Thank you, everybody. Good morning and welcome to the Citizens Life Science Conference. Really excited to be joined next by Aquestive Therapeutics. Aquestive is a company that has successfully leveraged its oral film technology through multiple approved products. Our focus right now, the company's focus is Anaphylm, which is an oral film epinephrine formulation for severe allergy. The company recently submitted the NDA, so you know a lot going on there and preparing for launch too. We are joined today by Dan Barber, the company's CEO. Dan, welcome.
Thank you.
Maybe just ask you to give a couple of intro comments and we'll jump into some Q&A.
Sure. First, Jason, thank you to you and the team at Citizens for inviting us back again this year. I was saying to you before, this is my fourth year in a row, which I feel like in this industry is a nice long run, so I'll take it. Look, this is, in my mind, and I've been at Aquestive a long time, the most exciting time we've had as a company. We just filed with the FDA our Anaphylm application, which is an epinephrine product which would be used for anaphylaxis and severe allergic reactions. That is something that was monumental for the team, and we're incredibly excited about where that takes us. As we look forward, there are two things that we are highly focused on. One is obviously getting Anaphylm through the FDA process as smoothly as possible. Two, of course, is commercial, commercial, commercial.
There's a lot of focus right now on all the pre-commercial activities and where we're going. We're 15% of the way through the clock with the FDA. It goes by fast, and we want to be ready.
Right. Let's just start there. You submitted the NDA just a few weeks ago. We're waiting to hear confirmation of the PDUFA date. Just remind us of the timelines there. I'll ask, at a very high level, how have the interactions been from FDA so far during the review?
Loaded question in today's world, right? First, on the timelines, pretty standard timelines. We would expect to receive our acceptance letter from the FDA in June. We're getting pretty close to when that should come through. We would expect, if we do have an advisory committee meeting, which the FDA said we may have one, we would expect that to occur in, call it mid-October to Thanksgiving, somewhere in that range. Of course, our PDUFA date, which we'll get assigned when we get our acceptance letter in June, we expect that to be the end of January, early February. Those are kind of the three milestones to point to. In terms of our interactions with the FDA, business as usual. What I would say is we are very aware as we look around at the problems that the FDA is facing around us.
So far, we have not experienced that.
I guess another loaded question. How are you thinking about an AdCom here?
For us, we really want an AdCom, right? Which is maybe kind of an odd thing to say for a company. We want our moment to really highlight our program, get the awareness up, have an advisory committee of MDs that is put together by the FDA give that positive vote for our program. We are hopeful that an AdCom does happen. We are preparing like one will, where we have our KOLs lined up. We are spending time even on slides. It is questionable in my mind whether with what the FDA is going through, whether they will be able to put an AdCom together. We will see.
I think the other positive point there is we have a recent example of an Adcom for the nasal spray, and we know exactly what FDA cared about. It was speed of onset, and that's something that we can talk about the product profile later. But you know exactly what the focus would be for FDA going into this.
We think we do. When I look back, we have six approvals that we've gotten through the FDA over the years. When I look at all of those approvals and I look at what we've done for this package, this is by far the most interactions we've had with the FDA prior to a submission, and by far the biggest package that we've put together. In fact, I think we've put together the biggest epinephrine package anyone on this planet's ever done. We feel like we've done all the right work. We feel like we've had all the right conversations. Now it's time for the FDA to do its work.
We'll dig in more into the development program, the data. Just at a high level, when you think about product label, product profile, what are the key attributes of Anaphylm that you really would want to highlight?
Sure. Sure. The way I think about it is I would separate two things, right? One, what's on the label, and two, how we'll position the product maybe is the way to put it. The label, one of the most critical things we want to see on the label is our PK curve. We think our product really, really shines when it comes to PK curve. As you know, Jason, our uptake on the front of the curve, those first 15 minutes, we match the autoinjector. That being in the label we think is important, and that will be a big selling point for physicians.
The other two things that we expect to have in the label, but we'll see as we go through the process, one would be information on our OASIS study, which is a study we did where we exposed people to an allergen and then gave our product. We have good results to show from that. The third area we've done a lot of work is in the storage conditions. Our product, which we believe is a product that can be taken with you wherever you are in life. You can take it to the top of a ski slope. You can dunk it in water. You can leave it on the seat of your car in Phoenix. We think having the storage conditions on the label would be really helpful as well.
Got it. Fantastic. All right. Let's talk about the commercial prep that you're doing. Where are you today? What are the priorities? You said it was obviously a core focus for the next few months.
Yeah. We usually have, usually when we're at your conference, we've just had earnings. This year, it's a little backwards for us. We're having this conference, then we'll have earnings next week. In our earnings call next week, we'll walk through extensively what we've done from a commercial standpoint. What I can share today that we've already said publicly is that awareness is a huge focus right now. We're very, very active in the community. We're at all the medical conferences. We're dealing with all the KOLs. We're putting out posters and presentations. All of that work is foundational awareness work. What we find with that awareness work is as we're out in the community, in our company, we've started to say, seeing is believing, right?
It's this idea that when people actually see the product and they experience it, and I have to, you know, I have to pull out my phone, when they see that you can actually carry the product on the back of your phone, and that our storage conditions allow that, we really see people's eyes light up. When I tie our work and the seeing is believing that we see to our preference data, our preference data shows a 2-to-1 preference for our product over the medical devices, that makes me very excited for once we have the opportunity to launch the product.
Let's talk about the data. You mentioned before that the early part of the curve, the PK curve especially, looks very similar to the autoinjectors. Just walk us through that data set, the pivotal PK by equivalent study.
Sure. Sure. With all of the pieces and parts of our program, or anyone's program, sometimes people forget the core, the fundamental, right? The fundamental part of our pivotal program follows the FDA's guidelines on how to get a comparable product approved. There are two elements. One is Cmax, right? Do you match on the peak amounts you give? The other is AUC. Is your exposure the same as the other product? In both of those instances, in our pivotal study, our Cmax actually is right between the two autoinjectors. Forget the IM. We're right between the autoinjectors. On partial AUC out to 60 minutes, which would be the other important measure, we're right between the manual IM and the autoinjector. On the two core pieces for approval, we hit our marks perfectly.
The other obviously important thing from a pivotal study perspective is that we're safe and well tolerated, right?
One thing I know has been discussed is that as you look at the 30-60 minute time frame, the tail drops off a little faster than other products. That is something that you have talked about with FDA. You have addressed it. You have data to speak to. Can you talk about just how you think about that tail and then the repeat dosing work you have done?
Sure. The first important thing to realize is that's actually not an element of approval, right? That's a, I'll call it an ad hoc question from the FDA. What the pharmacokineticist at the FDA has asked is, OK, if I look at just the 45-minute mark, just the 55-minute mark, and I look at your geometric mean values, they're lower than the other products. How should I think about that, right? What we've said to them is a couple of things. One, we've said, if you don't look at just mean, if you actually look at the data set, all of our points are within the data set of the other products. The second important point is obviously, in this disease state, all the action is in the first 30 minutes, right? You want to shut down that mast cell degranulation, and that's what our curve does.
At 45 to 60 minutes, you should be past the issues that you had during your severe allergic reaction. The final point, which is probably the most obvious of the three, is if you're still having symptoms at 45 minutes, that's what the second one's for.
You mentioned the OASIS study. I think this is a really important study. Can you walk us through, A, what the study was, and B, why you conducted it? Then we'll come back and talk about what you actually saw.
Sure. Yeah. The FDA originally wanted us to show some level of what happens with edema or any issues that may be in your mouth at the time of a reaction. We actually first proposed that we inject people with histamine, cause a reaction, and then dose our product. The FDA came back to us and said, that seems a little complicated. Why don't you just expose people to a known allergen? In our study, we exposed people to something that they were known to have an allergic reaction to. We did it twice. The first time we did it without giving our product. The second time we had them come back, and we had them be exposed to the allergen. We waited 15 minutes, and then we gave our product, and we compared what the change was between the two.
When our product is not given, we see edema. We see all the signs of an allergic reaction, and that lasts for well past an hour. When we expose them to an allergen, and then we give our product, within five minutes, the median time to all symptom relief was five minutes. Within 10 minutes, all angioedema is gone. We showed a clear benefit that not only we can show to the FDA, but going back to your label question, when that's in our label and we get to talk about that with physicians, we think that is an important element, especially when we look at our competitor who's recently launched, which is great, by the way, for patients. We know one of the barriers they've pointed to is clinical evidence. We have that clinical evidence, and that study is a really important one for us.
Just the last point, which I think is funny because it's part of the reason you started the study, was you also showed the PK curve has there's no impact on the PK curve.
That's right.
With or without edema.
That's right. That's correct.
Yeah. Maybe let's just talk about the competitor product for a second. An intranasal was launched several months ago. What's the feedback you hear from physicians, both in terms of their awareness and willingness to explore using the product?
Yeah. So I think this is a groundbreaking time for this space. The autoinjector, the EpiPen, and then the subsequent autoinjectors that have come through since then has really been the only thing people could use for 40 or 50 years, right? The fact that now we're starting to have these other alternate ways of delivering the product is not only incredible for patients, but it's going to allow a space that really hasn't gotten a lot of attention, or positive attention, I should say, in recent years, to really expand to where it belongs. What we really are excited about when we look at what our competitor is doing, we think the awareness is really important. The expansion of the market we already see happening, so this first quarter this year was 5% growth over last year's first quarter.
We expect the market to double over the next few years. Right now it is at about 5 million doses a year. We would expect that to get to 10 as these efforts take hold.
Clearly physicians are used to injectable products. How willing do you think they are to try something different?
Yeah, I think it's a spectrum. I think it's like most products in life. There is definitely a pent-up demand by patients, caregivers, health care providers who understand the problem in the space that people don't carry their product. They start to become less sensitive to the issue they may have. Now they are in a position of danger if they are exposed to the allergen. I think that group is very, very open to the products that are coming out. As you go across the spectrum, there, of course, will be physicians who, and they play an important role in the industry, who will say, show me, right? They want to see the other physicians have success with their patients first before they adopt a new product.
I think going back to the awareness idea, I think the best thing that companies like us can do to really get that spectrum to move in the right direction is make sure we put all of our information out, give them the opportunity to read our data, see how we have positioned our product, and also see how patients react to the product.
Are there things that you can do post-approval to continue to build that clinical experience set for physicians?
Sure. Sure. You see with the nasal spray that they did have a phase four commitment that involves use in the office. I think using any rescue product in an office setting, as most of you are probably aware, a lot of allergists have people come in for food allergy tests or other tests. Sometimes there is a reaction, and they do have to give epinephrine. Usually in a clinical setting, that's where the manual injection is used because it's cheap. If you can create a study or a use profile where physicians are able to use your product in their clinic, that can drive awareness and comfort with the product. Whether it's a phase four commitment from the FDA or just good practice, that's a great way to get people comfortable with your product.
You mentioned the market's growing. Can you just give us a few metrics around market size today?
Sure. Yeah. As I mentioned before, right now our data suggests the U.S. market is around 5 million doses, which puts it at about a $1 billion marketplace. We believe, and if you look at prevalence, the number of people who should carry a rescue product of some sort is, of course, much, much higher. The advocacy groups that talk about the need will put the number around 40 million. You have 5 million rescue products being prescriptions a year versus 40 million people who should be. We all know from the difference between prescriptions and prevalence, you're never going to get to 40 million.
In our mind, we think with the efforts that are going on, the awareness, the better products, the willingness of people to carry things that are more an extension of who they are than something that has to be carried in a bag, we do think that 5 million goes to 10 million. So a $1 billion market goes to $2 billion. Our competitor, and I hope they're right, has pegged the growth at 14 million a year. That would put it at almost $3 billion. We'll see. Somewhere between $2 billion-$3 billion is probably where the market lands.
OK. What does the market research say that non-injectables could become as a proportion of that market?
Yeah, our surveys, and like most companies in our situation, we've done a lot of surveys. Our surveys suggest that while the autoinjector use won't disappear, there will always be someone or some group of people who want the autoinjector, it will become a minor part of the market. There is no active awareness of the product. It is an older technology. We would expect that to become, pick whatever you want, a small percentage. We do believe that the other new technologies, so the nasal spray right now and our product, will take up the rest of the market. Obviously, we love our product. Our data suggests that we'll have more than the other product. Obviously, time will tell on that front.
I think it's just, we've talked about this before, we can debate all day long which technology gets slightly more or less use, but non-injectables will be a meaningful part of the market. That's what people really should think about in terms of the opportunity.
I don't see how it won't dominate the market. I just don't see how it won't.
Another part of this is the payers. So what's the work you've done so far? What are you hearing from them? And obviously, you're not going to guide to a price now, but just how do you think about broadly pricing strategy?
Sure. Yeah. We're obviously watching very closely what's going on with payers and with the launch of another product. There is only so much you can really do, right? From our perspective, the really important point with payers is that everyone has access to patients. We would expect in a well-organized marketplace that as our product comes out, the current products, any products behind us, that the payers treat those equally and allow them to have access as long as people aren't playing pricing games, right? That is our hope for this space so that the patient can benefit. The real work that we're doing right now is also on awareness. You're allowed, when you're a certain period of time ahead of launch, you're allowed to interact with payers. We're doing that on a daily basis.
We actually, thanks to Libervant, which unfortunately in the courts, we did not win in the courts, but thanks to Libervant, we do have all of our distribution contracts and a lot of our payer contracts set up. Those contracts are still live. They're still active, and they'll stay live. That's going to save us months and months of energy and startup time as we get to our launch.
Got it. Yeah. Commercial footprint. Can you talk about the let me ask this in a different way. So just give us an understanding of the current cash position, cash runway. And in the context of, especially in the market today, cash is a really important thing to be confident about. How do you think about the appropriate launch commitment?
Sure. Yeah. Next week at earnings, we'll have more of a cash update. What I would say broadly, what would be comments I've already said before is when you look at the ways to fund a company, we are in a position where we have a variety of ways to do that. That is really important. Anyone who's followed our story knows that Ernie Toth and I, Ernie, our CFO, is here with me today as well. We have, over the years, had to face times, especially several years ago, where we did not have a lot of options, where it was you had to make this work or you had to get an equity raise done. Where we sit right now, especially compared to a lot of companies around us, the options we have are actually really healthy. We can partner.
We can look to external markets to bring in money. We have debt facilities that we can employ if we wanted to. We can look to the equity markets if we have to, where they become healthier. All of those options together create a basket that makes us comfortable that we have a healthy path forward. I feel for the companies around us, as we were talking before, because I remember what that feels like. Thankfully for us, we're not in that situation right now.
When you look at the nasal spray competitor, where is the product getting used? What's the kind of number of physicians and the profile of physicians that you think are an ideal target to think about early during a launch?
Yeah. From our perspective, the way we think about it, there's no way other than focusing on the allergist and the high decile allergist, right? It may seem like a very simple approach because it is, right? For the first whatever period of time, making sure in those high decile allergists that our voice is heard, that our market share is healthy, that our adoption rate is good, that's going to be the core focus. As you get past that launch period of time and you start to look to be broader, we'll look to other places.
Maybe just one more. Again, understanding you're not giving guidance, but if you get approval, let's say towards the middle of the first quarter of next year, how do you think about the timing of the launch and how quickly you can start to get adoption?
Oh, we'll be ready. We will be ready. We're already hiring the key people, as I've said before. We're working with the payers, as we talked about. We will have the infrastructure in place. We will, day one, be—and I'm not saying product will be in the market day one—but day one, we will be locked and loaded and ready to go.
This is often a question which companies coming to market with their first products have to contend with. You're not coming to market with your first product. Just from a manufacturing perspective, where are you today? Talk about supply chain.
Yeah. No, and that's one of the really powerful parts of the way our company is set up is we control our supply chain. We make our own product. Making our own product allows us a lot of flexibility as we go through that final component with the FDA where you're working on labeling and what's the final version going to look like. A lot of companies have to wait a long period of time because of a change right at the end of the approval process. That, from my perspective, is really important. We have looked at the disruption that's in the supply chain from everything that's going on. From our perspective, there's nothing that we're concerned about. That's a really powerful position to be in for us.
I'll ask one more high-level question. As you think about the next really important 12 months here, where do you spend your time? What's the most important thing for you and the company to focus on?
Anaphylm, Anaphylm, Anaphylm. This is--we are a year ago when I was talking to you, we were talking about other elements of the company, which are still important and still there. But we're in the zone right now where launching Anaphylm is everyone's first conversation of the day and everyone's last conversation of the day.
Fantastic, Dan. Really appreciate you being here.
Thank you for having us.