RedHill Biopharma Ltd. Q1 FY2021 earnings call

• COVID programs: Opaganib's global 464-patient Phase 2/3 study in severe COVID-19 is almost 100% enrolled and awaiting topline results; RHB-107 is a Phase 2/3 COVID-19 program targeting outpatient mild to moderate patients with a Phase 3 study initiated in the U.S. and expanding globally. - Non-COVID programs: RHB-204 for nontuberculous mycobacterial infection has initiated a Phase 3 study. RHB-104 for Crohn's disease advanced with positive Phase 3 study results. - Commercial: Talicia achieved numerous sales milestones in the first quarter including highest quarterly, monthly, and weekly prescription volume; Movantik remains the market leader with 75% market share and improved coverage; Aemcolo resumed promotion as travel resumes. - RedHill team: Resilient in overcoming challenges during the pandemic, with a strong commercial and R&D team working towards milestones.

RedHill's net revenues for the first quarter of 2021 were $20.6 million, a decrease of $0.9 million compared to the fourth quarter of 2020, mainly attributable to typical cyclical seasonality trends in Movantik ex-factory sales. Research and development expenses increased $1.3 million compared to the fourth quarter of 2020, mainly due to progress of COVID-19 development programs. Selling, marketing, general and administrative expenses decreased by $3.3 million compared to the fourth quarter of 2020. Operating loss and net loss for the first quarter are lower by approximately $1.5 million compared to the fourth quarter of 2020, mainly attributable to decrease in marketing expenses. Movantik new prescriptions in the first quarter outperformed the same quarter last year prior to its acquisition by RedHill from AstraZeneca. Talicia showed consistent growth in prescription volume, repeat prescribing and new prescribers. Aemcolo's prospects were positively affected by the resumption of travel as the pandemic recedes. RedHill had a cash position of approximately $92 million as of March 31st to support R&D and commercial efforts.

• Expect growth throughout the year in all products. - Aim to achieve commercial operational breakeven by the end of the year. - Opaganib's global Phase 2/3 study nearing completion with anticipation of topline results soon. - RHB-107's Phase 3 study progressing. - RHB-204's Phase 3 study expected to have enrollment progress despite COVID-related slowdowns.

• Uncertainty regarding COVID-19 pandemic impact on study progress, e.g., NTM disease 3期 study screening slowdown. - Regulatory environment changes affecting approval timelines. - Market competition risks.

Q: What lessons were learned from Movantik's launch and strategies for future growth as the economy recovers from COVID-19?

A: Lessons included importance of market development; focus on raising awareness about opioid-induced constipation and promoting Movantik as the best PAMORA class drug. Strategies involve continuing to build on the strong brand and expanding conversations between patients and prescribers.

Q: On gross margins, should we expect them to increase throughout 2021?

A: Expect gross margin to improve as Talicia grows and due to differences in obligations between Movantik and Talicia.

Q: On the Phase 2/3 COVID study and rollout of opaganib assuming positive data, how much lag time between positive topline data and commercial rollout and which countries might be most amenable?

A: Initially likely conditional approval in most territories, with readiness in place for commercial agreements; discussions ongoing with potential pharma partners outside the U.S. for territorial rights.

Q: On opaganib's primary endpoint and FDA requirements, what are you looking for and is the primary endpoint an issue?

A: Primary endpoint was powered conservatively; not a single endpoint carries the day, usually an amalgamation of clinical outcomes; FDA requirements change, and data strength will be key once data is available.