Q4 2020 Epizyme Inc Earnings Call
Ladies and gentlemen, today's.
Yeah. It's shortly please can you just standby.
Thank you for your patience.
[music].
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Yeah.
Hello, and welcome to at the <unk> Conference call. At this time, all participants are in a listen only mode. There will be a question and answer session. After the prepared remarks it.
Please be advised that this call is being recorded and at this time is required.
I'd like to turn the call over to Bill Slattery Junior you may begin.
Yeah.
Thank you operator.
This morning episodic issued a press release, providing a business update in addition to fourth quarter and full year 2020 financial results that press release as well as slides to accompany today's call can be found in the investors section of the company's website at is on Dot com.
On the call with me today is Rob bays, Moore, President and Chief Executive Officer, Paolo to on Bassey Chief.
Chief Financial Officer, and Becky Becky and her chief commercial Officer, Matt.
Matt Ross Executive Vice President and Chief strategy, and business Officer, and doctors should poly Agarwal, Chief Medical officer will be joining us for the Q&A session.
As a reminder, today's discussion will include forward looking statements related to <unk> current plans and expectations, which are subject to certain risks and uncertainties actual results may differ materially due to various important factors, including those described in the risk factors section of our most recent forms.
The 10-Q 10-K and other SEC filings.
These forward looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date, we undertake no obligation to publicly update these statements.
At this time I would like to turn the call over to Rob Baseball Rob.
Thank you Bill and thank you all for joining us today.
2020 was a pivotal year for Amazon and encompass remarkable progress toward our mission of rewriting treatment for cancer through novel Epigenetic medicines.
I'd like for history to reflect that achieving two back to back FDA approvals within five months enrolling our clinical trials and launching tests Derrick all while working entirely remotely through a pandemic the likes of which none of US on this call has ever had to experience.
Reflects the level of execution that signals to people living with cancer.
<unk> is treating them and to our shareholders that our mission of debt because I'm, it's something we take very seriously.
For that I'd like to thank our incredible employees here at <unk>.
Our sales clinical and research teams I'll quickly adapted to our new environment and it's because of their efforts that we were able to execute across all of our 2020 initiatives.
Despite the many challenges for global pandemic brought to physicians people living with cancer and our ability to access them we.
We successfully transitioned depth designed into a fully integrated commercial enterprise as we launched our first product has barrick following our accelerated approvals with epithelioid sarcoma, a solid tumor cancer and Follicular lymphoma common heme malignancy.
From a clinical perspective, we advanced the development of Tazemetostat to support label expansion NFL and in additional solid tumor indications.
In fact, all of our 2020 clinical initiatives were achieved on time or ahead of schedule.
We also continue to progress our early stage pipeline, which you can expect to hear more about this year.
In addition, we raised sufficient cash to fund important growth initiatives and extend our operating runway into 'twenty two 'twenty three based on our current operating plan.
Our two approvals last year MAGE has varied the first and only treatment specifically indicated for es patients and the first and only FDA approved <unk> inhibitor on the market.
The clinical utility of Ted Barrett was quickly acknowledged by the oncology community and payers alike.
Within three weeks of both approvals.
As Erik was incorporated into the NCC in clinical practice guidelines in Es and FL.
Today has barrick is covered and over 90% of insured lives in the U S for use in both EPS and DSL indications.
Earlier this month, the NCC and guidelines for relapsed refractory FL patients for amendment to recommend tests for patients, whose easy H two status is unknown.
This revised recommendation reinforces that there is no requirement to test for easy as to status before prescribing tests Barrett.
Which is in line with our current label and supports that our education efforts are reaching the KOL community.
In the face of the Covid pandemic. The launch it has there has been anything but conventional.
Our commercial team has continued to adapt to the virtual environment. Ensuring this has very reaches all eligible patients as quickly as possible by finding new ways to engage with academic and community physicians.
As expected we saw the greatest initial adoption of <unk> and large academic centers.
But we're now seeing broader adoption among the many community practices as physician awareness and understanding of our label improves.
While the resurgence of COVID-19 cases in the fourth quarter extended the challenges that we described last year adoption of pets, Derek and yes, NFL continues to expand.
<unk> net revenues for the fourth quarter for $4 5 million or 31% increase over Q3, driven primarily by increased adoption in F. L.
Beyond revenue, we continued to see positive signs of our commercial execution and novel approaches to overcoming these challenges and ensuring patients have access to this drug.
During the fourth quarter monthly new prescriptions for <unk> continued to growth and we observed a 50% increase in new prescribing accounts, our largest quarter over quarter increase to date.
Overall I'm encouraged by how we executed given the circumstances and I remain enthusiastic about the long term potential for test Barrick in Es and FL.
I am pleased to be joined today by Vicky Makena <unk>, Chief commercial officer, who will elaborate on our commercial success momentarily.
As I noted earlier, we've also made progress throughout 2020 advancing our clinical programs to further develop tazemetostat completing all trial milestones on time or ahead of schedule.
We completed enrollment in the safety run in some of our Es confirmatory trial evaluating tazemetostat plus doxorubicin in frontline patients and for our F. L. Confirmatory trial evaluating our square plus Tazemetostat in second line and later patient.
We are now moving forward to initiate efficacy expansion portions of both of these studies.
Our post marketing commitments for Es and FL also remain on track.
We also completed enrollment in the safety run in portion of our metastatic castration resistant prostate cancer study evaluating.
Evaluating tazemetostat in combination with <unk> or abiraterone.
We plan to report safety and early activity data for all three safety run ins this year.
Scientific interest in this novel mechanism has also grown and then 2020 enrollment was initiated in several investigator sponsored trials and collaboration studies with Tazemetostat with many others being approved for currently under review.
Studies, such as the trial of Tazemetostat in frontline diffuse large b cell lymphoma and <unk>.
Which we are working on in collaboration with the lymphoma study Association continue to enroll patients as expected.
As we look forward into 2021 and beyond.
We believe that there are four pillars necessary to driving enhanced and sustainable long term growth for <unk> on the <unk>.
First maximizing our commercial effectiveness to ensure adoption of test barrick and as many appropriate FL patients as possible.
As importantly building tazemetostat pipeline in a drug potential to benefit people living with cancer is well beyond es and FL.
We will also expand our pipeline, bringing novel oncology therapeutics into clinical development and.
And transforming <unk> into a true oncology portfolio company.
And finally.
Working collaboratively and leveraging all available options to expand patient reach and increase shareholder value resource for leap and responsibly.
On today's call will focus on our fourth quarter results and the first of these four pillars.
We are excited to announce that we will be hosting a call to unveil. The next episode for <unk> next Tuesday March 2nd at.
10 o'clock a M eastern time.
During this call we will speak further to our next five year strategy provide updates related to our cash Barrick development plans and provide further detail regarding the advancement of our epigenetic pipeline.
Because of this we will be deferring much of the discussion related to ongoing and planned clinical trials along with pipeline expansion plans to next week.
Division Carl will provide insights into how we're thinking about our pipeline milestones potential new data and focus areas over the next five years.
You should expect to see more information about this call in the next 24 hours and we look forward to your participation.
And with that I'd like to turn the call over to Vicki <unk>, who will provide additional color on our ongoing launch efforts followed by Paolo who will briefly review our fourth quarter and year end financials before we open the call for Q&A.
E.
Thanks, Rob and good morning, everyone has their continues to gain traction and we are seeing encouraging prescription on awareness trends in epithelioid sarcoma and we were pleased with the uptake we are seeing in Follicular lymphoma, given the challenges we faced with Covid. This morning, we will go into greater detail on our progress.
On both indications.
After a long career in big pharma I decided to join the team here at Oppenheimer, 19th here, specifically because of the focus on the science of Epigenetics is an interesting and promising way of addressing cancer.
But more importantly, I came because I recognize that this specific medicine tazemetostat has the potential to help people with cancer in both solid and hematologic tumors.
And now is that <unk>, chief commercial officer, it's a privilege to lead our efforts to bring <unk> to patients.
We've launched has barrick as the first and only treatment specifically indicated for people, who had epithelioid sarcoma or es after receiving accelerated approval from the FDA in January 2020.
<unk> is an extremely rare disease affecting people primarily in their 13th and 14th.
We estimate that there are approximately 800 people on the U S who have been diagnosed and are living with es of which 300 ourselves have metastatic disease and are eligible for test Barrick we.
We observed strong adoption and yes during the first half from 2020, driven by the significant medical need in this rapidly progressing cancer along with the fact that we started introducing Ted very traditionally roughly two months before we experienced the full effects on the COVID-19 pandemic.
This provided us with the opportunity to initiate an in person dialog with our priority accounts before the environment shifted to the virtual world, we have all become quite familiar with.
As we transition to the second half for the year growth in Es began to scratch out while we continued to senior patients starting therapy in the third and fourth quarters. Some of the early patients treated in later lines of therapy began to cycle off treatment.
Patients with multiple relapsed refractory disease have shown an average duration of therapy with pads barrack between four and five months consistent with our phase two clinical data for second line and later patient.
While we're seeing utilization of <unk> across all lines of therapy in Es. The majority of unnecessarily. So it has been in second and third line or later patients due to the significant need for new treatment in that setting.
As physicians become more familiar with Barrick and are reporting positive initial experience that we expect that utilization will expand to earlier lines of therapy.
Thanks to the ongoing education efforts of our team awareness of <unk>, among physicians, who treat EPS has grown to over 80% as of Q for.
This is exactly where we wanted to be in the months following approval to.
Wrap up yes, I want to emphasize that this year, we are continuing our focus on bringing this medicine to patients in the first line setting where our clinical data showed more favorable efficacy for.
Regarding the most benefit for these patients with limited treatment options.
Use of cash Barrick in earlier lines of treatment expands we expect duration of therapy will increase as well.
Now, let's turn to our Follicular lymphoma, or FL progress since approval last June we obtained our second FDA accelerated approval for <unk> to treat adult patients with relapsed refractory FL.
Unlike our launch any F. The FL launch was completely virtual from the start.
Launching any oncology medicine. During this pandemic has required overcoming a number of obstacles.
For our team there have been two distinct challenges.
First patients are visiting their doctors with less frequency, which is accentuated NFL compared with other cancers due to the indolent nature of the disease and the general age of the patient population.
While patient visits remain down compared to pre COVID-19 levels. During the first quarter physicians and practices reported that they have recently started to encourage in person visits again.
However, we continued to see a 20% to 30% reduction in new F. L patient treatment starts on any therapy in the fourth quarter compared to pre COVID-19 level, which is understandable as most physicians are reluctant to change therapies without seeing their patients in person.
This obviously has had an impact on our ability to gain new patient starts for <unk>. Following our approval, but we believe this will eventually improve with broader vaccination and given that many of these patients have been without a treatment change for some time now.
The second major hurdle has been our field teams limited face to face access for treating physicians on their staff.
To date, our launch NFL has been almost entirely virtual.
While our teams have been able to reach all of their top tier accounts frequency of access to physicians, it's challenging and our ability to reach other accounts stakeholders has been less efficient in the virtual setting.
So here's the thing it has taken more time to get traction with physicians than might otherwise be the case in person and compounding. That's why all our approved label allows for very broad use of <unk> in patients with relapsed or refractory FL. It can require some explanation given the two unique indication statements.
To address these challenges we have initiated a number of educational programs and non personal promotion programs that support the team's efforts with physicians.
We have adapted with novel tools for field interaction and focused on innovative peer to peer programming in multiple formats, such as virtual speaker events local workshops and medical education programs.
We've partnered with patient advocacy groups to support programs focusing on disease awareness on empower patients to be an active participant on their care.
We have also increased our digital presence by investing in a diverse mix of media traditional online in social that are all focused on reaching health care professionals on patients.
As a result of our effort <unk> is coming from all lines of relapsed refractory therapy.
The largest growth in share has been in the third line and later patient where we exited December with the highest share of new patient starts with any individual treatment, but we also see growth in the second line setting, especially in patients with <unk> mutations.
We recorded our highest number of new prescribing accounts in the fourth quarter, which grew over 50% from the third quarter in the context of the pandemic. We are pleased with the sequential growth.
While revenue grew 31% on the same period <unk> total bottle demand, including free goods grew 42% free.
Free goods, where from our patient support program <unk>, now, which provides tandberg free of charge to eligible patients without the means to pay for therapy. We are committed to helping patients in need and in December. It is common to see some increase in free goods, which was accentuated by the economic conditions created by the pandemic.
Even with this December increase the overall percentage of free goods was in line with our annual patient assistance program utilization assumption for 2020.
Overall, we are pleased with the team's performance given the ongoing challenges presented by the COVID-19 pandemic.
The ability to reach health care providers has been severely impacted for all companies, but our new field team of seasoned professionals has achieved the highest share of voice in person and virtually relative to others working on F. L.
<unk> awareness has increased more than 60% since approval and physician intent to prescribe remain pi irrespective of a patient's easy H two mutation status or.
Our teams continue to adjust their approach to reach prescribers and have shown remarkable tenacity and creativity.
<unk> prescriptions for FL are now being written for patients with easy H, two activating mutations wild type easy H, two as well as an untested patients.
Utilization is continuing to grow on academic accounts and more importantly, we're seeing large community prescribers expanding their adoption of <unk> with.
With the recent amendment of N CCN guidelines for relapsed or refractory FL patients earlier. This month that recommends <unk> for patients with no satisfactory treatment options and who is easy. It's two status is unknown. We expect we will continue to see increased test utilization and usage by physicians as they reengage with their patients.
What's more payer coverage has continued to be very positive and reflective of our clinical data generated for <unk>.
Supporting broad use by physicians.
Over 90% of insured lives in the U S are currently covered for Cadbury in both Es and FL indication and the majority of prior authorization requirements are aligned to the patient population in our label.
While we expect some challenges to persist in 2021 is the pandemic, we are focusing on what we can control.
Growing new accounts and prescribers are.
Catering academic and community physicians about pads very attractive safety and tolerability profile, continuing to identify appropriate patients who can benefit from cash back and ensuring a positive physician experience.
Now I'll pass the call over to Paulo to talk about our financial results I look forward to addressing your questions during Q&A.
Hello.
Thank you Vicky and good morning, everyone. We closed the year in a very strong position financially with $373.6 million from cash cash equivalence and marketable securities. Our total non-GAAP operating expenses for 2020 were 200 and.
$9.6 million below our guidance as we manage spending carefully and continue to see a reduction in travel and other expenses due to the majority of employees working from.
Non-GAAP R&D and SG&A operating expenses for 2020, with approximately 101 $3 million and $106.2 million respectively.
Turning to revenue, we recorded full year 2020 revenue of $15 $8 million, which includes $11 $5 million, that's very es and FL, let's see and for.
For $3 million of collaboration revenue.
For the fourth quarter, we recorded revenue of $8 4 million, which included $4 5 million, that's very commit sales revenue and Threep on 9 million on the FERC collaboration revenue, which was recognized following the termination of the collaboration agreement with Celgene.
Our cash position with strength in the fourth quarter through day $150 million expansion of our loan facility with farmer Mac on advisors, which was executed in November.
Additional tranche further strengthened our balance sheet and will fund a number of critical growth initiatives for <unk> <unk>.
<unk> continued that's very commercial execution ongoing and planned the tomato set development new indications in combination regiments and advancing our research F for early pipeline.
As a reminder, we retain the option to expand the loan facility by an additional $150 million following mutual agreement with pharma com.
We expect non-GAAP adjusted operating expenses to be in the range of $235 million to $255 million for 'twenty 'twenty, one to support additional clinical development and continued investment in our commercial launches, including investments in manufacturing capabilities to ensure uninterrupted.
Supply of Pittsburgh for commercial patients in our clinical trials finally, where we're finding today with cash on cash equivalent to support our current operating plans into 'twenty two 'twenty three we're not providing for the moment and revenue guidance given that our launches are in the early stages.
And uncertainty related to the evolving COVID-19 pandemic.
I'd like to turn the call back over to Rob for closing comments Rob.
Thank you Vicki Impella.
While not without its challenges 2020 was a remarkable year for <unk>, where we executed exceptionally well all things considered.
We are encouraged by our progress in the Es and FL launches and remain confident in the long term potential of test Barrick to change the lives of patients living with cancer.
As a reminder, we hope that you will all join US next Tuesday March 2nd for our call to discuss the next episode for Amazon.
We will be elaborating further on our next five year vision for Amazon.
And we'll now open the call for your questions.
Operator.
Thank you.
To ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key.
Our first question will come from the line of Michael Yee with Jefferies. Your line is now open.
Hey, guys. Good morning, Thanks for the update Rob.
Two quick questions yeah.
One is I appreciate the color on the launch.
When I think about a launch usually it's a precision prescribing patient demand of reimbursement are really the keys.
Do you think out of all the information you just gave us at one of those is most important that you think that you need to better block and tackle around it.
To get things to pick up a bit maybe just talk about.
That and then the second question is a finance question for you gave some nice Opex guidance you have current cash I think I can do some math around where you might be at the end of the year.
Can you just remind me on that $150 million credit line. How does that work is it just really available theres no real.
Financial criteria, you have to hit to be able to do that can you just maybe remind us about that credit line. Thank you so much.
Yeah.
Yes, certainly let me start with the first question so with regards to.
How we're performing in the market right now, what's driving demand and where we see as the big thing Thats needed to unlock this first of all.
Yes. It is patient access continues to be terrific, we announced in the in the opening remarks that we have over 90% of lives covered for both FL and Es.
Those payer policies cover according to the label. So it allows for use as early as the second line. According to the label without requirement for testing all of the things that our label says.
We were encouraged that earlier this month, the NCC and guidelines are updated to reflect that there is no requirement for testing even in the second line setting.
Patients who choose to use <unk> in either a mile type mutant patients or those who are unknown.
To do that without testing and payer policies cover that second I think with regards to the uptake and the adoption. We're seeing we're actually very pleased with that we said on the call debt in the third line and later setting which is where the predominance of our data is we.
We actually exited the year at a higher share of new prescriptions than any other product in the category in that line of patients and we're also seeing growth in the second line setting as well predominantly in patients who have <unk> mutations. So we feel like that's a really great place to be six months into launch.
We've had a difficult time communicating with physicians and I think so there comes the challenges if patients aren't coming in to see their physicians.
We're still seeing that patient visits were down in.
In the fourth quarter, it was not substantially different in the third quarter.
And so in the third line setting patient new prescription starts for any product and we need that new patient start in order to get a prescription for <unk>, Eric and the third line setting that remain down about 40% in the fourth quarter compared to pre COVID-19 levels.
Overall, if you look at the relapse refractory population, it's 20% to 30% in the second line and later so we have to have the opportunity for a new prescription to be written for <unk> to be written and so a lot of that will correct itself as we've said before this isn't forever.
Believe that this year with the <unk>.
Wider use of the vaccines.
Many of these patients had been away from their physicians for quite some time physicians are calling now on trying to get these patients back into they can see them and initiate a new therapy, if they need it if they're having a bad experience if their disease is progressing and that really is the key to unlocking the growth of <unk> in the way that we envisioned but it's really more about that than execution.
Pleased with where we are five or six months into the launch.
Your second question has to do with financing. So we are we're in a strong position going into the year as we said our cash position remains into 2023.
We're in a solid financial position the extra $150 million that you asked about for loan facility.
This is purely an option there is no specific criteria that has to be triggered for that is upon mutual consent between us and pharmacon should we decide to use it but they are not specific criteria that have to be satisfied in order to to use the second tranche of debt.
Okay, great. Thank you and I appreciate it.
Thanks, Mike.
Thank you.
Our next question comes from the line of Erin wherever with Cowen. Your line is now open.
So thank you for taking my question.
So Robert maybe a couple the first one just sort of following mikes question.
Can you give us a little bit of a sense and sovereign line do you have any sense. How many patients are sort of failing standard of care annual lanes from income kind of putting context from a volume and Robinson from Covid. So we get a sense of kind of where you are.
Relative to the overall opportunity.
On that.
On the one hand.
And for your point, Youre, saying is actually going pretty well getting the message out there in this environment. Thanks for putting up are important driving impressive and then secondly, just on SG&A in the 125 million jobs for a little bit of a sense kind of maybe.
If you can how are you on how much wiggle room do you have with add on.
However, you're spending that money right now overall, maybe based on the few buckets. Thank you.
Yes, let me start and then maybe I'll ask.
Vicki as well to add a bit of color on the patients that were getting so the market size. We've always said this market size is around 12000 lapsed refractory patients of which 5000 or so plus of those are in the third line and later setting we don't expect that day or any differences there. It's a matter of how often those patients are coming in.
As we said we closed the end of the year with for new prescription share getting a higher share of those patients than any other single agent in the space, we're getting more of the mutant patients in wild type and you would expect that just based on our data <unk> always expected that our share would be higher in the mutant patients and in the wild type and in fact, that's what we're seeing.
But we're also seeing as I said use in the second line patient population as well predominantly in the east you mutant patients where our data was the strongest.
So that's.
Generally speaking where the patient volume is coming from and I'll ask sticky to add a bit more color in terms of.
What we're seeing so far okay, no that's great.
Nice to meet you for.
Lee here.
Just to add to Rob's comments, we I know in the third quarter, we shared our estimated new patient share at that time was about 8% and we were estimating for.
For this for the fourth quarter that were between 15, and 20% of new patient share, which as Rob said.
The fastest growing.
Drugs are not new trials for therapy and.
In terms of the utilization. So we're very pleased with that that we're continuing to see that growth.
The 15%, 15% to 20% is the average over the quarters I mean, obviously quite a higher than that.
So we're pleased with that the other thing I want to mention is where these patients are coming from because I think on.
As you know early on we were seeing more academically based on the institutions for prescribing more and another really positive signal that we've seen in the fourth quarter as the community practices are starting to come on line and utilizing <unk> to the point now that are our split of academic for community based on.
Prescriptions at a 60, 40 split which is 60% academic and 40% community and Thats continuing to increase so just the fact that we're finally seeing that share of voice as high as it is in the intent to prescribe and we're getting to the community.
That's going on that's really important for our continued growth. So we feel very pleased with that.
And then on the expense question I'll start and then maybe ask.
Hello to talk specifically to the SG&A component, but just a reference point for the expenses. We had already managed our expenses pretty tightly in 2020 to reflect the uncertainties about the pandemic.
The remote working environment net eliminated a lot of our travel related field related expenses. So we have managed 2020 down pretty tightly because of the debt. We expect some of that is a return on 2021 and also in 2020 of the FL launch was as we had a six month.
Basically investment in the launch of Follicular lymphoma for the June <unk> day. This year will have a full year of launch.
That being said, we've held flat most of our fixed costs. We have held flat in fact, we've actually reduced G&A in 2021 compared to 2020.
And now 2021 accounts for a full year launch expense for Follicular lymphoma. So the areas that we will grow in 2021 largely is in the area of clinical trials due to investments in our clinical studies as our safety run ins transition into the full phase III efficacy expansions and then also manufacturing to some.
<unk>, our commercial need and to support our clinical trial demand.
On Palo Alto, if you'd like to add a bit more color on the G&A portion of Ron's question.
Yes.
Sure, even though you already answered most of the questions. So.
As Rob said, we already manage quite tight from 'twenty to 'twenty. So if you look at the exit rate with just this morning from song.
Let's make Q4, and so really there is not a significant increase from 2021. The only difference is day one full year.
Launch activities, we reduced net steel, but we still invest.
In the launch I think we still believe on the potential of the product. Our sales force is now total 12 months lets start the <unk>.
On March up for direct from G&A has been.
And you would just compared to last year.
Alright, thanks, so much I appreciate it.
Thanks for Ron.
Thank you. Our next question comes from the line of Mohit <unk> with Citigroup. Your line is now open.
Great. Thanks for taking my question and thanks for providing all day.
Good morning.
So.
Maybe.
So just trying to do some math here so looking at you know.
$4 5 million number for the quarter Annualizing at about $18 million. Obviously it is early but if you. If you think about this being a 15% share of new market new patient market that only gives me about $1 million annual run rate, even at 100% and if I, even if increased by 30% to 40 person.
Accounting for Covid, I still get to $117 million tops. So.
I'm just trying to understand does this mean the market opportunities still at sub $200 million from this patient segment.
How should we think about debt because I mean, it seems like everything is going in right direction, but does not translate into sales.
Hi, Mo and thank you for the question.
And no in fact, our view of the market Hasnt changed at all with respect to the.
Attractiveness of Ted's Barrick in this market are the more the market size again keep in mind.
The market is 10 to 12000 and considering that so just look in the third line alone for third line portion of that patient population is about 5000 patients. We estimate that those patients on average tend to turnover roughly once a year on average so that means that of those patients they're always struck treated at some point because they've had they have changes of therapy.
That's the number that if you use that as the market size would be the appropriate size just a third line and later if you annualize revenues keep in mind the numbers that we're reporting are over the course of an entire quarter. So some of those patients don't have the benefit of three months of sales became became at the end of the quarter.
But even if that if you assume debt.
Patient population in the third line and later as roughly 5000, that's roughly 400 plus.
Plus patients per month that would normally be cycling through a new therapy. That's the number that's down by 40%. It remains down about 40% it was down more than that earlier in the year, but it remained down by 40%. So those are patients that if theyre not coming on to a new treatment. We don't have access to them, but it also affects the overall size of the market, but it's not the size it is not it.
It doesn't change the size of the market. We expect those patients will eventually come back again as Ive said many of those patients have been away for many months physicians.
Are starting to indicate that they are trying to bring those patients back in now because they realize they need to be seen.
We need to be brought back and assessed and I'll, let should probably talk a bit more about conversations that she is having with them.
When you look at it that way and look at the total annualized.
Value of that size of that patient population is consistent with what we've already said.
But it also is a part of the limitation of wide getting to total share. It takes a bit longer if you have a 40% reduction in the new starts that are happening on a month on month basis, because the patients just aren't coming in.
Maybe I'll ask you to speak to some of the conversations you are having with physicians that they're having with their patients now.
Good morning, Mohit I think it's an important question because I talk to the physicians for the community and academic.
Clause of Covid the number of visits as you know, especially in on April May June was very very low it's actually increased a little bit in the third quarter, a little bit, but then again, we had the second sorry, so the number of the elderly patients in indolent disease, it's not like an aggressive tumor like DLP CL and because of that these elderly patients on Hawaii.
The to the clinic quite to the hospital for physicians have daily with it.
Talk to them only if they're symptomatic on the progressing they would go into the clinic, but it does the tumor it does Ken says so physicians try to see and credit the patients two to come in and so what we expect is ethical with vaccination is increasing these patients are getting now based on the credit category that the nation, we hope to see that increase.
These patients coming into the clinic and it's an important factor for us to access that because they have to come to the clinic for us to be able to access on the Tennessee. So again I think it's going to change as the Covid environment changes and we are very encouraged by that.
Very helpful. Thank you very much for this one other question.
The accident, a physician who has been detailed by you is describing on luck describing that Larry.
What are the reasons why businesses to choose something else or cosmetics at this point, especially in third line setting.
Yes, that's great.
I was looking at me that's a great question.
And nice to meet you again.
We typically I think it's a couple of factors right and we do a lot of advisory sessions and talking to physicians.
What we hear from them off and believe it or not is especially in a COVID-19 environment. They say they are creatures of habit.
And in the community setting believe it or not we see a lot of Rituxan monotherapy news, which is surprising and they use it over and over and over again.
The good news is that now they havent another option and so on like I said it just takes us in my prepared remarks, I made the point about frequency right. We've reached all of these accounts.
We've reached over 60% of our tap care for patients type two tiers.
But it takes frequency right of getting that message across multiple times for them to change habits, and so we're doing a lot of things from the peer to peer perspective, as I mentioned to.
To get in front of them in different ways, because it is challenging for the for the field team from these accounts are still closed so.
We're providing them novel tools like I said, the peer to peer engagement.
Any other things to help with the educational piece of the label and once they get an experience that we're finding is they really.
Wow.
They want to use the drug again, so getting that first experience is really important.
Thank you Edwin sorry go ahead Stephanie.
One thing more debt I don't think it's losing it over April but I was happy.
Wonderful back, especially if the situation is just giving the chance of gene therapy.
One point that for these patients right now I don't think thats using some of that Doug over cosmetic at this moment I think theyre, just not going into the clinic and trying to have a change for iPad based so it's important to remember that during the situation.
Very helpful. Thank you very much.
Appreciate it.
Thank you.
Our next question comes from the line of David Lebowitz with Morgan Stanley. Your line is now open.
Well. Thank you very much for taking my question.
Given the nature of the environment.
Is there I guess any way that we could see I guess a.
Okay, I guess getting closer to a normalized launch.
In the current environment as you get more used to.
Running with the virtual launch or do we really need to wait until the pandemic kind of runs its course.
For 2022 until.
We can kind of see the launch get more normalized.
David. Thank you for the question, let me start and I'll ask Vickie to add if I Miss anything but there are a couple of parts of your question first of all with respect to how we're executing in.
Does it need some does the market need to return to somewhat normal for.
For us to be able to be effective and I think we're taking a completely different point of view, we've taken the point of view that we don't know how long the pandemic.
On the effects of the pandemic will be here. So we are adapting everything we're doing to be even more effective in this current environment.
Working remotely the way that we are.
The challenge is the frequency is harder to get to and when you have a new product and you're educating on a new mechanism frequency does matter.
But we're finding ways to do that some of the really interesting peer to peer work we're doing.
Physicians, who actually use the product in front of other physicians, who havent, especially in the community setting and we're finding there's been very effective.
In <unk>.
Helping physicians understand the label the data on and when and how to use test spirit, but.
We're certainly not waiting for the environment to change we are learning how to work more effectively in this environment I actually think some of the things that we've done differently because of it will help us be more effective going forward because I'm not sure of the access to institutions will completely go back to normal some of the institutions, we're starting to limit access anyway.
But with respect to for the patients coming in because thats really the big Big trigger.
We are starting to see that change it didn't change in the fourth quarter and we talked about that on the call.
We didn't we haven't seen a big change in the first quarter of this year, but again the vaccinations really are starting to just.
<unk> rolled out to the next wave for patients, but we expect that with two things for vaccinations being more.
Fully distributed.
Number one and number two these patients as Chevalet was saying they've just been a way now for so long as these are patients that although they were told upfront it might be better to take a watchful waiting approach that works for a few months, but they can't go many many months from now seeing their physician fees for cancer patients.
And because of that the physicians are now starting to ask these patients to come back in and they want to see them. So we expected net will start to change this year.
Only reason, we're not giving revenue guidance for the year as the rate to which that happens is just completely unclear. We do expect that it will begin to change for the reasons that I've said wider vaccination and the fact that these patients ultimately need to be seen by their physicians.
Yeah, and I would just add to make this happen.
That was why we.
We're trying to focus on what we can control right.
We can't necessarily control, it's hard for us to impact patients coming back and although we are doing some work with advocacy to see there is an opportunity there to help with that but we need to focus on controlling what we can directly control which is getting.
Educating the physician getting new patient starts focused on earnings.
New.
<unk> to get experience with the drag.
And that one place like I said once they have experienced.
Believes and based on that experience, they're going to use more so that's what we're focused on what we can control at this point.
That makes sense when it comes to I guess doctors typically like to see their patients before making a change in therapy.
Doesn't that also mean, they would typically like the comfort level knowing that for this.
The patient will be able to come in subsequent to that point given that if the patient has a tolerability issue that they might need to see the patient in relative short order at a subsequent to that so.
So they don't just need to see the patient initially, but they need to know there'll be able to see the patient subsequent to that in the coming months.
Yeah. This is Jim Farley, let me address it so absolutely I think what happens is they have daily visits and I'm getting back from the physicians. They have initial tele visits and to discuss the symptomatic perversion of debt is happening something and if they feel the debt of some dramatic progression that Sophie asked the patient to come into to the scans on the side of the patient is progressing and if they are.
They changed the therapy that is frequent follow up initially to ensure that debt is no safety issue, especially if that's moving into new address but knowing the profile of Tesla I guess, you know I think that that's incentives that they didn't know right. So the monitoring is on that.
Pent-up catlin it get on the fly that credit monitoring if you guys are giving on IV therapy or something like that of course, you on the fly monitoring niv.
I get it.
Administration, but I think that that's the have you seen interest by Dick has it.
Importantly, based on safety profile and requires less monitoring.
It was a part of the quarter.
Yes, yes, David It was actually a part of the earlier question too was what's the barrier to a new prescription and part of it is what you referenced.
Even with a drug that has a profile that you shouldn't be ideal in this situation because patients don't have to come in to infuse if it's.
If it's a mechanism or a drug that they don't have experience with if they're not seeing their patients. Initially they may be more reluctant to try something new.
I don't understand but what we're hearing from the physicians.
Once they've tried it they're seeing that the drug is very well tolerated theyre seeing great responses and their patients and they are much more open to many more patients once they have the opportunity. So as Vicki said it really just takes that first opportunity. Despite the peer to peer programs. We're doing have been so effective because theyre getting to hear now directly from peers, who for it in the drug as a <unk>.
For a good for their own experience to give them comfort in using sales varick and their patients as well.
Mhm.
Thanks for taking my questions.
Thanks, David.
Thank you. Our next question comes from the line of Peter Lawson with Barclays. Your line is now open.
Hey, Thanks for taking my questions just a follow up from that last dialogue.
Any sense of the script renews you've seen.
Yeah, Let me start Peter and then maybe I'll ask Vicky.
Vicki to comment further but.
No.
For some of the prescriptions, we have to go through the specialty pharmacy channel, we have a lot more visibility as scripts are refilled for those that go through the specialty distributor channel don't we sell into the channel and they distribute to the accounts, but from what we can see so far with the FL patients we're seeing.
Great persistence on the drug and we would have expected that remember the average duration of response in our phase II study was about a year for those patients and we expected debt.
Duration of response might actually be higher in the clinical setting. So we've seen that a majority of the patients NFL who've been written going all the way back to June when we got to approval for actually still on therapy. So we're very pleased by that.
Also with regards to just compliance we've not seen any issues with compliant patients for very compliant with their therapy again in the phase II trial, we saw a very high rate of compliance there as well. So we didn't expect to have compliance issues.
Net epithelioid sarcoma on some of the earlier patients.
Dropped off after as Vicki said I think an average of about five months, but remember the first patients that we got on drug in the Es launch where those patients who are second third fourth line.
And those were the patients who tend to have a much shorter survival because of the severity of their disease and that's why our focus this year is really beginning to push more upstream getting those patients in the first line setting where we saw a higher response rate and a higher duration of treatment in the phase II study.
Great. Thank you and then just.
Is there any way of kind of breaking out asbestos follicular revenues or scripts.
Kind of like 50 50 at the moment.
With regards of the factors that I talked about with the way the scripts how much of them go through the specialty pharmacy channel and the specialty distributor channel, we have less visibility into DSD, but I can tell you that our view is that the majority of the growth that we saw in the fourth quarter all came from Follicular lymphoma.
Okay. Thank you and then just.
Just a final question just on the loss for the first few weeks of <unk>, you've seen a similar kind of trend in traction for Tazemetostat.
We started seeing an impact from the NCC and guideline change.
Let me, let me address those separately I think the NCC guidelines because it's the first time the question has come up.
First of all the label already allowed for that so the NCC and guideline is in view I think it's good for us in that it reinforces the lack of requirement for testing.
For some physicians if they might've had some confusion about the label the label already allows for that and for the physicians who've used has very one of the comments has been they really appreciate the flexibility that the label provide stem. So we think the NCC guidelines just reinforces that it's actually not.
Something new that didn't exist before.
So with regard to the first quarter on the trends are positive as I've said, we've not we're not giving specific guidance on the first quarter, but.
Some of the larger trends around patients coming in.
We've not seen a major difference in first quarter, but we didn't expect to we expect that it would be after the vaccinations began to take hold more.
But with respect to physician adoption, we continue to see the kind of trend that we saw coming out of the end of 'twenty 2020.
Great. Thank you switch thanks for taking the questions.
Yeah.
Thank you.
Our next question comes from the line of David Niven Gorgon.
Those securities. Your line is now open.
Hey, Thanks for taking the question.
So.
Looking pre Covid Alright, my question is.
About how many times on these patients go on to see the Doctor. So that we could maybe think about going forward.
Are the patients going.
In your opinion as Covid recedes see.
See the doctors see their physician with the same frequency or might there be a bit of a rush to get an appointment.
A reset therapy.
Or again, what I'd go back to kind of pre COVID-19 frequency whatever that was.
If you knew what that was I appreciate it on there.
But the frequency of Doctor visits that day.
David This is Rob So let me answer.
Two parts, let me I'll talk about the frequency with which patients are getting treatments changed it and I'll turn it over to <unk> to talk about what.
What would be a normal regular cycle of how often these patients tend to see their physicians.
The third line and later patients we expect that they just based on historical trends based on the data on our.
Other drugs that have been approved in the third line setting because duration of treatment duration of response tends to be about a year we.
We typically see that they turn over their therapy on average about once a year with respect to how often they actually see their physician and of course of the year I'll, let <unk> speak for them.
Yeah, Hi, David So normally I need depends on the line of therapy and also if we look at Heartland on beyond based on day, Scott My debt. The numbers can stay due if I had any every three months that they go to live at the beach.
To the patient to the Doctor and they just check for scans on things like that.
This is a safety issue and you have set from crowds that IV. Initially different goal highlight quite example, I'd give you is that it's given at the Inc.
Kevin.
Given what I get it on IV administration. So you go more frequently because theyre getting IV and things like that but nominee for economic checkup itself as it came on.
Got it.
And.
Do you think that like for like I said, I don't want to say bullish but do you.
<unk>.
Yeah.
Emperors blip or whatever you want to call it a temporary increase in those visits.
As at rehab or because it's kind of receding gradually or patient perception will recede gradually you think kind of returns towards just a regular.
I'll see you in May.
Karla.
So I think it all depends on not depends on the coli vaccination and how frequently how everybody is kind of like I think what all I still believe that you know as I talk to a physician debt talking to the patients that trying to get them in so I don't expect that all on the peso would come at one go I think it will be gradual and the hospital themselves will open gradually that it's not going to happen like everybody.
He gets that tomatoes on the hospital they come just nominal right away I think it's going to take time to adapt to normal I think that's what.
Okay.
Thank you.
Okay.
Thank you.
Our next question will come from the line of Andrew Burns with SBB Leerink. Your line is now open.
Hi, Thanks.
Rob on your prepared comments I think for as you mentioned that youre going to uptick from the second line setting, but the uptake is predominantly on easy H two positive patients. So from a few questions on that observation.
Does that encourage you to promote testing awareness amongst the docs and I guess, what is the status of easy H testing now as a standalone test.
On a part of a panel and have you seen the number of patients being tested for easy as to status going up and then you may have said this but what percentage of patients treated with Tesla Eric for.
Follicular lymphoma are wild type versus ECH too positive.
So there are a lot of parts of that question, let me walk through them one by one thanks for the questions and if I Miss anything I'll, let you fill in.
First of all let's talk about <unk> testing, because I think it's relevant to your question around second line, we have seen an increase in testing for easy H two as we had expected that we would following the approval.
From the market research that we do.
It looks like about 50% of physicians are testing for easy H two today.
Up a bit from the prelaunch levels.
What we understand from that is they are not testing necessarily as a decision point about whether to use hasn't Eric on not just want to understand the type of disease. Their patient has and they want to be able to set expectations with their patients for many times. They are ordering the test at the same time they are writing prescriptions.
They are not actually using it as a condition for describing <unk> in the second line setting I think it probably is used more that way because most of the use for <unk> has been on a therapy. That's the label physicians are expressing a lot of interest in combinations and experimenting with different combinations for most of what we've seen so far commercially has been as monotherapy until.
On the second line setting again, given the stronger data in <unk> versus <unk>. It makes sense that that's where more of the use would be coming as a monotherapy and the second line setting.
So did that answer your two questions on those.
Right. Okay. So you are seeing about 50% of the patients that.
Get test Barrick tested for usage too.
Okay.
50%.
About 50% of the physicians that we did market research with same day or testing for ECA student not necessarily 50% of the patients, but about 50% of physicians now say they are testing.
Okay, I'm getting on that we're getting out there.
There is quite challenging because obviously.
We do buy claims data that the claims data doesn't include whether they were tests are now on.
So we don't have good visibility to that number although we know that in the third line plus setting we are seeing more on mute and utilization as well based on the market research that we have.
Okay.
What percentage.
And the unknown or untested are wild type.
Okay. So just just to follow up what percentage of patients in follicular that get good drug for usage to pause on about what I would think.
Have that that number available.
We don't have a good breakdown on that again because of all the part of the product which is over half of the scripts go through the specialty distributor. So we actually have to do retrospective research to get an understanding of how we think for drug is being used on things thats not captured through the specialty distributor but.
Anecdotally the feedback we're getting and through market research all three are growing both mutant and wild type and untested, which is actually a pretty big part of the market where physicians don't test at all.
Three of those are growing and as Vicki said, we're getting roughly.
Average of a quarter of 15% to 20% of all the patients in the third line setting in new prescriptions.
That is higher than that that's the average for the quarter.
So that's more than double where we were in the third quarter in terms of new patient starts but across those mutant and wild type <unk> patients, who are untested, which is a pretty large group Inc.
The total.
What is the availability of <unk> II test as a standalone past.
It's pretty widely available remember the label allows for any FDA approved.
Test for easy H, two is sufficient and what we're hearing from the payers is that they also allow for local testing and so there are many institutions have their own tests that they can use.
Also <unk> was included on panels with both quest and other commercial diagnostics that are panels that include <unk> in them. So there are many ways that physicians can access ECH do testing, we think thats a part of the reason that the testing rate has gone up among physicians has gone up from 30% to 35% prelaunch to around 50% today.
Okay. Thanks for answering all the questions I appreciate it.
Thank you Andy.
Thank you there are no further questions.
I'd now like to turn the call back to Rob <unk> for closing remarks.
Great. Thank you operator, and thank you all for joining us today and for all of your questions. We hope you can join us for our call to discuss the next episode Prep as I'm on March 2nd next Tuesday, and that you all stay safe and healthy have a great day.
Good day everyone.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
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On.
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