Good afternoon, and thank you for joining Evoke Pharma's First Quarter 2021 Earnings Conference Call. I would now like to introduce Christine Petraglia for opening remarks..

Good afternoon, and welcome to Evoke Pharma's First Quarter 2021 Earnings Conference Call and Audio Webcast. With me today are Dave Gonyer, Evoke's Chief Executive Officer; and Matt D'Onofrio, Chief Business Officer; as well as Chris Quesenberry from EVERSANA as GIMOTI's Chief Commercial Officer.

Earlier today, Evoke issued a press release announcing financial results for the first quarter ended March 31, 2021. We encourage everyone to read today's press release as well Evoke's quarterly report on Form 10-Q, which is filed with the SEC. The company's 10-Q report and press release are also available on Evoke's website at www.evokepharma.com.

In addition, this conference call is being webcast through the company's website and will be archived to 30 days for future reference. Please note that certain information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act.

We caution listeners that during this call, Evoke's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.

These forward-looking statements are qualified by the cautionary statements contained in Evoke's press releases and SEC filings, including its quarterly report on Form 10-Q and subsequent filings. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast.

Evoke undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I would now like to turn the call over to Dave Gonyer..

Thank you, Christine, and thank you all for joining us this afternoon for Evoke Pharma's First Quarter 2021 Earnings Conference Call. Today, I'll spend a couple of minutes upfront walking through some key points from our first full quarter since the launch of GIMOTI, albeit in the midst of the COVID surge in January and February.

We'll also provide an update on our commercial activities and specific insight on physician and patient feedback and some important trends as we look forward, and then we will review our financials.

As many of you may recall, GIMOTI is the first novel pharmaceutical treatment for gastroparesis to hit the market in over 40 years and represents a robust market opportunity with 12 million to 16 million adults reporting symptoms. This market continues to grow fueled by diabetes, which is a common cause of gastroparesis.

Currently, only an estimated 2 million to 3 million patients are receiving treatment with limited therapeutic options. GIMOTI is specifically designed to address the unique needs of adult patients with diabetic gastroparesis by delivering an established treatment as a nasal spray that bypasses the GI tract.

Adults suffering from diabetic gastroparesis, by definition, have unpredictable stomach emptying and may or may not vomit their medications. For these reasons, oral administration may be erratic which can be problematic since the drug absorption in the small intestine requires gastric emptying.

GIMOTI, which was approved by the FDA in June 2020 is the first and only treatment for diabetic gastroparesis where absorption is unaltered in patients with delayed gastric emptying. No other company is currently focused on gastroparesis treatments in physicians' offices today, and we continue to see enormous potential for gaining market share.

The only other FDA-approved therapy for gastroparesis available in today's market is metoclopramide, typically prescribed as an oral tablet and can fail to release symptoms experienced by patients in this oral delivery form. These symptoms caused by gastroparesis include nausea, abdominal pain, bloating, early satiety and vomiting.

The impact of this disease on individual's quality of life can be quite detrimental and dangerous as it may lead to poor diabetes control and hospitalizations are also frequently occur because of dehydration and malnourishment. The patient population is clearly in need of more effective treatment options.

We believe GIMOTI answers a critically unmet medical need serving as an effective alternative to the current standard of care to help those who suffer from acute and recurrent diabetic gastroparesis.

We are also acutely aware how unique and valuable our treatment is in order to protect our intellectual property for the nasal delivery and metoclopramide, the United States Patent and Trademark Office recently issued a notice of allowance to Evoke related to GIMOTI.

If granted, as expected, the patent will cover methods of use for nasal delivery of metoclopramide for the treatment of gastroparesis. The patent will be listable in the FDA's Orange Book. Over this quarter, we've made progress in providing a solution to this unmet medical need with our commercial launch of GIMOTI.

We launched GIMOTI during the pandemic, and it has continued to impact both patient access and healthcare provider capacity to treat. Just last month, Salix, a division of ours, released a survey about patients with irritable bowel syndrome, or IBS, during the pandemic.

We believe IBS provides a close proxy to the gastroparesis market as it is a motility disorder that is primarily treated by gastroenterologists. The survey results offer perspective from patients with IBS during the pandemic and insights about the symptoms and behaviors of patients over the past year.

More than 1/3 or 37% of those surveyed acknowledge that COVID-19 pandemic has made it more challenging to manage their symptoms and report deteriorating symptoms. And most notably, 35% of respondents have not discussed their symptoms with a healthcare provider at all since the pandemic began.

And this mirrors, the John Hopkins and CDC Research that found 41% of chronic care patients have avoided care during the pandemic. Patient volumes for gastroparesis patients were down significantly over the past year.

However, the number of patients returning to doctors' offices has begun to increase as more people feel comfortable doing so after becoming fully vaccinated. As our strategically structured GIMOTI sales team throughout the U.S.

focuses their efforts in areas of high diabetic populations with heavy metoclopramide usage and offices of doctors across the country begin to reopen our 27 field and 4 in-house sales representatives of dedicated Evoke gastroenterology care specialists have been gaining increased access.

This has allowed them the ability to educate the targeted gastroenterologists and select healthcare providers about the benefits of GIMOTI.

Our strategic message outlined in the benefits of bypassing the GI tract of patients that have delayed gastric emptying straightforward and clinically meaningful and to date has resonated well with providers as we are encouraged by the traction we have observed over the past 2 months.

The gastroenterologists and healthcare providers we have had conversations with this quarter have remained very positive. As Chris will discuss further in detail, the feedback we've received from prescribing physicians to patients have been outstanding.

Over the past few months, we've heard numerous anecdotes from physicians about patients who have relieved their symptoms by switching to or starting on GIMOTI. We are highly encouraged by how well received GIMOTI is among diabetic gastroparesis patients in search of more symptom relief that they may not be receiving from alternative medications.

Patients suffering from diabetic gastroparesis, who do not receive a maximum benefit from oral treatment, are pleased to find out there is now a new option available to them. This favorable sentiment is also demonstrated by the positive trends we are seeing within the growth of a number of prescribing physicians and refill rates.

Over this quarter, and including April, there were 178 prescribing physicians, which is a significant increase from the launch in the fourth quarter of last year. This is an important indication that awareness of GIMOTI is increasing in the medical community.

And we are confident that the word will spread as physicians discover how GIMOTI can provide relief in many patients compared to the other available treatments. Additionally, refill rates for GIMOTI were 73% from launch through the end of the first quarter of 2021.

We believe these refill rates are a testament to the efficacy of the product and patient satisfaction in this difficult-to-treat disease.

Our management team will continue to pay special attention to these key metrics as we look to gain further market share with GIMOTI and as the pandemic impact starts to reverse in the months ahead and deliver different results in the second half of the year.

Expanding the access to patients in need remains a high priority as we continue to execute our commercial strategy. This is why last year, we launched our program, EvokeAssist, to coordinate GIMOTI reimbursement and distribution through our exclusive pharmacy distribution program.

As with any new product launch, coverage by commercial plans and government payers is limited, our EvokeAssist program aims to make the process of determining coverage seamless and minimizing patient out-of-pocket cost for GIMOTI, where allowable. Patients with either Medicare or Medicaid account for a substantial part of the market.

In the first quarter, we completed the registration process to participate in Medicaid program, adding to the registration for Medicare Part D completed December of last year. While ensuring that patients who suffer from diabetic gastroparesis have access to our novel treatment, we have also focused our efforts on increasing awareness.

Educating not only physicians but also patients directly will be critical to the success of the commercial launch. To that end, in January of last year, we began our collaboration with EVERSANA for the commercialization, distribution and marketing of GIMOTI in the U.S.

This has enabled us to leverage their integrated suite of commercial capabilities and their highly experienced sales and marketing team as well as allowing us to avoid significant capital investment by utilizing the infrastructure expertise and financial resources, which were crucial ahead of our product launch and now even more importantly upon the commercialization.

With that, I'll now turn the call over to Chris for further details on the GIMOTI launch progression.

Chris?.

increasing the awareness of GIMOTI, increasing trial of GIMOTI via prescriptions and samples and increasing access to GIMOTI through our EvokeAssist program and payers.

We remain confident that there is a substantial unmet need that providers recognize the value proposition of GIMOTI and that there is a significant role that GIMOTI can play in helping patients manage their systems associated with diabetic gastroparesis. I would now like to hand the call back over to Dave..

Thanks, Chris. We're still in the beginning stage of launching GIMOTI. However, the positive feedback we continue to receive from physicians validates the need for this drug, as more doctor's offices open, patients will be pleased to discover new treatment option for diabetic gastroparesis.

Drug launches have been hindered due to the pandemic, but thanks to the recent progress of the vaccine rollout nationwide, patients feel more comfortable returning to the doctor's offices. And additionally, our field force has experienced increased access to speak with physicians about prescribing GIMOTI.

So we're excited to capitalize on this recovery momentum and drive the progress of our commercial launch forward. Now let me turn to Matt D'Onofrio to review the financials for the first quarter of 2021..

Thanks, Dave. And once again, thank you all for joining us this afternoon. Restating the basics of the EVERSANA agreement, EVERSANA will receive reimbursement of its commercialization costs pursuant to an agreed-upon budget and are only pay back through a portion of the revenue as it is recognized and received.

Once those costs are covered, EVERSANA will receive a percentage of product profits in the mid-to-high teens and Evoke retains over 80%. Net product profits are the net sales of GIMOTI, less reimbursed commercialization costs of both manufacturing and Evoke administrative costs set as a fixed percentage of net sales and third-party royalties.

During the term of our agreement with EVERSANA, they have agreed not to market promote or sell a competing product in the United States. Now let me review our financials for the first quarter of 2021.

For the first quarter of 2021, net sales were approximately $90,000, and the net loss was approximately $2.6 million or $0.08 per share compared to a net loss of approximately $1.8 million or $0.07 per share in the first quarter of 2020. This increase was primarily due to costs associated with the commercialization launch of GIMOTI.

Research and development expenses totaled approximately $0.3 million for the first quarter of 2021 compared to approximately $0.5 million for the first quarter of 2020. For the first quarter of 2021, selling, general and administrative expenses were approximately $2.3 million compared to approximately $1.3 million for the first quarter of 2020.

We expect that selling, general and administrative expenses will increase in the future as we continue to progress with the commercialization of GIMOTI and we reimburse EVERSANA from the net profits attained from the sales of GIMOTI.

Total operating expenses for the first quarter of 2021 were approximately $2.7 million compared to total operating expenses of approximately $1.8 million for the same period of 2020.

As of March 31, 2021, the company's cash and cash equivalents were approximately $18.2 million, which includes approximately $13.1 million in net proceeds raised from our common stock offering in January of 2021. We expect sufficient runway to fund our operations into the first quarter of 2022.

Also, last week, a proposal was voted in on the company's annual proxy to consider an increase in the total authorized shares allowed in the company. The recommendation by Evoke was to increase the shares from 50 million to 100 million.

Although the amendment to the company's amended and restated certificate of incorporation to increase the authorized number of shares of common stock received a substantial majority of votes cast, it did not receive a majority of the outstanding shares of common stock as required. So it was not approved.

The company proposed the measure based on a few basic guiding principles.

One that the fully diluted share count for the company is currently approximately 41 million based upon 32 million outstanding plus another 9 million reserve for warrants, stock options and the company's employee stock purchase plan, leaving about 9 million remaining for various circumstances, such as employee hiring, retention, product acquisitions, fundraising, et cetera.

Point two, the authorized shares provide an additional financial safety net should the more funding be deemed prudent to support the ongoing activities of the company. And three, similar companies typically maintain far more shares in the 50 million authorized shares currently within Evoke for such prudent uses.

Nevertheless, the company will press forward with the current authorized shares and expect to revisit this matter in the future. Let me turn the call back over to Dave for closing remarks..

Thank you, Matt. I'd like to close the call today by saying that we have the foundation in place for growth of GIMOTI, and we believe we are on the right track to make GIMOTI an important product in the gastroparesis market.

We will continue to implement our commercial strategy and will improve upon it every day, along with expanding reimbursement and access for GIMOTI to make sure GIMOTI is available for healthcare providers and their patients. I'd like to thank our shareholders for their continued interest in our company and our progress.

Throughout the rest of 2021, our team remains focused and committed to ensuring the successful commercial launch of GIMOTI, and we are confident and committed in our efforts to increase awareness, help patients and their providers access and unlock the considerable value in GIMOTI. Thank you. I'd now like to open the call to questions.

Operator?.

[Operator Instructions]. Your first question comes from the line of Raghuram Selvaraju from H.C. Wainwright..

This is Mazon [ph] for Ram. And congrats on the progress. Just a few from us.

So I was wondering what the gross to net discount levels are trending? How they look at this point? And what -- how they've been trending in the last quarter?.

Thanks, Mazon [ph], this is Dave. I'll let Matt to answer that question for you..

Sure. So we haven't put out any specific guidance on that. I'll just say in relationship to the rack price, we are still receiving a substantial portion of that as it relates to the average net realized price. If that helps provide some guidance, of course, with early days that, that number can move around quite dramatically.

But thus far, it's remained, again, substantially a large portion of the original pricing itself..

Okay. Good. Understood.

And I was wondering if you've made any progress on R&D activities in terms of the lower dose of GIMOTI?.

Yes, we have. So we -- according to the FDA and when we were approved, we had to put in a protocol for their review by March of this year. We did that in early March. And so we're waiting now for them to provide some feedback on that protocol. So yes, we have. We've also manufactured a dose as well to have it available..

Excellent.

And just finally, we wanted to get your views on tradipitant by Vanda Pharmaceuticals and whether you think it's likely to be a competitive threat in the future?.

Sure. Well, there's -- as we've discussed, there's a huge need in this marketplace for new drugs and different drugs. My understanding, they're looking for an indication for nausea as it relates to gastroparesis.

We'd like to try to understand how that will differ from like a Zofran, different products like that, that has different effects than those products would have on nausea for these patients. So our understanding is that they're moving through their clinical trial.

We know through experience the clinical trials in gastroparesis patients are very difficult. It's tough to find these patients. It's tough to do patient-reported outcomes with these patients. So I guess, we'll have to wait and see what the data looks like. Matt, I don't know if you had any comments..

The only other comment I would make is it's still an oral tablet, which we know from direct experience in the patient support groups that these patients vomit up these tablets and/or don't metabolize them in a normal predictable way already.

So given it doesn't have any pro motility action, and it's not some other non-oral delivery, we still think there's a definite differentiating factor between the 2..

Great. Yes. You have a competitive edge with the oral administration. Okay, thanks for clarifying..

Next one on the line is Yale Jen from Laidlaw & Company..

Congrats on the progress last quarter. My first question is that in terms of the new -- prescribed new scripts versus the total amount -- total scripts.

If I remember correct or heard correctly, is that 86% new scripts? If that so, was the increasing the -- or maintaining the high proportion of the new scripts will be the major goal for the marketing team over the next couple of quarters?.

Yes. So Yale, the 86% number refers to the patients that have completed their first month of therapy and are eligible for taking their second month of therapy and also have a refill associated with the prescription. 86% of those patients filled in the first quarter compared to 85% in the fourth quarter of last year.

So we're kind of maintaining that quarter-to-quarter..

And from the marketing team perspective, is that continuing having a high percentage of new script that the major goals for the next couple of quarters before you're getting more patients refilled as well?.

So we're actually seeing an increase in the total number of prescriptions and the contribution that refills are making. So we're encouraged by that. And obviously, we want to make sure that for those patients that are on therapy continue on therapy according to their physicians' plans.

So of all refill opportunities, so that's the first, the second or third, fourth refill. That rate of refill for patients, again, that have refills associated with the prescription is 73%. And so we're encouraged by that number as well..

Okay. Great. And maybe two quick ones. The first one technically related to R&D.

How should we think about the expenses for remaining of the year compared to the first quarter figures? Should we think that maybe the trial could start in the third or maybe fourth quarter? Or how should we help to -- how it will help us to model that?.

Yes, Yale, this is Matt. So as you know, we're a small virtual team and we take pride in being extremely frugal and making sure we're spending those dollars correctly. As it relates specifically to R&D, there's a good chance that we will not have to run a clinical trial. So we're still investigating some alternative pathways to approval for that.

And if that's true, that would greatly diminish any potential costs. Even if there was a clinical trial associated with that, it's a straightforward PK trial with healthy volunteers. That in and of itself is usually a couple of million dollars or something of that nature.

But at this point, we're still investigating the more speedy and cost-efficient route through in-vitro studies..

Okay.

Maybe the last question here is that given the societies open up, particularly with the increasing vaccination, are the reps increasing their chances with the face-to-face time with the physician or in the doctor's office? Or do you think that you still will do a lot of the online marketing efforts?.

Yes. So I think, Yale, the answer is we're going to continue to leverage both routes to be able to get access to physicians and the office staff. In the first quarter, we did see a paradoxical decline in access because of the increased patient volume and physician offices were kind of overburdened with the load.

Now as the first quarter ends and the second quarter starts, we're seeing access to offices increase. And we're also seeing increased access to the physicians themselves. We have always been out in the field and trying to promote and gain access live. So that's our preferred route of administration.

We only use virtual and phone to supplement those efforts and to follow-up. So I'm encouraged by the fact that we are increasing our access. And as I mentioned earlier, when we do have time with the physicians and especially when we have extended time, that is resulting in a positive interaction and in many cases, a prescription..

Okay. Great. Maybe just second last question. One more question here. You mentioned during the call about sampling.

Is that something that you can increase or start to do to help the marketing effort?.

So thanks. Absolutely. We're planning to do that. We're hoping that we can accelerate our plans to do that and plan to do so over the next month or so to give access to physicians to gain experience with patients on GIMOTI. So it's an important part of what we're trying to do. But what I'll say is it's part of an overall plan to increase promotion.

And so as I look at it, you kind of have a couple of positive things happening here at the same time that has increased patient visits for that catch-up care, increased access to the HCPs and increased in our sales force and overall promotional effort and execution is going to help us to hit our stride in the upcoming quarter..

There are no further questions at this time. I will now turn the call over back to the presenters..

Great. I'd like to thank everyone for participating in the call today, and we look forward to be providing updates next quarter. Thank you..

This concludes today's conference call. Thank you for participating. You may now disconnect..