Adamis Pharmaceuticals Corporation (NASDAQ: ADMP) First Quarter 2022 Earnings Conference Call May 16, 2022 5:00 p.m. ET
Robert Uhl – ICR Westwicke
Dennis Carlo – President and CEO
David Benedicto – Chief Financial Officer
Ron Moss – Chief Medical Officer
David Marguglio – Commercial Director
Conference call participants
Good evening and welcome to Adamis Pharmaceuticals’ first quarter 2022 financial results conference call. All participants will be in listen-only mode. [Operator Instructions]. Please note that this event is recorded.
I would now like to give the floor to Mr. Robert Uhl from ICR Westwicke. Please continue.
Thank you, operator. Good morning everyone and welcome to Adamis Pharmaceuticals’ first quarter 2022 financial results and business update conference call. Thank you for joining us today for the update. And welcome to our shareholders, analysts and anyone interested in Adamis.
With me today are Adamis President and CEO, Dr. Dennis J. Carlo, Chief Medical Officer, Dr. Ron Moss, Chief Commercial Officer, David Marguglio, and Chief Financial Officer, David Benedicto. The format of this call will consist of prepared remarks for management followed by questions and answers. This call is being webcast and will be available for replay in the investors section of our website adamispharmaceuticals.com.
In today’s call, we will make certain forward-looking statements about our business based on current expectations and current information. These statements speak only as of the current day and, except as required by law, we assume no obligation to update any forward-looking statement made today. Of course, any forward-looking statement involves risks and uncertainties. And our actual results could differ materially from those anticipated by the forward-looking statements we make today.
Additional information regarding factors that could affect our business and financial results is included in our most recent annual report on Form 10-K with the Securities and Exchange Commission, and in other subsequent filings we make with the SEC. These are available on the SEC website.
With that, I will now turn the floor over to Dr. Dennis Carlo, President and CEO.
Thanks Robert. And thank you all for being with us today. It’s not that long since our last call. Today’s call will therefore be brief, but I will try to highlight a few important advances. First, I’ll start with the ZIMHI or naloxone product. Drug overdoses claimed more lives than ever before in 2021. About 108,000 people died from drug overdoses according to the CDC, two-thirds of those involving [indiscernible]. Drug overdose remains a significant problem affecting all sectors of our society.
As we informed you on our last call, our business partner US WorldMeds launched ZIMHI at the end of March. In a few minutes, David Marguglio will provide more information, but we are very pleased with the market reception of ZIMHI and its adoption in the retail and non-retail sectors of the market. US WorldMeds has had some early success with commercial and government customers. Over the next six months, to reveal the sales trajectory we can expect for ZIMHI.
I will now switch from ZIMHI to SYMJEPI. On March 21, 2022, Adamis announced a voluntary recall of certain losses of Jepi Epinephrine Injection, 0.15 milligrams and 0.3 milligrams prefilled single dose syringes. Loss of affected SYMJEPI product will be recalled due to potential clogging of needle exhibiting epinephrine drug product delivery. I am pleased to report that we believe the investigation of the affected lots is nearly complete. That a root cause related to a particular lot of syringe needles has been identified and corrective and preventative actions have been and will be taken. We anticipate resolution and resumption of manufacturing once the investigation is complete and the issues are satisfactorily resolved. We expect this to happen in the near future.
With that, I’m going to hand over to our Chief Financial Officer, David Benedicto, to provide you with some highlights from our recently filed financial statements. David?
Thanks, Dennis. This afternoon, we had the pleasure of filing our Form 10-Q for the quarter ending March 31, 2022. I only intend to highlight a few parts of our finances in this discussion. And I encourage you to carefully review the 10-Q for more details and disclosures. I should point out that the presentation of our financial statements for the fiscal quarters is different from last year. This is due to our sale of assets related to our compounding pharmaceutical business, formerly conducted by our US compounding subsidiary, and our decision to end that business and sell or divest the remaining related assets. Therefore, income and expenses related to this activity. And these assets and liabilities are reflected in the continuing operations items of our income statement and balance sheet.
Revenue for the quarters ending March 31, 2022 and 2021 were 1.2 million and 1.4 million, respectively. Revenue for the three months ended March 31, 2022 consisted primarily of 1.1 million sales of ZIMHI to our US channel partner WorldMeds in anticipation of the commercial launch of ZIMHI announced in late March.
Revenues for the quarter ended March 31, 2021 are mainly composed of SYMJEPI injection sales. Due to the SYMJEPI manufacturing code and the voluntary recall, no SYMJEPI-related revenue was reported for the first quarter of 2022.
Selling, general and administrative expenses for the quarter ending March 31, 2022 and 2021 were $3.4 million and $3.5 million respectively. Selling, general and administrative expenses in 2022 reflect lower legal and compensation costs, offset by higher accounting and finance costs.
Research and development expenses were 4.2 million and 2.2 million for the first quarters of 2022 and 2021, respectively. The increase is mainly due to increased expenses related to the ongoing clinical trial of Tempol.
Net loss from discontinued operations for the three months ended March 31, 2022 and 2021 was 165,000 and 1.5 million respectively. The decrease in loss is mainly attributable to the liquidation and discontinuation of the product preparation activities in the United States.
Cash and cash equivalents as of March 31, 2022 amounted to 17.8 million. This year, we expect to receive additional proceeds from monies owed to us from the sale of certain USC assets to [indiscernible] and the disposal of USC’s remaining assets, which include land, building, and machinery and equipment. Again, please see our Form 10-Q for the quarter ended March 31, 2022 for further details and disclosures.
I will now hand over to our Chief Medical Officer, Dr. Ron Moss, for an update on product development.
Our Phase 2, Phase 3 clinical trial to evaluate Tempol as a treatment for COVID-19 is ongoing, with our planned interim analysis expected to take place in late May or early June as we are currently confirming statistical programs and datasets. This trial is double-blind, which means that only the Data Safety Monitoring Board, DSMB, knows what treatment this subject may receive during the trial. As an interim analysis of the trials, the DSMB carefully reviews this data and can stop or continue a trial and also make a recommendation to modify the trial or even request additional meetings if further clarification is needed. The trial is designed to have adequate statistical power when reaching 248 valid subjects. If the study continues, we do not plan to publish the data resulting from the interim analysis in order to maintain the blinding and integrity of the data as performed and other clinical trials. The time to trial completion depends among other factors on the two COVID infection rates, which increase enrollment to DSMB recommendations. If the trial is successful, we will also submit a clinical study report and request a meeting with the FDA as soon as possible.
Finally, we are investigating other potential clinical uses for Tempol, continue to seek non-dilutive government funding, and have recently applied for government grants.
At this point, I would like to hand over to David Marguglio.
Thanks Ron. I’d like to provide a quick update on how ZIMHI’s commercial launch is going. As with any launch, there is a ton of behind-the-scenes work that precedes any significant increase in sales, which includes establishing brand awareness, gaining market access, securing contracts, and more. ZIMHI has been form-examined by commercial, federal, and state forms. And it has already been added to many plans as an unrestricted or preferred brand. A few of these plans include Veterans Administration, many state medical or Medicaid plans, including many of the larger Blue Cross Blue Shield plans in Massachusetts, Michigan, and Tennessee, Highmark Blue Shield plans in Delaware, Ohio, Pennsylvania, New York and West Virginia and all [indiscernible] best business forms.
ZIMHI is available to more than 83% of physicians using electronic health records, and US WorldMeds is working to increase that number. After loading the wholesale distribution channel at the end of March, US WorldMeds began direct promotion to healthcare practitioners with a team of more than 20 regional account managers. Although we are still a few weeks away from that launch, feedback from the sales team has been quite favorable for the product, the size and intuitive nature of the device and the overall value proposition among stakeholders across the retail and non-retail market.
So, in summary, while we are very pleased with the activity to date and the trajectory of the product, Adamis and US WorldMeds remain optimistic about the long-term value of ZIMHI in the market. And with that, I’m going to hand over to Dennis.
Good. Thanks David. This will conclude our call and we will now open it to questions.
Q – Unidentified analyst
A – Denis Carlo
OK. That will end our call today. Thank you for your participation and interest Adamis Pharmaceuticals. Good evening to all.
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