Q4 2019 Earnings Call
Ladies and gentlemen, please standby your conference call will be getting momentarily once again, ladies and gentlemen, today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
[music].
Ladies and gentlemen, thank you for standing by welcome to the Orchard Therapeutics fourth quarter 2019 earnings Conference call. At this time, all participants' lines are not listen only mode. After the speakers presentation. There will be a question and answer session to ask the question. During the session you would need to press Star then one on your telephone.
Please be advised that today's.
If you require any further assistance. Please press Star then zero I would now like to handle conference over to your host right.
Were they liked.
Thanks, operator, good morning, everyone and welcome to Orchard fourth quarter 2019, Investor update you can access life for today's call by going.
The Investor section our website Orchard, Yeah Uh huh.
We get started likes to remind everyone that statements. We make on this call on its forward looking statement actual events or results could differ materially from those expressed or implied by any forward looking statement. As a result can vary risk factors and uncertainties, including those set forth in a three cents form 20-F, I haven't yet.
And any other filings that meaning.
Any forward looking statements made on this call it represent our views only as of today and should not be relied upon as representing her views as of any something Wendy.
Specifically disclaim any obligation to update or revise any forward looking statement.
And with that I'll turn the call over to our president and CEO Mark Rothera.
Good morning.
Thank you for joining us and have you read these me.
One of the themes at this year's campaign is to re frame what it means to have read disease.
This fits really well with our views at the time patient should be considered the temporary like.
Given the potentially transformative and even curative the sad that I, one time investigational gene therapies can provide.
I don't should we are harnessing the power genetically modified mud stem cells as we seek to correct the underlying cause severe rare diseases.
We have now treated over 170 patients across seven different diseases and demonstrates durable outcomes going up to 18 years.
If you break this down into cumulative patient yeah that exposure, that's about 750 patient ism data supporting the clinical profile about gene therapies.
This is all to say that all clinical data is really on another level in terms of durability of response and safety.
Oh business strategy is to create value by commercializing multiple valuable gene therapy programs for rare diseases.
Hi, a highly efficient global commercial platform.
Benefiting from increasing manufacturing and regulates we efficiencies at the time.
The key steps to executing on our strategy can be broken down into a number of components.
Firstly, we have built a fully integrated company with industry, leading capabilities in research and medical corporate strategy manufacturing regulatory affairs and commercial across an organization that is approximately 300 people strong.
Secondly, we've established an extensive pipeline seven clinical stage amount appointing stem cell gene therapy programs.
Thirdly, whereas establishing inefficient global manufacturing and supply chain, leveraging our existing CMO relationships, but also our emerging in house capabilities.
Fourthly, we're establishing a global commercial footprint on a same spaces and finally, we are keeping in mind the potential to use business development as a tool to create additional value.
Now turning to our three lead programs in MLT I'd ask you didn't want.
There are number of exciting near term milestones as these programs progress towards potential regulatory filings approval and launch.
For MLB all key priority is to obtain approval for and launch until 200 in Europe in the second half of Twentytwenty.
About a filing for LTL 200 in the United States is planned for late Twentytwenty Oh early 2021.
Regulatory filings I would tell one a one for idea is good and Oh chill, one or three for one or not that far behind.
We plan to initiate a rolling B.L.A. filing in the United States for LTL, one a one in the first half of the with completion of the file anticipated within 12 months.
The delay and M&A regulatory filings Oh chill, one of three in the U.S. and Europe I plan to 2021.
The pinnacle work supporting efficacy and safety for 88, Skid and Wassa is complete.
Radios good asterisk your guidance work on price consolidation runs and release criteria is ongoing using the commercial drug manufacturing process with patient self.
For one.
We've enrolled six patients in the ongoing Cryopreserved study and expect to report preliminary data sometime this year.
It's all planned at the focused commercial infrastructure, we are establishing MLB well said the backbone for the future planned launches of 80 is good and was with only modest additions needed to accommodate the additional launches.
Altogether, we believe there is at least a 1.5 billion incidents based annual opportunity from lead three programs in the geographies that we intend to cover that reimbursed orphan drugs.
Now, let's focus on the M.L.D. commercialization strategy.
We're focused on for strategic imperatives that are key to the commercial launch preparations.
Patient identification phase global infrastructure Bill.
Apply readiness and market access.
Starting with patient identification. This is an area of high importance as the audio patients are treated the back to their long term clinical outcomes.
So far we studied M.L.D. patients with the infantile and juvenile forms the disease and so we'll be talking a pediatric label launch.
You know the we as we estimate that approximately five to 800 patients on each year in the approximately 50 countries. That's typically reimbursed red is these therapies.
Oh Geez, we estimate 80% the incident population will be eligible for LTL 200 at launch.
In terms of prevalence, we believe that up to 30% of M.L.D. patients living with the slowest progressing juvenile foam and the disease could be eligible <unk> launch, assuming we secure target pediatric M.L.D. label.
The SIGA growth of approximately 80%, if we take into account idle M.L.D. patients.
And a few me we can successfully expand all label.
In order to identify these patients we have yeah and longer term initiatives ongoing.
Disease awareness is the first key area.
Now that a first as a treatment for M.L.D. is approaching a potential regulatory approval. There is a strong incentive to improve patient diagnosis.
Together with patient advocacy groups, we are using targeted tools and resources to educate pediatricians and other specialists on the early symptoms of MLB.
So physicians suspect and test for an MLP diagnosis sooner.
Improving access to the appropriate diagnostic tests is another important area.
We have a sponsored diagnostic testing program to help identify patients prior to newborn screening coming online.
Our goal is that within 14 days of any suspicion confirmatory test can be done.
Oh Ultimate goal is universal newborn screening using blood spot.
And I say is being developed and were now initiating with collaborators pilot studies in both Europe, and the United States, starting with New York State, Italy to validate these assays find patients and ultimately support the adoption of national screening program.
When launching a product for a rare disease is important to have focused and dedicated commercial team.
That enables you to bring these medicines to patients around the world as soon as possible.
Building, a global commercial footprint is our second imperative.
We're doing this on a phased approach through a combination of direct orchard team presence, but also coverage by a highly experienced partners in some geographies geographies.
For example, in the Middle East and Turkey, where we expect to higher incidence of patients also.
Phase one is the EMEA regional build out which is mostly complete.
And includes a team of 25 commercial live TV.
We are working on qualifying approximately six treatment census in the EMEA region at launch with specialized expertise in transplant and neuro metabolic disease area knowledge.
Phase two is our U.S. build out which is underway and will grow over the next 18 months in anticipation of the LTL 200 filing at the end of this year early next and the potential subsequent approval.
Phase three.
We'll extend or just coverage to the countries in other parts of the world. The typically reimbursable from drugs, particularly key countries in Latin America Asia.
This will stop in 2021.
Our third imperative covers the commercial launch supply.
We have a great partner in moments based in Milan, Italy.
They would be working on the M.L.D. program for eight years now and also have commercial manufacturing experience supporting service.
Our goal is to have back to inventory at launch in line with anticipated demand and a robust supply chain between Mohammad and the qualified treatments senses.
I'll touch on the full strategic imperative around pricing in market access at the close the call.
We believe there's a tremendous potential to treat a broad range of diseases with high unmet need using hematopoietic stem cell gene therapy approach, including other nearing metabolic and Neurodegenerative disorders.
Let me know handed over to Bobby developments topic, along with providing updates from the MPS one and he has three a program.
Well they.
Thanks Mark.
Jason I guess, one and then get three able to featured a well I'll start by briefly highlight in this presentation.
Also be providing an overview of our proof of concept study and that gets create which has recently initiated.
Our approach for both diseases use the same ex vivo HST gene therapy approach.
Limits its promising results that MLB.
Got it overexpression about his line in HST, how the ability to migrate to close but freight BARDA and deliver enzyme to the fitness.
Let's start with MPS one.
Well I want to spend some time discussing the proof of concept cohort or the whole now that needed Paula is that six months in seven valuable patients.
As a reminder, MPS won the lifetime stores. These characterized by Neurodevelopmental deterioration. So this legal manifestation I'm cardiopulmonary complication meeting that no child.
Oh generic metaphoric stem cell transplant remains a standard cat have a significant residual manifestations all the disease remain ulta treatments.
As of the late stage count all patients undergoing HST gene therapy, having crossed it an older patients showed sustained Super Bowl IP way activity in the plus free and the cerebral spinal fluid yes that.
This was accompanied by could control in heparin and doesn't solve it both in New York NC stat that normalize rapidly within three to six months post treatment.
The most important aspects of these data is that view on studies, an analysis of patients undergoing allogeneic HCT suggests the clinical outcomes correlate strongly but the level of quite the way enzyme expression.
For example, and IMMU one model of MPS will transform Walt I felt did not fully correctly CNS is great for PFS.
Whereas overexpression of I'd right through Lentiviral vector mediated HST gene therapy was able to say.
Certainly in a large published study of although HCT patients the level of argue expression achieving the periphery was a highly significant predictor of long term clinical outcomes.
A 12 month suppose cheaper in the patient with the longest follow is showing signs of resumed growth and bone remodeling improved no skill at a stable coming to school in line with evidence metabolic correction.
The trial is currently treated patients and we expect additional interim data to be present. This yet before fool proof of concept result are available in 2021.
Let's now turn our attention to have guests ray.
This is one of the most frequent forms of Mucopolysaccharidosis has no approved treatments well we were encouraged to see the University batiste present data on the first I guess, where patients treated with ex vivo HST gene therapy on a compassionate use spaces, who is doing very well engraftment of GE correct itself is stable and ends on.
Levels, well above the upper limit no nine months post treatment.
The vector and sell transaction poetical used to treat as compassionate use patients or the same thing is used in our recently initiated proof of concept study.
I'll briefly review the studies outcome measure and target patient population in order to provide a sense of scope objectives.
Patients between the ages of three months in two years with normal cognitive function or eligible for the trial, we're enrolling young patients in this initial study because as we've seen an MLP patients treated at a very early stage. These walk through our asymptomatic how the best response.
Presumably because the extent Airbus movie theaters status is limited.
That's the first in human study. The primary objective is to evaluate the safety and Tolerability of hotel Terawatt. In addition to growth and bottles prolific see measured by USCIS age expression leukocyte, a 12 months post treatment.
He secondary endpoints include cognitive behavioral measure as well as quality of life and activities daily living a three years post gene therapy, which is typically when we began to see decline in the function in untreated individuals.
The first patients. This trial has been involved and we expect report preliminary data later this year, especially as the or enrolled in the study progressive interim data cuts will be presented.
I wanted to look ahead now it's just an exciting new initiatives using the natural ability major piece to deliver therapeutic genes to the CNS. Another tissue. We believe there is a tremendous potential treat more neurodegenerative diseases, a new therapeutic areas.
We will do this by external collaboration and also through enhanced discovery and preclinical efforts in our established recession orchards in London.
In January we are excited to last in the near agreement with Dr. Alexandre Biffy, leading experts in gene therapy to help support expansion of our portfolio into additional areas of critical need patients, including new programs for rare and Onrad neurodegenerative diseases.
The expert the first adapt established.
Well the an MPS one program her experience and partnership will be about it.
It's an exciting time budget and we look forward is keeping your updates on these programs as they come in shows I'll now turn the call over to Frank.
Thanks, Bobby.
I'm going to start by reviewing our fourth quarter results, which are summarized in this mornings press release.
Then on such a bit on our outlook for the rest of the year and the upcoming launches for our lead programs.
Starting with the financial results, we ended the fourth quarter with 325 million in cash investments compared to 336 million at the end of 2018.
Consistent with our previous guidance, we expect that our existing cash and investments will fund our anticipated operating and capital expenditures into the second half of 2021.
During the fourth quarter, we recognized point 6 million in revenue related to Strimvelis.
Research and development expenses were approximately 31 million in the fourth quarter of 2019 compared to 17 million in 2018.
The increase was primarily driven by higher costs to advance our programs through later stages of development, including the addition of our clinical stage MPS one program in 2019.
That's DNA expenses were 19 million for the fourth quarter of 2019 compared to 12 million in 2018.
The increase was primarily due to investments to prepare for the potential commercialization of our late stage programs as well as DNA cost to support public company operations in 2019.
We used about 44 million of cash to fund operations in the fourth quarter 2019.
We expect a quarterly burn rate to increase in 2020 due to the capital investment for the manufacturing facility as well a sequential quarterly growth in operating expenses to support the central launch of OTI, All 200, and the second half of 2020.
I wanted to also use todays call to touch in our outlook for our lead programs.
We are building a global commercial infrastructure and a manufacturing platform that we can leverage with each subsequent product launch.
Notably each rare disease in our portfolio has its own set of unique factors that will influence the uptake curves as we enter the launch phase.
A few of these factors include first is there a pool of problem when patients and how easy will it be to identify and treat these patients.
Second does the disease currently have a high level of awareness and diagnostic tools in place to a patient identification.
And third where will we launched first.
To illustrate this was an example for disease like 80 skid newborn screening is already established in all 50 states in the U.S. and some countries in Europe.
So this gives us confidence that we should be able to quickly identify the incident population eligible for gene therapy driving faster uptake.
Another example for a disease like was patients typically live longer due to the slower progressing nature of the disease and many have already been diagnosed.
This will likely make the treatment are prevalent patients a key driver in early uptake.
We're also planning to launch these two therapies first in the U.S., where adoption can often happened quicker.
Turning to ml D O T. L 200 isn't investigational treatment for condition that is characterized by rapid progression.
This means that our work to raise the awareness for physicians and implement diagnostic initiatives will be crucial and driving adoption before newborn screening is in place.
Also we are planning to watch MLB first in Europe, assuming approval and there will be country by country negotiations with payers, which will mean, a phased rollout across the continent.
With a potential second half European MLP approval, we expect meaningful revenues starting in 2021.
We anticipate all three lead programs to regenerating U.S. revenue by 2022.
So in conclusion, we believe that we're taking the necessary steps to position. These programs for long term success and demonstrating the scalability of our platform approach.
As I said earlier in my remarks, the investments we made in 2019 and the continued build out of commercial in manufacturing and 2020 will take us a long way towards achieving our vision of building a fully integrated company with industry, leading capabilities and now mark back to you.
Thank you Frank.
In closing as we get closer to our anticipated hotel 200 launch I'd like to address the slow strategic imperative for LTL 200, namely market access.
We are seeking to bring in new type of medicine to the world a one off administration with the potential to deliver lifelong transformative benefit including the potential to kill.
As a company we have committed to fool key principles that will guide our approach to value on pricing.
Which we've been pro actively discussing and sharing with stakeholders.
Firstly, we are committed to share value.
I think our investigational gene therapies are intrinsically very valuable medicines to patients, but also to the family who according to recent research spends an average of 17 hours a day on caregiving responsibilities for an M.L.D. child.
We also expect the health care system in society more broadly to benefit from the potential value of these medicines.
And certainly we want to reinvest some of this value in future innovation for other rare disease patients who are in need.
Secondly were committed to risk sharing.
We recognize the gene therapies are still new to the system and questions exist about the durability of response over the long term.
Having treated more than 170 patients.
Seeing follow up now in our own portfolio spanning up was 18 years.
We are confident in the durability of response.
And are willing to engage in payment models the share risk if that is required.
Thirdly, we are committed to informed pricing applying well developed robust and recognize tools to the best available evidence, we have to measure value and into the term in pricing.
For instance, we recently conducted an M.L.D. kinda give the research exercise in close partnership and consultation with leading K wells and advocacy groups using standard well accepted instruments like Pete's QL.
Early findings from this project presented two weeks ago World indicate the children with them LD experience roughly 20 outpatient visits and three in patient visits in the last year.
On average six days I'll spend in hospital.
Inpatient.
That's an incredible amount of time to these parents to be away from work.
Away from the rest of their family and community and knowing that the cancer that child is only palliative.
I'm surprisingly them are finding suggest 83 to send to parents were forced to miss work caring caring for their child with 68% of this being unpaid leave.
Finally, we will engage with stakeholders across the continuum to health involved the way our health care system thinks about delivers and pays for gene therapy medicines.
Well, yes, it's mostly been about managing chronic conditions and treating symptoms that disease.
It's in everyone's interest there is a successful path forward for one off potentially curative medicines to be made available to patients.
Thank you for your time and attention.
Operator, you May now open the lines for questions.
Ladies and gentlemen, as a reminder to ask a question you need to press Star then one on your telephone keypad towards draw. Your question. Please priced foundry.
Standby, while we compile the culinary roster.
Our first question or comment comes from a line of a new from Ramos from JP Morgan Your line is open.
Hey, guys. Thanks, so much for taking the question I'm.
How are you thinking about the initial size and scope of the sales infrastructure build out in the E. U LTL 200, particularly as we think about layering on indications over the next several years and maybe you can touch on that on the U.S. market as well and then a quick second one on LTL one a one.
Drilling deal I supposed to be starting here in the first half well, but what are the gating factors to completing it given the known preclinical data and clinical data that really CMC related I guess the guidance is that the the the LTL one to one.
Having would complete within 12 months, but I guess why wouldn't it be quicker given everything that we know so far.
So much.
So anupam. Thank you very much for the question and the first one was about the size and scope of the team in Europe, and then be overlay for the additional launches and so.
As we mentioned.
For rare disease program, you really need a highly focused team doesn't have to be a large team, but focused and dedicated as we have we've guided to the fact that we have 25, that's TV out in markets in Europe were the major focus on the biggest market.
Such as Germany, France, UK and Italy.
But I think one of the advantage is oh, having our team in those countries is there also sort of regional hubs for clusters of countries. So how would the teams at why building. We expect you know patients to be refer not only from within those countries, but from a joining countries in.
So those Referenceable qualified center a.
A treatment.
You asked a bit about how do we scale up well.
You know the good thing is once you've established.
Core group would come to the key capabilities by like for example, a general manager of Germany Medical marketing and sales you really looking at sort of adding just incrementally you don't need another general manager you don't need another metric you don't need another head of marketing, but what you might be.
Some additional people on the ground or to meet additional customers.
To support patients getting to that treatment.
So it is kind of incremental and the same is true in U.S., where we will begin.
No well we are already preparing the build out this year in that you have with the MLP timeline in mind.
And the other thing that I think is is.
I think very efficient it's the most part you're thinking about the same treatment centers.
Same qualified.
The country.
And now the patient or 88 kids patients or WAFS patients.
Yeah, and again, you might add a few incrementally what you start with over time, but again, it's not oh.
A copy paste.
So the second question you asked was about.
88 Skid program.
So youre quite right that essentially we've done that a clinical work on efficacy and safety.
Last year, we talked about the cryo data that said the cryo is performing like fresh and really a key focus as after your guidance.
The process validation work.
Well, we're using the commercial that.
With that commercial drug manufacturing process, using patient material, which is something that they specifically oh. So no we're guiding to initiating the rolling B.L.A. in the first half of this yeah that work that I just alluded to is ongoing and I think will feature you know in the final module that.
We will then present close filing.
As you mentioned, we have up to 12 months to do that and not for the moment is the guidance forgiving.
Great. Thanks for taking my questions.
Thank you our next question from it.
[laughter].
Thank you our next question or comment comes from a line of Whitney.
Guggenheim Your line is open.
Hey, good morning, guys. Thanks for taking the question I'm just wanted to follow up on some of the comments on market access.
It sounds like you're doing a lot of work on sort of the establishing value side, but from a logistical perspective on the reimbursement side I guess, what work is ongoing around coding.
Or kind of any other like logistical reimbursement type consideration that we should be thinking about.
Thank you Whitney I think you know that the first focus from a market access point of view is the potential launch of I'd tell 200 in Europe in the second half of this year.
So that you know there are many aspects to them in ongoing engagement with Payors and.
You know, making sure that the payers appreciate the background to the product the data.
And you know the.
In a benefit that were able to convey to patients under your ability of that response, what other this is an educational exercise.
One thing my very delighted with is a clear signal of willingness to pay given the fact that this is a product for a very high unmet need very severe condition that affects children and for which there are no treatment today and where the dataset that you see no is very compelling.
As you know in Europe, there I think a this was alluded to in Frank's comments, it's a sort of say launch. So we also are engaging in a variety of different processes in different countries.
In order to be able to be well prepared you know on approval to move that forward as quickly as possible and to remind you you know the lead country in Europe is typically Germany, where you can launch relatively fast I've got an approval and have about a one year timeframe to complete the negotiation.
So I hope that answers your question because anything else you need to know please let me know.
Maybe just one quick follow up on sort of in that same thing as we think about uptake or or kind of penetration into the European markets versus the U.S. markets again with sort of reimbursement in the difference in the region first make frameworks in those geographies and any color you can give or kind of how you guys thinking about that at this point.
So it is a cascade of launches.
In Europe. So it's a very large market collectively have you know with 450 million inhabitant 28 countries and.
It is a cascade of a different launches with each country, having a specific approach that for approval I would say that you know one of the things that.
We have I think in favor of launching a part of my MLB tens of the impetus to get that's the market quickly is that really has no treatment for these children and it is very severe and so and the data is compelling and so I think that there is a you know a willingness to work with.
No no now prospectively, but also.
Rapidly through these processes because time really massive for these children.
Thanks.
Thank you our next question or comment comes from the line after Roger Ballou from Oppenheimer. Your line is up.
It's Roger for looking mainly done on mute your phone.
[laughter] [noise].
Our next question or comment comes from Gena Wang from Barclays.
Your line is open.
Thank you for taking my question <unk> Q1 is regarding the M.L.D. launch and be updates regarding the pipeline show for the M.M.L.D. launch.
Just wondering Mark you mentioned that you know a moment had oh well have sufficient inventory being produced to me the expected launch decline.
Just wondering goes inventory are you, referring to vectors and the plasmid and what is the expected launch demand.
In terms of the number patients.
And also the capacity after mall Matt.
How many patients products can be processed at the same time.
Thank you Gina.
Yes were obviously delighted to have a partner like Mohammad who've been working on the MLB program now for eight years and they have commercial manufacturing experience doing that already for the spring ballots program. So it's a great partner to have on this program.
So we worked with mom that actually on a whole range of programs and we have capacity.
That is if you like fungible flexible depending on you know the various programs and that in a different stages in importance in demand. So we have the ability was moment to tie trades.
You know very rapidly according to demand which is helpful.
The key thing that I was alluding to was the vector inventory.
As being one of the things that we wanted to make sure we had a implies to allow us to me.
Drug product manufacturing suites are also available at the moment and again there is certain flexibility that because we can manage across our portfolio a program with them.
Hi, I'm no, we're not guiding to patient numbers I, specifically I mean, if that changes in the future, we'll let you know but.
You know our intention is to make so when matching supply with anticipated the mountain.
Okay. Thank you and then my next question is regarding the pipeline.
And she has to be Amy and the N. P. S. One I just wondering what based on your discussion with if you and the other drug approval in a passionate what could be the latest thoughts for approvable endpoint and if we use structure shared that data of dose a you know the endpoints.
With that in your future.
Thanks for the question I'm going to turn that over to Bobby.
Yeah.
Thanks for that so that's far let me start with I guess, one first of all so this is a proof of concept study where the a problem endpoints.
Now as far as it because the endpoints are concerned are around a biological parameters of the enzymatic activity reduction substrate levels. The clinical endpoints are exploratory at the member in this proof of concept study and so we will move from this to a registrational study and the states.
From the proof of concept study will inform the endpoints for the Oh for the Registrational study and so obviously, we are having thoughts about what those endpoints would be in the Registrational study are they need to be clinically meaningful a endpoints and will and I think we can't give you details about that at the moment, but obviously you know to me.
Major issues and this one around cognitive defect illegal defects, a et cetera. So we'll look at how we can capture those in the registration study and once we've got to more detail an agreement to round out well, we'll shut that data with you.
As far as a and B three eight is concerned again, we're in and out of a proof concept study at the moment and University of Manchester and again within that they're all cognitive and point that on behavioral imports that are being measured and said that study has just started with the first station haven't.
Been involved.
Bobby just follow up question regarding MPS, one I'm, so that has being a while ago doers and get approval based on the S. The I see and the six minute walk test do you think you know this will still be the piece or you think the going forward. The endpoint that could change also has a tremendous.
I mean, I think at the moment to say we are.
Looking for a number of exploratory endpoints within the.
Proof of concept study and that includes when looking at like you were looking at ask legal optimality growth or et cetera. So we're looking at a number of things and so I think we'll need to take that on board first before we decide what endpoints will be for the Registrational study and I know you've talked about you all see.
We are being approved on the base the six minute walk us et cetera, but things have moved on since that time and also remember you. All he doesn't have the ability to correct. The cnf, which is one of the major opt analysis, what severe problems associated with that with MPS ones. So.
We would want to capture that within our endpoint for the Registrational study.
Okay, great. Thank you very much.
Okay. Thank you.
Thank you. Our next question to start comic cons front line Greg.
She furniture from Goldman Sachs. Your line is open.
Hey, good morning, or good afternoon folks. Thanks for taking my questions I've actually got a few but I'll try to keep them to maybe two or three first just on your opening comments around seeing the commercial revenue opportunity for your three lead program.
At 1.5 billion is there any other.
Color you can provide in terms of perhaps sizing magnitude if they're all equally.
Hey, 500 million a piece or how should we be thinking about that my second question just has to focus more around Oh T. L 200, and given that you're launching.
Every Europe first or how should we think about subsequent a U.S. pricing.
Should we be expecting that the price will be similar between the two geography is or you know, we commonly think about pricing in Europe are being less than what we see any U.S.
And then my final question.
It is for Frank and the model. Thanks for the color around quarterly cash burn and how would increase versus your exit rate in fourth quarter, but first half for second half should we just continue to steadily assume quarterly increase and.
Cash burn as we evolve from.
Beginning of the year towards second half here. Thanks.
Thanks, Greg So there's a question so I'll start with the first two and then hand over to Frank.
Talk about any more color on the 1.5 billion annual incidence opportunity driven revenue opportunity for the lead free program that reminding ourselves M.L.D.A.J. skewed and why.
And.
When we look at the global incidence in those key markets around the world.
When you you asked about more Carla.
The largest indication is MLB and then was and then aviate skid on an incident spaces.
And where we're expecting approximately 80% of the incident patients in the three indications.
To be eligible fraud gene therapies at a minimum it could actually be higher.
For a number of reasons I could go into as well.
And when you look at that collectively using current sort of gene therapy pricing analog as a guy.
You can see it's at least a 1.5 billion annual opportunity.
But I think very important color here is that.
Does not account for a really important upside which is prevalent.
And.
We've also given an indication about the prevalent pool.
In each of the indications I think Frank alluded to that in my prepared remarks, So no wisco overt syndrome for example, which of the slower progressing disease has a very significant problem.
We estimate three to 5000 patients worldwide living without condition you.
Living with a sort of damocles that need treatment and we expect that about 55% of that it could be eligible for gene therapy. So I think it's Frank alluded to you see that is up especially prevalent play as far as the revenue build is concerned and then incident.
With regard to M.L.D., we see it roughly as a balanced approach.
Approach with both incidents, but a 30% problem pool.
In the juvenile population that would be eligible for treatment, we think launch but ultimately this will be an incident based treatment.
So on the second point, you talked about which is okay ill 200 pricing.
There are many reasons to consider the fact that MLB pricing could be actually with a relatively tight corridor between us.
And Europe, because this is a very high unmet need very severe disease. There are no treatment options.
Given the day that Weve generates it as one of the Jordan. This is your spot I think we have a compelling case to make payers both sides of the Atlantic.
But that said I think we are of course launching in Europe. So yes.
And the pricing will be set for Europe to start with and then as another year or so before we get the U.S. launch so in that time will be.
Watching Kathleen listening learning and you know, we'll take a view on the U.S. price ultimately closer to the U.S. launch.
So the good question was over to you Frank if I could have never too to you.
Yeah sure no problem. So Greg on the modeling question I think for 2020 think about the growth in opex to be sort of incremental sequential growth on top of Q4, and I wouldn't say I mean, if there's an inflection within there it would likely come in the second half of the year as.
We start to ramp up some other commercial a spend on the U.S. in preparation for potential launch in the U.S. for M.L.D., but but I would say generally I'm just incremental growth quarter on quarter in terms of the other piece, which is the capex.
Because we'll start construction on the manufacturing facility in 2020, I think we've previously earmarked about 70 to 80 million total capex, which will be spread over 2020 and 2021. So the construction activities will ramp up I would say second half of 2020.
In first half 2021, largely so so that's how it model the capex and the burn associated with the manufacturing facility.
Great. Thank you very much for my question.
Thank you Greg.
Thank you. Our next question or comment comes from the line of Yarling Werber from Cowen Your line is open.
Ron Thanks, very much for taking my question actually two if I might actually so just really briefly I wanted to touch first on Strimvelis, how we should think about that slight up and down quarter over quarter sales and more importantly think how you're thinking about the drug thing for a particularly as the other radiation therapy approaches.
Personalization.
And then just a question on the Xceedium Palestinian programs, mostly just kind of regarding on getting regarding timelines. There. When you think we might have nics data and whether you're also considering a staggered filing launch between Europe and U.S. for Expedia as well thanks.
Great. Thanks for the question.
So.
Symbolic says being a tremendously helpful.
Learning tool for us about ex vivo gene therapy.
It is a great products its available only in one sense a in the world in Milan, Italy and.
Well, we've learned a lot about.
Helping patients can move to treatment center in fact in many cases from one country to another what it takes to help those patients be well managed and go through the treatment crisis.
And yes, it is a little bit bumpy and that's to some extent depends on this that the identification of patients and then the various stages of a patient going through the decision making process.
Between staying locally, let's say for bone marrow transplant with the risks that entails well going over to a center in Milan, Italy for treatment.
And I think one of the important distinctions to make going forward is that with our programs. As you know we've we've gone from Cryopreserved gene modified Stan So where it's been Dallas is only available as a fresh formulation, which means patients have to do the traveling.
As we look forward without cryopreserved be modified Stemcells, it's really does sell them to do the travel for the most pot, which is going to make it a lot easier for patients a along this journey.
So again I think the overall messages. We use this is a learning [laughter] prepare ourselves for launch for upscale 200 and beyond.
[laughter], Bobby maybe you could onto the next question. Yes. So are you on the as far as like CGD and be the south is concerned there are some similarities or as far as to what would things for a in goes to program. So for a xcede you'd be.
As you know the proof of concept is complete and our initial for from the pivotal study was that it would focus on late had lessons and a adults where the best result was seen but really in order to treat as many patients I I've possible, we want to be able to treat pediatric patients as well and so we need to see this year.
Outcome in pediatric patients so that part of the work for this yet but the other thing is this is a large problem population, but weve.
Talked about and so we need to get a manufacturing process that is appropriate to treat that number of patients. So we are spending again time. This yeah on ensuring a manufacturing processes that for the commercial opportunity and that involved the use of transaction that horses for example to add to optimize the.
Oh factor so dot CMC work is ongoing as well on third lots of part is really again, what is what were doing as far as because I've seen yet is concerned proof of concept again established a in that condition.
Large patient.
Population and opportunity and to try to get the manufacturing process correct in order to be able to to serve that opportunity and I'd say, that's predominantly looking at both the drug product or a process use of transduction enhances and also looking at factor as well so I hope that addresses your question.
Sure Thanks, very much guys.
Thanks Huh.
Thank you. Our next question or comment comes from the line of David Nierengarten from Wedbush Securities. Your line is open.
Hi, Thanks for taking my question I had one on.
The M.L.D. yeah.
Patient numbers and incidents versus prevalence.
And I know, there's there's a little bit of probably a blurry line, but you know the incidence numbers that you provided or.
Strictly burst or new diagnoses and I'm asking about new diagnoses because of course those might be a delayed diagnosis and so might actually be counted by some it's a problem. One patient. So I was just wondering if you could provide a little bit more detail on those patient estimates for.
The effects.
Okay I just make sure I understand your question, so you're right you're asking at what constitutes the annual incidence rate yeah. Yeah. If there were and then you know if it's if there were.
If there was a bright line there and then we should think about you know that that's completely separate can yeah, you'll patient.
Annual incidents versus drawing down I'm, you know some of the problem one patient yeah. So if there yeah sort of small degree of overlap or large or or non yeah. Yeah.
Yeah. So we've really look to incident as the right.
With the condition.
And you know we've signaled five to five to 800 patient yeah with M.L.D. across the country that reimbursable and drugs.
I think the on the problem side as you know Weve indicated about 30%, but we think will be eligible for treatment at launch based on you know juvenile patients that would have.
Symptoms that we could then treat.
Where it becomes possibly a little clarity is the adult form of.
Now the.
Because.
To some extent some of those they're not really diagnose income they Toronto actually.
They may be missed in the screen. So you know there is a potentially blurry line with with the I don't fall and as you can see in the prevalent who they are a large portion it's about 55% we estimated the problem pool and being that add hopeful which potentially have the time will also be up to address by expanding the label than doing sometimes.
The work.
Got it okay.
Okay. Thank you.
Thank you.
Thank you. Our next question or comment comes from a lot faster brasher for Lu from Oppenheimer. Your line is open.
Thanks, guys.
Hi, guys not being able to ask the question before but no problem, how I guess how.
I'm trying to understand what the requirements for the U.S., that's actually HM filed with the various is that you filed for LTL 200, just trying to understand that delay.
Yeah, Okay. Thank you well I think that's.
We believe we're actually in a strong place was a as you know a strong package that we developed for the European filing.
And really really the next step is to meet with the FDA, which were planning to do in the first half of its me you know this year.
To really just in shows that what we have needs and requirements.
And our expectation is that were intending to launch.
The end of this year, all Alley and 2021, that's pretty just crossing often checking that we've got what we need for the filing.
With the FDA in the first off yeah.
So it's more it's more just packaging information my phone in the needing to do anything.
Different yeah, that's not that bodies are on Sunday, but you know, we really need to meet with the FDA to go through everything that we now have in place and just check but everything we have is going to meet their requirement.
Okay understood. It and then well mom that also be supplying the U.S. market.
<unk>.
Yes, it will.
As Frank alluded to I bring you were bringing onstream, Iran facilities that will be available from 20 to 22 in California, or so yeah to launch in the U.S., we'll be working with mom that they are in a very experienced commercial CMO partner and now in time Weve.
Probably will give ourselves optionality with being able to provide through both locations so to.
Sure we have good capacity, but also you know redundancy and risk mitigation.
Okay and then my last question I'm can you remind us what the pricing first analysis and you right now.
When you it's around 600000, Jurez peptides and.
Okay. Thank you very much.
Thank you.
Thank you actually when no additional questions in the queue at this time I'd like to turn the conference back over to Mr. Mark for any closing remarks.
Well. Thank you again all of you for joining the call today, I think we're making tremendous progress towards our mission in bringing these potentially curative therapies to patients around the world.
And if we get these improvements.
To do you believe that we can provide lifetime benefit to patients to a single administration. So it really is a tremendous mission and twentytwenty promises to be a defining yeah auction on momentum continues to build somebody have potential approvals and launches to look forward to not only this year, but into next year.
Sure and its 20 to 22, so thanks for joining us in the fourth catching up again soon.
Ladies and gentlemen.
Concludes todays conference call. Thank you for participating you may now disconnect.
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