Q1 2020 Earnings Call
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May I have your name, please?
And you're with IRA.
circumference
And conducting a face-to-face meeting with the FDA this past February. We've been compiling all of this study reports the documents and files and preparing all the modules for submission the agency
Looking ahead. We remain on target to submit the completed completed NDA including the clinical module by the end of this quarter.
We will make it known when the miles when that Milestone has been achieved as it also sets up the timing for us to know more about the review timelines for vocals foreign as part of the day and under the fast track status previously granted debacle. Sporran. We're seeking priority review of the application and assuming and assuming granted and if we complete the job by the end of this quarter that was set up a new Ford eight during the first quarter of 2021 and assuming approval a plan launch of Iraq was boring to take place shortly after.
As an executive in our industry. It's rare very rare in a career that you're lucky enough to be able to bring a drug to Market where there's no FDA-approved Solutions and here it or any or we look forward to making meaningful differences in the lives of these patients the evolution of this organization over the past year has been well executed by the team and judging by the quality and breadth of experience. We've been able to add to the boar the commercial leadership team and throughout the organization. We have further strengthened our commercial capabilities and know how to successfully took place foreign with a world-class team and board of directors.
Last month, we we announced him.
Walter chairman and president and CEO of Verizon Pharmaceuticals that he had joined the board of directors here at Iranian. Tim is an industry veteran that brings a wealth of commercial and strategic experience that complements our bore as I introduced you all quarter Max Cloud joined us as a chief commercial officer and he will provide his initial observations about the ongoing commercial preparations and build work towards launching box was foreign on today's call lastly and in some ways most importantly we've brought aboard a new Chief Financial Officer Joe Miller who's with us today and after Twenty-One years of service including those that I said Technica. Anarania, Dennis has decided to retire I can tell you the dentist has worked tirelessly tirelessly over the years in sacrifice greatly at times to bring back was born to this point and we are truly grateful for everything. He's done for us in the company dead.
And while Dennis is Consulting for any to ensure a smooth transition, we're hopeful that he can enjoy his retirement and get back to travelling the world and enjoying the best that life has to offer Joe Miller our new CFO joins us a 20-plus years of Public public and private sector career in the pharmaceutical industry, which will come in handy as we look to launch. It was born here in the United States over the next year.
We also established in the first quarter our us commercial hub for a rainy in in Rockville, Maryland. This Hub will serve as a launching point for vocalist born in the US which we hope to return it shortly once things return to normal. So with that brief overview upfront, I'll turn the call over now to dr. Neil Solomon's to review the status of a new drug application for a club Lauren and our other development programs Neil. Thanks pizza and good afternoon everyone as Peter mentioned during the past few months. We've had heads down focus on writing and finalizing the box for an NDA that we oughta Missing full to the FDA by the end of this quarter.
Since we lost chance it in March and after we had completed the face-to-face meeting with the FDA in February, we have made significant progress to date. We've already submitted the non-clinical month to the FTA back in March and in April. We submitted the chemistry manufacturing controls module. We are working now to finalize the other necessary modules including the clinical. I am trying to submit everything to the FDA by the end of the quarter as part of the filing as Peter mentioned. We will also request priority review for vocalist boring as it was previously granted Fast Track designation by the FDA.
In terms of presenting the results from the Aurora study. I'd like to remind everyone that doctor Keisha Gibson did present the first results from Aurora back in March in the nkf Virtual Office for meetings. I'm pleased to report that this summer. We also have presentations at the virtual era and you'll are conferences stay tuned for more details regarding the date and time of presentations. Furthermore. We anticipate having a presence at the four conferences including in November.
another
Custom you feel quite often is regarding the primary publication of the Aurora results. We just wanted to let everyone know that you can submit the primary manuscript review later this year and let's have them know where once it's published.
In the entire or any other team it has been incredibly busy and exciting time and I couldn't be proud of my team for that continued execution during these interesting Global timer.
Switching topics fsgs expertise study as a recap for those who haven't been following are developments here closely. This study was initiated back in 2018 a name to enroll biopsy-proven treatment-naive primary subjects into an open-label exploratory study of boring fsgs is an ultra read it back to you around 5,000 new patients and nearly in the u.s. Due to difficulty in recruiting the patient population meeting Strode study criteria in the spring and summer of last year 2019. We open additional sites in the US as well as in the Dominican Republic furthermore. We amended the original study to allow inclusion of primary fsgs patients who had previously been treated with a limited amount of corticosteroids.
Unfortunately, despite these efforts and enthusiasm from the sides enrollment regardless of covid-19 has remained slow. We will continue to thank and support the small handful of our patients fsgs patients that were or are currently in the study. What we've learned is that importantly they've been no safety signals or tolerability issues that were noted in the study said the sample size is too small to make any conclusions regarding efficacy at this time. Therefore we have decided to set to invest our capital resources in other ways. And as a result we have preparing to explore box was born in other protein Uric kidney diseases including potentially pediatric nephrotic syndrome or adult idiopathic membranous nephropathy.
These additional indications are also produced in the same manner described in our 03 six patents, which also includes Ellen and fsgs service.
Giving us confidence surrounding the zero three six dozen patents. We are currently assessing broad appropriate communities is for clinical and Commercial feasibility with our Target of announcing club for the expertise study later this year the intense current workload with the NDA permit owners will be forthcoming next time. We were report called the results on the way out in front the ordering phase two or three studies evaluating Bacchus born of solution or Bob's in the dose-ranging study compared to vehicle remains on track despite the other location of this and our entire clinical development program to the FDA guidance to conducting maintaining data Integrity during the covid-19 pandemic.
based on
Discussions with the clinical trial sites and cro We believe We remain on track to report top-line results from this Phase 2 3 clinical trial during the fourth quarter of this year off and was that brief update on the clinical of Regulation from our pasta cool over to Max.
Thanks, Neil and good afternoon everyone. Thanks for taking the time as Peter mentioned. I've been part of the team for two months now and I'd like to take this opportunity to share with you my initial impression and focus what has struck me the most as I continue to learn more about lupus is just how devastating Ellen is as one of the most serious common and life-threatening complications of this disease these patients face significant morbidity and mortality with 10 to 30% of patients requiring dialysis just fifteen years after diagnosis.
When you take a step back and you look at this disease through the lens of all the stakeholders affected by there's a clear and Stark unmet need from a physician perspective doctors clearly expressed the need for more effective therapies, which achieve a quicker time to response as well as minimize the use of corticosteroids like prednisone.
Here's ultimately want to avoid the costs associated with end-stage renal disease including dialysis and or renal transplant.
Based on the Aurora Inn, Aurora study results a vocalist foreign-based regimen for a line clearly demonstrated the ability for the regimen to defend the kidneys by achieving both an early and sustained re no response for a greater proportion of patients. Nevertheless. Ellen is a relatively rare disease and we recognize barriers to ensuring local sports adoption wage based on our internal market research a few observations first. We see variability in treatment goals monitoring protocols and the remission or response criteria employed by practitioners.
We see variable experience and understanding of the current treatment approaches and also some inexperience around a multi targeted treatment approach lastly. We recognize the challenge lot launching vocal sporting during a time where covid-19 packs stakeholder access as we flesh out our capabilities. We're focused on implementing a rare disease model has the path to ease his vocal vocal Sports potential. This guy's our vision for building out a world-class commercial team and the phenotype of folks that were bringing aboard particularly. We're leveraging those took a deep expertise in the ecology Rheumatology lupus and other autoimmune conditions.
Second we're hiring a season team that has successfully executed on the launches of products across rare diseases as well as broader reader, you know indications globally.
over the
Last 60 days we've made great progress toward this goal. We've added key leaders to our existing commercial team in sales marketing Market access and operations team. We've also added new capabilities in professional relations thought leader engagement patient. Advocacy commercial supply chain and patient services across the board. We've been fortunate to be hiring industry-leading professionals and adding support staff to build out our immediate team.
Just for some perspective our current commercial leadership team has on average twenty four years of commercial experience nine of which in Rheumatology eight of which in the froggy plus team has been seasoned collectively through seventy-two launches.
So with that update again, I'd like to say what a pleasure. It is to be part of this team, and I'm looking forward to providing you further updates from the commercial perspective to all of you later this year. Thank you. May. I pass it over to Joe for a review our q1 financial results Joe.
Thanks Max and good afternoon all as of March Thirty 12020 Arena had cash cash equivalents and short-term Investments of 286.1 million compared to three hundred six million December 31st, 2019 net cash use an operating activities was 22.7 Million for the first quarter ended March Thirty $1.20 compared to 13.1 million for the first quarter ended up 3119. The company believes that it has sufficient Financial Resources to fund its current plans which can include conducting its ongoing research and development programs completing the NDA submission to the FDA. I'm conducting pre-commercial and launched activities manufacturing and packaging commercial drug Supply required for the launch the continued build out of our corporate supporting infrastructure and fund its remaining working capital needs 321. The company reported a Consolidated net loss 16.5 million or fifteen cents per common share for the first quarter ended March Thirty $1.20 as compared to a Consolidated net loss wage.
12.4 million or 14 cents per common share for the first quarter ended March 3119 the loss for the first quarter ended March Thirty One hundred twenty reflected in non-cash reduction of nine point five million in the estimated fair value of derivative warrant liabilities compared to a reduction of one point seven million in the estimated fair value of derivatives derivative warrant liabilities for the first quarter ended March Thirty, 1-19, the derivative warrant liabilities will ultimately be eliminated on the exercise or forfeiture of the warrants and will not result in any cash outlay by the company the outstanding warrants expire on December 28th, 2021 the loss before the change an estimated fair value of derivatives warrant liabilities and income taxes was 26.6 Million for the first quarter ended March Thirty $1.20 compared to 14.5 million for the same period in 2019 R&D expenses increased to 13.8 million for the first quarter ended March Thirty $120 compared to ten point six million for the first quarter ended March Thirty One Hundred Twenty Ninth
the increase in these
Fences primarily reflected higher costs related to the preparation of the NDA submission and the related supporting activities the ongoing boss Audrey phase two or three dry. I trial the Aurora to extension trial and the expansion of the medical Affairs team to support the launch apocalypse foreign non-cash charge the R&D also increase to 1.2 million for the quarter ended March Thirty $1 to $862,000 for the comparable period in 2019 reflecting the hiring of a significant number of Personnel in 2020 and an increase in the fair value of the stock options granted due to the increasing a company's Share Price Corporate Administration and Business Development expenses increased to 11.1 million for the first quarter of 2020 compared to three point nine million for the first quarter of 2019 season passes included the expansion of the commercial team hire Consulting and professional fees Insurance costs and Personnel compensation costs as the corporate organization build-out continued in the first quarter of 2012.
Non-cash expense charge the corporate Administration and Business Development also increased the 2.3 million for the first quarter ended March Thirty $1 compared to $740,000 for the comparable. And twenty nineteen reflecting the hiring of a number of significant Key Personnel in 2020, and an increase in the fair value of the stock options granted due to the increase in the company's share price in the corner with that review. I will pass it back to Peters for some concluding remarks Peter.
Hey, thanks, Joe and before opening up to Q&A. I just like to say that we are in your excited about what's on the horizon. If it's not obvious, we're keeping our heads down focused on filing the completed n d a former foreign furthermore. We're working to build additional value for vocals Forum with the boss dry eye syndrome program by completing the Audrey trial and Reporting those results later in the year based on our continued enthusiasm and confidence around the r36 patent. We are now looking to redeploy our resources and evaluate box was born and other kidney diseases Way Beyond fsgs and moving beyond this altar rare condition and into larger more commercially viable indications with a strong balance sheet of $286 million at the end of the quarter. We are adequately funded through 20 21 and can confidently execute on our development and Commercial launch plans off.
Thank you all for your attention today, and the team is here to take your questions. So at that operator, can we please open up for Q&A session?
Absolutely, ladies and gentlemen, if you would like to ask a question at this time, please press star one on your telephone keypad confirmation to indicate that your line is in the question. You may press star two. If you would like to remove your question from the Q4 participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keys. We asked if possible. Please leave yourself to one question them for additional questions.
Our first question comes from the line.
Allison Youngblood Cantor Fitzgerald, please proceed with your question
Hey guys. Thanks for taking my question and congrats on all the progress that you may have recorded. Just just a couple for me when I wanted to just kind of get any kind of feedback that you kind of heard from, you know, the Ft of the choices you had. It sounds like everything should go to the finish line, but just if anything notable popped up there and then second. I mean, I hope the drug is approved relatively quickly after you file and you may be launching hopefully in early twenties, and I guess you know for your new commercial lead and and for Peter, maybe just give you talk about how you think about targeting docs in the world of Covent you guys preparing to kind of think about something virtually. I know it sounds a little early, but I guess I feel like all companies are sort of having to think about multiple scenarios of losses or the next twelve months. Thank you.
Okay. Thanks and hope all is well on your end. Let me let me start with the first question cuz I think it's the simplest feedback from the FDA as we said on the last call from the February 25th interaction and up to this point has been I guess Neil you can jump in here if I if I miss anything but it's been it's been on target. We haven't heard or seen anything that has been a surprise to us. And and actually as we said when we met in Rockville all of this locked down it was quite a long meeting and we were we were very happy with the result Neil anything you dad there. No, I would not care what you say pizza. It was a it was a Collegiate meeting. We met many of the medical reviewers. There's most of whom have actually been following this program since its Inception in 2012, which is great news for us the familiar with us familiar with our story. I'm familiar with what they're about to receive, you know wage.
They also reiterated that this is only based on the one-year efficacy risk-benefit, which you know, we believe is is a very very positive. So yeah, very very long and onto the second question, which I'm sure this is the standard for just about everybody today is you know, how do you launch a drug in a world too? Covid-19? We're all we're all learning that as we go here. I sit on multiple other boards outside of our any of that have commercial products and obviously some of that those learnings as we're not going through the current situation can be transferred in we're also watching other companies that have drug approvals during this time to see what they're doing during a lockdown scenario. But before I I asked max if he's got any comments, I would tell you our current planning is basically three scenarios one, which is a a normal drug launch, and I don't know that number.
Prison new a normal drug launch anymore. There's a new world we're entering into so we what I mean by normal is that would be an unrestricted non lockdown assuming a choice. That's how we how we would approach the market. The second is a full lockdown scenario, which would mean that that recommendations come out that that basically would put us back into the same scenario. We sit in today if that would be if the virus reappears or a new strain of the virus reappears and states and the and the nation and countries quite frankly decide to lock down again, and the third would be sort of a a limited scenario where you know, the viruses circulating and maybe doctors offices and and take care facilities have less access. We're planning on all three scenarios and we're just trying to learn as we go but but plan a I will tell you is launched in a normal World scenario and birth.
Towards that objective.
And but but but hopefully it leaves some level of confidence that we're thinking about it on multiple different fronts Max. What would you what would you add or build on with that? So what I would add is that we are clearly building are virtual capabilities so will be enabled virtually irrespective of What scenario we launched under and then also I would I would I like that, you know in terms you talked about physician targeting the you know, the disposition of physician is is what you see what you see also in other rare diseases where you see a a number of small number of Physicians, it actually see a large number of patients and then you see most Physicians that see few patients and so we're clearly taking that into account in our targeting and deployment as well.
Great. Thanks for all the color and glad to hear you guys are doing well.
Thanks, Lacey.
Thank you. Our next question comes from Ken Cacciatore with Towing. Please proceed with your question. Hey guys, congratulations and all the management and board editions question for you is on the intellectual property. I was just wondering from a Layman's perspective. Can you just talk about what was surprising about the dosing of Aquis born and in these studies that allowed you to secure that patent office, and then would you anticipate those dosing instructions to be included in the label? Thank you.
Yes, so let me take the latter part of that first and then I would ask we have two folks on who who because their founder of company and and one in particular it was was intimately involved in in the whole application for for the Pat and Etc. And that's Mike Martin our chief operating officer. So but but I think the the last part of the question first is is probably the most important Our Hope would be that that we would see disappear in our our indication usage section of our our label, you know, it was how we we did both of our trials and that this is our egfr dosing protocol that was utilized in both our phase two in our phase three years as I've said too many investors along the way I think we we spend a lot of time with the agency over the the time we've been in the industry and you know a lot of time you're trying to modify the name.
That the way you do your clinical trial appears in your actual label our hope is that we we get what what we believe we will is is you know, get that dosing that we had in the trial appear in the label and you know most of the time that's the way it works out. So I think we're we're confident and hopeful that it appears in in the indication and usage section of our label a lot to see as we go through those negotiations, but but it's been a rare occasion of my my experience in the industry where how you do your trial and how you suggest or mandate that that the drug bhi Dost in your trial does not appear in your your message an indication section with that. The first part of the question was what was unique on the patent front and and and why the observation was unique and I would ask that and we can start off with Mike Martin, but if Mike wants to move to Neil, that's fine to just to go through a little bit more of that Mike. Yeah. Yeah, no problem. So so the long and skinny of it off.
is basically what we've done here is we generated intellectual property with respect to it personalized treatment regimen and we know from past experience with the drug and other
See and eyes that some patients are much more susceptible to those short-term hemodynamic effects of Castamere Inhibitors, um, and this causes kind of a a scrunching of the of the of the real life and thus a corresponding decrease in each of our it's it varies from Patient to Patient. But what we found is that if we can monitor these patients early on in therapy drop the dose manage these short-term options and new GF are and keep them on therapy the actually in both Aura and Aurora have shown to have better complete remission rates at six months and twelve months and that's exciting and that's unusual in that you would expect a lowering of a dose of this particular medication to generate a lower complete remission or partial remission rate. So that's the surprising result and I will find you that you can review the prosecution history. It's available on the USPTO under public pair and you can read how the response came out from the examiner and dead.
And what kind of data was presented to kind of basically Define or determine? This is patentable subject matter.
I'll leave it there.
Thank you, honey. Anything you Dad or I think we probably have it covered. But let me just check.
No, I think that's everything. Thanks Ken anything else?
So, that's it. Thanks so much. Thanks again.
Thank you. Our next question comes from Joseph Schwartz with SV. Please proceed with your question.
Great. Thanks very much. Hope you're offering well, just to continue some questions on the label. How do you anticipate the indication will look in terms of dead things like line of therapy induction vs. Maintenance and then how many patients in the United States do you think would be covered by however of those things are structured?
Hey, thanks, Joe and Neil to build on this with me, but I will tell you as I said an individual one-on-one with investors. We're in the process right now with Max joining and bringing his leadership team together on to do what most would expect of a commercial team is to really sort of nail down through patient flow modeling exactly where patients show up how they show up who they show up to rheumatologist nephrologist, you know, and ensure that that that we know the right call points within them all points is also ensuring that we have the right message delivered to those Physicians and and to ensure we're identifying the right patients. So we're in the process of looking at all that right now through research. I'll ask Neil to maybe just comment on on what we're we're aspiring to in the label and I think from that that answer you can probably derive at
least what that patient population could be but I do think it's going to be important to really
let's see where the label comes out and for us to then come back towards the latter part of the Year and be more definitive with you about you know how how we think we need to attack the call Target in terms of the physician base it's out there and then on top of that you know exactly what our our individualized message will be to identify the right patients and I think that'll be able to give you almost a pinpoint accuracy as to how many patients might be out there will also learn more as we look at coding and we actually get out there and start profiling docs and patience more commercially but Neil you want to try the label side of the equation yeah I'll make a start I mean I mean it's very important when we look at the label to see what sort of patience be enrolled into both our studies and actually we very deliberately made a made an effort to to to enroll of a broad range of Lucas and practice patience and such as the extremely active new onset even treatment-refractory patience to enroll so the target label for us is actually just the dog
Treatment of lupus nephritis and that's what our current position is. Obviously. We'll see how that pans out. But I mean, it's probably best to hand over to either Max or dead. It's a bit to build on that a bit more. Yeah. I mean I'll just I'll put a bow on it because I don't want to overly speculate on where we're going to end up on the label. But but what you should be hearing is we we we enrolled a very broad range of patients in our bar ask will be what we did in our trial. So we'd say go back and look at our entry-level criteria for the trial and I think they'll give a good idea where we're trying to arrange into and as I said before cuz I don't want to you know, put Max to on the spot to get into the details of it. We're in the process right now of really refining that into a a commercial table in a commercial message that will once we once we have a label be able to go out there and give more more direct feedback to the investment Community about exactly how many patients we thank God.
An opportunity could be but just to recap what we've said publicly as we think there's somewhere between four and five hundred thousand, you know, Lupus patients that are out there and that somewhere around 50% of those patients, you know have have lupus nephritis. And again, this is cyclical disease. So, you know, they they can and you know of that patient population a talking somewhere in the range of 2 to 250 thousand patients as our estimate and then of that what will be accessible to us. And when I think there's a label component to that page then I think there is a marketing execution component to it. We look forward to telling you more as we come to the back of the year and Joe that that round it out for you. Do you have another file. That's very helpful. Maybe just one on the dosing um scheme. Um, yeah, it does it require Physicians to do anything that they don't already do age.
in the normal course of treating lupus nephritis paid
And how how intensive of a of a dose adjustment scheme, do you envision Physicians having to be back in the real world? And and is it is it a big ask for them? Yeah. I'm going to ask Niall to build onto my front part of this question. But listen one of the benefits that this project has has is the ability to be to be flat Dost. So the last thing we would want is is a a patient Taylor dosing protocol protocol that have been put in our trials that actually may need to add a complexity so that it became something that that that couldn't be flat Dost and needed to be monitored like like some other first-generation CN eyes. So I think the short answer is docks are doing this already and tailoring a dose. They're taking these types of reeds already and tailoring the dose won't be anything that is additive to their normal birth.
Treatment their normal monitoring of the patient Neil fairly accurate or or am I off Target on that some pretty much it, you know, when a patient's our first president put on these drugs. They're in the doctor's office when they have an active flare very very frequently and the frequencies reflected in our study protocol, which is pretty much every every wage every two weeks in the first couple of months and the dosing the thing that triggers the dosing is egfr, which is routinely measured is cheaply done. It's basically a serum creatinine test done everywhere not just a specialist centres. You've done a local Labs everywhere in the country and that can be plugged into a very very simple formula return to the doctor or patient the same day off, you know within minutes. And so we we feel it's it's accessible is simple, but it also it's an informative as well.
Very helpful. Thanks for all the color. Thanks Joe.
Thank you. Our next question comes from Justin Kim with Oppenheimer & Company. Please proceed with your question. Hi, good afternoon everyone and thanks for taking the questions and hope everyone is staying safe. Maybe a little more specifically about the real world patient population. Do you have a sense on what the allowable egfr status range might look like practically speaking. Um relative to what the heck we saw for Aurora was and what were the results of Aurora including? Dr. Gibson presentation shape that thinking I think it's a great question being a treating nephrologist and really knowing that our current market research probably isn't drilling down on that or is drilling down on that. We don't have that data for you yet. I would turn that to Neil because he's been around these patients longer and maybe has a practical way of giving you some guidance on that meal.
Yeah. No, I mean it is a good question and we put a floor of you Jeff 4:45 clearly some patients have a much more more advanced and sicker patients have a lower wage. But I think just it's probably worth considering that when we started screening for this study. Very few patients are actually excluded on the basis of of that egfr and what we did permit wage. They had allergies your father and 45 and they had a pulse of steroids and that you have recovered they're still allowed in. So we you know, we believe it's a very very good real reflection off the the patient population you having proteinuria flares is certainly does exclude the ones who who are kind of very far gone who perhaps should shouldn't have see a nice but also perhaps you need to think very carefully about this or therapy they should have as well, you know, and and you know, it is possible that within that the future date we could, you know move into some of the more severe patience in the faith.
Program but that's for discussion between us and our commercial colleagues. And I think the last thing I would add.
That just is like listen as a as a, you know, grown up commercial guy here. I what's exciting to me is the prospect of being able to go in and engage a physician both through our medical effects are clinical organization, but all the way through to a sales representative where the conversation is not just starting at here's my drug years features and benefits of it. You're actually talking about the way these patients were treated the treatment Paradigm. How are drug fits into the treatment Paradigm? And I think this patient-centric dosing that we did the fact that there was a a steroid reduction protocol on the profile all give some element of challenging the individual physician-patient the individual physician treatment of the patient the entire Dynamic of the treatment Paradigm itself off. So with the Max's comments on the type of people commercially that we're trying to court and that we are successful according right now that experience and that engagement and Rheumatology in the fraud.
Gene experience in those two areas with that customer base is going to is going to pay dividends if and when we get the drug approved.
Give another question Jason. Yeah, maybe maybe just one then, you know in light of the clinical development strategy update. Can you just talk a little bit about the additional opportunities that were just mentioned on the call and and sort of mechanistically how they may benefit from block list Florence action on-site. Yeah. I the first thing I would would and then I'm going to ask Niall and do you know anyone else who may have a comment on on the call? I want to reinforce to invest your something. I've been saying all along. I think that you know fsgs, I think the company I work here before I came on board and I think we did the absolute right thing going after your kidney disease where you know patients currently in to some degree or getting utilization the first generation as we know that today and it made a lot of sense. I can tell you just from an investment standpoint that this was sort of an off npv or irr body of work that the that the
But he was going down. It was an exploratory study. We knew from the outset. Our estimate was that there were about four to five thousand patients here and that if we were to get the drug approved, um in lupus nephritis that the the pricing of the drug would be would be priced relative to the lupus nephritis Market what we believe much larger Black Market opportunities, so pricing accordingly and and the folks in with fsgs, we get the benefit of that but this wasn't a high return area for us and our burn on a monthly basis do the work. We're doing didn't justify continuing to to operate here when we go and operate in other areas where the return could be potentially better and the impact on patients could be better. So Neil mentioned a few I met ask him just to comment on the the maybe technical rationale on a few but maybe not goes so deep because we'd like to age
Back to investors and say specifically. What are those Targets in short order meal? Yeah. I mean, I think you actually touched on it with the word post high top of you. I think that's what most of these these conditions have in common and they're a good Target for customer only inhibitor. So, you know mechanistically disorder poster-sized leading to proteinuria, you know, and also that can change that is covered by biology or three seats patent, which actually the diseases that are mentioned as examples when they were not Final on that by any means I'm are covered by that and we look into more detail obviously disease that that there may have off label use of seeing eyes or very very high doses of steroids are a simple Target for us from a commercial perspective and we will report back and with those indications with Russian are both clinical and scientific and also commercial Russian all around those
Okay, great. Thanks so much, everyone.
Thanks, Justin.
Please proceed with your question.
Hey everyone. Thanks for taking my questions and congrats on the progress with the build-out of of the team in preparation for the launch a few questions have all been asked but let me start first with Neil if I could instead of fsgs, maybe a question on the vast program clearly that is progressing. Well with your target remaining for the fourth quarter. Just wondering if there have been any in a mental, um, uh, uh learnings or takeaways as you continue to to to treat patients enroll patients anything anecdotal there would be helpful.
Thank you. Next question comes from the line of what H C wing?
Yeah, Neil Jump Right In it now. Sorry.
Yeah, so did you please go ahead yeah. Yeah, cuz it seems just to me by name Ed. So no, I mean, you know, I say blinded or masks studies who say in in in uh phenomenology. So so we have you know, other than the fact that we receive top-line safety which wage so you can imagine in this world population. It's not a systemic disease and it's very good for the report. We don't hear a very much and you know, I'm not really at Liberty to disclose any of the other information. We have teams looking at the data from a day to clean perspective, but certainly there's there's no interior more stubborn or early analyses going on in this program.
Okay fair enough and then perhaps a question for Max. Excuse me. You had mentioned that uh, small handful of barriers to adoption and I was curious if you could, you know, given the brief time you've been at the company so far perhaps Jeff thoughts about how you are thinking about intending to address those and and where you see the sort of greatest opportunities for improvement.
Thanks.
Yes, I jump right on that. Thanks for the question. Yeah, so, you know the beers that that we see our our barriers that we you know have seen them in other rare diseases. And and again it's it's from this, you know, it's the reality that the many Physicians are only treating a handful of patients. Right? And so so the month so really the again I mentioned kind of imply applying a rare disease model which basically, you know means that hiring exceptionally talented world class people in the field that act to educate and you know and and promote our messages in terms of the identification and and and treating the right patient and you know Peter I think eloquently stated what what that looks like and you know again it's dead.
You know, it's not rare disease parents.
I'm of in sales and and and just said just add you know, I think that that the barriers that we have in the ones that that we were identifying early age to me. If done right with the right people with the right message or write label. We have the right drug. We believe it creates a great opportunity to sort of change the entire treatment Paradigm in the way tops are thinking about this disease are trial on the structure of our trial predicated that and now you know, we've got the negotiation we need to go through with the agency, you know, hopefully we gain approval in the early part in Iraq and you know go out there with the right message with the right people and just and and be able to really shift to the way patients are treated. It's a really cool commercial scenario though. I'm excited to to charge down it and I think it's why we're having such it's one of the reasons why we're having such success in recruiting. Hi talented people.
Great. Thanks for that. Then one last one for me. And this is for Joe Joe. How should we think about sort of the Cheesecake Factory of of objects? Especially the sg&a for the remainder of twenty-twenty given obviously lots of moving Parts across the three therapeutic bath bombs.
Yeah, I think if you kind of think about operating expenses across the board, obviously, they'll be some continued ramp up in sg&a as kind of we build out the infrastructure obviously q1 wasn't fully Birth by the full sg&a cost. So we'll have a slight increase as you kind of look out into the future quarters associated with that. Obviously, the remainder of the year will have quite a bit of Indian a preparation costs may have somewhat of a shift between kind of your your pure development costs into more of your kind of CMC and and and uh cost but overall, I think your your R&D expenses should remain pretty consistent with a recorder. I say if you use Q one is kind of your benchmark, you may have a you know, a slight increase in the coming quarters, but you could probably use q1 with with a little bit of an uptick to kind of project what the remainder of look like. Okay, great. That's helpful. Thanks again guys.
Thank you.
And obviously for everyone else on the phone because that question I think is sort of leading to the projection for we'll hope to be able to you know, as we get closer to a potential approved and label give better guidance in terms of what the future looks like after that point. So more to come
Thank you as a reminder ladies and gentlemen, if you would like to ask a question at this time, please press star one on your telephone keypad. Our next question comes from Roy Croft. Please proceed with your question everyone congrats on the progress and thanks for taking my questions. This is a follow-up to a prior question. I was wondering if if you are if you're doing market research, and if you have a good sense of how much off label use in non-locals to practice indications, you might get and then what indications that it's most likely to come from.
Yeah, I mean obviously.
We we would never project, you know, any spontaneous sales we might get in the market. I think some of that is just going to come down to Physicians comfort and not wanting to look at the drug. In other areas. You know, I think there's there's a well-worn path for that. I mean I think anti-tnf is a really good example of when you have a a new immunosuppressant if people feel comfortable and get comfortable with they start, you know tinkering with it and a lot of different areas, but obviously we can't comment on or speculate on any law able use nor would be in any way promote to it. So, um, you know, but but I think there's a host of areas. It's the N eyes are used today and I think you could use that as a way to look at how Doc's might think about it, but again reinforced not anything that we're looking to do in terms of promotion not anything we're encouraging ducks to do unless we actually do research and development.
I work there.
Understood and then I think on the fourth quarter call you said you could provide more on pricing details in the near-term. I just wanted to check in and see if if you could provide your latest thoughts on pricing God. Yeah. Yeah Max and his team are doing all that work as we speak. So, you know a whole, it's so labeled driven to that that you know, we've not given any any guidance here yet, but we look to in the future, you know, if we thinking about a first-quarter launch the best Target would be around that time. And if we, you know get get, you know potential launch that is and if we get more sensitivity closer will as we've said we want to give more details of the general launch plan as we go closer to Market towards the back half of the years, you know, if we have any any better range will come back at you. Obviously, there's also Market sensitivity around that not just you know, in terms of valuation, but also the competitive set out there.
So we're going to keep that as close to our best as as long as we can, but but appreciate the question.
Got it. Okay. Okay. Thanks for taking my questions.
Thank you. Our next question comes from Tom Bishop B. I research please proceed with your question. Yeah. Hi, you mentioned some some barriers to Insurance off of sport and just wondering if you could give us a little bit more on that. Did you just mean like relative to pricing or is there some other issues know? I I think I want to answer this for me, cuz I'm not I guess I'm close to close to some of the data we've done in the past. I think we're Max is trying to bring up is just you know, these are the normal barriers for any new product coming in the rare disease space. We're making sure that we look into all of them and dig into them. But as I've said historically when we concluded the phase 2 trial and we went out and we did our our preliminary market research on potential profiles and and what barriers there might be in terms of to access one. We found out with payers this today nor is lupus a managed category by Page.
That doesn't mean it won't be in the in the future. But today this isn't a category that
But they actively managed and when we brought profiles and put them in front of Physicians and payers with data like we had seen in our phase three in terms of outcome access did not appear to be an issue in a range of different pricing sensitivities that being said, you know, we're all over it. We're looking at doing current market research around the the profile coming out of these three and we will be prepared to ensure best. We can that that patients and Physicians have Flawless access to product. I think the point was being made is dead. You know, we're going to make sure we're on top of it but everything points to what this profile that brought access should be there for patients and that today this is not a managed categories even by pairs.
Okay, and my other question relates to Bas and I was pleased to see that the trial Is On Target. I was guessing that given the choice I would think people have to come into the physician's office for you know, the tests that that might have been delayed in this covid-19 environment, but apparently it was not an issue. I mean I get to your test. Yeah, I guess what I would what I would it's one of the things that that I would hope that most would take away is this is this a pretty damn good outcome for the company down in our space or saying, you know, Hey, listen our our trials locked up and we got no patience being enrolled. I want Neil to give a little bit more specificity as much as we can give them up but I do think you do take away should be we were doing a damn good job of enrolling and we had a a pretty damn good stable of patience up to that point and then second as Thursday.
Our opening back up. We've we've got a a really good statistical management plan in place that that we don't think we're going to see us hiccup here without telling too much detail. You know, what what what can I just to make folks feel comfortable that everything is is good and why it might be good for us outside of the fact that we had a really good enrollment up to that point. I you know, I think that's very important to know, you know, we we have a number of patients in and also there is there is some quite good guidance from the FDA around missing page visits, you know, the these subjects take their own jobs themselves that don't have to come in to the doctor's office. For example, tell them fusions so they can go away take their eye drops. And if they can't get back a doctor's office for an assessment they can delay that a few weeks and and certainly without a piece of art giving giving away. You know, our belief is that we've missed very few of those down.
You know, we've been in constant contact with us efficient and and we we've been and the protocol permits us to make sure that we get the the right number of patients in to get adequate statistical power.
By opening up a couple more sites in in areas of the US where there's a perhaps less affected by some of the shutdowns as well. So, you know, we're confident and you know, and and I think life is a bit of luck. There we go. Got a huge amount of patience in sort of early, but you know, the way things are going. Well, we're pretty confident that point how big was enrollment or where is it staying awesome, but we haven't we haven't actually given a number as to where we we stand enrollment in the trial but Neil you want to just give them the the total number in the cohorts. We're looking at June just have to remember that we have for groups of Mike may have to jump in here about five hundred eighty four in total of 180 in total. Okay, that that's what I'm yeah. Hi. Well, it's great that that's on target. Thank you and congratulations. Thank you.
Thank you. We have no additional questions at this time. So I'd like to pass floor back over to management for an additional closing comments. Great. I want to thank everybody for taking the time with Choice evening to to run through how the quarter one we continue to be incredibly excited about the opportunity that lies ahead for us, and we will look forward to reporting back to you soon on our home address on the NDA and our development programs. Thank you very much for taking the time and stay safe and healthy. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. Once again, we thank you for your participation. And you may disconnect your lines at this time.
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