RedHill Biopharma Ltd. (NASDAQ: RDHL) Webcast | SNN Network

Thanks very much. Thank you to SNN for hosting us today. We're excited to be here. There's a lot of exciting things that we will be sharing with you about what's going on with the company right now. Before we do that, I will be making some forward-looking statements. Please see our filings for a full disclosure of the risk. RedHill today is a very exciting moment in our company's history. There's a lot going on. There's so much we can talk about, but in the interest of time, I'll focus on a few things. First will be our development and progression from being an R&D company to being what we hope soon will be the leading GI specialty company. We've done that by getting Talicia, our lead product, approved, and then bringing in two additional commercial GI products as well. So we have now a full commercial infrastructure, three exciting products that I'll be talking about today, and we're getting ready to grow revenues and ramp up. We're in the infectious disease space, which is gaining momentum. A lot of awareness of the importance that it has both in public health and also in the financial markets today. They're also taking note. So a lot going on the commercial side of things that I'll be talking about. In addition, there is our COVID-19 program, which we've been generating a lot of press releases about because there's a lot of movement there, a lot of progress. We're moving very fast. Most notably, we're in the middle of the Phase II study in the United States. We've already announced that recruitment is going well. We're past a quarter of the way of recruitment. And also our Phase II/III global studies, and that one is also very important, a larger, more robust study of up to 270 patients. And that one we've also now announced that we've initiated. So these are two very important programs that, if we're successful, we think will really change the landscape for how COVID-19 is treated. There's a lot behind the programs, a lot behind the thinking, and even some compassionate use data in COVID-19 patients that we'll be sharing. So what is our goal? Our goal is to become a leading GI company. We do that with our commercial products that I mentioned, and also with our R&D program. We have a lot of late-stage R&D products that we're moving and that we've generated good data for. I only talked about some of that today, again in the interest of time, but we have a lot going on for a small company. This next slide is a snapshot of our full pipeline. As you can see here, there's the three initial commercial products that I mentioned we're promoting. That's Talicia for H. pylori infections in adults, Movantik, which is a product we acquired from AstraZeneca for opioid-induced constipation. This is a very important indication, and AstraZeneca invested a lot of resources to make sure this would be the brand leader, which it is. We're very lucky to be taking that product over, building on the enormous efforts and resources that AstraZeneca put into this product, and now taking over as a RedHill product and continuing that tradition. And then finally, Aemcolo, which is an exciting new product for traveler's diarrhea. Traveling, of course, is cut down quite considerably right now because of the pandemic, so this is a product that we'll see today, soon when the travel comes back. In addition, we have a full pipeline of products. I will point specifically to our NTM infection program, that's RHB-204. We just announced FDA clearance on this very important program. There's no currently approved first-line drug for NTM disease, and we could be that product. We have a study that's been cleared, that's a potential pivotal Phase III study, and we're very excited to get that before this. Our goal, our vision, is to become a leading specialty GI company. This is our plan for how we get there. We start small, we grow big, and then we have a lot of thinking about our future development and where we want to be in five, ten years. So you see those first couple products that we promoted initially when we got the company going, the commercial operations going, and then we moved on to Aemcolo, Talicia, Movantik, which is what we're promoting right now with our sales force of 100 reps and 30 field support professionals. And you see our pipeline products that we want to get approved in the future and will be the foundation for future growth in the company. A lot going on, very important for investors, for you guys out there to understand who we are and what our goals are, which is to become the leading GI specialty farming company out there, and the important momentum that we've generated and we're generating right now to achieve that goal. This next slide is our financial highlights. Our cash balance is $53 million as of June 30th, so that's an important cash safety cushion that we have to be able to promote our commercial products and also advance our pipeline. So I'll come back to opaganib. This is our drug for COVID-19 that I mentioned. It's a first-in-class oral drug that has a dual mechanism of action in that it's both anti-inflammatory and it's antiviral. As I mentioned, we're moving very fast with this one. We're already well into enrolling a Phase II study in the United States, and we've initiated a global Phase II/III study. And we believe we'll have data as early as Q4 from both of them, of course, assuming that recruitment goes as planned. A little bit more about opaganib. It's an SK2 inhibitor. It's a product that we acquired, and our partner, Appili, who originally developed it, did a tremendous amount of work pre-clinically for it. So we know that it's active in a whole bunch of disease state models. And the ones that initially attracted us were both the oncology and some anti-inflammatory models in GI. With the development of the pandemic, we looked at some of that work that was done, and we were pleasantly surprised to see how relevant it was to COVID-19 and some of the characteristics we see in COVID-19, both in terms of the structure of the RNA of the virus and also in terms of the way that the product is active as an anti-inflammatory. It's also been shown to be effective as an antiviral agent in pre-clinical models in a number of virus models, including Ebola, flu, and Chikungunya. So all of this gave us a lot of confidence to make this drug available to patients on a compassionate use basis, which we did. We did that here in Israel, and the results were very exciting. We were able to show that in the patients that were evaluated, and I'll show this on the next slide, it's just literally right now, in the patients that were evaluated, six of them were hospitalized patients. They were all on oxygen, all of them having severe to critical infection. After receiving treatment, all of them were able to be taken off oxygen and discharged from the hospital. And we looked at what was going on in terms of their blood. They had higher lymphocyte counts and decreased C-reactive protein, which is exactly what you'd want to see in recovered patients. So that was very exciting, although a handful of patients and it wasn't a prospective study, but that was enough to give us confidence to proceed into a Phase II study, which I mentioned that we have up and running right now. That's in 40 hospitalized patients in the United States, and that study recruitment is going well. And we're very excited to be able to get to the finish line with that one. In addition, we began a larger, more robust 270-subject global study. We already have that study approved in the UK and Russia, and we have applications ongoing in Italy, Mexico, and Brazil, and we're looking at other places as well. This is a very important study because of the scale and the global nature of the design of the study. We think it's very important. We're very excited to get that going. And as I mentioned, our goal is to have data as soon as Q4 for both of these studies in COVID-19. So we hope that will be an important contribution that RedHill is able to make to this global pandemic. There's great scientific and medical support for why this drug should work, and now we have to prove it. That's what we're trying to do, and we hope to have results soon and hopefully some exciting results to share. Moving back to our commercial operations, this is kind of the bread and butter of what we do as a GI company. We identify diseases around that medical need, we develop drugs, or in some cases we acquire them where they make sense, and we build a portfolio of products that are addressing areas of unmet medical need in the GI space. And these three products you see here are the ones I'll talk a little bit about now. So that's Talicia for H. pylori infection, Movantik for opioid-induced constipation, and Aemcolo for traveler's diarrhea. It's important to say that we're excited and expecting to see a ramp-up of sales. We're continuing as the country is learning to continue to operate with precaution instead of shutdown. There's a lot of excitement that we have in-house for Movantik. In fact, many of you may have seen the press release we just did on our discussions with Daiichi and the changing of the agreement in order to give us better economics and more control of the product. That's because of our confidence and excitement around Movantik. It's a brand leader, and we believe with the focus that we can give that this product will continue to be a leader in the space and for many years to come. Also, Talicia, we're very excited about that one. This is a product that we've spent a lot of time preparing the medical community for, whether that be at conferences, to our medical scientific liaisons, and since approval to our sales team. We've done a lot of work here, and as the country opens up and the GI clinics become more open to general flow of patients, we believe that the ramp-up of sales there will be important and very meaningful. So a few words about Movantik. Movantik is a product that was launched by AstraZeneca in 2015. It was approved in 2014, and the goal of this product was to address a problem that patients who take opioids faced. Opioids have some controversy, but for the most part, it really is the gold standard in the United States for moderate to severe pain. It works well when used appropriately. The problem with opioids is that the same effect that it has on the central nervous system, which is to alleviate pain, it also interferes with receptors in the GI system that help with motility. And as a result, a very significant percent of patients, something like 40 to 80 percent of patients who take opioids, develop constipation, and in many cases, severe constipation. In some cases, they have to reduce or discontinue use of opioids. So there was a strong need in the market for a drug to address this specific issue. And what is the issue? How can you alleviate the effect of constipation without undermining the pain-alleviating effects of opioids? And that was what was done by Movantik, the first of the PAMORA drugs that was approved. AstraZeneca did a large amount of investment in order to establish it as a leader, which it is. In 2019, it generated $96 million in net sales. We're very excited to take this over. Our team, consisting of a lot of the senior leadership from Salix, which was the leading GI company, are very familiar with the space of opioid-induced constipation, and we are very bullish on what RedHill can do with this product. Moving on to Talicia. Talicia is a product that is an in-house product. We took it over and conducted two Phase III studies, both of them very effective, and form the basis of our submission to FDA, which approved our drug on time in November. What are we trying to do here? H. pylori is a very widespread bacterial infection. It infects probably about a third of the United States. Probably around two to three million people get treated for it every year, and it's important bacteria to be treated because it is the primary cause of gastric cancer and the primary cause of peptic ulcer disease and other issues. The problem is that the standard of care that's used right now, which is a triple combination of clarithromycin, amoxicillin, and a PPI, has faced an increasing problem of resistance. And this is something that's seen all over the world of infectious disease. You develop a good drug, a good antibiotic, and over time, the bacteria is able to develop resistance to it. This is an area that's been largely neglected by the pharma world in terms of development, and that's why this drug is so important. We're coming in and we're addressing a true unmet medical need, which is resistance to the standard of care and the need for a new treatment that overcomes that resistance problem. And we've done that. How we've done that? We've taken out the problematic component of the standard of care that causes resistance and introduced a new component, which in our studies has shown no resistance from the bacteria. So we're very excited about making this the new gold standard, the new first-line treatment for H. pylori. Importantly, we have market exclusivity for a minimum of eight years under the FDA QIDP designation, and we have patent protection going out to 2034. So we think that this product could be a huge commercial success for RedHill and also great for patients. And we've already started promoting it. This is in fact, you see here our marketing piece. We're promoting it to 25,000 GI doctors, primary care physicians, and other healthcare providers, and we're focusing very much on managed care coverage, as that is a critical component of success for this product. This, as I mentioned, is the sort of the background of why this is an important disease to address. You're talking about gastric cancer, the primary cause of gastric cancer in the world, and a big problem of resistance. You see standard of care failing in 25 to 40 percent of patients. It's a huge number, a very big problem for doctors that face this. Both the WHO and the FDA have identified H. pylori as a key pathogen for developing new treatments. In fact, that's how we get the special status we have with FDA, and that's how we were able to get priority review, fast-track designation. It's recognized among thought leaders as an important public health concern, and as I mentioned, really neglected by the pharma community as a place for drug development. So where do we stand? We have a drug that is effective. We have a drug that addresses the concerns of resistance. It's approved. It has a great tolerability and safety profile, and we believe it will become the first-line gold standard treatment in this very important indication with the huge medical need. So we are excited to take it forward. The next product I'll just mention very briefly is Aemcolo. It's the third product in our commercial portfolio. We think it's a great product. It was brought to us by Cosmo, a leading GI company in Europe, a great partner for RedHill. They also made a strategic investment in RedHill, and they serve on our board. We think they're going to be a great partner for us going forward, and this is a great product as well. It's a product that addresses a problem with travelers, especially travelers to places that are not developed countries, and that is traveler's diarrhea caused by E. coli. Of course, right now, people aren't traveling because of the pandemic, so this product is going to see its day, it's going to have its day in the sun, but it's not right now, not while people are staying home. However, we are doing all of our work preparing for the day when traveling returns. And I would mention again a couple of the key characteristics of this product. It addresses traveler's diarrhea, and it's superior to what's out there with products such as Cipro and Xifaxan because it's minimally absorbed. So it's a targeted delivery system. You don't have to take a systemic antibiotic, and that has a number of advantages that we think will make it a very exciting product for physicians and for patients. Going a little bit into our pipeline, we just have a few minutes left, so I'll speak briefly about our pipeline. As I mentioned, we have a lot of products that we're developing. This includes RHB-104 for Crohn's disease. We had a successful Phase III study that we finished, and now we're working on a development of a diagnostic for MAP, which is the putative cause of Crohn's disease, and we think we've shown that MAP plays a critical role in Crohn's disease. RHB-102, or the Kindred for gastroenteritis and IBS-D, we've had successful Phase III and Phase II studies there. And we also have a bowel cleanser program, RHB-106. That's our full pipeline. And then, in the interest of time, I'll talk about the last component of our pipeline, a briefing. This one we just had a press release about, so it's very timely, which is RHB-204 for NTM infections. Why is this an important disease and topic? Well, NTM, or pulmonary non-tuberculous mycobacterial disease, specifically MAC infection, is a relatively new disease, but it's one that affects over 100,000 patients in the United States, and there's no approved first-line therapy. So this is a disease that has a strong need for a treatment to give physicians treatment options. Now, the good thing is that this has had some similar components to what we've developed for and done a successful study in Crohn's. So we know how these drugs work together. We know the safety profile, and that's why we're confident to take this product straight into a Phase III pivotal study. Again, about NTM, it's a problematic disease. Some of the symptoms include fever, weight loss, coughing of blood. It's chronic. It really doesn't go away by itself. And as I mentioned, over 100,000 patients in the United States, so really a disease with the need for a new treatment. This is the Phase III study that we had an announcement about. The FDA gave us clearance to proceed with this pivotal Phase III study, and we plan to initiate it in Q3. It's a 250-subject study in newly diagnosed or recently repeat-positive MAC disease. A very important study, very important drug. If we're approved, we could be the first drug to be approved as a first-line therapy for it, and we think that will have enormous value not just to patients but also to our shareholders in terms of the value we'll have for the company to be a leader in this space. So to sum up where we are, and then I'll turn it over to questions. We're a leading GI company. We're growing very quickly. We have a number of things happening, a number of milestones happening this year that we think will be pivotal for the company. First is around our COVID studies. We have a Phase II that we've already started recruiting well into, a Phase II/III study that we've initiated. It's a global study, and both of those could be yielding data as early as Q4. In addition, we have a commercial ramp-up that's going on now with the country opening up, or at least learning how to live life and manage a wicked disease ongoing, and that's important as we think this will be a fast-growing product and will lead to a revenue growth that will be very important and exciting for the company and our shareholders. We're in the infectious disease space, which is very important right now, both from a public health perspective and also from a financial perspective, and we think we're right in a place we need to be as a company to generate growth and value for our shareholders, both in the immediate term and the middle and long term. So with that, let me see if there are any questions. And we'll go from there. So let's see the first question that we have here, and these are questions that came to us, by the way, through written, and so I'll just read what the people who wrote them asked. Is there any progress regarding, I think he meant Helicobacter, testing in the US, and how did sales agents work at this time? Yeah, this is an important question. One of the consequences of the shutdown was not just that patients were significantly reducing their interactions with physicians and not going in to see physicians where in the past they might have, but also a lot of the laboratory and diagnostic testing was not being done. So for H. pylori in particular, that's problematic because treatment is given typically after you diagnose a patient. So we do see diagnostics coming back online, so that's very important. I think it's increasingly being recognized that especially in the healthcare world, life has to move on, and you have to find a way to move on safely rather than just shut down testing or shut down GI doctors' offices and things like that. So we are seeing things come back on. We are seeing our reps coming back into the field, not at the level of activity we want them to be, but they are coming back into the field. Some of them in areas where there is a significant infection rate are having to do more work from home, but in many places, we see reps returning to the field and calling on doctors, and you see the trends positive and growing. So that's important. Second question, also from the same person: When would there be results for the Phase II study in the US and COVID-19? Thanks very much. So recruiting on that study is going very well, and we believe as soon as Q4 we should have results. Of course, that depends on recruiting continuing to go as we've seen it go, but we're optimistic. There's definitely a lot of patients, unfortunately, in the US who are hospitalized and looking for treatment options, and they've been a good source for us for these studies. Next question: What was RedHill's rationale to acquire Movantik from AstraZeneca? That's another good question. So Movantik, we built originally, we were developing Talicia, and when we saw we had a winner in our hands and we had a pretty high degree of confidence that this drug would be approved, which we did, we realized that in building an infrastructure, we could leverage that infrastructure for economies of scale and find an additional product. So our ideal profile of a product would be one that was already established. With Talicia, you grow the brand, so if you can find a product that's well established or even a brand leader, it's a great complement. And we were very lucky to find that Movantik is a brand leader. So we benefit from the enormous amount of effort that AstraZeneca has put into it, and we can take it and just ride that and try to grow those sales. So it really is very complementary. In addition, if you look at the prescribers who you think will be writing Talicia and those who have written Movantik already, and this is an analysis we've done, when you overlap those, there's a very high correlation. So we think that our reps will be able to promote both products very well. In fact, all of our reps are responsible for both products. The next question: How does Talicia differentiate from current H. pylori treatments, and why is it important to eradicate bacteria? Yeah, so Talicia is very different from the standard of care out there. As I mentioned, probably 80-85 percent of patients who are treated for H. pylori are actually treated with the standard of care. That standard of care is clarithromycin, amoxicillin, and PPI. That is a substandard treatment. There's a high rate of resistance to that standard of care. So as I mentioned, it can be as high as 30, 40, and maybe even beyond in some places in the United States, resistance to standard of care. In addition, the one component of that standard of care, clarithromycin, belongs to a macrolide class of antibiotics, and the guidelines provided by the American College of Gastroenterology actually say to guide away from using that, which is a very strange situation where you have the leading GI thought-leading body guiding away from the standard of care that's used in 80-85 percent of patients. And why did they do that? Because it really is substandard, but there really are no options. So we really believe that we will be the first-line gold standard. We overcome the deficiencies of the current standard of care, and we think that it will be a great product and will just very quickly replace that standard of care. Running a little bit out of time, so let me see, there was one question: What is the main inflection point? I think this would be the last one we take. What is the main inflection point investors should look for? It's a good question. There are a number that are coming out that I would think about. The first one relates to our COVID-19 program. As I mentioned, we have two clinical studies that we're doing: a Phase II study in the United States that's recruiting patients, and the second one, a global Phase II/III study. Both of them, we believe, we'll be reading out before, by Q4, and that could form the basis for submission for emergency use authorization. So those two data readouts are very important. In addition, since we're a commercial operation, we'll continue to have ongoing earnings calls every quarter as we've always been doing, and those earnings calls will be updating the revenue and other metrics on our products, and those will be important products as we transition from an R&D company that burns cash to a cash-flow-positive company eventually. So seeing that transition happening over the course of all these earnings calls that we've been doing, I think that will be a very important and meaningful inflection point that investors should pay attention to. And then the last will be, I think, on the R&D side, specifically with NTM, for example, where we will be, we should be starting our pivotal Phase III study in Q3. That's a very important study for the company. As I mentioned, there are no approved first-line treatments. It's a disease that is urgently in need of a standard of care, and we believe we could be that standard of care. We have a drug that really is well positioned to be that, so we're excited to get that study going and then eventually report results on it. So those are the inflection points I would look for. So again, I want to thank everybody for listening in, for the great questions. The company is always available to answer questions and to address any topics that you guys wish. Thanks very much, and have a great morning.