ZVRA - NASDAQ
Zevra Therapeutics, Inc.
ZVRA·NASDAQ
$11.27
+3.6%HealthcareBiotechnology
Zevra Therapeutics, Inc., a rare disease company melding science, discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. The company utilizes its Ligand Activated Therapy technology to generate improved prodrug versions of FDA-approved drugs, as well as to generate prodrug versions of existing compounds that may have applications for new disease indications. Its prodrug product candidate pipeline is focused on the high need areas of attention deficit hyperactivity disorder, stimulant use disorder, and CNS rare diseases, including idiopathic hypersomnia (IH). The company's lead product candidate KP1077, which is under Phase II clinical trial for the treatment of IH and narcolepsy, is based on its prodrug of d-methylphenidate, known as serdexmethylphenidate. It is also developing KP879, a prodrug product candidate for the treatment of stimulant use disorder and is under Phase II clinical trial. In addition, the company has received FDA approval for AZSTARYS, a once-daily treatment for attention deficit hyperactivity disorder in patents age six years and older, and for APADAZ, an immediate-release combination product containing benzhydrocodone, a prodrug of hydrocodone, and acetaminophen. The company's product pipeline include, arimoclomol It has collaboration and license agreement with KVK-Tech, Inc. and Commave Therapeutics SA. The company was formerly known as KemPharm, Inc. and changed its name to Zevra Therapeutics, Inc. in February 2023. Zevra Therapeutics, Inc. was incorporated in 2006 and is headquartered in Celebration, Florida.
At a Glance
Live SnapshotMarket Cap$666.23M
EPS1.4000
P/E Ratio8.05
Earnings Date08/11/2026
Earnings Call Transcript
ZVRA • 2023 • Q3
Operator
Good morning, everyone. Thank you for joining the
Nichol Ochsner
Good morning and thank you for joining us today to review
Neil McFarlane
Thank you, Nichol, and thank you all for making the time to join us today. It's truly an honor for me to have the opportunity to lead
LaDuane Clifton
Thank you, and good morning, everyone. As you can see from the update that Neil has provided, Q3 2023 has been a time of incredible progress in our quest to make therapies available to people with rare diseases. Our financial results for the quarter reflect our steady progress and continued investments in advancing our development programs and building out our commercial capabilities with a focus on patient services and advocacy. For Q3 2023, we reported revenue of $2.9 million compared to the same amount for the same quarter in prior year. Q3 2023 revenue was comprised of $2 million in reimbursements from the French Early Access Program for arimoclomol and royalties from the A
Operator
[Operator Instructions] Our first question will come from Louise Chen with Cantor Fitzgerald. Please go ahead.
Louise Chen
Hi, thanks for taking my questions and congratulations on all the progress this quarter. I wanted to ask you on OLPRUVA and basically how you plan to commercialize this product and how you think about peak sales potential. And then for the arimoclomol NDA, was the additional or, I guess, larger amount of data that you said would take some time to review, something that was requested by the FDA or was it something that you wanted to provide? Thank you.
Neil McFarlane
Thank you, Louise. I'll ask Josh to take the OLPRUVA commercialization questions, and then I'll ask him to pass it off to Christal to discuss the NDA resubmission.
Joshua Schafer
Great. Thanks, Louise. With regard to the commercialization for OLPRUVA, we're excited for the deal to close, hopefully, any day now. Upon closure, we'll take over responsibility for commercializing this, and we see the opportunity to have a more fulsome launch for the drug, really targeting the first quarter to put full resources behind the commercialization. So we anticipate and are putting in place a sales team, medical liaisons. We have a particular focus on patient advocacy and working with the patient community to bring OLPRUVA to those living with UCD as well as the prescribing community. And we're building out a full suite of patient services as well to ensure that patients have access to OLPRUVA. And we anticipate that all of that will be in place by the end of the year to really optimize the commercial opportunity for OLPRUVA. With regard to revenue projections, we really haven't yet disclosed that, and we'd like to get a couple of months of commercial activity behind us before we're ready to do that. But the market size, as you probably know, is about $400 million with several products in that market now, and we see that we would have a differentiated product that would have the opportunity to take considerable share within that market. I'll pass it to Christal.
Christal Mickle
So, hi Louise, thanks for that question regarding the FDA and whether or not they requested specific studies or they were just studies that we conducted ourselves. So throughout this process, we have had several interactions with the FDA. The CRL had three concerns that they had, and we feel like we have sufficiently addressed those concerns. Again, all of that comes with a collaborative working relationship with the FDA. So as we decided on studies to conduct and got results for those studies, then we would meet with the FDA to discuss whether or not those were adequate. Again, most of those, it's all going to be review issues for the FDA, but we are confident that we have addressed what the FDA has access to.
Louise Chen
Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from Jonathan Aschoff with ROTH MKM. Please go ahead.
Jonathan Aschoff
Hi guys, good morning. Thank you. What were your exact A
Neil McFarlane
LaDuane?
LaDuane Clifton
Yes, good morning Jonathan, thank you for the question. The exact was I believe, is $880,000, so we rounded up to $900,000. And with regard to the $10 million milestone, we are definitely on track to earn that milestone during Q4 and then that of course, that cash will be received in Q1.
Jonathan Aschoff
And so that was one milestone, not a $5 million and a $10 million this quarter, just the $10 million?
LaDuane Clifton
The $5 million was earned in Q2 and then the cash was received in Q3. And so then looking ahead, the $10 million would be earned in Q4, we believe, and then received in Q1.
Jonathan Aschoff
Okay. How about this R&D spike? What does that look like going forward?
LaDuane Clifton
The increase in R&D was certainly because we're in the -- right in the middle of this Phase II trial. And so we're continuing to work through that. You can expect a similar trend going into Q4. And then that top line data for the KP1077 Phase II is expected in the first half of '24. So as the clinical phase kind of winds down towards the beginning of that first half for Q1, then you'll see it moderate a bit. As you look into the end of 2024, that we intend to initiate the Phase III for KP1077. And so then maybe towards the end of next year, you begin to see additional ramp up in R&D spend as that begins at the clinical phase there for the Phase III.
Jonathan Aschoff
Okay. In the U.S., how would you quantify that low-hanging arimoclomol fruit, the identified patients who are eager to take something for NPC?
Joshua Schafer
Hi Jonathan, this is Josh. I'd like to remind you that we have this ongoing expanded access program here in the U.S., which has roughly 70 patients who are already receiving arimoclomol. And it's our intention that upon approval, our focus is really going to be to convert those patients who are receiving free clinical drug now to paid patients on arimoclomol. So we see that as kind of a bolus of patients who will become commercial while at the same time, being able to -- try and reach those other patients with NPC who might not yet be on arimoclomol. I'd also remind you, as we mentioned in our prepared remarks, and as I'm sure you know, arimoclomol has a high degree of awareness within the prescribing community right now. So we've been working with the patient advocacy community and with the thought leaders to ensure that, one, arimoclomol is commercially available and approved, that we'll be able to bring it to those patients with NPC now. And there are roughly about 300 to 400 patients who are actively treated today.
Jonathan Aschoff
Okay. That's helpful. And so how many additional sales and marketing heads do you think you'll bring on for both OLPRUVA and arimoclomol, assuming approval in the middle of the next year, by the end of '24.
Joshua Schafer
Yes. I don't think we're yet prepared to give you a precise number. But we are planning to use a very -- use the same team to commercialize both OLPRUVA and arimoclomol. And given the fact that both markets are very concentrated and largely these patients are treated within the same centers of excellence of which there are roughly 40 or 50 across the country, we believe that we'll be able to reach the majority of physicians who diagnose and treat these patients with a very small team focused on those centers of excellence. And again, that team will be comprised of a sales team, marketing, account managers talking with payers and ensuring that there's sufficient access for these patients as well as a medical team out there as well.
Jonathan Aschoff
Yes, because you had mentioned not even quantity required for arimoclomol. Do you think 30 for everything or is it still something where it's that same number, not even 20?
Joshua Schafer
Yes. It's probably in that range in terms of the customer-facing team, but then we'll also have patient services and a robust hub that will provide support for those patients as they embark on their treatment journey. So I think within that range is probably a good direction.
Jonathan Aschoff
Okay. And lastly, do you have any sense of timing for OLPRUVA label expansion? How aggressively you might go into maple syrup or anything else or are you more so looking for additional orphan acquisition?
Neil McFarlane
Jonathan, this is Neil. That's a great question. We're going to -- and what I'm doing as part of my listening tour is really understanding what are the things that we need to focus on and have clear line to execute on today. That is our Acer program, that is the arimoclomol program and that's 1077. I think what I'm looking for the team right now to do is to evaluate the entire portfolio and find out how we're going to be able to make those decisions based on -- and prioritize those areas of development. So I think you got to stay tuned on that one. Give me another quarter and let's have that conversation next time.
Jonathan Aschoff
Okay, thank you.
Operator
Thank you. Our next question will come from Sumant Kulkarni with Canaccord. Please go ahead.
Sumant Kulkarni
Good morning. Thanks for taking my question and again, nice to see all the updates. So you mentioned several interactions with the FDA, but could you specify how long ago was the last interaction?
Neil McFarlane
Christal?
Christal Mickle
Yes, hi Sumant, thanks for the question. Our last interaction was the FDA meeting at the beginning of August.
Sumant Kulkarni
Got it. And then assuming the company has both OLPRUVA and arimoclomol to commercialize next year, do you think the organization will be at capacity with selling 2 important products for some time? Or do you think the infrastructure could support additional acquired rare disease products? And along those lines, how would you characterize the landscape of available rare disease products today, especially given how markets have treated small and mid-cap biotech?
Neil McFarlane
Sumant, the opportunity for us to be able to accelerate our commercial platform and capabilities by bringing the talent together with Acer and OLPRUVA and then arimoclomol, really is a platform. This is a step in the direction of us becoming a leading rare disease company. How we execute on that, I think we'll earn the right to be able to do this again and again and again. So from a standpoint of will we be at capacity, I think clearly executing on what we have to do will allow us to be able to make that decision at the time as to bring in additional assets under the umbrella. Josh, do you want to take the next one?
Joshua Schafer
Yes, absolutely. And just to add on to what Neil said. We are building the commercial capability in a way that it can be scalable for that purpose. And we're building it today with the intention to execute against our OLPRUVA plans, but scalable to then add arimoclomol and potentially other rare disease products if that comes. But that's the intent. And in terms of other rare disease products in the landscape, there are a number of very attractive other opportunities out there, whether they're in late-stage clinical development or already commercializing on the market. And so we are constantly scanning the horizon for other opportunities. But our focus right now is really on building the commercial team and executing against the plans that we have in place.
Sumant Kulkarni
All right, thanks.
Operator
Thank you. Our next question will come from Oren Livnat with H.C. Wainwright. Please go ahead.
Oren Livnat
Thanks for taking my questions. I think all of them are kind of touched on already, but just to build out some more. Firstly, I don't follow Acer already. Can you just help us understand what is the current state of OLPRUVA commercialization, so to speak, already in terms of existing support awareness. Obviously, you're going to dramatically resource that product early next year, but where is that at now?
Neil McFarlane
Oren, I'll ask Josh to hit on that.
Joshua Schafer
Yes, hey Oren. So OLPRUVA was approved in late 2022, but didn't actually make it into the market and into the channels until July of this year due to some of the financial challenges that the company was faced. And so consequently, there isn't a tremendous amount of awareness of OLPRUVA in the market today and the team at Acer is a pretty small team. They've been, I think, really effective given the limited resources that they have. But they don't have a sales force out there talking with physicians. They have a very small account team talking with payers. So we see this as a real opportunity to put appropriate resources behind it and to really drive the awareness of OLPRUVA and the benefits that it confers to our patients. And we think with that concerted efforts and the combined efforts of our two companies coming together, we can really drive awareness and demand for OLPRUVA.
Oren Livnat
Okay. And I guess, bigger picture conceptually, as you sort of lay a commercial groundwork now well ahead of potential arimoclomol approval, which is a new development in the story versus a few months ago, how do you think about the potential return on investment and shareholder value creation with OLPRUVA alone versus needing arimoclomol to layer on top of that infrastructure? I guess another way to put it, do you think do you need arimoclomol in addition to OLPRUVA to really reap the rewards of this infrastructure you're going to build out? Or is OLPRUVA a big enough opportunity alone in your view and arimoclomol, essentially, I guess, so to be gravy, all gravy on top of that.
Neil McFarlane
Yes. Thanks, Oren. I'm going to ask Josh to take that as one of the lead architects of the acquisition team.
Joshua Schafer
Yes. And Oren, thanks again for that question. And one of the reasons why this acquisition and bringing the two companies together was so attractive for us was that we see really a standalone potential of OLPRUVA to support the build-out of a commercial team. Keep in mind, as I mentioned earlier, this is going to be a very focused and efficient team, where we're -- while we're putting appropriate resources behind it, we're being very prudent about how we're doing that in a way that it's the right investment for that opportunity. And then we can scale it as appropriate as arimoclomol and other products come on board. But the deal was structured in a way that it took into consideration the possible scenario that we were only commercializing arimoclomol, and we believe that the investment that we're putting behind it will have an appropriate return, given the deal structure that we that we struck.
Oren Livnat
All right. And if I could just change gears to A
Neil McFarlane
Thanks, Oren. We're pleased with the performance and the acceleration that's happening at the A
LaDuane Clifton
Oren, right now, I think we're pleased in watching the progress of Corium, as Neil mentioned. And so we're excited to continue following those trends. Our financing strategy is a bit of a broader question than just a single part of our portfolio. And I think that we'll be evaluating all those things to make sure we have the capital we need to support Josh's efforts to make sure each of our catalysts are met. And then ultimately, we candidly, we want to get to a point where we're cash flow positive as a company, and we can -- we're going to continue working toward that.
Oren Livnat
All right and that's all I probably got for now. Thank you. Good luck.
Neil McFarlane
Thank you.
Operator
Thank you. That does conclude our question-and-answer session for today. I would now like to turn the call back over to Neil McFarlane for any additional or closing remarks.
Neil McFarlane
Thank you, Todd. As we look to the end of 2023 and into 2024, we're focused on three key priorities; first, to close the Acer acquisition and commercialize OLPRUVA for patients; second, to resubmit the arimoclomol NDA and make that product available; and third, to complete the Phase II trial in idiopathic hypersomnia and prepared to advance KP1077 with a differentiated profile into Phase III. Thank you all for your time today, and we look forward to speaking with you in the future.
Operator
This does conclude today's
Transcript from November 11, 2023
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