KemPharm, Inc. (NasdaqGS: KMPH), a specialty pharmaceutical
company focused on the discovery and development of proprietary
prodrugs, today announced that Travis C. Mickle, Ph.D., President
and CEO of KemPharm, has issued a Letter to Shareholders detailing
the company’s strategic focus on Central Nervous System (CNS)/Rare
Disease indications, as well as an updated clinical development
strategy.
The full text of the letter follows. Information about the
conference call and live audio webcast can be found following the
letter’s conclusion.
A MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER
Dear Fellow Shareholders:
Today is an important milestone in the ongoing
evolution of KemPharm and follows a series of transformative events
for the company during the past 12 months highlighted by the U.S.
commercial launch of AZSTARYS®, the uplisting of our stock to the
Nasdaq Global Select Market and its addition to the Nasdaq
Biotechnology Index, and the restructuring and recapitalization of
our finances, culminating with the announcement of a $50 million
share repurchase program through 2023. These events have allowed us
to build a strong foundation for the Company’s future, and with
that momentum, we have worked to thoughtfully refine our strategic
focus to CNS/Rare Disease indications for our future product
development efforts.
Given our significant expertise and a track
record of product development success, our strategic focus on
CNS/rare disease indications allows us to target high-value areas
with significant unmet needs. Our evaluation of both internal and
external product candidates is guided by criteria that include an
assessment of the commercial opportunity, and understanding of
clinical, development and regulatory risks, as well as time, cost
and need, among other strategic considerations. Within CNS/rare
disease, there are many potential indications where we believe our
LAT® (Ligand Activated Therapy) platform technology and our product
development expertise can provide multiple opportunities to drive
growth for KemPharm. Some of the possible areas of interest
include:
- Neurology and neurodegenerative
diseases like Alzheimer’s disease, Parkinson’s disease and
Huntington’s disease;
- Psychiatric disorders, which could
include indications focused on niche market opportunities like rare
sleep disorders or psychedelics; and
- Rare diseases and other adjacent or
related therapeutic categories, like gastroenterology, metabolic
diseases or endocrinology.
While we continue to build and acquire new
opportunities, serdexmethylphenidate (SDX), will be a key building
block for our CNS/rare disease pipeline and represents the
potential to continue driving near-term growth for KemPharm. For
those new to KemPharm, SDX is our proprietary prodrug of
d-methylphenidate (d-MPH). It is the primary active pharmaceutical
ingredient (API) in AZSTARYS, a once-daily product for the
treatment of attention deficit hyperactivity disorder (ADHD) in
patients ages six years and older, and is also the sole API in two
other development-stage products, KP1077 (Idiopathic Hypersomnia)
and KP879 (Stimulant Use Disorder).
As a prodrug, SDX is specifically designed to be
pharmacologically inactive until reaching the lower
gastrointestinal tract, where, by design, SDX is gradually
converted to d-MPH. For AZSTARYS, this property is key to the
drug’s ability to provide extended symptom control for up to 13
hours, and SDX’s combined formulation with d-MPH differentiates
AZSTARYS from other d-MPH-based ADHD treatments on the market.
AZSTARYS is being commercialized in the U.S. by Corium, Inc.
SDX also possesses several pharmacokinetic (PK)
properties that distinguish it from d-MPH and other stimulant drug
therapies. As highlighted at the recent APSARD 2022 Annual
Conference, research has demonstrated that SDX produces
dose-proportional d-MPH exposure, is not impacted by the presence
or lack of food, and is fully absorbed, metabolized and excreted
following oral administration. These properties, we believe, are
instrumental to the prodrug’s ability to enable a consistent and
smooth release of d-MPH.
Lastly, and perhaps most importantly, SDX is the
only methylphenidate-based compound designated as a Schedule IV
controlled substance by the U.S. Drug Enforcement Agency (DEA).
This is a significant distinction as it could indicate to
prescribers that SDX has a lower potential for abuse when compared
to d-MPH, a Schedule II controlled substance.
Given the many unique properties of SDX, we
believe there is a substantial opportunity to develop multiple
SDX-based drug candidates that potentially address disease
indications underserved by current therapeutic options. Based on
this promise, we conducted a clinical trial exploring the safety
and PK of SDX delivered at doses higher than those studied as part
of the AZSTARYS development program. The intent of the trial was to
determine if higher doses of SDX could be administered safely and
produce pharmacodynamic effects consistent with the dosing and in
alignment with disease indications that we believe could benefit
from the unique properties of SDX.
As reported in December, data from the study
indicated that the 240 mg and 360 mg doses of SDX were
well-tolerated and produced d-MPH exposure generally proportional
to the dose, with d-MPH plasma concentrations demonstrating a
gradual increase followed by a slow decline. Additionally, data
suggested that the higher SDX doses produced targeted biological
effects that potentially align with the treatment of idiopathic
hypersomnia and other sleep disorders, as well as stimulant use
disorder. Specifically, increased wakefulness, alertness,
excitability, and insomnia effects were observed in the study.
In short, the results were exactly what we were
hoping to achieve, allowing us to finalize our SDX development
plan.
KP1077 for Idiopathic Hypersomnia – Lead
Development Candidate
Buoyed by the favorable SDX data, we conducted
an analysis of potential development opportunities to determine how
to best prioritize our SDX-based product candidates in order to
maximize shareholder value. The process included:
- A risk assessment analyzing the
clinical, development and regulatory challenges for each
product;
- An evaluation of each product’s
commercial opportunity, including physician, payor, and competitive
landscape research; and
- A calculation of the projected
time, cost, and additional needs required to ensure regulatory
success with the FDA, from IND (Investigational New Drug
application) to NDA (New Drug Application)
From this, it was clear that KP1077 as a
treatment for idiopathic hypersomnia (IH) should be our lead
development candidate.
For those unfamiliar with IH, it is a rare
neurological sleep disorder affecting approximately 37,000 patients
in the U.S. However, anecdotal evidence suggests the actual number
of IH patients could be higher.
The cardinal feature of IH is excessive daytime
sleepiness (EDS), characterized by daytime lapses into sleep, or an
irrepressible need to sleep that persists even with adequate or
prolonged nighttime sleep. Additionally, those with IH have extreme
difficulty waking, otherwise known as “sleep inertia,” severe brain
fog, and may fall asleep unintentionally or at inappropriate times,
otherwise known as narcolepsy. Moreover, people with IH often
report memory problems, difficulty maintaining focus, and
depression.
IH is a serious, debilitating condition that can
impact every moment of a person’s life, even making the mundane a
challenge. As a result, both the medical and pharmaceutical
communities have begun to direct more resources at treating the
condition. Xywav®, developed by Jazz Pharmaceuticals, was approved
by the FDA in August for the treatment of IH, and recently, Harmony
Biosciences announced that it would initiate a Phase 3 trial of
Wakix®, currently approved for EDS or cataplexy in adult patients
with narcolepsy, in patients with IH. Additionally, prescribers
utilize narcolepsy medications and various
methylphenidate/stimulant products “off-label” to treat IH
symptoms, with methylphenidate being one of the most commonly used
stimulants for treating IH.
While each of these medications can help to
address certain IH symptoms, each has critical shortcomings,
including dosing inconvenience (Xywav requires two doses at night
with one dose occurring four hours after bedtime), serious adverse
events, such as elevated blood pressure and heart rate, and
significant drug-drug interactions (DDIs), including with
medications used to manage contraception and depression. In
addition to the shortcomings, patients have indicated that their
current medication effectiveness was poor1.
The market potential for IH is also highly
compelling. With limited treatment options available for this
small, underserved patient segment, there is the potential for
KP1077 to be designated as an orphan drug, as well as possible
eligibility for fast-track review status and for designation as a
breakthrough treatment. In addition, we believe that if
differentiated from other treatment options, pricing KP1077 in
between products like Teva Pharmaceuticals’ Provigil®
(approximately $24,000 per year at the highest dose) and Jazz
Pharmaceuticals’ Xywav (approximately $187,000 per year at the
highest dose) could lead to significant market share. Moreover,
since the patient population is relatively small and
well-monitored, given the debilitating nature of the disease, we
believe it would be possible for KemPharm to field its own small
specialty sales force to commercialize the product, and therefore
keep a larger portion of the economics instead of out-licensing
commercial rights to a third party.
Given these factors, we see a substantial
opportunity to advance KP1077 as a treatment for IH, and initial
market research suggests that KP1077 could capture a large share of
the IH market based on the following potential treatment,
regulatory and commercial benefits:
- Dosing flexibility –
either one dose or two doses – designed to address the two primary
issues associated with IH:
- Nighttime dose would
address sleep inertia
- Morning dose would
address daytime brain fog
- No drug-drug
interaction potential especially with hormonal contraceptives and
antidepressants
- Reduced abuse
potential with a Schedule IV designation
- Orphan drug
designation potential, as well as fast-track and breakthrough
designation eligibility
- No generic
equivalent
- Composition of
matter patents extending to 2037 with additional applications
potentially extending the IP time horizon
In addition to these potential benefits, we
anticipate an efficient and robust development program for KP1077.
At present, we are targeting an Investigational New Drug (IND)
application filing for KP1077 in IH by mid-year 2022. We then
anticipate initiating a Phase 2 trial of KP1077 in IH in the third
quarter of 2022 with top-line data by the second quarter of
2023.
We are also planning a parallel development
program for KP1077 in narcolepsy. The IND filing for this
additional program is expected during the second half of 2022, with
a Phase 2/3 trial expected to begin by the end of 2022 or early
2023.
While KP1077 will be our lead SDX development
candidate, we plan to continue the development of KP879 as an
extended-duration, agonist replacement therapy for the treatment of
Stimulant Use Disorder (SUD). However, through our evaluation of
the clinical, regulatory and development risks for pursuing the SUD
indication, we recognized that KP879 will require a more
challenging and lengthier development program that will likely
necessitate partnership with government, academia, or other
strategic partners to successfully advance the program toward
approval.
_______________1
https://www.sleepcountshcp.com/idiopathic-hypersomnia-treatment-options
Creating a CNS/Rare Disease Franchise
with SDX and Other Opportunities
Our strategic focus on CNS/Rare Disease
indications will also guide our ongoing business development
efforts to expand our development pipeline and accelerate value
creation. As already outlined, we are considering external
opportunities within neurology and neurodegenerative diseases,
psychiatric disorders, and other rare diseases, along with adjacent
or related therapeutic categories. We are seeking assets in Phase 2
or later, subject to our evaluation criteria, that we can
in-license or acquire.
If we are successful, new product candidates
that fit this focus could be accretive to KemPharm’s value
proposition by potentially adding new clinical data catalysts and
the potential to create incremental long-term value for
shareholders. In addition, we believe that a multi-channel
development program with multiple product candidates addressing
various CNS/rare disease indications will diversify risk and create
the potential for multiple commercial-stage products in the
future.
KemPharm –Poised for Significant Growth
in 2022 and Beyond
Foundational to the pursuit of our new strategic
focus is the potential to begin realizing royalties and sales
milestone payments from the ongoing commercialization of AZSTARYS.
Corium, our U.S. commercial partner for AZSTARYS, continues to see
prescriber momentum build, and we are pleased to report that
AZSTARYS now has payor access to more than 100 million commercial
and Medicaid patient lives as of January 1, 2022. Payor access for
AZSTARYS has doubled since October 1, 2021, thanks to the efforts
of the excellent team Corium has built for the commercial launch.
This success is leading Corium to accelerate national expansion of
the commercial roll-out, with full national staffing to be in place
by end of January 2022. We are encouraged by this progress and
expect 2022 to be a time of significant growth for AZSTARYS.
We also enter 2022 with a strong balance sheet,
which as of December 31, 2021, included cash and cash equivalents
totaling $127.8 million. Unlike many development-stage
biopharmaceutical companies, our balance sheet provides the ability
to pursue our strategic and product development objectives while
also seeking external opportunities. Available capital combined
with anticipated revenues allows us to pursue our development plan
and extend our cash runway through 2025 and beyond. In addition,
our recently announced $50 million share repurchase program, which
will remain in place through 2023, provides a mechanism through
which we can directly return value to shareholders as we are able
to realize success in our business efforts.
In closing, the successes that we have
experienced over the past year combined with the growth
opportunities anticipated for 2022 and beyond have been made
possible by the diligent efforts of our team and the support of our
shareholders. Thanks to all of you.
Sincerely,
Travis C. Mickle, Ph.D.Shareholder, President,
and Chief Executive OfficerKemPharm, Inc.
End of the shareholder letter text.
Conference Call
Information:
KemPharm will host a conference call and live
audio webcast with slide presentation on Wednesday, January 19,
2022, at 4:30 p.m. ET, to discuss its strategic focus on CNS/rare
disease indications and its updated clinical development
strategy.
Telephone Access: |
To access the conference call telephonically, interested
participants and investors will be required to register via the
following online form:
http://www.directeventreg.com/registration/event/6718737 Once
registered, all individuals will be provided with participant
dial-in numbers, a passcode and a registrant ID, which can then be
used to access the conference call. Participants may register at
any time. It is recommended that the registration process be
completed at least 15 minutes prior to the start of the call. |
|
|
Webcast Access: |
The live audio webcast with slide presentation will be accessible
via the Investor Relations section of KemPharm’s
website, http://investors.kempharm.com/. An archive of the
webcast and presentation will be available for 90 days beginning at
approximately 5:30 p.m. ET, on January 19, 2022. |
|
|
About
AZSTARYS®:
AZSTARYS is an FDA-approved, once-daily product
for the treatment of attention deficit hyperactivity disorder
(ADHD) in patients age six years and older. AZSTARYS consists of
SDX, KemPharm’s prodrug of d-methylphenidate (d-MPH), co-formulated
with immediate release d-MPH. Corium, Inc., a portfolio company of
Gurnet Point Capital, is leading all commercialization efforts for
AZSTARYS in the U.S.
The complete approved prescribing information
for AZSTARYS may be downloaded in PDF format here:
https://kempharm.com/wp-content/uploads/2021/03/AZSTARYS-Master-Label-Final_20210302.pdf
About KemPharm:
KemPharm is a specialty pharmaceutical company
focused on the discovery and development of proprietary prodrugs to
treat serious medical conditions through its proprietary LAT®
(Ligand Activated Therapy) technology. KemPharm utilizes its
proprietary LAT® technology to generate improved prodrug versions
of FDA-approved drugs as well as to generate prodrug versions of
existing compounds that may have applications for new disease
indications. KemPharm’s prodrug product candidate pipeline is
focused on the high need areas of idiopathic hypersomnia (IH) and
other CNS/rare diseases. In addition, the U.S. Food and Drug
Administration (FDA) has approved AZSTARYS®, a new once-daily
treatment for ADHD in patents age six years and older containing
KemPharm’s prodrug, serdexmethylphenidate (SDX), and APADAZ®, an
immediate-release combination product containing benzhydrocodone,
KemPharm’s prodrug of hydrocodone, and acetaminophen. For more
information on KemPharm and its pipeline of prodrug product
candidates visit www.kempharm.com or connect with us on Twitter,
LinkedIn, Facebook and YouTube.
Financial Disclosure
Advisory
The Company reports its financial results in
accordance with U.S. generally accepted accounting principles
(GAAP). The expected financial results discussed in this press
release are preliminary and represent the most current information
available to the Company’s management, as financial closing
procedures for the fourth quarter and fiscal year ended December
31, 2021, are not yet complete. These estimates are not a
comprehensive statement of the Company’s financial results for the
fourth quarter and fiscal year ended December 31, 2021, and actual
results may differ materially from these estimates as a result of
the completion of year-end accounting procedures and adjustments,
including the execution of the Company’s internal control over
financial reporting, the completion of the preparation and audit of
the Company’s financial statements and the subsequent occurrence or
identification of events prior to the formal issuance of the
audited financial statements for fiscal 2021.
Caution Concerning Forward Looking
Statements:
This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current
facts, including without limitation and which can be identified by
the use of words such as “may,” “will,” “expect,” “project,”
“estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,”
“continue,” “could,” “intend,” “target,” “predict,” or the negative
versions of those words or other comparable words or expressions,
although not all forward-looking statements contain these
identifying words or expressions. Forward-looking statements are
not guarantees of future actions or performance. These
forward-looking statements include statements regarding the
continued commercialization and market outlook for AZSTARYS®, the
potential benefits of AZSTARYS, KemPharm’s pipeline of product
candidates including the clinical development of KP879 and KP1077,
the promise and potential impact of our preclinical or clinical
trial data, upcoming milestones, including without limitation the
timing and results of any clinical trials or readouts, the
potential benefits of SDX or any other product candidates for any
specific disease indication, or the potential benefits of any of
KemPharm’s product candidates or market assessments, KemPharm’s
forecasted cash runway, our strategic and product development
objectives, and the execution and duration of our share repurchase
program. These forward-looking statements are based on information
currently available to KemPharm and its current plans or
expectations and are subject to a number of known and unknown
uncertainties, risks and other important factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. These and
other important factors are described in detail in the “Risk
Factors” section of KemPharm’s Annual Report on Form 10-K for the
year ended December 31, 2020, KemPharm’s Quarterly Report for the
quarter ended September 30, 2021, and KemPharm’s other filings with
the Securities and Exchange Commission.
While we may elect to update such
forward-looking statements at some point in the future, except as
required by law, we disclaim any obligation to do so, even if
subsequent events cause our views to change. Although we believe
the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will
prove to be correct. These forward-looking statements should not be
relied upon as representing our views as of any date subsequent to
the date of this press release.
This press release also may contain estimates
and other statistical data made by independent parties and by us
relating to market size and other data about our industry. This
data involves a number of assumptions and limitations, and you are
cautioned not to give undue weight to such estimates. In addition,
projections, assumptions and estimates of our future performance
and the future performance of the markets in which we operate are
necessarily subject to a high degree of uncertainty and risk.
KemPharm Contacts:
Tiberend Strategic Advisors, Inc.Jason
Rando/Maureen McEnroe, CFA(212) 375-2665 /
2664jrando@tiberend.commmcenroe@tiberend.com
KemPharm (NASDAQ:KMPH)
Historical Stock Chart
From Mar 2024 to Apr 2024
KemPharm (NASDAQ:KMPH)
Historical Stock Chart
From Apr 2023 to Apr 2024