Good afternoon, and welcome to the Evoke Pharma's Fourth Quarter and Full Year 2022 Earnings Conference Call. Currently, all callers have been placed in listen-only mode, and following management's prepared remarks, the call will be opened for questions. [Operator Instructions] Please be advised that today's call is being recorded.

I will now turn the call over to Daniel Kontoh-Boateng. Thank you, and you may begin..

Good afternoon, and thank you for participating in Evoke Pharma's conference call today. With me today are David Gonyer, Evoke's Chief Executive Officer; Chris Quesenberry, GIMOTI's Chief Commercial Officer from EVERSANA; and Matthew D'Onofrio, Evoke's Chief Business Officer. By now, you should have a copy of the press release we issued earlier.

If not, it is available on the Investor Relations page of our website at evokepharma.com. We encourage everyone to read today's press release as well as Evoke's annual report on Form 10-K, which is now filed with the SEC. The company's Form 10-K and earnings release are also available on Evoke's website.

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, 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 annual report on Form 10-K 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 David Gonyer.

Dave?.

first, Q4 has more holidays and fewer working days than Q3; those holidays coincide with the end of the month, which tend to be our stronger weeks; and there were also pharmacy closures due to weather events during that time; and lastly, we experienced a slightly higher number of prescriptions provided to uninsured or underinsured patients.

In such circumstances, it's Evoke's practice to offer GIMOTI at a discount to those patients in urgent need of gastroparesis symptom relief. And we expect to return to positive sequential revenue growth in 2023 as the sales mix returns to levels we saw in the first three quarters of 2022.

Finally, the number of cumulative GIMOTI prescribers increased by approximately 25% to 1,017 HCPs at December 31, 2022 from 812 through December 31, 2021. This metric continues to increase, reaching 205 prescribers at the end of January of this year, the highest month on record.

And finally, as I mentioned, prescription fills in the fourth quarter of 2022 increased by 8% compared to the previous quarter. Prescription fills for all of 2022 increased by 178% compared to 2021. With that, I'll turn the call over to Chris.

Chris?.

Thank you, Dave. 2022 was a year of tremendous progress for Evoke, GIMOTI and EVERSANA. I'd like to add my support to what Dave described as last year's significant progress in physician awareness and patient access to GIMOTI as a needed solution for relief of diabetic gastroparesis symptoms.

Our Evoke team was in EVERSANA and in the field as well as our partners at vitaCare and UpScriptHealth continues to execute on our strategy to make GIMOTI the standard of care for patients suffering with diabetic gastroparesis and to improve access to GIMOTI for appropriate patients.

There's not been without challenges at many turns, yet our team remains focused and is steadfast to alter the clinical inertia and a habit that has been status quo in this market, patients deserve better.

Broadening and deepening healthcare practitioner trial and adoption of GIMOTI was and will continue to remain our priority focus and we have made steady progress. Q4, by many metrics, was our best ever. We nearly doubled our new prescribers in 2022, growing 96%. In the fourth quarter alone, we increased new prescribers 43% over Q3.

And our total cumulative new prescribers continued to expand to 1,017. Repeat prescribers grew 774% in 2022 versus '21, and in Q4, we expanded our Q3 total by 14%. As prescribers grew, so did dispenses, at 8% improvement over Q3. Full year dispense growth was 178% versus 2021.

[And you'd] (ph) see excellent continuation by our patients with a 79% refill rate for those that have scripts remaining on their treatment. Lastly, refills for GIMOTI is a metric we are closely watching. Refills grew 34% in Q4 compared to Q3 and 219% year-over-year.

The primary driver of performance in Q4 and in 2022 was interactions with healthcare providers. Face-to-face interactions in the post-COVID era continues to be the most important lever.

We see a pattern emerging where when a healthcare provider in a practice prescribes GIMOTI and has a positive experience, they tend to prescribe more, and those that are in the practice with them begin to adopt GIMOTI as well. It is evidence that our total practice approach is paying dividends.

In addition, we conducted peer-to-peer educational programs last year. Those programs reached 673 total attendees where the rationale and benefits of GIMOTI were discussed, including relevant patient case experience.

These programs increased the knowledge of our audience and we saw significant impact on prescribing, increasing 44% from prior to attending a program. We plan to double our programming this year to reach a broader audience.

To further combat status quo thinking, we leveraged the publication of the updated ACG guidelines for gastroparesis by producing our own summary of the guidelines and highlighting the position of GIMOTI and oral metoclopramide as first-line pharmacotherapy. This has generated significant conversations and added credibility to our message.

We also continue to conduct patient market research to track their awareness, trial and utilization patterns. Our last wave confirms feedback we were hearing from providers and demonstrated that roughly 50% of users do not see any symptom improvement from existing oral treatment options, whether they're liquid or tablet forms.

38% of respondents discontinued their gastroparesis medications primarily due to either side effects or a lack of symptom improvement.

Of those respondents who were aware of GIMOTI prior to the survey, 43% are current users and 100% of those current GIMOTI users reported seeing at least some symptom improvement with diminished nausea being the most cited symptom improvement.

Finally, patients rated GIMOTI as more favorable than competing treatments on all attributes treats related to tolerability and efficacy compared to other treatments.

We are encouraged by these results and yet we recognize there is still a significant gap in conversations between patients and providers around whether current therapies are working, what alternative treatments are available, and how these treatments differ. Another contributor to success in 2022 was changing our distribution approach.

May of last year, after a four-month pilot, we switched distribution to vitaCare prescription services. The switch to vitaCare significantly improved prescribing of GIMOTI, allowing HCPs to e-prescribe GIMOTI directly.

Additionally, we saw the time from the submission of prescription to the delivery of GIMOTI to a patient's home, what we call speed to therapy, improve. Reliable access to GIMOTI, especially with a low out-of-pocket expense for patients, is a primary driver for their initial and ongoing use.

When patients get access to GIMOTI, we see and hear positive feedback. With the vitaCare process, our refill rates have continued to improve and is at 79%, the highest we've seen since launch. Another opportunity for GIMOTI is coverage by insurance plan.

We continue to build on our success and access with 110 payers approving at least one Rx since launch. In Q4, 69% of dispensers were covered by either a commercial or government insurance, and that is relatively stable from prior quarters. We are committed to expanding access to GIMOTI.

Part of that commitment comes in continuing to build on the value proposition for GIMOTI and to demonstrate further evidence. Dave outlined two important new studies that we have recently submitted to medical congresses, which have both been accepted.

These studies leverage our exclusive pharmacy data for GIMOTI patients and link it compliantly to claims database, which allows us to understand the utilization of healthcare resources, such as physician office visits, hospital outpatient visits, hospital inpatient visits and emergency room visits.

These were real-world data complement clinical trial data, which affirm the safety and efficacy of a product in a controlled setting and go beyond that to examine the impact of treatment on various stakeholders like providers, patients and payers, varied clinical and diverse demographic settings.

Now, prior to commenting on the new studies, the previous tardive dyskinesia study we conducted, which was presented at last year's Digestive Disease Week, remains an important clinical update for physicians to be aware of with the use of metoclopramide.

Whereas various prior small studies published decades ago, noticed an incidence rate of 10% or higher with TD for metoclopramide. This groundbreaking analysis examining claims data across 80 million patients in the U.S. showed a much lower incidence at 0.1% of all gastroparesis patients taking metoclopramide over the 10-year survey.

These data have received significant attention at several large congresses, helping physicians and patients to understand and assess risk-benefit for use of metoclopramide with the updated information. We plan to submit these data on the incidence of tardive dyskinesia in patients with gastroparesis for publication shortly.

The upcoming AMCP study that explores the utilization of healthcare resources of 294 patients six months before and six months after initiation of GIMOTI.

The study showed patients starting GIMOTI demonstrated fewer all-cause and diabetic gastroparesis related healthcare resource utilization for office, ER, inpatient and outpatient visits for the six-month intervals following initiation of treatment, achieving statistical significance for the diabetic gastroparesis related physician office visits and hospital outcome visits and a numerical improvement for emergency visits.

For all cause related HRU, there was a statistically significant reduction in physician office visits.

It's important to note that about half these patients tracked or on oral metoclopramide for a mean duration of 8.1 months prior to switching to GIMOTI, the scientific poster for AMCP should be available on the Evoke Pharma corporate website in the coming days.

And the next study to be delivered at the plenary session for Digestive Disease Week, 257 patients on GIMOTI were compared to a mass control of 257 patients with documented utilization of oral metoclopramide over six months in parallel.

These data will provide insight to the question, how does GIMOTI compare to the standard of care for gastroparesis in a real-world setting? These data are really important to understand as studies suggest that patients with diabetic gastroparesis are admitted to the hospital an average of four times a year and 30% of them are having to be readmitted within 30 days.

Cost of the healthcare system is significant and the impact on patients and their families is considerable. We are excited to share these first-in-class data and believe they will add important new information for patient, providers and payers alike.

In summary, I'd like to reinforce we are making positive strides in improving adoption and performance of GIMOTI. By many measures, Q4 was our best quarter to-date. We have tackled barriers and continued to address them proactively and with urgency. We continue to invest in value-generating areas and believe those will bear fruit in 2023.

Our goal remains to position GIMOTI as standard of care for patients with diabetic gastroparesis. This year, we'll be focused on building on the confidence in GIMOTI and in the programs and services surround information. If we're going to change the status quo, then confidence is the currency with which we have to deal in.

With that, let me turn the call over to Matt to discuss financials..

increased face-to-face interactions with physicians, primarily gastroenterologists, and other healthcare providers with our sales partner, EVERSANA; greater numbers of physicians within larger groups prescribing GIMOTI after their first-physician adoption; and more increased sales through our vitaCare prescription service partner.

Research and development expenses totaled $27,000 for the fourth quarter of 2022 compared with $36,000 for the fourth quarter of 2021. And for the full year of 2022, research and development expenses were approximately $0.3 million compared with approximately $0.6 million for the prior year.

Since receiving FDA approval of GIMOTI in June of 2020, Evoke's research and development costs continue to decrease and shift to commercialization and selling costs. For the fourth quarter of 2022, selling, general and administrative expenses were approximately $2.3 million compared with $1.7 million for the fourth quarter of 2021.

For the year ended December 31, 2022, selling, general and administrative expenses were approximately $9.6 million versus approximately $8.9 million for the year ended December 31, 2021.

The increase in SG&A costs year-over-year resulted primarily from shifting personnel costs from research and development to commercialization costs along with higher marketing, royalty and EVERSANA profit sharing costs.

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

Total operating expenses for the fourth quarter of 2022 were approximately $2.3 million compared with $1.8 million for the same period of 2021. And for the year ended December 31, 2022, total operating expense were approximately $10.3 million compared with approximately $9.8 million for the full year of 2021.

As of December 31, 2022, cash and cash equivalents were approximately $9.8 million. We believe based on our current operating plan that our existing cash and cash equivalents as well as future cash flows from net product sales of GIMOTI will be sufficient to fund our operations at least in the third quarter of 2023.

And finally, Evoke currently holds the majority of its cash at Pacific Western Bank within the [ISC] (ph), or insured cash sweep, accounts. These accounts move funds into separate FDIC insured accounts of up to $250,000 each on -- per day and is available as needed. And with that, we'll open up the call to questions.

Operator?.

Thank you, sir. [Operator Instructions] And we'll take our first question from Yale Jen with Laidlaw & Company. Your line is open..

Good afternoon, and thanks for taking the questions, and congrats on the quarters. A couple from -- the first one is that you mentioned that for the fourth quarter you have a more under and uninsured patients.

And what do -- you anticipate that to reduce in 2023? Was there any sign to suggest that of the first three months of this year?.

Thanks, Yale, for the question. No, so far in this first quarter, we haven't saw -- a little maybe trickle in January, but since then, we haven't..

Yes. And yes -- this is Matt. I don't think there's any predictive quantities around it, other than, as you know, sometimes around year-end and the beginning of the year, changes in plans and other things can cause hiccups around reimbursement for individuals as they move from one insurer to another.

So, I think there's maybe a very slight seasonal effect that you can see in the end of the year kind of timeframe, but nothing otherwise..

Okay. The second question is that maybe related, which is cost of goods for the fourth quarter, again, is substantially higher than the previous three quarters.

What have caused that? And would you anticipate this cost of goods ratio to continue for the 2023?.

Yale, yes -- so, I appreciate your question. I guess, we don't view this as being substantially out of whack, considering the increase in total product that was being sold.

It's possible I suppose that based upon some of the earlier product that had been manufactured prior to launch that may have been expensed prior to launch itself that may have added to it slightly. But otherwise, we wouldn't expect it to be anything significant there..

So, are you suggesting that the current cost of goods ratio -- the margin probably will be similar in 2023?.

Yes..

Okay. And two more quick ones. The first one is that the GIMOTI has been added to the ACG guidelines. Does that impact on the future, I guess, sales as well as reimbursement? And typically adding to the guideline will have sort of positive impact.

Just, what's your thoughts?.

So, certainly, being added to the ACG guidelines is a very positive step for a product and many physicians look to the guidelines for guidance in terms of what -- how to deal with new therapy. So, it's definitely a positive.

As I mentioned, as we are out there with our field sales organization talking to physicians, physicians appreciate the fact that we've been added to the guidelines and added to that first-line positioning. So, it's added a lot of credibility and built confidence in physician prescribing.

It still remains to be seen whether that coupled with some of the evidence generation that we are building will help us to get access for payers..

Okay. Maybe the last question here is that earlier, I think in this last year, you guys have mentioned that you might have to do a Phase IV study. Does that still -- could that be the case in 2023? And if so, would that impact on the R&D expenses for 2023? And thanks for answering those questions..

Yes, no problem. Yes, we're still talking to the FDA about working through that trial. It's still taking time to get agreement to what that trial would look like. So, we don't have any expectations at least in the first half probably the end of 2023, if any..

Okay, great. Thanks a lot. I really appreciate, and thanks..

Thanks, Yale..

Thank you. [Operator Instructions] All right. We have no further questions in the queue. So, this does conclude that portion of today's call. I would now like to turn the call back over to Dave Gonyer for any additional or closing remarks..

Great. Thank you. I just wanted to close by saying that our effort to make GIMOTI the standard of care for diabetic gastroparesis got a major boost last year in the areas that we outlined today.

I just want to remind everyone that GIMOTI is a novel product still in its launch phase, and such times come with both exhilarating growth and humbling times like the slight decrease in Q4 revenues that we saw though prescriptions were 8% higher.

Nonetheless, our trajectory is on a steep positive curve and we look forward to executing on our strategic plan and reporting the results for the remainder of the 2023. Thank you very much for your time..

Ladies and gentlemen, this concludes today's Evoke Pharma Fourth Quarter and Full Year 2022 Earnings Call and Webcast. You may disconnect your line at this time, and have a wonderful day..