Good morning, everyone. Thank you for joining the Zevra Therapeutics' First Quarter 2024 Corporate Update and Financial Results Call. Today's call is being recorded and will be made available on the company's website following the conclusion of the call. With that, I will now turn the call over to Nicole Ochsner, Vice President of Investor Relations and Corporate Communications at Zevra Therapeutics.

Good morning, and thank you for joining us today to review Zevra Therapeutics' progress in the first quarter of 2024, outlining our clinical advances, operational achievements, and financial results. Before we get started, let me take a moment to provide some important information. I encourage you to access the news release which was published this morning and is available in the Investor section of Zevra's website. As we begin our call, it's important to highlight that today's discussion will include forward-looking statements. Forward-looking statements are not promises or guarantees and are inherently subject to risks, uncertainties, and other significant factors that may lead to actual results differing materially from the projections made. Please refer to the Risk Factors section in our most recent Quarterly Report on Form 10-Q and other filings with the SEC on Annual Report on Form 10-K. I am pleased to welcome Zevra's management team members participating in today's call. I'm joined today by Neil McFarlane, President and Chief Executive Officer; LaDuane Clifton, our Chief Financial Officer; Joshua Schafer, our Chief Commercial Officer and Executive Vice President of Business Development; Christal Mickel, our Chief Development Officer; and Adrian Quartel, our Chief Medical Officer. Now, I'll turn the call over to Neil.

Thank you, Nicole, and thank you all for making the time to join us today. During the first quarter, we made steady progress in executing on our strategic objectives. On our last earnings call, we announced that we were focused on three key priorities. First, to successfully launch OLPRUVA and ensure access for patients. Second, to prepare for the potential launch of Arimoclomol, and third, to advance the KP1077 program in sleep disorders. I'm pleased to report that we are executing on all of these objectives, and today, we'll share with you a summary of our key accomplishments in the first quarter and the reasons we are optimistic for 2024 and beyond. In addition to executing on our three key priorities, we refinanced our existing debt with up to $100 million in committed capital, led by premier biotech investors, including Perceptive Advisors and Healthcare Royalty Partners. This new credit facility, which LaDuane will cover in more detail, has further strengthened our balance sheet and provides added capital flexibility to support our mission. The company continues to work through a period of significant growth and transformation with the addition of talented people and capabilities for each of the three companies that have now come together to become one Zevra. The team is making significant progress advancing our rare disease portfolio and in Q1, we initiated a long-range planning process, including a portfolio prioritization review with a focus on building a sustainable business with reliable cash flows. Achieving our strategic objectives to commercialize OLPRUVA and then upon approval, successfully launching Arimoclomol are key to reaching that seminal inflection point. We initiated the full commercial launch of OLPRUVA at the end of January 2024. As a reminder, OLPRUVA is indicated for the treatment of certain urea cycle disorders or UCDs, which are a group of rare genetic disorders that can cause harmful levels of ammonia to build up in the blood, potentially resulting in neurocognitive impairments, brain damage and in some cases, coma or death. We estimate that there are approximately 2,000 people in the US with UCD, of which roughly half are diagnosed and treated. The UCD market in the US is estimated at approximately $350 million annually. Despite the availability of therapies, unmet needs for people living with UCD persists. We believe that OLPRUVA is well suited to address these needs as it provides personalized doses for each patient's requirements, it is portable and easy for patients to take. And most importantly, it is palatable as it was formulated to overcome the challenging taste and smell associated with other formulations of sodium phenylbutyrate. Since launch, we've been focused on raising the awareness of OLPRUVA and demonstrating our commitment to UCD patients. In the quarter, we had four new patient enrollments, which we define as a prescription for a patient eligible for benefits investigation or our Quick Start program. We are encouraged by the progress that our rare disease specialists accomplished in the first few months of launch, meeting with more than 90% of the specialists at the 40 centers of excellence that treat people with UCD. We've also assembled a team of marketers, patient services, and market access professionals as well as medical science liaisons and patient advocates for engaging with key stakeholders at patient events and medical conferences. Our managed care team has been working with government and commercial payers to ensure broad access for patients. We have seen meaningful growth in reimbursement coverage, which was 55% at the time we acquired OLPRUVA to nearly 75% of covered lives as of May 1. Overall, I'm pleased with the progress we've made in the first few months of launch and look forward to reporting more details as the launch matures. Diverse commercial footprint was established to provide high strategic fit between OLPRUVA and Arimoclomol, given that the majority of prescribers for both products work within the same centers of excellence. If Arimoclomol is approved, we believe this close proximity and overlap in patient care will allow us to realize synergies and scale with our commercial infrastructure. In fact, our team has already begun to identify and compliantly engage with key opinion leaders and prescribers who treat UCD and Niemann-Pick Disease Type C or NPC. Our market access team has initiated clinical discussions with payers regarding NPC and Arimoclomol. These and other synergies across our brands will allow us to accelerate the launch of Arimoclomol and ensure patients have access to this much-needed therapy. As a reminder, Arimoclomol is our investigational drug candidate in development for the treatment of NPC, a rare genetic progressive and potentially fatal neurologic disease. If approved, Arimoclomol would be the first drug indicated for the treatment of NPC in the US. Currently, there are approximately 900 people living with NPC, of which, roughly 300 are diagnosed. Of those, approximately 70 are enrolled in our Expanded Access Program or EAP. During the quarter, the FDA assigned a new PDUFA date of September 21, 2024 and reaffirmed its intent to present the resubmission for discussion at an advisory committee meeting, for which we are thoroughly preparing. In National Niemann-Pick Disease Foundation, known as NNPDF, spearheaded efforts with six other advocacy and research organizations to compile a petition of nearly 1,000 signatures from NPC patients, caregivers and physicians with direct experience utilizing Arimoclomol that was submitted to the FDA in Q1. We were overwhelmed by the outpouring of support for Arimoclomol within the community. As the FDA review continues, we will maintain our EAP and continue working tirelessly to bring this potential therapy for patients living with this devastating rare disease. We continue to work closely with key opinion leaders to educate on Arimoclomol's disease-modifying clinical profile and raise awareness of the heterogeneous presentation of NPC. In April 2024, we presented new long-term real-world data during the Society for Inherited Metabolic Disorders. The presentation included data from EAP patients from the US centers and it demonstrated that adults treated with Arimoclomol, including those with and without the migalastat use had stable disease course, which is defined as not showing disease progression over the three years of treatment. The safety profile was consistent with that observed in the Phase 2/3 study. If approved, we intend to utilize our clinical data as well as the emerging real-world evidence from our EAP to establish Arimoclomol as foundational treatment for people living with NPC. Now I'd like to turn your attention to KP1077, our clinical candidate being developed as a treatment for idiopathic hypersomnia or IH, a rare chronic sleep disorder. IH is just characterized by excessive daytime sleepiness or uncontrollable need to sleep and difficulty waking. There remains an unmet need and we estimate 37,000 people in the US are currently diagnosed with IH. As you may recall, KP1077, serdexmethylphenidate, or SPX, was designed to steadily release d-methylphenidate, its active ingredient. This unique pharmacokinetic profile allows for flexible dosing to overcome these primary IH symptoms. This profile ensures that patients receive the optimal drug concentration during waking and active hours. SDX is currently designated as a Schedule IV controlled substance by the US Drug Enforcement Administration. During the quarter, we reported top line data from our Phase 2 study of KP1077 in patients with IH. We are encouraged by the results which shows that KP1077 is well tolerated and demonstrates early signs of differentiated and clinically meaningful benefits. The study successfully fulfilled the objectives of informing the design of a pivotal efficacy trial, and we are planning for end of Phase 2 meeting with the FDA in Q3. Since completing the trial and reporting top line results in March, we have been working closely with the sleep community to interpret these results. With only one approved treatment, there remains a large unmet need for therapies with different mechanisms of action to address the symptoms of IH. We look forward to presenting the full data package from our completed study at the upcoming SLEEP 2024 Conference in early June. As part of the strategic planning initiative kicked off in January, we completed our preliminary evaluation of the Celiprolol program for the treatment of Vascular Ehlers-Danlos Syndrome, or vEDS, which impairs COL3A1 connective tissue and leads to vascular and hollow organ ruptures. Celiprolol's mechanism of action is designed to reduce the mechanical stress on collagen fibers within the arterial wall through vascular dilation and smooth muscle relaxation. Celiprolol received Orphan Drug and Breakthrough Therapy Designations from the FDA. The Phase 3 protocol is being conducted under a special protocol assessment or SPA agreement with the FDA. We recently restarted recruitment of the Phase 3 trial, also known as DISCOVER trial, to support patients currently enrolled and to preserve the value of the program while we complete our portfolio review. This is a decentralized event trial design of Celiprolol on vEDS related event reduction. Celiprolol is a primary treatment option in various European countries and we believe that it could address the significant unmet need in the US as there are no approved treatments for the 7,500 diagnosed patients with vEDS. Looking ahead, we have three areas of focus: first, continuing to drive the launch of OLPRUVA; second, to prepare for potential advisory committee and launch of Arimoclomol; and third, to advance KP1077.

Thank you and good morning. Before I begin, I would encourage you to refer to our Quarterly Report on Form 10-Q, which we intend to file Thursday post market for more detailed information. As Neil has already outlined, the first quarter was a time of solid execution as we drive the business towards the accomplishment of our strategic objectives. Our financial results for the first quarter reflect our foundation of financial strength as we continued our investments in building out our commercial capabilities and in the advancement of our development programs. Net revenue for the quarter was $3.4 million, which includes $2.2 million of net reimbursements from the French EAP for Arimoclomol and $1.2 million of royalties and other reimbursements under the AZSTARYS license. Accordingly, we recognized commercial product revenue and shipments are received by our specialty pharmacy. Based on the early stage of launch and inventories in the channel, OLPRUVA sales were de minimus during the quarter. R&D expenses for the first quarter increased to $12.3 million, which was primarily driven by the KP1077 Phase 2 trial in IH that has since been completed as well as our work to support the Arimoclomol NDA during the ongoing review cycle and to prepare for a potential advisory committee sometime prior to the upcoming PDUFA date. Selling, general and administrative expenses were $9.9 million and reflect an increase in personnel costs and professional fees associated with our commercial infrastructure. Net loss for Q1 2024 was $16.6 million or $0.40 per basic and diluted share. As of March 31, 2024, total cash, cash equivalents and securities were $52.7 million, which was a decrease of $15 million, compared to December 31, 2023. Total shares of common stock outstanding were $41.8 million and fully diluted shares outstanding decreased by $1.4 million to $56.8 million, which includes approximately $5.6 million shares issuable upon exercise of warrants. As Neil mentioned, on April 10, we announced the refinancing of our existing debt with a new credit facility, which provides up to $100 million of committed capital. With the initial draw of $60 million, we have refinanced our existing debt of approximately $43 million and added an incremental $14 million in net cash proceeds to the balance sheet after fees and discounts. A second tranche of up to $20 million is available until October 5, 2025, and a third tranche of up to $20 million will become available upon approval of Arimoclomol in each case, subject to certain terms and conditions. By restructuring the amounts previously outstanding on two different facilities, we have simplified and extended the maturity while also providing additional non-dilutive capital to support our mission. As a result of this transaction and based on our current operating plan, available cash, cash equivalents and investments are expected to extend our cash runway further into 2026, subject to continued compliance with our debt covenants. Our forecast includes commercial revenue from sales of OLPRUVA, reimbursements from the French EAP for Arimoclomol and ongoing royalties under the historic license agreement. It does not include commercial revenue from the sales of Arimoclomol nor the sale of the priority review voucher which would follow an FDA approval. Disciplined utilization of resources will continue to be our guiding principle as we make prudent investments in our commercial and development operations while matching those investments to our operating requirements. We are optimistic about the opportunities we have in store during 2024. Our focus is on creating long-term value for shareholders by executing against our plan in support of our mission to become a leading rare disease company.

We will now take our first question from Tim Lugo with William Blair.

Thank you for taking a question. For Arimoclomol, I know the data submitted to the agency included use of Arimoclomol alone and in combination with migalastat. Can you just clarify how you expect the product to eventually be used by patients and is combination going to be used more? Is it going to be used alone more? Just what do you view the strength of data for both of those approaches?

Thanks for that question. So in clinical trials that was for patients that were both on migalastat and not on migalastat, and what we found is that patients whether they were on migalastat or not on migalastat improved whilst being on Arimoclomol. What we saw overall is that there was not a big difference between the improvement in patients with Arimoclomol or without Arimoclomol. So we believe that once we go to market that Arimoclomol will be the foundational therapy. So it is a disease-modifying treatment. And a lot of physicians and patients want to add on migalastat to their foundational therapy is really up to them. I think it needs to be noted that migalastat is not approved for treatment of Niemann-Pick C and Arimoclomol will be approved as foundational therapy for patients with narcolepsy.

Thank you. Can you discuss the support from patient advocacy groups regarding your recent filing? Could you summarize your interactions with these groups or any advocacy feedback you've received in the past quarter? It seems like there is increasing momentum following your submission.

Hi, Tim. This is Josh Schafer. We have been actively engaging with the patient advocacy community for several years, and they have shown their support for Arimoclomol. Recently, they signed a petition with 1,000 signatures from patients, caregivers, and physicians endorsing the submission and hopeful approval of Arimoclomol. This clearly indicates their backing for both Arimoclomol and Zevra. We remain deeply committed to that patient community, which is well-organized and has contributed significantly to raising awareness for Arimoclomol, which we hope will facilitate its launch upon approval. Currently, there are about 70 patients participating in our expanded access program in the United States, along with approximately 300 more patients in the US receiving treatment, and we aim to make Arimoclomol accessible to all those patients.

And I guess one last question. I believe you mentioned 300 NPC patients were diagnosed, there's an expectation of 900 here in the US. Can you just talk about that difference in a differential between diagnosed and expectation?

Sure. This 900 is the estimated prevalence of the disease. Not all of those patients are confirmed diagnosis, that is based on some claims data that was published in 2021, I believe. And of those 900, there are about 350 who have been diagnosed and are receiving some form of treatment, whether that's miglustat today or treatment for symptomatic disease.

We will take our next question from Jonathan Aschoff with ROTH MKM.

I was curious if you might be able to help us out a little with the de minimus OLPRUVA revenues. Any help there or you just wish to keep that quiet for now?

Good morning, Jonathan. It's really a function of sort of the product that's already at the specialty pharmacies and therefore, we had modest shipments during Q1. So our main focus during Q1 has been to build awareness to get out and make contact with the key opinion leaders and prescribing physicians. And we've touched actually over 90% of those folks at this point. So in future quarters, as enrollments continue to build, we'll see more pulls into the pharmacy and therefore, revenue will go up, but de minimus is de minimus.

Okay. And how about time to Celiprolol data, if you can venture a guess there at all and maybe help us out with the enrollment percentage at the present? Something that will give us a sense of at least when the data will come? I know it's several years.

Yes, Jonathan, thank you for that question. So we started recruitment to support patients that are currently enrolled. We are looking at Celiprolol as part of our whole portfolio as this is a part of preliminary report. We understand the value in the programs and we started this program. As said, this is under an SPA agreement with the FDA, and we're looking at about 48. We currently have 17 patients enrolled and we continue to enroll throughout the rest of the year.

Okay. And also, have you noticed anything on the part of Amgen regarding marketing strategy with RAVICTI or is it just absolutely not a needle mover for them?

So we can't really comment on what Amgen is doing, but we know that there are roughly 800 patients today that are receiving some therapy for UCD and about 25% of those patients still have some hyperammonemic events and that's probably due to poor compliance as a result of patients not being able to tolerate current therapies. And we believe that OLPRUVA is going to help to solve that problem with its ability to be personalized in its dose, to be portable, and in the way that it's delivered. And most importantly, the palatability that we think will lead to better outcomes for these patients.

Okay, thanks. And lastly, just a weird little detail. On your 10-K, it says on , you're at 43.4 million shares. Then, a day later in this press release here today it says that you have 41.8, so did you buy back 1.6 million or what happened?

There was no repurchases during Q1. And so shares outstanding as of end of the year was at 41.5 million and shares outstanding as of 331 is 41.8 million. So are you referring to the fully diluted share count, Jonathan?

It's just whatever is on Page 1 in the 10-K.

Okay.

We will take our next question from Louise Chen with Cantor.

So I wanted to ask you on peak sales for OLPRUVA. How do you think about that and how long do you think it'll take you to get there? And then another question we get a lot is just on KP1077, comparing it and contrasting it to other products in the market and where your competitive advantage is? And then lastly, just on your new opportunities here, the Celiprolol products, what is the market opportunity and how do you think about it? And what makes you excited about this opportunity? Thanks.

Sure. This is Josh, and I’ll address the Celiprolol question. In the first quarter, we focused on raising awareness of the drug, and we are pleased with our team's performance. We established a strong commercial organization comprised of skilled, experienced experts in rare diseases who have engaged with about 90% of prescribers. Additionally, we have been collaborating with patient advocacy groups and the payer community, achieving coverage for 75% of lives. This creates a favorable outlook for momentum as we approach the launch. It’s also worth noting that patients with rare diseases typically visit their physicians every six to nine months. While we are happy with the current progress, we know there’s more work ahead.

I'll ask Adrian to see if he can talk a little bit about the KP1077 differentiation.

Thank you for the question. There is a large patient population involved, specifically 37,000 patients, which still has significant unmet medical needs. We believe that KP1077 offers a unique mode of action that targets specific symptoms more effectively. Therefore, we see our product as differentiated. Additionally, the clinical profiles highlight its safety, positioning us in a competitive space with other products aimed at this population.

I think you also asked a little bit about the Celiprolol market opportunity, if I understood it as well.

Yeah, Celiprolol is used for the treatment of vEDS, of which there are about 7,500 patients in the US. In some European countries, it is currently being used as a standard of care for those patients. But other than that, there really is no treatment option for these patients other than surgery. So we think that if approved, Celiprolol would really offer some benefit for these patients who have no other available therapies.

We will take our next question from Oren Livnat with H.C. Wainwright.

Thank you for the question. I would like to follow up on OLPRUVA. I understand it's still early and that you've only mentioned four patients enrolled. Can you share where these patients are coming from? Are they new patients or are they switching from less favorable products? What has been your initial experience with getting reimbursement for these patients? Are you facing any challenges regarding the pricing set for February, and how quickly do you anticipate converting these patients to paid therapy in the future?

First off, it's important to note that the four patients we reported were just the new enrollments for the quarter. There are currently more patients on OLPRUVA who have been prescribed it. These patients come from various sources, including switches from current therapy and some who are new to therapy without any prior treatment. Like all rare disease products, there are necessary steps for patients to access treatments. However, we are pleased with the progress in our reimbursement efforts, achieving 75% coverage, up from 55% when we closed the transaction. We believe this is a significant improvement. Overall, we feel we are in a strong position and are well-prepared to compete moving forward.

Could you clarify how many patients were already receiving therapy? Were they part of the previous AZSTARYS launch? Are these patients currently paying for the treatment, or are they receiving it for free with the hope of transitioning them to paid therapy? Is the low revenue simply because these patients were already in treatment prior to your involvement, resulting in sufficient supply in the channels without the need for additional shifts?

Yes, it's a combination of factors. There were a few patients who had already received OLPRUVA and were enrolled before the transaction was completed. However, most of these patients began treatment late in 2023 and into the first quarter and now the second quarter. They come from various sources, including switches and naive patients. Regarding your question, these patients include both those who are paying and those who have enrolled in our Quick Start program, which enables us to start them on therapy while we evaluate the benefits and work towards converting them to paying patients.

I'll follow up with you guys afterward.

Well, I think there was a third part to your question which was really around the de minimus revenue. And it's important to note that there is a disconnect, as LaDuane mentioned, between the revenue recognition and the enrollments due to the way that we sell OLPRUVA into our specialty pharmacy. So that it's kind of an inflection of just that dynamic.

And are you hearing anything regarding relative pricing of these drugs or are they all expensive enough and presumably some unmet need with these patients, if they're even considering their products that it's not an issue, the potentially slightly cheaper nature of the products?

Yeah. So as you probably know, we've seen a lot of payers begin to put RAVICTI on its exclusion list as a result of RAVICTI's high price. We are benefiting from that, given that we have a significantly lower cost and more importantly, that we are able to compete on the clinical benefit OLPRUVA. And so that dynamic is certainly helping us.

We will take our next question from Sumant Kulkarni with Canaccord Genuity.

Hello, this is Kyle Qian speaking on behalf of Sumant. I have two questions. First, regarding Arimoclomol, can you discuss your strategy compared to others and the possibility of having an Advisory Committee meeting related to that product, considering the closeness of the two estimates? Second, have you conducted any mock advisory committee meetings for Arimoclomol, and what were the findings, particularly those you found surprising or contrary to expectations?

Thanks, Kyle. I'll take the last question and I'll hand off the question to Adrian around differentiation. To answer your question, yeah, we are thoroughly preparing for a potential advisory committee. We've had a number of red team, blue team exercises, preparing briefing books, multiple mock adcoms coming that we're learning from and perfecting our craft as we move forward. So I feel like we are certainly preparing for that at this point.

In regards to their being two targeting tests for Niemann-Pick C is great for patients. I think let's start with that. I think it's important to understand that Arimoclomol with its unique mode of action is really a disease-modifying piece where the entire product is more symptomatic treatment, especially in this context where the disease is progressive. The differentiated mode of action and the specific clinical profile of Arimoclomol, we believe, will lead to be the foundational treatment for patients with narcolepsy. And that's kind of where we're looking forward to.

And this concludes the Q&A portion of today's call. I would now like to turn the call back over to Neil McFarlane for any additional and closing remarks.

Thank you, Ashley. We continue to make solid advances towards achieving our mission of building a leading patient-focused rare disease therapeutics company. As we look to our catalysts in the second half of 2024, our strategic priorities are clear, and we look forward to updating you in the future. Thanks for joining us today. Have a wonderful day.

Thank you. This does conclude today's program. You may disconnect at any time and have a wonderful day.