Q3 2019 Earnings Call
As a reminder, this call is being recorded.
At this time I would like to turn the call over to Wade Walke, Vice President Investor Relations to lead off the call. Please begin.
Thank you Sean before we begin I encourage everyone goods. The investors section of the honest website <unk> press release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today.
non-GAAP financial results better represented the economics of our business and how we manage our business.
We have also posted slides on our website to accompany our discussion today.
With me on todays call or scan correct <unk> chairman of the board and Chief Executive Officer, Beth Hougen, Chief Financial Officer, and threatened on yet and Chief operating officer.
I'd like to draw your attention to slide three which contains are forward looking language statement will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties to our actual results may differ materially I encourage you to consult the risk factors discussed in or as you see filings for additional details.
Okay any color stands.
Wade and good morning, everyone. Thank you for joining it.
Our commitment to innovation led to the increasing value for our commercial medicines, our pipeline of technology, which today is reflected.
In our robust financial.
Because of our strong performance for nine months of this year.
We are significantly increasing our 2019.
Two.
A.
You can definitive proof we're on track.
To deliver approximately a billion dollars revenue was $375 operating income and more than $300 million.
This means that we expect to deliver our fourth year of operating in South America third here.
Net income.
We're keeping these strong results.
Continuing to invest aggressively is justified.
Across every element purpose.
We're keeping successes.
And making progress broadly.
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And we're extremely pleased with Kinross is can you flush.
Roger is the worldwide foundation of affair.
Preclude of all this and they.
All these supported by growing body of data.
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We're already seeing positive people that have had axiom Damian.
His leadership.
Yeah, I mean is adding key new members.
Through the <unk> leadership team.
With skills necessary to help the organization commercial development goals.
The first of several addition.
To the senior management team just kinda again.
It was recently promoted to chief commercial officer, after leading excuse U.S. commercial versus let's say six cities.
Importantly.
Beginning to see momentum build text study.
She is expanding the market opportunity protect city across the world.
For the approval in Brazil Tech side. He is now the first already targeted therapy.
For the frequency of patients with TCR Polyneuropathy in Latin America.
Given the substantial number of patients with your read of Terry for the disease, Brazil, Latin America is a key strategic.
But if you see therapeutic that's good market development in the medical support team in place.
In Brazil and plan to start launch activities protected.
She is also beginning.
To make significant progress.
Activity is now so on the market.
Okay. Following acceptance late night and the Scottish notices.
Yes, you.
Akcea successfully completed a pricing negotiations in Germany, and successfully completed reimbursement negotiations in Austria, Austria and Sweden.
Where tech said he is now on the market and preparation for additional you country launches are underway.
Libra.
Is now on the market in Germany, with FCS patients benefiting from the only medicine approved for the treatment as this devastating disease. Additionally, akcea is preparing for more E. U country launches next year P.T. She is preparing to expand a we libra into Latin America.
And.
In the U.S. and Canada, we believe new longer term data and our experience in the you will support our ongoing effort with regulators to find a path to the market for way to lever.
Damian and his team have also gained momentum in strengthening in advancing the actually a pipeline. Most recently, we had excess entered a collaboration with Pfizer to.
To develop.
And in commercialized Akcea, if we'd like three lrx for the treatment of certain metabolic and cardiovascular diseases. This collaboration with substantial upfront and backend economics.
Oh and targeted for diseases that are set or <unk>.
Very large patient populations.
Further evidence that our partners have confidence in our technology and its ability to provide benefit to patients with with diseases. Both rare.
Oh and much more common.
Additionally, akcea will soon have to a medicines in phase three development Akcea TTR lrx.
Index, Yeah April eight stellarex.
And early next year.
Actually it plans to report data from Phase two studies of it of Akcea April she three lrx and let's see if edge fleet like three alert in additions.
To our recent achievements with medicines in the exceed five funds. We also achieved multiple value driving success across the broader iOS pipeline this quarter.
We're on track to achieve our goal of ending 2019 with for phase three programs underway.
Pivotal studies are progressing for patients with Huntingtons disease in it so the one CLS.
And phase three programs for TTR LR.
And the TTR amyloidosis, and L.P.A., driven cardiovascular disease or be getting very shortly.
We made substantial progress with our medicines or the other than these two that are addressing diseases with large patient population. In addition to the new collaboration with Pfizer for entry <unk> like three Lrx fire.
Science to advance our like the effects were 11 medicine for the treatment of patients with thromboembolic disease and GSK licensed our HCV programs for the treatment of chronic hepatitis b virus infection.
Our neurological disease pipeline.
Advanced as well Biogen dose the first patient in its phase one two study for the treatment of patients with Parkinson's disease, another large disease.
We also added three new medicines for a logical five plus to partner with Biogen and one that's folio.
Importantly, we continue to strengthen our position as the leader in aren't a targeted drug discovery.
Okay, and development and our technology and used to advance. So it is at an increase in phase two.
Today, we can achieve these reached substantial financial and businesses successes.
While continuing to broadly and aggressively.
Invest across our business, including a investing in growing our commercial medicines and advancing our pipeline and technology.
These are of course, our highest priorities because we believe these investments have the greatest potential to free patient and shareholder value.
And because of our strong balance sheet and cash flow.
We can achieve all of this and achieve all these goals.
While also returning value to our shareholders in the near term so today.
I'm pleased to announce that our board of directors has authorized and initial share repurchase program of up to $125 million a with the potential for us to consider additional repurchases in in the future as part of our overall capital allocation strategy.
This action.
Reflects the confidence that we have in our business and our commitment to creating near term and long term value.
We also believe that's at today's stock price buying back our shares is really good investments and now I'll turn it over turn the call over to best to provide finding a financial update followed by Brett.
We will update you on or pipeline progress.
Thank you Stan.
Our strong financial results continued in the third quarter in the first nine month. It. This year, we delivered operating income of $217 million and net income of $189 million.
On a non-GAAP base that we also achieved substantial operating income and net income on a GAAP.
These strong results were driven by nearly $630 million in revenue more than 50% increase compared to last year.
Growth in both commercial revenues, including Spinraza continued blockbuster performance and R&D revenues as our partnered programs advance contributed to the substantial increase.
In the third quarter, we maintained our strong balance sheet was $2.2 billion in cash and we expect our cash balance to increase I mean busy payment from Pfizer and buyer this quarter.
Then the generated over $1.5 billion and worldwide net sales through the ended the third quarter, an increase of nearly 25% compared to last year.
Reflecting spinraza strong performance, our royalty revenue of $212 million increased by more than 25% compared to last year.
The total number of patients on Spinraza treatment increased by approximately 11% from last quarter, it's more than 9300 patients worldwide.
New patient starts in both the U.S. and around the world contributed to this growth.
In the U.S. adult patients for a significant driver of growth in the third quarter, increasing by 8% overlap corridor and as the largest estimate patient segment, we advise and believe that adult estimate patients.
Referenced that continued opportunity for growth.
Now approved in over 50 countries and was reimbursement in place in 40 countries. The number of patients on spinraza outside the U.S. increased by approximately 18% compared to last quarter.
John performance in established markets, such as the E <unk> and Japan, Pos rapid uptake in key markets in Latin America, and Asia Pacific were primary drivers of this growth.
Additionally, the first estimate patients in China recently began spinraza treatment.
[laughter] buys an expected growth to continue in these key markets and believes that the global opportunity from Spinraza is much larger than initial estimates.
With more than 45000 patients in markets, where Biogen has a direct presence.
Importantly, as the body of evidence supporting the robust profiling Spinraza continues to grow we believe Spinraza will remain a global foundation of care for the treatment of estimate Haitian all ages and tight.
Turning now to take setting and went live right. We earned $29 million from product sales and takes that he and way live right. During the first nine month of this year.
They acted team continues to make progress with lots of take study in the U.S. Act. The focus is on disease education, particularly in community centers, while maintaining strong relationships with physicians and the academic centers.
Additionally, use the act the genetic testing program is growing with more than 1000 physicians now using the program.
Both of these initiatives are translating into more physician prescribing take Betty.
Outside the U.S., we're extremely pleased that following approval in Brazil picks that is now the first our in a targeted therapy approved for the treatment of people with TTR Polyneuropathy in Latin America.
PTC therapeutics plans to start their launch activities in Brazil immediately.
We also look for its potentially expanding more broadly and other Latin American countries.
Additionally, patients are now on treatment in Austria, we need and in all four countries in the UK NXT as preparations for additional even country launches are underway.
I've been patient support program is now up and running across all commercial market and feedback from physicians has been quite positive.
So we're pleased to see this program expand with it takes that he lives.
Patients are now being treated with me Leverett in Germany. Following approval in the E. U NXP is preparing to launch in additional you countries next year, we look forward to potentially expanding into Latin America off at three PTC.
Reflecting the substantial and increasing value of our technology R&D revenue increased by more than 65% to $377 million.
R&D revenue included $198 million in license fee revenue from Novartis, GSK and El Nio them.
$100 million from amortization of upfront payment for advancing numerous programs and research and development.
$64 million and milestone payments.
Including nearly $25 million from Biogen.
Which included most recently a milestone payment for initiation of the phase one two study targeting large too for the treatment of people with Parkinson's disease.
We expect to recognize substantially all of the $250 million upfront payment we generated for advisors license of Akcea Angiopoietin like three Dash seller Act in our fourth quarter results.
Our recent license of Akcea Antiquate like free dashed lrx demonstrate the increasing economic we can command for our medicines and technology.
In addition to the $250 million upfront payment, we are eligible to receive up to $1.3 billion in milestone payments and tiered double digit royalties on net sales.
Moreover, Pfizer is adding substantial value by conducting future development and regulatory active activities and pain for these activity.
Additionally, we will recognize the $10 million milestone payment from buyer and bold and our fourth quarter results.
Fire will assume the development of Ioannis factor 11, dash, Lrx, which represents substantial value to us.
Our non-GAAP operating expenses increased to $412 million in the first nine months of this year compared to last year.
We are investing broadly across our business, including investing in commercializing Tech Betty globally, and watching way liberal in the you advancing and expanding our pipeline and advancing our technology.
Our strong financial performance. This year has let us to improve our 2018 guidance.
We're now projecting to earn $1 billion in revenue.
We are maintaining our original guidance for operating expenses, while continuing to aggressively invest across the business.
However, we do anticipate being at the lower end if the range for both R&D and S. DNA expenses.
We are increasing our operating income guidance to more than $375 million.
Which represents a more than fivefold increase over last year.
And importantly represent an operating margin of nearly 40%.
We're also increasing our net income guidance to more than 300 million dollar.
And we are increasing our cash guidance to $2.2 billion.
Our highest priority investments, our commercial medicine broad pipeline and our technology.
Our strong balance sheet and cash flow combined with our commitment to continued profitability.
We are also able to begin returning value to shareholders through an initial share repurchase program back to $125 million.
We plan to make stock repurchases under this program overtime.
Open market transactions.
And we anticipate that at the conclusion of this initial program, we will consider additional share repurchase program to provide even more value to shareholders.
The increasing value of our technology financial strength and ability to return value to our shareholders.
Further distinguishes us from our peers.
And with that I'll turn the call over to breadth to provide an update on our pipeline.
Thanks Ben.
Today, we have three medicines on the market pipeline of over 40 medicines advancing through development and many more progressing through research towards clinical trials Spinraza is the global foundation of care for the treatment of estimate patients have all ages and all that so many times and Biogen continues to report new even longer term data demonstrating.
Patient performance prolonged spinraza treatment.
New data from nurture study a presymptomatic infants now on treatment for approximately 45 months, we continue to see huge developing quite their normal healthy counterparts.
Member without Spinraza these babies whatever rapidly should come through their disease.
And patients with later on 7 million to Shine study.
Began to study as kids and have now reached adulthood continues show stabilization or improvement.
Measures or their disease.
Today, some patients treated with Spinraza Sunshine study again, the ability to walk on its just.
[noise] Biogen is also preparing to explore the potential of achieving even greater benefit with a higher doses spinraza with over 9000 patients on spinraza today, including some patients who are going on treatment for nearly six years Spinraza is well established safety profile is supportive of expand dosing.
Biogen phase two three devote study, which we expect to be in soon we will evaluate the safety and potential to achieve increased efficacy with a higher dose been Roger we pure loading doses in estimate patients have all ages, including the adults.
Additionally, we in Biogen are developing a follow on medicine for the treatment of estimate.
Focused on less frequent dosing, which could enter development next year.
Ioannis HPG Rx also known as RG six so for two is progressing in a comprehensive phase three program in patients with Huntingtons disease.
Most recently announced expanded enrollments in the phase regeneration HD. One study this expansion will enable a more thorough evaluation of each treatment, including me every four months dosing regiments. It also allows rose to add patients from China does that.
This pivotal study along with the phase one two open label extension and natural history studies are all important elements of Roche's comprehensive clinical program thoroughly evaluate the potential of ionization trx to be the first disease modifying medicine for the treatment of home you can see.
The phase three valor study of told person is also progressing Biogen is evaluating this medicine for the treatment in patients with sod, one LLS and hopes to bring told person to patients with this devastating disease as rapidly as possible.
Biogen also recently initiated a phase one two study of our medicine targeting large too.
Most common genetic cause Parkinson's.
This study will enroll patients from fourq to mutations as well as patients with the sporadic former Parkinson's.
Just together represents over 3 million patients worldwide.
Under our collaboration with Biogen, we now have eight medicines and development on top of a substantial research stage pipeline that together addresses a broad range neurological diseases, including all signers.
Frontotemporal degeneration in various forms of both AOL and Parkinson's disease and anymore.
In parallel we also continued to advance and expand our pipeline wholly owned matters.
In addition to the advances were making across our pipeline advances in our technology continue to enhance the performance of our medicines expand their commercial potential and enable abroad and robust pipeline of potentially transformative medicines for many years ago.
Today, our partners are recognizing the substantial commercial potential which is reflected in the increasing value we receive from our collaborations.
This value of course is based on the confidence our partners recognized in our technology to treat a broad range of users from rare the most common diseases affecting millions of patients for example.
GSK recently license, our HBV program and has repeatedly expressed strong enthusiasm about has potential to treat the more than 200 million patients around the world with chronic hepatitis b virus infections that are not adequately treated with current currently available there.
Furthermore, this year several of our partners have also made substantial investments and medicines develop with our likeable platform to address.
To address large patient population.
Our partners are attractive robust efficacy profile with like a medicines based on like there's increased potency, enabling low volume month, we or even less frequent dosing.
More importantly, our partners are confident in the favorable safety profile of our like platform as demonstrated by a total of over 1100 people treated to date with like a medicines, including nearly 300 patients treated for up to one year in the phase two studies of Akcea April Hcl architects.
Hi partner confidence in our like a technology is being demonstrated in many ways. For example, Pfizer license Akcea angiopoietin like three of our regulatory millions of patients with certain metabolic in cardiovascular.
Buyer chose to advance I always factor 11, lrx to treat millions of patients with thromboembolic disease.
And Novartis is advancing XC April lrx for the millions of patients would go a little late driven cardiovascular.
This study together with the outcome study for Akcea TTR Rx for patients with your garden. My obviously will be the first cardiovascular outcome studies for an ambitious medicine.
Furthermore, we continue to innovate and advance our antisense technology.
This investment has paid and continues to pay substantial dividends today, our antisense drugs incorporate many of these advances the benefit patients across a broad range of Jesus through advancements in medicinal chemistry and optimization and validation.
Nearly all routes and delivery, we can target most organs and cell types with our innocence medicines.
For example, we have already shown the feasibility of aerosol delivery to go along but with enhanced performance of our antisense medicines, along with more potent chemistries, we have substantially improved potential for commercial success for a broad ranging from these is further expanding the reach of our technology.
Our first Gen 2.5, pulmonary delivered medicine targets, the epic deals sodium channel fortinet in along.
We are advancing this medicine for the treatment in people with cystic fibrosis and other pulmonary.
And we look forward to sharing results from our in that phase one through study next year, along with updates and other pulmonary programs emerging within our pipeline.
We've also made substantial progress in advancing oral dosing of our antisense matters.
We believe we're on the verge in developing a commercially viable oral ambitions medicine by combining our Gen 2.5 chemistry.
With our likely chemistry.
The ability to deliver analysis medicine as a daily habit would represent yet another significant events with the potential to provide substantial value patient enable once again by our pioneering research.
We look forward to sharing results from these early clinical studies next year.
The first nine months of this year have been quite exciting highly productive in event. When we look forward to numerous additional value driving events through the end the year and grow next year.
I look forward to providing further pipelines technology highlights in the months become and now I'll turn the call back over to stand to close portion of the cool.
Thanks, Brett.
Rebuild Iona saw the foundation.
Of our sufficient technology.
And today the value of our technology as reflected in our financial strength.
And it's a product directly of our business model.
Our financial strength, then gives us the flexibility to maximize the value of each of our medicines and our technology.
Our partners are recognizing the value of our technology as demonstrated by the substantial economics.
Of our recent transactions our business strategy is succeeding.
And today, we're sustainably profitable ioannis is delivering more value to patients shareholders everyday.
Importantly, we're delivering value.
While investing in the future potential of our business, including advancing our pipeline of over 40 medicines growing or pipeline wholly own medicines advancing our technology at an ever faster pace.
Potentially delivering a commercially attractive aerosol and oral medicines in enabling new routes of administration.
Wow advancing new medicines.
For a broad new therapeutic areas.
Or <unk> or on December 13th we plan to host a webcast to discuss many of the recent advances in our technology. This will be a deep dive.
In the exciting science that we're working on right now and we believe positions the technology to be ever more powerful in years to comp I look forward.
To the opportunity to discuss our work with you in this form and just.
As an aside this is for real techno geeks, it's probably not for the fate of heart foot. We hope he told me this anyway.
So a watch for more information about the webcast, which will be announced very shortly the business success in the financial strength, we built give us confidence that we will continue to deliver value to our patients and shareholders today and over the years to calm and with that.
I'll turn the call over for today, Sean if you can set us up for killing they please.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing mckee.
If at any time to your question has been addressed and you would like to withdraw your question. Please press Star then too.
Our first questions they will come from Chad Messer with Needham and company. Please go ahead.
Great. Thanks for taking my question and congrats on the very strong financial results.
I I believe these.
Share buybacks are are really good sort of indicator of how Europe , how you're feeling about the business.
Oh I can appreciate it.
Just wondering if you could share your thoughts about some recent comments from Pfizer about since the parameters launch a I believe they said they identified.
Over 4000 patients with.
Our cardio myopic, the especially given that you guys are about to start a trial in that implications.
Oh, well I think they know this this diseases this space extremely well and of and we believe that there is a sizable market opportunity there and were very confident that the lack of form Oh took city.
It's going to deliver a great performance for like the other like a poor result of other medicines that bill.
All right Great and then as you know very excited about the concept of an oral anti sense and I'm sure will be hearing a lot more about that in the future, but any any thoughts on what makes sense to move first either new indications that Mike now.
I have been is amenable to you know using a subcu injection or.
Basically newer forms of of existing sorta tried and true drugs that you have.
[laughter] you will be hearing a lot more about it and you'll first here.
As Bret describes it on December 13th that are.
Upcoming technology webcast.
And the answer to your question is I'd say all the above.
All right kind of what I was expecting a looked looking forward to that webcast and congrats again, okay. Thanks, so much yet.
Our next question will come from Jim I'm personally with Wells Fargo. Please go ahead.
Yeah, Hi, guys that only add my congratulations and died great to see the share buyback in the confidence.
Underlying that so a couple of questions I guess number one I'm just thinking about the financial side of things could you maybe give us. Some that's how we should think about the outlook. Both in terms of revenues and and earnings or do we expect revenues to be a little lumpy given the contribution of R&D revenues and then to smooth out over time and just want to make sure. We're.
We're still guiding we're expecting a sustainable profitability and I've got a follow up.
Well, yeah, we now are reporting our fourth year of operating income or third year of net income.
And we're very confident and optimistic that next year will be another successful year financially and.
And across the business.
We are.
I'm really excited about the things that are going on as the portfolio next year.
And look forward to have another banner year next year.
And then just in terms of capital allocation I think what are the things you've highlighted.
Historically or or maybe even more recently is just investment in.
Technologies that could maintain or leadership in the in the genetic medicine space and so can you maybe talk to your efforts to go beyond antisense or extend your dominance and in this area of medicine, and how you're allocating capital to that yes. We are excited about that.
And it is progressing.
And it is progressing on.
Two or three broad pump Francois.
Number one is any access to anything that might.
Enhance the performance of the of the technology, we've invented today.
Number two is to expand or use of genomic information to an even greater expense and what we're doing it and then number three.
We're looking for the next so innocence technology.
Yeah, and if you think about those three.
Components of the investment strategy.
You would expect investments in the first.
Couple of components long before the third because you know the <unk>, enabling technologies like in the system will come along every day.
So I do expect that you'll begin to see some investments and in in those areas in in the coming month. They still the progress that we've made so far.
And then maybe just final question I know, there's not much you can stay on partner programs beyond what part of subside and what you've said in your prepared remarks, but maybe for your wholly owned pipeline what are the key product that you're most excited about maybe a question for Brad and and maybe speak for the visibility will get on those wholly owned products over the next year. So [laughter].
Yeah sure Jim.
Thanks for the question.
Our wholly owned pipeline is growing rapidly across all therapeutic areas or many therapeutic areas.
I I suppose the answer depends on how advanced the program isn't plus coupled with how the 10, what the potential is for the for that medicine to have a big impact to be a transformative medicine on the market.
That's a highlight a couple of three our growth hormone receptor for acromegaly is a very exciting programs that isn't phase two is due to read out next year and potentially move on space free so that could be a wholly owned program. This in inpatient acromegaly.
In phase three next year.
Arctic first six program.
Is very exciting it's a it's a program that has the potential to treat multiple disease populations, including beta don't see me intermedia out without seeing me is as well as my lows as flat as plastic syndrome, Mds, so lots of opportunity for that drug it's performed very well in phase one.
And is in phase two in its moving very rapidly and then our neuro pipeline. Its also worth commenting on Alexander's disease Fry on disease were for disease are all moving forward very nicely and obviously, we have validated nerve degenerative diseases with our platform. So that has very high potential.
Upside on that number last thing I would say is watch out for our long platform or a wrong, but pulmonary disease pipeline as I mentioned in.
In the webcast Martinez program is in phase one is showing great promise and there's more to come behind that.
And Jim I read I would add TTR <unk>.
Lrx, just our close as our number one asset that's wholly owned.
Just to point B commercialized through Appixia.
We're really excited about the potential of flu like a form of of Tech said actually liver incredible value.
And if you look at the economics of the large medicines that we have April April C.
Angiopoietin like three.
As of the Parkinsons at all Cibers medicines.
In fact through a lesson.
I think people tend to have forgotten how extraordinary the data with factor 11 were in that 300 patients.
So when he replaced with study.
Oh, you know I think it's to some extent state aid eight eight mistake to focus solely on our wholly owned pipeline because.
Oh.
The dollars it will come from those large products that are licensed under the economic tours, we have provided a matter.
A great deal and and its and again its manifestations of the business model works.
So I fully subscribed to what Britt said, but I would add though the comments that I made.
Obviously since I just did it.
[laughter] well thanks, thanks for taking the questions. Okay. Thanks.
Our next question will come from Tyler Van Buren with Piper Jaffray. Please go ahead.
Hey, guys congrats on the results.
No in the press release on their key upcoming events you Didnt.
Give a timeline of course, but I just wanted to get your updated thoughts on timing of putting Tim's data of course, and then once we get the data.
With the open label what would you expect these patients to show on the composite endpoint and what would be a successful outcome oh would be active therapy.
It sounds like a question that Brett should answer and I should have voice.
Thanks, Dan Thanks, Tyler [laughter], well I mean, the data that we're all focused on of course is the randomized phase three study, which student as Roshe said file and 2022 ranger or if not sooner.
And that's what we're laser focused on is that randomized pivotal study.
Regarding the open label data and Roche has said that they will share the results of that study.
Next year.
Which will include open label data from both the phase two study that we conducted as well as the the phase three study.
Initial started the phase three study, which have over about a 100 patients which then.
The dosing regimen was changed for us there's a lot of data there plus a natural history data.
As far as a what to look for obviously in the randomized study you're looking for a significant improvement in clinical endpoints compared to the Zibo group.
That's obvious and rating scale for Huntingtons is well documented you've been published on.
For the open label data you know, it's going to be looking for first strong trends I would say, it's a small relatively small sample size relative to the phase three randomized study.
As can be compared to natural history data, both it's they're going to be looking for ice assume Roche for me looking for many of the same benefits in clinical endpoints that are going to be part of the phase three that are part of the phase three study, maybe just some sub components to that such as cognition or motor function or are those sorts of things but.
They're going to be looking for strong trends in clinical endpoints that differentiate from the ongoing natural history work that they're doing.
Just had a comment or too.
We remain based on what we're observing the encouraged as does wrote about what about the ongoing open label study [noise].
And I.
I think we were very pleased that Roche made the decision to focus on the every four month dosing.
We've always felt that that was the best dose schedule.
For this medicine and so all in all.
We like the decisions that brochures made and then we're encouraged by the performance that we're we're seeing in the open label study.
Okay. Thanks for that and then on take study, where we're seeing a a slower trajectory in the launch relative to our Petro. So just broadly could you maybe help us understand what's going on other than obviously you guys launch two quarter. Later is are you guys maybe in different territory.
Aurizon receiving different uptake in different territories.
For example, in Europe should Portugal come online soon and then also in the U.S. I noticed the slide actually does not list you less as a territory. So maybe you guys seem slower uptake in the west which is a larger percentage of on Patrick ourselves.
Oh, yeah. So it was it [laughter]. The we certainly are happy we're certainly is considered the U.S. Some very important market didn't if it's not on the slide it was an oversight sorry.
Oh, we.
We are.
We what we're looking at right now is not so much what happened last quarter, but what's happening in the coming quarters.
And we are optimistic with the new leadership that ixia, we're seeing very significant shifts the momentum.
I do think that we'll see growth.
Accelerate a bit in the U.S.
Obviously, Brazil is a really important opportunity for us.
We're very pleased with what's happened in Sweden, the UK and in Austria. So these new markets.
Or important in and of course, Portugal is an important opportunity for us to [noise].
So.
Take city is Oh, a little behind what we hoped.
But based on the new team and the progress that we're we're seeing out of them, let's say poor. So you know optimistic that next year, we'll see an even better performance.
And hopefully this next quarter, we'll see an approval.
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Okay. Thanks, so much better.
Our next question will come from David Liebowitz with Morgan Stanley . Please go ahead.
Thank you very much for taking my question would you be able to.
To give us a run through of the recent HBV data and I guess talk about.
The reason.
That's the non like.
Form of the trial, just being pushed forward as opposed to like a form.
Yeah. It's we don't have a full answers that question.
What we do believe is that HBV infection hasn't effect on the Ace I would love for protein receptor.
So we didnt see the level of increase potency that we expected, but we saw also great performance over the parent.
And and and.
And then so we agree with the decision that the GSK has made.
And we're excited about what we're saying where that drug.
It's also a little farther along so overall I think to performance or the so the pair it was a very exciting.
But seeing those kinds of.
<unk> reductions and quite awhile.
And it looks like a good drugs.
Thanks for taking my question you bet.
Oh really Wanna add anything to that.
No I don't stay I think you got it.
You covered it nicely.
Our next question will come from Vincent Chen with Bernstein. Please go ahead.
Congratulations on the progress, though I treat the less frequently dose estimate drug, but you alluded to and how that might work Vicki question about this like roughly what's your approach to this I realize you probably won't say what technology or is it more matter of increasing the house blessed to be active fraction of Troy good increasing those to the.
Are you seeing all drugs to fill that sketchy, NFL and increasing the or or something else unique studies, but provide some color.
And could you readily applies to other programs in the portfolio such as the hunting this program and what implications.
For the therapeutic window studies drug.
These are really solid questions then Tim will get into more detail on December 13th then I think feel you'll enjoy.
You know what we can tell you then let's sport the what I'm going to tell you now.
We continue doing best obviously in all of those areas medicinal chemistry.
And remember that do illogical program is relatively newer compared to other programs and so.
You were still exploring novel medicinal chemistry approaches that we think can add some value there.
We know that these drugs distribute very broadly initiatives over the of assistance and we understand the factors that define how long they last.
So it's just taking all of the knowledge that we have plus all that we've learned over 30 years.
And applying it.
We will be talking about into so we'll release that gets very typical.
Complex.
I don't think I want to get into it.
Why you explained it on on this call, but that's another area of very very active progress for us.
And the into proofing delivery within the sell as well as food improving delivery to the so all focal points for the.
Well, what we're doing it.
Core in a sense for sure.
That help you hope.
Yes. Thank you very much I'll look forward to the third yeah.
Yeah, we'll be talking but at some length about all that.
Our next question will come from a re two barrels with Cowen. Please go ahead.
Hi, guys. Thanks for taking the question and thanks for sequencing my questions have perfectly I did want to follow up and on.
The new CNS programs that you mentioned I believe you mentioned that there were two new programs with Biogen and then one wholly owned can you elaborate a little more where they some of the ones that Brett mentioned, the pre on disease et cetera.
Would love to know within the pipeline it.
What's sort of timeline, we could be seeing for for clinical data from.
A dish and the additional enough.
Yeah, So Brett will take that but before before we get into that I would [laughter] I want to remind people of how exciting told person is.
And and we are based on all of the army bases with that menace, Liam Biogen are really excited about that drug.
And Oh and that is you know weve is isn't important relatively near term opportunity.
And so with that would that addition, I'll turn the question over to Brett.
Sure thing Thanks for too. So you know, we're continuing and we'll continue to add new exciting programs to the neuro pipeline with by engine. The two recent programs that were entered into our development pipeline. Our targets that are undisclosed at this point, we're too but the wholly owned probe.
And is our before drug and we've talked about before disease before which is quite engine storage disease of the CNS.
So we're very excited about that program pry on drug you mentioned before is non Biogen drove it's a wholly owned program by from my own is and we're expecting that to reach development shortly.
That really has oh.
You know rather that's not an ultra rare disease, that's a that's a disease with very significant populations to be treated.
So you know more and more drugs are coming we don't disclose them with Biogen right up front.
But our wholly owned pipeline for neuro continues to expand.
As well then its little early every two to just give me.
Uh huh, even a general sense of whether it's gonna be clinical data I think we'll hold off on that until next year when when it would become much if there.
Got it and then the pulmonary programs and you're going to talk a little bit more about in on December 13th.
Are those programs based on.
I guess.
New formulation like encapsulation or something involving enhancement agent like your oil program already sort of pure.
Is it a pure potency play for delivery disappear potency play.
Right, you'll recall that we showed.
<unk> quite a many years ago that these agents are really very nice to deliver by area. So we took the ideal for drug into clinical trials in it we demonstrated a broad distribution.
No meaningful pharmacology Ah we didn't feel it was in the end.
Quite good enough to continue developing for elsewhere and that given all the other medicines are available.
Well, then blaze the trail and and so these are formulated to it very simply just and sailing.
And they can be administered then by any of the devices that you that <unk> that you know about.
And so the key chain is the increase in potency.
And.
We are seeing really remarkably exciting performance now.
In the long.
And you know like every Oregon that we work on before we really move drugs forward, we invest in understanding the Oregon and how these drugs distribute not just in to the Oregon, but in the various cells of the orders and so we know all that.
Brett will share some of that with you at the December 13th.
Calls.
Great. Thanks for taking the question congratulations on that oral oral poster at CIA everybody was that some start to be up to the exclusion [laughter], whereas decided.
He remembers the wheel reminds me well in the third team that we already showed it was feasible with an M. Roe.
What we need it was just the big step up in potency, we think we got it.
And I think you'll be hearing a lot more about that in the coming month I've just from us.
Okay.
Next question. Our next question will come from Jessica Fye with JP Morgan. Please go ahead.
Hi, This is Daniel <unk>.
Yeah. Thanks for taking your question in light of to platelet platelet declines there, but the HBV like a product can you make the case for why did the product issue versus a reason to worry about the other like a product that's well no I won't do that I'll tell you, it's not an issue at all.
There's a lot of confusion about that.
What actually happened was very much.
Might or the declines in platelets that are not even.
But mostly clinically significant.
And it was just way the data were presented or are there really is no significant platelets issue even at doses of 480 milligrams a month with the life of drugs. That's what those data actually show a run do you want to add anything to that.
Just to add to that or those were loves you sense. Then a those are very high doses and the drops in platelets were not clinically meaningful in anyway.
So you know really has no no bearing at all or like a platform and again the confidence that has been demonstrated by the licensing of drugs like factor 11, Lrx, Andrew if written by three Tailorx and LP would away how our X by Novartis.
As in buyer and and Pfizer just illustrates the confidence or like the platform from not just on efficacy, but also safety and tolerability.
Even at 480 milligrams a month.
We did not have a single patients who've gotten below normal levels. So if I recall correctly. That's correct. That's correct Stan so it was simply the way that it was presented that caused confusion.
We regret that but that that that's that's that's those are the facts.
Thank you.
Our next question will come from money Farrar with has to be Leerink. Please go ahead.
Hey, Thanks, taking my question and congratulations on the results.
First of all on behalf of your investors. Thank you for returning capital to shareholders rather than the reverse what seems to be the norm in my coverage.
By the way, we're not normal [laughter] HM.
[noise].
Alan strong evidence for patient benefit on all kinds of clinical end points compared to natural history. So we also have that data to fall back on is the natural history.
And the performance of tech savvy in patients with cardiomyopathy. So we feel very confident in the powering assumptions of our phase three Cardium apathy study and we were confident that will be well balanced in our treatment arm versus our controller.
That things are getting ready to get underway. It quickly here. So we will be announced that you'll be hearing from us about all that.
Very near future.
Great. Thanks, taking my question guys.
Our next question will come from Palmetto with Stifel. Please go ahead.
Hi, guys. Thanks for taking the question is a net on for Paul.
Maybe just to put a finer point on the prior question about enact on the clinical studies would you think enrolling all CF patients or would you narrowed down to patients who aren't.
Currently eligible for CSAPR modulator.
Oh, I don't think we want to get into details as the clinical development program.
Beyond that but said we think it's an agent it can be used as a single agents and we think it can be used in combination and we believe that can be used in patients with mutations that are unresponsive to the current therapy.
Got you think that leave it there.
That makes sense then could you just discuss the inhaled dosing route given the pulmonary mucus burden I mean, I know translates down it.
But is that is that a crazy concern or is that something you guys have I've looked at so far it no. It's not a crazy in true at all it's something we looked at very carefully.
We had the benefit of having political extension style for in you know meaningful asthmatic patients or and then we look.
Very very carefully in animals, and ask does a significant mucus theory or a effect distribution too so.
The Rocky mills and into the later.
The smaller Airways natural was no.
And based on the early returns in the clinic.
We believe the is humans, you're telling you are still as well.
So.
Absolutely something that we were concerned about but we think we've resolved it and I think that Brett will be sharing some of that with deal and just on December 13th is that right.
Yeah, that's that's correct.
<unk>.
Gotcha, and then maybe one more and HBV message I understood loud and clear on the platelet declines.
But can you help us understand why GSK was dosing at 120 next week in the first place.
Yeah, because we didn't see the source that is the only time you know we've got now 13 14.
Like the liver like the drugs in development that is the only example, where we didn't see this the expected level of increasing potency.
And so well we know it's tied in some fashion to the HCV infection.
But beyond that so it's still very much of a shirt project for example, what happened.
But that's the reason, we just didn't get the level of but let's say we have seen with the other 12 or 13, a liver license.
Gotcha interesting thanks to the color you then yeah.
Our next question will come from and what you Moreau with Cantor Fitzgerald. Please go ahead.
Hey, guys. Thanks, so much for squeezing me in [laughter], So it'd be factor B program could you explain a little bit more of your scientific rationale or I guess your decision to target factor beaverson be and I guess your perspective on the clinical advantage or key differences between the targets.
I guess given that your partner Ross has already studied programs looking at factor D in geographic atrophy.
Let's talk about sort of mix resolves maybe you can comment on your thoughts on factor be versus de specifically and geographic atrophy. Thanks.
Well I will comment that we typically.
Well when one of these pathways like clotting factors and toppled the children look at everything it's it's easy for us to do.
Oh, and so we you know look at all the various factors and based on all the data. We had we believe the effect would be offers a significant advantages potentially benefit in safety compared to.
Somebody other Coppell, Texas.
So it's based on based on data.
Brett you want anything to them.
Ah yes.
It's a little bit it's just it's certainly based on the data we've generated directly looking at different complement factors in our animal models, but also you know where factor VIII lies in the alternatives compliment pathway.
It's just I don't Wanna get into the find details, but it's it's it's a more relevant targets and that pathway than factor D and of course, what's really really interesting in important and remember is that Roche developed the factor Deanna body and they came to the conclusion that factor be was a better target, which is why they partner with us on on this.
Program for for age related macular degeneration. So it's it's based on our data as Dan said, it's based on what we would expect in the pathway to complement pathway.
And we're not the only one simply been factor B.
Roche there's too.
In the study is progressing well.
So.
We're going to have some answers. It you know just going to be awhile, but the study certainly is progressing.
Oh wait how many more questions I'd say, probably bring just to close.
That's the last ones then okay, well [laughter] that's pretty.
Well thanks, everyone. We appreciate your attention on this busy day.
And we look forward to continue to deliver great results. This year the rest of this year and next year.
And look forward to sharing some of the nuts and bolts pixels behind a big picture.
With you on December 30, this we focus on the technology and the advances that we're making.
The conference has now concluded thank.
Thank you for attending today's presentation you may now disconnect.