Prepared remarks
Good afternoon, and thank you for joining Zevra's Second Quarter 2025 Financial Results and Corporate Update Conference Call. Today's call is being recorded and will be available via the Investor Relations section of the company's website later today. The host for today's call is Nichol Ochsner, Zevra's Vice President of Investor Relations and Corporate Communications. Please go ahead.
Thank you, and welcome to those who are joining us. Today, we will provide an overview of our recent accomplishments, followed by a review of our second quarter financial results. I encourage you to read our financial news release, which was distributed this afternoon and is available in the Investor Relations section of our website. Before we begin the call, please note that certain information shared today will include forward-looking statements. Actual results may differ materially from those stated or implied by any forward-looking statements due to risks and uncertainties associated with Zevra's business. Forward-looking statements are not promises or guarantees and are inherently subject to risks, uncertainties and other important factors that may lead actual results to differ materially from the projections made and should be evaluated together with the Risk Factors section in our most recently filed quarterly report on Form 10-Q, annual report on Form 10-K and other filings with the SEC.
In addition, we will disclose certain non-GAAP information on today's call, specifically adjusted net loss and adjusted net loss per share. Reconciling information to GAAP can be found in our financial results news release. I'm pleased to welcome Zevra's management team members participating in today's call. Neil McFarlane, Zevra's President and Chief Executive Officer; LaDuane Clifton, our Chief Financial Officer; and Josh Schafer, our Chief Commercial Officer. Our Chief Medical Officer, Adrian Quartel, will be available for today's question-and-answer session. Now it's my pleasure to hand the call over to Neil.
Thank you, Nichol, and thank you to everyone joining our update call this afternoon. At Zevra, our vision is to build a leading life sciences company whose core mission is to serve patients by bringing life-changing therapeutics to people living with rare diseases. We are demonstrating our ability to execute in a complex regulatory, clinical development and commercial environment to advance promising therapies with an approach that balances science with patient need. As a reminder, this vision is driven by the 4 pillars of our corporate strategy: commercial excellence, pipeline and innovation, talent and culture and corporate foundation. The execution of our strategy delivered remarkable performance in the second quarter and sets a strong foundation for continued momentum in Q3. On today's call, we'll highlight several key achievements. Q2 net revenue reached $25.9 million, reflecting robust demand and effective operational execution.
We completed the sale of our PRV for $150 million, a strategic transaction that strengthened our balance sheet. We also submitted our marketing authorization application, or MAA, for arimoclomol in Europe, marking an important milestone in our geographic expansion efforts. Let's dive in with an update on the U.S. launch of MIPLYFFA, the first approved treatment for people diagnosed with Niemann-Pick Disease Type C or NPC and the only treatment that has been shown to halt disease progression by addressing its underlying pathology. As a quick reminder, NPC is an ultra-rare, relentlessly progressive neurodegenerative disease caused by an inherited lysosomal storage disorder and leads to premature mortality. In the U.S., we estimate that roughly 300 to 350 patients have been diagnosed with NPC out of the estimated 900 people living with the disease. The approval of MIPLYFFA marked a fundamental shift in the treatment paradigm, and we believe that its ability to address disease progression is an important differentiator that will lead to long-term success.
We are incredibly proud of the work our team is doing to support the healthcare community and eligible patients with an intense sense of urgency. We've received positive feedback from both patients and physicians, which is reflected in the strong performance since launch with a total of 129 prescription forms through the end of Q2, of which 7 were enrolled in the quarter. Through rapid uptake in the early stages of launch, we have been able to reach over 1/3 of those diagnosed with NPC in the United States. This group primarily included patients in our Expanded Access Program, or EAP, who have been treated with MIPLYFFA for up to 7 years with the majority of patients remaining on therapy. Following the success of our early launch penetration, our commercialization efforts are focused on increasing both diagnosis and treatment access. The second segment of patients that we're focused on are those who have received an NPC diagnosis but may or may not be currently receiving treatment.
These patients typically were diagnosed at centers of excellence and managed in coordination with a local provider for ongoing care. We've mapped these referral patterns beyond the centers of excellence and are engaging the broader group of prescribers. The last segment of our patients are those living with NPC but who have not been diagnosed. Part of our contribution and responsibility to the patient community is to increase awareness and shorten the time to diagnosis for this devastating disease. We are demonstrating leadership through our disease state awareness campaign to help drive early diagnosis. The treatment of NPC is multifaceted, and our program offers education and genetic testing options for individuals with suspected lysosomal storage disorders. With growing awareness of MIPLYFFA, we look forward to extending our reach to serve additional patients. Our work with advocacy organizations is very important, and our support has been well received.
Josh will provide more details on our strong presence at recent congresses where Zevra and our specialty pharmacy engage with caregivers and people living with NPC. These are some of the ways that we're building our reputation as a reliable partner. Another exciting opportunity for MIPLYFFA is in Europe, where we estimate approximately 1,100 people are living with NPC. One of our priorities is to secure European approval and determine the optimal go-to-market strategy to ensure access for a greater number of patients. Just a few weeks ago, we announced the submission of the arimoclomol MAA to the European Medicines Agency, delivering on the early side of our second half of 2025 guidance. This is another significant and timely milestone for Zevra. To support the submission, we received guidance from EU regulators and assembled a robust data package, including new mechanistic and long-term clinical data generated since our FDA submission.
We have demonstrated a synergistic effect with miglustat, which is approved in Europe for NPC and is the standard of care in this more mature market, where we have an established EAP program, which increased to 89 patients enrolled at the end of the second quarter. And to further our efforts in the scientific and medical community, our data from the open-label extension study was recently published in the Journal of Molecular Genetics and Metabolism. The paper presents the impressive long-term efficacy and safety outcomes for NPC patients treated with MIPLYFFA in the 48-month open-label extension phase following the end of the 12-month pivotal trial. Additionally, we published data showing that MIPLYFFA upregulates expression of genes belonging to the coordinated lysosomal expression and regulation network or the CLEAR network, targeting the underlying pathophysiology of NPC to improve autophagy, reduce cholesterol accumulation and prevent cell death.
As the NPC marketplace evolves, shaping treatment guidelines will become more important for the NPC community. We believe our success in establishing MIPLYFFA's benefit with the largest data set of NPC clinical trial patients and having these data published in peer-reviewed journals will help inform treatment decisions. Turning now to OLPRUVA, which is a treatment for certain urea cycle disorders. We've previously discussed the limited pull-through we experienced in this launch, which continued in the second quarter with one prescription enrollment form. Our refined marketing efforts over the last several months have focused on identifying the patients for whom OLPRUVA is best suited, strengthening our patient support services and addressing reimbursement challenges. However, adoption continues to be slow, and we remain cautious. Josh will provide more detail on the product performance, and LaDuane will provide financial details on the noncash charge related to the prevailing trend later in the call.
Moving on to our pipeline. We're advancing celiprolol as a potential treatment of Vascular Ehlers-Danlos syndrome or VEDs, in the Phase III DiSCOVER trial. VEDS is a severe genetic connective tissue disorder characterized by a risk of dissection and rupture of the arteries, gastrointestinal tract and uterus. Celiprolol is an adrenoceptor modulator believed to decrease mechanical stress on the vascular wall of large arteries and hollow organs. In the second quarter, we enrolled 7 patients in the DiSCOVER trial, bringing the total to 39 patients enrolled out of the 150 patients required for complete enrollment of the trial. The genetic testing initiative to identify patients who have the COL3A1 gene mutation, which causes the disease, is ramping up in collaboration with patient advocates, KOLs, treating physicians and clinics, providing increased visibility and has a potential to accelerate future enrollment.
We are making progress in advancing our vision of becoming a leading rare disease company by focusing on the patients we serve. Our strategy balances near-term operational excellence with the agility and financial flexibility to support initiatives that build sustainable value for patients and shareholders alike. Let me turn the call over to Josh, who will provide more details on our commercial products.
Thank you, Neil, and good afternoon. Let's begin with MIPLYFFA for NPC. MIPLYFFA in combination with miglustat is the only treatment shown to halt disease progression at 12 months in a pivotal placebo-controlled study using the NPC clinical severity scale, which is the only validated measurement of NPC progression, assessing clinically meaningful markers such as impairment of mobility, cognition, speech and swallowing. In the second quarter, we received 7 prescription enrollment forms, and we have increased our product net revenue by 26% quarter-over-quarter, a reflection of new patient demand as well as access and retention. A new enrollment is defined as a prescription submitted to our specialty pharmacy, which begins the benefits investigation process to determine reimbursement eligibility. In the second quarter, our coverage reached 52% of all covered lives, which is consistent with our expectations at this stage of the launch.
For those other patients who are not immediately covered, we've been able to achieve reimbursement through medical exception pathways. We remain actively engaged in discussions with payers to facilitate reimbursement, and our current focus is on demonstrating the clinical value of MIPLYFFA to payers, especially leveraging our long-term open-label extension data, which showed durable clinical benefit for up to 5 years. Our field team, including case managers, continues to play a critical role on the front lines, working with patients and healthcare providers to navigate the reimbursement landscape. Their efforts have been instrumental in helping to overcome access barriers and allowing patients to receive timely support to secure coverage. Additionally, our AmplifyAssist program, which is a centralized resource that assists clinicians' offices and patients in navigating the reimbursement challenges and supporting coverage for all of our commercialized products, has been well received.
To further bolster our penetration into the second segment of patients, those NPC patients who have been diagnosed and are either on other treatments or not being treated, we have a number of initiatives underway. We are emphasizing the robustness of our data with its strong presence at scientific, medical and advocacy-related conferences where physicians and patients can learn more about MIPLYFFA's therapeutic impact. Last month, at the National Niemann-Pick Disease Foundation Conference, Dr. Barbara Burton, a key opinion leader and Professor at Northwestern University's Feinberg School of Medicine, presented an overview of MIPLYFFA and our unprecedented long-term data. We had a similarly strong presence at the Southeastern Regional Genetics Group Conference with 4 poster presentations. As Neil mentioned, the recent study brought our long-term 48-month data to the forefront for physicians, highlighting the duration of clinical benefit.
Specifically, an improvement in disease progression was seen at the first evaluated time point at 12 weeks and then continued for more than 5 years in a heterogeneous population of NPC patients with no new safety concerns. These results align with our pivotal trial data, which showed that MIPLYFFA in combination with miglustat halted disease progression compared to placebo over a 1-year study duration. Presentation of key data and insights like those provided in these recent publications are an important part of our strategy to raise awareness of the clinically meaningful impact that MIPLYFFA can have for patients, and we will continue to execute our publication strategy to support prescribing decisions. The third segment of patients, those that are undiagnosed, are an important population for us. It is critical to shorten the time to diagnosis to halt the progression of the disease sooner.
Our disease state awareness campaign, Learn MPC: Read Between the Signs, is designed to provide educational and genetic testing resources to support the diagnosis of new NPC patients. This program is helping to drive awareness of the disease as well as identifying patients who are previously undiagnosed and may be candidates for MIPLYFFA. Turning to OLPRUVA. UCDs are rare inherited metabolic disorders characterized by an excess accumulation of ammonia, which can be neurotoxic and lead to neurocognitive damage or even death. Although current treatments are effective, over 25% of hyperammonemia crises are caused by poor adherence to treatment. OLPRUVA was launched based on an established efficacy and safety profile, but with an innovative formulation that offers a palatable option in convenient premeasured single-dose envelopes for ease of use and ammonia control on the go. We believe in the benefits that OLPRUVA offers people with UCD.
However, we have seen slower-than-expected uptake. The mature UCD market and patient satisfaction with existing treatments resulted in one prescription enrollment form in the second quarter. An authorized generic to the market leader is anticipated, eventually creating a shift in the competitive dynamics, but we believe OLPRUVA's profile as well as our patient support activities will position us to compete in this changing landscape. We have been actively engaged in strategic negotiations with payers to facilitate reimbursement. In the second quarter, we saw our overall coverage increase to 79%. In summary, our commercial organization has reached critical mass, and the strength of our capabilities is being leveraged across our portfolio with a primary focus on MIPLYFFA. We are prioritizing and executing on key strategies to deliver value to patients living with rare diseases. I will now pass the call to LaDuane, who will present the financial results for the second quarter of 2025.
Thank you, Josh, and good afternoon, everyone. In addition to the financial details included in today's call, we encourage you to refer to Zevra's quarterly report on Form 10-Q for more detailed information, which we intend to file later today. In the second quarter of 2025, we reported net revenue of $25.9 million, which includes $21.5 million from MIPLYFFA, $300,000 from OLPRUVA, $2.6 million in net reimbursements from the French EAP for arimoclomol, $1.2 million from royalties and other reimbursements under the AZSTARYS license, and an upfront payment of $300,000 from the out-license of dextrorphan during the period. For our commercial products, MIPLYFFA and OLPRUVA, we recognize revenue when shipments are received by the specialty pharmacy. Cost of product revenue for Q2 2025 was $14 million, which includes $1.6 million of noncash intangible asset amortization. We conduct quarterly assessments of the recoverability of certain intangible assets and inventory in accordance with U.S. GAAP.
Based on the prevailing trends for OLPRUVA, including enrollments, paid authorizations as well as market and competitive landscape dynamics, we have recognized a noncash charge of $58.7 million for impairment of intangible assets and an inventory write-down of $11.7 million as of June 30, 2025. Operating expense for the second quarter was $24.2 million, which was an increase of $1.1 million compared to the same quarter a year ago. R&D expenses were $3.4 million for Q2 2025, which was a decrease of $7.1 million compared to Q2 2024 due to a decrease in third-party and personnel-related costs following the completion of the 1077 Phase II trial. SG&A expenses were $20.8 million for Q2 2025, which was an increase of $8.2 million due to professional fees incurred related to the proxy contest earlier this year, as well as other expenses associated with our commercial activities. During Q2 2025, we also recognized $147.9 million in other income, which includes $148.3 million in net proceeds from the sale of the PRD asset, which was completed on April 1, 2025.
This one-time transaction has provided significant nondilutive capital for the company and has further strengthened our financial position. Net income for the quarter was $74.7 million or $1.24 per basic share and $1.21 per diluted share. Excluding the one-time PRD sale, the one-time noncash impairment charge and the inventory obsolescence charge recognized during the quarter, adjusted net loss was $3.2 million or $0.06 adjusted net loss per basic and diluted share for Q2 2025. For the same quarter in 2024, we reported a GAAP net loss of $19.9 million or $0.48 per basic and diluted share. We are pleased with the early stages of the MIPLYFFA launch and our continued progress in building our corporate foundation through solid execution. Our focus remains on executing the launch of our commercial products and on the development of our pipeline, which includes supporting both the arimoclomol MAA in Europe and the ongoing Phase III trial for celiprolol.
As of June 30, 2025, total cash, cash equivalents and investments were $217.7 million compared to $68.7 million at the end of the prior quarter. Total debt was approximately $60.7 million. We believe that our existing capital resources continue to be sufficient to allow us to execute on our strategic priorities independent of the capital markets. Now I will turn the call back to Neil for his closing remarks.
Thank you, LaDuane. We are fortunate to be in a unique position with commercial therapies, late-stage development programs and a solid balance sheet to execute on our priorities. We attribute our success and momentum to staying true to our mission and the dedication of our team committed to making an impact on the lives of people living with rare diseases. Our focus moving forward remains firmly on executing across our 4 strategic pillars to accelerate our trajectory for transformative growth and long-term value creation. Thank you. We'll now open the call for questions.
Questions and answers
We'll take our first question from Brandon Folkes with H.C. Wainwright.
Congratulations on all the progress. Maybe just starting in the U.S. and my question is about new patient starts in Q2 or any trends in terms of enrollments?
Brandon, you cut out a little bit in the first part of your comment. It sounded like you were asking about U.S. MIPLYFFA and any trends. Could you please repeat the question?
Yes. Absolutely. Just any specialties contributing most to new patient enrollments in Q2 and since launch as well? Just any trends you see in the U.S. in terms of patient enrollments who weren't in the EAP program?
Well, I'll ask Josh to comment on the specifics around specialties, but I can say that we had MIPLYFFA revenue of about $17.1 million in Q1, which grew by 26% in Q2 to $21.5 million. This growth can be attributed to the success of our team in facilitating patient enrollments through their services. Looking at total enrollments from Q1 to Q2, we reached 129 total enrollments by the end of Q2. I'll pass it to Josh to discuss more about the specialties and trends.
Yes. Thanks for the question. We're seeing that the early patients were coming from clinicians involved in our EAP, primarily neurologists and pediatricians. Many of these trained pediatricians treat both children and adults with NPC. We're also seeing medical geneticists treating these patients, and an emerging small group of psychiatrists are treating these patients as well. This fits our expectations, and we're pleased with the trends seen so far.
Great. And then if I may just shift gears to Europe. You've done a tremendous job in the U.S. in terms of EAP conversion. Can you help us think through the challenges of converting the EAP patients in Europe after approval compared to the quick execution seen in the U.S.?
Yes, thanks, Brandon. In the past year, we've grown our EAP from 70 to 80 patients in our global program primarily in Europe to 89 patients at the end of Q2. Reimbursement in Europe will vary country by country, but we believe the continued growth of our EAP program in Europe, combined with the durability of therapy for long-term patients, will help us navigate these reimbursement challenges after gaining approval.
Congratulations on all the progress.
We'll go next to Kristen Kluska at Cantor.
Congrats on another good quarter. So first, I wanted to ask about the patient segments, particularly those diagnosed but not on therapies yet. Can you walk us through what that means? Are these newly diagnosed and they're taking steps? Are they interested in therapies, hoping to learn more? And then I have a follow-up.
All right, Kristen, I'm going to pass that one over to Josh to elaborate on our diagnosed patient population and our strategies for getting more patients onto MIPLYFFA as well as those who are newly diagnosed.
Yes. Specifically, the diagnosed patients not receiving treatment may have been diagnosed a year ago before therapies were available. Their initial symptoms may not have been severe enough for treatment. We are now seeing those patients return to their clinicians as they become aware of treatment options.
One point I want to emphasize is how we interact with the centers of excellence and surrounding providers who are in coordination for patient care. Our mapped referral patterns are essential to reach out to physicians outside of these centers of excellence, especially those who may have seen only a single NPC patient. Our field organization is equipped to educate them and offer MIPLYFFA.
Okay. Can you provide us a sense of what percent of patients are on paid MIPLYFFA? And I've heard from checks that reimbursement has improved for those that are on combination therapy. What are you seeing?
We report metrics around prescription enrollment forms, which help illustrate the top of the funnel, followed by covered lives and revenue numbers. Our revenue went from $17.1 million in Q1 to $21.5 million in Q2, indicating a 26% jump in paid drug. However, this does not directly correlate to new enrollment numbers.
I want to highlight that our patient services team has effectively converted enrollments to paid patients and ensured they receive timely medication refills. This high retention rate is encouraging. There has been minimal pushback regarding reimbursement for patients on combination therapy.
We will go next to Jason Butler with Citizens.
Congrats on the quarter. Can you estimate the average time from enrollment form to getting a patient on reimbursed drug, and are retention rates for patients not in the EAP consistent with those in the EAP?
Thanks, Jason. I'll let Josh address the time from enrollment to commercialization. It is improving. Regarding retention rates, it's too early to accurately gauge long-term adherence and persistency due to only being in the second quarter since launch. The majority of EAP patients transitioning to commercial products have remained on therapy without any issues.
To add, we are not seeing differences in retention between former EAP patients and newly enrolled patients on commercial product. This positive outcome covers all patients. Regarding timeframes, the enrollment to paid process varies based on the patient's insurance type, but many are getting covered quickly—some within 72 hours. Continued improvements in our processes keep reducing the time from enrollment to paid across all payers.
Great. And one more on OLPRUVA. Can you discuss investment strategies for commercializing the product separate from MIPLYFFA?
The commercial infrastructure operates synergistically across both MIPLYFFA and OLPRUVA. Our operational efforts for managing enrollments and reimbursement support benefit both products. It's challenging to isolate the specific costs since they are fundamentally linked. Overall, the synergies among our efforts present significant opportunities to build a sustainable model.
We'll go next to Sumant Kulkarni with Canaccord.
Regarding patient enrollment, you mentioned that 7 additional enrollment forms increased your total to 129. How do you anticipate growth in patient enrollment forms in the future? Also, how does ACNEORSA affect enrollment?
I appreciate the question, Sumant. Our performance with a modest number of diagnosed patients shows we can achieve success. We aim to expand on this number over time, and previous experience in Europe indicates potential for diagnosis rates to increase. Josh, please elaborate on strategies to drive performance in the U.S.
We are concentrating on increasing awareness among diagnosed but untreated patients. By emphasizing MIPLYFFA's clinical differentiation, we can convey its importance. We've also invested in disease awareness campaigns and genetic testing processes to identify undiagnosed patients. We plan to actively involve clinicians and pursue various educational efforts. Moreover, we will make use of sophisticated tools to identify NPC patient profiles and educate clinicians to spot undiagnosed conditions promptly.
Most notably, in the U.S., our launch of MIPLYFFA arrives with the most substantial clinical data on NPC. Alongside five years’ worth of data, we're well-placed to bring MIPLYFFA to those in need.
You enrolled 7 patients in the DiSCOVER trial for Celiprolol. Are you satisfied with the pace of enrollment, and when can we expect top-line data?
I'll defer to Adrian for more details on enrollment pace and expected timelines for data.
We launched a genetic testing initiative to touch base with centers treating patients for COL3A, which has yielded considerable interest from physicians wanting to refer suitable patients into the trial. While patients participating in the screening process takes time, we are optimistic about reporting exciting outcomes next quarter.
We are fortunate to have five years’ worth of clinical data available upon launch, forming a strong foundation for our outreach work and we anticipate maximizing our reach to NPC patients.
We'll move next to Sami Corwin with William Blair.
Congrats on the progress this quarter. How many unique MIPLYFFA prescribers do you have now and how has that grown? Are there signs of prescriber saturation? Also, could you talk about expanding MIPLYFFA coverage lives and any policies still pending?
I'll pass both questions to Josh for his insights on both unique prescribers and any potential saturation or fatigue.
We have observed considerable growth in the number of prescribers. Initially, we had a limited number of clinicians from EAP. We have since expanded as we treated patients in the market. The prescriber base will continue to grow as we reach those clinicians caring for individual patients, and we do not expect to face prescriber fatigue. In relation to coverage, we have 52% today and expect that percentage to rise as plans take time to review products post-launch. Coverage has been observed to grow alongside our expansion, propelled by direct experiences with OLPRUVA demonstrating our commitment to increasing covered lives.
We'll go next to Eddie Hickman with Guggenheim Securities.
Congrats on the progress. Following up on penetration, will we see a similar cadence for new patient enrollment forms or will it become more challenging to find these known diagnosed patients? Also, can patients start miglustat and MIPLYFFA at the same time?
I'll defer to Josh on both patient enrollment and combination therapy.
While many patients are being captured, the number we serve remains relatively limited, which provides room for growth. Predicting enrollment rounded trends is complex at this early stage, but as we raise awareness around our data and strategies—it encourages prospects for patient enrollment to expand. As for simultaneous use, it's advisable as patients can start on both therapies.
It does not appear we have any other questions holding. This concludes the Q&A portion of today's call. I will now turn the program back to our presenters for any additional or closing remarks.
Thank you, operator, and thanks, everybody, for joining the call today. We look forward to keeping you informed of our future progress. Have a great week.
This does conclude today's program. Thank you for your participation. You may disconnect at any time.