Q3 2019 Earnings Call
Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
Vince fibrosis due to Nash many of whom have already gained valuable experience prescribing of caliber to PBC patients.
As we've previously stated we are flexing up our existing infrastructure and capabilities, while building on our relationships within the community in preparation for our Nash launch.
Following its anticipated approval OTI is positioned to become the foundational therapy in patients with advanced fibrosis due to Nash, we continue to have productive interactions with physicians payers and patient groups, which Jerry will discuss in more detail shortly.
These stakeholders all recognize the critical importance of a therapy with a robust anti fibrotic benefit underscoring what we believed to be overseas heat vent Mitch.
I now want to pivot and spend some time discussing the upcoming annual meeting of the American Association for the study of liver diseases. The SL deliver meeting, where we will have a significant presence and more than 20 abstracts being presented in the general on late breaker sessions.
Our team is dedicated to our customers in the hepatology community and we're excited about the posters and presentations that will be showcased at the liver meeting.
Some highlights on the PTC side, we're presenting the final results from our phase three poised five year open label phase demonstrating OTI is durable therapeutic benefit with no new long term safety findings in PBC patients on treatment for up to six years.
On the Nash side, we'll have an oral presentation of the regenerate interim analysis results in the expanded intend to treat population, which reinforces the consistent benefit that OTI. It provides across the broader patient population.
We're also two important patient reported outcome or PR ROE abstracts from regenerate, including one demonstrating the patient reported quality of life scores are substantially below population norms, indicating that Nash with established fibrosis is not and asymptomatic disease and that effective antibiotic treatment can improve prs scores.
We also have an important first presentation of overseas effect on noninvasive tests and is that our most commonly used by physicians in assessing their nash patients.
As we've said before we believe there is growing acceptance in the medical community of entities, specifically for the diagnosis and staging of fibrosis due to Nash.
The new data that will be presented this week at the liver meeting our coming at an important time ahead of our expected launch.
We will showcase associate his ability to drive early and consistent improvements in a number of entities, including we believe for the first time ever in a therapeutics trial clear improvement in fiber scan assess trends in Dallas geography, a measure of liver stiffness correlated with fibrosis.
Even the invasive and expensive nature of liver biopsy, it's really encouraging to see the Nashville move to embrace these noninvasive tests and we believe the data from robust well controlled phase III studies, such as the interim analysis of regenerate will further accelerate the validation and adoption of noninvasive alternatives to biopsy as the Nash care pathway evolves.
Our ongoing phase three Nash clinical development program continues to progress well with the completion of enrollment of the outcomes cohort of regenerate with close to 2500 patients randomized and we continue to drive towards the completion of enrollment of reverse our phase three trial in Nash patients with compensated cirrhosis the only such.
I'd currently ongoing.
We're on track to finished screening this month with expected completion of randomization early in the new year.
As a reminder, the primary endpoint in reverse is fibrosis improvement with no worsening of Nash identical to the endpoint RC achieved in regenerate and last quarter, we announced we were expanding target enrollment in reverse to up to approximately 900 patients plus extending the double blind phase of the study to 18 months to align with regenerate.
As recently reaffirmed by FDA, we expect a successful readout or reverse to support expanding the indication negotiate to the treatment of Nash patients with compensated cirrhosis.
In summary, as we approach yearend, we're pleased to update you on the important progress we've made against our commercial and development objectives in 2019.
We expect we will end this year with approximately a quarter billion and O'callaghan net sales.
Three years after the launch of our orphan indication as a reminder, PBC is a rare liver disease and a market where no new therapies had been approved in 20 years prior to the approval of Ocala. It was uncharted territory much like Nash's today.
We have developed the PTC market thoughtfully and have been successful delivering a novel therapy to patients in need with regulatory approvals in more than 30 countries today.
With our recent Nash and da submission and upcoming M&A filings, we are uniquely positioned to do this again in Nash.
While the Nash market represents a much larger commercial opportunity, we believe our foundation in the specialist Hepatologists and Gastroenterologists community really positions us for success.
Couldn't be more proud of the continued amazing accomplishments of our intercept team worldwide now more than 500 strong.
Before I turn it over to Jerry I'd like to announce that we plan to host an investor event on Monday December 16 to provide additional detail regarding our Nash launch plans, including insights from our market research within the physician and patient communities and our thoughts about the commercial opportunity that we see ahead of us starting with our anticipated us approval and.
The launch next year.
So are there are of course, some details we won't be able to provide at this event such as anticipated pricing and certain details with respect to our label that will take final shape through the regulatory review period.
The rest assured we're working hard in these areas and based on progress made to date across the board feel confident in our ability to successfully launch associated Nash following approval.
With that I'll turn it over to Jerry for an update on our global commercial PPC business and our Nash prelaunch activities Jerry.
Thanks, Mark and good morning, everyone in quarter, three reported $61.5 million in worldwide Ocala, but net sales representing 32% growth over the third quarter of 2018.
In the US we achieved net sales of $45.2 million in the third quarter, representing an increase of approximately 23% as compared to the prior year quarter, and reflecting continued sequential growth in demand.
Turning to the international region, we achieved ex US net sales of caliber of 16.3 million in third quarter, representing an increase of approximately 65% as compared to the third quarter of 2018, reflecting strong launch performances in our key markets following rapid national reimbursement.
We're particularly pleased that our teams continue to increase the number of new patient initiations across the region as we transform PBC management.
As we look ahead to the remainder of 2019, I'm confident our ability to drive momentum in our commercial PVC business.
Now turning to Nash, we continue to make significant progress on our launch preparations.
In the US we continue working with physicians payers and patients focused on a framework defined by early in advanced fibrosis, rather than the traditional staging of the disease.
This change is being supported by the growing acceptance of noninvasive tests, and we continue to make progress on that front.
Based on our market research most of the patients with fibrosis due to Nash under specialist care for identified without a biopsy and the majority of community based specialists report that theyre comfortable identifying patients using noninvasive tests, including imaging modalities and blood based measurements.
We expect the use of these tests to continue to grow as important tools in the management of Nash patients.
We're also very encouraged by the end noninvasive data, demonstrating OTI AIDS efficacy, which will be presented at the upcoming AA sell de medical meeting as Mark mentioned earlier.
What we have learned continues to reinforce conviction in our thesis that there are many patients today suffering from advanced fibrosis due to Nash without an approved treatment option specialists are eager to treat these patients with the most urgent goal of preventing advancement to cirrhosis.
New data also suggest that the progression to cirrhosis can happen faster than previously anticipated.
For example in the advanced fibrosis population one in six patients can progress to cirrhosis and just 14 months. These patients are critically ill and the urgency to treat is paramount.
Our market insights indicate a clear willingness to treat these patients with an anti fibrotic therapy with LCH target product profile once approved and available in the market.
Our data also tells us that the urgency to treat does not just with physicians as the majority of patients with advanced fibrosis report that they're very concerned about their disease.
Many of these patients are seeking more information and during the quarter, We launched Nash truth, which is an unbranded disease education campaign focused on informing patients about the risk of Nash and progression to advanced fibrosis.
Our conversation with the payers in the us are progressing well.
We continue to educate them on the disease state and the importance of treating advanced fibrosis, and the best way to identify and monitor these patients.
Importantly, we are now engaging in a phase of proactive discussions with payers under FDA guidance regarding data from our phase three regenerate study as we continue to sequential dialogue through approval and the launch.
Payers view of the prevention of cirrhosis and the related complications as a key value driver and they generally agree that patients with advanced fibrosis have the greatest unmet need.
Payers also recognize the evolution towards the greater use of noninvasive methods diagnose patients with advanced fibrosis.
We believe that OTI, a strong value proposition based on a demonstrated fibrosis benefit resonates with Paris, and we'll continue to make the communication of this benefit a top priority.
I'm also happy to note that the expansion of our US payer team in the field is nearly complete and we had the right capabilities to ensure our success at launch.
As we look ahead, we're preparing for a specialty launch focused on patients with advanced fibrosis due to Nash.
Our plan is to target approximately 15000, hepatologists and Gi specialists in the us.
We already cover about 5000 of these specialists today for PBC with approximately 55 territory business managers.
We're on track to increase our internal sales organization to approximately 150 intercept territory business managers by the time, we launch and we now have identified the majority of the sales managers to support the scale up.
Consistent with our approach in PBC, we expect to deploy incremental field personnel from a contract sales organization to give us additional reach and flexibility.
The first wave of our new disease state contract sales team completed trading and began eight educating specialists last month.
We've also completed the expansion of our US Medical affairs team and the team has been executing well on a host of educational programs.
Overall, we'll remain focused on maintaining our strong PBC business, while ensuring we're prepared for every phase of our upcoming launch.
Across our international region, we haven't footprint in place in the key markets and continue to focus on market access preparedness and thought leader engagement.
It's important to highlight that the team we built for this launch has product expertise and skill sets.
Many of direct experience in leaving the launch of numerous successful blockbuster drugs with in larger pharmaceutical companies across many therapeutic areas.
We believe this deep expertise is important as we approach a blockbuster first to market opportunity with LCASD advance foreign product segment.
To summarize I feel very confident with the team we've built the progress, we're making and our ability to take advantage of this important opportunity I look forward to sharing more details about the launch at the event in December .
And now I'll turn the call over to our Chief financial officers Sandeep capacity, yet for a financial update sandeep.
Thank you Jerry and good morning, everyone. Please refer to our press release issued earlier. This morning for a full summary, our financial results for the quarter ended September Thirtyth 29 team.
Our solid financial results during the third quarter business as well for a strong end to 2019.
In the third quarter, we recognized 61.9 million in total revenues up from 47 million in the third quarter 2018, showing a growth of 32% versus the prior year quarter.
Our third quarter from Calvin net sales comprised of US net sales of 45.2 million and ex US net note with 16.3 million.
This represents a growth of approximately 23% and 65% versus prior year quarter, respectively.
We continue to see solid mccallum as demand growth in the U.S. During Q3, we observed orders from specialty pharmacies below underlying prescription growth.
This was a reversal of the trend we observed in Q2 and within our expectations as outlined during our Q2 call.
Total gross to net deductions for the third quarter were towards the lower end of our previously communicated 10% to 15% range.
Our GAAP operating expenses for the third quarter were 137.5 million in our non-GAAP adjusted operating expenses were 122.1 million.
As a reminder, our non-GAAP adjusted operating expenses excludes stock based compensation depreciation and amortization.
Our cost of sales for the third quarter Reserve point 5 million and were consistent with the prior year quarter.
Our selling general and administrative expenses for the third quarter were $76.8 million. This was an increase of 20 million over the prior year quarter and was driven primarily by increases related to our Nash launch preparation activities.
Our research and development expenses for the third quarter was 60.2 million.
This was an increase of 12.3 million over the prior year quarter.
Increase was primarily driven by cost associated when our Nash development program and the submission efforts.
As of September Thirtyth, 2019, we had cash cash equivalents and investment securities available for sale of approximately 712.4 million.
Turning to our financial guidance for the year.
29 team continues to be a critical year as we build momentum in our PBC business, while deploying resources to support our Nash regulatory efforts and launch activities.
We are confident in the financial outlook for the remainder of 2019 and expect to see continued strong growth demand in Q4 for account.
As Mark mentioned earlier for increasing our 2019 mcalpin net sales guidance range to between 245 and 250 million.
From the 235 to 245 million previously.
We continue to expect gross to net for the year to be in the 10% to 15% range.
We now expect 2019 non-GAAP adjusted operating expenses between 482 500 million from the 470 500 million previously.
We also recently announced the mutual agreement to terminate our partnership with Sumitomo Dainippon in China, and we're pleased to have the full unencumbered rights to associate globally.
In summary, we're in a very strong cash position have good momentum in our PBC business are making solid progress advancing our regulatory filing while continuing to make important investments to prepare for successful launch of both you and Nash.
Finally, as a reminder, non-GAAP adjusted operating expense is a non-GAAP financial measure under FCC regulation.
Please refer to our press release issued earlier this morning for full explanation and reconciliation of this measure.
I'd like to now turn it over to the operator for any questions operator.
Thank you as a reminder to ask a question you need to press star one your telephone.
To withdraw your question press the pound.
Please stand by all the compound the culinary roster.
Thanks.
First question comes from the line of only two young with Cantor Fitzgerald. Your line is open.
Hi, This is on the on Charlie can you help us frame what information, we should expect December investor update and in particular, what do you anticipate being in a position to get patient number and diagnosed disconnect at that time.
Yet.
So I'm going to give that to Jerry thanks.
Yeah. So we're definitely look forward to the.
Meeting in December and when I think we should expect is that.
We'll we'll update you all on our thinking about the market how we see the overall patient segments, where we anticipate our plan, we'll we'll target and based on all of the data that we've accumulated today relative sizing the of these segments and how we're going to attack. It so I think clarity on the.
Overall, our commercial approach to the different market segments again for us thinking about it more in the context of.
The market moving towards early in advanced fibrosis, and how we see that in the context over time.
Okay and then just also wondering.
You can find any color on how your conversation job holding my parents.
Around two patient have comorbidities and specifically what are receptive to the fact that nationalists type assets could have non linear progression.
Yes, again, what are the discussions with the Perez are progressing well as you can imagine.
It's a sequential.
Dialogue, we started with a lot of discussion around the disease state and now we're moving into.
In more depth on the.
On on our data.
The payers do recognize that the group of advanced patients are the ones that they're concerned about in terms of progression to cirrhosis and all of the.
Complications and costs that are accumulated with them and now it we're in that window, where we're really.
Defining with them the right advanced segment, frankly, looking at how best to identify those patients in the real world.
They are.
The.
Thinking about.
How best to look at these patients and clearly they see the progress also towards.
Morning, Noninvasive, a means of diagnosis is as the payers recognize like all the other stakeholders some of the challenges that exist with biopsy.
Great Frank could you update.
Thank you. Our next question comes on line of Brian Abrahams with RBC capital markets. Your line is open.
Hi, Thanks, very much for taking my questions I guess now with the NDA filed Im just wondering if you had any updated thoughts on whether the FDA might hold and AD com and what key questions might be discussed potentially discussed there and then I guess secondarily as you're doing or on the ground market research.
Sort of levels of pent up demand and Nash are you sensing relative to what you guys fuse. The initially addressable market I guess Im just wondering how indicative the early launch numbers and uptake could be for the overall longer term trajectory.
Thanks.
Yes, Thanks, Brian I'll take the first question. So we don't have any additional insight since last time, we talk to you about the possibility of an outcome. We are prudently preparing for one.
But of course, it will be up to FDA two to notify us so whether they want to hold one or not with respect to the second question unless Jerry to does it yes. So thanks for the question regarding.
How we see the initial phase the launch.
I think first of all we clearly recognize that this is a significant opportunity as.
We continue to stay focused on this advanced population, but we plan for a strong launch we're going to focus on the Hepcidin guys, who are the ones who are most likely treating this advanced to segment.
That we're targeting a couple of additional items, which I think are important we would think about the payer dynamic as being typical in terms of timing other specialty product launch so they'll go through their route formulary.
And coverage decisions as per there.
Their process, which is a very some from from payer to payer.
We do know that there are patients.
That are under the Carrabba specialist today that.
Specialists are comfortable using an anti fibrotic like go see a four we would anticipate.
That that treatment flow would be more like a typical chronic therapy, where patients are presenting at their next.
Scheduled to visit as opposed to a large group of patients on on day. One of launch. So we think about a strong launch and again typical with what you see with where the chronic specialty medication.
That's really helpful. Thank you.
And our next question comes on line of Mike Leigh with Jefferies. Your line is open.
Hey, guys. Thanks, and look forward to all the work you guys have done about the launch I guess it seems that you've made a lot of positive comments around your view.
Lack of need as a biopsy.
Presumably form whether Opteon war payers would require that we just remind us your confidence level or any precedents that a biopsy has been required for any type of these number drugs or other over drugs and what precedent for ends for payers to do that.
And then.
As it relates to a follow up question I was just asked can you just remind us how often these nash patients ranks cedar doctors or water consideration or they are actually people are the wedding lineup ready to go. Thanks.
Sure I'll start Mike So on the regulatory side is I've said this before is highly atypical of a regulatory authority to specified diagnostic methods.
In a label and certainly with respect to FDA, we know that.
They are just as attuned to the need to move away from this invasive method.
Diagnosing staging patients as a any other stakeholder.
I think there is precedent back back in the days when when viral hepatitis.
Studies were done with biopsy.
You don't you don't see the use of biopsy or certainly not the requirement of any kind of biopsy.
In those labels.
On the payer side ill Jerry can comment yes, Mike I think your question was regarding the frequency upon which some of these patients are.
In the specialists office, obviously, there's some variability there, but a good guidance is kind of once the twice a year depending on.
Some of the specific elements with the pace and so these patients that again, we would anticipate.
To be targeting first are ones that.
I have been recognized as having.
Progression of disease and would be under the care on on a relatively regular basis with their there have been ecologists or their gastroenterologist.
It was more around it.
Yes, and then it might just rented out we've said before them into a majority of our these patients under specialist care, but today I have not received a biopsy, we acquire certainly working very hard.
With respect to the noninvasive tests are that I referenced in my prepared remarks, we're very excited about the data that are being presented next week as sell the for example, looking at both proprietary Nonproprietary blood tests and imaging modalities like fiber scan trends in our stratigraphy. So.
This is this is a work in progress, but but we've said before that you know all stakeholders, including payers are well aware of the deficiencies of of biopsy. The the expense the risk the variability. The fact that it's non standard of care in day to day clinical practice so.
Thats kind of where we're at yes, Mike the only other thing that I would add is of course, when we talk about the the presentation of these patients. That's all in the context of no therapeutics available. So we do anticipate the again that the motivation to too.
To deal with these patient goes up when there's a drug available finally.
My point was that therefore, if you do not have biopsy requirements, we did by payers and like you say could be possible. We're at FDA, we feel very good at their Ajay cute bolus of non biopsy patients that are therefore.
We know that there are and again, we'll get into some more details on this next month I think it'll be one of the the interesting items. We do know that there are this group of patients that are our with specialists already.
And that have not only been identified as advanced but have sometimes a number of these tests already done in a relatively recent time again one of the things that's been lacking is a path forward for the physician and patient in terms of treatment.
Thank you.
Thank you and our next question comes on line two morale with Cowen Your line is open.
Good morning, guys. Thanks for taking the question.
About 1000 clinician.
Mentioned, we'll be targeting can you give us a little more granularity on who they are in line.
The.
Paul just gastro, whether they're up national carriers community centers and partly your your current thoughts on what percent of Nash patients maybe under their coverage and further advance lachapelle under their college.
Yes, so I'll address the first part of the question and I think the second part of the question in terms of the percentages that fall, that's probably an item that you'll see more.
More from us in a couple of weeks.
When we talk about the 15000 approximately.
Specialists targets out once that is the broad group of GE specialists.
Essentially the bulk of all of the Hepatologists.
That has relevance in Nash and again the broad based community group obviously, the the G group has some several different segments inside of that but we.
We are capturing the vast majority of GE specialists with that 15000. It is a flex up as we said the great thing is is that there's a core part of that 5000 or so we have been already.
Dealing with overtime in PBC and so the incremental physicians.
That will get is to get at need larger group of specialists, who treat Nash we've looked at quite a bit of data as you can imagine there is not traditional.
Prescription data in Nash since there haven't been any approved therapies, but we're looking at a lot of interesting data sets to be able to identify those physicians that have the advance population that we expect to be treated first.
Is there like it tier within them that covers more advanced Nash patients or specific centers of excellence that you are that you'll be targeting first in tier one.
Yes, there will be a subset of though is in the in the key centers obviously.
Some of the academic centers the groups that.
Our heavily involved in the clinical trials in terms of opinion leadership et cetera will be a core part of that and then there's another real important audience, which is the busiest community based.
Gastro practices, where theyre all large volume of patients due to the overall size of those practices.
Great. Thanks for taking the questions.
Thanks Richard.
Thank you. Our next question is from Yasmeen Rahimi with Roth Capital Partners. Your line is open.
Hi, Tim Thank you being the question. So first congrats to dominate the dilemma meeting with 22 presentation.
My first both of my questions are.
I'm sorry on the data being presented at the meeting.
First one is on the late breaker.
The five year long term safety data on point can you maybe.
Give us some color on did you lucky changes and provide us over five years or advance rate and then how does this data side inform you on your guard to cobalt and then where are we in regards to call cobalt timeline and how important outcome data not only in market penetration for PBC and as well.
Nash and then I have one more follow up in regards to abstract while PVD.
Sure Thanks, Jos and thanks for.
Focusing in on the data were obviously really excited about is healthy. This year, we do have 22 national PBC abstracts.
I think it's really important to highlight the the long term PBC data. This again this is did the completed.
Phase three poise trial data, we had a five year open label extension phase up to the one year double blind. So we have a number of patients have been exposed in that study for for up to six years.
As I mentioned in my prepared remarks, who got durable stable therapeutic response with no new safety signals and a nice tolerability profile profile as you mentioned.
I can't comment on on specific measures of provide us during that long term follow up.
Except to know that patients, obviously vote vote with their feet and we do see this this long term favorable tolerability.
That that we expect to extend into two majority of patients treated with this drug.
With respect to cobalt, which is our ongoing phase for.
Confirmatory outcome study in PBC that continues to enroll.
And we're on track in terms of event rate comments premature for me to to guide as to when we expect that you read out, but I will say that this is important both on the PBC and Nash sides were going to continue generating a really important clinical data and ultimately clinical outcomes data that we believe is going to continue to.
Two.
Drive a differentiated profile for O'shea second line in PBC.
And as the established foundational therapy.
In Nash.
So anyway, we encourage you to common checkout all the abstracts at the meeting.
Thank you Mark and then second question its abstract 20, ninee. So in that abstract he looked at mortality rate PBC patient with that Pattiki compensation before OTN Altira, let's see era. So specifically did you look into that 429 patients that were and the era after LSTA and.
What percentage of that we're taking north sea and therefore, you could actually calculate the director facts and well see improving mortality rate and you have not done. So do you plan on doing touched analysis, and then with when should we be expecting to see that.
You're talking about rate Kims upcharge. So this is not an intercept abstract very interesting that he went and looked at a large number of PBC patients with advanced disease compensated.
Cirrhosis trial, if you'd be in C.
This is precisely the advance segment that has been the most.
Fragile.
At most risk were.
Caliber is recommended on starting doses at just once once a week.
And the conclusion of this abstract was that since oceana was approved over three years ago.
Mortality in in this narrow patients segment appears to be lower than what would have been predicted.
Based on the natural history of the disease now.
Just want to stress the conclusion of this abstract is.
Is that this cannot key causally associated necessarily with a with a little caliber and so the answer to your question is we don't know or I don't know at least which of these patients if any.
We're on treatment, but certainly.
The conclusion is that with a hell of up around.
Mortality appears to have gone down I do think it's worth looking plunging more into into the data.
Well look forward to collaborating with with rate Kim on that.
Thank you obtain theone Boston.
Thank you thanks guys.
Thank you next question from Jay Olson with Oppenheimer. Your line is open.
Oh, Hey, thanks for taking the question.
I also had.
Some questions about a esselte abstracts.
As an abstract exploring synergies between visit Fibrate and O'shea in PBC can you talk about how you plan to the leverage those synergies in PBC and also maybe talk about potential synergies between these two molecules in the treatment of Nash and I have one follow.
Yes. Thanks for the question Jay So you're referring to an abstract out of France. This is this is a second on European cohort of patients.
And this is interesting it's Chris Corr for show who is the.
Lead investigator and the best versus study that was published last year.
And what do you looked at was patients with the inadequate or intolerant to UTI CA.
Who are then put on on either Ocala in second line or or best Fibrate Second line and then after a period of time.
Were put on the triplet therapy, so the combo therapy of those CA and meza.
And any way you look at the data, it's very clear that the combo.
Very substantially improves response, just as would be predicted and that again supports our rationale after we licensed as a fibrate earlier this year in the US to proceed with the development of fixed dose combination of of the two compounds first for the treatment of PBC and then.
We've also said that we intend to try it.
In Nash.
So yes, we think that it's another robust data set that can be leveraged in support of the the combination therapy in PBC.
Great and then.
My second question is related to recent publication, describing long term benefits in patients with PVC. After three years of treatment with associated focuses on histological endpoints and that publication combined with the abstracts you have it is.
Well the looking at the benefits of obesity treatment in patients with.
PVC after up to six years of therapy.
Can you just talk about what sort of competitive barrier. These data represent.
And what the impact would be of these data on new entrance into the PBC market.
Yes sure.
I commented on this a couple of minutes ago that we continue to generate exciting data that the publication, you're referring to is the.
The data we presented last year in a subset of voice patients who underwent baseline biopsy and then a follow up after after three years and we showed.
Fibrosis benefit in those patients, albeit small small number and it wasn't controlled.
And that coupled with the long term safety and efficacy data being presented at this meeting and eventually we hope a positive outcomes data will continue to cement we believe Ocala this position in second line.
Irrespective of who is coming down down the Pike and of course, we continue to be focused on generating new and exciting and differentiating data with with Ocala and the PBC side simply on the Nash side.
I mentioned in my remarks that we're obviously building on the the very exciting intra month 18 interim analysis data in support of the NDA and launch.
But we have having completed the outcomes cohort of regenerate close to 2500 patients randomized.
We're charging down the path for post marketing readout on on outcomes in Nash. So it's going to continue being exciting over the next few years.
Great. Thanks, again for taking my questions.
Thanks.
Our next question comes from the line of selling Richter with Goldman Sachs. Your line is open.
Thanks for taking the questions as Ross on for solving on the call you guys noted that the data from phase through January regenerate is going to be used to inform the payer decision. However should we be expecting at the PR around 90 data actually part of the initial label or just something that should be part of our more broader initiative to elucidate the noninvasive diagnostic potential though.
CA and then I've a follow up.
Yes, I can't comment right now on the specifics of what's going to end up in the label, but definitely the PRM and NRG data, we think are very important.
They are being presented next week in Boston.
There will be follow up publication.
On on these data.
And a lot more data mining to do to to really.
I understand that the nuances and implications of these data.
So I think more to the latter part of your question does this can be part of our broader educational effort.
And.
We're certainly going to leverage these data with our various stakeholders payers physicians.
Et cetera.
Great and then for Sandeep, so based on the reversal and the Twoq ordering trends how should we thinking about the underlying Q over Q demand change here and how this will play out into the fourth quarter.
Yeah. Good. Thanks, Ross the question I mean, we had obviously a very solid quarter.
Where we saw good underlying demand growth, even even through the summer period. So we had good growth in the us.
Continued contribution of international as well.
As you mentioned this quarter, we did see specialty pharmacy orders below the.
Underlying imus trends in the U.S., which was a reversal of what we saw the last quarter, which which we had anticipated and indicated so we increased our sales guidance for the balance of the year. So I mean, we have continued confidence.
I think we're at.
We don't see any impact.
Of potential trade inventory changes at least in quarter four but.
We see good good strong growth continued demand growth and and thus we increased our sales guidance range from two to 45 to 250.
Great. Thanks for the questions.
Our next question comes from the line of Brian Skorney with Baird. Your line is open.
Hi, Thank you for taking your questions. This is Jack dialing in for Brian .
We wanted to drill down into the central pricing discussion around PBC and Nash and we're wondering what levers you should think about as you look to potentially.
Implement differential pricing in PBC and Nash and.
If the FDA potential approval of the 10 milligram dose in Nash has an effect on your.
Though do you actually implement differential pricing in the two indications.
Thank you.
Okay. Thanks, Thanks for the question first as you know.
We filed a separate end da and so the the plan is of course to launch Nash under a different brand, which gives us some optionality so we positioned ourselves to.
Ultimately pursue the pricing option, which maximizes the Nash launch and also considers.
The overall long term value with the franchise, obviously the label and some of the questions that you mentioned.
Our not quite clear at this point as we go through the process.
So we'll plan to continue.
Our work the dialogue with the payers, which are in really an important input into that and finalize and communicate the overall pricing approach at the national.
Awesome. Thank you so much.
Thank you want our next question is from the line of Steve seed House with Raymond James Your line is open.
Good morning, Thank you.
Just want to follow up on the indication based pricing conditions does that easier and are beginning to achieve in the us for in Europe .
A one also asked just as you're preparing for a potential AD com just thinking about the different issues and questions could arise Columbia your thoughts on.
With the risk gallstones.
Basically CN regenerate business of academic literature, just discussing mechanism.
Risk gallstones. Thank you.
Yes, I guess I'll take the first step parts so regarding eyes.
Pricing, it's a different to assist them, obviously between the U.S. and and Europe and the different markets in Europe I have a different approach. So the the mechanisms in Europe will be varied some we'll look at it.
Completely independent because it will be by definition, a separate brand and we will have.
Its own discussion regarding the criteria that the individual international markets used to make their pricing decision where in the US we'll take the approach I outlined.
The earlier.
Yeah with respect to your question about AD Com mean, I mentioned earlier that we're preparing for one if there is one of 52 sides to have one.
And I think in terms of the focus of.
Interest at that AD com they would ultimately.
Go go to across the board to efficacy and safety and overall benefit risk Needless to say you know, we're obviously very confident based on all the data that we've seen in the favorable benefit risk profile.
Although CA 25 milligram dose the effective dose in this population with advanced fibrosis, yes, specifically about gallstones.
It was something where we saw in numeric.
Difference.
With with more gallstones reported in patients you'll see a 25 milligram.
Dose.
And there is a plausible mechanism that you alluded to in a recent publication on to the extent that this this signal proves to be.
Real we would we would think that it's probably a class effect.
Of FX or but again.
Gallstones very common in this patient population.
And imminently manageable in the vast majority of patients so.
From our perspective on that particular signal doesn't alter our view of benefit risk.
Thanks very much.
Thanks.
Thank you and our next question comes from the line of Alan Carr with Needham and company. Your line is open.
Hi, Thanks for taking my questions.
You talked earlier about 150 person sales force, but also.
Contract sales force summer if you could.
Talk more about potential scale that.
Timing around.
Building that decision to go into telling it and then also.
Can you go over the relative.
Opportunity in Europe , and then I guess the amount that you expect to invest there and.
In your own commercial infrastructure. Thanks.
Okay. Thanks, So as I mentioned in the prepared remarks.
We have a earlier sorry last month.
Implemented the the first group of our contract sales organization a team that's out there doing education.
It's really been a part of our Salesforce model for a while in PBC that we keep a portion of our overall sales team from a contract group. It gives us some flexibility and then some opportunity to to pulse when we need to.
I think the way to think about that group is it's a complement ultimately to the 150.
Internal sales team.
We will ramp up too for the launch will continue to look.
How to use the different levers effectively we will be progressively adding both to the contract group and to the internal team as we move forward through the launch as a as per our plant.
No specific details at this point on the size of the contract sales force.
Yes, we'll give some more deeply yes, yes, it will give some more details on kind of the the knee ramp up of process and the sizing when we get to the event, but the way to think about as again is that ultimately at launch the majority of our effort will come from that internal team of approximately 150.
Intercept territory business managers.
Okay, and then for Europe .
Yes, So Europe I mean, if you look at the prevalence data, there's potentially similar numbers of of patients in the European market obviously.
There will be.
The normal process in Europe around pricing and reimbursement, which will take some time, we'll look at our investment plan to take advantage of the opportunity, but also to move through on a milestone basis, you have different timing first on the regulatory front as we get ready to to file.
Later this quarter and then you look market by market.
Add.
The right way to ramp up the individual markets based on the the reimbursement process that exists in that individual market. So the nice a significant opportunity in Europe , which will tackle a progressive Lee.
But obviously the first focus in the first market in terms of chronology will be the U.S. market.
I think it's important to on the ERP and just want one I think important.
Consideration on Europe is we.
We did build up our internal infrastructure in the key European markets, where the PBC launch so like the us when we talk about flexing up the resources.
Same kind of process, there, where we start with an infrastructure and with a real good.
Strong teams and sound relationships with the key the key stakeholders in these markets to what extent are you opened two.
Co marketing or Outlicensing type arrangements and.
In parts of Europe .
Yes, Allen, we've said before that we're very open minded with with respect to strategic options if theres a likeminded.
Company.
Can accelerate access to patients in need we're we're very.
Open to that possibility.
Great. Thanks for taking my questions they sell.
Thank you. Our next question is from Liisa Bayko with JMP Securities. Your line is open.
Hi, Thanks, the majority of my questions have been answered bascome.
I guess, just that's probably a little bit more on your discussions with payers not on pricing, but really that they use of biopsy I mean were wearing today in terms of.
Either wanting to see a biopsy are they kind of at that point pretty comfortable with.
The non invasive approaches thanks.
Okay.
Okay. Thanks for the question.
I mean, I think as we've been indicating.
We believe entities are the best way frankly to diagnose the advanced fiber optic patient in the real world given all the challenges around biopsy I think if we think about the conversations and the.
Learnings we've had from payers there there are obviously well aware of the entities that are available for assessing fibrosis in liver disease.
Partially clearly thanks to their experience in hepatitis C.
Where the use of the Nike is on the payer side is a rather.
Consistent approach in many of the large payers. So we see this momentum.
Continue continue with repairs were were in the middle of as you can imagine all of those discussions now, but the momentum in the overall market is encouraging it's also.
Evident that the large regenerate dataset is going to be key in those discussions and so it's great to see that.
The Nic data specific to oversee a begins to emerge at at the meeting.
In Boston next week and that will really be an important part of the overall a dialogue with them and again I think payers understand that Theres. This group of advanced patients that.
They are most concerned about that all already being identified primarily through noninvasive.
Means in the in the practice setting today and they're also of course looking to what the key opinion leaders are saying so the fact that more data is emerging.
All the time and the tail wells are clearly behind this is going to be another important I mentioned, when we think about the the payer dialogue between now and one in launch.
Thank you.
Thanks Lisa.
Thank you and our next question is from Joel Beatty with Citi. Your line is open.
Hi, Thanks for taking my questions first wondering could you provide any thoughts on quite a labeling would be based on fibrosis stage and then secondly could you discuss potential upon the initial approval expected next year to year associate achieve Nash patients would ffour fibrosis I wrote.
Thats still being studied and the reverse study, but until those results come it seems like will be no other alternatives for those patients. Thanks.
Yes, so with respect to your first question.
I'd point out again that our breakthrough designation is in Nash patients with fibrosis.
And.
We wouldn't necessarily anticipate a stage specific.
Indication, but.
We'll we'll we'll see Ken.
Can't comment on on where we're going end up exactly in the label I think.
Post launch.
And for US I mean, it is a separate.
Population of patients we study in reverse I mentioned in my prepared remarks reverses the only such.
These three study that's ongoing right now it's a very important segment of the market with the highest unmet needs and I think again a positive.
Outcome in that study positive result in that study will support and expansion of the indicated.
Use of of the drug in this segment and further differentiate it.
But but in the initial phase will launch this is not a segment of the population we would be targeted.
Thank you.
Thank you and our next question is from the line of Jim Birchenough with Wells Fargo. Your line is open.
Hey, guys. Thanks for fitting in and apologies I joined a little late but couple of questions. Just want all caliber Mark what are the drivers for growth going forward. If its territory expansion, maybe speak to territories, where we're further behind if its.
Expansion of market share in Europe versus us could you maybe tell us where we're at market share wise Europe versus you asked and then any you asked what segments or you're missing right. Now that you think you get to that I've got it.
Paul.
Good morning, ladies and gentlemen, and thank you for joining the intercept pharmaceuticals third quarter 2019 financial results Conference call.
All participants are now in listen only mode.
Following opening remarks intercepts management will open the lines for question and answer period.
Please be advised that this call is being recorded at the company's request and website. This call will be archived on the company's website for approximately two weeks.
I would now like to introduce Lisa Defrancesco, Vice President Investor.
Good morning, ladies and gentlemen, and thank you for joining the intercept pharmaceuticals third quarter 2019 financial results Conference call.
All participants are now in listen only mode.
Following opening remarks intercepts management will open the lines for question and answer period.
Please be advised that this call is being recorded at the company's request and website. This call will be archived on the company's website for approximately two weeks.
I would now like to introduce Lisa Defrancesco, Vice President Investor Relations. Please go ahead.
Thank you operator good morning, Thank you for joining us on today's call. This morning, we issued a press release announcing our third quarter 2019 financial position and result.
And also posted accompanying slide which are available on our website at www dot intercept pharma dotcom.
Before we begin our discussion I'd like to note that during the call we will be making certain forward looking statements, including statements regarding one our crew product in clinical development program.
To the timing of our regulatory filings and potential approval of our product candidates, including okay for Nash and three our strategy prospect financial guidance and future commercial and financial performance.
Listeners are cautioned not to place under undue reliance on the forward looking statements speak only as of the data this call and we undertake no obligation to update such statements except as required by law. These forward looking statements are based on estimates and assumptions that although believes to be reasonable, earning apparently answer and subject to.
A number of risks and uncertainties.
But not necessarily all the factors.
That could cause our actual results to differ materially from our historical results are those anticipated are predicted by a forward looking statements are discussed in this morning, especially in our periodic filings with the SEC.
Today's call will begin with prepared remark from our CEO Dr. Mark presenting followed by the from our Chief operating officer generator. So in our chief financial officers and deep capacity as well then open the call to take your question. Please limit yourself to in this one initial question in order to allow time for all questions for the address let me now.
I'll turn the call over to our CEO Dr. Mark for then Mark.
Thanks, Lisa and good morning, everyone. Thank you for joining us on our third quarter 2019 conference call.
Let me begin my summary of the quarter by noting the achievement of the historic milestone with our submission of the first new drug application for Nash to the FDA.
This is an extraordinary to comps accomplishment for intercept and for the many patients suffering from advanced fibrosis due to Nash, who unfortunately have no approved therapies available to them.
I'd like to personally thank our team for their tireless efforts that resulted in our submission in September consistent with our public guidance.
We remain on track with our marketing authorization application or EMEA in the EU with anticipated filing later this quarter.
In addition to the execution of our regulatory filings, we've continued to be laser focused on ensuring commercial readiness for the first ever Nash launch.
With more than 15 years of experience focused on the development of novel therapies to treat aggressive non viral liver diseases interceptor remains the only company to have demonstrated a therapeutic anti fibrotic benefit in large placebo controlled phase two and three trials with our first in class FXR agonist dossier that we believe to be crucial for the effective treatment.
Of patients with advanced fibrosis Judah Nash.
As the leader in this space, we've proven time and again there is simply are no shortcuts developing effective new treatments for these indications as a marathon not a sprint and we remain well positioned for continued success with the anticipated first approved dash therapy on the horizon.
We are in the unfortunate position to be building on our established strong standing within the liver community globally.
Based on the foundation, we've built and ongoing commercial success of our PBC business worldwide, we have great confidence in our ability to execute a successful first to market launch of those here in Nash, which provided ftn grants us priority review and approval could be as early as the spring of 2020.
I mentioned PBC and Im pleased to point out the continued strong momentum in our business globally.
We've continued to see steady demand growth versus the prior year quarter based on solid execution of our commercial organization worldwide.
Given our performance today Weve increased our 2019 full year net sales guidance for all caliber to between 245 and $250 million.
We believe our established medical and commercial infrastructure supporting the BBC business uniquely positions us for success in Nash.
We've developed strong relationships with Hepatologists and Gastroenterologists. This specialists treating patients with advanced fibrosis due to Nash many of whom have already gained valuable experience prescribing ocala to PBC patients.
As we've previously stated we are flexing up our existing infrastructure and capabilities, while building on our relationships within the community in preparation for our Nash launch.
Following its anticipated approval those is positioned to become the foundational therapy in patients with advanced fibrosis due to Nash, we continue to have productive interactions with physicians payers and patient groups, which Jerry will discuss in more detail shortly.
These stakeholders all recognize the critical importance of the therapy with a robust antibiotic benefit underscoring what we believed to be as he is key advantage.
I now want to pivot and spend some time discussing the upcoming annual meeting of the American Association for the study of liver diseases. The a as they will deliver meeting where we will have a significant presence and more than 20 abstracts being presented in the general and late breaker sessions.
Our team has dedicated to our customers in the hepatology community and we're excited about the posters and presentations that will be showcased at the liver meeting.
Some highlights.
On the PTC side, we're presenting the final results from our phase 3.5 year open label phase demonstrating OTI is durable therapeutic benefit with no new long term safety findings in PBC patients on treatment for up to six years.
On the Nash side, we'll have an oral presentation of the regenerate interim analysis results in the expanded intend to treat population, which reinforces the consistent benefit that o'shea provides across the broader patient population.
We're also two important patient reported outcome or PR ROE abstracts from regenerate, including one demonstrating that patient reported quality of low scores are substantially below population norms, indicating that Nash with established fibrosis is not and asymptomatic disease and that effective antibiotic treatment can improve prs scores.
We also have an important first presentation of overseas effect on noninvasive tests and is that our most commonly used by physicians in assessing their nash patients.
As we've said before we believe there is growing acceptance in the medical community of entities, specifically for the diagnosis and staging of fibrosis due to Nash.
The new data that will be presented this week at the liver meeting our coming at an important time ahead of our expected launch.
We will showcase associate his ability to drive early and consistent improvements in a number of entities, including we believe for the first time ever in a therapeutics trial clear improvement in fiber scan assess trends in Dallas jogger fee, a measure of liver stiffness correlated with fibrosis.
Given the invasive and expensive nature of liver biopsy, it's really encouraging to see the nashvilles moved to embrace these noninvasive tests and we believe that data from robust well controlled phase III studies, such as the interim analysis of regenerate who will further accelerate the validation and adoption of non invasive alternatives to biopsy as the Nash care pathway.
Faults.
Our ongoing phase three Nash clinical development program continues to progress well with the completion of enrollment of the outcomes cohort of regenerate with close to 2500 patients randomized and we continue to drive towards the completion of enrollment of reverse our phase three trial in Nash patients with compensated cirrhosis, the only such study current.
So the ongoing.
We're on track to finished screening this month with expected completion of randomization early in the new year.
As a reminder, the primary endpoint in reverse is fibrosis improvement with no worsening of Nash identical to the endpoint associate achieved in regenerate and last quarter, we announced we were expanding target enrollment in reverse to up to approximately 900 patients plus extending the double blind phase of the study to 18 months to align with regenerate.
As recently reaffirmed by FDA, we expect a successful readout or reverse to support expanding the indication negotiate to the treatment of Nash patients with compensated cirrhosis.
In summary, as we approach year end, we're pleased to update you on the important progress we've made against our commercial and development objectives in 2019.
We expect we will end this year with approximately a quarter billion and O'callaghan net sales just three years after launch of our orphan indication as a reminder, PBC is a rare liver disease in a market where no new therapies had been approved in 20 years prior to the approval of Ocala. It was uncharted territory much like Nash's today.
We have developed the PBC market thoughtfully and have been successful delivering a novel therapy to patients in need with regulatory approvals in more than 30 countries today.
With our recent Nash and da submission and upcoming EMEA filings, we are uniquely positioned to do this again in Nash.
While the Nash market represents a much larger commercial opportunity, we believe our foundation in the specialist Hepatologists and Gastroenterologists community really positions us for success.
I couldn't be more proud of the continued amazing accomplishments of our intercept team worldwide now more than 500 strong.
Before I turn it over to Jerry I'd like to announce that we plan to host and an investor event on Monday December 16 to provide additional detail regarding our Nash launch plans, including insights from our market research within the physician and patient communities and our thoughts about the commercial opportunity that we see ahead of us starting with our anticipated us approval in.
Launch next year.
So are there are of course, some details we won't be able to provide at this event such as anticipated pricing and certain details with respect to our label that will take final shape through the regulatory review period.
Rest assured we're working hard in these areas and based on progress made to date across the board feel confident in our ability to successfully launch associated Nash following approval.
With that I'll turn it over to Jerry for an update on our global commercial PPC business and our Nash prelaunch activities Jerry.
Thanks, Mark and good morning, everyone in quarter, three reported $61.5 million in worldwide Ocala, but net sales representing 32% growth over the third quarter of 2018.
In the US we achieved net sales of $45.2 million in the third quarter, representing an increase of approximately 23% as compared to the prior year quarter, and reflecting continued sequential growth in demand.
Turning to the international region, we achieved ex US net sales level caliber of 16.3 million in third quarter, representing an increase of approximately 65% as compared to the third quarter of 2018, reflecting strong launch performances in our key markets following rapid national reimbursement.
We're particularly pleased that our teams continue to increase the number of new patient initiations across the region as we transform PBC management.
As we look ahead to the remainder of 2019 I'm confident in our ability to drive momentum in our commercial PBC business.
Now turning to Nash, we continue to make significant progress on our launch preparations.
In the US we continue working with physicians payers and patients focused on a framework defined by early in advanced fibrosis, rather than the traditional staging of the disease.
This change is being supported by the growing acceptance of noninvasive tests, and we continue to make progress on that front.
Based on our market research most of the patients with fibrosis due to Nash under specialist care for identified without a biopsy and the majority of community base specialists report that theyre comfortable identifying patients using noninvasive tests, including imaging modalities and blood based measurements.
We expect the use of these tests to continue to grow as important tools in the management of Nash patients.
We're also very encouraged by the noninvasive data demonstrating OTI AIDS efficacy, which will be presented at the upcoming AA sell de medical meeting as Mark mentioned earlier.
What we have learned continues to reinforce conviction in our thesis that there are many patients today suffering from advanced fibrosis due to Nash without an approved treatment option specialists are eager to treat these patients with the most urgent goal of preventing advancement to cirrhosis.
New data also suggests that the progression to cirrhosis can happen faster than previously anticipated.
For example in the advanced fibrosis population one in six patients can progress to cirrhosis and just 14 months. These patients are critically ill and the urgency to treat is paramount.
Our market insights indicate a clear willingness to treat these patients with an anti fibrotic therapy with associates target product profile once approved and available in the market.
Our data also tells us that the urgency to treat does not just with physicians as the majority of patients with advanced fibrosis report that theyre very concerned about their disease.
Many of these patients are seeking more information and during the quarter, We launched Nash truth, which is an unbranded disease education campaign focused on informing patients about the risk of Nash and progression to advanced fibrosis.
Our conversation with the payers in the U.S. are progressing well.
We continue to educate them on the disease state and the importance of treating advanced fibrosis, and the best way to identify and monitor these patients.
Importantly, we're now engaging in a phase of proactive discussions with payers under FDA guidance regarding data from our phase three regenerate study as we continued the sequential dialogue through approval and the launch.
Payers view, the prevention of cirrhosis and the related complications as a key value driver and they generally agree that patients with advanced fibrosis have the greatest unmet needs.
Pairs also recognize the evolution towards the greater use of noninvasive methods to diagnose patients with advanced fibrosis.
We believe that obviously, a strong value proposition based on a demonstrated fibrosis benefit resonates with Paris, and we'll continue to make the communication of this benefit a top priority.
I'm also happy to note that the expansion of our US payer team in the field is nearly complete and we have the right capabilities to ensure our success at launch.
As we look ahead, we're preparing for a specialty launch focused on patients with advanced fibrosis due to Nash.
Our plan is to target approximately 15000, hepatologist singye specialists in the U.S.
We already cover about 5000 of these specialist today for PBC with approximately 55 territory business managers.
We're on track to increase our internal sales organization to approximately 150 intercept territory business managers by the time, we launch and we now have identified the majority of the sales managers to support the scale up.
Consistent with our approach in PBC, we expect to deploy incremental field personnel from a contract sales organization to give us additional reach and flexibility.
The first wave of our new disease state contract sales team completed training and began eight educating specialists last month.
We've also completed the expansion of our US Medical affairs team and the team has been executing well on a host of educational programs.
Overall, we'll remain focused on maintaining our strong PBC business, while ensuring we're prepared for every phase of our upcoming launch.
Across our international region, we haven't footprint in place in the key markets and continue to focus on market access preparedness and thought leader engagement.
It's important to highlight that the team we've built for this launch has brought expertise and skill sets.
Many of direct experience in leaving the launch of numerous successful blockbuster drugs within larger pharmaceutical companies across many therapeutic areas.
We believe this deep expertise as important as we approach a blockbuster first to market opportunity without seeing the advanced fiber optic segment.
To summarize I feel very confident with a team we've built the progress, we're making and our ability to take advantage of this important opportunity I look forward to sharing more details about the launch at the event in December .
And now I'll turn the call over to our Chief financial officers Sandeep, coupled yet for a financial update sandeep.
Thank you Jerry and good morning, everyone. Please refer to our press release issued earlier. This morning for a full summary, our financial results for the quarter ended September Thirtyth 2019.
Our solid financial results during the third quarter business as well for a strong end to 2019.
In the third quarter, we recognized 61.9 million in total revenues up from 47 million in the third quarter 2018, showing a growth of 32% versus the prior year quarter.
Our third quarter Mcalmont net sales comprised of US net sales of 45.2 million and ex us net of 16.3 million.
This represents a growth of approximately 23% and 65% versus prior year quarter, respectively.
We continue to see solid recalibrate demand growth in the U.S. During Q3, we observed orders from specialty pharmacies, the low underlying prescription growth. This was a reversal of the trend we observed in Q2 and within our expectations as outlined during our Q2 call.
Total gross to net deductions for the third quarter were towards the lower end from our previously communicated 10% to 15% range.
Our GAAP operating expenses for the third quarter were 137.5 million in our non-GAAP adjusted operating expenses were 122.1 million.
As a reminder, our non-GAAP adjusted operating expenses excludes stock based compensation depreciation and amortization.
Our cost of sales for the third quarter Reserve point 5 million and were consistent with the prior year quarter.
Our selling general and administrative expenses for the third quarter were $76.8 million.
This was an increase of 20 million over the prior year quarter and was driven primarily by increases related to our Nash launch preparation activities.
Our research and development expenses for the third quarter was 60.2 million.
This was an increase of 12.3 million over the prior year quarter.
Increase was primarily driven by cost associated when our Nash development program and da submission efforts.
As of September Thirtyth, 2019, we had cash cash equivalents and investment securities available for sale of approximately 712.4 million.
Turning to our financial guidance for the year.
29 team continues to be a critical year as we build momentum in our PBC business, while deploying resources to support our Nash regulatory efforts and launch activities.
We are confident in the financial outlook for the remainder of 2019 and expect to see continued strong growth demand in Q4 for accounts.
As Mark mentioned earlier for increasing our 2019 Mcalmont net sales guidance range to between 245 and 250 million.
From the 235 to 245 million previous plant.
We continue to expect gross to net for the year to be in the 10% to 15% range.
We now expect 2019 non-GAAP adjusted operating expenses between 482 500 million from the 470 500 million previously.
We also recently announced a mutual agreement to terminate our partnership with Sumitomo Dainippon in China, and we're pleased to have the full unencumbered rights to associate globally.
In summary, we're in a very strong cash position have good momentum in our PBC business are making solid progress advancing our regulatory filing while continuing to make important investments to prepare for successful launch ammonia in Nash.
Finally, as a reminder, non-GAAP adjusted operating expense is a non-GAAP financial measure under SEC regulation.
Please refer to our press release issued earlier this morning for full explanation and reconciliation of this measure.
I'd like to now turn it over to the operator for any questions operator.
Thank you as a reminder to ask a question you need to press star one new telephone to withdraw your question press the pound.
Please stand by all the compound acuity roster.
Thanks.
First question comes from the line of only two young and with Cantor Fitzgerald. Your line is open.
Hi. This is on Charlie can you help us frame what information we should expect this December investor update and in particular, what do you anticipate being in a condition to get patient number and diagnosed sassnets at that time.
Yes.
Most so I'm going to give that to Jerry thanks.
Yes, so we're definitely look forward to the.
Meeting in December and when I think we should expect is that.
We'll we'll update you all on our thinking about the market how we see the overall patient segments, where we anticipate our plan, we'll we'll target and based on all of the data.
We've accumulated today relative sizing the of these segments and how we're going to attack. It. So I think clarity on the overall, our commercial approach to the different market segments again for us thinking about it more in the context of.
The market moving towards early in advanced fibrosis, and how we see that in the context over time.
Okay and then just also wondering.
He can provide any color on how your conversations are evolving with payers around.
Around occupation have come our nation's Pepsi and why that are receptive to the fact that Nash with Capex. This could have non linear progression.
Yes, again, what are the discussions with the Perez are progressing well as you can imagine.
It's a sequential.
Dialogue, we started with a lot of discussion around the disease state and now we're moving into.
More depth on the.
On on our data.
The payers do recognize that the group of advanced patients are the ones that they're concerned about in terms of progression to cirrhosis and all of the.
Complications and costs that are accumulated with them and now it we're not window, where we're really.
Defining with them.
The right advanced segment, frankly, looking at how best to identify those patients in the real world.
They are.
The.
Thinking about.
How best to look at these patients and clearly they see the progress also towards.
Morning, Noninvasive, a means of diagnosis is as the payers recognized like all the other stakeholders some of the challenges that exist with biopsy.
Great. Thanks, Frank could you update in December .
Thank you. Our next question comes on line of Brian Abrahams with RBC capital markets. Your line is open.
Hi, Thanks, very much for taking my questions I guess now with the NDA filed I'm. Just wondering if you had any updated thoughts on whether the FDA might hold an AD com and what key questions might be discussed potentially discussed there and then I guess secondarily as you're doing you're on the ground market research what sort of levels.
Pent up demand and Nash are you sensing relative to what you guys views. The initially addressable market I guess Im just wondering how indicative the early launch numbers and uptake could be for the overall longer term trajectory.
Thanks.
Yes, Thanks, Brian I'll take the first question. So we don't have any additional insight since last time, we talk to you about the possibility of an outcome.
We are prudently preparing for one.
But of course, it will be up to FCTA two to notify us so whether they want to hold one.
Or not with respect to the second question unless Jerry to does it.
Yes, so thanks for the question regarding.
How we see the initial phase of launch.
I think first of all we clearly recognize that this is a significant opportunity as.
We continue to stay focused on this advanced population we plan for a strong launch we're going to focus on the Hepcidin guys, who are the ones who are most likely treating this advanced to segment.
That we're targeting a couple of additional items, which I think are important we would think about the payer dynamic as being typical in terms of timing other specialty product launch so they'll go through their route formulary.
And coverage decisions as per there.
Their process, which is a very some from from payer to payer.
We do know that there are patients.
That are under the care of a specialist today that.
The specialists are comfortable using an anti fibrotic lycos CA four we would anticipate.
That that treatment flow would be more like a typical chronic therapy, where patients are presenting at their next.
Scheduled to visit as opposed to a large group of patients on day one of launch. So we think about a strong launch it again typical with what you see with where the chronic specialty medication.
That's really helpful. Thank you.
And our next question comes on line of Mike Leigh with Jefferies. Your line is open.
Hey, guys. Thanks, and look forward to all the work you guys have done about the launch I guess it seems that you've made a lot of positive comments around your view.
Lack of we'd have a biopsy.
Similarly formed leather Opteon war payers would require that we just remind us your confidence level or any question. Instead, a biopsy has been required for any type of these number drugs or other over drugs and what precedents mortgage for payers to do that.
And then.
As it relates to a follow up question Mark just asked can you just remind us how often these nash patients ranks cedar doctors or water consideration or they are actually people.
Ready lined up ready to go thanks.
Sure I'll start Mike So on the regulatory side is I've said this before it's highly atypical of a regulatory authority to specified diagnostic methods.
The label and certainly with respect to FDA, we know that.
They are just as attuned to the need to move away from this invasive method.
Diagnosing staging patients as any any other stakeholder.
I think there is precedent back back in the days when when viral hepatitis.
Studies were done with biopsy.
You don't you don't see the use of biopsies or certainly not the requirement of any kind of biopsy.
In those labels.
On the payer side ill Jerry can comment yes, Mike I think your question was regarding the frequency upon which some of these patients are.
In the specialists office, obviously, there's some variability there, but a good guidance is kind of once the twice a year depending on.
Some of the specific elements with the patient. So these patients that again, we would anticipate.
To be targeting first are ones that.
I have been recognized as having.
Progression of disease and would be under the care on on a relatively regular basis with their there have been ecologists or other gastroenterologist.
It was more around it.
Yes, and then it might just rented out we've said before the majority of our these patients under specialist care today has not received a biopsy we acquire certainly working very hard.
With respect to the noninvasive tests that that I referenced in my prepared remarks, we're very excited about the data that are being presented next week as sell the for example on looking at both proprietary Nonproprietary blood tests and imaging modalities like fiber scan trends in our stronger fees. So.
This is this is a work in progress, but but we've said before that all stakeholders, including payers are well aware of the deficiencies of of biopsy. The the expense the risk the variability. The fact that it's non standard of care in day to day clinical practice so.
Thats kind of where we're at yes, Mike the only other thing that I would add is of course, when we talk about the the presentation of these patients. That's all in the context of no therapeutics available. So we do anticipate again that the motivation to too.
To deal with these patient goes up when there is a drug available finally.
My point was that therefore, if you do not have biopsy requirements. We did by payers like you say could be possible. We're at FDA, we feel very good at their Ajay cute bolus of non biopsy patients that are there for you.
We know that there are and again, we'll get into some more details on this next month I think it'll be one of the the interesting items. We do know that there are this group of patients that are our with specialists already.
And that have not only been identified as advanced but have sometimes a number of these tests already done in a relatively recent time again one of the things that's been lacking is a path forward for the physician and patient in terms of treatment.
Got it thank you.
Thank you and our next question comes on line two morale with Cowen Your line is open.
Good morning, guys. Thanks for taking the question.
About 1000 clinicians that you mentioned.
We'll be targeting can you give us a little more granularity on who they are and.
And we'll be split between apologising Castro's, whether they're at national carriers community centers and at least your your current thoughts on what percent of Nash patients maybe under their coverage and further advance lachapelle under their college.
Yes, so I'll address the first part of the question and I think the second part of the question in terms of the percentages that fall, that's probably an item that you'll see.
More fromong upsell and in a couple of weeks.
When we talk about the 15000 approximately.
Specialists targets out once that is the broad group of GE specialist.
Essentially the bulk of all of the Hepatologists.
That have relevance in Nash and again, the broad based community group obviously, the the G group has some several different segments inside of that but we.
We are capturing the vast majority of GE specialists with that 15000. It is a flex up as we said the great thing is is that is a core part of that 5000 or so we have been already.
Dealing with overtime in PBC and so the incremental physicians.
That will get is to get at need larger group of specialists, who treat Nash we've looked at quite a bit of data as you can imagine there is not traditional.
Prescription data in Nash since there haven't been any approved therapies, but we're looking at.
A lot of interesting datasets to be able to identify those physicians that have the advanced population that we expect to be treated first.
Is there like it tier within them that covers more advanced Nash patients or specific centers of excellence that you are that you will be targeting first in tier one.
Yes, there will be a subset of though is in the in the key centers obviously.
Some of the academic centers the groups that.
Our heavily involved in the clinical trials in terms of opinion leadership et cetera will be a core part of that and then there is another real important audience, which is the busiest community based.
Gastro practices, where theyre all large volume of patients due to the overall size of those practices.
Great. Thanks Jane questions.
Thanks Richard.
Thank you. Our next question is from Yasmeen Rahimi with Roth Capital Partners. Your line is open.
Hi team. Thank you being the question. So first congrats damiani cylinder meeting with 22 presentation.
My first both of my questions are.
Centered on the data being presented at the meeting.
First one is on the late breaker.
The five year long term safety data point can you maybe.
Good luck some color on did you lucky changes in providers over five years or advance rate and then how does this data that inform you on your guard to cobalt and then where are we in regards to call cobalt timeline and how important outcome data not only in market penetration for PBC and as well.
But Nash and then I have one more follow up in regard to abstract 12.
Sure Thanks, Jos and thanks for.
Focusing in on the data were obviously really excited about his Sophie this year, we do have 22 national PBC abstracts.
And I think it's really important to highlight the the long term PBC data. This again this is that the completed.
Phase three poise trial data, we had a five year open label extension phase of the one year double blind. So we have a number of patients have been exposed in that study for for up to six years.
As I mentioned in my prepared remarks, who got durable stable.
Our pubic response with no new safety signals and a nice tolerability profile profile as you mentioned.
I can't comment on on specific measures of provide us during that long term follow up.
Except to note that patients obviously vote vote with their feet and we do see this this long term favorable tolerability.
That that we expect to extend to two majority of patients treated with this drug.
With respect to cobalt, which is our ongoing phase for.
Confirmatory outcome study in PBC that continues to enroll.
And we're on track in terms of event rate comments premature for me to to guide as to when we expect that to read out, but I will say that this is important both on the PBC and Nash sides were going to continue generating really important clinical data and ultimately clinical outcomes data that we believe is going to continue to.
Two.
Drive a differentiated profile for O'shea second line in PBC.
And as the established foundational therapy.
In Nash.
So anyway, we encourage you to calm and check out all the abstracts at the meeting.
Thank you Mark and then second question its abstract 20 ninee. So in this abstract he looked at mortality rate in PBC patients with metastatic decompensation before OTN Altira, let's see era. So typically did you look into that 429 patients that were in the era after LMCA and.
What percentage of that we're taking north sea and therefore, you could actually calculate the director facts on the improving mortality rate you have not done. So do you plan on doing pets analysis, and then when should we be expecting to see that.
You're talking about rate Kims upcharge. So this is not an intercept abstract very interesting that he went and looked at a large number of PBC patients with advanced disease compensated.
Cirrhosis trial, if you'd be and see.
This is precisely the advance segment that has the most.
Joel.
Most risk where.
Okay. Alibaba is recommended on starting doses at just once once a week.
And the conclusion of this abstract was that since associated was approved over three years ago.
Mortality in in this narrow patients segment appears to be lower than what would have been predicted.
Based on the natural history of the disease now I.
Just want to stress the conclusion of this abstract is.
Is that this cannot key causally associated necessarily with caliber and so the answer to your question is we don't know or I don't know at least with which of these patients if any.
We're on treatment, but certainly.
The conclusion is that with a hell of a around.
Mortality appears to have gone down I do you think it's worth looking plunging more into into the data.
Well look forward to collaborating with with rate Kim on that.
Thank you team Theone Boston.
Thank you thanks guys.
Thank you next question from Jay Olson with Oppenheimer. Your line is open.
Oh, Hey, thanks for taking the question.
I also had.
Some questions about a esselte abstracts.
As an abstract exploring synergies between does it fibrate and O'shea in PBC can you talk about how you plan to leverage those synergies in PBC and also maybe talk about potential synergies between these two molecules in the treatment of Nash and I had one follow up.
Yes. Thanks for the question Jack So you're referring to an abstract out of France. This is this is a second on European cohort of patients.
And there is interesting is Chris corporate show who is the.
Lead investigator and the best versus study that was published last year.
And what do you looked at was patients with the inadequate or intolerant to UTI CA.
Who are then put on on either Ocala in second line or best Fibrate Second line and then after a period of time.
Were put on the triplet therapy, so the combo therapy of those CA and meza.
And any way you look at the data, it's very clear that the combo.
Very substantially improves response, just as would be predicted and that again supports our rationale after we licensed as a fibrate earlier this year in the US to proceed with the development of fixed dose combination of the two compounds first for the treatment of PBC and then.
We've also said that we intend to try it.
In Nash.
So yes, we think that it's another robust data set that can be leveraged in support of the the combination therapy in PBC.
Great and then.
My second question is related to recent publication, describing long term benefits in patients with PVC. After three years of treatment with associated focuses on histological endpoints and that publication combined with the abstracts you have at a.
Well the looking at the benefits of obesity treatment in patients with.
PVC after up to six years of therapy.
Can you just talk about what sort of competitive barrier. These data represent.
And what the impact would be of these data on new entrance into the PVC market.
Yes sure.
I commented on this a couple of minutes ago that we continue to generate exciting data that the publication, you're referring to is the.
The data we presented last year in a subset of voice patients who underwent baseline biopsy and then a follow up after after three years and we showed.
Fibrosis benefit in those patients, albeit small small number and it wasn't controlled.
And that coupled with the long term safety and efficacy data being presented at this meeting and eventually we hope a positive outcomes data will continue to cement we believe Ocala this position in second line.
Irrespective of who's coming down down the Pike and of course, we continued to be focused on generating new and exciting and differentiating data with with Ocala above and the PBC side same thing on the Nash side.
I mentioned in my remarks that we're obviously building on these the very exciting intra month 18 interim analysis data in support of the NDA and launch.
But we have having completed the outcomes cohort of regenerate close to 2500 patients randomized.
We're charging down the path for post marketing readout on on outcomes in Nash. So it's going to continue being exciting over the next few years.
Great. Thanks, again for taking the questions.
Thanks.
Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is open.
Thanks for taking the questions as Ross on for solving on the call you guys noted that the data from paid through January regenerate is going to be used to inform the payer decision. However, should we be expecting that the PR around 90 data actually part of the initial label or just something that should be part of our more broader initiative to elucidate the non invasive diagnostic potential those.
Okay, and then I've a follow up.
Yes, I can't comment right now on the specifics of what's going end of in the label, but definitely the PRM and NRG data, we think are very important.
They are being presented next week in Boston.
There will be follow up publication.
On on these data and a lot more data mining to do to to really.
I understand the nuances and implications of these data.
So I think more to the latter part of your question. This can be part of our broader educational effort.
And.
We're certainly going to leverage these data with our various stakeholders pairs physicians.
Et cetera.
Great and then for Sandeep, so based on the reversal on the Twoq ordering trends how should we thinking about the underlying Q over Q demand change here and how this will play out into the fourth quarter.
Yeah. Good. Thanks, Ross the question I mean, we had obviously a very solid quarter.
Where we saw good underlying demand growth, even even through the summer period. So we had good growth in the us.
Continue contribution of international as well.
As you mentioned this quarter, we did see specialty pharmacy orders below the.
Underlying imus trends in the west which was a reversal of what we saw the last quarter, which which we had anticipated in indicated so we increased our sales guidance for the balance of the year. So I mean, we have continued confidence.
I think we're at.
We don't see any impact.
The potential trade inventory changes at least in quarter four but.
Yes, we see good good strong growth continued demand growth and and thus we increased our sales guidance range.
45 to 250.
Great. Thanks for the questions.
Our next question comes from the line of Brian Skorney with Baird. Your line is open.
Hi, Thank you for taking my questions. This is Jack dialing in for Brian .
We wanted to drill down into the.
Central pricing discussion around PBC, and Nash and we're wondering what levers you we should think about as you.
Look to potentially.
Implement differential pricing in PBC and Nash and.
If the FDA potential approval of the 10 milligram dose in Nash has an effect on your.
Though do you potentially implement a differential pricing in the two indications.
Thank you.
Okay. Thanks. Thanks for the question first as you know we filed a separate end da and so the plan is of course to launch Nash under a different brand, which gives us some optionality. So we positioned ourselves to ultimately pursue the pricing option, which maximize.
As is the Nash launch and also considers.
The overall long term value with the franchise, obviously the label and some of the questions that you mentioned.
Our not quite clear at this point as we go through the process.
So we'll plan to continue.
Our work the dialogue with the payers, which are in really an important input into that and finalize and communicate the overall pricing approach at the national.
Awesome. Thank you so much.
Thank you and our next question is on the line of Steve seed House with Raymond James Your line is open.
Good morning, Thank you.
Just wanted to follow up on the imitation based pricing submission does that easier underpinning to achieve in the us floor in Europe .
And then one also asked just as you're preparing for a potential AD com just thinking about the different issues and questions could arise.
Your thoughts on.
For the risk gallstones.
Additionally, CN regenerate business of academic literature, just discussing mechanism.
Chris Gallstones. Thank you.
Yes, I guess I'll take the first step parts so regarding eyes.
Pricing, it's a different system, obviously between the U.S. and and Europe end the different markets in Europe I have a different approach. So the the mechanisms in Europe will be varied some we'll look at it.
Completely independent because it will be by definition, a separate Brandon will have.
Its own discussion regarding the criteria that the individual international markets used to make their pricing decision where in the US we'll take the approach I outlined.
The earlier.
Yeah with respect to your question about AD Com I mentioned earlier that we're preparing for one if there is 150 decides to have one.
You know and I think in terms of the focus of of.
Interest at that AD com. They would ultimately you know go go to across the board to efficacy and safety in overall benefit rush Needless to say you know, we're obviously very confident based on all the data that we've seen in the favorable benefit risk profile associated to 25 milligram dose the effective dose.
In this population with advanced fibrosis, you asked specifically about gallstones.
It was something where we saw in numeric.
Difference.
With with more gallstones reported in patients so you'll see a 25 milligram.
Dose.
And Theres a plausible mechanism that you alluded to in a recent publication on to the extent that this the signal proves to be.
Real we would we would think that it's probably a class effect.
Of FX or but again.
Gallstones very common in this patient population.
And imminently manageable in the vast majority of patients so.
From our perspective on that particular signal doesn't alter our view of benefit risk.
Thanks very much.
Thanks.
Thank you and our next question comes from the line of Alan Carr with Needham and company. Your line is open hi, Thanks for taking my questions.
You talked earlier about 150 person sales force, but also.
Contract sales for summer if you could.
Talk more about potential scale that and timing around.
Looking at the decisions that go into telling and then also.
Can you go over the.
Relative.
Opportunity in Europe , and then I guess the amount that you expect to invest there and.
In your own commercial infrastructure. Thanks.
Okay. Thank so as I mentioned in the prepared remarks.
We have a earlier sorry last month.
Implemented the first group of our contract sales organization a team that's out there doing education.
It's really been a part of our Salesforce model for a while in PBC that we keep a portion of our overall sales team from a contract group. It gives us some flexibility and then some opportunity to to pulse when we need to.
I think the way to think about that group is it's a compliment ultimately to the 150.
Internal sales team.
That we will ramp up too for the launch will continue to look.
How to use the different levers effectively we will be progressively adding both to the contract group and to the internal team as we move forward through the launch as a as per our plant.
No specific details at this point on the size of the contract sales force.
Yes, we'll give some more deeply yep yep as it will give some more details on kind of the the knee ramp up of process and the sizing when we get to the event, but the way to think about it again is that ultimately at launch the majority of our effort will come from that internal team of approximately 150.
Intercept territory business managers, Okay, and then for Europe .
Yes, So Europe I mean, if you look at the prevalence data, there's potentially similar numbers of.
The of patients in the European market obviously.
There will be.
The normal process in Europe around pricing and reimbursement, which will take some time, we'll look at our investment plan to take advantage of the opportunity, but also to move through on a milestone basis you have.
Different timing first on the regulatory front as we get ready to to file.
Later this quarter and then you look market by market.
Add.
The right way to ramp up the individual markets based on the the reimbursement process that exists in that individual market. So the nice a significant opportunity in Europe , which will tackle a progressive Lee.
But obviously the first focus in the first market in terms of chronology will be the U.S. market.
I think it's important to on the ERP and just want one I think important.
Consideration on Europe is we.
We did build up our internal infrastructure in the key European markets, where the PBC launch so like the U.S. when we talk about flexing up the resources.
Same kind of process, there, where we start with an infrastructure and with the real good.
Strong teams and sound relationships with the key the key stakeholders in these markets to what extent are you opened two.
Co marketing or Outlicensing type arrangements and.
In parts of Europe .
Yes, Allen, we've said before that we're very open minded with with respect to strategic options if theres a likeminded.
The company.
Can accelerate access to patients in need we're very.
Open to that possibility.
Great. Thanks for taking my questions they sell.
Thank you. Our next question is from Liisa Bayko with JMP Securities. Your line is open.
Hi, Thanks, the majority of my questions have been answered bascome.
I guess just at the probably little bit more on your discussions with payers not on pricing, but really that they use of biopsy I mean, where where are they in terms of.
Either wanting to see a biopsy or are they kind of at this point pretty comfortable with.
Yes, well noninvasive approaches.
Okay. Thanks for the question.
I mean, I think as we've been indicating.
We believe Eni keys are the best way frankly to diagnose the advanced Fibrek patient in the real world given all the challenges around biopsy I think if we think about the conversations and the.
Learnings we've had from payers there there are obviously well aware of the entities that are available for assessing fibrosis in liver disease.
Partially clearly thanks to their experience in in hepatitis C.
Where the use of Eni keys on the payer side is a rather.
Consistent approach in many of the large payers. So we see this momentum.
Continue continue with repairs were were in the middle of as you can imagine all of those discussions now, but the momentum in the overall market is encouraging it's also.
Evident that the large regenerate dataset is going to be key and those discussions and so it's great to see that.
The Nic data specific to oversee a begins to emerge at at the meeting.
In Boston next week and that will really be an important part of the overall a dialogue with them and again I think payers understand that Theres. This group of advanced patients that.
They are most concerned about that all already being identified primarily through noninvasive.
Means in the in the practice setting today and they're also of course looking to what the key opinion leaders are saying so the fact that more data is emerging.
All the time and the tail wells are clearly behind this is going to be another important dimension. When we think about the the payer dialogue between now and one's been launch.
Thank you.
Thanks Lisa.
Thank you and our next question is from Joel Beatty with Citi. Your line is open.
Hi, Thanks for taking my questions. The first one is could you provide any thoughts on quite a labeling would be based on fibrosis stage and then secondly could you discuss potential upon the initial approval expected next year to use those CA to treat Nash patients would ffour fibrosis I realize.
Thats still being studied.
Reverse study, but until those results come it seems like will be no other alternatives for those patients. Thanks.
Yes, so with respect to your first question.
Yes, I'd point out again that our breakthrough designation is in Nash patients with fibrosis.
And.
We wouldn't necessarily anticipate you know a stage specific.
Indications, but.
We'll we'll we'll see Ken.
Can't comment on on where we're going to end up exactly in the label I think.
Post launch.
And for US I mean, it is a separate.
Population of patients we study in reverse I mentioned in my prepared remarks reverses the only such.
These three study that's ongoing right now it's a very important segment of the market with the highest unmet needs and I think again a positive.
Outcome in that study positive result in that study will support and expansion of the indicated.
Use of of the drug in this segment and further differentiate it.
But but the initial phase will launch this is not a segment of the population we would be targeted.
Thank you.
Thank you and our next question is from the line of Jim Birchenough with Wells Fargo. Your line is open.
Hey, guys. Thanks for fitting in and apologies I try to late but couple of questions. Just want all caliber Mark what are the drivers for growth going forward. If its territory expansion, maybe speak to territories, where we're further behind if its.
Expansion of market share in Europe versus us could you maybe tell us where we're at market share wise Europe versus you asked and then any you asked what segments are you missing right. Now that you think you get to that I've got to follow up.
Sure. Thanks, Jim So look as we said in our call. We're thrilled with the continued momentum in the business some around the world.
Jerry to comment on the specifics.
Yes, I guess, a couple of of maybe items as.
As we've mentioned throughout we see good underlying demand continue in the us market.
We still see.
As we've expanded the reach into a larger group of.
Hi, physicians that.
The broader community base G physician, who may only have one or two or three PBC patients is willing to prescribe for those patients once they get the appropriate information. So we do see.
Continue the opportunity to expand I think it's also important to the majority of patients out there in all markets frankly.
That are eligible for OCI. According to our second line treatment don't haven't received the yet. So there is still just a strong organic opportunity I did reference in the prepared remarks that really encouraged to see what's happening in the international markets, where we see good but we launched later so we are.
Earlier into the launch phase in many of those markets, but we see good solid growth.
Prospects continue and then yes there is.
The opportunities as we've expanded beyond the classic European markets.
So I think you see it we are still relatively early frankly from a volume standpoint in the PBC opportunity and we'll look to leverage that an appropriate way as we move forward.
The other thing I'd add Jim is there any color.
What's really encouraging to see is is it fair long term adherence rates that continue to improve we've got better adherence with with Ocala than the first lines.
And.
Also you know physicians are getting more and more.
Valuable experience with the drug so those who have on the most experienced prescribing Ocala vast majority have a positive experience with the drug and again you know as Jerry said earlier there is the core group of physicians will be prescribing for Nash.
And then maybe just on the noninvasive testing I'm just trying to understand the strength of the evidence in support of noninvasive testing could you maybe speak to the ability of noninvasive testing to discern regenerate patients from reverse patients or those eligible for regenerate and those that were ineligible.
If you have.
Numbers on positive predictive value negative predictive value sensitivity specificity, just trying to understand the strength of noninvasive testing.
David.
Exactly the right question and I'm happy to say that based on the data mining we've done in our own dataset and actually a recent really strong publication from from Gilead and a stellar three and four studies.
You can see.
Pretty robust sensitivity specificity, particularly when you use these tests together right. So so two sequential noninvasive tests.
Including standard commonly used Sarah logic tests that are available to to all physicians out there.
And also things that are growing in use like like trends in Dallas geographies ultrasound based technique.
And so we are confident bottom line that.
These tests are accurate enough to discern to identify patients with advanced fibrosis.
And help it also helpful. In addition to the other very standard work up a physician would do to too.
Identify and distinguish from cirrhotic patients.
Great. Thanks for taking the questions.
Thanks, Jim.
Thank you and your final question comes from the line of NAV and Jacobson VBS. Your line is open.
Hi, yes, thanks for taking the question can you hear me okay.
Yes, okay, great. Thanks to the so just maybe.
Maybe going into 2020.
If you could help us understand how we should be thinking about expenses as you ramp.
Your salesforce.
Marketing expenses all associated with the.
Depending on full launch of Nash any kind of color on some of the dynamics, we should be thinking about.
And also as it relates to or any other a line item for 2020, DG cogs or tax rates and so on and so forth.
Sure. Thanks for the question I think I mean is obviously a bit early to give guidance for 22020, I mean, we'll do that at a later point, but what I can say is so weve as Jerry mentioned Weve completed a large part of the infrastructure build as we going through this year in terms of the medical organization the payer Oregon.
Station you could see our spend has.
Increase as a result of it the key additional investment for as we get towards either later part of this year certainly.
For next year is the Salesforce expansion, our internal salesforce expansion, which would be the key investment as we think about next year, along with probably some additional resources to.
Continue education of the required in the market, but but they will provide greater clarity as we certainly.
We had closer to the next year, but hopefully that gives you something.
Okay, all right I think.
Thanks, Thanks, very much I think we run a little bit overtime, operator, so what we'll call. It there thanks, everyone for dialing in on we've had a great year. So far we look forward to driving to towards the Nash launch.
Next year.
And does see many of you in Boston.
Later this week.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.