Evoke Pharma - Earnings Call - Q4 2024

Executive Summary

• Q4 revenue was approximately $3.3M, up 24.6% sequentially; full-year 2024 revenue reached $10.25M (+97.8% YoY), modestly above the revised FY24 guide, with Q4 net loss of ~$1.2M or $0.49 per share.
• Management issued FY2025 net revenue guidance of approximately $16M (+~60% YoY), citing momentum in prescriber growth, improved fulfillment with ASPN, and reimbursement initiatives as drivers.
• Commercial KPIs strengthened: cumulative prescribers reached 2,553 (+46% during 2024), fill rates rose 72% YoY, and patient enrollments increased 22% YoY; management highlighted expanding pharmacy partnerships and new field reimbursement managers to improve prior authorization throughput.
• Strategic and regulatory tailwinds include new patents (Orange Book-listed in Q1’25), the Vanda CRL (tradipitant) keeping GIMOTI the only FDA-approved diabetic gastroparesis therapy in over a decade, and the FDA’s indicated discontinuation of domperidone expanded access supply in early 2025, all reinforcing GIMOTI’s positioning.

What Went Well and What Went Wrong

• What Went Well

  • Sequential acceleration: “Q4 2024 revenue increased 24.6% to $3.3 million over Q3 2024,” capping FY revenue at $10.25M (+97.8% YoY) and exceeding prior guidance.
  • Commercial execution: Transition to ASPN Pharmacies improved fulfillment; prescriber base grew 46% to 2,553; fill rates +72% YoY; patient enrollments +22% YoY. CEO: “2024 was a transformative year… Our revenue nearly doubled year-over-year, reaching $10.2 million…”.
  • Strategic moat: Two new U.S. patents (Orange Book-listed in Q1’25) and Vanda’s CRL underscore GIMOTI’s uniqueness; FDA’s domperidone discontinuation heightens need for non-oral alternatives.

• What Went Wrong

  • Losses persist amid higher OpEx: Q4 net loss ~$1.2M ($0.49/share) despite revenue growth; Q4 SG&A rose to ~$4.4M and total OpEx to ~$4.5M as commercialization costs stepped up.
  • Prior-authorization friction: Only ~50% of PAs are completed; company is adding 4 field reimbursement managers to improve conversion and reduce leakage, implying current access frictions remain a headwind.
  • Guidance dependencies and macro risks: 2025 guidance depends on reimbursement/fill assumptions and external factors (macroeconomy, supply chain, inflation), suggesting execution/macro sensitivity remains elevated.

Transcript

Operator (participant)

Good afternoon and welcome to the Evoke Pharma fourth quarter and full year 2024 earnings conference call. Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be open for your questions. At that time, you may register to ask a question by pressing * and 1 on your telephone keypad. Please be advised that today's call is being recorded, and we will be standing by if you should need any assistance. I would now like to turn the call over to Daniel Kontoh-Boateng. Thank you, sir. You may begin.

Daniel Kontoh-Boateng (Managing Director)

Good afternoon, and thank you for participating in the Evoke Pharma's conference call today. With me today are Matt D'Onofrio, Evoke's Chief Executive Officer; Chris Quesenberry, GIMOTI's Chief Commercial Officer from EVERSANA; and Mark Kowalski, Evoke's Chief Financial Officer. By now, you should have a copy of the press release we issued earlier. If not, it is available on the Investor Relations page of our website at evokepharma.com. We encourage everyone to read today's press release as well as Evoke's annual report on Form 10-K, which is now filed with the SEC. The company's Form 10-K and earnings release are also available on Evoke's website. Please note that certain information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform ACG. We caution listeners that during this call, management will be making forward-looking statements.

ACGual results could differ materially from those stated or implied by these forward-looking statements due to risk uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in Evoke's press releases and SEC filings, including its annual report on Form 10-K and subsequent filings. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast. Evoke undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances as of the date of this conference call. With that, I would now like to turn the call over to Matt D'Onofrio. Matt?

Matthew D'Onofrio (Co-Founder, and CEO)

Thank you, Daniel.

Thank you, Daniel. Good afternoon, everyone. Thanks for joining today. Start with a patient story to keep our focus on why we're working so tirelessly to help persons suffering from gastroparesis. This quote is from a real person, a patient that underscores why we do what we do at Evoke Pharma. A physician recently described to us a 23-year-old patient who had been to the hospital eight times in the prior six months to him receiving our medication. He had lost his job, moved back in with his parents, and he dropped below 100 pounds. He and his mother were desperate for a solution. One month after starting GIMOTI, he did not return to the hospital. He started regaining weight, and he had only experienced one episode of vomiting since he missed a dose. That's the kind of life-changing impACG we aim to deliver.

Stories like these drive us forward and reinforce our mission to make a meaningful difference in the lives of gastroparesis patients. 2024 was another growth year for Evoke Pharma. It was a year where we executed on our strategy, gained trACGion in the market, and delivered strong financial results. We achieved $10.2 million in total revenue, reflecting a 97% year-over-year increase compared to the prior $9.5-$10 million guidance. In Q4 alone, our revenue was $3.3 million, a 24.6% sequential increase. A major driver of this growth was the expansion of GIMOTI's prescriber base and improved prescription fulfillment. The transition to Aspen Pharmacies played a crucial role in this, significantly accelerating the delivery time of GIMOTI and rapid adjudication of insurance authorizations for patients. This, along with our growing provider engagement, led to a 46% increase in prescribers year-over-year, bringing our total cumulative prescriber base to 2,553.

Additionally, fill rates increased 72% year-over-year, and patient enrollments grew 22%. Our corporate position continues to improve with two additional Orange Book-listed patents that were allowed in 2024 and recently posted to the FDA website. We now have six listed patents related to GIMOTI into 2030. Additionally, the recent Vanda CRL and FDA's posted notice on domperidone discontinuation via the compassionate use program further emphasized the critical need for GIMOTI. GIMOTI remains the only approved product to treat this disease that has any evidence of improvement over prior standard of care oral metoclopramide. We continue to capture stories of patients that are not adequately treated with oral medications and find relief with GIMOTI, the only non-oral and reliable FDA-approved nasal treatment for gastroparesis. Evoke remains the only company positioned to elevate treatment for this devastating disease.

Now we'll turn to Chris to recap our commercial progress over the course of 2024 and plans moving forward into 2025.

Chris Quesenberry (Chief Commercial Officer)

Thanks, Matt. Good afternoon, everyone. To reinforce Matt's summary of 2024, in addition to improving the efficiency of our processes with our Aspen partner pharmacy, we had a number of milestone moments in 2024 that helped us to achieve the growth that Matt described. We expanded our pharmacy distribution network to create redundancy in key markets and mitigate loss of out-of-network scripts in other markets. We continue to build evidence supporting the utilization of GIMOTI and challenge the use of oral metoclopramide as the standard of care for patients with gastroparesis. We improved our execution in the field and overall by launching a fully integrated omnichannel program powered by artificial intelligence and launched a new marketing campaign focused on switch. Our message is being heard and recognized in various channels, including awards and presentations at conferences, attendance at sponsored speaking programs, and publications of our data.

Beyond commercial execution, we have also made meaningful strides in clinical validation. Our healthcare resource utilization, or HRU data, has continued to reinforce the value proposition of GIMOTI. At ACG in October of 2024, we presented data evaluating the impACG of GIMOTI, our FDA-approved metoclopramide nasal spray in patients with diabetic gastroparesis who were simultaneously taking GLP-1 receptor agonists. This research highlights GIMOTI's role as a potential supportive therapy for GLP-1 users experiencing gastroparesis symptoms. Furthermore, given the frequent questions and interest from providers on this topic, we are now integrating this data into our educational efforts. ACG was a defining moment for us.

Not only did we receive the Presidential Poster Award, but our larger booth presence allowed us to engage with hundreds of physicians, doubled the number of interACGions from last year, many of whom were learning about GIMOTI for the first time, and a good number of whom specifically sought us out. This underscores what we already believe: we are just scratching the surface in terms of market penetration. Awareness remains a top priority, and with EVERSANA's expanded efforts, we are well-positioned to accelerate broader provider education and drive adoption. Again, to emphasize the impACG of working with Aspen Pharmacies over the past year, this transition has been one of the most effective commercial strategies we've implemented. It has not only streamlined prescription fulfillment, but it has also improved the overall patient experience, reducing frustration and improving adherence.

Aspen's high patient retention rates help to ensure that more patients stay on therapy, which is critical for improving outcomes and supporting provider confidence in prescribing GIMOTI. The result of these adjustments to strategy and tACGical moves is that we were able to double revenue in 2024 from 2023. In fACG, we've doubled revenue two times over the last two years. We are making an impACG in the market and showing that we can impACG both providers' behaviors as well as our own processes to continue to build on the performance of GIMOTI. We took particularly big strides in the second and fourth quarter of last year and plan to continue progress towards growing business and market share as well as breadth of prescribing for GIMOTI. In fACG, as we continue to add new prescribers to the ranks of GIMOTI, the depth of prescribing continues to grow.

On average, we add between 65 and 75 new prescribers each month who generally write for their first prescription. Yet, we still continue to see the depth of prescribing per physician continue to grow, and it's now at nearly 6.5 scripts per prescriber. We believe neither of these trends show signs of slowing and underscores the fACG, again, that we've only scratched the surface for this brand in this market, and there is and continues to be significant upside potential. When we look at patients and the average number of months on therapy, the trends are remarkably similar to the ones you see on this graph. They continue to grow, and they show no signs of abating either. I'm excited because we continue to see signs of repeat patients with prescription renewals, strong refill rates, and overall fill rates that are cumulatively catching up to cumulative prescriptions since launch.

Let's now look at the efficacy of key components of our program. There are several improvements we have made within our processes, communication, and education in coordination with our pharmacy partner, Aspen Pharmacies. They have leading capabilities in communicating and onboarding patients, reporting and transparency, and tools for providers to support access for patients to important medications like GIMOTI. We are focused on streamlining the process and integrating it into the provider's workflow as much as possible. A significant indicator of those efforts is seen in meaningful rise in conversion rates over the course of the year. The quality of those same adjustments is reflected in improvement in the conversion rate for each payer type throughout the year. In addition to improvements with processes with Aspen Pharmacies, we added capacity and coverage by expanding our distribution network by seven dispensing pharmacies.

These partnerships have helped us patch holes in a payer system that in some instances requires pharmacies to be part of Altevium's network of pharmacies, where in others requires them to be within the state where the prescription is filled. We added these pharmacies throughout the year, which contributed to a 30% faster speed to therapy for patients, which is essentially the time between the prescription intake and the receipt by the patient of GIMOTI. A significant reduction in out-of-network prescriptions and increased overall conversion and reimbursement. This yielded a growth in year-over-year expenses by 72%. Importantly, when patients get their prescriptions filled, it increases both their confidence and prescriber confidence, which is a very important currency for us. No matter what the market, data is king, and the gastroparesis market is not different.

While we have a nasal route administration that demonstrated faster viability and clinical trial efficacy that shows relief of symptoms, previously, we couldn't answer two critical questions that physicians had. First, does the nasal route administration really matter? Second, are you any better than oral metoclopramide? Our retrospective real-world data and perhaps one of the largest studies of patients with gastroparesis was a significant step towards answering those questions. We demonstrated that GIMOTI was significantly better than oral metoclopramide in reducing visits and hospitalizations. Emphasizing the point, nearly two-thirds of patients in the GIMOTI group previously took oral metoclopramide. By switching from oral to the nasal route of administration, the patients achieved better results. In fACG, it somewhat answers a third important question, which is, if a patient is not doing well on oral metoclopramide, would they see benefit by switching to GIMOTI?

We think the answer is yes. With these data, we feel confident that we can move GIMOTI from a product providers are willing to try to a product they rely upon. We have taken this message to the market, and we have initiated a definitive switch campaign. We supercharged that with an omnichannel campaign powered by artificial intelligence that we launched at the beginning of Q4 last year. Our message is reaching a broader audience with a faster cadence and a more reliable presence than ever before. We believe we have high commitment within our sales team and significant engagement with our providers.

In fACG, we've been able to improve our reach to targeted physicians to 60%, make more than 2,000 additional calls that we wouldn't have been able to make beforehand, and send content over email that was engaging enough to compel a 16% open rate versus an industry average of 2%. Qualitatively, we know we're having an impACG because more providers are seeking GIMOTI out rather than us introducing GIMOTI to them, and providers are asking more questions and digging deeper into our data. As I transition from accomplishments in 2024 to double that revenue, we need to dig deeper into 2025 to achieve our own performance and expectations. We need to build on this momentum we've earned and not rest on those achievements. As I've said, we have only scratched the surface, and there are so many more patients who we can potentially help.

One area where there's still significant room for impACG is on the pharmacy side, and doing so in a strategic and thoughtful manner. Within gastroenterology, the landscape has been changing pretty dramatically, and thousands of providers are now part of very large GI prACGice organizations. These organizations are purpose-built to economize on share operationally and to scale office services to patients, hospital systems, and payers. Based on their size, they have increasing clout, and many of them have preferred specialty pharmacies they work with. Our goal is to meet them where they're at. We have many common goals and objectives, primarily centered on improved patient care and wanting a streamlined process. By adding pharmacies here and in this way, we believe it will be additive to our business. As we grow volume and continue to obtain prior authorization, we're going to invest in improving this process as well.

I am really excited to announce that we recently added four field reimbursement managers, or FRMs, and a leader to serve as a resource to prescribers in the prior authorization process. Currently, only 50% of them are being completed. We have demonstrated, though, that we can improve the completion rate with our sales team, but that took them off the task of selling. By deploying FRMs, we hope to solve a pain point for prescribers, the task of obtaining prior authorizations, which will take them away from patient care. We solve a pain point for ourselves by increasing the completion quality of prior authorizations. We expect this to impACG conversions, gross to net, and again, overall confidence in prescribing. We are going to continue to invest in evidence generation and education to reinforce that GIMOTI should be the standard of care.

We will continue to feature our healthcare resource reduction data prominently. As I mentioned earlier, recently, we have provided data to the growing discussion about GLP-1 use and the association with symptoms like nausea, vomiting, and gastroparesis. In a sub-analysis of our HRU data in 92 patients, we showed that patients taking GIMOTI fared better than patients taking oral metoclopramide across different healthcare visits. While these data are limited, we believe GIMOTI can be an option for patients on GLP-1 who have diabetes and suffer from gastroparesis. This pillar of evidence will continue to be an important part of GIMOTI and will further entrench the brand name in the market today and serve to differentiate GIMOTI against future entrants. In summary, we are ambitious about our plans and goals for 2025. We've set some solid groundwork and have made adjustments to capitalize on our opportunities and diminish our challenges.

Our aim is to continue to build on our performance. We are strategically partnering with pharmacies, improving the prior authorization process, expanding our share of voice, and improving our execution, adding to the reasons to believe in GIMOTI through evidence and data, and continuing to challenge ourselves on where else GIMOTI might add value to patients and providers. With that, I'll turn the call over to our Chief Financial Officer, Mark, to go over the financials.

Mark Kowalski (CFO)

Thanks, Chris. Once again, thank you for all joining us this afternoon. I'll get right into Evoke's financials for the fourth quarter and full year-end 2024 results. As Matt mentioned, for the fourth quarter of 2024, net product sales were approximately $3.3 million compared with $1.7 million during the fourth quarter of 2023.

The net loss was approximately $1.2 million, or $0.49 per share, compared with $2 million, or $7.13 per share for the fourth quarter of 2023. For the year ended December 31, 2024, net product sales were approximately $10.2 million compared with approximately $5.2 million for the year ended December 31, 2023. The net loss was approximately $5.4 million, or $2.81 per share, compared with a net loss of $7.8 million, or $27.97 per share for the year ended December 31, 2023. The year-over-year increase in revenue was due to the higher net product sales in 2024, resulting from enhanced prescription fulfillment through the Aspen Pharmacies network, robust commercialization efforts, and increased provider awareness through marketing of head-to-head real-world data demonstrating GIMOTI healthcare resource utilization benefits over oral metoclopramide.

There were no research and development expenses incurred during the fourth quarter of 2024 compared to $23,000 for the fourth quarter of 2023. For the full year of 2024, research and development expenses were approximately $16,000 compared with approximately $0.2 million for the prior year. For the fourth quarter of 2024, selling general administrative expenses were approximately $4.4 million compared with $3.5 million for the fourth quarter of 2023. For the year-ended December 31, 2024, SG&A expenses were approximately $15.1 million versus approximately $12.2 million for the year-ended December 31, 2023. The increase in SG&A cost year-over-year resulted primarily from higher marketing and EVERSANA profit-sharing costs. We expect that SG&A expenses will increase in the future as we continue to progress with the commercialization of GIMOTI and reimburse EVERSANA from the sales of GIMOTI.

Total operating expenses for the fourth quarter of 2024 were approximately $4.5 million compared with $3.6 million for the same period of 2023. For the year-ended December 31, 2024, total operating expenses were approximately $15.5 million compared with approximately $12.6 million for the full year of 2023. As of December 31, 2024, cash and cash equivalents were approximately $13.6 million. We believe, based on our current operating plan, that our existing cash and cash equivalents, including proceeds raised from financings in 2024, as well as future cash flows from net product sales to GIMOTI, will be sufficient to fund our operations into the first quarter of 2026. It's worth reiterating that one of the biggest financial milestones of 2024 was our $14.3 million capital raise, which was achieved through equity financings and warrant exercises.

This funding has allowed us to ensure NASDAQ compliance and extend our cash runway into Q1 2026, giving us the financial flexibility we need to execute operations smoothly and expand market access. We have a strong financial outlook for 2025. As noted in our press release, we are projecting net revenue guidance of approximately $16 million, which represents a 60% increase over 2024 net revenue. This projection is built on the momentum we've established, improved reimbursement pathways, and increasing prescription fills. Of course, as with any guidance, this outlook also considers external fACGors outside our control, such as macroeconomic conditions, supply chain constraints, and inflationary pressures. That said, we remain highly confident in our ability to execute and continue delivering strong results. With that, we'll open the call to questions. Operator? Absolutely.

Operator (participant)

At this time, if you'd like to ask a question, please press the * and 1 keys on your telephone keypad. Keep in mind, you may remove yourself from the question at any time by pressing the * and 1. We'll take our first question today from Neil Chen with Laidlaw & Company. Please go ahead. Your line is open.

Neil Chen (Managing Director)

Good afternoon. Thanks for taking the questions. Congrats on a good quarter. Thank you. We have two questions here. The first one, I just want to look at the competitive landscape that you have, the vendors that have the CRL, and also the compassionate use of the things being pulled out from the FDA. How do you see that could impACG on the competitive landscape?

What do you feel that the compACGion use of the scope of compACGion use drug and how much that could potentially be in the you could capture some of those?

Matthew D'Onofrio (Co-Founder, and CEO)

Sure. Sure. I'll make a comment, and then maybe Chris, you can chime in. It's really hard to know exACGly what will happen in terms of the domperidone component. We don't know when it will finally run out. We know that they said sometime this year. Obviously, there are patients that are out there taking it through that mechanism. The exACG number is not reported anywhere, so we don't know. We also know that some patients get illegally shipped in from Canada or other countries externally, which will probably continue as well.

We recognize that there's just a big need for product, and it's most likely going to end up in some way falling into our laps in terms of those patients are probably going to end up having to turn to an alternative like GIMOTI. I'll stop with that, and maybe Chris, you can further chime in.

Chris Quesenberry (Chief Commercial Officer)

I agree, Matt. It's not clear the volume, but what is clear is that yet another option is no longer available for patients sometime later this year. That continues to cement Evoke as a leader in this market. As patients and their providers turn to options, we will be there as an option for them.

Neil Chen (Managing Director)

Okay. Great. That's very helpful. Maybe a follow-up question here that I remember a few quarters in the prior quarters, you guys have talked about increased Medicaid and Medicaid, probably Medicaid pharmacy in different states.

Any update on that at that front?

Matthew D'Onofrio (Co-Founder, and CEO)

Yeah. Chris, why don't you take this one?

Chris Quesenberry (Chief Commercial Officer)

Yes. So that strategy that I mentioned earlier had helped us. And you saw earlier in the slide that the conversion rate of Medicaid and Medicare has increased over the year. And part of that reason is because we have brought on board those seven additional dispensing pharmacies. Medicaid, as an example, has gone from about 2% of our business at the early part of 2024 to now between 5-7%, depending upon the month. It is growing. As we demonstrate to providers that we can fill those prescriptions, we believe that will continue to grow.

Neil Chen (Managing Director)

Okay. Great. That's very helpful. Again, congrats, and thanks for taking the question.

Operator (participant)

Once again, if you'd like to ask a question today, please press the * and 1 keys on your telephone keypad.

We can pause for a moment to allow any further questions to queue. There are no further questions on the line at this time. This concludes the Q&A portion for today's call. I would now like to turn the call back over to Matt D'Onofrio for any additional or closing remarks.

Matthew D'Onofrio (Co-Founder, and CEO)

Sure. Hey, before we conclude the call, I want to take a moment to reflect on where we are heading. Looking ahead into 2025 and beyond, our strategy remains clear. Expand pharmacy partnerships to continue improving access. Increase provider awareness and engagement to drive broader adoption of GIMOTI. Leverage real-world data to strengthen payer discussions and reinforce GIMOTI's value. Continue improving prescription fulfillment rates to reduce leakage and abandonment. As per our mindset since Evoke's inception, maintain a disciplined approach to capital allocation, ensuring we maximize the return on every dollar invested in commercialization.

We've built strong momentum, and we are in a great position to capitalize on the foundation we've laid over the past year. With the right commercial infrastructure, strong strategic partnerships, and growing clinical validation, we believe GIMOTI is on its way to becoming the standard of care for gastroparesis treatment. We are looking forward to sharing our progress over the course of the year, and thank you for your continued support.