BHVN - NYSE

Greetings, and welcome to Biohaven Pharmaceuticals Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Cliff Bechtold, Chief Operating Officer.

Thank you, and welcome to the Biohaven's third quarter 2020 earnings call. Speaking on today's call are Dr. Vlad Coric, our Chief Executive Officer; Jim Engelhart, Chief Financial Officer; BJ Jones, our Chief Commercial Officer; and Dr. Elyse Stock, our Chief Medical Officer. Earlier this morning, we issued a press release announcing the third quarter 2020 highlights. A copy of this press release can be found on our website at biohavenpharma.com, and we will file our Form 10-Q later today. Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as we currently see it and include risks and uncertainties. A list and description of risks and uncertainties associated with an investment in Biohaven can be found in the company's filings with the U.S. Securities and Exchange Commission. Please be aware that you should not place undue reliance on the forward-looking statements we make today. For this call, we will focus on non-GAAP financial measures with detailed descriptions of GAAP and non-GAAP analysis in our filings. An archive of today's call will be posted to the Biohaven's website in the Investor Relations section. And with that, I will now turn the call over to our Chief Executive Officer, Dr. Vlad Coric.

Thank you, Cliff. Good morning to our investors and thank you for joining the call this morning. Before we get started with the earnings call, I wanted to take a moment to acknowledge the exciting news about the COVID-19 vaccine efficacy data from Pfizer this morning. This is an extremely important step in beating the COVID-19 virus and illustrative of the impact that the pharmaceutical industry can have on solving some of the most difficult healthcare problems that face society. I would like to congratulate and thank the scientists and leaders at Pfizer who put tremendous resources behind the science and designing such well-run studies that resulted in the robust efficacy data that we are hearing about this morning. We are indebted to these scientists and others in the pharmaceutical industry and at the FDA who are working on advancing the COVID-19 vaccines. Now turning back to our earnings release. This is our third quarter earnings call representing our second full quarter earnings since the launch of Nurtec ODT. These are extremely exciting times for Biohaven. And again this quarter, I am pleased to report the company continues to excel in achieving our goals across multiple areas. Our third quarter commercial performance was impressive and exceeded our expectations despite the continued challenges of the global pandemic. The progress of Nurtec ODT in the highly competitive CGRP marketplace has been exceptional with net revenues in the third quarter of $17.7 million representing a greater than 80% increase compared to our previous second quarter revenues. Third quarter prescriptions of Nurtec ODT continued to be extremely strong with over 220,000 prescriptions launched to-date reflecting a fast-growing market and our belief that Nurtec ODT is well on the trajectory to become a blockbuster drug. Formulary access to Nurtec ODT for patients has also considerably grown this last quarter. There are now over 200 million covered lives who have access to Nurtec ODT and we have attained almost 87% commercial coverage to-date. In addition to another impressive quarter of Nurtec ODT in the acute treatment of migraine, we are already looking to the future and planning for a potential launch for the prevention indication by mid-year 2021. We were particularly pleased to announce that the FDA accepted our sNDA for Nurtec ODT in prevention and have a second quarter 2021 PDUFA date. I want to highlight the robust and linear growth that we are continuing to see with Nurtec ODT. Although, we were second to market by a couple of months, our differentiated profile continues to drive demand from patients and the new-to-brand Rx market share continues to be almost evenly split between the two oral CGRP antagonists. As is clearly evident from the slide, our commercial team continues to outperform and their efforts overcoming the challenging circumstances of COVID is a testament to our commitment to serve our patients. I'd like to thank our entire commercial organization for their dedication and delivering such strong market performance again this past quarter. We continue to see positive momentum surrounding the Nurtec ODT launch and are truly able to see the difference we are making in so many patient lives. We believe there remains a significant opportunity to expand the oral CGRP market, as this new mechanism represents a transformative solution for patients with migraine beyond the generics and beyond over-the-counter medications. And within the growing multibillion-dollar migraine market Nurtec ODT is differentiated from our competitors, characterized by a notably high level of patient and physician satisfaction. Primary research, end market studies and prescription data all suggest Nurtec ODT is the brand of choice. Now that we are three quarters away through the year, it is evident that oral CGRPs have driven the lion's share of the overall CGRP market growth in 2020. We believe oral CGRP antagonist for the acute treatment of migraine will grow into a $4 billion to $5 billion annual market in the U.S. alone. Given the projected size of the overall market, we remain focused on investing in the long-term success of Nurtec ODT. Our goal is to drive patient and physician trial of our product and hence market share in this rapidly growing oral CGRP market. We are already beginning to recognize the positive return on investment with increasing physician advocacy and attracting a greater pool of patients and expect this to continue throughout the year-end. The strength of our commercial payer coverage is another leading indicator of the important impact that NURTEC ODT will have on patients suffering from migraine. I would like to again thank and acknowledge our managed markets teams led by Chris Barrett and Paul Sbrilli. Our goal was to achieve 80% insurance coverage by the end of 2020 but we were able to exceed that in just six months post-launch and three months ahead of our target. With our long-term goal and big vision in mind to build a blockbuster brand, we expect to begin to see benefits from this year's launch investments. Although broad investments and growing market share will continue well into next year, we expect that Nurtec ODT gross-to-net expenses will begin to improve in 2021, as patient affordability programs abate given the broad commercial access achieved in this past year and wholesaler distribution service agreement or DSA fees will begin to materially decrease as a result of substantive volume growth. 2020 has certainly been a pivotal year for Biohaven, as we have seen the positive impact of oral CGRPs in the lives of patients for the acute treatment of migraine. Nurtec ODT has demonstrated best-in-class differentiation with key attributes including its quick-dissolve ODT, fast onset of action, the ability for patients to return to normal functioning in 60 minutes and sustained efficacy for two days after a single dose. If the 2020 landscape for migraine treatment was about oral CGRPs and acute therapy, we hope that 2021 will be about oral CGRPs and prevention of migraine. We announced just last month that our sNDA application for Nurtec ODT was accepted by the FDA for the preventative treatment of migraine. If approved in 2021, this will be a great advancement for millions of patients as we bring forward the first dual-acting oral CGRP antagonist for both the acute and preventative management of migraine. Patients deserve a unified treatment of migraine across its entire disease spectrum. Finally, I'm pleased to report that the same R&D organization that has delivered Nurtec ODT to the market and completed our recent prevention sNDA filing has also been working diligently on advancing multiple pipeline assets. Our neuro innovation pipeline is poised to deliver multiple pivotal trials over the next year. The R&D team has been working tirelessly to bring new treatments to patients suffering from diseases like Alzheimer's, spinocerebellar ataxia, OCD, multiple system atrophy and ALS. Unlike the early days of our company, we are no longer reliant upon the results of a single upcoming study or a single modality for our future value creation. We have a deep and robust pipeline consisting of multiple compounds, modes of action and indications. Biohaven's diverse pipeline contains both low-risk opportunities in the life cycle management of our CGRP platform and higher-risk high-reward investments in our glutamate and myeloperoxidase inhibitor platforms. We have multiple pipeline opportunities to deliver novel treatments for patients and create value for investors. This slide highlights the exciting pipeline potential in multiple large-market disease indications. We have already spent time reviewing the progress with NURTEC ODT in the acute and preventative management of migraine, but there is also significant potential in the life cycle management of our broader CGRP platform. We plan to initiate at least three proof-of-concept trials over the next year in non-migraine indications and also plan studies in migraine or pain-related adjacencies. In addition, we are pleased to report that we initiated our second pivotal trial of intranasal zavegepant for the acute treatment of migraine in October. As you likely recall, the zavegepant is our third-generation CGRP antagonist that previously delivered positive results as an intranasal therapy in the Phase 2 dose-ranging trial for acute migraine. We believe that this asset will be complementary to NURTEC ODT and provide patients with another tool to treat migraine with the potential for an ultra-rapid onset of action. In October, we also began the one-year long-term safety trial of zavegepant that keeps us on track for a potential NDA filing at the end of 2021, if the pivotal acute trial proves to be positive. Finally, we are eagerly expecting top line results from our pivotal trial of Troriluzole in mild to moderate Alzheimer's disease. The trial has been tracking ahead of schedule and we now anticipate results in either December or January. The study enrolled 350 patients with Alzheimer's disease, who received treatment with Troriluzole dosed at 280 milligrams or placebo for one year. The co-primary outcome measure is the ADAS-Cog11 and the CDR Sum of Boxes. A change from baseline in hippocampal volume on MRI at week 48 is a key secondary outcome measure that assesses Troriluzole's potential for disease modification. Important measures of function, such as the ADCS-ADL scale and the Neuropsychiatric Inventory or NPI are also included as key secondary outcomes. In addition, biomarkers such as neurofilament light chain and p-tau181, which have emerged over the past two to three years as validated measures of disease progression, are also included in this trial. As we all know, there have not been novel treatments for Alzheimer's in decades and currently there are no disease-modifying therapies. If the Alzheimer's disease trial with Troriluzole is positive, we anticipate a 505(b)(2) filing. We are also on track to initiate our Phase 3 trial of Troriluzole in OCD by the end of this year. As we look to the future and our novel assets, I want to highlight the opportunity in our rare disease portfolio. We are advancing three therapies for devastating rare diseases with high unmet needs that have no or few approved treatment options. Our rare disease portfolio has the potential for significant value creation while bringing novel therapies to patients with severe neurodegenerative diseases. As our CMO, Elyse Stock, who will be on shortly, we are anticipating top line results in 2021 for SCA MSA and potentially ALS. Given that these disorders represent rare diseases, Biohaven has the internal expertise and scale to commercialize these rare diseases globally. We anticipate the potential for significant peak revenues as well as value creation upon positive results in our rare disease portfolio. To summarize, we have a strong portfolio of product opportunities in both common and rare diseases that we believe will deliver value for patients and investors in the near term as well as for years to come. Our goal is to continue to work hard to improve the lives of patients suffering from neurologic and neuropsychiatric disorders and continue to deliver best-in-class therapies from our promising pipeline for patients. I will now turn it over to Jim Engelhart, our Chief Financial Officer, to review the detailed results of our financial performance in this last third quarter.

Thank you, Vlad. Good morning, everyone, and thank you for joining today. The third quarter 2020 saw continued growth in net sales, increasing 82% to $17.7 million versus quarter two, driven by strong prescription volumes. I am so pleased with our company's performance, as it reinforces our commercial strategy and the impressive execution, since our launch in March. Once again, despite headwinds of the ongoing pandemic, NURTEC ODT continues to demonstrate, its differentiated label for the acute treatment of migraine to physicians and patients. We continue to work in a nimble and agile way, adapting to an evolving environment, and overcoming the challenges of a virtual world, to bring NURTEC ODT to patients suffering from migraine, while in parallel, advancing our clinical pipeline. As we commented in quarter two, we will not be providing financial guidance regarding projected revenues, spending or earnings, as we are still early in our first commercial launch, and continue to be under an uncertain economic environment with the pandemic. We will also be commenting on non-GAAP financial measures, while our filings contain the additional details on both, a GAAP and non-GAAP financial basis. For the three months ended September 30, we achieved net revenues of $17.7 million on robust script volumes, driven by patient demand for NURTEC ODT. We are very pleased with our continued market penetration, as it reinforces the differentiation of NURTEC ODT, and the unmet need that exists with patients for the acute treatment of migraine, as evidenced by continued growth in patients and health care professionals choosing NURTEC ODT. Continuing down the P&L. SG&A expense in the quarter on a non-GAAP basis was $110.2 million, compared to $22.4 million over the prior year quarter, an increase of $87.8 million. Most of our SG&A costs reflect our commercial investments and the increase to prior quarter, represents investment behind our NURTEC ODT launch. This investment includes our commercial infrastructure, consumer and health care professional promotion and direct-to-consumer programs, including investment in digital platforms. SG&A also includes general and administrative costs, including finance, legal, as well as other administrative functions that saw a slight increase to support the operational needs of our new commercial business, as well as efforts to complete our intra-entity asset sale, to our Irish subsidiary that was finalized this quarter. R&D investment in the quarter, on a non-GAAP basis, was $51.8 million, which decreased $6.2 million over the prior year quarter, primarily due to $7.5 million in costs related to pre-FDA approval process validation batches of rimegepant, in quarter three 2019. To wrap-up the P&L, we reported non-GAAP adjusted net loss for the three months ended September 30 2020, of $159.5 million or $2.67 loss per share, compared to $80.8 million or $1.55 per share loss for the same period. Turning to our balance sheet, as a result of our rimegepant IP sale to our Irish subsidiary in August, we recorded a deferred tax asset of $875 million. We've established a full valuation allowance, due to our current lack of net operating income history. The transfer of rimegepant intellectual property to our Irish subsidiary is part of our larger global operations expansion. The tax deductions for amortization of the deferred tax asset will be recognized in the future. If any amortization is not deducted for tax purposes it will be carried forward indefinitely, under Irish tax laws. We expect the majority of our anticipated global taxable income to be generated from our Irish subsidiary, and be subject to the Irish statutory rate, which is currently 12.5%. We estimate that our effective tax rate will be significantly less than the 12.5%, as we utilize various tax benefits including our NOL carryforwards. As a result of the financings we completed in August, our balance sheet remained strong with $550 million in cash and marketable securities, as of September 30th and immediate access to $100 million from our Sixth Street financing. We are well capitalized and have the liquidity to support our ongoing commercial and development initiatives and our corporate infrastructure. Our current cash position, together with our projected NURTEC revenue and available funding from our recent Royalty Pharma and Sixth Street transactions, provide the funds to continue supporting the NURTEC ODT brand and our pipeline, while providing the company with an accelerated path to profitability. To sum up, I am very pleased on the performance we delivered in the third quarter, with strong NURTEC ODT scripts and revenues, completion of the successful non-dilutive financings and our intra-entity transfer of rimegepant intellectual property to our Irish subsidiary and our continued sound fiscal discipline to ensure a lean and agile organization. With that let me turn it over to BJ. BJ?

Thank you, Jim. Good morning. I'm pleased to update you on NURTEC ODT's progress, launched-to-date. First and foremost, we remain excited about the early performance of NURTEC ODT in market, driven by the most talented and passionate professionals I've had the pleasure to work with. A quick note of thanks to the commercial founders of Biohaven, which keep our collective focus on the patients we serve and their loved ones. In the third quarter, we grew volume with 155% growth over prior quarter. We continued to observe widespread adoption among clinicians, with over 20% unique writers and our reach is rapidly approaching 140,000 patients since launch. We remain encouraged, as NURTEC ODT growth dynamics are fueled by the rapid expansion of the oral CGRP market. There are two primary sources of volume: one, the patients with migraine who may have failed or can't tolerate triptans; and two, patients who haven't been on a prescription within the past 12 months, but have been managing their migraine attacks with over-the-counter meds or through other methods. We expected the Rx-naive patient segment of the migraine population to enter the class as later adopters, which remains a long-term growth opportunity for the class, but we've been pleasantly surprised by these early entrants. As for the former triptan user segment of the patient base, the steep growth curve witnessed by the oral CGRP class in aggregate still only represents approximately 14% of the triptan market year-to-date. With heavy-branded class investment in awareness and education among the physician community, both specialists and primary care, as well as patients we expect this growth trend to continue for the long term. I'm thrilled to report that we're trending green on all early launch metrics, as our growth in breadth and depth of prescribing is healthy, new starts and refills are strong and brand perception tracks more positively from quarter-to-quarter. Recent Spherix syndicated data suggests that among neurologists oral CGRPs are rapidly gaining ground on triptans as the preferred acute therapy for patients with migraine. As we're all aware, triptans have been the standard of care for decades and enjoy the natural defenses of prescribing habits, patient familiarity and a managed care infrastructure that incentivizes generic use. So this early preference data among specialists is impressive, given we're still within a year of launching the class. If we then double-click on these data, the news for NURTEC ODT is even better, as we continue to witness meaningful differentiation from UBRELVY. In this case, neurologists show a slight preference for NURTEC as their agent of choice, 23% versus 20% and perceive it to be a more significant advancement over triptans, 51% versus 42%. In addition, the data revealed a growing perception of NURTEC ODT's differentiated benefit. Specifically, when asked, how does NURTEC ODT compare to UBRELVY on the following metrics, neurologists identified consistent comparative advantages for NURTEC across key clinical attributes, as well as perceptions of company and sales representative support. We're confident these early findings will continue to fuel NURTEC ODT's leadership presence in market. And just to reinforce Vlad's earlier comments, both sets of secondary prescription data, Symphony and IQVIA tell the same story. First with two novel product launches this year, the oral CGRP class is growing rapidly, due to tremendous unmet need among patients with migraine. And two, NURTEC ODT is competing favorably for market leadership in what will ultimately become a very large primary care market. We continue to make substantive progress on our strategic priorities, as introduced in our Q2 discussion. Number one is driving ACP awareness. With greater penetration of our customer base and compelling messaging that highlights NURTEC's differentiated clinical profile, we have now achieved over 90% awareness of the NURTEC ODT brand. Awareness leads to trial, trial to adoption and adoption to habit. Therefore, increased breadth of prescribing remains a critical success factor for us. And thus far, we have more than 20,000 high-volume prescribers on board and growing each week. Number two is activating patients. Our strategy to engage patients continues to fully leverage standard platforms of direct-to-consumer media while over-indexing on digital, social and word-of-mouth campaigns. We remain in line with our competitor’s share of voice, while executing a highly targeted and efficient plan. Of course, we look at share of voice, engagement and conversion data but nothing is more affirming about the potential of this brand than hearing the testimonials from literally thousands of patients who in many cases are having transformative life-changing experiences because of NURTEC ODT. Here's just one example of thousands received, after speaking with my doctor and learning more about NURTEC ODT, I'm able to get quick pain relief and get back to normal function when a migraine attacks in just one dose. Moving forward our consumer advertising will continue to feature actual NURTEC patients exclusively as we believe nothing is more compelling than the passionate expression of unprecedented relief, genuine surprise and heartfelt gratitude from authentic patients. And number three is ensuring access and affordability. We're pleased to report that contract negotiations and formulary decisions have largely been completed for the commercial channel with favorable NURTEC access for over 150 million people representing approximately 87% of commercial lives. We're also well ahead of plan for Medicaid and Medicare formularies as another 50 million or so lives have favorable NURTEC coverage. In our mission to make NURTEC widely available to patients suffering from debilitating migraines this breadth of access exceeds even our own high expectations. In closing, for all the reasons stated and more we're extremely optimistic about the full potential of NURTEC ODT to transform lives, but we're also realistic about the unprecedented and unpredictable headwinds of COVID-19. The projections of increased infection for the winter months could continue to place downward pressure on access to physicians and patients. And although this is certainly an industry challenge Biohaven is uniquely positioned and I believe uniquely committed to working with our customers to identify novel and innovative solutions to address their specific needs where perhaps large organizations can't. We'll continue to monitor these evolving market dynamics and anticipate change where feasible, but always remain close to our customers in flex when and wherever necessary to address patient needs. And with that, let me hand off to my partner Elyse.

Thank you, BJ. Again this quarter I'm happy to highlight the significant contributions made across our R&D organization to advance novel therapies. We continued to make impressive progress across multiple fronts, including our robust CGRP franchise, our growing glutamate platform and continued work and diligence on our myeloperoxidase inhibitor and other novel targets that will one day bring treatments to so many who suffer from debilitating neurologic disorders. Before providing this quarter's update across the pipeline, I wanted to highlight a couple of important R&D achievements in our CGRP receptor antagonist program. First and as stated earlier by Vlad, Biohaven's sNDA for NURTEC ODT in migraine prevention was accepted for filing by the FDA with issuance of a second quarter 2021 PDUFA date. This sNDA acceptance marks a really critical milestone in Biohaven's efforts to develop NURTEC ODT as a unique dual therapy for both the preventive and acute treatment of migraine. If our strategy is successful, NURTEC's highly differentiated and robust product profile will provide one prescription that has the potential to treat migraine across the complete migraine continuum. Its fast and durable action in treating acute attacks, allows for early return to function with excellent tolerability. An additional indication for prevention will allow for a single prescription to finally provide a unified treatment of migraine. Its oral route of administration, provides a low pill burden with its every other day dosing without the need for painful injections. The simplicity of a dual approach, coupled with a shorter half-life than injectables, allows for convenience and the ability for individuals to more quickly alter their medication regimen, should they need or choose to do so. If approved in prevention, NURTEC ODT will be the first and only CGRP targeting drug indicated for both, acute and preventive treatment of migraine. In this last quarter, we also made significant progress in the development of our third-generation CGRP antagonist, zavegepant.

Thank you, Elyse, Jim and BJ. In closing, Biohaven continues to demonstrate robust growth in terms of the commercialization of NURTEC ODT and important maturation of our late-stage neuro innovation pipeline. We expect continued market expansion of NURTEC ODT in migraine and anticipate at least four pivotal trial readouts over the next year. We have the potential for multiple NDAs over the next couple of years, and have important growth ahead of us as a company. Before opening up to Q&A, I'd like to end by thanking the entire Biohaven team for their relentless commitment to commercializing Nurtec ODT and advancing our innovative pipeline during this unprecedented pandemic. I would also like to thank all the patients, their family members and investigators, who participated in our clinical trials and help advance clinical care in the area of neuroscience. We must continue to work hard to bring novel treatments to patients suffering from diseases that affect the central nervous system. Finally, thank you to our visionary investors, who have helped fund our studies and bring Nurtec ODT to patients. We'd now like to open it up to questions. Operator?

Thank you. At this time, we will be conducting a question-and-answer session Our first question today comes from Paul Choi of Goldman Sachs. Please proceed with your question.

Hi. Thanks, good morning, everyone and thank you for taking our questions. A couple for me, please. Maybe just starting on the commercial side. Can you maybe comment on if you are seeing any off-label prevention use and just kind of what sort of utilization is being seen there ahead of your formal indication next year? And then just with regard to the payer side, can you maybe just comment also on just what the rate of rejections for prior authorizations and so forth has been like and just has there been sort of a decrease on that rate? And then I had a clinical question on Alzheimer's.

Thanks, Paul. Really appreciate that. With regards to the prescriptions we're seeing, it is mainly in the triptan-experienced patients. But as BJ noted, we are seeing a very nice early indicator of patients who haven't been on prescriptions over the last year also coming new into the space, which gets us extremely excited about the future growth ahead of us. We hear a lot of enthusiasm about what we're going to call this dual-acting approach with our prevention sNDA but we don't believe there's significant uptake in the prescriptions right now for prevention. Certainly all the docs are talking about it. They're very enthusiastic about it and we think that's going to contribute to future growth. I'll turn it over to BJ for your payer question.

Yes. Well, thank you for that. And as it relates to the payer question in terms of rate of prior authorizations denial with again greater than 87% approval within the commercial space, we actually don't see much denial at all. We're very happy we've received actually very strong feedback even from our customers, from clinicians, as well as patients that they see a relatively seamless process by which the prescription is written and then they can pull that at the pharmacy. So we're very pleased thus far.

Yes. And I would say the only challenge that COVID's brought up with regard to that is getting the doctors to fill out the prior odd forms. And so once they fill them out, we're seeing higher rates of approvals and we're not seeing those denials from the insurance companies. COVID presented some challenges in having the doctors in a timely fashion fill those out and so I think that contributed some of the challenges of COVID. And then Paul I think you had a question on Alzheimer's, which we're coming up to data. So excited to hear about what you want to know about AD?

Yes. Just with regard to the top line results just how much will you disclose initially versus a medical meeting down the road? And then just assuming the trial is positive, what will you have to do in terms of next steps with the regulators. You mentioned, the 505(b)(2) approach. Could you maybe just elaborate on that as well please? Thank you very much.

Sure. Thanks, Paul. Appreciate it. So with regard to the Alzheimer's data, which is forthcoming shortly, we expect to release our primary outcome measures, the co-primary is the ADAS-Cog and the CDR Sum of Boxes. We also at this point what's rate-limiting to the top line is we do want to wait for a very important biomarker which is the volumetric MRI and that is done by an external group and that's going to be rate-limiting to that top line. We think it's important to have both of those at the same time, so we can comment not just on clinical improvement but also is there evidence of disease modification. And as I mentioned earlier, there's a number of other exciting biomarkers. Those probably won't be ready at top line but at least we'll have a view on the volumetric MRI to point to. And the 505(b)(2), look because we now have experience with troriluzole for over three years now with our SCA trial, our OCD patients as well as the AD patients, we have a very robust safety package. Our active metabolite is riluzole and we have received confirmation from the FDA that troriluzole would be considered a 505(b)(2). We have received waivers on cork and others. So if we were in a fore shift position to have positive results we will very quickly be ready to move forward with the filing there. Thanks Paul. Next question?

The next question is from Tyler Van Buren of Piper Sandler. Please proceed with your question.

Hi, guys. Good morning. And thanks for taking questions. So on the launch, I appreciate that you guys are doing the exact right thing to ensure that you drive the most volume for the long-term and gross-to-net is clearly variable early on in the launch. If you just do the simple math and take quarterly NURTEC revenue divided by prescriptions, it looks like the gross-to-net might have gone down a little bit quarter-over-quarter. Of course there could have been stocking in Q2 or something like that that could have impacted. So could you just I guess give a little more color there? Did it jump down? Is it just -- or is it maybe more flat? What should we expect it to look like moving forward? And then on Alzheimer's just maybe any thoughts you have on the recent aducanumab Advisory Committee outcome and what you think you need to show in the Alzheimer's trial to have a more I guess supportive review by an Advisory Committee? Thank you.

Thanks, Tyler. This year as we've said multiple times is all about building the brand and getting physician and patient trial with NURTEC. As BJ went over once they experience the positive efficacy and the profile of this drug, we had a very differentiated preference compared to our competitor. And so this year is all about script volume and number of scripts. We're not overly focused on the investments required this year because we know building a large blockbuster brand requires that type of investment year one. Today for the first time, we did guide towards that in 2021 we will begin to see decreases in GTNs as we've said all along right? So this year one launch is about script volume. Year two and beyond, we'll be focused on maximizing profitability. With regard to the recent Adcom look, I think we're very excited to hear last week's Adcom and to hear FDA's perspective on how much of an unmet need Alzheimer's is and their acknowledgments that we as a field and as a regulatory agency need to move things forward in Alzheimer's. So we took that very positively. And we like everyone else will be waiting to see whether the approval comes. I've been researching AD for many, many years and I think everyone in the field would welcome a first-disease modifier. So wish them good luck and hope there's positive news there. Next question?

Thank you.

The next question is from Ken Cacciatore of Cowen and Company. Please proceed with your question.

Hi, good morning, everyone. Just want to follow up on Tyler's question as we get a lot of -- asked a lot about this gross-to-net or net value per prescription. So Ubrelvy seemed to be up quarter-over-quarter. So just wanted to know if you could help nuance a little bit of the difference maybe is occurring between them and you all? Is it distribution fees, or is it they got an earlier start on launch and therefore Managed Care is working its way to the plan level faster? Maybe you can talk mechanistically about when you give the 87% coverage just mechanistically what does it mean to start securing more value out of having that level of breadth? That's the first question. Second question which I think you're going to pass on is can you give us a sense of where you think net pricing will start to land in 2021 or later in 2021? Just give us a sense if you provide a range. And then last question. There is obviously and you talk about drawing prescriptions in from over the counter. And obviously, we can track the prescriptions of triptans or the total amount of triptan prescriptions that are out there. Can you try to size that kind of unknown over-the-counter maybe opioid NSAID market that pool that maybe you're also going to be going after? Thank you.

Thanks, Ken. So you're right. I think on the net sale per script number what we have said there is that look we're going to be in line with our peers when we're at that stable point. Gross-to-net will be considerably lower in future years. As we've said and you've highlighted some of the reasons why there's been high GTNs and some turbulence around them quarter-to-quarter this first year, because of the level of investment, but there's a number of things. As you know, it's very complex with regards to we say 87% insurance coverage. Remember that just doesn't turn on overnight, right? There's a cadence to insurance coverage coming on, and in the interim, that's where all our affordability programs, right? You have a choice, you can pay for affordability programs and get patients and doctors to experience NURTEC ODT and then beyond that over the course of their entire life and their illness, right? That's an important investment versus saying, we're going to try to manage low GTNs year one and lose the overall battle on market share. That wouldn't make any sense. And so I think the cadence of insurance companies coming on is an important part of it. And yes, there's a big delta in distribution fees. We're a brand-new company. We get the highest fees until you get volume, but again we were able to guide today. We already know for example we have very marked and substantial reductions projected for next year given some of the DSA fees that we've negotiated. So we're going to see that markedly change next year. And then also don't underestimate the Medicare, Medicaid mix as well. Again, being a new company, there's been a delay for us to get coverage in those areas. And although, they only represent about 15% of the acute migraine that delta between Medicare and Medicaid, because we are new to the system this year, as well as the DSA fees coming on to insurance all of that really accounts for the delta. Yeah, I would say for the rest of this year expect there to be high GTNs. And then as we've said for the first time today, we believe there will be reductions beginning in 2021, but we will continue to invest in building the market share. And beyond, you're going to see us right in line with our peers at steady-state. All right. And next question.

The next question is from…

I'm sorry, there's an over-the-counter question. We do think -- and I'll turn it over to BJ, there's very substantial market size and being front line in migraine. We believe ultimately with this profile not only is it going to be front line, but it's going to be primary care. We see there as being a very large market expansion. BJ, you want to add anything to that?

Yes, Vlad. The only thing I'd add to that and it's that, we -- at this point in time, we're approximately 25% or so right of our business is in that kind of Rx naive market. And obviously, the overall size of that market is very, very large. How rapidly though that we're able to penetrate that and get that conversion, we're still investigating that, right? But what we see is, we actually see that coming into this market much faster than we thought. So I can't give you a number in terms of the relative size of that, but we expect that to grow over time. That's what I said.

Great. Next question operator.

The next question is from Charles Duncan of Cantor. Please proceed with your question.

Yeah. Thanks for taking the question. Congrats Vlad and team on a great quarter of progress, had a couple of commercial questions and then one for Elyse for the pipeline. Relative to the commercial questions want to step back from gross-to-net debate and think more bigger-picture. I guess, Vlad, as you consider revenue potential for NURTEC over the next 12 months, what are the kind of nuanced operational metrics that you'll be looking at that will be most important to you to gauge the efforts in that franchise?

Thanks Charles. And then after we answer that we'll go back to you for the question with Elyse. Look this next year, I think, it's going to be really important to see our primary care penetration. I think that really is going to represent important market growth here as a class. Also BJ, again, gave the update on the percent of the triptan scripts that we are already seeing convert over. I want to see that continue quarter-over-quarter to increase, and then obviously the new patients in the space. And BJ, did I miss anything? I'll turn it over to you other operational metrics.

No. I mean, that's ideal. Essentially there were two primary metrics that we're looking at one of which is like, is the class growing as rapidly as we believe it can? And the second really is, what is our share of that class right? Those two primary things. There are many different metrics underneath those, but those are two prime.

Yes. And Chaz I think as you know look to see a new company like Biohaven basically splitting market share on the new-to-brand Rx with a large established company like AbbVie has been a big success for us thus far. We want to continue to demonstrate we can do that. We believe we have the differentiated profile. And ultimately patients and doctors are going to determine that market share. So, we look forward to expanding our profile from acute into the first dual-acting as well. And you had a question for Elyse.

Yes. Absolutely. Thank you. And for -- on the pipeline and thinking about Troriluzole strategy I know this is going to be difficult but I'm wondering if you could rank order call it probability of success for Alzheimer's disease spinal cerebellar ataxia and OCD and kind of what the basis is? And then a nuance in the Alzheimer's disease readout. If you saw kind of interesting but not compelling if you will clinical benefit but changes in hippocampal volume that pointed to greater benefit over time, would you continue to proceed?

Thanks Chaz. I'm going to turn it over to Elyse to answer. But I did want to just preface it to say I can't resist your question because the very reason why we're doing multiple Troriluzole studies I think in neuroscience everyone's notoriously been bad at predicting which of several indications is going to be the one that wins. And so we took this more of an agnostic approach ranked disorders where glutamate play an important role and then said let's run the experiment. Let the data determine where the wins are going to be rather than our prognosticating around that. So, with that, I'll let Elyse prognosticate and tell you what she thinks.

I got to tell you it's a very tough one. And we go around the room sometime thinking about which one we would rank first. I'm going to echo though what Vlad said. Glutamate is just a principal excitatory transmitter and it's really ubiquitous in the brain. And they're really distinct deficits in different brain disorders. And our hypothesis for Troriluzole is really disease-specific and independent for each of these whether it's SCA, AD, or OCD and even you saw with GAD. And so I think it's impossible to rank order them because the neural circuits that are dysfunctional are really not the same in each of these disorders. So, I'm going to take a pass on it because if we went around the room I think we would all take different flyers on this. I think they're distinct and any of them really could have positive outcomes. And so we're just excited right? If we knew the answers we certainly wouldn't run the study so we're running them and we're going to let them play out. And I'm not a betting person, so I can't take bets on that. With regard to your question about Alzheimer's disease and the readout on that and what happens if we have interesting but not compelling results on our primary endpoints but the volumetric MRI looks positive. Look, I think it really will depend on how close we are to statistical significance on the endpoints that we have of ADAS-Cog as well as our Sum of Boxes. So, I think it really will be a discussion that we have with the FDA. And -- but as Vlad said earlier that's why we really want to wait for the MRI results as well because we think together those three measures will really be able to inform us and inform the FDA as to whether we think this is really going to have the legs and the potential to be a game changer for Alzheimer's.

Perfect. Thanks for the added color.

Thanks Doug. Next question.

The next question is from Tim Lugo of William Blair. Please proceed with your questions.

Thanks for taking the questions. Congratulations on all the progress. If prevention is added on to the label next year does that trigger any new managed care efforts? And should we still expect GTN to continue to improve next year, or does that maybe change your GTN kind of discussions that you've just given us to say about improvement? And then maybe clinically can you talk about the experience from Troriluzole in the FDA patients given the prior Phase II and if any of those patients have undergone MRIs and if there's anything that being gleaned from those patients?

Thank you. Yes. No. One prevention, I'll let BJ talk about how it might affect GTN next year. BJ?

Yes. Thanks, Tim. And so, as it relates to preventive and if that comes through for us, absolutely we will need to and we'll certainly engage proactively with all the payers. And we have not done that as of yet. We're still obviously anxiously waiting for feedback from the FDA. But if we do get that approval, our expectation would be that we would have to reengage and revisit, right, frankly, some of the contracts that we currently have as it relates to will there be a variance in terms of the GTN-based upon what we've seen thus far with acute and what we've suggested. We don't know quite yet. There's a lot of work that still needs to be done. And again, we have not actively engaged payers on this front, but that will start very quickly. Actually frankly, in Q1 we'll start to have that preliminary discussion.

Yes, great. And on SCA, we're really excited. By every few months, we take a look at the long-standing patients treated in the SCA trial. We're seeing what we think is pretty impressive stability of disease that we think is consistent with the disease-modifying effect. We did have a cohort -- a large cohort of patients, who from the initial end of the SCA trial to when we started the extension had come off of therapy while we were getting the extension up and running and we saw a worsening of symptoms when people came off that then rebounded improved and stabilized after getting back on therapy. So, I do think from what we are seeing in the SCA trial, now three years out with the level of just people -- many patients' disease being quite stable over that time where you would expect with a neurogenic disorder where we tested folks genetically that they should have a larger worsening. And in the recent OCD results, I think those two point towards we have an active drug here and we're excited about the upcoming Alzheimer's. I've always viewed, as Elyse is saying, this is one of the most important excitatory neurotransmitters that we're modulating. These are the type of things that one would expect to have an effect. So we're encouraged by what we're seeing in SCA and OCD. I won't comment on biomarker changes. Thanks. Appreciate it.

No problem. Thanks.

Next question.

The next question is from Laura Chico of Wedbush Securities. Please proceed with your question.

Hey. Good morning, guys. Thanks for taking the question. I've got two for you one on NURTEC and one on Troriluzole. So first on NURTEC, I believe about $125 million of the term loan facility through Sixth Street was contingent on hitting that $45 million milestone of net sales by the first or second quarter of 2021. So, I'm wondering if you could just talk a little bit to your confidence in being able to achieve that milestone. And then, I got one follow-up on Troriluzole.

I'll turn it over to Jim for that.

Yes. Good morning, Laura. Yes. So we're confident in our ability to hit that milestone. We have either the first or second quarter to hit it, but we're confident in achieving that.

Okay. Maybe on Troriluzole, and my apologies if I've missed this, but it's actually a two-parter. So first, can you actually confirm if the last patient visit has already happened? And then, I know you were asked with regards to the aducanumab panel kind of what you saw the read-through here. But at the panel, there was a ton of debate around what constitutes a clinically meaningful effect. I don't think, I've actually heard you kind of clarify what you see that as here today for Troriluzole. So, I'm wondering if you could help us kind of understand in the specific context of a mild moderate AD population, what do you see as a clinically meaningful change on ADAS-Cog or CDR Sum of Boxes? Thank you.

Thanks. So we don't specifically comment on where every last data point is in that trial. As I said earlier, the rate-limiting is getting all the MRI data in and analyzed the volumetric MRI. It is being done by the ADCS. And so, it's a little outside of our control there. Mild to moderate, AD and our expectations, it depends on whether -- if you have evidence of disease modification you might actually expect a smaller effect size, because it's -- you're looking at stabilization not improvement. So, I think a lot of what will be deemed a success here is a are you seeing a symptomatic effect? If so, then that's a win, right? And you'd like to see a disease-modifying. But, if you have a symptomatic but not disease-modifying, I think that's a clear path forward. If you have a smaller improvement and more stabilization but a robust disease-modifying effect then, that's exciting because you have the potential to treat even earlier and prevent the progression of the illness. So I think in either case, would be a big win. And then of course, it's easy if you had both, a symptomatic and disease-modifying. I think that's obviously something we could all fantasize for and hope for, would be the most robust outcome. So, your question about the effect size really hinges on, effects on the biomarkers of disease modification. And we look forward to seeing those shortly. Next question.

Thanks, Vlad.

Thanks Laura. Appreciate it.

The next question is from Vamil Divan of Mizuho Securities. Please proceed with your question.

Great. Thanks a lot for taking my question. So obviously been a lot of question on the pricing side. I just have a couple of maybe more, on the volume side. So one, you mentioned the 220,000 prescriptions I believe, to-date. I was just trying to clarify, that is to date or is that through the end of the third quarter? And just…

Yeah, that's launched to-date Vamil.

Can you give us the third quarter number, like you did in the second quarter? How many scripts you saw internal?

I don't think we are sharing those. We're focused on launch to-date numbers. As you know, there's been some discrepancies between the two reporting systems. We obviously have our internal numbers. But given the discrepancy, we're not revealing the internal numbers.

Okay. And then, someone asked before, I don't know if you've commented, I may have missed it. Just was there any destocking or stocking dynamics, either this quarter or last quarter that we should be aware of, as you think about...

Yeah. Vamil good morning. Good morning, Vamil let me add. We don't report out on actual channel inventory. But what I can say is, there's nothing unusual or no material swings from -- in the levels that we've been managing.

Okay. And my last one…

And again, when you see the large increase in script volumes this quarter over last, obviously it's quite impressive. And we've always said, here's the script numbers. And we're way exceeding our script numbers.

Okay. Last thing if I could just on the $4 billion to $5 billion peak sales that you mentioned in the press release or I guess the class as a whole, can you talk about sort of what peak share of the triptan market, you think you'd be able to obtain to get that level? I think you said you're 14% now, just trying to get a sense again of kind of volume expectations longer term.

Well, as a clinician, I'm not sure, why folks would use triptans in the future state, given the cardiovascular risk factors and other tolerability, the medication overuse headache rebound headaches. But it's interesting when you do look at, some other generic markets, sometimes what happens is you see some erosion of the generic, but then it's really the growth of the novel treatment in the market is, where you see most of the uptake. So if you go and look at, the novel anticoagulants for example versus warfarin, there still is a very robust prescription of warfarin that's out in the market. But the novel anticonvulsants are probably going to be $10 billion-plus market annually. And so, we see that often where generics still will get prescribed. However, the novel therapeutic becomes the dominant market share. BJ you want to add anything to that?

Theres not much I can add. That was really answered well, Vlad. I agree that, what we don't know and what we're going to see over time is, what that relative ratio is between, if you will kind of ex-triptan users and Rx-naive. We expect again that latter group to continue to grow exponentially.

Yeah. The data doesn't show that, there's any decline in that quarter-over-quarter just really nice robust. I mean this far out of the launch just to see this continued linear growth not just for us for our competitor I think speaks towards, where this class is going.

Okay. Thank you.

The next question is from Sumant Kulkarni of Canaccord. Please proceed with your question.

Good morning. Thanks for taking my questions. I have a couple. So first on, Troriluzole, I'm not going to ask for a favorite indication or priority, but if everything goes per plan clinically what indication, do you expect to be in a position to file first? And my second question is on NURTEC ODT. What specifically can be done to make the sales per prescription number in, NURTEC ODT migrate upwards, or is it just that you might have to wait until you get approval for prevention, and then it becomes as simple as the competitor having two products for acute and prevention versus one for you, which means one plus one equals two scripts from a payer perspective for your competitor versus maybe 1.5 for you guys.

Thanks Sumant. So, with regard to what's the potential, if everything went as expected and we had positive data, what's the first Troriluzole indication that we would file an NDA for. That clearly would be Alzheimer's, if Alzheimer's ends up being positive. So, the team is already working on putting together the package at risk and having it ready to be submitted, if we're fortunate enough to have positive data. And as I said earlier, that will hinge on the type of robustness of the data, as well as whether there's disease-modifying effects, but we're already working on the submission package there. And I'll turn it over to BJ.

As it relates to the second question, so I guess I want to be clear that once again, as Vlad mentioned a moment ago, our expectation is that we'll be essentially kind of changing -- evolving the paradigm currently of how migraine is actually treated. Our belief is that, there's certainly greater growth opportunity, as it relates to a single product that will be used for both acute and prevention versus potentially having two compounds like to address each. And our expectation again is that it will be much more convenient. It will be much more simple frankly for physicians, as well as for patients right to -- actually against that different approach. So, our belief is that, we definitely have the more robust strategy and that will lead to overall leadership in the market.

All right. Last question, operator.

The last question is from Marc Goodman of SVB Leerink. Please proceed with your question.

Yes, good morning. A few questions. First, Jim, can you talk about just SG&A and is this quarterly level kind of what we should be expecting going forward into next year or will there be another step up? Secondly, Vlad can you talk about your plan for Europe? Is this something that you've considered in a different way versus previously? I mean I know some of these other countries, in Asia there'll be partners and stuff. But how are you thinking about Europe? And then thirdly, just on prevention. When that comes, how should we be expecting the prescription for prevention to be different from the prescription for acute? How are you thinking about that right now? Thanks.

Good morning, Marc. This is Jim. I'll take the first question on SG&A. As you know, we don't guide to our projected spending. But as we've said before, we have -- the majority of our spending in SG&A is driven by the commercial investment. And we have our full commercial organization in place. The variable component is obviously the level of spending and so, that can ebb and flow based on the programs that we have in any given period. So Vlad, you want to comment there?

Thanks. And Marc, we're very excited about global expansion of NURTEC ODT. We are on schedule for our EMEA filings in the first quarter. So that's going to get out the door pretty rapidly. And like always, we've always had an approach that if you needed to do it alone, one should do that. But our efforts there are focused in on the U.S. and certainly ex U.S. in all markets, we do look for the right partners. And so after the filing, we will probably early next year have some better guidance about our plans vis-à-vis potential partnerships, ex U.S. and also of course we're excited about China and BioShin. And there you saw a recent raise, so that we could build the right infrastructure there without it coming off of the Biohaven proper books. So, BJ I'll turn it over to you?

Yes. Marc, so it's an interesting question. Obviously, we have to be careful in regards to our projections about what the FDA has not yet approved. So obviously, we have to wait for an approval. We have to wait for the clarity in the label. But our expectation is clearly, we will promote it accordingly within that label. And our thought is that, a physician would either write for acute therapy or they would write for preventive therapy. And again, we will promote accordingly to what we receive in the label.

Yes. I'd just add as a clinician, I do think that, there will be a halo effect on acute meaning, that I think clinicians will say well why wouldn't I start with the acute therapy that could have preventative effects. And so, I think people will have the flexibility with this unified treatment start on acute. And then if you need to move to preventive, you can do so with the same agent by just changing the frequency of use and not the dose. I mean, think about how streamlining and convenient for patients and physicians. And I think, patients really deserve finally that unified treatment for migraine. Why do you have two different drugs, pay for two different drugs, have two different side effects. So, I think there's going to be a halo effect in acute.

So Vlad, should we be expecting that the prescription for prevention would be 15 pills at the same price obviously as it's priced right now?

I think we're going to be working with some creative options with payers and we're going to leave it at that until the drug is approved. And then, obviously those discussions with payers will have some more granularity on next year. Thanks Marc. Vlad Coric So thank you everyone for joining us today and we really appreciate the support of our employers and investors, as we move forward to delivering these life-changing therapies to patients. We look forward to speaking you soon. Thank you everyone. Thank you, very much.