Q3 2020 Alexion Pharmaceuticals Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to an axiom Pharmaceuticals third quarter 2020 results conference call.
At this time all participant lines are in listen only mode. So if you require operator assistance. Please press Star then zero.
After the speaker's presentation, there will be a question and answer session.
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Please be advised that today's conference maybe recorded.
I'd now like to hand, the conference over to your host today Mr., Christy, though head of Investor Relations. Please go ahead.
Thank you operator good morning, Thank you for joining us on today's call to discuss Alexey on performance for the third quarter 2020.
As has been our practice recently, we are practicing physical distance thing and our each doing the call from home.
Today's call will be led by Bud.
Hansen our CEO.
Eric will be joined by Rogness, Aron, our Chief Financial Officer, John Orloff, our global head of R&D.
Brian costs, our chief commercial and global operations Officer.
We will begin the call with a brief presentation and we'll reserve the rest of the time for your questions.
You can access the webcast slides that will be presented on this call and other earnings materials by going to the events section of our Investor Relations page on our web site.
Before we begin I would like to point out that we will be making forward looking statements and these statements involve certain risks and uncertainties that could cause our actual results to differ materially. Please.
Please take a look at the risk factors discussed in our SEC filings for additional detail.
These forward looking statements apply only as of today and.
And we undertake no duty to update any of these statements after the call except as required by law.
I'd also like to remind you that we will be using non-GAAP financial measures, which we believe provide useful information for the understanding of our ongoing business performance.
Reconciliations of our financial results and financial guidance are included in our press release. Please.
These non-GAAP financial measures should be considered in addition to but not a substitute for our GAAP results. Thank you.
With that it's my pleasure to give you our CEO Ludwig.
Thank you, Chris and good morning, everyone.
I'm pleased to share our third quarter performance today.
COVID-19 continues to test the global community healthcare systems and families word logs.
Our ability to successfully navigate through this challenging time is a testament to the strength of our business and the resilience of our global organization.
I'd like sounds patient centric culture and focus rare disease infrastructure continues to shine in this new environment I.
I would like to thank our employees worldwide for their hard work and commitment to our mission of transforming the lives of people, who are rare diseases and devastating conditions.
Despite the challenges posed by COVID-19, the election team has continued to deliver.
Third quarter financial results were strong with 26% revenue growth and 16% non-GAAP EPS growth year over year.
As a result, we're increasing our full year financial guidance to reflect the momentum of the business. We continued to progress our revised capital allocation strategy and are well on track to achieve our 2020 commitment to return capital to shareholders, a 500 to 500.
$50 million in share repurchases this year.
Our commercial execution remains resilient across the portfolio.
We don't Amyris, we have now achieved our ambition of greater than 70% conversion across each of our top markets and ph women.
We remain on track to achieve the same ambition in a typical each other.
Oh first quarter with index I was strong with.
With the integration efforts underway and approximately $39 million in sales within the quarter.
We look forward to continuing to drive this momentum as the integration progresses.
Finally progress continues in the R&D portfolio.
During the quarter, we received approval for the Ultra Mariner East 100 milligrams per ml high concentration formulation in the U.S. and Ulta mirrors approval for atypical H.U.S. in Japan.
We continue to advance our pipeline, including nearing completion of enrollment in our phase three volt Amir's Gmg trial, and our partner Caylin initiation of the phase III keen in one on one programs in L. amyloidosis.
As we have shared before we have a multiyear strategy for value creation against which we continue to execute.
It is our ambition to continue to lead and expand in a C business.
Meredith is now established as the market leader for PNM age across our top markets with atypical H.U.S. on track to achieve a similar outcome within two years of launch.
The expansion of our C business began wouldn't apology, which is now the largest franchise in the U.S. in terms of both revenues and patient volumes.
We continue to build upon this success with.
With additional old premieres development programs and a third generation Cfive inhibitor 17 20.
Finally diversify.
As we shared earlier this month we.
We have significant opportunity in affected the and EPS yoga and platforms and high value potential and innovate asset such as scale them one on one and 18 40.
Our acquisition of Fotolia earlier, this year has brought us endexo, which.
Which allows us to expand upon our critical care person to address this unmet need in the effect of 10 end markets.
Collectively these three components will drive sustainable and growing C. Five business, while also driving new growth opportunities beyond.
We have made great progress on our journey, thus far and have a strong foundation upon which to drive future growth.
Finally, turning to slide eight.
I like to reiterate some of the key messages from our Investor day earlier this month.
Over the last three years, we have transformed this company, establishing a strong foundation for sustainable long term growth and.
And delivering significant value for patients and shareholders.
Driven by a long term value creation strategy, we see sustainable growth ahead, and a clear path to revenues of $9 billion to $10 billion by 2025 and continues best in class operating margin.
Beyond this we see even greater value within our current pipeline of more than $10 billion in peak sales potential.
As a biotech company election is uniquely positioned to win in the industry with a unique set of rare disease tale of capabilities.
Over the next several years, we have a number of pivotal data readout and an ambition for more than five novel I in the filings by 2025.
Anchored by three novel platforms, and a number of promising individual asset.
We have built a diversified development portfolio, but the potential for seven blockbuster franchises to drive continued growth well into the future.
Our commitment to an ongoing success as a company comes down to the hard work done by our employees and we'd like to thank our teams all over the world for their continued dedication.
With that I will now turn the call over to a runner to discuss our financial results.
Absolutely.
Starting with Slide 10, we reported third quarter total revenue approximately 1.6 billion.
Please 26% year over year.
We are pleased with the momentum we saw over the quarter, which was driven by strength in our urology franchise.
Onto the growth in the CNH agents, the H.U.S. metabolic businesses and our first quarter of index that revenue.
Operating margins trend continue in Q3 with non-GAAP operating margin of 56%.
Non-GAAP EPS was $20.24, representing 16% growth year over year, driven primarily by strong top line growth.
Moving to slide 11 huh.
Third quarter total net product sales were primarily driven by volume growth across each of our medicines in key markets.
Turning to slide 12, Solaris revenue in the third quarter were approximately 1 billion, a 42 million year over year Solaris revenue was up 5% as close in to listen urology indication was partially offset by conversions to also Marin CNH and.
Atypical it Sheila.
Oh, it's a nice revenue in the third quarter was 289 million, including contributions from the ongoing launches atypical H.U.S.
We call we made a strategic decision to lower the annual cost for patients often there I'm scared to Solaris.
Also nice for a difficult issue at represent a 30% below where I will offer patients compared to Solaris given maintenance suite.
It will carry through to future I'll summarize indications that we are pursuing.
Total Sci Fi franchise revenues were 1.3 billion, an increase of 23% year on year.
[noise] metabolic revenues for the third quarter was 218 million, representing 19% growth versus prior year driven by volume.
On the right side of this slide we highlight Endesa third quarter sales of 38.9 million represent.
Representing Alexia first consolidation these sale after the closing of the Portola acquisition.
Performance in the quarter was driven by return hospitals, the man and further benefited by some normalization of stopping activities.
Turning to the CNL on slide 14 during the quarter non-GAAP R&D expense was 269 million or 17% of revenues.
Non-GAAP EPS GNS, there was 301 million or 19% of revenue.
The non-GAAP effective tax rate in the quarter was approximately 16%.
Non-GAAP code for her yeah, let's see dollars 24 cents growing 16% year over year.
GAAP earnings per share was $2.62.
We ended the third quarter was approximately 2.3 billion in cash and marketable security and repurchased approximately.
6 million shares at a cost of 74 million during the third quarter of Twentytwenty.
As of the end of the quarter, we repurchased 434 million in shares in Twentytwenty, leaving us well with inside our target of $500 million to $550 million for the year.
Free cash flow in the third quarter was approximately 812 million, bringing up to 2.1 billion year to date.
Now moving to slide 15, I'd like to provide an update you like Twentytwenty full year guide.
As we shared at our Investor Day earlier. This month, we are increasing our guidance.
And this update reflects revenues between 5.9 billion to 5.95 billion for the full year, which is 350 million above our prior guidance and reflects 19% growth year over year at the midpoint.
In terms of product revenue updated guidance for Solaris in Altamira is 5 billion to 5.035 billion.
Guidance for our metabolic business is now 835 million to 845 million and we expect industrial revenues to be 65 70 million in the second half of Twentytwenty.
This revised guidance reflects the continued strength, we have seen the business and our fourth quarter outlook insulting.
[noise] compliance weight onto need to be strong across indications and slightly above expectations.
Well he is talking about and also merits and the corresponding price headwinds the conversion implies.
And increased demand for that though.
In addition to the above and help you understand the quarter on quarter steels that are implied by our full year guidance I would also note the following.
Our new patient initiation cubillas has slowed compared to pretend that mic level.
We have not yet seen a material impact do you have a fair mix today, but we continue to monitor.
Fourth quarter guidance reflect approximately 17 million less a forecasted bender market and soccer international revenue versus third quarter Twentytwenty.
Finally, we continue to deliver best in class operating margins driven by top line strength.
Non-GAAP operating margin is expected to be between 54.5% at 55.5% of revenue.
Non-GAAP R&D expense is expected to be between 16% and 17% of revenue.
Gone you need to invest in our growing development portfolio.
Non-GAAP EPS Ginny spend is expected to be 19.5% to 20.5% of revenues.
GAAP EPS is expected to be between $1.78 cents in $2.13.
Non-GAAP EPS is expected to be between $11.70 and $12.
As previously discussed we continue to monitor the impact of the following as the Golden Monkey situation, both locally including access to medical care around the world.
Watch weights across our indications.
He was new patient starts and use their mix given fluctuating unemployment rate.
On slide 16.
We have a view of our quarterly revenues, including the implied revenue for fourth quarter based on the midpoint of our updated Twentytwenty guidance.
Fourth quarter guidance reflects approximately 17 million less a forecasted dental market and certain international revenue versus third quarter of 2020.
We expect year over year growth for the fourth quarter to be 4%, while full year growth is expected to be 19%.
With that I will now turn the call over to John to provide an update on our R&D activities.
Thank you I'd now starting on slide 18, you can see our robust clinical stage pipeline as we shared on our Investor day earlier in October we have made tremendous progress thus far in 2020 on our breadth of development.
The 20, plus clinical programs, we have plan today support earn vision for seven potential blockbuster franchise is expanding our existing presence in hematology nephrology metabolic neurology and acute care and.
It also aim to support our entrance into new areas such as cardiology in ophthalmology.
We continue to advance our Sci Fi platform with an emphasis on reaching even more rare disease patients.
It includes numerous ongoing late stage programs with Ulta mirrors in two newly announced indications we plan to pursue with Alex and 17 20, our third generation Cfive inhibitor.
We will be taking 17 24 initially to expand our presence in neuromuscular diseases with both Gmg Intermountain myositis and expect to share a topline data from the recently re initiated phase one healthy volunteer study in the first half of next year we.
We also continued to make great strides in diversifying our portfolio and expanding our pipeline outside of C. Therapies earlier. This month, we provided an update on our innovative factor de platform, including plans to advance analyze 10 2040 into geographic atrophy. We are excited about this program given the proof of concept that has already been established.
We complement inhibition as well as a number of properties, which we believe make this asset well suited for ophthalmology.
We also see the potential for an oral dosing regimen to have huge advantages over intravitreal injections, both in terms of patient preference and the ability to treat both simultaneously with a systemic approach.
We look forward to initiating this phase two program in the second half of next year.
Now turning to slide 19, we remain committed to our ambition for Tenda launches by 2023, you can see here. The current programs that we view as likely to launch within that window with the potential opportunity. Each presents the once weekly ultimately a subcutaneous program for Peanuts, you need typically to U.S. remains on track for filing in the third quarter of next.
This year.
We're also expanding our ultra mirrors portfolio with additional neurology nephrology programs I'm pleased to share that are ultimately GMT trial has achieved greater than 90% enrollment and we have closed the screening process for patients globally.
The animal SDLP Myris trial continues to progress and has achieved greater than 50% enrollment in our LSW program also continues to enroll.
Both the HFC TTM and complement mediated TDMA trials remain on track to initiate later this year and in the first half of next year respectively.
The phase three program in Japan for Gamebreak syndrome, with Solaris remains on track to initiate in the first half of 2021.
Building on this foundation, we see opportunity to diversify beyond Sci Fi with four additional late stage novel assets currently in scope.
We have initiated and look forward to progressing enrollment of the phase three portion of the pivotal program of CA yellow a one on one given the high unmet need of these patients with al Amyloidosis. We also remain on track to initiate a phase three program with Agee 10 for Aoxin 2060 in 80 TTR cardiomyopathy.
At the end of this year in Japan rounding out our current cardiology programs.
We continue to plan for phase three data in the first half of next year for our phase three superiority trial of adolescent 18 40 in Wilson's disease.
18, 40 has the potential to be a transformative new standard of care most of disease with its rapid onset of action profound copper clearance properties in convenient once daily oral dosing.
As shared during our Investor day, we are excited by the potential to redefine the treatment goals for Wilson disease by shifting from a focus on blood copper levels to a total body copying approach.
We continue to make progress here and look forward to sharing more in the future.
Finally, the Alex and 20, 40% H. add on therapy program remains on track to begin phase three development by the end of this year.
We are confident that our robust pipeline in innovative R&D capabilities will support our ambition to significantly expand the number of patients we serve.
Turning now to slide 20 to discuss progress made thus far in 2020 in key upcoming R&D milestones.
Ultimately has continued to expand its reach in Q3 with approval for atypical H.U.S. in Japan. We also received approval in the U.S. and a positive CH MP opinion in Europe for the Ultra mirrors 100, Meg per mill high concentration formulation before.
Before the end of 2020, we expect an additional four clinical programs to initiate into I am pleased to be filed with Alex and 18 20 expected soon.
Finally, we're looking forward to multiple potential value, creating inflection points over the next 12 months.
Building on our leadership in complement and diversifying beyond C. 520, 21 will be an exciting year for Alexia we.
Expect topline data read outs in a number of key programs, including the 18 40 Wilson's disease study in the first half and ultimately Gmg study in the second half with.
With that I'll now turn the call over to Brian whereby commercial highlights from the quarter Brian.
Thank you John turning first to slide 22 within the third quarter Pn each in Germany reached over 70% conversion of Soleris patients to Ulta Myris rounding out our top three markets to have achieved this ultra myris launch ambition.
Collectively making up roughly two thirds of our global revenues all three countries have established a new best in class standard by achieving this conversion in less than 18 months well ahead of our initial two year ambition.
This speaks to the value ultimately this brings to patients and our team's excellent expertise and execution capabilities.
Or ultimately this journey continues as we remain on track to achieve a similar ambition of 70% conversion within two years for atypical each use it.
As John mentioned earlier, we received regulatory approval for a typical each us in Japan in September and the local team is quickly progressing with launch activities.
We continue to innovate for patients to attempt to improve their holistic treatment experience, we're making progress with the launch of the 100 milligram per milliliter higher concentration of Ulta myris in the U.S., reducing the average annual infusion time by approximately 60% for patients.
And we look forward to expanding the Ulta mirrors franchise with a potential once weekly subcutaneous formulation with the goal to provide an alternative choice to patients who prefer to self administer.
Turning to neurology on slide 23 within the third quarter. Our US team added 111, new patients for a total of 2452, U.S.G.M.G. and immodesty patients on Solaris.
Since setting the ambition earlier this year to quadruple the number of U.S. neurology patients by 2025.
We've continued to drive growth despite the challenges posed by COVID-19.
So we are a strong value proposition in both G. M G in animal westie as well as the resilience of the commercial team makes this possible.
While new patient additions have slowed from pre coated levels. We do continue to see balanced growth across both indications and our teams are focused on continuing to pivot to new ways of working in light of the pandemic.
Specifically, we continue to improve our virtual effectiveness to support communications efforts with stakeholders across the health care ecosystem and given the strong value proposition of Solaris, we continue to focus on driving depth of adoption with physicians, who are experienced with the benefits of Solaris for both.
Both gmg animal as C patients.
We're also implementing artificial intelligence aided targeting to identify high potential new prescribers more efficiently with the ambition to drive prescribing breadth.
Finally, our one source organization in the U.S. provides trusted and consistent support services for patients.
In rare diseases. It often takes some time for a patient to initiate treatment. Once they are identified and one source helps support patients throughout the juries.
In addition to navigating reimbursement one source helps facilitate sharing infusion site information with HCP is in patients.
And increasingly many of our neurology patients have taken advantage of at home infusion availability.
Our ambition for neurology is one of our key value creation drivers and we remain confident in its long term growth trajectory.
We continue to be pleased with the progress, we're making with animal westie. Despite new insurance Soleris offers an incredible efficacy and safety profile for patients who risk facing devastating consequences from each and every relapse.
We also continue to see Ulta myris in GM GE as a potential key contributor to our long term growth once.
Once available we see a path forward for expanding the addressable population, we serve with Ulta myris with the phase three trial enrolling patients regardless of their prior treatment regimen.
Given the great progress Johns team is made with enrollment we anticipate a potential U.S. launch for all to mirror CNG LNG in the second half of 2022.
And we expect to ultimately extend our unique target market to approximately 20000 patients with the opportunity to move earlier in the patient journey.
We see this goal is achievable, even as new products come to market given the large number of GMP patients in the us and the remaining unmet needs. Many of these patients face we believe new insurance have the possibility to expand the overall treated patient population and to facilitate disruption of earlier line.
Often cyclical treatment regimens.
So while we're seeing a slowdown in new patient adds over the past two quarters. We're confident in the path forward as we continue to navigate COVID-19 evolve and innovate a growing new set of capabilities and build on our foundation in neurology over the years to come.
Turning to slide 24. This was the first quarter, we had index of fully in house and integration efforts are well underway.
As you heard from literally going to Rodney we saw strong performance from index in the us even when excluding the impact from some one timers for.
For the first time this year, we saw demand return consistent with free kobin levels as access to medical care has reopened more broadly and people have started to return to more active lifestyles.
Outside of the U.S., we also achieved a significant milestone by securing reimbursement in the UK for GE isolated bleeds.
We're continuing our pursuit of UK reimbursement expansion to intracranial hemorrhages as well as reimbursement in Germany.
While we're very pleased with our index or progress in just a few short months and the stabilization seen in sales for the quarter, we still have a ways to go in order to maximize the opportunity in line with our ambitions.
As we've discussed previously we plan to refocus the allocation of commercial resources to shift to a multifaceted hospital system approach.
We started this process and we'll continue to make inroads on hiring and onboarding over the coming months.
To execute on this approach in hospitals, we plan to optimize both new and existing top tier accounts first we'll work to achieve formulary status with index and its inclusion in bleeding protocols.
And we'll also educate to facilitate having index are built into the more systems and to complete a drug use review.
This way when a physician intends to use indexes the necessary steps are already in place from an economic standpoint to access the drug seamlessly.
Secondly, we will partner with institutions to raise awareness and build advocacy for indexes.
We'll work to identify clinical champions that understand the strong clinical value proposition of indexes and appreciate it's healthy economic value.
All with the goal to ensure stakeholders throughout the hospital are aware of and willing to use index. When a factor 10, a patient is suffering from a major bleed.
Finally, we will continue the efforts initiated by Portola to ensure demand is created and HCP is choose to use an index at the time of need.
We will focus on education in both network and affiliated centers to ensure broad pull through.
Expanded cross functional teams are already deployed against many of these target accounts and more will follow as we make progress in fully deploying our new mix of field facing teams and enhance capabilities.
And to drive even longer term growth with index. So we believe that geographic and label expansion or both key to success.
Plans are underway to seek access in reimbursement in new markets and our clinical team is working on developing plans to pursue a broader label.
As you heard on our Investor day, we see mdx as one of the key drivers of the lexicons mid term growth potential.
In each of these pieces are essential to deliver the full value of indexes.
While this will take some time to fully execute I'm incredibly pleased with the progress. The teams have made in just the first quarter alone and I look forward to sharing more updates with you on future calls.
So with that I'd now like to hand, it over to Ludwig for closing comments literally.
Thank you Brian.
In the third quarter, we continue to build on the momentum of the last few years.
We remained focused on executing against our value creation strategy and belief in our trajectory towards future growth.
As we have shared.
We don't focus rare disease expertise, we have the team and the resources to deliver on the promise of a broad and diverse pipeline and to be the leader in rare disease.
We see continued double digit revenue growth notebook folio and we believe we have a clear path to $9 billion to $10 billion in revenue by 2025.
There is vast potential and our pipeline, which is anchored by three novel platforms and several novel assets of which we believe will allow us to significantly grow the number of patients a rare diseases we serve.
We anticipate multiple pivotal readouts for some of these key programs over the next 12 plus months.
I'm very proud of the progress the entire election fee has made over the last several years.
And I'm confident that our continued momentum will drive long term value.
With that we will now open the call to questions.
Operator.
Ladies and gentlemen, if youd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
To withdraw your question press the pound key.
Our first question comes from Josh Schimmer with Evercore ISI. Your line is now open.
What was that for both on the inflammatory side as well as declines opportunities patients experience.
Because it apparent dammit.
The slowdown over the summer enrollment fell behind a little bit it's picking up now because we have.
Growing activity with second wave surges and us as well as France in UK. So we've seen an uptick in Enron.
Enrollment were over 30% enrolled now we do and plan to have an interim analysis after.
After a certain number of patients who have completed.
Likely in the first part of 2021.
Well, thanks, John I'll take the second question.
We are obviously seeing some impact from goal, but I wouldn't necessarily say that the third quarter was.
Driven by pent up demand, though we did see some orders as we mentioned, particularly in tender markets in certain international markets.
That will forecasted in fourth quarter come come in the third quarter.
If you look at our guidance for the fourth quarter for the full year, we are definitely taking into account.
The only sort of the selling days and the ultimate price headwind that additional goal that vein our field force in many countries and.
In the U.S. also remains.
Sort of working remotely and we have seen the slowdown in.
For example, the neurology patient that we mentioned so we are taking that into account.
Yes, John this is.
Go ahead, I was going to ill just jump into Josh This is Brian and.
And indeed with or without cold and for the future state and Thats virtual promotional effectiveness really healthy mix of in person as well as virtual secondly, we are pretty excited about the artificial intelligence guided.
Health care practitioners targeting efficiency and Thats really intended to help us out with breadth of prescribing.
We have the one source team of course with very strong patient support, particularly in the us and.
And then the thing I'm most proud of is that in neurology. We've got a team now that is highly experienced in both gmg as well as animal SD.
With three years and counting experience and so those are the areas that we're going to lean on as we go forward.
Okay, Operator, we'll take the next question.
Our next question comes from Cory Kasimov with JP Morgan Your line is now open.
My questions two of them for you I guess first one is kind of a follow up on our Brian was just talking about in the commercial front as it relates to geographic mix, where us Solaris growth remained strong, but the third quarter and nine months sales were down year over year in Europe, and Asia Pacific. So wondering if you can kind of go into some more color on that dynamic can we just talk.
Going about Tailwinds in Germany, but I'm, just kind of broadly speaking what are we seeing there and how should we be thinking about potential inflections going forward and then the second question is just wanted to ask about the rationale for taking Aoxin 2040 into GA versus your next Gen asset and maybe you can provide some clarity on timing for.
For 2015, and the incremental benefit you could expect there are over the first gen molecule. Thanks a lot.
Yes, Roger do you want to start with the moving parts financially and then I can speak to.
Some of the geographic does sure.
If we talk about the third quarter.
You can see that our we obviously had a very very strong third quarter EPS.
And some of it was a particularly because of different reasons as I mentioned there was some pull through.
In the third quarter from some international markets and rest of World markets.
We are seeing strong growth in a in Japan, though going forward.
Again honored on urology business is going strong in Japan, though we may have.
More effect from for example competitor trials, there and so forth.
I would say other regions.
The us continues to be strong with the exception of neurology, which as you mentioned the new patient adds are slowing down and down and.
In international we won't see the 70 million sort of a onetime I would say or.
What we're forecasting fourth quarter happening in third quarter, we won't really see that repeat again in fourth quarter. So those are some of the moving pieces were forecasting.
Yes inquiry I would just this is Bryan again I would just reflect back on the comments I was giving to Josh that.
You guys know that US Germany, Japan is about two thirds of our revenue. So just to keep it simple those three countries are really what we continue to monitor, particularly with the cobot impacts and what was interesting in the third quarter is the US as I mentioned was as everyone knows was still in very much a hot so.
And.
In most of the regions throughout the U.S., Germany had a cooling off period, Japan was probably in the best position in the third quarter and as Rodney said, we actually really pleased with the way things have continued in Japan, though I think it's fair to say, it's not opened up in the traditional sense as it was pretty cool.
Good.
And so what we continue to monitor is again, making sure that we've got the capabilities in place to be successful with or without cold, but I will also just say keep in mind. The fact that we've added 111 patients for gmg, while thats an admitted slowdown this is easily the most intense.
Headwind period, we could have imagined in terms of the coated dynamics. So we are I must say pleased certainly in the short term with the fact that we've continued to growth.
To grow and we definitely have seen remaining persistent ambition with forex.
Relative to growth in the rest in the longer term.
John do you want talk about.
Sorry, one other thing I forgot to mention is regarding the ultimate price headwind that given we've now achieved.
70% conversion in our major markets and we're on our way in terms of conversion for atypical Agee wrath, there's the ultimate price headwind as well.
Sorry, John you want to comment on 2014 for GA.
Yes, sure. So inquiry are right the pharmaco kinetic sand pharmacodynamics of 2050, when delivered systemically are better than danna Copan. However, in our preclinical experiments using a rabbit model of geographic atrophy we.
We found that 2040 is actually has a high affinity for melanin in the back of the eye, where it's concentrated and essentially allows for a prolonged distribution to the retina, which is very important to treating geographic atrophy. So said disease starts with the core ROI in the retinal pigment epic helium, which provides nutritional support.
To the photo receptors and so based on that model, we predict that 2040, despite its inferior systemic pharmacokinetics can be delivered to the eye.
With a low dosing frequency.
Such that it could support to Q day dosing in humans and so Thats why were taking 2040 based on that Rabbit model. We don't have similar preclinical data for 2050.
In contrast, 2050, as we've announced is going into Pn age as monotherapy on that study.
Study is on is ongoing right now phase two.
And we should have data in the middle of next year for that the phase three programs for Ghana, Copiague 2040 will be starting this quarter.
Operator, we'll take the next question.
Our next question comes from Geoffrey Porges with STB Leerink. Your line is now open.
A couple of questions.
But you also.
Wondering John if you can just confirm that the point estimate.
Hi.
And.
7.0 0.9.
And the confidence intervals.
I am not particularly wide.
Secondly, as you think about Subcu ultimately this will lead to expand.
Penetration of any real treatment in any of the major indications and then lastly, do you intend to study.
Q.
In MGM Animoto and could you just comment on the laws is a patent extension opportunity subcu.
Sorry for all the questions from the program.
So Jeff with regard to the topline data that we shared with spring, yes, we have achieved very strict noninferiority criteria. In fact, the lower balances are well above the the margin. So there's no issue there at very strong data.
And we agreed to the criteria with regulatory agencies. So we're on solid ground. There as you know we are generating.
Additional safety and drug device combination data, which would position us for a filing in the third quarter of next year, we do plan to attempt to extrapolate the data from this program, which is being conducted in patients with Penn age the regulatory agencies, both in the US and the you have granted us the extrapolation too.
Atypical hqs, we're in conversations now to see whether the same dataset can support a subcu filing in my senior Kravis animal.
Yes, and Jeffrey maybe this is Bryan again, maybe I'll just add on your question about subcu and whether or not it expands the market.
We certainly see that potential because there are a cohort of patients were sub Q will be.
The way that they want to receive therapy more home based therapy that said.
We don't see this as another sort of massive conversion going from Ulta Myris every two months, which is incredibly meaningful for patients to have that kind of minimal invasion in their life, while they're managing a rare disease over to Subcu once weekly, but we do think it's a very important addition of optionality for us.
Patients to have.
Operator, we'll take the next question.
Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.
Just two questions. So.
I know you talked to.
From a previous question around the.
The development of all comparison and COVID-19, but we've kind of heard some chatter around off label use happening now with Solaris and hospitalized COVID-19 patients I Wonder if you could maybe talk sort of qualitatively.
About any sort of measurable level of use of Solaris off label and these patients that you might be seeing regardless of geography.
And then I think Brian I think I heard you talk about balanced growth across both.
Neurology indications for for Solaris.
But then I think I heard you say the.
The 111, U.S. neurology ads were G.M.G. can you just sort of clarify that what's the what's the mix between anemone gmg. Thanks.
So Chris this is John I'll take the first question, yes, we do have experience with Solaris and COVID-19 earlier in the pandemic we had.
Patrick use an expanded access program.
In France, and it was used in Italy as well there is a case series published by Professor diurnal with five patients that showed.
Benefit of a solaris in those patients, but again its uncontrolled data on there are also some experience in France as well as in the UK with C inhibition, suggesting that there is a potential benefit.
We won't know until we actually have a carefully controlled data October 19, three or five study as I said is enrolling and we should have an interim data in the first part of 2021, there is strong scientific rationale for blocking terminal complement.
Supported by recent publications, where the dual mechanisms of inflammation and.
And Matt deposition, along with the Activations, a quite relation Cascade, which is clearly interlinked with comp.
Complement.
Physicians a C inhibition for success there have been other anti inflammatory that have been not successful as you've seen some of the data. We believe were upstream of that Im cytokine storm and that many of the downstream mediators can be blocked by blocking Sci Fi.
Yes, Chris just picking up on the second part of your question and it may have been misinterpreted when I referred to the.
The adding 111 patients in the us for neurology, that's a combination of GMT, an animal SD the point I was trying to make is that.
We have balanced growth with both of those indications and we didnt split out exactly how that breaks down.
But there's there are obviously very different disease states in the case of GMT. There is more promotional sensitivity as far as we can tell and it might be because gmg tends to be ill put quotes around it a little more forgiving for patients than the intensity of a relapse associated with animal westie. So what.
We see is in the US as I've mentioned the claims for Gmg had been down.
Not including solar is just overall about 20% animal SD when a patient relapses they need treatment and we do see that continued progress that we're making any other point I'll. Just make is it's important for this quarter to note that we have had no observable competitive impact within MST today.
Okay, we'll take the next question.
Our next question comes from the line of Phil Nadeau with Cowen and company. Your line is now open.
Good morning, congratulations on the quarter.
Two related questions for me first as we do think about another covered wave.
And what is the most recent data that you have on the proportion of your patients across indications that are getting at home infusions has.
Has in fact increased over the last six or nine months and.
And then second Brian just follow up on a point you just made it in your comments about Germany. It sounded like there was some warehousing of patients during covered that.
And they there was a bolus once.
Cobot subsided a bit.
And the answer to the last question, though it sounded like you also suggested maybe some gmg patience to simply go away. If they don't go on therapy immediately because there's promotional sensitivity and it's a more forgiving disease. So I guess I'm trying to trying to square those two comments what do you think will happen in the U.S. quench once covert subsides, where we see both warehouse patients.
Particularly in neurology or is there likely to be some proportion of patients weren't starting now.
Who for whatever reason will never ever going to see from therapy. Thanks.
Yes, good morning still good questions on the first one with Holden fusion, it's it's a relatively small part of overall utilization.
That said, we do see some growth and part of that is the growth that you would expect naturally motivated by kobin.
Burden of access to hospitals infusion center dynamics, and we're doing what we can appropriately to make sure that.
That that we make that available to patients as much as possible secondly on.
On Germany, and the dynamics around Gmg neurology I would I would not characterize it as patients go away with Gmg I think what you're seeing is a re phasing of treatment because a lot of patients in this era or likely managed on.
The typical high dose corticosteroids, where doctors can kind of do that remotely without a lot of intensive therapeutic education talking to patients through complement therapy and the like but the gmg of course doesn't go away. So I think what we saw in Germany is that you saw a case of patients being managed very intensity of cold.
And then when coated relaxed patients came in the doctor's had those appropriate educational discussions around complement and we saw really nice progress with patients being converted to Solaris therapy. So it's very tough to say from where we sit right now about the puts and takes on the timing on when that happens, but I think overall.
We take that as a very encouraging sign about the strengths first of all if complement as a key part of the underlying pathophysiology and secondly, just the resilience of the unmet need that's out there and the fact that when you have different geographies that move into different phases of cold it.
That we expect that there will be continued growth with Solaris and eventually when we get to that point would ultimately as well as I had mentioned.
Okay, we'll take our next question.
Our next question comes from the line of Mohit Bansal with Citigroup. Your line is now open.
Great. Thanks for taking my question a couple of questions. If I make these some of the index. It seems like the guidance is still fairly conservative.
Considering the TQ sense of $39 million could you talk a little bit about that and the other one is actually on a sub julys Thoma. This since you mentioned and Gi patients on relatively sensitive to promotion is is there is there thoughts of the Subcu Alto Moody's could exceed.
Finally, maybe have more utilization in and GE patients given that they are the relative age some big other diseases as well as disease state.
And also.
Competing against future competition that could be doing EPS, yet in spaces that were.
I would love to get your thoughts here. Thank you.
Yes, good morning, Mohit I'll I'll start with the index that just in the order that you asked in first I would just remind everyone that this is our first full quarter of having endesa.
Because the deal closed at the beginning of July. So we are really pleased with.
The progress, we're making on integrating the Portola team. We're thrilled to have these colleagues on board. We've got a lot of that is really healthy mix now with people who came from our organizational readiness, who have critical care acute care experience and now we've got all the expertise that came with the Portola team. So what we're focused on near term is rebounding.
Sensing efforts and I've talked to.
A number of times about the best way to think of the opportunity with index that is it's a three part story. So first ensuring that we've got really good awareness and really good advocacy with clinical champions. That's critically important in the complex institutions that were focused on to make sure that.
You've got bleed protocols in place formulary acceptance and ultimately.
Demand generation, which is the second pillar, but the third is about access and Thats a two part story its physical access making sure. The product is on site as well as economic access and that continues to get strengthened as time goes on so when we look at quarter to quarter I would not older extrapolate what we have in this quarter.
Or frankly, even the next quarter. These these re powered rebalanced mobilizations that we're doing will take time to pull through and that really is the story within index. It's a long term value creation story there were so excited about that.
And by the way the second one which was similar to the question the Geoffrey Porges asked on Ulta numerous subcu.
As I mentioned, we do believe in fact, we that's an important offering to build out more of a portfolio of choices that are ultimately space for patients. So I do think there is a potential to grow the market. I also think that there may be patients that say that for their home based treatment that that's the best on.
Option subcutaneous and perhaps not once every two months, which for the majority of patients. We believe will be the key profile the kill one.
And to that end in addition to developing ulti mirrors and Myrsini gravis that I just mentioned a moment ago. We are pursuing our third generation Cfivea inhibitor, 17, 20, which is finishing its phase one.
Study shortly we'll be moving into my senior gravitas with.
17, 20, and Thats a small volume.
Subcutaneous administration, that's ideally suited for auto injector. In addition to that we have our own F. CRM program, which has been rebooted going back into healthy volunteers to generate data in the first part of 2021 with the plans to move into my senior gravis.
In the second half of next year. So we do believe that having a subcu.
Offering is a good option for patients with MG in addition to those that they already have.
Okay.
Okay, operator, we'll take our last question.
Our last question comes from the line of Geoff Meacham with Bank of America. Your line is now open.
Morning, guys. Thanks for the question and congrats on a good quarter.
I have two in there probably for Brian.
So in teenage that was 30% of patients that that haven't switched to ultramarine.
Does that inform your view of the switching dynamic, let's say in a few years when multiple competitors are theoretically on the market just trying to get a sense for the stickiness of that population.
And then in the three major commercial countries, you've highlighted so Germany U.S. Japan.
Should could persist longer and the 2021 are there some new strategies that youve implemented today.
To help with new patient adds it does seem like maintaining stable patients is more straight forward, but new ads is a little bit more of a dynamic process. Thank you.
Yes, good morning, Jeff and.
Thanks for the kudos on the quarter. We are we are very pleased with the progress we've made in a very challenging period. So on the question about the 30% that Paul well roughly 30% lets say that have not converted to Ulta myris.
For PNM, especially and Thats more a story about theres, a long tail of PNM prescribing. So a lot of the conversions that we've achieved at this stage or doctors, who may have more than one p. in each patient then you've got a long tail, but just it just takes time to get everything in sync with the education of the Doctor. So they are aware of.
Ulta Myris the Doctor then educating the patient about all the benefits of the efficacy that they've had with Soliris plus every two months opportunity, which is less burdensome for them.
And we figure that thats going to take us. Some continued months, we have plenty of time to help the patient navigate through that journey, but I wouldn't necessarily over extrapolate that into all the other future indications that were pursuing with ulta mirrors by the time, we get there we believe the awareness of Ulta Myris all the benefits that the community will be aware.
It will be well established.
And with.
With respect to coded oriented new strategies to be successful in that continued era, yes.
Yes, definitely and as I had mentioned, we're mobilizing a lot more virtual promotional effectiveness.
Technology based training of our teens I think even without our efforts customers on the receiving end are becoming more oriented to that form of engagement and then just as one of many examples that I've cited openly the artificial intelligence claims based.
HCP targeting that we're doing is much more efficient than deploying our teams and having them try to go out and find clinicians who might be high potential to treat rare disease patient. So that's that's just one of many examples that were putting in place.
Yes, thanks, Brian the thing the opt for Sensus, we're at the top of the hour.
So we had another strong quarter of.
I want to thank all on my left some colleagues again for their hard work.
And needless to say that this team has been delivering quarter after quarter.
And we plan to continue to do so so thanks to all of you for dialing in.
And enjoy the rest of your day thanks, everybody.
Ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
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