RedHill Biopharma Ltd. Q3 FY2020 earnings call

• Talicia's extensive promotional efforts led to 300% quarter-over-quarter prescription growth and expansion of the prescriber base with national payer coverage for 167 million Americans. • Movantik reversed the trend of prescription decline prior to RedHill's acquisition and saw growth for the second consecutive quarter. • Global Phase 2/3 and U.S. Phase 2 studies with opaganib for COVID-19 are nearing completion, with important data generated demonstrating opaganib's integration with SARS-CoV-2. • Initiated manufacturing ramp-up for opaganib in preparation for potential emergency use applications as early as Q1 2021. • Initiated Phase 3 study of RHB-204 as an oral first-line therapy for pulmonary NTM infections. • The commercial team worked tirelessly to adapt during the pandemic, with Talicia's launch going well and Movantik successfully transitioned from AstraZeneca.

In the third quarter, RedHill saw significant progress. Talicia experienced a 300% quarter-over-quarter prescription growth. Movantik had prescription growth for the second consecutive quarter, reversing prior decline trends. Net revenues for the quarter were approximately $21 million. Gross profit was $10.6 million, or approximately 51%, up substantially from around 32% in the second quarter. Research and Development expenses were $4.3 million, an increase from $3.2 million in the previous quarter. Net cash used in operating activities decreased to $9.2 million in Q3 compared to $15 million in the second quarter, and net cash burn in the quarter decreased to $2.2 million.

• RedHill is working towards plant operational breakeven next year. • Opaganib's U.S. Phase 2 and global Phase 2/3 studies are close to data readout, with potential emergency use applications as early as Q1 2021. • RHB-204's Phase 3 study for pulmonary NTM infections is initiated, with enrollment expected to be completed within a year, and key outcomes to be monitored starting at month eight.

• Pandemic impact on commercial activities, including lab testing and colonoscopies being down year-over-year, and new-to-brand scripts significantly lower for target physician groups. • Uncertainty in the pace of the pandemic affecting in-person detailing and the progress of commercial efforts.

Q: Matt Kaplan inquired about opaganib manufacturing preparation, how Talicia and Movantik revenue growth translates from quarter-over-quarter, and the timeline for RHB-204 Phase 3.

A: Dror Ben-Asher stated that manufacturing ramp-up is underway with agreements with suppliers, script growth is the key indicator for revenue given ex-factory sales can be random, and RHB-204 Phase 3 study is initiated with enrollment expected within a year and key outcomes at month eight.

Q: David Hoang asked about MTD NTM study approval, post-marketing commitments, and comparison to Insmed's ARIKAYCE.

A: Gilead Raday responded that post-marketing commitments are unknown until NDA submission, RHB-204 is orally administered, standalone, and three times a week, differentiating it from Insmed's inhaled, refractory-patient indicated, non-standalone ARIKAYCE.

Q: Perry asked about feedback from prescribers on Talicia and the salesforce size.

A: Rick Scruggs said prescribers love Talicia, and the current salesforce size is comfortable with analysis ongoing to optimize, with no immediate plans for expansion.

Q: Scott Henry questioned Talicia revenue, expense levels, and Aemcolo's expanded indications.

A: Dror Ben-Asher noted script growth is the best indicator, expenses in Q3 considered indicative with PPP impact in prior quarter, and Aemcolo has potential for expanded indications post-travel resumption with preparations underway.