Jaguar Health, Inc. (NASDAQ:JAGX) Q3 2023 Earnings Call Transcript

Jaguar Health, Inc. (NASDAQ:JAGX) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Good morning. 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 Contenued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends, and product initiatives, including products in the development stage which may not achieve scientific objectives or meet stringent regulatory requirements. Forward-looking statements are subject to risk 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 of future events.

While management believes 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 during this webcast for a variety of reasons, including those described in the forward-looking statements and Risk Factors sections of the company’s Form 10-K for the year of 2022, which was filed March 24, 2023, 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 undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events, or otherwise.

A scientist in a lab coat holding a vial filled with a blue glowing liquid, representing the clinical-stage biopharmaceutical company’s research in rare diseases.

Additionally, please note that the Company supplements its condensed consolidated financial statements presented on a GAAP basis by providing non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which Company management assesses and operates the business. These non-GAAP financial measures should not be viewed in isolation or as substitutes for GAAP net sales and GAAP net loss, and are not substitutes for or superior to measures of financial performance in conformity with GAAP. Today’s conference is being recorded. At this time, it’s my pleasure to turn the call over to Lisa Conte, Jaguar Health’s Founder, President and Chief Executive Officer.

Lisa, the floor is yours.

Lisa Conte: Thank you very much. I’m glad we didn’t miss that opportunity to hear the very important forward-looking statements. Thank you all for joining. My name is Lisa Conte, and following my comments this morning, Carol Lizak, our Chief Financial Officer, will provide a detailed recap of the key financial results for the third quarter of 2023. Although I will preempt Carol to say that we’re pleased to report that net revenue increased 5% in the third quarter of 2023 versus the second quarter of 2023. However, this is a momentous time for Jaguar and hopefully a momentum time. The most important takeaway from today’s webcast is regarding the potential opportunity to expand the current indication of our FDA-approved product Crofelemer, under the trade name Mytesi, from the current specialty indication of non-infectious diarrhea in adults living with HIV/AIDS on antiretroviral therapy, specialty is a very important indication.

See also 20 Most Valuable IT Companies In The World and 12 Best Value Stocks To Buy Heading Into 2024 (Picked By Seth Klarman).

Q&A Session

It was fast tracked priority reviewed by the FDA, though it’s a relatively small indication in the United States. And we’re looking to potentially expand it to the much more profound and frankly much larger neglected need for the preventative treatment of diarrhea in adult cancer patients with solid tumors receiving targeted therapy with or without standard chemotherapy. Topline results from our pivotal Phase 3 trial, referred to as the OnTarget trial, which is investigating safety and efficacy for this indication of Crofelemer, are expected to be out before Thanksgiving 2023, so literally around the corner. This trial is studying an indication we also refer to as preventative treatment of chemotherapy-induced overactive bowel. If you’ve ever heard the terms chemotherapy-induced nausea and vomiting, chemotherapy-induced pain and neuropathy, chemotherapy-induced overactive bowel, which includes symptoms such as unpredictable and/or chronic debilitating diarrhea, looser watery stools, and urgency.

We believe Crofelemer represents a paradigm approach and mechanism of action, a new way of treating and potentially preventing treatment-limiting diarrhea, cancer treatment-limiting diarrhea associated with cancer therapy in these patients. And this varying in terms of the potential patient benefit, for patient comfort, patient dignity, potential patient quality of life, and the opportunity to expand dramatically the number of people that can access and benefit from Crofelemer. I’ve recently been conducting a listening tour of patient advocacy groups, particularly the metastatic cancer patient population. The metastatic patient voice is becoming more and more prominent. They’re living longer, five, 10, 20 years, with the amazing breakthroughs in targeted therapies.

So, as I’m hearing and learning at what cost to quality of life with side effects from cancer therapies, targeted therapies they will be on for the rest of their life. I had the founder of a cancer patient advocacy organization tell me yesterday that she has no doubt most of her patient members would prefer to have a shorter survival time with less severe side effects. In fact, a patient and caregiver survey that was published this past August in the Journal JCO Oncology Practice, indicated that quality of life was the number one topic of importance to patients. Quality of life ranked higher than survival, ranked higher than access to care, ranked higher than cost of care. What are some of these side effects? More than 80 targeted cancer therapies are FDA-approved, many of which cause diarrhea in 50% to 100% of patients.

In addition, cancer patients suffer from pain, neuropathy, muscle cramping, nausea, fatigue, alopecia, rashes, itching, and more. Patients want to live, not just exist, and at the same time recognizing that their lives are likely to be different. As an example, one patient I spoke with has unpredictable diarrhea incontinence. She almost didn’t know if it should be called diarrhea because it doesn’t happen to her every day, not even every week, which is another issue, trying to gain a common understanding of the definition of diarrhea. Anyway, the unpredictability causes her to wear a diaper when she leaves home. She also mentioned when she’s on a long Zoom call anyway, when she leaves home, she feels particularly vulnerable when she’s walking for exercise, which used to be a daily activity of hers along with her friend hiking tribe.

However, a common story that I hear is that friends without cancer can’t face the reality of their now metastatic friend and often find excuses to not be there. So, this woman had a bit of a happy story, for animal lovers. She got a dog to hike with, Herman. We know dogs don’t mind stinky things, so she’s comfortable with the unpredictability when she’s with Herman. This is patient reality, diapers and dogs. When clinical studies refer to manageable toxicities, patients ask, manageable for whom? You can hear more of my patient quality of life stories from a video podcast series I initiated in which you can view on Jaguar’s social media channels. So, Crofelemer, back to Crofelemer, is the active ingredient in Mytesi, our prescription drug product that’s already commercially available, FDA-approved, and the OnTarget trial is evaluating the same formulation, the same dose of Crofelemer that comprises Mytesi.

All patients enrolled in the OnTarget study are solid tumor patients on targeted therapies. We focus the enrollment criteria on targeted therapies that cause diarrhea in more than 50% of patients with or without cytotoxic chemotherapy. That number of targeted agents is 24, the more than 80 approved targeted therapies. This is what’s referred to as a basket trial designed to bring benefit to as much of the patient population as possible. Mytesi is already in commerce. We plan to file a supplemental new drug application for Mytesi. Mytesi is approved under a new drug application for its HIV indication. We plan to file a supplemental new drug application for the prevention of cancer therapy-related diarrhea based on the OnTarget results. While most new drug applications fail or get delayed because of a safety issue or manufacturing issue, Mytesi is already approved for its HIV indication, which is a chronic indication, and therefore chronic safety testing has already been completed, and the drug, of course, is available from a network of specialty pharmacies throughout the United States.

So, what we’re focused on with the topline results before the end of – before Thanksgiving, so what we’re focused on with these topline results of the OnTarget trial is statistical significance of the primary efficacy endpoint to support a potential expanded label and expanded educational and promotional activities. This brings me to the second key takeaway for today’s webcast, second key clinical takeaway, Jaguar is supporting investigator-initiated and investigator IND proof of concept studies of a different formulation of Crofelemer, a powder formulation of Crofelemer for administration as liquid oral solution, which is a distinct product. It’s distinct from Mytesi, and it’s for the rare disease indications of microvillus inclusion disease.

I’m going to refer to that as MVID, which is a congenital diarrhea disorder, and short bowel syndrome. I’m going to refer to that as SBS, with intestinal failure. And we’re supporting these trials on three different continents, US, Europe, and the Middle East, North Africa regions. Crofelemer has been granted orphan drug designation by both the FDA and the European Medicines Agency, which is called the EMA, for MVID and SBS with intestinal failure. And we expect to have proof of concept data coming from six different third-party proof of concept studies on three different continents between the end of the year and the beginning of 2024, again, just around the corner. In accordance with the guidelines of specific European countries, published data from such clinical investigations could support reimbursed early patient access to Crofelemer for SBS and/or MVID for these catastrophic and often lifelong conditions.

And we’re looking to – we’re targeting by late 2024. This is a program, the early patient access program, the reimbursed early patient access program, that does not exist in the United States. By forming Napo Therapeutics in 2021 in Italy, we put a commercial footprint in Europe to be able to take advantage of this opportunity while the product is going through a full global development program. MVID is a severe – it’s actually an ultra-rare infant disease characterized by intestinal failure, diarrhea, malabsorption, acid base instability, bottom-line requiring intensive parenteral support for nutritional and fluid management every single day. There are currently no approved drug treatments or any other therapeutic agents in development that we’re aware of for MVID.

Intestinal failure is a catastrophic health situation that often inflicts patients with short bowel syndrome as well. In a short bowel syndrome patient, a typical gut is about 20, 25 feet. For a normal person, a short bowel might be five feet or less. It could be due to congenital reasons. It could be due to surgery. It could be due to an accident. In this situation, there’s not enough intestinal surface area to absorb the nutrients of light proteins, carbs, vitamins, and minerals, et cetera. These patients typically end up on parenteral nutrition seven days a week, 20 hours a day, an absolutely catastrophic situation, as I mentioned, and a significant opportunity also for infections and complications. This need for daily IV intervention has high morbidity, unfortunately, high mortality, and high expense.