Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) Second Quarter 2022 Earnings Conference Call August 10, 2022 4:30 p. m. Eastern Time
Participating companies
Robert Uhl – Managing Director, ICR Westwicke
David J. Marguglio – President and Chief Executive Officer
David Benedicto – Chief Financial Officer
Ron Moss – Managing Director
Conference Call Participants
Operator
Greetings and welcome to the call of Adamis Pharmaceuticals’ last quarter 2022 monetary effects convention. [Operator Instructions] As a reminder, this convention is being recorded recently. Now I must introduce your host, Robert Uhl, Westwicke RCM. Continue.
Robert Uhl
Thank you, operator. Welcome to the call of Adamis Pharmaceuticals’ 2022 Quarter Corporate Updates and Monetary Effects Convention. Thank you for signing up today to receive the update. Members of Adamis’ leadership team will sign up for me on the call, adding his new role as CEO, David J. Marguglio; Medical Director, Dr. Ron Moss; and Chief Financial Officer David Benedicto. They will share with us their Adamis updates.
Our format for this call will consist of control-ready comments and then we will open it to questions and answers. This call is broadcast over the Internet and can be played on the investor segment of Adamis’ online page in adamispharmaceuticals. com.
In today’s call, we will ensure that forward-looking statements relating to our business are based on existing expectations and existing information. These statements are only valid as of today. And as required by law, we assume no legal responsibility to update any forward-looking statements made today in the future. Of course, any forward-looking statement involves hazards and uncertainties and our actual effects may differ materially from those expected through the forward-looking statements we make today.
Additional data relating to items that may only be our commercial and monetary effects is included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and in other upcoming filings with the SEC. These are located on the SEC. website.
Let me introduce you to the new CEO, David Marguglio.
David J Marguglio
Thank you, Robert. Je, thank you all for listening to us today to allow us to keep you informed about our quarterly moment and perhaps, more importantly, to hear how we intend to break this underperforming trend. In May of this year, I became CEO of a corporate with a percentage value of $0. 40. He failed to comply with NASDAQ, amid a product recall, as part of an ongoing Justice Department investigation and had a limited amount of money.
Add to that a horde of disgruntled shareholders and I can understand why the candidate might have been reluctant to take on this challenge. However, I saw beyond the existing Adamis scenario how far we can take it. He knew the company had strong assets and can be leveraged to unlock significant value.
For starters, we have two approved products that can compete in giant markets. We have an ongoing clinical trial for Tempol that shows its efficacy, not only can it potentially become a successful remedy for COVID, but it can also potentially expand to treat other respiratory diseases. diseases. But most importantly, we have a small, committed team of other highly professional and experienced individuals who are committed to saving the lives of patients and this company.
Before accepting this position, I proposed to our Board of Directors what would be a competitive change plan that, at times, can put significant pressure on the company, our employees and our partners. It’s about converting the corporate culture, improving operations. systems and processes, and setting collective and individual goals to set ourselves up for success.
The board of directors supported the plan and we are already more than two months away. I would like to share with you some of those new goals that I believe, like us in achieving them, deserve to have a positive effect on the company’s inventory price, as well as on rebuilding the percentage shareholder value.
First, we want to turn sales of zimhi and SYMJEPI into money flow. If we can increase sales and margins, the resulting cash flows can potentially fund the entire business. of ZIMHI. In addition, once we resume manufacturing, we will continue SYMJEPI’s past expansion trends.
I have a smart and capable spouse in the United States WorldMeds and I am sure they will succeed in expanding sales of any of the products. However, in the future, they are committed to offering Adamis trouble speaking normally, which in turn allows us to offer you more visibility into your business efforts. In a moment I will give you a percentage of some.
To increase our margins, we have recently introduced several projects to decrease the load on our injection device. For a relatively short, rather modest and relatively short delivery time, this deserves to particularly decrease the load of goods on our products. In the future, we will make further improvements in production, where sales volumes justify further investment.
The next purpose is to expand and advance our line of progression. Based on our ongoing charts, in addition to our ongoing charts with, on COVID-19, we continue to compare Tempol for other indications. However, even if we remain limited in terms of short-term capital, we will not advance new clinical systems without monetary, government, or personal support.
In the short term, I believe the COVID trial data, if positive, will broaden interest and further discussions with public and personal non-dilutive funders. expand our portfolio. The criterion for advancing any of those opportunities will be to first determine whether they are cumulative and strategic for the company, and then objectively measure whether we have the monetary and human capital to move them forward.
Listen to people, I perceive that there is a lot of frustration and fatigue among investors, however, we are at a critical turning point. Lately we are wondering our systems and the maximum facets of how the business operates. We have set new business goals that, as we execute them, deserve to put us on the upward path to new degrees of success. I ask everyone to remain vigilant, to help in this procedure and to give us a little more time to change Adamis, regain his acceptance as true. and ultimately build shareholder value.
I would now like to introduce our CFO to share with us a brief update on our recently filed financial statements. David?
david benedict
This afternoon, we filed our Form 10-Q for the quarter ended June 30, 2022. I will highlight some parts of our financial statements and sincerely urge you to refer to 10-Q for more information and main points. First, as I have discussed in previous calls, the filing of our monetary statements for the first fiscal quarter differs from last year due to our sale of similar assets to U. S. subsidiary Compounding.
As a result, income and expenses similar to this business and those assets and liabilities are reflected in the portions of operations discontinued in our revenue stream and balance sheet. That said, revenue for the six months ending June 30, 2022 and 2021 was approximately $1. 2 million and $2. 6 million respectively. The lower revenues are basically due to the suspension of production and the recall of SYMJEPI in 2022 offset through ZIMHI’s product launch sales.
Administrative and general selling expenses for the first six months ended June 30, 2022 and 2021 were approximately $7. 6 million and $8. 5 million, respectively. from 2022 to around $7. 5 million, versus $4. 4 million in 2021. La construction is basically similar to the ongoing clinical trial for Tempol.
The net loss discussed above from discontinued operations for the six months ended June 30, 2022 and 2021 was approximately $0. 2 million and $3. 1 million, respectively. The reduction in loss is basically due to the cessation of US Compounding’s activities.
Cash and money equivalents as of June 30, 2022 totaled $8. 9 million. Cash expenses for the current quarter were higher than planned due to disbursements of approximately $5. 2 million similar to the second turn PPP loan payment, SYMJEPI retirement expenses, and termination expenses. expect the inflow of money from operations to return to a normalized point in the current part of 2022.
We also expect to make more profit in the current part of 2022, which may differ from recoveries of approximately $2 million to $3. 5 million, following our sale of certain USC assets to Fagron in 2021 and the disposition of USC’s remaining assets. Again, I urge you to check out our recently filed Form 10-Q for more information and main points.
I will now give the floor to our chief medical officer, Dr. Ron Moss.
rum moss
Thank you, David. I’m really excited to share with you today that we have completed the patient recruitment needed for the upcoming interim Data Safety Oversight Committee assembly for our Phase 2/3 clinical trial to compare Tempol as a potential COVID remedy. -19. We are also approximately 10 patients short of enrolling the full length of the 248-patient pattern and have asked sites to suspend enrollment when patient number 248 is enrolled.
As a reminder, the goal of the study is to evaluate the effects of Tempol on the clinical development of inflammation and the hospitalization rate of outpatients with COVID-19. Our trial requires other people with moderate COVID-19 symptoms to have comorbidities such as diabetes or center disease, as those patients typically have worse outcomes that require hospitalization or have prolonged symptoms. Therefore, we are recruiting an express subset of moderate symptomatic COVID-19 patients with known threat factors.
As a reminder, the trial is double-blind, meaning that only the Data Security Oversight Committee knows what remedy a topic can get into the trial. to the company.
As you may recall, the DSMB already met in March and June 2022 to compare clinical and protective knowledge from the interim analysis. On both occasions, they proposed that they remain unchanged.
Once the data cut threshold is reached, the number of paints required to prepare for a DSMB assembly is considerable. The organization of clinical studies is dedicated to the monitoring and verification of data at all clinical sites and several statisticians and programmers prepare the studies. that will be submitted to the Data Security Oversight Committee. Hidden knowledge sets are first reviewed through Adamis, then the CRO will review the knowledge before everything is offered to the DSMB for review.
The next DSMB meeting to review interim data is scheduled for late September. At that time, the DSMB will compare the number one efficacy endpoint, which is the rate of sustained clinical resolution of COVID-19 symptoms between Tempol and placebo. , as well as protection in other people with a greater threat of disease progression. This will be the first time the DSMB evaluates effectiveness statistics and I expect there to be at least 4 results.
One imaginable result is that no efficacy is demonstrated. In this case, the DSMB could claim that it would be unnecessary to continue and that the company would likely avoid the trial. patients showed significant efficacy in the intermediate assembly of DSMB. At best, the DSMB would possibly present trial prevention because even with a relatively small body of knowledge, it has already demonstrated its efficacy. Here, we will most likely submit a clinical examination report to the FDA with an assembly request to discuss the effects and regulatory next steps.
A third imaginable end result is that the power trends that favor Tempol are met at endpoint number one, but statistical significance is not yet reached. data.
In this case, the DSMB would estimate the number of additional patients needed to achieve statistical significance in outcome number one. This result would still be very encouraging.
And there is a fourth imaginable end result. As you know, in addition to endpoint number one, clinical examination analyzes secondary endpoints, adding adjustments to inflammatory markers, hospitalization, and all-cause mortality. Therefore, some other positive end results would be if the test fails to demonstrate efficacy at endpoint number one, but shows significant efficacy at one or more of the secondary endpoints.
Many measured laboratory markers would possibly correlate with COVID-19 disease progression. Therefore, the study may also provide further evidence of the concept about the effect of Tempol on laboratory markers of disease progression. We are now getting to the last record required for the size of the initial examination pattern.
Unless the test is adjusted or the enrollment of a large number of additional patients through the DSMB, we expect to obtain the first data from this test in the fourth quarter of this year. Now, if this trial is ultimately successful, it may simply be a real game-changer for our company’s healthcare, providers, and patients.
As you know, the FDA has already approved two other oral antivirals under emergency use authorization for outpatients with COVID-19. If the data from this trial yields positive results, we will talk a lot with the FDA about the next steps and needs for an imaginable EUA, emergency use authorization.
As you know, lately there is a great need for new effective treatments for COVID-19 and we hope that Tempol will fill this gap. Whatever form COVID takes in the future, we believe there will be a medical need and a broad market for effective treatments. Deals.
Finally, we continue to explore other possible indications for Tempol and seek non-diluting government and non-governmental investments to further expand Tempol for other indications. If such an investment materializes, we will keep you informed about our plans for further clinical expansion.
At this point, I will turn my back on David Marguglio.
David J Marguglio
Thanks Ron. Je will now provide an advertising update for any of our products. As you know, in March, we announced the voluntary withdrawal of 4 batches of SYMJEPI due to a possible needle obstruction.
The first production step of SYMJEPI is carried out for Adamis through Catalent Belgium. And I’m oversimplifying here, yet Catalent essentially supplies all the parts and fabrics needed to formulate epinephrine, dose the syringes, and insert the rubber stoppers first of all. moving the syringes to fill them for final assembly.
During a regimen inspection of a batch of dosing syringes, Catalent detected some with clogged needles. This introduced a thorough investigation that, after several months, decided that the cause of the failure was a defective batch of stainless metal needles.
Working with Catalent and Dose Syringe suppliers, we have developed corrective and thrifty moves that we have shared with the FDA. We are committed to bringing SYMJEPI back to market as soon as all stakeholders are convinced that such corrective moves will avoid shortcomings. in long-lasting batches.
Since those moves are still being finalized and many are beyond Adamis’ direct control, I can’t provide a target date as we speak today, but I can guarantee that everyone interested from — with the manufacturer, from the syringe supplier to the U. S. will be able to provide a target date as we speak today. USA WorldMeds is working feverishly to resupply SYMJEPI as soon as possible.
Let me now turn to the launch of ZIMHI. US WorldMeds began shipping ZIMHI to wholesalers in late March. As you probably know, the first year of the launch of ads for any brand-name drug focuses on establishing basic policies and charts to find a basis on which to increase sales. .
I am very pleased to share with you that US WorldMeds meets or exceeds its goals during the first hundred days after launch. The comments in the box are very positive. Clients indicated that they see how higher doses of ZIMHI and intramuscular treatment possibly offer significant benefits over intranasal treatment.
In today’s environment, where 85% of overdose deaths in the U. S. While U. S. opioids are attributable to more potent artificial opioids like fentanyl and its derivatives, a product that could provide higher levels of naloxone more temporarily in a compact, easy-to-transport package could be offering consumers who have one and take the right solution. This is especially vital if the caregiver does not have immediate access to naloxone devices.
As far as the market is concerned, unsurprisingly, the largest users of naloxone devices are in the non-retail public interest sector. This includes paramedics, police, firefighters and other first responders, as well as repair, damage relief and other centers. public interest groups of the network. US WorldMeds is aggressively targeting this market, however, this is a long sales cycle. Required contracts take six months or more to complete. However, once in place, they usually result in much larger orders.
To expedite those orders, US WorldMeds recently introduced a website that allows institutional customers to place orders and get drop shipments through zimhidirect. com. In addition to its efforts in this sector, US WorldMeds is also donating amounts of ZIMHI to give a definitive and spouse contribution with those organizations to fight the opioid epidemic.
In the retail naloxone market, prescribing has accelerated in recent years due to increased awareness of naloxone among the general public and a developing trend among physicians to co-write naloxone with opioid prescriptions. To be able to sell in the retail sector, we will have to create market access first. Basically, it’s about adding your product to the bureaucracy of the payer and pharmacy benefit manager so that reimbursement is approved without significant restrictions.
Creating market access is a frustratingly slow procedure that takes six to 12 months to get many forms. US WorldMeds is making steady progress and recently achieved significant victories with some of the largest insurers and PBMs. Unfortunately, we still can’t percentage of the main points of those winnings until payers and PBMs have publicly updated their forms.
One facet of the retail market that needs some naloxone is that most states have state orders that allow you to get a naloxone product from a pharmacy without an individual prescription. These regulations differ from state to state and adding a product to the status order can take a long process. Once again, US WorldMeds has made significant progress and I am pleased to say that, as of today, ZIMHI has been added to state orders in 25 states.
While expanding market access, US WorldMeds has established a team of 20 sales representatives who detail doctors and clinics to raise awareness of the logo and generate scripts. They intend to grow this team as ZIMHI gains strength. To summarize the ZIMHI update, the announcement release is proceeding as planned. Market reception has been very positive and we remain optimistic about the long-term good fortune of this product. Let me upload some breaking news here.
You may remember that I described our team’s commitment to saving patients’ lives earlier. Well, this week, US WorldMeds shared with us two recent cases in which ZIMHI was effectively used to resuscitate patients from what were allegedly fentanyl overdoses. Both instances were single and performed interventions, so only one dose was needed to revive patients, as the product was designed and planned.
My purpose today is to provide you with an update that will help you perceive the current state of Adamis and how we intend to replace his trajectory. Between our SEC filings, recent press releases, social media posts, and our discussions today, our purpose is to provide investors with as much transparency as possible within the framework of legal and regulatory requirements. The last thing I’ll mention is that if you haven’t already, be sure to vote for your shares at the next annual meeting of shareholders.
With that, I’ll open it up for questions.
Q&A session
Operator
Thank you. We will now conduct a Q&A query [Operator Instructions]
Robert Uhl
Hey, operator. I’m Robert. I have questions that have arisen.
Operator
it’s okay.
Robert Uhl
It is ok. These are questions that have come to us through investor emails. Let me jump right on to that. An investor asks what exactly will come out of the DSMB assembly at the end of September?I mean, will you know how effective Tempol is compared to the popular of care?Will you make any kind of virtual announcement as to the number of hospitalizations in Tempol compared to the number of hospitalizations of patients not treated with Tempol?So what will you be able to say as a result of this analysis?
rum moss
Hi. I’m Dr. Moss. So, as I mentioned very briefly, if the trial is stopped for its efficacy or lack of efficacy, we will provide abstract data in the public domain. If the trial continues, we will provide some data that does not yet provide very detailed data as the trial will have to be blinded if it continues.
Robert Uhl
So when you discussed the main knowledge for the fourth quarter, is this the time when we would see a little more revealing or what will it look like?
rum moss
No. De fact, at the next DSMB assembly, statistical research will be carried out on the main evaluation criterion and, as I have already mentioned, one of the 4 characteristics will occur on the basis of this statistic. So, in fact, the assembly at the end of September will be very definitive for this test.
Robert Uhl
It is ok. Perfect. Thanks for clarifying this. Also some questions about your coin balance that you reported here at the end of the current quarter. What kind of clue does this offer you? And I know you said that you could make more profit from divesting the business from before. So just communicate what your coins, track, and opportunities for further fundraising will fund?
David J Marguglio
Oui. Let’s make an exchange with that, and then, if David B has other clarifications, he can intervene in the current quarter, which is more or less out of our overall quarterly consumption. And we expect that in the current part of the year we will return to a more generalized level. So, we expect money that will allow us to succeed at the end of the year. And then, as you mentioned, Robert, we have more capital resources, which we hope will come in this period as well.
But to your wider consultation on what we intended to do to raise more capital. I think the truth is that no one needs to increase the budget to those levels. Therefore, the maximum likely end result would be for us to take into account the publication of an interim assembly. with the DSMB, seeing what the results of that meeting are and the possible impact on the percentage value before determining a funding plan for the future.
Robert Uhl
It is ok! Genial. Es useful. And then also the kind of — kind of the same question, but having — in a different way. With the potentially very clever news to be published in September for DSMB’s Tempol, and it turns out that the launch of ZIMHI is actually starting to gain traction and the story of the two patients whose lives were stored is a very compelling explanation of why to use the product. And it turns out that it is getting closer and closer to the SYMJEPI solution and its dissemination. So wouldn’t you believe that all those things can have a positive effect on the value of your inventory and that you can then ease some of the tension to split up or even postpone the investment until some of those positive things have?Additional effects: have the effects that have been had taken into account in the percentage value?What do you think of that?
David J Marguglio
Well, I think the answer to all of this is yes. And I think we discussed it either in the legal force and/or in some of our communications last month. The purpose of the opposite department goes beyond the undeniable attempt to bring the percentage value back in line with the NASDAQ. It is true that this is a motivation. But it also aims to bring the percentage value to such a point that it can be purchased through a more basic health care budget that is only limited based on the existing percentage value.
So, I have the impression that this in itself slows down the overall stock, and the merit of the division, even in the smallest proportions, is that it opens up percentages to continue to fund the company. But certainly, as you mentioned, there are a number of short-term points that we believe can have a positive effect on the percentage price, and we don’t intend to make investment decisions or an opposing allocation and an imaginable proportion until some of those occasions sweat?
Robert Uhl
It is ok. Super. So, only another one came along, and he talked a little bit about it in his ready comments and it’s about long-term acquisitions. It turns out that there is no great preference for making short-term acquisitions, even more so that you would like SYMJEPI and ZIMHI to work as well as Tempol. And if they’re positive, at some point you could make more acquisitions or product opportunities. Is this the right message?
David J Marguglio
Yes, I think that’s true. However, I would add that I am firmly convinced that in this industry, we will have to keep innovating or die. And if this innovation is in more indications for Tempol, or in the licensing or acquisition of a compound that we can put in our already approved device or other opportunities that can withstand that, as I mentioned in my opening remarks, which we were looking for to be immediately beneficial for the company. But until we have greater visibility into where the investment is coming from to help any new project, it’s not something we’re actively working on.
Robert Uhl
Súper. Es very useful and clarifying. So much for the questions. So, with that, I think we’re going to conclude our call today. Once again, I must remind everyone that the Company will have its 2022 Annual Meeting of Shareholders in two days, on August 12. at 10:00 a. m. Pacific Time, 1:00 p. m. m. eastern time. And thank you very much for your participation and for your interest in Adamis Pharmaceuticals. If you have further questions, please let us know. Good evening, everyone.
Operator
This concludes today’s conference call. You can disconnect your lines at this time. And thank you for your participation and have a day.