3.1 million in commercial readiness costs and increases in personnel-related costs and other general and corporate expenses as we continue to prepare for the commercial launch, if approved, of vibegron. Total operating expenses were $28.8 million for the first quarter of 2020, compared to $27.5 million for the same period in the prior year.

Net loss was $30.5 million or $0.99 per share for the first quarter of 2020, compared with a net loss of $28.5 million or $0.94 per share for the same period in the prior year. Cash used in operations were $30.8 million for the quarter ended June 30, 2020, as compared to $31.6 million in the immediate prior quarter ended March 31, 2020. As of June 30, 2020, total cash was $63 million. In July, we added to this cash position by drawing down $43 million from a low interest five-year term loan facility with DSP.

We now have $128.5 million remaining under this facility. Looking ahead. For the second quarter of fiscal 2020, we expect our cash burn to be in the range of $35 million to $40 million. For the full fiscal-year 2020, we now project a cash burn between $195 million to $205 million.

With that financial update, I would like to turn the call back over to Jim.

Jim Robinson -- President and Chief Executive Officer

Thank you, Ajay. As we prepare to go to your questions, I'd like to summarize how we're thinking about what we've accomplished to date and our focus for the future. We're pleased with the progress we've made so far, and we continue to make strides across all aspects of our business. We have several important milestones in the back half of the year, including top-line safety data from the Phase 2a study of vibegron for treatment of IBS-associated pain in November.

We expect the completion of cohort one enrollment in our Phase 2a of our novel injectable gene therapy for OAB, URO-902, and the potential approval of vibegron in late December. In anticipation of the approval of vibegron, we are focused on building our commercial team and executing on our launch plan. In summary, we believe we are well-positioned to be a strong, leading competitor in this market and are excited about the future. And with that, operator, we finished our prepared remarks.

We'll now go to questions. Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from Ram Selvaraju with H.C. Wainwright. Your line is now open.

Blair Daniel Cohen -- H.C. Wainwright and Company -- Analyst

Hi. This is Blair Cohen on for Ram. Just a couple of questions from me. First, have you started label discussions about vibegron yet with the FDA? And if not, when do you expect those conversations to start?

Jim Robinson -- President and Chief Executive Officer

Cornelia, do you want to handle that?

Cornelia Haag-Molkenteller -- Chief Medical Officer

Yeah. So the label discussions -- thank you for your questions. The label discussions start a bit later in the review cycle. So with the PDUFA goal date in December, we'd expect them in the fall.

So as of now, we've been responding to FDA request label. Discussions, we expect to start in the fall.

Blair Daniel Cohen -- H.C. Wainwright and Company -- Analyst

OK. Great. And then as far as drug-to-drug interactions, what, in particular, do you consider the most problematic for mirabegron and that you do not expect to see with vibegron? And what commercial implications do you think this could have?

Jim Robinson -- President and Chief Executive Officer

So Blair, thanks again for your question. I'll have Cornelia start, and then I'll add on the commercial aspect on the second part of your question. Cornelia?

Cornelia Haag-Molkenteller -- Chief Medical Officer

OK. First of all, vibegron does not have a drug-drug interaction at the CYP2D6 level. And as you know, this, for example, is called out in the label of the other beta-3 agonist, at least on the first page. So we do not have a drug-drug interaction at the CYP2D6 level, which we think is clinically very important.

A lot of cardiovascular drug and a lot of psychotropic drug and also pain drugs are metabolized via CYP2D6. So I think this lack of this drug-drug interaction is very important. Of course, we need to see the final label from the FDA, but we do not expect a drug-drug interaction regarding that to cytochrome P450. And I'll hand to Jim for the commercial side.

Jim Robinson -- President and Chief Executive Officer

Yeah. Thanks, Cornelia. And as Cornelia just said, Blair, if in fact, the label reflects the lack of CYP2D6 interactions, the commercial implication for that would be for patients, especially if you think about the elderly population or long-term care, those drug-to-drug interactions are going to be pretty important and have been important to monitor and the lack of that interaction is going to be important, especially when you think about the number of medications that patients and long-term care facilities are off and on, including antidepressants, as well as antihypertensives. So we do think there's a clear message about the value that vibegron would provide in patients that are on those types of medications.

Blair Daniel Cohen -- H.C. Wainwright and Company -- Analyst

OK. Great. And then last one for me. Could you just comment on how enrollment is proceeding for the COURAGE study with coronavirus? And have you adjusted the protocol at all? Have you added any sites, maybe virtual visits, things like that?

Jim Robinson -- President and Chief Executive Officer

Yeah. Thanks, Blair. I'll have Cornelia handle that one as well.

Cornelia Haag-Molkenteller -- Chief Medical Officer

So the COURAGE study is running in the U.S. and Europe. And as you know, there are regional differences with the coronavirus. We have restarted the study in most centers also in the U.S., but of course, depending on geographic location and having documented COVID-19 measures in place.

We are actually content with the COURAGE enrollment in the COURAGE study, also because we have Europe as additional continent in the study. But of course, we have to closely monitor and are monitoring the development of COVID-19 globally. So at the moment, we are content, but of course, we have to monitor the situation.

Blair Daniel Cohen -- H.C. Wainwright and Company -- Analyst

OK. Thank you.

Jim Robinson -- President and Chief Executive Officer

Thank you.

Operator

Thank you. And our next question comes from Eric Joseph with J.P. Morgan. Your line is now open.

Eric William Joseph -- J.P. Morgan -- Analyst

Hi. Thanks for taking my questions. I just had one as it related to the COURAGE trial and the opportunity in men with BPH. Can you talk a little bit about how the ideology of OAB may differ in this population compared to men without BPH or in women? And then in understanding that there's no approved medication currently for this population, I'm curious to know what your sense is on the extent to which OAB and men with BPH is currently managed with Myrbetriq and to what extent there may be pushback at the part of payers or physicians looking to like -- for these patients currently? Thanks.

Jim Robinson -- President and Chief Executive Officer

Thanks, Eric. I'll have Cornelia start with the -- answering your question. I'll follow up.

Cornelia Haag-Molkenteller -- Chief Medical Officer

OK. Yeah. Hi, Eric. As you know, the real etiology of OAB is not known.

It has to do with the aging of the bladder. That certainly is one of the main factors, maybe with the stretch receptors. However, the true origin is not known. Men with BPH have an additional extra factor which women don't have, because men have a prostate.

So the urethra is longer, sorry to go into anatomy now, and their bladder outlet is different from that in women. Women have a very short urethra while the men have the prostate. And if there is an enlargement or an obstruction of the outlet, basically, the overactive bladder sort of works against this outlet obstruction. And so it is actually pathophysiologically slightly different from the OAB, the general OAB, particularly in women.

That's why the FDA agreed to a separate development program for OAB in men with BPH. There is no approved therapy. There are occasional published studies. They exist, but there's really no good development program to fully characterize the efficacy and safety of an OAB medication, including the beta-3 agonist in men with BPH and OAB.

Jim Robinson -- President and Chief Executive Officer

And Eric, if I could just build on the question related to the label, clearly, it's a differentiated label with vibegron, if we're successful with achieving that indication. And I think from a payer receptivity perspective, it's really positive, given the fact that it has the ability to treat overactive bladder and overactive bladder in men with BPH. So we view it, obviously, as a strong positive from a differentiation perspective, including a payer differentiation perspective.

Eric William Joseph -- J.P. Morgan -- Analyst

Got it. And just as a follow-up, if I could. Just thinking about commercial preparedness and just kind of anticipating kind of competition in this space. Do you have a sense currently of the footprint that Astellas currently has with Myrbetriq, the level at which they're still supporting that brand? And do you anticipate much in the way of sort of counter detailing that launch?

Jim Robinson -- President and Chief Executive Officer

I can't comment specifically on their sales force size or structure. What I can tell you is that with the size and structure that we're putting in place, we feel very comfortable that we'll be able to cover over 50% of the market as it exists today. So as we've spoken previously, we'll have roughly 115 to 120 urology specialty reps, which will cover the universe that we want to cover. In addition to that, we'll have 30 to 40 long-term care sales reps, which will cover the long-term care facilities and provides us, we believe, an advantage in terms of that space.

So with just 116 sales reps, we'll be able to cover well over 50% of the market, closer to 55% of the market. We also expect, with our urology specialty team, to be able to cover the top decile primary care physicians, which are -- prescribe basically at the level of urologists. So we feel very good about that. As we've talked about previously, we continue to evaluate primary care partnerships, which would also be an important part of our go-to-market strategy.

And that's something that we're continuing to work on and evaluate as we speak.

Eric William Joseph -- J.P. Morgan -- Analyst

Great. Thanks for taking the question.

Jim Robinson -- President and Chief Executive Officer

Thanks, Eric.

Operator

Thank you. [Operator instructions] Our next question comes from Biren Amin with Jefferies. Your line is now open.

Biren Amin -- Jefferies -- Analyst

Yeah. Hi, guys. Thanks for taking my questions. Maybe also to start on COURAGE.

The first portion of the BPH trial looked at, I think, 80 patients. And I think you looked at safety at week four. But have you evaluated any efficacy components in that Phase 1 portion of COURAGE in terms of just daily micturation or urgency at week four? And can you comment on if there's any read-through that you've seen in that first portion to the week 12 primary endpoint for the Part 2 portion?

Jim Robinson -- President and Chief Executive Officer

Biren, it's Jim. Thanks for your question. I'm going to have Cornelia handle that to start.

Cornelia Haag-Molkenteller -- Chief Medical Officer

Well, the review by the Data Safety Monitoring Board was based on the safety and not efficacy. And they reviewed the safety data. So that basically is what they reviewed, and they concluded that we can continue to the larger patient population. And as of now, for all OAB drugs, just to put it carefully, there typically is not a big -- not a substantial difference between week four and week 12 regarding efficacy.

I may remind you, if you look at the vibegron data in OAB, efficacy was already seen at week two over placebo and then certainly at week four. So I don't think, even for OAB BPH, you have to wait for week 12. However, we will, of course, look at week 12. It is, however, also a double-blind six-month study as this was the requirement from the FDA, but the primary endpoint is week 12.

Biren Amin -- Jefferies -- Analyst

Got it. And then maybe if you could just comment on launch and any feedback you've received from payers regarding your discussions with the upcoming launch in terms of pricing or regarding step edits, prior authorization that you think you might face? Any, I guess, anecdotes would be helpful.

Jim Robinson -- President and Chief Executive Officer

Yeah. So it's Jim again. Thanks for the question. So we have just completed our hiring of our market access team.

So the entire long-term care regional account and national accounts team is complete. That team is engaging in preapproval information exchange meeting starting next week. So we'll be able to engage with key national payers and regional payers on the clinical overview of vibegron. But we do expect we'll get some indications and feedback at that point about vibegron.

And we'll be able to take that into consideration as we move forward with our go-to-market strategy. As you would have guessed, we've done extensive market research with payers to date on pricing, what the expectations would be. We still have yet to make a determination on pricing, both at a WACC basis, as well as a contracting basis. But we will expect to have a pretty much locked in and have our go-to-market approach finished in December, expecting approval and then engaged with negotiations starting literally January 1 or 2 so that we can accelerate the review and potential formulary addition of vibegron as soon as possible.

Biren Amin -- Jefferies -- Analyst

And then on the long-term care side of things, that seems to be a considerable component of patients that drives prescriptions in the OAB market. What are your thoughts, Jim, in terms of -- is this an area that would be an early adopter? Or -- and I guess, what challenges do you face in gaining adoption in this market?

Jim Robinson -- President and Chief Executive Officer

So I do think it's going to be an early adopter. If you think of the profile of vibegron, one of the key differentiators versus any other beta-3 in the space is that vibegron is crushable. And so the stats basically indicate up to 40% of patients in long-term care facilities either cancel or have trouble swallowing. So having the ability to have a crushable tablet is going to be very important in that space, and it provides a differentiation for us.

And as was mentioned earlier by Cornelia, the lack of CYP2D6 drug-to-drug interaction is also going to be an important differentiator. So I do think they have the potential to be an early adopter to vibegron. In terms of challenges, I think the obvious challenges for us will be access from the standpoint of what the access to long-term care facilities could look like if we're still dealing with the pandemic and COVID-19. But even that being said, we have plans in place that will allow us access at the corporate level, as well as at the consultant pharmacy level so that we can engage with the right people that are making formulary decisions to create order sets for access to vibegron.

So we feel good about long-term care, as you asked. It's an early adopter for sure, and we believe that's an opportunity for differentiation for us.

Biren Amin -- Jefferies -- Analyst

Great. Thanks for taking my question.

Operator

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Jim Robinson for any closing remarks.

Jim Robinson -- President and Chief Executive Officer

Well, thank you, Daniel, and thank you for those that attended our earnings call today. We appreciate your attendance and absolutely appreciate your questions, and we look forward to providing future updates in the coming quarters. Have a good afternoon.

Operator

[Operator signoff]

Duration: 35 minutes

Call participants:

Ryan Kubota -- Executive Director of Investor Relations

Jim Robinson -- President and Chief Executive Officer

Cornelia Haag-Molkenteller -- Chief Medical Officer

Ajay Bansal -- Chief Financial Officer

Blair Daniel Cohen -- H.C. Wainwright and Company -- Analyst

Eric William Joseph -- J.P. Morgan -- Analyst

Biren Amin -- Jefferies -- Analyst

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