Q1 2020 Earnings Call
[music].
Welcome to the GW Pharmaceuticals first quarter 2020 financial results call at this time, all participants are they listen only mode.
First question answer session will solve the formal presentation if anyone should require operator systems. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mr., Stephen Schultz Vice President Investor Relations. Thank you. Sir you may begin welcome all of you and thank you for joining us today.
For our first quarter Twentytwenty results call again, Im Steve Schultz, Vice President of Investor Relations at GW.
And today I'm joined by Justin Gover, GW is Chief Executive Officer, Darren Cline, U.S., Chief Commercial Officer, Chris Tovey, Our Chief operating Officer, Dr. Volcker can efforts Chief Medical Officer, and Scott Jukka, Belo, our Chief Financial Officer.
We hope you've had a chance to review our press release issued a short while ago.
And expect to file our form 10-Q later today.
As a reminder, during today's call will be making certain forward looking statements. These statements reflect GW use current expectations regarding future events, including but not limited to statements regarding financial performance clinical and regulatory activities patent applications timing of product launches and statements relating to market.
Acceptance and commercial potential.
Forward looking statements involve risks and uncertainties and actual events could differ materially from those projected here in the list and description of risks and uncertainties associated with investments in GW can be found in the company's filings with the U.S. Securities and Exchange Commission.
These forward looking statements speak only as of today's date May 11 2020.
Finally, an archive of today's call will be posted to the GW website in the Investor Relations section.
Ill now turn the call over to Justin Gover cheap.
As Chief Executive Officer.
Thanks, Steve and welcome to those who joined us today.
Let me begin by expressing my best wishes to you and your families. In these extraordinary times that we are living through I hope that all of you by healthy insane.
When the significant risks of the Cobot 19 situation became evident GW acted rapidly to develop an action plan with the primary goals and protecting the safety and well being of our employees safeguarding patient access to our medicines.
With the exception of our manufacturing personnel our company moves to work from home operation in mid March and this continues to work well.
I'm impressed with the flexibility and agility of our entire organization pivoting to operate in this new environment I wanted to take this opportunity to express my appreciation to our employees. So the way in which they have responded to this crisis.
We have not had any interruptions and ensuring that our medicines are available to those who rely on them for that daily health and we continue to make progress across all areas of the business.
We had GW control already manufacturing supply chain, which has proven to be very beneficial mix.
This control has not only enable GW to ensure manufacturing continuity, but it has in fact allowed us to increase epidiolex production in recent weeks.
I would also credit to provide more detail on the specific actions. His team have taken regarding production as well as his thoughts on the progress of Epidiolex commercialization in Europe later in the cool.
Our commercial teams continue to actively interact with clinicians will be at virtually.
We are fortunate that going into this cobot 19 situation Epidiolex brand awareness was very high among both patients and physicians.
Our specialty pharmacy model, which features direct home delivery for the vast majority of all patients has been in place since launch and continues to work well.
In a moment I will have down provide his perspective on how the US commercial operation is adjusting and preparations for the expected upcoming TSC launch and insights to date on the second quarter.
Following the U.S. and European commercial updates vocal will provide an R&D update Scott will review our financial results.
Let me now hand, the call over to down for Us commercial update.
Thank you Justin I'm very pleased to report continued growth and strength of Epidiolex Qs sales in the first quarter. We continue to hear feedback from both caregivers and health care professionals as to how this transformational therapy continues to improve the lives of thousands of patients.
You must have dialect sales were 106.1 million in the first quarter compared to 33.5 million in the equivalent quarter last year.
You will recall in our Q4 call we discussed the likely seasonality impact in Q1 common to the anti epilepsy drug class.
While we did see this expected seasonality effect in January in early February the latter half of the quarter, particularly March shows strong sales growth.
Overall, we believe our proactive efforts to support patients managing through reauthorization requirements out of pocket resets and change of employer plans led to a minimal drop off and refill rates.
As cover 19 took hold in March we do not believe there was a pulling forward of epidiolex prescription into the first quarter.
Given that Epidiolex was.
Until very recently scheduled the majority of health plans do not approved 90 day fills as a result, we see the Q1 revenue number as an indicator, but there remains significant potential for the growth in the brand in 2020.
New patient starts were consistent with the prior quarter and retention remains a strength of the brand. We continued to see a slight increase in average dosing during the quarter.
As discussed in our previous earnings call, our adoption of Epidiolex varies across different target segments.
Our penetration and and prescribing of our top level targets is driving nearly half of Trx is with 97% of those targets have been written the prescription in Q1.
We continue to believe that the next wave of prescribers, which account for over 1008 Cps. This has significant growth opportunity for the brand and a key focus for our commercial team in 2020.
During Q1, we saw increased prescriber penetration in this group with nearly 90% having prescriptions filled.
All HCP Deciles added prescription volume and grew market share over Q4.
As the effects of covered 19 started to take hold in mid March we suspended all face to face field sales activities.
But we have continued to interact with our customers on a virtual basis.
Once we transitioned to the virtual setting.
We were able to provide our sales team with updated core materials optimized for digital distribution, along with the ability to where appropriate.
Engage in virtual interactive lunch and learns.
We're also successful and converting 70% of previously scheduled lives speaker programs to an online platform.
While we have seen a significant decline in the number of engagements as you would expect the quality of the engagements, they're taking place are robust and meaningful conversations focused on identifying patients that can benefit from epidiolex.
We continued to see solid performance during April and in general fill it epidiolex as a product that as the attributes to stay strong even in the covered 19 environment.
To date the impact of Coven 19 has been less than we had feared that said we must recognize that few patients are currently visiting their physicians in person and then many epilepsy physicians are not a custom to initiating new therapies through telemedicine.
This is therefore, a more challenging environment for new patient initiations in the second quarter.
Looking at the market more broadly market research conducted in the first quarter prior to Coven 19, and continued to show intent to increase Epidiolex use.
While the majority of used identified in our research is coming from DS and LG US approximately 60% of HCP is interviewed reported using epidiolex for other refractory epilepsies with the intent to grow use in these other segments.
One of our initiatives in 2020 is a focus on the long term care segment as we completed the buildout of our account team in Q1.
As we all know long term care has been impacted particularly hard by the pandemic.
That said, we have started to execute our plan and launched a collaboration with the largest long term care group purchasing organization during the quarter.
This allows us to interact and educate 1100, plus independent long term care pharmacies and associated consultant pharmacists within their network. We plan on rolling out virtual Epidiolex education programs to this audience next month.
Looking ahead and beyond Cobot 19, the recent da action to these scheduled up a dial acts as a positive development for the brand that will have long term benefits for health care providers patients and caregivers. While this is scheduling is now complete at a federal level. The remains ongoing administrative work within many states.
And we hope will be completed later this year.
We are excited about the expected label expansion at the end of July two includes Caesars seizures associated with TSC.
Our pre launch preparations are well underway with our medical market access and marketing teams all having conducted extensive market research advisory boards and other launch planning activities that will position us for a successful launch into this disease state.
Regardless of the covered 19 circumstances were planning for this launch for either in person or virtual sales environment.
Interestingly our market research suggests most clinicians are not currently aware of the Epidiolex TSC data and we believe they will be highly receptive to our outreach from our commercial team when we receive approval.
I want to remind you that the estimate a number of patients that have seizures within the Trc population is 40 to 45000, a doubling of the addressable diagnose patient population. This expansion is clearly an important opportunity for growth in the second half of this year and beyond.
Turning to our payer initiatives, we started a new year with continued momentum in our discussions around the evolving coverage for Epidiolex and DS LG us and broader intractable epilepsies.
We are using these interactions to engage payers with the goal of removing are easing PPA days and moving to simple step edits where appropriate.
Our conversations also now include the future inclusion of TSC into their epidiolex policies.
These have been very productive conversations and we foresee near immediate inclusion of the TSC indication within most plans upon approval.
This review of TSC and the anticipated approval coincides nicely with their current utilization review of Epidiolex.
The plans utilization data continues to show appropriate use and LG smbs and the vast majority of other intractable epilepsy claims are being improved via the plans appeals or peer to peer process.
While cover 19 has had an impact on the scheduling of some important pair meetings and the last six weeks.
We remain confident.
The payer policy will evolve and expand throughout the remainder of the year.
In conclusion.
We are well positioned to see continuation of us sales momentum and the remainder of 2020.
This medicine addresses the significant unmet need and has proven itself to provide meaningful and sustained seizure reductions and otherwise treatment resistant patients and tend to increase prescribing. Among HCP is remains high payer discussions are heading towards further opening of access.
And then the next few months, we expect to expand the opportunity significantly to launch of the TSC indication.
We continue to be focused on serving our patients and providers. During this extraordinary time and our comfort that epidiolex continues providing benefits of patients and families in need.
Now I'll turn the call over to Chris to provide an update on progress in Europe and manufacturing.
Thank you Darrin, let me start with an update on global manufacturing and supply chain, which falls under my oversight.
First and foremost.
These significant investments in our own manufacturing facilities and limited reliance on other organized other organizations in our production process has given us the ability to control the environments and the output.
We have implemented numerous operating changes to ensure the safety of our manufacturing stuff and I'm pleased to report that they're working effectively with no impact on our production schedule.
As a result, our manufacturing facilities operating at its highest levels of efficiency and we've been able to build up significant stocks of us and European product.
Importantly, the recent news of the DEA scheduling of Epidiolex in the US. We can now look forward to greatest simplicity and asked supply chain, which further enhances our ability to ensure us patient supply continuity.
Now switching to our Epidiolex launch in Europe, which is predominantly focused on five major markets.
In first quarter, we made good progress against our launch plans.
As I've stated previously in 2020, our principal focus is on securing favorable pricing and reimbursement conditions for epidiolex in the major European markets.
In the UK towards the end of 2019, we received endorsement from nine.
And central funding for Epidiolex from the NHS, England was introduced in January.
In Italy, the reimbursement authorities have now completed the first step in that process by awarding epidiolex innovation status on the basis of clinical value.
Consequently, following finalization of pricing negotiations with the reimbursement authorities would you still expected later this year Epidiolex, we funded centrally as opposed to through regional funding, which would have to take more time to secure and could have varied across Italy.
This is an excellent result.
In Germany, where epidiolex enjoys orphan medicine status within the pricing reimbursement process. We've received a positive GBA benefit rating further the GBA also considered the value of Epidiolex 10 make today to be considerable which ensures that we're in good shape, because we entered the pricing negotiation.
In phase.
In France, the number of Epidiolex patients in the French regulatory agency sponsored 80, you early access program continues to grow and in parallel with this we're making good progress in the pricing and reimbursement process with the transparency Commission.
Finally, we're also enjoying early success in our second weight of European countries as we've been granted early temporary reimbursements in Sweden, whilst our submission is still under review.
Along with these pricing and reimbursement successes sales in the first quarter from the commercial luge countries of Germany in the UK represent a good style.
She less net sales in Q1 totaled $10 million.
This number is impart flattered by the transition of early access patients and some additional loan term prescriptions being written in March as Jim the in the UK entered Cobiz related Lockdowns.
In addition, these sales do include a contribution from 80, you an ERP sales in France, and Spain, respectively with that said these sales clearly demonstrate a positive reaction to the epidiolex proposition but positions.
The coding 19 crisis has come in a difficult time in our European launches as our sales organization, who is just beginning to establish relationships and educate conditions.
With all of our commercial and medical customer facing stuff now working from home and customer engagement limited largely to digital channels that contact with physicians is significantly constrained.
Looking ahead epilepsy clinics in Europe are heavily impacted by Koby 19, a new patient initiations of currently reduced.
This reality will mean that the return to normal treatments and prescribing practices will be prolonged and we'll continually impacts. The next few months into two commercial launch countries.
Thank you and let me hand, the call to bulk up for his update.
Thank you, Chris and good day, everyone before I begin I would like to ask my personal things and appreciation to all the healthcare and service professionals, who continue to work so hard on the front lines. During this pandemic.
Regarding our IP Dylex program I'm pleased to report that the FDA has accepted our S and the for the use of that be dialogues to treat seizures associated with two burress sclerosis complex.
The FDA has granted priority review, which highlights the unmet need for new treatment options for patients with TSMC and the PDUFA date has been set for July 31.
2020.
In Europe, we also submitted a type two variation application to the European Medicines Agency and recently received notice that this filing also has been accepted for their review.
If approved happy dialects will be shown to be effective in treating seizures associated with Lennox Gastaut syndrome for Dravet syndrome, and Toubro sclerosis complex, thus confirming the broad anti seizure effects of this medicine.
The publication of our Phase three TSC trial is currently under review by a major medical Journal.
Moving to clinical trials.
Like for the rest of the industry Cobot 19 has caused disruption to our activities.
Our clinical operations team has been using this time productively to plan for a successful restart of our studies, depending on the regional covert 19 situation.
Ill start up activities have continued and we are now in that position to initiated studies sites in the upcoming weeks.
As more clinical trial sites in various regions continued to resume a more normal pattern of activity. We anticipate our studies will return to standard operations as we look forward to delivering our clinical activities to plan.
As we emerge from covert 19, I am excited at the extensive clinical program planned for this year.
Indeed.
By the end of this year, we expect to be conducting seven phase two and four phase three trials as well as one phase four study.
We will also be conducting six phase one trials on new pipeline products and formulations.
Further trials are often the planning for 2021.
As we look ahead in the next wave of connected products.
It is clear the big some moulds is our top priority.
The Big Simos offers a near term route to market in the us and as a product for which extensive safety and efficacy data already exist and which is already manufacture that commercial scale.
It is truly a pipeline in the product with at least three target indications expected to be developed over the next few years.
US market research demonstrates that it has significant commercial potential in Ms spasticity spinal cord injury, spasticity and the broader specificity market.
As a complex botanical product. We also believe that in the big some modes may benefit from long exclusivity.
Interactions with the FDA has been particularly productive.
Wireless specificity, we are able to bridge from previously conducted positive feedback phase three trials in Europe by adding a new phase three you placebo controlled trial with approximately 450 patients and the number of smaller mechanistic studies to the body of evidence.
We had been expecting to commence this program the second quarter, but in light of corporate 19, now expect us to begin the second half of this year towards the end of 2020, we also expect to commence the spinal cord injuries specificity clinical program as well as a phase two trial in posttraumatic stress disorder.
Beyond the big some modes, we are advancing phase two programs and autism schizophrenia.
And neonatal hypoxic ischemia can sell philosophy.
In addition, the number of earlier stage programs are being ready to enter the clinic and 2021.
As we emerge from Cobot 19, I very much look forward to updating you as we commenced these important clinical trials. Thanks.
Thank you and that we now have the call to Scott Chuck or below to provide the financial review.
Thank you Volcker and good afternoon.
I'll now provide high level comments on GW financial results for the quarter ended March 31 to 2020.
A more detailed discussion of results will be provided in our 10-Q to be filed with the FCC later today.
I'll start with revenue.
Total revenue for the quarter was $120.6 million compared to 39.2 million in the prior year quarter.
This increase is due primarily to global Epidiolex net sales of 116.1 million in the quarter.
Total deductions from gross sales for allowances were 31.1 million for the quarter compared to 7.5 million in the prior year and relate mainly to epidiolex.
Gross to net performance in the quarter was in line with our expectations.
Cost of sales amounted to $10.8 million for the quarter or 9% of net product sales compared to 5.1 million or 13% of net product sales in the prior year quarter.
Moving to R&D spend.
Total research and development expense for the quarter was in line with the previous quarter at $45.9 million.
This represents an increase of 15.5 million from the prior year quarter.
This increase reflects expenses related to the ongoing Epidiolex development program.
As well as advancing the victim more clinical program and our other pipeline programs.
Turning to SGN ahead.
Selling general and administrative expenses increased to $71.2 million in the quarter from 55.1 million in the same period in 2019.
This increase is primarily due to costs related to the launch of Epidiolex in the us and the build out of our commercial operations in Europe.
This is all resulted in a net loss for the quarter of $8 million compared to 50.1 million in the prior year quarter.
Moving on to cash flow net cash used in operating activities for the quarter amounted to $18.6 million compared to 58.4 million for the prior year quarter.
Capital expenditure was $6.9 million compared to 12.3 million in the same period in 2019.
As previously announced during the quarter, we reacquired the rights to commercialize sativex in the UK from buyer for approximately $6.4 million.
The cost to reacquire license has been capitalize as an intangible asset and will be amortized over its estimated useful life.
Resulting net decrease in cash and cash equivalents for the quarter amounted to $36 million.
We ended the quarter with cash and cash equivalents of $500.9 million.
Turning to guidance.
The full extent to which the covered 19 pandemic will impact our expenditure for the remainder of the year is uncertain and at this time Theres no change to our previous guidance.
We continue to expect R&D NSG near expenses for 2020 in the range of 530 to 560 million and capital expenditure in the range of $30 million to $40 million.
We do anticipate however, as spend will be in the lower end the ranges.
Thank you and I'll now hand, the call fact adjusted.
Thank you Scott.
As you have heard Epidiolex continues to demonstrate strong receptivity in both of us and in Europe and uneven in the Covance 19 environment, we see major growth opportunities in Twentytwenty, particularly as we expand the products used to include the seasons associated with TSC significantly broadening its overall and utility in epilepsy.
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We continue to believe that Epidiolex has a long commercial life ahead.
With the addition of another patent last week, we now have 10 patents listed in the Orange book and we expect the addition of further Ltvs DS Ntsc patents this year.
These patents expire in 2035 and provide real confidence in the durability of the brand.
In addition to the use patents granted and under review we continued to progress the composition patent application process.
And while our clinical trials are on hold until the current restrictions are sufficiently east. This is a temporary situation and we continue to expect important pipeline progress and twentytwenty.
At the forefront of that listed in the fixed and Nols and exciting late stage program for GW in the us for which we expect extended exclusivity.
We strongly believe that now is the ideal time for this product to emerge into the us believe that it can meet patient needs across multiple indications in the coming is.
Indeed, we're now planning a virtual deep dive for investors and analysts on this product. So please look out for further details of this event in the coming weeks.
I do believe that GW is well positioned as any company to withstand the impacted the coated 19 situation and to emerge from this crisis, where the real momentum for both Epidiolex and the pipeline.
Again, we hope to you and your family as a safe and healthy during these challenging times and on behalf of GW I want to thank those workers on the front lines from doctors nurses to all other essential workers, who are continuing to provide critical services.
Also I am extremely grateful to those GW manufacturing employees that have made a significant commitment to maintain our operations in recent weeks to ensure patient access to our medicines.
Thank you feel time today and I look forward to updating you on future progress.
I would now like to open the call for a few questions.
Thank you will now be conducting our question and answer session and the interest of timely assay. Please limit yourself to one question.
If he would like to ask your question. Please press star one on your telephone keypad, a confirmation tone would indicate your line is and the question Q. You May proceed start to see that can move your question from the Q for participants using seeker equipment, and maybe necessary to pick up your hands that before passing the Starkey one moment. Please illegal for your question.
Our first question comes from the line of Cory Kasimov with Jpmorgan. Please proceed with your question.
Hey, good afternoon, guys. Thank you for taking my question I wanted to ask you about DEA scheduling of Epidiolex. It sounds like there hasn't been any sort of acute tailwind from this just given the administrative work that needs to be completed but can you talk about what you see the impact kind of longer term how much easier.
Does this make access for patients and providers alike, and what might mean for off label use.
Hey, curious Justin here. Thank you for the question.
I'll start and may be hand to Darren in the second so.
Just to you as you say to clarify the process, we the fed the DEA scheduling is complete at the federal level.
Different states.
Operate insight in different ways when it comes to this issue. So there are.
There will be a process over the coming month for this too.
Take place through throughout the Union, So I wouldn't expect immediate impact, but one would expect during the course of this year, but these scheduling to be actions across all 50 states split on Darren maybe compressco indication.
Yes sure high Corey. Thanks for the question I think there are few that we can we can think about one is the ability for physicians to write for longer duration of therapies.
Three months to in some cases are two a year I would also provides flexibility in some states for nurse practitioners or physician assistance.
So right prescriptions.
Then lastly, I would think I think I'd point to just the ability of prescriptions too.
More easily move from specialty pharmacy to other specialty pharmacies that are perhaps in network. So those are the long term benefits we see from.
Some of these scheduling and early feedback once this August sorted out as you know excitement across the physician base around this.
Okay. Thanks for taking the question I see nice to see a good quarter. Thanks guys.
Thank you. Our next question comes from the line of Salveen Richter with Goldman Sachs. Please proceed with your question.
Good afternoon. Thank for taking my question. So just maybe could you comment on organic growth PRM and in this current period, how doctors are looking at diagnoses and telemedicine as we look to additional add on a launch with the new indication.
Thanks, Elvina, Darren I think I'll handle frontier.
Yeah sure high Salveen. Thanks for the question.
I think that physicians now.
I think you mentioned tele medicine.
As we entered into mid March and we moved to not only pulling our field, but we started to see.
Moved to shelter for patients and physicians.
No not a lot of epilepsy centers were set up for telemedicine.
But in general I think the disease state.
Will lend itself very well for the future, but I think that and then also that from patient retention perspective, but I think new diagnoses.
There are difficult and the tele medicine in epilepsy World.
At least as they did this transition mid March through April.
And I think as we see things opening up in the future will they'll get more settled in as it relates to the ability to manage patients being telemedicine.
Thank you.
Thank you. Our next question comes from the lineup to Dana Magic with Bank of America. Please proceed with your question.
Hi, Good afternoon, guys. Thanks for taking the question and maybe Duston can you give us a little bit of color on how your expectations are that are how we surpassed our expectations for the PSC licensed and I think is a path you had indicated not to expect that same type of initial pen.
Bolus of demand that you had seen when you launched here first give indication but at the same time just based on some of the market battery third Q. Don are told US about today, there does seem to be a significant amount of physicians, who may not fully now that he.
Should we should we assume that the contribution of PSP.
Initially would be led by doctors being educated and and there isn't already a decent amount off label use to that.
No not quick follow up.
Yes, thanks to the now maybe I'll start on.
And there may be you can add amount I think it's an interesting launching healthy is a different circumstances. When we first launched epidiolex in that there was obviously no option for patients prior to the launch there is that case for TSC patients today, but but I think research and continues to demonstrate that usage in TSC.
It's not not high at this moment, so plenty of opportunity here.
I think it's also reasonable to say that as I think down put it in said in his remarks that.
Whilst we have.
A lot of the key investigators within the community that knows the product within TSC broad awareness.
C of our TSC days. There is is is not as high and I think thats actually represents a really good opportunity.
For real growth.
But it will be a different dynamic to the launch experience that we had with we've driven and ltvs.
Maybe Darren antiviral, maybe payer aspects of this as well.
Yes, I think Theres a couple of accessing that we think I wanted just to that prescriber.
Awareness in our market research when we're able to show the for those that are not aware showed on the target product profile.
It's very high and I think the focal seizure aspect of being the predominant seizure type in these patients also gives physicians a greater appreciation for.
How they may utilize this and adopted in their practice I think on the payer front as I alluded to in my prepared remarks with the priority review is when the PDUFA date at the end of July. This has really accelerated payer interactions focused on TLC and initial reaction is very easy.
Ill add to their current Epidiolex.
Policy. This in conjunction with already the utilization review that they continue to do around LG Astra vague on the other refractory epilepsies that are upon appeal, our peer to peer or getting approved. So these two are coming together very nicely.
And so we expect.
Broad coverage for our TSC upon approval and I think lastly.
Because of the called file that we currently have.
As we get closer to approval more targeting of physicians whether in the comment.
Environment.
While other its face to face on the virtual I think this type of data this label expansion.
I positions will be very eager to engage with us regardless of that covered 19 environment. So we.
As we prepare for that.
We think this is an important label expansion an important for patients and physicians.
And your expectations to be on a higher ago relative to the other chemicals.
Thanks.
The thing we do expect really the label to reflect the TSC data look, namely the 25 milligram per kilogram maximum dose so.
We don't expect the bottom of the dose range to change, though so it may lead to some additional increase.
Obviously depends on exactly how the label is written but but we do expect some increase to the Max so that.
That might have an impact certainly within the TSC population on the average to.
Okay. Thank you.
Thank you. Our next question comes from the line, Phil Nadeau with Cowen and company. Please proceed with your question.
Good afternoon, Thanks for taking my question.
Just one maybe back on uncovered and the impact to current trends it sounds like based on your commentary about new patient starts so a bit of pull through pull forward of orders in Europe.
You wouldn't be unreasonable for us to expect.
Flat quarter over quarter sales in Q2.
Yes. That's a question is that is at a fair assumption or would you like to suggest that we should be taking otherwise from Q2 sales.
And then related as we monitor the quarter.
My name is or with me a prescription trends.
Given the recent withdrawal of data from some of those prescriptions services in your opinion or the trends that we're seeing it all informative how much weight should we put on prescription data as we.
Evaluate the quarter.
As is progressing thanks.
Hi, Thanks, So for the question I mean, just dealing with the latter 0.1st I mean, I did I answer is no different to the previous.
Couple of quarters, where we've been in cautioning heavily in cautioning heavily against and.
Too much.
Interpret over interpretation, particularly of the data feeds that you get.
I see the proportion of given the there's been some reduction in the fees going into that service it's on.
It's it's and it's less no more reliable over time, so be careful of that obviously with the fraught with respect to your first question.
We know we just approaching half way through Q2, so I.
I think we're obviously very hesitant to be too prescriptive around what Q2 might look like but maybe Scott I'll invite you just too.
Share to share some thoughts.
Yes, I mean.
I think that your comment around Europe is correct I think that.
Europe, certainly has been more impacted than the us.
Specifically due the timing of where we were on the launch.
And so I think you're going to definitely certainly going to see we expect to see pressure there.
From a us perspective I think.
You know we've commented on what we've seen kind of through April.
But I would say that it's certainly not unreasonable what's your thinking I mean, I think that we we wouldn't expect anything.
Necessarily.
Much better than flat.
Perfect. That's very helpful. Congrats on our progress.
Thank you. Our next question comes from the line of Marc Goodman with SPD Leerink. Please proceed with your question.
When you say.
Got you were just talking about the U.S. specifically right.
Look I have Mahay is Justin here I think it's.
Forecast in Q2 now it would be.
Challenging I think we just we just want to caution on ex us and just say so far April has been a good month in the U.S., but we have to be mindful as down put in his script that.
You patient initiation in Q2 is just a more challenging environment fulfill I understand I'm just trying to understand how he answered. The question did answer the question for total sales. There was the answer for just the Westfield not we completely understand why Europe would be challenging given a lot of pull through into the previous quarter.
Yes, we're not expecting to see.
So at this point, we're not expecting to see revenue down in the U.S.
Right. Okay, and then I guess my question is really just about pricing. If you could just give us a sense for.
How you think we should think about pricing before the launch you gave us a flavor for your forecast, obviously, you know weight based and all that and indeed, you asked I was curious.
How that's evolved especially.
There was a price increase and then also just in Europe.
As a sense of what number on average we ship accusing just given all your conversation. Thanks.
Yes for the for the use pricing.
Our assumptions around year, one as we exited work.
We'll move we're very accurate actually so.
I think as we think about this year.
We are as Darren mentioned in his script seeing some increased use dosing.
And so that.
That does have an impact of course, though there may be some more modest impact.
In terms of.
The revenue per patient during twentytwenty, but it's I.
I think I think it's by and large there's a small price increase that that was taken as a as it has an effect as well, so a moderate impact, but but not not significant.
On on Europe.
Chris would you like to comment on Europe.
Yes, Thanks, Justin Thanks, Mark for the question.
Hi lost.
In my prepared remarks fits into that so the impact on on sort of sales evolution. The launch I think actually pricing reimbursement processes stood up quite well despite.
The background concepts.
In terms of the major markets I think we're able to me.
We are progressing pretty much on plan in terms of pricing reimbursement obviously.
What we achieved in the UK at the backend of last year in and how that fed through.
Let's start of this year and put us in a really good place. So we're seeing pricing reimbursement the processes.
Germany, France, Spain, and Italy will that stopped a month because of the agencies involvement in coated 19, progressing really well and we still need some went on track for that 70% plus sort of us to anchor range that we've talked to that so I think when you said 2020 was about pricing reimbursements and.
Actually we are making really good really good progress that we were happy with where we're dying on pricing in Europe.
Thanks.
Thank you. Our next question comes from the line on the keys with Stifel. Please proceed with your question.
Great.
Thanks, so much taking the questions.
Just on one you per year gross to net comments your comments surrounding patients.
I guess light up dosing among your patient base and then also the price increase.
Yes, what price headwind or tailwind in one Q and maybe you can kind of clarify a underlying facing growth and then just separate on your lifecycle program for Epidiolex.
You have a QD formulation and the work and and if so when might we see data on that thank you.
Scott you want to take the price impact on Q1 question.
Sure absolutely, yes, so Paul.
I would say overall on price you accrue your correctly, we did take a price increase in the you know in the first in January actually and remember with the high there was a 6% increase with the high Medicaid you should we have with our drug.
Only about half of that would be expected to read through because of the Medicaid CPI penalties that you pay gross to net in the quarter addition, in addition to the CPI panel the impact on there is some seasonal seasonality due to.
Co pay resets et cetera.
I Wouldnt save it certainly was not a head was not a headwind.
But it was I would say it was it was positive but.
Probably not remarkably positive in that quarter due to some of the seasonality impacts.
And then with regards to formulation pool, we have.
Less about moving into towards a different dosing schedule and more to do with the.
Formulations themselves in terms of convenience and any other benefits so.
A capsule.
Formulation, which is.
In in studies now.
At which would I think likely still be a twice a day regimen and then improved oral solution.
But both both of these options, we would expect to continue to be twice daily formulation.
Okay. Thanks to maybe just to clarify Scott's comments it sounds like with the price increase engrossed in that not really rise and all that might set price may have been a modest tailwind for the quarter overall was that the right way to think about marriage I understand yeah, exactly that's exactly the way to think about it.
Alright, thanks, so much.
Thank you. Our next question comes from the line of storage Ballenger with Needham and company. Please proceed with your question.
Hi, Good evening, just one question for me if one of your 2020 goals was to broaden.
Peter access to at the dialects and I think you had previously mentioned that 50% of covered lives open access and another 70% had.
Prior auth just based on indication.
Has there been any movement on these numbers and.
What are other ways, we could see this broadening payer access that you're targeting.
Thanks for the question Darren I can hannity.
Yes so.
We were exited 2019.
With nice momentum moving in with payer discussions that continue to be ongoing.
Their utilization review.
Continues to show.
Strong.
Average for LG, Astra Varian and again those other average refractory epilepsies getting approved.
That in conjunction now with TSMC.
Priority review and PDUFA.
They've now included Trc into their evaluation of the Eplex Epidiolex policy, which we we actually view as a positive because it actually reinforces the broader discussing discussion around removing or using P. Asian and.
The burden on physicians.
So we continue to see that movement, nothing specifically in the quarter I think that.
We'll continue to move.
Towards this I will say the recent kogas.
And we highlighted this in the script key meetings that.
As people transition to work from home.
Have gotten in the way some big meetings being canceled and we're working to love logistics, but we have seen those engagement pick back up.
Last couple of weeks, so we anticipate movement, there and I think that you'll see but the TSC approval updating policies.
We would look for that too.
Coincide nicely with a broad a nice broadened epidiolex policy.
Okay.
Thank you. Our next question comes from the line Esther Robalo with Oppenheimer. Please proceed with your question.
Hey, thanks.
For taking my question.
You can find.
Our guidance can you help us understand whether we should it back.
Early April quarterly spend more backend loaded.
And then also confirm whether the composition of matter.
And it's very asset in the fall there yet so thanks.
So the first question as I think was that expenditure guidance.
Scott.
Yes Esther.
I would expect that it would be more back half loaded given the impact of cover 19, obviously on our clinical trials et cetera. So I would expect back half loaded spend.
For the rest of the year.
Thank you Scott and on your second question has to on the composition of panelists. The the process is ongoing but I think I think the meaningful updates will there so now likely to be in 2021.
Okay. Thank you very much.
Thank you. Our next question comes from the line of Nina rental cars with Citi. Please proceed with your question.
Hi, guys. Thanks for taking my question I'm, just going back to the QST launched given that a lot of these patients are institutionalized either in a long term care.
Facility or a similar studying how has opened 19 changed if at all your thoughts around that launch just talk a little bit more about.
Great.
Thank you for the question.
Darren.
Yes, it was it and dark need just to clarify TSC and then you said did you say long term care.
Also just just with the Trc patients are on many of them are located in either treated animals in institutionalized door or something like that so I'm just the backed by those patients you 10, Yeah, I got kind of in hospital setting Yep Yep. Thanks. Thanks for the clarification. So I think I'll take it on on two fronts I think we.
One the.
The market research or discussion with physicians.
And even down to the patient in the TS Alliance, which is a pretty strong advocacy group, they're excited for new approved products in the space. So I think that.
You know our ability to upon approval cigar and educate physicians around the data will spur.
Them to evaluate patients so that they currently to treat and how to incorporate epidiolex into that and to that I think that also in this.
It was you mentioned this curve it environment, we're preparing for for both scenarios and and again I think the data is compelling enough.
The unmet need is there the Selby I think willing to engage and understand the data dependent upon that the coven I think as it relates to the long term care segment.
Thats been extremely hard hit.
But as I pointed out Weve continued through covered to advance. This initiative. Our account team was in place in the early part of the first quarter.
We've had discussions with some of the large buying groups and went into an alliance with one of the largest.
Which provides us a platform to educate them around epidiolex and within the current indications and then in the future around Trc, So I think that.
By the time, we get to the PDUFA dates and approved.
We'll be ready to launch this label expansion.
And really be agnostic to the site as long as we're able to engage with physicians and particularly lawn care long term care. The pharmacy audience I think will be good shape.
Great. Thank you.
Thank you. Our next question comes from the line of Yatin Suneja with Guggenheim Partners. Please proceed with your question.
Hi, guys. Congrats on all under the results just a couple of questions will be comment on the level of penetration you might have been too in the other one love Gospel prison population. What this current split might be for adult voices pediatric and then I have a quick follow up.
Yes.
Yes, and then just to clarify it was the penetration of within DS LDS patients as well as the adult pediatric split.
Yes.
Okay.
As Darren.
Yes, I think so adult pediatric split remains roughly 55% pediatric 45% adult.
And without any specifics, we still think theres a lot of opportunity LG. After that I mean, we can still say were less than 50% penetrated in both those patient populations.
So plenty of growth left out within the current on label.
Indication.
Got it with regard to the gross commence could you comment on.
The full year gross to net income for percentages for the sort of model given that we wanted they tend to retire this month.
Well 100 so.
Thank you.
Yes, Scott do you want to address Chris Smith.
Yes, Yatin Hi, Scott.
Yeah, I think well when I would recommend it to ones probably going to be a fairly good proxy.
No I mentioned some of the seasonality around the co pay resets on you may be aware that we waived co pays for our patients.
Through September 30, so for at least the next two quarters.
Without giving us specific numbers that Q1 would be a good proxy on the gross and outside.
Thank you.
Thank you. Our final question comes from the line of David Tobacco without the core capital. Please proceed with your question.
Hi, guys and congrats on a quarter or just a couple of quick questions here. The first as I think Darrin in your prepared remarks, you mentioned retention.
Is quite well among your patient base I'm, just wondering if you could quantify that a bit later.
David This is Justin here I'll give down a retro second we don't quantify.
Metrics around that so I think.
You can take Darren positive commentary around.
Retention is the continued continued.
In terms of the metrics that we measure in time linked and we continue to be pleased with how its going.
Okay. Great. Thanks, Justin then my second question is around to another one of a gets your prepared comments. So your next leaving prescribers in the west the cool.
Thousands on health care professionals I'm, just wondering if you think when you're going down the list now.
Additionally, each cps and given that they may not be in the specialty care setting do you think the call good could have any potential impact on two how these.
Of 1000, HCP as will the see about the dialogue.
Darren would you like to address that.
Yes, sure Hey, David Thanks, Thanks for the question, Yeah, I think you know.
Give you a little flavor on on these physicians there there are more community based and more general neurology may typically see more adult patients, but I think it and it has set a really good foundation for us in going into that that next level now I think the one thing that we've articulated and everyone's facing is you know as engagements.
You know, our but but one thing that we've factored is.
Where we are able to to engage in person.
Is this kind of.
First obviously, but in this even in the second tier.
We are we can time with these physicians.
There were really robust conversations and we're pulling out a few things one as you know the thought process on prescribing by these physicians.
You know what their current patient types are within their practice.
And then how do we how do they fit epidiolex more broadly into a into their practice now that's been a focus of ours and then with continues to be and again, while the engagements have dropped off when we do have them. These are the type of conversations we're having so I think it it will set a good foundation for us once we.
Can engage with our physicians a much more on a on a broad basis, but I think they're leaving to really some nice end up conversations.
Very helpful. Derek Thanks, and congrats again on the quarter.
Thank you we have reached the end of our question and answer session I would like to turn the call back over to management for any closing remarks.
Great well. Thank you again for joining us it's been a.
Estimating start to.
Twentytwenty as we look to navigate this crisis, but I think we do feel that GW is well placed as any company to emerge from this crisis with.
Significant growth prospects rapida likes in us and Europe, a pipeline and several important studies ready to execute strong balance sheets, and ER and important leading strategic positioning can happen with sign. So we look forward to the rest of the year and.
And in particular, please do look out for further details about our mimic the big some old event that will be providing more details on in the next few weeks. So thank you stay safe and thanks again for your attention today.
Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.