Q3 2020 Global Blood Therapeutics Inc Earnings Call
The ongoing impact of code 19, total net revenue from the sales of Ahcs brighter was $36.9 million for the third quarter of 2020 in.
$882.5 million through the first nine months of 2020.
Third quarter revenues were driven by underlying patient demand as well as good payer coverage and reflected our progress with new prescriptions.
Including more new patient scripts in the second half of the third quarter.
The third quarter results compares to $31.5 million in the second quarter and represents a $4.8 million or 17% sequential increase.
I would remind you that the second quarter included a tailwind from new prescriptions that originated in the first quarter, but were not dispensed and thus not recorded as revenue until the second quarter.
We did not have the same tailwind in the third quarter, because we have reduced the time from enrollment to dispensing medication.
As you think about modeling revenue based on our new patient prescriptions it.
It is important to note that while this is the best indicator of demand and the initial trajectory of the launch but.
The translation into revenue can be delayed or impacted by multiple factors.
I'll now walk you through some of those dynamics, which continue to be consistent with analogs for our launch.
First.
As with all novel medicines, there is a lag between inox bridal prescription entering GBT source and when it is dispensed to patients.
And inevitably along the way some prescriptions will be abandoned by the patient and never filled.
We estimate that together these factors have time lag in abandonment impact up to about 25% of new prescriptions.
Around 15% to 20% of this is related to abandonment.
And the balance represents the lag time factor of prescriptions working their way through the payer and physician office processes.
For example, as prescriptions in the third quarter were more weighted to the second half of the quarter. A portion of these prescriptions may not be filled until the fourth quarter.
It also means that of the dispense new prescriptions the.
The majority drove only one to two bottles in the quarter.
Next I'll highlight adherence, which is how patients are taking occupied over time as prescribed.
For various reasons overtime, some patients discontinue therapies.
In a launch year analog suggest annual adherence will be in the range of 60% to 80%.
We are currently well within that range.
As we have said previously it is very early in the launch to be making any long term estimates of adherence as this could change over time.
Our gross to net adjustment was 13% in the third quarter.
The adjustment each quarter will be driven by patient insurance coverage prescriptions filled by 340, B. pharmacies, the Medicare part D coverage gap and patient co pay system.
As previously stated we anticipate that overtime, our gross to net would stabilize at around 25% to 30% once we reach our expected payer mix.
Over the last two quarters, we have seen more Medicaid patients that were eligible for dual coverage with Medicare as well as a patient preference to go to GVT source.
As a result, we now anticipate we will likely be at the lower end of that range at steady state.
Cost of sales for the third quarter was 513000.
Cost of sales was low as the majority of the manufacturing costs related docs private sales were incurred prior to FDA approval and thus were recorded as R&D expense.
We expect the cost of occupied a sales as a percentage of revenues will increase in future periods as fully expensed product manufactured prior to FDA approval is utilized.
It is important to point out that we believe that we have enough commercial supply box prior to sustain estimated patient needs until late 2021.
R&D expenses for the third quarter of 2020 were $40.2 million compared with $39.1 million for the same period in 2019.
The increase in R&D expenses in 2020 was primarily due to an increase in external costs related to our in Clackamas program and preclinical research activities related to our collaboration with serious pharmaceuticals.
This was partially offset by a decrease in manufacturing costs for Aucs brighter.
Following the FDA approval of Ahcs brighter, we now capitalized manufacturing to inventory.
Sales general and administrative costs for the third quarter 2020 were $54.5 million compared with $29.7 million for the same period in 2019.
The increase in ESG in expenses was primarily due to increased employee related costs, including non cash stock compensation and other professional and consulting services associated with the build out of our commercial operations and launch of Ahcs brighter.
Our increased patient in HCP education and promotion efforts.
Are also reflected in the EPS genia expenses in 2020.
Net loss for the third quarter was $59.9 million compared to $64.5 million for the same period in 2019.
Basic and diluted net loss per share for Q3 was 97 cents per share compared with one dollar seven cents per share for the same period in 2019.
We ended the third quarter with a strong balance sheet and with cash cash equivalents and marketable securities of $535.2 million compared with $574.2 million.
June Thirtyth 2020.
We continue to believe that our existing cash and investments along with access to the additional side 75 million under our term loan facility have the potential to provide the necessary runway for us to achieve positive cash flow, while enabling ongoing advancement of clinical development programs and other earlier stage product candidates.
We remain confident that we are operating from a position of strength.
And with that ill now turn the call over to DJ.
Thank you Jeff.
Good afternoon, everyone I'm quite pleased with our progress on the X. bridal launch in the third quarter as we continue to effectively manage through a dynamic environment created by COVID-19.
I want to thank our team for their passion and dedication they bring everyday to make this possible.
I will provide an update around the three key metrics that combined with net revenues will give you further insights into our progress these metrics are.
New prescription for EPS, Bretaa, which informs underlying patient demand the number of healthcare providers prescribing entrepreneur, which captures the progress we are making in adoption and.
And payer coverage, which speaks to the access environment for ARX brighter.
First new prescriptions.
There were more than 1000, new prescription forex brighter during the quarter. This.
This result is in line with our expectation that new prescriptions in Q2, we are going to be a good proxy for Q3, we.
We are pleased with this result for several reasons in.
In terms of the macro environment. It was another challenging quarter that began during a surge in COVID-19 cases around the country. This created a headwind sickle cell patients had lower levels of engagement with the health care system than before the pandemic.
That said, we were encouraged that new prescriptions began to improve in August as new COVID-19 case was moderated which continued in September both months included some weekly prescription results that were approaching pre pandemic levels.
Similarly, we saw some regional successes in top FCD States, such as New York, New Jersey, and California, where physicians have been able to consistently see patients in person.
As we consider the outlook for Q4, we are balancing the positives with the ongoing uncertainty going into the winter as new COVID-19 cases rise across many parts of the United States as well as the impact of the holidays.
Given these dynamics, we believe it is prudent to anticipate that new prescriptions in the fourth quarter will likely be consistent with Q2 and Q3.
As use of our credit grows we have expanded our review of patient charts claims and lab data to include over 1500 patients and the results continue to confirm that almost half of the patients started therapy with a baseline hemoglobin greater than eight grams per deciliter and nearly half experienced three or more vlccs.
In the prior year.
The results demonstrate that ex freida is being prescribed to a broad range of patients, which we believe is a positive indication of its growth potential as adoption expands.
We're also pleased that I might majority of new prescriptions continue to become enrollments in GBT source signaling the effectiveness of our patient support program.
In Q3, the time from prescription enrollment to a patient receiving medication was about around two weeks, which is consistent with Q2 and in line with best practices for orphan therapies.
Now I'll turn to the SEC second metric healthcare provider penetration.
Similar to the prescription trends the ability to engage with our customers in Q3 was influenced by the rate of new COVID-19 cases.
Our sales team medical science liaisons and access navigators have been actively educating customers throughout the pandemic.
While most physician offices were open to virtual meetings in Q3 in person visits started to grow accounting for about one third of our engagement by the end of the quarter.
We expect the mix of in person meetings with HCP to further improve over time, though it will be variable depending on cobot 19th.
I'm proud to say that by the end of the quarter. The total daily volume of our sales interactions with HCP has returned to pre pandemic levels.
Interaction with ox brighter.
Contributing to the increased penetration we are building momentum with our broader marketing and educational activities are full branded message platforms for Hcp's and patience launched in the third quarter and were featured in our promotional efforts at key sickle cell disease medical and community meetings.
We have also elevated our digital presence, which has led to increased engagement with the C D community, including via social media.
Turning to pay her coverage as Ted highlighted at the end of the third quarter, we achieved our goal a broad coverage and did so I had to schedule.
As of the end of the quarter, we have achieved access for 90% of covered lives in the United States versus 53% at the end of the second quarter.
This coverage include published decisions or verified patient adjudication the.
The box brighter responds in an acutely ill COVID-19 in fact that S. T D patients.
We're also very excited to have nine abstract except it at the American Society of Hematology annual meeting next month and.
Including our 72 week analysis from the hope study that support the sustained benefits of Ox Friday.
This includes an abstract which utilize a validated outcomes to known as the clinical global impression of change or CGI that measures a patients change an overall health status.
We will also have several real world evidence abstracts, including a large.
1200.
75 patient study.
And that study arced Friday improved hemoglobin reduce blood transfusion and demonstrated a trend toward reduced vlc's.
We believe this additional real well evidence will give health care providers added confidence in the real world benefit to box Friday for the patients they serve.
We will also share new research from our pipeline.
This includes data supporting the best in class potential for and clock him at our novel fully human monoclonal piece selecting inhibitor.
Which we are evaluating for the potential to reduce vlc's.
We remain on track to initiate a pivotal clinical study on and clock him out in the first half of 2021.
We will also present for the first time data on our next generation hemoglobin ask <unk> polymerization inhibitor G. B T 21006 O one.
Also known as six O one.
This unique molecule with new intellectual property.
That we designed as a potential innovative advance over ox Friday.
We are very excited about the potential of because I wanted to raise the bar even father above the excellent results, we are seeing with ox Friday.
The preclinical data with 601 demonstrate that it normalised hemoglobin by reducing hemolysis and significantly in blue Red cell health.
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If approved this would expand occupied as potential to treat an additional 17000 patients in the U.S.
Finally, I'm also pleased that we are making progress on our ongoing clinical trials.
After a covert related pause our clinical development activities are accelerating.
In closing I want to thank our employees for their excellent work and passion they bring everyday.
Together, we are impacting the lives a mini sickle cell patients by delivering a critical new treatment option in our spread in advancing potential new innovative therapies in the future.
Our team is driven by our goal to make FCD, a well managed chronic disease and to profoundly impact the disparities in health care These patients space.
With that I'd like to open the call for questions operator.
Thank you, we'll now be conducting a question and answer session to start please limit yourself to one question. If we have time remaining we will take follow up questions. If you would like to ask a question. Please press. The one followed by the four on your telephone keypad.
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21, this was primarily due to frankly, the great outcome on the Medicaid side, where we essentially have 100 per cent coverage now, but some of the states require brook broken brick and mortar holding of inventory. So we have some of that impact there that will have to be worked out through the quarter as well, but we certainly.
You don't expect a downward revenue or flat revenue for next quarter.
Thank you.
Next question.
Comes from Jim Bitch enough with Wells Fargo police specific to your question.
Yeah, Hi, guys. It yeah I just wanted to follow up on you know revenues versus new patient Stark cause I think there there seems to be a bit of a disconnect when people look at you.
3000 patients that have come into the system through the end of Ah two queued up to 4000.
But only 17% growth in revenues and so.
You know you you you said one to two bottles per patient and it reflected the timing and more back half waiting a new patient start that could come through and four Q, but what would you expect to be you could you say could you be more specific on that once it between one to two bottles what was it in two Q and.
What would you expect to be the run rate you know if you're if patients are refilling every 30 days you expect it to be closer to three but could you just give us some context for the one to two bottles and what maybe more specificity than what you saw onto Kim.
Yeah sure Jim one of the benefits, we got it I alluded to it in the prepared remarks was in queue to we did get a benefit from the fact that it was taking us longer to fill scripts and do we had a big bowls that came through in the first quarter 650.
New Rx is but it was taken about 30 days to fill those scripts. So that came through a portion of those came through in the second quarter. So that's why we saw greater revenue growth in the first and from the first quarter of the second quarter.
And when we refer to the the pace the bottles that were one to two in this quarter, it's strictly related to the new Rx is so those are patients that are starting in that particular quarter. Some of them might start in the middle of the quarter some of them might start and the end of the quarter. So we wouldn't get the the full <unk>.
Benefit of that full quarters worth, but I don't know D. J. If you want to add anything further yeah, Hey, Jam I I I know you know this but just to be abundantly clear the the 4000 or so approximately enrollments are new patient prescription. So we have launched a date that's really the top of the final right. So that's <unk> that doesn't represent patients on therapy, so just to be <unk>.
Correct in other words, they don't set up the shipment they have something else come up in their life that either delays or prevent them from really starting therapy at that time.
Sometimes it's a cancellation as well they simply let us know through our hub that hey, they're not ready yet or they're moving or whatever it is so that that can be a whole series of reasons why patients don't start their therapy, even though they've been prescribed and that's been true in all the chronic therapies and all especially areas I've worked in throughout my career then after the pay.
We expect that to change as the pandemic subsides and they get more accurate.
And then also if as more of the Medicaid patients come on as part of the mix that will also drive it up so we we see that continuing to to increase probably into the middle of next year.
Matthew Harrison with Morgan Stanley. Please proceed with your question.
Hi, Thanks for taking the question. This is corner on for Matthew can you just comment on where you guys are staying with durability for existing patient and then and if that changed materially during the quarter.
Over a quarter.
Yeah.
So when you said your ability you're talking about staying on therapy.
Yeah Okay.
Okay. So D J you might want to check that.
And.