Jaguar Health, Inc. (JAGX) Earnings Call Transcript & Summary

Good day, and welcome to the Jaguar Health Investor Call. Today's conference is being recorded. Before I turn the call over to management, I'd like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product and technology initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on currently available information and management's current assumptions, expectations and projections about future events. While management believes that its assumptions, expectations and projections are reasonable in view of currently available information, you are cautioned not to place undue reliance on these forward-looking statements. The company's actual results may differ materially from those discussed in this call for a variety of reasons, including those described in the forward-looking statements and Risk Factors section of the company's Form 10-K for the year ending December 31, 2020, which was filed March 31, 2021, and its other filings with the SEC, which are available on the Investor Relations section of Jaguar's website. Except as required by law, Jaguar Health undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise. At this time, it is my pleasure to turn the call over to Lisa Conte, Jaguar Health's President and Chief Executive Officer. Lisa, the floor is yours.

Okay. Thank you very much. Thanks all for joining. My name, as you heard, is Lisa Conte, I'm the Founder and the CEO of Jaguar Health. And I'm always excited to speak about crofelemer progress and the potential for crofelemer to benefit even more patients. This is a discussion of value and values; stakeholder value and company culture values. Crofelemer, which is Mytesi brand name in the U.S., approved and, of course, the labeled indication for the symptomatic relief of noninfectious diarrhea in adult patients living with HIV/AIDS on antiretroviral therapy. Mytesi is the core asset from which we can continue to build value for Jaguar shareholders and all stakeholders. What is the foundation of that value? Crofelemer is an FDA-approved product and an FDA-approved product for chronic use with a chronic safety profile. That's quite an asset and quite an achievement that approximately 1 in 2,000 biotech companies is able to achieve from their discovery platform. To paint the picture of the Mytesi story, it starts with a tree growing in the rain forest, for this picture, let's say, in Peru. We have collaborated for over 20 years with exclusive suppliers, businesses led by foresters working in the rainforest, who have, during that time, also engaged in reforestation activities. They harvest CPL, which is crude plant latex from the bark of a tree. For each tree harvested, 2 new trees are planted, all in the beautiful setting of the outdoors surrounded by the sounds and smells of the rainforest and often the tributaries of the Amazon, such as the Napo River as well. That material has been loaded into 30-gallon drums, shipped to India, processed under good manufacturing practices, manufacturing practices to crofelemer. Also, interesting surroundings on that journey to India. Then shipped to the United States, Cincinnati, to be put into final pill formulation bottled and on its way through the U.S. warehousing distribution and patient access pathway. This one tree has provided relief to patients across America living with HIV/AIDS and GI distress. These are all stakeholders along the pathway as well. How do we expand that? Crofelemer provides Jaguar with multiple shots on goal. That value enhancement comes from access to potentially hundreds of millions of patients who could benefit as crofelemer gets developed and potentially approved for multiple pipeline indications in multiple geographies around the world. And it is risk mitigation to have several different patient pathways to get there. With crofelemer, the team at Jaguar and Napo Pharmaceuticals, our wholly owned subsidiary, is skilled, nimble and inspired to address some of the distress in the current pandemic. Up to 47% of acute COVID-infected patients deal with diarrhea. A recent publication, scientific publication, just put the figure for a group of long-haulers suffering from diarrhea at 59%, and indicated an association between diarrhea as a symptom of the impairment of particular organs. This study was conducted in Europe, which, for various reasons, seems to be more proactive in addressing therapeutics, symptomatic relief therapeutics and repurposed drugs -- drugs already approved for another indication to address these emerging health needs from COVID and add value to patients' lives, and that's really the most important value. The mission and commitment of this company and this remarkable asset, crofelemer. Our internal values as an organization will undoubtedly lead to value for all our stakeholders. I'm pleased to present the interview of me and Josh Mailman, the lead sponsor of Dragon SPAC, a well-known impact investor, well-known to the company, been involved supporting the company for over 20 years, on Innovators with Jane King. We seem to have a series going along with Jane that speaks to the progress we're making with Napo EU, our wholly owned subsidiary, recently incorporated in Italy and the development of crofelemer for our planned COVID-related indication. I'm now going to ask Peter, my colleague, to get the video playing, and I'll come back and make some final comments. Peter? [Presentation]

It's wonderful to see you again and to talk about the progress that we've been making at Napo EU and very specifically with crofelemer. Crofelemer is the active ingredient in Mytesi and is being licensed from Napo in the U.S. to Napo EU for an initial indication -- development for an initial indication of COVID-related diarrhea. The progress that we've made is that we've now had a meeting -- we've met with national regulatory -- drug regulatory authority. And we were able to have agreement that COVID-related diarrhea and, in particular, in an acute patient population, is an unmet medical need, which means we qualify now for a conditional approval halfway by the EMA, an accelerated approval pathway, an accelerated clinical program. And that was sort of a go, no-go situation for the business plan, the business model of Napo EU. So we're now moving forward. They asked for us to provide a protocol synopsis, which we provided for an accelerated clinical program. We have agreement also that the patients can be included outside of the EU. So if you think about the pandemic that's raging in India, that's raging in Brazil, so for rapid patient enrollment. They also agreed that we don't need to have a comparator. This will be placebo-controlled, which is an indication that opioids, the risk of constipation from opioids are not considered suitable for this situation. And then finally, there was a bit of a gift, which is the unsolicited product that we could take the package that we have for approval in the United States. Mytesi is approved in the United States for HIV-related diarrhea. That also could be submitted under a conditional approval pathway without additional clinical work. So we now have a pathway for our business plan to potentially have approval of crofelemer in Europe by the end of 2022 and, of course, subsequent to that, the patient benefit that could come from that.

Sure. Now as the pandemic in vaccinations progress, how does that affect the patient population?

So we have the acute patient population, which is still popping up with waves, third, fourth waves, whatever wave we're in, in certain areas of Europe, certain states within the United States. Of course, as I mentioned, India, Brazil, other South American countries, and that's the acute situation. And then we have the long-hauler situation. And the numbers are still emerging here. This is a syndrome that is still trying to be defined. It's a constellation of symptoms, which include gastrointestinal issues, the most common of which is diarrhea, the brain bug that you've heard about, the [ T ] arthritis-type symptoms. It's still unknown exactly what this is all about. It looks like in an overreaction of the immune system, a dysregulation of the sympathetic nervous system is what has been reported recently. But when you think about the numbers, 25% is the number that is batted around on the low end of number of people in the world who have been [ inborn ] in Europe who have been infected with COVID. The numbers are about 30%. We'll be dealing with long-hauler. About 30% of those will be dealing with GI symptoms, of which diarrhea is the most prominent. So you put all that together, you're talking about 50 million to 100 million people just in Europe, who could be dealing with long-hauler symptoms. And we don't know at this point how long long-hauler is. So we're in there for the long haul. It should be said, though, Napo EU will have the opportunity to develop all indications of crofelemer. So it's within its business model to take that opportunity on for other indications as well.

Now does Natural EU operate independently?

So at this moment, we're incorporated. It's still run by Jaguar, which wholly owns Napo EU. Napo EU will be standalone. So we are in the process of 3 key hires, medical regulatory and a chief -- basically a President and Managing Director. We've brought in marketing consultants to help us with the sequencing and prepare to launch the product, which would presumably could be at the very end of 2022, if all goes well with the conditional approval pathway, so will operate on its own. And we would expect to have funding about the time that we're starting clinical trials, hopefully from the pathway that we're working with, with the SPAC, where we are the named target of the European SPAC and do have a memorandum of understanding there.

So Josh, I think that transitions nicely to you. So can you explain your role in this with Dragon SPAC?

Yes. Basically, yes, I have known Jaguar Health and been involved for many years. And the opportunity emerged to effectively create a new entity in Europe, which is not an uncomplicated process, and it has certainly been complicated by the fact that we're -- we've been in the middle of COVID. Everything has slowed down as many of us have seen in -- from construction to getting SPACs off the ground. The SPAC world is new to Europe, so kind of following on much of the work that's gone on here. But we've been proceeding a pace. We hope that everything will be together, and we will be ready to go by, before the vacation period begins in Italy. We have a lot of interested investors in the Jag and Dragon SPAC, some of whom have history with the company, some of whom have relationships with Italy. And so we're very enthusiastic about moving forward. And I'm fully supportive of the -- as a sponsor of the Dragon SPAC, and we're excited to get in the market.

How are you feeling about the timing of the transaction?

I think -- well, what I should say is I think, hopefully by the end of June, we would hope to be in the market. There's certainly -- again, as I said, these things are -- take more time than you think, but I think that's a pretty good estimate from where we are right now. It has nothing to do with money. It has to do with paperwork and bureaucracy.

Yes. I can only imagine the complication so thank you. And Lisa and Josh, I hope you come back when this actually comes to fruition, and we can get an update. That would be great.

You got it.

Of course. We'd be happy to.

We're moving up [indiscernible]. Thanks, Jane. [Audio Gap] Before itself, we'd like to get your day started. As many of you may be aware, Jaguar's Annual Meeting of Shareholders is scheduled for May 13, 2021. Stockholders who held Jaguar's stock at the close of business on the record date, which is April 12, 2021 are entitled to and are being requested to vote. We hope all of you -- who are entitled to vote do so and in accordance with the recommendations of the Board of Directors of Jaguar. We greatly appreciate your support as we continue efforts to grow sales, progress multiple possible follow-on indications for crofelemer and Mytesi, and an unwavering focus on patients in need, particularly during this crazy pandemic time. With the interesting outreach we get from individuals on many topics and often rainforest-focused topics, we are building a Jaguar health community. So please do follow our post on the newly launched Jaguar Health community site on Instagram. That concludes our webcast for today. Please be safe. Be well, and thank you again for your interest and support of Jaguar Health, Napo Pharmaceuticals and Napo EU. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.