Hello, and thank you for joining the Zevra Therapeutics Q2 2024 Financial Results and Corporate Highlights 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 Oschner, Vice President of Investor Relations and Corporate Communications for Zevra Therapeutics.

Good afternoon, and thank you for joining us today to review Zevra Therapeutics progress in the second 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 afternoon and is available in the Investors Section of the Zevra website. As we begin our call, it's important to highlight that certain information covered in today's discussions will include forward-looking statements. We caution listeners that actual results could differ materially from these stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. 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 those projections made. These forward-looking statements are qualified by the cautionary statements contained in the Risk Factors section in our most recent quarterly report on Form 10-Q and our other filings with the SEC annual report on Form 10-K. I'm pleased to welcome Zevra's management team members participating in today's call. I'm joined by Neil McFarlane, President and Chief Executive Officer; LaDuane Clifton, our Chief Financial Officer; Josh Schafer, our Chief Commercial Officer and Executive Vice President of Business Development; 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 second quarter, we made steady progress executing on our strategic objectives, preparing for the advisory committee meeting and the potential launch of arimoclomol, driving the launch of OLPRUVA and advancing KP1077 for sleep disorders. These objectives are important building blocks for our long-term strategic plan to build a sustainable rare disease company with reliable cash flows. An important element of executing against our strategy is to build and maintain our position of financial strength. During the first half of 2024, we made investor outreach a primary objective, highlighting the opportunities and catalysts for value creation that we have as a company. There has been a significant interest and growing momentum as we continue to execute our objectives. Last week, following the favorable outcome of the FDA Advisory Committee meeting focused on arimoclomol, we undertook a modestly sized underwritten public offering to capture that momentum and build on our base of investors as we lean into the potential of our near-term catalysts. With this funding, we have added net proceeds of approximately $64.5 million to our balance sheet, bringing our pro forma June 30, 2024, cash, cash equivalents and investments to $113.8 million. This was the right time to demonstrate our confidence and take this important step to prepare for success. The proceeds will extend our cash runway and bolster our flexibility in executing both near and long-term objectives, including full preparation for the potential launch of arimoclomol and the flexibility to accelerate our clinical pipeline. Now I'll share a summary of our key second quarter accomplishments and outline why we remain optimistic in our ability to deliver on our strategic plan. Let's start with arimoclomol. Our product candidate for Niemann Pick Disease Type…

Thank you, Neil, and good afternoon. As we begin, I encourage you to refer to our quarterly report on Form 10-Q, which we intend to file later today for more detailed information. We have made meaningful progress during the second quarter, and our financial results also reflect discipline in our capital allocation to drive towards success in reaching our strategic objectives. Our second quarter results included net revenue of $4.4 million, which includes $3.1 million in net reimbursements from the French EAP for arimoclomol and $1.3 million of royalties and other reimbursements under the AZSTARYS license. For our commercial product, OLPRUVA, we recognize commercial product revenue when shipments are received by our specialty pharmacy. And as we previously announced, we transitioned to a new specialty pharmacy during the quarter, which required us to ship new product and recognize returns from the prior specialty pharmacy, which offset revenue for the period. The result was de minimis revenue recognized during Q2. We believe this transition will lead to improved patient services as enrollments grow. Additionally, cost of goods sold was inflated during Q2 due to recognition of a $3.2 million obsolescence reserve against OLPRUVA inventory, which is nearing expiration. This excess inventory was ordered prior to our acquisition of Acer and the previous delay in the products launch impacted the rate of usage, leading to the need for this reserve to be recognized in the quarter. Our R&D expenses for the second quarter were $10.5 million, which is a slight decrease, compared to the first quarter of 2024 and primarily due to the completion of the KP1077 Phase II trial. Selling, general and administrative expenses were $12.6 million during second quarter, reflecting our commercial team being in place for the entire quarter and actively engaged in activities to build awareness and provide…

Thank you. [Operator Instructions] We'll take our first question from Louise Chen with Cantor. Please go ahead. Your line is open.

Hi, congratulations on all the progress this quarter. Thanks for taking my questions. So I had a few for you. First question was how you think about OLPRUVA sales in the second-half of '24, and then are you -- do you have any thoughts on initial thoughts on pricing for arimoclomol, if it gets approved? And then last question is just on arimoclomol, the patent protection and marketing exclusivity? Thank you.

Thanks, Louis. Why don't I start with the last question, and I'll tee up the pricing, and then I'll hand it off to Josh to talk a little bit about arimoclomol and as well as OLPRUVA. In regards to the patent protection and marketing exclusivity for arimoclomol, we rely on orphan drug exclusivity for up to seven years. And then in regards to pricing for arimoclomol, it's a little early for us to be talking about pricing as we're just now in the labeling discussions. But I think it's -- I want to make it clear to everybody that it is our goal to make arimoclomol is widely available as possible as we can. And with that, I'll hand it off to Josh to talk a little bit about what we've been doing around understanding the market for arimoclomol around what we could do for pricing as well as OLPRUVA sales in the second-half of 2024. Josh?

Yes. With regards to arimoclomol pricing, we have conducted pretty extensive market research with payers, and we've gone out and we've tested the clinical profile and really pressured them around responding to the value proposition and the clinical value of arimoclomol for patients with NPC. I have to say that it's widely been viewed as what could potentially be foundational therapy, if approved by payers. But of course, the final label will ultimately influence the final price and how payers view that. But we're working very closely with them, and we're putting in place patient services and other resources to make sure that arimoclomol will be as widely available to patients as possible. And then with regards to OLPRUVA in the second-half. And I'd like to just remind everyone that the first-half was really built was really focused on building awareness where there was very little awareness within the prescribing community for OLPRUVA. We're very happy with the progress the team made in terms of getting in front of prescribers and payers and really building that awareness across that prescribing community, and we have more than 75% covered lives for patients with UCD. We've also put in place some other resources and tactics, including a free trial program and a demonstration program to be able to allow the physicians and prescribers to see how OLPRUVA works. And we've made a change to our specialty pharmacy. All of this, I think, bodes well for the second-half. And as we really begin to focus on building more awareness within the patient community. We're looking forward to seeing increased enrollments.

Thank you.

We'll take our next question from Tim Lugo with William Blair. Please go ahead. Your line is open.

Thanks for the questions. Congratulations on all the progress, obviously, a transitional quarter. I guess after the AdCom, it seems like combination use with miglustat is going to be maybe occurring a little bit more than I maybe had expected. I'd just love to hear your thoughts around combination use in the real world once approved? And how does that fit into your pricing thoughts? And then maybe also some initial kind of feedback you've heard from the patient activity groups post AdCom?

Thanks, Tim. I think -- let me handle your first question, and then I might actually ask Josh to talk a little bit about the advocacy engagement and/or Adrian. I think one of the things that's really important is you get what you study, when it comes to labeling discussion, and we studied arimoclomol versus placebo with underlying routine care. And those patients could have been stratified to miglustat or some other kind of primary treatment that the patient had a routine care, I think, was standard. And our discussions and the AdCom, we -- and I think now as we're driving into our labeling discussions, you usually get what you studied. And for us, that's arimoclomol versus placebo. That's the outcome that we're looking for. So I can't talk more about the combination therapy at this point in the game, because we're in the process of round one. But I do think that there's precedent around study -- you get what you study. In regards to the initial feedback from the patient advocacy organizations, let me ask Josh to talk a little bit about where we're seeing some excitement from the advocacy organizations today.

Yes. I think if anyone tuned into the advisory committee meeting 10 days or so ago, you would have seen overwhelming support for arimoclomol from prescribers, caregivers and patients. And that really is a reflection of the benefits that many patients have received from arimoclomol through our expanded access program and open-label program. And as we move forward, we expect that support to really continue. I can also say that as we've gone out and we've talked with payers and physicians and done some market research and tested the profile many of them really see arimoclomol as the first approved drug for Niemann-pick really is the foundation for therapy for these patients.

Operator?

[Operator Instructions] We'll take our next question from Oren Livnat with H.C. Wainwright. Please go ahead. Your line is open.

Thank you for taking the questions. Let me add my congrats to the outcome of the AdCom. Just so I'm clear, you mentioned you've entered the first round of labeling comments with the discussions with the FDA. Can you say if you've actually had any explicit additional information requests or anything new you've had to provide in this process? And I have follow-ups.

So the answer to your question is, we have gotten our first round of label negotiations. And I think your second question was in regard into any specific information requests. We have received additional information requests, as you can imagine throughout this process as you continue to get them. In regards to new data to be provided, we have not been -- had any request to add new data more so than what has been shared specifically with the advisory committee.

All right...

Sorry, with the FDA, not the advisory committee with the FDA.

Okay. Perfect. Assuming you're approved in late September, do you have any expectations for timing for product availability, given the significant overlap with OLPRUVA. I assume that will be relatively quickly, but I'm curious if you need to set up any different reimbursement support infrastructure given this is a new indication unlike UCD. And in the NPC community and centers of excellence, I guess, I'm going already asked about the feedback post AdCom, but I'm just curious if there's any -- you didn't sense that there's any particular preparation or expectations there post AdCom? Are you hearing about warehousing of patients or any proactive outreach maybe to patients and families in anticipation of potential approval?

Let me start by talking a little bit about the potential for our PDUFA at the end of September. We are on track in order to be able to have product in the channel within the customary time frame, let's call it, eight to 12 weeks, maybe even smaller than that eight to 10 weeks post launch, which is fairly standard. Let me turn it over to Josh to talk a little bit about new infrastructure and/or the needs in the NPC community post the advisory committee.

Oren, as a reminder, we built the commercial team really focused not just on OLPRUVA, but in anticipation of an approval and launch of arimoclomol. So it is really rightsized to be able to optimize both products. And we also have the benefit of having a team out there now talking to prescribers about UCD oftentimes, these are the same physicians who are seeing Niemann-pick patients. And so our team is out there profiling some of these physicians, understanding where the patients are our team on the market access side is having conversations with payers on the clinical differentiation of arimoclomol and the need to treat. So the team is in place. We feel quite confident that it's rightsized for both products. And we will be well positioned to begin commercialization as soon as drug is in the channel. In terms of -- where these patients are. We continue to work very closely with the investigators in our expanded access program. As a reminder, we've got more than 70 patients here in the U.S. who are in that program as well as other patients were being seen by those same investigators who are eagerly awaiting the approval of arimoclomol.

And I guess just lastly, you segued into the EAP patients, is there any preparation you can do separate or in addition to standard market pre-commercial activities with regard to this EAP population, in particular, since you know the patients and have relationships with them directly to some extent. Is there anything you can do to expedite their transition to commercial products when this product is available as opposed to maybe what the process would be with a new patient?

So thanks, Oren. A couple of things. One is, I think, number one, we should get on the table here so that we're going to continue to support these patients in the EAP program until we've got commercial supply and access for patients to be able to transition. Answering your second part of the question, and we are working directly with investigators, not necessarily with patients directly because recall, the EAP program is still collecting data, and we don't have to direct the hands on with patients. The next thing you asked about is in regard to, can you set up your EAP program to allow for more seamless transition to that I think I want to make it clear. It's our goal to be able to transition our EAP patients to commercial supply within the first year post launch, and that will allow us to be able to move on to other areas that we can collect data and real-world data and other things that can help patients move forward. So there are things that we can do, and we're working with those sites and investigators. One of them is around supply. We may give a 90-day supply, then it may go to a 60-day supply. But we're doing this in a very cautious way to ensure that every patient continues to have access to the EAP and supply. I can't be more emphatic about the fact that we are here to make sure that we're taking care of these patients in the EAP until they can get transitioned.

Thank you so much. I appreciate it.

Thank you. This does conclude the Q&A portion of today's call. I would now like to turn the call back over to Neil McFarlane for any additional or closing remarks.

Thank you. 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 upcoming catalysts in the second half of 2024, our priorities are clear. and we look forward to updating you in the future. Thank you for joining us today.

This does conclude today's program. Thank you for your participation, and you may now disconnect.