Evoke Pharma, Inc. (EVOK) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Eh Jen, senior biotech analyst at Laidlaw and Company and we appreciate you attending our KOL fireside chat event this morning to discuss an overview of the diabetic gastroparesis. The reason presented a real-world healthcare resources utilization of GIMOTI versus the oral metoclopramide as well as a brief chat about the use of GLP-1 agonist in diabetic gastroparesis patients. Today's format will be starting with my introduction, what I'm doing right now of Dr. Michael Cline, followed by a presentation regarding those 3 subjects just mentioned. And afterwards, it will be a Q&A section. For audience who want to ask questions, please type in your question on the Q&A part of your screen, and I will convey that to Dr. Cline. So first of all, we are really honored to have Dr. Michael Cline from Cleveland Clinic to provide us his analysis and discussion about these subjects. He's at the Department of gastroenterology, hepatology and the nutrition and a board certified and practicing gastroenterologist with the specialty interest in gastrointestinal mortality disorder, such as gastroparesis. He also has done researches in these areas as well. Prior to joining Cleveland Clinic, he has been taking a fellowship at the Allegheny General Hospital of Gastroenterology and took a residency beforehand at Mount Carmel Healthcare System in Internal Medicine. Dr. Cline earned his medical degree at Ohio University College of Osteopathic Medicine, and a surprise, he also was with -- that we learned that he was a musician prior to become a doctor, and he may talk more about that, I don't know. So welcome, and thank you, Dr. Cline. First, could you start the presentation of the diabetic gastroparesis in the use of GIMOTI, as well as the real-world healthcare resources utilization of GIMOTI versus oral metoclopramide and maybe cap it up with a little bit comments on the GLP-1 agonist. So, please?

Thank you so much, Yale. I appreciate it. Welcome everybody, I appreciate and let's get started. So what we hope to do in this talk today is go over the diabetic gastroparesis and talk about kind of real-world BP, as I call it, as well as utilization, we'll spend very little bit of time on the GLP-1s, but really more focused on the diabetic gastroparesis population because that's what we see in my gastroparesis clinics. So we have one of the largest, if not largest gastroparesis clinics in the country. We averaged somewhere between 2,200 to 2,400 patients a year. And the vast majority of them are diabetics, not all, but quite a few. And so we are in desperate need of treatment options for these patients, and we'll talk about Gimoti in that respect. By way of disclosure, I am a paid consultant for Evoke Pharmaceutical. And so we'll keep -- we'll keep things on label, but I am able to give my medical opinion to off labeling, but I will let you know that, that's what I'm doing when I do it. So let's start with the diabetic gastroparesis and kind of get an idea of what this disease really is. And for those of you in the audience that aren't real familiar with this illness, so gastroparesis, by definition, gastro means stomach, paresis means slower paralyzed. And in diabetes, you end up getting numerous issues with gastric emptying. Number one, chronic hyperglycemia, high blood sugars over decades, well damaged nerve endings. Their fiber is off of the vagus nerve, not necessarily the vagus nerve itself, but fiber is off the vagus nerve, resulting in loss of contractility or motion of the stomach wall itself. In addition, and this is newer information now muscles called ICC, the interstitial cells of cajal. Dr. Cajal was the first gentleman to ever hand draw a neuron in the human -- from the human. Anyways, these ICC cells are the pacemaker cells of the stomach. They're actually the pacemaker cells of the entire gut. They go from the stomach clear to the rectum. And what happens is, as you lose those cells, you lose the coordinated contraction of the stomach and intestine. And the longer you've had diabetes, the less it's controlled, the more cell damage you get and actually, these cells are destroyed. And they're not -- as far as we know, replaceable or reproducible. Once they're gone, they're gone. The last part of the gastric company, which is also very interesting in diabetics specifically is -- now when you try to eat or drink something, your something has to relax. It has to expand to let the food or water in. In diabetics, specifically, that accommodation as it's called that expansion doesn't happen, which leads patients to filling up quickly when they eat or drink something, feeling like they've eaten a Thanksgiving dinner when they've had 2 bites of food or 5-ounce of water. That's an accommodation issue, which is somewhat unique to diabetic gastroparesis. Other types of gastroparesis to get it, but nowhere near to the degree of diabetics. The last part of this then is also blood glucose issues. And that is -- it's a double-edged sword in the sense that -- it's hard to control blood sugars when your stomach does not empty well because it's hard to time the medication insulin, for example, with your intake. Normally the diabetics [indiscernible], you eat food, you take your insulin. Well, that's fine if your stomach is emptying normally. If it doesn't empty normally, then the next thing is, you have a spike in your insulin, your blood sugar plummets, so now you get sick. So you eat something to raise the blood sugar, but then your blood sugar skyrockets because the insulin is gone. So you're always kind of chasing your tail, trying to catch up with your blood sugar based on stomach emptying. Classically, the gastroparesis symptoms are nausea, voting and early satiety that filling up quickly followed by postprandial fullness and abdominal pain and bloating. A lot of times, we see gastroparesis patients, especially diabetics because of the loss of those ICC cells, they will also have significant constipation. So a lot of the bloating may be lower intestinal [indiscernible]. [indiscernible] in the most 4 or 5 years, greater than 60% of the gastroparesis [indiscernible] cases actually diagnosed [indiscernible]. And here's one of the problems, and that is these patients utilize our health care system and utilize it a lot, and it becomes very expensive. Can you hear me all right?

I'm hearing all right now. It was a little bit.

Okay, so these patients utilize our healthcare system a lot. And in the sense that they have at 2.5x more ER visits and inpatient hospitalizations [indiscernible] without GP are really sick. They were admitted at least 4 times a year for nausea, vomiting and dehydration. That is unrelated to their blood sugars that is related to their gastric emptying. Well, across the United States are getting hammered on is readmission rates. And it's one of the things we talk a lot about in all of our administrative meetings is these readmission rates and how to decrease readmission rates. And in a separate study done just a few years ago, 2022 or 2018 and then repeated in 2022, it was a 30% readmission rate within 30 days for a diabetic gastroparetic patient. So we're left with how do we treat these patients. And this is kind of where GIMOTI falls in. So there's been a drug called metoclopramide or Reglan that's been around since 1974. It came out of France, and it's an oral medication in pill form as well as liquid. The problem is if you have a stomach that does an empty well, but may not get out of the stomach and may be very useless in the patient, they may not experience it. So Gimoti was developed in [indiscernible] to try and combat that loss of efficacy. So the advantages of the nasal delivery system is you get predictable and very rapid absorption through the nasal mucosa directly into the blood stream. Much more rapid onset of action to the target organ of the stomach and you bypass the liver first pass metabolism which occurs [indiscernible] through the bloodstream, through the gut. And then what you get is considered many patients and physicians have had about Reglan, about metoclopramide, that the therapeutic benefit varies. Well, it varies because we're not sure how it gets out of the stomach. So you might take a pill in the morning and it won't empty out of the stomach and both of them empty out of the come. Now you've just overdose. So initially, you got no response. Now you've got a side effect because you're overdosing. The nasal approach avoids all of that. So in addition to this, there was a study done in how many nasal medications we're using in the United States, and they looked at 2000 to 2010 and then 2010 to 2020, and the number of nasally administered drugs tripled in 10 years. So the public is becoming very comfortable with nasal inhaled medications. In a survey of -- in the Phase II trials during GIMOTI'S Phase II trials, 98 patients [indiscernible] 74% of the patients in the study preferred the nasal spray over any other way to take the medication. [indiscernible] actually wanted the nasal spray [indiscernible] vomiting and when they try to get sick, including medication. So they all -- 74% of them actually preferred the nasal spray over the oral choice. Let's talk about [indiscernible] delivery system is and how much better the patient does. So this was a study done looking at 1, 2, 3 and 4 weeks. And what we looked at was the symptoms of all GP symptoms, nausea, vomiting severity of illness in other words. So a significant difference in week 1, week 2, week 3, was starting to show a change. By week 4, there was not a statistical significance. But the patient got better, much much quicker with the nasal spray. And that's really the key, especially if they're in an ER or a hospital, you don't want them readmitted in 30 days. You want them better in a week. So they're not coming back to your ER. The other thing is that the number used to determine this improvement is what's called the GCSI score. And if you see on the box on the right there, it says patients in the post [indiscernible] analysis had a baseline score of 2.7, 0 meaning no symptoms, 4 meaning severe symptoms, so moderately severe patients. They weren't simple patients to treat. But a significant improvement clear up to week 3, and that's really what we're looking for. We're looking at the patient wants to get better quickly. They don't want to have to take a medicine for 2 months before they see a response. So here's what GIMOTI looks like. It's indicated for the relief of adults with acute as well as recurrent diabetic gastroparesis. And this disease is what we call relapsing disease. It's not a disease that goes away. It's always there. But there will be acute exacerbations followed by a baseline of illness. And unfortunately, that baseline of illness is not a good place to live. So it's even worse when they get sick acutely. There is a black box warning on this drug due to previous incidents of tardive dyskinesia. And what we have identified is you don't want to treat them for longer than 12 weeks, take a break and then restart the drug. But the tardive dyskinesia risk, and we'll talk about that next. But the tardive dyskinesia risks and the risks of Reglan have been way over reported in the literature and actually way overestimated. So in the studies on GIMOTI, during the study, there was no evidence of tardive dyskinesia reported. And there have been no studies -- I was going to say no TD cases reported since its launch. We use it appropriately, and that's the key with all physicians. We should be using drugs appropriately in the right patient. So who shouldn't we use GIMOTI in? Well, obviously, over age 65 increases the risk. If they have significant kidney dysfunction, that increases the risk. If they're already on drugs that could cause tardive dyskinesia or already have tardive dyskinesia, obviously, that's not a good patient. And the actual incidence of tardive dyskinesia in Reglan or metoclopramide or GIMOTI patients is less than 1%. The estimates is 0.9%. There was a recent analysis that were down to 0.03%. So it's actually way over reported for the actual incidents. There are numerous drugs on the U.S. market that have a much higher incidents of tardive dyskinesia, and that is why there's other drugs out there now that you see advertised on TV all the time for tardive dyskinesia control because those drugs have a significant incidence of TD unlike this category of drug. Well, it's more important, I think, especially as we get in -- we're getting into and we are already into the managed care system and healthcare utilization costs, right? We all have to be confident of that question in the healthcare system because of how expensive it is to take care of patients. And we're all getting older. We have an epidemic of diabetes in the United States, and we're going to see a lot more patients with diabetic [indiscernible]. There's a question, I'll answer it real quick since it pumped up on my screen. How often do we see TD patients with using metoclopramide. The answer is not very often, very rarely actually, and if [indiscernible] the drug, and that's the appropriate approach as if they have any evidence of TD, you stop the drug. You don't ever restart it. Even if it's transient, you wouldn't want to restart it. We're a world health utilization. So let's take a look at this. So this was a very large retrospective review, 514 patients. They were all over age 18, 2 different -- they had to have at least 2 insurance claims with the diagnosis of gastroparesis at least 30 days apart. One [indiscernible] with diabetic gastroparesis. And then they had to show a fill of GIMOTI and oral metoclopramide in that time period, and it was greater than 6 months pre index and greater than 6 months post-index claim history. They edge match the GIMOTI versus oral Reglan. By sex, age, region, payer, comorbidity index that Charleston co-morbidity index is a score looking at other health issues with the patient and then diabetic gastroparesis severity scores. So a very well put together study. And here's what we found. What we found was that patients who were treated with Gimoti, had a tremendous reduction in essentially everything. But what I really want you to focus on are the physician office, the inpatient hospitalization and the emergency room. And that is that they had a drop by 36% for nausea, vomiting, in reports to physicians' offices, a 68% reduction in hospitalizations for nausea and vomiting. Remember at the beginning, I told you, the average person had at least 4 admissions for a year just for nausea, vomiting, and dehydration if they have diabetic gastroparesis. So 68% reduction in that and a 60% reduction in ER utilization for nausea and vomiting when they use GIMOTI. Tremendous healthcare savings as well as lifestyle improvement for these patients, quality of life is significantly better in this patient. Let's go back one slide. They also looked at this at all cause. We don't have that slide, but at all cases. And they looked at improvement across the board also in all of these areas for all symptoms, not just nausea and vomiting, but nausea and vomiting obviously is the key symptom the patient worries about what we presented that. What we're going to do real quickly here is go over the literature, at least a couple of slides here on GLP-1s because they are a phenomenal drug for diabetes control. And there are some issues with them. So we know that GLP-1s based on the therapies of glucose, they control blood sugars extremely well. It does say in all of their package inserts that it does slow gastric emptying. And we know that. And it is a study done by -- there was a general study that was published in 2023. And GLP-1 agonists use compared to [indiscernible] associated with an increased risk of pancreatitis and gastroparesis with a 3.6 HR, confidence intervals were good. The incidents per 1,000 for semaglutide is 9, liraglutide 7 and buproprion-naltrexone is 3. And what I'd say about that is you have to balance out diabetic control versus stomach. And as I sit with a patient, I had a patient today who has uncontrolled budgets for years, decades, had gastroparesis even before they started the vision on a GLP and then came to me because she got sicker on the GLP, which is not surprising, it's going to slow the study down more. However, her A1C, I was telling the group before we started, her A1c was 20 before she got put on the GLP. Her A1c now is 6.9. Her diabetes isn't going to kill her with an A1c of 6.9. If they would have left at an A1C of 20, it wouldn't matter what her stomach was doing. She would have died of diabetic complications. So we will treat the gastroparesis because this patient had diabetic gastroparesis even before the GLP was on board. Obviously, with Gimoti to start this. Yes. So the GLPs are there. They do cause issues. But you really have to balance it out to -- we must get these diabetics controlled. Their sugars have to be controlled. There was a study done 4 years ago looking at sugar control and they used diabetics and nondiabetics. And they found that the diabetic stomach is actually more sensitive than a nondiabetic stomach. With a blood sugar of 185, the stomach starts slowing down on its own even without permanent damage. So when these patients have an A1c of 7.5 or 8, they're already at that level, and there's stomach may be slow just because of hyperglycemia. So in my idea is let's get these blood sugars under control, get their diabetes to be controlled, presenting long-term complications, and we'll deal with the stomach part of this, that's not a problem. So that was a very rapid overview. I wanted to give time for questions and discussions, and we'll open it up. I know you had some questions already preloaded there yet.

Sure. First of all, thanks for the very insightful presentations. And I'm going to take advantage of the Q&A at the beginning to ask some questions. First of all, just about your projects, I'm just wonder that on average, how many gastroparesis patient you yourself treat, let's say, per month. And you mentioned a little bit that Cleveland Clinic are treating 2200 to 2400 patients a year. And you have any general comments on that, and then we'll have some follow-up.

Sure. So the clinic -- basically, the clinic, myself, I have [indiscernible] I work with. We have a dietitian that's gastroparesis trained and then we have a behavioral medicine, Ph.D. and a GI psychologist who is a PhD. We do a lot of virtual visits on patients. We see them once in the clinic and then follow up virtually. The patient profile is predominantly a mix of diabetic gastroparesis, which tends to be in the older population, above age, let's say, 35 or 40. Typically, the patient would have to have diabetes for at least 10 years and have at least 1 or 2 other complications prior to getting gastroparesis. And then there's the younger group of patients, the teenage young adults, women, predominantly that have the autonomic dysfunction. We have seen the on-slot of COVID-induced gastroparesis patients all across the country. That is happening also. More common [indiscernible] in one study done last year, COVID-induced gastropresis is more common in diabetics than nondiabetics. But we see quite a few COVID patients every week, post-COVID patients. They've had gastroparesis for a year or so after. Since the COVID started, they got sick 2 years ago and the gastroparesis has been there ever since.

Okay. Great. That's very helpful. And so let me sure I read it correctly. So roughly 2,400 patients overwhelming majority will go through you or related to your [indiscernible].

Right. So some of them actually will have previous surgeries on the stomach. That obviously is all separate group. I don't tend to see those, they go to my surgery partners, but yes.

Right. So overall, you guys are -- certainly one of the largest practicing institution that is treating gastroparesis in this country.

Right.

Then my next question is that -- what might be your treatment decision based on the different severity level of the patients and the other factors to take different treatment for the gastroparesis patients?

Sure. So when it comes to diabetic gastroparesis, I base my treatment options essentially on symptoms. The gastric emptying test by definition, would -- has to be positive where they don't get into my clinic -- so they all have abnormal gastric emptying tests before they get here. But really when GIMOTI was launched, the literature and the data is so strong. This was way before the health care utilization stuff came up that we were kind of stuck using Reglan or erythromycin off-label and Reglan is on label, obviously, but erythromycin off-label. The domperidone, there was a question actually, I'll answer that question that's in the chat now. On domperidone, question was asked how many patients are on domperidone, I have zero on domperidone. The Cleveland Clinic opted out of the federal mandated program to write for domperidone, it's also not covered by any insurance and it's expensive. So we -- I've cut writing for domperidone. I've not written a prescription for domperidone in 4 years. So when the nasal spray came out, it really changed how we do this. I used Gimoti exclusively in my diabetic gastroparesis patients, especially those patients that have high nausea and vomiting scores. Because like I showed you that one slide, the nausea and vomiting decreases dramatically in the first week or two. And so the patient leaves here realizing they're going to get better much quickly.

And okay, great. That's helpful. And given you have a very large practice, you have some estimate that what percentage of a patient might be suitable for GIMOTI, and what's the real world -- I mean what's your current situation -- current [indiscernible]. ,

Right. So we're -- there is a shift across the country and not just in my clinic, but there's a shift across the country. It used to be, let's say, 80-20, 80% diabetic gastroparesis coming into our clinic and 20% nondiabetic. That shift is getting more evenly split, but still if you look statistically, probably a predominance of diabetic gastroparesis, maybe in the 55% to 60% versus 45%, 40%. But the diabetic population, I think there's lots of reasons why the shift may be happening, it's still a large volume of patients, don't get me wrong. There was one estimate over 4 or 5 years ago that said over 1 million patients in the United States probably have diabetic gastroparesis and don't know it. They don't -- haven't been tested. They don't go to their doctor and complaint of symptoms. That's an estimate, nobody really knows if that's true. But -- when I look at treatment options, we obviously want to try medication first, saving the surgical procedures for next. A lot of times, it's a lot less invasive, especially as a diabetic. You don't want to be -- you don't want to have to do surgery on a diabetic if you can avoid it. But we do offer them a lot of other options in addition to the medication.

Okay. So certainly, medication, at least for diabetic patients, the medication is much more preferable than other more invasive procedures.

Correct. That's a lot less risk overall -- when you're talking of surgery [indiscernible] infection, anesthesia, a lot of these people already have heart disease, kidney disease -- things like that.

Right. And the comorbidity certainly could be an issue as well to consider. And with the recently reported the real-world healthcare resources utilization results at the American College of Gastroenterology last year, which are one of the authors and do you see this -- the fields that -- or your colleagues start shifting to prescribing GIMOTI more and both probably you or your institution. So your colleague -- your peers outside of your institution as well as maybe in the more smaller clinics.

Yes. So we are seeing and actually have recently seen several patients coming in already having been on GIMOTI or on GIMOTI -- and I will say this, and I don't blame the gastroenterologist for this because if I was in a small community, I wouldn't want to have to handle a gastroparesis patient because they are very time consuming, but they will start the patient on GIMOTI, and then refer them to us. And I'm okay with that. That's fine. I don't mind taking over the GIMOTI prescription, for example, or offering the patient other options if the patient wants to discuss other treatment options. Yes. So we are seeing that [indiscernible] the private gastroenterologists are starting to realize that -- and I was in private practice before I came to the clinic, too. I did [indiscernible] in my private practice, but what a lot of times private practice gastroenterologist's mentality is this patient is time-consuming for my staff. They're constantly calling being sick, they're constantly tying up the messages. They're constantly leaving my chart messages or phone calls that they're sick. And those kind of patients, they bogged down to practice, that's very busy, so they want the patient referred to a tertiary care center like ours. And I'm okay with that, that's why we're here.

Right. And -- in your experience, obviously, it varies patient by patient. But do you start to not just initially treat it with GIMOTI, maybe have refills and have more refills. Do you start to see more of that happening other than -- in addition to the new patients or new prescriptions?

Yes, I don't have a lot of data on that. In our practice, we've not had very many patients that want to come off of it once they use it. That's number one. So once they're on it, and there's a question that was posed, it's a very good question, 2,900 units of GIMOTI sold in 2023. There's 16,000 practicing GI docs. Three reasons for that, to be honest with you. Number one, a lot of practicing gastroenterologists when they make a diagnosis of gastroparesis, they wash their hands of the patient. And I hear that from patients all the time. I had a patient today actually tell me her private gastroenterologist said, "Oh, you have gastroparesis. I don't know what to do for you, go see somebody else." And that was his exact words to the patient, he wasn't comfortable. So a lot of the disparity in the number of gastroenterologists versus treatment, to be honest with you, is education. It is education of the general gastroenterology population. Even here at Cleveland Clinic, for example, I'm the only gastroenterologist specializes in GB. My general GI partners do not want to treat gastroparesis patients. So that's true out in the community GI also. And again, I don't blame them, they're difficult patients to treat. And so they don't want to be tied down with them. But we hear that a lot. And that's true all over the country and the centers that treat GB, like Mayo, like Johns Hopkins and Mass General in Boston and Texas Tech, and is the reason the clinics are overwhelmed with diabetic gastroparesis or gastroparesis [indiscernible] is the regular gastroenterologist out there do not want to treat this disease. They want to [indiscernible] reflux and treat Crohn's.

So at this point, I assume you would anticipate that with the publication of that or reporting of that analysis as well as potential greater promotion by the company. For GIMOTI, you anticipate more usage going forward because of the intrinsic benefit of GIMOTI in treating gastroparesis. Is that right?

Correct. Yes. Yes, I would think so. I mean I know and there's other things -- the other thing is -- and this is true, as I'm sure a lot of people in the audience may be aware, I look at it kind of along the same lines as technology, right? There's early adopters and late adopters. And I think the early adopters are people like me that have gastroparesis clinics, who are comfortably treating the disease. And then there's late adopters who go, "Oh, wait, I have a patient that saw this clinic is now on this drug. What's this drug all about." So it's got to get filtered out and I think the other thing that it has to be filtered out too, which is a monumental task is endocrinology. It's got to get filtered out to the endocrine doctors who are the diabetic specialists, right? That look, -- if you have a patient with these symptoms, they need worked up for gastroparesis. And if they have it, here's the choice that you should be using or at least get them to a gastroenterologist that knows what they're doing with this disease and treat them. Because I think a lot of times the patient. By the way, the average patient out there, the average patient has had symptoms for over 2 years before they get their first gastric emptying test, 2 years [indiscernible].

And you mentioned earlier during your prepared remarks that -- this seems to be an underdiagnosed condition, is that right? Both in general and maybe even in the diabetic patients, so I assume greater awareness may be needed for patients be more cautious about what their condition and the seeking treatments for that.

Correct. Yes. And it's basically awareness. It is -- I think it's very -- it's sad to some degree because I hear this a lot from my patients that the patient walks into the physician and says, "I think I have this disease, can I have this test." Yet the physician hasn't even brought up the -- doesn't have a red flag in their head that says needs to have a gastric emptying test. And it's the kind of thing is -- if the patient has the right diseases, it should be one of the top things on your list. If they're diabetic and they're not controlled or they're controlled, but they've had diabetes for 20 years, they're at a huge risk of gastroparesis.

Right. Maybe some of the [indiscernible] already tolerated discomfort and not really understand there's solutions to that.