Evoke Pharma, Inc. (NASDAQ:EVOK), a specialty pharmaceutical company focused primarily on the development and commercialization of drugs to treat gastrointestinal (GI) disorders, has reported its financial results for the fourth quarter and full year ended December 31, 2023. The company's performance in 2023 was marked by significant progress in the commercialization of its lead product, GIMOTI® (metoclopramide) nasal spray, as it continues to establish GIMOTI as a transformative treatment option for patients suffering from diabetic gastroparesis.
Financials
For the full year 2023, Evoke reported net product sales of $5,180,630, a substantial increase from the $2,500,000 reported in the prior year. This growth was driven by the company's strategic initiatives to expand its prescriber base, deepen prescribing patterns, and enhance patient access through improved pharmacy distribution and services. The company's net loss for the year was $7,792,295, compared to a net loss of $8,200,000 in 2022.
Evoke's cash and cash equivalents stood at $4,739,426 as of December 31, 2023, providing the company with the resources to continue its commercial activities and support ongoing research and development efforts. The company's operating cash flow and free cash flow for the full year 2023 were both -$4,984,977, reflecting the company's continued investment in the commercialization of GIMOTI.
Fourth quarter 2023 results also demonstrated Evoke's momentum, with net product sales reaching $1,735,490, up from $796,000 in the same period of 2022. The company's net loss for the fourth quarter was $2,000,000, or $0.59 per share, compared to a net loss of $1,800,000, or $0.54 per share, in the prior-year quarter.
Business Overview
Evoke Pharma is a specialty pharmaceutical company focused on the development and commercialization of drugs to treat gastrointestinal (GI) disorders, with a particular emphasis on GIMOTI (metoclopramide) nasal spray. GIMOTI is the first and only nasally-administered product indicated for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis.
Diabetic gastroparesis is a GI disorder affecting millions of patients worldwide, in which the stomach takes too long to empty its contents, resulting in a variety of serious GI symptoms and systemic metabolic complications. The gastric delay caused by gastroparesis can compromise the absorption of orally administered medications, making GIMOTI's nasal administration an important treatment option.
Evoke received approval from the U.S. Food and Drug Administration (FDA) for its 505(b)(2) New Drug Application (NDA) for GIMOTI in June 2020 and launched commercial sales of the product in the United States through its commercial partner, Eversana Life Science Services, LLC, in October 2020.
Commercial Highlights and Outlook
Evoke's commercial performance in 2023 was marked by significant progress, with the company doubling its net revenue for GIMOTI compared to the prior year. The number of new prescriptions grew by 86%, and total prescriptions dispensed increased by 101% year-over-year, demonstrating the growing demand for GIMOTI.
The company also expanded its prescriber base by 72% and increased the depth of prescribing by 36%, indicating that healthcare providers are continuing to embrace GIMOTI as a valuable treatment option for their patients with diabetic gastroparesis.
Evoke's strategic investments in 2023 have paid dividends, as the company has not only strengthened the belief in GIMOTI among healthcare providers, but also doubled the patient count on therapy. Looking ahead to 2024, the company is projecting net revenue of approximately $14 million, nearly tripling its 2023 performance.
Enhancing Patient Access and Improving Prescription Fulfillment
A key focus for Evoke in 2023 was improving patient access to GIMOTI and streamlining the prescription fulfillment process. The company transitioned its pharmacy services to ASPN Pharmacy, a strategic move that has positioned Evoke to better meet its distribution needs, enhance patient access, and optimize its services.
Since the transition to ASPN Pharmacy, Evoke has seen tangible improvements in its prescription fulfillment rates. Specifically, the company has experienced a 2% overall increase in the number of new prescriptions filled, with an even more impressive 22% improvement when excluding and processing prescriptions. Additionally, Evoke has seen a 6% increase in sales that are reimbursed without the need for patient affordability programs, a testament to the streamlined processes and the inherent value proposition of GIMOTI.
Furthermore, ASPN Pharmacy's focus on rapid and transparent patient communication has yielded positive results, with a 12% reduction in patient-initiated abandonment of prescriptions. These improvements in patient access and adherence are vital to Evoke's mission of ensuring that GIMOTI reaches all those who can benefit from it.
Compelling Real-World Evidence Supports GIMOTI's Value Proposition
Evoke has continued to generate and present compelling real-world evidence that demonstrates the clinical and economic benefits of GIMOTI compared to oral metoclopramide. At leading gastroenterology conferences, such as Digestive Disease Week and the American College of Gastroenterology Conference, Evoke's data was selected for plenary presentations, underscoring the strength and importance of the company's health resource utilization studies.
These studies have shown that patients taking GIMOTI experienced a 68% reduction in inpatient hospitalizations and a 60% reduction in emergency department visits compared to those taking oral metoclopramide. Importantly, despite the higher prescription costs of GIMOTI, the total healthcare costs for patients taking GIMOTI were significantly lower, by over $15,000, than those taking oral metoclopramide over a 6-month period.
These data not only resonate with GI professionals but also underscore Evoke's commitment to patient care and economic efficiency for payers. The company is actively engaging with payers to discuss the potential impact of this real-world evidence on coverage decisions, with preliminary feedback indicating that the data could lead to more favorable coverage policies for GIMOTI.
Addressing Concerns Around Tardive Dyskinesia
One of the key challenges Evoke has faced is addressing healthcare providers' concerns around the risk of tardive dyskinesia (TD), a potential side effect associated with metoclopramide. The company has recognized the need to educate and inform healthcare providers, as well as patients, about the actual risk of TD with GIMOTI.
Evoke is leveraging the comprehensive information in GIMOTI's label to help providers understand that the box warning is a roadmap and the label information are guardrails to help them avoid prescribing to patients at risk. The company is also updating healthcare providers with the most recent data, which indicates that the risk of TD with metoclopramide is likely less than 1%.
Furthermore, Evoke is expanding its educational efforts to include not only gastroenterology specialists, but also psychiatry and neurology experts, to ensure a comprehensive understanding of the TD risk and appropriate patient selection for GIMOTI. By addressing these concerns head-on, Evoke aims to empower healthcare providers to make informed benefit-risk assessments when considering GIMOTI for their patients.
Potential Upside from GLP-1 Agonist Usage
Evoke has also identified a potential opportunity arising from the increased use of GLP-1 agonists, a class of medications used for the treatment of type 2 diabetes and weight management. Recent studies have suggested that the use of GLP-1 agonists may be associated with an increased risk of gastroparesis-like symptoms, which could potentially drive more patients to seek treatment for their GI issues.
While the definitive evidence linking GLP-1 agonists to gastroparesis is still limited, Evoke believes that even a 1% incidence rate could have a significant impact on the gastroparesis market, given the large population expected to be treated with GLP-1 agonists in the future. The company is closely monitoring this development and believes it could represent an additional growth opportunity for GIMOTI, although this was not factored into the company's 2024 guidance.
Liquidity
As of December 31, 2023, Evoke had cash and cash equivalents of $4,739,426. The company believes that its existing cash, cash equivalents, and future cash flows from net product sales of GIMOTI will be sufficient to fund its operations into the fourth quarter of 2024.
Evoke has also taken steps to strengthen its financial position, including a public offering completed in February 2024 that provided the company with net proceeds of approximately $6.2 million. This additional capital, combined with the company's projected revenue growth, is expected to support Evoke's ongoing commercialization efforts and research and development activities.
Risks and Challenges
While Evoke has made significant strides in the commercialization of GIMOTI, the company continues to face several risks and challenges that could impact its future performance. These include:
1. Continued market acceptance and adoption of GIMOTI: Evoke's success is heavily dependent on its ability to drive increased awareness and utilization of GIMOTI among healthcare providers and patients.
2. Reimbursement and coverage decisions by payers: Evoke's ability to maintain and expand favorable coverage and reimbursement policies for GIMOTI will be crucial to the product's long-term success.
3. Reliance on third-party manufacturers and suppliers: Evoke does not own or operate its own manufacturing facilities, and any disruptions in its supply chain could impact the company's ability to meet demand for GIMOTI.
4. Regulatory and compliance requirements: Evoke must continue to comply with various regulatory and legal requirements, which could result in additional costs and delays.
5. Competition from other gastroparesis treatments: GIMOTI faces competition from well-established products, including oral and intravenous forms of metoclopramide, which could limit the product's market share.
Conclusion
Evoke Pharma's performance in 2023 was marked by significant progress in the commercialization of GIMOTI, with the company doubling its net revenue and expanding its prescriber base and patient count. The company's strategic investments, including the transition to ASPN Pharmacy, have improved patient access and prescription fulfillment, while the compelling real-world evidence supporting GIMOTI's clinical and economic benefits has the potential to drive further adoption and favorable coverage decisions from payers.
Looking ahead, Evoke is projecting net revenue of approximately $14 million in 2024, nearly tripling its 2023 performance. The company's focus on addressing healthcare providers' concerns around tardive dyskinesia and the potential upside from the increased use of GLP-1 agonists further underscore Evoke's commitment to ensuring that GIMOTI reaches all those who can benefit from it.
Despite the challenges the company faces, Evoke's strong financial position, with $4.7 million in cash and cash equivalents as of December 31, 2023, and the additional capital raised in the recent public offering, provide the resources necessary to support its ongoing commercial activities and research and development efforts. As Evoke continues to execute on its strategic initiatives, the company is well-positioned to capitalize on the significant opportunity presented by the gastroparesis market and deliver value to its shareholders.