Welcome to the Jaguar Health Investor Conference Call.

Before I turn the call over to management, I’d like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impacts of competitive products and pricing, industry trends and product and technology initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements.

Forward-looking statements are subjects to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management’s current assumptions, expectations and projections about future events.

While management believes that its assumption, expectations and projections are reasonable in view of currently available information, you are cautioned to not place undue reliance on these forward-looking statements.

The company’s actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the forward-looking statements and Risk Factors sections of the company’s Form 10-K for the year ending December 31, 2019, which was filed April 3rd, 2020 and its other filings with the SEC which are available on the Investor relations section of Jaguar’s website.

Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.

Additionally please note, the company’s supplement its condensed consolidated financial statements presented on a GAAP basis by providing gross sales, non-GAAP EBITDA and non-GAAP recurring EBITDA.

Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which company management assesses and operates the business.

These non-GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss and are not substitutes for or superior to measures of financial performance in conformity with GAAP. At this time, it’s my pleasure to turn the call over to Lisa Conte, Jaguar’s Health President and Chief Executive Officer.

Lisa, the floor is yours..

providing responsibly harvested plant-based medicines to help people and animals live healthier and more vibrant lives. I also would like to give a shout out and happy birthday to our Chief of Staff, Jon Wolin. Mytesi is the first and only natural, fair trade plant-based oral drug approved under FDA botanical guidance.

Our team started in 1989 working with indigenous healers in the Amazon Rainforest to direct us towards potential sources of traditional medicines. We now have an extensive library of plants with medicinal properties, including the Croton lechleri tree, the source of crofelemer, the active ingredient in Mytesi.

Today, our team stands as committed as we were then to realizing the potential of these products and we’re pleased to report the following progress we have made in the first quarter 2020 to support our mission to not only become a financially sustainable business but also to continue to provide Mytesi to the people living with HIV who rely on it as an important part of their treatment regimen.

We have two speakers from the company for today’s call in addition to myself. Following my comments, Carol Lizak, Jaguar’s Senior Vice President of Finance and Chief Accounting Officer, will provide a brief recap of the Q1 financials.

Following Carol, we’ll hear from our Vice President of Commercial Strategy, Ian Wendt, who will provide important updates on our recently announced enhanced market access program for Mytesi for the approved indication, the currently approved indication of symptomatic relief of non-infectious diarrhea in adult patients with HIV/AIDS on antiretroviral therapy.

Before we jump in, I’d like to let all of you participating on today’s call know that questions can be submitted via the webcast link for this call that appears on the Events and Presentations page of the Investor Relations section of Jaguar’s website.

The URL for Jaguar’s website is jaguar.health, and the link to the Events and Presentations page appears in our Q1 2020 earnings release. We will address questions during the Q&A segment at the end of today’s call. And we’ll do our best to get to as many questions as possible. All right, we’ll jump right into it now.

As we announced on Wednesday this week, Jaguar, and Napo have entered into a joint account receivable purchase agreement with Oasis Capital that will allow Oasis to purchase all of the company’s accounts receivable related to our April 2020 sales of Mytesi to Cardinal Health.

These April 2020 accounts receivable, which are not recognized in today’s Q1 filings, have a gross value of more than $2.7 million. Per the terms of the agreement, Oasis will receive a fee of 5.45% of the gross value following their purchase of these accounts receivable for $1,032,000.

Cardinal pays Napo-Jaguar 70 days after the purchase on the button. This transaction with Oasis allows Napo and Jaguar to accelerate the cash realization of the sale. Oasis will return to the company within five days any amount that exceeds the sum of the purchase price and their fee.

As with all gross sales, these accounts receivable will be reduced by Medicare, ADAP 340B chargebacks, returns and wholesale distribution fees based on historical trends to determine net sales.

We’re pleased to have forged this agreement with Oasis because it supports our strategy of bringing in non-dilutive capital as we continue to focus on our new enhanced market access strategy and work to make our commercial business a financially sustainable business supported primarily by growth in Mytesi sales.

In other news related to non-dilutive financing, as we announced on April 16, Jaguar entered into an agreement with Atlas Sciences to develop NP-500, a non-core plant-based type 2 diabetes drug candidate that has successfully completed Phase I clinical trials.

The deal involves the receipt of $1.5 million by Napo for the sale of NP-500’s technology and intellectual property to Atlas.

With the sale, Jaguar received an exclusive 10-year license to develop and commercialize NP-500 technology in all territories worldwide, except Greater China, inclusive of the right to sublicense NP-500 development and commercialization rights.

The agreement with Atlas also supports our ongoing strategy, to bring in non-dilutive capital at this time, to fund Napo’s plant-based R&D pipeline.

While we remain laser-focused on maximizing the full potential of our non-opioid prescription medicine Mytesi, which is unrelated to NP-500 and is the only oral plant-based medicine approved by the FDA under botanical guidance, we hope to forge additional non-dilutive funding partnerships to advance key pipeline indications into development and commercialization outside the United States.

As we announced on March 5, we have entered into a royalty interest purchase agreement with Iliad Research and Trading.

Under the terms of the agreement, Jaguar received $350,000 in connection with the sale of a royalty interest to Iliad that entitles Iliad to receive $500,000 of future royalties on sales of Mytesi as well as certain upfront license fees and milestone payments from licensees and/or distributors.

At Jaguar and Napo, we remain committed to our dual strategy of forging regional ex U.S.

business development deals to bring in non-dilutive dollars, to support efforts to move key potential Mytesi pipeline indications into clinical trials to support our goal of expanding crofelemer access to all patients in need throughout the world, while simultaneously, we work again to become a financially sustainable business, supported by the growth in Mytesi sales for the current approved indication.

With regards to pipeline development efforts, we’re pleased to report our progress on the lead target follow-on indication for Mytesi, the symptomatic relief of cancer therapy-related diarrhea, which we refer to as CTD, cancer therapy-related diarrhea.

Based on FDA feedback, we’re revising the protocol, the informed consent, the statistical analysis plan, among other requirements, so we can initiate the clinical trial in the second half of 2020, of course, funding dependent, and this has been a process of 18-plus months working with the FDA to gain agreement on this single pivotal protocol.

Diarrhea is a common adverse event seen with chemotherapy agents, typically used in breast and colon cancers, and in particular, the more recently introduced therapeutic classes of epidermal growth factor receptor monoclonal antibodies and tyrosine kinase inhibitors, often used for chronic adjunctive care management of cancer.

The increased need for and use of these agents has made diarrhea one of the most disabling issues for cancer patients. Diarrhea has been reported as one of the most common side effects of the recently approved TKI, tyrosine kinase inhibitor, tucatinib, a Seattle Genetics product.

And as with other TKIs, such as neratinib, is a disruptive side effect for patient comfort and adherence to their cancer treatment regimens. Diarrhea in this patient population has a potential to cause dehydration, potential infections, non-adherence to treatment, dose reductions of treatment.

A novel antidiarrheal Mytesi may hold promise for treating secretory diarrhea and therefore, also support long-term cancer treatment adherence in this population.

We have demonstrated each of these benefits in dog studies, an important animal model for the human experience and studies that will be published and presented at scientific conferences over the next year, virtually, nevertheless presented.

Transitioning over to the legacy animal side of Jaguar’s business for a moment, I’d like to comment regarding our efforts to gain FDA approval to market Canalevia, our oral plant-based prescription drug candidate, for the treatment of both cancer-induced diarrhea, which we refer to as CID, cancer-induced diarrhea, in dogs and exercise-induced diarrhea, EID, exercise-induced diarrhea, in dogs.

As we announced this past Tuesday, Jaguar has been informed by the FDA Center for Veterinary Medicine, which I’ll refer to as CVM, Center for Veterinary Medicine, that the Environmental Impact technical section has been deemed complete as part of our application for the conditional approval of Canalevia for EID under the Minor Use/Minor Species Animal Health Act of 2004, which we refer to as MUMS, and which is similar to Orphan Drug designation for human drug products.

We are leveraging many of the same major technical sections from our CID submission for the proposed EID indication. The CVM has also confirmed the completeness of two of the other three major technical sections of Jaguar’s Canalevia CID application. We expect to submit the fourth and final technical section in the very near future.

From a timing perspective, if the applications are successful, Canalevia could be available under conditional approval for CID and EID in the first half of 2021. Since our July 2017 merger between Napo and Jaguar, as previously announced, Jaguar Human portfolio has been and continues to be our core focus.

However, CID in dogs is an interesting model for human medical need and is being pursued as our first prescription indication for animal health. We believe there is an important unmet medical need for the treatment of CID in dogs.

Certain cancer treatment agents provided to dogs are human drugs or have the same mechanism of action as human cancer drugs. And these agents’ mechanism of action often have meaningful rates of diarrhea as they do in humans as well. Canalevia acts locally in the gut, it’s minimally absorbed systemically.

It does not alter gastrointestinal motility, has no significant effects on normally functioning intestinal ion channels or the transport of electrolytes or fluids and has no side effects different from placebo.

These features are further augmented by the lack of effects of Canalevia on the absorption or metabolism of co-administered chemotherapy drugs orally or by other routes of administration.

Before turning the call over to Carol Lizak to recap Q1 results, I’d like to comment on the letter Jaguar received on May 4 from the committee on Oversight and Reform of the U.S. House of Representatives regarding the recent list price adjustment of Mytesi.

The committee expressed an interest in understanding whether the price adjustment was connected to the company’s request for emergency use authorization from the FDA to market Mytesi for the symptomatic relief of diarrhea and other gastrointestinal symptoms in patients with COVID-19 under the emergency use authorization.

As previously disclosed, the FDA denied our request on April 7, and that was prior to any price adjustment in Mytesi. Of course, the company intends to fully cooperate with the committee.

A public statement about the price adjustment and our commitment to ensuring that people living with HIV continue to have uninterrupted access to Mytesi is available on the Jaguar website.

As noted in the statement, the decision to adjust the price for crofelemer was made in December 2019 as part of an expansion of our comprehensive patient access program and to help the company gain financial sustainability.

Have we received emergency use authorization, we would have deferred the price adjustment until after the emergency use period ended. That’s all I’ll be saying about this topic at this time. I will now turn the call over to Carol Lizak.

Carol, are you there?.

Yes. I am..

Okay. Take it away..

Thank you, Lisa. And thank you all for joining our call today. The key financial highlights for the quarter ended March 31, 2020, are as follows.

Net sales during the first quarter of 2020 were approximately $900,000 and approximately $1.6 million in the first quarter of 2019, a decrease of 45% or $700,000 quarter-over-quarter, largely due to a significant purchase of Mytesi in the first quarter of 2019 by Cardinal Health, the company’s third-party logistics and distribution agent for commercial sales for the purpose of establishing Cardinal Health’s initial inventory of Mytesi, from which Cardinal Health would distribute the Mytesi.

Although our overall volume decreased quarter-over-quarter, the Mytesi total prescription volume increased 16% in the first quarter of 2020 over the first quarter of 2019.

The total operating expenses for the first quarter of 2020 was approximately $8.5 million as compared to approximately $7.4 million for the same period last year, a 16% or $1.1 million increase quarter-over-quarter.

This increase was primarily due to a non-cash one-time item, inducement expense of $1.6 million relating to the accounting for warrant exercise, preferred stock amendment and a reduction in the conversion price of the series B preferred stock of a certain investor recorded in the first quarter of 2020, and none in the same period last year.

The net loss for the first quarter of 2020 was $7.9 million, compared to a net loss of $8.3 million in the first quarter of 2019, a 4% or approximately $400,000 decrease quarter-over-quarter. There was a recorded loss on extinguishment of debt of $1.9 million in the first quarter of 2019 and none in the same period of 2020.

That concludes my recap of high-level financials for the first quarter of 2020, and I will now hand the discussion over to our next speaker, Ian Wendt..

Good morning, all. I hope everybody is doing well. I’d like to start out by saying how proud I am to be working with this team. We are committed to doing the right thing, not only for people and the animals we serve, but also for the planet. We want the people living with HIV who benefit from our plant-based products to thrive.

We want the planet to thrive, while we sustainably harvest crofelemer and responsibly work with local and indigenous communities in the rainforest. And we want our business to thrive, so we can continue to support people living with HIV to rely on our medically necessary product. Every decision we make is based on this longstanding commitment.

As recently announced, in concert with the aforementioned goals, we expanded the NapoCares Patient Support Program for Mytesi last month. The expansion meaningfully increased copay support for commercially insured patients, which includes allowing the copay amount to remain the same whether a patient fills a 30-day or a 90-day prescription of Mytesi.

I’m pleased to report that commercially insured patients increased utilization of this program by 27% in Q1 2020 versus Q4 2019.

In April of this year, Jaguar also expanded its NapoCares Patient Support Program by increasing the income ceiling from two times the federal poverty limit to five times the federal poverty limit, which will allow more low-income patients to receive Mytesi at no cost to them. This helps patients access Mytesi when cost was previously a barrier.

The copay program and patient assistance program are components of a comprehensive suite of patient support services that we are rolling out in the current quarter with the support of AssistRx, a patient hub services provider.

To date, there are no contracted discounts with commercial insurers in place and contracting represents another significant opportunity to reduce access barriers that exist with payers. Contracting talks with select large payers are expected to begin next month.

As we announced on Wednesday of this week, April 2020 sales of Mytesi to Cardinal Health have a gross value of $2,753,639. As with all Mytesi gross sales, this figure will be reduced by Medicare, ADAP 340B chargebacks, returns and wholesale distribution fees based on historical trends to determine net sales.

That concludes my comments, and I will now turn the conversation over to Lisa Conte..

Thanks, Ian. Okay. Looking ahead, we continue to believe 2020 has the potential to be a transformative year for Jaguar and Napo. We look forward to continuing expanding the NapoCares program as part of our enhanced market access strategy as we continue to work to become a financially sustainable business.

I can’t say that enough, financially sustainable business. I can’t say that enough, financially sustainable business, supported primarily by the growth in Mytesi sales. Our additional mantra at Napo is pipeline, pipeline, pipeline, driven by business development, business development, business development, non-diluted funding sources.

We have a remarkable risk-mitigated pipeline that includes multiple novel and important potential follow-on indications for Mytesi, which we consider to be a pipeline within a product.

GMP commercial manufacturing, obviously, is in place for Mytesi, and several of our targeted Mytesi follow-on indications are backed by strong Phase II and/or proof-of-concept data. As an additional reminder, because Mytesi is approved under FDA’s botanical guidance, there is no pathway by which a generic version can be developed.

The depth of our pipeline provides potential supportive care solutions for large patient populations across multiple disease indications and around the globe. And we believe this pipeline will fuel long-term value creation for investors and provide non-dilutive funding opportunities for our partner collaborations.

With that, I conclude my comments, and I’m looking to see, and I don’t believe we even have any questions submitted through the portal. So, this concludes our call for today. Thank you all once again for joining. Please be safe. Be well, and we’ll see you next quarter..

Q -:.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day..