RedHill Biopharma(US:RDHL)2022-06-23 17:25Financial Data and Key Metrics Changes - RedHill reported net revenues of $18.2 million in Q1 2022, down from $22.1 million in Q4 2021, attributed to typical cyclical trends in Movantik sales [72] - Gross profit was $10.2 million in Q1 2022, representing a 56% gross margin, expected to improve as Talicia prescriptions grow [73] - Cash used in operating activities decreased by over 70% to approximately $4 million compared to approximately $15 million in Q4 2021, indicating a clear path towards financial independence [71] Business Line Data and Key Metrics Changes - Movantik achieved an 8.6% increase in prescription volume compared to Q1 2021, maintaining nearly 74% market share in the PAMORA class [27][35] - Talicia's prescription volume grew by 12.8% over Q4 2021 and 80% compared to Q1 2021, establishing it as the most prescribed branded H. pylori therapy in the U.S. [24][37] - The company achieved record quarterly prescription volume for both Movantik and Talicia in Q1 2022, with positive momentum continuing into Q2 [26][36] Market Data and Key Metrics Changes - Talicia became available to 14 million Medi-Cal beneficiaries as a preferred brand with no restrictions, enhancing its market access [38] - The company expects further prescription volume lift from improved payer coverage and recognition of Talicia's clinical benefits [40] Company Strategy and Development Direction - RedHill is focused on achieving earlier profitability, targeting positive cash from operations to start during the second half of 2022, with a comprehensive cost reduction plan expected to generate approximately $50 million in savings over the next 18 months [8][15] - The company is exploring potential acquisitions of revenue-generating synergistic products to expedite cash generation [12] - RedHill is committed to advancing its COVID-19 programs, opaganib and RHB-107, through external funding sources, emphasizing the need for oral therapeutics in the ongoing pandemic [19][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the current market reality but expressed confidence in the company's ability to achieve financial stability and growth [8][11] - The management highlighted the importance of cash preservation and generating cash flow as a priority, with a clear goal of achieving breakeven during the second half of the year [95] Other Important Information - The company has streamlined its U.S. commercial team workforce by approximately one-third as part of its cost reduction plan [9] - RedHill's R&D expenses decreased to $3.1 million in Q1 2022 from $5.9 million in Q4 2021, reflecting ongoing optimization of R&D costs [73] Q&A Session Summary Question: Impact of the reduction of the commercial team on overall sales - Management indicated that territories would be covered by remaining representatives and that a comprehensive analysis was conducted to optimize commercial operations [79][84] Question: Expected timeline for achieving $50 million in OpEx savings - Management provided a detailed plan indicating that savings would be realized over the next six quarters [86] Question: Competitive landscape for Talicia following a competitor's FDA approval - Management expressed confidence in Talicia's efficacy, particularly in addressing clarithromycin resistance, which is a significant issue in H. pylori treatment [91] Question: Cash flow positive from operations definition - Management clarified that cash flow positive includes all G&A and selling expenses, excluding stock compensation [106] Question: Current cash runway and operational profitability timeline - Management confirmed confidence in cash runway for the next 12 months and beyond, with plans to achieve operational profitability in the second half of the year [112]