Q2 2020 Aimmune Therapeutics Inc Earnings Call
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Ladies and gentlemen, please standby your immune conference will begin momentarily once again, ladies and gentlemen, thank you for your patience and please standby.
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Ladies and gentlemen, thank you for standing by and welcome to the Amy in second quarter 2020 earnings Conference call. At this time all participants are in listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press Star then one on your touched on telephones.
Please be advised to today's conference is being recorded if you require any further assistance. Please press Star then zero I would like to have the conference over to one your speakers today Misty she'll Vice President of Investor Relations Ma'am. Please go ahead.
Thank you Michelle good afternoon, and thank you for joining us today to discuss Amy second quarter 2020 financial results and recent operational highlights. This call will be archived replay will be available on a corporate website immune dot com.
Joining me on the call today are Dr., Jason Dallas, President and Chief Executive Officer, Dr., Daniel Adelman, Chief Medical Officer, Andrew Oxybate, Chief Commercial Officer, and Air cooled Chief Financial Officer. After our prepared remarks, we'll open the call for questions.
Before we begin I would like to remind you that during today's call and Q NHS and we will be making forward looking statements. These forward looking statements include Amy's expectations regarding the impact of Cobiz 19 on its business, including on the commercial launch that's how far is here and the company's clinical trials.
Potential benefits, it's how force yet they are two or one and a map 7195.
Commercial launch of California, including engagement of our commercial field team with allergists.
Timing for when allergy practices may reopen timing for initiating direct to consumer mobilization activities and timing for payers in the United States to make policy decisions on California, the timing of a potential regulatory action date for the M&A for air where no one by the email and by Swissmedic the timing of risk.
Eating theater from a phase two clinical trial for air to a one.
Plants timing for the announcement of data from Poseidon clinical trial for California.
The timing for initiating a phase one clinical trial of aim at southern 195.
Plans to develop its multi tree nut program to sufficiency of Amy cash resources and the potential applications of the coated approach to treating life threatening food allergies.
Risks and uncertainties that contribute to the uncertain nature of these forward looking statements include the effects of the cobot 19 pandemic on her business financial condition, the expectation the immune will need additional funds to finance operations.
Means dependence on the success of California.
Amy's ability to build a commercial field organization and distribution network. The degree of acceptance of California, among physicians patients healthcare payers patient advocacy groups and the general medical community.
Immunes ability to obtain favorable coverage and reimbursement from third party payers for California.
Amy's ability to implement and comply with the rent for California.
I mean for any of its collaborative partners ability to initiate and or complete clinical trials.
Unpredictability of the regulatory process, the possibility that immunes or any of its collaborative partners clinical trials will not be successful reliance on third parties for the manufacturer of passwords, yet in their product candidates.
Well regulatory development in the United States in foreign countries and aiming it means ability to attract and retain senior management personnel.
These forward looking statements are based on assumptions and are subject to risks and uncertainties that can cause actual results to differ significantly from the stated on this call.
These risks and uncertainties you should not place undue reliance on these forward looking statements. Please refer to recorded quarterly report on form 10-Q for the quarter ended June Thirtyth 2020 for some of the important risk factors that could cause actual results could differ materially from forward looking statements made on this call except as required by law I mean, just.
And any obligation to publicly update or revise any information to reflect the events or circumstances that occur after this call.
Now I'll turn the call over to Jason Dallas.
Thank you de de and good afternoon, everyone. Thank you for joining US today Cross second quarter 2020 financial results Cool I.
I Hope you and you'll find me something safe and healthy during these challenging times.
Well the U.S. in particular has been in constant flux since March two two pandemic.
I think it's important to dive right into how those pandemic has affected the launch in California.
We were well prepared for a long following portfolio of approval to be on the January.
That's exactly some of the U.S. national state of emergency due to covert 19 in mid March Oh field teams had visited $3000 just fully implementing a whole rems program.
We also the colder in April we conducted market research with 150 physicians them over 400 caregivers to understand how they were thinking about portfolios and fuel can you sell through in place requirements.
From this market research, we were pleased to see but the demand for portfolios of treatment option has not diminished either allergists full would kinda give us.
The results reinforce our expectations for the long term potential of portfolio.
With that said the resets also highlights of the knowledge with some dissipate, but they would have an average appointment backlog of two to three months to walk through once they reopen their processes, implying that it could be lake Palma before I would just be guns got southern California patients.
We reflect come a second quarter each month needs to be reviewed individually.
In April the majority of Allergists offices were closed both went off before that starting new patients on therapy.
That's what consumers with the like the impacts of a pandemic on their practices them on their business.
In may the focus of outages trained to how best to Reengage with patients.
I will just started real thing that practices I'll feel paulson medical science liaison forgot to Reengage books virtually on occasionally in person with Allergan.
I would just offices reopened the majority of backlog of existing patients to treat before taking on new food allergy patients.
Drew with a month of inflection the majority of all of you practices around the country, we opened in some form.
We saw a study pick up in all of our leading indicator glaucoma.
Basically we saw an acceleration of college is some patients enrolled in the Rems program and I was just stopping you patients on portfolio.
Oh practice account managers full palms rugged mobile reengaging with I was just in person once again to a system with Rems notifications train them and provide additional educational resources. This trend has continued through July.
As of today that'd be a thousand dollar just on 600 allergy practices already certified approximately $100 just have enrolled patients in the Rems program an off of these allergists enrolled more than one patient.
The thing some clinics beginning to somebody operationalized cellphones here at scale with double digit numbers, if you patients faster.
These ramps enrollment figures represent the shops increase since may and we view. These statistics is encouraging signs for the future uptake of portfolio.
I'd like to show with you a couple of the money I'm at don't So we've received from the field costs this quarter, reflecting on tasiast them for portfolio from both let's just kinda give us.
One clinic with an estimated 200 peanut allergic patients raises an educational post for kinda give us about the white to you on their website.
They received so many calls from interested parents want the how to does it makes a separate phone lines and an office representative to start to witness.
Another allergists with over 160, pediatric peanuts allergic patients.
So that's about all of them about helpful. Here in two waves of laid off to that path.
First hundred 11 cents, that's an overwhelming response on the allergists, there's no scheduling patients for treatment.
These are just a few money such on those and we are very encouraged by them as they reflect the burden of disease on the need for therapy for patients who peanut allergy.
We recently initiated a targeted consumer marketing campaign to create awareness of California, among patients and caregivers.
We've also continued to make significant progress with payers, which will be invaluable as more physicians thought to treat patients with California.
Under will provide more detail on these topics in a few minutes.
But I would you pass this is to increasingly introduced California for their patients over the next few months, although the country. It's still grappling with Covance, 19th and we are on track to territory. We don't anticipate I'll just shutting down their process is completely that's they did in March and April since they have loved to adopt this new environment.
Overall, we're optimistic I'm excited about the progress, we're making on behalf of patients with food allergies.
Definitely balancing mulch activities pipeline advancement in cash preservation, we remain confident about prospects and stats Fastenal mission to improve the lives of people food allergy I'll now turn the call moving to dogs to discuss recent be presented clinical data about pipeline.
Thank you Jason.
We presented an 18 month and to your foresee a data from our Arco for study the European economy with allergies clinical knowledge important dock.
Which was held the online at the beginning of June.
The data we presented demonstrated ongoing.
During the first two years of daily treatment with California, and the associated with improvements in 80, an efficacy in patients with peanut allergy agent support a 17 years old.
He sensation response rates were and stuff that one one of my house and too there's a daily treatment with California and show progressive improvement with duration of therapy.
At two years over 80% of the participants who completed.
Oh Arco for we're able to tolerate a single dose of 2000 milligram.
We're cumulatively 1043 milligram, which is equivalent to about approximately 14 peanut kernel.
[laughter] contract.
The median does a peanut protein reported to cause a clinically meaningful allergic reaction with accidental exposure.
I couldn't really one hell of one kernel.
Which implies that the level of protection achieved by our clinical studies is highly clinically significant.
Similarly, total treatment related adverse events adjusted for duration of exposure progressive weve decline with direction, but Uh huh.
Further modulation of immune responses and improved but clinical parameters are anticipated subsequent years treatment.
Regarding our European regulatory filing we were pleased with the progress, we're making with the regulatory processes.
Well see the day, one any questions from the Yemen and expect a more complete its regulatory review of our marketing authorization application in the fourth quarter of this year.
The Swissmedic review is also on going and we expect that review to be completed mid Twentys 21.
Turning to our pipeline, we'd like all other companies running clinical trials experienced a pause in the enrollment that newpage and our ongoing program during the pandemic.
Well, we are pleased to announce that we've been able to resume enrollment in the Poseidon published studies.
As we mentioned on our last call.
That's a cost saving measures we closed enrollment in the air tool one phase two clinical trial in patients with any dollar tree.
The trial continues for the patients who are currently enrolled and we intend to review the data from these patients when they're available and then determine the best path forward.
With regard to our multi treating that allergy program you have a productive pre I and the meeting with Yep Yep Yep March.
Hopefully tenafly clearpath forward to submission of it I did.
There remains some CMC and analytical methods development work still to be completed.
This is an interesting innovative program.
And to develop a single drugs.
Potentially creep up to 85% patients with allergies to treat.
The prevalence of cleanup allergy in the United States could close by.
Allergy and one peanut allergy the majority patients do thought tend to outgrow their allergy between us.
Finally, we're excited about seven to 195, our recently acquired monoclonal antibodies and the potential it may have as an adjunct to hurt the with popcorn stuff and other product candidates in our portfolio.
Hey, Matt how could potential to improve the patient journey [laughter] desensitization process and perhaps it's not worth the time to readmission and a larger percentage your position than those treated with towards the alone.
We expect to start those patients in the phase one be study early in 2021.
I'll now turn the call over to Andrew.
Thank you Dan.
I'll just mention despite the challenges posed by October 19, we're beginning to see some positive leading indicators.
I'll just offices begins to reopen after being affected by the pandemic.
As we shared my last earnings call. We conducted market research would have a 150 outages in April I Wonder if somebody in public health, but it was having on the processes and their ability to prescribe, California.
While the research reinforce the I'll just use government for California, I suppose we approved treatment option for that penology patients.
It also highlighted the practices would see no new patients and then appointment volume was down by an average of 65%.
It's an ability to fulfill appointments with existing patients for issued an appointment backlog. The al just estimates it would take two to three months to work through once that process is we're able to reopen.
Despite this buffalo dynamic, we're beginning to see gradual number of allergies across the U.S. initiating patients some Paul horse here and we're encouraged by the early trends that we'll see.
As of the end of July over $50. You sit now started patients some Paul fawzia on half of them have initiated multiple patients.
Clinics are beginning to more fully operationalized portfolio as an example, there's a single clinic from by two LNG from the Midwest over 20 patient new stops already.
Based on the market research that we can talk in April we anticipated that it would most likely be early September before I will just quit their existing appointment backlog, we're able to start in the shooting patients on portfolio.
You are encouraged to be ahead at this pace.
The slots is steadily increasing prescribed the numbers. We've also seen an acceleration of number they see pease, who already certified which is a leading indicator of Olympics and prescribing base.
Recall the following all Rems website go launch dates in late February.
600.
He p. certifications by the time to U.S. declared a national say some emergency due to covert almost let's see.
We then so slow down in the rights of runs enrollment.
I'll just focus on the median punch it covered on the processes.
Although we still saw this number to rise to 700 fine.
Oh placement, we shut and my last earnings call.
Encouragingly over the past couple of months the rest of enrollment Reaccelerated. That's process begins to emerge from coconut Jason mentioned.
Well, it's a day million thousand I'll, just 600 algae practices are rems certified thermal almost $100 you said enroll patients in the Rems and this number continues to climb we talked a week.
I will fuel things continue to work diligently to support allergies and I saw this talk to initiate patients on therapy.
The nature of these interactions continues to vary across the country, where the mix for virtual and face to face meat and depending on how the allergies practices managing through the pandemic.
Our teams have adapted well this new way of working and we have several examples across the country processing, which have receipt Paul for the education logistics training on full run certification in a fully virtual model, which has been able them christopoulos patients waiting lists.
I'm also pleased to show that we began out digital and print marketing campaign targeting patients caregivers in early July.
It will be steadily ramping up our activities necessary for the remainder of this year.
Multiple rounds of market research confirmed the high demand from patients for approved treatment options.
This is reinforced by the reserves, we conducted with over 400 caregivers in April which indicated no change in enthusiasm for the portfolio. Despite the koby pandemic.
The goal patient engagement is to ensure the patient caregivers are aware health for the first and only approved treatment option for peanut allergy.
They have directed accurate information.
And that they were encouraged to consult with allergies to determine if they will be an appropriate treatment Canada.
Without recipe rems enrollment numbers. It bounces passed the 1000 mall was 600 certified healthcare settings nationally.
I'll, just beginning to prescribe foresee an accelerating numbers, we feel that now is the right onto increased patient awareness of treatment options.
In order to maximize the impact to our assets, we run analytics across different geographic markets.
Multiple variables such as HCP Rems enrollments peanut allergy patient numbers and local co. Good case incidence identifying which markets we shouldn't should be targets.
We are currently employing saga online engagement consisting of page search as well as Don had some specific web sites, which we know index well, we can media consumption habits of the patient care giver.
I will also begin advertising on social media on old was the first.
All of this is done in conjunction with a patient website as a source of information and support materials for the patients and I can't give us.
Your first into August before we will out additional channels is for media mix, including Prince advertisements and commercials on addressable TV platforms, such as to which will enable us to reach on consumer audience on a highly targeted basis.
I'll awful in early May we showed that we had made a strong softener conversations with payers not seem a strategic account directors I continue to engage the clinical committees of insurers.
What's conferencing to discuss the details of the final powerful was the label.
That's fine we shouldn't they were 15 plans in the U.S., which had on the interim opponent policies written regarding California, representing approximately 43 million lives.
I'm pleased to share. So we continue to make strong progress in this area and I've got today.
13 on policies written representing approximately 102 million lives.
Besides the creation of new policies for a number commercial payers, including regions. We're also present, the PNC Committee a tri care.
Sure of over 9 million U.S. military for time reason the families has elected to unhelpful as he said that preferred formulary, we don't get $30 per month patient co pay.
Well, obviously really pleased with the progress I'll pay a team has continued to make despite the challenges presented by Chauvet.
As of the end of June we are policies, we probably authorization criteria established for almost 46% about targets it 220 million lives.
Commercial and managed Medicaid books of business.
As a reminder, in situations where patients plan is not yet made a formal formulary coverage determination.
As it continues to be available by medical exception.
We look forward to continue conversation, we paid in Q3, including the largest ppms, which we anticipate we'll be making coverage determinations in the next couple of months.
In summary, we are highly encouraged by the leading indicators that we see as al just offices begins reopened after being shut down by the pandemic.
We're just beginning to ramp about targeted consumer marketing activities, which will help facilitate treatment consultations between patients and their balances.
Finally, despite the pandemic, we continued to make strong purposes pay us in Q2, we anticipate further meaningful progress moving forward as more pays make coverage determinations in Q3.
All in all we're well positioned to support I'll just from the teams, we look forward to helping more and more patients and families were living with the peanut allergy.
And with that I'll turn the call over there.
Thank you Andrew.
Business continues to be fully funded based on our current business plan. We exited the second quarter of 2020 with 318 million of cash cash equivalents and investments.
During the second quarter of 2020, we used 53 and a half million of cash to operate our business a significant decrease from the first quarter.
The decrease in cash use quarter over quarter is due to savings generated by employees as they successfully executed the spend management plans that we mentioned on our last earnings call.
These efforts yielded 14 and a half million in operating expense savings excluding the licensing of am ABS 7195 in this first quarter. We plan to continue our cost management efforts for the remainder of this year.
As we shared with you in our last quarterly earnings call revenue to date comprised of initial stocking buyer specialty pharmacy and distribution partners and he is not an indication of prescription pill pull through two patients in the quarter.
In addition to distribution fees, we also pay our pharmacy partners fixed quarterly management and data access fees that are part of the gross to net adjustment of revenues. Consequently for the second quarter. We did not record any net revenues cost of revenue for the quarter and six months ended June 30 Twentytwenty.
Was 4.9 million up 5.1 million, respectively, which included a four and a half million write off of the inventory during the quarter ended June 30.
The primary reason for the write off is that prior to the pandemic, we had manufactured product supply in anticipation of a robust launch in the first quarter.
As the pandemic has affected our launch we now anticipate that is in Missouri will not be usable based on its expiration date.
Due to the unusual circumstances caused by the pundit and making the second quarter, we do not expect and Terry right up to be a recurring event.
R&D expenses for the quarter and six month ended June 30, 2020 were 23 million and 59, and a half million, respectively versus 32 million and 63.3 million for the comparable periods of 2019.
The decreases reflect cost containment measures and the close out of certain California that clinical trials.
The R&D expense for the six month ended June 30, 2020 also includes the one time 10 million license fee for 89719 side.
As Ginny expenses for the quarter and six months ended June 30 were 38.1 million, an 87.2 million, respectively versus 31.2 million and 54.9 million for the comparable periods of 29 cheat.
The increases from prior year were primarily due to additional headcount to support to commercialization of California, including a specialty field team of approximately 80 practice account managers targeting practicing oncologist and other costs related to medical affairs and the commercial launch.
The Q2 SGN a expense of 38.1 million compares to an expense of 49.1 million for the first quarter and the reduction reflects cost containment efforts.
For the quarter and six month ended June 30, GAAP net loss was 69.2 million and 155.7 million, respectively versus 62.9 million and hundred 17.1 million for the comparable periods of 29 chief.
On a per share basis kept that GAAP net loss for the <unk> per share for the quarter and six months ended June 30 was a dollarssix and $2.40 respectively versus the dollar one and $1.88 for the comparable periods of 29 cheap.
In addition to reporting GAAP financial information our quarterly results include non-GAAP financial measures, which we believe provide useful supplemental information to investors on a per share basis non-GAAP net loss for the quarter and six months ended June 30, 2020 was 81 cents and a dollar.
84, respectively versus 87 cents on $1.62 for the comparable period. So 2019, non-GAAP net loss excludes stock based compensation upfront cash an equity payments associated with the execution of the Admob 7195 license agreement and inventory charge.
It is recorded in the second quarter of Twentytwenty.
As CFO and as the leadership team, we can draw up cash preservation plan, but our employees other ones who need to execute against those plan.
We are grateful for their dedication towards this effort.
As a management team, we're prioritizing commercial efforts to support a successful launch of California in the U.S., while mindfully preserving capital necessary to fully fund our business plan.
With that we will open the call for questions.
Thank you again, ladies and gentlemen, if you wish to ask a question at this time. Please press Star then one on your touched on telephone.
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My first question comes from the line Leann.
So with Wedbush. Your line is open. Please go ahead.
Congratulations on your progress and thank you for taking my questions I'm focused right now on Europe.
Or potential approval if that happens.
What do you have to do to get the first launch and how long will it take and what are you doing to prepare for that now.
[noise] nicely on a this is Jason so I'll give you a high level on success, then I'll hand over to answer who can give you a little bit more detail. So one of the things that has not gotten sort of got impacted by the covert 19 situation at the European regulatory process, which as you heard that earlier.
Layouts has pretty much progress as we had expected the too so as you say we do expect.
Approval at the end of this year in Europe.
We have built a European core commercial organization over the course of the last 18 months, but it will also actually built the core of the German launch organization in Germany, and we have also point to the general manager in front from the UK as we think about rollout in Europe, and I think you know.
Well that.
When you get approval in Europe, you really get the opportunities launch immediately in Germany, and most other markets require a reimbursement process before you can actually fully operationalized, you'll launch so I'll get back that's sort of behind picture of what we've done let me how the tundra and haven't put somebody on the both for you.
Yeah, I'm highly on would be assumption that we would receive approval towards the end of the clearly we wouldn't launch into.
Into the holiday period, and so we're looking at launching sometime in the in the first part.
2020 wrong box set upon approval to allow us to do is to begin to promote said to increase the awareness of how fuji isn't because improved treatment option in a number of European markets. Even if you haven't actually started putting products into the marketplace, including Germany and I'm.
Mentioned, Germany, because Germany, but would be one of off to us to lead markets, Germany, along with the private market in the UK.
Which would be ahead of some sort of formal submission to the nice.
So as Jason mentioned, we've been building it infrastructure in Germany and in the UK and also France, because France is an important market as well.
Now in anticipation of launching in those countries and when you launch in Europe. It tends to happen over a number of bumps and so it's probably about an 18 month to 24 month process to go from your lead markets through all of the reimbursement dossiers submissions and eventual eventually launching index across markets in Europe. So.
That's sort of what it looks like right now assuming we would get the approvals towards the end of this year.
Thank you.
Thank you and our next question comes from the line of Chris Raymond with Piper Stanley. Your line is open. Please go ahead.
Thanks, maybe a question for Andrew as possible and sorry. If this has been sort of explain already but I just wanted to dig into the Parametrics. You gave I think I'd say 39 plans of policies in place.
Thank you said that that represents 42% of your target population can you just clarify does does that mean that all 39 plans have favorable formulary decisions or is there some sort of categorization of that group that like different buckets, if they fit into.
And I have a follow up.
Yes, good it's a good question, Chris So yes, there are there a 39 from with policies, which spell out the prior authorization criteria that must be fulfilled for patients to be able to to be tree, we foresee so.
From a from a planning perspective your patients were two ways in which you're you can have fuel.
For the treatment covered one is fine obviously, helping get on formulary or the other is via having on medical exception of is not on formulary in either case. The prior authorization Keegan that has the criteria that will be used whether it's on formulary or whether it's on.
Our medical exception.
For the patient to be can be given the treatment and this is found that for the specialty products to how about that goes from the criteria.
So the focus of I'll tell you seem right now is making sure that probably for authorization criteria is in line with the label I'm doesn't create undue burden or barriers for patients to quickly get on product I'm very pleased to say that we were around 80% all the prior authorization criteria that had been written for those going on policies.
It is very acceptable in our eyes in some of that being able to get patients clunky product.
Whether or not patient is whether or not a plan has a formal formulary position or whether it's by medical exception. The co pay level will be the same it's either going to be tier three or four depending on the design of the plan and therefore, the co pay level will be the same and on the patient if it's a commercial patient can work with us.
By down that companies with little is $20 a month. So our focus right now is getting those policies published a making sure the window publish we're working with the payers. So that the criteria are consistent with the label on the appropriate patient population for the drug and just a slight directionally. What you said, it's 39 policies covering one.
Hundred 2 million lives not represents 46% of this hundred 20 million lives that we're targeting.
Okay, great. Thanks for that clarification, and then obviously there's been a.
A lot of talk about.
Regional differences in terms of opening back up.
Coated.
They did effects.
And also you know some going any other direction can you talk about maybe any regional differences that you're seeing.
You know positive or otherwise in terms of.
Your territories.
Yes, yes suddenly so first of all just just to Orient you. When we think about the country. We we divide the country to 10 region. So as we talk about where they see prices account managers. They are divided up equally into 10 regions <unk> eight per region.
First of all 10 of those regions, how patients who have started on California.
So from that standpoint, we see that consistently across the country.
That said.
As we've seen more and more patients go on the product in the first places we sold and go on with the South and Southeast, particularly Texas, Florida and Georgia.
And what happened is we're now seeing more and more patients come on in New England, and New York and we're seeing them start to pick up momentum and I think it's easy to speculate that it would be that's really attributed to.
The incidence of cold today currently and the fact that coming out of.
What was that a heavier incidence rate a few months ago.
At this point the vast majority of our account managers are able to engage with allergies to some degree face to face across the country.
Many of them or some sort of hybrid model, whether doing extra face to face as well as well as virtual engagements using technology.
The most challenging in terms of our ability to have faced assays meetings. Most challenging area continues to be the southwest, particularly around Los Angeles' and the inland Empire.
Also as to what degree in Arizona. So there are some differences that clearly.
I suspect will continue to be the case, but what is encouraging is even in areas where.
There are more challenges because of koby, we're still seeing patients go on the product is valid just working through.
How they're going to manage their practice, given given kobe and maybe the managing at a reduced capacity and.
I have to do things so they can accommodate things like social distancing food, that's still persevering through that and working through the backlog of appointments that we talked about I'm looking to try and put patients from POF, we'll see where they can.
Thank you.
Thank you.
Our next question comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is open. Please go ahead.
Afternoon, now, Jason and team yeah like called the updates on progress working through a challenging environment [laughter] couple of quick questions for all of you.
First the first of all for Andrew you know, it's nice to hear that Youve got some patients that have been started down how far is here.
Yes, I'm wondering if there's been any feedback from the field with regard to their early clinical experience and if that's consistent with what you had anticipated given they experience in that you know in this study.
Yeah Charles.
Obviously early days in the launch, but certainly the feedback we've received it has been exactly that very consistent with.
What we saw in the clinical studies.
No surprises at all.
And then in terms of the ability to deal with the Rams a is that consistent with what you had anticipated that doesn't appear to be a chat a challenge for patients in particular I'm thinking about the activity level kind of requirement is is that a challenging and Frank.
Cleave would you would you imagine that remote learning if it occurs in the fall could actually be helpful to putting additional patients on the drug.
Yeah, all along so maybe the second part of my turn it over to a to talk to idle London the common on.
Some deals across your question.
Certainly we think that depending on where people are in the country and what the situation is with local schooling money, we'll see as an opportunity to patients on through the full particularly if they see that.
For the for the entirety of the full semester.
They're going to be working in a virtual remote environment. So we certainly think back probably something that depending on where they are and what the situation is that they may we'll take advantage of them.
Can you want to provide a little bit of maybe additional flavor on.
The patient experience, particularly with Rems and anything what we're hearing filling from my perspective.
Exactly would expect and there's no undue burden from the rems process, either in enrollments or on the ongoing administration of the drug.
Yeah, I'd Echo that Charles I think what is the things that important to remember is that.
This is this is a group of allergists, who are administering the strike and they are very familiar with immunotherapy and how to manage patients who were up dosing, whether it be where subcutaneous immunotherapy are now with oral therapy.
For the them so far what I've been hearing is everything is going very smoothly, but the.
The physician and healthcare professional journey is quite smooth and so far the patients have also experienced.
A pretty seamless.
Experience in the clinic.
It's actually going very very well so far.
Okay very good that's helpful. One more for you again, and then one quick one for Eric and damn regarding the Yemeni process. You mentioned receiving that 880 questions is there any color you can provide us on kind of where those were oriented is is there perhaps any differ.
Current views with regard to the grams or what the label could actually read in in Europe, If you will relative to the state.
Sure. So there is.
The Rems itself is unique to the United States.
In Europe, we have something that's a similar but that doesn't have the illegal.
But the Rems patents in the United States in the Cold risk management plan.
And the risk management plan that was submitted to the M&A.
Was extremely close with not identical to the risk management plan that was included in our BLE.
I don't believe that they're going to be any.
Really substantive differences in the label, there's always going to be some.
You know small tweaks here and there, but the essence circle labels will be very similar between the United States from Europe.
Okay very very helpful last question.
Yeah, maybe I'm sorry that side. This is Jason but that was running nothing surprising that they want Eightys I think we had anticipated all the questions we were going to get from the regulated somewhere well into being ready to respond to though.
Yeah, Okay that endeavor.
And that's what I was really wondering if you you respond. So last question for Eric you know I know, it's only one month into three month quarter, but if phs and I'm going ask you speculate do you take a look at the kind of you know patient starts et cetera.
Well what would you anticipate in terms of revenue for this quarter, how should how should we think about that should this be of revenue quarter should that be a restocking corridor. I mean, just how how would you think about this quarter and maybe even the fourth quarter. This year.
Well as you know we don't we don't give guidance, so I'm not gonna do that.
We do expect to see continued progress.
And.
Mentioned in our prepared remarks, the specialty pharmacies have to work through the inventory that they've already ordered so what that means in terms of new orders that it's too early to speculate on.
Okay. That's hasn't had to take one other comment certainly, but we sort of alluded to as we've gone through the presentation. Today about is that we already have seen an inflection that were out of the turning point now, but the reality is that these allergy processes get back up and running they are working through their backlog of existing immunotherapy patients and we will see a steady income.
So as we get into the sort of backend of this quarter.
That increasing over time I. So I think it's kind of hot for us to predict at what speed, that's going to happen, but it is going to happen.
We do expect particularly coming back into the Calder casino see nice uptake going into the fourth quarter.
Good deal. Thanks, that's helpful. Appreciate all the color.
Thank you and our next question comes from the line of Evans Chairman with Credit Suisse. Your line is open. Please go ahead.
Yes, Hi, Jonathan we go on for agency agreement.
Can you expand on the clinical development plan for an accident went up seven one night five and how do you think about balancing the R&D efforts required behind this asset bears the commercial efforts around California. Thanks.
Dan you want to start.
Sure.
So the aim ABS everyone nine five program is being developed as an adjunct therapy for our.
Our product platform.
We are looking at.
A way to improve the patient journey.
And certainly to accelerate time to remissions in the larger proportion of patients.
You know it is a.
It's an R&D program and like most biotech companies, it's important for us too.
Have a pipeline of products that we continue to move forward and this is wonderful wonderful products in our portfolio.
Great. Thanks.
Thank you and our next question comes from the line came with RBC capital markets. Your line is open. Please go ahead.
Hi, guys. This is picking them on for Ken.
One question for Odyssey.
Paul You mentioned some of the allergist have single patient and some locked out the half of them have more than a single patient enrolled who we would just wondering if so what would that take for the low single digit patients.
To increase could double digits for the I was just to have already in gold from patients. Thank you.
James lunch.
Yeah Yeah.
Yeah. So.
Obviously.
It depends on the situation. The one thing that we know is happening when we found this in the research we conducted in April and certainly what we're seeing out there in the field and we're hearing from college is you know bears this out there that backlog of appointments of patients for other conditions of the I'll just seeing the working through.
So.
When patients when they're starting to put call for your patience on its often because a patient is saying hey, I know that you don't have any appointments free but I really want to get my child started on this and so that there's the slotting the main opportunistically and their existing appointment scheduling so to answer your question the way that those those.
Interest is that now how maybe a handful of patients are going to go to multiple handfuls of men dozens and on from.
It's really going to be is that a plan that backlog is cleared through and those shchedrin swaps open up as I said, we do have an example.
One clinic is managed to work through that situation and now is able to start putting on double digit and now you know over 20 patients zone.
It's going to depend on the clinic in their own particular situation as they work through the backlog that was created by going to shut down because of the pandemic.
Got it Super helpful and just to follow up on that the clinic you just mentioned, which has enrolled 20 patients this that and maybe to ask in an area where gold with cases there.
Kind of on the decline or is that anything related to covert or not.
I don't think it is actually.
As I look at whether it is it's not necessarily an area.
It's been highlighted as being either low or particularly a hybrid cobot I mean, it's been good you know somewhere where it was there was certainly cobot bad that continues to be Cobra day, you don't see dramatic decline I think they've just determined that there were going to persevere and work through it and figure out how theyre going to reach out to that.
Algae patients get appointment shed, you'll them, then respect social distancing and get them through so.
That's why I mean, it's such a case by case basis, but in this case, it's not like we could pointed out and say that happened to be in an area with very low cope with up to up more than the case nationally.
Thank you so much that correctly, congrats again on the quarter.
Thank you.
Thank you and your next question comes from the line.
The speaker with Cowen Your line is open. Please go ahead.
Great. Thanks for taking my questions. The first one I just want to understand in terms of the allergists practice since many allergists treat a lot of seasonal allergies, let's say in a normal environment, let's put covert aside for a minute is there seasonality to patient flow in their office and if so is there any particular time of year, that's normally the slowest.
So far so I'll start and then.
Don can jump in as the practicing Allen Justin.
Maybe a little flavor to it so there is absolutely seasonality seasonality to allergy product.
But it's also important to remember that once you stop somebody on the immunotherapy for seasonal allergies, you're essentially committing to a treatment paradigm, but lot somewhere between three to five yes, right. So the first six months. The injection is every week. The second six months. Since every two weeks and then it's every month for up to three to five years in total so it's a longtime treatment plan.
When we talk about backlog, what we're talking about as when the practices were close to the folks that were ready well into though desensitization weren't getting their weekly or monthly injections are they shouldn't be in that they need to get back into the practice and get them back off back on track.
What is definitely real this year in times of the dynamic at that time parent when things were shot which is sort of middle of March through middle to backend of made depending on what you're on the country is exactly the pie when the new wave of seasonal allergy patients would tend to come into a process right. So that would be sort of new patients that you're bringing into the process to build on.
Many obviously practice is actually missed that new wave this year.
I'm not actually frees up theoretically some capacity for them once they flow through their backlogs to introduce new therapies like California here into the practice that anything you want to add to that.
I think everything that trace concept was correct I think.
Some of those patients who.
I didn't get their allergy shots during that three month period of time come back and they're down duston their re upped dose relatively quickly and that's part of the backlog and then of course, if you see patients who've got.
That's my Ray topic dermatitis, who have seen during that's got typical pollen season, you want to check back in with them and make sure that their medications are properly being administered.
That's part of the backlog, but everything that Jason said, it's absolutely correct.
Gotcha and my second question is on California, specifically, if a patient starts treatment and then need to stop in dose escalation phase, whether it's because covert comes back off or whatever the reason they want to restart a few months later, which can make continue with the last dose. They were ran or would that be recommended to start from the first NBC.
Typically first dose and go to basically square one.
So so far the kind of depends what they've done and we've created we've created by the way that we get drug to patients in a way to create a lot of flexibility in an ideal world. What happened is that if they start as they were somewhere on the up dosing and for some reason they didn't want to go back to the Doctor to go up to the Max dose level, they could actually stay whatever dose level day.
<unk>.
Almost for then for the period of time so.
I wanted to wait a couple of months, we could just make certain that they continue to get the dose that they were on and then when they do go back to a doctor's office. They can continue on the dosing up dosing regimen ads as it should have been right. The two weeks hurt dose level Israeli a speed limit you shouldn't go quicker than that but you can stay on each dose in the opposing for.
Hey, long period of time, and there's nothing wrong with slowing down the up dosing Paris.
If folks Miss there, though so that they miss it for for a few days then you can think about keeping them on the same because we're learning it just wants if I missed it four weeks then you probably have to take them right. That's the beginning of thought at the beginning of the Upto say, which is exactly why we built the flexibility and to be able to provide them with ongoing supply of whatever dose. It was that they were on when they last winter.
To that.
Gotcha, and lastly, if they work to be honest kind of stay stable intermediate dose would the insurance still cover that is this is ever class kind of a special exception, because they're not escalating doses higher.
So we when we crafted the flexibility into the plan.
Actually flat price, but that's the sort of it doesn't matter what those who are on the cost to the insurance on the out of pocket for exactly the same and that's because some patients didn't need to oppose sometimes down both somebody has to be sort of flexibility for the outages to tailor the up those into the individual patients. So so far we haven't seen any issues or concerns with payers around.
This by the way something Thats very very.
Common when we when folks when the I'll just start up dosing people for their seasonal allergies, they approached them to hold them, let's say down bust them again.
You know that flexibility is right common in the world of allergy and something that both the clinical petition with the pay as they used to.
Gotcha, I think very much taking my questions.
Thank you enough.
Our next question comes on line of pathway with Goldman Sachs. Your line is open. Please go ahead.
Thank you and good afternoon, everyone and thank you for taking your questions.
Maybe one on the commercial side here and could you maybe <unk>.
Characterize for us what you're seeing in terms of the early adopters that you mentioned earlier, particularly those who are pretty I'm seeing double digit type numbers of patients are these.
Patients to the degree you have these details on X experienced whitey patients were converting to an approved program or are these de novo patients and then.
Secondly in terms of the clinics to our prescribing here are you mostly same thing at ones with.
If the existing practices or are you also saying a fair number of first time, Oh, I see prescribers and that I've a follow up question.
Yeah.
<unk>.
Yeah, Hi, Paul it's Andrew.
So I don't.
We're now at a point in terms of number of patients. So I don't have visibility on.
Every single case by any means but I can say that to my knowledge all of the patients all de Novo patients who are who are starting or were not converted over from for many of them sort of over like see.
Uh huh.
From a from a.
From a profit standpoint.
The majority and I.
Probably are a couple of exceptions, but the majority.
Clinics that all starting 0.40, and therefore I'd also like see from at those times. So.
There may be some that are doing some oh I see other foods.
During the minority I think the vast majority all clinics, who are taking advantages. This is the first approved.
Therapy, you're not doing this for the first time, we pump for you.
Great that's helpful color.
Turning to the European side, just given the environment, there and with respect to to the Covance situation as you look to 2021.
Is it correct to assume then.
How are you framing sort of what uptake might look like in the European experience in 2020 Watt would would you assume.
Reimbursement aside faster or higher utilization the early quarters of a launch thank you very much.
Andrew you want to answer that it's all.
Yeah I will.
Obviously, very it's hard to predict the future and we would anticipate launching in Europe in the first part of 20 warm so who knows exactly what will be but.
If you look at Europe, and the way the pandemic is being managed and frankly, the encouraging right. The cases are going down one would think we'll be able to launch in that situation without a great deal of impact from coded certainly I'm optimistic that will be the case and so I don't think it'll be any major change to what we're currently planning.
In terms of what we expect to see from an uptick standpoint in Europe.
And Paul maybe add one thing to that and that is that you know Europe, we talk about as a single entity, but it's actually 32 separate countries in each of those countries have slightly different ways of practicing medicine and slightly different ways of reimbursing.
Slightly different ways of thinking about patient flow through this systems and so we have to look at them individually, we have market research and all of the key markets that tell us how best to think about it go to Bakken strategy in most markets him as a nuance and all of them.
I see our initially tension that focuses on Germany.
And so thats why Weve spent a lot of a lot of time working on some second really important thing for us to get right at the end of this year on the beginning of next year is the quality of the submission with that we put into reimbursement authorities in the other market.
Thank you and our next question comes from the line of Derek touched a lot of Stifel. Your line is open. Please go ahead.
Hi, guys and thanks for taking my questions and congrats on the progress just two questions I guess first off.
It's a bit of.
For nation in terms of how you recognize revenue and I guess typically how should we be thinking about the stocking assumption and obviously with coping 19, our practices more reluctant to.
Stock this product until they get more visibility or how is that going and then second question for Eric you talk about being able to fund the company through this card business plan.
Does that include profitability and I guess as we think about the second half spend should it kind of near what we just saw here in the second quarter. Thanks.
So let me take the first piece and then like Eric can cut out a bit more flavor to announce your second question. So just just a point of clarification that.
Helpful. If there is not a viable product so the practices themselves did not tend to stock any of this at all the only thing that we shipped to the practices directly is the initial dose and kits, which is the the dosing uptight creation that they use on the very first day and then the office dosing kits, which as we the box of all the individual starting doses right. So the bulk of the supplies.
Directly to patients and so therefore inventory has held at our specialty pharmacies, we recognize revenue when drug.
Product changes hands.
On the Threepl to the specialty pharmacy, So and then Eric do you on that.
Out of it most of that non synthetic second question.
Yes in terms of or of the run way, which is the essence of your question.
You know were weak.
I do see ourselves that's fully funded based on current business plan on our current business plan of course that makes assumptions about.
How we.
See.
The introduction of California, continuing to ramp.
So so we feel good about that and then in terms of the burn rate.
Yeah, I mean, it should be and we continue to to manage our expenses very closely and.
Every quarter, there's some give and take up and down but that we can continue to see you know really good.
We expect to see continued really good cup contained on for the rest of the year.
Hi, Thanks, guys.
Thank you and I'm showing no further questions at this time and I would like to turn the conference back over to Jason Dallas for any further remarks.
Thank you everyone for joining our call today, Oh, I'm very proud of the team at a minimum of progress that we've made three was extremely challenging time with almost 1000 physician signed up for grabs pickup policies covering 102 million lives about our recently initiated targeted consumer marketing campaign, we anticipate the portfolio lumpy picking up over the coming months.
I'll market research shows that there is still strong demand from Alan just can't give us for treatment for peanut allergy and we're excited to be able to offer them. The personnel the FDA approved therapy.
We have been and we'll continue to be thoughtful about I'll spend for that we can get portfolio to those who need while preserving capital. We believe for long term prospects will pause here on Damian remained strong and promising we look forward to providing future updates as always I. Thank you for ongoing support for joining us on todays call.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect everyone have a great day.
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