Jaguar Health, Inc. Q4 FY2023 Earnings Call

Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends, and productive initiatives, including products in the development stage which may not achieve scientific objectives or meet stringent regulatory requirements. Forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management's current assumptions, expectations, and projections about future events. While management believes its assumptions, expectations, and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed during this webcast for a variety of reasons, including those described in the forward-looking statements and risk factor sections of the company's Form 10-K for the year 2023, which was filed on April 1, 2024, and its other filings with the SEC, which are available on the investor relations section of Jaguar's website. Except as required by law, Jaguar undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events, or otherwise. Additionally, please note the company supplements its condensed consolidated financial statements presented on a GAAP basis by providing non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which company management assesses and operates the business. These non-GAAP financial measures should be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP. Today's conference is being recorded. At this time, it's my pleasure to turn the call over to Lisa Conte, Jaguar Health’s Founder, President, and Chief Executive Officer. Lisa, the floor is yours.

Thank you for joining our Investor Webcast for the fourth quarter of 2023. My name is Lisa Conte, and I am the Founder, President, and CEO of Jaguar Health and our subsidiary, Napo Pharmaceuticals. I appreciate your participation in this webcast. I want to address a key question from shareholders regarding the release timing of results from the OnTarget trial. OnTarget is our pivotal Phase 3 trial of crofelemer, a novel plant-based prescription drug aimed at preventing cancer therapy-related diarrhea in patients with solid tumors undergoing targeted therapy, with or without cytotoxic chemotherapy. We completed the treatment phase involving about 280 patients in the fourth quarter of last year, 2023. This study is unique as it is a patient-reported outcome study, meaning that clinical endpoints are based on real-time patient data collected daily through a digital app across six different countries. The database is locked, ensuring the security and integrity of the patient-reported outcome data. I want to emphasize that we are fully confident in the integrity and security of the data. You may wonder why there have been no results from the OnTarget trial yet. Like many small companies and even larger pharmaceutical companies conducting large global trials, we rely on numerous third-party contractors for complex statistical programming, all of whom must comply with good clinical practice as mandated by the FDA. These processes are part of the statistical analysis plan for OnTarget. In November 2023, while we were still blinded to the results, we discovered a programming error from one of our contractors affecting the analysis algorithm for the trial data. Importantly, this does not compromise the integrity of the data collection or the data itself. As we remain blinded, it took us some time to decide on the next steps. We are aware of the high expectations surrounding this milestone, which includes the release of the OnTarget data, a significant moment for a potential supplemental indication of a product that could transform both our company's valuation and the lives of patients in need. To manage the complexities of our statistical needs—considering the variety of tumor types, therapies, countries, and patient data—we engaged a highly experienced biostatistics expert in 2023 to oversee the statistical programming and analysis plan. He has previously analyzed the successful Phase 3 ADVENT trial that led to the approval of crofelemer for HIV-related diarrhea. He understands the endpoints related to the unique mechanism of action of crofelemer and is dedicated to conducting this process under good clinical practice guidelines with urgency. We cannot impose strict timelines on this unfolding process, which is why we cannot provide a reliable date for the completion of data analysis and result disclosure for the OnTarget trial. However, we are receiving regular updates, and the results will be released in due course. I understand the frustration of not being able to provide a specific timeline, but I assure you that the integrity of the data analysis process and the data itself remain our top priority. Next, I want to address our strategic focus on cancer supportive care. A leading cancer patient advocate living with metastatic cancer has shared the numerous side effects of treatment she has encountered over the past 15 years. This highlights the significant unmet medical needs in cancer supportive care. Our mission centers on enhancing patient quality of life, dignity, comfort, choice, and enabling adherence to life-saving therapies. About 80% of cancer survivors have unmet supportive care needs, and many discontinue or reduce their crucial therapies due to adverse side effects. For instance, patients experiencing cancer therapy-related diarrhea are over 40% more likely to stop or reduce their treatment compared to those without this issue. At Jaguar and Napo, we are exploring additional commercial opportunities in cancer supportive care to complement our CTD initiatives. We are actively working to amplify the patient voice in cancer care. We are launching multiple digital channels aimed at fostering community engagement and education among cancer patients. This initiative coincides with our participation in both the Oncology Nursing Society Congress in April and the American Society of Clinical Oncology annual meeting in June. Nurses and nurse practitioners play a vital role in patient supportive care, and our channels will provide a platform for patients to share their experiences. I, too, have a personal connection to this mission after my own cancer diagnosis this past year. I am excited to announce our recent out-license agreement with Gen Ilac, a Turkish specialty pharmaceutical company known for partnering with global innovators to address significant unmet medical needs. I recently returned from Turkey, where I initiated this collaboration with Gen's CEO, whose extensive experience in the Turkish market aligns with our goals in cancer supportive care. Gen has invested $2 million at a 70% premium to the current stock price, recognizing the value we offer. They also hold licensing rights to crofelemer for rare diseases such as intestinal failure and microvillus inclusion disease. We plan to collaborate on a new, concentrated formulation of crofelemer tailored to these orphan indications, distinct from the Mytesi pill formulation. Jaguar is engaged in clinical efforts addressing intestinal failure across three continents, with strong leadership from our Italian subsidiary, Napo Therapeutics. Dr. Massimo Radaelli, a significant figure in Napo Therapeutics, has been appointed as President of Jaguar International. His extensive experience in the pharmaceutical industry will greatly benefit our international expansion efforts. In conclusion, the landscape of cancer treatment is evolving for the better with the rise of targeted therapies. While these therapies offer longer lives, they also come with increased side effects and unmet needs. As a company committed to patient supportive care, we are intensifying our focus in this area. Our journey with crofelemer has provided invaluable insights into educating healthcare communities about its innovative mechanism of action. Though the HIV supportive care market may be stabilizing due to advancements in treatment, the need for supportive care in cancer is on the rise. No side effects should be considered tolerable, and we remain dedicated to addressing all treatment-related challenges faced by patients. Next, we will hear from Massimo Radaelli and our CFO, Carol Lizak, regarding the financial highlights for the fourth quarter of 2023, after which I will return. Thank you.

Well, thank you, Lisa, and thank you all for joining our webcast today. I'll begin my review of our financials for the fourth quarter of 2023. Prescription product net revenue was approximately $9.7 million in the year 2023, representing a decrease of approximately 18% over the combined prescription product net revenue in the year 2022, which totaled approximately $11.9 million. The combined prescription net revenue was approximately $2.3 million in the fourth quarter of 2023, representing a decrease of 18% over the combined prescription net revenue in the third quarter of 2023, which totaled approximately $2.8 million and a decrease of approximately 30% over the combined prescription net revenue in the fourth quarter of 2022, which totaled approximately $3.3 million. Mytesi total prescription volume decreased by about 4% in the year 2023 over 2022. Mytesi owned prescription volume increased slightly by approximately 1% in the fourth quarter of 2023 compared to the third quarter of 2023 and decreased by approximately 4% in the fourth quarter of 2023 over the fourth quarter of '22. Prescription volume differs from invoice sales volume, which reflects, among other factors, varying buying patterns among specialty pharmacies in the closed network as they manage their inventory levels. Loss from operations decreased by $100,000 from $34.4 million in 2022 to $34.3 million in 2023, which included an impairment loss on intangible assets of about $400,000. Non-GAAP recurring EBITDA for 2023 and 2022 were a net loss of $34.5 million and $27.4 million, respectively. Net loss attributable to common shareholders decreased by approximately $6.2 million in 2023 from $47.5 million in '22 to $41.3 million in 2023. That concludes my recap of high-level financials for the fourth quarter of 2023. I will now hand the discussion back to Lisa Conte.

Thank you, Carol. As we wrap up this call, I want to emphasize our enthusiasm for Jaguar and the family of companies, including Napo, as we focus on our key initiatives in the near term. I appreciate everyone joining us and supporting our mission to enhance the quality of life, dignity, and treatment outcomes for people in need worldwide, particularly concerning the side effects associated with cancer therapy. We will end our webcast now, but before we do, we will share a final video featuring Jaguar team members discussing the significance of cancer supportive care. Additionally, we are excited to launch multiple digital channels and look forward to engaging in conversations with those impacted by this issue. Thank you all very much.