Amneal Pharmaceuticals, Inc. (AMRX) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us. We are here to share the positive results of the pivotal Phase III clinical trial of RISE-PD for IPX-203 for Parkinson's disease. Today, we issued a press release announcing the top line findings. The press release and presentation are available on our website at amneal.com. We are conducting a live webcast of this call, a replay of which will also be available on our website after its conclusion. Please note that certain statements made during the call regarding matters that are not historical facts, including, but not limited to, management's outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Cautionary Statements on Forward-Looking Statements in our press release and presentation, which applies to this call. Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. On this call this afternoon are Chirag and Chintu Patel, Co-CEOs; Richard D'Souza, Senior Vice President of Specialty R&D; Joe Todisco, Chief Commercial Officer of the Specialty segment, Dr. Alberto Espay from the University of Cincinnati Academic Health Center and Dr. Robert Hauser from the University of South Florida Health Neuroscience Institute. They will be joined for the Q&A by Dr. Stanley Fisher, VP of Medical Affairs. I will now turn the call over to Chirag.

Thank you, and good afternoon, everyone. Before we discuss Phase III results, I would like to provide some high-level comments about Amneal. We are a diversified generics and specialty pharmaceuticals company focused on providing affordable essential medicines for patients. Since Chintu and I rejoined the company as co-CEOs 2 years ago, we are focused on improving our financial performance, diversifying our business, strengthening our balance sheet and rebuilding our R&D pipelines. A few weeks ago, we reported very strong second quarter results, the highest levels our company has delivered since 2018, and that reflects the diversity and durability of our product portfolio. Furthermore, we have rebuilt our Generics R&D pipeline and are excited about the robustness of our Specialty pipeline. Within Specialty, we are continuing to build our portfolio. We are focused on growing the business through organic growth, advancing our R&D pipeline and pursuing suitable inorganic opportunities focused primarily in neurology and endocrinology. In looking at our pipeline, we have molecules at various stages of preclinical and clinical development. We expect to launch at least 1 specialty product per year starting in 2022. With IPX-203, we will seek to extend our market leadership in this space and continue to strengthen our Parkinson's portfolio. Today marks an important milestone as we are pleased to share top line data of our pivotal IPX-203 Phase III trial. IPX-203 is an investigational product that we have been studying for some time. Based on the positive top line data plus other supportive data, we now plan to submit a new drug application to the FDA in mid 2022. I'll turn the call over now to Chintu.

Thank you, Chirag. Good afternoon, everyone. Parkinson's disease has become the fastest-growing neurological disorder worldwide. And there are approximately 1 million patients diagnosed in the U.S. As many of you know, it is a progressive disorder of the central nervous system that affects dopamine-producing neurons in the brain. It is characterized by stiffness, resting tremor, slowness of movement and impaired balance. Although it is not considered a fatal disease, it is associated with significant morbidity and disability. The average age and diagnosis for patients with Parkinson's disease is 60 years old. And as people live longer, the number of patients living with this disease is predicted to grow significantly over the coming decades. Although the combination of carbidopa/levodopa has been the gold standard of treatment for Parkinson's disease since the 1970s, it has some limitations, including increased off time as the disease progresses. While some treatments can provide patients with more on time, the quality of that on time remains inconsistent. This is where the concept of good on time comes into play. These therapies may complicate treatment regimens, which can lead to challenges with medication adherence and increased health care costs. As a result, there is a clear need for improved carbidopa/levodopa formulations to help patients function more consistently and experience more good on time. IPX-203 is a normal oral formulation of carbidopa/levodopa extended-release capsules for patients who have motor fluctuations. IPX-203 was developed with an innovative formulation that contains immediate relief and extended-release granules and mucoadhesive polymers to provide rapid absorption and maximize levodopa absorption. We believe this technology has the potential to help patients achieve more good on time with less frequent dosing. We are so excited about the potential for IPX-203 to be an innovative new treatment option for patients with Parkinson's disease. With that, I will hand it over to Joe Todisco, our Chief Commercial Officer.

Thank you, Chintu. I am very excited about our Phase III top line results and the tremendous commercial opportunity that IPX-203 now represents for Amneal. The drug delivery platform underlying IPX-203 is unlike that of any other long-acting CD/LD formulation, containing both immediate-release and extended-release granules to provide rapid absorption and maximize levodopa absorption over time. We do not view IPX-203 as merely a line extension of RYTARY. Rather, we believe that IPX-203 will be a distinct innovative therapy for the treatment of Parkinson's disease that will have broad market appeal beyond existing RYTARY patients and prescribers. Taking a step back for a moment. When Amneal acquired Impax back in 2018, we took over a RYTARY franchise that was experiencing stagnated growth. We took a deep look at Impax' legacy marketing and market access strategies, and we quickly made a number of changes. We repaired broken KOL relationships, boosted formulary coverage, rebuilt patient support and hub services and improved physician education around proper dosing conversion from immediate-release CD/LD. Those actions have led to a near doubling of RYTARY sales since 2018. While I am pleased with the results of that course correction, you don't get a second chance to make a first impression. To that extent, for the launch of IPX-203, we intend to get the strategy right the first time. From a commercial marketing standpoint, I am very encouraged by the top line results related to our primary and secondary endpoints as well as what we have seen in our post-hoc analysis for IPX-203. As I mentioned earlier, we see the market opportunity for IPX-203 being larger than RYTARY. RYTARY has been tremendously successful with current year sales trending towards $170 million despite having only 5% penetration into the broader CD/LD space. With IPX-203, we see a real opportunity here with a medication that can have broader marketability with both movement disorder specialists and general neurologists that treat Parkinson's disease. We believe that when our clinical program is complete, IPX-203's potential to provide more good on time per dose for patients compared to the standard of care will be a well-defined and understood and a differentiating factor for IPX-203 in the eyes of patients and prescribers. Now let me introduce you to the experts we have with us today who will share the successful results of the RISE-PD Phase III pivotal trial. Dr. Richard D'Souza, Senior Vice President of Specialty R&D; Dr. Robert Hauser from the University of South Florida Health Neuroscience Institute; and Dr. Alberto Espay, from the University of Cincinnati Academic Health Center. I will now turn the call over to my colleague, Richard.

Thank you, Joe. Good afternoon, everyone. I'll move to the next slide, please. The next one. I'm going to spend some time talking to you about the design of the study, and that's important because it puts the results in context so you can fully understand the results. Before I do that, let me remind everyone that this protocol was reviewed by the FDA under a special protocol assessment. And as you know, a special protocol assessment, also called an SPA, is an advanced declaration from the FDA that if the design, the endpoints and the statistical analysis are agreed to by the FDA, then they will find that study acceptable for approval. Let me go from left to right on this chart. So the patients who entered this study were on immediate-release levodopa, and were experiencing more fluctuations. Levodopa is the standard of care, it's the gold standard. And it means that when patients were on this gold standard, they were still experiencing fluctuations and the medication was not working perfectly. We then took them through a 3-week dose adjustment period where the doctor could optimize this drug, both in terms of increasing or decreasing the dose or increasing and decreasing the dosing frequency. So now we have the standard of care that patients have been on, and we are optimizing this so that we optimize the patient's target. Patients then go through a 4-week dose conversion period where they convert to our drug, IPX-203. In this phase, we restricted dosing to every 8 hours, which is 3 times a day. And we were very purposeful in doing this because our null hypothesis in this test was to test that if patients were fully optimized on immediate-release levodopa and we converted them and put them on IPX-203 3 times a day, will we still map? So this was very purposeful in limiting the dosing for IPX-203. After the 4-week dose conversion period, we split the group in two. One group was on IPX-203. The other group was on immediate-release levodopa in a double-blind fashion. And at the end of the study, which is week 20, we looked at efficacy. And efficacy here was defined as good on at week 20 compared to baseline. In this case, the baseline was week 4 at the point they were randomized. Just to provide some context in terms of the size of the study. This was a relatively large sophisticated study. We had 108 clinical sites. Approximately 50% of them were in the U.S. and 50% of them were in 7 European countries. 630 patients entered the study. 506 were randomized and 449 completed the study. Next slide, please. So the primary efficacy endpoint here was a change from baseline in good on for IPX-203 compared to immediate-release levodopa. The difference we saw in terms of the change was IPX-203 was superior to immediate-release levodopa by 0.53 hours even when IPX-203 was taken, on average, 3 times a day, while immediate-release levodopa was taken, on average, 5x a day. So let me just repeat. IPX-203, with limited frequency of dosing, was shown to be better than optimized standard of care, which is immediate-release levodopa. Let me also define good on for you. Good on is when the patient is experiencing efficacy from their symptoms without any side effects or without any dyskinesia side effects. So they're on when the drug is working. But if there's too much drug, too much levodopa, then they get side effects from the levodopa, which is called dyskinesia. And that's why with immediate-release levodopa, you get peaks and valleys and you're either on or off, and when you're on and you get too much drug and you get dyskinesia. So this study, as I pointed out, was approved by FDA under a SPA and we got a win for the study. So we're very excited with these results. We set out to run a certain kind of study, and we exactly got these results. I also want to take you through the secondary endpoints of this stage. So we measure a number of secondary endpoints. The first one is off time. Off time is when the medicine is not working. And as you can see, we were superior to immediate-release levodopa by about 0.48 hours. And this is important because you want to see an improvement in good on, which gets better, and you want to see a decrease in off time. So that number is just the [ opposite ], a negative number. In addition, we measured additional endpoints. We looked at Patient Global Assessment of Improvement (sic) [ Patient Global Impression of Change ] called PGI-C, and we look at much improved and very much improved and IPX-203 was superior to immediate-release levodopa. Now these endpoints I've talked about so far is what the patients report. This is how they feel. In these kinds of studies, you also want to know when the doctor tests the patient, what is does the doctor feel? That endpoint is called MDS-UPDRS, and sorry, it's quite a tongue twister. And this is the Movement Disorder Scale, society scale, and their version of the Unified Parkinson's Disease Rating Scale. There are 2 parts to this. Part 3 is when they measure motor effects, which means they will measure hand movements or tremor, and part 2 is when motor effects that affect their daily living is measured like can the patient get up from their chair. And the good news here is for these measures, the 2 groups were about the same. And I want to point out that this particular measurement is taken during the day when the patient has had medicine and when the blood levels of the medicine are such that they're working well. So it's done in the on position. So we didn't expect to see a difference, and there was no difference, and this is good news. So these are the results of the primary and secondary endpoint. We also wanted to understand that since the doses were -- dosing interval was different, what does this mean in terms of what happens for each dose so you can compare it on an apples-to-apples basis. And we looked at good on time per dose and good on time for doses, the benefit from the drug for each dose. And good on time per dose was 1.55 hours longer for IPX-203 versus immediate-release levodopa. So we're very happy with the results, the primary endpoints, the secondary endpoints and additional analysis all look very consistent and they're in line with what we were expecting. So at this stage, I think it will be good for you to hear from Dr. Espay and Dr. Hauser details of this analysis and offer you some charts. And importantly, they provide context of what does it mean to them, what does it mean to the patient. Dr. Espay?

Thank you, Richard. I appreciate the invitation to present the data of the results. As you can see with the next slide, if you mind moving it forward. And you'll see that what is shown here is the full 20-week data for the double-blind phase preceded by the open-label component. So on the x-axis essentially is the entire step duration that includes 2 phases, as Richard pointed out at the beginning, the open-label adjustment of IR, carbidopa-levodopa, followed by the conversion and optimization of IPX-203. And what you see in the y-axis is the mean good on time, which is the main study endpoint. As you see, the higher, the better the on time is that period within which patients can experience the best benefit from the medication. And the good on time is defined as the combination of on without dyskinesia plus, on without troublesome dyskinesia. And it is a state that we want our patients to be and that's why it was chosen as the primary endpoint of the study. So as you see, when patients are entered into the open-label extent, they are first optimized in terms of IR, and there is a benefit in good on time, which is further enhanced as patients are moved on to the IPX-203. So a major steep increase in the on time. As patients that entered the double-blind phase, as you see here, week 7, this is when patients are located to active IPX-203 and placebo or active IR carbidopa/levodopa and placebo. As you can see, the magnitude of benefit in the good on largely persists in the IPX-203 arm but undergoes decline in the IR carbidopa/levodopa, which yields a difference of just under 0.6 hours in favor of IPX-203 week 20. Next slide shows the exact opposite in the sense that we're looking at the off time. And as you would expect, if the on time goes up, the off time should go down. This is, of course, the time patients aren't experiencing the benefits of levodopa. They lower the "off" time, the longer patients are experiencing their symptoms. You can see that there is a similar reduction of off time in both arms in the open-label component of the study. But once patients are randomized after week 7, you can see that there is essentially a separation whereby the IPX-203 arm retains most of the maximum decline obtained in off time during the open-label phase whereas those in the IR carbidopa/levodopa have lost, again, about 0.6 hours or so, 0.75 hours, in fact, yielding a significant difference of between 0.5 and 0.6 hours in favor of IPX-203 by week 20. So these 2 data points suggest that the benefit has been sustained throughout the study. Most of the benefit, of course, changed during the open-label extension, which is not unusual. I'm going to pass it on now to Bob for the other elements of the study results.

Great. Thank you very much, Alberto. If we could have the next slide. So here, we have the secondary endpoints from the RISE-PD study. And in that first set of rows, we see that a significantly greater proportion of patients on IPX-203 compared to immediate-release carbidopa/levodopa reported being much improved or very much improved on the Patient Global Impression of Change scale. 29.7% of patients on IPX-203 reported that they were much improved or very much improved compared to 18.8% of patients on immediate-release carbidopa/levodopa and that yielded a p-value of 0.0015. So a statistically significant difference in favor of IPX-203. In the middle set of rows, we see results for mean MDS-UPDRS part 3 scores. This is the Unified Parkinson's Disease Rating Scale, motor examination scores performed in the on state. And not surprisingly, these weren't different across groups. These examinations are performed in the on state when medication is working whether patients are on IPX or 203. And since their examinations are done when the medication is working, it's not really too surprising that there wasn't a difference across groups. Similarly, in the bottom rows here, we have the mean MDS-UPDRS sum of part 2 and 3 score. I just mentioned the part 3 scores are a motor examination. Part 2 scores are a historical score based on motor experiences of daily living, which is asking the patient how they did doing various activities, both in the on state and off state. And again, we're just asking the patients how they did on and off. So again, it's not surprising that there wasn't a difference here depending on which formulation of levodopa they were on in that most patients in each group continued to experience at least some on and some off. Next slide, please. Okay. On this next slide, we have the post-hoc analysis looking at good on time per dose. And for me, this is the key metric that characterizes long-acting levodopa formulations. You can think of this as the duration of benefit from an administered dose. And what we saw here was that for immediate-release carbidopa/levodopa, good on time per dose at end of study week 20 was 2.21 hours, and we compare that to IPX-203, good on time per dose was 3.76 hours. So with IPX-203, we were getting 1.55 hours more good on time per dose or we can think of it as lasting 1.55 hours longer per dose. P-value less than 0.0001. So I think this is one of the key take-home messages from this study, that IPX-203 was providing benefit lasting about 70% longer per dose in this important clinical trial. Next slide, please. And on this next slide, we had the most common adverse events that we're seeing in the RISE-PD study. Recall that patients were initially in the immediate release carbidopa/levodopa dose adjustment period. And you see in column 3, the reported adverse events for these 4 adverse events there. And then patients went on to the IPX-203 dose conversion. Those adverse event incidences are in column 1. And you see that there's a slight increase there in that open-label dose conversion. And then patients went on to the randomized maintenance period where they could be on immediate-release as carbidopa/levodopa or IPX-203. And here, we see slightly more nausea and dry mouth with IPX-203 compared to immediate-release carbidopa/levodopa. But all of these figures are well within the range as we commonly see with levodopa formulations in clinical trials. So I think with that, I'll pass it back to Richard and say thank you very much.

Thank you, Dr. Hauser. So let me summarize. I want to make a few points here. As part of the summary, the first one is we are very excited. We designed a certain kind of Phase III program. We reviewed this with the FDA, they agreed to the study, and we have a win on the study. So we have a statistical win exactly the way we expected it, that this was done with IPX-203 being taken on average 3 times a day, while immediate-release levodopa was taken on average 5 times. I'm sharing top line results with you. The next step is to analyze the details of these results. So there's a lot more work to be done. We are also doing a 9-month open-label extension study for safety, which is required by the FDA. And after we complete that, we will put together our NDA and file the NDA. We expect to file the NDA sometime in the middle of next year. And the work regarding market analysis and go-to-market work has just begun with Joe Todisco's group, and we'll be working very closely with them, with Joe's team. Thank you.

Now we'll open it up for question and answer.

[Operator Instructions] So the first question comes from David Amsellem of Piper.

Okay. So I'm just going to sort of throw this out there, and this is sort of at the risk of comparing across clinical trials. But in looking at the RYTARY label, just cherry picking data points, if you look at of time, I think there's a delta between active drug and between RYTARY and immediate-release levodopa/carbidopa of about an hour, and I'm sort of looking at this study and seeing somewhat smaller delta. Again, I'm comparing across studies. So maybe if you can talk about differences in those 2 studies in terms of underlying populations or how we should just generally think about the relative efficacy of 203 versus RYTARY. And then as sort of a follow-up to that, if we're just thinking about differentiation versus RYTARY, is it really more or less a function of just the lower daily pill burden? Or is there -- are there other salient points regarding differentiation that you can tease out?

Thank you, David. Good question. So just as a context, you already said that this was not a head-to-head comparison with RYTARY. So these are 2 distinct separate study. Given that context, RYTARY is a good product. But IPX-203 is even potentially better product, which will provide an innovative new treatment option to Parkinson's disease patients. We are very pleased with our top line data from the RISE-PD pivotal Phase III study. And I'll let Dr. D'Souza to walk you through and give you some data points and the comparison of the 2 different study IPX and RYTARY. Dr. D'Souza?

Thank you, Chintu. Happy to do that. I thought it was useful, since this is an important question, instead of giving you 1 or 2 sentence answer, to step back and kind of give you a holistic answer. So what are we trying to get done here? Levodopa therapy -- optimum levodopa therapy is when you want to get steady levels that last a long time, right? So you don't get the on and off time and the swings. The issue is that levodopa has a short half-life. And when you're giving it orally, you can sustain-release it so that you get longer lasting. The issue there is that the area where it's absorbed in the gastrointestinal tract is very small. And therefore, it's very hard to give a sustained-release form that lasts a long time. So we set out to solve that problem. So let me talk about the technology. IPX-203 has the latest technology, I'm very proud of what we developed. 25% of levodopa is immediate-release because you want the fast action. 75% is in an extended-release form. That extended-release form is coated with the polymer to release drug at exactly the right rate that we want it to. But as I pointed out, it has to be absorbed in the certain segment of the small intestine. To do that, we have used polymers that allow this drug to be anchored at the site of absorption and stay longer so it's absorbed longer in a sustained fashion to give you sustained [ blood levels ]. We've tested this with pharmacokinetic studies to ensure that it's doing exactly what we wanted to do, and it lasts longer than other forms. Now you asked a good question on direct comparison. We don't have a direct comparison. It's probably not scientifically sound to compare them side by side. But as you pointed out, there were differences. Let me point out some differences, right? In the RYTARY study, which was the advance PD study, patients were told to take the drug every 6 hours. So on average, they took it almost 4 times a day, big difference. There were other differences too, in terms of the length of the study, in terms of how patients were converted, in terms of the table that was used to convert patients, but we won't get into that. So in this study, patients were asked to take the drug every 8 hours. And on average, they took it 3 times a day. So without comparing studies side by side, if you look at the 2 data, and then you account for -- the dosing is different, how do you compare that? But I think Dr. Hauser talked about this. We look at good on time and the benefit of good on time on a per dose basis, and that's kind of an equalizer even though they're 2 different studies. And we published this data, and for RYTARY, good on time per dose was 1.2 hours. In this particular study, good on time per dose was 1.55 hours. So even though we come to a direct comparison, I think we've got some pretty good indications here that, on an apples-to-apples basis, this seems to be -- to do exactly what we want it to do, and it seems to be a long-lasting drug just the way it was designed. I'm happy to pass it to Dr. Hauser to elaborate on it.

Yes. Thank you, Richard. I agree with what you said there. With regard to a long-acting levodopa preparation, what we want is a long duration of benefit. And as I mentioned in the few slides that I presented, the key metric, I think, is looking at the duration of benefit per dose. There are a lot of restrictions in these clinical trials and will be free in clinical practice to adjust the medications and apply them more frequently as needed. So in analyzing the clinical trials, I think that metric of good on time per dose is critical. And you hit the nail on the head. In the RYTARY study, we found it was 1.2 hours, good on time per dose, and with IPX-203, 1.55 hours. So that's pretty substantial. It comes out to something like a little more than 20 minutes per dose. And I think if that plays out in clinical practice, that will be a real benefit to our patients.

And David, just to close out, it's not the convenience of dosing. It's just not reducing the pill burden but it is to get a constant blood level concentration throughout the day and [ removes ] the peaks and valleys, which leads to a lot of motor fluctuations for patients. So this is a clear distinction that, absolutely, IPX-203 is not convenient on 1 less pill a day, but it brings a lot more therapeutic benefits to the patient in managing overall the motor fluctuation by maintaining the blood level concentration. Does that answer your question, David?

So the next question comes from Greg Fraser of Truist.

A quick follow-up on the dosing discussion. What's the average dosing frequency for RYTARY with the real-world prescribing? And then I had a question on just what are the difference in the dropout rate for the IPX-203 arm versus the IR arm? And if so, what were the main reasons for patients dropping off -- dropping out of the maintenance phase of the study?

Thank you, Greg. For the dosing frequency currently for RYTARY, I would like Dr. Stan Fisher, our Chief Medical Officer, to answer that.

Yes. Thank you, Chintu. We conducted some surveys on real-world evidence and see how is RYTARY used in real world? And in real world, RYTARY used 4 or 5 and often 6 times a day in order to cover an entire day. And remember, the goal of therapy is to have no fluctuations. And very often, levodopa was given as often as 8 and 9 times a day. And RYTARY was given 4 to 6 times a day. What we hope to achieve here is to achieve the same continuity with even less frequent dose, which means there's going to be less interruptions and less symptoms throughout the day.

Richard, can you answer the second portion?

Yes. The second question was on dropout rate and what was the reason for the dropout rate. And as I mentioned earlier, these are top line results. There's a lot of work ahead in terms of understanding dropout rate, in terms of understanding different sites, different regions. So there's a lot of slicing of the data to fully understand it. But of course we look at the data at this point and looking at people going from -- through the different visits and through randomization, we didn't pick up anything unusual. Most common reason for dropout rates just seems to be because they didn't want to continue in the study. I can tell you, we also looked at it in terms of pre-COVID versus post-COVID understand if there were any trends there, and they don't seem to be very strong trends there that, that changed anything.

The next question comes from Nate Rich.