Good morning ladies and gentlemen and welcome to the Strongbridge Biopharma Plc Corporate Update and Q1 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. [Operator Instructions] As a reminder this conference call is being recorded. I would now like to turn the conference over to your host, Lindsay Rocco, of Elixir Health, Public Relations.

Thank you and good afternoon, everyone. We are pleased that you could join us today for Strongbridge Biopharma’s first quarter 2021 earnings and corporate update conference call. Joining me from Strongbridge this morning are John Johnson, Chief Executive Officer; Dr. Fred Cohen, Chief Medical Officer; Scott Wilhoit, Chief Commercial Officer; and Rich Kollender, President and Chief Financial Officer. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Reference to these risks and uncertainties are made in today’s press release and disclosed in detail in the company’s periodic and current event filings with the U.S. Securities and Exchange Commission. I will now turn the call over to John Johnson.

Thanks, Lindsay. Good morning, everyone and thank you for joining us today. Since our last investor call and despite the ongoing COVID-19 pandemic, we are pleased to report we have made significant strides in advancing our portfolio of treatments for rare endocrine and rare neuromuscular conditions. I'd like to begin by saying that the company is eagerly awaiting the Day 74 Letter notification from the U.S. Food and Drug Administration surrounding the filing status of our new drug application for RECORLEV for the treatment of endogenous Cushing's syndrome. Fred will go into more detail shortly. However, I would like to take a moment to thank the Strongbridge team for their continued hard work and dedication as we await the notification from the FDA. Our market research continues to show that there are significant unmet need in the treatment of endogenous Cushing's syndrome, especially with women who are affected two times more often than men. We look forward to working with the FDA to bring this important product to market. I would also like to provide an update on the progress that we have made with regard to the intellectual property for RECORLEV. As announced in today's press release, we are pleased to share that Strongbridge recently received notification from the United States Patent and Trademark Office that it has entered a notice of allowance for U.S. patent application ending in 387 covering a method of treating Cushing's syndrome patients with RECORLEV (levoketoconazole), who also take Metformin for Type 2 diabetes. This notice of allowance concludes the substantial examination of the patent application and is expected to resolve in the issuance of the U.S. Patent after the administrative processes are completed. The term of the U.S. patent scheduled to issue from this application will expire in September 2040. I would like…

Thank you, John. As John mentioned, the company is awaiting notification from the FDA regarding our NDA submission for RECORLEV for treatment of endogenous Cushing's syndrome. As background on the regulatory process Day 74 Letter from the FDA typically confirm filing acceptance of an NDA submission and include all the pertinent information such as the target PDUFA action date and the plan date for the internal mid cycle review meeting as examples. Strongbridge anticipates receiving the official Day 74 Letter for the RECORLEV NDA submission shortly and we look forward to providing an update thereafter. With regards to recent scientific exchange of data from our clinical development program for RECORLEV in April, a diabetes subgroup analysis from the phase three Sonic study for RECORLEV was published in the peer reviewed journal frontiers and endocrinology. In March, in terms safety and efficacy results including new data analyses from the phase three logic study were also presented via poster at the endocrine society's 2020 long virtual annual meeting. We're continuing to pursue additional manuscripts and presentations surrounding our logic study and look forward to sharing key data with the medical community later this year. As to scientific exchange concerning KEVEYIS in April, a case report concerning the patient with Andersen-Tawil Syndrome switching from acetazolamide to KEVEYIS was presented at the American Academy of Neurology virtual meeting. This case report was also recently published in the peer-reviewed journal Neuromuscular Disorders. With that I will turn the call over to Scott, who will review key KEVEYIS highlights from the first quarter along with ongoing RECORLEV launch preparation activities, Scott?

Thanks, Fred and good morning everyone. As John mentioned, KEVEYIS our first commercial stage, rare neuromuscular product performed very well in the first quarter. Thanks to our team's dedication to serving the many unmet needs of the periodic paralysis community. In the first quarter of 2021, KEVEYIS achieved net revenue of $8.4 million, which represents a 25% quarter-over-quarter increase from the $6.7 million in net revenue for the first quarter of 2020. We attribute first quarter performance to the growth in total patients on drug resulting from new patient starts combined with improved discontinuation rates for existing patients on therapy. Additionally, as part of our comprehensive and ongoing mitigation plan surrounding the COVID-19 pandemic, we remain focused on efficient virtual sales execution by improving the use of our physician targeting data, creating access and confirming potential TTP patients. These efforts have provided a steady flow of new referrals with high levels of physician and patient engagement. We also continue to utilize new digital marketing tactics with consistent and relevant content which have led to an increased number of new patient leads. From a patient services standpoint, there were also improvements in first pass prior authorization approvals and new patient on-boarding resulted in improved conversion rates and lower discontinuation rates during the quarter. These debates results in our continued solid execution across key commercial functions provide a strong footing as we entered the second quarter. Turning to RECORLEV, we are continuing to aggressively move ahead with launch preparedness activities including ongoing cultivation of key opinion leader and patient advocacy relationships. Development of RECORLEV brand position, sales for sizing and optimization and market access activities, as well as ongoing physician and patient market research. As we move closer to the RECORLEV launch, we're planning to provide a more in depth update on our progress and in the marketplace we expect to be competing in. With that, I'll turn the call over to Rich, who will review our financial highlights from the first quarter before we open the call up to questions. Rich?

Thank you, Scott. The press release that we issued this morning contains details of our financial results for the first quarter of 2021. Rather than read through all of those details, my comments today will focus on some key financial results. Net revenue from sales KEVEYIS increased $1.7 million or 25% to $8.4 million, compared to $6.7 million for the same period in 2020. The company recorded cost of sales of $0.4 million compared to cost of sales of $1 million for the same period in 2020. Cost of sales decreased due to changes in the assumptions underlying the allocation between the purchase price of our inventory and our supply agreement. Our first quarter gross margins were 95% compared to gross margins of 85% for the same period in 2020. Turning to our operating expenses for the first quarter of 2021, SG&A expenses were $10.9 million compared to $10.4 million for the same period in 2020. The increase for the first quarter 2021 was primarily due to increase in our non cash stock compensation expense. R&D expenses were $5.8 million, compared to $7.6 million for the same period of 2020. The decrease is primarily due to decreases in costs associated with our logics and optics trials, offset by increases in regulatory costs associated with our NDA submission. Basic net loss attributable to ordinary shareholders on a GAAP basis was $11.8 million or $0.18 per share compared to a basic net loss attributable to ordinary shareholders of $12.7 million or $0.23 per share for the same period in 2020. Net loss for the first quarter was lower than the same period in 2020 due to the increase in KEVEYIS revenue of $1.7 million. The improvement in our gross margin and the reduction in R&D expenses. Those decreases were offset by $0.8…

[Operator Instructions] Your first question is from the line of Roger Song with Jefferies.

Great, good morning, guys. Thank you for taking my questions. So just the first one is related to KEVEYIS. I think Scott your prepared remark very interesting, you say improve the discontinuation rate for this population. Just curious, what are the key drivers to achieve that kind of a lower discontinuation rate here?

Yes. This is Scott. I'm happy to take that one. I think, we're consistently looking at our operations and looking at how we can make improvements across how we're interacting with physicians and patients. So I think the first is really setting expectations around when a patient is going on therapy both with the physician and if we have the opportunity with a consented patient with the patient. So I think that's first and foremost. I think one of the things that we did during the pandemic was to focus our discussions with physicians and patients early in the treatment cycle. An example would be reinforcing the dosing considerations in terms of how to titrate in the early phases of the treatment. That's with the physician and certainly the expectations of that with the patient. That's just one example of the things that we do in terms of our communication with two important parties there. I think the second thing is just the cadence of our calls and the focus of those calls in the early window of a patient going on treatment. So we think that results and has resulted in improved engagement both on the provider and the patient side, which has especially been important kind of during this pandemic phase. And it's something that we'll certainly leverage going forward. Hopefully that adds a little color to your question.

That's great. Thanks, Scott. And the next question is related to RECORLEV. So when you kind of find your competitor for the Cushing’s syndrome space, they are having some difficulty identifying new patients because the diagnostic and the titration kind of burdens there. Just curious, assuming you will get approved a couple months and then when you start to launch RECORLEV in Cushing's syndrome do you expect you will have some kind of pent up kind of demand in the hall, if so how would you prepare to capture those kind of potentially delayed new patients for Cushing's syndrome?

Yes. Scott why don't I start and then you can finish. What we know today is that there's significant unmet need. We know that up to 40% of the patients are described as not being well controlled by their physicians. So to your point about pent up demand, we do believe that that's there, we do see a lot of switching in this category. And we certainly look at those patients that physicians believe aren't optimally controlled or who may be having some side effects as the low hanging fruit when we first launched. And that's a pretty significant part of the population. Scott, is there anything else you'd want to add to that?

No, John, I think that covers the waterfront from our perspective.

Okay, next question is from the line of Hartaj Singh with Oppenheimer.

Good morning. This is Jackie in for Hartaj. Congrats on a great quarter and thanks for taking our questions. Let’s first RECORLEV, so when met to see some data from the restoration phase from RECORLEV and then we'll maybe we see some preliminary data from your open label extension study objects, just if you could frame kind of the data release publication presentation strategy there, before first quarter of 2022?

Hi, this is Fred, yes I got it. So for logics and the restoration phase, as you point out, so far we've disclosed results to the end of the randomized withdrawal phase, including the primary and key secondary endpoints of the study and safety to that time point. We do intend to disclose and report in a scientific forum, the full logic study. As we speak, we're starting work on a manuscript and we intend to submit that this calendar year. I don't have an exact date for you at this point. We may or may not present that at a scientific forum this calendar year. It really depends on the opportunities available to us to do that and whether it's accepted. But if we do decide to do that, and have a forum for that, we'll announce that later in the year. So that would probably be in the second half of the year. In terms of the optic study, we don't have any plans to present any results from the optic study this year. That is a long term study that's expected to continue to have patients being observed both for efficacy and safety for at least three years per patient. And so, we'll finish up until 2022, at the end of 2022, beginning of 2023, and we don't have an interim analysis for that currently planned. It's not to say that we couldn't do an interim analysis at some point if we so wish, but at this point, we don't have any interim analysis plan, and therefore, we don't have any immediate plans for an interim scientific presentation. Again though, we are interested in sharing results of that study when soon as we can. And so at this point we're thinking it won't be until the 2023 timeframe, but if we decide to do something before that time perhaps in concert with launch activities will certainly let you know about that.

Got it. Thanks Fred and also Fred, I think right now is about 70 -71 days since you filed NDA and obviously your craft that are important 60 days at least, just want to make sure from your end, you still expect standard 10 months review cycle and no outcome, correct?

So right now, yes, I mean, your timing is correct approximately. So we do expect to have a Day 74 letter shortly and we'll update the street when we have further information to report on the contents of that letter. In terms of ISTURISA we don't know, we do anticipate that with a Day 74 letter that the FDA would inform us whether they believe that advisory committee will be needed as part of the review of, part of the NDA. I will find out that while we can speculate on the potential actions of FDA at this point, we do believe that the previously reported positive results from LOGICS and SONICS provide substantial evidence that support the review and potential approval of RECORLEV in endogenous Cushing's syndrome and just remind you that an advisory committee is not a mandatory step that the FDA, we need to take with our particular application.

Yes. Got it and then last question, and maybe for John or Rich, assuming a quarter got approved, I guess, you will be called profitable. I think our way right now -- but since you are Irish company, if you could just talk a bit more how being an Irish company could help you as a good tax strategies versus your peers here in the U.S.?

I am happy to. Yes I mean you are absolutely right. And so we do have a potential advantage ultimately when we are a profitable company from a tax perspective given the expected increase in corporate tax rates here in the United States with the Biden proposal as compared to what we would anticipate our effective tax rate would be in the future for us as a profitable company. So there is a potential advantage there. We'll have to see how that obviously plays out. It's premature to comment further.

Got it. Great. Thanks for all the questions. I would just jump back in the queue. Thanks.

The next question is from the line of Annabel Samimy with Stifel.

Hi, thanks for taking my questions. So you've had a chance to present RECORLEV data now and a couple of forms. The endo meeting we had in the journals. Can you talk about some of the feedback that you're getting from this additional data? And I'm also curious about their views relative to, I guess the competitive landscape of history is also kind of out there trying to position for frontline. So just want to think, obviously, RECORLEV has potential for frontline. So maybe you can talk about it some of the feedback in terms of the competitive landscape? Thanks.

Thanks Annabel. Fred you talk a little bit about the reaction of feedback you've got from physicians and then Scott, you can take over positioning.

Sure. So we have talked to a lot of so called key opinion leaders and of course investigators in the studies at this point. I think, the general reaction particularly from folks who use the drug is that it feels familiar to them in terms of the titration scheme in terms of the monitoring, in terms of the efficacy that they saw. The efficacy I think they believe is highly competitive with what we've seen from other drugs, albeit with lesser potency compared to, perhaps the newest drug is ISTURISA, which is very potent and as you know has led to some alterations in the titration scheme and so on and it attempts to mitigate some of the potency issues in terms of people getting feelings of maybe adrenal insufficiency. And so that was brought out as a potential differentiation. The other thing that was brought out as potential differentiation compared to some of the newer drugs had to do with use of men versus women. And it was mentioned, I'd say nearly uniformly that the drugs act differently ISTURISA versus levoketoconazole in terms of how they inhibit cortisol production and how they affect androgen production, for example. with androgens decreasing fairly markedly in women who are using levoketoconazole which can be advantaged to the women who are experiencing androgenic side effects in particular whereas that does not appear to happen with ISTURISA therapy, in fact, with ISTURISA there may actually be an increase in androgens, which in some women may lead to worsening of their androgenic side effects from the Cushing's. So the physicians we spoken to see that as an important potential differentiator, basically the gender, the gender differences between the drugs. Otherwise, I think one of the things we referred is that the experience with ISTURISA is relatively new. No single physician has treated more than, one or two patients with it. So the jury remains out on what the ideal patient for that drug is going to look like. We do still believe and Scott and comment on this, that RECORLEV is going to have a place in therapy, most likely as a first line medical therapy and we think particularly in women who are having androgenic side effects or who are concerned about those would be good candidates. So Scott did you want to give further details?

Yes. I think just building on what Fred said about ISTURISA I think our research confirms a lot of what Fred mentioned, I would add that a lot of physicians give us feedback on the dosing titration being a little slower than they expected as Fred said, there aren't a lot of physicians who have a large number of patients on. But I think it's fair to say that to-date many haven't reached perhaps the maintenance dose yet. So they've taken a little longer to titrate them. I think our research would suggest that that's because there's some concern about adrenal insufficiency as Fred mentioned. So that comes out in our research. I think overall, though, the early use, is like, the work that we did in 2019, in our market research. It's competitive profile with good efficacy. And I think they're just its early days where they're getting their experience with it. I think as it relates to RECORLEV, I think we’ve remained really confident in terms of the profile. And as you know, we tested the SONICS profile, and we're in the process of doing more work with the complete package. But I think at the end of the day, we believe that the RECORLEV offers a meaningful differentiation given the unmet need that we've discussed. Certainly what resonates, I think, are a few things. One is, it's supported by a label, potentially. It's approved two positive phase three results, study results. The indications broad that resonates well with physicians certainly in the anti control, cortisol control. I think by and large, whether it's our formal market research or somewhere by our advisory boards, physicians recognize that they see good clinical efficacy from the trial designs. The ability to monitor is clearly important certainly versus some products where that may not be the case. I think the secondary endpoints and particularly cardiovascular rated endpoints resonate well and I think Fred also said these signs and symptoms in particular androgenic effects where RECORLEV maybe androgenic sparing that comes across in our researches very-very important in particular for women. And lastly, but not least important, they look at the safety profile and see that it's well tolerated and there were no unexpected safety signals which we believe could be a potential differentiator. So those are some of the things that we're hearing in our research.

Great. Thank you for that color. And just going back on the, I guess prior question in terms of the population. What do you see as the low hanging fruit? I mean, would it be new patients coming on therapy for the first time? Would it be patients who aren't well controlled? What do you think is the area that you're going to focus on first?

Yes, I think we'll get start Annabel with both those populations. The newly diagnosed patient new to pharmacotherapy patients aren't as robust as the patients who are not well controlled or who are experiencing side effects on some of the other medications? And so, I think, you'll probably be more likely to see the not well controlled patients. But clearly we've been told that newly diagnosed patients especially women will be prime candidates.

Okay, got it. And then any more color on pricing, given the competitive landscape? I mean, we know that we've always talked about pricing within that orphan drug comparable range of other treatments. Do you think you might need to rethink that given the increasing competitive landscape?

Yes. Thanks I think, we're not going to comment, obviously, for competitive reasons too much on what our pricing strategy will be. But as both myself and Scott have said previously, we expect to be in that rare disease pricing corridor. We believe that RECORLEV offers significant benefits to patients and certainly we'll have a pricing study done as we get closer to market and understand the external environment as well. But our plans continue to look inside that corridor and beyond that we're not going to comment at this point, but I appreciate the question.

And one last question if I may ask. Can you talk little bit about the commercial infrastructure build and what we're, what you're thinking for OpEx progression for the year?

Yes. We're still working through that. We do know that we're going to leverage our entire infrastructure today, there will be some ads just in order to make sure that we're servicing the patients as well as we possibly can with for example, patient access managers, we'll make sure that there is proper access for those patients. The sales force piece we're going to leverage our current sales force plus it'll be some added and we're still fine tuning that as we speak. As for the OpEx Rich, I don't know if you can give a range on that?

Yes. We haven't given a range. But Annabel you and I spoke last quarter. I would assume investment in -- increased investment in commercial, obviously, as we head into the back end of the year as we've discussed before, and you'll see a reduction in obviously clinical and regulatory type expenses as we head into the back end of the year as well just given the reduction obviously in spend there, given LOGICS being wrapped up, etc. So that's the way to think about it.

Great, thank you.

The next question is from the line of Jonathan Wolleben with JMP Securities.

Good morning. Congrats on the progress. And thanks for taking the questions. For more on the populations, do you have a sense based on your market research what percentage of Cushing's patients are women with these androgenic side effects who are on current medications? And then also to the IP you're expecting what percent are on Metformin as well, that'd be helpful to know.

So Scott you want to talk a little bit about the market research and then Fred can comment on the Metformin piece.

Sure. I think based on our market research while we didn't get granular in terms of the percent of patients or number of patients that experience these types of side effects from their treatment. We do know and we did ask, as you may recall, we asked physicians to think about the current set of pharmacologic treatment options. And then, we layered in future products including ISTURISA and RECORLEV and [Indiscernible] as well. And I think that's the phase where those types of things came out in terms of the potential impact of the androgenic side effects. And physicians being aware and certainly keenly aware that that may be negative for their female patients. So while we don't know from the research the percentage. We do know that it's clearly an area of opportunity and potential interest that physicians are aware of and certainly when they viewed the profiles of future products, I think that's where we got the feedback that this may be future products, I think that's where we get the feedback that this may be potentially important differentiator for RECORLEV.

So in terms of diabetes. So diabetes is one of the more common comorbidities associated with Cushing's syndrome. In our clinical trials program, we saw prevalence of Type 2 diabetes at baseline of between about 35% and 40%. That does seem to be consistent with the literature description of a broader endogenous Cushing's syndrome population. So you can figure upwards of 40% of patients have Type 2 diabetes, at the time they're diagnosed, or shortly thereafter and of those a clear majority use Metformin. In our clinical trials program, it was between about 70% and 80%.

That's helpful. And then you're talking about optics a little bit earlier, I was wondering if you could comment on how many patients are enrolled and how retention is looking. And if the intention is to roll those patients over to commercial product when that wraps up in late 2022 to 2023?

Sure in terms of specific numbers of patients I can tell you that we enrolled a total of 51 patients across all of our sites globally. The majority of those were in Europe. At this point, we're not going to talk retention numbers, but I will say that the clear majority of those are still enrolled in this study. Our intention is to try to have patients who are in the study at the time of a marketing approval go transfer onto the commercial product at that point. But I'm not prepared to say at this point, how many numbers we're talking about. I would not anticipate it would be a large number of patients. So given what I just said. In terms of the optic study progress as I indicated before, the study is intended to provide at least three years of experience on the drug. And so we don't anticipate having any data from the study until 2023. There is a provision that if the drug gets approved, prior to that time point that patients could be transferred to a commercial product earlier.

That's helpful. Thanks for taking the questions.

Your final question is on the line of Robin Garner with Craig-Hallum.

Hello. Good morning, and congratulations on the quarter out. Question on KEVEYIS. Are you guys still on track for a $34 million to $36 million range for 2021? And do you have any updates on IP for KEVEYIS?

We certainly Robin and thanks for the questions, believe that we are well positioned to achieve that guidance. And so we're confident in that and certainly congrats to Scott and his team on a really good first quarter and really strong April. So we feel good about that guidance. As it relates to the KEVEYIS IP Rich, do you want to provide a few comments on that?

Sure. I'm happy to and good morning, Robin, and thanks for the question. Yes. We continue to prosecute the state, using our IP counsel as well as availing yourself of all means, through the U.S. Patent Office, including the appeals process to push forward our state in terms of specificity around that we expect to be able to come back to all of you in the second half of this year with a further update. So that's what we're saying at this point in time.

Thank you. And then will the data and the publications that have been reported since your NDA filing, are those going to be included in your submission to the NDA? So will all of the data after that point be in consideration as well?

So I'm not going to comment on the specifics of what we're submitting with the NDA except to say that we do believe it's a comprehensive submission and that the FDA will be provided with the substantive information that they need to make a decision in terms of proof of drug.

Okay, great. Thank you for answering my questions today.

Okay. I'm showing no further questions at this time. I would now like to turn the conference back to John Johnson for closing remarks.

In closing Strongbridge has made significant advances towards its mission of serving the unmet needs of rare disease patient populations. We are pleased with the continued growth of KEVEYIS on a quarter-over-quarter basis compared to the prior year and we remain confident in the potential to bring RECORLEV to market. We are committed to working closely with the FDA following the receipt of the Day 74 letter and look forward to having the opportunity to make a meaningful improvement in the lives of patients with Cushing's syndrome. With that, I would like to thank you all for joining us today and for your continued support. We look forward to updating you on our future calls. Thank you and have a great day.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.