Q1 2020 Earnings Call
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This time I would like to hand over to Mr., Christopher <unk> head of Investor Relations.
Thank you operator good morning.
You for joining us on todays call to discuss the lexicons performance for the first quarter of 2020.
Today's call will be led by the Big Hanson our CEO.
But there will be joined by a Radnets, Aaron our Chief Financial Officer, John Orla, Our global head of R&D, and Brian Cox, Our Chief commercial Global operations Officer.
I will note, we're practicing physical distancing in each will be joining the call.
You can access the webcast slides that will be presented on this call.
Going to the event section of our Investor Relations page on our website.
Before we begin I would like to point out that we will be making forward looking statements and these statements involve certain risks and uncertainties that could cause our actual results to differ materially.
Please take a look at the risk factors discussed in our FCC filings for additional detail.
These forward looking statements apply only as of today.
We undertake no duty to update any of the statements after the call except as required by law.
I'd also like to remind you that we will be using non-GAAP financial measures, which we believe provide useful information for the understanding of our ongoing business performance.
Reconciliation of our financial results and financial guidance are included in our press release.
These non-GAAP financial measures should be considered in addition to but not as a substitute for our GAAP results. Thank you, but big.
Thank you, Chris and good morning, everyone.
Before we review our first quarter performance I like to take a brief moment to discuss scoping 19 and elections response to this global held prices.
Above all we remain committed to a mission of serving patients affected by rare and devastating disease.
We will focus on serving to patients who rely on us So did the live we secure.
Interrupted supply on the medicine.
We have taken pool active massive.
Like to mitigate risks and supply.
And continue to actively monitor the evolving situation worldwide.
We're doing all parts to protect ourselves and Dolby surround us by being smart in our interactions to minimize risk of spreading the fires and placing additional burden on our health care systems.
Patients families and health care providers, all at the front off on mine as we work to support them through new innovative and Portugal means.
In addition to patients we also remain committed to protecting the safety well being of a global employees.
And it's all early March we have largely shifted to remote operating model for older non essential employee.
Essential onsite staff, including dosing R&D and manufacturing continue to report to work sites, where we are taking all appropriate caution.
The transition to this new remote reality has been largely scene.
Alexia thing called global employees for their continued hard work towards our mission.
Turning to our response to this global health crisis.
Based on preclinical data supporting double complement in corporate 19, and preliminary clinical evidence from approximately a 100 patients.
Let's see on has just initiated phase three clinical trial investigating do you still open mariners in adults with Golden like team, who all hospitalized with severe claim onea <unk> acute respiratory distress syndrome.
The recognition of the urgent needs some patients.
And in order to streamline the emergency excess process. We have opened expanded access programs in the U.S. in France, but to use slayers in severe cases, so cool with 19 pneumonia.
In addition, we're committed to supporting our community and health care systems through this fantastic.
The election charitable foundation has made a number of charitable donations to organizations, including the WH show and americares.
Given the intact Qubic 19 has had a medical care worldwide.
We do expect an impact on our business in 2020.
As a normal access to care challenge during this time.
We expect a temporary slowing of patient starts and clinical trial enrollment.
While we saw strong topline growth into first quarter, we expect growth into remain lumpy year to be tempered by the pandemic, which will be reflected in two days guide.
Despite this.
We still see a potential path to achieving the midpoint of our non-GAAP EPS guidance issued earlier this year.
Obama joining Brian will provide additional detail on coping 19 impact.
Turning to slide five.
As we have discussed in the past.
We have positioned to create long term value for all of our stakeholders.
We remain committed to the goals, we have identified too cheap.
We have an ambition for double digit topline growth.
Establishing ultra merits as the market leader in P. NH, an atypical H. you watch.
That ensures a durable based business upon which we expect we can build for them.
Continued success in ontology franchise.
As well as the newly announced opportunity we half with index Huh.
Well fights new it from growth drivers as we continue to build portfolio.
We all know way to delivering upon the four times expansion of our you West Neurology business is also listen to all of you launched ranked continues.
We look forward to the potential broadening of our addressable patient population with the introduction of Fulton married and Gmg and it'll always be.
We have built a strong portfolio and remain committed to achieving 10, new launches by 2020 suite.
In parallel we continue to make significant progress in diversifying our portfolio through internal R&D and Florida business development, where we believe we can try and weak the greatest return on investment.
While the current environment is dynamic and rapidly evolving remain focused on execution towards peace ambitions.
Turning to slide six.
We have made meaningful progress towards our strategic goals in the first few months 2020.
Well two years has been further establish that's a market leader in P. NH across all three key geographies with over 67% converging.
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I'm proud to share the dot LS trial is underway with the first station having been dose in March.
With regard to our diversification objective, we have made clear progress by entering into an agreement to acquire Portola.
And are excited.
The opportunity index that brings.
I'm very proud of a strong execution, thus far in 2020.
With that I'll now turn the call over to a bottom.
Thank you literally.
Starting with slide eight we reported first quarter total revenues of approximately 1.4 billion.
An increase of 27% year over year.
We are incredibly pleased with the momentum we saw over the quarter, which was driven by strength in on urology franchise continued growth in the core businesses and volume growth for metabolic business.
Our non-GAAP operating margin was 62% an increase of 424 basis points versus prior year driven by the strong performance we saw on the top line.
Non-GAAP EPS was $3.22, representing 35% growth year over year also driven primarily by strong topline growth.
Moving to slide nine.
First quarter go he net product sales were primarily driven by patient volume growth across all of our key markets.
Turning to slide 10.
Delivers revenues and the first quarter or were approximately 1 billion with year over year growth of 6%.
Hello. This revenue growth was driven primarily by animal with the GM GE revenues, partially offset by Ulta myrisk conversion dynamic and be in age and atypical each year.
Automotive revenues and the first quarter were 223 million into his contribution from the U.S. launch in atypical H.U.S.
Don't see five revenues increased 26% year over year.
Metabolic revenues for the first quarter were 199 million, representing 29% growth year over year.
Turning to the BNL on slide 11 during the quarter non-GAAP R&D expense was 186 million talking for center revenue.
Non-GAAP EPS unique min 259 million or 18% around.
The non-GAAP effective tax rate in the quarter was approximately 15%.
We reported first quarter non-GAAP EPS of $20 and 20 defense growing 35% year over year.
GAAP earnings per share for $2, a 50 cents.
We ended the first quarter with approximately $2.5 billion in cash and marketable securities.
This is not adjusted for the Portola transaction, which is expected to close later this year.
Now moving to slide 12, I'd like to provide an update to our twentytwenty full year guidance.
Again, you know that this does not yet into the back of the portfolio acquisition as a deal has not yet so.
Absolutely alluded to in his opening remarks, while the current pandemic creates a highly volatile and rapidly changing environment, we recognize the need to provide additional color on our business and potentially back on our financial.
Why do we have provided providing updated guidance today I will note that we are learning more and more each day and this guidance reflects our best understanding of the over 19 environment at this point in time.
Starting with the top line, we're guiding to revenues of 5.230 billion to 5.330 billion for the full year what are the Midpoints reflects 6% growth over 2019.
In terms of product revenues updated guidance for solution also Maris, it's 4.495 billion to 404.530 billion.
While guidance for our metabolic business is now 735 million to 716.
This topline guidance assumes a gradual reopening of medical assets around the globe starting in July.
It includes the momentum demonstrated by our first do you performance an acceleration in conversion to ultimately was driven by the lower burden on patients on health care system to like every eight week dosing and continued strong compliance rate across indication.
These are offset by unexpected temporary slowing of new patient cases delays in treatment starts and the potential for change in Bayer me, if an increasing proportion of patients moved to Medicaid in light of rising unemployment rate.
Non-GAAP operating margin is expected to be between 55%, 56% the revenues.
Non-GAAP R&D expense is expected to be between 16, and 17% and reflect both the incremental expense.
Related to our Kobin 19 trial and timing impact of Cobot 19, some R&D program.
This now exclude milestones relating to the discontinued antibody program.
Non-GAAP as unique spend is expected to be 18.5% to 19.5% of revenue and include global 19 related expenses, including those related to expanded access program and digital commercial investment.
GAAP EPS is expected to be between $8 in 14 cents, an $8 and 47.
Non-GAAP EPS is expected to be between $10.45, a $10 a 75 cents.
This reflects a proactive expense management and financial discipline.
The upper end of this range remains in line with the midpoint of our prior Twentytwenty guide.
We look to provide further updates in future quarters as the Corbett 19 situation the ball.
Finally on slide 13, I would highlight our ongoing capital allocation strategy.
We've had a strong start to Twentytwenty would bode the closure of a clinical stage deal with the Kelly on and entering into an agreement to acquire portal.
We're excited by the opportunity for potential value creation afforded to us why these transaction.
We also repurchased 1.3 million shares were 107 million in the first quarter of Twentytwenty.
We remain focused on strategic deployment of capital and continues to look for assets that support our diversification strategy in the near and long term as we believe this will provide the best return on our investment for both shareholders on patients.
We will continuously evaluate the strategy as the market potential business development opportunities that evolves.
I'll now turn the call over to John to provide an update on our R&D.
Thank you arena.
Slide 15, you can see our current development portfolio, which continues to evolve.
We now have 19 planned clinical stage development programs for 2020.
Later this quarter, we expect to report PK data from our phase three once weekly on bodies subcutaneous Ulti mirrors program, which remains on track for potential launch in 2021.
We've made the decision to conduct the plan C. Five inhibitor renal basket study with healthy mirrors, rather than hail like San 18 10.
Meanwhile, on the subject of multi Myris I'll also note that we have decided to no longer pursue pbms as an indication.
This decision is based on findings from retrospective clinical and biomarker analyses, which did not support moving forward with this program.
With regards to some of the new assets in the portfolio. We expect interim data from the phase two studies of hail extend to all four deanna cocaine in see threeg in the coming quarter.
We are excited about the proposed acquisition of Portola announced earlier this week and look forward to providing additional detail on the trials to expand indexes indication.
Including the phase two urgent surgery program after the transaction closes.
Turning to slide 16, we highlight the current programs, we see on track to launch by 2023 and the potential opportunity each presents.
As we've heard across the industry, but we'd 19 has created headwinds for R&D programs, including some delays in trial enrollment and paused healthy volunteer studies.
Despite these headwinds we have protected and prioritize these programs to help ensure we achieved our ambition for 10 potential launches by 2023.
Starting on the left we're expanding or C portfolio, well beyond the pn age and atypical each U.S. businesses with Delta mirrors, neurology, and nephrology programs, which collectively presents an opportunity to expand our treated patient population by tens of thousands of patients.
Building on yes, we see opportunity to diversify our business beyond C. Four additional late stage novel assets.
Enrollment is complete in our phase three superiority trial rail accent, 18, 40, and Wilson's disease and we remain on track to have phase three data in the first half of next year.
Dosing is underway in the phase two dose selection portion of our pivotal phase three program CA 101 inhale amyloidosis.
Patients are currently treated with chemo therapeutic agents not approved for him why doses and median overall survival is only 18 months post diagnosis.
Clinical data supporting our rationale for the collaboration.
Showed a 63% overall organ response rate in addition to efficacy on cardiac and renal endpoints.
Our phase two three program look at an overall survival primary endpoint with patient function.
Life in cardiac imaging, serving a secondary endpoints.
Last year, we announced a license agreement with items to develop and commercialize Agee 10 for 80, TR Cardium I ought to be in Japan.
We believe the AG 10 has potential to stabilize TTR heart disease progression.
Pending regulatory discussions we plan to extend the AG can development program into Japan later this year.
Finally, we remain on track with the ongoing indications for 2040, Pn age with extra vascular hemodialysis and see Threeg, which will be covered in more detail in just a minute.
We are excited about the opportunity for these 10 potential launches to significantly expand the number of treated patients and will provide updates as we progress in here.
Next I wanted to spend a few minutes on slide 17, as I'm excited to discuss the potential role of C. Five inhibition in treating cobot 19 related severe pneumonia and the design of our recently initiated phase three trial.
We see the left side of the chart.
Let's see five is elevated in acute cobot 19 infection and this elevation ultimately drives downstream release, a pro inflammatory and pro thrombotic cited kinds of human claims that leads to severe pneumonia blood clots and multi organ dysfunction in many advanced cope with patients.
On the right side, you can see the design of our trial, which will enroll approximately 270 covert 19 patients suffering from severe pneumonia or acute respiratory distress syndrome, Rds randomized two to one versus got supportive care, including allowing the background use of other drugs.
The primary endpoint is overall survival at day 29.
Turning to slide 18, I'd like to provide an update on our factor deep portfolio.
Our teams have been busy over the past quarter continuing to move forward with the existing programs for 2040.
The phase three program for PMT age with E. H is on track to begin in the second half of 2020.
And we expect interim data for C. GE in mid 2020.
With 2050, there's potential for the first oral monotherapy for PNM age.
These two pennies program is underway, we also see tremendous opportunity in a broad range of additional indications.
First of these will be a phase two renal basket program given the strong rationale for complement inhibition in these indications.
We look to initiate this phase two program in the first half of next year and will share additional indications for our factor de platform later this year.
Finally, turning to slide 19, I'd also like to highlight our internally design by specific Cfive inhibitor, Alex and 17, 20, which we see as a best in class option. It continue expanding or C. Five franchise.
Only 25 kilograms 17, 20 is unique many body tailor made for convenience subcutaneous administration.
We see opportunity in a number of new and larger population rare diseases.
We're pleased with the results we have seen in phase one program, thus far which support weekly dosing and are currently in the process of selecting specific indications that we will move forward with.
In conclusion, our development portfolio has grown significantly in the last two and a half years and I'm incredibly proud of all the hard work undertaken by the entire R&D organization, especially in light of the challenges posed by covert nights.
With that I'll turn the call over to Brian to provide commercial highlights on the quarter Ryan.
Thank you John turning first to slide 21, we had a very strong first quarter with demonstrated progress in our goal is best in class conversion to alter myris for PNM, each and atypical each U.S. as well as continued growth in or neurology franchise.
As of last week, we've achieved greater than 67% conversion opinion, each patients to ultra myris across the U.S., Germany and Japan.
Further solidifying Ulta myris his position as the pn each market leader.
Three largest volume markets.
This strong performance is due in large part to the compelling value proposition to Volta myris, both for patients and for payers, which is increasingly appreciated in light of the ongoing cobot 19 pandemic with patients only requiring infusions every eight weeks.
We'll also further enhance patient experiences with our higher concentration hundred milligram per milliliter formulation, which reduces the infusion time by more than 50% to 45 minutes.
We also remain pleased with our early launch in atypical each U.S. and the U.S. We're conversion remains on track for the same 70% conversion ambition within two years that we set for Pn age.
And we received the good news last week that the committee for medicinal products for human use has adopted a positive opinion for ultra myris, an atypical each U.S.
So we now expect a final decision from the European Commission in June.
Our neurology business continues its growth trajectory with further progress towards our stated ambition of quadrupling, our U.S. treated patient population.
You can see we exited the first quarter with 2152 patients on treatment with Soliris for Gmg animal Westy in the U.S.
While we continue our efforts to grow prescriber breath through continued education on the role of complement inner neurology indications near term risk, especially focused on driving depth with our current prescribers to continue to expand use in the current cobot environment.
With Ulta Myris expected to launch in our neurological indications starting in late 2022 or early 2023, we aim to be on market with an every eight week infusion.
Additionally, our once weekly on body subcutaneous formulation will when it's approved provided another important treatment option for patients who prefer self were home based administration.
Turning to slide 22, you'll see we've taken a number of steps as an organization to ensure we continue to serve the needs of patients into these cobot 19 environment.
In fact, it's worth noting that many of these efforts were already initiated in are evolving operating model.
And the current environment has helped us to accelerate our progress.
With respect to infusion site of care access for our C patients.
Actively working to mitigate potential disruptions in infusion visits.
We're working to expand access to home infusion and it made significant progress in rolling out this important option to patients.
Are you Espys one source case management team is actively engaged in assisting patients with logistics related to their preferred site of care.
New digital outreach methods have enabled our field teams to seamlessly adjust to the current remote environment and continue making connections with clinical decision makers and our teams are actively adopting best practices for virtual engagement.
Slide 23 highlights Alexey ons commercial portfolio, both today and in the future with an emphasis on our growing critical care business.
Almost all atypical each U.S. patient starts in a growing number of animal as the patient starts occur in the hospital setting.
We see this has a distinct advantage moving forward as we continue to plan for diversification of our business, including site of care diversification for patients.
With the news earlier this week of or proposed acquisition of Portola.
We anticipate that our existing presence in critical care will allow us to support significantly increased utilization and accelerate adoption of endexo.
It's important to note that atypical each us animal westie in indexes early part of this growing portion of the business.
Our Ulta Myris portfolio has the potential to include a number of more acute indications.
Including HSC TTM may as well as complement mediated Tms.
Moving to slide 24, as a proposed acquisition of Portola provides us with the unique opportunity to leverage our existing capabilities to deliver potential long term growth.
And DEXA is a transformative medicine for these patients who would otherwise the devastating consequences, including a significant risk of mortality.
Our core capabilities in enabling access provide us with the tools and know how to unlock growth through access pull through and institutional endorsement.
In closing I'd like to take a brief moment to thank or global commercial and operations organizations for their hard work and dedication, especially during this global crisis, which has allowed us to continue to bring home to the rare disease patients we serve.
Ill now turn the call back to midweek for closing comments Ludwig.
Thank you Brian.
Im very proud of what the team delivered into first quarter of 2020.
And co Brian and want to thank all the employees around the globe for their hard work.
Similarly, we also want to thank our employees families would that flexibility and support.
We recognize the coping 19 pandemic will have near term and lasting impacts on the way we operate.
However, I'm confident that despite these challenges you will continue to deliver on a long term strategy for value creation.
Importantly, we maintain our unwavering focus on patients in a commitment to advance our mission to deliver life changing therapies to people living with bad diseases.
With that we will now open up to call two questions operator.
Ladies and gentlemen, as a reminder to ask a question. Please press Star then one or your telephone keypad.
Your question has been asked what are you wish to remove yourself from MCU simply press the pound.
Please standby we've compiled acuity roster.
Our first question or comment comes from a line of Cory Kasimov from JP Morgan Your line is open.
Hey, good morning, guys. Thank you for taking my questions wanted to start just can you provide some more granularity on on what's driving the updated revenue guide in the context of patient conversion versus new patient starts and in terms of the impact on new patient starts. So there are indications that you think or better insulated in this environment are you seeing impact.
Across the board.
Brian you want to take that.
Yes, good morning, Corey Thanks, a lot for the question and not at all surprising that that's the very first question I think thats on all of our minds is where do we go from here and what are the dynamics.
Summarize it this way that in the first quarter as you saw we saw a relatively small impact on first quarter sales and that's thanks to continued strong demand momentum number one and number two the strength of the products, which we know resonate really well with both.
Physicians as well as patients.
Just to take a step back so we and I mentioned this in the prepared comments that we took proactive action.
Stopping all of our field force activities. The in person activities in early March and I'm very proud we did that it was with the mindset of the safety of our employees as well as the health care professionals and so we simultaneously started shifting to virtual digital interaction with customers number one.
Secondly is I also mentioned, we pivoted and we have quite a nice breadth of prescribers across the different indications, but in a virtual world the emphasis over indexes into depth. So work, we're really trying to focus on those who already have experience and deepen our penetration with those customers.
I'll just no. This is really important step that supply has been maintained and are one source patient support program they've done a great job, just making sure that they're helping patients navigate the system.
To your question about what are we seeing at the patient level.
New it's clear that new patient case volume is affected and that's that's both from the patients perspective as well as some of the sites of care have been depending on whether or not there are real hotspot encoded.
I had been more limited in terms of.
Ability to handle patient volume so we've seen some impacts there.
The other dynamic is trying to initiation of therapy.
Can also be affected and.
And we're in the early stages of being able to even properly assess what that looks like.
But that's all been baked into our guidance and our outlook as best we can see and then another big dimension that that we monitor in our diseases, because theyre chronic is compliance and persistency. So.
Theres, a few puts and takes it varies across different diseases as to which of those we think might be more impacted than others. For example in she mg.
It tends to be less acutely symptomatic if the patient were to slow therapy relative to something like Pn age.
We're in P., an h., we know that indicates a serious at the end of the two week interval. The patient is at risk of feeling symptoms. So that's a clear advantage of the conversion to ulta near its going to every eight week confusion.
And we're going to learn more each week and we'll just continue to provide updates as we get more clarity.
Hope that helps.
Thank you as a reminder, ladies and gentlemen, we were asked that you. Please limit yourself to one question. So that we can get as many questions answered it as much as possible. Our next question or comment comes from a line of Geoffrey Porges from SVB Leerink. Your line is open.
Thank you very much.
So.
Do you have a question on commercial.
Could you, Brian give us a little bit more color on the proportion of revenue.
The U.S. and the proportion its commercial to talk about whether you're seeing any uptick in the demand for child care given the economic circumstances.
Yes, maybe I don't know rather do you want to comment on the mix and then I'll, just say that for charitable care I get no visibility to that that's as.
Leading the commercial teams that is outside of any of my decision, making or even.
Visibility in that regard.
Yes so.
I'd say.
No about 55% of our business is in the U.S. and about 20% of that is talk Medicare part B.
And we mentioned in our guidance that does include.
You know some assumptions around the some of the shift that may happen more to Medicaid from commercial payers given the the rising unemployment rates and we've taken some of that into account.
When you look at our operating expenses.
Clearly there is some things that we were benefiting from so for example, lowered involved US you know travel entertainment and Congresses and Weve on purpose delayed.
Non staff expenses, obviously, there's not a de delays as well, but on the other side, we're making a number of investment.
As Brian mentioned on the digital side, we also had an increase in.
Sort of expanded access program compassionate use program as well.
I called it studied over the idea studied that.
John mentioned is also additional expense for this year. So those are some of the puts and takes on on the expense side and we're trying to do.
Management of expenses, the best we can without compromising sort of our corporate objectives around the 10 launches and you will that mission.
So Jeff Jeff the I'm going to put the two questions together.
Thank you it's fair to say there are three key factors that all driving on new sales guidance. The first one.
As Brian was saying was the new patient starts that we believe.
It's slowing down and the lower compliance so thats one.
Number two is read to see you next celebrated its goals from years conversion.
You know that is a pricing headwind for us.
Although that is our strategy and we want this to happen, but it's a pricing headwind.
And number three in the U.S., we anticipate that the payer mix will change.
Since the Medicaid portion will increase because.
Of higher unemployment rate. So these are the three factors driving on who sales guidance.
So we'll take the next question.
Thank you. Our next question comes from the line of Chris Raymond from Piper Sandler Your line is open.
Thanks, just Tom.
Maybe go into the the R&D plans I was just looking through your 10 three through Q it it looks like.
The plan for restarting your Fcr and trials.
And I know you're talking about covert input.
Impacts on.
Trial suspension et cetera, but yes, CRM trials looks like they're not starting until 2021.
Can you maybe talk about what the gating factor is there is it.
Something outside of coded that's driving that that pushback.
Thank you Chris This is John on first of all just want to reiterate our commitment to.
Delivering on those kind of launches by 2023 and those programs are on track, we did say that there is.
An impact on some of the trials that are enrolling to some extent were predicting.
Some delays in the ongoing study studies that have completed enrollment like 18, 40 and Subcu. We're on track to deliver on those milestones as stated with regard to F. CRM.
It's a combination of the impact of covert 19.
No we started to healthy volunteer study.
With the Subcu formulation in December that program had to be paused in the first quarter because of the outbreak of cobot 19.
Along with that we have made the decision to transition from Ivy formulation for hemolytic anemia to subcu because of the competitive landscape.
The combination of those two things basically delay the re initiation of both programs to the early part of 2021.
Thank you.
Cigna next next question please.
Thank you. Our next question comes from a line of Paul matters from Stifel. Your line is open.
Hey, great. Thank you so much for taking my question.
Just one on acres for Brian.
Right. Historically acres is had kind of a more unique persistence dynamic and thats kind of balance between chronic.
Versus intermittent therapy are you seeing any change with that in the pandemic and then in terms of new starts.
The new starts stem from real medical emergencies, and crises or are you seeing fewer patients actually show up to the hospital, what they used to get Solaris or is that relatively stable. Thanks. So much.
Yes, Hey, Paul good morning.
First I'll, just say with with atypical each U.S. and the ultra myris.
Launch pathway, which started at the end of last year and just as a quick reminder, that was an early approval. So we were thrilled to get going on that launch following the success, we've had with Ulta mirrors ph.
I will qualified by saying that all the indicators and I know this would be a theme for a discussion is what what are we seeing and hearing in the cobot world. It has error bars around it because we're all as a world we're learning together.
What this means but so far qualitatively I'm quite pleased with how we're doing in the us with our Ulta Miro C. Typically Qs launch in fact.
It is essentially on track with our 70% facilitated patient conversion ambition within two years same ambition that we set for PNM age.
And you know that we actually moved the goalpost earlier for clear at age.
And we feel really good right now based on our progress at 67% in the U.S., Germany, and Japan, but where they typically to us. It is it's proceeded well.
I've not heard disproportionate qualitative comments around patient stopping therapy earlier or a profound impact on new patient starts. That's obviously one of the key areas that will continue to monitor and the reason I hedge by giving specifics is because everyone knows.
It really depends on geography, and where patients are in the U.S. and whether or not it's cold and hot spot and even where it's a hot spot those start to cool off and then other areas pick up.
But all in all three.
Thank goodness, we have ulta myris, thank goodness that physicians patients and payers all recognize the benefits and we're well on track with their launch.
We'll take the next question. Please. Thank you for our next question or comment comes from the line or Geoff Meacham from Bank of America. Your line is open.
Hey, guys. Thanks, so much for the question.
Brian just a follow up in the covered impact question I was just curious.
You see much in a way of stable because that holiday or maybe.
During the time between infusions, you mentioned some variance among them petitions, but just curious if they're lessons to be learned of what's worked and what's not worked across different geographies and then.
Real quick John just what the ongoing phase Threea Ulta, Mercent Covre 19 patients.
That's in process, but wondering if you could share any anecdotes from your early experience cushions. Thanks.
Yeah. Good morning, Jeff I'll start so good question and in from.
Jason holidays again, we're kind of early days and the whole cobot dynamic so that from a temporal basis will take some time to really monitor it is one of the key things that we'll be looking at with.
Persistency and overall compliance, but I think for us in all the elements that were.
Baked into the guidance Ludwig and a rather have highlighted the key that that we have already seeing some impacts early on.
Maybe not surprising anybody is new patient case identification number one and then the second one is when it cases identified the timeline that it takes from that case to initiation of therapy is what's on the more fragile edge of rare disease treatment.
From a compliance and persistency perspective, as I mentioned.
There are as you described it Jeff drug holidays.
For patients, we've not yet seen any kind of profound impact, but again. It is one of the places that will be monitoring and frankly doing our best through things like the one source patient support system to help patients get the right education navigate through their therapy. If they had for example, a disruption in site of care.
No we don't guide where patients go but the one source team does a fabulous job of helping the patients navigate through those kinds of dynamics.
And Jeff This is John with regard to your question on the Phase three study first of all I want to thank the R&D team and the broader crush cross functional team for jumping on this really quickly really finalizing a protocol and getting the study underway in two months time.
In this began with with our evaluation of the scientific rationale and the preclinical evidence that there is a role for terminal complement intermediating inflammation and perhaps thrombotic.
Coagulopathy that exist in some of these patients and the potential to intervene with a cfive inhibitor.
We have a compassionate use program that Ludwig mentioned 100 patients treated them through that experience have anecdotal evidence that is encouraging although it's not controlled in any way, which underscores the need for us to proceed with randomized controlled trial.
And so thats underway imminently and we're looking forward to to getting results from that study.
Take the next question please.
Our next question or comment comes from lined up Mohit Bansal from Citigroup. Your line is open.
Great. Good morning, and thanks for taking my question hopefully listing safe bet.
Regarding immuno growth ambitions.
Just curious on how do you factor in the upcoming images.
S T T bodies.
What kind of this do you see do your Solaris estimate its business due to that.
And is it possible.
Let's see five franchise.
Fine.
The knee showed a very sick patient population due to that especially subcu. Thank you.
Well they love it.
Oh go ahead, sorry, but none of you go for.
Yes, maybe I'll start on that one because it really points towards.
You mentioned Fcr end and.
With neurology.
Obviously, we see that as a key growth opportunity.
Looking back two and a half years now that we're going to launch we did not exist in neurology, two and a half years ago, we've already communicated in.
Multiple times actually that that has in two and a half years become the largest volume patient volume aspect of our business in the U.S.
We supplemented the work that we've been doing with GM GE last year with art animal as Steve launch.
And.
I think everyone knows that we put forward a pretty bold ambitions that the started this year say, we see an ambition pathway to getting to four times the patient volume that we have in the U.S. or that we ended in the U.S. in 2019, when we get to 2020 fives and that will be let me just think of if we.
Achieve forex.
How significant that will be for our business, but certainly for patients now with respect to.
New potential competitive insurance. This is a pretty large patient volume arena in Gmg 60 to 80000 patients in the us.
And with Soleris, we operate on the severe side of that spectrum six to 8000 patients roughly so that is you could call. It a niche, but it's not a small niche actually and it's one that is unique competitively. We believe and then with ultra myris. Thanks to the work that John and the R&D team are doing with the ongoing.
During Trialing gmg.
We opened up the aperture such that Theres not a restriction as we head into serious regained trial for patients to have failed on immuno suppressive therapy. So we see that opportunity opening up from perhaps 60000 patients to roughly 20000 patients, but again that's all.
On the more moderate to severe side of the spectrum.
The new entrants that we see potentially coming in.
Will disrupt first line therapies immunosuppressive therapies corticosteroids things that frankly had been around so long and our unlabeled they need to be disrupted and then the question will be what happens when those sale and that's where having a suite of Solaris and Ulta Myris, we believe will be critically important with our new.
Allergy growth.
I don't have anything.
Health to add to that so we'll take the next question.
Our next question or comment comes from the line of Phil Nadeau from Cowen and company. Your line is open.
Alright, Thanks for taking my question and congrats on the progress.
Just one follow up on Covidien a pipeline question uncovered.
However, other companies have noted a pull forward of orders into Q1, particularly in exercise territories.
Ahead of coated.
He didnt, calling out in your numbers to did you see any pull forward of orders.
Particularly in Europe, or it looks like you had a bump in revenue and then second Justin issues acquisition in index.
There was a big change in utilization and index in Q4.
Based on our math revenue Pristiq Costco went from like $60000 to $45000 from that because a lot of controversy among portola shareholders. Do you have any understanding of what happened in Q4, and how would you plan to.
Reinvigorate utilization wants indexes in your hands. Thanks.
Yeah, Roger do you want to start on the first one yeah. So maybe on the first one Oh, we didn't call out specifically, but we have seen some amount of inventory pull through in the first quarter.
Wasn't was most obviously huge number but we have seen from stocking in the first quarter.
As you mentioned.
In terms of the Portola acquisition.
We mentioned yesterday I think.
There's a lot of factors, which maybe we think we can do a lot better on them and brands going to talk about that second.
But a big soccer that needs to be is around the assets and that's where we think we can plan really critical Brian you want to expand on sort of our commercial strategy and why this was such an excellent set for us.
Yeah, I mean it thanks for the question Phil.
We.
Yes, we could articulate what we had heard from Portola as they characterize the dynamics in the fourth quarter.
And.
A lot of that had to do with the fact that there was gen. One product still in the channel and.
There was a return of that product and then there was some continued demand dynamics as well that they spoke to.
The levers that we believe will be critically important.
To do with a combination of access and in for those who dialed in for yesterday's discussion you know access as a critical element for any launch, particularly when you're talking about penetration of institutional settings. It's multi dimensional. So one is got to make sure you've got product on.
And for an acute conditions like this immediately available to is that these are funded through DRG hospital payment dynamics and there are there are mechanisms like and tap and awareness of MTAP as well as the implementation of that that coverage to help out with the gap in DRG payment.
There's also the importance of society guidelines, which now there's 19 medical societies around the world that has supported the use of index that's critically important.
And then very recently in March.
As new very important health economics and outcomes data that's been published that shows a 57% reduction in 30 day all cause mortality. So we will look to really make use of that as an access lever, but the other dynamics are you've got to have a key opinion leader as it.
Champion, who really endorses the product in the institution and that's that becomes important when the moment of formulary protocol decisions are made and then of course, there's just underlying demand.
Generation. So those three combined levers is where our focus will be.
So we take two more questions.
Our next question or comment comes from the line of Robyn Karnauskas from Suntrust. Your line is open.
Hi, guys. Thanks for my question.
Yeah, that's on the high dose patients that were on height of Solaris more frequent Solaris we've been hearing from for a while not a lot of came out havent switch the patient because they believe there wasn't specific data from the ultimate this trial and their high revenue generating patient given cobot are you seeing any in general pre at prior to Q.
What percentage of those do you think it switched roughly and has that changed we've seen acceleration switch to ultramarine no patient population given the frequency they'd have to go into that go into their doctor. Thanks.
Yes, good morning, Robyn, it's Brian again.
Interesting question and so we may not have the granularity that you're looking for for very specific patients and what dose that they were on but I will say.
And it is interesting with coal did that there are many things that are real challenges not just for our business but.
For the whole industry.
But for our product portfolio. It has been interesting that we've seen an acceleration actually in some of the hotspot areas of Ulta Myris conversions and the reason for that may not be.
Surprising to most that you are moving from Solaris every two weeks infusion to Ulta Myris every eight weeks and that is obviously great for the patients as a burden of.
Drug delivery for them, but it's been really helpful for institutions that have infusion centers and so it has been interesting that we started to see the green shoots of that kind of acceleration occur even in some of them more challenged parts of the country.
And Robin this is John if I can just add while the phase three program didn't specifically study patients who had to uptight titrate on Solaris into the program. We did have a very large the largest that's ever been conducted naive study with nearly 250 patients and so you estimate that 10, Chris.
Or maybe a little more than that of those would have required or higher dose of Solaris. We know that all of them. We're adequately controlled with complete sustained C. Five suppression throughout the study and the Ulta myris treated arm with no excursions above that threshold. So we're pretty confident that we've nailed the dose in the dosing regimen and that we.
Those patients cover but that again they would have been part of the study in the nine study covered with our clearance.
Yes, we take Oh last question.
Our final question comes from a line of Matthew Harrison from Morgan Stanley. Your line is open.
Great. Good morning, Thanks for taking the question I was hoping I know you've touched on the from the commercial dynamics, but could you just maybe providing a little more detail what the impact is flowing new patient starts versus I.
I guess, let's call it less persistence or people skipping or extending new doses and then.
The impact of you know, but the I guess a mix shift too.
Either more Medicare or.
Less commercial patients. Thanks.
Yes, a run the do you want me to start.
Yes go ahead.
Sure So good morning Matthew.
There are a couple of dynamics that you've already actually three that you highlighted and so for compliance and persistency.
We haven't quantified, but I will qualify and this is perhaps easy math to do when when you talk about impacts on on compliance. We're we're really looking at the entire base of our patients. So.
If there were in impact.
That is one that on a relative basis would play out more significantly for the business and that's why that's a key focus for us, but I mean, it's a focus for us where the business, but it really is because these are rare diseases that need patients to stay on therapy. So we're doing all that we can appropriately to make sure that we're supporting them in that journey.
For new patient starts.
That's the gross side of the equation and it's one that has a lag effect, obviously, when we would start to see that impact our business. So we have seen some impact on new patient starts as I'd mentioned as well as time to initiation on therapy Rod that has spoken about how that's all been worked into our best.
Awareness right now and guidance there are error bars around that of course, and we'll continue to monitor.
But I would say from from the new patient starts side that is one that could be more of the twoq to threeq dynamic relative to compliance.
But anything you wanted to add.
No that's good.
Excellent so.
Just a couple of for closing remarks.
Thank you all saw that we started the year with a very strong momentum 27% sales growth.
Real on the thing called the election employees for their hard work.
Very product, but all of you.
Coping 19 is slowing us down there's no question about that but we still expect to grow.
For the year to go and we plan to go back to steady state after that.
As we discussed on long term ambition of double digit revenue growth.
Then launch it by 2023 quadrupling argue ESMO Gi footprint those ambitions have not changed.
So we believe we have a very strong durable sustainable business with a very strong strategy and very strong execution.
So I want to thank all of you pull dialing in.
Have a great.
Great they everybody in the states too so thanks everybody.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect everyone have a wonderful day.
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