Q4 2020 Theravance Biopharma Inc Earnings Call
Ladies and gentlemen, good afternoon, I'd like to welcome everyone to the third bench Biopharma fourth quarter and full year 2020 conference call during.
During the presentation, all participants will be in a listen only mode of.
The question answer session will follow the company's formal remarks task of question press. The Star key followed by the digit one of your telephone.
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All of the Pea these instructions after management management completes their prepared remarks.
Also today's conference call is being recorded.
And now I would like to turn the call over to Gail Cohen, Vice President Corporate Communications. Please go ahead.
Good afternoon, and thank you for joining the serve out of Biopharma board of late and full year, 'twenty and 'twenty conference call to discuss our business.
As the only I remind you that the call will contain forward looking statements, which will involve risks and uncertainties.
Including statements about our development pipeline expected benefits of our products the anticipated timing of the clinical trial regulatory filings and expected financial results.
Information concerning factors that could cause results to differ materially from our forward looking statements of describe further.
The filings with the FCC.
And now I would direct your attention to slide three.
Joining us are free.
Rick Winningham, Chief Executive Officer.
Led by Frank How Cologne, Chief Business Officer, Brad Coleman, Chief Medical Officer, and Andrew Hindman, Chief Financial Officer.
Following our prepared remarks, we will open the call for questions now I will hand, the call to Rick for opening remarks.
Thanks, Gail good afternoon, and thank you for joining us.
To begin the I want of highlights the resilience and the persistence of the terror events Biopharma team in 2020.
That drove our programs forward and helped US lay the foundation for 2021, which we believe will be a transformational year for the company.
If you've been following through events Biopharma would come as no surprise during the fourth quarter and year end presentation.
We're leading with <unk> calorie you Pal is the only.
First of all the once daily <unk> Bronchodilator approved of the U S for the maintenance treatment of patients with chronic obstructive pulmonary disease of COPD.
Your Perl rewrites standalone profitability as reported last quarter and continued to grow market share each quarter.
Last year, despite a respiratory pandemic.
This profitability measure of bonus based on accounting for consolidation of our 35% of the the profit loss what what's the actress formerly Milan and then factoring in additional <unk> expenses by their events.
Got shelled shared with the interest.
The interesting survey of small form of commercial teams accomplished this during an ongoing COVID-19 viral surges.
While always remaining mindful of the health and safety of our teams and the communities that they serve.
Our market share continued to grow.
In the fourth quarter.
And Frank will share the details of our progress with you in 2020, you calories of one of the key pillars for transformational change.
Moving to slide four.
The second major pillar for transformational change as our pipeline and today, we will focus on PD, one items, three and investigational nebulize lung selective pan JAK inhibitor to treat patients hospitalized with acute lung injury due to COVID-19, who required oxygen at the time of enrollment.
This is part of our inhaled JAK inhibitor portfolio.
The survey of <unk> Biopharma team moved nine O three rapidly from preclinical stage and of the clinic last year in response to the global pandemic our press release today.
Share of the encouraging initial.
Clinical data from the first part of the two part of placebo controlled randomized phase two study the <unk>.
<unk> the miracle of improvements in clinical outcomes shorter hospital stays and fewer death when compared to placebo.
<unk> nine O three was generally well controlled the demonstrated evidence of improvements in several relevant inflammatory biomarkers.
With low systemic exposure at all doses.
Part one of the phase two study enrolled a small number of patients consistent with other dose escalation studies and it wasn't powered for efficacy.
Importantly, part one as I said is the double blind placebo controlled study in contrast to some of the early open label of COVID-19 studies and we've allowed all patients, including those on placebo to be on standard of care treatments, including oxygen anti coagulants and that's the message.
Zone.
Brent will walk through the results of part one in more detail shortly.
In the past year, we've pioneered pan JAK inhibition of the lung and garnered an incredible amount of data and insights. Our team is working diligently to put the puzzle pieces together to help make a difference for patients suffering from respiratory conditions, both acute conditions and chronic conditions.
Yeah.
Since we last reported we completed the additional analysis on TV to $82 36 of dry powder lung selective pan JAK inhibitor in the asthma, taking a deep dive into the gene signature and biomarker data from the phase <unk> study.
The gene pathway analysis, and biomarker data or consistent with targeted engagement in the world.
The robust body of scientific evidence from TD $82 36 of TD <unk> hundred three provide confidence for us to continue the lung selective inhaled Pan JAK inhibitor program for asthma. However, based on our current understanding of $82 36, we've decided to pause that clinical program.
For TD $82 36 in its current form and apply or $8 36 in the <unk> III learnings by refining the form of $82 36, as well as expanding the number of molecules in our portfolio of inhaled JAK inhibitor suitable for dry powder inhalation drawn from.
Our ongoing research efforts the.
The full data set for TD $82 36 will be presented at future scientific meetings.
Turning to our later stage programs, we continue to expect the <unk> phase III results for symptomatic neurogenic orthostatic hypotension, and the eyes and certainty of phase II results in ulcerative colitis, and Crohn's disease to read out during the third quarter 2021 likely in three separate press releases.
And finally as I highlighted during my presentation at the annual J P. Morgan Healthcare conference last month.
The third pillar of the transformation, we expect to see in 2021 is sort of changing financial profile.
Andrew will end the presentation with the financial update that include.
21 operating covenants, so now let's move to slide five and Frank will speak to the commercial team's progress with your Perl right Frank.
Thanks, Rick remember <unk> is indicated for the maintenance treatment of patients with COPD is.
It's the first and only once daily Nebulizer long acting muscarinic antagonist that provides a full 24 hours of control for patients.
In the second full year since its commercial launch you probably continue to experience solid net sales growth on an annual basis in 2020.
This was achieved through our combined commercial sales and marketing efforts with our partner Beatrice formerly Mylan.
Their advanced Biopharma and be interest co promote in the U S with our combined sales infrastructures targeting healthcare professionals that treat the universe of COPD patients suitable for your salary.
We cover the hospitals the interest covers the community.
The power of year over year sales grew by 159% compared to 2019 in the face of many obstacles related to the pandemic.
Turning to slide six since the launch of empowering we've gained share in both the hospital and the community settings.
Many patients with COPD experienced an acute episode serious enough to require a trip to the hospital for immediate here.
The hospital, then becomes the key point of switch a person with COPD from of handheld inhaler to you Pal.
Data shows that most patients that receive the power in the hospital are discharged from the prescription to continue treatment, allowing for continued Repowering therapy post discharge you can see by the market share of its growth the strategy in collaboration between the Beatrice and <unk> Biopharma teams continue to work effectively of converting <unk>.
Is this from competitive products to you.
Yeah.
On slide seven we break down their advanced Biopharma is implied 35% share of net sales for Ya salary. During Q4 of 2020, $13 6 million and totaling $50 million in revenues for full year 2020 remember the V interest their vans Biopharma commercial partnership is the 65 35.
And law split so this only shows our implied 35% of the salaries of sales.
Been reassuring to see that while the COVID-19 pandemic affected your calorie sales growth in 2020, specifically in quarter two we recover the growth in the second half of the year. Additionally.
Additionally, we continue to be encouraged by market feedback and performance indicators, including hospital formulary wins patient uptake and market access over the past 12 months.
And we continue to track key performance metrics since launch of <unk>.
Total of 627 formulary and non formulary accounts have ordered your salary and two thirds of these accounts have reordered at least once.
We recorded 198 formulary wins covering over 400 accounts with the formulary win rate of 91%.
85% of these formulary accounts of purchased to date, owing to a lag between formulary approval and ordering commencing.
Salaries of commercial coverage has increased to 74% we continue to provide exceptional medical information support to our customer base by fulfilling 100% of health care provider requests in under 30 days since launch.
We remain encouraged by healthcare industry indicators, the market and customer response to you powering.
Promotional efforts fueling salaries growth, including an emphasis on digital innovation will continue to expand as we worked through the future stages of the pandemic.
To be able to demonstrate month over month share gains. Despite COVID-19 speaks to the unique attributes of your powering of the patient needs in the market and the strategies of promotional investments we have in place for the brand.
So now I'll turn the call over to Brett the delve into the G. D O 903 data.
Thank you Frank.
Moving to slide eight TD one of three a lung selective nebulizer JAK inhibitor is currently in development for the treatment of hospitalized COVID-19 patients the require oxygen supports.
So the non industry has the potential to inhibit the pulmonary inflammation that's associated with severe COVID-19 disease in an effort to reduce the number of patients the required admission to ICU for assisted ventilation.
Duration of hospital stay and the risk of debt.
As previously reported when the pandemic took hold around the world early last year, we moved out of Atlanta is very quickly into the clinic, where we evaluated a range of Netherlands doses of the single and multiple doses in a phase one study in healthy volunteers.
Moving to slide nine the healthy volunteer data showed on his face of has a favorable safety and tolerability profile and low systemic PK.
This data allowed us to initiate the two punch phase two study pumped.
Pump one was the placebo controlled double blind multiple ascending dose study evaluating three nebulize dose levels, one three and 10 milligrams in hospitalized patients with COVID-19, compared to placebo with eight patients in each cohort.
Today, we are sharing the initial data from part one that has informed our confidence to progress to pump too.
The larger placebo controlled study of 198 patients testing the three milligram dose of the non history.
Added to standard of care.
Part two is actively enrolling patients and we expect to report results in the second quarter 2021.
Turning to slide 10.
One is a small sub study intended to assess safety PK and exploratory clinical measures, but is nevertheless provided us the directional information about the potential of that non history in COVID-19.
Oh, no no trade was well tolerated in hospitalized COVID-19 patients as it had been in healthy volunteers in phase one.
There were no drug related serious adverse events, although one patient in the 10 milligram cohorts med predefined stopping rules and was withdrawn as of propulsion due to an isolated incidents of high a L. T.
This patient with Covid with no additional consequences.
From a clinical perspective, it was encouraging to see the ninety-three show the positive trend versus placebo in the number of parameters, including improved clinical status children hospital stay and fewer deaths, albeit in a small number of patients.
As reported in our press release today, we saw a reduction in main hospital stay from $22 five days on placebo to $15 three days for those patients on the three milligram dose and $15 two days. So those patients from the 10 milligram dose although non its rate.
In terms of mortality, we know that hospitalized COVID-19 patients have an increased risk of debt.
And in this study there were two deaths in the placebo cohort one day in the one milligram cohorts and none in the three or 10 milligram cohorts.
We also saw evidence of improvement in several biomarkers and in keeping with our lung selective approach, we saw low systemic exposure at all doses.
Moving to slide 11. This histogram shows the clinical state of school for each dose showing the seven day treatment period.
And the school of five shut in seven pink, indicating the clinical status on the admission with darker shades of red Shang levels of deterioration and levels of gray and blue shouldnt levels of improvements now.
And must continue to remind you. This is a small study grid, but what is noteworthy is that the number of patients in the placebo group continued to decline after admission into the hospital with 50% of claim intubation by day seven.
In contrast, none of the patients in the earn in of the three cohorts decline during the seven day trading periods and some patients show evidence of improvement.
Turning to slide 12, the numerical differences between placebo and <unk> cohorts continue for the remainder of the 28 day observation period with the treatment effect more months of the three and 10 milligram cohorts and the one milligram cohort.
Moving to slide 13 900.
<unk> also demonstrated the same consistent PK characteristics that had previously been seen in the healthy volunteers with low dose dependent concentrations in the blood following once daily administration for seven days.
Net were well below those expected to inhibit systemic JAK pathways and consistent with our intended profile of this lung selective nebulize Pan JAK inhibitor.
Note that we administered a loading dose from day, one of double the dose in the one and three milligram dose groups in order to achieve steady state levels more quickly than the loan in recognition of the fact that of hospitalized COVID-19 patients on oxygen are prone to deteriorate quickly after admission.
Turning to slide 14, the data from part one including safety and exploratory clinical data across all of the doses informed our decision to progress the three milligram dose into pumped two of the study.
If the data from pump one is ultimately predictive of what we see in pontoon, including these day session of the improvements in oxygenation in the blood with the three milligram dose compared to placebo over the seven day treatment period.
Then one line of three could potentially offer an important additional treatment option.
The line COVID-19 patients.
Importantly, one honestly offers the potential of broad pan JAK anti inflammatory therapy in the lung without increasing the risk of systemic side effects that are associated with other JAK inhibitors, Inc.
Cleaning the risk of blood closing already of high risk in patients with COVID-19.
I don't know honestly also targets the lung inflammation caused by COVID-19, not the Corona virus itself.
So should not be affected by which mutational strains of COVID-19 caused this acute lung injury.
But one of three could potentially produce similar anti inflammatory effects in response to other sources of acute lung injury, including influenza Harrow influenza and other coronaviruses such of Mers and Sars.
We look forward to updating you on our progress with our non US right next quarter. When we expect we'll have data from part two.
I'll now turn the call over to Andrew of the financial updates.
Thank you Brett.
And before moving to our financials, let's start with an update on Gsk's trilogy on slide 16.
As a reminder, trilogy is the first and only once daily single Inhaler Triple combination therapy approved for the treatment of COPD and asthma therapy.
<unk> biopharma receipts of upward tiered royalties on global net sales of trilogy.
At present 75 per cent of the income from our economic interest is pledged to service principal and interest payments on our outstanding 20, thirty-five nonrecourse notes and.
And the remaining 25% of income is retained by us.
During GSK as recent earnings call. They noted the trilogy continued to lead the market as a single inhaler triple therapy with with full year over year global sales growth in 2020 of 60% over 2019 results generating global net sales of $315 million during.
The fourth quarter of 2020, and $1 1 billion for the full year.
Moving to slide 17 here, we provide our 'twenty 'twenty, one financial guidance, providing a new format. The book focuses on key operating expense categories of R&D and SG&A, excluding share based compensation.
We believe this change provides greater transparency and how we are allocating capital and will begin to highlight the changing financial complexion of our business.
For 'twenty 'twenty, one R&D expenses, excluding share based compensation, we expect to invest between 195 and $225 million relative to an actual expense of $230 million in 2020.
For SG&A expenses, excluding share based compensation, we are providing a range of $80 million to $90 million relative to an actual expense of 70 $70 million in 2020.
Regarding the timing of expenses throughout 'twenty 'twenty, one for R&D in particular, we expect greater spend during the first half of 2021 due to the the completion of the ample ochs of team and I've been sitting there studies in Q3.
With that I'll turn it back to Rick for some closing remarks.
Thanks, Andrew moving to slide 18, I remain grateful for the work of the theory events Biopharma team and what they've been able to deliver for their passion dedication and commitment in 2020 as we move into 2021.
We anticipate 2021 will be a transformational year for thorough Vance. Thanks in part to you Pal rate with the capability to continue to grow market share and sales and beyond in 2021 and beyond.
Gsk's trilogy in which we are of economic interest continues its strong commercial launch each central door changing financial complexion of.
Our lung selective JAK inhibitor TD of 903 was encouraging data in the phase II part, one and part two data not far behind with results expected next quarter.
There is also part of the picture Therapeutics anti Inflammatories will continue to play an important role of the COVID-19 fight, making the investigation of TD 903 that much timelier and more important.
Three critical data Readouts from Q3, 2021 and blocks of team phase III for symptomatic neurogenic orthostatic hypotension.
Items set now in phase <unk> for ulcerative colitis.
In phase II for Crohn's disease, a very busy third quarter for the company.
Over the past few years, our knowledge of organ selective drug design applied modify inflammation specific tissue has increased significantly whether targeting tissues in the lung the got the eye of the skin.
We rely on our proven development or commercialization of commercial expertise complemented by strategic partnerships and the strong capital position to create the value driving catalysts that we expect to see in 2021.
The transformational year.
I'll now hand, the call back to the operator for questions.
Thank you Sir once again the people like to ask a question may do so by pressing the star key followed by the digit one and you had some telephone.
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Again, that's star one if you'd like to ask the question.
And we'll pause for a moment to assemble our roster.
We'll have our first question from Geoffrey Porges with SVP Leerink. Your line is open.
Thank you very much and I appreciate all the additional data on a non are true.
Great.
Quick questions, if I may of few free.
Free Brett could you just remind us of the frequency of dosing heroes of the seven day of course.
And then Rick could you, perhaps give us some update on the arbitration within the day of the timing for resolution of that.
Another question from Brett.
Look the there's obviously been a bit of noise about JAK inhibitors and the safety.
I'm just wondering if you were being contacted or have any request from the FDA about CV safety observations studies or anything that you might have additional requirements of might be imposed from you for us in Sydney.
And then Rick Lastly, could you just comment on which the process from timing for opt in decisions from Gerry Gerry After you hit those phase III results from now it's not till Q3.
Yes, absolutely.
The address both of my questions.
Questions and then I'll turn it over to Brett while the.
In the arbitration.
The arbitration is the.
Here, we finished the arbitration hearing.
Yes, we have to file a brief at closing arguments we would expect results.
From the arbitrator.
In the late in this quarter or early in the second quarter of it because of the confidentiality provisions.
The LLC agreement I really can't go beyond that.
Now so that's that's where we are with your reiteration, we expect to see it.
Resolved here over the next several weeks.
Most of the process for for timing on the J&J opt in what the.
What we do is we deliver a data package to them that begins the trigger of the 90 day clock for at four for Austria.
We've worked with the.
J&J very closely throughout this process of the debate of extraordinary par.
Partner of in the IBD program and the.
So that we've already developed what the packages the information that's included.
All of our programming.
<unk> already begun so that so that once the study is closed and we have data, we'll be able to turn debt that data package.
J&J very quickly.
To start the clock.
So those of those are my two questions and I'll turn it back to Brad.
For the night of three commentary of dosing frequency.
Brett.
Thanks, Rick and thanks for your question.
Terms of the frequency of dosing, we administered the first day as patients came into the hospital and were admitted.
The client oxygen and then subsequent doses, we'd given once daily every morning for the remainder of the seven day period or until patients when discharged from hospital that they let the sooner.
Sooner than they would obviously received the number of doses the full being discharged.
Up to seven days of dosing and it was the single administration. Each day. It was deliberate bias a nebulizer device and one of the benefits of that Nebulize device would be that it can be given to patients who are on oxygen, but it could also be given to patients who go on to the advent of laser we actually didn't see any of that patients go on to the ventilator and the.
At the group, but if it were required you could introduce this nebulizer into the ventilation circuit as well.
Great in terms of safety.
Safety.
Asking Jeff Abouts, presumably the most recent data which is around the types of citizen from a recently published.
Base study.
The end.
Being contacted by the FDA since that day Sir.
Payments, the requiring any additional safety observations of any additional monitoring we do have a an established Tibetans program in place looking for a broad range of known JAK inhibitor of risks.
Of course without one approach, we believe that the lung selective or in the case of items sitting in the gut selective approach should reduce the risk of systemic side effects, but nevertheless, because of that well established we continue to monitor for those on a non-GAAP basis on all of our programs, but we've not had any additional requirements.
The S T a.
Beyond our routine surveillance I think one last thing to add on that as that of course, the 10th of fit and it may states that was generated in patients with rheumatoid arthritis and pose on the long history of data, having being generated in the RF space with either Tofacitinib.
In the case of Parasiticide from government.
A lot of the data coming into the safety database comes from the fact that they are tracing of the systemic conditions like all right.
In our case with Ais and citizen.
The focus is entirely on the gun gut selective program. So we don't seek to treat patients with conditions in other parts of the Buddy because.
In fact, we believe that our therapy remains of organ selective. So there are elements of the price stink.
Distinguish us and differentiate us from the existing products like Texas.
Great. Thank you for your hospital.
Okay.
Our next question on some of our free them.
With Cowen and company your line is open.
Hi, Thanks for taking my question congrats.
Congrats on that quarter.
Brett just digging into that the.
From 903 data a little bit.
You mentioned, there's a lot of background of standard of care, but.
Of course.
Seems like standard of care for the treatment of COVID-19 changes every day.
And can you describe what the patients from the different groups, we're actually receiving in terms of how much steroids were any of them getting room debt severe or or some of the antibody therapies are out there and were there any differences between the groups in this therapy.
Thanks for the question, Matt Great question and in fact.
Ted pointed out that we were running the study in the late summer and into the fall of last year.
At which stage dexamethasone had become established as a standard of care therapy. It wasn't.
Established in the first half of last year.
With placebo controlled study. So if you go back and look at the first generation of studies that were run they were not placebo controlled and very few of them had background steroids, including the <unk> study.
The study has got a high degree of background juice in fact, almost all of our patients were on dexamethasone at the standard form of the Grand days every day all patients also receiving anti coagulant therapy, because by the time that he started it was fairly well.
Understood. That's clothing was the background risk factor now.
Now we started a study in the U K and then moved into parts of Eastern Europe.
The Romania, Ukraine were reminiscent of it was not an established standard of care. We've subsequently.
T study into a much larger range of countries, including the U S, Brazil, Argentina, South Africa, and we've seen not only a broad of reach across sites, but we're now also seeing the more established use of brand as it is so the <unk> T study is likely to include of Gracie use of the and decided but we saw very little of best.
The part one study.
We also deliberately excluded patients on items fitness, Inc.
In part one because of the potential for interference with the.
IL six and because of interest we would config.
Confident that items hitting that had actually established itself as the standard of care I think theres still a question mark about that.
The full hunting license Fitbit remains of Contra indicated therapy, but they use of debt.
Or how about tosi.
Brett you mentioned the eyes to set the up I think I'm sorry.
Thank you Bob I'm thinking of Covid.
Of completing therapy is.
The taste of Tennessee.
I'm referring to.
Okay.
I'm guessing.
Yeah, I'm guessing syndrome that severe without their care most of the placements and then also the antibody therapy was also not being pursued the most of the sites.
That's correct I think what we've seen is debt.
RFP such as convalescent plasma test the system. The Bassett nib of being was Israeli for patients who cannot tolerate dexamethasone and that's consistent with current guidance, which is now of imaging.
Based on evidence of being generated out of the last six to eight months of the of different there.
Okay, Great. That's very helpful and then with the.
Free formulation work on 80 236.
Whats the goal with the three formulation whats the target profile of shooting for is it.
Longer duration of exposure of shorter just what are you trying to accomplish.
Yeah, I think what we're trying to accomplish a number of things I think people can.
Oversimplify of bet.
The optimization of parameters for inhaled medicines.
Obviously with JAK inhibition were went to a new class.
Some people might focus on potency potency is is the one attribute it's an important attribute but it's about one of 15 attributes that you would need the optimized in order to deliver a successful respiratory medicine. So.
When I said form this wasn't so much formulation.
As it was sort of the physical characteristics.
Or a crystallization of the of $82 36, and I don't want to go into this too deeply because it merely by describing it.
Well begin to give the perhaps competitors and understanding of better understanding of of what needs to be done.
But nonetheless, it's what one or two of these 15 parameters that were that we think can be further optimized either with the different form of $82 36 or with one of the other JAK.
JAK inhibitors that we've got in the.
Coming out of the research efforts.
Okay, great. Thank you.
Our next question comes from Douglas Tsao with H C. Wainwright Your line is open.
Hi, good afternoon, thanks for taking the questions just.
If you could maybe walk us through the decision to proceed with the <unk> three milligram versus the 10.
Teens debt.
Per.
<unk>.
On some of the metrics it seems like maybe the the.
The 10 have you got the three does better sort of in the first seven days of Bad day seven day by day 28, you'll start to see some sort of somewhat better trends in the 10 milligram, although I get it that these are super small numbers, but in.
In that same day, and why not potentially to investigate the 10 milligram.
Okay.
The great question, Doug and really I think I'd start by describing the way in which we approach our assessment of all of our JAK inhibitors, which is to look at therapeutic index. So we put a great deal of emphasis on the evidence that we are seeing on the safety side as well as on the efficacy side I mentioned that one of the patients in the 10 milligram dose group.
Triggered a stopping criterion for an isolated elevation on one of the liver function tests a L. T now.
Now, it's not clear whether that was actually associated with therapy or not there are the reasons why patients can have elevations in lung and liver function.
Tests in hospital.
But out of an abundance of caution we acknowledged the vent patients had met that stopping rule.
When we looked at the treatment differences between three and 10 I think you've described it well there was some modest differences between the three and 10, they both seem to say the pump from the one milligram and both of them providing comparable benefit so on balance we felt that the three would have an optimal balance of the safety.
And the efficacy of remind you that we did give of doubling dose and the three milligram group as well so actually those patients get six milligrams in total on the first day.
We did not do that with the 10 milligram group because they are modeling of suggested they would not need that's a loading dose, but the three milligram group do get that extra shutting the arm so to speak of inhalation.
To get them up to the steady state more quickly.
And for those reasons, we felt that the three was really optimal for further assistance.
Okay, Great that's really helpful and then.
Just turning to your calorie if I look at the trends in terms of of the hospital market share it looks like in the third quarter.
The little bit and that really came back strongly in the fourth quarter I know that there was some talk or sort of confusion around sort of the use of the nebulizer therapy in the context of Covid do you think that was what attributed sort of that step back in the third quarter or was it just the lack of access just given the situation in terms of sales people.
Being able to get into institutions to talk about the product. Thank you.
Hey, Frank you want to handle that.
It was mostly to.
All of the call just being very very busy treating patients.
The COVID-19.
Coupled with the the lack of access to health care.
Institutions and quite frankly doctors offices that were closed.
The the other factor the compounded as Pulmonologists based on our marketing research. We know that Pulmonologists are reticent to change therapy or initiate of new therapy, unless they do of real real live exam, including Spirometry in other words, not tele medicine. So all of those factors caused the dip.
What you see there in the third quarter it recovered nicely in the fourth quarter and it appears the recovery is continuing and the beginning of 2021.
Okay, and then just frankly, the quick follow up I mean, I know towards the end of the year. We did see another surgeon in infections and that seems to be unfortunately, coming down pretty quite dramatically did you see any sort of impact on on on trends at.
At the end of the fourth quarter and into the first quarter or.
Was it really just limited to that Theres third quarter. Thank you.
Well the yes, we the business recovered nicely in the in December in fact December was our biggest month of.
All of the months involved in the pandemic in other words dating back to March.
And we also see a desire on the part of Pulmonologists to want to see patients to want to have patients come in and get checked out because they haven't checked out in quite some time. So we are seeing as the country is seeing a bit of a recovery in end of the vaccines are beginning the rollout where.
Seeing the requisite increase in the number of visits the pulmonologists.
Okay, great. Thank you so much that's very helpful.
And the next question comes from Lisa <unk> with Evercore ISI. Your line is open.
Hi, there can you maybe.
Talk a little bit more about how youre thinking about breakthrough.
And anything you're seeing of Covid in Atlanta.
The asthma program in the maybe a little bit more about what you're going to tweak the asthma program.
What we should expect from timing there and then I'll have one of my question after that thanks.
Yeah, I'll start and then all of transitioning over to Brad I mean, I think clearly.
The biomarkers of nine O three that we saw a move.
The other the number of other metrics that we follow that give us an understanding of of how JAK inhibitor can be used in an acute hyper inflammatory state like COVID-19. It.
It in forms of.
It informs the asthma program the other aspect of this.
The work over the last couple of months that it's been incredibly informative was really dissecting the of.
The gene pathway data from the one six study.
And I think this we were having.
The broadly and Directionally the effect that we wanted to have.
On a number of gene pathways and keep in mind. If you remember the one six study. These patients were on inhaled corticosteroids we were seeing.
A change in in and proteins on top of what these patients were experiencing on steroids. So this was this was another important piece of the puzzle Bret.
Thanks, Rick and just to add to our break the same visa in the asthma program with 80 236, we now have consistent evidence of target engagement, whether we look at nitric oxide that is excluded in the breadth or we look at cytokines that are released into the fluid that fills the lungs or even in the gene signature.
Days of all of that is telling us that if we deliver a JAK inhibitor into the lung we're able to modulate that inflammation. So that's the 80 236 cleaning of the state of with nine of the three in COVID-19 is further validation to the fact that we're engaging the target we've seen some improvements in the in market.
Inflammation in the blood of these patients that tells us that the clinical improvements is being matched by improvements on some of these key markets. For example of CRP, which is a marker of inflammation in the body. So if we take the two different signatures from these two different molecules, albeit in different disease States I think it's getting the said greater.
Understanding of the ability to modulate inflammation in the lung in the different conditions. One last thing to add is that of course of three prior to Covid was being developed for a chronic condition that was being looked at for lung transplantation and although the COVID-19 signal is an acute condition.
Condition. It obviously gives us some encouragement that this anti inflammatory mechanism may be of utility in chronic conditions as well such as <unk> and reducing the rejection rates in lung transplantation.
I think the other Mr close Lisa.
This ties of back with other published.
The publications that we've had we've seen now.
In the COVID-19 study of reduction in the CRP of systemic marker of inflammation.
And.
As a reminder of the eyes in the setting of the phase one b, even though the drug was was almost completely.
Lately contained to the intestinal tissue and very little of drug in the systemic circulation. We also saw a reduction of the marked reduction of CRP.
In patients with ulcerative colitis. So we know that we're reducing systemic markers of inflammation by simply focusing on the Oregon that isn't the flame.
Okay, and so I guess as it pertains to the asthma program one of the next steps then.
Yeah, Brett do you want to start and then I'll close.
You're on mute.
Apologies, sorry, I think as Rick was saying earlier Lisa.
We're really taking the learnings from these programs, we decided that for the lead form of 80 236.
We're going to pose that development program, we're investing our efforts in the portfolio of injection of JAK inhibitors that could be both forward to evaluate inc.
In asthma and in other inflammatory conditions.
Really looking to.
Pick the best candidates amongst the this is something that we have previously done for example in the beta agonist program, where we considered several iterations of before lending on the optimal.
Of forming agent, which actually went home to become a component of free.
The Nora and trilogy. So this approach of looking for the best rather than the first pass of the post I think could be really well applied to JAK inhibition.
And just to add to that I think that's and that's where our focus is our focus.
Today is on the development.
Of the medicine that can stand the test of time.
And of chronic condition that is delivered via dry powder inhaler for asthma patients and we have an understanding of how good that drug has to be you know what.
I think the quality of the drug itself.
Creates a.
Barrier of entry for others. So the the.
The next step quite simply or are working through.
The $82 36 in another form and bringing the other potential D. P. I.
The JAK inhibitors of forward in the translational science and then continuing to move my no three forward and most importantly, getting the data from from part two of the Phase two study, which is going to give us the larger dataset than what even we've seen today. However, the.
Part one of just Didnt underscore the part one data that we do have is now a JAK inhibitor lob in the disease model, but in a disease and in showing albeit small numbers showing an effect of reducing inflammation in the lung in that disease.
Okay. Thanks.
Our next question comes from Rama with Jpmorgan. Your line is open.
Hey, guys. Thanks, so much for taking the question just a quick one from me on items.
The press release noted and I think you guys talked about on the call that the the.
As you can see in Crohn's disease, Readouts, they're gonna be provided separately in three and three two.
Can you.
Maybe talk to us a little bit about the cadence of the disclosures. If you can and my Kid might have a follow up I'm not sure.
Hey, Andrew you want to touch on that.
Sure Yeah on the.
The really unfortunately, we can't give you much more granularity right now the the studies are ongoing and we will.
It will be as as forthright and transparent in the communication as we can be we understand the the criticality and the materiality of the data.
For both studies and also for Amp of locked the team so.
But unfortunately, we're not going to be able to get more granular right now.
Great. Thanks for taking my question.
Our next question comes from take from Perella of Morgan Stanley. Your line is open.
Great. Thanks for taking my question so.
My first one was a follow up on the island sitting there.
Specifically with regards to the J&J opt in.
Wondering if you could just kind of clarify for us.
For the 90 day period that you mentioned the J&J has.
Is that.
90 days.
Per indication or is the process more of that they've got a data package that combines both datasets for UC and Crohn's and then they have 90 days based off of that data package to make a decision for both indications.
That's my first question.
Yeah. It's good question, yeah, our or we anticipate delivering.
The data package that has both sets of data.
The J&J for their decision.
Understood and.
The the best of your understanding with J&J are they going to be making of separate decisions for UC and crohn's or is the decision for a broad development program in IBD based off book datasets.
Oh, I think they'll consider both.
Consider both datasets I don't have a perspective on.
Whether one is more important than the other I think there are there going to be looking at both datasets, obviously, the ulcerative colitis a day.
Data set is the more advanced state of set being in phase two b and now we're actually rolling patients out of the <unk> program into the phase III maintenance study, whereas the Crohn's study is the phase two of sort of proof of concept in Crohn's and I'll, just ask Brett to add anything.
Perhaps one additional comment of the crime and that's.
It's not the.
The sense that we don't know who we're talking to with the Janssen colleagues and we'll post the.
The states are able to some.
The strangers that we've never met we're working day to day with these individuals.
On the ongoing combat stay ahead of an integral part in the original design of the studies and this has been a real hand in glove partnerships and we continue to work very closely with them in anticipation of these readouts. So that that 90 day period is ready he's to maximal effects and then getting stuck into the data.
And a lot of the planning with the is getting into this right now is being done in very close collaboration with Janssen really to look to make best use to make the inefficient the window of time.
Okay understood. That's helpful. And then just one follow up shifting gears to your.
Your earlier stage programs like the two of two in the inhaled Alpha of inhibitor you've spoken about previously just wanted to get a sense of.
What the status of those programs in the next milestones our debt.
Looking for.
And 52 O. Two we continue to work a walkthrough of Jensen on the next stage with Jensen on the next stage of that of that program.
Likely targeting.
The development pathway.
Celiac disease.
With the out five inhibitor we've been in.
Going through of Phase, one single ascending and the multiple ascending dose ranging study of of the out in the hailed out five inhibitor.
We continue to work through that and the before the end of this year certainly we should have a phase one.
C or b, where how revised characterize it with some exposure in patients with the <unk>.
Video Pathic pulmonary fibrosis net program, so Brett anything to add there.
No I think you summarized it well Rick nothing to add.
Okay, great. Thank you.
Our next question comes from Brian Scorning with Baird. Your line is open.
Hey, good afternoon, thanks for taking the question.
Two questions I mean to start I guess.
I think the other week Glaxo filed.
Pretty brutal 13D Han in of Veeva and I'm, just wondering if there's anything to take away from this vis vis.
The the arbitration decision and I think it's the first time like we've sort of seen publicly glaxo why in.
The other kind of call out.
The very specifically the the.
<unk>.
Intense seem to be diverging with what the intense of the part of Rd is more of a at the time of its operations.
I mean does that admissible, it's glaxo a party to the arbitration do they have sort of of Roland testifying.
Sure.
Yeah, Brian listen Thanks for the question I really can't get into the arbitration process itself I think we didn't we were.
We were surprised as anybody with regard to the.
With regards of the filing and to get more color all of it the filing I think it probably should come from from GSK.
Because of again.
Again, we weren't aware of that that it was going to be done so.
Got it and then I forgot to ask the question on on own INO three just in terms of the the a L. P threshold, but of chips are the stopping criteria.
It kind of like dose.
Can you outline what the threshold was and then whether or not there was any concomitant bilirubin increases.
And then have you guys looked at all at systemic administration of own INO three in any of the animal models and if so is liver the end organ tox there.
Thanks, Brian.
I can describe the L. T increase we put of thresholds.
Cost of all of our protocols actually four four times the upper limit of normal.
And the patient triggered it only on a L. T. There was absolutely no change on a S T bilirubin or any of the other liver function parameters. So there was no price rule trigger or any clinical manifestations with this patient at all of its purely a single biochemicals arrangements.
But because we continue to monitor the these things and because of the stipulated in the protocols, we withdrew therapy as a precaution.
We certainly if you look at our preclinical tox.
These molecules are actually designed to be labor. So they don't generate very high levels in the systemic circulation a breakdown very quickly when they get into the.
Systemic circulation.
Of the toxicity is not of concern in our animal models.
And so this was really just the standard surveillance in the clinic. It was not done specifically because the way any preclinical concern.
Got it thanks that's helpful.
Our next question comes from Joseph Stringer with Needham <unk> Company. Your line is open.
Yeah.
Hi, everyone. Thanks for taking the question.
Wanted to switch the upper lots of <unk>.
Given that they're at.
Well the off patent in 2021, I'm just wondering the comment on.
The potential thoughts on.
The pricing given sort of the two posing forces of.
Generic entry and potentially better.
The profile for <unk> lots of teen and secondly, how does the.
The generic entry of potentially affect the debt.
The patient population.
For the drug the would you see it as more.
Inadequate responders or treatment naive patients.
Maybe some color on that thanks.
Yeah, I'll start and just give Brad a heads up but I bet. The company even after a couple of remarks, I think we see ample work standards of dramatically different medicine.
The north arrow of drug pseudo but the the.
The of facts of the matter is in the label the effect of North Taro does not last does not last very long in terms of.
Affect all the O HSA one.
Because it's really of the agonist, so theres probably some tachyphylaxis.
In fact happens with with the longer.
Closure of two docks of dopant, you see cycling coming in and out, whereas the drug like amp of <unk> once a day.
Effectively operates like an antagonist, making use of the body's own norepinephrine worse drugscope of effectively introduces exogenous.
The north from there from the attic into the system. So.
I think these are these are dramatically different medicines. There is a relatively small number of patients that are that are treated with north arrow of day in day out that have an O H, we would see.
We would see the ample work still finding a home in a much larger patient population and hopefully we will see what we've seen in other studies with the aim for walks team that we don't see his supine hypertension.
Debt that in fact plagues the drug pseudo pursue so Brett.
And I think he said it well Rick the again this is about therapeutic index just as it is with the rest of our portfolio and then <unk> seen is really optimized to drive the efficacy when it's needed to take the body of an endogenous norepinephrine into allowed to last for longer net.
<unk> to occur in the early part of the day of when patients the easing and the levels of norepinephrine need to be high during the part of the day, so and prolonged team maintains those when patients go to sleep at night.
I know the system shuts down and not producing as much norepinephrine and non drug will not potentiate any additional effect because the body is not producing north of nephron says the much more of physiological response, and we think that will translate into better efficacy of module.
Sustained duration of therapy, as well as bit of safety lower risk of supine hypertension when patients the sleeping at night, they should set us apart from our Doxy data. We know for example, even today that if we see efficacy at four weeks in our pivotal phase III study, the FDA would view that as distinct and improve.
On the North theater of data, which is any share in efficacy at one week.
One last point to make is that the north area of label. In fact is a conditional approval. They still don't have full approval because there's an outstanding dataset that's required.
With the originated company with lump Inc. One of the question marks around the introduction of generics is what will happen if the learned back as the originator isn't able to supports the labeling requirements and what implications that may have the generic substitution as well. So if all of those reasons, we still remain really committed to the ample of scene program. We think it will be.
How do you differentiate it from from nowhere.
Thank you. The appears we have no further questions on the flow I'd now like to turn the conference back over to Mr. Winningham. Please go ahead Sir.
Yeah. Thank you operator, and I'd like to thank everybody for joining us are with US for this call. We're very excited about the year ahead, what we have the capability to do as an organization and we look forward to update of U S.
As the quarters roll by for 2021.
Please have a good day and stay safe. Thank you.
This concludes today's conference call. We thank you for your participation you may now disconnect everyone have a great day.
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Yes.