RedHill Biopharma Ltd. Q4 FY2020 earnings call

• Commercial: Successfully completed three full quarters of Movantik promotion, maintained Movantik's market leadership with ~75% share, Talicia saw 52% Q4 quarter-over-quarter prescription growth, strengthened digital marketing capability, and Aemcolo had plans for 2021 with upside potential as travel returns. - R&D: Positioned at the forefront of COVID-19 therapeutics with opaganib and RHB-107 in Phase 2/3 studies; RHB-104 for Crohn's disease completed Phase 3 study with positive endpoints; RHB-204 initiated Phase 3 study for NTM; Opaganib showed clinical efficacy signals and ongoing global Phase 2/3 study with ~two-thirds enrollment.

Movantik had an annualized revenue of about $8 million, maintaining its position as a market leader in its category with approximately 75% market share. Talicia had an annualized revenue rate of about $8 million, with 52% quarter-over-quarter prescription growth in the fourth quarter of 2020 and achieved its highest weekly prescription volume in December. Both products contributed to the company's revenue, with Movantik's strong market share and Talicia's growth despite the pandemic.

• Expect 2021 to be a breakout year with strong momentum across commercial and R&D. - Aim for commercial operational breakeven by end of 2021. - Anticipate gross margin expansion due to Talicia's growth. - Plan to complete enrollment in opaganib's global Phase 2/3 study in Q2 and get top-line results towards end of Q2.

• Uncertainties around COVID-19 program outcomes, as actual events may differ from projections. - Potential differences between expected and actual commercial access due to ongoing pandemic-related challenges.

Q: On Talicia revenues, should we assume roughly $2 million in the quarter based on $8 million annualized run rate?

A: Yes, exactly.

Q: Guidance for cash flow positivity by Q4 2021, main drivers?

A: It’s both TALICIA and expense reductions.

Q: Increase in R&D and selling expenses in Q4 2020, one-time reasons?

A: Slight increase due to COVID-19 programs development, reasonable to assume it will come down going forward.

Q: Shares outstanding as of early March?

A: Around 46 million ADS.

Q: Aemcolo utilizing many financial resources?

A: Does not require significant resources right now.

Q: Clarification on operational breakeven focusing on commercial operations?

A: Yes, correct, relates specifically to commercial operations not including development stage activities.

Q: Promotional activities evolution for 2021?

A: As COVID conditions improve, access will improve, and promotional plans are on track with brand.

Q: Aemcolo's long-term growth potential and rifaximin activities?

A: Not concerned about Bausch Health's rifaximin activities, will keep promoting Aemcolo for travelers' indication and look at other indications with partner Cosmo.

Q: Opaganib NDA timing and NDA elements?

A: Phase 2/3 study ~two-thirds enrolled, expect to complete enrollment and get top-line results in Q2, discussions with regulators, and essential elements of NDA already assembled.

Q: Movantik and Talicia scripts cadence in 2021?

A: Expect typical first quarter, but confident in acceleration as year goes on, especially for Talicia as conditions improve.

Q: Opaganib discharge time from hospital?

A: Global Phase 2/3 study with 464 patients will quantify outcomes better, primary outcome is time to achieving room air breathing no oxygen support by day 14 with robust benefit seen in Phase 2 study.

Q: Commercial access assessment on a 0-10 scale?

A: Likely 6-7, returning to normal but still some states with lockdown-like conditions.

Q: Gross margin expansion in 2021?

A: Expected to expand due to Talicia's growth as it doesn't have the royalty obligation Movantik has.

Q: Movantik prescription growth drivers (targeting vs conversion)?

A: Targeting has improved, and consistent brand presence with resources behind it is bearing fruit.

Q: RHB-107 timeline for readout?

A: Initiated enrolling, ongoing, expect data in second half of 2021