Earnings Call Transcript - JAGX Q1 2024

Operator, Operator

Before I turn the call over to the 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 product initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements. Forward-looking statements are subject to risks 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 the 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 the webcast for a variety of reasons, including those described in the forward-looking statements and Risk Factors sections of the company's Form 10-K for the year 2023, which was filed 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 that 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 of items of these non-GAAP measures provides investors with additional information that reflects the basis upon which company and management assess and operate the business. These non-GAAP financial measures should not 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.

Lisa Conte, CEO

Hello, and thank you for joining our webcast for the first quarter of 2024. I'm Lisa Conte, the Founder, President, and CEO of Jaguar Health and Napo Pharmaceuticals, as well as the Chairman of our Italian subsidiary, Napo Therapeutics. I may use Jaguar and Napo interchangeably when discussing our company activities. After my comments, our CFO, Carol Lizak, will summarize the financial highlights for the first quarter of 2024. However, I want to share our combined Q1 2024 net revenue of approximately $2.4 million from our prescription and nonprescription products, which represents a roughly 20% increase compared to Q1 2023 and an approximate 4% increase from Q4 2023. Carol will provide more details shortly. Now, I want to address a common question from shareholders regarding the timing of the results from our OnTarget trial. We are revising our timeline and expect the top-line results to be imminent. Until the results are available, we remain blinded to them. The OnTarget trial is a pivotal Phase III study for our novel plant-based prescription drug, Mytesi, aimed at preventing cancer therapy-related diarrhea in patients undergoing targeted therapies with or without chemotherapy. This trial is designed to achieve a broad label based on its outcomes. We are in an era of targeted therapies for cancer treatment, which allow cancer patients, including those with metastatic disease, to live longer. However, these therapies can also produce severe side effects that may require patients to reduce their drug dosage or discontinue treatment altogether. Side effects are rated on a scale from 1 to 4, and even mild side effects can significantly impact a patient's comfort, dignity, quality of life, and adherence to their treatment regimen. Research often refers to lower-grade side effects as tolerable. Yet we must question, tolerable for whom? For example, grade 2 diarrhea involves 4 to 6 loose watery stools a day and potential incontinence—how is that tolerable? A prominent cancer advocate living with metastatic lung cancer has discussed the 21 distinct side effects she has managed throughout her journey. This clearly highlights an unmet medical need in cancer supportive care, and there are no acceptable toxicities. Our aim is to take a leading role in this field, and Jaguar and Napo are exploring additional commercial opportunities beyond cancer therapy-related diarrhea to include oral mucositis. Recently, we expanded our commercial focus to encompass cancer-related supportive care by in-licensing Gelclair, an FDA-approved prescription product for oral mucositis, which marks our first step into this new franchise. At the recent Oncology Nursing Society Congress, we raised awareness among oncology nurses about our commitment to cancer supportive care, as they play a crucial role in helping cancer patients. The feedback on Gelclair was overwhelmingly positive. Nurses expressed their excitement about the product returning to the market. Gelclair provides soothing and protective qualities and is a significant advancement over current pain management treatments. We will also showcase our products at the American Society of Clinical Oncology annual meeting in Chicago, one of the largest gatherings of oncology professionals worldwide. Next, I want to discuss our focus on rare disease indications for crofelemer. This distinct formulation differs from Mytesi and is highly concentrated for specific applications. Jaguar has five clinical programs around the globe, including multiple regulatory filings, aiming to support clinical testing for conditions like short bowel syndrome and congenital diarrheal diseases, specifically microvillus inclusion disease. My recent trip to meet with clinical investigators was inspiring as I witnessed the dedication of healthcare professionals working with patients who often rely on parenteral nutrition for extended periods. It is our goal to generate clinical proof of concept for the rare diseases we are targeting, as we work towards gaining early patient access in Europe, having received orphan designation for both conditions in the U.S. and Europe. Through our journey of bringing crofelemer from the rainforest to patients, we have gained valuable insights into educating healthcare professionals and payers about its innovative action mechanism. We have also observed the positive responses to our veterinary product, Canalevia, approved for chemotherapy-induced diarrhea in dogs. Jaguar is committed to enhancing patient supportive care and intends to continue developing prescription pharmaceuticals to manage neglected symptoms across various complex diseases globally. Next, I will hand it over to our CFO, Carol Lizak, for a review of the financial highlights from the first quarter of 2024, and I will return afterward.

Carol Lizak, CFO

Thank you, Lisa. Thank you all for joining our webcast today. I'll begin my review of our financials for the first quarter of 2024. The combined net revenue for the company's crofelemer prescription products, Mytesi, Canalevia-CA1 and $4 million in the first quarter of 2024, representing an increase of approximately 20% over the combined net revenue in the first quarter of 2023, which totaled approximately $2 million and an increase of approximately 4% over the combined net revenue in the fourth quarter of 2023 which totaled about $2.3 million. Mytesi prescription volume decreased in the first quarter of 2024 compared to the fourth quarter of 2023 by 7%, which occurs every year as commercial and Medicare insurance deductibles reset and result in higher co-pays for patients in Q1. Prescriptions decreased slightly by 2.5% in the first quarter of 2024 compared to the first quarter of 2023. Prescription volume differs from the invoiced 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 $1.6 million from $9.9 million in the quarter ended March 31, 2023, to $8.2 million during the same period in 2024. Non-GAAP recurring EBITDA for the first quarter of 2024 and the first quarter of 2023 were a net loss of $7.5 million and $9 million, respectively. Net loss attributable to common shareholders decreased by approximately $2.9 million from $12.2 million in the quarter ended March 31, 2023, to $9.2 million in the same period in 2024. That concludes my recap of high-level financials for the first quarter of 2024. I will now hand the discussion back to Lisa.

Lisa Conte, CEO

I do want to just clarify something that I said earlier, and that's regarding early patient access for crofelemer for intestinal failure in Europe. So I mentioned that it's based on proof-of-concept results. Those results may start coming in 2024 and 2025, we would expect the early patient access reimbursed program, therefore, based on those results to occur in 2025. And with that, I want to thank you all again. We're highly energized about all the important near-term initiatives, including the upcoming launch of Gelclair, and what is now imminent results from OnTarget cancer therapy-related diarrhea, our Phase III clinical trial for crofelemer and this is a formulation that we currently have on the market, Mytesi. Thank you all for the support to develop and commercialize prescription pharmaceuticals, plant-based for essential supportive care and management of neglected symptoms across multiple complicated disease states with a very strong focus right now on cancer patients in need around the world. And that's the conclusion of our call for today. Have a good day.

Operator, Operator

And this concludes today's call.