Zevra Therapeutics, Inc. (ZVRA) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of KemPharm. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to LaDuane Clifton, the Chief Financial Officer, Secretary and Treasurer of KemPharm, Inc. Mr. Clifton, the floor is yours.

Thank you, and good morning. Welcome to KemPharm's 2020 Annual Meeting of Stockholders. Today's virtual-only meeting is a live webcast. We appreciate your attendance, and we hope that this virtual meeting will maximize the participation of stockholders regardless of their location, especially given the limitations on travel and gatherings during this time. This technology enables us to reach a larger audience, while also containing our costs. Before I call the meeting to order, I'd like to introduce you to the members of the board and the business team who are with us on the webcast today. All of the members of the Board of Directors are in attendance, including our Chairman, President and CEO, Travis Mickle; our Independent Lead Director, Rich Pascoe; Matt Plooster; Joseph Saluri; and David Tierney. I would also like to introduce Jack Cadden of RSM US LLP, the company's independent auditor; and Brent Siler of Cooley LLP, the company's counsel, both of whom are available to respond to appropriate questions if needed. And so now the meeting will officially come to order. We will proceed with the formal business of the meeting as set forth in your notice of annual meeting and proxy statement. After the formal part of our meeting, we will review the company's recent business activities, and then to conclude, we will provide an opportunity for you to ask any questions you may have. [Operator Instructions] I will now provide the secretary's report regarding the list of stockholders and proof of mailing of notice. I have at this meeting a complete list of the stockholders of record of the company's common stock on April 21, 2020, the record date for this meeting. I also have an affidavit certifying that on May 8, 2020, a notice of annual meeting of stockholders of the company was deposited in the U.S. mail to all stockholders of record at the close of business on April 21, 2020. At this time, I would like to introduce Ginger Lawrence of Computershare, the company's transfer agent. Ms. Lawrence has been appointed to act as Inspector of Election at today's meeting and has taken and subscribed the customary oath of office to execute her duties with strict impartiality. We will file this oath with the records of the meeting. Her function is to decide upon the qualifications of voters, accept their votes and when balloting on all matters is completed, to tally the final votes. I have been informed by the Inspector of Election that proxies have been received for 42,430,215 of the 58,176,419 shares of common stock outstanding on the record date, which represents approximately 73% of the total number of outstanding shares. This constitutes a quorum for the meeting today, and we may now carry out the official business of the meeting. There are 2 proposals to be considered by the stockholders at this meeting. If you need a copy of the Form 10-K or the proxy statement, the links have been provided online. The time is now 8:04 on Friday, June 19, 2020, and the polls are now open for voting on all matters to be presented. The polls will be closed to voting after we go through the matters to be voted on. The first item of business is the election of 2 directors to serve until the 2023 annual meeting and until their successors are elected. The nominees for director are Richard W. Pascoe and David S. Tierney. The second item of business today is the ratification of the appointment of RSM US LLP as the independent registered public accounting firm of the company for its fiscal year ending December 31, 2020. Those are the only proposals for today's meeting. Now I will review the voting procedures. Voting is by proxy and on the Internet during this meeting. You do not need to vote during the meeting if you have already submitted your assigned proxy prior to the meeting. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Any stockholder who has already voted and does not want to change their vote, need not take any further action. Each share of common stock is entitled to one vote. [Voting]

The time is now 8:06 a.m., and the polls are now closed for voting. Now we will review the preliminary vote results. The report of the Inspector of Election covering the proposals presented at this meeting is as follows: The proposal to elect Richard W. Pascoe and David S. Tierney as Directors of the company is carried. The appointment of RSM US LLP as the independent registered public accounting firm of the company for its fiscal year ending December 31, 2020, is ratified. We expect to report our preliminary voting results or if available to us on a timely basis, our final voting results on a current report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting. If not earlier reported, we expect to report our final voting results in an amendment to our Form 8-K within 4 business days after the final results are known to us. The 2020 annual meeting of stockholders of KemPharm, Inc. is now concluded. So now moving forward, management will make a presentation regarding the company's recent business highlights and then entertain questions from stockholders. As with most presentations, the following discussions contain forward-looking statements, may differ materially from those discussed here. Additional information concerning factors that could cause such a difference can be found in our annual report on Form 10-K for the year ended December 31, 2019. And now it is my pleasure to introduce KemPharm's Chairman, President and CEO, Travis Mickle.

Thanks, LaDuane. As many of you are already aware, we provided a recent update in the shareholder letter from myself. But I'd like to highlight a few items here. First of all, with the KP415 NDA, we have received the $5 million milestone payable from an affiliate of GPC in accordance with the acceptance of the NDA by the FDA for review. The FDA has notified us that we have a PDUFA date, the action date for potential approval on March 2, 2021. The letter that contained this PDUFA date also listed a few outstanding items that the FDA would like to see. All of these were expected, and none of them were substantial. It's certainly a good indication of a positive filing and acceptance of the KP415 NDA. We've also announced recently that Corium will actually be the commercial party that will take this product forward as an affiliate of GPC. Corium is led by Perry Sternberg, who is a very strong commercializer, marketer of CNS drugs like KP415. Worked for many years at Shire, I've known him for quite a while, and I can tell you, has a great track record of success in this space. Now I'd like to briefly turn it over to LaDuane, discuss a little bit of our financial highlights, and then I'll come back to what's -- kind of what's on the horizon.

Thanks, Travis. Since last year's annual meeting, KemPharm's financial position has improved, although a lot of work remains ahead of us. We have completed a number of initiatives that we -- that have served to improve the cash runway, which now extends past the PDUFA day for KP415 and up to the debt maturity date of March 31, 2021. We accomplished this in several stages, which included reducing our expense base through a 36% reduction in workforce, the natural conclusion of the KP415 clinical program and then other cost reductions. This is a continuing area of focus for us as we continue to be diligent in containing costs. Next, we entered into the license agreement with GPC for KP415 and KP484. That agreement has allowed us to receive $15 million in upfront and regulatory milestone payments to date as well as earn development services revenue. For the first time in the company's history, we have begun reporting revenue on a consistent basis. Q1 2020 represented KemPharm's third sequential quarter of services revenue, and this trend is expected to continue into the foreseeable future. We also were able to complete the first phase of debt restructuring, which allowed us to add principle and interest payments to the principle that would be due in 2020 and therefore, allow us to preserve cash. We have more to do and addressing the upcoming debt maturity is our highest priority. We have already initiated the second phase of this process, which we believe is addressable as we work towards the potential approval of KP415. We will keep you posted as that process moves forward. Back to you, Travis.

So looking behind the recent highlights of our business, we can see several events that may be upcoming here. I mentioned before, and it was also in the shareholder letter that we do expect Corium to provide a public forum in which they will provide an update on their thoughts around the ADHD market and the KP415 opportunity. Stay tuned for that, we'll let you know as soon as that has been scheduled. Right now, Corium is actually conducting a commercial and market assessment of additional KP415 opportunities. This could include labeling expansion, additional dosage forms and other opportunity that exists out of the current profile that we have described to you for KP415 as well as they're evaluating KP484, and our Option products, KP879 and KP922, all of which seem interesting, but of course, resources and priorities are with Corium at this point. I also look forward to perhaps providing you an update in the future, the Deerfield prodrug discovery collaboration, where again 2 different molecules could be brought forward in the discovery of new prodrugs. Additionally, APADAZ, we are working closely with KVK, a lot of recent successes with the national availability of that product as well as some headway that we've had behind the scenes, and we hope to provide an update as soon as something more materializes. And the nice thing is here with the current platform, we still have the ability and the technology to build and discover additional value whether that be through or with one of our current partners, a new partner or additionally, at some point, when the resources are available, something that we could again take forward to move the company from that position. I believe now we can actually take any questions that you may have.

That's right, thank you. I would like -- I would now like to open the floor for Q&A. [Operator Instructions] So we'll give just a moment to see if any questions come into the queue. Okay. At this time, we're not seeing any questions posted through the web portal. And so with that, we will conclude the meeting. Travis?

Thanks, LaDuane, and thank you, everyone, for joining today. We are looking forward to updating you on a number of exciting potential milestones in the rest of 2020 and beyond. Thanks again for your time. This concludes the meeting. You may now disconnect.