Q4 2020 Global Blood Therapeutics Inc Earnings Call
Greetings and welcome to global Blood Therapeutics Conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the prepared remarks, if anyone should require operator assistance. During the conference. Please press star zero on your telephone.
And Pat as a reminder, this conference is being recorded I would now like to turn this conference over to Mr. Steven In My group. Please go ahead, Sir you may begin.
Thank you and welcome to <unk> conference call to discuss the company's financial results for the fourth quarter and full year, 'twenty and 'twenty and to provide a business update.
I'm, Steve and immigrate head of communications and Investor Relations joined.
Joining me on the call are Dr. Ted Love, our President and CEO.
We'll provide and high level update on our progress on the fourth quarter and over the full year of 2020.
Jeff Farrow, our Chief Financial Officer, who will provide an overview of our financial results.
And David Johnson or D. J, our chief commercial officer, who will give an update on the ox bright of launch.
Ted will then close with an update on our pipeline activities and other long term growth initiatives.
Earlier. This afternoon, we issued a press release announcing gbt's progress and financial results for the fourth quarter and year ended December 31 2020.
Before we begin I would like to remind you that certain statements. We make on this call that are not historical facts may be forward looking statements that are subject to risks and uncertainties informing.
Information concerning factors that could cause actual results to differ materially from those expressed or implied by such forward. Looking statements are contained in our SEC filings, including but not limited to our most recent annual report on form 10-K, as well as in today's press release.
Copies of our SEC filings and press releases can be obtained from the investors page of our company website at GBT Dot com.
The forward looking statements made on this call are only as of the time. They are made and should not place undue reliance on such statements future events or simply the passage of time and they can.
Cause our beliefs to change and we disclaim any obligation to update any forward looking statements other than as required by law.
With that I will turn the call over to Ted.
Thank you Steven and good afternoon, everyone.
'twenty and 'twenty was a historic year for GBT headlined by the launch of Ox Friday and significant progress on our R&D pipeline.
We are in a position of strength and we continue to build value with multiple commercial regulatory and clinical milestones in the coming months and years.
It is clear that Oxford is fundamentals are strong.
And this is supported by several facts.
First strong adoption and awareness.
During the first full year of the launch we generated nearly 124 million in revenue.
Making it the most successful launch in sickle cell disease history.
This happened despite a once in a century pandemic.
In addition to.
<unk> and patient awareness of ox Ryder is extremely high.
Nearly 100 per cent.
Of health care professionals, who are aware of ox, Brad and either have prescribed it our plan too.
Second robust data.
The growing body of clinical data, including the hope study shows that ox Friday resulted and durable improvements and hemoglobin and hemolysis over 72 weeks of treatment.
Both the hope study and the published real World experience data shows most patients taking on Brader report improvement and overall health status.
We've seen in real world data statistically significant reductions and blood transfusions and V S piece.
And I know many patients that have returned to their normal daily activities, including getting back into the work force.
And third broad access.
Our analysis of prescription trends confirm that hcp's are starting a broad range of patients on ox Friday irrespective of their baseline hemoglobin V O C history and age.
We establish a broad payer coverage and less than a year one quarter ahead of our 'twenty and 'twenty go which demonstrates that payers understand the benefits of ox Friday.
Based on these points, we believe ox spread it is well on its way to become foundational in S. T D care.
Yeah.
And every lunch you learn and adapt.
COVID-19 has accelerated this process for our team and we believe this will put GPT and medium and stronger position coming out of the pandemic.
Until that time comes we believe we can continue to sustain our current levels of new prescriptions and look forward to the opportunity to accelerate our growth when the pandemic subsides.
We have a deep appreciation for the disproportionate impact of COVID-19 on sickle cell patients and the ratio inequality and health care.
Which have met which have been magnified by the pandemic.
As part of our long term commitment G. B T support for the sickle cell community has increased each year and we are proud to have helped this community and a variety of ways in 'twenty and 'twenty.
Total financial support was more than $2 million and a couple of specific examples include number one GBT and our employees and members of our board contributed nearly $400000 to directly support the urgent patient and family needs related to.
The COVID-19 pandemic.
Number two we also provided funding to nonprofit organizations working to improve access to care in S. E D through our ongoing XL Grant program.
And thirdly, we hosted the ninth annual sickle cell disease Therapeutics Conference Ted.
Our father advanced health care for people living with sickle cell disease.
Overall, we are very happy with our launch progress.
GBT is a clear leader and sickle cell disease, and we are poised to deliver for patients in 'twenty and 'twenty, one and beyond.
With that I will turn the call over to Jeff to provide and update on our fourth quarter and full year results.
Thank you Ted.
G. B P delivered solid results in the fourth quarter and full year, 'twenty and 'twenty and we have continued to maintain a healthy balance sheet.
It is also exciting to see the investment and we have made and our S. E D pipeline evolve as we move to new assets into the clinic.
Total net revenues from sales of ox brighter was $41 3 million for the fourth quarter of 'twenty, and 'twenty and $123 8 million for the full year 'twenty and 'twenty.
Despite the ongoing impact of COVID-19.
Fourth quarter revenue grew by $4 4 million or 12% over the third quarter.
The sequential revenue growth was driven by patient demand for ox brighter.
Primarily from prescription refills.
This was partially offset by the impact on new prescriptions due to the pandemic and the Thanksgiving and Christmas holidays.
Our gross to net adjustment was approximately 12% and the fourth quarter.
As previously noted we continue to expect our gross to net adjustment to increase over time, driven by patient insurance coverage prescriptions filled by 340, <unk> pharmacies, the Medicare part D coverage, GAAP and patient co pay systems.
Our gross to net adjustment and fourth quarter revenue benefited by approximately 600000 related to a reversal of our return reserve for ox brighter.
As we come to the end of our first year of launch and review actual levels of returns, which have been de Minimis. We've adjusted the return reserve to appropriate levels.
In terms of inventory days on hand at our distributors was approximately three days higher than the elevated level of inventory we experienced in the third quarter.
So as we think about the first quarter of 'twenty 'twenty, one and this could result in less bottle purchases as distributors utilize the inventory built up in Q3 and Q4.
Overall, I'm pleased with the revenue from MX, Friday, and 'twenty and 'twenty.
As we think about the first quarter of 2021, we anticipate flat revenue compared to the fourth quarter, 'twenty and 'twenty, which includes the expectation of a higher gross to net adjustment.
We also expect new prescriptions to remain flat and we do not expect to see significant growth until the pandemic subsides.
Based on the latest thinking.
Our best estimate is that this may not occur until the second half of this year.
After which we anticipate we will be able to incrementally increase new prescriptions quarter over quarter.
D J will talk more about some of our ongoing efforts.
Cost of sales for the fourth quarter was approximately $1 million and for the full year was approximately $2 million as compared with 48000 and for the fourth quarter and full year 2019.
Cost of sales was low and the prior year as the majority of the manufacturing costs related to fixed price sales were incurred prior to FDA approval industrial were recorded as R&D expense.
We continue to expect that the cost of ox brightest sales as a percentage of revenues will increase as fully expense product manufactured prior to FDA approval is utilized.
We continue to believe that we have a robust commercial supply of ox brighter to sustain estimated patient needs and into 'twenty and 'twenty two and.
And the production of ox brighter by our contract manufacturers has not been impacted by government mandated COVID-19 vaccine production orders.
R&D expenses for the fourth quarter 2020 were 41 million compared with 65 million for the same period 2019.
For the full year R&D expenses were 155 million compared with 175 million and the prior year.
The fourth quarter of 2019 included $20 million and expense related zeros Pharmaceuticals collaboration agreement signed in December 2019.
<unk> expense.
The decrease in R&D expenses, and the fourth quarter was primarily due to lower manufacturing cost per ox brighter.
Following FDA approval, we capitalized manufacturing and inventory.
This decrease was partially offset by an increase and external costs related to our and clock and map program and preclinical research activities related to our cereals collaboration.
Sales general and administrative costs for the fourth quarter, 'twenty and 'twenty were $59 million.
Compared with $45 million for the same period and 2019.
For the full year, SG&A was $211 million compared to $117 million and the prior year.
The increase in SG&A expenses was primarily due to increased employee related costs, including noncash stock compensation and other professional and consulting services associated with the Buildout of our commercial operations and launch a box brighter.
Our increased patient and HCP education and promotion efforts are also reflected in SG&A expenses in 'twenty and 'twenty.
Net loss for the fourth quarter was 62 million compared to 96 million from the same period and 2019.
Net loss for the full year was $248 million compared to 267 million and the prior year base.
Basic and diluted net loss per share for Q4 was one dollar per share compared with $1 59 per share for the same period and 2019.
Basic and diluted net loss per share for the full year was $4.04 per share compared to 457 per share and the prior year.
We ended the year with a strong balance sheet and with cash cash equivalents in marketable securities of $560 9 million compared with $535 2 million at September 30th 'twenty and 'twenty.
In summary in and unpredictable year I'm extremely pleased with Gbt's 'twenty and 'twenty results.
Our revenue from ox brighter has far exceeded pre pandemic street expectations, and more and a strong financial position.
I also remain confident that when COVID-19, subsides, our growth will accelerate and our positioning for the long term will remain strong.
And with that I will now turn the call over to D. J.
Thank you, Jeff and good afternoon, everyone.
We ended 2020 by delivering another quarter of solid progress with Yahoo right of launch.
We achieved this in spite of growing COVID-19 cases across the U S, which is a testament to the passion and dedication of our team.
And I want to thank all of our employees for the effort throughout the launch.
As I've done in prior quarters, I will provide an update around the three key metrics that combined with net revenues will give you further insight into our progress. These.
And these metrics are new prescriptions per <unk> rider, which informs underlying patient demand.
And number of health care providers, prescribing ox rider, which captures the progress, we're making and adoption and payer coverage, which speaks to the access environment for arthritis.
First new prescriptions.
Nearly 5000, new prescriptions were written for <unk> between launch and the end of 'twenty and 'twenty, including approximately 950 during Q4.
This is despite a continued decrease level of sickle cell patient and health care provider interactions due to the pandemic.
We're pleased that we were able to maintain this level of new prescriptions in the fourth quarter, given the dramatic and rapid rise and COVID-19 cases, coupled with the normal impact of the holidays.
As we continue to increase the number of patients and our patient claims and lab data. It now reflects more than 2400 patients. We continue to see a broad patient profile Forex brighter and.
Nearly half of arthritis patients have an average base hemoglobin above eight grams per deciliter and about one third have a baseline of three or more annual D. O seats. In addition, more than half of occupied of patients are on a combination regimen. These trends bode well for the future of ox rider as it shows a broad range of views.
Beginning in Q3, we rolled out several new websites and drove social media that increased our interactions with health care providers and patients and the second half of the year.
At the end of 'twenty and 'twenty, we had more than 425 visits per day tour H C. P focused websites, we recorded more than 14 million digital impressions from H C piece and the second half of 'twenty and 'twenty with 75% growth in the impressions and Q4 over Q3.
And our patient focused disease awareness program sickle cell speaks.
Has now grown to more than 60000 followers on Facebook, we think that's a great indicator of our ability to educate on S. E D.
We continue to roll out new content and 'twenty 'twenty, one leveraging our broader toolbox of marketing and educational materials for example.
We now offer getting started guides and brochures, which can be provided to patients to support discussions on ox brighter.
For GBT source solutions, we now exclusively offer our high touch model, which is shown to result in better adherence rates.
And we recently launched the GBT source dotcom website to provide information for patients caregivers and health care professionals about starting and staying on ox Friday.
We also recently partnered with the iconic magazine brand essence to educate and motivate our patients and caregivers via sponsored content and digital advertising.
And finally after following the requirements of the F. D. A pre submission under occupied is accelerated approval process, we will have new patient tools, including everything from treatment journals side effect management tip sheets, and smart bottle cap stickers and alarms with the goal of improving overall adherence.
In addition, our field teams have been trained on the 72 week analysis of the Phase III <unk> study, which was presented at ash in December to use on the field supplementing our already compelling 24 week data.
Our medical field teams also are trained on the emerging real world data and had been educating hcp's on these important findings. In addition, the team recently launched a new M. S. L on demand capability. So that they can interact with health care professionals in real time.
This new offering allows us to address the challenge of limited in person meeting opportunities with health care professionals, while maximizing the impact of our interactions.
We believe our digital and field engagements will continue to build awareness with patients as well as support for more physicians prescribing <unk> rider, while also helping them keep their patients on therapy and hopes of achieving better outcomes.
Which leads me to my second metric health care provider penetration.
And the fourth quarter COVID-19 continued to be a headwind, causing decreased in person interactions by both patient and our field teams.
We continue to drive in person interactions in the geographies, where we are able to do so and virtual engagements continue in all areas.
While interactions were curtailed during the quarter due to the pandemic, we continue to engage in discussions with H C piece with a focus on fostering deeper relationships and gaining and even better understanding of the patient journey.
We continue to bring greater awareness to GBT and ox brighter.
And I want to flag, what Ted mentioned earlier of those Hcp's, who are aware of box rider nearly 100%.
Have either prescribed it or plan to in the future.
Our efforts in 'twenty and 'twenty have contributed to achieving 1365 unique health care providers, who have written a prescription for rux brighter from launch through the end of the year, including about 190, new prescribers in Q4.
This is important because we know that new writers typically start multiple patients on ox rider.
When we look at the breakdown of writers, we continue to see prescriptions being written by both specialists and non specialists, which we believe is a positive trend for the long term trajectory of the launch.
This was a great start and a solid base of prescribers and consistent with all the launches and my career as we enter year two of the launch we are optimizing our sales efforts with learnings from year one.
And this includes better targeting of our most active hcp's and adjusting territories to maximize access referral trends and institutional dynamics.
We believe these improvements will position us even better for the future.
Turning to payer coverage.
As we previously reported as of September 30th we achieved broad payer coverage one quarter ahead of our goal.
This coverage provides access to 90% of covered lives and the United States.
And Q4, we made small incremental gains and we will continue to work to optimize coverage.
In summary.
We have acted nimbly and the face of COVID-19.
And we have taken the learnings from the first year of launch to enhance how we approach the market.
We've also rolled out new materials that focus on expanding adoption and supporting adherence.
I believe we are and a stronger position as an organization because of these actions and I continue to be confident and the long term potential of ox Friday I'm.
I will now turn the call back over to Ted to discuss the potential expansion of ox rider and our pipeline.
Thanks T J.
As you've heard today, we made significant progress with the launch of Ox Friday, and we continue to refine our tactics in 'twenty and 'twenty one.
We also continue to make good progress and our regulatory efforts to broaden access to ox Friday.
We continue to plan to file a regulatory application with the F. D. A T and expand the ox Friday label to include children Ages four to 11 by mid 2021.
Providing occupied access to younger patients is one of our top priorities.
We believe that mitigating red blood cell signaling and destruction early in life will modify the course of the disease and alleviate serious and life threatening complications.
In the U S. We recently enrolled the first patient in our pediatric expanded access program or EAP to provide access to ox Friday prior to its potential approval for younger children.
In January we announced that the European Medicines agency accepted our submission for ox brighter for regulatory approval.
Based on standard timelines, including clock stoppages, we estimate their review, we will take about 12 to 15 months.
As the EMA and works through their review.
<unk> are able to gain experience with <unk> through and EAP that we launch for eligible patients in Europe and other regions outside the U S.
In the six GCC countries in the Middle East, we continue to work with our distributor partner Biopharma EMEA to make ox Friday available.
We intend to establish a similar partnership for Latin America, including Brazil, where the bulk of the regions FCB patients live.
Now turning to R&D pipeline I'm really thrilled about the progress we've made this past year.
In December we announced the appointment of Dr. Kim Smith, Whitley, and EVP and head of research and development.
Kim is a highly accomplished global leader in sickle cell disease with an impressive track record.
She joins our leadership team from children's hospital of Philadelphia.
And where she will continue to see patients part time.
She will officially join us in May.
Let me take a moment to update you on the pipeline.
First and clock of map is potentially the best in class P Selectin inhibitor.
This therapy has been dosed and more than 700 patients in a previous non sickle cell program, which gives us confidence and its safety.
At Ash, we shared data that shows it binds to a unique site that allows and clock and mapped inhibit T select and more potently, which we believe will enable quarterly dosing versus the currently available monthly intravenous dosing.
For an intravenous infusion quarterly versus monthly dosing is a very important distinction for patients.
We plan to initiate two pivotal studies phase III studies shrink locker map in the first half of 2021.
The first study will focus on reducing V O sees over a 48 week treatment period.
And second study enabled Beinecke, Inc. Locker maps quarterly dosing potential will focus on reducing 90 day hospital readmission following and initial V L see hospitalization.
The two studies are designed to potentially enable two independent regulatory submissions for separate indications.
Moving to G. B T 20, 161, or six O. One our next generation hemoglobin polymerization inhibitor also has the potential to be best in class.
At Ash, we presented data that shows 601 has the potential to normalize hemoglobin through improve red blood cell survival and improved organ function.
If this plays out in the clinic 601 has the potential to provide a functional cure and a once daily pill.
We have enrolled patients and a healthy volunteer study.
And our goal is to have proof of concept data and sickle cell patients by year end.
In closing I want to reiterate three key points regarding the outlook for GPT.
First we are continuing on our path to be the leader in sickle cell disease.
Every day, our team is focused on discovering developing and delivering highly effective safe and scalable therapies for patients living with this terrible disease.
We have a strong track record of execution and a deep commitment to the S. C D community.
We are proud to make a difference and determine to and the disparities and health care. These patients suffer.
Second the ox Friday lunch has been a great success. The fundamentals are strong and we believe this first in class oral therapy will become foundational in F. C D care.
Lastly, we are building for the long term with our pipeline and global expansion.
Our two lead clinical candidates have best in class potential and.
And Clark a map with potentially more potency and quarterly dosing and six O on with early data, suggesting it may provide a functional cure for sickle cell disease.
We could not do any of this without our employees and I want to thank them for contributing to the impressive progress we made in 'twenty and 'twenty and the continued passion they bring every day.
We continue to be driven by our mission and we are getting closer to our goal of transforming S. C D into a well managed condition.
With that we'd like to open the call for questions operator.
Thank you we will now be conducting a question and answer session to start please limit yourself to one question. If we have time remaining we will take follow up questions. If you would like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is it a question.
And Q you May press Star two if you would like true Love. Your question from the queue from participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys, one moment, while we poll for questions and.
First question comes from the line of Gregory Zhao with RBC capital markets. You May proceed with your question.
Hi, This is Andrew on for Greg. Thank you for taking my question and congrats on the quarter.
And maybe just a question on on.
And the feedbacks on patients and Dr. Consistent program, which has been very positive thing and.
Notably and question I was wondering how should we foresee that price things, we're seeing and what is the right level ups and quite steady state.
Thanks.
Were you asking about the feedback that we're getting from physicians and I just want to make sure I understood. The question and this is Ted.
Hi, Ted Yeah, just feedback from from physicians and maybe on that.
From patients too.
Hospital, Yeah, Yeah happy to take that the.
<unk> has been excellent I mean, as you know every drug and have side effects and are side effects have been.
Generally well manageable related T reversible Gi issues.
And that is a minority of patients.
From the hopes that and he was about 25 per cent of patients had G. I.
Side effects that we're always manageable.
But in terms of the patient feedback I think one of the abstracts and I would point you to was from.
What's from Ash and it reported.
I think about 80% of the patients reported that their health status was.
A significantly or at least moderately improved after being on therapy and that was actually quite consistent with the blinded placebo controlled data that we gathered and the hope study. So we have excellent data to show that it's not just anecdotal that these patients feel better at its Don.
And it through blinded placebo controlled work and then as I mentioned.
And there.
The prepared remarks, we've definitely seen patients also who are unable to work who've been able to get back and into the workplace. So that's all very exciting price and I think it's it's great news for patients.
Great. Thank you and congrats again and on the corner.
Thank you.
Our next question comes from the line of Liana <unk> with Wedbush Securities. You May proceed with your question.
Lina Your line is live.
Hey, sorry, I was on mute on.
So you had told us that Q4 would be flat over Q3, and now you're telling US Q1 will be flat over Q4 I'm. Just wondering is the success for Q4 revenues.
Due to what you were describing is increased.
Increased handholding with patients on.
And that you were going to show them and why our attention.
And and and and apparently if that said it worked but now you're saying flat over and you know because of some of the inventory for a couple of days, but.
It seems to me that it might be higher than that since Q4 was higher than Q3 and your comments.
Total liana. Thanks. This is Ted thanks for the question I think I'll ask Jeff.
Jeff to speak to some of the specifics sure Yeah, No I do think some of the D. J S. Team's efforts have been helping us as we move forward clearly the pandemic really reared its ugly head and the second half of Q4. Despite that we were still able to get 950, New Rx is but there was a couple of sort of I would characterize them a non routine.
And events that happened in Q4 that if you take them out it really is more of a flat quarter and Q4.
We did have day inventory buildup that you had mentioned.
In the.
The fourth quarter of about three days so.
So we do expect and and we've seen it quite frankly in the first month and a half year of the quarter, where the distributors are not buying as much initially now that could change towards the end of the quarter, but currently it's a little bit less and the run rate. We saw in the fourth quarter. We also had the impact of a re.
<unk> and the gross net given our return reversal of about 600000, and we won't have the benefit of that in the first quarter and we also expect that gross to net to continue to move up incrementally quarter over quarter.
So those are really sort of the reasons that we expect a flat Q1 force as it compares to the fourth quarter.
Alright. Thank.
Thank you very much.
Uh-huh.
Our next question comes from the line of.
Alicia Young with cancer you May proceed with your question.
Hey, Thanks for taking my question and you know.
Kudos to you guys are kind of working through all of it but it's a lot to work through.
I guess when you.
And your script you talked a little on about like you know demand associated with retail is it sort of fair to think that that that's picking picking up a little bit.
On fundamentally and and I guess in terms of like as it relates to the doctors that you see are coming on do you feel like theres kind of going on there.
On a another small bump up as we go through the year.
You know as you kind of continue to add doctors and perhaps they are and they transfer patients. Thanks.
Thanks, Olivia and I'll ask D J tipped to respond to that sure Alicia Yeah. We did see refills, where were strong in Q4 and that helped us out. So we do think our tactics are helping there and of course, we have many more tactics that we rolled out throughout Q4 and into Q1, and we just had a really effective at national.
I will meeting this month, where we rolled out the 72 week hope data to the field lots of new materials, including the starter kits, including the Ah patient brochures and of course, we're activating our hub to do even more.
For patients. So all of this is going to help us that said Q4 with the spike in Covid and we did see a decrease and the number of interactions between patients and health care providers in the sickle cell community in Q4 from Q3 because of that Spike.
But that said, we do have some tailwind that we think are going to help us. So we're very confident about this year being able to.
It would be able to grow, especially once we get past the pandemic.
Okay.
Our next question comes from the line of Richard barrel with Cowen You May proceed with your question.
Hi, This is Michael on Ontario, Karen and thank you for taking the question and thank you said the update and it may be intent on your rollout and switching to exclusively using the high touch model could you maybe remind us what last you have with the plants and if you on when exactly you would anticipate potentially in and impact on our.
And it's like a high touch model. Thank you.
Thanks, Leila D J.
Sure Yeah. The high touch model was turned on and we've always had a high touch model throughout last year, we gave patients a choice when they enroll and the GBT source solution to do high touch adherence program or or a more of a low touch what we found in year. One is the high touch model works, better and encouraging patients and giving them the information they need to stay on therapy. So.
We've done away with the low touch model and we just simply enroll folks and the high touch model. We did that that was initiated at the end of Q4 last year. So we would you know all the patients going forward. This year will be on that model.
In addition, we've pushed some services down to the S. P level as well because we know that some patients through the 340 B program or whatnot will go straight to our S. P partner as.
And as opposed to straight to the hub and we want to make sure. They get the same support so copay assistance from adherence programs and things like that are also going to be initiated at the S. P level as well.
And so through all of these efforts, we would expect our patients to benefit from these services throughout this year and the high touch model is just more outbound phone calls text messages reminders, especially in that first month of initiating therapy.
Thank you very helpful.
Our next question comes from the line of <unk>.
And Guggenheim Partners you May proceed with your question.
Oh, Hi, there. Thank you for taking my question just two questions from me number one for Jeff If you can help us.
And if you can maybe quantify how should we model growth on that going up and we understand you have this and order of ourselves.
How much high you could go on and on the long term you have sat 25 ish percent and what is the trajectory and then I apologize if I missed it I think in the past you have provided a little bit more color on three or four.
Metrics like abandonment red deer, and trade phasing.
And and lag time and picking prescription can you maybe give us an update relative to the December update that you provided during ash. Thank you.
And thanks John.
Jeff do you want to speak to the gross to net and maybe DJ you could speak to some of the other metrics sure happy to Hyatt and.
Yes, I think absent the return reversal, we would've probably ended up pretty close to what we had for Q3, which would have been around 13 and 14%.
I think we will see incremental increases in Q1.
And it's tough to model just given that when the $3 40 D pharmacies come on line. That's when we'll start to see more of that larger discount taking place to 23, 1% discount that they are eligible for so if we think about sort of when we expect new Rx has to pick up we would expect that to start to pick up again.
Sometime in the middle to second half of the year and then I think once we get to steady state, we will probably end up around the 25% range. So it'll be step wise as.
As we move through it and ramping up probably a little more significantly and the second half of the year and then at steady state, which we hope will be sometime in 2022.
It will be around the 25% rate.
Yeah, and yacht and we didn't comment a lot on those metrics, mainly because there wasn't anything appreciably different from our Q3 metrics.
Conversion rates still remain very high in the 75 per cent range in terms of patients coming into the hub and being converted into a new patient starts so that remains consistent and Q4.
Abandonment rates kind of still at that same the same level. It's been at but we are very successful at converting the vast majority of patients to a new new start.
Adherence rates are consistent right, we're still well within that range of <unk>.
First year.
Products are being within 50 to 70 per cent adherence rate for an annual rate and we ended the year again well within that rate.
So no changes there and then start times, we've we've I think we've kind of on optimized our start times to about two weeks from the time, we get the prescription and takes about two weeks for us to work with the payer the prior authorization process applying a copay assistance or any other support the patient needs and then and then it's <unk>.
Converted into a shipment and so it was consistent and Q4 at about two weeks with Q3.
Got it very helpful. Thanks.
Our next question comes from the line of Jason Go Barry with Bank of America. You May proceed with your question.
Hi, This is on your mind on true, Jason and thanks for taking my questions.
And just wondering if you can talk about the current market environment and a little more day.
As far as like patient flows on per Se on normal you know interactions with health care provider on recently.
Yeah. Thanks for the question.
I think that it's pretty much what we would expect as we've seen the COVID-19 cases rise we've consistently seen physician patient interactions go downward and as Jeff referred to that that was certainly something that was very significant in.
And Q4, so that's why we're quite frankly very happy that we've been able to hold our enrollments in in the and the 1000 range 90 50, specifically in.
In Q4.
We obviously expect that to improve.
As COVID-19.
And if we can't be on Covid, and maybe there will even be a bit of a recovery because many of these patients probably have gone a significant period without seeing the physicians that debt D. J do you have anything you want to add that.
Just that our overall engagement with our our field teams and our target list was a little bit lower in Q4 than Q3, and some of that had to do with the two holidays and Q4 in.
In addition, we were able to maintain despite the increase and Covid about 25 per cent of our interactions were in person are higher and some markets like New York, where it was about half of our interactions and Q4 were in person and lower and other markets, where our where it's a little bit more shut down.
But we're doing of course virtual engagements across the board as well so.
So Q4 because of the holidays, a little bit lower on the engagement and because of Covid.
Okay, Great also on the durability.
Patients remaining on track just from the early adopting cohorts specifically you know those who started to drag on and the first quarter of client and 'twenty do you have.
Numbers for what percentage remain on track.
Well I think we really only report out one year numbers because that's the only thing you can really compare to as D. J likes to say persistence always goes down right because patients get older. They die so persistent and ultimately will go to zero.
If you follow people along enough just through the mortality effect so.
To be kind of consistent and have some day compared to we compare to the one year number and really wanted to just educate that when you look at the one year number.
We are.
Insistent with other other comparable products.
Alright, thank you.
Our next question comes from the line of.
Mark Breidenbach with Oppenheimer you May proceed with your question.
Hey, guys. Thanks for taking the question.
Just wondering if we should expect spread as European label to be materially different from the U S label since day isn't requiring a post approval confirmatory trial.
And I just wanted to also make sure that the 950, new prescriptions that you recorded in <unk> does that include any contribution from the early access program in Europe or other ex U S territories or is that those are all U S prescriptions. Thanks.
So no the early access program.
Is non revenue so we would not count that.
As an enrollment even in the U S who cannot count early access enrollment of children as enrollments.
And we also don't count patients that are restarting therapy as enrollment either on.
All of the enrollments are new enrollments of patients out of within label.
At.
Within the majority of cases be paying patients.
The.
The question with regard to the EMA is a good question. We obviously don't know how things will work out ultimately with the EMA, but we've had obviously very good interactions with them to date.
And our requested indication in Europe is for the treatment of.
And of the anemia, and hemolysis of sickle cell disease.
And so it's a slightly different wording.
And then in the U S. Essentially all patients with sickle cell disease have anemia, and hemolysis. So it's not a terribly different label, but it is a label that speaks.
Speaks to something that we know the drug does in fact and to your question about.
Requesting of.
Our confirmatory study we've.
We've had no such discussions with them on that topic and we don't anticipate.
Dissipate that but of course, you don't know, what's going to happen and our regulatory process until you get get through it.
Got it thanks for taking the question.
Youre welcome.
Our next question comes from the line of Joe Hogan with Wells Fargo and you May proceed with your question.
Great. Thanks for taking our questions guys and congrats on the progress.
D J, thanks for patients who have not persisted on therapy.
Maybe can you provide us any color on on efforts, you're taking to get patients back on therapy, and then quickly Ted maybe just for Nexgen and 601 with the proof of concept data coming by year end can you just remind us how hemoglobin occupancy translates into improved efficacy and maybe what's the target profile there.
Right, maybe I'll start first and then transition and P. J so.
On a lot of the information about what kind of occupancy you want is derived from genetic data for example in individuals with persistent expression of fetal hemoglobin. We find that those individuals are essentially normal win are about 35%.
And our more of their hemoglobin is is is fetal hemoglobin and we know from a lot of work that we did initially with the ox Friday, but ultimately it's at its relevant for six O. One that modifying a sickle hemoglobin molecule is functionally the same as.
Introducing a hemoglobin F molecules, so we'd be looking for similar levels of modification in the 35 per cent range. The data that we actually showed at ash, which showed that the sickle mice were essentially being cured of sickle cell disease was in fact targeting about 35% on.
Vacations, and we think that's the.
The right target.
And then finally with regard to what we would expect to be showing and proof of concept data, we would be looking for occupancy and we'd be looking for a kind of a maximum effect on.
On hemolysis, and and maximum effect on raising hemoglobin and we're also likely to do some.
Functional looking at the sales are using.
Using things like the <unk> technology and you look at.
Uh huh, how flexible the sales or how much.
How much you can elongate them and their reaction is essentially the oxidative stress so we'd be looking at some of those functional data as well.
Yeah, and then regarding discontinuation.
First by way of background, we wouldn't classify someone has the discontinuation based on missing a shipment and and and missing a few phone calls we do a lot of follow up.
Over the course of weeks and even months before we would classify someone as a discontinuation that said if somebody does discontinue we still don't give up on them and we really approached them from four different.
And support mechanisms and educating the doctor's office to continue to reach out to the patient and encourage them to reengage. Our GBT source solution hub does outpatient outreach to engage with patients to reconnect. Our S. P partners are very engaged and talking with the patient and trying to re engage the patient and lastly, we have a very strong advocacy.
Team and that is in touch with the community and we engaged the advocates and the community to educate them on the importance of staying on therapy. So we have those four mechanisms and we've been successful about 20% of our discontinuation and ultimately restart and we found that out and in throughout last year.
Very helpful. Thanks, guys.
Our next question comes from the line of Paul Choi with Goldman Sachs. You May proceed with your question.
Thank you and let me add my congrats to your progress as well.
My question is with regard to your commercial efforts I guess as you get feedback from from your sales force and and and patient feedback I guess over the near term and in the course of 'twenty and 'twenty, one of which of the sort of leverage do you think are most addressable and actionable by yourself force is it with regard to our.
And the abandonment rate at the top of the funnel or are you or do you think it's payer coverage and payer rejections and just maybe on that last part there and what is sort of the.
What has been the recent coverage rates by by payers and thank you.
You may want to take that now add in if you if you like sure.
Well I think our sales force is very focused on filling the funnel. So their their biggest impact is always going to be on driving demand and we just had an incredible meeting. This this this month, where lots of new materials for them to go out and use and educate on a we found a 28% increase and enrollments with physicians that are trained through our physician speaker network and and and.
Tend to Speaker program for example, so we're increasing our speaker programs, we're increasing the amount of information. We can share now that we have 72 week data and then the patient support materials that were distributing including starter kits are going to be very helpful. So driving enrollments is the name of the game for our sales force, but we don't have just one field team, we also have and <unk>.
Access navigator team and a medical science team and field based payer team. So they're all working within their channels to also support patients. Our axis navigators are kind of our GBT source solution field team that are out making sure patients.
Our engaged and don't discontinue therapy and have the best chance of a.
And I've, starting and staying on therapy. So that's what their focus is on and we think that with their new materials, they will be able to impact things like abandonment and adherence. So they're very focused on that and the payer team has done a great job. We're not done there we've we have 90% coverage right.
And but it's not always perfect and they're still 10% that you know that were not covered and so they are still very active engaged with payers of course, we're very excited about our next expansion of our labels into pediatrics and the payer teams can start those conversations early with payers towards planning for that this year to make sure payers aren't caught on.
Guard with that and and the payer coverage picture has been very very good but.
But we do still have a very active team out there educating payers on on a daily basis.
Okay, great. Thank you.
Our next question comes from the line of Matthew Harrison with Morgan Stanley. You May proceed with your question.
Great. Good afternoon, thanks, very much I guess I just wanted to confirm sort of your underlying assumptions from the demand picture. It sounds like I know, you've obviously highlighted a handful and one time headwinds heading into the first quarter, but it sounds like to overcome that and you expect actually the underlying demand extra they got a bit better for patients I really.
And maybe marginally so could you just comment on that and how youre thinking about that relative to the pandemic.
Over the next sort of two quarters before you think theres, a significant pick up and the second half.
Sure, Matt and thanks for the question P J and feel free to air, but I'll I'll start out by saying that the biggest challenge that we've really been up again is sickle cell patients are afraid of getting infected and.
And the higher the infection rate in the country or in their community the more likely they are to.
Sequester at home and not even venture out to have and interaction with our prescriber and be able to be prescribed a medication. We think that is going to relax as the infections in the country go down.
And patients feel it's simply safe to get on mass transit and to get out into the world and interact with people that they obviously don't know.
And could be people that could infect them. So I think we really don't anticipate that.
And that's going to change very much and the first half from the year, we're hoping obviously that and the second half of the year the whole country begins to feel a lot more comfortable and.
Interacting and and and less concerned about getting getting COVID-19. So that's really the big issue.
Our next question comes from the line of Danielle Brill with Raymond James You May proceed with your question.
Hey, guys. Thanks for the question I guess.
On.
As a follow up from the last one on.
You know.
You commented in your press release that you expect.
On new prescription share.
And prove in the second half of year and surpassed pre COVID-19 levels over time.
Do you still think that you can get back to your pre COVID-19.
Levels. This year is the first part of the question and then also just curious now that vaccines are ramping and and we're.
We're seeing some signs of recovery from the pandemic. If you have any early insights into how.
Things are tracking with and the sickle cell community banks.
Thanks Danielle.
I think one of the reasons that we've tried to really restrain ourselves to come in and just one quarter ahead is because we really have no idea what's going to go on with Covid.
Every day, you know you and all of US listened and news and we hear about new strains, we hear about things going on and so we'd really rather not try to get out and predict quarter by quarter.
Based on what we're seeing right now we really don't think we'll be able to do much more than I thousand enrollments in Q1, as we make progress Danielle we definitely will want to give you as much site into the future as we think we can get but we just think it's it's really difficult for us to try.
To anticipate what's going to happen with.
Truly the country getting to 70, 80% vaccinated, what's going to happen with these new strains that we don't have enough insight into that as a really a.
Really really predict the future that far out we do feel very confident that we will get back to and exceed.
The Q1 performance, but that's really going to be driven by the change in behavior of people related to lack of fear of getting COVID-19 and dying.
Our next question comes from the line of Matthew Holt from J P. Morgan you May proceed with your question.
Hey, guys. Thanks for taking my question. So just a quick one from me I'm curious if we can get an update on the status of the confirmatory phase III trial and <unk>.
Sure.
And Matthew it's a great question I can tell you all these trials that I know of.
And.
In.
And particularly orphan diseases or not and rolling they they really arent and routing because when patients have a reasonably long survival in front of them as opposed to somebody who's dying of cancer and the next six months.
They're trading off a high risk of dying if they get COVID-19.
For for for for benefit.
For our benefit that's less certain certain a longer term benefit so.
It's very very difficult to ask the sickle cell patients to come into our hospitals.
Hospitals and clinics from blood draws and visits and risk getting COVID-19. So these trials really are not and rolling we think that we've been doing a great job. However of getting the infrastructure up. So for example, we've been spending a lot of time, making sure that we're doing remote.
Learning to really educate the sites around the world really well.
To do high quality T C. D. For example.
But we're not trying to get those sites to brain those children and.
Because we really wouldn't want to be responsible for anybody dying of COVID-19.
Great and that makes sense. Thank you.
Our next question comes from the line of Raju Prasad with William Blair. You May proceed with your question.
Thanks for taking the question.
And maybe a follow up on and I think one day was asked earlier, but given how engaged are the sickle cell community, how and how does the vaccine distribution going with them.
Is there.
And the apprehension English, we're taking that change and I can talk about community and just given what you've learned.
From the U S launch how are you thinking about the.
Washington kind of the other age groups as well as the MAA and the.
Covid World and thanks.
So I'll I'll take the vaccine question and DJ you can come and pay after that so there is absolutely and issue a vaccine hesitancy.
And in this country and actually around the world.
Based on what I read and it's probably highest and.
And in in minority communities and.
And that relates to a lot of the things that you know as well as I know about historical myth.
Mistreatment by the health care system, so that exist.
I've been told by from individuals that and major hospitals.
And the rate of declining the vaccine has been as high as.
60%, 65% are in.
In certain groups, it's not great and any group.
But it's been as high as $60 65 per cent.
I do think however.
This could get much better because a lot of this is not necessarily and willing to take the vaccine.
I don't want to beat a Guinea pig I don't want to be the first wanting to get at so many of these individuals may come around to take the vaccine. They just may not want to be in the front group.
I can also tell you that.
We have a hodgepodge of rules around who's even eligible for the vaccine today.
And I don't think many sickle cell patients have been even offer the vaccine and California until very recently, so I think it's early days to be conclusive, but your question about vaccine hesitancy, it's a real it's a real concern, but it's not just in the sickle cell community, but I would say that it's at.
It's probably even more acute.
And communities of color.
Our next question comes from the line of Jill Lee with True Securities. You May proceed with your question.
And just make Alcoa fueling and Fortunately thank you for taking our question.
So for the two operations net adds.
One gram increase in hemoglobin book, So to show clinical improvement you can have and the other information as to why this happened and could we expect higher numbers on pensions to be able to true clinical improvement analysis based on that.
Central time on numbers of patients who show from the 72 week POC and.
And what is the readout from the Vantiv moving global trial, plus any tailwind from express to him.
So let me try to touch.
Touch on your question on a few ways. One is that there's no data showing a correlation.
And between raising hemoglobin and lowering V O sees with the exception quite frankly of ox brighter.
What we've seen with ox Friday is that the more hemoglobin goes up.
The lower the VLC rate goes, but that's never really been seen before that makes perfect sense to me because the reason the hemoglobin is going up is because you are preventing the primary problem and sickle cell disease, which is the hemolysis, which leads to vascular inflammation.
And that leads to V. L C. So.
But ordinarily there has not been a correlation of raising hemoglobin and Laura and B O sees although that is what we've seen what occupied and we havent really quantitative it.
But I think if you go and look at the most recent abstracts from as you can see our curves where patients with hemoglobin above 12 actually had very very low V. O C. Right. So that was super encouraging.
On.
With regard to the broader issue.
I would refer you back to other abstracts that we presented at <unk>.
At Ash and other major meetings I would probably go back to cash not this past year, but the one before where we've demonstrated a ton of data that shows the lower your hemoglobin.
The wash your outcomes and it doesn't take very big differences differences is as small as point to 0.3 grams per deciliter decrease in their hemoglobin significantly increase.
Your risk of of of multi organ damage and damage to your kidneys damage to your brain.
We've also demonstrated.
Data that shows that as you raise your hemoglobin your T. C D declines and we know that T. C. D is a powerful predictor of your rate of having.
A CNS and Farquar stroke, so there's a ton of data, but really don't have time to go through it out on this call, but there is a wealth of data that shows that low hemoglobin is a bad thing and raising the hemoglobin by lowering the rate of red cell destruction due to the disease is very likely to be.
Their benefit and of course that was the basis of the accelerated approval and the U S.
And the readout from the global travel pause talks right.
Oh bluebirds.
And.
I'm not sure what you would read out are you asking about from Bluebird and they add probably I'm not at Liberty to say very on trial Bluebird since the blood work for Bluebird, yes.
Yes, just about the pause in Virginia.
And kind of be trial due to concerns that the gene therapy might cause cancer on the road and would expect that it would be a positive for us.
Congrats on targeting to send me the cash.
Yeah, I think I'd reserve that question for for for Nick and his team at at Bluebird, There, obviously dealing with a situation I can just tell you on a personal level.
It's been painful for me because our goal has been for patients to have more options.
And for patients to get great outcomes. So it's been.
Sad to kind of watch some poor outcomes, but I know that bluebird and the F. T. A L still working through it and hopefully they'll get through this and a positive way.
Thank you so much for and kind of cash.
Our next question comes from the line of Joe <unk> with Piper Sandler You May proceed with your question.
Hey, guys. Thanks, so much for taking my questions I want to follow up on a prior question, but maybe ask it a little bit differently. So Ted I think you've said in the past that you need to get back to at least the 16 50, new prescription and you saw on <unk> to see meaningful growth and our business and I understand it's very difficult to predict.
When you might get back there, but is that still the benchmark that we should keep in mind when we think about.
Returning to meaningful sequential growth.
Yeah, I think if we could get back to those numbers you would obviously start to see.
The growth be quite robust and.
Really the only thing that's different between today.
And Q1 of last year, if COVID-19 and the sickle cell population is big and the vast majority of them of course are not on X brighter.
Ah the big variable here is this pandemic, which is tragically affected their community and has tragically.
Greatly diminish their interactions with health care professionals. So we're very bullish that once there's a perception that it's safe to.
And to leave your home these patients will leave their homes and they'll begin to behave like they were behaving in Q1 of last year.
Yeah.
Okay got it thanks for taking my question.
Our next question comes from the line of John Newman with Canaccord. You May proceed with your question.
Hi, guys. Thanks for taking my question.
First question I had was for D. J D and could you tell us the percentage of prescriptions that are heading out to patients via mail order and is there a way that GBT can sort of encourage that going forward and also is it possible to prescribe a larger quantity of drug for a mail order prescription second.
And I have is just.
And of a broader question, which is.
Would there be a time going forward, where you would potentially consider maybe some targeted DTC advertising.
Perhaps it wouldn't last that long, but it just seems like.
There hasn't been such a long time since there's been any therapies for sickle cell disease I'm just curious if that's if it's and.
And approach that you might consider thanks.
Those are great questions for D day, John Yeah, and John and I swear I didn't plant those questions because but they're they're just exactly perfect. Because yes, we have thought about DTC and and targeted programs. We have a lot of digital targeted DTC going on right now.
A bunch of which we initiated in the second half of last year and through the first half of this year that includes a lot of social media.
Really driving people, we've seen a dramatic increase for example, and in web traffic to our websites because of it.
So that's one form of DTC, but we're looking at everything Theres lots of very targeted as you know and <unk>.
Media that we can use and look at whether it would be you know with the proliferation of streaming TV you can be very targeted and and in a cost effective way on TV and now like you you never could before on radio and out of home as well. So we're looking at all that and stay tuned and I'm sure. We'll have more announcements on that later this year and.
Regarding mail order, yes, 100% actually of our prescriptions from mail order, we do all of our prescriptions are shipped right to the patient's door. So we don't we don't want we don't go through any retail channel, we have a very tight and small.
<unk> channel that's a closed channel. So we have very tight relationships with our S. P partners and all of those bottles get shipped right to the patient's house now there is a I guess, a small percentage of patients that can pick it up at their institution if their institution decides to order through their 340 B program. So there is a small percentage of patients that access it that way, but the rest.
From mail order and in terms of the quantity of mail order, Yeah, we're happy to do that but John and that's really controlled by the payer the payer decides and usually a payer won't let you shipped three bottles of a rare orphan more expensive specialty drugs. So it's it's highly uncommon for you to get approval to send more than a single bottle that said around the bid.
Turning of the year, we did contact our patients and make sure that anyone that was switching insurance.
We wanted to proactively talk to them about their copays.
And out of out of pocket, so that we could manage that and make sure they wouldn't GAAP and therapy. So we did ship some models out through our free drug program in advance during the new year to make sure some patients didn't GAAP there.
Great. Thank you.
Ladies and gentlemen, there are no further questions at this time I would like to turn the floor back over to management for closing comments.
I'd simple close by thanking everyone for joining us today.
And I wish you all a to stay healthy and safe and also encourage you to reach out if you have any additional questions. Thank you.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and enjoy the rest of your evening.
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