Jaguar Health, Inc. (JAGX) Q2 2022 Earnings Call Transcript

Jaguar Health, Inc. (NASDAQ: JAGX) Q2 2022 earnings call dated Aug. 22, 2022

Corporate Participants:

Lisa Conte — Founder & Chief Executive Officer

Carol Lizak — Chief Financial Officer

Ian H. Wendt — Chief Commercial Officer

Analysts:

Presentation:

Operator

Ladies and gentlemen, please standby. Before I turn the call over to management, I’d like to remind you that management may make forward-looking statements relating to such matters as continued growth prospects for the company, uncertainties regarding market acceptance of products, the impact of competitive products and pricing, industry trends and product initiatives, including products in the development stage, which may not achieve scientific objectives or meet stringent regulatory requirements.

Forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These statements are based on current available information which management’s current assumptions, expectations and projections about future events. While management believes its assumptions, expectations and projections are reasonable in the view of the current available information, you are cautioned not to place undue reliance on these forward-looking statements.

The company’s the actual results may differ materially from those discussed during this webcast for a variety of reasons, including those described in the forward-looking statements and risk factors sections of the company’s Form 10-K for the year 2021, which was filed March 11, 2022 and its other filings with the SEC, which are available on the Investor Relations section of Jaguar’s website. Except as required by law, Jaguar undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.

Additionally, please note that the company’s supplements its condensed consolidated financial statements presented on a GAAP basis by providing gross sales, non-GAAP EBITDA and non-GAAP recurring EBITDA. Jaguar believes that the disclosure items of these non-GAAP measures provide investors with additional information that reflects the basis upon which the company’s management assesses and operates the business. These non-GAAP financial measures should not be viewed in isolation or as substitute for GAAP net sales and GAAP net loss and are not subject or substitute for or superior to measures of financial performance in the conformity with GAAP. [Operator Instructions]

At this time, it is my pleasure to turn the call over to Lisa Conte, Jaguar Health’s Founder, President and Chief Executive Officer. The floor is yours, Lisa.

Lisa Conte — Founder & Chief Executive Officer

Thank you. That’s quite a mouthful to start with. Welcome all. As you just heard, my name is Lisa Conte, and I am the Founder, President and CEO of Jaguar Health and our wholly-owned subsidiary in the United States, Napo Pharmaceuticals. I am also Chairman of the Board of Napo Therapeutics, the corporation we established in Milan, Italy last year to which we granted an exclusive license to crofelemer in Europe, and I’ll be speaking about that more later. But I’m going to begin today with the key top-line results for the second quarter of 2022.

Prescription product net revenue of $2.9 million, representing an approximate 12% increase over Q1 2022, a quarter-over-quarter calculation. And an approximate 644% increase over Q2 last year 2021, a year-over-year calculation. This is the fourth consecutive quarter of growth in Mytesi net revenue. And we are quite pleased with the growth trajectory of our current prescriptions of business. And as you’ll hear, quite excited about the late-stage pipeline opportunities that we feel will be transformative in the value creation and value recognition for all our stakeholders, including patients and shareholders.

I’ll continue with a few brief updates. And then Carol Lizak, Jaguar’s Chief Financial Officer, will provide a recap of the key financial results for the second quarter of 2022. After Carol speaks, we’ll hear from Ian Wendt, Jaguar’s Chief Commercial Officer. Ian will speak to updates on Mytesi-related commercial initiatives to continue to educate and serve the HIV community, the activities that will serve future pipeline indications for crofelemer and about ongoing commercial efforts underway for Canalevia CA1, our prescription drug for the treatment of chemotherapy-induced diarrhea, which I’ll refer to as CID, chemotherapy-induced diarrhea in dogs that has been conditionally approved by the FDA and became commercially available to veterinarians in the United States to provide comfort and relief to their canine patients at the end of April 2022. This is the first quarter that we are reporting sales for Canalevia CA1, which is very exciting and important for those patients.

As a reminder, commercialize human drug product is named Mytesi. The generic name is crofelemer. It is the first-in-class anti-secretory agent approved initially for the specialty indication of the symptomatic relief of non-infectious diarrhea in adult patients with HIV/AIDS on antiretroviral therapy. As the term specialty implies, this is a relatively small, important though relatively small market. This indication was fast-tracked by the FDA. And that’s why it’s the first approved indication for crofelemer.

What is really powerful about crofelemer is that this is a pipeline within a product. And what I’m going to focus on today are the two late-stage clinical milestones we have that we feel are potentially transformative initiatives for the company to take crofelemer from a pipeline opportunities to tangible revenue generating patient benefiting product indications. Interestingly, Canalevia CA1 is conditionally approved by the Center for Veterinary Medicine of the FDA for chemotherapy-induced diarrhea in dogs.

The two human follow-on indications we are focused on are; cancer therapy-related diarrhea in the U.S. And through Napo Therapeutics, which I’ll refer to as Napo Thera, through Napo Thera’s rare disease business model, the orphan indication of short bowel syndrome in Europe. Each of these indications has a major clinical event planned to take place within the next approximate six to 12 months.

So first, what exactly are these indications? Let’s talk about cancer therapy-related diarrhea. It’s estimated that up to 80% of chemotherapy patients experience diarrhea. Managing diarrhea has the potential to impact the outcome of cancer therapy as approximately 40% of patients go off their lifesaving cancer therapy or move to or even start with a sub-therapeutic dose of their chemotherapy due to diarrhea. This is in addition to the impact on patient comfort, dignity and the cost to the healthcare system from immense dehydration in potential infections, a point quite important for healthcare reimbursement.

Enrollment is continuing for the on-target study, our pivotal Phase 3 trial of crofelemer for cancer therapy-related diarrhea in humans. We’re aiming to complete enrollment with a total of 256 patients by the first half of 2023. This is a prophylaxis study which tells you a lot about how important it is to get in front of the impact of diarrhea during cancer treatment. CTD is not your garden variety diarrhea. This is diarrhea that put patients in the hospital not only for dehydration, also for electrolyte imbalance that can have cardiovascular effects and can cause organ shutdowns and has even resulted in death in some patients who have been in cancer agent manufacturers clinical trials.

With the new targeted cancer therapies that are used chronically, both in metastatic and in curative cancer situation, therapies are used for months or years until the patient passes on. Sometimes the incidence of diarrhea this is high as 100%. Recent reports show the diarrhea occurs 50% to 100% of the time with different targeted agents. To project the potential market opportunity for CTD, since crofelemer is the first drug candidate that’s being evaluated to be approved for this indication, we’re looking at an analogous market chemotherapy-induced nausea and vomiting referred to as CINV. This market is projected to be closed to a $3 billion global market this year according to a report published by Allied Market Research. CINV agents are typically only used for the first three days in traditional cytotoxic chemotherapy. With CTD cancer therapy-related diarrhea, we are talking about diarrhea that can persist on a chronic basis for months and for years.

The successful completion of our on-target pivotal trial will result in a supplemental new drug application filing for the same formulation as the currently commercialized crofelemer or Mytesi. Mytesi is of course already approved for a chronic use in people living with HIV/AIDS and has a full FDA compliance supply chain in place from the rain forest to essentially every one of our specialty pharmacy distribution network across the United States. As a reminder, safety and manufacturing are the two most common reasons that new drug applications fail. These activities are completed for Mytesi from a regulatory perspective. Hence, we spent much care and engaged in extensive communication with the FDA in the design and implementation of this final clinical and regulatory step to support bringing crofelemer to cancer patients suffering with diarrhea.

I’ll now discuss our second prioritized pipeline indications for crofelemer, short bowel syndrome, referred to as SBS. SBS is a catastrophic situation for patients. It is a classic rare disease affecting an estimated 40,000 people around the world. The normal gut, it is 20 to 25 feet in length. In SBS, the patients’ gut could be less than 5 feet for congenital reasons or as a result of surgery due to cancer inflammation or an accident. As you can imagine, with a very short gut [Indecipherable] whatever goes in comes right out. The bottom line is there is not enough intestinal real estate. There is not enough surface area for the SBS patient to absorb what I’ll call the nutrients of life, carbohydrates, proteins, fats, vitamins and minerals.

So what happens is these patients often end up on parenteral nutrition, the intravenous feeding of liquid nutrients for up to 20 hours a day, seven days a week. Obviously, a significant negative impact on the patient’s quality of life. And there are multiple negative health effects, inceptions and complications associated with parental nutirition. Parental nutrition is also expensive, costing hundreds of thousands to a million dollars a year to manage an individual patient, including the myriad of complications with high morbidity and mortality. The global SBS market is projected to reach $5 billion by 2027, according to report from Vision Research Reports.

Although parental nutrition is considered the standard of care, there is a good product approved for SBS called teduglutide, which is the GLP-2 analog. It is essentially a growth hormone intended to grow the real estate of the gut slightly so that there is a little bit more time for absorption of the nutrients of life. It’s administered as an injection and is estimated to be utilized in less than 10% of the SBS patient population. Teduglutide has a range of side effects and cannot be used chronically. It has been shown to increase cardiovascular risk, especially the risk of developing congestive heart failure. And its use has been shown to increase absorption and metabolism of concomitant medications.

The primary endpoint in the trial for the approval of teduglutide was the reduction in the time required to be on parental nutrition by about 20%. What we’re looking to do with crofelemer is to reduce the time on parental nutrition as the primary endpoint as well and provide better stool formation and a quality of life measurement. With crofelemer’s strong safety profile, we expect patients to be able to tolerate and benefit from crofelemer chronically.

SBS development of crofelemer is being pursued through the company we established in Europe last year called Napo Therapeutics, Napo Thera, which holds an exclusive license to crofelemer for Europe from Jaguar. It’s a classic license agreement incorporating upfront payment milestones and royalties. The reason for basing this new company in Europe is because the EMA, the European Medicines Agency, which is the FDA Europe, has an early access program for orphan indications like SBS because of the impact on patients. With published proof of concept data, patients in specific major markets in Europe can get access to a product through an early access program where full approval is being pursued. And for those patients, the product is reimbursed. And this is not a program that exists in the United States.

We have approved the planned investigator-initiated proof of concept trial of crofelemer for SBS and the third-party investigator is targeting the presentation of results from the study in December of this year 2022 at a Global GA Conference, which will take place in Dubai. With the publication of the results of this proof of concept study, Napo Thera is aiming to implement the early access program for patient treatment and revenue generation. The timing of this happens to coincide with when we expect to complete our pivotal Phase 3 trials of crofelemer for cancer therapy-related diarrhea.

Again, a key advantage of the Napo Thera efforts to Jaguar is that Napo Thera is well over majority-owned by Jaguar, providing potential equity accretion value to Jaguar’s shareholders and stakeholders, value that we believe is unrecognized at this time. Jaguar also receives the value of any clinical data generated by Napo Thera for SBS. And reciprocally, Napo Thera receives the value and the ability to utilize the CTD, the cancer Phase 3 data Jaguar is developing. Hence, the parallel, complementary and geographically-focused development of crofelemer for each of these two core pipeline mutations, CTD and SBS, are progressing simultaneously and collaboratively each with their own dedicated focus and extremely experienced and talented teams.

For the recap, in approximately 12 months, we expect to have completion of enrollment in our Phase 3 trial of cancer therapy-related diarrhea called the OnTarget trial, we expect to have published proof of concept data in support of an early access program in Europe for SBS which could bring in meaningful revenues, two expected transformative events on the near-term horizon.

An additional key milestone for 2022 on the human front is the filing of an investigational new drug IND application with the FDA in the third quarter this year for symptomatic relief of diarrhea from cholera for our NP-300 drug candidate, also referred to as lechlemer. Lechlemer is a decent chemical collection of proanthocyanidins extracted from Croton lechleri tree, which is the same tree from which we get crofelemer, which we believe define lechlemer as a distinct product from crofelemer under FDA botanical guidance, the guidance upon which crofelemer is approved.

Lechlemer works as the same novel anti-secretory mechanism of action as crofelemer, yet has a lower manufacturing cost. In support of this IND, we received comprehensive animal toxicity preclinical services supported by the National Institute of Allergy and Infectious Diseases for four preclinical studies. We plan to pursue a tropical disease priority review voucher for lechlemer under the FDA’s financial incentive program to develop drugs for tropical diseases such as cholera. Priority review vouchers are transferable. And in past transactions by other companies have sold for prices ranging from $67 million to $350 million and which provides for a potential immediate return on investment upon approval of the product for the symptomatic relief of diarrhea from cholera.

Moving on to the animal health side of our business. As I mentioned, crofelemer is also the active ingredient in Canalevia-CA1, our product for chemotherapy-induced diarrhea in dogs, for which commercial launch activities are ongoing now. The whole cancer situation in dogs is remarkably analogous to the human situation. As with human cancer patients, dogs go off their disease modifying chemotherapy or move to a sub-therapeutic dose approximately 40% of the time due to diarrhea, meaning these dogs cannot complete their therapeutic dose of chemotherapy because of diarrhea.

The comfort of the dog is one of the most important, if not the most important consideration of the dog owner when deciding whether or not to put their dogs through cancer treatment, because of course you can’t talk to the dog and let them know it’s going to be terrible for three months, you will feel awful hanging there and you have the whole dynamic of the quality of life in the household with the dogs that may have lost control on the rug or in the bed in the household.

There are a couple of really important factors in the dog market. The incidence of cancer in dogs has been reported to be 5 times what we see in humans. An estimated 9 million dogs were acquired by U.S. households during the pandemic according to the American Pet Products Association, bringing the total number of dogs in the United States to about 108 million, which is roughly one dog for every three humans in the country. And unfortunately, about 50% of dogs over the age of 10 are going to be diagnosed with cancer at some point.

U.S. veterinary market operates in a pay-out-of-pocket model. From a financial perspective, this dynamic allows us to have great predictability between gross revenue and net revenue and a higher overall gross to net ratio, which is a much different situation than we have on the human side of the business in the United States. Education and promotion about the devastating impact of cancer therapy-related diarrhea builds awareness about the importance of managing diarrhea so that the practitioners can take the best care of the patients regardless whether the patient is a human or a dog.

We launched the first ever canine cancer registry in the United States in May in New York. And believe it or not, the registry did not previously exist in the United States for canine cancer. It was an event — the launch of this with great fanfare, a great PR event, a great Investor Relations events and a great educational event. This project is called the jaguar Health’s Canine Cancer Take Charge initiative, that’s an acronym. Our goal in establishing the first U.S. national canine cancer registry in cancer care index is to assess the prevalence in incidence of cancer in dogs, and most importantly, how you can keep the dog and the entire family’s situation comfortable during what is often a very siloed and tragic event for our families and help create a community of support with the information that comes from the registry.

On August 10, Gallup, the leading national polling organization, published an article providing their analysis of results from Take Charge canine cancer, the first ever nationally representative survey of U.S. dog owners’ experience with the disease. The data from the survey indicate that of the 67% of Americans, 67% who have had at least one dog in the past 10 years, nearly one in five, which is about 30 million people, have had at least one of their dogs experience cancer.

In addition to CID in dogs, crofelemer is expected to be conditionally approved for the treatment of exercise-induced diarrhea in dogs in the next six months. With the Take Charge initiative underway, the commercial launch of Canalevia-CA1 continuing the potential additional dog indication for crofelemer, this is Jaguar’s year of the dog. In the next 12 months, there is the potential for a lot of other news from both the canine and human fronts. We have global rights to crofelemer for all indications.

On the business development front, in June 2022, as announced, we entered an exclusive license and services agreement with Ontario, Canada-based SynWorld Technologies Corporation, SynWorld, for the treatment of diarrhea in dogs in the China market with Canalevia. The agreement is structured to bring license fees of $5 million and up to $5 million in unregistered equity infusion to Jaguar over the next approximate 24 months. As additional consideration for the license, Jaguar is entitled to receive 60% of any products from sales of the product in China. And if Jaguar reimburses SynWorld for the direct expense of obtaining regulatory approval in China, the profit-sharing will be 80% and 20% respectively for Jaguar and SynWorld.

We also entered an agreement at the end of the first quarter of 2022 this year with Quadri Pharma that grants Quadri quandary exclusive promotional, commercialization and distribution rights for specified human indications of crofelemer in Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE and Oman. This is a revenue-sharing relationship for HIV-related diarrhea. And the agreement terms provide Jaguar with an increase in the revenue-sharing percentage for sales in these countries of newly approved indications which will apply to the CTD in potentially inflammatory bowel disease indications for crofelemer of course upon marketing approval.

And in June 2022 this year, Jaguar and Filament Health signed a letter of intent to enter collaboration agreements to develop botanical prescription drugs for specific psychoactive target indications in the United States. The goal of the collaboration is to extend the botanical drug development skillsets of both companies in order to develop pharmaceutical-grade, plant-based, standardized drug candidates and then partner with potential future licensees regarding their responsibility for the more expenses, development and commercialization of these novel drugs.

Jaguar’s Entheogen Therapeutics Initiative, ETI, aims to discover and develop groundbreaking novel natural medicines derived from psychedelic and psychoactive plants for the treatment and potential cure of mood disorders, neurodegenerative diseases, addiction and mental health disorders. Beyond the current agents being pursued by multiple third-parties, including psilocybin, MDMA, ketamines and four others.

What we are focusing on are the next generation of these compounds. This effort has mobilized Jaguar asset the library of 2,300 plants and 3,500 plant extracts that was generated over three decades. I believe you can expect to see additional business development deals because we are committed. It is our cause to bring crofelemer and all our potential products to all patient populations in need in geographies around the world.

Lastly, I’d like to let all of you participating today know that we will have a brief Q&A segment, as we always do, at the end of this webcast to address questions, if there are any, please submit in writing. Questions can be submitted via the webcast link for today’s event that appears on the Events and Presentations page of the Investor Relations section of Jaguar’s website. The URL for Jaguar’s website is jaguar.health.

We’ll now move along to key financial results for the first quarter of 2022. Carol, I will turn it over to you, please.

Carol Lizak — Chief Financial Officer

Thank you, Lisa, and thank you all for joining our webcast today. I’ll begin my review of our financials for the second quarter of 2022. Mytesi net revenues during the second quarter of 2022 was approximately $2.8 million and about $2.6 million in the first quarter of 2022, an increase of approximately $200,000 or 10% quarter-over-quarter and the increase of 644% over Mytesi net revenues in the second quarter of 2021, which totaled about $400,000.

Mytesi prescription volume, the metric the company believes to be the best indicator of growth in patient demand, increased 8.2% in the second quarter of 2022 over the second — the first quarter of 2022. Prescription volume differs from invoiced sales volume, which reflects, among other factors, varying buying patterns among specialty pharmacies in the close network as they manage their inventory levels.

Mytesi gross revenue, a non-GAAP measure, was approximately $3.7 million in the second quarter of 2022 and $3.4 million in the first quarter of 2022, representing an increase of approximately $300,000 or 9% quarter-over-quarter and a decrease of approximately 24% over Mytesi gross revenue in the second quarter of 2021, which totaled approximately $4.9 million.

As Lisa mentioned, Canalevia-CA1 became commercially available to veterinarians across the U.S. at the end of April 2022. Canalevia-CA1 net and gross revenue during the second quarter of 2022 were $87,400.

Non-GAAP EBITDA for the second quarter of 2022 and the second quarter of 2021 was the net loss $5.4 million and $10.8 million respectively. For the second quarter of 2022, the loss from operations was $6.3 million compared to a loss of $11.6 million in the second quarter of 2021, a decrease of $5.3 million quarter-over-quarter. For the second quarter of 2022, the net loss attributable to common shareholders was approximately $9.4 million compared to a net loss of $14.1 million in the second quarter of 2021, a decrease of approximately $4.7 million quarter-over-quarter.

And in addition to the loss from operations, interest expense increased by $500,000 from $2 million in the three months ended June 30, 2021 to $2.5 million for the same period in 2022, that’s primarily due to the interest from the royalty note agreements. And change in fair value financial instruments and hybrid instruments designated at fair value options losses increased $1.2 million from a loss of $500,000 in the three months ended June 30, 2021 to a gain of $700,000 for the same period in 2022. Other expense increased by $1.1 million from $200,000 in the three months ended June 30, 2021 to $1.1 million for the same period in 2022 due to the foreign currency transactions.

That concludes my recap of high level financials for the second quarter of 2022. I will now hand the discussion over to Ian Wendt, our Chief Commercial Officer.

Ian H. Wendt — Chief Commercial Officer

Thank you, Carol, and good morning to all. As Carol stated, Mytesi total prescription volume, a metric we believe to be the best indicator of patient demand, increased 8.2% in the second quarter of 2022 over the first quarter of 2022. As previously announced, the transition we completed this past January to a closed network of specialty pharmacies, resulted in a meaningful reduction in Mytesi distribution costs as well as a higher average net price.

In fact, I’m very pleased to report that we significantly outperformed the industry gross to net average in the second quarter of 2022 as we did in both of the two previous quarters for sales of our human prescription product. This improvement in our GTN was largely as a result of the efficiencies realized by the transition to a closed network of specialty pharmacies. And as Lisa mentioned, Q2 2022 is the fourth consecutive quarter of growth in Mytesi net revenue, which we’re also very pleased about.

A key component of the company’s market access strategy are initiative to transition to a closed network of specialty pharmacies is intended to help remove access barriers for patients prescribed Mytesi and include services such as a higher level of support for prior authorizations, appeals, adherence counseling and home delivery options. While patients often visit retail pharmacies for short-term or uncomplicated medical needs, specialty pharmacies focus primarily on serving patients with complex and chronic medical conditions like HIV.

Importantly, this transition allowed us to begin utilizing sales and prescription data directly provided by our network of specialty pharmacies to more accurately track prescription volume and the patient journey rather than relying on a third-party provider of estimate data for these important performance metrics. This also assist in the preparation of our U.S. commercial distributor network for potential future indication expansion of crofelemer to other populations of patients with complex medical needs such as CTD, inflammatory bowel disease and SBS.

I’m also pleased to report that our innovative, recently launched programs that further support patients connecting to care and medication access services are continuing as planned. The first program is our telehealth initiative, which went live in May, that enables patients seeking help with their HIV-related diarrhea to be linked immediately to a provider for assistance with their medical needs. This new capability prevent patients from having to wait until their next scheduled doctor visit to get help with what is an urgent problem.

Our second recently launched program delivers digital Mytesi and disease state education directly into a provider’s EHR, that’s electronic health record systems so that they learn about Mytesi at the moment they are seeing their HIV patients. This technology allows us to intelligently deliver ads to a provider based on the profile of the patient they are seeing in their exam room. This is strictly a one-way communication. We do not receive any protected health information. Both of these programs are designed to drive incremental brand awareness, among prescribers who have not written Mytesi previously and among patients who have not been able to receive immediate care for their HIV-related diarrhea.

Turning to the animal health side of our business. We are thrilled, as Lisa mentioned, that Canalevia-CA1, our FDA conditionally approved treatment for chemotherapy-induced diarrhea or CID in dogs, became commercially available to veterinarians across the United States at the end of April 2022. Since that time, we have succeeded in pushing Canalevia-CA1 into broad distribution with the leading veterinary distribution centers. We see new clinics ordering Canalevia-CA1 each week and then have multiple clinics that have placed repeat orders. This is a great indicator that veterinarians are seeing the clinical benefits of our product among their patients.

Canalevia-CA1 is an important prescription drug introduction for the veterinary community and the thousands of dogs experiencing CID. As Lisa commented, dogs as with humans, may discontinue their chemotherapy treatment approximately 40% of the time due to diarrhea. Canalevia-CA1 can help support the comfort and quality of life of dogs while being treated with chemotherapy, which may help them remain compliant with their life saving treatment. The reception of Canalevia-CA1, among general practice vets and veterinarians oncologists who have learned about the product has been extremely positive.

Commercial launch activities for Canalevia-CA1 remain underway. The product was the focus of Jaguar Animal Health’s exhibit booth at the recent in April veterinary cancer society mid-year conference in Puerto Vallarta, Mexico. The company also held a well-attended dinner event for veterinary oncologists about CID in dogs at this conference. We exhibiting at the 2022 American College of Veterinary Internal Medicine, ACVIM forum, in Austin in June. And we’ll be exhibiting at the upcoming International Veterinary Emergency and Critical Care Symposium in San Antonio, Texas this Septermber and at the Veterinary Cancer Society Annual Conference in Norfolk, Virginia in October.

We are also developing a CID educational content that will be eligible for continuing education credits for veterinarians to help increase awareness of this important issue. As announced, we expect Canalevia could additionally receive FDA conditional approval under the name Canalevia-CA2 for the treatment of exercise-induced diarrhea or EID in dogs in the first quarter of 2023.

That concludes my comments. Thank you all for your time today. And I’ll pass the conversation back to Lisa.

Lisa Conte — Founder & Chief Executive Officer

Thanks, Ian. Thanks, Carol. We at Jaguar, Napo and Napo Thera are energized about all of our important initiatives underway in 2022 and beyond. I would also like to mention that, as we announced this past Friday. Jaguar received formal notice on August 18 that the listing qualifications staff of the NASDAQ stock market has granted the company an additional 180-day grace period through February 13, 2023 to gain compliance with the $1 bid price requirement for continued listing on the NASDAQ capital market. We are pleased to have obtained additional time from NASDAQ to evidence compliance with the bid price requirement.

And as we seek to regain compliance with this rule, we are laser focused on our two late-stage clinical events in the next approximate six to 12 months that we expect to be transformational in terms of value creation in recognition for the company. We did file a preliminary proxy on Friday, August 19 for a special meeting of the shareholders of Jaguar. As noted in the proxy resolutions, we are not making a reverse split of the Jaguar shares.

We’ll now open the floor for written questions that have come in, and I will move to those now repeat the question. There aren’t a lot. There is a couple here. One of them was — is, during the past slide presentations you mentioned that there would be a cholera voucher filing in the first half of the second quarter of 2022. When is the filing of the lechlemer cholera going to happen?

I think that is a bit of a misunderstanding. So the voucher for the cholera program, the tropical disease priority review voucher is something that is granted by the FDA upon FDA approval for the tropical disease. So in our case, it could be approval of lechlemer for cholera, which has never been planned for 2022. What has been planned and what will happen is the filing of the IND which will occur in the third quarter. So that’s just around the corner of this year. When the clinical program is completed successfully is when you potentially receive the voucher and then the voucher is transferable and it could be sold at that time. As a reminder, cholera, as compared to be indications approved and being pursued for crofelemer, cholera is an acute indication so the clinical trials are and that we have done in the past for cholera with crofelemer with the same mechanism of action of our published is three days of treatment.

What are the earnings from Napo specifically?

So in case, again, I know sometimes it can be confusing with the name. Napo Pharmaceuticals is wholly-owned by Jaguar Health. So essentially, they are interchangeable when we say Jaguar Napo. Napo Therapeutics, Napo Pharmaceuticals, Napo Therapeutics is the private Italian corporation that was established in Italy under an exclusive license to crofelemer from Jaguar Napo Pharmaceuticals. And it is, as I mentioned, well over a majority owned also by Jaguar. And therefore, we have the equity benefit in that corporation as well as the license benefit.

And let’s see. Can you remind us of the primary endpoint in the OnTarget study? And what is the expectation going into data readout in the near-term? What constitutes a positive readout from the study?

So the study is — the label being targeted is for prophylaxis in cancer therapy-related diarrhea, a basket approval for all solid tumors. And patients on targeted therapies, these are tyrosine kinase inhibitors, epithermal growth factor receptor antibodies with or without cytotoxic chemotherapy. Prophylaxis, and this was actually a suggestion, an assistance from the FDA which is really a wonderful opportunity for patients to never have to experience the diarrhea and also quite beneficial from a commercial perspective.

It’s three — the primary endpoint is after three months. And it’s an area under the curve calculation of the improvement in stool formation or essentially the reduction in diarrhea compared to the placebo. So it’s 256 patients. Mytesi, literally Mytesi, the same dose, the same formulation, one-to-one compared to placebo. Patient enrollment will be — is targeted to be completed in the first half of 2023. Three months, as I mentioned, for the primary endpoint. So in the second half of 2023 is when we would expect to have the readout.

What constitutes a positive results [Indecipherable] is very remarkable. In that, it’s a single point. It is the p value on the primary endpoint. And that would allow us therefore to expand the labeled indication for Mytesi. And we are already preparing for inventory production towards the end of 2023, beginning of 2024.

Will we pay a dividend?

There is no plans to pay any dividend at this point. When we’re a profitable organization and as we have our pipeline indications approved, that is something that can be considered.

Are you in negotiations with other strategic partners?

Absolutely. As I mentioned, you can expect to see business development deals going forward. In particular, again as I’ve mentioned, we have discussions going on with Entheogen Therapeutics Initiative, which is an effort to mobilize and find value from an asset that we created over three decades. So 2,300 plants, 3,500 plant extracts. Looking at those that could provide potential second generation psychoactive psychedelic products that we will partner with and we are seeking partnerships with one of the many well financed companies that are focused on psychoactive and psychedelic, as again as I mentioned, psilocybin, MDMA, ketamines. They’re all chasing about the same seven compounds, what are the next generation, what are the new mechanisms of action we can bring to the table with what we do so well, which is the library, the ethnobotanical first-hand information, the guidance on how to proceed with a product under botanical guidance, the supply and count on the partner that is focused on regulatory clinical development, commercialization in these areas as our internal efforts are focused clinically on fulfillment and gastrointestinal indications.

And I’ve got a compliment here. Thank you.

And that is all the questions at the — that’s all the questions. So thank you. I know this was a long call. There’s a lot of news. And we appreciate your interest and consideration. That concludes our webcast for today. Thanks once again all of you for joining and your interest in Jaguar, crofelemer, Napo, Napo Therapeutics and we are going to get back to work because there’s a lot to do. Thank you.

Operator

[Operator Closing Remarks]