Zevra Therapeutics, Inc. (NASDAQ:ZVRA) Q2 2023 Earnings Call Transcript

Jonathan Aschoff: I was curious, so that was just the [$670,000] booking for AZSTARYS revenue versus [$630] in the prior quarter. I was just kind of curious if that math is correct, because you said arimoclomol was $2.8 million, $5 million milestone, just leave [$670]. Why was that kind of flat like that after the growth in the last couple of quarters?

LaDuane Clifton : No. So it was not flat. So I guess when I read through all the components of revenue, when you — if you add it all together, there is the cost of revenue of [$677], which I guess if you look at the press release in the detail. So to be clear, we had $800,000 in net sales royalties from AZSTARYS. So it was not flat.

Jonathan Aschoff: Okay. So the net arimoclomol is not $2.8 million. It’s a little less or it is $2.8 million, and it kind of can’t be $2.8 million.

LaDuane Clifton : There is a cost of revenue associated with the milestone. If you remember, we pay a 10% royalty to request it. And so we had to recognize a 10% reduction based on that. That’s the difference that you’re thinking of.

Jonathan Aschoff: Okay. And I was curious, in your response to the first question, you were talking about the interim IH data to inform a Phase III trial. But I was thinking, why do you even care about that, the final data is a few months away, isn’t that vastly more important and informative in the Phase III than what comes at the end of this quarter?

Christal Mickle: So actually, no. The whole point of the Phase II trial was to inform the Phase III trial. It’s ultimately, this prodrug is a stimulant. And so we know that there’s going to be an effect. And so what we wanted to get out of this trial is really those nuances that we’ll need to understand as we’re preparing for the Phase III trial and preparing the protocol for the Phase III trial. So this — getting this interim data is going to allow us to kind of refine that Phase III trial move forward with FDA meetings and further preparations for those — for the Phase III trial while we finish up to Phase II.

Jonathan Aschoff: Okay. And lastly, I guess it’s fair to assume maybe you can say this is your AZSTARYS milestone that they will substantially decrease as a percentage of the sales figure that triggers that. Here, it’s a 20% ratio, but that should substantially decrease as we go forward. Is that at least fair to say?

LaDuane Clifton : I haven’t made that statement. So no, I wouldn’t say that.

Jonathan Aschoff: So they might actually stay fairly in line with that 20% payout kind of ratio?

LaDuane Clifton : I mean I think that would be a great outcome as it did. And I’d say this just — I would just remind you that when we went back and had a chance to renegotiate these milestones back in April of ’21. We really were looking for a way to pull milestones forward, if you will. And so those ratios are probably a little bit different than what you might think are typical of a market license. So the fact that the first few are in this range I think, speaks to some of those amendments we were able to get agreed to back in that time frame.

Jonathan Aschoff: Yes. I mean to have $25 million trigger sales milestone at any time is a pleasant surprise for sure. So you guys really did a good job on the front end of that.

Operator: And this does conclude the Q&A portion of today’s call. I would now like to turn the call back over to Christal Mickle for any additional or closing remarks.