RedHill Biopharma Ltd. Q1 FY2022 earnings call

• RedHill implemented a comprehensive cost reduction plan targeting $50 million in operational cost savings over 18 months, achieving a >70% reduction in cash used in operating activities in Q1. This included reducing the U.S. commercial team workforce by ~1/3 and streamlining SG&A expenses.
• The company has a robust commercial portfolio with three FDA-approved proprietary drugs, showing continued prescription growth and expanded managed care coverage.
• R&D strategy has been refined to rely mostly on external funding, with promising clinical data for opaganib, RHB-107, and RHB-204. Opaganib has broad antiviral activity and is in development for multiple viral indications, while RHB-107 showed promising results in COVID-19 studies, and RHB-204 is in late-stage development for NTM disease.

In the first quarter of 2022, RedHill's net revenues totaled $18.2 million. Movantik contributed a significant portion, with 8.6% growth compared to Q1 2021. Talicia achieved record prescription volume, with 12.8% volume growth over Q4 2021 and 80% growth vs Q1 2021. A $2 million out-licensing deal for Talicia also contributed to revenues. Movantik maintained nearly 92% payer coverage, and Talicia saw expanded managed care coverage, including improved access via PBMs.

• Target to achieve positive cash from operations during the second half of 2022.
• Expect operational cost savings of approximately $50 million over the next 18 months.
• Anticipate external funding for R&D programs through grants, industry partnerships, and participation in platform studies for programs like opaganib, RHB-107, and RHB-204.

• Market dynamics and regulatory challenges could impact the commercialization of products, especially for COVID-19 therapeutics.
• Uncertainty in pandemic trends and viral variant evolution may affect the development and approval of COVID-19 programs.
• Dependence on external funding for R&D programs poses a risk if funding sources are not secured as planned.

Q: Talk about the reduction of the commercial team and its impact on sales.

A: RedHill consolidated territories, merged sales leadership, and employed Customer Engagement Specialists to answer physician questions and reach out to white space. The reorganization was done to hit revenue targets for 2022 and 2023 while controlling costs.

Q: Thoughts on potassium competitive acid blockers affecting Talicia sales.

A: Talicia has best-in-class on-label efficacy, especially in addressing clarithromycin-resistant populations, and is expected to remain the leading brand for H. pylori treatment going forward.

Q: What is the cash runway given current cash levels?

A: RedHill has no going concern remark and is confident in its cash position to cover the next 12 months and beyond, with current cash levels supporting the cost-cutting plan and path to operational profitability.

Q: Regulatory pathway for opaganib in COVID-19.

A: The expectation is that a confirmatory study could support possible use authorization or full applications for opaganib in COVID-19, depending on the outcome of the study and the state of the pandemic at the time of submission.

Q: Funding and enrollment for RHB-204.

A: Potential external funding could accelerate enrollment and study timeline for RHB-204. The company aims to enroll the Phase 3 study within 1.5 years, with external funding potentially enabling expansion to additional territories and faster progression towards an NDA filing.